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HomeMy WebLinkAbout12-002 Conner OPINION OF THE COMMISSION Before: John J. Bolger, Chair Donald M. McCurdy Raquel K. Bergen Nicholas A. Colafella Mark Volk Mark R. Corrigan DATE DECIDED: 9/24/12 DATE MAILED: 10/5/12 12-002 Anita T. Conner, CPA, MST, CFP Anita T. Conner & Associates, P.C. 8000 Old York Road Elkins Park, PA 19027 Dear Ms. Conner: This responds to your letters dated July 18, 2012, and July 31, 2012, by which you requested an 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 a former member of the board of trustees of a charter school, who is the majority owner of an accounting and financial services firm which bears her name, with regard to the firm’s potential provision of financial and bookkeeping services to the charter school. II.FACTUAL BASIS FOR DETERMINATION: You request an advisory from this Commission based upon the following submitted facts. On May 2, 2012, you officially resigned from your position as a Member of the Board of Trustees of the New Media Technology Charter School (“Charter School”). The Charter School is currently looking to hire a company to provide financial and bookkeeping services and has put out a Request for Proposal (“RFP”) to the public, seeking proposals from companies for the provision of such services. You are the majority owner of an accounting and financial services firm which bears your name, specifically, “Anita T. Conner & Associates, P.C.” (the “Firm”). The Firm might respond to the RFP. The Managing Partner of the Firm’s Accounting Services Division would make the decisions as to whether the Firm would respond to the RFP and whether the Firm would Conner, 12-002 October 5, 2012 Page 2 enter into a contract with the Charter School. You state that you would not be involved in the decision as to whether to respond to the RFP. If the Firm would be awarded a contract with the Charter School, the contract would be signed by the Managing Partner of the Accounting Services Division and not by you, and you would not be a provider of any services to the Charter School under the contract. Based upon the above submitted facts, you ask whether you would be in violation of Section 1103(g) of the Ethics Act or any other Section of the Ethics Act if the Firm would respond to the RFP and be awarded a contract with the Charter School for the provision of financial/bookkeeping services. By letter dated August 28, 2012, you were notified of the date, time and location of the public meeting at which your request would be considered. On September 17, 2012, this Commission received your letter Brief, in which you present the following additional facts and points. You are a certified public accountant and financial advisor for the Firm. In 2010, the Charter School was in danger of losing its charter. One of the requirements for retaining the charter was to appoint a certified public accountant to the Board of Trustees. You were appointed to the post, and in 2012, after playing an integral role in restructuring the Charter School, you resigned from the Board of Trustees. The Firm has three departments, specifically, Accounting Services, Tax Services, and Financial Services. You are the Managing Partner of the Financial Services Department, and your specific job responsibilities include providing financial planning services to the Firm’s clients. The Managing Partner of the Firm’s Accounting Services Department would like to respond to the RFP. The Managing Partner of the Firm’s Accounting Services Department would prepare the proposal, sign contracts and manage the staff in performing all services rendered. You contend that you would not violate the Ethics Act as a result of the Firm’s submission of a response to the RFP and provision of financial/bookkeeping services to the Charter School based upon your assertions that: (1) your past involvement on the Charter School Board of Trustees would not have any influence on the Firm being awarded the contract because the RFP is an open and public process; (2) under circumstances where an active board member is permitted to contract with the governmental body with which he/she is associated, the spirit of the Ethics Act is not intended to place a former board member at a disadvantage to an active board member; and (3) if the Firm would be awarded the contract, you would not have any supervisory or overall responsibility for the implementation or administration of the contract. 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. In the former capacity as a Member of the Board of Trustees of the Charter School, you would be considered a “public official” subject to the Ethics Act and the Regulations of Conner, 12-002 October 5, 2012 Page 3 the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1; Eiben, Opinion 04-002; 24 P.S. § 17-1715-A. Consequently, upon termination of your public service, you became a “former public official” subject to Section 1103(g) of the Ethics Act. Section 1103(g) restricts a 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,” 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. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. "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 official/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. Conner, 12-002 October 5, 2012 Page 4 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 a 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 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. The governmental body with which you are deemed to have been associated upon termination of public service, hereinafter referred to as your “former governmental body,” includes the Board of Trustees and all departments, offices, and other units of the Charter School in their entirety. Therefore, for the first year following termination of your public service, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before your former governmental body. Having established the above general principles, o ur analysis of your specific question hinges upon whether, under the submitted facts, you would be deemed to have engaged in an “act.” This is because the Ethics Act’s definition of the term “represent” requires an “act” by the former public official/public employee. In Stephens v. State Ethics Commission, 571 A.2d 1120 (Pa. Cmwlth. 1990), the Commonwealth Court of Pennsylvania determined that a former public employee did not “act” and therefore did not violate a predecessor provision of Section 1103(g) of the Ethics Act (then Section 3(e)) when someone else included his name without his knowledge on a permit amendment application submitted to his former governmental body. The Court stated: …[T]he definition of the term representation found in the Commission’s own regulations requires an act by the former public employee. That is, a former public employee must at least do something to be found in violation of the Act …. Stephens himself did not submit the application or authorize Bordner to list his name …. More importantly, Stephens was Conner, 12-002 October 5, 2012 Page 5 unaware that his name had been used. Based on the Commission’s findings, no act – which requires the doing of a thing – can be attributed to Stephens, and therefore he cannot be charged with representation as defined by the Commission’s regulations. Id. 571 A.2d at 1121-1122. Based upon the submitted facts, we conclude that the submission to the Charter School of a Firm proposal responding to the RFP or other, related document(s) from the Firm would cause you to run afoul of Section 1103(g) of the Ethics Act for engaging in prohibited “representation” before your former governmental body. Because you are the majority owner of the Firm and are aware of the proposed submission of such a proposal to the Charter School, the submission of any such documents could not occur without at least your acquiescence, if not your express approval. Unlike the former public employee in Stephens, supra, you specifically have knowledge of your Firm’s proposed submission of a proposal to the Charter School. Any documents submitted from the Firm in response to the Charter School’s RFP would necessarily include your name and thus would have the inherent potential to influence the decision of the Board of Trustees of the Charter School with respect to the award of a contract for financial/bookkeeping services. Any invoices or bills submitted from the Firm to the Charter School for services provided under a contract between the Firm and the Charter School would likewise have the inherent potential to influence the decision of the Board of Trustees of the Charter School with regard to making payment for such services. As for the assertions of your letter Brief, we note that the Legislative intent in promulgating the restrictions of Section 1103(g) of the Ethics Act was to protect the public trust. See, Shay, Opinion 91-012; Long, Opinion 97-010. The public trust is paramount over private interests. See, e.g., Confidential Opinion, 07-018; Confidential Opinion, 07- 017; Adams/Rendell (Re: DiBerardinis), Opinion 07-010; Adams/Rendell (Re: McGinty), Opinion 07-009. Moreover, the General Assembly, in promulgating the Ethics Act, did not authorize this Commission to create exceptions to Section 1103(g), Long, Opinion 97-010, and Section 1103(g) itself does not contain any exception for a contract awarded through an open and public process. Finally, even if you would not have any supervisory or overall responsibility for the implementation or administration of the proposed contract between the Charter School and the Firm, prohibited representation would occur through the inclusion of your name on the proposal responding to the RFP and/or other, related document(s) from the Firm submitted to the Charter School. This Opinion is limited to addressing your question under Section 1103(g) of the Ethics Act only. This Opinion does not address Section 1103(a) of the Ethics Act, pertaining to conflicts of interest for public officials and public employees; because you are a former public official, any use of authority of office by you would involve past conduct, and an Opinion may not rule upon the propriety of past conduct. See, 65 Pa.C.S. §§ 1107(10), (11).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. Conner, 12-002 October 5, 2012 Page 6 IV.CONCLUSION: In the former capacity as a Member of the Board of Trustees of the New Media Technology Charter School (“Charter School”), you would be considered a “public official” subject to the provisions of 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 your public service, you became a “former public official” subject to Section 1103(g) of the Ethics Act. The governmental body with which you are deemed to have been associated upon termination of public service, hereinafter referred to as your “former governmental body,” includes the Board of Trustees and all departments, offices, and other units of the Charter School in their entirety. For the first year following termination of your public service, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before your former governmental body. Based upon the submitted facts that: (1) the Charter School is currently looking to hire a company to provide financial and bookkeeping services and has put out a Request for Proposal (“RFP”) to the public, seeking proposals from companies for the provision of such services; (2) you are the majority owner of an accounting and financial services firm which bears your name, specifically, “Anita T. Conner & Associates, P.C.” (the “Firm”); (3) you are the Managing Partner of the Firm’s Financial Services Department; (4) the Managing Partner of the Firm’s Accounting Services Department would like to respond to the RFP; (5) the Managing Partner of the Firm’s Accounting Services Department would make the decisions as to whether the Firm would respond to the RFP and whether the Firm would enter into a contract with the Charter School; (6) the Managing Partner of the Firm’s Accounting Services Department would prepare the proposal, sign contracts and manage the staff in performing all services rendered; (7) you would not be involved in the decision as to whether to respond to the RFP; and (8) you would not sign the contract with the Charter School or be a provider of any services to the Charter School under the contract, you are advised as follows. The submission to the Charter School of a Firm proposal responding to the RFP or other, related document(s) from the Firm would cause you to run afoul of Section 1103(g) of the Ethics Act for engaging in prohibited “representation” before your former governmental body. Because you are the majority owner of the Firm and are aware of the proposed submission of such a proposal to the Charter School, the submission of any such documents could not occur without at least your acquiescence, if not your express approval. Any documents submitted from the Firm in response to the Charter School’s RFP would necessarily include your name and thus would have the inherent potential to influence the decision of the Board of Trustees of the Charter School with respect to the award of a contract for financial/bookkeeping services. Any invoices or bills submitted from the Firm to the Charter School for services provided under a contract between the Firm and the Charter School would likewise have the inherent potential to influence the decision of the Board of Trustees of the Charter School with regard to making payment for such services. 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. By the Commission, Conner, 12-002 October 5, 2012 Page 7 John J. Bolger Chair