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Home My WebLink About93-006 RichardsonDear Mr. Richardson: I. ISSUE: STALE EMIG* COMM1551ON SOS FiNANCti BUILDING HAIt`st1Seu1R PtNNSYL.VANIA 17120 OPINION OF THE COMMISSION Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Dennis C. Harrington Roy W. Wilt Aiistin M. Lee Allan M. Kluger- Joseph W. Marshall, III DATE DECIDED: June 28, 1993 DATE MAILED: July 7,_1993._ 93 ..006 Wayne M. Richardson Office of the Chancellor State System of Higher Education 301 Market Street P.O. Box 809 Harrisburg, PA 17108 Re: Conflict, Public Official /Employee, HonorariUtt, State System of Higher Education, University President, University Vice - President, Chancellor, Vice - Chancellor, Dean, Declination, Institutional Endowment Funds, System -wide Foundations. This Opinion is issued in response to your letter of request dated May 27, 1993. Whether the Public Official and Employee Ethics Law imposes any restrictions or prohibition upon chancellors, vice - chancellors, university presidents, university vice - presidents, or deans of the State System of Higher Education from donating declined honoraria to institution endowment funds or the system -wide foundation. II. FACTUAL BASIS FOR DETERMINATION: On behalf of the university presidents and 'chancellors of the State System of Higher Education, you seek advice about the Wayne M. Richardson July 7, 1993 Page 2 legality of their declination of honoraria payments which would be donated to institutional endowment funds. Although these chief executive officers decline honoraria, they see such offers as opportunities to benefit the State System of Higher Education which currently needs funding since public support for the system is low and the need for funding is great. Each university has an endowment fund which is administered directly or through a fiduciary arrangement with affiliated foundations. In addition, there is a system -wide foundation which raises funds for system- wide educational initiatives: The university presidents propose that they be allowed to request that the declined honoraria payments be donated to their respective endowments funds. Likewise, the chancellors request that the declined honoraria payments be donated to the system -wide foundation. Finally, there are other persons, such as vice-presidents, deans and vice - chancellors, who are also public employees and who are seeking to take similar action. III. DISCUSSION: As chief executive officers of the State System of Higher Education, these individuals are public employees as that term is defined under the Ethics Law, and hence are subject to the provisions of that law. 65 P.S. §402; 51 Pa. Code §11.1; Richardson, Opinion 89 -017. Section 3(a) of the Ethics Law provides: Section ''3.' <Restricted Activities. (a) No public official or public empldyee shall engage in Conduct that constitutes a conflict of interest. Section 3(d) Of the Ethics Law provides: Section 3. Restricted activities (d)(1) No public official or public employee shall accept an honorarium. (2) This subsection shall not be applied retroactively. 65 P.S. §403(d). The following terms are defined in the Ethics Law as follows: Section 2 _ .initions.. Wayne M. Richardson July 7, 1993 Page 3 "Conflict or conflict of interest." e by a public official or public employee of the authority of hig gf f ioe or employment or any conf identid1 Of9014tiAll rgceived through his holding public offige or employment for the Private pecuniary benefit a f Mmgelf, a member of his immediate family or a ?ustness with which he or a member of his, i }e4tate family is associated. "Co ,fiiptn gr negufiipt of interest" d0@$ not i.ne144 ill ptl9p 44v4-ng a tie minimis eggnomic im act AP w4ip a f fasts to the same degree a class cons .$tir8' gf the general publig or a subelaas 99asia4ng pf an industry, occupation pr 9the€ grqup iic] includes the publip gffigidi s € p is employee, a member 9f l .s ifflfile4Ottio fgR4Y pr a business with which he or g Agm p f,is immediate family is associated. "Authority of office eF 91 19Ynt !' actual ppwer provided by 1aq, # #e exercisg of which is necessary to the performance 9f duties arld reppons .bi ities unique to a particular public office or position- of pppi4s employment. "Honorarium." Payment made 4 recognition of published works, appearg *Ises speeches and presentations and which isk intended as consideration for the vale of such services which are nonpublic occupatioi j. or professional in nature. The term does nct include tokens presented or provided which are of de minimis economic impact. Iri addition, Sections 3(b) and 3(c) of the Ethics :l 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 mace to these provisions of 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. In Pancoe, Opinion 89 -011, we determined that .a public official /public employee was not prohibited from outside business activities provided there was not a use of the authority of office for the advancement of the public official's /public employeelsown personal financial gain. As to honoraria - , the issue is whether a WaY#e M. Alehtixdsion 441Y 7, M3 1190 4 ppylkiN mmgepent or literary work is done as a professional 4 alltkVI.tY PF 41 the capacity of a public offiCial/employee. ftRgYi $99tien 3(d) of the Ethics Yaw, which clearly mould be the oftiy de"Ction implieated 44 this case, we would normally differentiate as to whether the activity ii n outside protessional activity which 4701,14 not be re@trigted by ifection 3(d) of the Ethice T.aw or whethOV the fee PO the activity is an honorarium whidp wopl4 be prohlblted by SeCtiQ4 5(d) of the Ethics Law. See, Baker ppinipp In t4i4 e#gef t!he fgctRal 111:4410g1.9 stipulate0 that the Payments W94 Ike A9119;AKIA: geneef the narrow question we must rec.4Ye i4 WhetheE thege pgyments as honoraria, through Elec.17.0ai9R; may nfilvffth@l@PII be made tg the institutional enOewmePt t14 eE the gYgtee foundation. Thus, we must 0,q40, W4etheE 4 pOlt9 PftleialiePpleYee may engage in a certain actiYtty 4 4 henerarium whiph would not go to that to eduoational funds or the system-wide founOatien. IR 9v0er to resolve the above fvest404, WO have reviewed the 4 41%011141ft 4.424.414tive clethate e.n the honorarium iesue which occurred he passe @f Act 9 Of 19”. Although OA amendment had ?ropssaii to deal with WS PitUAttg/I (House Legislative 4.9 FebPWqr 14 , 19 at a#64 itt a.N.,)* the proposal was W4th4 44ter iRter;:eigatien OY ether Ropregentatives concerning ta1 1 -loopholes" or the Oiminishment of the effectiveness of the STAalri4ion. e arde 41%O aware of Oatww,4ht, Advice No. 92-505, an tRtiP*0 A4m4% ggunnel4 wi pared that • lichool filstrict P4 VAA IttEthtilbited trma donatiag IWAWAVia to the school clisVgdt 49WMAI% Her, it aPPeara Oat the fotssoing Advice vas diWkdet* 9* ttleg WIAVAI Wee 4se that the reepsotor would attsuga the honorarlk 00 thigk 0o4kote it to the school district account, We beI4ove that- 4%qt.ict4 34) ef the athis Law would prohibit the pr aelkimt0 tA this oase. SeCtiOr. 5(d)(1) Prohibit, e tfr liel cf an hiCtPrAtziwn by a p4blic offtclalamp4Vioa. Th(ik "AoQopt" t4; nOlt Xilatted t0 the actual receipt of t‘tua honamt*Itua 0Att0iolfeavlayee. The term hAt A broAdek meaniA% 4 . gAWM24040% tttot Activity which results le the tet-eipt cf thit MbiUt:ot hukoitairiva„ Theo, the totality 6f the teativity occuV5 4A 04 the offer to the performande and final panr encompass the acceptance "Ale , Atceptance ot tayik hottwoorkva coAtriAod of that totality of activity And is grgh4bIted, The fact that the pu1)14a officiaIlemWrWio MAW decline the Wayne M. Richardson July 7, 1993 Page 5 honorarium rather than accept and then transfer it to the endowment funds or the system -wide foundation does not warrant any different result because we do not find a legal distinction between the two transpirations. Further, even if the public official /employee declines the honorarium, he nevertheless would exercise some discretion as to the destination of the funds which is an element of control. Another concern of even greater significance involves the disposition of the honoraria. In the instant matter, the honoraria would be targeted for a worthwhile educational purpose. If we were to allow the acceptance of honoraria in this case, we would then be required in other cases to determine which institutions would be charitable. The possibility would also exist that efforts would be made for extending the allowance of honoraria for non - charitable or political purposes. Concerns such as the above were raised during the legislative debate on the honoraria issue regarding a proposed amendment which would have allowed an exception if the honoraria were given to charity. As noted above, after various members of the General Assembly raised concerns, the amendment was withdrawn. We are mindful of the fact that these public employees are seeking to decline the honoraria so that the payments would be paid to worthy causes consisting of institutional endowment funds or the system wide foundation. However, the General Assembly enacted the law which we must administer within the statutory limitations. We may not create an exception which does not exist by statute. Lastly, there is not any room for interpretation in this instance since we are confronted with the above legislative debate. Such action reflects a legislative intent not to allow the contemplated activity. 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 Law has not been considered in that they do not involve an interpretation of the Ethics Law. IV. CONCLUSION: University presidents, university vice - presidents, chancellors, vice- chancellors, and deans of the State System of Higher Education are public employees subject to the provisions of the Ethics Law. Section 3(d)(1) of the Ethics Law prohibits the declination of honoraria payments in favor of donations to institutional endowment funds or the system -wide foundation. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Wayne M. Richardson July 7, 1993 Page 6 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, James M. How Chair