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HomeMy WebLinkAbout11-536-S ADVICE OF COUNSEL July 28, 2011 11-536-S This is a supplemental Advice of Counsel from the Pennsylvania State Ethics Commission. Issue: Whether Confidential Advice, 11-536, which was issued June 29, 2011, in response to a request for an advisory pursuant to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., is void to the extent the advisory request failed to truthfully disclose all of the material facts relevant to such request. Facts: By letters dated April 15, 2011, and June 21, 2011, you requested a confidential advisory from the Pennsylvania State Ethics Commission on behalf of Individual A. Your advisory request presented facts that were summarized in the Advice of Counsel as follows: In [month, year], the Bs of [name of political subdivision] (“the Political Subdivision”) appointed Individual A as the Solicitor for the Political Subdivision. The Political Subdivision considers Individual A to be an at-will part-time employee. As the Political Subdivision Solicitor, Individual A is required to provide legal services to the Political Subdivision on a part-time basis for a minimum of [number] hours each year, for which he is paid compensation of approximately [amount] per year. The Political Subdivision issues W-2s Individual to Individual A and withholds FICA contributions from his pay. A does not receive any employment-related benefits provided by the Political Subdivision, such as sick or vacation days, holiday pay, or health, dental, and vision benefits. Individual A has no specific work hours, and no one from the Political Subdivision controls or directs the means, manner, method, sequence, or timing of his provision of services. Individual A assumes his own liability for the professional services that he renders, and he must provide the Political Subdivision with proof of his own malpractice insurance coverage for such services. As the Political Subdivision Solicitor, Individual A is responsible for bringing and defending any lawsuits on behalf of the Political Subdivision. Individual A reviews and drafts contracts between the Political Subdivision and vendors or service providers, advises the Political Subdivision Bs on matters such as interpreting statutes that apply to Political Subdivision operations, and drafts policies and ordinances on behalf of the Political Confidential Advice, 11-536-S July 28, 2011 Page 2 Subdivision. However, Individual A does not provide legal services or advice to the Political Subdivision Bs concerning C matters. You state that for at least the past [number] years, the Political Subdivision Bs have retained separate outside law firms to handle C matters and D for the Political Subdivision. Such outside firms have performed various legal services pertaining to C matters for the Political Subdivision. In [month, year], the Political Subdivision Bs determined that they were going to cease using one of the law firms that had been utilized to act as outside counsel on C matters. You state that by virtue of a public resolution approving an E, the Political Subdivision Bs subsequently engaged the law firm of [name of law firm] (“the Firm”) to represent the Political Subdivision in certain C matters. Individual A is an equity partner at the Firm. Under the proposed arrangement between the Political Subdivision and the Firm, the counsel work on C matters would not be performed by Individual A but would be performed by other attorneys at the Firm. You state that on [date], the Firm notified the Political Subdivision Bs that the Firm would not be performing any services for the Political Subdivision and withdrew the Firm’s representation prior to performing any services for the Political Subdivision or receiving any compensation from the Political Subdivision. Confidential Advice, 11-536, at 1-2 (Emphasis added). Based upon the above submitted facts, you asked whether Individual A, in his capacity as Solicitor for the Political Subdivision, would be considered a public employee subject to the Ethics Act, and if so, whether the Ethics Act would impose any prohibitions or restrictions upon Individual A in his capacity as Solicitor for the Political Subdivision with regard to the Political Subdivision’s prospective retention of the Firm to serve as outside counsel on C matters. On June 29, 2011, Confidential Advice, 11-536 was issued to you in response to your advisory request. Confidential Advice, 11-536 specifically noted that an advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts, and that an advisory is only issued as to future conduct. Confidential Advice, 11-536, at 2 (public version) and at 2-3 (confidential version). Confidential Advice, 11-536 determined that based upon the submitted facts, Individual A, in his capacity as the Solicitor for the Political Subdivision, would not be considered a “public employee” subject to the Ethics Act and therefore would not be subject to the restrictions of Section 1103(a) of the Ethics Act (pertaining to conflict of interest) or Section 1103(f) of the Ethics Act (pertaining to contracting). Based upon that determination, Confidential Advice, 11-536 stated that your second question, regarding the Political Subdivision’s prospective retention of the Firm to serve as outside counsel on C matters, did not need to be addressed. Following the issuance of Confidential Advice, 11-536, certain news articles came to the attention of staff of the State Ethics Commission. Such news articles indicated that as of at least [designation of time] prior to the issuance of Confidential Advice, 11-536, Individual A no longer held the position of Solicitor of the Political Subdivision . Additionally, according to at least one news article, Individual A denied claims that he had received vacation days but admitted that he had participated in the Political Subdivision’s employee pension plan. In contrast, the advisory request letters Confidential Advice, 11-536-S July 28, 2011 Page 3 submitted to the Commission indicated that Individual A received only the aforesaid compensation of approximately [amount] per year, and that Individual A received no other employment-related benefits provided by the Political Subdivision, such as sick or vacation days, holiday pay, or health, dental, and vision benefits. April 15, 2011, advisory request letter, at 3; June 21, 2011, advisory request letter, at 2. Discussion: As noted in Confidential Advice, 11-536, 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. You are advised that Confidential Advice, 11-536 is void to the extent the advisory request failed to truthfully disclose all of the material facts relevant to the request. If Individual A , in his capacity as Solicitor for the Political Subdivision, received employment-related benefit(s) from the Political Subdivision, such as vacation days or participation in the Political Subdivision’s employee pension plan, then the advisory request failed to truthfully disclose those material facts. Individual A’s participation in the Political Subdivision’s employee pension plan as well as his receipt of any vacation days would have been considered employment-related benefits and would have been material and critical to a determination of whether he was a “public employee” subject to the Ethics Act. Additionally, the Commission was not informed prior to the issuance of Confidential Advice, 11-536 that Individual A no longer held the position of Solicitor of the Political Subdivision . Such a change in circumstances would have rendered the advisory request moot. Conclusion: Confidential Advice, 11-536 is void to the extent the advisory request failed to truthfully disclose all of the material facts relevant to the request. If Individual A , in his capacity as Solicitor for [name of political subdivision] (“the Political Subdivision”), received employment-related benefit(s) from the Political Subdivision, such as vacation days or participation in the Political Subdivision’s employee pension plan, then the advisory request failed to truthfully disclose those material facts. Individual A’s participation in the Political Subdivision’s employee pension plan as well as his receipt of any vacation days would have been considered employment-related benefits and would have been material and critical to a determination of whether he was a “public employee” subject to the Ethics Act. If, prior to the issuance of Confidential Advice, 11-536, Individual A no longer held the position of Solicitor of the Political Subdivision , such a change in circumstances would have rendered the advisory request moot. 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. Confidential Advice, 11-536-S July 28, 2011 Page 4 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