Loading...
HomeMy WebLinkAbout19-006 ConfidentialPHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE., 717-787-0806 TOLL FREE 1-800-932-0936 FINANCE BUILDING WEBSITE: www,eihir%paslo 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 OPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Ro er Nick Melanie DePalma Monique Myatt Galloway Michael A. Schwartz Shelley Y. Simms DATE DECIDED: 516/19 DATE MAILED: 5/22/19 19-006 To the Requester: 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 s�.,l would impose prohibitions or restrictions upon a Member of the PennsyTvinia General Assembly ("State Legislator") --specifically a Member of Chamber A -- with regard to proceeding with, and actively participating in the operations of, a for -profit [type of private entity] ("T) where: (1) The State Legislator has already formed the B but it is not yet conducting business; (2) Once operational, the purpose and function of the B would be to provide C services to clients such as [types of public and private clients]; (3) The B would be entirely owned and operated by the State Leislator and another individual, with each having a 50% ownership interest in the (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 1 This Commission has statutory jurisdiction to issue advisories (0 inions of the Commission and Advices of Counsel) under only two laws, specifical the Ethics Act and oennsylvania's lobbying disclosure law ("Lobbying Disclosure Law") 65 Pa.C.S. § �13AOI ets�eg. This Commission has statuto *unsdiction to issue certain "determinations" as to status, but not advisories, under the Pennsylvania Race Norse Develo ment and Gamin seq., and the Medical Marijuana Act, Act, 16 of2016 (see,Act ("Gaming Act") 4 Pa.C.S. § I 101 et s 35 P.S.P. § 10231.2101. 1 (d)�I)), and those laws are not addressed herein. As the instant advisory request noes submit any facts or pose any questions that would appear to implicate the Lobbying Disclosure.-Ilaw, this Opinion is limited to addressing the advisory request under the Ethics Act. Confidential Opinion, 19-006 May 22 ' 2019 Page 2 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 Would have an active role in operating the B, and he would receive income from the B in the form of salary and profits; and (7) The State Legislator would satisfy the disclosure requirements of the Ethics Act as to income received from the B and ownership interest in the B. III. FACTUAL BASIS FOR DETERMINATION: You have been authorized by the Honorable (name] ("State Legislator D"), who is a Member of Chamber A, to request a confidential advisory pinion from this Commission on his behalf. You have submitted facts that may be fairly summarized as follows. , Ina private capacity, State Legislator D has formed a for -profit [type of private entity ("B" that is not yet conducting business, Once operational, the purpose and function ol the would be to provide C services to clients such as [types of public and private clients]. The B would be entire) owned and operated by State Legislator D and another individual, with each having a 0% ownership interest in the B. 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. State Legislator Us status as a Member of the General Assembly would not be referenced in any marketing efforts by the B. State Legislator D would have an active role in o erating the B, and he would receive income from the B in the form of salary and profits. State Legislator D would satisfy the disclosure requirements of the Ethics Act as to income received from the B and ownership interest in the B. Based upon the above facts you ask whether the Ethics Act would impose any prohibitions or restrictions on State Legislator D with regard to proceeding with the B and actively participating in its operations. By letter dated ANril 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 M% 6, 2019, you appeared together with State Leqislator D and elaborated on plans for the B. You stated that there are no plans for the B to have any contracts with the Commonwealth of Pennsylvania, but that it would be possible for the B to contract with type of institutions]. You indicated that through a series of events, it would be ossible type State budget monies administered by lone or two encies] to be provided to type of institutons that might particular Commonwealth a i ultimately use such monies ?or services provided Ill. DISCUSSION: It is initial noted that pursuant to Sections 1107 10) and 1107(11) of the Ethics Act, 65Pa.C.S.,_ �(07(10), (11), advisories are issued to t.��e requester based upon the facts that the re 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 ODinion, 19-006 ag Maye 3 22 ' 2019 P 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 11 03(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, �alj 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 emplo ee of the authority of his office or ernployr9ent or any confidential information received through his holding public office or employment for theprivate pecuniary benefit of himself, a member of his immediatefamily 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 minirnis 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 Liblic official or public employee, a member of his immediate farnily 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, holdingcompany, joint stock company, receivership, trust or any legal 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 he equity of the business or more than 5% of the assets of the economic interest in indebtedness. 65 Pa.C.S. § 1102. Section 11 03(a) of the Ethics Act restricts public officials/public employees in their Confidential Opinion, 19-006 ag May 22 ' 2019 Pe 4 public capacities, not theiwivate capacities. Subject to the statutory exclusions to the definition of the term "con icf' or "conflict of interest," 65 Pa.C.S. § 1102, pursuantto Section 11 03(a of the Ethics Act, a public official Liblic employee is prohibited from using the authority Vpublic office/employment or confidential information received by holding such apublic position far 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. The B would be considered a business with which State Legislator D is associated in his capacity as an owner. 65 Pa.C.S. § 1102. Private activities with no connection to either a use of public office/emloyment or a use of confidential information received lo� holding the public position wouldnot form the basis for a violation of Section 11 03(a) of the Ethics Act. f., Confidential Opinion, 15-003. Additionally, to the extent the activities of a Legislator relate to "legislative actions" introducing, considering, debating, voting, enactin, adopting, or approving I�glslation), they are constitutionally controlled and are exempt from the purview c the Ethics Act and the State Ethics Commission. Confidential Opinion, 05-002; Corrigan, Opinion 87-001. Therefore, based upon the submitted facts, you are advised that Section 11 03(a) of the Ethics Act would not prohibit State Legislator D from acting in his; private capacity to proceed with the B and activelyparticipate in the operations of the B. State Legislator D would be required to satisfy alapplicable disclosure requirements of Sections � 104 and ITPa.C.S: §§ 1104, 1105, with respect to filing Statements of 1105 of the Ethics Act, 6 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 he Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the eXslative Code of Ethics, 46 P.S. § 143.1 et sea., or Rules of ChamberA. Additionally, this pinion does not address the Pennsylvafi-i6 Race Horse Development and Gaming UN Pa.C.S. § 1101 et seg., and/or the Medical Marijuana Act, Act 16 of 2016, 35 P.S. § 10231.101 et sea. IV. CONCLUSION: As a Member of the Pennsylvania General Assembly --specifically a Member of Chamber X-the Honor -able (name] ("State Leaislator D") is a public official subject to the provisions of the Public Official and EmployeeP-thics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et sea. Based upon the submitted facts that: (1) in a private capacity, State Legislator D H-as formed a for -profit [type of private entity] (W) that is not yet conIcting business; (2) once operational, the purpose and function of the B would be to provide C services to clients such as [types of public and private clients]; (3) the B would be entirely owned and operated by Legislator D and another individual, with each having a 50 Yo ownership interest in the B; (4) none of the work associated with the establishment and operation of the B would utilize state resources (such as taxpayer-fundedoffice; computers or phones), nor would the work be performed in any state-owned (5) State Legislator D's status as a Member of the General Assembly would not be referenced in any marketing efforts by the P; (6) State Legislator D would have an active role in operating the B, and he would receive income from the B in the form of salary and profits; (7) State Le islator D would satisfy the disclosure requirements of the Ethics Act as to income receive from the Band ownership interest in the B; �8) there are no plans for the B to have any contracts with the Commonwealth of ennsylvania, but it would be possible for the B to contract with type of institutions); and (9) through a series of events, it would be possible for State type monies administered by [one or two particular Commonwealth agencies] to be provided to [type of institutions] that might ultimately use such monies for services provided by the B, you are advised as follows. Confidential Opinion, 19-006 May 22, 2019 Page 5 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 notform the basis far a violation of Section 1103(a) of the Ethics Act. Additionally, to the extent the activities of a Legislator relate to "legislative actions" introducing, considering, debating, voting, enacting, adopting, or approving legislation) (introducing, are constitutionally. controlled and are exempt from the purview of the Ethics Act and the State Ethics Commission. Based upon the submitted facts, Section 1103(a of the Ethics Act would not prohibit State Legislator D from acting in his private capacity �o proceed with the B and actively a e in the operations of the B. State Legislator D would be required to satisfy all participate , applicable disclosure requirements of Sections 1104 and 1105 of the Ethics Act, 65 P a.C.S 1104, 1105, with respect to filing Statements of Financial Interests as a public official. The propriet� 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 teislative Code of Ethics, 46 P. S. § 143.1 et §s X, this or Rules of ChamberA. Additionally, s pinion does not address the Pen nsylvan—ia Race Horse Development and Gaming ct, 4 Pa.C.S. § 1101 et seg., and/or the Medical Marijuana Act, Act 16 of 2016, 35 P.S. § 10231,101 et seq. — Pursuant to Section 1107(10 of the Ethics Act, the person who acts in good faith on this Opinion issued to him shall 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. By the Commission, Ni A' w4d h as A. Colafella, Chair