HomeMy WebLinkAbout14-551 Confidential
ADVICE OF COUNSEL
October 30, 2014
14-551
This responds to your undated letter postmarked September 19, 2014, received
September 23, 2014, by which you requested a confidential advisory from the
Pennsylvania State Ethics Commission.
Issue:
Whether the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101
et seq., would impose prohibitions or restrictions upon an A B of Governmental Body C
of Political Subdivision D with regard to serving as an E for a local \[type of company\].
Facts:
You request a confidential advisory from the Pennsylvania State Ethics
Commission based upon submitted facts that may be fairly summarized as follows.
You are an A B of Governmental Body C. You were recently approached by an
officer of a local \[type of company\] (the “Company”) and asked whether you would be
interested in serving as an E for the Company. You state that as an E, you would act as
an independent contractor to the Company. Your name would not appear in any
literature for the Company, and you would not be identified as an employee on any
Company stationary or elsewhere.
The Company does not do any business with Political Subdivision D. You state
that most of the Company’s clients are Fs, Gs, and other Hs which you have not dealt
with in your role as an A B of Governmental Body C. You further state that as an E for
the Company, you would not identify yourself as a B of Governmental Body C to any
clients of the Company or use your office to garner any business for the Company.
Based upon the above submitted facts, you seek guidance as to whether the
Ethics Act would permit you to serve as an E for the Company.
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 an A B of Governmental Body C, you are a public official subject to the
provisions of the Ethics Act.
Confidential Advice, 14-551
October 30, 2014
Page 2
Sections 1103(a) and 1103(j) of the Ethics Act provide:
§ 1103. Restricted activities
(a)Conflict of interest.--
No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
(j)Voting conflict.--
Where voting conflicts are not
otherwise addressed by the Constitution of Pennsylvania or
by any law, rule, regulation, order or ordinance, the following
procedure shall be employed. Any public official or public
employee who in the discharge of his official duties would be
required to vote on a matter that would result in a conflict of
interest shall abstain from voting and, prior to the vote being
taken, publicly announce and disclose the nature of his
interest as a public record in a written memorandum filed
with the person responsible for recording the minutes of the
meeting at which the vote is taken, provided that whenever a
governing body would be unable to take any action on a
matter before it because the number of members of the body
required to abstain from voting under the provisions of this
section makes the majority or other legally required vote of
approval unattainable, then such members shall be
permitted to vote if disclosures are made as otherwise
provided herein. In the case of a three-member governing
body of a political subdivision, where one member has
abstained from voting as a result of a conflict of interest and
the remaining two members of the governing body have cast
opposing votes, the member who has abstained shall be
permitted to vote to break the tie vote if disclosure is made
as otherwise provided herein.
65 Pa.C.S. §§ 1103(a), (j).
The following terms related to Section 1103(a) 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
Confidential Advice, 14-551
October 30, 2014
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.
65 Pa.C.S. § 1102.
It is noted that Section 1103(a) of the Ethics Act does not prohibit public
officials/public employees from having outside business activities or employment.
However, subject to the statutory exclusions to the Ethics Act’s definition of the term
“conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, a 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 support a finding of a conflict of interest (Amato, Opinion 89-
002).
In each instance of a conflict of interest, the public official/public employee would
be required to abstain from participation. The abstention requirement would not be
limited merely to voting, but would extend to any use of authority of office including, but
not limited to, discussing, conferring with others, and lobbying for a particular result.
Juliante, Order 809. Subject to certain statutory exceptions, in each instance of a voting
conflict, Section 1103(j) of the Ethics Act would require the public official/public
employee to abstain and to publicly disclose the abstention and reasons for same, both
orally and by filing a written memorandum to that effect with the person recording the
minutes.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
Section 1103(a) of the Ethics Act applies to restrict public officials and public
employees in their public capacities. Therefore, Section 1103(a) would apply to restrict
you in your capacity as a public official, rather than in your private capacity.
The Ethics Act would not prohibit you, in your private capacity, from serving as
an E for the Company. However, at such times as you would have a
business/employment relationship with or would have a reasonable expectation of
developing a business/employment relationship with the Company, you would have a
conflict of interest under Section 1103(a) of the Ethics Act in your official capacity as an
A B of Governmental Body C in matter(s) that would result in a private pecuniary benefit
for the Company unless one of the statutory exclusions to the definition of “conflict” or
“conflict of interest” as set forth in the Ethics Act, 65 Pa.C.S. § 1102, would be
applicable.
Confidential Advice, 14-551
October 30, 2014
Page 4
As noted above, in each instance of a conflict of interest, you would be required
to abstain from participation, which would include voting unless one of the statutory
exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the
disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied
in the event of a voting conflict.
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.
Conclusion:
As an A B of Governmental Body C of Political Subdivision D, 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)
you were recently approached by an officer of a local \[type of company\] (the
“Company”) and asked whether you would be interested in serving as an E for the
Company; (2) as an E, you would act as an independent contractor to the Company; (3)
your name would not appear in any literature for the Company, and you would not be
identified as an employee on any Company stationary or elsewhere; (4) the Company
does not do any business with Political Subdivision D; (5) most of the Company’s clients
are Fs, Gs, and other Hs which you have not dealt with in your role as an A B of
Governmental Body C; and (6) as an E for the Company, you would not identify yourself
as a B of Governmental Body C to any clients of the Company or use your office to
garner any business for the Company, you are advised as follows.
Section 1103(a) of the Ethics Act applies to restrict public officials and public
employees in their public capacities. Therefore, Section 1103(a) would apply to restrict
you in your capacity as a public official, rather than in your private capacity. The Ethics
Act would not prohibit you, in your private capacity, from serving as an E for the
Company. However, at such times as you would have a business/employment
relationship with or would have a reasonable expectation of developing a
business/employment relationship with the Company, you would have a conflict of
interest under Section 1103(a) of the Ethics Act in your official capacity as an A B of
Governmental Body C in matter(s) that would result in a private pecuniary benefit for the
Company unless one of the statutory exclusions to the definition of “conflict” or “conflict
of interest” as set forth in the Ethics Act, 65 Pa.C.S. § 1102, would be applicable. In
each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event
of a voting conflict. 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.
Confidential Advice, 14-551
October 30, 2014
Page 5
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