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HomeMy WebLinkAbout89-549 MeyerSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 6, 1989 Evan Meyer 89 -549 Assistant City Solicitor Law Department 15th Floor, Municipal Services Building Philadelphia, PA 19102 -1692 Re: Former Public Employee; Section 3(e), Commerce Director, City of Philadelphia; Philadelphia Industrial Development Corporation Dear Mr. Meyer: This responds to your letter of May 3, 1989, in which you requested advice from the State Ethics Commission. Issue: You ask whether the Ethics Act presents any restrictions upon the employment of a commerce director with an industrial development corporation following his termination of service with the commerce department. Facts: At the direction of William P. Hankowsky, who was Commerce Director for the City of Philadelphia, hereinafter Philadelphia, until April 1, 1989, you request an advisory opinion from the Ethics Commission regarding the post - employment restrictions upon Mr. Hankowsky as President of the Philadelphia Industrial Development Corporation, hereinafter PIDC. After stating that PIDC is a public non - profit corporation, the purpose of which is "to promote the industrial and economic development of the City of Philadelphia ", you note that PIDC was designated as the official industrial development agency for Philadelphia as per the Industrial Development Assistance Law, the Act of May 31, 1956, P.L. 1911, 73 P.S. SS351 -358. You then recite the purpose for the Industrial Development Assistance Law which is, in part, to provide assistance to counties on matching grant basis for purpose of planning and promoting programs designed to stimulate the establishment of new or enlarged industrial, commercial and manufacturing enterprises. You then assert that Philadelphia accomplishes the foregoing through a cooperative program among Philadelphia, PIDC and the Philadelphia Authority for Industrial Development, hereinafter PAID. After stating that PAID is an Evan Meyer June 6, 1989 Page 2 authority organized under the Industrial Development Authority Act, the Redevelopment Area Economic Cooperation and Implementation Act and finally the Industrial and Commercial Development Authority Law which are codified at 73 P.S. SS301- 386, you recite the various duties and responsibilities of PAID. You then note that PIDC has various contracts with Philadelphia which may be categorized into three kinds of agreements: (1) contracts to pass on Philadelphia, Federal or State moneys as loans to companies to create jobs, (2) contracts to manage projects for Philadelphia and (3) contracts wherein PIDC nominates purchases for property of Philadelphia to be disposed of by PAID. In addition, you note that PIDC is under contract with Philadelphia to provide certain services including the staffing of the Developer Services Committee. In the latter regard, you note that PIDC assists developers relative to agenda preparation of issues to be reviewed by the Developer Services Committee. You then assert that PIDC's role is similar to the Commerce Department in that both entities provide assistance to developers so that they will understand requirements necessary for obtaining requisite approvals. You then conclude that PIDC acts in a capacity of an agent for the Commerce Department. After raising the issue as to whether Mr. Hankowsky as President of PIDC may represent that agency before the Philadelphia Commerce Department in matters relating to contracts, present and future, you express your view that the State Ethics Act would not restrict such activities on the part of Mr. Hankowsky. You then cite several advisory opinions of this Commission, such as Heverlina, Advice of Counsel No. 88 -540 and Haaan, Opinion No. 84 -19 wherein it was determined that an exception exists as to the applicability of Section 3(e) of the Ethics Act as to certain intra - governmental employment transfers. According to your analysis, the exception relates to the recognition that the general concerns of Section 3(e) of the Ethics Act regarding termination of state service followed by employment with a non - governmental employer do not exist in situations of employment by another governmental body. In addition, you cite Appeal of German, 27 Pa. Commw. 108, 366 A.2d 311 (1976), which involves the status of Harristown Development Corporation, and conclude that PIDC is not a private enterprise but is rather in the nature of a quasi- governmental agency. You finally request advice as to whether Section 3(e) of the Ethics Act restricts Mr. Hankowsky's employment with PIDC and if so the precise nature of the restrictions, noting that prior advisory opinions of the Commission have allowed for the administering of existing contracts as to individuals who have Evan Meyer - June 6, 1989 Page 3 terminated their governmental service and obtained employment with another entity. Discussion: As a former Commerce Director for City of Philadelphia, Mr Hankowsky is to be considered a "public employee" within the definition of that term as set forth in the Ethics Act and the regulations of this Commission. 65 P.S. S402; 51 Pa. Code S1.1. Consequently, upon termination of this employment, he would become a "former public employee" subject to Section 3(e) of the Ethics Act. Section 3(e) of the Ethics Act provides that: Section 3. Restricted activities. (e) No former official or public employee shall represent a person, with or without compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 P.S. S403. Initially, to answer your request the "governmental body" with which he was associated while working with the Philadelphia Commerce Department must be identified. Then, the scope of the prohibitions associated with the concept and term of "representation" must be reviewed. In this context, the Ethics Commission has previously ruled that the "governmental body" with which an individual may be deemed to have been associated during his tenure of public office or employment extends to those entities where he had influence, responsibility, supervision, or control. See Ewina, Opinion 79 -010. See also Kury v. Commonwealth of Pennsylvania, State Ethics Commission, 435 A.2d 940 (1981). From the description and analysis of his duties and responsibilities and based upon the facts outlined above, his jurisdiction, responsibility, influence and control appears to have been Philadelphia Department of Commerce. Thus, the "governmental body" with which he was "associated" upon the termination of his employment would be Philadelphia Commerce Department. Therefore, within the first year after he would leave Philadelphia Department of Commerce, Section 3(e) of the Ethics Act would apply and restrict his "representation" of persons or new employers vis -a -vis Philadelphia Department of Commerce. You, however, argue that the restrictions of Section 3(e) have no application to this case on the theory that Mr. Hankowsky Evan Meyer June 6, 1989 Page 4 will now be employed by PIDC which is a quasi - governmental agency. In particular, you assert that Mr. Hankowsky comes within the exception regarding intra - governmental transfers which are discussed in the Hagan and Heverlina supra. The exception set forth in the foregoing advisories have application only if Mr. Hankowsky is transferring from one governmental body to another. Although it is clear the Philadelphia Department of Commerce is a governmental body, the question as to the nature of the PIDC is in question. The Industrial Development Assistance Law in Section 3 defines and "Industrial Development Agency ", in part, as follows: The term "industrial development agency" shall mean any nonprofit corporation, organization, association or agency which shall be designated by proper resolution..." 73 P.S. 353. Thus, an industrial development agency is statutorily defined not as a quasi - governmental agency but as a nonprofit corporation. See also 252 Op. Att'y. Gen. 82 (1962), wherein the Attorney General of Pennsylvania opined as to whether a I.D.A. would be subject to the minimum wage law which was applicable only as to "public bodies ". The Attorney General concluded that the I.D.A.'s were private local nonprofit agencies rather than public bodies even though they received funding from public bodies. In arriving at his decision the Attorney General noted that the mere receipt or dispersal of public funds did not raise an agency to the level of an instrumentality of the state. Since Appeal of_,German did not define the nature of I.D.A.'s, the case appears to have no applicability or relevance to the instant matter. Therefore, PIDC is not a governmental entity. Turning now to the question of the restrictions which the Ethics Act would impose upon Mr. Hankowsky in his new employment with the PIDC, it is noted that the Ethics Act would not affect his ability to appear before agencies or entities other than with respect to the Philadelphia Department of Commerce. Likewise, there is no general limitation on the type of employment in which he may engage, following his departure from Philadelphia Department of Commerce. It is noted, however, that the conflicts of interest law is primarily concerned with financial conflicts and violations of the public trust. The intent of the law generally is that during the term of a person's public employment he must act consistently with the public trust and upon departure from the public sector, that individual should not be allowed to utilize his association with the public sector, officials or employees to secure for himself or a new employer, treatment or benefits that may be obtainable only because of his association with his former public employer. See Anderson, Evan Meyer June 6, 1989 Page 5 Opinion 83 -014; Zwikl, Opinion 85 -004. In respect to the one year representation the Ethics Commission has promulgated regulations to define "representation" as follows: Section 1.1 Definitions. Representation - -- Any act on behalf of any person including but not limited to the following activities: personal appearances, negotiating contracts, lobbying, and submitting bid or contract proposals which are signed by or contain the name of the former public official or public employee. 51 Pa. Code $1.1. The Commission, in its opinions, has also interpreted the term "representation" as used in Section 3(e) of the Ethics Act to prohibit: 1. Personal appearances before the governmental body or bodies with which he has been associated, (that is Philadelphia Department of Commerce), including, but not limited to, negotiations or renegotiations on contracts with the Philadelphia Department of Commerce; 2. Attempts to influence Philadelphia Department of Commerce; 3. Participating in any matters before Philadelphia Department of Commerce over which he had supervision, direct involvement, or responsibility while employed by Philadelphia; 4. Lobbying, that is representing the interests of any person or employer before Philadelphia Department of Commerce in relation to legislation, regulations, etc. See Russell, Opinion 80 -048 and Seltzer, Opinion 80 -044. The Commission has also held that preparing and signing a proposal, document or bid, or listing his name as the person who will provide technical assistance on such proposal, document, or bid, if submitted to or reviewed by Philadelphia Department of Commerce, constitutes an attempt to influence his former governmental body. See Kilareski, Opinion 80 -054. Therefore, within the first year after he leaves Philadelphia Department of Commerce, he should not engage in the type of activity outlined above. The Commission, however, has stated that the inclusion of his name as an employee or consultant on a "pricing Evan Meyer June 6, 1989 Page 6 proposal," even if submitted to or reviewed by Philadelphia Department of Commerce, is not prohibited as "representation." See Kotalik, Opinion 84 -007. He may, assist in the preparation of any documents presented to Philadelphia Department of Commerce so long as he is not identified as the preparer. He may also counsel any person regarding that person's appearance before Philadelphia Department of Commerce. Once again, however, his activity in this respect should not be revealed to the Philadelphia Department of Commerce. Of course, any ban under the Ethics Act would not prohibit or preclude him from making general informational inquiries of Philadelphia Department of Commerce to secure information which is available to the general public. See Cutt,, Opinion 79 -023. This, of course, must not be done in an effort to indirectly influence these entities or to otherwise make known to the Philadelphia Department of Commerce his representation of, or work for his new employer. Finally, the Commission has concluded that if he is administering an existing contract as opposed to negotiating or renegotiating a contract, his activities would not be prohibited by the Ethics Act. See Dalton, Opinion 80 -056 and Beaser, Advice 81 -538. Additionally, it is noted that Section 403(b) of the State Ethics Act would prohibit any public employee or public official from accepting a position of employment if said position has been offered based upon the understanding that the official conduct of the employee or official, while working for his former governmental body, was influenced by such offer. See 65 P.S. 5403(b). 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: As a former Commerce Director, Mr Hankowsky is to be considered a "public employee" as defined in the Ethics Act. Upon termination of his service with Philadelphia Department of Commerce, he would become a "former public employee" subject to the restrictions imposed by Section 3(e) of the Ethics Act. As such, his conduct should conform to the requirements of the Ethics Act as outlined above. His governmental body for the purpose of the one year representation restriction is Philadelphia Department of Commerce. Evan Meyer June 6, 1989 Page 7 Further, since Mr. Hankowsky has terminated his employment or service, as outlined above, he is reminded that the Ethics Act also requires him to file a Statement of Financial Interests for the year following his termination of service. 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 in any other civil or criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. such. This letter is a public record and will be made available as 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 in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code 52.12. SiryQerely, O Vincent 3! Dopko, General Counsel