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HomeMy WebLinkAbout17-001 ArnesonSTATE ETHICS COMMISSION 309 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Marla Feele Melanie De&lma DATE DECIDED: 1125117 DATE MAILED: 217117 To the Requester: Erik Arneson Executive Director, Office of Open Records Dear Mr. Arneson: 17 -001 This Opinion is issued in response to your letter dated October 25, 2016, by which you requested an advisory from the Pennsylvania State Ethics Commission. L ISSUE: Whether the Public Official and Employee Ethics Act ( "Ethics Act "�, 65 Pa.C.S. § 1101 et se q., would impose prohibitions or restrictions upon an individua serving as the Executive Director of the Pennsylvania Office of Open Records ( "OOR" ) with regard to authorizing an expenditure of OOR funds to pay legal bills /expenses for a law firm's representation of the individual in litigation that: (1) determined that the Honorable Tom Wolf, Governor, exceeded his removal power under the Pennsylvania Constitution and dismissed the individual from his position as Executive Director of OOR without the authority of law; and (2) resulted in a court order directing the restoration of the individual to his position as Executive Director of OOR. li. FACTUAL BASIS FOR DETERMINATION: . You request an advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. You were duly sworn in as the Executive Director of OOR in January 2015. The Honorable Tom Wolf, Governor ( "Governor Wolf "), subsequently attempted to terminate your employment as the Executive Director of OOR. You retained a law firm (also referred to herein as "the Law Firm ") to litigate whether your employment as the Executive Director of OOR was improperly terminated by Governor Wolf in violation of the Pennsylvania Constitution and the Right -to -Know Law, 65 P.S. §§ 67.101 - 67.3104. We take administrative notice of the following. On January 26, 2015, you, P.O. BOX 11470, HARRISBURG, PA 17108 -1470 • 717- 783 -1610 • 1 -800- 932 -0936 • www.ethics.state.pa.us Arneson, 17 -001 February 7, 2017 Page 2 individually and in your official capacity as the Executive Director of OOR, togetherwith the Senate Majority Caucus, commenced litigation against Governor Wolf in the Commonwealth Court of Pennsylvania. In Arneson v. Wolf, 117 A.3d 374 (Pa. Cmwlth. 2015), the Commonwealth Court determined that a Governor does not have the authority to remove an Executive Director of OOR without cause. Since Governor Wolf did not contend that he had cause to terminate your employment as the Executive Director of OOR, the Commonwealth Court concluded that Governor Wolf exceeded his removal power under Article VI, Section 7 of the Pennsylvania Constitution and dismissed you from your position as Executive Director of OOR without the authority of law. The Commonwealth Court ordered that you be restored to the position of Executive Director of OOR and that you receive any back pay and benefits owed, discounting certain offsets. The Order of the Commonwealth Court was subsequently affirmed by the Pennsylvania Supreme Court. See, Arneson v. Wolf, 124 A.3d 1225, 2015 Pa. LEXIS 2396 (2015). You ask whether you would have a conflict of interest with regard to authorizing an expenditure of OOR funds to pay legal billslexpenses for the Law Firm's representation of you in the litigation that resulted in your restoration to the position of Executive Director of OOR, and if so, whether permitting the Deputy Director of OOR to authorize the payment of such legal billslexpenses would cure any ethical issues. By letter dated January 5, 2017, you were notified of the date, time and location of the public meeting at which your request would be considered. At the public meeting on January 25, 2017, you appeared for the purpose of answering any questions of the Commissioners. You offered additional information, the material portion of which may be fairly summarized as follows. The Law Firm representing you in the in the litigation that resulted in your restoration to the position of Executive Director of OOR was Lamb McErlane PC ( "Lamb McErlane "). The Senate Majority Caucus was represented by other counsel from a different law firm. The Senate Majority Caucus did not pay any portion of the bills from Lamb McErlane. The total amount of your legal billslexpenses from Lamb McErlane for the aforesaid litigation is approximately $185,000.00. You did not seek payment of your legal billslexpenses as part of the aforesaid litigation. However, it is our understanding that an agreement has been reached through the Governor's Office of General Counsel whereby approximately $160,000.00 of your aforesaid legal billslexpenses will be paid from a source other than OOR. Your request for an advisory opinion from this Commission pertains to the potential payment by OOR of the remaining balance of your legal billslexpenses totaling approximately $25,000.00. III. DISCUSSION: It is initially noted that pursuant to Sections 1107(10) and 1107(l 1) 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, this 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 truthfullly disclosed all of the material facts. As the Executive Director of OOR, you are a public off iciallpublic employee subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: § 1103. Restricted activities Arneson, 17 -001 February 7, 2017 Page 3 (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 employyee 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. 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 off iciallpublic 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 officiallpublic 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 509. 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 Fbenefit 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). In the instant matter, the answer to the question that you have posed hinges upon whether you would receive a private pecuniary benefit if OOR funds would be expended to pay the aforesaid legal bills /expenses. To the extent a public official, through a use of authority of office, receives governmentally paid legal representation such that there are no out of pocket expenses, the public official receives a pecuniary benefit. Miller, Opinion 03- 012. Such pecuniary benefit is a private pecuniary benefit where the public official is not entitled to publicly paid legal representation. A. Arneson, 17 -001 February 7, 2017 Page 4 Various court decisions have addressed the issue of whether a public official is entitled to legal representation at government expense. In Silver v. Downs, 493 Pa. 50, 425 A.2d 359 (1981), the Pennsylvania Supreme Court concluded that two township supervisors who were defendants in a recall action were entitled 'to representation by the township solicitor or other counsel retained with public funds_ However, the allegations in the recall action related to the official activities of the township supervisors in handling township accounts, as to which allegations there was a statutory right to publicly provided legal counsel. The Supreme Court further noted that the case did not involve accusations of criminal conduct. In In Re Birmingham Township, Delaware Count , 597 A.2d 253 (Pa. Cmwlth. 1991), the ommonwealth Court held that two towns ip supervisors were entitled to a public defense in a recall action where there was no substantial supporting evidence for allegations of criminal conduct. Based upon Silver, supra, the Commonwealth Court concluded that township officials facing a recall action ordinarily have the right to a defense paid out of township funds because township officials should not be forced out of office in order to avoid the substantial legal costs of defending their official actions, except the local government should not pay for the defense of an official who committed an act of criminal misconduct while in office. In R.H. v. State Ethics Commission, 673 A.2d 1004 (Pa. Cmwlth. 1996), the Commonwealth Court affirmed this Commission's decision that two township supervisors violated Section 3(a) of a prior version of the Ethics Act, Act 170 of 1978, when they used the township solicitor to represent them at taxpayer expense in litigation they brought to challenge the township auditors' decision to decrease the annual laborer wage for the township supervisors in their working positions as laborers. The Commonwealth Court determined that the benefits the township supervisors sought through the litigation against the township auditors were personal to the township supervisors and not necessary for the general conduct of business of the township. Lastly, in S ms v. Lower Southampton Township, 702 A.2d 885 (Pa. Cmwlth. 1997), the Commonwealth Court held that under Silver, supra_, a township tax collector, who was sued in a recall action which alleged the tax collector failed to perform certain duties of his office, was entitled to le .9al representation at the township's expense. The Commonwealth Court noted that as in Silver, there were no allegations that the township tax collector had engaged in any criminal activity. Based upon the above precedents, we reach the following conclusions. In the instant matter, the litigation that you commenced against Governor Wolf involved the issue of whether he had the legal authority to dismiss you from your position as Executive Director of OOR. Governor Wolf did not contend that he had cause to terminate your employment in such position, and the litigation did not involve any matters of a personal nature. Given that the litigation ultimately resulted in a court order directing your restoration to the position of Executive Director of OOR, it is our view that the litigation was clearly related to your official duties as the Executive Director of OOR and that the payment by OOR of the balance of the actual and reasonable legal fees and expenses that you incurred in the aforesaid litigation would not constitute a "private pecuniary benefit." Therefore, you are advised that you would not have a conflict of interest under Section 1103(a) of the Ethics Act with regard to authorizing an expenditure of funds from the OOR to pay the balance of the actual and reasonable legal fees and expenses for Lamb McErlane's representation of you in the litigation that resulted in your restoration to the position of Executive Director of OOR. The propriety of the proposed conduct has only been addressed under the Ethics Act. Arneson, 17 -001 February 7, 2017 Page 5 IV. CONCLUSION: Based upon the submitted and administratively noted facts that: (1) you were duly sworn in as the Executive Director of the Pennsylvania Office of Open Records ( "OOR ") in January 2015; (2) the Honorable Tom Wolf, Governor ( "Governor Wolf') subsequently attempted to terminate your empploymeat as the Executive Director of OOR; () you retained a law firm, namely Lamb McErlane PC ( "Lamb McErlane "), to litigate whether your employment as the Executive Director of OOR was improperly terminated by Governor Wolf in violation of the Pennsylvania Constitution and the Right -to -Know Law, 65 P.S. §§ 67.101- 67.3104; (4) on January 26, 2015, you, individually and in your official capacity as the Executive Director of OOR, together with the Senate Majority Caucus, commenced litigation against Governor Wolf in the Commonwealth Court of Pennsylvania; (5) in Arneson v. Wolf, 117 A.3d 374 (Pa. Cmwlth. 2015), the Commonwealth Court determined that a Governor does not have the authority to remove an Executive Director of OOR without cause; (6) since Governor Wolf did not contend that he had cause to terminate your employment as the Executive Director of OOR, the Commonwealth Court concluded that Governor Wolf exceeded his removal power under Article VI, Section 7 of the Pennsylvania Constitution and dismissed you from your position as Executive Director of OOR without the authority of law; (7) the Commonwealth Court ordered that you be restored to the position of Executive Director of OOR and that you receive any back pay and benefits owed, discounting certain offsets; 8) the Order of the Commonwealth Court was subsequently affirmed bythe Pennsylvania Court, Arneson v. Wolf, 124 A.3d 1225 2015 Pa. LEXIS 2396 (2015) (9) the Senate Majority Caucus, which was represented in the aforesaid litigation by other counsel from a different law firm, did not pay any portion of the bills from Lamb McErlane; (10) the total amount of your legal bills/expenses from Lamb McErlane for the aforesaid litigation is approximately $185,000.00; (11) you did not seek payment of your legal bills/expenses as part of the aforesaid litigation; (12) it is your understanding that an agreement has been reached through the Governor's Office of General Counsel whereby approximately $160,000.00 of your aforesaid legal billslexpenses will be paid from a source other than OOR; and (13) your request for an advisory opinion from this Commission pertains to the potential payment by OOR of the remaining balance of your legal bills/expenses totaling approximately $25,000.00, you are advised as follows. As the Executive Director of OOR, you area public official public em loyee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act' , 65 Pa.C.S. § 1101 et seg. You would not have a conflict of interest under Section 1103(a) of the Ethics Act wi #h regard to authorizing an expenditure of funds from the OOR to pay the balance of the actual and reasonable legal fees and expenses for Lamb McErlane's representation of you in the litigation that resulted in your restoration to the position of Executive Director of OOR. The propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(10), the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. By the Commission, i Nicholas A. Colafella Chair