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Home My WebLink About16-520 Jewell ADVICE OF COUNSEL March 30, 2016 Richard G. Jewell, J.D. Director Berkeley Research Group Four PPG Place Fourth Floor Pittsburgh, PA 15222 16-520 Dear Mr. Jewell: This responds to your letter dated February 17, 2016, 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 prohibitions or restrictions upon an individual serving as a Member of the Pennsylvania Gaming Control Board, who in a private capacity is an independent contractor to a consulting firm, with regard to marketing the consulting firm’s professional services to various Commonwealth entities. Facts: You request an advisory from the Commission based upon submitted facts that may be fairly summarized as follows. On June 1, 2015, you were sworn into office as a Member of the Pennsylvania Gaming Control Board (“Gaming Control Board”) for a term ending on January 17, 2017. You state that pursuant to the Pennsylvania Race Horse Development and Gaming Act, 4 Pa.C.S. § 1101 et seq., you are permitted to have additional limited part- time employment subject to a salary cap of not more than fifteen percent in excess of the compensation paid to a Member of the Gaming Control Board. Effective January 1, 2016, you entered into a contractual relationship as an independent contractor to a consulting firm named “Berkeley Research Group” (the “Firm”). You state that the contract you signed with the Firm is consistent with the additional compensation permitted for a Member of the Gaming Control Board. As an independent contractor to the Firm, you will be involved in marketing the Firm’s professional services. You state that you will not be paid a commission on business obtained for the Firm. Some of the potential business for the Firm could be with Commonwealth entities. Jewell, 16-520 March 30, 2016 Page 2 Based upon the above submitted facts, you pose the narrow question of whether the Ethics Act would impose prohibitions or restrictions upon you with regard to marketing the Firm’s professional services to the following Commonwealth entities: (1) The Pennsylvania Department of Transportation (“PennDOT”) and the Pennsylvania Turnpike Commission, to which the Firm would provide support in construction claims work; (2) The Pennsylvania Office of the Attorney General, to which the Firm would provide assistance in defending the Commonwealth in litigation and pre- litigation matters; and (3) The Pennsylvania State System of Higher Education and the Pennsylvania Department of Education, to which the Firm would provide litigation support and general policy consulting. 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 a Member of the Gaming Control Board, you are a public official 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 Jewell, 16-520 March 30, 2016 Page 3 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 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). Jewell, 16-520 March 30, 2016 Page 4 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 applying the above provisions of the Ethics Act to the narrow question posed, you are advised as follows. Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes restrictions upon public officials and public employees. Therefore, Section 1103(a) would impose restrictions upon you in your capacity as a public official, rather than upon you in your private capacity. Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity as an independent contractor to the Firm, from marketing the Firm’s professional services to PennDOT, the Pennsylvania Turnpike Commission, the Pennsylvania Office of the Attorney General, the Pennsylvania State System of Higher Education, or the Pennsylvania Department of Education. However, Section 1103(a) of the Ethics Act would prohibit you from using the authority of your public position as a Member of the Gaming Control Board, or confidential information obtained by being a Member of the Gaming Control Board, in furtherance of your private work for the Firm. 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 Pennsylvania Race Horse Development and Gaming Act. Conclusion: Based upon the submitted facts that: (1) on June 1, 2015, you were sworn into office as a Member of the Pennsylvania Gaming Control Board (“Gaming Control Board”) for a term ending on January 17, 2017; (2) pursuant to the Pennsylvania Race Horse Development and Gaming Act, 4 Pa.C.S. § 1101 et seq., you are permitted to have additional limited part-time employment subject to a salary cap of not more than fifteen percent in excess of the compensation paid to a Member of the Gaming Control Board; (3) effective January 1, 2016, you entered into a contractual relationship as an independent contractor to a consulting firm named “Berkeley Research Group” (the “Firm”); (4) the contract you signed with the Firm is consistent with the additional compensation permitted for a Member of the Gaming Control Board; (5) as an independent contractor to the Firm, you will be involved in marketing the Firm’s professional services; (6) you will not be paid a commission on business obtained for the Firm; and (7) some of the potential business for the Firm could be with Commonwealth entities, you are advised as follows. As a Member of the Gaming Control Board, 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, 65 Pa.C.S. § 1103(a), pertaining to conflict of interest, imposes restrictions upon public officials and public employees. Therefore, Section 1103(a) would impose restrictions upon you in your capacity as a public official, rather than upon you in your private capacity. Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity as an independent contractor to the Firm, from marketing the Firm’s professional services to the particular Commonwealth entities about which you have inquired, namely, the Pennsylvania Department of Transportation, the Pennsylvania Turnpike Commission, the Pennsylvania Office of the Attorney General, the Pennsylvania State System of Higher Education, or the Pennsylvania Department of Education. However, Section 1103(a) of the Ethics Act would prohibit you from using the authority of your public position as a Member of the Gaming Control Board, or confidential information obtained by being a Jewell, 16-520 March 30, 2016 Page 5 Member of the Gaming Control Board, in furtherance of your private work for the Firm. 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