HomeMy WebLinkAbout97-504 DiBuonaventuroJohn P. DiBuonaventuro
86 Andover Court
Wayne, PA 19087
Dear Mr. DiBuonaventuro:
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 1 71 08 -1 470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
January 8, 1997
97 -504
Re: Former Public Employee; Section 3(g); Executive -Level State Employee; Section
3(i); Director; Office of the Governor, Southeastern Pennsylvania.
This responds to your letter of December 2, 1996 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 the Director of the Office of the Governor,
Southeastern Pennsylvania, following termination of service with the Governor's
Office.
Facts: You have served as the Director of the Office of the Governor,
Southeastern PA from January 18, 1995 to December 31, 1996. Your office was
responsible for five Counties — Chester, Delaware, Bucks, Montgomery, and
Philadelphia. The regional offices serve as local communication links between the
Administration and local business, government, and community leaders. As Director,
you reported to the Deputy Chief of Staff.
As of January 1, 1997, you accepted a position as Managing Director for
Century Financial Partners, LLC (CFP). CFP is based in Atlanta and provides advisory
and capital raising services to the long term care and senior housing markets in both
the private and public sector. Paul Zelenkofske of Jenkintown is Chairman and Troy
Taylor, formerly of KPMG, is President and located in Atlanta. Your role will be one
of Account Representative and along with handling government relations for the firm,
you will be responsible for the following:
1. Development of the privatization business as it relates to national,
state, municipality, and county owned nursing homes, assisted
living facilities, retirement homes, and senior occupied low income
housing developments.
DiBuonaventuro, 97 -504
January 8, 1997
Page 2
2. Geography includes all states in the U.S. with Pennsylvania
counties as the initial target.
3. To identify opportunities and qualify the ability and willingness of
local government representatives to realistically complete the
transaction.
4. Liaison to completion between the CFP project team and client.
5. Report status and recommended actions relating to the various
current transactions and prospects.
6. Know and keep CFP informed of competitive information and
trends in the marketplace both in the public and private sector.
7. Create and maintain awareness, within the appropriate
governmental institutions, of CFP past performances, successes
and mission.
8. Investigate and assess the privatization of various other
government owned assets.
In addition to the above responsibilities, the new position requires SEC licensing
including Series 7 and 63.
You have asked the following specific inquiries as to ethics issues:
1. Whether you will be permitted to ask members of the Governor's
Office for introductions to individuals (including government
officials) in other states and counties within Pennsylvania other
than Delaware, Bucks, Montgomery, Chester, and Philadelphia?
2. Whether there are any particular responsibilities and /or restrictions
regarding information you learned while working in state
government, specifically the Department of Public Welfare's
Byberry and Eastern State locations which could be considered as
future sites for some type of senior housing?
3. Whether you will be permitted to ask for and receive basic
information regarding the nursing home and health care industry
within and outside the state from members of the Administration?
4. Whether you will be permitted to communicate with certain
agencies regarding the firm's business? Because of the industry
in which the firm hopes to be involved, and the proposed use of
taxable and tax - exempt financing, you believe that you and the
firm may have, from time to time, issues with the following
agencies: State, Health, Aging, Public Welfare, Pennsylvania
Housing Finance Agency, and the Governor's Office.
DiBuonaventuro, 97 -504
January 8, 1997
Page 3
5. Whether you will be permitted to do non -state related business
with county governments across Pennsylvania including Chester,
Delaware, Bucks, Montgomery and Philadelphia?
Discussion: In your former capacity as Director for the Office of the Governor,
Southeastern PA, you would be considered a public official /public employee and an
"executive -level state employee" within the definition of these terms as set forth in the
Public Official and Employee Ethics Law and the Regulations of this Commission. 65
P.S. §402; 51 Pa. Code § 1 1.1.
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.
"Executive -level State employee." The Governor,
Lieutenant Governor, cabinet members, deputy secretaries,
the Governor's office staff, any State employee with
discretionary powers which may affect the outcome of a
State agency's decision in relation to a private corporation
or business or any employee who by virtue of his job
function could influence the outcome of such a decision.
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
DiBuonaventuro, 97 -504
January 8, 1997
Page 4
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(g) of the Ethics Act provides that:
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.
Section 3(i) of the Ethics Law provides:
Section 3. Re Ac tivities
(i) No former executive -level State employee may
for a period of two years from the time that he terminates
his State employment be employed by, receive
compensation from, assist or act in a representative
capacity for a business or corporation that he actively
participates in recruiting to the Commonwealth of
Pennsylvania or that he actively participated in inducing to
open a new plant, facility or branch in the Commonwealth
or that he actively participated in inducing to expand an
existent plant or facility within the Commonwealth,
provided that the above prohibition shall be invoked only
when the recruitment or inducement is accomplished by a
grant or loan of money or a promise of a grant or loan of
money from the Commonwealth to the business or
4 corporation recruited or induced to expand.
Under Section 3(a) of the Ethics Law quoted above, a public
official /employee may not use the authority of public office/ employment or
confidential information received by holding such a public position for the private
pecuniary benefit of himself, a member of his immediate family, or business with
which he or a member of his immediate family.is associated.
In applying Section 3(a) of the Ethics Law to the proffered facts, Section 3(a)
would prohibit you from using the position or emoluments of your public position or
confidential information to advance an opportunity of private employment with CFP.
Once again, it is not suggested that you have engaged in such conduct and the
foregoing is provided to give a complete response to your inquiry.
As for Section 3(i) of the Ethics Law, you would be subject to that provision of
law since you would be a former executive -level state employee. However, Section
3(i) would not restrict you from the position of employment with CFP provided and
DiBuonaventuro, 97 -504
January 8, 1997
Page 5
conditioned upon the assumptions that you did not actively participate in recruiting
CFP to Pennsylvania, and that you did not actively participate in recruiting or inducing
CFP to open or expand a facility or branch in Pennsylvania through a grant or loan of
money or a promise of a grant or loan of money from the Commonwealth of
Pennsylvania to CFP.
Upon termination of public service, you also became a "former" public
official /public employee subject to Section 3(g) of the Public Official and Employee
Ethics Law.
To answer your request with respect to Section 3(g), the governmental body
with which you were associated while working with the Office of the Governor must
be identified. Then, the scope of the prohibitions associated with the concept and
term of "representation" must be reviewed.
The term "governmental body with which a public official or public employee
is or has been associated" is defined under the Ethics Law as follows:
Section 2. Definitions.
"Governmental body with which a public official or
public employee is or has been associated." The
governmental body within State government or a political
subdivision by which the public official or employee is or
has been employed or to which the public official or
employee is or has been appointed or elected and
subdivisions and offices within that governmental body.
It is noted that Act 9 of 1989 significantly broadened the definition of the term
"governmental body with which a public official or public employee is or has been
associated." It was the specific intent of the General Assembly to define the above
term so that it was not merely limited to the area where a public official /employee had
influence or control but extended to the entire governmental body with which the
public official /employee was associated. The foregoing intent is reflected in the
Iegis!ative debate relative to the amendatory language for the above term:
We sought to make particularly clear that when we
are prohibiting for 1 year that revolving -door kind of
conduct, we are dealing not only with a particular
subdivision of an agency or a local government but the
entire unit..." Legislative Journal of House, 1989 Session,
No. 15 at 290, 291.
The Ethics Law must be construed to ascertain and effectuate the intent of the
General Assembly under 1 Pa. C.S.A. §1901.
Based upon the above, the governmental body with which you were associated
upon termination of public service would be the Governor's Office in its entirety,
including but not limited to the Southeastern PA Office, together with any boards or
commissions on which you served or as to which you acted in the Governor's stead
and any similar bodies over which you exercised influence, discretionary authority or
DiBuonaventuro, 97 -504
January 8, 1997
Page 6
control. The above is based upon the language of the Ethics Law, the legislative intent
(Legislative Journal of House, 1989 Session, No. 15 at 290, 291) and the prior
precedent of this Commission. Thus, in Sirolli, Opinion 90 -006, the Commission found
that a former Division Director of the Department of Public Welfare (DPW) was not
merely restricted to the particular Division as was contended but was in fact restricted
to all of DPW regarding the one year representation restriction. Similarly in Sharp,
Opinion 90- 009 -R, it was determined that a former legislative assistant to a state
senator was not merely restricted to that particular senator but to the entire Senate
as his former governmental body.
Therefore, within the first year after termination of service with the Governor's
Office, Section 3(g) of the Ethics Law would apply and restrict representation of
persons or new employers vis -a -vis the former governmental body, specifically the
Governor's Office in its entirety, together with any boards or commissions on which
you served or as to which you acted in the Governor's stead and any similar bodies
over which you exercised influence, discretionary authority or control.
Turning now to the scope of the restrictions under Section 3(g), the Ethics Law
does not affect one's ability to appear before agencies or entities other than with
respect to the former governmental body. Likewise, there is no general limitation on
the type of employment in which a person may engage, following departure from their
governmental body. It is noted, however, that the conflicts of interest law is primarily
concerned with financial conflicts and violations of the public trust. The intent of the
law generally is that during the term of a person's public employment he must act
consistently with the public trust and upon departure from the public sector, that
individual should not be allowed to utilize his association with the public sector,
officials or employees to secure for himself or a new employer, treatment or benefits
that may be obtainable only because of his association with his former governmental
body.
In respect to the one year restriction against such "representation," the Ethics
Law defines "Represent" as follows:
Section 2. Definitions.
"Represent." To act on behalf of any other person in
any activity which includes, but is not limited to, the
following: personal appearances, negotiations, lobbying and
submitting bid or contract proposals which are signed by or
contain the name of a former public official or public
employee.
The Commission, in Popovich, Opinion 89 -005, has also interpreted the term
"representation" as used in Section 3(g) of the Ethics Law to prohibit:
1. Personal appearances before the former governmental body or bodies,
including, but not limited to, negotiations or renegotiations in general or
as to contracts;
2. Attempts to influence;
DiBuonaventuro, 97 -504
January 8, 1997
Page 7
3. Submission of bid or contract proposals which are signed by or contain
the name of the former public official /employee;
4. Participating in any matters before the former governmental body as to
acting on behalf of a person;
5. Lobbying, that is representing the interests of any person or employer
before the former governmental body in relation to legislation,
regulations, etc.
The Commission has also held that listing one's name as the person who will
provide technical assistance on such proposal, document, or bid, if submitted to or
reviewed by the former governmental body constitutes an attempt to influence the
former governmental body. Section 3(g) would also prohibit in general the inclusion
of the name of a former public official /public employee on invoices submitted by his
new employer to the former governmental body, even though the invoices pertain to
a contract which existed prior to termination of public service. Shay, Opinion 91 -012.
However, in the event of work performed on a contract already awarded ,,and not
involving the unit where the former public employee worked, the name of the former
public employee may appear on routine invoices if required by the regulations of the
agency to which the billing is being submitted. Abrams /Webster, Opinion 95 -01 1.
Therefore, within the first year after termination of service, you should not engage in
any of the prohibited activities outlined above.
You may assist in the preparation of any documents presented to your former
governmental body. However, you may not be identified on documents submitted to
your former governmental body. You may also counsel any person regarding that
person's appearance before your former governmental body. Once again, however,
the activity in this respect should not be revealed to your former governmental body.
Of course, any ban under the Ethics Law would not prohibit or preclude the making of
general informational inquiries of your former governmental body to secure information
which is available to the general public. This must not be done in an effort to
indirectly influence the former governmental body or to otherwise make known to that
body the representation of, or work for the new employer.
In addition, the term "Person" is defined as follows under the Ethics Law:
Section 2. Definitions.
"Person." A business, governmental body, individual,
corporation, union, association, firm, partnership,
committee, club or other organization or group of persons.
In Confidential Opinion 93 -005, the Commission held that Section 3(g)
precludes a former public official /employee from providing consulting services to his
former governmental body for a period of one year after termination of service in that
the prohibition against representing a person includes the former public
official /employee representing himself.
Having set forth the above, your specific inquiries shall now be considered.
DiBuonaventuro, 97 -504
January 8, 1997
Page 8
In response to your first specific inquiry, pursuant to Section 3(g), you would
not be permitted to ask members of the Governor's Office for such introductions.
Such conduct would constitute representation of your new employer before your
former governmental body.
As for your second specific inquiry, you could not use confidential information
that you learned while working for the former governmental body for a prohibited
private pecuniary benefit. The acquisition of confidential information while you served
in a position of public employment, and the subsequent receipt of a financial benefit
for or through such confidential information, would be sufficient to make out the
elements of a Section 3(a) violation. The above would apply generally as well as to
the specific examples you cited (Department of Public Welfare's Byberry and Eastern
State locations).
In response to your third specific inquiry, as noted above, you could make
general informational inquiries of your former governmental body to secure information
which is available to the general public so long as such would not be done in an effort
to indirectly influence the former governmental body or to otherwise make known to
that body the representation of, or work for the new employer.
In response to your fourth specific inquiry, you would be permitted to so
communicate with agencies which are not included within your former governmental
body.
In response to your fifth and final specific inquiry, as noted above, the
restrictions of Section 3(g) apply to restrict you as to your former governmental body
and so would not apply to restrict you as to County governments which are not
included within your former governmental body.
Lastly, 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 Act 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: In your former capacity as Director for the Office of the Governor,
Southeastern PA, you would be considered a public official /public employee and an
executive -level state employee subject to the provisions of the Ethics Law. Under
Section 3(i) of the Ethics Law, you would not be prohibited from accepting a position
of employment with Century Financial Partners, LLC (CFP) based upon the
assumptions that you did not actively participate in recruiting CFP to Pennsylvania, and
that you did not actively participate in recruiting or inducing CFP to open or expand a
facility or branch in Pennsylvania through a grant or loan of money or a promise of a
grant or loan of money from the Commonwealth of Pennsylvania. Upon termination
of service with the Office of the Governor, you became a "former" public official /public
employee subject to Section 3(g) of the Ethics Law. The former governmental body
is the Office of the Governor in its entirety, including but not limited to the
Southeastern PA office, together with any boards or commissions on which you served
or as to which you acted in the Governor's stead and any similar bodies over which
you exercised influence, discretionary authority or control. The restrictions as to
DiBuonaventuro, 97 -504
January 8, 1997
Page 9
representation outlined above must be followed. The propriety of the proposed
conduct has only been addressed under the Ethics Law.
Further, should service be terminated, as outlined above, the Ethics Law also
requires that a Statement of Financial Interests be filed for the year following
termination of service.
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 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.
7 erely,
Vincent J. Kopko
Chief Counsel