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HomeMy WebLinkAbout11-004 Confidential OPINION OF THE COMMISSION Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Raquel K. Bergen Nicholas A. Colafella Mark Volk DATE DECIDED: 6/23/11 DATE MAILED: 7/15/11 11-004 This Opinion is issued in response to your letters dated February 25, 2011, and February 28, 2011, as supplemented and revised by your three letters dated June 7, 2011, by which you requested a confidential advisory from this Commission. I.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 Commonwealth Official A with regard to receiving payment of engagement fees for the delivery of speeches and presentations about [specific topics] and related topics. II.FACTUAL BASIS FOR DETERMINATION: You have been authorized by Commonwealth Official A to request a confidential advisory from this Commission on his behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. Commonwealth Official A is the head of Department B(“the Department”). The Department generally is responsible for [certain responsibilities]. Commonwealth Official A’s current public position is the [quantitative description] public office that he has held. You state that Commonwealth Official A has not accepted honoraria while holding public office. Commonwealth Official A earned an [advanced degree] from Educational Institution 1 and an [undergraduate degree] in [certain majors] from Educational Institution 2. Before Commonwealth Official A assumed his current public role, he worked for almost [number] years as a [type of leader] and C. In particular, for various time periods between [year 1] and [year 2], Commonwealth Official A was engaged in the following Confidential Opinion, 11-004 July 15, 2011 Page 2 activities: (1) serving as a D at a firm that provides [types of services] for [companies with a certain orientation]; (2) co-founding [number] Es that provided F and guidance for [type of companies] in the [particular geographic area]; and (3) leading a G that, inter alia, assisted its members with [performing a certain activity] and provided educational and financial programs, events, and publications. Commonwealth Official A also served as a lecturer and teacher before he began public service. While Commonwealth Official A was serving as the [title of position] of an H that focused on [certain matters], an I named [name of entity] contracted with him to speak around [a geographical area]. Commonwealth Official A was part of a [type of group], and he often received payment for speeches that he delivered mainly to [type of professionals] on topics including, but not limited to, [particular matters]. As a paid speaker, Commonwealth Official A spoke to [quantitative description] of organizations, including Js and leading Gs. Commonwealth Official A also served as a K and L at Educational Institution 1 and at Educational Institution 3. Commonwealth Official A, in his private capacity as a lecturer, continues to receive invitations to deliver speeches and presentations from entities that he developed relationships with prior to entering public service or that are familiar with his reputation. Two Is have also expressed interest in representing him. Commonwealth Official A proposes to deliver speeches and presentations to gatherings of [type of professionals] at conferences and seminars primarily held at [certain locations]. The speeches and presentations would not be related to Commonwealth Official A’s position or role as a public official, but rather, would be on subjects such as [particular subjects], and related topics and would draw upon Commonwealth Official A’s years of experience and expertise as a C, paid speaker, and M. You state that the proposed speeches and presentations would not focus upon the Department, Pennsylvania public policy matters, or state government issues and would not draw upon the operations of the Commonwealth or the Department or any information or relationships developed by way of Commonwealth Official A’s role as a public official. You further state that the fees related to the proposed speeches and presentations would be appropriate and market-rate for paid speakers of Commonwealth Official A’s level and would not be merely a token of appreciation for his attendance. Based upon the above submitted facts, you ask whether the Ethics Act would impose any prohibitions or restrictions upon Commonwealth Official A with regard to receiving payment of engagement fees for the delivery of speeches and presentations about [specific topics], and related topics. Your advisory request as revised by your letters of June 7, 2011, no longer includes any other question(s) originally posed. By letter dated May 27, 2011, you were notified of the date, time and location of the executive meeting at which your request would be considered. At the executive meeting on June 23, 2011, you appeared and offered to answer any questions of the Commissioners. You stated that the engagement fees that would be paid to Commonwealth Official A would come directly from the I as a conduit for the ultimate audience. You stated that the payers/entities that would be paying such engagement fees would not have matters pending before the Department, would not be doing business with the Department, and would have no affiliation with the Department whatsoever. You stated it would be possible that a payer/entity paying an engagement fee might do business with the Commonwealth separate and apart from the Department. You stated that Commonwealth Official A’s official title would be listed in the programs for such speeches and presentations, but the subject matter of such speeches Confidential Opinion, 11-004 July 15, 2011 Page 3 and presentations would have nothing to do with Commonwealth Official A’s duties and the Department’s duties for the Commonwealth. III.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, this 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 further noted that, pursuant to Sections 1107(10) and (11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), an opinion/advice may be given only as to prospective (future) conduct. To the extent that your inquiry relates to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent that your inquiry relates to future conduct, your inquiry may and shall be addressed. Commonwealth Official A is a public official and executive-level State employee subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: § 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). 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 whichhe 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. 65 Pa.C.S. § 1102. Confidential Opinion, 11-004 July 15, 2011 Page 4 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. "De minimis economic impact." An economic consequence which has an insignificant effect. 65 Pa.C.S. § 1102. Section 1103(d) of the Ethics Act is an absolute prohibition against accepting honoraria. The question of whether a given payment is an honorarium prohibited by Section 1103(d) is determined by an application of the statutory definition set forth in the Ethics Act, not by the mere label that may have been attached to the payment. Confidential Opinion, 01-001. The statutory definition of "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. Crompton, Opinion 09-002; Confidential Opinion, 01-001. In Baker, Opinion 91-004, we set forth criteria for determining whether the exclusion applies in any given instance, which criteria include the following: the private occupation of the public official/public employee; the expertise of the public official/public employee in the area; the history of activity in the occupation prior to public service; the purpose for the invitation; the capacity in which the public official/public employee is invited; the subject of the speech, work or presentation; the group spoken to and the composition as to members or non-members of the group; the purpose for gathering the group; the amount of the fee relative to the services performed; the source of the invitation; the event at which the speech is given; the subject matter of the speech or published work as compared to the normal subject matter dealt with by the occupational/professional group; and any other relevant factors. See also, Confidential Opinion, 01-001. In the instant matter, application of the relevant criteria to the submitted facts establishes that the proposed speeches and presentations about [specific topics] and related topics would be given in Commonwealth Official A’s private capacity as an experienced C, paid speaker, and M as opposed to his public capacity as the head of the Department. It is our determination that for speeches or presentations that: (1) would be Confidential Opinion, 11-004 July 15, 2011 Page 5 about [specific topics] and related topics; and (2) would be unrelated to Commonwealth Official A’s public office, a payment of engagement fees that would be legitimately intended as consideration for the value of the speech or presentation would not constitute an “honorarium” as that term is defined by the Ethics Act and could be accepted by Commonwealth Official A subject to the restrictions of Section 1103(a) of the Ethics Act. Cf., Confidential Opinion, 01-001. In this regard, it is noted that subject to the statutory exclusions to the definition of “conflict” or “conflict of interest” as set forth in the Ethics Act, 65 Pa.C.S. § 1102, Commonwealth Official A would have a conflict of interest in matter(s) before the Department that would financially impact any entity that would pay him engagement fee(s) for a speech or presentation. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. IV.CONCLUSION: Commonwealth Official A is a public official and 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) Commonwealth Official A is the head of Department B(“the Department”); (2) Commonwealth Official A’s current public position is the [quantitative description] public office that he has held; (3) Commonwealth Official A has not accepted honoraria while holding public office; (4) Commonwealth Official A earned an [advanced degree] from Educational Institution 1 and an [undergraduate degree] in [certain majors] from Educational Institution 2; (5) before Commonwealth Official A assumed his current public role, he worked for almost [number] years as a [type of leader] and C; (6) before beginning public service, Commonwealth Official A was a lecturer, teacher, and part of a [type of group], and he often received payment for speeches that he delivered mainly to [type of professionals] on topics including, but not limited to, [particular matters]; (7) Commonwealth Official A also served as a K and L at Educational Institution 1 and at Educational Institution 3; (8) Commonwealth Official A, in his private capacity as a lecturer, continues to receive invitations to deliver speeches and presentations from entities that he developed relationships with prior to entering public service or that are familiar with his reputation; (9) Commonwealth Official A proposes to deliver speeches and presentations to gatherings of [type of professionals] at conferences and seminars primarily held at [certain locations]; (10) the speeches and presentations would not be related to Commonwealth Official A’s position or role as a public official, but rather, would be on subjects such as [particular subjects], and related topics and would draw upon Commonwealth Official A’s years of experience and expertise as a C, paid speaker, and M; (11) the proposed speeches and presentations would not focus upon the Department, Pennsylvania public policy matters, or state government issues and would not draw upon the operations of the Commonwealth or the Department or any information or relationships developed by way of Commonwealth Official A’s role as a public official; and (12) the fees related to the proposed speeches and presentations would be appropriate and market-rate for paid speakers of Commonwealth Official A’s level and would not be merely a token of appreciation for his attendance, you are advised as follows. The proposed speeches and presentations about [specific topics] and related topics would be given in Commonwealth Official A’s private capacity as an experienced C, paid speaker, and M as opposed to his public capacity as the head of the Department. For speeches or presentations that: (1) would be about [specific topics] and related topics; and (2) would be unrelated to Commonwealth Official A’s public office, a payment of engagement fees that would be legitimately intended as consideration for the value of the speech or presentation would not constitute an “honorarium” as that term is defined by the Ethics Act and could be accepted by Commonwealth Official A subject to the restrictions of Section 1103(a) of the Ethics Act. Confidential Opinion, 11-004 July 15, 2011 Page 6 The propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(10) of the Ethics Act, the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair