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HomeMy WebLinkAbout17-007 Confidential. jr STATE ETHICS COMMISSION 309 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Marla Feeleyy Melanie DePalma DATE DECIDED: 9127/17 DATE MAILED: 10/11/17 To the Requester: 17 -007 This Opinion is issued in response to the July 21, 2017, confidential advisory request received from your client, Individual A. I. ISSUE: Whether Section 1103(8) of the Public Official and Employee Ethics Act ("Ethics Act "), 65 Pa.C.S. § 1103(g), would impose restrictions upon an individual formerly employed as B with Entity C with regard to serving as D of the E during the first year following termination of employment with Entity C. II. FACTUAL BASIS FOR DETERMINATION: On behalf of Individual A, you request a confidential advisory from this Commission based upon submitted facts, the material portion of which may be fairly summarized as follows. Individual A was previously employed as B with Entity C. A copy of the official Job Description for that position has been submitted and is incorporated herein by reference. It is noted that the duties of the position include, inter alia, [performing certain duties with respect to the E]. Individual A terminated her employment with Entity C on [date]. Individual A has been offered employment to serve as D of the E. Individual A states that the E essentially exists to [perform a certain activity] for the benefit of Entity C. Copies of the By -Laws, Articles of Incorporation and other corporate documents, and an organizational chart for the E have been submitted. The E is a P.O. BOX 11470, HARRISBURG, PA 17108-1470 • 717- 783 -1610 • 1 -800- 932 -0936 • www.ethics,state.pa.us Confidential 0 inion, 17 -007 cto er 7 Page 2 nonprofit corporation. A copy of the Position Description for the D of the E has also been submitted. It is noted that per the Position Description, the D of the E serves as the primary contact with the F of Entity C and serves ex- officio on various Entity C Gs, such as the [listing]. Additionally, the D of the E [performs certain duties] to accomplish [certain objectives] in coordination with Entity C. The affairs of the E are managed by a Board of Directors, which includes among its members the H (or designated other Member) of the I of Entity C. The F of Entityy C serves as an ex- officio non - voting member of the Board of Directors of the E. The D of the E serves as a non- voting member and secretary of the E's Board of Directors. Any member of the Board of Directors of the E who becomes a J of Entity C with authorization to [perform a certain function] for Entity C is deemed to have resigned that day from the Board of Directors of the E. A private legal opinion was obtained by Individual A, which has been submitted with the advisory request. Individual A states that such private legal opinion provides an accurate recitation of the facts. Per the additional facts set forth in the private legal opinion, as D of the E', Individual A would have authority to negotiate and sign contracts between the E and Entity C. Examples of such contracts include: [listing of contracts], several of which contracts may be up for renewal or renegotiation within Individual A's planned first year of employment with the E. Additionally, a (type of legal document] between Entity C and the E sets forth the contractual relationship between Entity C and the E and requires the F of Entity C in consultation with the D and Board of Directors of the E to determine at the start of each fiscal year the extent to which Entity C will provide the E with [various forms of resources to enhance the ability f the E to perform its functions. This consultation results in annual [type of agreementsj between Entity C and the E. From time to time, Entity C and the E also enter into [type of agreements] to [share certain costs]. All contracts between Entity C and the E must be approved by the I of Entity C and the Board of Directors of the E. The [type of contract] between and among Entity C, the E, and Entity K describes Entity C as [description] and the duties of the E as follows: [description]. The aforesaid submitted private legal opinion contends that the interests of Entity C and the E are aligned, and for that reason, Individual A's proposed employment with the E would not raise potential conflicts of interest and should not be viewed as running afoul of Section 1103(g) of the Ethics Act. However, the private legal opinion recommends that Individual A avoid negotiating, renewing, renegotiating, signing or including her name in any contracts between the E and Entity C during the first year of her employment in the new position. Individual A states that she has postponed taking the employment position as D of the E so as to avoid unintentionally running afoul of the Ethics Act. By letter dated August 30, 2017, Individual A was notified of the date, time and location of the executive meeting at which her request would be considered. Thereafter, you entered your appearance in this matter as her Counsel. Confidential O inion, 17 -007 cto er 7 Page 3 On September 18, 2017, this Commission received your Brief, in which you note that prior to employed with Entity C, Individual A held several positions with the E. You state that Invidual A has substantial experience in [certain activities l. You state that given Individual A's unique knowledge in Entity C L., her relationship with Entity C's [types of persons involved with Entity C], and the harmonious relationship between Entity C and the E, Individual A is an attractive and logical candidate for the position of D of the E. You state that the revolving door provision of the Ethics Act was enacted to prevent conflicts of interest. Referencing Jones, Advice 89 -523 as involving an analogous situation, you contend that Individual A`s acceptance of the position as D of the E would not create a conflict of interest. You assert that the new position would be in complete harmony with the prior position and employer, and that the E is an affiliated organization of Entity C and exists solely for the benefit of Entity C.1 You state that while it is undisputed that Individual A may take the position with the E, she is seeking clarity regarding any temporary limitations that may exist. You state that Individual A is willing o adopt the recommendation made in the aforesaid private legal opinion that she abstain from participation in any contract negotiations for a period of one year from the date of her resignation from Entity C. In this regard, you note that the E has vested others --- including the Officer M and Officer N of its Board of Directors —with authority to negotiate and sign agreements on behalf of the E. At the executive meeting on September 27, 2017, you appeared together with Individual A, Individual A's spouse, Individual O, and Individual P, who currently serves as Officer M of the Board of Directors of the E. You and those with you provided additional information, commentary, and arguments, the material portion of which may be fairly summarized as follows. While you assert that Entity C and the E are basically one and the same, you nevertheless acknowledge that the are different entities for reasons which include concerns related to a certain activity A particular concern was raised regarding [certain legal considerations]. Although Entity C is part of the Commonwealth of Pennsylvania, it is your belief that the Commonwealth of Pennsylvania does not exercise authority over the E. Some funding is provided by Entity C for staff of the E, but staff members of the E are employees of the E and not of Entity C. Entity C offers Q to E employees as well as to Entityy C employees. However, that is the only benefit provided b Entity C to employees of the E. The E enjoys the use of Entity C's [certain facilities], but the E is housed on its own property [location in proximity to] Entity C. Individual A has never participated in the Commonwealth of Pennsylvania's R, even while employed by Entity C. Due to the relationship between the E and Entity C, the S that Individual Awould receive in the proposed position would be identical to those received in her prior position with Entity C. Individual P spoke at the September 27, 2017, Commission meeting and asserted that it is critical that the F of Entity C and the D of the E have constant communication. Jones, Advice 89 -523 is an Advice of Counsel that was issued under the first version of the Ethics cAct 170 of 1978. Under the more recent versions of the Ethics Act, this Commission has expressed the legislative intent of Section 1103(g) as being to protect the public trust and to prevent a former public official /public employee from using his association with the public sector, officials or employees to secure for himself or a new employer, treatment or benefits that might be obtainable only because of his association with his former governmental body, See, e.g., Connor, Opinion 12- 002, at 5; Confidential Opinion, 97 -007; Ledebur, Opinion 95 -007. Confidential Opinion, 17 -007 cto er 7 Page 4 individual A indicated that she would "expect to be there" as a representative of the E at meetings with the F of Entity C. Ill. DISCUSSION: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1'107(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, this 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 truthfullly disclosed all of the material facts. In the former capacity as B with Entity C, Individual Awould be considered a "public employee" sub JJJect to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Cf., kite. This conclusion is based upon the submitted facts, which when reviewed on an abjective basis, indicate clearly that the power exists to take or recommend official action of a non - ministerial nature with respect to one or more of the following: contracting; procurement; administering or monitoring grants or subsidies; planning or zoning; inspecting; licensing; regulating; auditing; or other activity(ies) where the economic impact is greater than de minimis on the interests of another person. Consequently, upon termination of employment with Entity C, Individual A became a "former public employee subject to Section 1103(g) of the Ethics Act. While Section 1103(g) does not prohibit a former public official /public employee from accepting a position of employment, it does restrict the former public official /public employee with regard to "representing" a "person" before "the governmental body with which he has been associated": § 1103. Restricted activities (g) Former official or employee. - -No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the governmental body with which he has been associated for one year atter he leaves that body. 65 Pa.C.S. § 1103(g) (Emphasis added). The terms "represent," "person," "governmental body," and "governmental body with which a public official or public employee is or has been associated" are specifically defined in the Ethics Act as follows: § 1102. Definitions "Represent." To act on behalf of any other erson in any activity which includes, but is not limited to, the following: personal appearances, negotiations, lobbying and submitting bid or contract proposals which are signed by or contain the name of a former public official or public empioyee. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, Confidential Opinion, 17 -007 October 11, 2OT7— Page 5 club or other organization or group of persons. "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or Judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Governmental body with which a public official or public employee its or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. 65 Pa.C.S. § 1102. The term "Person" is very broadly defined. It includes, inter alia, corporations and other businesses. It also includes the former public official /public employee himself, Confidential O inion 93-005, as well as a new governmental employer. Ledebur, Opinion 95 -007. The term "represent" is also broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (3) submission of bid or contract proposals which are signed by or contain the name of the former public officiallpublic employee; �4) participating in any matters before the former governmental body as to acting on beha f of a person; and (5) lobbying. Popovich, Opinion 89 -005. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits the inclusion of the name of a former public official/ public employee on invoices submitted by his new employer to the former governmental body, even if the invoices pertain to a contract that existed prior to termination of service with such governmental body. Shay, Opinion 91 -012. However, if such a pre -- existing contract does not involve the unit w -ere a former public employee worked E the name of the former public employee may appear on routine invoices if required by the regulations of the agency to which the billing is being submitted. Abrams/Webster, Opinion 95-011. A former public official/public employee may assist in the preparation. any documents presented to his former governmental body. However, the former public official/public employee may not be identified on documents submitted to the former governmental body. The former public official/public employee may also counsel any person regarding that person's appearance before his former governmental body. Once again, however, the activity in this respect should not be revealed to the former governmental body. The Ethics Act would not prohibit or preclude making general informational inquiries to the former governmental body to secure information which is available to the general public, but this must not be done in an effort to indirectly influence the former governmental body or to otherwise make known to that body the representation of, or work for, the new employer. Section 1103(g) only restricts the former public off iciallpublic employee with regard Confidential Opinion, 17 -007 0—c—tol—er—T7,2017 Page 6 to re resentation before his former governmental body. The farmer public official/public employee is not restricted as to representation before other agencies or entities. However, the "governmental b with which a public official /public employee is or has been associated" is not limited to the particular subdivision of the agency or other governmental body where the public official /public em loyee had influence or control but extends to the entire body. See, Le isEative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion 90 -006; Sharp, Opinion 90-009 -R. Based upon the submitted facts, the governmental body with which Individual A is deemed to have been associated upon termination of her employment with Entity C is Entity C in its entirety. Therefore, for the first year following termination of Individual A's employment with Entity C, Section 1103(g) of the Ethics Act would apply and restrict "representation" of a "person" before her former governmental body as delineated above. The E is a "person" as the Ethics Act defines that term, and it is a separate entity from Entity C. The submissions offered in support of the advisory request contend that the interests of Entity C and the E are aligned, and for that reason, Individual A's proposed employment with the E should not be viewed as running afoul of Section 1103(8) of the Ethics Act. However, in promulgating the Ethics Act, the General Assembly did not empower this Commission to carve out exceptions to the applicability of Section 1103(g) based upon perceived aligned interests —or for any other reason. While some circumstances may be more compelling than others, this Commission does not have the authority to create an exception which does not exist by statute. Claycomb, Opinion 14- 004; Confidential Opinion, 07 -006; Whitlock, Opinion 04 -015; Zi'e ler, Opinion 98 -001; Long, pinion 97 -0 0; Richardson, Opinion 93 -006. Although Section 1103(g) of the Ethics Act would not prohibit Individual A from accepting a position of employment with the E, during the first year following termination of Individual A's employment with Entity C, Section 1103(g) of the Ethics Act would prohibit Individual A from performing any job duty(ies) for an employer, such as the E, that would involve prohibited representation before Entity C. wring the one -year period of applicability of Section 1103(g), Individual A may not act in such a way as to male known to Entity C her representation of, or work for, a new employer such as the E. See, etc ., EdleY, Opinion 17 -002 at 4; Conner, Opinion 12 -002 at 4 -5; Desmond, Opinion 08 -004 at 6; Wagne r, Opinion 07 -013 at 4; �_ohfidential Opinion, 07 -012, at 5 2nti, Opinion 07 -007, at 4. Lastly, the propriety of the proposed course of conduct has only been addressed under Section 1103(g) of the Ethics Act. IV. CONCLUSION; In the former capacity as B with Entity C, Individual A would be considered a "public employee" subject to the Public Official and Employee Ethics Act ( "Ethics Act'), 65 Pa.C.S. § 1101 et seq., and the Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et sec.. Upon termination of employment with Entity C, Individual A became a "former pub Fic employee" subject to Section 1103(g) of the Ethics Act. The governmental body with which Individual A is deemed to have been associated upon termination of her employment with Entity C is Entity C in its entirety. For the first year following termination of Individual A's employment with Entity C, Section 1103(8) of the Ethics Act would apply and restrict "representation" of a "person" Confidential Opinion, 17 -007 cto er 7 Page 7 before her former governmental body as delineated above. The restrictions as to representation outlined above must be followed. The E is a "person" as the Ethics Act defines that term, and it is a separate entity from Entity C. Although Section 1103(8) of the Ethics Act would not prohibit Individual A from accepting a position of employment with the E, during the first year following termination of Individual A's employment with Entity C, Section 1103(8) of the Ethics Act would prohibit Individual A from performing any job duty(ies) for an emNurying er, such as the E, that would involve prohibited representation before Entity C. the one -year period of applicability of Section 1103(g), Individual A may not act in such a way as to make known to Entity C her representation of, or work for, a new employer such as the E. The propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(10), the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. By the Corn fission, Mark . Corrigan Vice Chair Chair Nicholas A. Colafella dissents.