HomeMy WebLinkAbout01-559 ConfidentialADVICE OF COUNSEL
May 25, 2001
01 -559
Re: Conflict; Public Official /Public Employee; A; B Bureau; C Department; Private
Employment or Business.
This responds to your letter of April 23, 2001, by which you requested
confidential advice from the State Ethics Commission.
Issue: Whether an A in the B Bureau of the C Department is prohibited or
restricted by the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S.
§1101 et seq., from forming a private business in addition to public service.
Facts: You are an A with the B Bureau in the C Department. You have submitted
a copy of your job description and two organization charts, which documents are
incorporated herein by reference.
As an A, you review D documents submitted by outside E professionals retained
to F for the Commonwealth. Your reviews are limited to E's. You have no
responsibilities with respect to G's who may ultimately H the I's or otherwise enter into
contracts with the Commonwealth with respect to the E's you review. You do
occasionally become involved in disputes relating to I's where the G's have already
been selected. In those disputes, your responsibility is to provide technical assistance.
You do not make the ultimate decisions to settle the disputes.
You state that you are a J, having been licensed in Pennsylvania since [date].
You further state that before you came to work for the Commonwealth, you were a K for
over [number] years. You started in your current position in [date].
You would like to create an L for anyone serving the D industry. Your function
would be that of M. You would oversee the L E and operation of the business. You
would work on the business only during hours outside the normal work hours that you
maintain for your position with the Commonwealth. You intend to take on a partner who
will devote full time to the day -to -day running of the business, including all sales
activities. You state that no potential partner has yet been identified.
You state that the L would be available to anyone without charge. Businesses
that would N in and 0 the L would have free unlimited access. Income would be
generated only from the sale of P. P would be sold on a national level and only to Q's.
No R would be accepted from E professionals or G's (although all E professionals and
G's would be free to N in the L, and 0 the L without charge).
You believe that the proposed business interest would not present a conflict of
interest based upon the following reasons:
Confidential Advice, 01 -559
May 25, 2001
Page 2
1. Your responsibilities with the Commonwealth are limited to reviewing E's by E
professionals. The review is conducted before G's are selected and before any
S's or T's are selected. The U's include generic V's for W's that could be
provided by several different T's /S's. This is because Commonwealth law
requires that V's be non -X. Only in rare circumstances are items specified as X,
in which case a letter from the Y and Z must be submitted to the Secretary for his
approval. You are not involved in the process of approving X V's.
2. Disputes in which you may become involved typically deal with AA E issues that
arise after the G has been selected. Again, the E issues on which you are
consulted involve W's or BB's that could be provided by many T's /S's.
3. In the rare instance where your review of an E or dispute would involve
consideration of W's specified to be provided by a CC, you state that you would
disclose your potential conflict, and request to be excused from reviewing the E
or dispute. You further state that because of the stage at which you are involved,
any such recusal would be extremely rare. You note that you would also refuse
to accept DD from any S or T whose product was a material element of any
dispute on which you would be consulted, for at least one year after the
conclusion of your involvement in the matter.
4. You intend to select a business partner who is available to devote his or her
efforts to the enterprise on a full time basis. You expect that such person would
have no dealings with the Commonwealth that would be within the scope of your
responsibilities. In the highly unlikely event that your partner would have a
business interest in an entity that would be associated with a dispute in which
you would be involved, you would disclose the potential conflict and ask to be
excused from providing consulting services on such matter.
Given the above stated facts, you request the State Ethics Commission to
conclude that you would not have a conflict of interest if you would pursue the business
interest as described above.
Discussion: It is initially noted that pursuant to Sections 1107(10) and (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 an A with the B Bureau in the C Department, you are a public employee as
that term is defined under the Ethics Act, and hence you are subject to the provisions of
that Act.
Section 1103(a) of the Ethics Act provides:
$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:
Confidential Advice, 01 -559
May 25, 2001
Page 3
$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.
"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.
Section 1103(j) of the Ethics Act provides as follows:
$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
Confidential Advice, 01 -559
May 25, 2001
Page 4
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 applying the above provisions of the Ethics Act to your inquiry, you are advised
that Section 1103(a) of the Ethics Act does not prohibit public officials /public employees
from having outside business activities or employment; however, the public
official /public employee may not use the authority of his public position or confidential
information obtained by being in that position for the advancement of his own private
pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89-
011. Examples of conduct that would be prohibited under Section 1103(a) would
include: (1) the pursuit of a private business opportunity in the course of public action,
Metrick, Order No. 1037; (2) the use of governmental facilities, such as governmental
telephones, postage, staff, equipment, research materials, or other property, or the use
of governmental personnel, to conduct private business activities, Freind, Order No.
800; Pancoe, supra; and (3) the participation in an official capacity as to matters
involving the business with which the public official /public employee is associated in his
private capacity, such as the review /selection of its bids or proposals, Gorman, Order
No. 1041.
Having established the above, your specific inquiry shall now be addressed.
It is initially noted that the proposed business described above would be a
business with which you, as M, would be associated. It is further noted that a business
relationship would exist as to the T's /S's who would pay you /your business to EE on the
L. If a matter involving the business, any future business partner, or the T's /S's would
come before you in your official capacity as an A, you would have a conflict of interest
as to such matter. Miller, Opinion No. 89 -024. This should not become a problem in that
you have stated that you would 1) abstain from participating in any matter involving a
CC; 2) refuse to accept DD from any T's /S's whose product was a material element of
any dispute on which you would be consulted; 3) abstain from participating in any
dispute that would involve a business partner who would have a business interest in any
entity that would be involved in such a dispute; and 4) structure the business to ensure
that you could not use the authority of your office or confidential information for a private
pecuniary benefit. However, should a conflict arise, you would be required to abstain
from participation and to satisfy the disclosure requirements of Section 1103(j).
Under the facts which you have submitted, Section 1103(a) of the Ethics Act
would not preclude you from the business activity described above subject to the
restrictions and qualifications as noted above.
This Advice is limited to addressing the applicability of Section 1103(a) of the
Ethics Act. It is expressly assumed that there has been no use of authority of office for a
private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further,
you are advised that Sections 1103(b) and 1103(c) of the Ethics Act provide in part that
no person shall offer to a public official /public employee and no public official /public
employee shall solicit or accept anything of monetary value based upon the
understanding that the vote, official action, or judgment of the public official /public
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.
Confidential Advice, 01 -559
May 25, 2001
Page 5
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. Specifically not addressed herein is the applicability of
the EE.
Conclusion: As an A with the B Bureau in the C Department, you are a public
employee subject to the provisions of the Ethics Act. Section 1103(a) of the Public
Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq., would not
preclude you from outside business activity subject to the restrictions and qualifications
as noted above. In the event that the business, any future business partner, or business
client(s) would have matter(s) pending before your governmental body, you would be
required to abstain and to satisfy the disclosure requirements of Section 1103(j) of the
Ethics Act set forth above. 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. 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(h ). The appeal may be received
at the Commission by hand delivery, United States mail, delivery
service, or by 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