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HomeMy WebLinkAbout91-010 FreemanMr. Jan H. Freeman 266 N. 24th Street Camp Hill, PA 17011 Dear Mr. Freeman: I. Issue: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Dennis C. Harrington, Chair Daneen E. Reese Roy W. Wilt James P. Gallagher DATE DECIDED: December 5,1991 DATE MAILED: December 10,1991 Re: Public Official, Former Public Official, Executive -level State Employee, Section 3(g), Section 3(i), Executive Director, Pennsylvania Energy Office, Offer of Employment, Director of Public Policy of the Philadelphia Electric Company. This Opinion is issued in response to your letter of request dated August 29, 1991. 91 -010 Whether the. Public Official and Employee Ethics Law presents any prohibitions or restrictions upon your prospective employment with the Philadelphia Electric Company following termination of service as Executive Director of the Pennsylvania Energy Office. II. Factual Basis for Determination: By letters dated August 20, 1991, you have notified Governor Casey and Lieutenant Governor Singel of your decision to resign your present position as the Executive Director of the Pennsylvania Energy Office ( "PEO "). So that you may properly carry out the duties and responsibilities of your new position with the Philadelphia Electric Company, you seek a formal ruling from the State Ethics Commission regarding restrictions of the Ethics Law which would apply to you. You have submitted copies of the following documents: letters of resignation dated August 20, 1991 from you to Governor Casey and Lieutenant Governor Singel; a reply letter dated August 20, 1991 from Lieutenant Governor Singel; a job description for your position as .. Executive Director of the PEO; an "operational job description" which you prepared on August 29, 1991 for your position as Executive Director of the PEO; a job description for your future position as Director of Public Policy for the Philadelphia Electric Company; and a memorandum to you from Cristina S. Papson, Assistant Counsel for the PEO, setting forth Attorney Papson's opinion regarding the restrictions of the Ethics Law on former public officials /employees, all of which documents are incorporated herein by reference. Your job description as Executive Director for the PEO describes highly responsible professional and administrative work in directing the PEO. One of your numerous responsibilities is administering grant programs for energy development, conservation, research, planning, education, demonstration projects, and other purposes consistent with Commonwealth plans and policies. Your job description states that you coordinate the energy- related activities of state agencies and work with the Governor's Office and department secretaries on Administration initiatives. The Lieutenant Governor provides overall review of the program effectiveness. According to your "operational job description," the Lieutenant Governor, as Chairman of the PEO, provides oversight and guidance regarding your position, and you meet with him regularly. You state that most of your daily and weekly interaction has been with the Lieutenant Governor's Office. However, you acknowledge that on "very infrequent occasions" you and your Office interact with the Governor or members of his immediate staff. On some occasions, you and your Office have interacted with the Governor's Policy Office as well, although in a mainly informational manner. A copy of Executive Order 87 -15 (July 22, 1987) has been obtained from the Governor's Office which Executive Order is also incorporated herein by reference. Under Executive Order 87 -15, the Lieutenant Governor is the Chairman of the PEO and he designates the Executive Director and is responsible for hiring the staff. He also forms an advisory council composed of members of the General Assembly, the Pennsylvania business community, the general public and public officials, to provide advice and assistance to the PEO on matters affecting the state's energy situation. The numerous duties and responsibilities of the PEO include being the primary manager and coordinator of federal energy grants, petroleum overcharge funds, and private energy funds; assuming the responsibilities assigned to the Governor's Energy Council under prior statutes, regulations, and Executive Orders; establishing a Building Energy Conservation Committee ( "BECC "); and providing necessary staff and assistance to the Pennsylvania Energy Development Authority ( "PEDA "). It is noted that in connection with the latter duty, the submitted memorandum of Assistant Counsel for the PEO indicates that you have the power to select the Director of PEDA. The said memo further acknowledges that the PEO is organizationally under the Governor's Office, although Attorney Papson states, ". . . it was created as a separate entity with powers and duties distinct from , those of the Governor's Office." See, Papson Memorandum, August 16, 1991, at 3. Finally, Attorney Papson indicates that there are boards placed under the jurisdiction of PEO, which she exemplifies as including the BECC, 11., and that there are other boards where you serve as a member, such as the Board of the Ben Franklin Partnership Fund. Id., at 4. III. Discussion: As Executive Director of the PEO, you are a public employee as that term is defined under the Ethics Law, and hence you are subject to the provisions of that law. In addition, you are an executive - level state employee as that term is defined under the Ethics Law, and hence you are subject to the requirements of Section 3(i) of the Ethics Law, infra. 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 and no public official /employee shall solicit or accept any thing 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. Section 3(i) of the Ethics Law provides: Section 3. Restricted Activities (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 corporation recruited or induced to expand. Under Section 3(a) of the Ethics Law quoted above, a public official may not use the authority of office or confidential information to obtain a private pecuniary benefit for himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated. As quoted above, Section 3(i) sets forth a specific prohibition that a former executive -level state employee for a period of two years after termination of state employment may not be employed or receive any compensation or act in a representative capacity for a business or corporation that the former executive -level state employee participated in recruiting or inducing. It should be further noted that the above restriction specifically applies to the situation where 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 of Pennsylvania to the business or corporation recruited or induced to expand. The intendment of the above provision of the Ethics Law is to prohibit an executive -level state employee from obtaining employment or acting as a representative for various businesses or corporations that were recruited or induced to expand. Thus, Section 3(i) of the Ethics Law would restrict employment for a two year period as to any business or corporation if the recruitment or inducement was accomplished by a grant or loan of money or promise of a grant or loan of money from the Commonwealth of Pennsylvania to the business or corporation which was recruited or induced to expand. Section 3(i) of the Ethics Law would not preclude employment or representation of clients unless the above qualifying condition of Section 3(i) is applicable. 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 the Philadelphia Electric Company. 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 to Section 3(i) of the Ethics Law, you are subject to that provision of law since you are an executive -level state employee. However, Section 3(i) would not restrict you from the position of employment with the Philadelphia Electric Company provided you did not actively participate in recruiting or inducing the Philadelphia Electric Company to open a new facility or branch in the Commonwealth or participate in inducing the Philadelphia Electric Company to expand an existing plant or facility that was accomplished by a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania to the Philadelphia Electric Company. The proffered facts establish that you were involved in grant administration as Executive Director of the PEO, but the facts do not indicate whether you actively participated in either recruiting or inducing the Philadelphia Electric Company to open a new facility or branch or expand through a grant or loan of money from the Commonwealth. Accordingly, and based upon the assumption that there has been no active participation by you in such recruitment or inducement of the Philadelphia Electric Company to open or expand a facility or branch through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania, we are of the opinion that you would not be prohibited from accepting the position of employment with the Philadelphia Electric Company. Upon termination of your public service, you would become a former public official subject to the restrictions of Section 3(g) of the Ethics Law, which provides: 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. 65 P.S. 5403(g). 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 was the Legislature's specific intent to define the term "governmental body with which a public official or public employee is or has been associated" 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 legislative 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. In applying the above definition to the instant matter, keeping the legislative purpose in mind, we must conclude that the governmental body with which you were associated upon termination of public service would be the PEO, which would specifically include all boards and commissions both within and outside of the PEO as to which you were Chair and /or a member, See, Confidential Opinion 91 -002, including but not limited to the Board of the Ben Franklin Partnership Fund where your membership as Executive Director of the PEO is statutorily designated, 71 P.S. §158(n); PEDA (based upon Attorney Papson's statement, which we assume to be true, that as Executive Director of the PEO, you have the power to select PEDA's Director), and any similar bodies over which you exercise influence, discretionary authority or control; the Lieutenant Governor's Office; and the Governor's Office. It is clear to this Commission that the governmental body with which you were associated must include the Governor's Office. The Governor created the PEO by Executive Order, and, as Assistant Counsel for the PEO acknowledged, the PEO is organizationally under the Governor's Office. We do not believe that the Governor's designation of the Lieutenant Governor to serve as the Chairman of the PEO and the Governor's delegation of administrative duties to the Lieutenant Governor in any way alter the fact that the PEO is an Office within the Governor's Office. We may not ignore the statutory definition of "governmental body with which a public official or public employee is or has been associated," which on its face, clearly includes subdivisions and offices within a governmental body as part of the governmental body. We may not ignore the clear legislative mandate set forth above, which requires us to deem a former governmental body to be not only the particular subdivision of an agency or a local government but the entire unit. In this case, the "entire unit" includes the Governor's Office. Furthermore, your job description specifically includes work with the Governor's Office and department secretaries on Administration initiatives. You have admitted that on some occasions, you and your Office interact with the Governor himself or members of his immediate staff. Thus, both organizationally and as a practical matter, we must conclude that your former governmental body includes the Governor's Office. Therefore, within the first year after termination of your public service, Section 3(g) of the Ethics Law would apply and restrict representation of persons, which would include but not be limited to your new employer, vis -a -vis the PEO; all boards and commissions both within and outside of the PEO as to which you were Chair and /or a member, including but not limited to the Board of the Ben Franklin Partnership Fund; PEDA, and any similar bodies over which you exercise influence, discretionary authority or control; the Lieutenant Governor's Office; and the Governor's Office. 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 under Section 3(g) on the type of employment in which a person may engage, following departure from his 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 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. 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 Popovich, Opinion 89 -005, we have 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; 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. This 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. Therefore, within the first year after termination of service, you should not engage in the type of activity outlined above. You may assist in the preparation of any documents presented to your former governmental body so long as you are not identified as the preparer. 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 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. 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. IV. Conclusion: As Executive Director of the Pennsylvania Energy Office ( "PEO "), you are a public employee and 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 the Philadelphia Electric Company based upon the assumption that you did not actively participate in inducing or recruiting the Philadelphia Electric Company to open or expand a facility or branch 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 PEO, you as a former public employee must comply with the restrictions of Section 3(g) noted above. Your former governmental body would be the PEO, which would specifically include all boards and commissions both within and outside of the PEO as to which you were Chair and/or a member, including but not limited to the Board of the Ben Franklin Partnership Fund; the Pennsylvania Energy Development Authority ( "PEDA "), and any similar bodies over which you exercise influence, discretionary authority or control; the Lieutenant Governor's Office; and the Governor's Office. Lastly, 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(10), the person who acts in good faith on this opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. such. 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, Dennis C. Harrington Chair