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HomeMy WebLinkAbout93-505 LucasMs. Nancy Lucas 2538 Gypsy Lane Glenside, PA 19038 Dear Ms. Lucas: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG. PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL January 14, 1993 93 -505 Re: Former Public Employee; Section 3(g); Legislative Budget Analyst; Commonwealth of Pennsylvania, House of Representatives; Majority Appropriations Committee; Managed Care Project Director; Philadelphia Mental Health Care Corporation. This responds to your letter of October 29, 1992, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any restrictions upon employment of a Legislative Budget Analyst following termination of service with the Commonwealth of Pennsylvania, House of Representatives Majority Appropriations Committee. Facts: As a former employee of the House of Representatives, you request an advisory from the State Ethics Commission regarding your responsibilities concerning contact with the General Assembly. You state that from January, 1987 through Friday September 25, 1992, you were employed as a Legislative Budget Analyst with the House of Representatives Majority Appropriations Committee. On the following Monday, September 28, 1992, you became employed by the Philadelphia Mental Health Care Corporation ( "PMHCC ") as the Managed Care Project Director. You report directly to the Deputy Health Commissioner for Mental Health and Retardation for the Philadelphia Department of Public Health. You indicate that this is a joint project between the City of Philadelphia and the State Department of Public Welfare. You are responsible for directing the City of Philadelphia's managed care model(s) for medical assistance recipients' mental health services. The development of this project will necessitate interaction not only with the Department of Public Welfare but also with members and staff of the General Assembly as they require input, information and notification on the project's progress which may impact upon their Ms. Nancy Lucas January 14, 1993 Page 2 constituents and the potential for authorizing legislation. In response to a request for additional information pertinent to your request, a letter dated December 29, 1992 has been submitted by Ted C. Weerts, Ph.D., Executive Director of the PMHCC. The facts submitted in said letter are set forth verbatim: The Philadelphia Mental Health Care Connection, d.b.a. The Philadelphia Mental Health Care Corporation (PMHCC), was initially established in 1987 by the city Office of Mental Health /Mental Retardation (OMH /MR) to administer the city's five -year (1987 -1992) grant Program on Chronic Mental Illness from the Robert Wood Johnson Foundation (RWJF). As a primary part of the RWJF grant, PMHCC established a housing development corporation, the 1260 Housing Development Corporation (1260 HDC) in 1988, to develop independent living arrangements for persons with serious mental illness. A second major objective of the grant was to assist the city OMH /MR in consolidating all public mental health service funds under OMH /MR's jurisdiction, including Medicaid funds. The corporation did provide technical and management assistance to OMH /MR on this objective for the term of the grant. PMHCC has also contracted with OMH /MR and with the city's Coordinating Office of Drug and Alcohol Abuse Programs (CODAAP) to perform management and program coordinating functions for the city's mental health, mental retardation and drug and alcohol treatment systems. In addition, the corporation has received other small grants from the RWJF and the Pew Foundation to perform specific management and support projects for the public mental health and mental retardation systems. A brochure that describes many of the corporate contract programs is attached. PMHCC is a not - for - profit corporation with the principal mission of improving service opportunities for persons with serious mental illness. The corporation has a governing Board of Directors of seven members; most board members are advocates for persons with mental illness because of their own illness or because of the illness of family members. The Ms. Nancy Lucas January 14, 1993 Page 3 city's Deputy Commissioner of Health for mental health and mental retardation is an ex- officio member of the Board (Directors list is attached). The great majority of the corporation's contract funding (95 %) derives from the city OMH /MR and CODAAP departments; all contracts are for one year, renewable at the end of each year. The contracts prescribe in detail the deliverables for the contracts and the billable expenses. In Fiscal Year 1991 -92, the corporation's revenues and expenses were $11.2 million. Its assets derive primarily from its housing development activities; its affiliate 1260 HDC fully owns residential properties appraised at $3.0 million and PMHCC holds in reserve $4.2 million of rental subsidy funds in the form of Treasury Bill STRIPS. Ms. Nancy Lucas has been hired by PMHCC as Director of the Managed Care Program under contract from the city OMH /MR. She assists the Office in planning and implementing a citywide managed care system for Medicaid reimbursed mental health services. Her duties represent a continuation of the responsibilities the corporation had under the RWJF grant. As with most of [PMHCC's] contract responsibilities, Ms. Lucas works closely with the administration of the city OMH /MR in performing her duties. Letter of December 29, 1992 at 1 -2. The enclosures referenced in the said letter are incorporated herein by reference. Based upon the above, you are requesting that the State Ethics Commission advise you of the activities which you may and may not undertake with regard to the General Assembly and specifically the House of Representatives, within the parameters of the Ethics Law. Discussion: As a Legislative Budget Analyst for the House of Representatives Majority Appropriations Committee, you would be considered a "public employee" within the definition of that term as set forth in the Public Official and Employee Ethics Law and the Regulations of this Commission. 65 P.S. S402; 51 Pa. Code 51.1. This conclusion is based upon the job description, which when reviewed on an objective basis, indicates clearly that the power exists to take or recommend official action of a non - ministerial Ms. Nancy Lucas January 14, 1993 Page 4 nature with respect to contracting, procurement, planning, inspecting, administering or monitoring grants, leasing, regulating, auditing or other activities where the economic impact is greater than de minimis on the interests of another person. The crucial issue to be determined in this matter is whether upon leaving your position as a Legislative Budget Analyst for the House of Representatives Majority Appropriations Committee to assume an employment position with PMHCC, you terminated public employment and became a "former public employee" subject to Section 3(g) of the Public Official and Employee Ethics Law which provides as follows: Section 3. Restricted activities (g) No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 P.S. S403(g). If Section 3(g) would apply, contact with your former governmental body, the House of Representatives, would be quite restricted. The applicability of Section 3(g) hinges upon the nature of PMHCC. If PMHCC is a purely private entity, your status as a "public employee" would cease upon termination of your prior position with the House of Representatives, and Section 3(g) would apply to you. On the other hand, if PMHCC is itself a part of the political subdivision of the City of Philadelphia, your status as a "public employee" subject to the Ethics Law would continue uninterrupted from your prior position to your new position. In this regard, it is noted that your employment with the House of Representatives ended on Friday, September 25, 1992, and the following Monday, September 28, 1992, your employment with PMHCC commenced such that there was no hiatus between your employment positions. A review of the facts which have been submitted necessitates the conclusion that the PMHCC is itself a part of the political subdivision of the City of Philadelphia such that your status as a "public employee" subject to the Ethics Law never ceased and Section 3(g) never came into effect. This conclusion is based upon the following case law. In the context of tax collection issues, the Pennsylvania Supreme Court has held that a management company hired to run a city gas works would be deemed part of the political subdivision Ms. Nancy Lucas January 14, 1993 Page 5 itself. Commonwealth v. Philadelphia Gas Works, 484 Pa. 60, 398 A.2d 942 (1979). The Court reached the same conclusion with regard to a management company hired to run a county airport parking lot. Moon Area School Dist. v. Garzonv, 522 Pa. 178, 560 A.2d 1361 (1989). In Moon Area School District, the Supreme Court concluded that the management company was a servant of the county rather than an independent contractor. This conclusion was based upon the Court's analysis of prior case law holding that if a contractor is under the control of the employer, both as to the result of the work and the manner in which it is to be performed, it is a servant. An independent contractor, on the other hand, exclusively controls the manner in which the work is to be done and is responsible only for the result. Moon Area School District, supra, 522 Pa. at , 560 A.2d at 1367 -1368. Although the Court in the above cases was dealing with the tax collection issue rather than an application of the Ethics Law, its reasoning is cogent and applicable to the instant situation. The submitted facts establish that PMHCC performs contractual administration, management and program coordinating functions for the City. Per Mr. Weerts, as with most of PMHCC's contract responsibilities, you work closely with the administration of the City Office of Mental Health /Mental Retardation in performing your duties. The City's Deputy Commissioner of Health for mental health and mental retardation is an ex- officio member of the PMHCC Board. Furthermore, you report directly to the City's aforesaid Deputy Commissioner of Health for mental health and mental retardation in your new employment position, rather than to the Executive Director or other PMHCC staff or management. Thus, for purposes of the Ethics Law, the PMHCC would be deemed to be part of the City of Philadelphia and you would be deemed to be a "public employee" in your present position with PMHCC. Given that there was no hiatus between your two positions of public employment, Section 3(g) would not apply to you because you did not become a "former public employee." However, as a present "public employee" subject to the Ethics Law, you continue to be subject to the requirement to file a Statement of Financial Interests for each year in which you hold the public position with PMHCC and for the year following your termination of this service. If you have not already done so, a Statement of Financial Interests must be filed within fifteen (15) days of this Advice in your capacity as a public employee at PMHCC for calendar year 1991. The next Statement of Financial Interests will be due on or before May 1, 1993 for calendar year 1992. 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 such. Ms. Nancy Lucas January 14, 1993 Page 6 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 Philadelphia Home Rule Charter. Conclusion: As a Legislative Budget Analyst for the House of Representatives Majority Appropriations Committee, you would be a public employee subject to the provisions of the Ethics Law. In your new position as the Managed Care Project Director for the Philadelphia Mental Health Care Corporation ( "PMHCC "), you continue to be a public employee subject to the provisions of the Ethics Law. Given that there was no hiatus between your two positions of public employment, the restrictions of Section 3(g) did not come into effect upon termination of your prior position with the House of Representatives Majority Appropriations Committee. In your new position, you continue to be subject to the requirement to file a Statement of Financial Interests for each year in which you hold the position at PMHCC and for the year following your termination of this service. 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 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. ncerely, V ncent 57 Dopko Chief Counsel