Loading...
HomeMy WebLinkAbout01-584 ConfidentialADVICE OF COUNSEL August 8, 2001 01 -584 Re: Former Public Official /Employee; Section 1103(g); Executive -Level State Employee; Section 1103(i); A; B; Department C; Executive Director; D; E. This responds to your letter of July 9, 2001, by which you requested a confidential advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act ") presents any restrictions upon employment of an A following termination of service with Department C, particularly with regard to employment as Executive Director of D following its merger with E. Facts: As the current A for the B within Department C, you request a confidential advisory from the State Ethics Commission. You have been preliminarily selected to serve as the Executive Director of D following what would appear to be its merger with E. You inquire as to the restrictions of the Ethics Act that would apply to you if you would resign your current employment with Department C to accept the new post. You have submitted extensive facts which may be fairly summarized as follows. In your current position as A, you report to the Director of F, who reports to the Executive Director for B, who reports to the G, who reports directly to the H of Department C. As A, you oversee all aspects of the I, which includes the drafting and implementation of legislation, the development of J, the recruitment of potential Ks and Ls, the promotion of incentives to Ms, the administration of regional Ns, the interpretation of legislation, and the representation of Department C at various events. Additionally, you serve as a liaison to Department 0 and conduct interviews with various Ps. You travel extensively to conduct seminars regarding the benefits of a Q, and you represent the interests of current and potential projects occurring within the Qs. You provide support and assistance to the R's S when solicited. You factually represent and assure the State Ethics Commission that during your tenure as A, you have not worked directly or indirectly with the D or with E in any way. You specifically state that you did not in any way grant or loan money or promise to grant or loan money from the Commonwealth, nor did you participate in any decision to do so, in order to induce or recruit the D to locate, expand, or begin doing business in Confidential Advice, 01 -584 August 8, 2001 Page 2 the Commonwealth. Although the D has received Commonwealth monies in the past for its T, you have never been involved in any way with the D's efforts to receive Commonwealth monies or with the Commonwealth's decisions to allocate such monies for the T. You have submitted the following facts regarding the D and E. The D was incorporated in [date], with the approval of Department C. You state that the D is a private, not - for - profit corporation. You state that at its inception, the D constituted the "private sector component" of a public - private partnership among the Commonwealth, local Ms, and Ls within the Commonwealth. E has been the "public sector component" of the public - private partnership described above. E was created by a U within the R's V of [date]. E has been a component within Department C. Its goals and missions have complimented those of the D and have been directed toward an identical outcome. The D has provided resources to and support of the W activities of E. You state that as a result of the evolution of the D and E and a belief that the continued existence of two entities seeking to accomplish the same goals was unnecessary, the D voted to amend its Bylaws on [date]. You have submitted a document which you identify as a copy of the new Bylaws, which document is incorporated herein by reference. You state that the D will continue to function under the new Bylaws, but E will no longer receive X within the R's V. E's Y Program will continue as a Commonwealth Program under the purview of the R's S, but such program will not in any respect be part of the work of the D. Per the new Bylaws, the D's mission is stated as follows: [Quote]. Bylaws, Article [number], Section [number]. The same Section of the Bylaws further states: [Quote]. You state that the new D Bylaws purposefully establish the structure of the D, the D Board, and the D committees to ensure an equitable representation of both the public and private sector. Per the new Bylaws, the D Board shall be co- chaired by the R and a p rivate sector director. The D Board will include four categories of directors as follows: number directors from the private sector; [number] directors from the public sector; number Z sector directors; and [number] AA sector directors. The [number] directors from the public sector will include the H of Department C, who is designated per the Bylaws to serve on the D's Committee BB and Committee CC. Per the new Bylaws, the D will be managed by an Executive Director who will report to the D Board. You state that the Executive Director shall serve at the leasure of the Board as neither a public official nor public employee. Neither the Executive Director nor the D staff will be Commonwealth employees. Confidential Advice, 01 -584 August 8, 2001 Page 3 You state that following the adoption of the new Bylaws, the D Board immediately commenced a search for an Executive Director, and you have been preliminarily selected for such position. The D's budget this fiscal year is in the total amount of [amount] and anticipates financial support from Department C in the approximate amount of [amount]. You state that another D staff person undertakes, and shall continue to undertake, all communications with Department C regarding same. You state that you did not participate in the discussions concerning the D's budget for this fiscal year, and that no Commonwealth monies have supported or will support the position of D Executive Director. You further state that you have been advised that the D will not be requesting additional Commonwealth financial support during the next twelve to fifteen months. You note that the D and the Commonwealth share the same goal. You state that interaction with Department C and other Commonwealth departments or agencies will be on a collaborative basis, following the directives and initiatives adopted by the D Board. Finally, you represent and assure the State Ethics Commission of the following: 1. You will not use your current position as A, confidential information gained by being in that position, or emoluments of your public position for the private pecuniary benefit of yourself, the D, any D Board Director, or any personnel of the D. 2. You will resign your employment with Department C immediately upon accepting the position of Executive Director of the D. 3. You will not represent any person, with promised or actual compensation, on any matter before Department C (including any Department C program or initiative, such as the R's S or the Y Program for one year after you leave Department C. 4. You will not represent any person, with promised or actual compensation, with regard to the I or any Q before the General Assembly or any Commonwealth department or agency, including Department 0, for one year after you leave Department C. 5. You state that you recognize that your interaction with the public sector directors of the D Board, specifically including the H of Department C, will be governed by the Ethics Act. 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 for the B within Department C, you would be considered a public official /public employee and an "executive -level State employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. §1102; 51 Confidential Advice, 01 -584 August 8, 2001 Page 4 Pa. Code §11.1. Upon resigning from employment with Department C, you would become a former public employee and a former executive -level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act. Section 1103(i) restricts former executive -level State employees as follows: §1103. Restricted activities (i) Former executive -level employee. - -No former executive -level State employee may for a period of two years from the time that he terminates employment with this Commonwealth be employed by, receive compensation from, assist or act in a representative capacity for a business or corporation that he actively participated in recruiting to this Commonwealth or that he actively participated in inducing to open a new plant, facility or branch in this Commonwealth or that he actively participated in inducing to expand an existent plant or facility within this Commonwealth, provided that the above prohibition shall be invoked only when the recruitment or inducement is accomplished by a grant or loan of money or a promise of a grant or loan of money from the Commonwealth to the business or corporation recruited or induced to expand. 65 Pa.C.S. §1103(i). Section 1103(i) restricts the ability of a former executive -level State employee to accept employment or otherwise engage in business relationships following termination of State service, under certain narrow conditions. The restrictions of Section 1103(i) apply even where the business relationship is indirect, such as where the business in question is a client of the new employer, rather than the new employer itself. See, Confidential Opinion 94 -011. However, Section 1103(i) would not restrict you from being employed by, receiving compensation from, assisting, or acting in a representative capacity for the D under the submitted facts: (1) that during your tenure as A, you have not worked directly or indirectly with the D or with E in any way; (2) that you did not in any way grant or loan money or promise to grant or loan money from the Commonwealth, nor did you participate in any decision to do so, in order to induce or recruit the D to locate, expand, or begin doing business in the Commonwealth; and (3) that although the D has received Commonwealth monies in the past for its T, you have never been involved in any way with the D's efforts to receive Commonwealth monies or with the Commonwealth's decisions to allocate such monies for the T. Unlike Section 1103(i), Section 1103(g) does not prohibit a former public official /public employee from accepting a position of employment. However, it does restrict the former public official /public employee with regard to "representing" a "person" before the governmental body with which he has been associated ": §1103. Restricted activities (g) Former official or employee. - -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. 65 Pa.C.S. §1103(g) (Emphasis added). Confidential Advice, 01 -584 August 8, 2001 Page 5 The terms "represent," "person," and "governmental body with which a public official or public employee is or has been associated" are specifically defined in the Ethics Act as follows: §1102. Definitions "Represent." To act on behalf of any other person in any activity which includes, but is not limited to, the following: personal appearances, negotiations, lobbying and submitting bid or contract proposals which are signed by or contain the name of a former public official or public employee. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. "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. 65 Pa.C.S. §1102. The term "Person" is very broadly defined. It includes, inter alia, corporations and other businesses. It also includes the former public employee himself, Confidential Opinion 93 -005, as well as a new governmental employer. Ledebur, Opinion 95 -007. Therefore, for purposes of your inquiry, the question of whether the D really is private in nature, as you state, or is governmental in nature, need not be addressed: either way, the D is a "person" for purposes of applying the restrictions of Section 1103(g) of the Ethics Act to you. The term "representation" is broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (3) submission of bid or contract proposals which are signed by or contain the name of the former public official /employee; (4) participating in any matters before the former governmental body as to acting on behalf of a person; and (5) lobbying. Popovich, Opinion 89 -005. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits the inclusion of the name of a former public official /public employee on invoices submitted by his new employer to the former governmental body, even though the invoices pertain to a contract that existed prior to termination of public service, Shay, Opinion 91 -012. However, if such a pre - existing contract does not involve the unit where the former public employee worked, the name of the former public employee may appear on routine invoices if required by the regulations of the agency to which the billing is being submitted. Abrams/Webster, Opinion 95 -011. Confidential Advice, 01 -584 August 8, 2001 Page 6 A former public official /public employee may assist in the preparation of any documents presented to his former governmental body. However, the ublic official /public employee may not be identified on documents submitted to the former governmental body. The public official /public employee may also counsel any person regarding that person's appearance before his former governmental body. Once again, however, the activity in this respect should not be revealed to the former governmental body. The Ethics Act would not prohibit or preclude making general informational inquiries to the former governmental body to secure information which is available to the general public, but this must not be done in an effort to indirectly influence the former governmental body or to otherwise make known to that body the representation of, or work for the new employer. Section 1103(g) only restricts the former public official /public employee with regard to representation before his former governmental body. The former public official /public employee is not restricted as to representation before other agencies or entities. However, the "governmental body with which a public official /public employee is or has been associated" is not limited to the particular subdivision of the agency or other governmental body where the public official /employee had influence or control but extends to the entire body. See, Legislative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion No. 90 -006; Sharp, Opinion 90- 009 -R. The governmental body with which you would be associated upon termination of public service with Department C would be Department C in its entirety, including but not limited to the B. Therefore, for the first year after termination of your service with Department C, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before Department C. In this regard, it is noted that you have stated that you recognize that your interaction with the public sector directors of the D Board, specifically including the H of Department C, will be governed by the Ethics Act. You are advised that pursuant to Section 1103(g) of the Ethics Act, any such interaction with the H of Department C may not involve Department C or the H in his or her official capacity. Based upon the facts which have been submitted, this Advice has addressed the applicability of Sections 1103(g) and 1103(i) only. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as rohibited 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 /employee 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. Lastly, 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 DD. Conclusion: As A for the B within Department C, you would be considered a public official /public employee and an "executive -level State employee" subject to the Public Official and Employee Ethics Act ( "Ethics Act "), Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., and the Regulations of the State Ethics Commission, 51 Pa. Code §11.1 et seq. Upon resigning from employment with Department C, you would become a former public official /public employee and a former executive -level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act, 65 Pa.C.S. §§ 1103(g), (i). Under Section 1103(i) of the Ethics Act, you would not be Confidential Advice, 01 -584 August 8, 2001 Page 7 prohibited from being employed by, receiving compensation from, assisting, or acting in a representative capacity for D under the submitted facts: (1) that during your tenure as A, you have not worked directly or indirectly with the D or with E in any way; (2) that you did not in any way grant or loan money or promise to grant or loan money from the Commonwealth, nor did you participate in any decision to do so, in order to induce or recruit the D to locate, expand, or begin doing business in the Commonwealth; and (3) that although the D has received Commonwealth monies in the past for its T, you have never been involved in any way with the D's efforts to receive Commonwealth monies or with the Commonwealth's decisions to allocate such monies for the T. With regard to Section 1103(g), the restrictions as outlined above must be followed. The former governmental body would be Department C in its entirety, including but not limited to the B. The propriety of the proposed conduct has only been addressed under the Ethics Act. Further, should service be terminated, as outlined above, the Ethics Act would require that a Statement of Financial Interests be filed by no later than May 1 of the year after termination of service. 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