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HomeMy WebLinkAbout09-578 DichterHarriet Dichter Deputy Secretary Office of Child Development and Early Learning Departments of Education and Public Welfare 333 Market Street, 6 Floor Harrisburg, PA 17126 Dear Ms. Dichter: ADVICE OF COUNSEL November 13, 2009 09 -578 This responds to your letters dated September 18, 2009, and September 30, 2009, by which you requested an advisory from the Pennsylvania State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., would impose any prohibitions or restrictions upon the Deputy Secretary of the Office of Child Development and Early Learning, Pennsylvania Departments of Education and Public Welfare, with regard to accepting an offer of supplemental employment with the Gates Foundation ( "Foundation ") to provide assistance on the Foundation's early childhood learning strategy, where: (1) the Foundation does not provide resources to the Commonwealth of Pennsylvania for the early childhood work overseen by the Deputy Secretary; and (2) such assistance would be provided only as to the Foundation's national work and work in the state of Washington. Facts: As Deputy Secretary of the Office of Child Development and Early Learning, Pennsylvania Departments of Education and Public Welfare ( "OCDEL "), you request an advisory from the Pennsylvania State Ethics Commission. You have submitted a copy of your official Commonwealth position description, which document is incorporated herein by reference. You state that OCDEL integrates the work of the Pennsylvania Department of Public Welfare to enable the delivery of early childhood services focusing on early learning. As Deputy Secretary of OCDEL, you are responsible for overseeing the planning, program and policy development, and implementation for multiple programs including Pre -K Counts, the full -day kindergarten initiative, the state -based Head Start program, the Keystone Stars early learning program, Nurse Family Partnership, Child Care Works, and Early Intervention (0 -5). You state that you have been offered supplemental employment with the Gates Foundation ( "Foundation ") to assist the Foundation with its early learning strategy, which strategy focuses on the Foundation's national work and work in the Foundation's home state of Washington. You state that the Foundation does not provide resources to the Commonwealth of Pennsylvania for the early childhood work overseen by you. Dichter, 09 -578 November 13, 2009 Page 2 You state that you would provide assistance only in the area of early childhood learning and only as to the Foundation's national work and work in the state of Washington. The Foundation would compensate you for your services. Based upon the above submitted facts, you ask whether the Ethics Act would permit you to accept the aforesaid position of supplemental employment with the Foundation. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. It is noted that the submitted facts do not indicate: (1) whether you would perform the proposed supplemental employment as an employee of the Foundation or an independent contractor; or (2) the specific nature of the work you would perform in providing the aforesaid assistance to the Foundation. As Deputy Secretary of OCDEL, you are a public official /public employee and an Executive -level State Employee subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §§ 1103(a), (j). (j) Voting conflict. - -Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. Dichter, 09 -578 November 13, 2009 Page 3 The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 65 Pa. C. S. § 1102. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. In each instance of a conflict of interest, the public official /public employee would be required to abstain fully from participation. The abstention requirement would not be limited merely to voting, but would extend to any use of authority of office, including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. Subject to certain statutory exceptions, in each instance of a voting conflict, Section 1103(j) of the Ethics Act requires the public official /public employee to abstain Dichter, 09 -578 November 13, 2009 Page 4 and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. It is noted that Section 1103(a) of the Ethics Act generally does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position - -or confidential information obtained by being in that position- -for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, Metrick, Order 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity or private client(s). Miller, Opinion 89- 024 Kannebecker, Opinion 92 -010. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation, and in the instance of a voting conflict, to abstain and fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Any business as to which you are a director, officer, owner, or employee or in which you have a financial interest would be considered a business with which you are associated. A sole proprietorship or self - employed individual is included within the definition of the term "business" as set forth in the Ethics Act. 65 Pa.C.S. § 1102; In Re: Nomination Petition of Paulmier, 594 Pa. 433, 937 A.2d 364 (2007). Subject to the statutory exceptions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, in your capacity as Deputy Secretary of OCDEL, you would have a conflict of interest in matters that would financially impact you, any business(es) with which you are associated, or the customer(s) /client(s) of any business(es) with which you are associated. See, Kannebecker, supra; Miller, supra. Section 1103(d) of the Ethics Act provides as follows: § 1103. Restricted activities. (d) Honorarium. - -No public official or public employee shall accept an honorarium. 65 Pa.C.S. § 1103(d). The Ethics Act defines the term "honorarium" as follows: § 1102. Definitions "Honorarium." Payment made in recognition of published works, appearances, speeches and presentations and which is not intended as consideration for the value of such services which are nonpublic occupational or professional in nature. The term does not include tokens presented or provided which are of de minimis economic impact. 65 Pa.C.S. § 1102. Dichter, 09 -578 November 13, 2009 Page 5 Section 1103(d) of the Ethics Act is an absolute prohibition against accepting honoraria. The statutory definition of the term "honorarium" generally includes payments that are made in recognition of speaking engagements /presentations, appearances, and published works, but excludes such payments if: (1) they are legitimately intended as consideration for the value of such services; and (2) they are undertaken in the public official's /public employee's private professional or occupational capacity and are not related to the public position. Confidential Opinion, 01 -001. In response to your specific inquiry, you are advised as follows. Based upon the submitted facts, Section 1103(a) of the Ethics Act would not prohibit you from accepting supplemental employment to provide the Foundation with assistance on its early childhood learning strategy in your private capacity. However, in your public capacity as Deputy Secretary of OCDEL, you generally would have a conflict of interest in matters that would financially impact the Foundation, regardless of whether your work for the Foundation would be performed as an independent contractor or as an employee. In each instance of a conflict of interest, you would be required to abstain fully from participation. The abstention requirement would extend beyond voting to include any use of authority of office. In each instance of a voting conflict, you would be required to abstain fully and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. The submitted facts do not indicate the specific nature of the work you would perform in providing the aforesaid assistance to the Foundation, and specifically, whether your work for the Foundation would include speaking engagements /presen- tations, appearances, or published works. You are advised that Section 1103(d) of the Ethics Act would prohibit you from accepting any payment that would constitute an "honorarium" as that term is defined by the Ethics Act. The propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Governor's Code of Conduct. Additionally, this advisory under the Ethics Act does not relieve you of any obligation to obtain permission for the proposed supplemental employment from others, such as agency heads /designees at OCDEL, the Pennsylvania Department of Education, or the Pennsylvania Department of Public Welfare, or the Secretary of Administration. Conclusion: As Deputy Secretary of the Office of Child Development and Early Learning, Pennsylvania Departments of Education and Public Welfare ( "OCDEL "), you are a public official /public employee and an Executive -level State Employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Based upon the submitted facts that: (1) you have been offered supplemental employment with the Gates Foundation ("Foundation") to assist the Foundation with its early learning strategy, which strategy focuses on the Foundation's national work and work in the Foundation's home state of Washington; (2) the Foundation does not provide resources to the Commonwealth of Pennsylvania for the early childhood work overseen by you; (3) you would provide assistance only in the area of early childhood learning and only as to the Foundation's national work and work in the state of Washington; and (4) the Foundation would compensate you for your services, you are advised as follows. Section 1103(a) of the Ethics Act would not prohibit you from accepting supplemental employment to provide the Foundation with assistance on its early childhood learning strategy in your private capacity. However, in your public capacity as Deputy Secretary of OCDEL, you generally would have a conflict of interest in matters that would financially impact the Foundation, regardless of whether your work for the Dichter, 09 -578 November 13, 2009 Page 6 Foundation would be performed as an independent contractor or as an employee. In each instance of a conflict of interest, you would be required to abstain fully from participation. The abstention requirement would extend beyond voting to include any use of authority of office. In each instance of a voting conflict, you would be required to abstain fully and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. Section 1103(d) of the Ethics Act would prohibit you from accepting any payment that would constitute an "honorarium" as that term is defined by the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 - 787 - 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Robin M. Hittie Chief Counsel