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HomeMy WebLinkAbout85-018 MuirMr. William R. Muir, Jr., Esq. 705 West Union Street West Chester, PA 19382 Dear Mr. Muir: II. Factual Basis for Determination: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 July 26, 1985 OPINION OF THE COMMISSION 85 -018 Re: Former Public Official; Insurance Commissioner; Section 3(e); Attorney This responds to your letter of July 2, 1985, in which you requested the opinion of the State Ethics Commission. I. Issue: What restrictions are placed upon your potential employment following your termination of service as the Insurance Commissioner of Pennsylvania,. You have served as the Insurance Commissioner for the Commonwealth of Pennsylvania. In this position, you were responsible for the operation of the Pennsylvania Insurance Department and the regulation of insurance companies, agents, brokers and salesmen operating in the Commonwealth of Pennsylvania. You have recently resigned this position and will engage in the private practice of law in Chester County, Pennsylvania. As part of your future plans, you will be providing legal, consulting and management services to Professional Underwriting and Risk Management LTD, (P.U.R.M.), a Pennsylvania corporation, engaged in the insurance consulting and management business. In this respect, you have provided the State Ethics Commission with a copy of the proposed agreement between yourself and P.U.R.M. As part of this agreement, you have accepted the following restriction on your activity: "It is further agreed that Muir shall not, in any way, interface with any Pennsylvania State Agency." You have conditioned your execution of this agreement upon the approval of the State Ethics Commission of your proposed activity. The Commission has reviewed your proposed activity in light of the State Ethics Act and the conclusions are set forth below. Mr. William R. Muir, Jr. July 26, 1985 Page 2 III. Discussion: At the outset, it must he noted that the Ethics Commission may only address your question within the purview of the Ethics Act. The Commission may not and will not offer advice with respect to any duties or obligations that may be imposed by other provisions of law such as the State Adverse Interest Act or the Governor's Code of Conduct. As the Insurance Commissioner for the Commonwealth of Pennsylvania, you are a " public official" within the definition of that term as set forth in the Ethics Aca. Ji d the regulations of this Commission. 65 P.S. §402; 51 Pa. Code §1.1., See, Nelson, 85 -008. Consequently, upon termination of this employment, you would become a "former public official" subject to Section 3(e) of the Ethics Act. Sectiu:? 3(e) of the Ethics Act provides that: Seotio•i 3, ri estricted activities. (e) No former official or public employee shall represent a person, with or without compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 P.S. 403(e). We note that you are a practicing attorney in the Commonwealth of Pennsylvania. In this respect, the Supreme Court of Pennsylvania has held that Section 3(e) of the Ethics Act, 65 P.S. 403(e), was an impermissible intrusion upon the Supreme Court's authority to regulate an attorney's conduct. Pennsylvania Public Utility Commission, Bar Association v. Thornburgh, 62 Pa. Commw. 88, 434 A.2d 1327, affirmed 498 Pa. 589, 450 A.2d 613, (1982). The State Ethics Commission has, as a result, applied this decision to mean that there are no prohibitions under Section 3(e) of the Ethics Act upon your conduct insofar as that conduct constitutes the practice of law. The Commission also believes, however, that if the activities that an attorney intends to undertake before his former governmental body do not fall within the category of the "practice of law," the prohibitions of Section 3(e) of the Ethics Act might be applicable. Activities which could be considered by the Commission not to constitute the "practice of law" or to be undertaken in the capacity of lawyer- client, include activities such as lobbying and negotiating on contracts. We do not, however, need to address these issues in that you have voluntarily agreed to abide by the restrictions set forth in the Ethics Act. Mr. William R. Muir, Jr. July 26, 1985 Page 3 Generally, in a request of this nature, the Commission would attempt to identify with specificity the governmental body with which you were associated while serving the Commonwealth. In this context, the Ethics Commission has previously ruled that the "governmental body" with which an individual may be deemed to have been associated during the tenure of public office, or employment extends to those entities where the person had influence, responsibility, supervision, or control. See Ewing, 79 -010. See also Kury v. Commonwealth of Pennsylvania, State Ethics Commission, 435 A.2d 940 (1981). As the Insurance Commissioner for the Commonwealth of Pennsylvania, your jurisdiction, responsibility, influence and control extended at least to the Insurance Department, hereinafter the Department. You have, as noted previously, agreed as part of your contract with P.U.R.M., not to interface with any state agency. In this respect, there is no doubt that you have gone well beyond the restrictions imposed by Section 3(e) of the Ethics.Act and the opinions of the Commission. Thus, in relation to your proposed contract with P.U.R.M., this Commission believes that you have and will meet all the requirements imposed by the Ethics Act. While you have only presented your request for advice in relation to the aforementioned employment contract, we believe that it is expedient to also outline the general standards of Section 3(e) of the Ethics Act as they may relate to your work on behalf of clients other than P.U.R.M. The following is once again based upon the understanding that as an attorney you have voluntarily accepted the restrictions imposed upon your practice of law by the Ethics Act. The Ethics Act generally would not affect your ability to appear before agencies or entities other than with respect to the Department and any other agency or Department where you may have had influence, responsibility or control. We have not made a determination as to what, if any other, agencies or departments may be included within this restriction . You are welcome to seek further advice if such a question arises within the one -year period. Likewise, there is no general limitation on the type of employment in which you may engage, following your departure from the Department. We do note, 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 Mr. William R. Muir, Jr. July 26, 1985 Page 4 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 benefit that may be obtainable only because of his association with his former public employer. See Anderson, 83 -014; Zwikl, 85 -004. With respect to the one -year representation restriction, the Ethics Commission has promulgated regulations to define "representation" as follows: Section 1.1. Definitions. Representation - -- Any act on behalf of any person including but not limited to the following activities: personal appearances, negotiating contracts, lobbying, and submitting bid or contract proposals which are signed by or contain the name of the former public official or public employe. 51 Pa. Code 1.1. The Commission, in its opinions, has also interpreted the term "representation" as used in Section 3(e) of the Ethics Act to prohibit: 1. Personal appearances before the governmental body or bodies with which you have been associated, (that is the Department, including, but not limited to, negotiations or renegotiations on contracts with the Department; 2. Attempts to influence the Department; 3, Participating in any matters before the Department over which you had supervision, direct involvement, or responsibility while employed by the Department; 4. Lobbying, that is representing the interests of any person or employer before the Department in relation to legislation, regulations, etc. See Russell, 80 -048 and Seltzer, 80 -044. The Commission, has also held that preparing and signing a proposal, document or bid, or listing your name as the person who will provide technical assistance on such proposal, document, or bid, if submitted to or reviewed by the Department, constitutes an attempt to influence your former governmental body. See Kilareski, 80 -054. Therefore, within the first year after you leave the Department, you would be prohibited from engaging in the type of activity outlined above. You may assist in the preparation of any documents presented to the Department so long as you are not identified as the preparer. You may also counsel any person regarding that person's appearance before the Department. Once again, however, your activity in this respect should not be revealed to Mr. William R. Muir, Jr. July 26, 1985 Page 5 the Department. Of course, any ban under the Ethics Act would not prohibit or preclude you from making general informational inquiries of the Department to secure information which is available to the general public. See Cutt, 79 -023. This, of course, must not he done in an effort to indirectly influence these entities or to otherwise make known to the Department your representation of, or work for your new employer. In addition to the foregoing, and in order to be complete, you should also be aware of the special provisions of the Ethics Act relating to executive -level employees. In this respect the Act provides that: Section 3. Restricted activities. (g) 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 corporation recruited or induced to expand. 65 P.S. 403(g). Executive -level State employee is defined as: Section 2. Definitions. "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 deicison. 65 P.S. 402. You, as Insurance Commissioner for the Commonwealth of Pennsylvania, are clearly within this definition. Mr. William R. Muir, Jr. July 26, 1985 Page 6 Thus, if you have to any extent participated in the recruiting of any corporation to initiate operations, open a new plant, facility or branch in the Commonwealth and Commonwealth funds were employed as an inducement, therefore, you would be prohibited for a period of two years from the date of your termination from being employed by that corporation. Finally, the Commission has concluded that if you are administering an existing contract as opposed to negotiating or renegotiating a contract, your activities would not be prohibited by the Ethics Act. See Dalton, 80 -056 and Beaser, 81 -538. IV„ Conclusion: As the Insurance Commissioner for the Commonwealth of Pennsylvania, you are to be considered a "public official" as defined in the Ethics Act. Upon termination of your service with the Department, you would become a "former public official" subject to the restrictions imposed by Section 3(e) of the Ethics Act. Additionally, as an executive level employee, you would be subject to the provisions of Section 3(g) of the Act. As such, your conduct should conform to the requirements of the Ethics Act as outlined above. Finally, you are reminded that the Ethics Act also requires you to file a Statement of Financial Interests for the year following your termination of service Pursuant to Section 7(9)(i), this opinion is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any civil or criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance of the advice given. Ths letter is a public record and will be made available as such. Finally, any person may request within 15 days of service of the opinion that the Commission reconsider its opinion. The person requesting reconside- ration should present a detailed explanation setting forth the reasons why the opinion requires reconsideration. JJC /sfb By the Commission HE ERT B. CONNER Chairman