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HomeMy WebLinkAbout88-568 SmithDear Mr. Smith: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 ADVICE OF COUNSEL May 26, 1988 88 - 568 Kevin Hopkins Smith, Esquire Route 113 At Yellow Springs Road Chester Springs, PA 19425 Re: Former Public Official; Section 3(e); Borough Council; Legal Representation of Clients; Non -Legal Representation of Clients This responds to your letter of April 5, 1988, 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 Borough Council. Facts: In your advice request you state that you are currently serving a four -year term as a Borough Councilman in the Borough of Phoenixville, hereinafter, Borough. You then state that you will be moving outside of the Borough and will be resigning your position at the end of the month. You also advise that you maintain a sole proprietorship for the practice of law and that you almost exclusively represent one real estate developer who has not yet been involved in a project within the Borough. You then express your concern regarding the limitations upon your representation of this client in the event that he would be interested in purchasing any real estate with the borough. You specifically inquire as to whether the Ethics Act would restrict your representation as an attorney of this client regarding the following activities: consulting with the Borough's zoning staff as to subdivision and zoning requirements, the availability of municipal services and the municipality's attitude towards the development proposal; advising your client of the results of the above discussions so that he could consider that information and deciding whether to purchase realty; representing your client before the Borough's planning commission and discussing matters with the various Borough consultants such as engineers, architects and the solicitor; representing your client before Kevin Hopkins Smith Page 2 the borough zoning hearing board regarding such matters as variances; special exceptions, etc.; representing your client before Borough Council regarding zoning changes and subdivision approvals and representing your client and working out disputes that may arise with the Borough staff during the course of the development of a project. You then ask whether the above inquiries would have the same or different results under the Ethics Act if you were to be a principal in the real estate ventures rather than as an attorney representing a client. Discussion: As a councilman for the Borough of Phoenixville, you are a "public official" as that term is defined under the Ethics Act. As such, your conduct must conform to the provisions of that law. 65 P.S. Section 401; 51 Pa Code 51.1. You are probably aware of the case entitled Pennsylvania Public Utility Bar Association v. Thornburgh, 434 A.2d 1327, 62 Pa. Cmwlth. 88 (1981), affirmed per curiam 450 A.2d 613, 498 Pa. 589•(1982) which deals with the applicability of. Section 3(e) of the Ethics Act to attorneys in the regulation of their practice of law. However, you seek clarification of the question of the applicability of the Ethics Act to your situation and any restrictions that might be placed upon your conduct with respect to your practice of law and new work and /or employment. In light of the recent decision in Pennsylvania Public Utility Commission Bar Association, supra, where the Court held that Section 3(e) of the Ethics Act, 65 P.S. §403(e), was an impermissible intrusion upon the Supreme Court's authority to regulate an attorney's conduct, the State Ethics Commission has applied this decision to mean that there are no prohibitions under Section 3(e) of the Ethics Act upon your conduct insofar as that conduct constitutes the practice of law. Therefore, insofar as your conduct before the Borough in particular, the agency or entity with which you were associated, would constitute the practice of law, Section 3(e) of the Ethics Act cannot be applied to restrict that proposed activity. Particular reference should be made to the decision of the Commonwealth Court at Footnote 7, 434 A.2d at page 1331 - 1332. In this note, the Court indicates that any activity in which the - attorney proports to render professional services to a client may only be regulated by the Supreme Court. The State Ethics Commission, therefore, must conclude that to the extent that you would represent a client, as a lawyer, before the Borough or otherwise, Section 3(e) of the Ethics Act Would not operate to bar such activity. Kevin Hopkins Smith Page 3 If, however, the activities that you intend to undertake do not fall within the category of the practice of law, the prohibitions of Section 3(e) of the Ethics Act might be applicable. Activities which might be considered, by the Commission, not to constitute the "practice of law" or to be undertaken in the capacity as lawyer- client, might include activities such as lobbying and negotiating on contracts. However, it is assumed for the purposes of this Advice, that you intend to undertake these in the capacity of lawyer- client, that these activities would constitute the practice of law, and that the provisions of Section 3(e) of the Ethics Act pursuant to the mandates of the Supreme Court's ruling would, therefore, be inapplicable. In any event, you should be advised that your activity, even if Section 3(e) of the Ethics Act were to be applicable, would not regulate your conduct, except with respect to the Borough -- the "governmental body" with which you are "associated." Therefore, any representation which you might undertake with respect to a client or employer before any entity other than the Borough would not be restricted by Section 3(e) of the Ethics Act in any event. As can be seen from the above, Section 3(e) of the Ethics Act would not restrict your activity as an attorney representing a client regarding the six activities that you have set forth in your letter. However, if you were to become a principal in the real estate venture, then clearly you would not be in an attorney - client situation and the restrictions of 3(e) of the Act would apply to you. Section 3(e) of the Ethics Act provides: 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. 5403. As previously noted, the governmental body with which you were associated while serving was the Borough. Therefore, within the first year after you would leave the Borough, Section 3(e) of the Ethics Act would apply and restrict your "representation" of persons or new employers vis -a -vis the Borough. Kevin Hopkins Smith Page 4 The Ethics Act would not affect your ability to appear before agencies or entities other than with respect to the Borough. Likewise, there is no general limitation on the type of employment in which you may engage following your departure from the Borough. 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, 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 employee. 51 Pa. Code 51.1. 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 you have been associated, (that is the Borough), including, but not limited to, negotiations or renegotiations on contracts with the Borough; 2. Attempts to influence the Borough; 3. Participating in any matters before the Borough over which you had supervision, direct involvement, o responsibility while employed by the Borough; Kevin Hopkins Smith Page 5 4. Lobbying, that is representing the interests of any person or employer before the Borough in relation to legislation, regulations, etc. See Russell, Opinion 80 -048 and Seltzer, Opinion 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 Borough, constitutes an attempt to influence your former governmental body. See Kilareski, Opinion 80 -054. Therefore, within the first year after you leave the Borough, 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 Borough, is not prohibited as "representation." See Kotalik, Opinion 84 -007). You may, assist in the preparation of any documents presented to the Borough so long as you are not identified as the preparer. You may also counsel any person regarding that person's appearance before the Borough. Once again, however, your activity in this respect should not be revealed to the Borough. Of course, any ban under the Ethics Act would not prohibit or preclude you from making general informational inquiries of the Borough to secure information which is available to the general public. See Cutt, Opinion 79 -023. This, of course, must not be done in an effort to indirectly influence these entities or to otherwise make known to the Borough your representation of, or work for your new employer. 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, Opinion 80 -056 and Beaser, Advice 81 -538. In applying the above to the six questions which you pose in your capacity as a principal in a real estate venture, Section 3(e) of the Ethics Act would not restrict your consulting with the borough's zoning staff regarding subdivision and zoning requirements since that is information which is available to the public. However, in terms of specific requests regarding the borough's attitude toward a development proposal, this would relate to your specific representation as a principal of a real estate venture and such activity would be prohibited by Section 3(e) of the Act. As to your second inquiry regarding advising your clients on this information, Section 3(e) of the Ethics Act would not restrict such discussions since the prohibition of Kevin Hopkins Smith Page 6 Section 3(e) relates to your representation before your governmental body but not as to discussions with the client. As to your third and forth inquiries, Section 3(e) of the Ethics Act would not restrict your activities in this regard since the planning commission and zoning hearing board are not your former governmental body which is the Borough. Lastly, as to your fifth and sixth inquiries concerning representing a client, which would not be in an attorney /client situation as you have posed it before the Borough regarding the zoning matters or working out disputes, this is clearly an activity which would be prohibited by Section 3(e) of the Ethics Act as noted above. Section 3 b of the Ethics Act •rovides: (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 employee or candidate for public office would be influenced thereby. 65 P.S. S403(b). Section 3(b) of the Ethics Act must be referenced in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which a public official or employee must observe, a public official or employee must neither offer nor accept anything of value on the understanding or with the intention that his judgment would be influenced thereby. It is assumed such a situation does not exist here. This Section is referenced not to indicate that any such activity has been or will be undertaken but in an effort to provide a complete response to your inquiry. Lastly, 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. Conclusion: As a borough councilman, you are to be considered a "public official" as defined in the Ethics Act. Upon termination of your service with the Borough, you would become a "former Kevin Hopkins Smith Page 7 public official" 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 is the Borough. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Further, should you terminate 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. such. This letter is a public record and will be made available as 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 former 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 52.12. S cere ly, Vincent 3. Dopko, General Counsel