HomeMy WebLinkAbout16-548 Hanns
ADVICE OF COUNSEL
July 26, 2016
Chanell Hanns
2201 Bryn Mawr Avenue, Apt. 314
Philadelphia, PA 19131
16-548
Dear Ms. Hanns:
This responds to your letter dated May 24, 2016 (postmarked June 1, 2016, and
received June 3, 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 restrictions upon employment of a Deputy
Commissioner for Finance for the City of Philadelphia Department of Human Services
(“City Department of Human Services”) following termination of employment with the
City Department of Human Services.
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.
On August 8, 2011, you were appointed as the Deputy Commissioner for
Finance for the City Department of Human Services. You went on administrative leave
on January 7, 2016, and your employment with the City Department of Human Services
was terminated on April 14, 2016.
You state that as the Deputy Commissioner for Finance for the City Department
of Human Services, you were responsible for the day-to-day operations of the Division
of Finance. You state that although you oversaw contracting, you were not the sole
decision maker in awarding contracts. For many contracts, Requests for Proposals
were reviewed by a group, and a provider was selected through a detailed process.
Some nonprofit organizations with ongoing relationships with the City Department of
Human Services were awarded contracts through a process that did not involve
Requests for Proposals.
Following termination of your employment with the City Department of Human
Services, you started a consulting company named “JK Consulting, LLC” (the
“Company”) that works with nonprofit organizations on financial and operations
management strategy.
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July 26, 2016
Page 2
Based upon the above submitted facts, you pose the following questions:
(1) Whether you would be permitted to market the Company’s services to
nonprofit organizations that have contracts with the City Department of
Human Services or other City departments such as the City Department of
Public Health, the City Department of Behavioral Health, and the like, and
if so, whether you would be permitted to do so at this time;
(2) Whether your/the Company’s performance of work for any nonprofit
organization that does business with the City of Philadelphia (“City”) would
be considered “representing” that nonprofit organization; and
(3) Whether your/the Company’s performance of work for any nonprofit
organization that contracts with the City would be a violation of Section
1103(f) or Section 1103(g) of the Ethics Act.
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 this advisory is limited to addressing your
prospective conduct and does not address the conduct of the Company. You are
advised that Sections 1103(a) and 1103(g) of the Ethics Act, discussed herein, apply to
public officials/public employees and former public officials/public employees
respectively and would not apply to restrict the conduct of the Company. Additionally,
the restrictions and requirements of Section 1103(f) of the Ethics Act (pertaining to
contracting) do not apply following termination of service in the public position.
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
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July 26, 2016
Page 3
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.
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.
In the former capacity as the Deputy Commissioner for Finance for the City
Department of Human Services, 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 City Department of
Human Services, you became 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:
§ 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
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July 26, 2016
Page 4
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
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
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July 26, 2016
Page 5
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 are deemed to have been associated
upon termination of your employment with the City Department of Human Services is
the City Department of Human Services in its entirety. Therefore, for the first year
following termination of your employment with the City Department of Human Services,
Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person”
before the City Department of Human Services.
Your specific questions shall now be addressed.
During the first year following termination of your employment with the City
Department of Human Services, Section 1103(g) of the Ethics Act would not prohibit
you from marketing the Company’s services to nonprofit organizations that have
contracts with the City Department of Human Services or other City departments such
as the City Department of Public Health, the City Department of Behavioral Health, and
the like—or performing work directly or through the Company for nonprofit
organization(s) doing business with the City—subject to the condition that in performing
such activity(ies), you would not engage in prohibited representation before the City
Department of Human Services as set forth above.
With regard to Section 1103(a) of the Ethics Act, 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—either directly or
through the Company—with a nonprofit organization subject to the conditions that you:
(1) did not use the authority of your public position in matter(s) pertaining to such
nonprofit organization when you had an actual or reasonable expectation that you/the
Company would enter into a business/employment arrangement with such nonprofit
organization or would otherwise receive a private pecuniary benefit relating to such
nonprofit organization; 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 nonprofit
organization or other private pecuniary benefit relating to such nonprofit organization.
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
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: o
Based upon the submitted facts that: (1)n August 8, 2011, you
were appointed as the Deputy Commissioner for Finance for the City of Philadelphia
Department of Human Services (“City Department of Human Services”); (2) you went on
administrative leave on January 7, 2016, and your employment with the City
Department of Human Services was terminated on April 14, 2016; (3) as the Deputy
Commissioner for Finance for the City Department of Human Services, you were
responsible for the day-to-day operations of the Division of Finance and oversaw
contracting, although you were not the sole decision maker in awarding contracts; (4)
for many contracts, Requests for Proposals were reviewed by a group, and a provider
was selected through a detailed process; (5) some nonprofit organizations with ongoing
relationships with the City Department of Human Services were awarded contracts
Hanns, 16-548
July 26, 2016
Page 6
through a process that did not involve Requests for Proposals; and (6) following
termination of your employment with the City Department of Human Services, you
started a consulting company named “JK Consulting, LLC” (the “Company”) that works
with nonprofit organizations on financial and operations management strategy, you are
advised as follows.
In the former capacity as the Deputy Commissioner for Finance for the City
Department of Human Services, 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 City Department of
Human Services, you became a former public official/public employee subject to
Section 1103(g) of the Ethics Act. The former governmental body is the City
Department of Human Services in its entirety. For the first year following termination of
your employment with the City Department of Human Services, Section 1103(g) of the
Ethics Act would apply and restrict “representation” of a “person” before the City
Department of Human Services. The restrictions as to representation outlined above
must be followed.
With regard to Section 1103(a) of the Ethics Act, 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—either directly or
through the Company—with a nonprofit organization subject to the conditions that you:
(1) did not use the authority of your public position in matter(s) pertaining to such
nonprofit organization when you had an actual or reasonable expectation that you/the
Company would enter into a business/employment arrangement with such nonprofit
organization or would otherwise receive a private pecuniary benefit relating to such
nonprofit organization; 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 nonprofit
organization or other private pecuniary benefit relating to such nonprofit organization.
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
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July 26, 2016
Page 7
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