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HomeMy WebLinkAbout19-005 ConfidentialPHONE: 717- 783 -1610 STATE ETHICS COMMISSION FACSIMILE: 717- 787 -0806 TOLL FREE: 1 -800- 932 -0936 FINANCE BUILDING wEBSITE:www.ethics.oajov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 171200400 OPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Melanie DePalma Monique Myatt Galloway Michael A. Schwartz Shelley Y. Simms DATE DECIDED: 516119 DATE MAILED: 5117119 19 -005 To the Requesters: This Opinion is issued in response to your letter dated April 3, 2019, by which you requested a confidential advisory from this Commission. I. ISSUE: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.,1 would impose prohibitions or restrictions upon a Member of the Pennsylvania General Assembly ( "State Legislator") -- specifically a Member of Chamber A -- with regard to establishing a non - profit [type of private entity] ( "B "), actively participating in the operations of the B, and soliciting charitable contributions and holding fundraisers to fund such B, where: (1) The purpose and function of the B would be to provide C services to public and non- public [types of institutions] located in the Commonwealth of Pennsylvania, at no cost to such institutions; (2) The B would be funded entirely by charitable contributions and would not charge any fee for its services; (3) The B would be run by the State Legislator and another individual, with each having an active role in operating the B and soliciting contributions and holding fundraisers, 1 This Commission has statutory jurisdiction to issue advisories (Opinions of the Commission and Advices of Counsel) under only two laws, specifically, the Ethics Act and Pennsylvania's lobbying disclosure law ( "Lobbying Disclosure Law "), 65 Pa.C.S. § 13A01 et seq. This Commission has statutory' risdiction to issue certain "determinations" as to status, but not advisories, under the Pennsylvania Race Horse Development and Gaming Act ( "Gaming Act ") 4 Pa.C.S, § 1101 et seq., and the Medical Mariana Act, Act 16 of 2016 (see, 35 P.S. § 10231.2101.1(d)�1)) and those laws are not addressed herein. As the instant advisory request does not submit any facts or pose any questions that would appear to implicate the Lobbying Disclosure Law, this Opinion is limited to addressing the advisory request under the Ethics Act. Confidential Opinion, 19 -005 17, 2019 Page 2 (4) None of the work associated with the establishment and operation of the B would utilize state resources (such as taxpayer - funded computers or phones), nor would the work be performed in any state -owned office; (5) The State Legislator's status as a Member of the General Assembly would not be referenced in any marketing efforts by the B; (6) The State Legislator might receive income from the B in the form of salary; and (7) The State Legislator would satisfy the disclosure requirements of the Ethics Act as to income received from the B. II. FACTUAL BASIS FOR DETERMINATION: You have been authorized by the Honorable [name] ( "State Legislator D "), who is a Member of Chamber A, to re uest a confidential advisory Opinion from this Commission on his behalf. You have submitted facts that may be fairly summarized as follows. In a private capacity, State Legislator D intends to establish a non - profit [type of private entity] ( "B ") that would have as its purpose and function providing C services to public and non - public [types of institutions] located in the Commonwealth of Pennsyylvania, at no cost to such institutions. The B would seek tax - exempt status as a 501(c)(3) organization. The B would be funded entirely by charitable contributions and would not charge any fee for its services. The B would be run by State Legislator D and another individual, with each having an active role in operating the B and soliciting contributions and holding fundraisers. None of the work associated with the establishment and operation of the B would utilize state resources (such as taxpa yer-funded computers or phones), nor would the work be performed in any state -owned office. State Legislator D's status as a Member of the General Assembly would not be referenced in any marketing efforts by the B. State Legislator D might receive income from the B in the form of salary. State Legislator D would satisfy the disclosure requirements of the Ethics Act as to income received from the B. Based upon the above facts, you ask whether the Ethics Act would impose any restrictions on State Legislator D with regard to establishing the B and actively participating in its operations. By letter dated April 10, 2019, you were notified of the date, time and location of the executive meeting at which your request would be considered. At the executive meeting on May 6, 2019, you appeared together with State Legislator D, who elaborated on his background prior to serving as a Member of the General Assembly, and the connection of that prior experience to plans for the B. III. DISCUSSION: It is initially noted that pursuant.to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, this Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the Confidential O inion, 19 -005 17 2019 Page 3, requester has truthfully disclosed all of the material facts. As a Pennsylvania State Legislator, State Legislator D is a public official subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: § 1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. Definitions " " Conflict or conflict of interest. Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "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 has a financial interest. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the Business or more than 5% of the assets of the economic interest in indebtedness. 65 Pa.C.S. § 1102 (Emphasis added). Section 1103(a) of the Ethics Act restricts public officials /public employees in their Confidential Opinion, 19 -005 Ma 17, 2019 Page 4 public capacities, not their private capacities. Subject to the statutory exclusions to the definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. At such times as State Legislator D's relationship with the B would fall within any of the categories listed in the Ethics Act's definition of the term "business with which he is associated" —such as director or employee —the B would be considered a business with which State Legislator D is associated. 65 Pa.C.S. § 1102. See, Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708 (2009 (Holding that tFie tics Act's definition of the term business" includes non - profit entities. However, to the extent the activities of a Legislator relate to "legislative actions" f introducing, considering, debating, voting, enacting, adopting, or approving legislation), hey are constitutionally controlled and are exempt from the purview of the Ethics Act and the State Ethics Commission. Confidential Opinion, 05 -002; Corrigan, Opinion 87 -001. Additionally, private activities with no connection to either a use of public office/employment or a use of confidential information received b holding the public Confidential would not form the basis for a violation of Section 1103(a) of the Ethics Act. Cf., Confidential Opinion, 15 -003. Therefore, based upon the submitted facts, you are advised that Section 1103(a) of the Ethics Act would not prohibit State Legislator D from engaging in private activities in his private capacity to establish the B, actively participate in the operations of the B, and/or solicit charitable contributions and hold fundraisers to fund the B. State Legislator D would be required to satisfy all applicable disclosure requirements of Sections 1104 and 1105 of the Ethics Act, 65 all §§ 1104, 1105, with respect to filing Statements of Financial Interests as a public official. 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 herein is the Legislative Code of Ethics, 46 P.S. § 143.1 et sect., or Rules of Chamber A. IV. CONCLUSION: As a Member of the Pennsylvania General Assembly -- specifically a Member of Chamber A - -the Honorable [name] ("State Legislator D ") is a public Official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act"), 65 Pa.C.S. § 1101 et ssec . Based upon the submitted facts that: (1) in a private capacity, State Legislator D intends to establish a non - profit [type of private entity] ( "B ") that would have as its purpose and function providing C services to public and non- public [types of institutions] located in the Commonwealth of Pennsylvania, at no cost to such institutions; (2) the B would seek tax - exempt status as a 501 O(3) organization; (3) the B would be Mended entirely by charitable contributions and would not charge any fee for its services; (4) the B would be run by State Legislator D and another individual, with each having an active role in operating the B and soliciting contributions and holding fundraisers; �5) none of the work associated with the establishment and operation of the B would uti ize state resources (such as tax a er- funded computers or pphones), nor would the work be performed in any state -owned office; (6) State Legislator D's status as a Member of the General Assembly would not be referenced in any marketing efforts b the B; (7) State Legislator D might receive income from the B in the form of salary; and (8) State Legislator D would satisfy the disclosure requirements of the Ethics Act as to income received from the B, you are Confidential O inion, 19 -005 May 17, Page 5 advised as follows. Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), restricts public officials /public employees in their public capacities, not their private capacities. Private activities with no connection to either a use of public office /employment or a use of confidential information received by holding the public position would not form the basis for a violation of Section 1103(a) of the Ethics Act. Therefore, based upon the submitted facts, Section 1103(a) of the Ethics Act would not prohibit State Legislator D from engaging in private activities in his private capacity to establish the B, activel participate in the operations of the B, and/or solicit charitable contributions and hold fundraisers to fund the B. State Le islator D would be required to satisfy all ap licable disclosure requirements of Sections 1104 and 1105 of the Ethics Act, 65 PzCI.S. § 1104, 1105, with respect to filing Statements of Financial Interests as a public officia . The propriety of the proposed conduct has only been addressed under the Ethics UTO Pursuant to Section 1107(10) of the Ethics Act, the person who acts in ood faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Byte Commission, Nic o as A. Colafella, Chair