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HomeMy WebLinkAbout13-003 Raphael OPINION OF THE COMMISSION Before: John J. Bolger, Chair Nicholas A. Colafella, Vice Chair Raquel K. Bergen Mark R. Corrigan Roger Nick Kathryn Streeter Lewis DATE DECIDED: 7/10/13 DATE MAILED: 7/18/13 13-003 David J. Raphael, Esquire Chief Counsel Pennsylvania Department of Environmental Protection Rachel Carson State Office Building P.O. Box 8464 Harrisburg, PA 17105 Dear Mr. Raphael: This Opinion is issued in response to your letter of January 23, 2013, by which you requested an advisory from this Commission. I.ISSUE: Whether the Public Official and Employee Ethics Act would impose any prohibitions or restrictions upon an individual serving as the Director of the Bureau of District Oil and Gas Operations (“Bureau”) within the Pennsylvania Department of Environmental Protection (“Department”) with regard to performing the duties of his Commonwealth position where: (1) in a private capacity, the individual is a protector of a family trust that includes rental and royalty interests in gas leases on family-owned property in the Commonwealth; (2) no drilling activity is currently taking place on such property and no royalties are currently being paid or accrued; and (3) the drilling of oil or gas wells on such property and related activities would be subject to the Bureau’s regulatory oversight. II.FACTUAL BASIS FOR DETERMINATION: As Chief Counsel of the Department, you have been authorized by John W. Ryder (“Mr. Ryder”), who is currently employed with the Department as the Director of the Bureau, to request an advisory from this Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Mr. Ryder became the Director of the Bureau effective April 7, 2012. You have submitted a copy of a position description for the position of Director of the Bureau, which Raphael, Opinion 13-003 July 18, 2013 Page 2 document is incorporated herein by reference. You state that as the Director of the Bureau, Mr. Ryder performs professional managerial work directing the activities of professional, administrative and technical staff engaged in a variety of duties involving the permitting, inspection, enforcement, and compliance activities of the statewide oil and gas program. You state that while Mr. Ryder does not personally perform well site inspections, he directs the activities of other Bureau employees engaged in permitting and inspecting well operations and enforcing oil and gas laws, regulations and policies. You further state that a finding by Mr. Ryder that a well operation is not in compliance with law or regulation could lead to enforcement action against the responsible operators, which in turn could result in obligations by the operators to take corrective action and pay financial penalties. In a private capacity, Mr. Ryder is one of three protectors of a family trust (“Trust”) that includes rental and royalty interests in gas leases on family-owned property (the “Trust Property”) in Lycoming County, Pennsylvania. As a protector of the Trust, Mr. Ryder is a beneficiary of the Trust and has some power to direct the trustee in the handling of Trust assets. The gas leases on the Trust Property are held by a single gas company (the “Gas Company”). No drilling activity is currently taking place on the Trust Property, and no royalties are currently being paid or accrued. If oil or gas wells would be drilled on the Trust Property, the drilling and related activities would be subject to the Bureau’s regulatory oversight. You state that since Mr. Ryder learned of his appointment as Director of the Bureau, he has had no involvement in overseeing the Bureau’s regulatory activities with respect to the operations of the Gas Company and has had no input into his subordinates’ decisions regarding regulatory oversight of the Gas Company’s activities. You further state that Mr. Ryder has agreed to recuse himself from any Department activity regarding the Gas Company. Based upon the above submitted facts, you seek guidance as to whether the Ethics Act would impose any prohibitions or restrictions upon Mr. Ryder with regard to performing the duties of his position as the Director of the Bureau--including management duties--as a result of his role in his private capacity as a protector of the Trust. By letter dated May 30, 2013, you were notified of the date, time and location of the public meeting at which your request would be considered. 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. 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. If the activity in question has already occurred, this Commission may not issue an Opinion but any person may then submit a signed and sworn complaint, which will be investigated by this Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct that has already occurred, Raphael, Opinion 13-003 July 18, 2013 Page 3 such past conduct may not be addressed in the context of an advisory Opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall, be addressed. In the capacity as the Director of the Bureau, Mr. Ryder would be considered a “public employee” subject to the Ethics Act and the Regulations of this Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. This conclusion is based upon the position description, which when reviewed on an objective basis, indicates 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. Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted activities (a) Conflict of interest.-- No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The following terms pertaining to conflicts of interest 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. Raphael, Opinion 13-003 July 18, 2013 Page 4 “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. Section 1103(a) of the Ethics Act prohibits a public official/public employee 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. The use of authority of office includes more than mere voting; for example, it includes discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. Sections 1103(b) and 1103(c) of the Ethics Act, 65 Pa.C.S. §§ 1103(b), (c), provide in part that no person shall offer or give to a public official/public employee anything of monetary value 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. In his capacity as the Director of the Bureau, Mr. Ryder generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. The Pennsylvania Supreme Court has held that in order to violate Section 1103(a) of the Ethics Act, a public official/public employee “must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit.” Kistler v. State Ethics Commission, 610 Pa. 516, 528, 22 A.3d 223, 231 (2011). Based upon Kistler, the existence of a violation of Section 1103(a) would depend upon the circumstances in a given case. You are advised that Mr. Ryder would have a conflict of interest and would violate Section 1103(a) of the Ethics Act in performing the duties of his position as the Director of the Bureau--including but not limited to management duties--to the extent that: (1) he would be consciously aware of a private pecuniary benefit for himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated; and (2) his action(s) would constitute one or more specific steps to attain that benefit. Kistler, supra. In each instance of a conflict of interest, Mr. Ryder would be required to abstain from participation. 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. IV.CONCLUSION: In the capacity as the Director of the Bureau of District Oil and Gas Operations (“Bureau”) within the Pennsylvania Department of Environmental Protection (“Department”), John W. Ryder (“Mr. Ryder”) would be considered a “public employee” Raphael, Opinion 13-003 July 18, 2013 Page 5 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. Based upon the submitted facts that: (1) Mr. Ryder became the Director of the Bureau effective April 7, 2012; (2) as the Director of the Bureau, Mr. Ryder performs professional managerial work directing the activities of professional, administrative and technical staff engaged in a variety of duties involving the permitting, inspection, enforcement, and compliance activities of the statewide oil and gas program; (3) while Mr. Ryder does not personally perform well site inspections, he directs the activities of other Bureau employees engaged in permitting and inspecting well operations and enforcing oil and gas laws, regulations and policies; (4) in a private capacity, Mr. Ryder is one of three protectors of a family trust (“Trust”) that includes rental and royalty interests in gas leases on family-owned property (the “Trust Property”) in Lycoming County, Pennsylvania; (5) as a protector of the Trust, Mr. Ryder is a beneficiary of the Trust and has some power to direct the trustee in the handling of Trust assets; (6) the gas leases on the Trust Property are held by a single gas company (the “Gas Company”); (7) no drilling activity is currently taking place on the Trust Property, and no royalties are currently being paid or accrued; (8) if oil or gas wells would be drilled on the Trust Property, the drilling and related activities would be subject to the Bureau’s regulatory oversight; (9) since Mr. Ryder learned of his appointment as Director of the Bureau, he has had no involvement in overseeing the Bureau’s regulatory activities with respect to the operations of the Gas Company and has had no input into his subordinates’ decisions regarding regulatory oversight of the Gas Company’s activities; and (10) Mr. Ryder has agreed to recuse himself from any Department activity regarding the Gas Company, you are advised as follows. In his capacity as the Director of the Bureau, Mr. Ryder generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. Mr. Ryder would have a conflict of interest and would violate Section 1103(a) of the Ethics Act in performing the duties of his position as the Director of the Bureau--including but not limited to management duties--to the extent that: (1) he would be consciously aware of a private pecuniary benefit for himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated; and (2) his action(s) would constitute one or more specific steps to attain that benefit. In each instance of a conflict of interest, Mr. Ryder would be required to abstain from participation. 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, John J. Bolger Chair