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HomeMy WebLinkAbout13-560-S Teplitz ADVICE OF COUNSEL November 19, 2013 Honorable Robert F. Teplitz State Senator Pennsylvania Senate The State Capitol Senate Box 203015 Harrisburg, PA 17120-3015 13-560-S Dear Senator Teplitz: This responds to your letter dated October 7, 2013, by which you requested supplemental advice 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 Pennsylvania-based law firm as an employee, where: (1) the law firm created a limited liability corporation to provide government relations assistance for clients of the law firm and/or the limited liability corporation; and (2) the Pennsylvania State Senator would not be an employee of the limited liability corporation and would not lobby on behalf of clients of either the limited liability corporation or the law firm itself. Facts: By letter dated July 22, 2013, you submitted an initial request for an advisory from the Pennsylvania State Ethics Commission. In response to your initial advisory request, Teplitz, Advice 13-560, was issued to you on August 19, 2013. Advice of Counsel 13-560 was based upon submitted facts that were 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.” Teplitz, 13-560-S November 19, 2013 Page 2 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 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. Teplitz, Advice 13-560, at 1-2. Teplitz, Advice 13-560 determined that you are a public official subject to the provisions of the Ethics Act. The Advice concluded 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 Teplitz, 13-560-S November 19, 2013 Page 3 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. Teplitz, Advice 13-560, at 5. In your October 7, 2013, advisory request letter, you state that you are in final discussions with a Pennsylvania-based law firm (“the Pennsylvania-based Firm”), which is not the particular law firm referred to in Teplitz, Advice 13-560 as “the Firm.” If you would accept a position with the Pennsylvania-based Firm, you would be an employee of such firm, most likely with the title “of counsel.” Several years ago, the Pennsylvania- based Firm created a separate legal entity, formed as a limited liability corporation (hereinafter referred to as “the LLC”), to provide government relations assistance for clients of the Pennsylvania-based Firm and/or the LLC. You state that you would not be an employee of the LLC and that you would not lobby on behalf of clients of either the LLC or the Pennsylvania-based Firm itself. In light of the above additional facts, you request a supplemental advisory as to whether the Ethics Act would permit you to accept a position as an employee with the Pennsylvania-based Firm, and if so, whether there would be additional limitations, restrictions, or reporting requirements imposed 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. This Supplemental Advice incorporates herein by reference the quotations, citations and commentary as to the Ethics Act set forth within Teplitz, Advice 13-560. In considering the additional submitted facts, you are advised as follows. Teplitz, 13-560-S November 19, 2013 Page 4 Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity as an attorney, from accepting a position as an employee with the Pennsylvania-based Firm. If you would accept such a position, the Pennsylvania-based Firm would be considered a business with which you are associated in your capacity as an employee, and 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 the Pennsylvania-based Firm. 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 the Pennsylvania-based Firm or work for the Pennsylvania-based 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, if you would accept a position as an employee with the Pennsylvania- based 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 the aforesaid 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 the aforesaid 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 additional submitted facts that: (1) you are in final discussions with a Pennsylvania-based law firm (“the Pennsylvania-based Firm”), which is not the particular law firm referred to in Teplitz, Advice 13-560 as “the Firm”; (2) if you would accept a position with the Pennsylvania-based Firm, you would be an employee of such firm, most likely with the title “of counsel”; (3) several years ago, the Pennsylvania-based Firm created a separate legal entity, formed as a limited liability corporation (hereinafter referred to as “the LLC”), to provide government relations assistance for clients of the Pennsylvania-based Firm and/or the LLC; and (4) you would not be an employee of the LLC, and you would not lobby on behalf of clients of either the LLC or the Pennsylvania-based Firm itself, 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 an employee with the Pennsylvania-based Firm. If you would accept such a position, the Pennsylvania-based Firm would be considered a business with which you are associated in your capacity as an employee, and 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 the Pennsylvania-based Firm. However, to the extent the activities of a state legislator relate to “legislative actions” (introducing, Teplitz, 13-560-S November 19, 2013 Page 5 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 the Pennsylvania-based Firm or work for the Pennsylvania-based 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. If you would accept a position as an employee with the Pennsylvania-based 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 the aforesaid 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 the aforesaid 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 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