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Home My WebLink About88-583 HafnerClaude Hafner, II, Esquire 407h North Hanover Street Hershey, PA 17033 Dear Mr. Hafner: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 14, 1988 88 -583 Re: Conflict of Interest, Member of the General Assembly, Providing accounting services to organizations doing business with the Commonwealth This responds to you letter of May 13, 1988, in w'iich ylu requested advice from the State Ethics Commission. Issue: You ask whether the State Ethics Act presents any restriction or prohibition upon a member of the General Assembly from providing professional services as an accountant to organizations which do business with the Commonwealth of Pennsylvania. Facts: You state that you represent a member of the General Assembly who is an accountant and who has been retained to render professional services to organizations that deal with the Commonwealth of Pennsylvania. Specifically, you state that the member seeks to provide professional services to a client who is a provider of medical assistance services to public assistance recipients for which the business obtains payment from the Department of Public Welfare. You note that the client provides goods or services to the Commonwealth on a bid basis with the contract being awarded to the lowest bidder as per the applicable Commonwealth and departmental procurement regulations. You then state that the client of the member provides goods or services as per the request for proposals which are judged in accordance with publicly stated criteria as per the applicable Commonwealth and departmental procurement regulations. Thereupon you note that only one of the criteria is price and that the other criteria are graded by a departmental panel wherein the review is done in an Claude Hafner, June 14, 1988 Page 2 Fsgr.ire objective manner although there may be some'element of subjectivity involved. You conclude by requesting advice under the Ethics Act as to whether this member of the General Assembly may provide an accounting services under the foregoing circumstances. Dscussion: As a member of the General Assembly, the individual a public official within the definition of that term as set f:�rh in the Ethics Act and the regulations of this Commission. SesICI:rigan Opinion, 87 -001; 65 P.S. §402; 51 Pa. Code §1.1. As such he is subject to the provisions of the Ethics Act. S,. =ction 3(a) of the Ethics Act provides: Section 3. Restricted Activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Section 3(a) basically provides that a public official or employee may not use his public office or confidential information to obtain a financial gain other than compensation as provided for by law for himself or a member of his immediate family or a busine';s with which he is associated. Under this provision, the Ethics Commission has determined that the use of office by a public official to obtain a gain or benefit for himself or a member of his immediate family which is not provided for in law constitutes a "financial gain other than compensation provided fo:: by law." These determinations have been appealed to the Commonwealth Court of Pennsylvania which has affirmed the Orders of the Commission. See McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529 (1983). See also Yocabet v. State Ethics Comms3ion, Pa. Commw. , 531 A.2d 536 (1987). Thus, under this provision, a public official may not use his public position to secure benefits for himself or a member of his immediate family which are not provided for by law. Domalakes, Opinion 85 -010; likewise, the receipt of private financial gain or benefit through use of office is not permitted under this section, Huff, Opinion 84 -015. Basically, the Ethics Act does. riot state that it is Claude Hafner, II, Esquire June 14, 1988 Page 3 inherently incompatible for a public official to serve or be employed as an accountant. In the instant matter, the Ethics Ant would not then prohibit this member of the General Assembly from serving as an accountant for an organization that would do business with the Commonwealth of Pennsylvania under the above facts and circumstances. See Goodman Opinion, 88 -001. Section 3(b) of the Ethics Act provides: (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 thn public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Section 3(b) of the Ethics Act must be referenced in or .er 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. Section 3. Restricted activities. (d) Other areas of possible conflict shall be addressed by the commission pursuant to paragraph (9) of Section 7. 65 P.S. 403(d). Under the above provision of law, the Ethics Commission, however, is also empowered to address other areas of possible conflict pursuant to Section 3(d). 65 P.S. 5403(d). Fritzinger, Opinion 80 -008; DeBenedictis, Opinion 86 -002. The parameters of the type of activity encompassed by this provision are generally Claude Ha A.er, II, vu : : -1 June 14, 198n Page 4 reviewed in light of the preamble to CT:2thics Act which enunciates the legislative intent of the Act. The intent and purpose of the Act is to strengthen the faith and confidence of the people in their government by assuring the public that the financial interests of the holders of public office present neither a conflict nor the appearance or a conflict with the public trust. A public official or employee, pursuant to this provision, is to ensure that their personal financial interests present neither a conflict nor the appearance of a conflict with the public trust. 65 P.S. S401. Such a conflict may exist where an individual represents one or more adverse interests. Alfano, Opinion 80 -007; where an individual serves in positions that are incompatible or conflicting; Nelson, Opinion 85 -009, or where such an official or employee accepts compensation to which he is not entitled. Domalakes, Opinion supra. Although the Ethics Act would not restrict the member of the General Assembly from acting as the accountant and providing professional services to a client who does business with the Commonwealth, the Ethics Act would impose restrictions upon that individual in that he could not use public office or confidential information to obtain this business. 65 P.S. S403(a). Further, the public official could not use Commonwealth offices or personnel or facilities or equipment in soliciting or performing his private business nor could his legislative office be used as a contact point. See Dorance Order, 456. 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. Specifically not addressed in this advice is the applicability of the State Adverse Interest Act or the Legislative Code of Conduct in that none of these statutes involve an interpretation of the Ethics Act. Conclusion: As a member of the General Assembly he is a public official subject to the provisions of the State Ethics Act. Although the Ethics Act would not prohibit this individual frry providing accounting services to a client that does business with the Commonwealth of Pennsylvania, the Ethics Act would impose certain restrictions upon his conduct as noted above. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Sectior_ 7(9)(ii), this Advice is a complete Claude Hafner, II, Esrs?,re June 14, 1988 Page 5 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 acid will be mad vAl lee,- , Gs Finally, if you disagree with this Advice or if you 3 ? (.: P•11" reason to challenge same, you may request that the full Commission review this Advice. A personal appearance be -- tJ Commission will be scheduled and a former Opinion from the Commission will be issued. Any such appeal must be madc, =.:z writing to the Commission within 15 days of service of • Advice pursuant to 51 Pa. Code §2.12. Sincerely, Vincent J. Dopko, General Counsel