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HomeMy WebLinkAbout87-658 CarmellaJames D. Carmella, Esquire 724 Church Street Indiana, PA 15701 Dear Mr. Carmella: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 December 31, 1987 ADVICE OF COUNSEL 87 -658 Re: Former Public Official; Section 3(e), County Commissioner, County Insurance Policies This responds to your letter of December 14, 1987, in which you requested advice from the State Ethics Commission. Issue: You ask whether the Ethics Act presents any restrictions upon a county commissioner following his termination of service with the the county. Facts: In your letter you state that you are the solicitor for County and that you are requesting advice on behalf of County Commissioner Anthony S. Hewitt, who is presently serving and has been re- elected to serve an additional four year term beginning on January 3, 1988. You further state that Commissioner Hewitt has accepted employment outside the Commonwealth and consequently will not fulfill his second term which will result in a vacancy that will be filled by the Court of Common Pleas. You also state that Commissioner Hewitt owns an insurance agency in Indiana County and that he wrote insurance for the county prior to taking office. You state that when he originally took office, he discontinued writing insurance for the county but now that he is leaving office, he is interested in once again writing insurance policies for Indiana County. You indicate that the commissioner would be interested in writing insurance in either of two ways: submitting proposals to write insurance as the current county policies expire or alternatively arranging with the present insurance agent for the county that Commissioner Hewitt could take over the insurance and become broker of record. As to the second proposal, you note that when Commissioner Hewitt took office he represented Traveler's Insurance Company but he withdrew his name as broker of record when he was elected and had another Traveler's agency underwrite the insurance while he was commissioner. Commissioner Hewitt now suggests that James D. Carmel la, Esquire December 31, 1987 Page 2 the other agent withdraw as broker of record so that Mr. Hewitt may resume his former insurance underwriting after he leaves public office. You further note that Commissioner Hewitt has accepted a position in Raltimore, Maryland, where he w i l l move; however, he w i l l , as owner of the insurance agency in Indiana County, continue to operate that business which will he managed by local people. You conclude by requesting advice as to whether Commissioner Hewitt, after his resignation, may write insurance for the county; whether Commissioner Hewitt would be restricted from writing insurance if the county put the insurance out on bid and lastly, what effect Section 3(e) of the Ethics Act would have on this matter. Discussion: As a county commissioner for Indiana County, Mr. Hewitt is to be considered a "public official" 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. See Huff Opinion, 84 -015 Consequently, upon termination of this employment, he would become a "former public official" 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. Initially, to answer your request it is necessary to identify the "governmental body" with which he was associated while working with the county. Then, the scope of the prohibitions associated with the concept and term of "representation" must be reviewed-. 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 T1981). Based upon the facts outlined above, his jurisdiction, responsibility, influence and control appears to have been Indiana County. Thus, the "governmental body" with which he has been "associated" upon the termination of his employment would be Indiana County. Therefore, within the first year after he would leave Indiana County, Section 3(e) of the Ethics Act -would apply and restrict his "representation" of persons or new employers vis -a -vis Indiana County. James D. Carmelia, Esquire December 31, 1987 Page 3 The Ethics Act would not affect his ability to appear before agencies or entities other than with respect to Indiana County. Likewise, there is no general limitation on the type of employment in which he may engage, following his departure from the county. It is noted, however, that the conflicts of interest law is primarily concerned with financial conflicts and violations 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 employer, treatment or benefits that may be obtainable only because of his association with his former public employer. See Anderson, 83 -014; Zwikl, 85 -004. In respect to the one year representation restriction the Ethics Commission has promulgated regulations to define "representation" as 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. The Commission, in its opinions, has also 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 one has been associated, (that is Indiana County), including, but not limited to, negotiations or renegotiations on contracts with Indiana County; 2. Attempts to influence Indiana County; 3. Participating in any matters before Indiana County over which he had supervision, direct involvement, or responsibility while employed by Indiana County; 4. Lobbying, that is representing the interests of any person or employer before Indiana County 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 one's name as the person who will provide technical assistance on such proposal, document, or hid, if submitted to or reviewed by the governmental body, constitutes an attempt to influence one's James D. Carmel la, Esquire December 31, 1987 Page 4 former governmental body. See Kilareski, 80 -054. Therefore, within the first year after Mr. Hewitt leaves Indiana County, he should not engage in the type of activity outlined above. The Commission, however, has stated that the inclusion of one's name as an employee or consultant on a "pricing proposal," even if submitted to or reviewed by the governmental body, is not prohibited as "representation." See Kotalik, 84 -007. One may, assist in the preparation of any documents presented to the governmental body so long as he is not identified as the preparer. He may also counsel any person regarding that person's appearance before Indiana County. Once again, however, his activity in this respect should not he revealed to the county. Of course, any ban under the Ethics Act would not prohibit or preclude him from making general informational inquiries of Indiana County to secure information which is available to the general public. See Cutt, 79 -023. This, of course, must not he done in an effort to indirectly influence these entities or to otherwise make known to Indiana County his representation of, or work for his new employer. In the instant situation, the activity which Mr. Hewitt contemplates is providing insurance coverage to Indiana County. Such contemplated conduct is precisely the activity which Section 3(e) of the Ethics Act was designed to prohibit or restrict, namely the representation of Mr. Hewitt's insurance agency or Mr. Hewitt individually before his former governmental body, Indiana County. In Kreger, No. 595, the Ethics Commission found that a former member of a municipal authority violated Section 3(e) of the Ethics Act, as well as Sections 3(a) and 3(c), when he negotiated a consulting contract and appeared before governmental within one year after he resigned as authority member. See also Wolpert, No. 169, wherein this Commission found that a school director violated Section 3(e) of the Ethics Act when he contracted with a school district within one year after he terminated his service. See also Komoroski, No. 550. Therefore, under Section 3(e) of the Ethics Act, Commissioner Hewitt may not appear before his farmer governmental body, Indiana County, by proposing, submitting or underwriting insurance policies for the county. Regarding the alternative proposal whereby Commissioner Hewitt would request the current broker of record to withdraw followed by the substitution of Commissioner Hewitt, such contemplated activity would not remove the 3(e) prohibition of the Ethics Act because Commissioner Hewitt would be attempting to do indirectly that which he could not do directly. See Motto Opinion, 83 -015. See also Welz Opinion, 86 -001. Additionally, if Mr. Hewitt were to substitute as broker of record and if a claim or dispute regarding a policy arose, Commissioner Hewitt, through his firm, would have to appear before the county and represent his insurance agency relative to the dispute or- claim. The fact that Commissioner Hewitt would be working in Maryland and having James D. Carmel la, Esquire December 31, 1987 Page 5 local people manage the insurance company would not alter the result because the insurance agency would be a "business with which he is associated" as that term is defined in the Ethics Act: Section 2. Definitions. "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 holder of stock. 65 P.S. 402. Regarding you last concern as to whether the county could put the insurance out on bid and, if so, what restrictions would he imposed upon Commissioner Hewitt regarding that contracting process, Section 3(c) of the Ethics Act provides: 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 51 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). In relation to the above provision of law, the State Ethics Commission has generally determined that this provision is a procedure to be used when a public official or employee contracts with his own governmental body in excess of $500. Bryan, 80 -014; Lynch, 79 -047. The Commission, however, has also determined that the above provision of law is not a general authorization for a public official to contract with his own governmental body where such is otherwise prohibited by law. The above provision of law clearly is intended to be a procedure to he utilized where contracting is otherwise allowed by law. For example, if a particular business transaction was prohibited under Section 3(a) or 3(e) of the State Ethics Act, this particular provision of law would not authorize that transaction. Additionally, if a particular code prohibits a public official from being interested in a contract, this provision would not allow that interest. James D. Carmelia, Esquire December 31, 1987 Page 6 Parenthetically, where contracting is otherwise allowed or where there appears to be no expressed prohibition to such contracting, the above particular provision of law would require that an additional procedure he utilized when such business is transacted. This procedure, the open and public process, must he used in all situations were a public official is otherwise appropriately contracting with his own governmental body in excess of $500. This open and public process would require: (1) prior public notice of the employment or contracting possibility; (2) sufficient time for a reasonable and prudent competitor /applicant to he able to prepare and present an application or proposal; (3) public disclosure of all applications or proposals considered and; (4) public disclosure of the contract awarded and offered and accepted. See, Cantor, 82 -004. Thus, in the event that contracting would be allowed, the above process must be employed. However, in the instant matter, Section 3(e) would be applicable and would bar the contracting process as discussed above. Lastly, it must be noted that your questions have only been addressed under the Ethics Act; the propriety of the proposed conduct has not been considered under any other statute, code, regulation, or ordinance or other code of conduct other than the Ethics Act. Conclusion: As a county commissioner, Mr. Hewitt is to be considered a "public official" as defined in the Ethics Act. Upon termination of his service with Indiana County, he would become a "former public official" subject to the restrictions imposed by Section 3(e) of the Ethics Act. As such, his conduct should conform to the requirements of the Ethics Act as outlined above. Under Section 3(e) of the Ethics Act, Commissioner Hewitt for a period of one year after he leaves his position as county commissioner may not submit proposals or contract with Indiana County regarding insurance underwriting for the county either directly or indirectly by having the agent of record withdraw with Commissioner Hewitt substituting. His governmental body for the purpose of the one year representation restriction is Indiana County. Lastly, the propriety of the proposed conduct has only been considered under the Ethics Act; the applicability of any other statute, code, regulation, or ordinance other than the Ethics Act has not been considered. Further, should Commissioner Hewitt terminate his employment or service, as outlined above, he is reminded that the Ethics Act also requires him to file a Statement of Financial Interests for the year following his termination of service. James D. Carmel la, Esquire December 31, 1987 Page 7 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 ful 1 Commission review this Advice. A personal appearance before the Commission wi 11 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 .