HomeMy WebLinkAbout17-521 Confidentialt
STATE ETHICS COMMISSION
309 FINANCE BUIL ID;NG
P.O. BOX 11470
HARRISBURG, PA 1 71 08 -1 470
(717) 783 -1610
1- 800 - 932 -0936
ADVICE OF COUNSEL
March 30, 2017
To the Requester:
17 -521
This responds to your letter dated January 31, 2017, by which you requested a
confidential advisory from the Pennsylvania State Ethics Commission ( "Commission ").
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
ACS. § 1101 et se %, would impose prohibitions or restrictions upon an individual with
regard to performing the duties of his public position as an A of Governmental Body B if
the individual, in his private capacity, would be hired by a company to serve in the role
of C for an event, where: (1) some of the sponsors of the event may be Governmental
Body B Ds or Es; and (2) an entity has obtained an F from Governmental Body B to G
at the event.
Facts: As an A of Governmental Body B, you request a confidential advisory from
tFe--7ommission based upon submitted facts that may be fairly summarized as follows.
The [name of event] ( "the Event ") is being produced by [name of company]
;yocdy ompany 1 "). Company has hired [name of company] ( "Company 2 ") to providye
pe of services l for the Event. Neither Company 1 nor Company 2 is a Governmental
B D, E, or
The [name of entity] ( "the Entity ") has obtained an F from Governmental Body B
that allows the Entity to G at the Event. You state that while you did not personally
approve the Entity's I for the F, such I was approved by Governmental Body B.
You anticipate that the Entity, like all Event participants, will pay monies to
Company 1 for the right to participate in the Event. In addition to receivin participant
fees and ticket revenue, Company 1 may receive monies from Js of Ks that are
sponsoring the Event. Some of these Event sponsors may be Governmental Body B Ds
or Es.
Company 2 wants to hire you to serve in the role of C for the Event, in which
capacity you would [perform certain activities]. You anticipate that you would direct the
placement of structures and attend to other logistical concerns for all Event participants,
including the Entity. You state that your only role would be that of C and that you would
not be involved in procuring sponsors for the Event. You would be paid by Company 2
FAX: (717) 787 -0806 6 Web Site: www.ethics.state.pa.us 0 e -mail: ethicsPstate.pa.us
Confidential Advice, 17 -521
March , 2017
Page 2
and not by the aforesaid Event sponsors. You would not receive any compensation
from the Entity or other Event participants.
Based upon the above submitted facts, the question that is presented is whether
the Ethics Act would impose prohibitions or restrictions upon you with reg and to
performing the duties of your public position as an A of Governmental Body B if you
would be hired by Company 2 to serve in the role of C for the Event.
Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of
e 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. §§ 110700), (11). An advisory only affords a
defense to the extent the requester has truthfully disclosed all of the material facts.
As an A of Governmental Body B, you are a public official subject to the
provisions of the Ethics Act.
Sections 1103(a) and 11030) 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
bod 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
permitted to vote to break the tie vote if disclosure is made
as otherwise provided herein.
65 Pa.C.S. §§ 1103(a), 0).
The following terms related to Section 1103(a) are defined in the Ethics Act as
follows:
Confidential Advice, 17 -521
March 7
Page 3
§'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.
"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.
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.
In each instance of a conflict of interest, the public official/public employee would
be required to abstain from participation. The abstention requirement would not be
limited merely to voting, but would extend to any use of authority of office including, but
not limited to, discussing, conferring with others, and lobbying fora articular result.
Juliante, Order 809. Subject to certain statutory exceptions, in each instance of a voting
coffin ic�t, Section 11030) of the Ethics Act would require the public official/public
employee to abstain and to publicly disclose the abstention and reasons for same, both
orally and by filing a written memorandum to that effect with the person recording the
minutes.
Confidential Advice, 17 -521
March , 2017
Page 4
Per the Pennsylvania Supreme Court's decision in Kistler v. State Ethics
Commission, 610 Pa. 516, 22 A.3dp223 (2011), in order to violat ction 1103(a) of the
Ethics Act, —a public official /public employee:
... must act in such a way as to put his office /public position]
to the purpose of obtaining for himself a private pecuniary
benefit. Such directed action implies awareness on the part
of the [public official/public employee] of the potential
pecuniary benefit as well as the motivation to obtain that
benefit for himself.
Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics
cctt, a public officiallpublic 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." Id., 610 Pa. at 528, 22 A.3d at 231.
In addition, Sections 1103(b) and 1103(c) of the Ethics Act, 65 Pa.C.S. §§
1103(b), (c), provide in part that no person shall offer or give to a public official /pubic
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 compete response to
the question presented.
Having established the above general principles, 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. Section 1103(a) of the Ethics
Act would impose restrictions upon you in your capacity as a public official, rather than
upon you in your private capacity. Therefore, Section 1103(a) would not prohibit you, in
your rivate capacity, from being hired by Company 2 to serve in the role of C for the
Even .
It is unclear from the submitted facts whether Company 2 would hire you as an
employee or independent contractor. If you would be hired as an employee of
Company 2, Company 2 would become a business with which you are associated•
In your public capacity as an A of Governmental Body B, you would have a
conflict of interest under Section 1103(a) of the Ethics Act as to discussions), vote(s),
and /or other official action(s) if: (1) you would be consciously aware o a private
pecuniary benefit for yourself, member(s) of your immediate family, or a business with
which you or member(s) of your immediate family are associated; (2) your action(s)
would constitute one or more specific steps to attain that benefit; and (3) neither the de
minimis exclusion nor the class /subclass exclusion set forth within the Ethics Act's
definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, would be
applicable. Cf. Kistler, supra.
As noted above, in each instance of a conflict of interest, you would be required
to abstain from participation, which would include voting unless one of the statutory
exceptions of Section 1103�) of the Ethics Act would be applicable. Additionally, the
disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied
in the event of a voting conflict.
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
Confidential Advice, 17 -521
March 30, 2017
Page 5
interpretation of the Ethics Act. Specifically not addressed herein is the applicability of
[statute /cite].
Conclusion: As an A of Governmental Body B, you are a public official subject to
e provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S.
1101 et sec.. Based upon the submitted facts that: (1) the [name of event] ( "the Event'
is being produced by [name of company] ( "Company 1'.); (2) Company 1 has hired
name of company] ('Company 2 ") to provide [type of services] for the Event; (3) neither
name 1 nor Company 2 is a Governmental Body B D, E, or H; (4 the (name of
entity] ( "the Entity ") has obtained an F from Governmental Body B that allows the Entity
to G at the Event; (5) while you did not personally approve the Entity's I for the F, such I
was approved by Governmental Body B; (6) you anticipate that the Entity, like all Event
participants, will pay monies to Company 1 for the right to participate in the Event; (7) in
addition to receiving participant fees and ticket revenue, Company 1 may receive
monies from Js of Ks that are sponsoring the Event; (8) some of these Event sponsors
may be Governmental Body B Ds or Es; (9) Company 2 wants to hire you to serve in
the role of C for the Event, in which capacity you would [perform certain activities]; (10)
you anticipate that you would direct the placement of structures and attend to other
logistical concerns for all Event participants, including the Entity; (11) your only role
would be that of C, and you would not be involved in procuring sponsors for the Event;
12 you would be paid by Company 2 and not by the aforesaid Event sponsors; and
(13) you would not receive any compensation from the Entity or other Event
participants, 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. Section 1103(a) of the Ethics
Act would impose restrictions upon you in your capacity as a public official, rather than
upon you in your private capacity. Therefore, Section 1103(a) would not prohibit you, in
your private capacity, from being hired by Company 2 to serve in the role of C for the
Event.
It is unclear from the submitted facts whether Company 2 would hire you as an
employee or independent contractor. If you would be hired as an employee of
Company 2, Company 2 would become a business with which you are associated.
In your public capacity as an A of Governmental Body B, you would have a
conflict of interest under Section 1103(a) of the Ethics Act as to discussion(s), vote(s),
and/or other official action(s) if: (1) you would be consciously aware of a private
pecuniary benefit for yourself, member(s) of your immediate family, or a business with
which you or member(s) of your immediate family are associated; (2) your action(s)
would constitute one or more specific steps to attain that benefit; and (3) neither the de
minimis exclusion nor the class /subclass exclusion set forth within the Ethics Act's
definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, would be
applicable.
In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict. 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.
Confidential Advice, 17 -521
March 30, 2017
Page 6
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 writingg and must be acttuua, l�
received at the Commission within thirty (30) days of the date o t is
Advice p pursuant to 59 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