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HomeMy WebLinkAbout13-560 Teplitz ADVICE OF COUNSEL August 19, 2013 Honorable Robert F. Teplitz State Senator Pennsylvania Senate The State Capitol Senate Box 203015 Harrisburg, PA 17120-3015 13-560 Dear Senator Teplitz: This responds to your letter dated July 22, 2013, 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 prohibitions, restrictions, or requirements upon a Pennsylvania State Senator, who in a private capacity is an attorney licensed to practice law in Pennsylvania, with regard to joining a law firm as a part-time salaried employee. Facts: As a Pennsylvania State Senator, you request an advisory from the Pennsylvania State Ethics Commission (hereinafter also referred to as the “Commission”). You have submitted facts that may be fairly summarized as follows. In a private capacity, you are an attorney licensed to practice law in Pennsylvania. You are in discussions with several Pennsylvania-based law firms which you hope will ultimately result in part-time employment at a law firm at a salary not to exceed your salary from the Pennsylvania Senate. If you would accept employment at one of the aforesaid law firms, you would not be a partner in or owner of the law firm but would be a salaried employee, most likely with the title “Of Counsel.” One of the law firms with which you are in discussions, hereinafter referred to as “the Firm,” currently serves as outside counsel to the Delaware River Port Authority (“DRPA”), a bi-state transportation agency that governs the toll bridges and the commuter train between Pennsylvania and New Jersey. From approximately 2007 to mid-January 2013, you served as the alternate for Pennsylvania State Auditor General Jack Wagner on the DRPA Board of Commissioners (“Board”). At some point during your tenure on the DRPA Board, the DRPA went through a competitive process to select two firms as outside counsel. You state that you were not involved in the review or selection process for such outside counsel other than that you voted in favor of the selection of the Firm. You state that you had no relationship with or anticipation of a Teplitz, 13-560 August 19, 2013 Page 2 relationship with the Firm at the time of your vote or thereafter and that you had little direct contact with the Firm during your tenure on the DRPA Board. Based upon the above submitted facts, you pose the following questions: (1) Whether the Ethics Act would permit you to accept a position as a part- time salaried employee with the Firm or another law firm; (2) What limitations or restrictions would the Ethics Act impose upon you in your capacity as an elected official if you would accept such a position; and (3) What additional reporting requirements would the Ethics Act impose upon you if you would accept such a position. 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. As a Pennsylvania State Senator, you are a public official subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: § 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 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 Teplitz, 13-560 August 19, 2013 Page 3 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 65 Pa.C.S. § 1102. Section 1103(a) of the Ethics Act does not prohibit public officials/public employees from having outside business activities or employment; however, the public official/public employee may not use the authority of his public position--or confidential information obtained by being in that position--for the advancement of his own private pecuniary benefit or that of a business with which he is associated. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89-002. 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. Sections 1104 and 1105 of the Ethics Act, 65 Pa.C.S. §§ 1104-1105, provide for the filing of annual Statements of Financial Interests by public officials/public employees. Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), provides that each public official/public employee must file a Statement of Financial Interests for the preceding calendar year, each year that he holds the position and the year after he leaves it. Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), and its subsections detail the financial disclosure that a person required to file the Statement of Financial Interests form must provide. Section 1105(b)(2) of the Ethics Act requires the filer to disclose on the Statement of Financial Interests his occupation or profession. Section 1105(b)(5) of the Ethics Act requires the filer to disclose on the Statement of Financial Interests the name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more but does not require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges. Section 1105(b)(8) of the Ethics Act requires the filer to disclose on the Statement of Financial Interests any office, directorship or employment in any business entity. In applying the above provisions of the Ethics Act to your inquiry, it is initially noted that the Commonwealth Court of Pennsylvania has determined that DRPA Board Teplitz, 13-560 August 19, 2013 Page 4 Members and employees are not subject to the jurisdiction of the Pennsylvania State Ethics Commission. See, Delaware River Port Authority v. State Ethics Commission, 585 A.2d 587 (1991). Based upon the submitted facts, you are advised that Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity as an attorney, from accepting a position as a part-time salaried employee with the Firm or another law firm. A law firm that employs you will be considered a business with which you are associated in your capacity as an employee. Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a Pennsylvania State Senator, you could have a conflict of interest under the Ethics Act in matters that would financially impact a business (such as a law firm) with which you are associated. However, to the extent the activities of a state legislator relate to “legislative actions” (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the Pennsylvania State Ethics Commission. See, Mann, Opinion 07-005; Confidential Opinion, 05-002; Corrigan, Opinion 87-001. As for other actions, you would not transgress Section 1103(a) of the Ethics Act unless: (1) you would be consciously aware of a private pecuniary benefit for yourself, a member of your immediate family, or a business with which you or a member of your immediate family is associated; and (2) your action(s) would constitute one or more specific steps to attain that benefit. See, Kistler v. State Ethics Commission, 610 Pa. 516, 528, 22 A.3d 223, 231 (2011). Sections 1103(b) and 1103(c) of the Ethics Act would prohibit improper influence/understanding(s) such as with respect to your becoming employed with any particular law firm or work for such law firm. 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 questions presented. Finally, as a Pennsylvania State Senator, you are required to file annual Statements of Financial Interests in compliance with Sections 1104 and 1105 of the Ethics Act. If you would accept a position as a part-time salaried employee with a law firm, then Section 1105(b)(2) of the Ethics Act would require you to disclose on your Statements of Financial Interests your occupation/profession as an attorney. Section 1105(b)(5) of the Ethics Act would require you to disclose on your Statements of Financial Interests the name and address of such law firm as a direct/indirect source of income totaling in the aggregate $1,300 or more, assuming that such disclosure threshold would be met. Section 1105(b)(8) of the Ethics Act would require you to disclose on your Statements of Financial Interests any office, directorship or employment you would have with such law firm. The propriety of the proposed conduct has only been addressed under the Ethics Act. Conclusion: As a Pennsylvania State Senator, you are a public official 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) in a private capacity, you are an attorney licensed to practice law in Pennsylvania; (2) you are in discussions with several Pennsylvania-based law firms which you hope will ultimately result in part-time employment at a law firm at a salary not to exceed your salary from the Pennsylvania Senate; (3) if you would accept employment at one of the aforesaid law firms, you would not be a partner in or owner of the law firm but would be a salaried employee, most likely with the title “Of Counsel”; (4) one of the law firms with which you are in discussions, hereinafter referred to as “the Firm,” currently serves as outside counsel to the Delaware River Port Authority (“DRPA”); (5) from approximately 2007 to mid- January 2013, you served as the alternate for Pennsylvania State Auditor General Jack Wagner on the DRPA Board of Commissioners (“Board”); (6) at some point during your Teplitz, 13-560 August 19, 2013 Page 5 tenure on the DRPA Board, the DRPA went through a competitive process to select two firms as outside counsel; (7) you were not involved in the review or selection process for such outside counsel other than that you voted in favor of the selection of the Firm; and (8) you had no relationship with or anticipation of a relationship with the Firm at the time of your vote or thereafter, and you had little direct contact with the Firm during your tenure on the DRPA Board, you are advised as follows. Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity as an attorney, from accepting a position as a part-time salaried employee with the Firm or another law firm. A law firm that employs you will be considered a business with which you are associated in your capacity as an employee. Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a Pennsylvania State Senator, you could have a conflict of interest under the Ethics Act in matters that would financially impact a business (such as a law firm) with which you are associated. However, to the extent the activities of a state legislator relate to “legislative actions” (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the Pennsylvania State Ethics Commission. As for other actions, you would not transgress Section 1103(a) of the Ethics Act unless: (1) you would be consciously aware of a private pecuniary benefit for yourself, a member of your immediate family, or a business with which you or a member of your immediate family is associated; and (2) your action(s) would constitute one or more specific steps to attain that benefit. Sections 1103(b) and 1103(c) of the Ethics Act would prohibit improper influence/understanding(s) such as with respect to your becoming employed with any particular law firm or work for such law firm. As a Pennsylvania State Senator, you are required to file annual Statements of Financial Interests in compliance with Sections 1104 and 1105 of the Ethics Act. If you would accept a position as a part-time salaried employee with a law firm, then Section 1105(b)(2) of the Ethics Act would require you to disclose on your Statements of Financial Interests your occupation/profession as an attorney. Section 1105(b)(5) of the Ethics Act would require you to disclose on your Statements of Financial Interests the name and address of such law firm as a direct/indirect source of income totaling in the aggregate $1,300 or more, assuming that such disclosure threshold would be met. Section 1105(b)(8) of the Ethics Act would require you to disclose on your Statements of Financial Interests any office, directorship or employment you would have with such law firm. 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 Teplitz, 13-560 August 19, 2013 Page 6 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