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Home My WebLink About17-544 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 (717) 733 -1610 1- 800- 932 -0936 ADVICE OF COUNSEL July 19, 2017 To the Requester: 17.544 This responds to your letter dated May 18, 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 F_a.U.S. § 1101 et seq., would impose prohibitions or restrictions with regard to the hiring of an A ind victual for a B, C, D position of employment with the E of the F, where such position would be underwritten by a G H organization for [a particular length of time]. Facts: You have been authorized by Individual I, who is the J of the F, to request as confidential advisory from the Commission under the following submitted facts. Individual 1, in his role as the J of the F, manages employees serving under the E. The E oversees [type of functions] of the F. A G entity named "[name of entity] ( "the Entity ") supports A individuals and seeks to secure K employment for Entity clients who may have Ls but lack the means to obtain such employment for various reasons. The Entity recently approached Individual I and proposed to him that if the E would be willing to provide a B position of employment for one of the Entity's A clients with Ls, a different entity that is a G H organization would be willing to underwrite the position for [a particular length of time]. The E has a few C, D employment positions, including Ms and F Ns, which could potentially be filled by A individuals. Individual I is in favor of the idea of the E becoming an employer of individuals who might not otherwise be able to secure K employment as a result of being A. Because the E has never participated in such an employment program before, Individual I believes that it would be beneficial to first take part in a pilot program of employin, A individuals through the Entity with underwriting by the aforesaid G H organization. Based upon the above submitted facts, the question that is presented is whether the Ethics Act would impose prohibitions or restrictions with regard to the hiring of an A individual for a B, C, D position of employment with the E that would be underwritten. by a G H organization for [a particular length of time]. FAX: (717) 787 -0806 0 Web Site: www.ethics.state.pa.us 0 e -mail: ethicsPstate.pa.us Confidential Advice, 17 -544 Jul 19, 2017 Page 2 Discussion: It is initial) noted that pursuant to Sections 1107(10) and 1107(11) of e Ethics Act, 66 Pa.C.S. y§§ 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 en age 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. Based upon the submitted facts, the only Section of the Ethics Act to be addressed in this Advice is Section 1103(e) of the Ethics Act. Section 1103(e) of the Ethics Act provides: § 1103. Restricted activities (e) Contingent and severance payments. -- (1) No person shall solicit or accept a severance payment or anything . of monetary value contingent upon the assumption or acceptance of public office or employment. (2) This subsection shall not prohibit: (i) Payments received pursuant to an employment agreement in existence prior to the time a person becomes a candidate or is notified b a member of a transition team, a search committee or a person with appointive power that he is under consideration for public office or makes application for public employment. (ii) Receipt of a salary, fees, severance paent or proceeds resulting from the safe ym of a person's interest in a corporation, professional corporation, partnership or other entity resulting from termination or withdrawal therefrom upon the assumption or acceptance of public office or employment. (3) Payments made or received pursuant to paragraph (2)(i) and (ii) shall not be based on the agreement, written or otherwise, that the vote or official action of the prospective public official or employee would be influenced thereby. 65 Pa.C.S. § 1103(e). Pursuant to Section 1103(e) o exceptions, a person is prohibited from anything of monetary value contingent office or employment. Section 1103(e) f the Ethics Act, subject to certain statutory soliciting or accepting a severance payment or upon the assumption or acceptance of public was enacted to address concerns involving the Confidential Advice, 17 -544 July 19, 2017 Page 3 subsidization of the salaries of public officials /public employees by outside entities. Minor, Opinion 90 -016. In Confidential Opinion, 91- 005 -R, the Commission held that Section 1103(e) of the Ethics Act would not preclude two associate attorneys from a private law firm from being utilized by a city solicitor, district attorney, or other public entity for a period of time while their salaries and benefits would be paid by their law firm since their acceptance of such employment would not be contingent upon the solicitation or acceptance of anything of value. The Commission concluded that the "contingent" element of Section 1103(e) of the Ethics Act was lacking because the law firm allowed the associate attorneys to choose from among various options for employment with public or private entities. In Rendell /Lillie, Opinion 92 -001, the Commission held that Section 1103(e) of the Ethics Act woulTnot prohibit a city mayor from utilizing executives on loan from Eemployers on a purely voluntary basis to work within the city or on a short term basis to perform very specialized functions when the salaries of the individuals would continue to be paid by their private employers, The Commission concluded that the "contingent" element of Section 1103(e) of the Ethics Act was not present because under the submitted facts, the business executives would not be directed by their private employers to leave industry and join the city but rather would be given a real choice whether to serve and spend time in the city government as consultants. In Confidential Opinion, 92 -003, the Commission held that Section 1103(e) of the Ethics Act would not preclude a corporate executive from accepting the position of deputy mayor for a city when he would not accept a city salary but would continue to accept his corporate salary because the acceptance of employment with the city would be on a purely voluntary basis. In contrast to the Commission precedents cited above, the funding source for the position in the instant matter would not even be a current employer. Indeed, the submitted facts do not indicate anv relationship between the prospective employee and the funding source. Based upon t e submitted facts, it does not appear that the funding source would stand to gain from the proposed arrangement. Based upon the above, you are advised as follows. Section 1103(e) of the Ethics Act would not prohibit the hiring of an A individual for a B, C, D position of employment with the E that would be underwritten by a G H organization for [a particular length of time], where the acceptance of the position with the E would be on a purely voluntary basis such that the "contingent" element of Section 1103(e) would not be present. Cf., Confidential Opinion, 92 -003; Rendell /Lillie, supra; Confidential Opinion, 91- 005 -R. 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: Based upon the submitted facts that: (1) Individual 1, in his role as the J of tFie F, manages employees serving under the E; (2) the E oversees [type of functions) of the P (3) a G entity named [name of entity] ( "the Entity ") supports A individuals and seeks to secure K employment for Entity c cents who may have Ls but lack the means to obtain such employment for various reasons; (4) the Entity recently approached Individual I and proposed to him that if the E would be willing to provide a B position of employment for one of the Entity's A clients with Ls, a different entity that is a a G H organization would be willing to underwrite the position for [a particular length of time]; (5) the E has a few C, D employment positions, including Ms and F Ns, which Confidential Advice, 17 -544 July 19, 2017 Page 4 could potentially be filled by A individuals; (6) Individual I is in favor of the idea of the E becoming an employer of individuals who might not otherwise be able to secure K employment as a result of being A; and (7) because the E has never participated in such an employment program before, Individual I believes that it would be beneficial to first take part in a pilot program of employing A individuals through the Entity with underwriting by the aforesaid G H organization, you are advised as follows. Section 1103(e) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1103(e), would not prohibit the hiring of an A individual for a B, C, D position of employment with the E that would be underwritten by a G H organization for [a particular length of time], where the acceptance of the position with the E would be on a purely voluntary basis such that the "contingent" element of Section 1103(e) would not be present. Lastly, the'propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(1'1) 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 actual! received at the Commission within thirty (30) days of the date of this cdvvice pursuant to 51 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