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HomeMy WebLinkAbout10-613 Confidential ADVICE OF COUNSEL October 6, 2010 10-613 This responds to your letter dated August 17, 2010, by which you requested a confidential advisory from the Pennsylvania State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would impose any prohibitions or restrictions upon a state legislator in his capacity as a public official if the state legislator, in his private capacity as an A, would work for a business that either indirectly or directly benefits from a state subsidy for B C. Facts: You have been authorized to request a confidential advisory from the Pennsylvania State Ethics Commission on behalf of State Legislator A, hereinafter referred to as “the State Legislator.” You have submitted facts, the material portion of which may be fairly summarized as follows. The State Legislator maintains a D in his private capacity as an A. The business (“the Business”) of a friend (“the Friend”) of the State Legislator will be pursuing a contract (“the Contract”) to install a large B C facility (“the Facility”) that would be located in the State Legislator’s legislative district. You state that the Friend has approached the State Legislator with regard to handling the [type of activity] of the Contract. You state that various state subsidies are part and parcel of the B C industry at the present time, such as, for example, grants and loans for large-scale B [type of projects] offered to businesses and other entities by the E Program administered by Commonwealth Department F and Commonwealth Department G under the direction of Commonwealth Entity H. You state that the State Legislator believes that the Business would not be the direct beneficiary of any such state subsidies but would benefit indirectly if the developer/owner of the Facility site received a state subsidy in the form of a grant or loan. Based upon the above submitted facts, you pose the following questions: (1) Whether the Ethics Act would impose any prohibitions or restrictions upon the State Legislator if, in his private capacity as an A, he would work for a business that indirectly benefits from a state subsidy for B C; and Confidential Advice, 10-613 October 6, 2010 Page 2 (2) Whether the Ethics Act would impose any prohibitions or restrictions upon the State Legislator if, in his private capacity as an A, he would work for a business that directly benefits from a state subsidy for B C. 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. The State Legislator is a public official as that term is defined by the Ethics Act, and therefore the State Legislator is 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. (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. 65 Pa.C.S. §§ 1103(a), (j). The following terms 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 Confidential Advice, 10-613 October 6, 2010 Page 3 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. 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. Section 1103(a) of the Ethics Act generally does not prohibit public officials/public employees from having outside business activities or employment. However, a public official/public employee may not use the authority of the public position--or confidential information obtained by being in that position--for the advancement of the public official’s/public employee’s own private pecuniary benefit or that of a business with which he or she 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, 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 a business with which the public official/public employee is associated in his private capacity (Gorman, Order 1041; Rembold, Order 1303; Wilcox, Order 1306), or private client(s) (Miller, Opinion 89-024; Kannebecker, Opinion 92-010). If the private employer or business with which the public official/public employee is associated or a private customer/client would have a matter pending before the governmental body, generally the public official/public employee would have a conflict of interest as to such matter. Miller, supra; Kannebecker, supra. 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. Confidential Advice, 10-613 October 6, 2010 Page 4 In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. As to state legislators specifically, to the extent the activities of a state legislator relate to “legislative actions” (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the State Ethics Commission. See, Corrigan, Opinion 87-001. Thus, Section 1103(a) of the Ethics Act would not apply to the State Legislator insofar as his activities would constitute legislative actions. You are advised that pursuant to Section 1103(a) of the Ethics Act, the State Legislator generally would be prohibited from using the authority of his public position to directly or indirectly effectuate a pecuniary benefit to a business that would be the State Legislator’s client in his private capacity as an A, including but not limited to the Business. However, Section 1103(a) of the Ethics Act would not apply to the State Legislator insofar as his activities would constitute legislative actions. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Conclusion: As a state legislator, State Legislator A, hereinafter referred to as “the State Legislator,” is a public official 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) the State Legislator maintains a D in his private capacity as an A; (2) the business (“the Business”) of a friend (“the Friend”) of the State Legislator will be pursuing a contract (“the Contract”) to install a large B C facility (“the Facility”) that would be located in the State Legislator’s legislative district; (3) the Friend has approached the State Legislator with regard to handling the [type of activity] of the Contract; and (4) various state subsidies are part and parcel of the B C industry at the present time, such as, for example, grants and loans for large-scale B [type of projects] offered to businesses and other entities by the E Program administered by Commonwealth Department F and Commonwealth Department G under the direction of Commonwealth Entity H, you are advised as follows. Pursuant to Section 1103(a) of the Ethics Act, the State Legislator generally would be prohibited from using the authority of his public position to directly or indirectly effectuate a pecuniary benefit to a business that would be the State Legislator’s client in his private capacity as an A, including but not limited to the Business. However, Section 1103(a) of the Ethics Act would not apply to the State Legislator insofar as his activities would constitute legislative actions. 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. Confidential Advice, 10-613 October 6, 2010 Page 5 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