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HomeMy WebLinkAbout97-008-R 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 Boyd E. Wolff Julius Uehlein DATE DECIDED: 10/2/97 DATE MAILED: 10/14/97 97 -008 -R Re: Former Public Official; City; Commissioner; Contract; Hearing Officer; Represent; Section 3(g); Compensation; Reconsideration. This Confidential Opinion is issued in response to your July 10, 1997 request for reconsideration of Confidential Opinion, No. 97 -008. Whether this Commission should grant reconsideration of Confidential Opinion, No. 97 -008. II. FACTUAL BASIS FOR DETERMINATION: By letter dated February 12, 1997, you requested a confidential advisory on behalf of Mr. A. Mr. A formerly served as a Commissioner for Commission B which regulates Utility C (Utility). While serving on Commission B, Mr. A performed two specific additional duties: he served as a D hearing appeals from the Reports and Recommendations issued by a Hearing Officer as to appeals filed by the Utility's customers; and he also served as a Hearing Examiner as to the Utility's capital budget. Mr. A's official duties as a Commissioner ended on or about September 24, 1996. At the conclusion of Mr. A's service, he was asked by the Chair and Executive Director of Commission B to continue performing these two additional duties as a compensated Special Master and Hearing Examiner, pursuant to a contract with Commission B. Your initial request for an advisory was submitted to determine if such would be prohibited under the Ethics Law. Confidential Opinion, No. 97 -008, issued on June 11, 1997, responded to your request and found that Mr. A, as a former Commissioner for Commission B, would be a former public official subject to Section 3(g) of the Ethics Law. The Confidential Opinion further found that during the one- year period following termination of service, Section 3(g) would prohibit a former public official from entering into a consulting Confidential Opinion, 97 -008 -R October 7, 1997 Page 2 contract for compensation with his former governmental body to provide services that he had performed while a public official. The Confidential Opinion cited this Commission's decision in Confidential Opinion, No. 93 -005 as controlling, and distinguished Confidential Opinion, No. 92 -005. By letter dated July 10, 1997, you timely requested reconsideration. It was your contention that this Commission committed an error of law and fact when it determined that the acceptance of a consulting contract, without any further representation of self or others, constitutes a violation of Section 3(g) of the Ethics Law. You posited that this Commission erred when it relied upon Confidential Opinion, No. 93 -005. You advanced numerous arguments in support of your contention that Mr. A's situation is more like the factual scenario in Confidential Opinion, No. 92 -005, wherein this Commission held that during the one -year period following termination of service, Section 3(g) would not prohibit a former public employee from entering into a consulting contract with his former governmental body under the unique factual context of providing services as an impartial arbitrator between it and labor unions. Citing Confidential Opinion, No. 92 -005 and various case law (Dodaro v. State Ethics Commission, 527 Pa. 539 (Pa. 1991); Stephens v. State Ethics Commission, 571 A.2d 1120 (Pa. Commw. Ct. 1990)), you argued that a strict construction of Section 3(g) is not mandatory and moreover, is not warranted in the instant matter. You argued that there is no practical difference between the manner in which Mr. A proposes to represent himself before his previous employer and the manner in which "A" proposed to represent himself before his former governmental body in Confidential Opinion, No. 92 -005, so as to support a strict construction of Section 3(g) of the Ethics Law in this case. You asked this Commission to consider the following rhetorical question: "Will the public have more confidence in its government when that government rehires a former employee who, unquestionably, is well- respected, well - liked, competent, fair and motivated to continue public service ?" Based upon your numerous arguments, you asked this Commission to reconsider Confidential Opinion, No. 97 -008. You specifically asked this Commission to issue an - Opinion permitting Mr. A to be "re- employed" by Commission B during the one -year period following the termination of his service on Commission B, to provide the services set forth above. We initially reviewed your request for reconsideration at our meeting on August 14, 1997. At that meeting, certain issues were discussed which could not be resolved without further information. Unfortunately, since you did not appear at that meeting, those issues could not be resolved. Consequently, the Commission directed its Chief Counsel to correspond with you for the purpose of inquiring as to whether the arrangement between Commission B and Mr. A would involve any indicia of employment, such that Mr. A could conceivably be considered to be a "public employee" subject to the Ethics Law in performing the proposed work for Commission B, and also as to what Mr. A's status has been since September 24, 1996 when his service on Commission B terminated. The first area of inquiry was prompted by references in your request for reconsideration to the "rehiring" or "reemployment" of Mr. A by Commission B Letter of July 10, 1997 at 5 -6), and your reliance upon Confidential Opinion, No. 92- 005 which Opinion recognized as a possibility that a consultant who would provide the same services to his former governmental body that he had previously provided in his Confidential Opinion, 97 -008 -R October 7, 1997 Page 3 former public capacity could be considered to be a "public employee" (Id., at 6). The second area of inquiry was prompted by observations that Mr. A's service as a Commissioner ended on or about September 24, 1996; that the one year period of applicability of Section 3(g) was about to expire; and that certain remarks made by the Chairwoman of Commission B at its September 24, 1996 "Tribute and Farewell" to Mr. A suggested that he would be continuing to work with the Commission. By letter dated September 10, 1997, you responded to this Commission's inquiries. In response to the first question, regarding indicia of employment, you advised that per the proposed contract, the "means, method, and manner" of Mr. A's activities would be controlled and directed by Commission B. On the other hand, you noted that Commission B would neither withhold any amounts for taxes and the like from payments to Mr. A for services rendered, nor provide any benefits such as would be provided to an employee of Commission B. In response to the second question, regarding Mr. A's status since he left Commission B in September, 1996, you advised that Mr. A and Commission B did not desire to execute the proposed contract without first obtaining the approval of the State Ethics Commission. Since this Commission's approval was not obtained, the contract was not executed. You further advised that Mr. A did not perform any compensated services for Commission B after his term as a Commissioner ended. However, at the request of Commission B, and out of his sense of commitment to Commission B, Mr. A voluntarily heard three customer service appeals on an uncompensated basis. The last such hearing occurred on or about May 22, 1997. Mr. A did not perform any services for Commission B after the date of our Opinion in this matter. Based upon all of the above, you seek reconsideration of Confidential Opinion, No. 97 -008. III. DISCUSSION: We have been asked to reconsider Confidential Opinion, No. 97 -008. This Commission may exercise broad discretion in determining whether to grant or deny reconsideration if such discretion is exercised in a sound manner. Krone, Opinion No. 84- 001 -R; PSATS v. State Ethics Commission, 499 A.2d 735 (1985). The Regulations of this Commission provide: §13.3. Opinions. (d) Reconsideration may be granted in the discretion of the Commission under §21.29(e). §21.29. Finality; reconsideration. (b) Any party may ask the Commission to reconsider an order or opinion within 30 days of service of the order or opinion. The requestor shall present a detailed explanation setting forth the reason why the order or opinion should be reconsidered. Confidential Opinion, 97 -008 -R October 7, 1997 Page 4 (e) Reconsideration may be granted at the discretion of the Commission if: (1) A material error of law has been made. (2) A material error of fact has been made. (3) New facts or evidence are provided which would lead to reversal or modification of the order or opinion and if these could not be or were not discovered by the exercise of due diligence. 51 Pa.Code §§13.3(d); 21.29(b), (e). At our August 14, 1997 meeting, when we initially reviewed the request for reconsideration, we could not rule upon it based upon the facts which were before us at that time. There was a factual issue that needed to be resolved before a proper ruling could be made. Specifically, it was unclear as to whether Mr. A could arguably be considered to be a "public employee" if he were to engage in the proposed services for Commission B. On the one hand, the information which was submitted to us suggested that Mr. A would be an independent contractor providing consulting services to his former governmental body. On the other hand, there were at least two references in the July 10, 1997 letter requesting reconsideration that characterized the prospective relationship between Mr. A and Commission B as a "rehiring" or "re- employment." The factual issue needed to be resolved because Section 3(g) of the Ethics Law would not preclude Mr. A from being "employed" by his former governmental body provided that a true public employment relationship would exist. See, Confidential Opinion, No. 93 -005 at 8. There were additional inquiries posed by the Commissioners at the meeting of August 14, 1997, as to what Mr. A had been doing during the first 11 months - following his termination of service as a Commissioner with Commission B. Since you were not present at our August 14, 1997 meeting to answer our questions, we directed our Chief Counsel to pose the inquiries to you in writing. You responded in an expeditious manner. Based upon your responses to our questions, it would seem that the factual issue as to indicia of employment could be argued either way. On the one hand, the control that would be exercised by Commission B as to the "means, method, and manner" by which Mr. A would perform the proposed services is one factor that would suggest an employment status. On the other hand, the fact that there would be no withholding from payments to Mr. A and that he would not be provided with any of the benefits that might be available to other individuals who are considered to be employees, weighs toward a contrary conclusion. Moreover, this Commission finds itself at a juncture where the one year period of applicability of Section 3(g) has expired. Despite our best efforts to respond to your request for reconsideration, and despite your best efforts to respond to our inquiries, due to the passage of time, the issues presented by your request for reconsideration have become moot. Confidential Opinion, 97 -008 -R October 7, 1997 Page 5 Consequently, we deny your request for reconsideration based upon the fact that it is now moot. We feel compelled, however, to commend Mr. A for his sensitivity to the ethics issues that were involved in his inquiry and for refraining from accepting compensation while he provided services to Commission B during the one year period following termination of his service as a Commissioner for that body. IV. CONCLUSION: The request for reconsideration of Confidential Opinion, No. 97 -008 is denied as now moot in that the request is based upon Section 3(g) of the Ethics Law and the one year period of applicability of Section 3(g) has elapsed. 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 as redacted is a public record and will be made available as such.. By the Commission, aneen E. Reese Chair Commissioner Austin M. Lee, Vice Chair, dissents.