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HomeMy WebLinkAbout12-519 Huber ADVICE OF COUNSEL March 23, 2012 Connie S. Huber, CPA, CGFM 1813 Hunter Drive Mechanicsburg, PA 17050-1606 12-519 Dear Ms. Huber: This responds to your two letters dated February 2, 2012, 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 prohibitions or restrictions upon a Special Assistant for Financial Management with the Pennsylvania Department of Community and Economic Development (“DCED”), whose spouse is the majority owner of a corporation that has applied for a grant which would be funded in part by the U.S. Small Business Administration and would be awarded by DCED, with regard to matter(s) pertaining to such grant. Facts: You request an advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. You are employed as a Special Assistant for Financial Management with the Financial Management Center within DCED. You have submitted copies of a document entitled “Special Assistant for Financial Management DCED,” which you state outlines your job duties, and an organization chart for DCED, both of which documents are incorporated herein by reference. You state that your duties and responsibilities as a Special Assistant for Financial Management include the review and supervision of the Monitoring and Reporting Division within the Financial Management Center of DCED and special projects. You directly supervise and complete the Employee Performance Review (“EPR”) for one employee. You indirectly supervise three other employees and serve as the reviewing officer for their EPRs. As a supervisor, you have the authority to make recommendations but not final decisions with regard to hiring and firing. Your spouse, Richard J. Huber, is the majority owner of a corporation named “Genesis Systems, Inc.” (“Genesis”). Genesis, through the World Trade Center of Central Pennsylvania, applied for a Global Access Program grant (“Grant”). The Grant would be funded in part by the U.S. Small Business Administration (“USSBA”) and would be awarded by the Office of International Business Development (“Office”) within DCED. The Grant could be awarded for a maximum amount of $5,000.00 per year and Huber, 12-519 March 23, 2012 Page 2 would be a one-to-one matching grant to offset a portion of the awardee’s qualifying expenses associated with export promotion activities. Genesis has applied for the maximum Grant amount. You state that prior to you having any knowledge that Genesis would be applying for the Grant, you provided financial advice to Office staff handling the federal grant awarded from the USSBA. In April 2011, you certified that the Commonwealth of Pennsylvania has the proper internal financial management system in place that meets standards prescribed by the federal government. Based upon the above submitted facts, you seek guidance as to whether you would have a conflict of interest in your position as a Special Assistant for Financial Management for DCED with regard to matter(s) pertaining to the Grant. 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, 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 your inquiry relates to future conduct, your inquiry may and shall be addressed. As a Special Assistant for Financial Management for DCED, you are a public employee subject to the provisions of the Ethics Act. This conclusion is based upon the submitted facts, which when reviewed on an objective basis, indicate clearly that the power exists to take or recommend official action of a non-ministerial nature with respect to one or more of the following: contracting; procurement; administering or monitoring grants or subsidies; planning or zoning; inspecting; licensing; regulating; auditing; or other activity(ies) where the economic impact is greater than de minimis on the interests of another person. 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 Huber, 12-519 March 23, 2012 Page 3 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 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. "Immediate family." A parent, spouse, child, brother or sister. "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 Huber, 12-519 March 23, 2012 Page 4 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. The use of authority of office is not limited merely to voting, but extends 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. 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. In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. Your spouse is a member of your immediate family as that term is defined in the Ethics Act. Genesis is a business with which your spouse is associated in his capacity as an owner. 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, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest in matters before DCED that would financially impact Genesis. You also would be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being a Special Assistant for Financial Management for DCED, to effectuate a private pecuniary benefit to Genesis through a detriment to a competitor for grant(s) from DCED. You specifically would have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining to the Grant. If Genesis would be awarded the Grant, you would continue to have a conflict of interest in your official capacity in matter(s) relating to the Grant. In each instance of a conflict of interest, you 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. 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: As a Special Assistant for Financial Management for the Pennsylvania Department of Community and Economic Development (“DCED”), you are 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) your spouse, Richard J. Huber, is the majority owner of a corporation named “Genesis Systems, Inc.” (“Genesis”); (2) Genesis, through the World Trade Center of Central Pennsylvania, applied for a Global Access Program grant (“Grant”); (3) the Grant would be funded in part by the U.S. Small Business Administration and would be awarded by the Office of International Business Development within DCED; (4) the Grant could be awarded for a maximum amount of $5,000.00 per year and would be a one-to-one matching grant to offset a portion of the awardee’s qualifying expenses Huber, 12-519 March 23, 2012 Page 5 associated with export promotion activities; and (5) Genesis has applied for the maximum Grant amount, you are advised as follows. Your spouse is a member of your immediate family as that term is defined in the Ethics Act. Genesis is a business with which your spouse is associated in his capacity as an owner. 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, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest in matters before DCED that would financially impact Genesis. You also would be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being a Special Assistant for Financial Management for DCED, to effectuate a private pecuniary benefit to Genesis through a detriment to a competitor for grant(s) from DCED. You specifically would have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining to the Grant. If Genesis would be awarded the Grant, you would continue to have a conflict of interest in your official capacity in matter(s) relating to the Grant. In each instance of a conflict of interest, you 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. 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