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HomeMy WebLinkAbout94-617 BuberDear Mr. Buber: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 3, 1994 Paul Buber, CPA, MBA County Auditor Schuylkill County Controller's Office 401 North Second Street Pottsville, PA 17901 -2520 94 -617 Re: Conflict, Public Official /Employee, Private Employment or Business, CPA, Tax and Accounting Practice, Solicitation of County Retirees for Tax and Accounting Services. This responds to your letter of September 20, 1994, in which you requested advice from the State Ethics Commission. Issue: Whether an auditor employed by a county controller's office, who has a private tax and accounting practice, is prohibited or restricted by the Public Official and Employee Ethics Law from soliciting county retirees to provide them with tax and accounting services on his own time using his own facilities and equipment, where the names of such retirees would be obtained from public documents. Facts: As an Auditor employed by Schuylkill County in the Schuylkill County Controller's Office, you request an advisory from the State Ethics Commission. You have enclosed a copy of your job description which document is incorporated herein by reference. In addition to your full -time employment as an Auditor for the Controller's Office, you are also a licensed certified public accountant and maintain a tax and accounting practice on a part - time basis. Your tax and accounting practice work is not performed during County time and it does not utilize County property. This work is performed at your home on your own time during evenings and on weekends. Schuylkill County maintains a pension plan for full -time employees; this pension plan is regulated according to the County Pension Law, Act 96 of 1971 of the General Assembly of the Commonwealth of Pennsylvania. Buber, Paul, 94 -617 October 3, 1994 Page 2 The activities of the pension plan are accounted for in a separate Trust Fund which is under the control of the Schuylkill County Retirement Board. The Schuylkill County Retirement Board is the elected decision making body of the pension fund and consists of five members: the three County Commissioners, the County Controller, and the County Treasurer. When full -time employees retire, they are eligible for a pension benefit and have several options available from which to select. The retiree discusses the individual retirement options with the Deputy Controller who is also employed by the Controller's Office. You are not involved in any of these discussions. Your direct Supervisor is the County Controller; therefore, the performance of your day to day duties does not result in interaction with the Deputy Controller. Once the retiree selects an option, this information is presented to the Deputy Controller. The Deputy Controller then passes all information directly to the County Controller. The County Controller reviews the information and then reports the name of the retiree and the annuity benefit to the Schuylkill County Retirement Board which meets in a public forum on a weekly basis. This information is also recorded in the minutes of the Schuylkill County Retirement Board which minutes are available to the public for inspection. You state that some of these retirees may be able to reduce their federal tax liability on their pension benefit if they qualify for a death benefit exclusion. In connection with your tax and accounting practice and on your time -- not on County time -- you were considering a direct solicitation to the retirees. This would be prepared by using your business equipment and your business stationery -- not County stationery. Your direct solicitation would be based on the information that you know is public information (names of retirees from the minutes of the Schuylkill County Retirement Board). Your direct solicitation would: a) Make the retiree aware of the possibility of qualifying for the death benefit exclusion; and b) Offer your services to prepare tax returns (on your time) for a fee that is reasonable and customary for a CPA practicing in the area. Based upon all of the above, you request an advisory as to any prohibitions or restrictions of the Ethics Law with regard to your aforesaid intended solicitation of the Schuylkill County retirees. Buber, Paul, 94 -617 October 3, 1994 Page 3 Discussion: As an Auditor for the Schuylkill County Controller's Office, 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 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 Huber, Paul, 94 -617 October 3, 1994 Page 4 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. In applying the above provisions of the Ethics Law to the instant matter, it is noted that Section 3(a) of the Ethics Law does not prohibit public officials /employees from outside business activities or 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 facilities or personnel. In particular, the governmental telephones, postage, staff, equipment, research materials, personnel or any other property 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 or promote such business activity. Pancoe, supra. Similarly, Section 3(a) would expressly prohibit the use of confidential information received by holding public office/ employment for such a prohibited private pecuniary benefit. In the event that the private employer or business has a matter pending before the governmental body or if the public official /public employee as part of such official duties must participate, review or pass upon that matter, a conflict would exist. Miller, Opinion 89 -024. In those instances, it is necessary that the public official /public employee be removed from that process. In such cases as noted above, Section 3(j) of the Ethics Law would require not only that the public official /public employee abstain from participation but also file a written memorandum to that effect with the person recording the minutes or the supervisor. In summary, the Ethics Law would restrict the following: 1. The use of authority of office to obtain any business in Buber, Paul, 94 -617 October 3, 1994 Page 5 a private capacity; 2. utilization of confidential information gained through public position; 3. participating in discussions, reviews, or recommendations on matters which relate to the business /private employer which may come before the governmental body and in such cases publicly announcing the relationship or advising the supervisor as well as filing a written memorandum as per the requirements of Section 3(j) of the Ethics Law. Brooks, Opinion 89 -023. Having set forth the above general principles which apply to public officials /public employees who engage in outside private employment, your specific situation shall now be addressed. With regard to your proposed solicitation of County retirees for the purpose of offering tax and accounting services to them, on your own time using your own facilities and equipment, such solicitation would not contravene Section 3(a) of the Ethics Law conditioned upon the assumption that you would comply with the principles set forth above as to Section 3(a) of the Ethics Law, and specifically would not use the authority of your public position or confidential information accessible to you as a result of your public position to advance such private employment opportunities with the County retirees. 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 County Code and /or any codes of ethics applicable to certified public accountants. Conclusion: As an Auditor for the Schuylkill County Controller's Office, you are a public employee subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would not preclude you from outside employment /business activity subject to the restrictions and qualifications as noted above. Conditioned upon the assumption that you would not use the authority of your public position or any confidential information available to you as a result of your public position, Section 3(a) of the Ethics Law would not preclude you from soliciting County retirees for purposes of providing tax and accounting services to them on your own time using your own facilities and equipment, where you would obtain the names of the retirees from public documents. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Buber, Paul, 94 -617 October 3, 1994 Page 6 such. 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 appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within fifteen (15) days of the date of this Advice pursuant to 51 Pa. Code 513.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717- 787 - 0806). Failure to file such an appeal at the Commission within fifteen (15) days may result in the dismissal of the appeal. Chief Counsel