Loading...
HomeMy WebLinkAbout87-507 SamuelSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 January 16, 1987 ADVICE OF COUNSEL Ralph David Samuel, Esquire 1500 Walnut Street Philadelphia, PA 19102 Re: Attorney, Representation of Municipality, Spouse Employed by Municipality Dear Mr. Samuel: 87 -507 This responds to your_letter of January 2, 1987, wherein you requested the advice of the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibitions upon your representation of a municipality when your wife is employed by that municipality. Facts: You advise that you are an attorney engaged in a private practice of law in the City of Philadelphia. You further indicate that you have never been employed by nor have you represented the City of Philadelphia. Your wife, Lynn C. Malmgren, is employed by the City of Philadelphia as the Director of Human Resources for the Philadelphia Water Department. In this respect, she reports directly to the water commissioner. She has no role in the selection of outside counsel to represent the City of Philadelphia. The legal affairs of the Water Department are handled by the Office of City Solicitor through a Divisional Deputy Solicitor. You have advised that the City Solicitor, of Philadelphia, has proposed to enter into a letter of representation with your law firm, Samuel and Ballard, P.C., to act as co- counsel in relation to a class action antitrust case which has already been filed in the Eastern District of Pennsylvania. The subject matter of this suit is price fixing of chlorine and caustic soda products which are used by the City of Philadelphia principally in the operations of the Water Department. You will not be paid any fees by the City of Philadelphia for your representation and any fees generated will be a result of and contingent upon the creation of a common fund resulting from the class action litigation. The fee that will be paid to you, as counsel, would be specifically fixed and allocated by the court based upon the amount of work performed and the results Ralph David Samuel, Esquire January 16, 1987 Page 2 obtained for the class. You advise, that in the event that the class certification fails, it is possible that no fee would be awarded. You have requested the advice of the State Ethics Commission regarding whether there would be any prohibitions upon your entering into this letter of representation with the City of Philadelphia in light of the fact that your spouse is an employee of that municipality. Discussion: Initially, it should be noted that the State Ethics Commission may address the question which you have posed solely within the purview of the State Ethics Act. This Commission will not address the issue that is herein presented under any other code of conduct, or statute. It should also be noted that, as a private attorney engaged in the practice of law who is not otherwise employed by a governmental body, you, as an individual, are not a public official or public employee within the purview of the State Ethics Act. As such, and pursuant to appropriate judicial precedent, this Commission may not address issues relating to your private practice of law and the representation of clients in the practice of law. See Pennsylvania Utility Bar Association v. Thornburgh, 498 Pa. 589, 450 A.2d 613, (1982); Ballou v. State Ethics Commission, 496 Pa. 127, 436 A.2d 186, (1981). Therefore, insofar as your letter requests advice in relation to whether or not you, as a private attorney, may represent the City of Philadelphia, this Commission, by law, has no jurisdiction to respond thereto. In relation to the provisions of the State Ethics Act, however, we may address your question insofar as the conduct of your spouse who is a public employee is concerned. Generally, certain limitations will be applicable to her as a public employee of the City of Philadelphia. Generally, the State Ethics Act provides as follows: Section 3. Restricted activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Within that provision of law, your spouse may not participate or otherwise take any action, as a city employee, that will result in your law firm receiving a financial gain. Thus, your wife must abstain from participating in any decision by the Philadelphia Water Department or the City, generally, if she is involved in such matters, that would relate to the selection of your firm as counsel in this matter. Similarly, your wife may not participate in any matter related to your representation of this City, including matters that would result in your firm benefitting thereby. She may not use any confidential information obtained in her public employment for similar purposes. Ralph David Samuel, Esquire January 16, 1987 Page 3 In addition to the foregoing, the State Ethics Act provides as follows: Section 3. Restricted activities. (c) No public official or public employee or a member of his immediate family or any business in which the person or a member of the person's immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business shall enter into any contract valued at $500 or more with a governmental body unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. Any contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract. 65 P.S. 403(c). The Commission has, on a number of occasions, in the past, determined that this provision of law would be applicable when a municipality attempts to hire a municipal solicitor and the solicitor is either an immediate family member of one of the municipal officials involved in such selection, or the municipal official involved in the selection is associated with that firm. See, Smith, 85 -605; Cantor, 82 -004. As such, the Commission determined that in the event the contract be entered into between the municipality and the contemplated solicitor would be in excess of $500, the open and public process requirement of 3(c) would be applicable. These prior precedents of the Commission, however, also clarified that the Section 3(c) open and public process procedure would only be applicable in those situations where the public employee or official or the immediate family member of that employee or official was attempting to contract with the governmental body with which the official was associated. See, Bryan, 80 -014, Lynch, 79 -047. Therefore, the open and public process requirement of Section 3(c) would apply if and when the business with which the official is associated or the immediate family member of that official attempts to contract or seeks to contract with the governmental body with which that official is associated. In the instant situation, your wife is associated with the Water Department in the City of Philadelphia. She is a Human Resource Director for that agency. Your contract, however, will be entered into between your law firm and the office of City Solicitor. For this purpose, we assume that the Water Department will have no input or duties in relation to your selection. As such, we believe that you would be contracting with an agency separate and apart from that with which your spouse is associated. As such, Section 3(c) of the State Ethics Act would not be applicable as you would not be Ralph David Samuel, Esquire January 16, 1987 Page 4 contracting with the City Water Department. This reasoning is in line with prior Commission opinion. In Cohen, 80 -012, the State Ethics Commission determined that there was no prohibition upon the employment by the City Solicitor's Office in Philadelphia of an expert witness who was related to an employee in another governmental body of the City. As such, this opinion would appear to be applicable to the current situation. It is noted, that because of this determination, there is no need to reach the issue of whether the type of contract or agreement between your firm and the City is the type contemplated by Section 3(c). Our decision is based upon the fact that prior Commission precedent would require an open and public process as set forth above. Finally, it should be noted that the State Ethics Commission may address other areas of possible conflict. 65 P.S. §403(d). The parameters of the types of activities encompassed, by this provision of the Act, are generally determined through reviewing the intent and purpose of that law. Generally, the Ethics Act was promulgated in order to insure the public that the interests of their officials do not conflict with the public trust. Such conflicts generally arise when a public official attempts to serve one or more interest that are adverse. See, Alfano, 80 -007. In the event that such a conflict of interest should develop, you should seek the further advice of this Commission. Conclusion: The State Ethics Act presents no per se prohibition upon a private attorney being retained by a municipality to represent that municipality even though the attorney's spouse is an employee of that municipality. The spouse may not participate in the selection or hiring of the law firm that will represent the municipality. Additionally, Section 3(c), of the State Ethics Act, would not require an open and public process in the instant situation in that the contract will not involve the governmental body with which the spouse is associated. If additional conflicts should arise, the further advice of this Commission should be solicited. 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. Ralph David Samuel, Esquire January 16, 1987 Page 5 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. Sinc ohnJ. Gene Counsel