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HomeMy WebLinkAbout14-555 Confidential ADVICE OF COUNSEL November 19, 2014 14-555 This responds to your undated letter postmarked October 6, 2014, received October 8, 2014, 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 serving as a county A with regard to accepting a part-time position as the B for a company which provides C services for the county and other counties located in the \[certain geographical area\] of the Commonwealth. 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 the A for \[name of county\] (“County”), and you plan to retire from your public position when your current term of office ends in \[month, year\]. You have been offered an agreement for employment (“Agreement”) by a company named \[name of company\] (“the Company”), which provides C services for the County and other counties located in the \[certain geographical area\] of the Commonwealth. You have submitted a copy of the Agreement, which is incorporated herein by reference. It is noted that pursuant to the Agreement, you would be employed in a part-time position as the B for the Company, for the purpose of \[certain purpose\]. You state that the final terms of the Agreement might not be complete. Based upon the above submitted facts, you seek guidance as to whether the Ethics Act would impose any prohibitions or restrictions upon you with regard to accepting a part-time position as the B 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. 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. To the extent that your inquiry relates to conduct that has already occurred, such past Confidential Advice, 14-555 November 19, 2014 Page 2 conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may and shall be addressed. As the County A, 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 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 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 Confidential Advice, 14-555 November 19, 2014 Page 3 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 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. In addition, 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. Having established the above general principles, 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 accepting a part-time position as the B for the Company. However, if you would accept such a position with the Company, the Company 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, you would have a conflict of interest in your official capacity as the County A in matter(s) that would result in a private pecuniary benefit for you or 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. For example, you would generally be prohibited from selecting the Company to perform services for the County or approving payment(s) to the Company. Additionally, you would be prohibited from using your public position as the County A to solicit business for the Company. See, Mann, Opinion 07-005; Confidential Opinion, 04-010; Guloien, Opinion 90-011. As noted above, in each instance of a conflict of interest, you would be required to abstain from participation. You are further advised that upon termination of your service as the County A, you would become a “former public official” subject to the restrictions of Section 1103(g) of the Ethics Act. Section 1103(g) of the Ethics Act provides as follows: § 1103. Restricted activities (g) Former official or employee.-- No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the Confidential Advice, 14-555 November 19, 2014 Page 4 governmental body with which he has been associated for one year after he leaves that body. 65 Pa.C.S. § 1103(g). The terms “represent,” “person,” and “governmental body with which a public official or public employee is or has been associated” are specifically defined in the Ethics Act as follows: § 1102. Definitions "Represent." To act on behalf of any other person in any activity which includes, but is not limited to, the following: personal appearances, negotiations, lobbying and submitting bid or contract proposals which are signed by or contain the name of a former public official or public employee. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. 65 Pa.C.S. § 1102. The term “person” is very broadly defined. It includes, inter alia, corporations and other businesses. It also includes the former public official/public employee himself, Confidential Opinion, 93-005, as well as a new governmental employer. Ledebur, Opinion 95-007. The governmental body with which you would be deemed to have been associated upon termination of your service as the County A would be the office of the County A in its entirety. Therefore, for the first year following termination of your service as the County A, Section 1103(g) of the Ethics Act would prohibit you from representing a “person,” including but not limited to the Company, before the office of the County A. 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 County Code. Conclusion: Based upon the submitted facts that: (1) you are the A for \[name of county\] (“County”), and you plan to retire from your public position when your current term of office ends in \[month, year\]; (2) you have been offered an agreement for employment (“Agreement”) by a company named \[name of company\] (“the Company”), which provides C services for the County and other counties located in the \[certain geographical area\] of the Commonwealth; (3) pursuant to the Agreement, you would be employed in a part-time position as the B for the Company, for the purpose of \[certain purpose\]; and (4) the final terms of the Agreement might not be complete, you are advised as follows. Confidential Advice, 14-555 November 19, 2014 Page 5 As the County A, 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. 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 accepting a part-time position as the B for the Company. However, if you would accept such a position with the Company, the Company 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, you would have a conflict of interest in your official capacity as the County A in matter(s) that would result in a private pecuniary benefit for you or 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. For example, you would generally be prohibited from selecting the Company to perform services for the County or approving payment(s) to the Company. Additionally, you would be prohibited from using your public position as the County A to solicit business for the Company. In each instance of a conflict of interest, you would be required to abstain from participation. Upon termination of your service as the County A, you would become a “former public official” subject to the restrictions of Section 1103(g) of the Ethics Act. The governmental body with which you would be deemed to have been associated upon termination of your service as the County A would be the office of the County A in its entirety. Therefore, for the first year following termination of your service as the County A, Section 1103(g) of the Ethics Act would prohibit you from representing a “person,” including but not limited to the Company, before the office of the County A. 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