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HomeMy WebLinkAbout01-537 McCormacKathy P. McCormac 1010 Southfield Court Harrisburg, PA 17111 Dear Ms. McCormac: ADVICE OF COUNSEL April 16, 2001 01 -537 Re: Conflict; Public Official /Employee; Research Analyst; Insurance Committee; House of Representatives; Immediate Family Member; Spouse Employed as Lobbyist for a Firm That Represents Clients With Respect to Legislation Pending in House of Representatives. This responds to your letter of March 15, 2001, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. §1101 et seq., presents any prohibition or restrictions upon a research analyst for the Insurance Committee of the House of Representatives whose spouse is employed as a lobbyist for a firm that represents clients with respect to legislation pending in the House of Representatives. Facts: You have been employed with the House of Representatives ( "House ") since August 27, 1997. You currently are a Research Analyst for the Insurance Committee. Your job responsibilities include providing analyses, opinions and recommendations on bills, amendments and proposals for legislation that fall within the jurisdiction of the Committee or otherwise deal with the subject of insurance, to your Leadership, the Insurance Committee Chairman, Executive Director and Members, and other Caucus members and staff. You also participate in drafting insurance related bills and amendments. Your spouse left his position as Chief of Staff for the House Majority Leader to take a position on February 1, 2001 as a lobbyist with the firm of Pugliese Associates ("Pugliese"). Pugliese lobbies on behalf of many clients in connection with numerous bills and amendments on a wide range of subjects that are being considered in the General Assembly. You state that while your spouse will not be involved in any lobbying activities with the House for a one -year period, other lobbyists in the firm will be engaged in lobbying activities, some of which could relate to legislation that comes before the Insurance Committee or comes across your desk because of your involvement with insurance issues. McCormac, 01 -537 April 16, 2001 Page 2 Given the above facts, you pose the following questions. 1. To the extent you perform your job duties at the direction or request of legislators (or staff working at the request of legislators) pursuant to their lawmaking power, whether your activities would fall within the scope of Corri an, Opinion 87 -001, wherein you state the Commission held that the Speech and Debate lause precludes the application of the Ethics Act with respect to the lawmaking activities of legislators. You indicate that you have enclosed several United States Supreme Court opinions, however, no opinions have been submitted with your request. 2. If Corrigan, supra, is inapplicable, you ask for guidance as to the following, noting that you may not have any knowledge as to the interests of Pugliese's clients regarding any legislation that you are asked to deal with or as to whether the legislation in question involves a matter on which Pugliese is representing a particular client. a. If Pugliese is representing a client on a tax bill in the Finance Committee or any other legislation before any other committee, and an unrelated bill comes before the Insurance Committee that also affects the same client, whether you must recuse yourself even though that client is not being represented by Pugliese on that particular insurance matter; b. If an insurance bill would come before the Insurance Committee that would affect a number of Pugliese's clients in the same way that it would affect countless other business enterprises throughout Pennsylvania, but Pugliese would not be engaging in any lobbying activities on that particular bill, whether you must abstain from dealing with that particular legislation as part of your legislative duties; c. Given that sometimes you are aware of Pugliese's involvement as to its clients' legislative interests and sometimes you have no knowledge of Pugliese's interest in specific legislation or the impact of such legislation upon the firm or its clients, as to the latter, whether you have any responsibilities under the Ethics Act; and d. Given that many or most businesses or entities have a minimal or substantial degree of interest in much of the legislation that comes before the Insurance Committee, what is the standard for determining whether the degree of interest as to any particular bill is sufficient to trigger the abstention requirement of the Ethics Act; and e. Given that you have no voting rights, whether Section 1103(j) of the Ethics Act would apply to you. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. § §1107(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As a Research Analyst for the Insurance Committee of the House of Representatives, you are a public employee as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: McCormac, 01 -537 April 16, 2001 Page 3 $1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The following terms are defined in the Ethics Act as follows: $1102. 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. The term 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. "Immediate family." A parent, spouse, child, brother or sister. "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. 65 Pa.C.S. §1102. In addition, Sections 1103(b) and 1103(c) of the Ethics Act 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. Section 1103(j) of the Ethics Act provides as follows: McCormac, 01 -537 April 16, 2001 Page 4 $1103. Restricted activities. (j) Voting conflict. - -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. 65 Pa.C.S. §1103(j). In each instance of a conflict, Section 1103(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 above provisions of the Ethics Act to the instant matter, pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Your spouse is a member of your immediate family as defined under the Ethics Act. Further, Pugliese, your "souse's firm," is a business with which he is associated. Pursuant to Section 1103(a) of the Ethics Act, if a matter would come before you as a Research Analyst for the Insurance Committee that would result in a financial gain to you, your spouse, or Pugliese, you would have a conflict of interest, could not participate, and would be required to observe the disclosure requirements of Section 1103(j) of the Ethics Act. Having established the above general principles, your specific inquiries shall now be addressed. With regard question 1 involving the applicability of the Commission's holding in Corri an, Opinion 87 -001, you are advised as follows. In Corrigan, supra, the ommission addressed the question of whether the Ethics Act would prohibit a member of the General Assembly from voting in relation to a measure or bill pending before the Pennsylvania State Senate or the Pennsylvania House of Representatives where such measure or bill would affect the legislator's private interests. The Commission first considered the following provisions of the Constitution of Pennsylvania. McCormac, 01 -537 April 16, 2001 Page 5 Privileges of Members Section 15. The members of the General Assembly shall in all cases, except treason, felony, violation of their oath of office, and breach of surety of the peace, be privileged from arrest during their attendance at the sessions of their respective Houses and in going to and returning from the same; and for any speech or debate in either House they shall not be questioned in any other place. Constitution of Pennsylvania, Article 11, Section 15. Vote Denied Members with Personal Interest Section 13. 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. Constitution of Pennsylvania, Article 111, Section 13. In reviewing the above constitutional provisions and pertinent case law, the Commission held: The activities of a member of the General Assembly insofar as such relate to legislative actions, defined as the introduction, consideration, debating, voting, enactment, adoption or approval of legislation, are constitutionally controlled. Such legislative actions are therefore exempt from the purview of the State Ethics Act and the State Ethics Commission.... the application of the State Ethics Act to non - legislative activities are in no way affected by this opinion. Corrigan, Opinion 97 -001 at 4. (Emphasis added). In that the Commission in Corrigan specs ically addressed the applicability of the above quoted constitutional provisions as they apply to the activities of a member of the General Assembly, Corrigan, supra, does not apply to you as a Research Analyst with the Insurance Committee, as you are not a member of the General Assembly. With regard to question 2.a. involving a Pugliese client affected by a bill before the Insurance Committee, the Commission has, in the past, considered the extent to which a public official would have a conflict where a business relationship would exist between the public official and another party. In Miller, Opinion 89 -024, the Commission addressed the issue of whether a township zoning officer was restricted by the Ethics Law from working for a consulting firm when that firm provided services to private clients whose plans could be brought before the township zoning commission for approval. The Commission first determined that the consulting firm was a business with which the township zoning officer was associated. Next, the Commission concluded that the zoning officer had a conflict as to approving, recommending, or playing any role in the approval of permits or in relations to any township action involving a client, plan or project involving the consulting firm. Id. The concern in Miller was that the township zoning officer would look favorably upon a matter submitted for township action by private clients so as to engender a continued private business relationship with those clients. Based upon Miller, supra, you would have a conflict as to bills that would come before the Insurance Committee that would affect a Pugliese client, even though that client would not be represented by Pugliese on that particular insurance matter. McCormac, 01 -537 April 16, 2001 Page 6 With regard to question 2.b. involving an insurance bill where Pugliese would not be engaging in any lobbying activities as to such bill, the State Ethics Commission, in Kannebecker, Opinion 92 -010, determined that a township supervisor, who in his private capacity was an attorney, would have a conflict of interest as to matters before the township involving ongoing client(s) or client(s) for whom he was on retainer, even if he would not represent such client(s) as to the matter pending before the township. The Commission determined that as a general rule, a conflict would not exist as to former client(s), but that under certain circumstances, a conflict could exist as to former client(s) depending upon factors such as the number of prior representations of the given client and the period of time over which such occurred. Based upon Kannebecker, supra, you would have a conflict as to legislation that would affect an ongoing Pugliese client, even though Pugliese would not be engaged in any lobbying activities as to such legislation. With regard to question 2.c., pursuant to the Ethics Act and prior Commission precedent, you are required to abstain in instances of a conflict of interest. See, Palovich, Order 1164. The elements of Section 1103(a) and the restrictions of Section 1103(j) are fully set forth above. With regard to question 2.d., the Ethics Act's definition of "conflict" or "conflict of interest" provides an exclusion with respect to the use of authority of office when such action has a "de minimis economic impact." The Ethics Act defines "de minimis economic impact" as " an economic consequence which has an insignificant effect." 65 Pa. C. S. § 1102. The Commission applied the de minimis exclusion in Schweinsburq, Order No. 900, when it addressed whether a township supervisor, who was also an appointed roadmaster, violated Section 3(a) of the Ethics Law when he received $61.20 for work on a pump house project that he did not actually perform. The supervisor's personal logs reflected that he was performing other duties for the township on the days and at the times that the time reports reflected that he was purportedly working on the pump house. The Commission stated: In applying the de minimis economic impact exclusion, we must note that this is not a term that we may quantify as to a set dollar amount for all cases; to the contrary, the definition must be applied and determined on a case by case basis since a given dollar amount which may be de minimis in one case would not be so in another based upon the factual circumstances. As to the instant case, we do believe under these facts that the amount in question has a de minimis economic impact. On that basis, we find no violation of Section 3(a) of Act 9 of 1989. Schweinsburq, at 18. As stated in Schweinsburq, supra, the question of whether the de minimis exclusion applies must be determined on a case by case basis. Where a use of authority of office or confidential information by a public official /public employee would have an economic consequence that would have an insignificant effect, the de minimis exclusion would apply. With regard to question 2.e., as noted above, Section 1103(j) would require you to abstain from participating in any matter where you would have a conflict. In each instance of a conflict, Section 1103(j) would require you to disclose the nature of your interest both orally and in a written memorandum to your supervisor. Cooper, Opinion 92 -009. McCormac, 01 -537 April 16, 2001 Page 7 Finally, it is recognized that generally legislation pending before the Insurance Committee would have a sufficiently broad application that the class /subclass exclusion of Section 1103(a) would apply. However, in some instances, the legislation might affect your spouse's employer's clients in such a way as to make the class /subclass exclusion inapplicable. In these instances, you would have a conflict and must observe the disclosure requirements of Section 1103(j) of the Ethics Act. The propriety of the proposed conduct has only been addressed under the Ethics Act; 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 Act. Conclusion: As a Research Analyst for the Insurance Committee of the House of Representatives, you are a public employee subject to the provisions of the Public Official and Employee Ethics Act "Ethics Act "), 65 Pa.C.S. §1101 et seq. Your spouse is a member of your immediate family. Pugliese Associates ( "Pugliese "), your spouse's lobbying firm, is a business with which he is associated. Pursuant to Section 1103(a) of the Ethics Act, if a matter would come before you as a Research Analyst for the Insurance Committee that would result in a financial gain to you, your spouse, or Pugliese, you would have a conflict of interest, could not participate, and would be required to observe the disclosure requirements of Section 1103(j) of the Ethics Act by disclosing the nature of your interest both orally and in a written memorandum to your supervisor. Corrigan, Opinion 97 -001, wherein the Commission addressed the question of whether the Ethics Act would prohibit a member of the General Assembly from voting in relation to a measure or bill pending before the Pennsylvania State Senate or the Pennsylvania House of Representatives where such measure or bill would affect the legislator's private interests, does not apply to you as a Research Analyst with the Insurance Committee, because you are not a member of the General Assembly. You would have a conflict as to bills that would come before the Insurance Committee that would affect a Pugliese client, even though that client would not be represented by Pugliese on that particular insurance matter. You would also have a conflict as to legislation that would affect an ongoing Pugliese client, even though Pugliese would not be engaged in any lobbying activities as to such legislation. Where a use of authority of office or confidential information by a public official /public employee would have an economic consequence that would have an insignificant effect, the de minimis exclusion would apply. In instances where legislation pending before the Insurance Committee affects Pugliese's clients in such a way as to make the class /subclass exclusion inapplicable, you would have a conflict and must observe the disclosure requirements of Section 1103(j) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. McCormac, 01 -537 April 16, 2001 Page 8 A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code §13.2(hh). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or byy FAX transmission (717 -787- 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Vincent J. Dopko Chief Counsel