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HomeMy WebLinkAbout15-003 Confidential OPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Roger Nick Kathryn Streeter Lewis Maria Feeley Melanie DePalma DATE DECIDED: 7/15/15 DATE MAILED: 7/22/15 15-003 This Opinion is issued in response to your letter of June 26, 2015, by which you requested a confidential advisory from this Commission. I.ISSUE: Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would impose prohibitions or restrictions upon a State Legislator serving in the A, or upon an A employee (“Staff Member”) serving as the B and as the C, with regard to, or as a result of, a D where: (1) the State Legislator would \[type of activity\] and become an E of a private F G; (2) the Staff Member would become an H of such F G; (3) none of the \[types of activities\] of the F G by the State Legislator or any of the Hs of the F G would utilize state resources or be performed in any State-owned office; (4) all required disclosures as to reportable \[type of information\] and \[type of information\] would be made on the State Legislator’s and Staff Member’s respective Statements of Financial Interests; and (5) the Staff Member’s \[type of activity\] the F G would be voluntary and would not affect in a positive or negative way the Staff Member’s status as an employee of the State Legislator. II.FACTUAL BASIS FOR DETERMINATION: You have been authorized by State Legislator I to request a confidential advisory from this Commission on his behalf. You also request a confidential advisory from this Commission on your own behalf. In your advisory request letter, you submitted facts that may be fairly summarized as follows. State Legislator I is currently J. You are the B and the C. State Legislator I intends to \[type of activity\] and become an E of a private F G named \[name\], which is located in \[location\], Pennsylvania. State Legislator I’s K in the F Confidential Opinion, 15-003 July 22, 2015 Page 2 G might be shared with L, who has no connection to State government. There will be Hs of the F G, who will have little or no Ms. The Hs of the F G will include you and other individuals associated with State government. You state that none of the \[types of activities\] of the F G by State Legislator I or any of the Hs of the F G will utilize State resources or be performed in any State-owned office. You further state that State Legislator I and you will make all required disclosures on your respective Statements of Financial Interests as to reportable \[type of information\] and \[type of information\]. You state that your \[type of activity\] the F G will be voluntary and will not affect in a positive or negative way your status as an employee of State Legislator I. At this Commission’s executive meeting on July 15, 2015, you appeared and offered additional facts, which may be fairly summarized as follows. The F G is an existing, long-standing N G. You state that it is a good-sized G but is a small O. You state that there is no connection between the F G and any of the Ps. The F G was Q, and that is what generated State Legislator I’s R in \[type of activity\] the F G. You state that the \[type of activity\] of the F G will be an arm’s length transaction in every respect. There is no S resulting from State Legislator I’s involvement. The T will be the U based upon Vs. You note that although you are an A employee, you have latitude in your private capacity to \[type of activity\] Gs. All of the W that you will \[type of activity\] the F G will consist of X. At least some of the individuals who will be \[type of activity\] will Y, which will occur through an arm’s length transaction. A new Z will be AA. You state that at this time, there is no plan to change the BB of the F G. State Legislator I and you are CC for the \[type of activity\] of the F G. Finally, you state that while State Legislator I and you will not use your respective official capacities to \[type of activity\] the F G, you cannot control the motivations of others in \[type of activity\] F from the F G. However, you state that State Legislator I and you are vigilant and adept at detecting improper motivation in the contexts of DDs and EE, and that State Legislator I and you will be alert and vigilant for any improper motivation in the context of the F G as well. You state that if State Legislator I or you detect what appears to be improper motivation on the part of a potential FF of the F G, State Legislator I/you will not \[type of activity\]. Based upon all of the above submitted facts, you pose the following questions: (1) Whether the Ethics Act would impose prohibitions or restrictions on State Legislator I with regard to \[type of activity\] and being an E of the F G; and (2) Whether the Ethics Act would impose prohibitions or restrictions on you with regard to \[type of activity\] and being an H of the F G. We commend State Legislator I and you for bringing this important matter before this Commission. III.DISCUSSION: Confidential Opinion, 15-003 July 22, 2015 Page 3 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, this 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 noted that the submitted facts do not indicate whether your K in the F G would constitute a GG. This Opinion assumes that you would have a GG in the F G. In his capacity as a State Legislator serving in the A, State Legislator I is a public official subject to the provisions of the Ethics Act. As the B and C, you are a public official/public employee subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act, pertaining to conflicts of interest, 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 whichhe 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. "Immediate family." A parent, spouse, child, brother or sister. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, Confidential Opinion, 15-003 July 22, 2015 Page 4 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 restricts public officials/public employees in their public capacities, not their private capacities. Subject to the statutory exclusions to the definition of the term “conflict” or “conflict of interest, 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. Current Pennsylvania Supreme Court precedent holds that to violate Section 1103(a) of the Ethics Act, a public official/public employee: … must act in such a way as to put his \[office/public position\] to the purpose of obtaining for himself a private pecuniary benefit. Such directed action implies awareness on the part of the \[public official/public employee\] of the potential pecuniary benefit as well as the motivation to obtain that benefit for himself. Kistler v. State Ethics Commission, 610 Pa. 516, 523, 22 A.3d 223, 227 (2011). To violate Section 1103(a) of the Ethics Act, a public official/public employee “must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit.” Id., 610 Pa. at 528, 22 A.3d at 231. To the extent the activities of a State legislator would relate to “legislative actions” (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they would be constitutionally controlled and exempt from the purview of the Ethics Act and this Commission. See, Corrigan, Opinion 87-001. Having set forth the above general principles, you are advised as follows. Because Section 1103(a) of the Ethics Act does not restrict public officials/public employees in their private capacities, Section 1103(a) would not prohibit State Legislator I and you from entering into the proposed D in your private capacities. Purely private G activities would not form the basis for a violation of Section 1103(a) of the Ethics Act. Ds among public officials and their subordinates can raise issues under the Ethics Act, for example, if a subordinate is subject to duress in the public position relative to private G activities, or receives financial benefits in the public position in order to direct them to the G. However, per the submitted facts, you are under no obligation to enter into Confidential Opinion, 15-003 July 22, 2015 Page 5 the proposed D with State Legislator I and your involvement with the F G will not affect in a positive or negative way your status as an employee of State Legislator I. Generally, Section 1103(a) of the Ethics Act would restrict State Legislator I and you from taking action(s) in your respective public capacities that would result in a financial benefit to the F G or to yourselves or your immediate family member(s) as HHs in the F G. For example, action(s) taken in a public capacity to secure Commonwealth grants or loans for the F G could form the basis for a violation of Section 1103(a) of the Ethics Act. \[Type of activity\] F from the F G using Commonwealth funds, or soliciting or directing others to do so, could form the basis for a violation of Section 1103(a) of the Ethics Act. Acting in the public capacity in matter(s) involving a known FF of the F G could transgress Section 1103(a) if the Kistler standard of conscious awareness of a private pecuniary benefit and directed action in the public capacity to attain that benefit would be established and no exclusion/exemption would apply. Acting in matter(s) involving an unknown FF of the F G, or an FF whose IIs from the F G are de minimis, generally would not transgress Section 1103(a) of the Ethics Act. It is not possible to foresee every issue that might arise under the proposed D, and State Legislator I and you are welcome to seek further advice from this Commission if there are specific circumstances that you would like the Commission to address. Finally, State Legislator I and you would be required to satisfy the disclosure requirements of the Ethics Act as to your respective Statements of Financial Interests. 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. IV.CONCLUSION: As a State Legislator serving in the A, State Legislator I is a public official subject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. As the B and C, you are a public official/public employee subject to the provisions of the Ethics Act. Based upon the submitted facts that: (1) State Legislator I is currently J; (2) State Legislator I intends to \[type of activity\] and become an E of a private F G named \[name\], which is located in \[location\], Pennsylvania; (3) State Legislator I’s K in the F G might be shared with L, who has no connection to State government; (4) there will be Hs of the F G, who will have little or no Ms; (5) the Hs of the F G will include you and other individuals associated with State government; (6) none of the \[types of activities\] of the F G by State Legislator I or any of the Hs of the F G will utilize State resources or be performed in any State-owned office; (7) State Legislator I and you will make all required disclosures on your respective Statements of Financial Interests as to reportable \[type of information\] and \[type of information\]; (8) your \[type of activity\] the F G will be voluntary and will not affect in a positive or negative way your status as an employee of State Legislator I; (9) the F G is an existing, long-standing N G; (10) the F G is a good-sized G but is a small O; (11) there is no connection between the F G and any of the Ps; (12) the F G was Q, and that is what generated State Legislator I’s R in \[type of activity\] the F G; (13) the \[type of activity\] of the F G will be an arm’s length transaction in every respect; (14) there is no S resulting from State Legislator I’s involvement; (15) the T will be the U based upon Vs; (16) all of the W that you will \[type of activity\] the F G will consist of X; (17) at least some of the individuals who will be \[type of activity\] will Y, which will occur through an arm’s length transaction; (18) a new Z will be AA; (19) at this time, there is no plan to change the BB of the F G; (20) Confidential Opinion, 15-003 July 22, 2015 Page 6 State Legislator I and you are CC for the \[type of activity\] of the F G; (21) State Legislator I and you will not use your respective official capacities to \[type of activity\] the F G; (22) State Legislator I and you are vigilant and adept at detecting improper motivation in the contexts of DDs and EE; (23) State Legislator I and you will be alert and vigilant for any improper motivation in the context of the F G as well; and (24) if State Legislator I or you detect what appears to be improper motivation on the part of a potential FF of the F G, State Legislator I/you will not \[type of activity\]; and further based upon the assumption that you would have a GG in the F G, you are advised as follows. Because Section 1103(a) of the Ethics Act does not restrict public officials/public employees in their private capacities, Section 1103(a) would not prohibit State Legislator I and you from entering into the proposed D in your private capacities. Purely private G activities would not form the basis for a violation of Section 1103(a) of the Ethics Act. Generally, Section 1103(a) of the Ethics Act would restrict State Legislator I and you from taking action(s) in your respective public capacities that would result in a financial benefit to the F G or to yourselves or your immediate family member(s) as HHs in the F G. For example, action(s) taken in a public capacity to secure Commonwealth grants or loans for the F G could form the basis for a violation of Section 1103(a) of the Ethics Act. \[Type of activity\] F from the F G using Commonwealth funds, or soliciting or directing others to do so, could form the basis for a violation of Section 1103(a) of the Ethics Act. Acting in the public capacity in matter(s) involving a known FF of the F G could transgress Section 1103(a) if the Kistler standard of conscious awareness of a private pecuniary benefit and directed action in the public capacity to attain that benefit would be established and no exclusion/exemption would apply. Acting in matter(s) involving an unknown FF of the F G, or an FF whose IIs from the F G are de minimis, generally would not transgress Section 1103(a) of the Ethics Act. It is not possible to foresee every issue that might arise under the proposed D, and State Legislator I and you are welcome to seek further advice from this Commission if there are specific circumstances that you would like the Commission to address. Finally, State Legislator I and you would be required to satisfy the disclosure requirements of the Ethics Act as to your respective Statements of Financial Interests. The propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(10) of the Ethics Act, the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. By the Commission, Nicholas A. Colafella Chair Vice Chair Mark R. Corrigan did not participate in this matter.