HomeMy WebLinkAbout87-561 PerrySTATE ETHICS COMMISSION
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
May 12, 1987
ADVICE OF COUNSEL
Mr. James A. Perry 87 -561
Public School Employes' Retirement System
P.O. Box 125
Harrisburg, PA 17108
Re: Public Employee, Invitation to Reception from Company Affiliated With
Public Agency
Dear Mr. Perry:
This responds to your letter of March 31, 1987, wherein you requested the
advice of the State Ethics Commission.
Issue: Whether the State Ethics Act presents any prohibitions upon your
attendance at a reception sponsored by an investment services group that has
been affiliated with your public agency.
Facts: You currently serve as the executive director of the Pennsylvania
Public School Employes' Retirement System, where you are the senior
administrator of the State's retirement fund for public school employees. In
this respect you are responsible for the planning, formulation and
implementation of policies for the retirement board. This includes the
development of programs and procedures to implement the general policies
adopted by the board and the execution of decisions stemming from these
general guidelines. You also oversee the activities of the investment
coordinator including in -house management of short -term investments. You
administer the daily operation of the retirement system to assure prompt
receipt and investment of contributions and investment income, accurate record
keeping, prompt and regular payments to retired members and related services
to contributors and public school jurisdictions. You have further advised
that you provide input to the board with respect to the decisions that deal
with contracts and in the case of small contracts you actually have the
authority to contract on behalf of the board.
You indicated that you have received an invitation to a cocktail
reception and dinner being sponsored by the Trust and Investment Services
Group of First Pennsylvania Bank. The First Pennsylvania Bank is currently on
contract with the Treasury Department as custodian for the public school
employes' retirement fund. Their contract was negotiated and entered into
with the Treasury Department, but, the Public School Employes' Retirement
Board is a party to that contract and receives services from First
Pennsylvania Bank. You have provided a copy of the invitation and it
indicates that it is in relation to an event not involving your public agency.
Lames A, Perry
May 12, 1987
Page 2
Discussion: As the Executive Director of the Public :school Employes'
Retirement Board you are a public employee as tr,at term is defined in the
State Ethics Act. As such your conduct must conform to the requirements
therof. 65 P.S. §402; (Site). The 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).
Generally, this provision of law would prohibit any public official from using
their position in order to obtain a financial gain other than the compensation
provided by law. In the instant situation, it does not appear as though you
are in a situation where you would be using any of the benefits of your public
office or any confidential information obtain through your public office to
obtain any financial gain for yourself or any member of your immediate family.
Therefore, this provision of the State Ethics Act would place no prohibitions
upon your contemplated activity. In addition to the foregoing, the State
Ethics Act also provides as follows:
Section 3. Restricted activities.
(b) No person shall offer or give to a public official or
public employee or candidate for public office or a member
of his immediate family or a business with which he is
associated, and no public official or public employee or
candidate for public office shall solicit or accept,
anything of value, including a gift, loan, political
contribution, reward, or promise of future employment
based on any understanding that the vote, official action,
or judgment of the public official or public employee or
candidate for public office would be influenced thereby.
65 P.S. 403(b).
Reference is made to the above provision of law, not to imply that there has
or will be any violation thereof, but merely to provide a complete response to
your question. The Ethics Act would prohbit the receipt of anything of value
based upon the understanding that your official decision will be influenced
thereby.
James A. Perry
May 12, 1987
Page 3
In addition to the foregoing, the Ethics Act further provides that this
Commission may address other areas of possible conflicts of interest. 65 P.S.
§403(d). Such a conflict of interest can exist in any number of situations.
The Commission, in the past, has reviewed a number of situations where public
employees are involved with entities in which they had an on going public
relationship. For example, in Favinger No. 29 this Commission determined that
regulators as public employees could not except gifts from individuals that
were regulated. Similarly, in that opinion the Commission ruled that persons
regulated could not sponsor hospitality rooms from those that they regulated.
Favinger No. 29. Similarly, in Miller this Commission determined that public
officials could not accept meals, lodging and other benefits from individuals
or corporate entities that were seeking to have the governmental entity
employing those officials rule upon a matter of benefit to the company and
which was in the purview of the official's authority. See Miller, 33 -006.
This Commission has also determined that an individual who re is ve es a benefit
or gift as a result of his public activity from an entity doing business with
his public agency would be required to provide that gift to the governmental
agency. See Urick, 85 -019.
In the instant situation, it is clear that the reception that is being
sponsored by the First Pennsylvania Group does not relate in any wa:, to your
public activities. In this respect you are not being required to attend this
meeting as a result of your public duties. If such were the situation then
you would be arguably attending this reception at the behest of your public
employer and as part of your contractual relationship with this entity.
However, in the instant situation, the reception that is being conducted has
no affiliation whatsoever with your governmental agency. In this respect, it
would appear that this receiption would be in the form of a gratuity that is
being offered. While the Ethics Act does not absolutely prohibit the receipt
of a gratuity by a public employee or public official, such items must be
reported if in excess of $200.00. In the instant situation and because of
your extremely high level position with the board, it probably would be the
better practice under these circumstances to forego participating in this
reception. This would be so in light of the fact that you have the ultimate
and overall responsibility of keeping the board informed as to investment
opportunities in relation to the public school employes' retirement fund. In
this respect, your activities must be conducted in the best interest of your
public employer. On the other hand, you have been offered the opportunity to
attend a social affair by a company that is on contract with the state not
relating to the activities of your public employer. In light of all the
surrounding circumstances and inlight of your particular position. with the
board it would probably be the better practice for you not to attend this
particular function even though the State Ethics Act does not absolutely
prohibit such attendance. This course of action would appear to he most
reasonable in light of all the surrounding circumstances.
James A, Perry
May 12, 1987
Page 4
Conclusion: It would be the better practice for you as executive director of
the Public School Employs' Retirement System not to participate in a social
function at the expense of a company that is currently sevvi ci ng the
retirement system when that function is not in relation to any of your
authorized public activities.
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 rursuant
to 51 Pa. Code 2.12.
Co no
Acting General Counsel