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HomeMy WebLinkAbout99-604 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL September 16, 1999 FAX: (717) 787 -0806 ® Web Site: www.ethics.state.pa.us ® e -mail: ethics@state.pa.us 99 -604 Re: Former Public Official /Public Employee; Section 1103(g); Executive -Level State Employee; Section 1103(i); A Manager; B; C Department. This responds to your letter of August 12, 1999 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act ") presents any restrictions upon employment of a A Manager following termination of service with C Department. Facts: On August 6, 1999, you resigned from your position as A Manager for B, a Bureau within C Department. In this position, you worked to promote the Commonwealth of Pennsylvania's economic development goals. B is a group of economic development professionals working with businesses by providing assistance with business development matters, such as permits and site searches. On September 15, 1999, you will have accepted a position as an Associate with D, responsible for doing research and due diligence on potential investment opportunities. D is a California -based venture capital firm which invests in business to business e- commerce start-ups. You state that your new position with D, by it very nature, will never require you to interact with C Department or B in helping a start-up company or D to secure state financing. During your tenure as A Manager with C Department, you served as a point of contact for D on its site selection process for a base for its Mid - Atlantic operations. You served in this capacity together with, and under the supervision of, F, Director of B. Part of your responsibilities was to address D's concerns with doing business in the Commonwealth. You provided D with contacts in the Pittsburgh and Harrisburg areas to assist the firm in its decision concerning site selection. At the conclusion of the site selection process, in approximately May, 1999, your interaction with D ended. After D decided to locate its Mid - Atlantic operation in the Commonwealth, C Department offered a G to D to provide financial assistance to open a Mid - Atlantic operation in the Pittsburgh area. You state that you were not involved in the decision to offer or the offering of the G to D. As A Manager, you were not authorized to offer financial assistance to any company or approve financing. This responsibility rested with C Department H and F. You state that you did not grant or loan Commonwealth money, or promise to grant or Confidential Advice, 99 -604 September 16, 1999 Page 2 loan Commonwealth money, or participate in any decision to do so, to induce D to locate its Mid - Atlantic operation in Pennsylvania. You interviewed with D on or about July 8, 1999, at D's invitation, and accepted employment on August 1, 1999. You state that during your initial interaction with D while serving as A Manager, there were no discussions concerning possible employment opportunities with that firm. While the Mid - Atlantic site will serve as the base of your operations with D, you will be working throughout the Mid - Atlantic region. In making this request, you stress that you will not use your former position as A Manager or emoluments of public office or confidential information that you gained therein for your private pecuniary gain or the pecuniary gain of D. You also state that you will not represent a= person, with promised or actual compensation, on any matter before C Department or B for one year following the effective date of your resignation. You request a confidential advisory with regard to any conflicts that may exist as to your employment as an Associate with D in relation to your previous position with C Department. Discussion: In the former capacity as A Manager for B with C Department, you would be considered a public official /public employee and an "executive -level State employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. §1102; 51 Pa.Code §11.1. Consequently, upon termination of public service, you became a former public official /public employee and a former executive -level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act. Section 1103(i) restricts former executive -level State employees as follows: Section 1103. Restricted activities. (i) Former executive -level employee. - -No former executive -level State employee may for a period of two years from the time that he terminates employment with this Commonwealth 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 this Commonwealth or that he actively participated in inducing to open a new plant, facility or branch in this Commonwealth or that he actively participated in inducing to expand an existent plant or facility within this 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 corporation recruited or induced to expand. 65 Pa.C.S. §11030). Section 1103(i) restricts the ability of a former executive -level State employee to accept employment or otherwise engage in business relationships following termination of State service, under certain narrow conditions. The restrictions of Section 1 1030) apply even where the business relationship is indirect, such as where the business in question is a client of the new employer, rather than the new employer itself. See, Confidential Opinion No. 94-011. However, Section 1103(i) would not restrict you from Confidential Advice, 99 -604 September 16, 1999 Page 3 being employed by, receiving compensation from, assisting, or acting in a representative capacity for a new employer provided and conditioned upon the assumptions that you did not actively participate in recruiting your new employer to Pennsylvania, and that you did not actively participate in recruiting or inducing your new employer to open or expand a plant, 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 your new employer. Unlike Section 1103(i), Section 1103(g) does not prohibit a former public official /public employee from accepting a position of employment. However, it does restrict the former public official /public employee with regard to "representing" a "person" before "the governmental body with which he has been associated ": Section 1103. Restricted activities. (g) Former official or employee. - -No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the aovernmental body with which he has been associated for one year after he leaves that body. 65 Pa.C.S. §1103(g) (Emphasis added). The terms "represent," "person," and "governmental body with which a public official or public employee is or has been associated" are specifically defined in the Ethics Act as follows: Section 1102. 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. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. "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. 65 Pa.C.S. §1102. The term "Person" is very broadly defined. It includes, inter al, corporations and other businesses. It also includes the former public employee himself, Confidential Opinion 93 -005, as well as a new governmental employer. Ledebur, Opinion 95 -007. Confidential Advice, 99 -604 September 16, 1999 Page 4 The term "representation" is also broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (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; and (5) lobbying. Popovich, Opinion 89 -005. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits 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 that existed prior to termination of public service, Shay, Opinion 91 -012. However, if such a pre- existing contract does not involve 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 -011. A former public official /public employee may assist in the preparation of any documents presented to his former governmental body. However, the public official /public employee may not be identified on documents submitted to the former governmental body. The public official /public employee may also counsel any person regarding that person's appearance before his former governmental body. Once again, however, the activity in this respect should not be revealed to the former governmental body. The Ethics Act would not prohibit or preclude making general informational inquiries to the former governmental body to secure information which is available to the general public, but 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. Section 1103(g) only restricts the former public official /public employee with regard to representation before his former governmental body. The former public official /public employee is not restricted as to representation before other agencies or entities. However, the "governmental body with which a public official /public employee is or has been associated" is not limited to the particular subdivision of the agency or other governmental body where the public official /employee had influence or control but extends to the entire body. See, Legislative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion No. 90 -006; Sharp, Opinion 90- 009 -R. The governmental body with which you were associated upon termination of public service is C Department in its entirety. Therefore, for the first year after termination of your service with C Department, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before C Department. Based upon the facts which have been submitted, this Advice has addressed the applicability of Sections 1103(g) and 1103(i) only. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /employee and no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment 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. Confidential Advice, 99 -604 September 16, 1999 Page 5 S.TrFerely, Vincen . Dopko Chief Counsel Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act; 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 Act. Conclusion: Upon termination of service as A Manager with C Department, you would become a former public official /public employee and a former executive -level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Public Official and Employee Ethics Act ( "Ethics Act "), Act 93 of 1998, Chapter 11. Under Section 1103(i) of the Ethics Act, you would not be prohibited from being employed by, receiving compensation from, assisting, or acting in a representative capacity for D based upon the assumptions that you did not actively participate in recruiting D to Pennsylvania, and that you did not actively participate in recruiting or inducing D to open or expand a plant, 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. With regard to Section 1103(g), the restrictions as outlined above must be followed. The former governmental body is C Department. The propriety of the proposed conduct has only been addressed under the Ethics Act. Further, should service be terminated, as outlined above, the Ethics Act would require that a Statement of Financial Interests be filed by no later than May 1 of the year after termination of service. Pursuant to Section 1107(11), an 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, provided 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.