HomeMy WebLinkAbout17-581 LeonePHONE: 717- 783 -1610
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To the Requester:
STATE ETHICS COMMISSION
FINANCE BUILDING
613 NORTH STREET, ROOM 309
HARRISBURG, PA 17120 -0400
ADVICE OF COUNSEL
December 18, 2017
Mr. Gerald A. Leone, Esquire
Assistant Counsel
Pennsylvania Historical and Museum Commission
Dear Mr. Leone:
FACSIMILE: 717- 787 -0806
WEBSITE: www.ethics.pa.gov
17 -581
This responds to your letters dated October 18, 2017, and October 26, 2017, by
which you re uested an advisory from the Pennsylvania State Ethics Commission
("Commission-1.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
P—a-0'S. § 1101 et se q., would impose prohibitions or restrictions upon a Member and
Chair of the Pennsylvania Historical and Museum Commission ( "PHMC ") with regard to
serving as a Member of the Board of Directors of the Pennsylvania Heritage Foundation
the "Foundation ") in either a voting capacity or a non - voting, advisory capacity, where:
�1) the Foundation raises charitable donations on behalf of PHMC and its projects; and
2) pursuant to a contract between PHMC and the Foundation, PHMC provides office
space and $100,000 per year to the Foundation for it to run PHMC's fundraising
operations.
Facts: You have been authorized by Nancy Moses ( "Ms. Moses "), who is a
Member and Chair of PHMC, to request an advisory from the Commission on her
behalf. You have submitted facts that may be fairly summarized as follows.
The Foundation raises charitable donations on behalf of PHMC and its projects.
Pursuant to a contract (the "Contract ") between PHMC and the Foundation, PHMC
provides office space and $100,000 per year to the Foundation for it to run PHMC's
fundraising operations.
Prior to 2015, PHMC Commissioners served as ex officio and voting Members of
the Foundation Board of Directors. In 2015, PHMC's then -Chief Counsel raised
concerns that those PHMC Commissioners who were serving on the Foundation Board
of Directors could put themselves at risk of violating the Ethics Act. In the interest of
ensuring compliance with the Ethics Act, all PHMC Commissioners who were serving as
ex officio and voting Directors in 2015 resigned from the Foundation Board of Directors.
In 2017, Ms. Moses was appointed as Chair of PHMC, a new Executive Director
of PHMC was hired, and six new Members began serving on the Foundation Board of
Leone, 17 -581
D cember 18, 2017
Page 2
Directors. PHMC and the Foundation desire interactions that are legally and ethically
sound, and it has been proposed that one or two PHMC Commissioners serve as
uncompensated Members of the Foundation Board of Directors in a non - voting,
advisory capacity. You state that while the Foundation itself will accrue private
pecuniary benefit, the mission and activities of the Foundation do not redound to the
financial benefit of the Commissioners. You state that a PHMC Commissioner serving
on the Foundation Board of Directors in a non - voting, advisory capacity would not
benefit financially from the contractual relationship between PHMC and the Foundation
and would have no control over the Foundation's actions or funds.
Based upon the above submitted facts, the question that is presented is whether
the Ethics Act would impose rohibitions or restrictions upon Ms. Moses with regard to
serving as a Member of the Foundation Board of Directors in either a voting capacity or
a non - voting, advisory capacity.
Discussion: It is initial) noted that pursuant to Sections 1107(10) and 1107(l 1) of
Me Ethics-Act, 65 Pa.C.S. y§§ 1107(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, the 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 truthfully disclosed all of the material facts.
As a Member and Chair of PHMC, Ms. Moses is a public official subject to the
provisions of the Ethics Act.
Sections 1103(a) and 11030) of the Ethics Act provide:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
(j) Voting conflict. - -Where voting conflicts are not
otherwise addressed by the Constitution of Pennsylvania or
by any law, rule, regulation, order or ordinance, the following
procedure shall be employed. Any public official or public
employee who in the discharge of his official duties would be
required to vote on a matter that would result in a conflict of
interest shall abstain from voting and, prior to the vote being
taken, publicly announce and disclose the nature of his
interest as a public record in a written memorandum filed
with the person responsible for recording the minutes of the
meeting at which the vote is taken, provided that whenever a
governing body would be unable to take any action on a
matter before it because the number of members of the body
required to abstain from voting under the provisions of this
section makes the majority or other legally required vote of
approval unattainable, then such members shall be
permitted to vote if disclosures are made as otherwise
pprovided herein. In the case of a three - member governing
body of a political subdivision, where one member has
abstained from voting as a result of a conflict of interest and
the remaining two members of the governing body have cast
opposing votes, the member who has abstained shall be
Leone, 17 -581
December 18, 2017
Page 3
permitted to vote to break the tie vote if disclosure is made
as otherwise provided herein.
65 Pa.C.S. §§ 1103 (a), 0).
The following terms related to Section 1103(a) are defined in the Ethics Act as
follows:
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate
family or= a business with which he or a member of his
immediate family is associated. The term does not include
an action having a de minimis economic impact or which
affects to the same degree a class consisting of the general
public or a subclass consisting of an industry, occupation or
other group which includes the public official or public
employee, a member of his immediate family or a business
with which he or a member of his immediate family is
associated.
"Authority of office or employment. " The actual
power provided by law, the exercise of which is necessary to
he performance of duties and responsibilities unique to a
particular public office or position of public employment.
"Business." Any corporation, partnership, sole
proprietorship, firm, enterprise, franchise, association,
organization, self- employed individual, holding company,
joint stock company, receivership, trust or any legal entity
organized for profit.
"Business with which he is associated." Any
business in which the person or a member of the person's
immediate family is a director, officer, owner, employee or
has a financial interest.
65 Pa.C.S. § 1102.
Subject to the statutory exclusions to the Ethics Act's definition of the term
"conflict" or "conflict of interest," 65 Pa.C.S. § 1102, a public officiallpublic employee is
prohibited from using the authority of public office /employment or confidential
information received by holding such a public position for the private pecuniary benefit
of the public official/public employee himself, any member of his immediate family, or a
business with which he or a member of his immediate family is associated.
In each instance of a conflict of interest, the public official/public employee would
be required to abstain from participation. The abstention requirement would not be
limited merely to voting, but would extend to any use of authority of office including, but
not limited to, discussing, conferring with others, and lobbying for a particular result.
Juliante, Order 809. Subject to certain statutory exceptions, in each instance of a voting
coffin iict, Section 11030) of the Ethics Act would require the public official/public
employee to abstain and to publicly disclose the abstention and reasons for same, both
Leone, 17 -581
limber 18, 2017
Page 4
orally and by filing a written memorandum to that effect with the person recording the
minutes.
Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows:
§ 1103. Restricted activities
(f) Contract. - -No public official or public employee or
his spouse or child or any business in which the person or
his spouse or child is associated shall enter into any contract
valued at $500 or more with the governmental body with
which the public official or public employee is associated or
any subcontract valued at $500 or more with any person
who has been awarded a contract with the governmental
body with which the public official or public employee is
associated, 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. In such a case, the public official or
public employee shall not have any supervisory or overall
responsibility for the implementation or administration of the
contract. Any contract or subcontract made in violation of
this subsection shall be voidable by a court of competent
jurisdiction if the suit is commenced within 90 days of the
making of the contract or subcontract.
65 Pa.C.S. § 1103(f).
The term "contract" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Contract." An agreement or arrangement for the
acquisition, use or disposal by the Commonwealth or a
political subdivision of consulting or other services or of
supplies, materials, equipment, land or other personal or real
property. The term shall not mean an agreement or
arrangement between the State or political subdivision as
one party and a public official or public employee as the
other party, concerning his expense, reimbursement, salary,
wage, retirement or other benefit, tenure or other matters in
consideration of his current public employment with the
Commonwealth or a political subdivision.
65 Pa.C.S. § 1102.
Section 1103(f) does not operate to make contracting with the governmental
body permissible where it is otherwise prohibited. Rather, where a public official /public
employee, his spouse or child, or a business with which he, his spouse or child is
associated, is otherwise appropriately contracting with the governmental body, or
subcontracting with any person who has been awarded a contract with the
governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an
open and ublic process" be observed as to the contract with the governmental body.
Section 1103(f) of the Ethics Act also provides that the public officiallpublic employee
may not have any supervisory or overall responsibility as to the implementation or
administration of the contract with the governmental body.
Leone, 17 -581
Uecermber 18, 2017
Page 5
In ap Iying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
Section 1103(a) of the Ethics Act would not prohibit Ms. Moses from serving as a
Member of the Foundation Board of Directors in either a voting capacity or a non - voting,
advisory capacity. If Ms. Moses would become a Member of the Foundation Board of
Directors, the Foundation would be a business with which Ms. Moses is associated as a
Director -- regardless of whether Ms. Moses would be serving in a voting capacity or a
non - voting, advisory capacity. Cf., Sadler, Advice 09 -509.
Subject to the statutory exclusions to the definition of "conflict" or "conflict of
interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to
Section 1103(x) of the Ethics Act, Ms. Moses would have a conflict of interest in her
capacity as a Member and Chair of PHMC in matter(s) that would financially impact the
Foundation, such as contract(s) between PHMC and the Foundation, including but not
limited to oversight of work performed by the Foundation relative to the Contract or
participating in matter(s) involving renewal of the Contract or future contract(s) between
PHMC and the Foundation. Ms. Moses would further have a conflict of interest with
regard to voting to approve payment(s) to the Foundation.
In each instance of a conflict of interest, Ms. Moses would be required to abstain
from participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
The restrictions and requirements of Section 1103(f) of the Ethics Act would have
to be observed whenever applicable. Section 1103(f) would not be applicable to the
Contract given that the Contract was not entered into at a time when the Foundation
would be considered a business with which Ms. Moses is associated. Cf., Lind, Advice
16 -547; Shearer, Advice 15 -539; Lewis, Advice 13� -587; Bowers, Wdvice 07 -588;
Burkhart , Arc vice 03 -535. However, any renewal(s) of the Contract or future contract(s)
between PHMC and the Foundation valued at $500.00 or more would be subject to the
restrictions and requirements of Section 1103(f) of the Ethics Act to the extent that: (1)
Ms. Moses would be a Member of PHMC; an (2) the Foundation would be a business
with which Ms. Moses is associated.
The propriety of the proposed conduct has only been addressed under the Ethics
Act; the applicability of any other statute, code, ordinance, regulation or other code of
conduct other than the Ethics Act has not been considered in that they do not involve an
interpretation of the Ethics Act. Specifically not addressed herein is the applicability of
the Governor's Code of Conduct.
Conclusion. As a Member and Chair of the Pennsylvania Historical and
Museum Commission ( "PHMC "), Nancy Moses ( "Ms. Moses ") is a public official subject
to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Pa.C.S. § 1101 et se q. Based upon the submitted facts that: (1) the Pennsylvania
Heritage oundation7t a "Foundation ") raises charitable donations on behalf of PHMC
and its projects; (2) pursuant to a contract (the "Contract ") between PHMC and the
Foundation, PHMC provides office space and $100,000 per year to the Foundation for it
to run PHMC's fundraising operations; (3) prior to 2015, PHMC Commissioners served
as ex officio and voting Members of the Foundation Board of Directors; (4) in 2015,
PHMC's then -Chief Counsel raised concerns that those PHMC Commissioners who
were serving on the Foundation Board of Directors could put themselves at risk of
violating the Ethics Act; (5 ) in the interest of ensuring compliance with the Ethics Act, all
PHMC Commissioners who were serving as ex officio and voting Directors in 2015
resigned from the Foundation Board of Directors; (6) in 2017, Ms. Moses was appointed
as Chair of PHMC, a new Executive Director of PHMC was hired, and six new Members
Leone, 17 -581
U_ecernber 18, 2017
Page 6
began serving on the Foundation Board of Directors; (7) PHMC and the Foundation
desire interactions that are legally and ethically sound, and it has been proposed that
one or two PHMC Commissioners serve as uncompensated Members of the
Foundation Board of Directors in a non - voting, advisory capacity; (8) while the
Foundation itself will accrue private pecuniary benefit, the mission and activities of the
Foundation do not redound to the financial benefit of the Commissioners; and (9) a
PHMC Commissioner serving on the Foundation Board of Directors in a non - voting,
advisory capacity would not benefit financially from the contractual relationship between
PHMC and the Foundation and would have no control over the Foundation's actions or
funds, you are advised as follows.
Section 1103(a) of the Ethics Act would not prohibit Ms. Moses from serving as a
Member of the Foundation Board of Directors in either a voting capacity or a non - voting,
advisory capacity. If Ms. Moses would become a Member of the Foundation Board of
Directors, the Foundation would be a business with which Ms. Moses is associated as a
Director regardless of whether Ms. Moses would be serving in a voting capacity or a
non - voting, advisory capacity. Subject to the statutory exclusions to the definition of
"conflict" or "conflict of interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S.
§ 1102, pursuant to Section 1103(a) of the Ethics Act, Ms. Moses would have a conflict
of interest in her capacity as a Member and Chair of PHMC in matter(s) that would
financially impact the Foundation, such as contract(s) between PHIVIC and the
Foundation, including but not limited to oversight of work performed by the Foundation
relative to the Contract or participating in matter(s) involving renewal of the Contract or
future contract(s) between PHMC and the Foundation. Ms. Moses would further have a
conflict of interest with regard to voting to approve payment(s) to the Foundation.
In each instance of a conflict of interest, Ms. Moses would be required to abstain
from participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
The restrictions and requirements of Section 1103(f) of the Ethics Act would have
to be observed whenever applicable. Section 1103(f) would not be applicable to the
Contract given that the Contract was not entered into at a time when the Foundation
would be considered a business with which Ms. Moses is associated. However, any
renewal(s) of the Contract or future contract(s) between PHMC and the Foundation
valued at $500.00 or more would be subject to the restrictions and requirements of
Section 1103(f) of the Ethics Act to the extent that: (1) Ms. Moses would be a Member
of PHMC; and (2) the Foundation would be a business with which Ms. Moses is
associated. Lastly, the propriety of the proposed conduct has only been addressed
under the Ethics Act.
Pursuant to Section 1107(11) of the Ethics Act, an 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, provided the requester has disclosed
truthfuily.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 appeal the Advice to the full
Commission. A personal appearance before the Commission will be
scheduled and a formal Opinion will be issued by the Commission.
Leone, 17 -581
member 18, 2017
Page 7
Any such appeal must be in writingg and must be actually
received at the Commission within thirty (30) days of the date of this
Advice pursuant to 59 Pa. Code § 93.2(h). The appeal may be
received at the Commission by hand delivery, United States mail,
delivery service, or by FAX transmission (797 '-787 -- 0806). Failure to
Me such an appeal at the Commission within thirty (30) days may
result in the dismissal of the appeal.
Since ly,
Robin M. Hittie
Chief Counsel