Loading...
HomeMy WebLinkAbout95-009 GruitzaI. ISSUE: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Roy W. Wilt Allan M. Kluger Rev. Joseph G. Quinn Boyd E. Wolff DATE DECIDED: October 27. 1995 DATE MAILED: November 8, 1995 95 -009 Honorable Michael C. Gruitza House of Representatives Commonwealth of Pennsylvania Room 116, East Wing House Box 202020 Harrisburg, PA 17120 -2020 Re: Conflict; Public Official /Employee; General Assembly; Representative; Non - profit Corporation; Caucus; Natural Resources and Sportsmen's Issues; Use of Commonwealth Resources, Funds, Equipment or Personnel. Dear Representative Gruitza: This Opinion is issued in response to your advisory request dated October 11, 1995. What restrictions would the Public Official and Employee Ethics Law impose upon members of the General Assembly who create a non- profit corporation to promote legislation as to natural resources and issues of concern to Pennsylvania sportsmen if: (1) work for the corporation would be performed by legislators or government employees on their own time outside of normal work hours; (2) governmental buildings, rooms and facilities available to the general public would be utilized by the corporation or legislators; or (3) if Commonwealth resources, funds, equipment or personnel would be utilized by the corporation. Gruitza, Michael C. 95 -009 November 7, 1995 Page 2 II. FACTUAL BASIS FOR DETERMINATION: As a Member of the House of Representatives, you request a written advisory opinion from the State Ethics Commission regarding your prospective membership in a newly formed "caucus." Members of the General Assembly have formed a non - profit corporation under the Internal Revenue Code Section 501 (c)(3)(Charitable Organization). The organization has been formed to promote legislation to preserve the Commonwealth's natural resources, discuss and promote issues of common concern to Pennsylvania sportsmen, promote the enjoyment of the natural resources of the Commonwealth and raise the awareness of Commonwealth residents in these areas and other related endeavors and activities. You seek an application of the Ethics Laws to the following questions as to such an organization registered under the Internal Revenue Code Section 501 (c)(3) (Charitable Organization), Section 501 (c)(4) (Social Welfare Organization) or 501 (c)(7) (Social Club): 1. If individual legislators created a non - profit corporation, as described above and for the aforementioned purposes, would there be any violation of Pennsylvania Ethics Laws, rules or regulations? a. If the corporation was formed as a 501 (c)(3) charitable corporation? b.. If the corporation was formed as a 501 (c)(4) social welfare organization? C. If the corporation was formed as a 501 (c)(7) social club? 2. Assuming that there are no ethical violations resulting from the legislators forming a non - profit organization as set forth above, would there be any ethical violations if individuals who are not legislators or legislators who are non - voting members of the organization were to volunteer their time for advancing the organization's goals? You note that for a governmental employee, the time donated would be outside of the individual's normal work time. 3. Assuming that no ethical violations would result from the formation of such a corporation, as set forth above, would any ethical violations occur if governmental buildings, conference rooms, areas or other facilities were utilized by the corporation and /or legislators in promoting the goals of the organization if the buildings, etc. were generally open to the public? Gruitza, Michael C. 95 -009 November 7, 1995 Page 3 4. May the organization utilize any resources, funds, equipment or personnel of the Commonwealth of Pennsylvania? If so, you request an enumeration of any restrictions or consequences that may apply. On October 27, 1995, Tom Hiller (Hiller), the Executive Director of the House Game and Fish Committee, appeared on your behalf to provide further information and to pose additional questions in oral format. The present non - profit corporation known as the Pennsylvania Legislative Sportsmen's Club, of which you are not a member, was established with the aid of lobbying organizations who approached certain members of the General Assembly and who established bank accounts for the Caucus. Preliminary meetings of the Caucus involved only a few members. Subsequently, membership was opened to members of the House and Senate of the General Assembly. Although the lobbing organizations originally recommended incorporation as a non- profit, they subsequently determined to unincorporate because there was no demonstrated need for a corporate board of directors or related corporate requirements. Further, since the Internal Revenue Code, Section 501(c)(3), contains prohibitions as to activities to influence legislation, the lobbing organization suggested a switch to 501 (c)(4), like the AFofL /CIO, rather than a corporate status. The members subsequently voted to dissolve the corporation. Although the paper work has not been filed, questions exist as to the past as well as future activities of the Caucus. Since the corporate status is going to be dissolved, Hiller inquired whether additional questions may be posed verbally or in written format. Specifically, Hiller questioned how a normal legislative caucus," such as a children's caucus or timber caucus, can utilize their funds such as holding dinner events or similar events. Hiller noted that a normal caucus may utilize House Staff for caucus purposes. The Caucus would like guidance on the issue of how the disbursement of dues may be utilized without the existence of a corporate entity. This would be an informal organization which would request people to contribute dues to that organization for dinners, entertainment and similar activities. III. DISCUSSION: As a Member of the House of Representatives of the Commonwealth of Pennsylvania, you are a public official as that term is defined under the Ethics Law, and hence you are subject to the provisions of that law. Section 3(a) of the Ethics Law provides: Section 3. Restricted Activities Gruitza, Michael C. 95 -009 November 7, 1995 Page 4 65 P.S. §402. (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. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. "Financial interest." in a legal entity engaged which comprises more than business or more than 5% economic interest in indeb Any financial interest in business for profit 5% of the equity of the of the assets of the tedness. Gruitza, Michael C. 95 -009 November 7, 1995 Page 5 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 judgment of the public official /employee would be influenced thereby. Reference is made 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 addressing the questions that you have posed under the Ethics Law, we are cognizant of the Preamble to the Ethics Law which provides: (a) The Legislature hereby declares that public office is a public trust and that any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust. In order to strengthen the faith and confidence of the people of the State in their government, the Legislature further declares that the people have a right to be assured that the financial interests of holders of or nominees or candidates for public office do not conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this act shall be liberally construed to promote complete financial disclosure as specified in this act. Furthermore, it is recognized that clear guidelines are needed in order to guide public officials and employees in their actions. Thus, the General Assembly by this act intends to define as clearly as possible those areas which represent conflict with the public trust. 65 P.S. §401. (b) It is recognized that many public officials, including most local officials and members of the General Assembly, are citizen - officials who bring to their public office the knowledge and concerns of ordinary citizens and taxpayers. They should not be discouraged from maintaining their contacts with their community through their occupations and professions. Thus, in order to foster maximum compliance with its terms, this act shall be administered in a manner that emphasizes guidance to public officials and public employees regarding the ethical standards established by this act. Gruitza, Michael C. 95 -009 November 7, 1995 Page 6 Your specific inquiries shall now be addressed. It is noted that to the extent you have raised general inquiries, our response must also necessarily be general. The analysis of your first specific inquiry would not vary with the corporation's formation as a 501 (c)(3) (Charitable Organization), a 501 (c)(4) (Social Welfare Organization) or a 501 (c)(7)(Social Club). In any such case, individual legislators would not be in transgression of the Ethics Laws or this Commission's rules or regulations through their mere creation of a non - profit corporation for the purposes which you have specified. Driags, Opinion 94 -007. We must note, however, that there are restrictions in the Internal Revenue Code which prohibit these types of entities from engaging in attempts to influence legislation. As to your second specific inquiry, the Ethics Law would not prohibit those subject to its jurisdiction from donating their own time outside of normal work time for the advancement of such an organization's goals. Hafer, Opinion 90 -013. Turning to your third specific inquiry, no transgression of the Ethics Law would occur from the corporation's and /or legislators' use of those portions of governmental buildings and facilities which portions of governmental buildings and facilities are specifically available for use by the general public. To the extent that such particular portions of governmental buildings, conference rooms, areas and facilities are available to be used by the general public, the corporation could also use such facilities under the same terms and conditions which are applicable to the general public. Friend, Order No. 981. Finally, as for your fourth specific inquiry, we reiterate that this Commission may only address questions within the narrow confines of the Ethics Law. There may be other laws which would impact upon the proposed use of Commonwealth resources, funds, equipment or personnel for or by this organization. As for the Ethics Law, within the parameters of the Ethics Law itself there would be the potential for a violation of Section 3(a). Such a violation would be found where the definitional elements for a violation of Section 3(a) would be established. You may request further advisories from this Commission on this issue as particular circumstances arise. We generally note as to your fourth specific inquiry that the use of Commonwealth resources, funds, equipment or personnel for personal or private business purposes has been held to be in violation of Section 3(a) of the Ethics Law. Freind, Order No. 800. As for the General Assembly's constitutional power as a body to make appropriations, we note that our decision in this matter has been made solely under the Ethics Law, as to which our jurisdiction is limited. We have long recognized that powers which are constitutionally afforded to the General Assembly are exempt from the purview of the Ethics Law and this Commission. Corrigan, Opinion No. 87 -001. Such powers include the Gruitza, Michael C. 95 -009 November 7, 1995 Page 7 power to make appropriations. We clearly do not have the power to interpret or apply such provisions of the Constitution of the Commonwealth of Pennsylvania. However, we note the following Constitutional provisions which some other forum could consider and apply to the questions you have posed: § 13. Vote denied members with personal interest A member who has a personal or private interest in any measure or bill proposed or pending before the General Assembly shall disclose the fact to the House of which he is a member, and shall not vote thereon. § 29. Appropriations for public assistance No appropriation shall be made for charitable, educational or benevolent purposes to any person or community nor to any denominational and sectarian institution, corporation or association: Provided, That appropriations may be made for pensions or gratuities for military service and to blind persons twenty -one years of age and upwards and for assistance to mothers having dependent children and to aged persons without adequate means of support and in the form of scholarship grants or loans for higher educational purposes to residents of the Commonwealth enrolled in institutions of higher learning except that no scholarship, grants or loans for higher educational purposes shall be given to persons enrolled in a theological seminary or school of theology. § 30. Charitable and educational appropriations No appropriation shall be made to any charitable or educational institution not under the absolute control of the Commonwealth, other than normal schools established by law for the professional training of teachers for the public schools of the State, except by a vote of two- thirds of all the members elected to each House. Constitution of the Commonwealth of Pennsylvania, Article 3, Sections 13, 29, 30. We do not address the other issues which Hiller has orally presented in that such an inquiry is not complete and may not be addressed until it has been submitted to this Commission in writing. 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. Specifically not addressed is the Legislative Code of Conduct. Gruitza, Michael C. 95 -009 November 7, 1995 Page 8 IV. CONCLUSION: A Member of the House of Representatives is a public official subject to the provisions of the Ethics Law. The Ethics Law would not restrict individual legislators from creating a non - profit corporation, styled as a "caucus," with the purpose of promoting the enjoyment of natural resources and issues of concern to sportsmen. The Ethics Law would not prohibit those subject to its jurisdiction from volunteering their own time outside of normal work time for the advancement of such an organization. The Ethics Law would not prohibit the use by the corporation and /or legislators of those particular portions of governmental buildings, conference rooms, areas and /or facilities which particular portions of governmental buildings, rooms, areas and facilities are specifically available for use by the general public, subject to the same terms and conditions which are applicable to the general public. The prospective utilization by the corporation of Commonwealth resources, funds, equipment or personnel poses the potential for a violation of section 3(a) of the Ethics Law. Such a violation would be found where the definitional elements for a violation of Section 3(a) would be established. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. 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. This letter is a public record and will be made available as such. Finally, any person may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty 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, YaAi. 00 6 a Daneen E. Reese Chair