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HomeMy WebLinkAbout12-513 ADVICE OF COUNSEL February 28, 2012 12-513 This responds to your letters dated January 13, 2012, and January 19, 2012, 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 an individual employed as an A by a Member of the General Assembly with regard to serving on the board of a non-profit [type of entity] that operates a facility located in the Member’s legislative district when: (1) the Member hosts a [type of event] at the facility; and (2) in prior years, the individual advised and assisted the facility in applying for Bs from [name of governmental body]. Facts: You request a confidential advisory from the Pennsylvania State Ethics Commission on behalf of an individual (“Individual”). You have submitted facts that may be fairly summarized as follows. The Individual is employed as an A by a Member (the “Member”) of the General Assembly. You state that based upon the examples contained in Section 11.1 of the Regulations of the State Ethics Commission (see, 51 Pa. Code § 11.1, “public employee”), the Individual, in his capacity as an A for the Member, would be considered a “public employee” for purposes of the Ethics Act. The Individual has been asked to serve on the board of a non-profit [type of entity] (the “Entity”). The Individual would not be compensated for his service on the board of the Entity. The Entity operates a facility (“Facility”) that is C. The Facility is located in the Member’s legislative district. You state that the Member hosts a [type of event] at the Facility and that Ds pay for the cost of the event. You state that in prior years, the Individual advised and assisted the Facility in applying for Bs from [name of governmental body] that were E. Based upon the above submitted facts, you pose the following questions: (1) Whether the Ethics Act would permit the Individual to accept a position on the board of the Entity; and (2) If so, what additional reporting requirements would the Ethics Act impose upon the Individual. Confidential Advice, 12-513 February 28, 2012 Page 2 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. Preliminarily, it is noted that the submitted facts do not include an official job description for the Individual’s position as an A for the Member. This Advice assumes, without deciding, that in his capacity as an A for the Member, the Individual is a public employee subject to 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 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 Confidential Advice, 12-513 February 28, 2012 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. A non-profit entity is a “business” as that term is defined by the Ethics Act. Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708 (2009). In each instance of a conflict of interest, a public official/public employee would be required to abstain 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 and to publicly disclose the abstention and the reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. Having established the above general principles, your specific questions are addressed as follows. In response to your first question, you are advised that Section 1103(a) of the Ethics Act would not prohibit the Individual from serving on the board of the Entity. If the Individual would serve on the board of the Entity, the Entity would be considered a business with which the Individual is associated (see, Rendell, supra), and pursuant to Section 1103(a) of the Ethics Act, in his public capacity as an A for the Member, the Confidential Advice, 12-513 February 28, 2012 Page 4 Individual would generally have a conflict of interest in matters that would financially impact the Entity and/or the Facility. In each instance of a conflict of interest, the Individual would be required to abstain from participation in his public capacity. In response to your second question, you are advised that in addition to complying with the other substantive disclosure requirements for Statements of Financial Interests set forth in Section 1105 of the Ethics Act, 65 Pa.C.S. § 1105, the Individual would be required to disclose on his annual Statement of Financial Interests his membership on the board of the Entity as an “office, directorship or employment of any nature whatsoever in any business entity” pursuant to Section 1105(b)(8) of the Ethics Act, 65 Pa.C.S. § 1105(b)(8). 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: This Advice assumes, without deciding, that in his capacity as an A for a Member (the “Member”) of the General Assembly, the individual (“Individual”) on whose behalf you have inquired is a public 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) the Individual has been asked to serve on the board of a non-profit [type of entity] (the “Entity”); (2) the Individual would not be compensated for his service on the board of the Entity; (3) the Entity operates a facility (“Facility”) that is C; (4) the Facility is located in the Member’s legislative district; (5) the Member hosts a [type of event] at the Facility, and Ds pay the cost for the event; and (6) in prior years, the Individual advised and assisted the Facility in applying for Bs from [name of governmental body] that were E, you are advised as follows. Section 1103(a) of the Ethics Act would not prohibit the Individual from serving on the board of the Entity. If the Individual would serve on the board of the Entity, the Entity would be considered a business with which the Individual is associated, and pursuant to Section 1103(a) of the Ethics Act, in his public capacity as an A for the Member, the Individual would generally have a conflict of interest in matters that would financially impact the Entity and/or the Facility. In each instance of a conflict of interest, the Individual would be required to abstain from participation in his public capacity. In addition to complying with the other substantive disclosure requirements for Statements of Financial Interests set forth in Section 1105 of the Ethics Act, 65 Pa.C.S. § 1105, the Individual would be required to disclose on his annual Statement of Financial Interests his membership on the board of the Entity as an “office, directorship or employment of any nature whatsoever in any business entity” pursuant to Section 1105(b)(8) of the Ethics Act, 65 Pa.C.S. § 1105(b)(8). 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. Confidential Advice, 12-513 February 28, 2012 Page 5 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