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HomeMy WebLinkAbout88-572 ClaryJohn T. Clary, Jr., Esquire Park Plaza 225 North Washington Avenue P.O. Box 909 Scranton, PA 18503 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 2, 1988 88 -572 Re: Statement of Financial Interests, Attorney Dear Mr. Clary: This responds to your letter of April 8, 1988, wherein you indicate that you are a former public employee /attorney with the Office of Chief Counsel, Department of Transportation and have failed to file the Statement of Financial Interests. Your appeal has been processed as a request for an advice from the State Ethics Commission. Issue: Whether a fw.ner attorney with the Office of Chief Counsel, Department of Transportation 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: In your letter of April 18, 1988, you advise that you appeal the notice that you must file a Statement of Financial Interests for 1987 relating to your prior Commonwealth employment. You state that until September 30, 1987 you were an attorney in the Office of the Chief Counsel, Department of Transportation, hereinafter Penn Dot. You then cite four cases thvolving State Ethics Commission litigation: Ballou v. State Ethics Commission, 56 Ct. 240, 424 A2d 983 (1980), affirmed 27, 436 A2d 186 (1981); Kremer v. State Ethics Commission, 56 160, 424 A2d 968 (1981), affirmed 503 Pa. Commonwealth in part 490 Pa. Pa Commonwealth Ct. Pa. 358, 469 A2d 593; John T. Clary, Jr., Esquire Page 2 Pennsylvania Public Utility Commission Bar Association v, Thornburgh, 62 Pa. Commonwealth Ct. 88, 434 A2d 1327 (1981); affirmed 498 Pa. 589, 450 A2d 613; Waiert v. State Ethics Commission, 491 Pa. 255, 420 A2d 439 (1980). After stating that the Administration continues to require attorneys to file as a "condition of employment ", you reference language in the PUC Bar Association Case, supra and conclude by requesting the basis for the filing requirement by the State Ethics Commission in light of your view that "any requirement that forces the attorneys so to file has been declared unconstitutional." Discussion: Generally, as former attorney in the'Office of Chief Counsel in Penn Dot, there is no doubt that you were a public employee within the purview of the State Ethics Act. 65 P.S. X1.1. You are, 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. 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 cif the Commonwealth Court in Ballou v. State Ethics Commission, 424 A.2d 983, 56 Pa. Cmwlth. 240 (1981), affirmed in part, 496 Pa. 127, 436 A.2d 186 (1981). A short review of this case and others as well as their factual context and conclusions is appropriate in reviewing your advice request. The Ballou Case arose when a township solicitor, filed a petition for declaratory judgement and injunctive relief seeking to be exempted from the financial reporting and disclosure requirements of the Ethics Act. The factual context in which this declaratory judgement 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 constitutionally of John T. Clary, Jr., Esquire Page 3 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. 1. 4th 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. 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 fi ancial interest, has been fully regulated with respect to atto neys by the Supreme Court" and, therefore, held that the financial reporting and disclosure provisions of the Ethics Act, as app ied to attorneys, infringed upon the Supreme Court's inherent an exclusive power to regulate the conduct of attorneys. Therefore the Commonwealth Court concluded that the preliminary objections of the State Ethics Commiss.on should be overruled. Following the entry of final judgement in this matter, the State Ethics Commission appealed this ruling to the Supreme Court. Upon review, the Supreme Court ssued an Opinion on October 3, 198). This opinion concluded as ollows: "The order of Commonwealth Court is affirmed insof r as it directs judgement in favor of appellee (Ballou)." In its Opinion, the Supreme Court made it clear that they were not rev ewing the conclusions of the Commonwealth Court as to the possibi ity that the application of the Ethics Act would constitute an u constitutional infringement upon the Supreme Court's exclusive p wer to govern the conduct of persons privileged to practice law ir Pennsylvania. Essentially, the Supreme Court criticized the Commonwealth Court for reaching, addressing, and deciding a constitutional issue when, as the Supreme Court found, the case could be properly decided and disposed of on non - constitutional grounds. John T. Clary, Jr., Esquire Page 4 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 solicitors are situated similarly to members of advisory boards who, because they have no 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 you were not "employed by the Commonwealth" or "responsible for taking or recommending official action" with respect to the categories outlined in the 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 frogâ–ş 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 bleen challenged to this point. Thus, even your reliance upon the Commonwealth Court's Ballou ruling may not be presented as persuasiv, or dispositive precedent because the factual circumStar. :es, 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 exte ds to or is applicable to this situation absent a clear palpab e demonstration of the unconstitutionality of these provisi ns as applied to your case and factual circumstances and absent cogent argument that the Commonwealth Court ruling in Ballou ust be mandatorily observed and applied to your factual situatio . Basically, no case which John T. Clary, Jr., Esquire Page 5 you present or argue in your appeal is identical on a factual basis or is clearly applicable to mandate the conclusion that the Legislature may not adopt and apply the Ethics Act and its financial reporting and disclosure provisions to full -time employees. The second case you cited in your letter of appeal is Kremer v. State Ethics Commission, 503 Pa. 358, 469 A.2d 593, (1983). In the cited case, the Pennsylvania Supreme Court held that the financial disclosure requirements were unconstitutional as applied to judges. That case is distinguishable because the Court in Kremer relied predominately upon the factor that there existed a complete Code.cf Conduct for Judges. There is, however, no similar comprehensive code for attorneys who are and serve only as full time public employees. The Ethics Act as applied to attorneys was once again scrutinized by the Pennsylvania Supreme Court in Pennsylvania Public Utility Commission Bar Association v. Thornburgh, 498 Pa. 589, 450 A.2d 613, (1982). (affirmi11g per curiam the decision of the Commonwealth Court of Pennsylvania at 62 Pa. Cmwlth. 88, 434 A.2d 1327, (1981).) In that case Commonwealth Court extended the decision in Wagert infra, to attorneys generally. That case, however, did not deal with the financial disclosure requirements of the Ethics Act but rather only addressed the prohibition in the act regarding a former public emjloyee representing a person before his former governmental body. The fourth and final case you cite is Wagert v. State Ethics Commission, 491 Pa. 255, 420 A.2d 439, (1982), wherein the Pennsylvania Supreme Court found that the section of the Ethics Act, which prohibited former public officials /employees from representing any person before their former governmental body for a period of one year after the termination of such public employment, was unconstitutional as applied to former judges who anticipated practicing law before the Court on which they had previously served as judges. The basis of this ruling was that the section encroached upon this Coui$t's exclusive power to regulate "the practice of law ". The Court indicated that both the Code of Judicial Conduct and the Ethics Act specifically provided for the same potential conflict situations. Thus, in that particular factual situation, the Ethics Act was clearly inconsistent with promulgated Supreme Court rules regarding the practice of law. The precise issue you raise was argued before the Pennsylvania Supreme Court in Thau and Maunus v. State Ethics Commission, 38 M.D. 1987, on April 11, 1988. Thus, at this point John T. Clary, Jr., Esquire Page 6 in time, there is no decision of a court of final appellate jurisdiction which has ruled on this issue in your favor. This Commission, has not to date issued any order, 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, you are a public employee cove -ed by the State Ethics Act and are required to file a Statement :)f Financial Interests. Conclusion: As a former attorney in the Office of Chief Counsel in Penn Dot, you are 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 you on or before May 1, of each year in which you served and of the year after you 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 requirement 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