HomeMy WebLinkAbout96-001 ConfidentialI. ISS UE
OPINION
Before:
`
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
OF THE COMMISSION
Daneen E. Reese, Chair
Austin M. Lee, Vice Chair
Roy W. Wilt
John R. Showers
Rev. Joseph G. Quinn
Boyd E. Wolff
DATE DECIDED: 2/15/96
DATE MAILED: 3/1/96
96 -001
Re: Conflict, A Department, B Fund, Gifts, Donations, Regulated
Entities, Trade Associations, Equipment, Automated Technology.
This Opinion is issued in response to your confidential
advisory request of January 3, 1996.
Whether under the Public Official /Employee Ethics Law, an
agency may receive monetary donations from private entities it
regulates to update its computers and related equipment.
II. FACTUAL BASIS FOR DETERMINATION
You are writing on behalf of A Department (Department)
regarding the establishment of B Fund (Fund).
Since the Department's current technology is seriously
outdated, it is inadequate to serve the needs of the companies
regulated by the Department and the consumers in Pennsylvania. For
the fiscal year 1996 -1997, the Department would need approximately
C for fixed assets to improve access to automated technology. This
includes -D for EDP and related equipment and E for an interactive
telephone system. This amount would be sufficient to provide all
Department employees with desktop computers and access to a
sufficient number of printers, fax modems and appropriate software.
Opinion, 96 -001
February 21, 1996
Page 2
The A industry recognizes the benefits to both consumers and
regulated entities if the Department can efficiently perform its
functions through enhanced technology that is being offered. The
Department has received offers from these entities and individuals
who would like to contribute to the Fund for that purpose.
Currently, certain Department employees lack computers to
produce responsive letters to inquiries. Further, current requests
for public information result in the manual retrieval of a paper
file and the production of a photocopy rather than public on -line
access to such information. Stationery must be manually fed
because there are a limited number of printers. FAX transmissions
must be sent from a central location because there are no FAX
modems. Finally, there is no e -mail capability.
In your letter you quote from the Administrative Code, 71 F.S.
§193, which you state permits the acceptance of gifts by a state
agency:
"Every administrative department, every independent
administrative board and commission, and, with the
approval of the department with which it's [sic]
connected, every departmental administrative board or
commission, may accept gifts or donations or money,
securities, or other personal property, which, or the
income of which, shall be used in conducting the work of
such department, board or commission . . ."
As per the Administrative Code, the Department would like to
create the Fund which would be used only for the purpose of
automation improvement and would be subject to standard accounting
procedures and oversight by F. To avoid the perception that the
Department would be influenced by the entities or individuals who
contribute to the Fund, it has been suggested that the Fund could
be collected and administered by another state agency so the
Department would not know the identity of the contributors or the
amounts of the contributions.
After generally referencing unnamed prior Commission decisions
which discuss the establishment of blind trusts under certain
circumstances to avoid conflicts, you seek a confidential advisory
as to the Fund proposal.
In a supplementary submission of February 7, 1996, a proposal
for the establishment of the Fund has now been prepared and
submitted. The proposal provides further details as to the Fund
and its purpose of improving the current level of technology and
automation. The industry has offered to assist the Department
through donations which the Department believes may be accepted
under the Administrative Code to avoid any perception of
inappropriate influence from the entities the Department regulates.
Opinion, 96 -001
February 21, 1996
Page 3
To that end, the Department would only accept donations from the
trade associations but not the regulated entities. Second, an
agency other than the Department would administer the Fund. Third,
the donations would be placed in a separate account limited to the
above restricted purpose and subject to proper accounting and
oversight.
You appeared with your Chief Counsel at the executive session
on February 15, 1996 and supplied the following additional
information. In the last year, the Department has made strides in
updating technology through a 35% to 50% increase in the number of
computers for its employees. However, there still are no telephone
answering machines so that west coast companies must call by noon
to obtain necessary business information. Such information cannot
be processed in a timely and efficient manner for the Department's
constituents: consumers, G. Such technology is necessary because
the A field is highly automated in the private sector and the
Department is in need of at least as good technology in order to
operate in a proper fashion.
Although the above supplementary submission stated that
donations would be limited from trade associations rather than the
regulated companies in an effort to separate the industry from
those who are regulated, a question has arisen as to whether the
trade associations would have the corporate authority to accept
such donations from members for a pass through to the Department.
Hence, consideration is now made for a blind trust which could
accept donations from the regulated companies, trade associations,
(non- regulated) companies and private individuals.
The Department places reliance upon the Administrative Code
which provides a statutory authorization for the receipt of such
types of donations without creating an appearance of impropriety.
Lastly, there is H which notes the proposal and a recent journal
article which references and supports this concept.
III. DISCUSSION
Certain subject individuals in the Department would be public
officials /employees as those terms are defined under Act 9 of 1989
and the current regulations of the Commission so as to be subject
to the provisions of the Ethics Law.
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.
Opinion, 96 -001
February 21, 1996
Page 4
The following terms are defined in the Ethics Law as follows:
65 P.S. §402.
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.
"Gift." Anything which is received
without consideration of equal or greater
value. "Gift" shall not include a political
contribution otherwise reported as required by
law or a commercially reasonable loan made in
the ordinary course of business.
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. 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.
Section 3(j) of the Ethics Law provides as follows:
Opinion, 96 -001
February 21, 1996
Page 5
Section 3. Restricted activities
(j) Where voting conflicts are not
otherwise addressed by the Constitution of
Pennsylvania or by any law, rule, regulation,
order or ordinance, the following procedure
shall be employed. Any public official or
public employee who in the discharge of his
official duties would be required to vote on a
matter that would result in a conflict of
interest shall abstain from voting and, prior
to the vote being taken, publicly announce and
disclose the nature of his interest, as a
public record in a written memorandum filed
with the person responsible for recording the
minutes of the meeting at which the vote is
taken, provided that whenever a governing body
would be unable to take any action on a matter
before it because the number of members of the
body required to abstain from voting under the
provisions of this section makes the majority
or other legally required vote of approval
unattainable, then such members shall be
permitted to vote if disclosures are made as
otherwise provided herein. In the case of a
three - member governing body of a political
subdivision, where one member has abstained
from voting as a result of a conflict of
interest, and the remaining two members of the
governing body have cast opposing votes, the
member who has abstained shall be permitted to
vote to break the tie vote if disclosure is
made as otherwise provided herein.
If a conflict exists, Section 3(j) requires the public
official /employee to abstain and to publicly disclose the
abstention and reasons for same, both orally and by filing a
written memorandum to that effect with the person recording the
minutes or supervisor.
In applying the provisions of the Ethics Law to the instant
matter, it is clear that the receipt of any monetary contributions
directly from the entities which the Department regulates or
through one of their associations would be gifts. The receipt of
such gifts by the Department is not prohibited by the Ethics Law in
that our jurisdiction is limited primarily to public officials,
public employees and candidates, but not governmental bodies.
Therefore, in order to supply a comprehensive response, our
inquiry will be limited to the conduct of those public officials
and public employees within the Department who interact with the
Opinion, 96 -001
February 21, 1996
Page 6
regulated entities that are making the gifts. We shall address
such conduct in two respects: the use of the equipment by the
public officials /public employees and, second, the possibility of
personal gifts to such individuals from the regulated entities.
As to the usage of such equipment by public officials /public
employees, Section 3(a) of the Ethics Law restricts public
officials /employees usage of governmental facilities, supplies or
equipment to governmental use, but not for personal use or outside
business activities. Pancoe, Opinion 89 -011. In particular, the
governmental computers, FAX modems as well as telephones, postage,
staff, other equipment, research materials, or any other property
could not be used as a means, in whole or part, to carry out
private business activities. In addition, the public
official /employee could not during government working hours,
solicit or promote such business activities. Pancoe, supra. Once
again, we are not suggesting that such activity will occur but are
merely attempting to supply a broad based response.
As to the matter of gifts, we note that there is no per se
prohibition under the Ethics Law as to the receipt of gifts by a
public official /employee. See,, Wolfgang, Opinion 89 -028; Cooper,
Opinion 92 -009. In Wolfgang, supra, we held that a contribution to
a candidate for office in and of itself without any additional
facts would not create a conflict if the individual was elected to
that office. In Cooper, Opinion 92 -009, we determined that a
public official /employee with major medical problems could be the
recipient of funds from vendors of his governmental body, subject
to certain restrictions, one being that a blind trust be created to
maintain the anonymity of the donors. However, in other cases we
have found violations where public officials have accepted personal
gifts from vendors or individuals and subsequently acted upon
matters which the donors had pending before the governmental body.
.aag, Volpe, Order 579 -R; Smith, Order 578 -R; Feller, Order 576 -R.
Since the gifts in this case will be to the Department and not its
public officials /employees, this issue should not arise.
To conclude, as to the question you pose regarding the receipt
of gifts to the Department for computer equipment from the entities
it regulates, the Ethics Law does not prohibit such monetary gifts
to the Department.
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.
Opinion, 96 -001
February 21, 1996
Page 7
IV. CONCLUSION
The Public Official and Employee Ethics Law does not prohibit
an agency from receiving monetary donations from private entities
it regulates.
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,
Onus/106 eutte__
Daneen E. Reese
Chair