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HomeMy WebLinkAbout83-553 KrogerMr. Richard S. Kroger 1044 Bolton Court Bensalem, PA 19020 Ma Ang Address STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 May 27, 1983 ADVICE OF COUNSEL RE: Section 3(e); Restrictions on Respresentation Dear Mr. Kroger: 83 -553 This responds to your letter of April 6, 1983, in which you requested advice from the State Ethics Commission. Issue: You request advice as to what restrictions are placed upon you as a former public employee. Facts: You write that you have left the position as Revenue Field Auditor I with the Department of Revenue, Bureau of Audits, Philadelphia Region. The job description for a Field Auditor I indicates that the job entails auditing and analyzing of the financial books and records of various business entities. Further, the job requires that auditing procedures and accepted accounting principles be utilized to discover whether a particular business, by its record - keeping practices, is properly recording taxable income resulting from its operation, in compliance with federal, state, and local tax statutes. The auditor must be able to interpret and thoroughly explain to those selected for audit the applicable provisions of the Tax Reform Act of 1971, as it applies.. to their operations. Also there are occasions when sensitive issue audits are required which involve considerable expertise to conduct the audit thoroughly and equitably. The position is a professional position requiring little direct supervision while at work on the particular audit assignments. Work is assigned on a case -by -case basis by the supervisor taking into consideration the distance that will have to be travelled by the auditor in performing the audit. Individual audit assignments and results are also reviewed by the supervisor upon their completion. You have also asked about the propriety of a number of activities which you may undertake upon leaving employment with the Commonwealth which occurred December 30, 1982, including: State Ethics Commission • 308 Finance Building • Harrisburg. Pennsylvania Mr. Richard S. Kroger May 27, 1983 Page 2 A. assisting someone whose client has been chosen for a Pennsylvania sales tax audit and who needs advice as to how to prepare the audit; B. filing the Pennsylvania sales tax returns for a company, or, serving as a consultant to businesses regarding the Pennsylvania Sales Tax; C. disseminating documents (example, newsletters), giving advice on the Pennsylvania sales tax; further, writing a newspaper or periodical column dealing with Pennsylvania sales tax questions and information; 0. speaking engagements before interested parties (example, CPA's) concerning the Pennsylvania sales tax; E. advertising yourself as someone to contact to resolve a sales tax problem; F. representing a company in appeal proceedings before a hearing examiner. You indicate that the Bureau of Audits, hereinafter the Bureau, operates independently of the hearing examiners, but that audit reports which you file for the Bureau become part of the record which may be viewed by a hearing examiner upon taxpayer appeal. You also state that if a tax return is prepared by someone other than the taxpayer, the preparer's name and signature - must appear on the return. Returns are filed with the Bureau of Audits in Harrisburg and the data thereon is transferred to computers. This computer input /data forms the basis of information, among other reports, from which the Field Auditor would work in conducting an audit. If after audit, adjustments are considered based upon the Bureau's ruling /report, the preparer may be required to resolve discrepencies or explain the tax return preparation with the auditor. In addition, the preparer, if appeal is made, may be required to deal with the hearing examiner who reviews and recommends decisions on appeals. You have also requested advice regarding the penalties for engaging in prohibited activities and are concerned as to whether any of these restrictions shall continue past the one year following your resignation from Bureau service; effective December 30, 1982. Mr. Richard S. Kroger May 27, 1983 Page 3 Discussion: As a Field Auditor I, you were a "public employee" subject to the provisions of the Ethics Act, 65 P.S. 401 et seq. The Act defines public employee as including an individual employed by the Commonwealth who is responsible for taking or recommending official action of a non - ministerial nature with regard to inspecting, licensing, regulating or auditing any person. 65 P.S. 402. Among the restrictions with which you as a former public employee, must comply is the following: No former public 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. 403(e). The governmental body with which you were associated is the Bureau of Audits within the Department of Revenue. Thus, for the one -year period following your retirement from the Commonwealth's employment, you may not represent any person before the Bureau. See Lamberti, 82 -509. The Commission has held that the concept of "representation" precludes the following activities: 1. Personally appearing before the Bureau, including but not limited to negotiations on contracts; 2. Attempting to influence the Bureau or its personnel; 3. Participating within this one -year period in any manner or specific case over which you had supervision or direct involvement, including responsibility, while associated with the Bureau; 4. Lobbying, that is, representing the interest of any person before the Department for the one -year period as to legislation, regulations, etc. Morris, 80 -039; Russell, 80 -048; 5. Signing and submitting, under your own name, correspondence, proposals, contracts, or other items to the Bureau. Despite the restrictions composed by Section 3(e) you may nevertheless engage in the following activities in relation to the Bureau within the one -year period: Mr. Richard S. Kroger May 27, 1983 Page 4 a. Administer rather than negotiate or re- negotiate any contract that exists or is to be awarded to you or a business with which you are involved or employed as long as that contract is awarded without your name being included on a submission or bid proposal as noted in Item 5 above and as long as you comply with the other above mentioned items. b. Make general information inquiries of the Bureau or any other body within the Department of Revenue as long as no attempt is made to influence those bodies prohibited above. c. Use the knowledge and expertise gained during your tenure as a public employee in relation to clients or other employers except as outlined above. d. Appear and represent any person on behalf of any client or employer before any governmental body other than the Bureau. With regard to your particular questions we provide the following response: A. You may assist a client who has been chosen for audit and give advice on preparing for same so long as you do not personally represent said client during this audit. B. You may prepare and sign tax returns to be submitted to the Bureau in Harrisburg so long as these do not necessitate or result in your representing the taxpayer before the Bureau, an auditor of the Bureau in explaining or seeking to rectify accounts /make adjustments, or the hearing examiner on appeal resulting from a taxpayer audit. Refer here to 51 Pa. Code 5.8(e) which generally categorizes filing of tax returns as "ministerial" activities. C. You may write and disseminate newsletter or columns giving advice on Pennsylvania Sales Tax matters, questions and information. D. You may speak before interested parties concerning Pennsylvania Sales Tax so long as such does not require your appearance or representation before the Bureau as prohibited and discussed above. See Nos. 1 -5. E. You may advertise your services in relation to Pennsylvania Sales Tax. Mr. Richard S. Kroger May 27, 1983 Page 5 With regard to penalties for engaging in the prohibited activities, Section 409(b) of the Act indicates that such activity constitutes a misdemeanor, and that the person "shall be fined not more than $1,000 or imprisoned for not more than one -year, or be both fined and imprisoned." 65 P.S. 409(b). Again, these restrictions pertain to you only for the one -year period following the termination of your employment with the Bureau. Conclusion: As a former public employee, your conduct should be guided by this advice within the parameters established above, your activities in the year following your retirement from public employment are restricted by Section 3(e) of the Ethics Act as discussed above. Furthermore, you must file a final Financial Interest Statement no later than May 1, 1983, as required by Section 4(a) of the Act. F. You may not appear and represent a person - client before the hearing examiner on appeals because your name, reputation, and expertise as a Bureau auditor would have formed part of the input the examiner's reviewed in deciding appeals. It would be best to avoid such direct re- appearance before these examiners for the one -year specified to expire on December 30, 1983, to avoid the appearance of a conflict of interest under Section 1 of the Ethics Act. See Japak, 83 -007. 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. 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. CW /rdp Attachment cc: Robert Bloom, Secretary Sincerely, IS ndra S. Christianson General Counsel