HomeMy WebLinkAbout99-633 MartinoGregory S. Martino
162 Timber Ridge Road
Hummelstown, PA 17036
Dear Mr. Martino:
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
(717) 783 -1610
1- 800 - 932 -0936
ADVICE OF COUNSEL
December 1, 1999
Re: Former Public Employee; Section 1103(g); Executive -Level State Employee;
Section 1103(i); Deputy Insurance Commissioner; Commonwealth of Pennsylvania
Insurance Department; Pennsylvania Health Care Cost Containment Council.
This responds to your letter of October 26, 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 the Deputy Insurance Commissioner for
the Office of Rate and Policy Regulation following termination of service with the
Commonwealth of Pennsylvania Insurance Department.
Facts: As Deputy Insurance Commissioner for the Office of Rate and Policy
Regulation with the Pennsylvania Insurance Department, you seek an advisory from
the State Ethics Commission regarding limitations on your activities following
termination of your service with the Commonwealth.
You have been employed by the Pennsylvania Insurance Department for 11
years. For the last 6 years, you have served as Deputy Commissioner for the Office
of Rate and Policy Regulation. You have submitted a copy of your job description with
organizational chart, which is incorporated herein by reference. It is noted that your
duties included representing the Insurance Commissioner on the Pennsylvania Health
Care Cost Containment Council.
You are resigning from the Insurance Department effective November 26, 1999.
On November 29, 1999, you will begin a new job with Aetna US Healthcare as its
Head of Regulatory Affairs for all states, including Pennsylvania. You pose the
following questions:
1. What is the limitation on future business contacts with the
Pennsylvania Insurance Department and other areas of State government,
specifically, the Department of Health, the Department of Welfare and
the Governor's Office?
2. Over the past 6 months as Deputy Insurance Commissioner, you
have commented on the internal, confidential regulations drafted by the
Department of Health for Act 68 of 1988. This review and comment
was part of your duties as Deputy Insurance Commissioner. When these
FAX: (717) 787 -0806 • Web Site: www.ethics.state.pa.us • e -mail: ethics @state.pa.us
99 -633
Martino, 99 -633
December 1, '1999
Page 2
regulations begin to proceed through the Independent Regulatory Review
Commission (IRRC) process for public comment, may you, as an
employee of Aetna US Healthcare, review and submit comments on these
draft regulations?
Discussion: As Deputy Insurance Commissioner for the Office of Rate and Policy
Regulation for the Commonwealth of Pennsylvania Insurance Department ( "Insurance
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 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 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 participated 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. §1103(i).
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 1103(i) 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 being employed by, receiving compensation from, assisting, or acting
in a representative capacity for Aetna US Healthcare provided and conditioned upon
the assumptions that you did not actively participate in recruiting it to Pennsylvania,
and that you did not actively participate in recruiting or inducing it 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.
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 ":
Martino, 99 -633
December 1, 1999
Page 3
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
governmental 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 alia, 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.
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
Martino, 99 -633
December 1, 1999
Page 4
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 1 103(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 Sharp, Opinion 90- 009 -R.
The governmental body with which you would be associated upon termination
of public service would be the Pennsylvania Insurance Department in its entirety (see,
Kaiser, Opinion 97 -013) and the Pennsylvania Health Care Cost Containment Council
(see, Morris, Opinion 89 -026). Therefore, for the first year after termination of your
service with the Insurance Department; Section 1 103(g) of the Ethics Act would apply
and restrict "representation" of "persons" before the Pennsylvania Insurance
Department or the Pennsylvania Health Care Cost Containment Council.
Turning to your specific inquiries, the first inquiry regarding restrictions on future
business contacts with the Pennsylvania Insurance Department has been fully
addressed above. As noted above, the restrictions of Section 1103(g) of the Ethics
Act would apply only as to representation before your former governmental body.
Based upon the facts which you have submitted, the restrictions of Section 1 103(g)
of the Ethics Act would not apply to your future contacts with the Department of
Health, the Department of Welfare, or the Governor's Office because they would not
be part of your former governmental body.
As for your second inquiry, involving the draft Department of Health regulations
with which you previously had official involvement while the regulations were internal
and confidential, you are advised as follows.
As the regulations begin to proceed through the IRRC process for public comment,
Section 1 103(g) of the Ethics Act would preclude you from reviewing and submitting
comments on behalf of your new employer, Aetna US Healthcare, only if the Department
of Insurance or the Pennsylvania Health Care Cost Containment Council would have
further involvement as to the regulations, such that you would be representing your new
employer before your former governmental body.
Martino, 99 -633
December 1, 1999
Page 5
However, pursuant to Section 1103(a) of the Ethics Act, a public official /public
employee may not use confidential information obtained by being in the public position
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. Section
1 103(a) of the Ethics Act provides:
Section 1103. Restricted activities.
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
65 Pa.C.S. §1103(a).
The following terms are defined in the Ethics Act as follows:.
Section 1102. 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. The term 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.
65 Pa.C.S. §1102.
You are advised that you may not use confidential information obtained by being
in your Commonwealth position for the private pecuniary benefit of Aetna US
Healthcare.
Based upon the facts which have been submitted, this Advice has addressed the
applicability of Sections 1 103(g) and 1 103(i). It is expressly assumed that there has
been no use of authority of office for a private pecuniary benefit as prohibited by Section
1 103(a) of the Ethics Act. Further, you are advised that Sections 1 103(b) and 1 103(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
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December 1, 1999
Page 6
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.
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. Specifically not addressed herein is the
applicability of the Governor's Code of Conduct.
Conclusion: Upon termination of service as the Deputy Insurance Commissioner for the
Office of Rate and Policy Regulation with the Commonwealth of Pennsylvania Insurance
Department ( "Insurance 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 Aetna US Healthcare based upon the
assumptions that you did not actively participate in recruiting Aetna US Healthcare to
Pennsylvania, and that you did not actively participate in recruiting or inducing Aetna US
Healthcare 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 would be the Pennsylvania Insurance
Department and the Pennsylvania Health Care Cost Containment Council.
Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee
may not use confidential information obtained by being in the public position 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. You are advised that
you may not use confidential information obtained by being in your Commonwealth
position for the private pecuniary benefit of Aetna US Healthcare.
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
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December 1, 1999
Page 7
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.
Sincerely,
t;,„/-1 _
Vincent J. opko
Chief Counsel