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HomeMy WebLinkAbout01-603 EckertJohn H. Eckert 3607 Beaufort Street Harrisburg, PA 17111 Dear Mr. Eckert: ADVICE OF COUNSEL November 26, 2001 01 -603 Re: Former Public Employee; Section 1103(g); Unemployment Compensation Appeals Program Manager; Unemployment Compensation Board of Review; Department of Labor and Industry; President; Private Corporation; Contract With Commonwealth. This responds to your letter of October 18, 2001, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act ") presents any restrictions upon employment of an Unemployment Compensation Appeals Program Manager following termination of service with the Department of Labor and Industry. Facts: Until July 20, 2001, you were employed as an Unemployment C ompensation Appeals Program Manager for the Unemployment Compensation Board of Review within the Department of Labor and Industry. In your former position, you supervised the work of Unemployment Compensation Appeal Referees whose work ranged from hearing and deciding disputes regarding unemployment compensation benefit eligibility to claims for relief by employers from unemployment compensation tax charges. You are currently the President of Renaissance Technologies, Inc. ("Renaissance"), a Pennsylvania corporation engaged in the design, development and programming of various computer software applications. You pose three questions. The first two questions are based upon the assumption that Renaissance would be supplying services as a subcontractor to a hypothetical company, ABC, Inc. 1. Whether 65 Pa.C.S.A. Section 1103(g), or any other provision of the State Ethics Act, would prevent Renaissance or you, as an employee of Renaissance, from providing software development services to ABC, Inc. in the performance of a Eckert, 01 -603 November 26, 2001 Page 2 software development contract that ABC, Inc. would have with the Commonwealth; 2. Whether 65 Pa.C.S.A. Section 1103(g), or any other provision of the State Ethics Act, would prevent Renaissance or you, as an employee of Renaissance, from providing software development services to ABC, Inc. in the performance of a software development contract that ABC, Inc. would have with the Department of Labor and Industry; and 3. Whether 65 Pa.C.S.A. Section 1103(g), or any other provision of the State Ethics Act, would prevent Renaissance from directly contracting with the Commonwealth generally or the Department of Labor and Industry and if not, whether you would be permitted to provide software development services as an employee of Renaissance in furtherance of such a contract. 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. In the former capacity as an Unemployment Compensation Appeals Program Manager for the Unemployment Compensation Board of Review within the Department of Labor and Industry, you would be considered a "public employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. §1102; 51 Pa. Code §11.1. This conclusion is based upon certain job duties outlined in your letter, which clearly indicates that you are a "public employee." Consequently, upon termination of public service, you became a "former public employee" subject to Section 1103(g) of the Ethics Act. While Section 1103(g) does not prohibit a former public official /public employee from accepting a position of employment, 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). The terms "represent," "person," and "governmental body with which a public official or 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 Eckert, 01 -603 November 26, 2001 Page 3 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. The term "representation" is also 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 /public 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. 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 Eckert, 01 -603 November 26, 2001 Page 4 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 /public 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 90 -006; Sharp, Opinion 90- 009 -R. The governmental body with which you were associated upon termination of public service is the Department of Labor and Industry in its entirety including, but not limited to the Unemployment Compensation Board of Review. Therefore, for the first year after termination of service with the Department of Labor and Industry, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before the Department of Labor and Industry. Having set forth the restrictions of Section 1103(g) of the Ethics Act, your specific inquiries shall now be addressed. You are initially advised that to the extent your inquiries pertain to Renaissance Technologies, the Section 1103(g) restrictions only apply to former public officials and public employees, not to corporations. With regard to your first question, the Ethics Act would not prohibit you, as an employee of Renaissance, from providing software development services to ABC, Inc. in the performance of a software development contract that ABC, Inc. would have with the Commonwealth, assuming that such contract would not involve prohibited representation before the Department of Labor and Industry. The Section 1103(g) restrictions would not apply to your future contacts with Commonwealth agencies other than the Department of Labor and Industry, because such would not constitute your former governmental body. With regard to your second question, the Ethics Act would not prohibit you, as an employee of Renaissance, from providing software development services to ABC, Inc. in the performance of a software development contract that ABC, Inc. would have with the Department of Labor and Industry to the extent that in providing such services, you would not engage in prohibited representation before the Department of Labor and Industry during the one -year period of restricted activity. As to your last question, the Ethics Act would not prohibit you, as an employee of Renaissance, from providing software development services in furtherance of a contract that Renaissance would have with the Commonwealth or the Department of Labor and Industry so long as you would not "represent" Renaissance before the Department of Labor and Industry as delineated above. Based upon the facts which have been submitted, this Advice has addressed the applicability of Section 1103(g) only. 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. 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 Governor's Code of Conduct. Eckert, 01 -603 November 26, 2001 Page 5 Conclusion: In the former capacity as an Unemployment Compensation Appeals Program Manager for the Unemployment Compensation Board of Review within the Department of Labor and Industry, you would be considered a "public employee" as defined in the Public Official and Employee Ethics Act ( "Ethics Act "), Act 93 of 1998, Chapter 11. Upon termination of service with the Department of Labor and Industry, you became a `former public employee" subject to Section 1103(g) of the Ethics Act. The former governmental body is the Department of Labor and Industry in its entirety including, but not limited to the Unemployment Compensation Board of Review. The restrictions as to representation outlined above must be followed. 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. The 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