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HomeMy WebLinkAbout95-638 BurdeHoward A. Burde Chief Counsel Department of Health Health & Welfare Building Harrisburg, PA 17108 Dear Mr. This requested Burde: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 27, 1995 95 -638 Re: Conflict, Public Official /Employee, Department of Health, Interactive Health Company, Sovereign Group Enterprises, Business with which Associated. responds to your letter of December 7, 1995 in which you advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions on the appointment of an individual to the position of Executive Deputy Secretary for the Department of Health who has certain private business interests. Facts: You have been authorized by Daniel F. Hoffman who is currently under consideration for the position of Executive Deputy Secretary for the Department of Health to request an advisory on his behalf. He has submitted his Statement of Financial Interests as to the Governor's Code of Conduct. In his letter of December 6, 1995 he clarifies two items contained in the financial disclosure documents. Regarding, Interactive Health Company, all but 3.75% of the shares Mr. Hoffman owns will be transferred to his current partner, Marie Williams, who is unrelated to him. Regarding Sovereign Group Enterprises, Inc. which is owned jointly by Mr. Hoffman and his wife, it is his intention to keep the company active so that his wife can pursue consulting work. Your inquiry relates to any restrictions that would apply should Mr. Hoffman be appointed. Burde, 95 -638 December 27, 1995 Page 2 Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. § §407(10), (11), advisories 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 material facts relevant to the inquiry. 65 P.S. § §407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As an Executive Deputy Secretary for the Department of Health, Mr. Hoffman would be a public official as that term is defined under the Ethics Law, and hence he would be 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 Burde, 95 -638 December 27, 1995 Page 3 duties and responsibilities unique to a particular public office or position of public employment. "Immediate family." A parent, spouse, child, brother or sister. "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 the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 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(f) of the Ethics Law provides as follows: Section 3. Restricted activities (f) No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not Burde, 95 -638 December 27, 1995 Page 4 have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. Parenthetically, where contracting is otherwise allowed or where there appears to be no express prohibitions to such contracting, the above particular provision of the law would require that an open and public process must be used in all situations where a public official /employee is otherwise appropriately contracting with his own governmental body, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more. This open and public process would require that the following be observed as to the contract with the governmental body: (1) prior public notice of the employment or contracting possibility; (2) sufficient time for a reasonable and prudent competitor/ applicant to be able to prepare and present an application or proposal; (3) public disclosure of all applications or proposals considered and; (4) public disclosure of the contract awarded and offered and accepted. Section 3(f) of the Ethics Law also requires that the public official /employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. Section 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities (j) Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and Burde, 95 -638 December 27, 1995 Pare 5 disclose the nature of his interest, as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of tl:'s secti n makes tae majority or other 1 gall rep -aired vote of approval unattainable, then :uch members shall be permitted tc vote if disclosu= 1s are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest, and the remaining two members of the governing ' - -dy have ^_ast opposing votes, the membe_ who as absta-aed shall be permitted to vote to break the tie vote if disclosure is made as other ,e provided herein. If a conflict exists, Section 3(j) requires the public official /employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In thr event that the required abstention results in the inabilit3 of the governmental body to take action because a majority is unattainable due to'the abstention(s) from conflict under the Ethics Law, then in that event participation is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. 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 no-: prohibit public officials /employees from outside business activi. es or employment; however, tae 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 governmF_ltal 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 Burde, 95 -638 December 27, 1995 Page 6 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. Mr. Hoffman is not prohibited from accepting the position of Executive Deputy Secretary of Health. As to Interactive Health Company, Mr. Hoffman would not have a conflict as to that business based upon the factual statement that he will divest himself of any financial interest in that business, as the term financial interest is defined in the Ethics Law. However, as to Sovereign Group Enterprises, Inc. (SGE), since that business is jointly owned by Mr. Hoffman and his wife, that is a business with which associated as that term is defined under the Ethics Law. Accordingly, Mr. Hoffman, as Executive Deputy Secretary, would have a conflict as to matters involving SGE, must remove himself from such matters and comply with the disclosure requirement of Section 3(j) of the Ethics Law quoted above. In addition, if SGE would seek to contract with the Department of Health, the requirements of Section 3(f) of the Ethics Law must be satisfied. 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 respective municipal code. Conclusion: As Executive Deputy Secretary for the Department of Health, Mr. Hoffman would be a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would not prohibit Mr. Hoffman from accepting the position of Executive Deputy Secretary of Health but he would have a conflict as to any matters involving Sovereign Group Enterprises, Inc., a business with which he is associated, that come before the Health Department. The requirements of Section 3(j) and 3(f) of the Ethics Law, to the extent applicable, must be satisfied. 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. such. This letter is a public record and will be made available as Aurde, 95 -638 December 27, 1995 Page 7 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 thirty (30) days of the date of this Advice pursuant to 51 Pa.Code §13.2(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 thirty (30) days may result in the dismissal of the appeal. cerely, Vincent J. Dopko Chief Counsel