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HomeMy WebLinkAbout88-527 Hafner IIClaude Hafner, II, Esquire 407 1/2 North Hanover Street Hershey, PA 17033 Dear Mr. Hafner: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 March 4, 1988 ADVICE OF COUNSEL 88 -527 Re: Attorney, General Assembly Member, Representation, Section 3(a) This responds to your letter of January 29, 1988, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act imposes any prohibition or restrictions upon a member of a General Assembly from representing clients as an attorney at law before Departments of the Commonwealth of Pennsylvania. Facts: You state that you represent a client who is a member of the General Assembly of the Commonwealth of Pennsylvania and who is also an attorney engaged in the private practice of law. You further state that your client has been retained by two organizations which seek his legal representation in cases against the Commonwealth. The first case relates to a facility which participates in the Department of Public Welfare's (DPW) Medical Assistance Program. You state that this organization has appealed a determination made by DPW's Office of Medical Assistance relative to the facility's rate determination. You note that the appeal will be heard by DPW's Office of Hearings and Appeals. You then describe the appeal process whereby if either party is dissatisfied with the initial appeal, a review may be requested by the Secretary of DPW followed by an appeal of that decision to Commonwealth Court. In these proceedings wherein both DPW and the organization will have legal representation, you inquiry as to whether the member may represent the organization in the DPW appeal process, in Commonwealth Court and in other courts if an appeal is taken. You also ask whether the member's status as a minority chairman of a Legislative Committee would have an impact on his duties under the Ethics Act. The second situation concerns a contract dispute between a publicly traded corporation and the Department of the Commonwealth. You state that the contract which related to cost cutting in providing certain services, was cancelled for reasons allegedly unrelated to the quality of Claude Hafner, II, Esquire March 4, 1988 Page 2 service provided by the contractor. It is further noted by you that at the time of cancellation there was a balance oweing of 500,000 for serves allegedly provided and unpaid. You note that the contractor has requested the member to represent him in litigation with the Commonwealth both for the recovery of payment of services allegedly rendered as well as for the claim for additional damages. You further state that prior to the actual litigation, negotiations will take place both with the representatives of the Department and the Governor's Office in an effort to amicably resolve the matter without litigation. You then note that the member is a lawyer and member of the minority party who holds less than 1 /10% of the stock in the parent company of the contractor. You then inquiry as to whether the member may represent the contractor in the discussions with the Department and the Governor's Office prior to the commencement of litigation regarding payment for prior services and re- negotiation of the contract; whether the member may represent the contractor in litigation before the Board of Claims as to the payment for prior services and as to damages for alleged wrongful cancellation of the contract and whether the member may represent the contractor in litigation or in the participation in settlement negotiations after litigation is commenced relative to payment for prior services and re- negotiation of the contract. You also inquiry as to whether a member status as a minority chairman of any Legislative Committee would impact upon the advice. Discussion: As a member of the General Assembly the attorney is a "public official" as that term is defined in the Ethics Act. 65 P.S. §402; 51 Pa. Code §1.1. As such, his conduct is subject to the provisions of the Ethics Act. Section 3(a) of the Ethics Act provides: Section 3. Restricted activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). In the instant matter, you have requested advice as to the conduct of a member of the General Assembly not as it relates to him as a Legislator but solely as it relates to his private practice of law regarding representing private clients before Departments of the Commonwealth of Pennsylvania. You are probably aware of the case entitled Pennsylvania Public Utility Bar Association v. Thornburgh, 434 A.2d 1327, 62 Pa. Cmwlth. (19817 affirmed per curiam 450 A.2d 613, 498 Pa. 589 (1982) which deals with the applicability of Section 3(e) of the Ethics Act to attorneys in the regulation of their practice of law. Claude Hafner, II, Esquire March 4, 1988 Page 3 In light of the recent decision in Pennsylvania Public Utility Commission Bar Association, supra, where the Court held that Section 3(e) of the Ethics Act, 65 P.S. 403(e), was an impermissible intrusion upon the Supreme Court's authority to regulate an attorney's conduct, the State Ethics Commission has applied this decision to mean that there are no prohibitions under Section 3(e) of the Ethics Act upon his conduct insofar as that conduct constitutes the practice of law. Therefore, insofar as his conduct before the Departments of the Commonwealth would constitute the practice of law, Section 3(a) of the Ethics Act also cannot be applied to restrict that proposed activity. Particular reference should be made to the decision of the Commonwealth Court at Footnote 7, 434 A.2d at page 1331 - 1332. In this note, the Court indicates that any activity in which the attorney proports to render professional services to a client may only be regulated by the Supreme Court. The State Ethics Commission, therefore, must conclude that to the extent that he would represent a client, as a lawyer, before the Departments of the Commonwealth or otherwise, Section 3(a) of the Ethics Act would not operate to bar such activity. If, however, the activities that he intends to undertake do not fall within the category of the "practice of law ", the prohibiton of Section 3(a) of the Ethics Act might be applicable. However, for the purposes of this advice, it is assumed that he intends to undertake these activities in the capacity of lawyer - client, that these activities would constitute the practice of law and that the provisions of Section 3(a) of the Ethics Act, pursuant to the mandates of the Supreme Court's ruling would therefore be inapplicable. Section 3(b) of the Ethics Act provides: Section 3. Restricted activities. (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Section 3(b) of the Ethics Act must be referenced in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which a public official or employee must observe, a public official or employee must neither offer nor accept anything of value on the understanding Claude Hafner, II, Esquire March 4, 1988 Page 4 or with the intention that his judgment would be influenced thereby. It is assumed such a situation does not exist here. This Section is referenced not to indicate that any such activity has been or will be undertaken but in an effort to provide a complete response to your inquiry. 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. Specifically not addressed in this advice is the applicability of either the Legislative Code of Ethics or the Code of Professional Responsibility in that those codes do not involve an interpretation of the Ethics Act. Conclusion: Section 3(a) does not restrict the activities of a member of the General Assembly regarding the representation of private clients before the Departments of the Commonwealth insofar as those activities constitute the practice of law. The propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed is the propriety of the the proposed conduct under either the Legislative Code of Ethics or the Code of Professional Responsibility. Pursuant to Section 7(9)(ii), this Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct i n any other civi 1 or crimi nal proceeding, providing the requestor 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 request that the full Commission review this Advice. A personal appearance before the Commission will be scheduled and a formal Opinion from the Commission will be issued. Any such appeal must be made, in writing, to the Commission within 15 days of service of this Advice pursuant to 51 Pa. Code 2.12. cerely, Vincent a. Dopko General Counsel