HomeMy WebLinkAbout87-632 MchughPatrick M. McHugh, Esquire
Suite 1510, Two Penn Center Plaza
15th & JFK Boulevard
Philadelphia, PA 19102
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PA 17120
TELEPHONE: (717) 783 -1610
November 19, 1987
ADVICE OF COUNSEL
Re: Statement of Financial Interests, Attorney
87 -632
Dear Mr. McHugh:
This responds to your letter of October 14, 1987, wherein you indicate
that you represent Mr. Gary DiVito who is a former public employee /attorney
with the Liquor Control Board (LCB) and who has failed to file the Statement
of Financial Interests. This matter has been processed as a request for an
advice from the State Ethics Commission.
Issue: Whether a former Chief Counsel for the Pennsylvania Liquor Control
Board is 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 dated October 14, 1987, you have stated that
Mr. DiVito, as a former public employee, has refused to file the Statement of
Financial Interests and that the decision of the Supreme Court in State Ethics
Commission v. Maunus /Thau, 38 M.D. 1987 will, in all likelihood, be
diapositive of the issue herein. No other basis for the refusal to file the
Statement of Financial Interests has been asserted and it is, therefore,
assumed 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, your question will be addressed within the
purview of that assertion.
Patrick M. Mchugh, Esquire
November 19, 1987
Page 2
Discussion: Generally, as former Chief Counsel to the Liquor Control Board of
Pennsylvania, hereinafter the LCB, there is no doubt that Mr. DiVito is a
public employee within the purview of the State Ethics Act. 65 P.S. §402. 51
Pa. Code §1.1. Mr. DiVito is, therefore, required to comply with the
provisions of the State Ethics Act. Generally, the State Ethics Act provides
that public employees must file a Statement of Financial Interests by May 1 of
each year in which they serve and of the year after they leave such position.
Said statement is to cover financial interests 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 its rationale
in finding that those individuals were not exempt from the Ethics Act coverage
in light of their positions as attorneys. For the purpose of this advice, the
analysis of the Commission as set forth in the opinions issued to those
individuals will be restated.
With respect to your argument that an attorney should be exempt from the
financial reporting and disclosure provisions of the State Ethics Act,
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 theft ffactual context and their conclusions is appropriate in
reviewing your advice request.
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 di sl cosure requirements 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. Ballou's 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
any 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.
Patrick M. Mchugh, Esquire
November 19, 1987
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, as applied to attorneys, infringed
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 In
affirmed insofar as it directs judgment in favor of appellee ( Ballou)."
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 criticized the Commonwealth Court for reaching, addressing, and deciding
a constitutional and
u aof the
on nonrconstitutional found,
groundscase could be
properly decided disposed
Specifically, the Supreme Court in reviewing the case clearly based its
determination on statutory, not constitutional grounds. The Supreme Court's
ruling in effect concluded that an individual serving in 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
because for are
situated similarily to members of advisory boards who, p
power to expend 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 Mr.
DiVito was not "employed by the Commonwealth" or "responsible for taking or
recommending official action" with respect to the categories outlined in the
Patrick M. Mchugh, Esquire
November 19, 1987
Page 4
definition of "public employee" within the Ethics Act. Therefore, based upon
this concession, your situation is factually, substantially different from
that situation which was addressed by both the Commonwealth Court and the
Supreme Court in Ballou. The Supreme Court's ruling in that 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 municipality; 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, the Commission is not willing to nor does it 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 case and factual
unconstitutionality of these provisions as app
circumstances and absent cogent argument that the Commonwealth Court ruling in
Ballou must be mandatorilY observed and applied to your factual l i itua i io . on a
Basically, no case which you present or argue in your appeal
factual basis or is clearly applicable to mandate the conclusion that the
Legislature may not adopt and apply
the e Ethics
esAct s and its
Mrinancial reporting
and disclosure provisions to full-time
Lacking any specific dispositive or clearly, factually applicable or
identical case or precedent, your arguments and appeal on this score must be
rejected.
The above issue, which was presented to the Commonwealth Court in Thau
and Maunus and which is therptthan Pennsylvania
the did
not assert any new grounds ds o
its opinion. The Courts, however, have not to date issued any rulings that
indicates the position of the respondents in that matter is one which is most
likely to be determined in their favor. Additionally, the Commonwealth Court
of Pennsylvania has made no indication that they would issue any type of
indivviduadual s. or Mr. DiVitogisrnot which
indiil
not a party in the Commission's preceedi ngs involving these individuals. As
such, it is not believed that the fact tWhilehtheredare appropriatevstepsethat
case currently affects you in any way.
may be taken which may result in a postponement of the filing requirement as
applied to Mr. DiVito, this Commission, has not to date issued any order,
Patrick M. Mchugh, Esquire
November 19, 1987
Page 5
opinion, advice or policy statement that would require the suspension of the
filing requirement as to classes of individuals absent the issuance of a court
order so directing. As such, Mr. DiVito is a public employee covered by the
State Ethics Act and is required to file a Statement of Financial Interests.
Conclusion: As former Chief Counsel to the Pennsylvania Liquor Control Board,
Mr. DiVito is to be considered a former public employee within the purview of
the State Ethics Act. The Ethics Act would require that a Statement of
Financial Interests be filed by him on or before May 1 of each year in which
he served and of the year after he left such a position. 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 requiremnt as 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.
Sincerely,
Vincent J. Dopko
General Counsel