HomeMy WebLinkAbout86-568 MurphyMr. J. Martin Murphy, CPA
22 Rrader Drive
Wilkes- Barre, PA 18705
Dear Mr. Murphy:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108-1470
TELEPHONE (717) 783 -1610
June 2, 1986
ADVICE OF COUNSEL
86 -568
Re: Former Public Employee; Section 3(e), Revenue Auditor Supervisor,
Department of Revenue
This responds to your letter of May 11, 1986, in which you requested
advice from the State Ethics Commission.
Issue: You ask whether the Ethics Act presents any restrictions upon your
potential employment following your termination of service with the
Pennsylvania Department of Revenue.
Facts: You advise that you are resigning your position with the Pennsylvania
Department of Revenue as a Revenue Audit Supervisor in the Bureau of Audits
Scranton Office. You have been a supervisor for approximately one year and
the effective date of your resignation is April 24, 1986. You are a Certified
Public Accountant and you are planning to establish a private accounting
practice. You have requested the advice of the State Ethics Commission in
relation to any restrictions that may be placed upon you as a result of the
State Ethics Act.
In your position with the Pennsylvania Department of Revenue, you were
involved in the review, examination, and analysis of books and financial .
records of individuals and businesses in order to determine taxpayer
compliance with Commonwealth tax laws and regulations. You were also involved
in the development and preparation of audit assignments and the review and
analysis of completed audits in the central office. Generally, you supervised
a staff of auditors who were conducting audits to determine taxpayer
compliance with Commonwealth sales and use, corporation, liquid fuels,
cigarette, malt beverage, personal income and escheats laws and regulations.
Work involved designing audit schedules, review and completed audits and-
training employees to ensure their development. You generally reviewed the
work of the field auditors in order to ensure adherence to proper methods,
techniques and procedures, and in order to provide detail instructions and
close guidance including technical guidance and assistance.
Mr. J. Martin Murphy, CPA
June 2, 1986
Page 2
You planned and directed the audit program to examine the accounts and
records of various taxpayers. You specified areas in audits which warranted
particular attention and you also were involved in preparing revisions and /or
recommending revisions to audit standards and instructions. You also
participated in the preparation of audit manuals for use by the Bureau Audit
Personnel. We have reviewed your job description and position classification
and have incorporated those documents herein by reference.
Discussion: At the outset, it must be noted that the Ethics Commission may
only address your question within the purview of the Ethics Act. The
Commission may not and will not offer advice with respect to any duties or
obligations that may be imposed by other provisions of law such as the State
Adverse Interest Act or the Governor's Code of Conduct.
As a Revenue Audit Supervisor for the Pennsylvania Department of Revenue,
hereinater the Department, you are to be considered a "public employee" within
the definition of that term as set forth in the Ethics Act and the regulations
of this Commission. 65 P.S. §402; 51 Pa. Code §1.1. This conclusion is based
upon your job description, which when reviewed on an objective basis,
indicates clearly that you have the power to take or recommend official action
of a non - ministerial nature with respect to contracting, procurement,
planning, inspecting or other activities where the economic impact is greater
than de minimus on the interests of another person. See Kroger, 83 -553.
Consequently, upon termination of this employment, you would become a
"former public employee" subject to Section 3(e) of the Ethics Act. Section
3(e) of the Ethics Act provides that:
Section 3. Restricted activities.
(e) No former 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.
Initially, to answer your request we must identify the "governmental
body" with which you were associated while working with the Department. Then,
we must review the scope of the prohibitions associated with the concept and
term of "representation ". In this context, the Ethics Commission has
previously ruled that the "governmental body" with which an individual may be
deemed to have been associated during his tenure of public office or
employment extends to those entities where he had influence, responsibility,
supervision, or control. See Ewing, 79 -010. See also, Kury vs. Commonwealth
of Pennsylvania, State Ethics Commission, 435 A.2d 940 (1981).
Mr. J. Martin Murphy, CPA
June 2, 1986
Page 3
From the description and analysis of your duties and responsibilities and
based upon the facts outlined above, your jurisdiction, responsibility,
influence and control appears to have been exercised within the Bureau of
Audits generally. Thus, the " governmental body" with which you have been
"associated" upon the termination of your employment would be the Bureau of
Audits, hereinafter the Bureau. Therefore, within the first year after you
would leave the Department, Section 3(e) of the Ethics Act would apply and
restrict your "representation" of persons or new employers vis-a-vis the
Bureau. See Kroger, 83 -553.
The Ethics Act would not affect your ability to appear before agencies or
entities other than with respect to the Bureau. Likewise, there is no general
limitation on the type of employment in which you may engage following your
departure from the Department. We do note, however, that the conflicts of
interest law is primarily concerned with financial conflicts and violations of
the public trust. The intent of the law generally is that during the term of
a person's public employment he must act consistently with the public trust
and upon departure from the public sector, that individual should not be
allowed to utilize his association with the public sector, officials or
employees to secure for himself or a new employer, treatment or benefits that
may be obtainable only because of his association with his former public
employer. See Anderson, 83 -014; Zwikl, 85 -004.
In respect to the one year representation restriction, the Ethics
Commission has promulgated regulations to define "representation" as follows:
Section 1.1. Definitions.
Representation - -- 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 employe. 51 Pa. Code 1.1.
The Commission, in its opinions, has also interpreted the term
"representation" as used in Section 3(e) of the Ethics Act to prohibit:
1. Personal appearances before the governmental body or bodies with
which you have been associated, that is the Bureau, including, but not
limited to, negotiations or renegotiations on contracts with the Bureau;
2. Attempts to influence the Bureau;
3. Participating in any matters before the Bureau over which you had
supervision, direct involvement, or responsibility while employed by the
Department;
Mr. J. Martin Murphy, CPA
June 2, 1986
Page 4
4. Lobbying, that is representing the interests of any person or
employer before the Bureau in relation to legislation, regulations, etc. See
Russell, 80 -048 and Seltzer, 80 -044.
The Commission has also held that preparing and signing a proposal,
document or bid, or listing your name as the person who will provide technical
assistance on such proposal, document, or bid, if submitted to or reviewed by
the Bureau, constitutes an attempt to influence your former governmental body.
See Kilareski, 80 -054. Therefore, within the first year after you leave the
Department, you should not engage in the type of activity outlined above.
You may, assist in the preparation of any documents presented to the
Department so long as you are not identified as the preparer. You may also
counsel any person regarding that person's appearance before the Department.
Once again, however, your activity in this respect should not be revealed to
the Department. Of course, any ban under the Ethics Act would not prohibit or
preclude you from making general informational inquiries of the Department to
secure information which is available to the general public. See Cutt,
79 -023. This, of course, must not be done in an effort to indirectly
influence these entities or to otherwise make known to the Department your
representation of, or work for your new employer.
In addition to the foregoing, this Commission has issued previous advices
regarding Department of Revenue Auditors and has specifically indicated i n
those advices that the following activities are also encompassed within the
purview of the State Ethics Act:
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 before the Bureau.
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 and auditor of the Bureau
in explaining or seeking to rectify accounts /make adjustments or the
hearing examiner on appeal resulting from a taxpayer audit. (See 51
Pa. Code 5.8(e)), which generally categorizes filing of tax returns
as ministerial activities.
c. You may write and disseminate newsletters or columns giving advice on
Pennsylvania sales tax matters, questions and information.
d. You may also speak before interested parties concerning Pennsylvania
sales tax, so long as such does not require your appearance or
representation before the Bureau.
Mr. J. Martin Murphy, CPA
June 2, 1986
Page 5
e. You may not appear and represent a person /client before the hearing
examiner on appeals. See Kroger, 83 -553.
Finally, the Commission has concluded that if you are administering an
existing contract as opposed to negotiating or renegotiating a contract, your
activities would not be prohibited by the Ethics Act. See Dalton, 80 -056 and
Beaser, 81 -538.
Additionally, we note that Section 403(b) of the State Ethics Act would
prohibit any public employee or public official from accepting a position of
employment if said position has been offered based upon the understanding that
the official conduct of the employee or official, while working for his former
governmental body, was influenced by such offer. See 65 P.S. §403(b).
Conclusion: As a Revenue Auditor Supervisor, you are to be considered a
"public employee" as defined in the Ethics Act. Upon termination of your
service with the Pennsylvania Department of Revenue, you would become a
"former public employee" subject to the restrictions imposed by Section 3(e)
of the Ethics Act. As such, your conduct should conform to the requirements
of the Ethics Act as outlined above. Your governmental body, for the purpose
of the one year representation restriction, is the Bureau of Audits.
Further, should you terminate your employment or service, as outlined
above, you are reminded that the Ethics Act also requires you to file a
Statement of Financial Interests for the year following your termi nation of
service.
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.
Si ncer
ohn J. no
Gener. Counsel