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HomeMy WebLinkAbout92-001 LillieHonorable Edward G. Rendell Office of the Mayor Room 215 City Hall Philadelphia, PA 19107 I. Issue: ` STATE ETHICS COMMISSION 308 FINANCE BUILDING . HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Dennis C. Harrington, Chair James M. Howley, Vice Chair Daneen E. Reese Roy W. Wilt Austin M. Lee James P. Gallagher Allan M. Kluger DATE DECIDED: February 20, 1992 DATE MAILED: February 26, 1992 92 -001 Ms. Charisse R. Lillie City of Philadelphia Office of City Solicitor 15th St. and J.F. Kennedy Boulevard Philadelphia, PA 19102 -1682 Re: Conflict, Public Employee, Mayor Elect, City, Philadelphia, Executive -on -Loan, Volunteer, Salary paid by Corporate Employer. Dear Mayor Rendell and Ms. Lillie: This Opinion is issued in response to your request of December 19, 1991. Whether the Public Official and Employee Ethics Law imposes any prohibition or restrictions upon a mayor elect from utilizing executives -on -loan in an office of management and productivity which develops management and efficiency recommendations and executives - on -loan to work in very specialized function's within the city to implement reforms and changes proposed by the, office of management and productivity. II. Factual Basis for Determinations The City of Philadelphia is in the midst of a fiscal crisis and is working on the creation of a broad based partnership between the public and private sectors as part of an overall strategy for convincing the financial markets and citizenry that Philadelphia can be managed well and efficiently. Mayor Elect Edward G. Rendell, who will begin his term of office of January 6, 1992, has been working directly with business leaders and official organizations representing the private business sector to develop a comprehensive plan for bringing managerial expertise and efficiencies into the operations of Philadelphia. The Delaware Valley business leadership has been requested to form a steering committee to develop and implement a plan for making a private /public partnership. A plan has been developed which is comprised of three separate elements. First, a management and productivity task force will be formed by the private business sector which will not be part of the government of the City of Philadelphia but which will conduct a comprehensive management consulting study of the Philadelphia City government operations. The task force will draw on the expertise of the business community in the greater Philadelphia area to conduct the study on a pro Bono basis. The task force will work with government officials to identify problems and assign them to appropriate volunteer executives who will have no line responsibility or any other supervisory role in the operations of the government of Philadelphia. The volunteer business executives will be acting as unpaid outside consultants for the purpose of analyzing individual problems and formulating proposals that will become part of the overall efficiency, productivity and management study. The second element of the partnership will consist of the creation by Mayor -Elect Rendell of the Office of Management and Productivity (OMP) within the Mayor's office which unit will be responsible for working with the consulting task force and implementing management and efficiency recommendations developed by that task force and its own staff. In addition, OMP will study and implement appropriate recommendations for managerial reform as to reports from the City Controller's Office and other public and private sources. Mayor -Elect Rendell will ask the business leadership to seek volunteers from within its own ranks to help staff OMP and said volunteers will be asked for at least one year commitments to work full time for OMP but will remain on whatever salary or other employment arrangements which currently exist with their individual employers. The third and final element of the partnership involves the utilization of special help by Mayor -Elect Rehdell on a short term basis. In particular, it is anticipated that there will be a need to seek from the ranks of the business community short term volunteers who could perform certain very specialized functions in City government necessary to implement reforms and changes proposed by the volunteer business community consulting group or OMP. As a hypothetical example, you note that the private sector might recommend that a particular department of City government have one additional exempt deputy or OMP might suggest the need for a particular type of assistance like some specialized computer or high technology function on a short term basis. If such occurs, Mayor -Elect Rendell would periodically discuss this with the steering committee to seek such short term volunteers who would exercise such line or supervisory responsibility within City government that would be appropriate for the tasks at hand. These individuals would be volunteers who would be willing to spend time in the City government without seeking any salary or emoluments from Philadelphia and would maintain whatever existing employment relationships with their current employers. After referencing Commission Opinions, 90 -014 and 91- 005 -R, you express your view that the proposed partnership would be consistent with and permitted by both the letter and spirit of the Ethics Law. You assert that the central premiss behind the comprehensive partnership is volunteerism whereby the business executive is not directed by his employer to leave private industry to join City government but rather told quite clearly that he would have a real choice to either spend time in City government only if he chooses to do so, in which case the person's private salary and other benefits and perquisites would continue and remain unaffected by the decision as to whether he would volunteer his services. You accept the fact that any volunteer and the business with which he is associated would be told that he must adhere to all ethics laws including those that govern whether a business with which the individual is associated can do business with the City as well as those governing conflicts of interest and finally the disclosure form filing requirements. You request an opinion as to whether any aspect of the above program conflicts with the Ethics Law. Finally, you note that in light of the fiscal crisis presently confronting the City and the need for the new administration to move rapidly in attacking the fiscal crisis and strengthening the image of the City in the business community at large, in financial markets and among the citizens of the City you request that we proceed in a expedited fashion to issue an Opinion as to your request. III. Discussion: When Mayor -Elect Edward G. Rendell begins his term of office on January 6, 1992, he will be a public official as that term is defined under the Ethics Law and hence subject to the provisions of that law. 65 P.S. 402 The following terms are defined under the Ethics Law: Section 2. 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 of a member of his immediate family is associated. "Conflict" or "conflict of interest" 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 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 P.S. Section 402 Section 3(a) of the Ethics Law provides as follows: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 P.S. 403(a). In addition, Sections 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public official /employee anything of monetary value and no public official / employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has or will be any transgression thereof but merely to provide a complete response to the question presented. Section 3(e) of the Ethics Law provides: Section 3(e) Restricted Activities. (e)(1) No person shall solicit or accept a severance payment or anything of monetary value contingent upon the assumption or acceptance of public office or employment. 65 P.S. Section 403 (e) (1). As we noted in Confidential Opinions 90 -014 and 91- 005 -R, Section 3(e) of the Ethics Law restricts an individual from either soliciting or accepting a severance payment or anything of value contingent upon the acceptance of public employment. In Confidential Opinion 90 -014, we concluded that a city mayor was restricted by Section 3(e) of the Ethics Law from an individual to a city position where the individual's cuu``rrrent corporate employer would continue to pay his salary because the individual would be accepting something of monetary value contingent upon the acceptance or assumption of public employment. Our decision was based upon the preexisting negotiations and discussions prior to the acceptance or assumption of public employment and the receipt of the salary which would be higher than that set by city ordinance for that position. However, in Confidential Opinion 91- 005 -R, we concluded that associate attorneys from a private law firm could be utilized by a city solicitor or district attorney or other public entity for a period of time while their salaries and benefits were paid by their law firm since in that case the acceptance or assumption of public employment was not contingent upon the solicitation or acceptance of anything of value. Thus, in the latter case, the contingency element of Section 3(e) was not present given the fact that the law firm allowed the associate lawyers to choose among various options for employment in either the public or private sector. In applying Section 3(e) of the Ethics Law and our prior precedent to the instant matter, we believe that facts at bar are analogous to Confidential Opinion 91- 005 -R. In this regard, we note that volunteerism is the operational aspect of this particular program. Since it is expressly stated and assumed that all business executives are not directed by their private employers to leave industry and join the City but rather are given a real choice whether to serve and spend time in City government as consultants, we must therefore conclude that the "contingent" element of Section 3(e) is not present in this case. Section 3(e) the Ethics Law would not prohibit the use of executives -on -loan for the OMP or as short term volunteers who would perform certain very specialized functions within City government. Likewise, the utilization from the private business sector of a management and productivity task force, the members of which would serve on a pro bono basis, for the purpose of identifying the problems and assigning appropriate volunteer business executives who would have no line responsibility or supervisory role in the operation of City government, would not be prohibited by Section 3(e) of the Ethics Law. As noted in our prior Opinions, the executives -on -loan who would serve in the OMP as well as the executives -on -loan who would serve on a short term basis in very specialized functions within City government would be considered public employees under the Ethics Law. Their private employers would be businesses with which they are associated and consequently those public employees would have conflicts under Section 3(a) of the Ethics Law regarding matters involving their private employers or any clients of their private employers. See, Mille; Opinion 89 -024. The executives -on -loan could not participate or be involved with any matter regarding the businesses with which they are associated or clients of those businesses and would have to comply with the disclosure requirements of Section 3(j) of the Ethics Law which provides: Section 3. Restricted activities (j) 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 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 P.S. §403(j). As has been noted in the advisory request, the executives -on -loan who would be working in public employment must file Financial Interests Statements pursuant to the requirements of Section 4(a) of the Ethics Law, 65 P.S. 404(a). Adjunct to our ruling above, we note that the management and productivity task force that will conduct the comprehensive management consulting study on a pro bono basis will not be a part of City government. Based upon the above facts, the members of that task force would not be public officials /employees subject to the provisions of the Ethics Law, except for Sections 3(b) and 3(c) which have application to everyone. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute code, ordinance, regulation or other code of conduct other than the Ethics Law has not been considered in that they do not involve an interpretation of the Ethics Law. Specifically, the Home Rule Charter of Philadelphia has not been addressed herein. IV. Conclusion: A mayor -elpet of a city will be a public official subject to the provisions of the Ethics Law when he begins his term of office. Section 3(e) of the Ethics Law would not prohibit the mayor from utilizing executives -on -loan from private employers on a purely voluntary basis to work within the city or on a short term basis to perform very specialized functions when the salaries of the individuals would be continued to be paid by their private employers. Those executives -on -loan who so choose to serve the city would be considered public employees and would have a conflict whenever their private employers, the businesses with which they are associated, would have matters pending before the city. Those executives -on -loan would also have a conflict as to any clients of their private employers. The executives- on -loan could not participate in those matters and must observe the disclosure requirements of Section 3(j) of the Ethics Law. Additionally, the executives -on -loan must file the Financial Interest Statements as required by Section 4(a) of the Ethics Law. The members of an advisory task force who would conduct a comprehensive management consulting study without having any line or supervisory responsibility would not be public official /employees under the Ethics Law. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(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. such. This letter is a public record and will be made available as Finally, any person may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within fifteen days of the mailing date of this Opinion. The person requesting reconsideration should present a detailed explanation setting forth the reasons why the Opinion requires reconsideration. By the Commission, l Dennis C. Harrington Chair S