HomeMy WebLinkAbout93-005 ConfidentialRe: Conflict, Public Employee, Executive -Level State Employee,
Former Public Employee, Governmental Body with which
Associated, Consultant, Represent, Person.
This Opinion is issued in response to your confidential
advisory request of May 6, 1993.
I. ISSUE:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
OPINION OF THE COMMISSION
Before: James M. Howley, Chair
Daneen E. Reese, Vice Chair
Dennis C. Harrington
Roy W. Wilt
Austin M. Lee
Allan M. Kluger
Joseph W. Marshall, III
DATE DECIDED: June 28, 1993
DATE MAILED: July 7, 1993
Whether the Public Official and Employee Ethics Law imposes
any prohibition or restrictions upon a former management -level
employee of a state department from entering into a contract as a
consultant to provide professional, technical or advisory services
to the governmental department with which he was associated within
one year of termination of service.
II. FACTUAL BASIS FOR DETERMINATION:
93 -005
You are the A, a management -level employee, with Department B.
In the near future, you will be resigning from your position and
will be developing your own business. You are considering the
formation of a professional relationship with Department B whereby
you would be hired as an independent contractor /consultant.
You have provided information as to your current duties as a
Confidential Opinion No. 93 -005
July 7, 1993
Page 2
public employee and your proposed future duties as an independent
contractor which information is incorporated herein by reference.
Currently, you coordinate the production and dissemination of
public and employee relations materials including news releases,
employee newsletters, program brochures, correspondence and video
presentations. You also produce all Department related video
materials for internal and external use.
In your new business, you will continue producing video and
broadcast materials for Program C which you are currently doing as
an employee and such other programs and events as the D deems
necessary. Further, you will be scripting and filming such
materials. In addition to the video producing services for
Department B, you will also be performing such services for other
private clients as well as state agencies, state associations and
non - profit corporations.
You believe that the proposed arrangement will increase the
Department's efficiency and productivity. You will do the job more
quickly and efficiently because you will use your own equipment and
be able to do the job for less than the Department of General
Services would charge. You request an opinion from this Commission
as to the applicability of the Ethics Law to this proposed
arrangement.
III. DISCUSSION:
As the A with Department B, you are a public employee and an
executive -level state employee as those terms are defined under the
Public Official and Employee Ethics Law of June 26, 1989, Act 9 of
1989. Accordingly, you are subject to the provisions of the Ethics
Law and the restrictions therein are applicable to you.
Section 3(a) of Act 9 of 1989 specifically prohibits a public
official /employee from engaging in conduct that constitutes a
conflict of interest which is defined to be a use of authority of
office or confidential information by a public official /employee 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.
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
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.
Section 3(i) of the Ethics Law provides:
Confidential Opinion No. 93 -005
July 7, 1993
Page 3
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.
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 restrict you from employment or
receiving compensation from a client only if you actively
participated in recruiting or inducing the employer /client to open
a new facility or branch in the Commonwealth or participated in
inducing the employer /client 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 employer /client.
The facts do not indicate whether you actively participated in
recruiting or inducing a prospective client to open a new facility
or branch or expand through a grant or loan of money or a promise
of a grant or loan of money from the Commonwealth. Conditioned
upon the assumption that there has been no active participation by
you in such recruitment or inducement of a prospective client 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, you would not be prohibited from such
activity under Section 3(i).
The foregoing commentary regarding Sections 3(a), (b), (c),
and (i) of Act 9 of 1989 is offered not to suggest that there has
been or will be any improper use of public office or• confidential
information or any improper understanding but merely to provide a
complete response to the issue presented.
Confidential Opinion No. 93 -005
July 7, 1993
Page 4
Section 3(g) of the Ethics Law 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. §403(g).
As quoted above, Section 3(g) sets forth a specific
prohibition that a state employee for a period of one (1) year
after termination of state employment may not represent a person
with promised or actual compensation on any matter before the
governmental body by which he was employed. The intention of the
above provision of the Ethics Law is to prohibit a state employee
from acting as a representative for various businesses or
corporations that have matters before the governmental agency.
Thus, Section 3(g) of the Ethics Law would restrict, for a one year
period, representation of a person with promised or actual
compensation, on any matter before that governmental body.
Following your resignation, you would become a former public
employee subject the restrictions of Section 3(g) of the Ethics Law
quoted above.
The Ethics Law defines the following terms:
The following words and phrases when used
in this act shall have, unless the context
clearly indicates otherwise, the meanings
given to them in this section:
"Person." A business, governmental body,
individual, corporation, union, association,
firm, partnership, committee, club or other
organization or group of persons.
"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.
65 P.S. $402.
Confidential Opinion No. 93 -005
July 7, 1993
Page 5
This Commission, in popgvich, Opinion 89 -005, has generally
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
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 of employer before the former governmental body in
relation to legislation, regulations, etc.
We have also held that listing one's name as the person who
will provide technical assistance on proposals, documents, or other
materials, 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 may not engage in the type of activity outlined above.
One may assist in the preparation of materials or any
documents presented to the former governmental body, however, so
long as he is not identified as the preparer. One 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. Of
course, any ban under the Ethics Law would not prohibit or preclude
the making of general informational inquiries of the former
governmental body 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 business.
This provision of law seeks to prohibit a former public
official /employee from gaining an undue advantage from prior public
service as a result of his prior relationship with individuals and
his functioning within his former governmental body.
When an individual is a public employee, he is subject to
various controls and oversight that are imposed upon him.
However, when an individual leaves public employment and becomes a
former public employee, he is no longer subject to those controls
Confidential Opinion No. 93 -005
July 7, 1993
Page 6
in the context of new employment; his interest lies with his new
employer or in the case of a consultant, with himself. We find
the above to be significant and within the proscribed ambit of
Section 3(g) which is designed to prevent a financial advantage to
former public official /employee's who could take advantage of their
prior association with the governmental body. In short, Section
3(g) prohibits public officials /employees from leaving governmental
service and then coming back to capitalize upon their connections.
In applying the provisions of Section 3(g) of Act 9 of 1989
quoted above together with the relevant definitions to the matter
before us, a clear reading of that provision of law prohibits your
contemplated activity of providing consulting services to
Department B. In the instant matter, you would be acting on behalf
of yourself as to the contract for consulting services between you
as a former public employee and your governmental body, Department
B. In this regard, Section 3(g) does restrict representation of "a
person" and "person" is defined to include an "individual" which
obviously may include the former public employee himself. The
activity in question clearly fits within the restriction of Section
3 (g).
It is argued that the arrangement in this case will save
Department B money. However, the fact that the Department is saved
money is not a consideration in the Ethics Law and hence beyond the
parameters of our decision making. We are limited to looking at
the Ethics Law and what the law is designed to prevent.
It might . be argued that a literal wording of Section 3(g) and
the statutory definition of "represent" -- "To act on behalf of any
other person. ." specifically excludes activity by a person on
behalf of himself individually. Under the definitional section of
the Ethics Law, it is provided that words and phrases shall have
their stated meaning . . unless the context clearly indicates
otherwise. . ." The context of Section 3(g) does indicate
otherwise since it restricts representation as to ". . . a person.
. . ." which is indicative of a legislative intent to have the term
"represent" include such activity on behalf of the former public
official /employee himself. Further, all of the advantages that a
former public official /employee of a governmental body has exists
whether he represents others or himself.
We conclude that a public official /employee may not leave
governmental service and provide consulting services as an
individual to that body within one year of termination of
governmental service because under such circumstances he would be
acting on behalf of a person (himself).
Our decision in this matter is consonant with our holding in
Kreger, Order No. 595, wherein we found that a former municipal
Confidential Opinion No. 93 -005
July 7, 1993
Page 7
authority member who within one year of termination of service came
before his former governmental body to provide consulting services
through his consulting business, registered as a fictitious name,
violated the Ethics Law:
Section 3(e) provides that no former official
or employee shall represent a person before
his governmental body within one year after he
leaves public employment. This Commission has
construed the term representation of a
"person" to include the former public official
or employee. Thus, personal appearances by a
former official before the former governmental
body are deemed to come within the purview of
the restrictions of Section 3(e) of the Act.
You, through your business, Oak Knoll, in
appearing before your former governmental body
as a management consultant from the date of
your resignation violated Section 3(e) of the
Ethics Act. See Wolpert, No. 169, wherein
this Commission found that a school director
violated Section 3(e) of the Ethics Act when
he contracted with his school district within
one year after he terminated his service.
Kreger, Order No. 595, p. 23.
We must conclude that Section 3(g) would prohibit you, as a
former public employee, from entering into a contract for
consulting services between yourself and your former governmental
body within one year of termination of service. The contemplated
activity is expressly prohibited by Section 3(g) of Act 9 of 1989.
In reaching our decision, we do not impute any improper intent or
motivation. Sections such as 3(g) as well as 3(a) and 3(f) and
others are designed to restrict activity which has the potential
for financial conflict. No mens rea or intent is required. See,
Yacobet v. State Ethics Commission, 109 Pa. Commw. Ct. 432, 531
A.2d 536 (1987).
The opinion expressed herein is distinguishable from
Confidential Opinion 92 -005. In that case, a former public
employee, who represented a city in matters of negotiations,
contract administration and grievances with labor unions,
terminated his employment and became an impartial labor contract
arbitrator. He then participated in labor arbitration matters
between the city and labor organizations. We held in that case
that because of the unique factual context of providing services as
an impartial arbitrator between his former governmental body and
labor unions, such activity would not be prohibited. Confidential
Opinion 92 -005, being unique on its facts, is not controlling here.
Confidential Opinion No. 93 -005
July 7, 1993
Page 8
The fact pattern in the present case is clearly one of an
individual appearing before his former governmental body in a
representative capacity specifically prohibited by the Ethics Law.
Under these circumstances, Confidential Opinion 89 -019, which was
explicitly not overruled in Confidential Opinion 92 -005, is
controlling. The facts in the instant matter are similar to those
in Confidential Opinion 89 -019 wherein we held that if a public
employee terminated municipal service and then contracted to
provide consulting services to the municipality through a business
with which he was associated, such activity would be prohibited
under Section 3(g) of Act 9 of 1989. See also, Kreger, supra.
Hence, the termination of public employment and the entry into a
contract with the governmental body for private services within one
year after termination of public services is prohibited under
Section 3(g) of the Ethics Law.
Lastly, and most importantly, we note that the application of
Section 3(g) is not unduly harsh in that the Ethics Law does not
prohibit the rehiring of the former public employee to perform
those services provided that a true public employment relationship
exists. It does provide a mechanism in many situations to handle
such matters without transgressing either the literal requirements
or spirit of Section 3(g). For the - foregoing reasons, we conclude
that Section 3(g) of Act 9 of 1989 prohibits the proposed
consulting services contract between you and Department B.
The propriety of the proposed conduct has only been addressed
under the Ethics Law, = -.the applicability of any other statute _code,
.ordinance, regu1at .oti ; or other code of conduct other t1a
Ethics Law has not ;been considered in that they do not - Invo13/e
interpretation of the Ethics Law.
IV. CONCLUSION:
A the A with Department B is a "public employee" and
executive -level state employee subject to the provisions of the
Ethics Law. Under Section 3(i) of the Ethics Law, an executive
level state employee would not be prohibited from accepting a
position of employment based upon the assumption that he did not
actively participate in inducing or recruiting said 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 Department B, the
individual will become a "former public employee" subject to
Section 3(g) of the Ethics Law. Section 3(g) of Act 9 of 1989
prohibits the individual from entering into a consulting contract
with Department B within one year of termination of service. The
propriety of the proposed conduct has only been addressed under the
Ethics Law.
Confidential Opinion No. 93 -005
July 7, 1993
Page 9
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,
004.%kets1
James M. Howl
Chair