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HomeMy WebLinkAbout12-576 Kindler ADVICE OF COUNSEL November 16, 2012 Connie R. Kindler 3405 Chestnut Street Camp Hill, PA 17011 12-576 Dear Ms. Kindler: This responds to your letter dated September 25, 2012 (postmarked September 27, 2012, and received October 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 restrictions upon employment of an Acting Deputy Secretary of Education following termination of service with the Pennsylvania Department of Education. Facts: You request an advisory from the Pennsylvania State Ethics Commission regarding the post-employment restrictions of the Ethics Act. You have submitted facts, the material portion of which may be fairly summarized as follows. You served as the Acting Deputy Secretary of Education for the Pennsylvania Department of Education (“Department of Education”) from December 27, 2011, through May 18, 2012. A corporation named “Public Financial Management, Inc.” (“PFM”) was awarded a prime contract (the “Contract”) with the Department of Education to provide support to the Chief Recovery Officer (“CRO”) in the development and implementation of recovery plans for distressed school districts (the “Project”) under the terms of Act 141 of 2012 (“Act 141”). You state that PFM is charged with engaging subcontractors qualified to lend support to the CRO and that pursuant to the Contract, such subcontractors must be approved by the Department of Education. You state that you have been authorized to conduct business in Pennsylvania as “Connie R. Kindler Educational Consulting, LLC” (the “Corporation”) and that PFM has requested your services as a subcontractor in connection with the Project. You state that the Corporation would serve as a member of the technical assistance team for school districts designated as recovery school districts under the terms of Act 141. The work performed by the Corporation would be presented to PFM and ultimately to the CRO in the preparation of a corrective action plan for a recovery school district. You state that the Corporation would assist in the preparation of documents presented to the Kindler, 12-576 November 16, 2012 Page 2 Department of Education but would not personally appear before the Department of Education. The proposed subcontract agreement between the Corporation and PFM would be effective from 2012 through June 30, 2013. You have submitted a copy of a letter dated September 27, 2012, from David J. Sallack (“Mr. Sallack”), Managing Director of PFM, addressed to the State Ethics Commission. Mr. Sallack’s letter indicates, inter alia, that under the proposed subcontract, you would analyze the academic shortcomings of a distressed school district, evaluate staff and instructional performance, and generate recommendations to improve the performance of the students through changes to the academic operation of the distressed school district. The letter states that you would prepare material and make recommendations to both PFM and the CRO and that the CRO would ultimately determine the exact nature of the corrective action plan to be prepared. The letter further states that the CRO would be responsible for presenting the corrective action plan to both the distressed school district and the Department of Education. The letter additionally states that in the preparation of the corrective action plan, you might interact with various personnel in the Department of Education to perform analysis and prepare recommendations. Based upon the above submitted facts, you seek guidance as to whether you would run afoul of the Ethics Act if the Corporation would enter into a subcontract with PFM under which you would provide services in connection with the Project. 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 of Education for the Department of Education, you would be considered a public official subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1; Kindler, Advice 12-555. The submitted facts are insufficient to enable a conclusive determination as to whether, in the aforesaid position, you would also be considered an employee, and therefore an “executive-level State employee” as that term is defined by the Ethics Act. See, 65 Pa.C.S. § 1102. In order to provide a complete response to your inquiry, this Advice assumes, without deciding, that in the former capacity as the Acting Deputy Secretary of Education for the Department of Education, you would also be considered an executive-level State employee subject to the Ethics Act. Consequently, upon termination of service with the Department of Education, you became a former public official subject to the restrictions of Section 1103(g) of the Ethics Act, and, to the extent you were an executive-level State employee, you became a former executive-level State employee subject to the restrictions of 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 years from the time that he terminates employment with this Kindler, 12-576 November 16, 2012 Page 3 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 restrict 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 of Pennsylvania. 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,” 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. Kindler, 12-576 November 16, 2012 Page 4 "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. 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 Kindler, 12-576 November 16, 2012 Page 5 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 your service with the Department of Education is the Department of Education in its entirety. Therefore, for the first year following termination of your service with the Department of Education, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before the Department of Education. Having established the above general principles, you are advised as follows. Under the submitted facts, it would be impossible for you to avoid running afoul of Section 1103(g) of the Ethics Act if the Corporation would enter into a subcontract with PFM under which you would provide services in connection with the Project. Because the Corporation bears your name, the submission of the Corporation’s name to the Department of Education for approval as a subcontractor with PFM would necessarily involve prohibited representation before your former governmental body. Cf., Conner, Opinion 12-002. Prohibited representation would further occur to the extent that you would interact with various personnel in the Department of Education to perform analysis and prepare recommendations in the preparation of corrective action plan(s) or have other forms of contact with the Department of Education relative to the Project. 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 of Education for the Pennsylvania Department of Education (“Department of Education”), you would be considered a public official 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. This Advice assumes, without deciding, that as the Acting Deputy Secretary of Education for the Department of Education, you would also be considered an executive-level State employee subject to the Ethics Act. Upon termination of service with the Department of Education, you became a former public official subject to the restrictions of Section 1103(g) of the Ethics Act, and, to the extent you were an executive-level State employee, you became a former executive- level State employee subject to the restrictions of 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 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, Kindler, 12-576 November 16, 2012 Page 6 through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania. The governmental body with which you are deemed to have been associated upon termination of your service with the Department of Education is the Department of Education in its entirety. For the first year following termination of your service with the Department of Education, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before the Department of Education. The restrictions as to representation outlined above must be followed. Based upon the submitted facts that: (1) a corporation named “Public Financial Management, Inc.” (“PFM”) was awarded a prime contract (the “Contract”) with the Department of Education to provide support to the Chief Recovery Officer (“CRO”) in the development and implementation of recovery plans for distressed school districts (the “Project”) under the terms of Act 141 of 2012 (“Act 141”); (2) PFM is charged with engaging subcontractors qualified to lend support to the CRO, and pursuant to the Contract, such subcontractors must be approved by the Department of Education; (3) you have been authorized to conduct business in Pennsylvania as “Connie R. Kindler Educational Consulting, LLC” (the “Corporation”), and PFM has requested your services as a subcontractor in connection with the Project; (4) the Corporation would serve as a member of the technical assistance team for school districts designated as recovery school districts under the terms of Act 141; (5) the work performed by the Corporation would be presented to PFM and ultimately to the CRO in the preparation of a corrective action plan for a recovery school district; (6) the Corporation would assist in the preparation of documents presented to the Department of Education but would not personally appear before the Department of Education; (7) the proposed subcontract agreement between the Corporation and PFM would be effective from 2012 through June 30, 2013; (8) under the proposed subcontract, you would analyze the academic shortcomings of a distressed school district, evaluate staff and instructional performance, and generate recommendations to improve the performance of the students through changes to the academic operation of the distressed school district; (9) you would prepare material and make recommendations to both PFM and the CRO, and the CRO would ultimately determine the exact nature of the corrective action plan to be prepared; (10) the CRO would be responsible for presenting the corrective action plan to both the distressed school district and the Department of Education; and (11) in the preparation of the corrective action plan, you might interact with various personnel in the Department of Education to perform analysis and prepare recommendations, you are advised as follows. It would be impossible for you to avoid running afoul of Section 1103(g) of the Ethics Act if the Corporation would enter into a subcontract with PFM under which you would provide services in connection with the Project. Because the Corporation bears your name, the submission of the Corporation’s name to the Department of Education for approval as a subcontractor with PFM would necessarily involve prohibited representation before your former governmental body. Prohibited representation would further occur to the extent that you would interact with various personnel in the Department of Education to perform analysis and prepare recommendations in the preparation of corrective action plan(s) or have other forms of contact with the Department of Education relative to the Project. 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. Kindler, 12-576 November 16, 2012 Page 7 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