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HomeMy WebLinkAbout17-533 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 (717) 783 -1610 1- 800 -932 -0936 ADVICE OF COUNSEL May 30, 2017 To the Requesters: 17 -533 This responds to your letter dated April 7, 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 S. § 1101 et seg., would impose prohibitions or restrictions upon a State Legislator serving in the A with regard to: h) �ar� icip atin in legislative actions on matter(s) related to B if the State Legislator, in his ivate cwould start a business that would work to C businesses with B Ds r Es anFs; r (2) engagi ng in private business activities on behalf of the proposed business or its clients. Facts: You have been authorized by State Legislator G to request a confidential advisory from the Commission on his behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. State Legislator G is a Member of the H, and he has been I of the H's J on B for the 2017 -2018 legislative session. In his legislative capacity, State Legislator G has supported and continues to support legislation that benefits and provides K to B programs through various [type of agencies]. In his private capacity, State Legislator G is considering starting a business (the "Proposed Business ") that would work to C businesses with B Ds for Es and Fs. The Proposed Business would receive payment from businesses and [type of political subdivisions] for performing services related to B for Es and Ls for Fs. There may also be opportunities through alternative K for the Proposed Business to serve as an M or an N for B projects and programs. State Legislator G may be interested in pursuing K opportunities, including Os from [particular agencies], either for the Proposed Business directly or on behalf of its clients. You state that State Legislator G would not use government resources to conduct his private business activities or use confidential information received through his public office for the benefit of the Proposed Business. You further state that State Legislator G would not lobby the A in his private capacity. Based upon the above submitted facts, you pose the following questions: (1) Whether State Legislator G, as an owner of the Proposed Business, would generally be considered a member of a class or subclass for purposes of FAX: (717) 787 -0806 a Weis Site: www.ethics.state.pa.us 0 e-mail: ethics0state.pa.us Confidential Advice, 17 -533 May 30, 2017 Page 2 the "class /subclass exclusion" set forth within the Ethics Act's definition of the term "conflict" or "conflict of interest "; (2) Whether the Ethics Act would impose any restrictions upon State Legislator G with regard to participating in legislative actions on matters related to B; (3) Whether the Ethics Act would impose any restrictions upon State Legislator G, in his private capacity, with regard to soliciting business for the Proposed Business; and (4) Whether the Ethics Act would impose any restrictions upon State Legislator G, in his private capacity, with regard to soliciting or a plying for O K opportunities, including Os from particular agenciesf for the Proposed Business or its clients. 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. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. State Legislator G is a public official subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: § 1103. Restricted activities (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 related to Section 1103(a) are defined in the Ethics Act as follows: § 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. Confidential Advice, 17 -533 May Page 3' "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." An 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. Section 1103(a) of the Ethics Act restricts public officials /public employees in their public capacities, not their private capacities. Subject to the statutory exclusions to the definition of the term "conflict" or "conflict of interesf, 65 Pa.C.S. §.1102, pursuant to Section 1103(x) of the Ethics Act, 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. The Pennsylvania Supreme Court has held that to violate Section 1103(a) of the Ethics Act, a public officiallpublic 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 v. State Ethics Commission, 610 Pa. 516, 523, 22 A.3d 223, 227 (2011). To violate Section 1103(a) of the Ethics Act, a public official/public 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. A conflict of interest would riot exist to the extent the "de minimis exclusion" and/or 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. The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact, a conflict would not exist and Section 1103(a) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburg, Order 900. Confidential Advice, 17 -533 May 30, 2017 Page 4 In order for the class/subclass exclusion to apply, two criteria must be met: (1) the affected public official/public employee, immediate family member, or business with which the public official/public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official/public employee, immediate family member, or business with whicfi the public official/public employee or immediate family member is associated must be affected "to the same de ree" (in no way differently) than the other members of the class/subclass. 65 Pa.C.S. 1102, see, Kablack' Opinion 02.003; Rubenstein, Opinion 01 -007. The first criterion of tie excl ion is satisfied where t e members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual /business in question and the other members of the class/subclass are reasonably affected to the same degree by the proposed action. Kablack, supra. 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/public 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 complete response to the question presented. Having set forth the above general principles, you are advised as follows. The Proposed Business would be considered a business with which State Legislator G is associated in his capacity as an owner. Because Section 1103(a) of the Ethics Act does not restrict public officialslpublic employees in their private capacities, Section 1103(a) would not prohibit State Legislator G, in his private capacity, from soliciting business for the Proposed Business or soliciting or applying for O K opportunities, including Os from [particular agencies], for the Proposed Business or its clients. In his capacity as a public official, State Legislator G could have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact him or the Proposed Business. To the extent the activities of a state legislator would relate to "legislative actions" (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they would be constitutionally controlled and exempt from the purview of the Ethics Act and the Commission. See, Confidential Opinion, 14- 001; Mann, Opinion 07 -005; Confidential Opinion 05 -002; Coran, n — pinion 87 -001. Thus, Section 1103 (a) of the Ethics Act would not apply to State Legislator G when he would be engaged in legislative actions pertaining to matters related to B. As for other actions, State Legislator G would not transgress Section 1103(a) of the Ethics Act unless: (1) he would be consciously aware of a private pecuniary benefit for himself or the Proposed Business; (2) his action(s) use of authority of office or confidential information received by being in his public office) 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. The submitted facts do not enable a conclusive determination as to whether the class/subclass exclusion would be applicable to State Legislator G, as an owner of the Proposed Business, or to the Proposed Business itself, regarding any future actions State Legislator G might take as a public official. Even if a true subclass would exist, the submitted facts are insufficient to determine whether any particular action would Confidential Advice, 17 -533 May 30, 2 Page 5 affect State Legislator Glthe Proposed Business to the same degree as other members of such a subclass. Lastly, the propriety. of the proposed conduct has only been addressed under the Ethics Act. The applicabiity 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 State Legislator serving in the A, State Legislator G is a public official su ect to the provisions of the Public Official and Employee Ethics Act "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Based upon the submitted facts that: (1) State Legislator G is a Member of-the H, and he has been I of the H's J on B for the 2017- 2018 legislative session �2) in his legislative capacity, State Legislator G has supported and continues to support e islation that benefits and provides K to B programs through various [type of agencies,; 3) in his private capacity, State Legislator G is considering starting a business the "Proposed Business ") that would work to C businesses with B Ds for Es and Fs; (4) the Proposed Business would receive payment from businesses and [t pe of political subdivisions] for performing services related to B for Es and Ls for Fs; ( � there may also be opportunities through alternative K for the Proposed Business to serve as an M or an N for B projects and programs; �6) State Legislator G may be interested in pursuing K opportunities, including Os from particular. agencies], either for the Proposed Business directly or on behalf of its clients; (7) State Legislator G would not use government resources to conduct his private business activities or use confidential information received through his public office for the benefit of the Proposed Business; and (8) State Legislator G would not lobby the A in his private capacity, you are advised as follows. The Proposed Business would be considered a business with which State Legislator G is associated in his capacity as an owner. Because Section 1103(x) of the Ethics Act does not restrict public officials /public employees in their private capacities, Section 1103(a) would not prohibit State Legislator G, in his private capacity, from soliciting business for the Proposed Business or soliciting or applying for O K opportunities, including Os from particular agencies], for the Proposed Business or its clients. In his capacity as a public official, State Legislator G could have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact him or the Proposed Business. To the extent the activities of a state legislator would relate to "legislative actions" (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they would be constitutionally controlled and exempt from the purview of the Ethics Act and the Commission. Thus, Section 1103(x) of the Ethics Act would not apply to State Legislator G when he would be engaged in legislative actions pertaining to matters related to B. As for other actions, State Legislator G would not transgress Section 1103(a) of the Ethics Act unless: (1) he would be consciously aware of a private pecuniary benefit for himself or the Proposed Business; (2) his actions) (use of authority of office or confidential information received by being in his public office) 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. The submitted facts do not enable a conclusive determination as to whether the class/subclass exclusion would be applicable to State Legislator G, as an owner of the Proposed Business, or to the Proposed Business itself, regarding any future actions State Legislator G might take as a public official. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Confidential Advice, 17 -533 May 30, 2017 Page 6 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. 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 actually received at the Commission within thirty (30) days of the dateoftl is Avicepursuant to 51 Pa. Code § if3.2(h). The . appeal may be received at the Commission by hand_ delivery, United States mail, delivery service, or by FAX transmission (777 - 787 - 0806). Failure to Me such an appeal at the Commission Within. thirty (30) days may result in the dismissal of the appeal. Since r ly, , - d7x��- Robin M. Hittie Chief Counsel