Loading...
HomeMy WebLinkAbout14-500 Confidential ADVICE OF COUNSEL January 24, 2014 14-500 This responds to your letter of December 2, 2013, by which you requested a confidential 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 or restrictions upon an individual, who in a private capacity is an attorney and an A in a law firm which includes various types of governmental entities among its clients, with regard to representing such governmental entities or participating in the law firm’s bid for work from such governmental entities if the individual would be elected as a Member of the Pennsylvania legislature. Facts: You have been authorized by Individual B to request a confidential advisory from the Pennsylvania State Ethics Commission on her behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. Individual B is an attorney and an A in the law firm of [name of law firm] (“the Firm”). Individual B is also the C in one of the Firm’s Ds. The Firm’s clients include the Commonwealth of Pennsylvania through the E (hereinafter referred to as “the Commonwealth”), a Pennsylvania Governmental Entity F, Pennsylvania Governmental Entity Gs, and certain Governmental Entity Hs in Pennsylvania through contracts with the relevant Governmental Entity Gs, and in one case, with the I itself. You state that work for the Commonwealth or any other Pennsylvania entity does not constitute more than J of the Firm’s revenues. Individual B is not currently materially involved in the representation of the Commonwealth. Individual B is generally actively and intimately involved in the representation of Governmental Entity F, the Governmental Entity Gs, and the Governmental Entity Hs. Individual B is considering seeking election as a Member of the Pennsylvania legislature (“State Legislator”). You ask that it be assumed for purposes of this advisory that if Individual B would be elected as a State Legislator, she would take office, remain an A in the Firm, and have no involvement in the representation of the Commonwealth or in any bids for work from the Commonwealth, whether renewals of existing contracts or bids for additional contracts. Confidential Advice, 14-500 January 24, 2014 Page 2 Based upon the above submitted facts, you pose the following questions: (1) Whether Individual B would be permitted to continue her work as a member of the Firm team representing Governmental Entity F or to represent Governmental Entity Ks; (2) Whether Individual B would be permitted to participate in the Firm’s bid for additional work or renewals of continuing work from Governmental Entity F or Governmental Entity Ks as existing or new clients; (3) Whether Individual B would be permitted to continue her work as a member of the Firm team representing Governmental Entity Gs as existing or new clients; (4) Whether Individual B would be permitted to participate in the Firm’s bid for additional work or renewals of continuing work from Governmental Entity Gs as existing or new clients; (5) Whether Individual B would be permitted to continue her work as a member of the Firm team representing Governmental Entity Hs as existing or new clients; (6) Whether Individual B would be permitted to participate in the Firm’s bid for additional work or renewals of continuing work from Governmental Entity Hs as existing or new clients; and (7) Whether the Firm would be under any requirement to [take certain actions]. 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. 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 Confidential Advice, 14-500 January 24, 2014 Page 3 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. "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. Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is prohibited 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. 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. Pancoe, Opinion 89-011. Examples of conduct that could form the basis for a conflict of interest under Section 1103(a) of the Ethics Act would include the pursuit of a private business opportunity in the course of public action (Metrick, Order 1037) and the participation in an official capacity as to matters involving the business with which the public official/public employee is associated in his private capacity or private client(s) (Miller, Opinion 89-024; Kannebecker, Opinion 92-010). 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). In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. The Firm is a business with which Individual B is associated in her capacity as an A. If Individual B would be elected as a State Legislator, upon assuming said position, she would in that capacity be a public official subject to the Ethics Act. Confidential Advice, 14-500 January 24, 2014 Page 4 Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes restrictions upon public officials and public employees. Therefore, Section 1103(a) would impose restrictions upon Individual B in her capacity as a public official, rather than upon her in her private capacity as an attorney and A in the Firm. Pursuant to Section 1103(a) of the Ethics Act, in the public capacity as a State Legislator, Individual B could have a conflict of interest in matters that would financially impact her or the 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, Individual B would not transgress Section 1103(a) of the Ethics Act unless: (1) she would be consciously aware of a private pecuniary benefit for herself, a member of her immediate family, or a business with which she or a member of her immediate family is associated; and (2) her 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). Having established the above general principles, your specific questions shall now be considered. In response to your first through sixth questions, you are advised that the Ethics Act would not prohibit Individual B, in her private capacity as an attorney and A in the Firm, from representing Governmental Entity F or Governmental Entity Ks, Governmental Entity Gs, or Governmental Entity Hs as existing or new clients, or from participating in the Firm’s bid for additional work or renewals of continuing work from the aforesaid governmental entities as existing or new clients. You have not established legal standing to submit your seventh question as to the conduct of the Firm. However, you are generally advised that the restrictions of Section 1103(a) of the Ethics Act only apply to public officials and public employees. The propriety of the proposed conduct has only been addressed under the Ethics Act. Conclusion: Based upon the submitted facts that: (1) Individual B is an attorney and an A in the law firm of [name of law firm] (“the Firm”); (2) Individual B is also the C in one of the Firm’s Ds; (3) the Firm’s clients include the Commonwealth of Pennsylvania through the E (hereinafter referred to as “the Commonwealth”), a Pennsylvania Governmental Entity F, Pennsylvania Governmental Entity Gs, and certain Governmental Entity Hs in Pennsylvania through contracts with the relevant Governmental Entity Gs, and in one case, with the I itself; (4) work for the Commonwealth or any other Pennsylvania entity does not constitute more than J of the Firm’s revenues; (5) Individual B is not currently materially involved in the representation of the Commonwealth; (6) Individual B is generally actively and intimately involved in the representation of Governmental Entity F, the Governmental Entity Gs, and the Governmental Entity Hs; (7) Individual B is considering seeking election as a Member of the Pennsylvania legislature (“State Legislator”); and (8) if Individual B would be elected as a State Legislator, she would take office, remain an A in the Firm, and have no involvement in the representation of the Commonwealth or in any bids for work from the Commonwealth, whether renewals of existing contracts or bids for additional contracts, you are advised as follows. The Firm is a business with which Individual B is associated in her capacity as an A. If Individual B would be elected as a State Legislator, upon assuming said position, she would in that capacity be a public official subject to the Ethics Act. Section 1103(a) Confidential Advice, 14-500 January 24, 2014 Page 5 of the Ethics Act, pertaining to conflict of interest, would impose restrictions upon Individual B in her capacity as a public official, rather than upon her in her private capacity as an attorney and A in the Firm. Pursuant to Section 1103(a) of the Ethics Act, in the public capacity as a State Legislator, Individual B could have a conflict of interest in matters that would financially impact her or the 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. As for other actions, Individual B would not transgress Section 1103(a) of the Ethics Act unless: (1) she would be consciously aware of a private pecuniary benefit for herself, a member of her immediate family, or a business with which she or a member of her immediate family is associated; and (2) her action(s) would constitute one or more specific steps to attain that benefit. The Ethics Act would not prohibit Individual B, in her private capacity as an attorney and A in the Firm, from representing Governmental Entity F or Governmental Entity Ks, Governmental Entity Gs, or Governmental Entity Hs as existing or new clients, or from participating in the Firm’s bid for additional work or renewals of continuing work from the aforesaid governmental entities as existing or new clients. 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