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HomeMy WebLinkAbout97-008 ConfidentialI. 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 Julius Uehlein DATE DECIDED: 5/29/97 DATE MAILED: 6/11/97 97 -008 Re: Former Public Official; City; Commissioner; Contract; Hearing Officer; Represent; Section 3(g); Compensation. This Confidential Opinion is issued in response to your advisory request on February 12, 1997. Whether the Public Official and Employee Ethics Law imposes any prohibition or restrictions upon a former City Commissioner in contracting with his former governmental body to provide some of the services he performed during his term on the Commission. II. FACTUAL BASIS FOR DETERMINATION: Mr. A formerly served as a Commissioner of Commission B which regulates a Utility. Mr. A performed two specific additional duties while serving at Commission B: as a D wherein Mr. A heard appeals from the Reports and Recommendations issued by a Hearing Officer as to appeals filed by the Utility's customers; and as a Hearing Examiner as to the Utility's capital budget. At the conclusion of Mr. A's service, he was asked by Commission B's Chair and Executive Director to continue performing these two additional duties as a compensated Special Master and Hearing Examiner. This request has been submitted to determine if such service would be prohibited under the Ethics Law. Mr. A asserts that the issue and facts presented in his case are sufficiently analogous to Confidential Opinion, 92 -005 which is controlling. After proffering your statement of the issue, you present the facts as follows. On or about June 8, 1992, Mr. A was appointed by Mayor C to serve a four year term Confidential Opinion, 97 -008 June 11, 1997 Page 2 as a Commissioner for Commission B. Mr. A was one of the two Members of the five - member Commission who served on a voluntary basis, excepting [sic] a minimal stipend. The other three positions are always filled by two City Councilpersons and by the City Controller. Mr. A's official duties as a Commissioner ended on or about September 24, 1996. Commission B is charged with the responsibility of regulating and overseeing the Utility, a collection of assets owned by the City, which provides service to commercial, industrial and residential customers within the City. In addition to his regular duties as Commissioner and Vice - Chairman of Commission B, Mr. A also served as a D regarding customer service appeals and as a Hearing Officer regarding capitol budget proceedings. As a D, Mr. A heard appeals from Reports and Recommendations issued by a Hearing Officer as to customer service appeals. Specifically, customers would appeal decisions rendered by the Utility to the Commission Hearing Examiner. These appeals were forwarded to the Hearing Examiner who would then hold hearings and submit a Report and Recommendation to Commission B. The customer or the Utility could file exceptions to the Hearing Examiner's Report and Recommendation. Mr. A, as a D, would conduct further proceedings to review the exceptions and submit his own Report and Recommendation to Commission B. Commission B would either accept, reject or modify Mr. A's Report and Recommendation. Thereafter, the customer or Utility could appeal the final decision of Commission B to the Common Pleas Court. The work of the Hearing Examiner as to customer service appeals and the Utility's operating budget is often performed by non - Commissioners. You have attached a contract between the Commission and the present Hearing Examiner which is incorporated herein by reference. Mr. A has served as D and as capitol budget Hearing Examiner for his entire term. But for the fact that Mr. A's term with Commission B ended, the Commission would not be seeking to contract with Mr. A to act as Special Master and Hearing Examiner. You state that in the conduct of both his regular and additional duties, Mr. A conducted himself well, tirelessly performed his duties with distinction and served as a valuable resource to the other Commissioners so as to be viewed as fair, frank, hard- working and committed. Based upon his prior service, commitment, sense of justice and fair play, the Chair and Executive Director of Commission B have requested Mr. A to continue his service as D and Hearing Officer by a proposed contract between Mr. A and Commission B, a copy of which is incorporated herein by reference. Your provide an analysis wherein you compare our prior ruling in Confidential Opinion, 92 -005 to the instant matter. As in Confidential Opinion, 92 -005, you assert that Mr. A will not be acting in the normal representative capacity but in a quasi - judicial capacity as an independent arbitrator, mediator and fact - gatherer. You contend that the instant matter is different factually from Confidential Opinion, 93 -005 where a management -level state employee sought to resign from his position in order to start a new business to provide to his former governmental body the same services he previously performed in his public employment. You note that Mr. A has not decided to terminate his employment in order to develop a business which would capitalize on his governmental contacts. Mr. A has been solicited by Commission B within the one year prohibition period to continue to perform the Confidential Opinion, 97 -008 June 11, 1997 Page 3 services which he had performed while a Commissioner. You argue that Mr. A would be resuming the same duties which he had while a Commissioner so that his return to service could be considered to be a resumption of his public employment with a limited change in his status. You reiterate that, as in Opinion 92 -005, Mr. A would be acting as a quasi - judicial officer on behalf of Commission B in the capacity of an impartial mediator, arbitrator and fact - gatherer. The issue and facts in Confidential Opinion, 92- 005 in your opinion are sufficiently analogous to your case so that Confidential Opinion, 92 -005 would be controlling. You conclude that Mr. A's service as Special Master and Hearing Examiner would not be prohibited under the Ethics Law. III. DISCUSSION: In his former capacity as a Commissioner for Commission B, Mr. A would be considered a "public official" within the definition of that term as set forth in the Public Official and Employee Ethics Law and the Regulations of this Commission. 65 P.S. §402; 51 Pa.Code § 1 1.1. Consequently, upon termination of public service, Mr. A became a "former public official" subject to Section 3(g) of the Public Official and Employee Ethics Law. Section 3(g) of the Ethics Act provides that: 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. Mr. A was associated with Commission B as his governmental body. 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. Act 9 of 1989 significantly broadened the definition of the term "governmental body with which a public official or public employee is or has been associated" by defining the above term 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. See the Legislative Journal of House, 1989 Session, No. 15 at 290, 291. The Ethics Law must be construed to ascertain and effectuate the intent of the General Assembly under 1 Pa. C.S.A. §1901. Confidential Opinion, 97 -008 June 11, 1997 Page 4 The former governmental body with which Mr. A was associated following termination of public service would be Commission B. The above is based upon the language of the Ethics Law, the legislative intent (Legislative Journal of House, 1989 Session, No. 15 at 290, 291) and the prior precedent of this Commission. See, Boonin, Opinion 90 -003. Therefore, within the first year after termination of service with Commission B, Section 3(g) of the Ethics Law would apply and restrict representation of persons before Commission B. As to the scope of the restrictions under Section 3(g), such restrictions have been discussed in detail in Popovich, Opinion 89 -005, which are incorporated by reference and will not be repeated. 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 applying the definition of "Person" quoted above, we have held that the term includes a former public employee representing himself in providing consulting services to his former governmental body. Confidential Opinion 93 -005. Further, the term "Person" includes a new government employer which is represented by the former public employee before his former governmental employer. Ledebur, Opinion 95 -007. In the instant matter, it is argued that our decision in Confidential Opinion, 93- 005 is distinguishable and that our decision in Confidential Opinion, 92 -005 is controlling. In Confidential Opinion, 93 -005, we concluded that a public employee could not terminate public service and then contract to provide those same services to his former governmental body within one year of termination of service. In Confidential Opinion, 92 -005, we found that Section 3(g) did not apply because the former public employee was acting as an impartial arbiter between his former governmental body and the labor unions and hence was not representing himself before his former governmental body. In the instant matter, we find Confidential Opinion, 92 -005 to be inapposite but Confidential Opinion, 93 -005 to be on point. Mr. A would be contracting as a consultant to provide some of the same services to his former governmental body that he performed while serving as a public official. Mr. A would not be acting as an arbiter between his former governmental body and a third party. To the contrary, Mr. A would be doing that which he did before his termination of service but now would be representing himself doing such services. Such activity is prohibited by Section 3(g) of the Ethics Law. Confidential Opinion, 93 -005, supra. We reject the argument that Mr. A could be considered as resuming his public employment with a limited change in status. The submitted facts and proposed contract reflect that Mr. A would not be hired as an employee but as an independent consultant via a contract. Parenthetically, we have held that if a former public Confidential Opinion, 97 -008 June 11, 1997 Page 5 official /employee is rehired by the former governmental body so that a true public employment relationship exists, such action would not be prohibited by Section 3(g) of the Ethics Law. See, Confidential Opinion, 93 -005, supra. Our decision is consonant with the purpose of Section 3(g), namely, to prohibit former public officials /employees from capitalizing on their prior service by using their connections with their former governmental body to their advantage for financial gain. Two scenarios involving Section 3(g) relate to former public officials /employees using their contacts or knowledge of operations within their former governmental body for the benefit of their new employer or clients and second, using their former employment to obtain consulting contracts with their former governmental bodies. As to the latter, it makes no difference whether the solicitation for a consulting contract is by the governmental body, the former public official /employee, or by mutual desire. Similarly, even if the proposed conduct does not involve any inappropriate intent, such is irrelevant. Yocabet v. SEC, 531 A.2d 536 (1987). The point is that Section 3(g) of the Ethics Law prohibits this type of conduct. Parenthetically, assuming that the date of termination for Mr. A was on September 24, 1996, the one year prohibition of Section 3(g) would end on September 24, 1997. Lastly, the propriety of the proposed conduct has only been addressed under Section 3(g) of 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. IV. CONCLUSION: A City Commissioner is a public official subject to the Ethics law. Section 3(g) of the Ethics Law prohibits a former public official from entering into a consulting contract for compensation with his former governmental body within one year of termination of service to provide services that he performed while a public official. 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. Vice Chair Austin M. Lee dissents. By the Commission, 1 0 AtisAu6 Daneen E. Reese Chair