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HomeMy WebLinkAbout01-001 ConfidentialI. ISSUE: OPINION 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: 2/26/01 DATE MAILED: 3/12/01 01 -001 Re: Conflict, Public Official /Employee, Honorarium, Member, Licensing Board A, B, Independent Consultant, Speaking Engagements, C Companies, Test Material Development Committee, Entity D. This Opinion is issued in response to your confidential advisory request dated January 9, 2001. Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq., would present any prohibition or restrictions upon a Member of Licensing Board A with regard to accepting fees for speaking engagements /presentations or for participating in developing test materials, where such activities would be related to the Member's profession as a B but would be unrelated to the Member's public position. II. FACTUAL BASIS FOR DETERMINATION: As a Member of Licensing Board A, you seek a confidential advisory from this Commission regarding restrictions imposed upon you by the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq. You ask whether the Ethics Act would prohibit your future acceptance of certain fees which have been described as "honoraria." Specifically, you ask whether you may accept fees from C companies for speaking engagements /presentations which appear to be related to your profession as a B but unrelated to your public position. You also ask whether you may accept fees for participating through Entity D as a member of a test material development committee in developing test materials related to your profession. Confidential Opinion, 01 -001 March 12, 2001 Page 2of7 You have submitted copies of documents pertaining to various contractual agreements for such services, which documents are incorporated herein by reference and may be summarized as follows. 1. The first document packet consists of a copy of an executed Agreement dated March 5, 1997, between you and Company E, by which you agreed to perform services as a speaker at various educational programs. The composition of your audiences is not indicated. Per the Agreement, you would provide speaking services as an independent consultant, not as an employee of Company E. You would speak on such topics as you and Company E would from time to time agree. From the context of the Agreement, it would appear that the topics would pertain to your profession but not Licensing Board A. Company E agreed to pay you "reasonable honoraria" in return for your services, and to reimburse you for reasonable travel, lodging, and meal expenses directly related to the services provided under the Agreement. 2. The second document packet includes an invitation from Company E for you to participate as a consultant at the F Meetings, and an executed Agreement Letter by which you agreed to do so. The composition of your audiences is not specified. Per the Agreement, you agreed to attend and participate in academic sessions and workshops on 1 of 2 specified dates, at which you would provide G opinions based on H experience and opinions on marketing issues including marketing strategies and programs. Company E agreed to pay you a fee of [amount] for such consultative services and to provide an additional payment of [amount] for incidental expenses and round -trip transportation and lodging for two nights. 3. The third document packet includes an executed Letter Agreement dated August 17, 2000, between you and Entity 1, setting forth the terms by which you would participate as a speaker in that program. The composition of your audiences is not indicated. The Agreement provides for an honorarium for each presentation, as well as various expenses. The honorarium is set at [amount] per presentation, except that a second or subsequent presentation in the same city on the same day is compensated at [amount]. The packet provides an example of your participation as the leader of a particular educational program. The lecture involved an issue related to your profession, but unrelated to Licensing Board A. 4. The fourth document packet consists of various documents from Entity D pertaining to your recent nomination and agreement to serve on a test material development committee for developing test materials related to your profession. According to the materials which you have submitted, committee members could additionally be invited to contribute to the preparation of materials and /or to participate as instructors for courses designed to prepare individuals for related examinations. An honorarium would be provided for your participation as a member of the committee. The documents which you have submitted describe the fees to be paid to you as "honoraria." The question before this Commission is whether such fees really are honoraria as defined by the Ethics Act and are therefore prohibited by the Ethics Act. By letter dated January 30, 2001, you were advised of the date, location, and time of the executive meeting at which your confidential request was to be considered. You responded that you would not attend the meeting but would make yourself available by telephone in the event that there were any questions relative to your request. III. DISCUSSION: Confidential Opinion, 01 -001 March 12, 2001 Page 3 of 7 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, this Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct which has already occurred, such past conduct may not be addressed in the context of this Opinion. Thus, this Opinion shall not rule upon the propriety of any past fees which you may have received for your participation in speaking engagements /presentations or on test development committees. However, to the extent you have inquired as to future conduct, your inquiry may and shall be addressed. In this regard, this Commission considers your request to be seeking guidance as to future conduct, and the contractual agreements which you have submitted to be exemplifying the types of activities for which you may be paid comparable fees in the future. As a Member of Licensing Board A, you are a public official as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Sections 1103(a) and 1103(j) of the Ethics Act provide: §1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. (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 Confidential Opinion, 01 -001 March 12, 2001 Page 4of7 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(a), (j). The following terms pertaining to conflict of interest 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. 65 Pa.C.S. §1102. Section 1103(d) of the Ethics Act provides: §1103. Restricted activities (d) Honorarium. —No public official or public employee shall accept an honorarium. 65 Pa.C.S. §1103(d). The term "honorarium" is defined in the Ethics Act as follows: §1102. Definitions "Honorarium." Payment made in recognition of published works, appearances, speeches and presentations and which is not intended as consideration for the value of such services which are nonpublic occupational or professional in nature. The term does not include tokens presented or provided which are of de minimis economic impact. 65 Pa.C.S. §1102 (Emphasis added). In applying the above provisions of the Ethics Act to the circumstances which you have submitted, pursuant to Section 1103(a) of the Ethics Act, a public official /public Confidential Opinion, 01 -001 March 12, 2001 Page 5 of 7 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. A public official /public employee is not prohibited from outside business activities provided there is no use of the authority of office or confidential information obtained by being in the public position for a prohibited private pecuniary benefit. Pancoe, Opinion No. 89 -011. In each instance of a conflict of interest, the public official /public employee must abstain from participation in the public capacity and observe the disclosure requirements of Section 1103(j) as set forth above. The abstention requirement is not limited merely to voting, but extends to any use of authority of office. The use of authority of office as defined in the Ethics Act includes, for example, discussing, conferring with others, and lobbying for a particular result. See, Juliante, Order 809. Section 1103(d) is an absolute prohibition against accepting honoraria. However, the question of whether a given payment is an honorarium is to be determined as a matter of law by an application of the statutory definition set forth in the Ethics Act, not by the mere label which may have been attached to the payment. Under Pennsylvania law, form is not elevated over substance (Baehr Brothers v. Commonwealth of Pennsylvania, 487 Pa. 233, 409 A.2d 326 (1979)), nor is an arbitrary label elevated over the applicable statutory definition. The statutory definition of "honorarium" generally includes payments which are made in recognition of speaking engagements /presentations, appearances, and published works, but excludes such payments if: (1) they are legitimately intended as consideration for the value of such services; and (2) they are undertaken in the public official's /public employee's private professional or occupational capacity and are not related to the public position. 65 Pa.C.S. §1102. In Baker, Opinion 91 -004, this Commission set forth criteria for determining whether the exclusion applies in any given instance. The criteria are: the private occupation of the public official /public employee; the expertise of the public official /public employee in the area; the history of activity in the occupation prior to public service; the purpose for the invitation; the capacity in which the public official /public employee is invited; the subject of the speech, work or presentation; the group spoken to and the composition as to members or non - members of the group; the purpose for gathering the group; the amount of the fee relative to the services performed; the source of the invitation; the event at which the speech is given; the subject matter of the speech or published work as compared to the normal subject matter dealt with by the occupational/ professional group; and any other relevant factors. In the instant matter, application of the relevant criteria establishes that fees for activities such as those which you have submitted would not constitute "honoraria" prohibited by the Ethics Act. First, you are a B, and although you have not submitted your curriculum vitae, there is a certain statutorily prescribed standard of experience for a member of your profession to serve on your Board. See, Act K at Section L. Further, although the composition of your audiences for speaking engagements /presentations has not been specified, the purpose of the activities would appear to have nothing to do with the work of Licensing Board A as set forth in Act K . The proposed speaking engagements /presentations for the C companies appear to be limited to topics related to your profession as a B and unrelated to your public position. The C companies themselves would not be subject to regulation by Licensing Board A. Confidential Opinion, 01 -001 March 12, 2001 Page 6of7 As for your participation through Entity D on the test material development committee, some activities would not involve speeches /presentations, appearances, or published works, and all activities would appear to be related to your profession and not your public position. Although Licensing Board A has some involvement with testing entities, such involvement is tangential to the main functions of the Board. Citation M. Finally, in light of your profession, fees such as those exemplified by the contractual agreements which you have submitted would not be unreasonable. Based upon the above, you are advised that Section 1103(d) of the Ethics Act, which provides that no public official or public employee shall accept an honorarium, would not prohibit you from accepting payments from C companies or Entity D where such payments would be legitimately intended as consideration for your services relative to speeches, appearances, presentations, published works, or participation on a test development committee, and such activities would be undertaken in your capacity as a B and would be unrelated to your public position. Despite the labels attached to such payments, as a matter of law, they would not constitute "honoraria" under the definition of the Ethics Act and could be accepted subject to the restrictions of Section 1103(a) of the Ethics Act set forth above. You are cautioned that to the extent Licensing Board Awould have involvement with Entity D, you would be required to comply with Sections 1103(a) and 1103(j) of the Ethics Act as to such matters. This Opinion is based upon the facts which have been submitted and is limited to addressing the applicability of Sections 1103(a), 1103(d), and 1103(j) 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. 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 N. IV. CONCLUSION: A Member of Licensing Board A is a public official subject to the provisions of the Public Official and Employee Ethics Act (the "Ethics Act "), 65 Pa.C.S. §1101 et seq. Section 1103(d) of the Ethics Act, which provides that no public official or public employee shall accept an honorarium, would not prohibit the Member from accepting payments from C companies or Entity D where such payments would be legitimately intended as consideration for the Member's services relative to speeches, appearances, presentations, published works, or participation on a test development committee, and such activities would be undertaken in the Member's capacity as a B and would be unrelated to the Member's public position. Such payments would not constitute "honoraria" under the definition of the Ethics Act and could be accepted subject to the restrictions of Section 1103(a) of the Ethics Act. Confidential Opinion, 01 -001 March 12, 2001 Page 7 of 7 To the extent Licensing Board A would have involvement with Entity D, the Member would be required to comply with Sections 1103(a) and 1103(j) of the Ethics Act as to such matters. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. 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