HomeMy WebLinkAbout84-512 NesticoMr. Joseph F. Nestico
554 West Chocolate Avenue
Hershey, PA 17033
Dear Mr. Nestico:
Mailing Address.
STATE ETHICS COMMISSION
P.O. BOX 1 179
HARRISBURG, PA 17108
TELEPHONE: (717) 783 -1610
January 27, 1984
ADVICE OF COUNSEL
RE: Former Employee, Department of Revenue, Section 3(e)
84 -512
This responds to your letter of December 30, 1983, in which you requested
advice from the State Ethics Commission.
Issue: You ask what restrictions you face as a former employee of the
Department of Revenue under Section 3(e) of the Ethics Act.
Facts: You indicate that you serve as the Director of the Bureau of Audits
within the Department of Revenue of the Commonwealth of Pennsylvania. You
terminated State service officially at the close of business on Thursday,
December 29, 1983 but you indicate that you were replaced as Director of the
Bureau of Audits on Tuesday, October 11, 1983. This early replacement was
designed to enable your successor to gain the benefit of assuming his new role
while utilizing your services as an advisor.
You have provided us with a job description is incorporated herein
by reference and an organizational chart of the Bureau of Audits. You
indicate, in addition, that you reported to the Deputy Secretary for
Administration within the Department of Revenue.
Upon termination of your service with the Commonwealth, you will assume a
position as a state tax consultant with the certified public accounting firm
of Stockton, Bates, and Company. You request a ruling as to whether or not
you may be permitted to represent prospective clients before the Board of
Appeals in the Department of Revenue and the Board of Finance and Revenue on
matters related to state tax assessments and appeals.
Discussion: There is no doubt that as the Director of the Bureau of Audits
you were a public employee during your tenure with the Department of Revenue,
hereinafter the Department. Therefore, upon termination of this employment
with the Department, you became a "former public employee." As a "former
public employee" your conduct must conform to the requirements of Section 3(e)
of the Ethics Act as set forth below:
State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania
Mr. Joseph F. Nestico
January 27, 1984
Page 2
(e) No former official or public employee shall represent
a person, with or without compensation, on airy matter
before the governmental body with which he has been
associated for one year after he leaves that body.
65 P.S. 403(e).
As a former public employee, you must, for the first calendar year
following your termination of employment, typically be required to refrain
from "representing" any person with or without compensation before those
governmental bodies with which you are deemed to have been associated while
employed by the Department. We must, however, review your request by asking
the following questions:
1. what is the scope of the term an activity known as "representation ";
2. to which governmental bodies do these restrictions and prohibitions
against representation extend in your case; and,
3. when does the one -year period begin with respect to each of these
bodies in your case?
In response to the first question, it is clear that the Commission has
determined that the prohibited activities described as "representation" in
Section 3(e) extend to such activities as:
1. Personal appearances before the governmental body or bodies with
which you have been associated, including but not limited to
negotiation or re- negotiation of contracts;
2. attempts to influence the body or bodies with which you have been
associated;
3. participation in any manner before these bodies in a case or matter
over which you had supervision, direct involvement, or
responsibility while employed by the Department of Revenue; and
4. lobbying, that is representing the interests of any person before
the governmental body or bodies with which you have been associated
in relation to legislation, regulations, etc. See Russell, 80 -048
and Seltzer, 80 -044.
In addition, the regulations of the State Ethics Commission define the
term "representation" as follows:
Mr. Joseph F. Nestico
January 27, 1984
Page 3
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.
Thus, these activities as outlined above, would be specifically
prohibited pursuant to Section 3(e) of the Ethics Act with respect to the
governmental body or bodies with which you are deemed to have been associated
while serving with the Commonwealth. It should be noted that mere act of
preparing and signing with your own name or having your name appear as the
person who will serve in regard to a proposal (such as technical advisor on
the proposal) has been held to constitute an attempt to influence your former
governmental body should such a proposal be presented to or reviewed by the
body or bodies with which you are deemed to had been associated. Thus, such
activities are also prohibited. See Kilareski, 80 -054. This is because the
inclusion of your name as preparer or technical advisor on such a proposal
that would be submitted to the body or bodies with which you are deemed to
have been associated has the potential for influencing the decision of those
bodies. Also, where you know or should know that such a submission or
proposal that you might make to a entity other than that body or those bodies
with which you are deemed to have been associated would be reviewed by the
body or bodies with which you have been associated, your name should not
appear on such a proposal. Anderson, 83 -014.
While the above - referenced restrictions apply to you pursuant to Section
3(e) of the Ethics Act vis -a -vis that governmental body or bodies with which
you have been associated, you may, nevertheless work for an employer, such as
Stockton, Bates, and Company and may, despite the above - referenced
restrictions, engage in the following activities:
a. You may administer rather than negotiate or re- negotiate any
contract that exists or is to be awarded to your future employer
so long as the contract or sub - contract is awarded or entered into
without the inclusion of your name as noted above.
b. You may make general informational inquiries of the governmental
body or bodies with which you have been associated so long as there
is no attempt to influence those bodies.
c. You may utilize the knowledge and expertise gained during your
tenure as a public employee so long as you do not use any
confidential information gained during your service as a public
employee.
Mr. Joseph F. Nestico
January 27, 1984
Page 4
d. You may appear and represent any person on behalf of any client or
new employer before any entity or governmental body except that
governmental body or bodies with which you are deemed to have been
associated.
Moving to the next question, we must now determine which governmental
body or bodies you may have been associated with while employed by the
Department of Revenue. In your position as the Director of the Bureau of
Audits, we conclude that your influence must have been Department -wide as
there would be little doubt that the public would view you as a former
employee of the Department of Revenue rather than merely being associated with
the Bureau of Audits. See Japak, 83 -007. Thus, we must conclude that the
governmental body with which you have been associated is the Department of
Revenue. However, you specifically ask us to review the question of whether
you may, having been deemed to have been associated with the Department of
Revenue, appear and represent prospective clients before the Board of Appeals
in the Department of Revenue and the Board of Finance and Revenue.
The Board of Appeals, as we understand it, is an arm of the Department
that holds quasi - judicial hearings following tax -payer appeals of assessments
that may have come about as a result of an audit and assessment produced by
your Bureau. With respect to the Board of Appeals, we have previously held
that the Board of Appeals is an integrated part of the Department of Revenue.
See Wagner.,80 -042; Bright, 81 -583; and Sonnenshein, 80 -534. Thus, we must
conclude that insofar as you have been associated with the Department of
Revenue, the Board of Appeals within the Department of Revenue, would be
considered one of the "governmental bodies" with which you have been
associated and to which the prohibitions of Section 3(e) of the Ethics Act
would extend.
However, in the above - referenced rulings, we have also distinguished the
Board of Finance and Revenue from the Board of Appeals. It is our
understanding that the Board of Finance and Revenue is a separate entity from
the Department, is independent of the Department and is composed of five state
officials, one of which happens to be the Secretary of the Department of
Revenue. However, beyond this connection, neither your Bureau nor the
Department in general, has responsibility or control over the actions of the
Board of Finance and Revenue. Accordingly, consistent with these facts and
our prior precedent, we conclude that as an employee and Director of the
Bureau of Audits within the Department of Revenue, you should not be
considered to have been associated with the Board of Finance and Revenue.
Accordingly, you would face no restrictions under Section 3(e) against
representing any person before the Board of Finance and Revenue. The
restrictions that our outlined above in Nos. 1 through 4 would be applicable
to the Department of Revenue, including the Board of Appeals within the
Department of Revenue.
Mr. Joseph F. Nestico
January 27, 1984
Page 5
Finally, you ask whether the one -year restriction contained in Section
3(e) would begin to run from the date you terminated service with the
Commonwealth in general as of December 29, 1983 or as of the date when you
were replaced as the Director of the Bureau of Audits on October 11, 1983.
Again, precedent of the Commission has been established indicating that where
an employee has been officially replaced in his position but does not
terminate service with an agency until a later date, the date of replacement
rather than the date of termination of general employment can be taken as the
date from which the one -year restriction against representation before the
body with which the individual has been associated is to be calculated. See
Wagner, supra. Thus, in your case, the one -year restriction vis -a -vis the
Department, generally Bureau of Audits and the Board of Appeals would begin to
run as of October 11, 1983. Of course, with respect to the Board of Finance
and Revenue, no one -year or other restrictions would be applicable.
Conclusion: You became a "former public employee" subject to the restrictions
of the Ethics Act and your conduct as such, must conform to the requirements
of the Ethics Act as subscribed in this Advice. Specifically, you may not
appear or represent any person, new employer, etc., with or without
compensation for the one -year period beginning October 11, 1983 through
October 11, 1984, before the Department, the Bureau of Audits or the Board of
Appeals within the Department of Revenue. There are no restrictions on your
appearance or representation of persons before the Board of Finance and
Revenue.
As a former public employee, however, you must also file a Financial
Interest Statement for each year that you held the position described above
and for the year following your termination of services. Thus, a Statement of
Financial Interests should be filed no later than May 1, 1984, which
represents the filing required for the year following your termination of
service. This Financial Interest Statement will record information for the
calendar year 1983.
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.
This letter is a public record and will be made available as such.
Mr. Joseph F. Nestico
January 27, 1984
Page 6
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.
SSC /rdp
cc: James Scheiner, Secretary
Leon Boncarosky, Personnel Director
Si cerely,
Sandra S. Chri tianson
General Coun s -1