HomeMy WebLinkAbout15-550 Confidential
ADVICE OF COUNSEL
July 28, 2015
15-550
This responds to your letter dated June 24, 2015, by which you requested a
confidential advisory from the Pennsylvania State Ethics Commission (“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 A, who in his
private capacity as a B and C has a “financial interest” as that term is defined in the
Ethics Act in certain companies, with regard to participating in matters that would
involve the Ds in which such companies operate but that would not directly relate to
such companies or any entities in which his E has a financial interest.
Facts:
You request a confidential advisory from the Commission on behalf of A.
You have submitted facts that may be fairly summarized as follows.
In his private capacity, A is a B and C who \[performs a particular activity\] within
the F, G, and H sectors. You state that A has a “financial interest” as that term is
defined in the Ethics Act in each of the following companies: \[list of companies\]
(hereinafter collectively referred to as “the Companies”). The Companies operate in Ds
including the F, G and H Ds.
You state that A will abstain from engaging in matters before Commonwealth
Agency I directly relating to the Companies as well as any entities in which his E has a
financial interest.
Based upon the above submitted facts, you seek guidance as to whether the
Ethics Act would permit A to participate in matters that would involve the Ds in which the
Companies operate but that would not directly relate to the Companies or any entities in
which his E has a financial interest.
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.
Confidential Advice, 15-550
July 28, 2015
Page 2
A is a public official and executive-level State employee subject to the provisions
of the Ethics Act.
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.
Confidential Advice, 15-550
July 28, 2015
Page 3
"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,
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.
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 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.
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.
Per the Pennsylvania Supreme Court’s decision in Kistler v. State Ethics
Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order 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, supra, 610 Pa. at 523, 22 A.3d at 227. 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.
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
Confidential Advice, 15-550
July 28, 2015
Page 4
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.
In applying the above provisions of the Ethics Act to your inquiry, you are advised
as follows.
A’s E is a member of his “immediate family” as that term is defined in the Ethics
Act. Under the submitted facts, each of the Companies is a business with which A is
associated in his capacity as a holder of a financial interest in the respective Company.
A would not have a conflict of interest and would not violate Section 1103(a) of
the Ethics Act as to participating in matters that would involve the Ds in which the
Companies operate but that would not directly relate to the Companies or any entities in
which his E has a financial interest unless: (1) he would be consciously aware of a
private pecuniary benefit for himself, a member of his immediate family such as his E, or
business(es) with which he or a member of his immediate family is associated such as
any Company(ies); (2) his official action would constitute one or more specific steps to
attain that benefit; and (3) neither the de minimis exclusion nor the class/subclass
exclusion set forth within the Ethics Act’s definition of the term "conflict" or "conflict of
interest," 65 Pa.C.S. § 1102, would be applicable. Cf., Kistler, supra.
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:
A is a public official and executive-level State employee 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) in his private capacity, A is a B
and C who \[performs a particular activity\] within the F, G, and H sectors; (2) A has a
“financial interest” as that term is defined in the Ethics Act in each of the following
companies: \[list of companies\] (hereinafter collectively referred to as “the Companies”);
(3) the Companies operate in Ds including the F, G and H Ds; and (4) A will abstain
from engaging in matters before Commonwealth Agency I directly relating to the
Companies as well as any entities in which his E has a financial interest, you are
advised as follows.
A’s E is a member of his “immediate family” as that term is defined in the Ethics
Act. Under the submitted facts, each of the Companies is a business with which A is
associated in his capacity as a holder of a financial interest in the respective Company.
A would not have a conflict of interest and would not violate Section 1103(a) of the
Ethics Act as to participating in matters that would involve the Ds in which the
Companies operate but that would not directly relate to the Companies or any entities in
which his E has a financial interest unless: (1) he would be consciously aware of a
private pecuniary benefit for himself, a member of his immediate family such as his E, or
business(es) with which he or a member of his immediate family is associated such as
any Company(ies); (2) his official action would constitute one or more specific steps to
attain that benefit; and (3) neither the de minimis exclusion nor the class/subclass
exclusion set forth within the Ethics Act’s definition of the term "conflict" or "conflict of
interest," 65 Pa.C.S. § 1102, would be applicable. 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
Confidential Advice, 15-550
July 28, 2015
Page 5
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