Loading...
HomeMy WebLinkAbout86-582 SkellyKenneth B. Skelly, Chief Counsel Liquor Control Board 406 Northwest Office Building Harrisburg, Pennsylvania 17124 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 July 9, 1986 ADVICE OF COUNSEL Re: Statement of Financial Interests, Attorney Dear Mr. Skelly: 86 - 582 This responds to your appeal of April 28, 1986, wherein you indicate your decision not to file a Statement of Financial Interests in accordance with the State Ethics Act. This matter has been processed as a request for an advice from the State Ethics Commission. Issue: Whether, as Chief Counsel for the Pennsylvania Liquor Control Board, you are a public employee as that term is defined in the State Ethics Act and, therefore, required to file a Statement of Financial Interests in accordance with the Act. Facts: Pursuant to your letter of appeal dated April 28, 1986, you have declined to file a Statement of Financial Interests pending the resolution of a current court case, Thau and Maunus v. State Ethics Commission, No. 277 C.D. 1985, (Commonwealth Court), no other basis for your refusal to file the Statement of Financial Interests has been asserted and we will, therefore, assume for the purpose of this advice that you have adopted the same legal arguments as set forth by Mr. Thau and Ms. Maunus in their court appeal. Generally, those individuals have not contested the fact that they are public employees within the purview of the State Ethics Act, rather they have asserted that they are exempted from Ethics Act coverage by virtue of their positions as attorneys. As such, we will address your question within the purview of that assertion. Kenneth B. Skelly, Chief Counsel July 9, 1986 Page 2 Discussion: Generally, as Chief Counsel to the Liquor Control Board of Pennsylvania, hereinafter the LCB, there is no doubt that you are a public employee within the purview of the State Ethics Act. 65 P.S. §402. 51 Pa. Code §1.1. You are, therefore, required to comply with the provisions of the State Ethics Act. Generally, the State Ethics Act provides that all public employees must file a Statement of Financial Interests by May 1 of each year i n which they serve. Said statement is to cover financial i nterests for the prior calendar year. Generally, the Commission has addressed the specific question which you are asserting in the opinions that have been issued to Maunus, 84 -020B; and Thau, 84 -020A. In those opinions, the Commission generally set forth the rationale in finding that these individuals were not exempt from Ethics Act coverage in light of their positions as attorneys. For the purpose of this advice, we will restate here the analysis of the Commission as set forth in the opinions issued to those individuals. With respect to your argument that as an attorney you should be exempt from the financial reporting and disclosure provisions of the State Ethics Act, we note that reliance is placed upon the ruling of the Commonwealth Court in Ballou v. State Ethics Commission, 424 A.2d 983, 56 Pa. Cmwlth. 240 (1981). It should be noted that this ruling of the Commonwealth Court was subject to further review by the Supreme Court and its ruling may be found at Ballou v. State Ethics Commission, 496 Pa. 127, 436 A.2d 186 (1981). A short review of these cases and their factual context and their conclusions is appropriate in reviewing your appeal. The above case arose when a township solicitor, Richard D. Ballou, filed a petition for declaratory judgment and injunctive relief seeking to be exempted from the financial reporting and disclosure requi rments of the Ethics Act. The factual context in which this declaratory judgment was sought was clearly that the individual, Mr. Ballou, served as a solicitor to a county coroner, a municipal authority and several townships and he raised the question on the applicability of the Ethics Act to municipal solicitors and also the question of constitutionality of the financial reporting and disclosure requirements. Mr. Ballouss first argument was that he was not a "public employee" because he was an independent contractor and, therefore, not within the definition of "public employee" as contained in Section 2 of the Ethics Act, 65 P.S. §402. Essentially, Mr. Ballou argued that he did not fall within the class of "public employees" because he was not an "individual employed by the Commonwealth or a political sub - division ". Similarly, Mr. Ballou argued that he was not a "public employee" because his duties as township solicitor did not include responsibility for taking or recommending as to official action. With respect to these two arguments the Commonwealth Court ruled that as a municipal solicitor, Mr. Ballou would be considered a "public employee" as defined in the State Ethics Act. Thus, absent any exemption, Mr. Ballou would have been found to be a "public employee" subject to the Ethics Act. Kenneth B. Skelly, Chief Counsel July 9, 1986 Page 3 However, the Court was also asked to address the question of whether the imposition of the provisions of the Ethics Act upon Mr. Ballou, as a municipal solicitor and an attorney, was unconstitutional as an infringement upon the Supreme Court's exclusive power to govern the conduct of persons privileged to practice law in Pennsylvania. As to this argument, the Commonwealth Court agreed that the "subject of conflict of interest, including disclosure of financial interest, has been fully regulated with respect to attorneys by the Supreme Court" and, therefore, held that the financial reporting and disclosure provisions of the Ethics Act applied to attorneys infringes upon the Supreme Court's inherent and exclusive power to regulate the conduct of attorneys. Therefore, the Commonwealth Court concluded that the preliminary objections of the State Ethics Commission should be overruled. Following the entry of final judgment in this matter, the State Ethics Commission appealed this ruling to the Supreme Court. Upon review, the Supreme Court issued an Opinion on October 3, 1981. This Opinion concluded as follows: "The order of Commonwealth Court is affirmed insofar as it directs judgment in favor of appellee ( Ballou)." In its Opinion, the Supreme Court made it clear that they were not reviewing the conclusions of the Commonwealth Court as to the possibility that the application of the Ethics Act would constitute an unconstitutional infringement upon the Supreme Court's exclusive power to govern the conduct of persons privileged to practice law in Pennsylvania. Essentially, the Supreme Court chastised the Commonwealth Court for reaching, addressing, and deciding a constitutional issue when, as the Supreme Court found, the case could be properly decided and disposed of on non - constitutional grounds. Specifically, the Supreme Court in reviewing the case clearly based their determination on statutory, not constitutional grounds. The Supreme Court's ruling i n effect concluded that an individual serving i n the capacity of solicitor to a municipality was neither a public employee nor public official within the scope of the Ethics Act. Thus, it was unnecessary for the Commonwealth Court to have reached and for the Supreme Court, therefore, to review the question of the constitutionality of financial reporting and disclosure requirements of the Ethics Act as applied to attorneys, in general. The Supreme Court's conclusion was basically that municipal solicitors are situated similarily to members of advisory boards who, because they have no power to extend public funds or to otherwise exercise the power of the state, should not be considered to be "public employees" or in that context to be "employed by the Commonwealth" and to be responsible for taking or recommending official action with respect to the categories listed in the definition of "public employee" under the Ethics Act. As noted above, in your particular case, you have not argued that you are not "employed by the Commonwealth" or "responsible for taking or recommending official action" with respect to the categories outlined in the definition of "public employee" within the Ethics Act. Therefore, based upon this concession, we find your situation to be factually, substantially different Kenneth B. Skelly, Chief Counsel July 9, 1986 Page 4 from that situation which was addressed by both the Commonwealth Court and the Supreme Court Ballou. We believe the Supreme Court's ruling in this case was limited to and exempted from the statutory definition of "public employee" or "public official" only those persons who served in the part -time capacity as independent contractors as solicitors with the municipalilty and that your factual situation is substantially different or has not been challenged to this point. Thus, even your reliance upon the Commonwealth Court's Ballou ruling may not be presented as persuasive or dispositive precedent because the factual circumstances, which you have not challenged in the present case, are substantially different from those which the Commonwealth Court itself was reviewing. Accordingly, the Commission found that the Commonwealth Court ruling is not dispositive, fully persuasive or binding with respect to the situation you present. Basically, we are not willing to nor do we have the power to declare the provisions of the Ethics Act unconstitutional or to concede that this power of the Supreme Court extends to or is applicable to this situation absent a clear and palpable demonstration of the unconstitutionality of these provisions as applied to your case and factual circumstances and absent cogent argument that the Commonwealth Court ruling in Ballou must be mandatorily observed and applied to your factual situation. Basically, no case which you present or argue in your appeal is identical on a factual basis or is clearly applicable to mandate the conclusion that the Legislature may not adopt and apply the Ethics Act and its financial reporting and disclosure provisions to full -time employees, such as yourself. Lacking any specific dispositive or clearly, factually applicable or identical case or precedent, we conclude that your arguments and appeal on this score must be rejected. The above issue, as it was more recently presented to the Commonwealth Court in Thau and Maunus, did not assert any new grounds other than those considered by the Commission in its opinion. The Court, however, has not to date issued any ruling that indicates the position of the respondents in that matter is one which is most likely to be determined i' n their favor. Additionally, the Commonwealth Court of Pennsylvania has made no indication that they would issue any type of injunction or restraining order which would effect all similarly situated individuals. You are not a party to that particular action and you were not a party in the Commission's preceedings involving these individuals. As such, we do not believe that the fact that this Commonwealth Court case is currently pending affects you in any way. While there are appropriate steps that may be taken which may result in a postponement of the filing requirement as applied to you, this Commission, has not to date issued any order, opinion, advice or policy statement that would require the suspension of the filing requirement as to classes of i ndividuals absent the issuance of a court order so directing. As such, we believe that you are a public employee covered by the State Ethics Act, thereby required to file a Statement of Financial Interests. Kenneth B. Skelly, Chief Counsel July 9, 1986 Page 5 Conclusion: As Chief Counsel to the Pennsylvania Liquor Control Board, you are to be considered a public employee within the purview of the State Ethics Act. The Ethics Act would require that a Statement of Financial Interests be filed by you on or before May 1 of each year in which you serve. To date, no court cases have determined that full -time publicly employed attorneys are exempt from the State Ethics Act. This Commission does not believe that the fact that one court case is pending wherein the issue may be resolved is sufficient justification for this agency to suspend the filing requirement to all other potentially affected individuals. 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 nc oh n J. .nti Gen, • Counsel ter°