HomeMy WebLinkAbout91-536 ConfidentialRe:
As part of the
State C's Department
review their work, to
on the project. The
Consultant E has not
consultant wanted to
include you.
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
May 13, 1991
91 -536
Conflict, Public Official /Employee, Director, Bureau A,
Department B, Travel, Consulting Firm, Consultant Selection
Committee, Paid Expenses.
This responds to your letter of March 14, 1991, in which you
requested advice from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Law
presents any prohibition or restrictions upon you as Director of
Bureau A within Department B from serving at the request of State
C's Department D on a panel to review the work of Consultant E
without compensation but with travel expenses to be paid by State
C's Department D.
Facts: As Director of Bureau A within Department B, you request
an advisory regarding the propriety of your serving at the
request of State C's Department D on a panel to review the work
of Consultant E. You have submitted a letter from Consultant E
describing the process suggested by Consultant E to State C's
Department D that would result from the first phase of their
project to redesign all of their F systems, which letter is
incorporated herein by reference. You have provided additional
information telephonically on April 24, 1991 with the express
understanding that the content of that telephone conversation be
incorporated herein by reference. You have clarified that
Consultant E has not yet been awarded a contract and is only
submitting a proposal to State C's Department D at this time.
bid which Consultant E is submitting to
D, the consultant proposes that a panel
give State C's Department D a perspective
panel has not been established yet since
yet been awarded the contract, but the
be able to propose a specific panel to
The suggestions of Consultant E as outlined in the
incorporated letter would include assembling a "select committee"
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comprised of data processing and industry professionals with the
appropriate background and credentials to help State C's
Department D evaluate the quality of the products that the
consulting contractor would deliver at the completion of Phase I
of the proposed project. The consulting contractor would then
present the work that had been accomplished to the select
committee during a day -long session on -site at State C's
Department D at the end of the first phase. Consultant E wishes
to submit your name for consideration to serve at the request of
State C's Department D on such a panel to review the consultant's
work. The consultant envisions that the select committee would
serve at State C's Department D's request, and would report its
findings to that Department. The Consultant's letter states that
it is involved only to the extent that it is suggesting this
approach to provide additional assurance of quality results to
State C's Department D.
Consultant E is a private firm which installed a number of
automated data processing systems within your department, one of
which you were closely involved in: the G system for
Pennsylvania. If awarded the contract, the ultimate involvement
of Consultant E would be to design and install a new system for
State C's Department D, much like the G System which this
consultant successfully designed and installed for Department B.
As such, Consultant E feels that your experience would be of
value to State C's Department D. It would be the decision of
State C's Department D to utilize you, and the consultant wants
only to list your name for that state authority's consideration.
It is your understanding that you will receive no compensation as
to the contemplated activity but that State C's Department D
will bear travel expenses for you to visit their site. Your
expenses would be part of the contract cost, although you do not
know if you would be reimbursed directly or whether State C's
Department D would pay Consultant E and you would be reimbursed
through the consultant. Either way, you stress that State C's
Department D would pay the expenses.
Your participation on the panel would involve a one -day trip
to State C's Department D. You would go to State C for the
meeting and if you decided to do more there it would be at your
own expense.
It is your desire to take part in the select committee. You
recognize that the consultant's intent in asking you to serve on
the panel is to achieve an advantage in winning the contract.
However, you believe that your involvement would serve both
parties. Furthermore, although you find the prospect of the trip
to State C personally attractive, you also believe that you will
learn from the experience which could benefit Department B. You
admit that your participation on the panel would not be a
required or necessary part of your job, but it would be the type
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of activity that helps to establish a liaison between your own
Department and another State's Department. Also, your Department
can get invaluable information from other Departments. Thus,
your participation on the select committee would be good exposure
and could also further your own Department's interests and its
reciprocity in seeking and sharing assistance with regard to
other State Departments.
As for your connection with Consultant E, it has been four
to five years since this consultant was working with the
Department B project in which you were directly involved. During
that time you were in charge of the project for Department B, and
you worked closely on a daily basis with people from Consultant
E. During that time, you became acquainted with Mr. H, the
individual at Consultant E who wrote the incorporated letter
seeking your willingness to serve on the select committee. You
also became acquainted with Mr. I, a managing partner for
Consultant E. You admit that you had various conversations with
these gentlemen, as well as with other people from Consultant E
regarding what it would be like to work for this consultant and,
jokingly, regarding your working for this consultant or doing
consulting work for it in the future. You emphasize in the
clearest terms that such conversations were casual and not
serious, but were only in a humorous vein to keep a lighter mood
while doing business. You stress that there were never any
formal discussions regarding your working for this consultant,
nor have you ever submitted a resume to it. Furthermore, the
consultant hires individuals who must work their way up. All of
these facts you submit to assure this Commission that there are
no understandings with the consultant regarding your working for
it, doing consulting work for it, or serving as a reference for
it in the future.
You confirm that there are no understandings of any nature
whatsoever between you and Consultant E whereby you would receive
anything in exchange for your involvement in this activity. You
additionally confirm that this consultant has not discussed with
you what you would say if you were to serve on the select
committee. You perceive your role as being two -fold:
(1) to give State C's Department D tips on what is
possible and what is not possible for their
system; and
(2) to direct comments to particular ways of doing
things.
You state your opinion that although this consultant is
expensive, its cost is justified because it is very good at what
it does.
Page 4
As for other contracts between Consultant E and your
Department, you state that Department B currently has a contract
with a different branch of this consultant. That branch does
audits of J. The contract was awarded to this consultant a
couple of years ago (prior to that there was a different
consultant), but you did not serve on the selection committee.
Bureau K within your department recently completed work with
Consultant E with regard to systems like those installed with
your own Bureau. You personally sat on the "Steering Committee"
and reviewed the progress of this consultant with regard to that
contract. You note that your Bureau works closely with Bureau K.
You acknowledge that if you were to put out a bid now for
work involving the system, Consultant E would have an "inside
track" because it knows the system having designed and installed
it. You do not know of any need for such a bid but acknowledge
that it could happen.
In your written request for advice, you note that you
coincidentally requested approval within your Department with
regard to its internal policy as well as the Governor's Code of
Conduct. Subsequently, you were informed by your Department that
your name could not be included on the proposal. However, it is
your understanding that if Consultant E is awarded the contract,
and if State C's Department D wants the panel and asks you to
take part on the panel, that you will be permitted by your
Department to do so. If the Secretary of your Department
approves your participation on the panel of the select committee,
but not as part of your job, you will take personal leave to
enable your participation. You state that you will not
participate on the select committee - even on your own time - if
the Secretary of Department B does not permit your participation.
If permitted, and if your participation on such select
committee is requested by State C's Department D, y ou state
you will participate whether or not the contract is awarded to
Consultant E.
Discussion: As Director for Bureau A within Department B, you
are a public employee as that term is defined under the Ethics
Law, and hence you are subject to the provisions of that law.
Section 3(a) of the Ethics Law provides:
Section 3. Restricted Activities.
(a) No public official or public
employee shall engage in conduct that
constitutes a conflict of interest.
Page 5
The following terms are defined in the Ethics Law as
follows:
Section 2. 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. "Conflict" or
"conflict of interest" 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
or 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.
Sections 3(b) and 3(c) of the Ethics Law provide in part
that no person shall offer to a public official /employee anything
of monetary value and no public official /employee shall solicit
or accept any thing of monetary value based upon the
understanding that the vote, official action, or judgement of the
public official /employee would be influenced thereby.
In considering the propriety of your serving on the select
committee for State C's Department D to review the work of
Consultant E, as a private firm, it must initially be noted that
this advice is expressly conditioned upon the following
assumptions which are based upon your representations:
1. That you will receive no compensation of any nature
whatsoever, other than the reimbursement of travel expenses,
for your participation on the select committee;
2. That you have not used the authority of your public
employment to advance prospects of future employment,
Page 6
consulting opportunities, and /or other private financial
benefits with Consultant E;
3. That there are no understandings with Consultant E that
would contravene Sections 3(b) or 3(c) of the Ethics Law,
including but not limited to favorable ent future
consultant or gifts, rewards, or promises
employment related to your participation on the select
committee;
4. You have not and would not be using confidential information
obtained through your public employment.
Based upon the facts which you have submitted, your
participation on the select committee would only occur if
approved by the Secretary of Department B. The Secretary has
denied such permission prior to the awarding of the contract by
State C's Department D to Consultant E. However, if the contract
is awarded to Consultant E, it is your understanding that you
would be permitted to serve on the select committee.
It is not certain whether your participation on the select
committee would be as a function of your employment or as a
personal endeavor for which you would take personal leave from
your employment. You have indicated that your participation on
the committee could be in either an employment or private
capacity, possibly depending upon whether the request to your
department comes from State C's Department D or from Consultant
E.
In either event, the Ethics Law would not specifically
preclude you from participating on the select committee, subject
to the restrictions set forth herein. Some of the restrictions
applicable to you would vary depending upon whether your service
on the select committee would be in your capacity as a public
employee or in a private capacity. Therefore, the restrictions
to which you are subject under each of these circumstances will
be clearly spelled out below so that you will be advised of your
obligations under the Ethics Law in either event.
If you participate on the select committee in your capacity
as Director of Bureau A, you would be representing the Bureau and
furthering its interests to network with such departments in
other states and to acquire information which could be useful to
the Department in Pennsylvania with regard to its own operations.
You have emphasized that there would be no compensation for you,
other than the payment of your expenses, and therefore you would
be subject to the restrictions which the Commission has set forth
in similar circumstances involving legitimate business trips.
Page 7
In Shiotoski, Opinion 89 -027, the Commission recited the
standards and criteria to be applied in determining whether
business travel is in accordance with the Ethics Law (citing
standards enumerated in Dacthir, Opinion 86-012 in the context of
school directors accepting a trip at the expense of a potential
contractor to tour his facilities):
The standards to be applied in order to
determine whether such travel would be in
accord with the Ethics Law were enumerated in
Dacthir as follows:
(1) The traveling official may not directly bill or
receive reimbursement from the vendor or
contractor.
(2) Such reimbursement should be arranged by the
vendor with the school district.
The nature of the expenses incurred and the
amounts paid by the vendor should be specifically
outlined and enumerated to the school district.
Such information should also be available to the
public.
(
(4) The nature and extent of the travel must be
reasonable in nature.
The following criteria should be considered in relation
to whether the travel is reasonable.
a. Is the trip necessary in order to review
equipment, material, facilities which the
governmental body is considering purchasing
and which cannot be transported to the
location of the governmental body?
b. Is it necessary for the entire governmental
body to travel in order to review such
facilities, equipment or materials or is it
more reasonable for one or two members of the
governmental body to review such items and
report back to the governmental body?
c. Is the location and extent of the trip
including the length of time during which the
individual travels reasonable in nature to
the duties that are to be performed by the
official while traveling?
Page 8
d. Has the vendor supplied additional items
during the trip including gifts,
entertainment, and other gratuities that are
unreasonable in nature and in relation to the
official duties that are being performed?
e. Would the travel, by the official, accord the
vendor any advantages over other vendors?
Public officials may not accept travel expenses
and accommodations for spouses of the public
official.
The travel must be in accordance with the official
duties and responsibilities of the individuals
involved. The travel must not be related to any
tangential items not related to the official
duties and responsibilities of the public
official.
Shiptoski Opinion 89 -027 at 5 -7.
Thus, although your participation in the select committee in
your capacity as a public employee would not be per se prohibited
by the Ethics Law, the trip and related expenses would be
subject to review under the above criteria to determine
conformity with the Ethics Law.
In Richardson, Opinion 89 -017, the Commission concluded that
expense paid trips by foreign nations for state employees
relative to education exchange programs would be in accordance
with the Ethics Law after noting that the incurred expenses only
related to the educational mission and that expenses were to be
paid through the university rather than on an individual basis to
the employees themselves. The Commission concluded in Richardson
that there would not be a use of the authority of office for
private pecuniary benefits and that the trips would be clearly
job related functions of the state employees.
Thus, if you participate in the select committee in your
capacity as Director of Bureau A, you are advised to also conform
your travel and expenses to the above Richardson standards to
ensure conformity with the Ethics Law.
If, on the other hand, you participate on the select
committee in a private capacity, you would be subject to
restrictions outlined below which apply to public employees
involved in private activities /business.
Section 3(a) of the Ethics Law does not prohibit public
officials /employees from outside business activities or
Page 9
employment; however, the public official /employee may not use the
authority of office for the advancement of his own private
pecuniary benefit or that of a business with which he is
associated. Pancoe, Opinion 89 -011. A public official /employee
must exercise caution so that his private business activities do
not conflict with his public duties. Crisci, Opinion 89 -013.
Thus, a public official /employee could not perform private
business using governmental telephones, postage, staff,
equipment, research materials, personnel or any other property,
and such could not be used as a means, in whole or part, to carry
out private business activities. In addition, the public
official /employee could not during government working hours,
solicit to promote such business activity. Pancoe, supra.
The Ethics Law would clearly restrict the use of authority
of office to obtain any business in a private capacity and /or the
utilization of confidential information gained through your
public position.
Thus, if you would participate on the select committee in a
private capacity, your conduct must conform to the above
restrictions.
The propriety of the proposed conduct has only been
addressed under the Ethics Law; the applicability of any other
statute, code, ordinance, regulation or other code of conduct
other than the Ethics Law has not been considered in that they do
not involve an interpretation of the Ethics Law. Specifically
not addressed herein is the applicability of the internal
policies of Department B and /or the Governor's Code of Conduct.
Conclusion: As the Director of Bureau A for Department B, you
are a public employee subject to the provisions of the Ethics
Law. Under the facts as you have presented them, the Ethics Law
would not preclude you from participating in a select committee
at the request of State C's Department D to review the work of
Consultant E subject to the conditions and restrictions set forth
above. This advice is expressly conditioned upon the following
assumptions:
1. That you will receive no compensation of any nature
whatsoever., other than the reimbursement of travel
expenses, for your participation on the select
committee;
2. That you have not used the authority of your public
employment to advance prospects of future employment,
consulting opportunities, and /or other private
financial benefits with Consultant E;
Page 10
3. That there are no understandings with Consultant E that
would contravene Sections 3(b) or 3(c) of the Ethics
Law, including but not limited to favorable treatment
of the consultant or gifts, rewards, or promises of
future employment related to your participation on the
select committee;
4. You have not and would not be using confidential
information obtained through your public employment.
Depending upon whether the Secretary of your Department would
approve your participation on the select committee as part of
your public employment or as a private activity for which you
would be required to take personal leave from your public
employment, you would be subject to the restrictions set forth
above which apply to you in your respective public and private
capacities. Lastly, the propriety of the proposed conduct has
only been addressed under the Ethics Law.
Pursuant to Section 7(11), 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 in writing
and must be received at the Commission within 15 days of the date
of this Advice pursuant to 51 Pa. Code 52.12.
S' rtgerely,
Vincent :!'. Dopko,
Chief Counsel