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HomeMy WebLinkAbout11-562 Leonard-Haak ADVICE OF COUNSEL November 9, 2011 Izanne Leonard-Haak Health-Management Associates rd 800 N. 3 Street Suite 201 Harrisburg, PA 17102 11-562 Dear Ms. Leonard-Haak: This responds to your letter dated September 23, 2011 (postmarked October 11, 2011, and received October 12, 2011), 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.C.S. § 1101 et seq., would impose any restrictions upon employment of an Acting Deputy Secretary for Medical Assistance Programs following termination of employment with the Pennsylvania Department of Public Welfare (“Department of Public Welfare”). Facts: You request an advisory from the Pennsylvania State Ethics Commission regarding the post-employment restrictions of the Ethics Act. You have submitted facts that may be fairly summarized as follows. On August 26, 2011, you retired from Commonwealth employment as the Acting Deputy Secretary for Medical Assistance Programs with the Department of Public Welfare, in which capacity you oversaw various aspects of the Pennsylvania Medicaid Program authorized under Title XIX of the federal Social Security Act. You state that in your former position with the Department of Public Welfare, you had some limited contact with the Pennsylvania Department of Insurance (“Department of Insurance”) during 2010 for planning and development purposes related to state options regarding the implementation for the federal Affordable Care Act. You state that you were never in a supervisory or managerial relationship with anyone in the Department of Insurance and that you did not have approval authority on any programs or policies of the Department of Insurance. In your former position with the Department of Public Welfare, you had regular meetings with the Deputy Secretary for the Office of Long Term Living (“OLTL”) and staff of OLTL with regard to OLTL’s program and policy under Title XIX (the Medicaid provisions) of the federal Social Security Act. You state that you did so in order to be Leonard-Haak, 11-562 November 9, 2011 Page 2 informed, as the Secretary of Public Welfare had directed that you sign off on any request to the federal Centers for Medicare and Medicaid related to the use of Title XIX funding regardless of whether the funds were to be used for programs under your direct purview or under the purview of other offices. You state that staff of the Pennsylvania Department of Aging (“Department of Aging”) and the Secretary of Aging sometimes participated in the aforesaid meetings. You state that the Deputy Secretary of OLTL reported to both the Secretary of Public Welfare and the Secretary of Aging. You further state that you had no managerial or supervisory responsibility for staff of OLTL or the Department of Aging. Effective August 29, 2011, you became an employee of an independent national research and consulting firm named “Health Management Associates,” which specializes in complex health care program and policy issues. You state that it is possible that you might be interested in responding to requests for proposals or collaborating with other contractors in providing technical assistance on initiatives of the Department of Insurance and the Department of Aging. Based upon the above submitted facts, you seek guidance as to whether the Ethics Act would impose any restrictions upon you with regard to representing clients before, or doing work for, the Department of Insurance and the Department of Aging during the first year following termination of your Commonwealth employment. It is administratively noted that OLTL is “co-located” within both the Department of Public Welfare and the Department of Aging. See, Resolution No. OR-08-242 of the Executive Board (October 7, 2008). The organization chart for OLTL designates OLTL as being part of both the Department of Public Welfare and the Department of Aging. The organization chart for the Department of Public Welfare designates the Deputy Secretary for Medical Assistance Programs as being solely within the Department of Public Welfare and not within OLTL. 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. In the former capacity as the Acting Deputy Secretary for Medical Assistance Programs with the Department of Public Welfare, you would be considered a public official/public employee and an “executive-level State employee” subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Consequently, upon termination of Commonwealth employment, you became a former public official/public employee and a former executive-level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act. Section 1103(i) restricts former executive-level State employees as follows: § 1103. Restricted activities (i)Former executive-level employee.-- No former executive-level State employee may for a period of two Leonard-Haak, 11-562 November 9, 2011 Page 3 years from the time that he terminates employment with this Commonwealth be employed by, receive compensation from, assist or act in a representative capacity for a business or corporation that he actively participated in recruiting to this Commonwealth or that he actively participated in inducing to open a new plant, facility or branch in this Commonwealth or that he actively participated in inducing to expand an existent plant or facility within this Commonwealth, provided that the above prohibition shall be invoked only when the recruitment or inducement is accomplished by a grant or loan of money or a promise of a grant or loan of money from the Commonwealth to the business or corporation recruited or induced to expand. 65 Pa.C.S. § 1103(i). Section 1103(i) restricts the ability of a former executive-level State employee to accept employment or otherwise engage in business relationships following termination of State service, under certain narrow conditions. The restrictions of Section 1103(i) apply even where the business relationship is indirect, such as where the business in question is a client of a new employer, rather than the new employer itself. See, Confidential Opinion, 94-011. However, Section 1103(i) would not prohibit you from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a business subject to the conditions that you did not actively participate in recruiting such business to Pennsylvania, and that you did not actively participate in inducing such business to open or expand a plant, facility, or branch in Pennsylvania, through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth. Unlike Section 1103(i), Section 1103(g) does not prohibit a former public official/public employee from accepting a position of employment. However, it does restrict the former public official/public employee with regard to “representing” a “person” before “the governmental body with which he has been associated”: § 1103. Restricted activities (g)Former official or employee.-- No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 Pa.C.S. § 1103(g) (Emphasis added). The terms "represent," "person," "governmental body," and "governmental body with which a public official or public employee is or has been associated" are specifically defined in the Ethics Act as follows: § 1102. Definitions "Represent." To act on behalf of any other person in any activity which includes, but is not limited to, the following: personal appearances, negotiations, lobbying and submitting bid or contract proposals which are signed by or contain the name of a former public official or public employee. Leonard-Haak, 11-562 November 9, 2011 Page 4 "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. 65 Pa.C.S. § 1102. The term "Person" is very broadly defined. It includes, inter alia, corporations and other businesses. It also includes the former public employee himself, Confidential Opinion, 93-005, as well as a new governmental employer. Ledebur, Opinion 95-007. The term "represent" is also broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (3) submission of bid or contract proposals which are signed by or contain the name of the former public official/public employee; (4) participating in any matters before the former governmental body as to acting on behalf of a person; and (5) lobbying. Popovich, Opinion 89-005. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits the inclusion of the name of a former public official/public employee on invoices submitted by his new employer to the former governmental body, even if the invoices pertain to a contract that existed prior to termination of service with such governmental body. Shay, Opinion 91-012. However, if such a pre-existing contract does not involve the unit where the former public employee worked, the name of the former public employee may appear on routine invoices if required by the regulations of the agency to which the billing is being submitted. Abrams/Webster, Opinion 95-011. A former public official/public employee may assist in the preparation of any documents presented to his former governmental body. However, the former public official/public employee may not be identified on documents submitted to the former governmental body. The former public official/public employee may also counsel any person regarding that person's appearance before his former governmental body. Once again, however, the activity in this respect should not be revealed to the former governmental body. The Ethics Act would not prohibit or preclude making general informational inquiries to the former governmental body to secure information which is available to the general public, but this must not be done in an effort to indirectly Leonard-Haak, 11-562 November 9, 2011 Page 5 influence the former governmental body or to otherwise make known to that body the representation of, or work for, the new employer. Section 1103(g) only restricts the former public official/public employee with regard to representation before his former governmental body. The former public official/public employee is not restricted as to representation before other agencies or entities. However, the “governmental body with which a public official/public employee is or has been associated” is not limited to the particular subdivision of the agency or other governmental body where the public official/public employee had influence or control but extends to the entire body. See, Legislative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion 90-006; Sharp, Opinion 90-009-R. In the instant matter, the governmental body with which you are deemed to have been associated upon termination of Commonwealth employment is the Department of Public Welfare in its entirety, which includes OLTL. For the first year following termination of your employment with the Department of Public Welfare, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before the Department of Public Welfare. You are advised that Section 1103(g) of the Ethics Act would not prohibit you from representing clients before, or doing work for, the Department of Insurance or the Department of Aging during the first year following termination of your Commonwealth employment subject to the condition that in so doing, you would not engage in any activity(ies) that would involve prohibited representation before the Department of Public Welfare--such as OLTL--as delineated above. Based upon the facts that have been submitted, this Advice has addressed the applicability of Sections 1103(g) and 1103(i) only. It is expressly assumed that there has been no use of authority of office or employment, or confidential information received by being in the public position, for a private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer or give to a public official/public employee and no public official/public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official/public employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. Lastly, 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. Specifically not addressed herein is the applicability of the Governor’s Code of Conduct. Conclusion: In the former capacity as the Acting Deputy Secretary for Medical Assistance Programs with the Pennsylvania Department of Public Welfare (“Department of Public Welfare”), you would be considered a public official/public employee and an “executive-level State employee” subject to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., and the Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et seq. Upon termination of Commonwealth employment, you became a former public official/public employee and a former executive-level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act. Under Section 1103(i) of the Ethics Act, you would not be prohibited from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a business subject to the conditions that you did Leonard-Haak, 11-562 November 9, 2011 Page 6 not actively participate in recruiting such business to Pennsylvania, and that you did not actively participate in inducing such business to open or expand a plant, facility, or branch in Pennsylvania, through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth. The governmental body with which you are deemed to have been associated upon termination of Commonwealth employment is the Department of Public Welfare in its entirety, which includes the Office of Long Term Living. For the first year following termination of your employment with the Department of Public Welfare, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before the Department of Public Welfare. The restrictions as to representation outlined above must be followed. 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