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Home My WebLink About93-565STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL May 20, 1993 John P. Glenn 93 -565 102 Craig Road Dickson City, PA 18519 Re: Conflict, Public Official /Employee, Administrative Officer, Auditing Unit, Department of Labor and Industry, State Workmen's Insurance Fund, Former Employer, Insurance Company, Compensation Severance Payment. Dear Mr. Glenn: This responds to your letter of May 12, 1993, 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 an Administrative Officer of the Auditing Unit with the Department of Labor and Industry, State Workmen's Insurance Fund from receiving payment for services performed prior to accepting public employment with the Commonwealth of Pennsylvania. Facts: You are an Administrative Officer for the Auditing Unit of the State Workmen's Insurance Fund within the Department of Labor and Industry, in Scranton, Pennsylvania. You were previously employed by Chamberlin Insurance. When you terminated your employment at Chamberlin Insurance, it was agreed that you would be compensated for your prior "book of insurance business." None of this business was with the State Workmen's Insurance Fund or with the Commonwealth of Pennsylvania, generally. Chamberlin Insurance will not release any payments to you without authorization from the Commonwealth. Based upon the above, you request an advisory from the State Ethics Commission as to your ability to receive payments due to you as a result of your prior insurance business. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. SS407(10), (11), advisories John P. Glenn May 20, 1993 Page 2 are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the materials facts relevant to the inquiry. 65 P.S. § 5407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As an Administrative Officer for the Department of Labor and Industry, 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. 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 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 John P. Glenn May 20, 1993 Page 3 particular public office or position of public employment. "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. In addition, 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 anything of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. Section 3. Restricted activities (e)(1) No person shall solicit or-accept a severance payment or anything of monetary value contingent upon the assumption or acceptance of public office or employment. (2) This subsection shall not prohibit: (i) Payments received pursuant to an employment agreement in existence prior to the time a person becomes a candidate or is notified by a member of a transition team, a search committee or a person with appointive power that he is under consideration for public office or makes application for public employment. (ii) Receipt of a salary, fees, severance payment or proceeds resulting from the sale of a person's interest in a corporation, professional corporation, partnership or other entity resulting from termination or withdrawal therefrom upon the assumption or acceptance of public office or employment. John P. Glenn May 20, 1993 Page 4 (3) Payments made or received pursuant to paragraph (2)(i) and (ii) shall not be based on the agreement, written or otherwise, that the vote or official action of the prospective public official or employee would be influenced thereby. (4) This subsection shall not be applied retroactively. 65 P.S. 5403(e). The above provisions of the Ethics Law do not have application to the fact situation presented herein. Section 3(e) requires two conditions for its application. The first condition is the offer or acceptance of a "severance payment or anything of monetary value;" the second condition is that the acceptance is "contingent upon assumption or acceptance of public employment." Based upon the submitted facts, the acceptance of the payment, severance or otherwise, does not appear to be conditioned upon the assumption or acceptance of public employment. 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 Governor's Code of Conduct. Conclusion: As an Administrative Officer for the Department of Labor and Industry, you are a public employee subject to the provisions of the Ethics Law. The receipt of the payments from Chamberlin Insurance as agreed upon would not violate the Ethics Law where, as in this case, it is not contingent upon assumption or acceptance of public employment. Further, based upon the assumption that there are no understandings which would contravene Sections 3(b) and (c) of the Ethics Law, the Ethics Law would not prohibit the payments. 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. John P. Glenn May 20, 1993 Page 5 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. .Anv such avveal 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 513.2(h). Sincerely, I () Vincent J. Dopko Chief Counsel