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HomeMy WebLinkAbout01-004 ConfidentialOPINION OF THE COMMISSION Before: Daneen E. Reese, Chair Louis W. Fryman, Vice Chair John J. Bolger Frank M. Brown Susan Mosites Bicket Donald M. McCurdy DATE DECIDED: 5/15/01 DATE MAILED: 5/30/01 01 -004 Re: Public Official, Former Public Official /Public Employee, Section 1103(g), Former Executive -Level State Employee, Section 1103(1), B, C, Board Member, R, S, T, U, Law Firm, Employment, Attorney, Lobbyist. This Opinion is issued in response to your request for a confidential advisory by letters dated April 19, 2001, and April 27, 2001. I. ISSUE: Whether the Public Official and Employee Ethics Act (Ethics Act), 65 Pa.C.S. §1101 et seq., presents any prohibitions or restrictions upon the employment of an individual who is the former B, a continuing Board Member of the W and the X, and who is an attorney, following termination of employment with the Commonwealth of Pennsylvania. II. FACTUAL BASIS FOR DETERMINATION: Effective [date], you resigned from your A position as B for the C. As B, you reported to D and E. You You submitted a copy of what you characterize as your job description" from F, which is incorporated herein by reference and includes the following: [quote]. F, at [page number]. As a member of the D's H, you dealt primarily with matters relating to the operation of government with reg to I, J, K, and L. You were responsible for submitting and supervising the M for the N of the D. You were charged by the D with the specific task of spearheading the development of his proposed 0 for P of the Q. Additionally, you served on the Boards of the R, the S, T, and the U. You state that T and S are part of the V, but that R and the U are not a part of any Executive Agency. Finally, you state that you served and continue to serve on the Boards of the W and the X. Confidential Opinion, 01 -004 May 30, 2001 Page 2 In contrasting the position of B to other positions within the Executive branch, you note the following: 1. The B is not a Y of the Commonwealth. 2. The B, unlike the office of D or Z, is not an elected office. 3. There are no prescribed duties or powers to be performed by the B pursuant to the Pennsylvania Constitution. 4. The powers and duties of the D do not devolve to the B, even in the event of disability or death of the D. 5. The B is not subject to confirmation by the Senate. Further, you note that no other AA or department reported to or through you to the D. Unlike the BB, the CC, or DD, all of whom also serve on the D's H, as B, you did not hire or supervise employees in the Executive agencies that dealt with or formulated EE relating to the agencies. Effective [date], you became employed by the law firm of FF. You state that in this position, you will not only practice law but will also provide governmental affairs services for various clients seeking to appear before the Legislative and Executive branches of state government, as well as independently elected statewide offices. You expect to engage in certain government affairs activity falling within the definition of "lobbying" and requiring registration under the Lobbying Disclosure Act, 65 Pa.C.S. §1301 et seq. You state that you assume that you are restricted from representing any person or entity before the C, the GG, the N of the D, T, and S for a period of one year following termination of your employment with the Commonwealth. You further assume that you would be banned from representing any person or entity before any Executive branch agency under the D's jurisdiction on matters directly related to the D's 0 for the Q. Noting that throughout your tenure with Pennsylvania state government, you have sought to adhere to the highest level of integrity, you seek an opinion from this Commission as to the restrictions that apply to you now under the Ethics Act with respect to your representation, either as a lobbyist or as an attorney, of individuals or entities before state agencies /governmental bodies. By letter dated May 8, 2001, you were notified of the date, time and location of the executive meeting at which your request would be considered. III. 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, this 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 continuing Member of the Boards of W and X, you are a public official and continue to be subject to the requirements of the Ethics Act relating to current public officials. See, Spieqelman, Opinion 91 -011. Given your stated awareness of this fact, Confidential Opinion, 01 -004 May 30, 2001 Page 3 and given that you have posed no questions as to those Boards, we shall now address the restrictions which apply to you with regard to your former positions. In your former capacity as B for the C, and in your former service on at least some of the Boards identified in the factual recitation above, you would be considered a public official /public employee and an "executive -level State employee" subfect to the Ethics Act and Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Consequently, upon termination of employment with the Commonwealth, you became a former public official /public employee and a former executive -level State employee as to your former public positions, and you became 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: Section 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 FF or its client(s) provided and conditioned upon the assumptions that you did not actively participate in recruiting FF or such client(s) to Pennsylvania, and that you did not actively participate in inducing FF or such client(s) to open or expand a plant, facility, or branch in Pennsylvania, through a grant or loan of money or a promise of a rant or loan of money from the Commonwealth of Pennsylvania to FF or such client(s). 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 ": Section 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 Confidential Opinion, 01 -004 May 30, 2001 Page 4 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 public employee is or has been associated" are specifically defined in the Ethics Act as follows: Section 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. 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 /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 public Confidential Opinion, 01 -004 May 30, 2001 Page 5 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. Since the restrictions of Section 1103(g) only apply as to representation before your former governmental body, it is important that we accurately define what your former governmental body includes. Based upon the facts which you have submitted, we conclude that the governmental body with which you would have been associated upon termination of employment with the Commonwealth would include all of the following: the GG; the N of the D; the C in its entirety; V in its entirety, including but not limited to the S and T; any other Executive agency with which you would have had extensive involvement regarding the D's proposed 0 for P of the Q; and, to the extent such are governmental bodies, the R and U. Your "former" governmental body would obviously not include the two Boards on which you continue to serve as a public official, specifically, the Boards of W and X. Therefore, for the first year after termination of your employment with the Commonwealth, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before your former governmental body as defined above. With regard to your continuing service on the Boards of W and X, you would continue to be a public official subject to the requirements of the Ethics Act relating to current public officials. Your representation of individuals or entities as a lobbyist would be subject to the restrictions set forth above. We would note that this Commission considers lobbying and the practice of law to be separate, distinct, and mutually exclusive activities. See, Capozzi, Opinion 99 -1025; Flaherty, Opinion 99 -1010; Artz, Opinion 99 -1007. Moreover, lobbying is one of the enumerated examples of forms of "representation" in the definition of "represent" as set forth in the Ethics Act, 65 Pa.C.S. §1102. As for representation of clients before your former governmental body in your capacity as an attorney, you are advised as follows. Following the landmark case of Pennsylvania Public Utility Commission Bar Association v. Thornburgh, 434 A.2d 1327 (Pa. Commw. Ct. 1981), aff'd per curiam, 498 Pa. 589, 450 A.2d 613 (Pa. 1982), this Commission consistently held that the predecessors of Section 1103(g) (Section 3(e) of Act 170 of 1978 and Section 3(g) of Act 9 of 1989) could not be applied to restrict an attorney's conduct insofar as it constituted the practice of law, because the Supreme Court had the exclusive authority Confidential Opinion, 01 -004 May 30, 2001 Page 6 to regulate an attorney's conduct in that regard. See, e.q., Andrews, Opinion No. 90- 018. This Commission was of the understanding that any activity in which the attorney purported to render professional services to a client could only be regulated by the Supreme Court. Pennsylvania Public Utility Commission Bar Association v. Thornburgh, 434 A.2d at 1331 -1332 (Note 7). However, Section 1103(g)'s counterpart provisions were considered to restrict attorneys as to other, non -legal representation before their former governmental bodies, such as, for example, lobbying. In 1999, the ruling of the Supreme Court of Pennsylvania in P.J.S. v. State Ethics Commission, 555 Pa. 149, 723 A.2d 174 (1999), caused us to revisit the question of whether Section 1103(g) of the Ethics Act operates to preclude even legal representation by a former public official /public employee before his former governmental body. Although the appellant in P.J.S. was not a "former" public official /public employee, we found that certain language in the Court's Opinion as to Section 1103(a) of the Ethics Act appeared to be equally applicable to Section 1103(g). Specifically, the Court stated: Contrary to appellant's assertion, the fact that the conduct proscribed by the conflict of interest provisions of the Ethics Act is similar to that proscribed by the Rules of Professional Conduct, does not mean that the Commission's investigation is barred. Appellant is not exempt from the jurisdiction of the Commission by virtue of his status as an attorney. Rather, appellant is subject to the jurisdiction of this court because of his status as an attorney. The jurisdiction of this court is exclusive in the sense that it applies equally to all members of the Bar of Pennsylvania. The exclusive jurisdiction of this court is infringed when another branch of government attempts to regulate the conduct of attorneys merely because of their status as attorneys. However, the jurisdiction of this court is not infringed when a regulation aimed at conduct is applied to all persons, and some of those persons happen to be attorneys. The flaw in appellant's separation of powers argument is illustrated by this court's recent decision in Commonwealth v. Stern, 549 Pa. 505, 701 A.2d 568 (Pa. 1997). In Stern, this court struck a penal statute that criminalized the conduct of attorneys. 18 Pa.C.S. §4117(b)(1). In finding that the penal statute infringed on this court's exclusive jurisdiction to regulate the professional and ethical conduct of attorneys, it was the fact that the statute made the conduct at issue criminal if performed by an attorney which was significant. Where a regulation deals with attorneys as a class then it infringes upon the jurisdiction of this court. To hold, as appellant suggests, that the mere status of "attorney" exempts one from meeting the necessary professional regulations which flow from whatever position one holds in addition to that of "attorney" is absurd. Clearly appellant's status as an attorney does not bar the Commission from investigating allegations that appellant engaged in conduct proscribed by the Ethics Act. The investigation of appellant by the Commission does not infringe upon this court's exclusive jurisdiction to regulate the ethical and professional conduct of attorneys admitted to the practice of law in this Commonwealth. P.J.S. v. State Ethics Commission, 555 Pa. 149, 157 -158, 723 A.2d 174, 178 (1999) (Emphasis added). The Court in P.J.S. drew a very clear, logical, and sensible distinction between the regulation of attorneys specifically, which intrudes upon the Court's jurisdiction, Confidential Opinion, 01 -004 May 30, 2001 Page 7 versus the regulation of groups that happen to include attorneys, which does not intrude upon the Court's jurisdiction. In reviewing the above analysis by the Supreme Court, this Commission determined in Shaulis, Opinion 99 -003, that Section 1103(g) of the Ethics Act applies to prohibit representation by a former public official /public employee before the former governmental body, even if that former public official /public employee happens to be an attorney engaged in the practice of law. In Shaulis, supra, we noted that Section 1103(g) is not targeted at attorneys specifically, nor does it regulate them exclusively. To the contrary, Section 1103(g) of the Ethics Act imposes restrictions upon all former public officials /public employees, some of whom are attorneys but many of whom are not. Moreover, the prohibition against representation before the former governmental body during the first year is not exclusively targeted at legal representation. To the contrary, the key term "represent" is defined so as to include any form of representation. 65 Pa.C.S. §1102. We viewed P.J.S., supra, as setting the parameters for permissible regulation of persons who include, but are not limited to, attorneys. We determined that the Section 1103(g) restrictions fit precisely within the parameters enunciated by the Supreme Court. Thus, we held that based upon P.J.S., supra, the restrictions of Section 1103(g) apply to restrict a former public official /public employee even as to the practice of law before the former governmental body. The Shaulis Opinion was appealed to Commonwealth Court. Commonwealth Court reversed the Shaulis Opinion "insofar as it attempts to apply the provisions of Section 1103(g) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1103(g) to [Shaulis'] representation, as an attorney, of clients before the Department of Revenue and the Courts of this Commonwealth." Shaulis v. State Ethics Commission, 739 A.2d 1091, 1106 (Pa. Commw. 1999). On November 1, 1999, the Commission filed a Petition for Allowance of Appeal with the Supreme Court of Pennsylvania. On April 11, 2000, the Supreme Court of Pennsylvania granted the Petition for Allowance of Appeal, limited to the following issues: 1. Does the lower Court's decision -which continues to exempt former public officials /public employees who happen to be attorneys from the restrictions of Section 1103(g) of the Ethics Act - conflict with the controlling precedent set by the Supreme Court of Pennsylvania in P.J.S., supra, that attorneys may be regulated by this Commission as part of a class which includes non - lawyers? 2. Did the lower Court exceed the bounds of appellate jurisdiction and act contrary to longstanding judicial precedent - including its own on point" ruling -by entertaining this matter as an appeal from an advisory opinion? Pursuant to Pa.R.A.P. 1736(b), the taking of an appeal by the Commonwealth operates as an automatic supersedeas in its favor. Given that the Commission's appeal of the Commonwealth Court decision operated as an automatic supersedeas, the Commonwealth Court's decision is inoperative pending the Supreme Court's ruling. Therefore, pending a Supreme Court ruling on the aforementioned appeal, it is the view of the State Ethics Commission that the Section 1103(g) restrictions would apply to you even if your proposed representation would constitute the practice of law. Confidential Opinion, 01 -004 May 30, 2001 Page 8 Based upon the facts which have been submitted, this Opinion has addressed the applicability of Sections 1103(g) and 1103(i) 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 /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. 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 HH or the Rules of Professional Conduct. IV. CONCLUSION: Upon termination of employment with the Commonwealth of Pennsylvania, the former B, who also served on the Boards of various public bodies, 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 Public Official and Employee Ethics Act, 65 Pa.C.S. § §1103(g), (i). Under Section 1103(i) of the Ethics Act, the former B would not be prohibited from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a private law firm or its client(s) provided and conditioned upon the assumptions that he did not actively participate in recruiting the private law firm or such client(s) to Pennsylvania, and that he did not actively participate in inducing the private law firm or such client(s) to open or expand a plant, facility, or branch in Pennsylvania, through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania to the private law firm or such client(s). With regard to Section 1103(g), the restrictions as outlined above must be followed. Based upon the submitted facts, the governmental body with which the former B would have been associated would include all of the following: the GG; the N of the D; the C in its entirety; the V in its entirety, including but not limited to the S and T; any other Executive agency with which the former B would have had extensive involvement regarding the D's proposed 0 for P of the Q; and, to the extent such are governmental bodies, the R and U. The "former" governmental body would not include Boards on which the former B continues to serve as a public official, in this case, the Boards of the W and the X. For the first year after termination of the former B's employment with the Commonwealth, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before the former governmental body as defined above. The restrictions of Section 1103(g) would apply even if such representation would constitute the practice of law. With regard to continuing service on Boards such as the Boards of W and X, the former B would continue to be a public official subject to the requirements of the Ethics Act relating to current public officials. Confidential Opinion, 01 -004 May 30, 2001 Page 9 With respect to the former B's former public positions, 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(10), the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). By the Commission, Daneen E. Reese Chair