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HomeMy WebLinkAbout17-502 HafnerSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 (717) 783 -1610 1- 800 -932 -0936 ADVICE OF COUNSEL January 13, 2017 To the Requester: Mr. C.J. Hafner, 11 Chief Counsel Democrat Legal Staff Senate of Pennsylvania Dear Mr. Hafner: 17 -502 This responds to your letter dated December 1, 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 � a T-S: 1101 et sec ., would impose prohibitions or restrictions upon a Pennsylvania State Senator, who in his private capacity as an attorney is affiliated with a law firm in an of- counsel position, with regard to attending meetings of the law firm and its clients and providing advice to the law firm and its clients on matters) related to the Medical Marijuana Act ( "Medical Marijuana Act "), Act 16 of 2016, 35 P S 10231.101 et seq., where the Pennsylvania State Senator was the first co-sponsor of the Senate Bill which was enacted as the Medical Marijuana Act, and he continues to play an unofficial role in the development of the Commonwealth's policies and regulations regarding medical marijuana. Facts: You have been authorized by Pennsylvania State Senator Daylin Leach enator Leach ") to request an advisory from the Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Senator Leach has been a Member of the Pennsylvania General Assembly since 2002. In a private capacity, Senator Leach is an attorney -licensed to practice law in Pennsylvania. Senator Leach was a sole practitioner at the time that he was first elected to the Pennsylvania General Assembly, and he closed and liquidated his practice shortly thereafter. In the spring of 2016, Senator Leach received an offer from a Philadelphia -based law firm ( "the Firm ") to become affiliated with the Firm in an of- counsel position. Senator Leach accepted the position based on the following terms: he will provide advice to both the Firm and clients on a number of matters; he will attend meetings between the Firm and clients and potential clients, he will not be counsel of record for any client or represent any client in court; he will be paid a predetermined, flat annual FAX: (717) 787 -0806 • Web Site: www.ethics.state.pa.us • e -mail: ethics(@state.pa.us Hafner, 17 -502 awry 13, 2017 Page 2 salary and will not receive any other compensation or benefits; and his compensation will not increase or decrease depending upon what clients retain or do not retain the Firm or upon the result of any matter in which the Firm is or was involved. The Firm's practice includes a few specializations, including a new area of practice regarding medical marijuana law in Pennsylvania. Senator Leach is one of the leading proponents in Pennsylvania for the legalization of medical marlJuana, and he was the first co- sponsor of Senate Bill 3 of the 2015 -2016 Legislative Session, which was ultimately enacted as the Medical Marijuana Act. You state that Senator Leach continues to play an unofficial role in the development of the Commonwealth's policies and regulations regarding medical marijuana. Senator Leach organized and hosted a conference of interest groups for the purpose of eliciting best practices from other states in their implementation of medical marijuana programs. In addition, although Senator Leach has no authority regarding the promulgation of regulations related to medical marijuana by the Pennsylvania Department of Health ( "Department of Health "), his staff has regularly attended meetings with the Department of Health where regulatory issues are discussed. Staff from all four caucuses of the Pennsylvania General Assembly and representatives of interested parties have also attended the aforesaid meetings. Senator Leach has no authority with regard to the Department of Health's award of licenses under the Medical Marijuana Act. Although the Firm practices in a number of specializations, requests to Senator Leach have so far been for information regarding the Medical Marihuana Act or the ongoing regulation drafting process. You state that none of the questions posed to Senator Leach were asked by persons who were clients of the Firm as of December 1, 2016 (the date of your advisory request letter). Based upon the above submitted facts, you pose the following questions: (1) Whether the Ethics Act would permit Senator Leach to meet with Firm clients who may wish to apply for licenses under the Medical Marijuana Act; (2) Whether the Ethics Act would permit Senator Leach to advise Firm clients on effective ways to prepare their applications, such as, for example, by creating a diversity plan or developing a business plan; (3) Whether Senator Leach would be permitted to meet with Firm clients who have questions or concerns about regulatory issues; (4) Whether Senator Leach would be permitted to advise the Firm or Firm clients who have received licenses on compliance issues; and (5) Whether Senator Leach would be permitted to raise with the Department of Health the issue of a Firm client's regulatory concern, where such issue would be raised as a general concern without specifically identifying the client. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics ct, 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 trut fully disclosed all of the material facts. Hafner, 17 -502 uar aT y 13, 2097 Page 3 It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion/advice may be given only as to prospective (future) conduct. To the extent that your ingiry relates to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may and shall be addressed. In his capacity as a Member of the Pennsylvania State Senate, Senator beach is a public official subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act 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 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 compan , joint stock company, receivership, trust or any legal entry 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. Hafner, 17 -502 a� nuary 13, 2017 Page 4 65 Pa.C.S. § 1102. 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 pecunia 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 applying the above provisions of the Ethics Act to the instant matter, 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) imposes restrictions upon Senator Leach in his capacity as a public official, rather than upon him in his private capacity as an attorney. Pursuant to Section 1103(a) of the Ethics Act, in his public capacity as a Member of the Pennsylvania State Senate, Senator Leach could have a conflict of interest under the Ethics Act in matters that would financially impact him or a business with which he is associated. (It is parenthetically noted that the submitted facts do not enable a conclusive determination as to whether the Firm is a business with which Senator Leach is associated in his capacity as an attorney affiliated with the Firm in an of- counsel position.) However, to the extent the activities of a state legislator relate to "legislative actions" (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the Commission. See, Mann, Opinion 07 -005; Confidential Opinion, 05- 002; Corrigan, Opinion 87.001. As mother actions, Senator Leach would not transgress Section '1103(a) of the Ethics Act unless: (1) he would be consciously aware of a private pecuniary benefit for himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated; and (2) his action(s) (use of authority of office or confidential information received by being in his public office) would constitute one or more specific steps to attain that benefit. See, Kistler v. State Ethics Commission, 610 Pa. 516, 528, 22 A.3d 223, 231 (2011). Turning to your five specific questions, you are advised that Section 1103(a) of the Ethics Act would not prohibit Senator Leach, in his private capacity as an attorney affiliated with the Firm in an of- counsel position, from: (1) Meeting with Firm clients who may wish to apply for licenses under the Medical Marijuana Act; (2) Advising Firm clients on effective ways to prepare their applications; (3) Meeting with Firm clients who have questions or concerns about regulatory issues; (4) Advising the Firm or Firm clients who have received licenses on compliance issues; or (5) Raising with the Department of Health the issue of a Firm client's regulatory concern, where such issue would be raised as a general concern without specifically identifying the client. Finally, 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 Hafner, 17 -502 January 13, 2017 Page 5 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; Based upon the submitted facts that: (1) Pennsylvania State Senator Daylin Leach ( "Senator Leach ") has been a Member of the Pennsylvania General Assembly since 2002; (2) in a private capacity, Senator Leach is an attorney licensed to practice law in Pennsylvania; (3) Senator Leach was a sole practitioner at the time that he was first elected to the Pennsylvania General Assembly, and he closed and liquidated his practice shortly thereafter; (4) in the spring of 2016, Senator Leach received an offer from a Philadelphia -based law firm ( "the Firm ") to become affiliated with the Firm in an of- counsel position; (5) Senator Leach accepted the position based on the following terms: he will provide advice to both the Firm and clients on a number of matters; he will attend meetings between the Firm and clients and potential clients; he will not be counsel of record for any client or represent any client in court; he will be paid a predetermined, flat annual salary and will not receive any other compensation or benefits; and his compensation will not increase or decrease depending upon what clients retain or do not retain the Firm or upon the result of any matter in which the Firm is or was involved; (6) the Firm's practice includes a few specializations, including a new area of practice regarding medical marijuana law in Pennsylvania; (7) Senator- Leach is one of the leading proponents m Pennsylvania for the legalization o medical marijuana, and he was the first co- sponsor of Senate Bill 3 of the 2015 -2016 Legislative Session, which was ultimately enacted as the Medical Marijuana Act ( "Medical Marijuana Act "), Act 16 of 2016, 35 P.S. § 10231.101 et sse ; (8) Senator Leach continues to play an unofficial role in the development of the Commonwealth's policies and regulations regarding medical marijuana; (9) Senator Leach organized and hosted a conference of interest groups for the purpose of eliciting best practices from other states in their implementation of medical marijuana programs; (10) although Senator Leach has no authority regarding the promulgation of regulations related to medical marijuana by the Pennsylvania Department of Health ( "Department of Health "), his staff has regularly attended meetings with the Department of Health where regulatory issues are discussed; (11) staff from all four caucuses of the Pennsylvania General Assembly and representatives of interested parties have also attended the aforesaid meetings; (12) Senator Leach has no authority with regard to the Department of Health's award of licenses under the Medical Marijuana Act; (13) although the Firm practices in a number of specializations, requests to Senator Leach have so far been for information regarding the Medical Marijuana Act or the ongoing regulation drafting process; and (14) none of the questions posed to Senator Leach were asked by persons who were clients of the Firm as of December 1, 2016 (the date of your advisory request letter), you are advised as follows. As a Member of the Pennsylvania State Senate, Senator Leach is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S, 5 1101 et se q. Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes restrictions upon public officials and public employees. Therefore, Section 1103(a) imposes restrictions upon Senator Leach in his capacity as a public official, rather than upon him in his private capacity as an attorney. Pursuant to Section 1103(a) of the Ethics Act, in his public capacity as a Member of the Pennsylvania State Senate, Senator Leach could have a conflict of interest under the Ethics Act in matters that would financially impact him or a business with which he is associated. (It is parenthetically noted that the submitted facts do not enable a conclusive determination as to whether the Firm is a business with which Senator Leach is associated in his capacity as an attorney affiliated with the Firm in an of- counsel position,.) However, to the extent the activities of a state legislator relate to "legislative actions (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the Commission. As for other actions, Senator Leach would not transgress Section 1103(x) of the Ethics Act unless: (1) he would be consciously aware of a private pecuniary benefit for himself, a member of his immediate family, or a Hafner, 17 -502 January 13, 2017 Page 6 business with which he or a member of his immediate family is associated; and (2) his actions (use of authority of office or confidential information received by being in his public o ice) would constitute one or more specific steps to attain that benefit. Section 1103(a) of the Ethics Act would not prohibit Senator Leach, in his private capacity as an attorney affiliated with the Firm in an of- counsel position, from: (1) meeting with Firm clients who may wish to apply for licenses under the Medical Marijuana Act; (2) advising Firm clients on effective ways to prepare their applications; �3 meeting with Firm clients who have questions or concerns about regulatory issues; 4) advising the Firm or Firm clients who have received licenses on compliance issues; or (5) raising with the Department of Health the issue of a Firm client's regulatory concern, where such issue would be raised as a general concern without specifically identifying the client. 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 ursuant to 51 Pa. Code § 73.2(h). The appeal may be received p at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (777 - 787 - 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, - ��� L? , Robin M. Hittie Chief Counsel