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HomeMy WebLinkAbout157 WaldmanJay C. Waldman, Esquire General Counsel of Commonwealth Governor's Office Room 225, Main Capitol Building Harrisburg, PA 17120 RE: #81 -97 -C Dear Mr. Waldman: are: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 September 13, 1982 ORDER OF THE COMMISSION No. 157 The State Ethics Commission has received a complaint regarding you and a possible violation of the Ethics Act (Act 170 of 1978). The Commission has now completed its investigation into these allegations and finds that you did not violate the Ethics Act or engage in conduct which created the appearance of a conflict of interest under the Act. The individual allegations and findings on which our conclusion is based I. Allegations: 1. That you communicated with Harvey Bartle, III, (hereinafter "Bartle ") regarding the appointment of the law firm of Dechert, Price & Rhoads (hereinafter "Dechert ") and received correspondence from him relating to same. 2. That as a public official or public employee, General counsel of the Commonwealth of Pennsylvania, you appointed the Dechert firm as legal or outside counsel to the Pennsylvania Housing Finance Agency (PHFA). 3. That you consulted with or advised Harvey Bartle, III, of your or the Administration's decision to replace counsel of PHFA and /or to appoint the Dechert firm as legal /outside counsel to PHFA prior to the issuance of the Opinion of Attorney General Bartle on the question of appointment of PHFA counsel, issued on January 13, 1981. 4. That this appointment occurred after and as a result of an official Opinion of the former Attorney General Harvey Bartle, III, who was before and after his tenure as Attorney General, associated with or a partner in the Dechert firm. Jay C. Waldman, Esquire September 13, 1982 Page 2 A. Findings: 1. You serve as General Counsel of the Commonwealth and as such are a public official within the purview of the Ethics Act. 2. As General Counsel you appointed the Dechert firm as co- counsel to the Pennsylvania Housing Finance Agency (PHFA). 3. You were aware of the Opinion of the then Attorney General of the Commonwealth, Harvey Bartle, III, issued on January 13, 1981, that PHFA was an "executive agency" under the terms of the newly enacted Commonwealth Attorneys Act 164 -1980 and, therefore, that PHFA would receive legal counsel as appointed by the General Counsel's office. 4. This Opinion was subsequently reviewed by the independently elected Attorney General who in a July 22, 1981 letter stated that: This issue was previously considered by this Office in early February in response to questions raised by the General Counsel. At that time, it was determined that the opinion was and should continue in full force and effect. 5. Harvey Bartle, III, as of January 20, 1981, left the Office of Attorney General. a. Bartle had immediately prior to entering public service, been associated as a partner in the private practice of law with Dechert. b, Early in January, 1981, Bartle had decided to return to the private practice of law upon the expiration of his role in office on January 20, 1981. c. As of February 9, 1981, Bartle returned to Dechert as a partner. 6. In June, 1980, the Finance Committee of PHFA initiated a review /selection prccess to obtain bond counsel for PHFA. The position of bond counsel is separate and distinct from the position of outside counsel to PHFA, and the review /selection process was not structured for and did not attempt to choose a law firm to serve as outside counsel. It was to this latter position, outside counsel to PHFA, that the Dechert firm was subsequently appointed. 7. Nearly 50 law firms, including Dechert, were sent request /questionnairs by PHFA relating to the bond counsel position. Fifteen firms, including Dechert, responded and, pursuant to Finance Committee review, were reduced to eight deemed qualified as bond counsel. Dechert was one of these eight firms. Jay C. Waldman, Esquire September 13, 1982 Page 3 8. The appointment of Dechert as outside counsel (as opposed to bond counsel) to PHFA was based upon your authority under the Commonwealth Attorneys Act of 1980, together with your knowledge and belief that Dechert enjoyed an excellent reputation and had considerable expertise in the field of housing law. 9. You did not at any time negotiate the terms of the Dechert appointment with Bartle. 10. There is no evidence that you consulted with or advised Bartle of your decision to replace outside counsel of PHFA and /or to appoint Dechert as outside counsel to PHFA prior to January 13, 1981, the date when Bartle issued his opinion on the status of PHFA under the Commonwealth Attorneys Act. 11. There is no evidence that you communicated with Bartle to secure or influence the opinion he issued on Janaury 13, 1981, which concluded that PHFA was an "executive agency" under the Commonwealth Attorneys Act. 12. Robert Ross, Jr. (hereinafter "Ross ") is a Deputy General Counsel in your office who serves on the PHFA Board as the representative of the Secretary of Banking. 13. A notation on records retained at the office of the Attorney General indicates that the request for an opinion as to PHFA was initiated by January 7, 1981, by Ross. 14. a. Shirley Dennis, Secretary of the Department of Community Affairs, who is the statutorily appointed Chairman of PHFA, denies making the request for the opinion issued on January 13, 1981, by Bartle. b. Shirley Dennis attended the PHFA meeting of January 13, 1981, and as recorded in the minutes of that meeting relating to .a discussion on the Commonwealth Attorneys Act: "Mr. Ross suggested the Attorney General be asked to give his opinion on this matter. Mr. Ross will handle this report." c. The opinion which was issued by Bartle on January 13, 1981, was directed to Shirley Dennis, Secretary of Department of Community Affairs. d. The fact that Bartle issued his opinion (No. 3 above) on January 13, 1981, indicates that an opinion in all probability had been requested prior to the January 13, 1981 PHFA meeting at which Ross was authorized to secure an opinion. There is no evidence of any request for an opinion prior to the January 13, 1981 opinion issued by Bartle other than the "confidential" inquiry by Ross as set forth above. Jay C. Waldman, Esquire September 13, 1982 Page 4 15. Sometime after February 9, 1981, Ross called Bartle at the Dechert firm to advise that Dechert had been appointed outside counsel to PHFA. 16. In a March 26, 1981 letter to Bartle, you confirmed the appointment of Dechert as outside counsel to PHFA. By letter of March 30, 1981, Bartle acknowledged this appointment and advised you that Dechert partner, William F. Bohlen, would be in charge of PHFA matters on behalf of Dechert. 17. In response to publicized criticism of the appointment of three separate law firms to three separate legal positions, including the appointment of Dechert as PHFA counsel and one firm as bond counsel to the Pennsylvania Industrial Development Authority, Paul Critchlow, Press Secretary ,,- to the Governor, issued a Press Release ( #710 -D81 dated July 17, 1981) which referred to an opera and public process by which these firms were appointed. The open and public selection process referred to in this Press Release was not used in the appointment of Dechert. B. Discussion: As a public official, your conduct must present neither a conflict of interest nor the appearance of a conflict. In the present circumstances, Section 3(a) of the Ethics Act would have been violated if you had used your office as General Counsel for your personal financial gain. Section 3(b) of the Ethics Act would have been violated if you had offered something of value to influence Bartle's official conduct in the issuance of the opinion concerning the status of PHFA counsel under the Commonwealth Attorneys Act. Based upon the facts, we find no violation of either Section 3(a) or Section 3(b) of the Ethics Act. We also find that there was no appearance of a conflict of interest pursuant to Section 1 of the Ethics Act. We do wish to note, however, that the inability of Mr. Ross and others to promptly supply clear and precise information concerning the intiation of the Bartle opinion caused unnecessary confusion and initially complicated the ability of the Commission to fully investigate and understand the relevant facts of this matter. We further note that the failure of Mr. Critchlow to adequately distinguish between the process for appointment of PHFA bond counsel and appointment of PHFA outside counsel in his press release of July 17, 1981 contributed to public confusion in this matter. In the interest of promoting a climate in which government activities are performed in a manner that cannot give rise to public misperceptions or doubts, we ask you to convey the Commission's admonition to those individuals, both in and outside of your office, who were involved in the initial reponses to our inquiries, and to urge them that should a similar situation arise, they be fully cooperative with the Commission so as to perpetuate the bond of trust and understanding between the public and their officials. Jay C. Waldman, Esquire September 13, 1982 Page 5 C. Conclusion: You did not violate Section 3(a) or Section 3(b) of the Ethics Act, nor did you create an appearance of a conflict of interest in your actions relating to the appointment of Dechert, Price & Rhoads as outside counsel to PHFA. II. Allegation: That the appointment of Dechert was made with knowledge that members of the firm had made financial contributions to the 1978 election campaigns of Governor Thornburgh, Lt. Governor Scranton and the Republican State Finance Committee in 1978 -81. A. Findings: In addition to the findings set forth above, we make the fol owT ing: 18. Dechert and members of the Dechert firm made financial contributions to political campaigns of gubernatorial candidates of both the Republican and Democratic parties. 19. There is no evidence that you had any knowledge of these contributions at the time of the Dechert appointment. 20. There is no evidence that Dechert or its members made any contributions, or that any were accepted with the understanding that your official conduct as General Counsel would be influenced thereby. B. Discussion: Section 3(b) of the Ethics Act specifically prohibits the giving and receipt of a "political contribution" based upon any understanding that the vote, official conduct or judgment of the public official or employee or candidate for public office would be influenced thereby. This section makes it clear that not all campaign contributions violate Section 3(b) of the Ethics Act. Only those which are given with the understanding that official conduct would be influenced are prohibited. We recognize that in the broadest sense all political contributions are motivated by the giver's desire to see a certain candidate succeed who may be more favorable to the giver's viewpoints and interests. This "motive" does not constitute the type of "understanding" necessary to make an otherwise valid contribution a violation of Section 3(b) of the Ethics Act. Jay C. Waldman, Esquire September 13, 1982 Page 6 In the present case, our findings fail to indicate any "understanding" which would transform these contributions into violations of Section 3(b) of the Ethics Act. C. Conclusion: There is no violation of Section 3(b) of the Ethics Act or the appearance of a conflict of interest in the circumstances presented. Our files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final and will become available as a public document within 15 days unless you file documentation with the Commission which justifies reconsideration and /or challenges pertinent factual findings. During this 15 -day period, no one, including the Respondent unless he waives his right to challenge this Order, may violate this confidentiality . by releasing, discussion or circulating this Order. Any person who violates the confidentiality of a Commission proceeding is guilty of a misdemeanor and shall be fined not more than $1000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). CW /rdp Sincerely, Paul J./Smith Chai rraan Commissioner Smith filed a concurring Opinion. Commissioner Weiss filed a concurring Opinion in which Commissioner Hill joins. Commissioner Evans did not participate in'this decision. Paul J. Smith, Commissioner. s STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 STATE ETHICS COMMISSION September 13, 1982 CONCURRING OPINION IN WALDMAN ORDER #157 of September 13, 1982, by We should not dismiss this case, without some statement as to the total circumstances surrounding the official responses made to questions raised about the Dechert appointment and our investigation into this matter. Although I concur in the result reached by the majority, I feel compelled to express my views on this case separately. I agree that no appearance of a conflict with the public trust has been found but we should review your role in this matter from one other aspect. We should review and make some statement as to the circumstances surrounding the official responses made to questions raised about the Dechert appointment as well as to responses relating to,our investigation. I am particularly concerned about these responses made before our investigation began. These responses were made to the public and may have been misleading to the public - -a more serious circumstance, in my view than any lack of cooperation with this Commissions investigation. In particular, the July 7, 1981, press release could have created or reinforced the inaccurate identification of Secretary Dennis as the initiator of the request for the January 13, 1981 Opinion of the Attorney General. You cannot be held personally responsible for these confusing statements or for the public's reaction to them. But the public could assume that you as the appointing authority, played some role in the preparation and issuance of this press Concurring Opinion #157 September 13, 1982 Page 2 release. Such statements, if not completely accurate, affect the public's perception and their confidence in their government by permitting questions to be raised regarding the impartiality of public officials or raising unnecessary doubts as to the accuracy of the information. The public deserves, and in the long run, public officials must be prepared to provide accurate responses and to correct misleading statements. This will assure the public that governmental officials have exercised the power of their office in an impartial manner. Misstatements provided to the public or misperceptions created or allowed to continue, are counter - productive, defeat the general purpose of the Ethics Act and do a disservice to the public. I suggest that you review the information supplied the public before the initiation of our investigation and provide any corrections or additions necessary. - 21'4,k 04%4 \ --Paul J. /Smith Commissioner CONCURRING OPINION OF COMMISSIONER WEISS TO THE WALDMAN ORDER #157 SEPTEMBER 13, 1982 I concur in the unanimous finding of the Cotm that, "you did not violate 'the Ethics Act or engage in conduct which created the appearance of a conflict of interest under the Act." I find it necessary, however, to file a concurring opinion because of my strong disagreement with the suggestions in Commissioner Smith's concurring opinion that the Governor's Press Secretary engaged in "misstatements "in a July 7, 1981 press release. I additionally wish to express my dissatisfaction with his conclusion that, although you should not be held personally responsible for such statements, you have some amorphous "obligation" to see that the public is provided with undefined new, and supposedly more correct, information. The alleged "misstatements" upon which Mr. Smith dwells concern the alleged "inaccurate identification of Secretary Dennis as the initiator of the request of the January 13, 1981 Opinion of the Attorney General." I believe that Mr. Smith completely misses the point in his concurring opinion, and in so doing, could convey a false and unwarranted perception. The issue is not whether it appears in September of 1982 that Mrs. Dennis, as head of the PHFA, may not have initiated the request for the Opinion. Rather, the question is what Mr. Critchlow and you might reasonably have believed on July 7, 1981. I have scrutinized the entire record in this matter and believe that the evidence clearly presents a very reasonable basis for your and /or Mr. Critchlow's belief at that time. According to your verbatim transcribed interview with the Commission investigator, "My assumption it was Mrs. Dennis was based on a legal requirement in the State that only the head of an agency or the Governor may ask for an Attorney General Opinion. That's why I assumed it had to be Mrs. Dennis." Other transcribed interviews in this case make clear_that the Attorney General and his chief deputy also believed and recalled that the request for an opinion came from Mrs. Dennis. To quote from the record, the Commission's investigator stated, "I have had two interviews with Mr. Bartle and in both instances, Harvey has related that the request for an opinion from him came from Shirley Dennis." To quote his chief deputy,_ "As I recall, the request came from Shirley Dennis." Of similar importance is the fact that the Attorney General directed and sent the ,Opinion to Mrs. Dennis. - Accordingly, the record makes clear that whether or not it was Mrs. Dennis who initiated the request, you and a number of other key people in this process clearly thought she did at the time in question. As a result of confusion in the staff's organization and presentation of the relevant material in this matter, I personally requested and reviewed the entire record in this case for myself. 'I believe it is manifestly unfair for a Commissioner to imply criticism of people for saying something that they had every reason to believe at the time they said it, even if it subsequently turns out that they may have been incorrect, Dated: September 22, 1982 Commissioner Hill joins in this opinion. (1)(7 c" C R.' WEISS Commissioner