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HomeMy WebLinkAbout16-506 Grinberg ADVICE OF COUNSEL February 9, 2016 David Grinberg 1006 Baythorne Drive Mechanicsburg, PA 17050 16-506 Dear Mr. Grinberg: This responds to your letter dated December 10, 2015, by which you requested an 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 restrictions upon employment of the Deputy Executive Director of the Pennsylvania eHealth Partnership Authority (“Authority”) following termination of Commonwealth employment. Facts: You request an advisory from the Commission regarding the post- employment restrictions of the Ethics Act. You have submitted facts that may be fairly summarized as follows. You are currently employed as the Deputy Executive Director of the Authority. You have submitted a copy of a job description for your position as Deputy Executive Director of the Authority, which job description is incorporated herein by reference. The Authority is governed by a Board of Directors (“Authority Board”). As the Deputy Executive Director of the Authority, you routinely interact with the Authority Board. You state that you are in a position to influence but not make decisions related to contracts, grants, and similar business relationships between the Authority and a variety of public sector firms. The Authority routinely works in partnership with other agencies, such as the Pennsylvania Department of Health and the Pennsylvania Department of Human Services. In a private capacity, you are the majority owner and president of a company named “Dynavet Solutions, LLC” (the “Company”). You state that the Company has historically done no business with the Commonwealth. You state that you are considering your options for employment if you should choose to leave your position with the Commonwealth at some point in the future. Based upon the above submitted facts, you pose the following questions: (1) Whether you would be permitted to work with a private sector firm on matters not related to business that the private sector firm would have with the Authority; Grinberg, 16-506 February 9, 2016 Page 2 (2) Whether there would be any restrictions on your ability to do business with firms affiliated with an individual appointed to the Authority Board; (3) Whether there would be any restrictions on your ability to leverage private sector relationships that you established while serving as a government official in order to seek future employment or business relationships not related to business with the Authority; and (4) Whether there would be any restrictions on your ability to do business with government agencies other than the Authority. It is administratively noted that the Authority is an independent agency of the Commonwealth. See, 35 P.S. § 510.302. 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. Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 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 Grinberg, 16-506 February 9, 2016 Page 3 the performance of duties and responsibilities unique to a particular public office or position of public employment. 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. The use of authority of office is not limited merely to voting, but extends 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. The Pennsylvania Supreme Court has held that in order 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.” Kistler v. State Ethics Commission, 610 Pa. 516, 528, 22 A.3d 223, 231 (2011). Based upon Kistler, the existence of a violation of Section 1103(a) would depend upon the circumstances in a given case. Raphael, Opinion 13-003. Sections 1103(b) and 1103(c) of the Ethics Act 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 questions presented. As the Deputy Executive Director of the Authority, you would be considered a public official/public employee subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Consequently, upon termination of your employment with the Authority, you would become a former public official/public employee subject to Section 1103(g) of the Ethics Act. While Section 1103(g) does not prohibit a former public official/public employee from accepting a position of employment, it does restrict the former public official/public employee with regard to “representing” a “person” before “the governmental body with which he has been associated”: § 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 governmental body with which he has been associated for one year after he leaves that body. 65 Pa.C.S. § 1103(g) (Emphasis added). 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: Grinberg, 16-506 February 9, 2016 Page 4 § 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 term "represent" is also broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (3) submission of bid or contract proposals which are signed by or contain the name of the former public official/public employee; (4) participating in any matters before the former governmental body as to acting on behalf of a person; and (5) lobbying. Popovich, Opinion 89-005. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits the inclusion of the name of a former public official/public employee on invoices submitted by his new employer to the former governmental body, even if the invoices pertain to a contract that existed prior to termination of service with such governmental body. Shay, Opinion 91-012. However, if such a pre-existing contract does not involve the unit where a former public employee worked, the name of the former public employee may appear on routine invoices if required by the regulations of the agency to which the billing is being submitted. Abrams/Webster, Opinion 95-011. A former public official/public employee may assist in the preparation of any documents presented to his former governmental body. However, the former public official/public employee may not be identified on documents submitted to the former governmental body. The former public official/public employee may also counsel any person regarding that person's appearance before his former governmental body. Once again, however, the activity in this respect should not be revealed to the former governmental body. The Ethics Act would not prohibit or preclude making general informational inquiries to the former governmental body to secure information which is Grinberg, 16-506 February 9, 2016 Page 5 available to the general public, but this must not be done in an effort to indirectly influence the former governmental body or to otherwise make known to that body the representation of, or work for, the new employer. Section 1103(g) only restricts the former public official/public employee with regard to representation before his former governmental body. The former public official/public employee is not restricted as to representation before other agencies or entities. However, the “governmental body with which a public official/public employee is or has been associated” is not limited to the particular subdivision of the agency or other governmental body where the public official/public employee had influence or control but extends to the entire body. See, Legislative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion 90-006; Sharp, Opinion 90-009-R. The governmental body with which you would be deemed to have been associated upon termination of your employment with the Authority would be the Authority in its entirety. Therefore, for the first year following termination of your employment with the Authority, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before the Authority. Your specific questions shall now be addressed. With regard to your first, second, and fourth questions, you are advised as follows. During the first year following termination of your Commonwealth employment, Section 1103(g) of the Ethics Act would not prohibit you from: (1) working with a private sector firm on matters not related to business that the private sector firm would have with the Authority; (2) doing business with firms affiliated with an individual appointed to the Authority Board; or (3) doing business with government agencies other than the Authority, subject to the condition that in performing such activity(ies), you would not engage in prohibited representation before the Authority as set forth above. In response to your third question, you are advised as follows. Section 1103(a) of the Ethics Act would prohibit you from using the authority of your public position, or confidential information accessed or received as a result of being the Deputy Executive Director of the Authority, in furtherance of your entering into a business/employment relationship with an entity, regardless of whether the business/employment relationship would not be related to business the entity would have with the Authority. As for entities with which you have already had official involvement, an advisory cannot provide a ruling as to past conduct. You are generally advised that the elements of a violation of Section 1103(a) of the Ethics Act would not be established as a result of your prospectively entering into a business/employment relationship with an entity where you: (1) did not use the authority of your public position in matter(s) pertaining to such entity when you had an actual or reasonable expectation that you would enter into a business/employment arrangement with such entity or would otherwise receive a private pecuniary benefit relating to such entity; and (2) did not otherwise use the authority of your public position or confidential information received as a result of being in your public position in furtherance of securing a business/employment arrangement with such entity or other private pecuniary benefit relating to such entity. Cf., Desmond, Opinion 08-004. Lastly, 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 Grinberg, 16-506 February 9, 2016 Page 6 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 the Deputy Executive Director of the Pennsylvania eHealth Partnership Authority (“Authority”), you would be considered a public official/public employee subject to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., and the Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et seq. Upon termination of your employment with the Authority, you would become a former public official/public employee subject to Section 1103(g) of the Ethics Act. The former governmental body would be the Authority in its entirety. For the first year following termination of your employment with the Authority, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before the Authority. The restrictions as to representation outlined above must be followed. During the first year following termination of your Commonwealth employment, Section 1103(g) of the Ethics Act would not prohibit you from: (1) working with a private sector firm on matters not related to business that the private sector firm would have with the Authority; (2) doing business with firms affiliated with an individual appointed to the Authority Board, or (3) doing business with government agencies other than the Authority, subject to the condition that in performing such activity(ies), you would not engage in prohibited representation before the Authority as set forth above. Section 1103(a) of the Ethics Act would prohibit you from using the authority of your public position, or confidential information accessed or received as a result of being the Deputy Executive Director of the Authority, in furtherance of your entering into a business/employment relationship with an entity, regardless of whether the business/employment relationship would not be related to business the entity would have with the Authority. As for entities with which you have already had official involvement, an advisory cannot provide a ruling as to past conduct. You are generally advised that the elements of a violation of Section 1103(a) of the Ethics Act would not be established as a result of your prospectively entering into a business/employment relationship with an entity where you: (1) did not use the authority of your public position in matter(s) pertaining to such entity when you had an actual or reasonable expectation that you would enter into a business/employment arrangement with such entity or would otherwise receive a private pecuniary benefit relating to such entity; and (2) did not otherwise use the authority of your public position or confidential information received as a result of being in your public position in furtherance of securing a business/employment arrangement with such entity or other private pecuniary benefit relating to such entity. 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 Grinberg, 16-506 February 9, 2016 Page 7 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