HomeMy WebLinkAbout87-589 SimpsonMr. Richard W. Simpson
2101 Woodview Drive
Harrisburg, PA 17112
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PA 17120
TELEPHONE: (717) 783 -1610
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June 22, 1987
ADVICE OF COUNSEL
87 -589
Re: Former Public Employee; Section 3(e), Insurance Department
Dear Mr. Simpson:
This responds to your letter of May 28, 1987, 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 Insurance
Department.
Facts: You have served the Commonwealth of Pennsylvania in the capacity of
the Director of the Bureau of Regulation of Rates and Policies with the
Pennsylvania Department of Insurance, hereinafter Department. You advised
that as of June 9, 1987 your position with the Department was abolished and
you were furloughed. You note that in Section 2 of the Management Directive
205.12, it is provided that no former employee shall represent a person, with
or without compensation, in front of the departing agency for a period of one
year after the employee leaves the agency. You state that you have several
employment interviews scheduled and you anticipate that you will be in a
position of instructing various insurance companies regarding proper
procedures for filing policies and /or rates for approval with the Department.
Lastly, you state that since you Would be instructing companies rather than
representing them, you do not feel that there would be any violation of the
Management Directive.
Copies of your job specification and your job description have been
obtained, which are incorporated herein: From the job specification, it is
noted that you, as director of the Bureau of Regulation of Rates and Policies,
hereinafter the Bureau, perform highly responsible administrative work
relative to the planning, directing and coordinating of the Bureau program as
to rates including the review of policies, rates and rating plans of insurance
companies, the administration of laws and regulations relative to workmen's
compensation policies and rates, and lastly the review of advertising material
to ensure adherence to the insurance laws and regulations. Your duties also
include representing the Commissioner at conferences and committee meetings on
matters relating to fire, inland marine, casualty, title, accident, and health
Mr. Richard W. Simpson
June 22, 1987
Page 2
insurance. You are responsible for exercising supervision over the policy
examiners who engage in the review and ah of policies, rates, forms, and
rating plans and secondly, over the actuaries who review the financial and
statistical data relative to workmen's compensation insurance. In general,
you exercise considerable independence in your position subject to the general
review of the insurance commissioner.
From your job description it is noted that you have the responsibility
for planning and directing the overall operations of the Bureau.
Specifically, your duties consist of carrying out departmental and
Commonwealth policy on insurance, initiating . programs and procedures for
continuing compliance, directing the preparation of regulations and their
i nterpretations, advi sing the Commissioner on bureau issues, representing the
department as a hearing, officer at rate hearings, coordinating bureau
activities with other divisions in the department, overseeing personnel
matters, preparing budget and periodic reports, representing the Department
and the Commonwealth in speaking engagements, assisting the Commissioner on
the National Association of Insurance Commissioner's Sub - committee and Task
Force assignments, and handling any other matters as directed by the
Commissioner.
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 bureau di rector for 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 mi nimus on the interests of another person.
See Grode, 87 -512.
Consequently, upon termination of this employment, you would became 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.
Mr. Richard W. Simpson
June 22, 1987
Page 3
Initially, to answer your request we must identify the " governmental
body" with which you were associated white working with the Department. Then,
we must review the scope of the prohibitions associated with the concept and
tern 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).
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 the Bureau. Thus, the
"governmental body" with which you have been "associated" upon the termination
of your employment would be 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
Bureau.
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 i s primarily concerned with financial conflicts and vi olati ons 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 empl oyer, treatment or benefits that
may be obtainable only because of his association with his former public
employer. See Anderson, 83 -014; Zwi kl , 85 -004.
In respect to the one year representation restriction, the Ethics
Commission has promulgated regulations to define "representation" a 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.
Mr. Richard W. Simpson
June 22, 1987
Page 4
The Commission, in its opinions, ha 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;
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. (The
Commission, however, has stated that the inclusion of your name as an employee
or consultant on a "pricing proposal," even if submitted to or reviewed by the
Bureau, is not prohibited as "representation." See Kotalik, 84 -007).
You may, assist in the preparation of any documents presented to the
Bureau so long as you are not identified as the preparer. You may also
counsel any person regarding that person's appearance before Bureau. Once
again, however, your activity in this respect should not be revealed to the
Bureau. Of course, any ban under the Ethics Act would not prohibit or
preclude you from making general informational inquiries of Bureau 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 Bureau your representation of, or
work for your new empl oye r.
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 Secti
prohibit any public employee or publi
employment if said position has been
the official conduct of the employee
governmental body, was influenced by
on 403(b) of the State Ethics Act would
c official from accepting a position of
offered based upon the understanding that
or official, while working for his former
such offer. See 65 P.S. §403(b).
Mr. Richard W. Simpson
June 22, 1987
Page 5
Conclusion: As a Bureau Director, you are to be considered a " public
employee" as defined in the Ethics Act. 1ipon termination of your service with
the Department, 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
i s Bureau.
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Further, should you fermi nate 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 termination 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 Advi
challenge same, you may request that the ful
personal appearance before the Commission wi
Opinion from the Commission will be issued.
writing, to the Commission within 15 days of
to 51 Pa. Code 2.12.
ce or if you have any reason to
1 Commission review this Advice. A
11 be scheduled and a formal
Any such appeal must be made, in
service of this Advice pursuant
Sincerely,
Vincent J. Dopko
General Counsel