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HomeMy WebLinkAbout90-003 BooninMr. David M. Boonin 1210 Pine Street Philadelphia, PA 19107 Dear Mr. Boonin: 1990. I. Issue: Before: Helena G. Robert W. W. Thomas G. Sieber Dennis C. STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION II. Factual Basis for Determination: Hughes, Chair Brown, Vice Chair Andrews Pancoast Harrington DATE DECIDED: February 23, 1990 DATE MAILED: March 6, 1990 90 -003 Re: Conflict, Public Official, Public Employee, Former Employment, New Employment, Governmental Body, Governmental Body with which a Public Official or Public Employee is or has been associated, City, Philadelphia Gas Works, Philadelphia Gas Commission, Utility and Regulatory Affairs, Chief Executive Office This Opinion is issued in response to your request of January 10, What restriction does the Public Official and Employee Ethics Law impose upon a public official /employee who is a member of the Philadelphia Gas Commission and Assistant Finance Director for Utility and Regulatory Affairs of the City of Philadelphia regarding his possible appointment to the position of Chief Executive Officer of the Philadelphia Gas Works. You are currently an uncompensated member of the Philadelphia Gas Commission (PGC), and an employee of the City of Philadelphia (City), as an Assistant to the Finance Director for Utility and Regulatory Affairs. Since you are being considered for an appointment to the position of Chief Executive Officer (CEO) of the Philadelphia Gas Works (PGW), you request advice under Act 9 of 1989 as to whether you would be restricted in dealing with either the PGC or the City if you are appointed as CEO of PGW. In particular, you inquire as to whether your acceptance of the CEO position and your resignation as a Mr. David M. Boonin 2 Page 2 member of PGC and as Assistant to the Finance Director for the Utility and Regulatory Affairs would make you a former public official /employee who would be restricted for a period of one year from representing any person on behalf of PGW before the PGC or the City. You have submitted a photocopy of the Agreement between the City and the Philadelphia Facilities Management Corporation (PFMC) relating to the operation of PGW which characterizes PGW in Section XI, paragraph 7 as a group of assets that are owned by the City. The Agreement characterizes PFMC as a non - profit corporation organized for the purpose of operating PGW with the PGC having the responsibility of overseeing the operation of the PGW by PFMC. It is further provided that any power specifically not granted to PFMC is retained by PGC. Section VI, paragraphs 1,2,3 provide for the membership of PGC. In addition, the activities of PGW are regulated by the Finance Director, City Solicitor, City Controller, and City Council. Section VI, paragraph 5 sets forth the powers of PGC. PGC may approve or disapprove the personnel selected by PFMC for certain executive positions with PGW including the CEO position. After indicating that you have recused yourself from participating in any PGC votes while you are under consideration for the CEO position, you took such action so as to avoid even the appearance of a conflict. You characterize PGC which consists of five members, two appointed by Council, two by the Mayor and one by the City Controller, as a super board of directors overseeing the operation of PGW. The Agreement between the City and PFMC recites its purpose to provide quality gas service to the City at reasonable rates which may be effectuated by having PGC assume all responsibilities for overseeing the operation of PGW by PFMC and by granting PGC all powers not specifically granted to PFMC under the Agreement with the City including the ability to set rates. The function of PGC is beyond that of a traditional regulatory commission in that it can inject itself into the operation by ' functioning as a super board of directors. You suggest the distinctive nature of the PGC is why there is no prohibition on a PGC member or employee subsequently working for PGW as opposed to the employment restrictions on a utility commissioner with a regulated utility. PFMC is a non - profit corporation established for the purpose of managing PGW under the Agreement of December 29, 1972; it has no assets, and is a "paper" corporation, the members of which are appointed by the mayor and indemnified by the City. The Agreement further provides that PFMC is to provide a CEO for PGW with the salary being paid directly from PGW's bank account. PGW has represented itself as integral part of the City. In particular PGW has taken the position that it is not a separate legal entity from the City but is an agency of the City, that is, it is a mere collection of real and Mr. David M. Boonin 3 Page 3 personal property owned by the City. After referencing the cases of Commonwealth v. Philadelphia Gas Works, 484 Pa. 60, 398. 2d 942 (1979) and Philadelphia Facilities Management Corporation v. Beister, 60 Pa. Commw. Ct. 360, 431 A.2d 1123 (1981), you quote from the latter decision which construes PGW not to be any "identifiable legal entity." After quoting Section 2 of the Ethics Law, you concede that you are a public official by virtue of your position on PGC and also a public employee by virtue of your position as Assistant to the Finance Director for Utility and Regulatory Affairs. You quote Section 3(g) of the Ethics Law and note that the duties of the CEO of PGW include administering the Agreement with PFMC as well as exercising such powers as are determined by the board of PGW which would include appearing before PGC as a witness, advocating certain positions and taking all necessary steps to assure continuous gas service in the City. The CEO would also have contact with the Office of the Finance Director for Utility and Regulatory Affairs although most of the interfacing between PGW and the Finance Director would be handled by the Chief Financial Director of PGW rather than by the CEO. Presently the Financial Director issues the bonds for PGW, administers the pension fund and establishes the format for financial records, assists in the preparation of the operating budget, approves the capital budget and has access to examine the books, records and assets of PGW. You state that in your capacity as Assistant to the Finance Director you had no direct involvement responsibility or supervision of any issues related to PGW or PGC and that your employment requires City residency as a condition of employment. You then proffer your analysis of the application of the Ethics Law to the issues in this matter. After asserting that PGW, PGC and the City are one governmental entity, you state that your resignation as PGC member and as Assistant to the Finance Director followed by your employment as CEO of PGW would not make you a former public official /employee because you would be transferring from one position to another position in the same governmental body. Initially you quote Section 3 -909 of the Philadelphia Home Rule Charter which provides for PGC: "The Gas Commission shall be constituted and appointed in accordance with the provisions of such contract as may from time to time be in effect between the City and operator of the City Gas Works, or, in the absence of a contract, in such manner as may be provided by ordinance." In addition you also quote Section 5 -902 of the charter which provides: Mr. David M. Boonin 4 Page 4 "The Gas Commission shall exercise such powers and perform such duties as may from time to time be provided in contracts between the City and the operator of the City Gas Works, in the absence of a contract, by ordinances." You allude to the Agreement between the City and PFMC and reference PGC's duties of overseeing the operation of PGW, fixing the rates for supplying gas to customers and setting standards for the purchases and sales of non gas items which are subject to review by the law department of the City. Even though your pay check as a City employee is issued from a City account and PGC employees and PGW employees are paid from the PGW account, you argue that there is a "direct identification" of PGW and PGC with the City since PGC supervises PGW. After quoting the definition of "governmental body ", you argue that in the new position you would continue to be associated with the supervision of the same assets pursuant to the same Agreement. You then assert that reimbursement for your salary would be paid from the PGW account which also pays your current reimbursement for expenses as a member of PGC. You believe that moving from one position in the Finance Directors Office to the position of CEO of the PGW would be a continuity of service which is not within the intendment of 3(g) concerning public official /employees who leave public service to enter the private sector. After arguing that Section 3(g) would not apply to intra - governmental transfers, you reference confidential Opinion, 89 -015 for the proposition that an exclusion exists regarding an appearance by a former public official /employee before a governmental agency. You cite Dalton, Opinion 80 -056 as holding that a former public employee was not precluded under section 3(e) of Act 170 of 1978 from representing a person before his former governmental body regarding the administration of an existing contract. Because the former public employee moved to private industry, you note in Dalton that the administration of an ongoing contract was permitted which is similar to one of your primary roles as CEO in overseeing the operation of the contract between the City and PFMC. You conclude that the Ethics Law should not prohibit your appointment to the compensated position of CEO of PGW and request of an opinion of this Commission on the issue. III. Discussion: As a member of the Philadelphia Gas Commission you are a public official and as the Assistant to the Finance Director for Utility and Regulatory Affairs of the City of Philadelphia you are a public employee as those terms are defined under the Public Official and Mr. David M. Boonin 5 Page 5 Employee Ethics Law of June 26, 1989, Act 9 of 1989. Accordingly, you are subject to the provisions of the Ethics Law and restrictions therein are applicable to you. Section (3) 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. (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. In addition, Section 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 or will be any transgression thereof but merely to provide a complete response to the question presented. The following terms are defined under the Ethics Law: 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 or his immediate family or a business with which he or a member of his Mr. David M. Boonin 6 Page 6 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. "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body, or other establishment in the Executive, Legislative or Judicial Branch of a State, a nation, or a political subdivision thereof or an agency performing a governmental function. "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. "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. In determining whether the Ethics Law would restrict your, appointment to the CEO position with PGW, we must review the applicability of Sections 3 (a) and (g) of the Ethics Law. Under Section 3(a) of the Ethics Law quoted above, although this provision of law would not preclude you from being considered or appointed to the position of CEO of PGW, that provision of law would prohibit you from using confidential information or the authority of office to advance your own appointment or to eliminate any competitors for that position. Thus, although you may apply for that position and Mr. David M. Boonin 7 Page 7 submit your resume and present qualifications in an interview pursuant thereto, you could not use the authority of your public office or employment as a means in whole or part to promote your appointment or conversely eliminate any competitors for the position. Pepper, Opinion 87 -008. Subject to the qualification as noted above, Section 3 (a) of the Ethics Law would not prohibit your appointment to the position of CEO of PGW. Regarding the applicability of Section 3 (g) of the Ethics Law, the question before us is whether your resignation as a public official from the PGC and as a public employee as Assistant Finance Director contemporaneously with your appointment as CEO with PGW would classify you as a former public official /employee in light of your two resignations. Before addressing the above question, we must determine your governmental body. We agree that the inter connection between the City, PGW, and PFMC compels the results that your governmental body is the City. Pollock, Opinion 89 -031. Since the City is your governmental body and since you are resigning from two public positions within that body to accept another appointed position of public employment, does such action categorize you as a former public official /employee. It is our view that the actions on your part would constitute a transfer from two positions of public service to a new position of public service within the same governmental body. Therefore, you would not become a former public official /employee because you would continue under the rubric of public service subject to the controls of your governmental employer, the City. Our decision in this case is limited to these unique circumstances and certainly would not have application to situations where a public official /employee would terminate service with this governmental body and seek to provide services as an independent contractor, consultant, or in some capacity, other than remaining as an employee or an official within that governmental body. Accordingly, Section 3 (g) of the Ethics Law would not restrict your appointment as CEO to the PGW. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law; the propriety of any other statute, code, regulation or ordinance other than the Ethics Law has not been considered. IV. Conclusion A Philadelphia Gas Commissioner and Assistant Finance Director for Utility and Regulatory Affairs of the City of Philadelphia is both a public official and public employee subject to the provisions of the Ethics Law. Although Section 3 (a) of the Ethics Law would not prohibit his appointment to the position of Chief Executive Officer of such. Mr. David M. Boonin 8 Page 8 the Philadelphia Gas Works, he could not use the authority of office or confidential information as a means of promoting his appointment or eliminating any competitors. Section 3 (g) of the Ethics Law would not prohibit the public official /employee from resigning from his two positions of public service within the City of Philadelphia and accepting another position of employment within the City. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. 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 on the advice given. This letter is a public record and will be made available as Finally, any person may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within fifteen days of the mailing date of this Opinion. The person requesting reconsideration should present a detailed explanation setting forth the reasons why the Opinion requires reconsideration. By the Commission, ena G. Hughes, hair