Loading...
HomeMy WebLinkAbout96-502 KesterDear Mr. Vilim: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL January 30, 1996 Guy Vilim, Esquire 96 -502 Gold & Vilim 1608 Walnut Street Suite 1102 Philadelphia, PA 19103 Re: Former Public Employee; Section 3(g); Department of Labor & Industry; Office of Vocational Rehabilitation; Statewide Independent Living Council; Vocational Rehabilitation Specialist II; SILC Coordinator. This responds to your letters of November 30, 1995 and December 20, 1995 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law restricts a public employee with regard to the termination of Commonwealth employment to accept private employment with a private agency which has been created to assume a newly - privatized governmental function from the former governmental body. Facts: Your office represents the Statewide Independent Living Council (SILC), which is a new non - profit agency that promotes equal access and inclusion of people with disabilities into society within Pennsylvania. You request an advisory on behalf of Ms. Joan Kester, who is presently employed by the Department of Labor & Industry (L &I) as a Rehabilitation Specialist in the Central Office of the Office of Vocational Rehabilitation (OVR). You have submitted a copy of Ms. Kester's job description, which is incorporated herein by reference. Ms. Kester's job classification is "Vocational Rehabilitation Specialist II." Ms. Rester is currently assigned to perform duties as OVR's liaison to SILC. Until recently, Ms. Kester's duties were described as "SILC Coordinator." OVR assigned Ms. Rester to SILC in Vilim/Kester, 96 -502 January 30, 1996 Page 2 accordance with the provisions of the Federal Rehabilitation Act of 1973, 29 U.S.C. 6701 gt egg., (the Rehabilitation Act). The Rehabilitation Act prompted SILC's original creation as part of State government, as well as its recent separation and privatization. Ms. Kester's proposed new position would be that of Executive Director of SILC. Her duties would be those normally assigned to an executive director, including overall responsibility for the day -to -day operation of SILC as well as responsibility for all programmatic, personnel and financial matters. She would report to SILC's Board of Directors. Her duties as Executive Director would essentially be the same as those she performed until October 1, 1995 as SILC Coordinator for OVR. You have submitted a copy of the duties Ms. Rester performed as SILC Coordinator, which is incorporated herein by reference. You state that this matter arises out of ongoing efforts by the Commonwealth to comply with the Rehabilitation Act, which provides federal funds to states to assist in the creation and funding of a network of centers to provide support services for disabled persons. Pennsylvania receives more than $1 million each year in federal funding to support these programs. Pennsylvania itself contributes slightly less than that to the programs. The Rehabilitation Act requires that each state identify a Designated State Unit (DSU) which develops an annual plan detailing how the state will comply with mandates of the Rehabilitation Act. The DSU in Pennsylvania is OVR. The state plans drafted by OVR define services that will be provided to persons with disabilities using Rehabilitation Act funds. They also set forth the state's design for the establishment of a network of agencies that will actually be responsible for delivering the services, set forth the steps that the state will undertake to assure coordination and efficiency in the delivery of services, define the state's objectives in fulfilling the purposes of the Rehabilitation Act, and specify the actions to be taken in order to achieve the objectives stated in the plan. Finally, the state plans establish the timeliness for implementation of each action. The Rehabilitation Act also requires that each state create a SILC which assists in the development of the state plan. The members of the SILC are appointed by the state governor but, by statute, the SILC may not be created as a part of any existing state agency. The SILC monitors, reviews, and evaluates implementation of the state plan. To assure the ability of the SILC to perform these functions, each state plan must include a description of resources assigned to the SILC, "including such staff and personnel, as may be necessary to carry out the functions of the Council (SILC)." The DSU may assign staff to SILC but the SILC must remain independent of the DSU: Vilim /Rester 96 -502 January 30, 1996 Page 3 While assisting the Council [SILO] carry out its duties, staff and other personnel shall not be assigned duties by the designated state agency [DSU] or any other agency or office of the state, that would create a conflict of interest. 29 U.S.C. 8796d. Consistent with these requirements, Pennsylvania created the SILC and appointed its members, and OVR assigned Ms. Kester to duties supporting SILC. To confirm that Ms. Kester was not also assigned any other duties which might create a conflict of interest, OVR created a job description for her as SILC Coordinator. The state then reported Ms. Kester's duties in the state plan which was submitted to the federal government to become effective October 1, 1994 (the beginning of the federal fiscal year). You have submitted relevant parts of that plan which are incorporated herein by reference. Per the plan, as of October 1, 1994, SILC was not an entity separate from the state. As required by the Act, the SILC Coordinator continued as an employee of the DSU but was headquartered at SILC with sole responsibilities to SILC. You feel it is significant that the same state plan also identified the direction the state wanted to pursue in improving the structure and operation of SILC in future years: to make the SILC an entirely independent entity. The plan stated, "The SILC remains financially connected to the DSU, but these ties are decreasing as the Council [SILC] gains independence." At that time, the state intended to have SILC incorporate as a private agency and then directly employ the staff assigned to it. The state built this intention into the state plan submitted for the following year. That state plan, which became effective on October 1, 1995, explained: The SILC is applying for its non - profit corporation status, to be effective prior to 10/1/95. The SILC headquarters is located at 899 Penn Avenue, Suite 5, Sinking Spring, PA 19608 . . . The Executive Director and other SILC staff will be employees of the corporation, and have sole responsibility to the SILC. No other job duties are assigned that create a conflict of interest. The SILC receives funds through a grant with the DSU. You state that in accordance with this plan by the state to privatize SILC and convert its staff into employees of the new private corporation, the state also planned to privatize Ms. Kester's duties as SILC Coordinator, only under the new title of Executive Director. The new SILC Board of Directors agrees that Vilim /Kester, 96 -502 January 30, 1996 Page 4 they will consider hiring her as SILC'c Executive Director. If that happens, the transfer would involve Ms. Rester's resignation from state employment and her subsequent employment by the new private entity. You state that although Ms. Rester was necessarily involved in the process that led to the decision to privatize SILC, the decision itself was made entirely by others within OVR and the executive committee at SILC. Ms. Kester also has no role in the process by which SILC will decide whether to hire her as Executive Director. If hired as Executive Director, Ms. Rester's salary will remain the same as she currently earns and her benefits and other conditions of employment will decrease. Effective October 1, 1995; as planned, SILC incorporated as a private, non - profit entity. Ms. Kester is still assigned to SILC by OVR but the Board of Directors of the new corporation has assumed all control of discretionary decisions related to finances, personnel and other operational issues until the executive director position is filled. Ms. Rester currently performs only ministerial and liaison duties at SILC and will not regain authority to direct decisions within SILC unless and until she is able to accept the Executive Director position. She is still assigned no duties at OVR. Your specific question is as follows: if the Commonwealth privatizes a government function and transfers the jobs involved in performing that function from the public sector to a private agency created to assume that function, does the Ethics Law prohibit the affected government employees from accepting the new private sector jobs? It is your belief that no violation would exist in Ms. Rester's situation because you believe that the Ethics Act was never intended to reach the type of privatization of government functions at issue here; because Ms. Kester played no decisive role in the privatization of the SILC and her job; and because Ms. Rester will not benefit financially from such a privatization. In support of your theory you cite podaro v. SEC, 527 Pa. 539, 594 A.2d 652 (Pa. 1991) and various other case law. You note that the state decided that it could best comply with federal legal mandates by privatizing a government function and by privatizing Ms. Kester's job at the same time. You state that no one familiar with the decision doubts that she is the most qualified person to hold the Executive Director's job, and that the best implementation of the plans made by the State includes her transfer into that position. You state that it would be an absurd and unreasonable result, contrary to the intent of the Ethics Act, to require that someone else, less qualified, take the Executive Director position to the detriment of the public interest. Vilim/Kester, 96 -502 January 30, 1996 Page 5 As for Section 3(g) of the Ethics Law, 65 P.S. §403(g), you proffer your view that its prohibitions would not apply, primarily because the Ethics Act was, in your view, never intended to reach a privatization process such as this. You contend that if the Ethics Act does not apply here, then an individual prohibition in the Act would not apply either. You state that the result of applying this prohibition to Ms. Kester would be to prohibit the person most qualified to implement the State's own privatization plan from interacting with OVR, a function that you state is essential to both the operation of SILC and the privatization plan itself. You state that the Legislature never intended for the Ethics Law to create such an absurd, self- defeating result. You state that additional reasons for concluding that the Section 3(g) prohibition does not apply here are that Ms. Rester has not been "associated" with OVR for more than a year, and that she now performs the functions of neither a public employee nor a public official. You further state that Section 3(g) regulates the conduct of former government employees who were able to exercise discretion so as to direct or influence actions and decisions by the particular government agencies with which they were associated and specifically limits these persons' representation before those particular entities for one year. It is your belief that this limit would not restrict Ms. Rester in any way as SILC's Executive Director. Ms. Rester is a Rehabilitation Specialist. You feel it is significant, however, that Ms. Rester has not performed any of those duties in more than a year. Rather, Ms. Kester performed the functions of SILO Coordinator between October 1,1994, and October 1, 1995. By law, Ms. Rester had no duties assigned to her within OVR during that period. Also by law during that period, SILC was not even a part of OVR or any other existing state agency. Consequently, Ms. Kester has had no duties and no authority within OVR for more than a year. She has not had any authority to direct or influence any actions within OVR. You believe that as a result, she has not been "associated" with OVR as the Ethics Act uses that term. You therefore believe that nothing in her proposed SILC employment would invoke the prohibition of Section 3(g) as it applies to OVR. You state that Ms. Rester has not been associated with OVR, as the Act uses that phrase, for more than the one year period of the Section 3(g) prohibition. You feel that the intent of Section 3(g) is to prohibit representation before a particular agency by one who has, within the last year, had authority inside that particular agency to take or recommend non - ministerial actions by the agency. You believe that is not the case here and that Section 3(g) should not prohibit Ms. Rester from representing SILC before OVR as the Executive Director. You further state that you believe the Ethics Act does not apply because Ms. Kester is not presently acting as a public Vilim /Rester, 96 -502 January 30, 1996 Page 6 official or public employee under the statute. You believe that Ms. Rester would not be a public official because she is neither an elected nor an appointed official. You also believe that the definition of public employee as used in the Ethics Act, does not apply to Ms. Rester. You state that, since October of this year, SILC has existed as an entity that is entirely separate and independent from the government. As such, SILC has taken onto itself all of the non - ministerial authority formerly exercised by Ms. Rester as the SILC Coordinator. Under this arrangement, Ms. Rester is still assigned to SILC, but all of her duties relate to that private entity, and all of her duties involve non - discretionary, ministerial functions. You feel that these facts place her current situation outside the definition of a public employee and outside the intended scope of the Ethics Act. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. 55407(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 P.S. 55407(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 the propriety of past conduct cannot be addressed in the scope of an advisory. 65 P.S. 55407 (10) , (11) . As the SILC Coordinator, classified as a "Vocational Rehabilitation Specialist II," for the Department of Labor & Industry, Office of Vocational Rehabilitation, Ms. Rester would be considered a "public employee" within the definition of that term as set forth in the Public Official and Employee Ethics Law and the Regulations of this Commission. 65 P.S. 5402; 51 Pa.Code 511.1. The submitted job descriptions, which set forth Ms. Rester's duties as SILC Coordinator and as a Vocational Rehabilitation Specialist, when reviewed on an objective basis, indicate clearly that the power exists to take or recommend official action of a non - ministerial nature with respect to contracting, procurement, planning, inspecting, administering or monitoring grants, leasing, regulating, auditing or other activities where the economic impact is greater than de minimis on the interests of another person. Either job description would be sufficient to support the above conclusion. Thus, even if Ms. Rester's job description for her duties in one or the other of these positions were to be ignored, the remaining job description would, in and of itself, establish her status as a "public employee" subject to the Ethics Law. Under the objective test reviewed and approved in phillips v. SEC, 79 Vilim /Kester, 96 -502 January 30, 1996 Page 7 Pa.Commw. 491, 470 A.2d 659 (1984), Ms. Rester is clearly subject to the Ethics Law. Section 3(a) of the Ethics Law provides as follows: Section 3. Restricted Activities 65 P.S. 5403(a). (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. "Conflict" or "conflict of interest" is defined in the Ethics Law as follows: "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. "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. 65 P.S. §402. Section 3(g) of the Ethics Act provides that: Section 3. Restricted activities. (g) 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. Although you argue that neither Section 3(a) nor 3(g) should be applied to Ms. Rester in light of the privatization of a former governmental function which is involved here, the Commission does Vilim /Kester 96 -502 January 30, 1996 Page 8 not have the authority to legislate such exceptions to the Ethics Law. Richardson, Opinion 93 -006. Under Section 3(a) of the Ethics Law quoted above, a public official /employee may not use the authority of public office/ employment or confidential information received by holding such a public position for the private pecuniary benefit of himself, a member of his immediate family, or business with which he or a member of his immediate family is associated. In applying Section 3(a) of the Ethics Law to the proffered facts, Section 3(a) would prohibit Ms. Rester from using the position or emoluments of her public position or confidential information to advance an opportunity of private employment with the SILC. The facts which have been submitted do not enable a conclusive determination as to whether the elements of Section 3(a) would be met if Ms. Rester were to accept the position of employment with SILC. However, to illustrate Section 3(a) through a hypothetical example, if Ms. Rester, as a public employee, would for example be involved in creating the job description for the Executive Director of SILC -- the position which she now seeks to hold -- such could constitute a basis for a conflict of interest. Within the limitations of the facts which have been provided, this Advice must necessarily be limited to providing the above general guidance and hypothetical example as to Section 3(a). Upon termination of public service, Ms. Rester would become a "former public employee" subject to Section 3(g) of the Public Official and Employee Ethics Law. Initially, to answer your request the governmental body with which Ms. Kester was associated while working with the Department of Labor & Industry, Office of Vocational Rehabilitation must be identified. Then, the scope of the prohibitions associated with the concept and term of "representation" must be reviewed. The term "governmental body with which a public official or public employee is or has been associated" is defined under the Ethics Law as follows: Section 2. Definitions. "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. Vilim /Rester, 96 -502 January 30, 1996 Page 9 Notwithstanding your arguments as to Ms. !tester's alleged lack of duties /authority at OVR during the past year, Ms. Rester has been and continues to be employed yy L &I, not SILC, for purposes of applying the above statutory definition. It is noted that Act 9 of 1989 significantly broadened the definition of the term "governmental body with which a public official or public employee is or has been associated.° It was the specific intent of the General Assembly to define the above term so that it was not merely limited to the area where a public official/ employee had influence or control but extended to the entire governmental body with which the public official /employee was associated. The foregoing intent is reflected in the legislative debate relative to the amendatory language for the above term: We sought to make particularly clear that when we are prohibiting for 1 year that revolving -door kind of conduct, we are dealing not only with a particular subdivision of an agency or a local government but the entire unit..." ;, egislative Journal of House, 1989 Session, No. 15 at 290, 291. The Ethics Law must be construed to ascertain and effectuate the intent of the General Assembly under 1 Pa. C.S.A. §1901. Based upon the above, the governmental body with which Ms. Rester was associated upon termination of public service would be the Department of.Labor and Industry in its entirety, including but not limited lo OVR. The above is based upon the language of the Ethics Law, the legislative intent (Legislative Journal of House, 1989 Session, No. 15 at 290, 291) and the prior precedent of this Commission. Thus, in $irolli, Opinion 90 -006, the Commission found that a former Division Director of the Department of Public Welfare (DPW) was not merely restricted to the particular Division as was contended but was in fact restricted to all of DPW regarding the one year representation restriction. Similarly in Sharp, Opinion 90- 009 -R, it was determined that a former legislative assistant to a state senator was not merely restricted to that particular senator but to the entire Senate as his former governmental body. Therefore, within the first year after termination of service with L &I, Section 3(g) of the Ethics Law would apply and restrict representation of persons or new employers vis -a -vis L &I in its entirety, including but not limited to OVR. Turning now to the scope of the restrictions under Section 3(g), the Ethics Law does not affect one's ability to appear before agencies or entities other than with respect to the former governmental body. Likewise, there is no general limitation on the type of employment in which a person may engage, following Vilim /Rester 96 -502 January 30, 1996 Page 10 departure from their governmental body. It is noted, however, that the conflicts of interest law is primarily concerned with financial conflicts and violations of the public trust. The intent of the law generally is that during the term of a person's public employment he must act consistently with the public trust and upon departure from the public sector, that individual should not be allowed to utilize his association with the public sector, officials or employees to secure for himself or a new employer, treatment or benefits that may be obtainable only because of his association with his former governmental body. In respect to the one year restriction against such "representation," the Ethics Law defines "Represent" as follows: Section 2. 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. The Commission, in Povovich, Opinion 89 -005, has also interpreted the term "representation" as used in Section 3(g) of the Ethics Law to prohibit: 1. Personal appearances before the former governmental body or bodies, including, but not limited to, negotiations or renegotiations in general or as to contracts; 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; 5. Lobbying, that is representing the interests of any person or employer before the former governmental body in relation to legislation, regulations, etc. The Commission has also held that listing one's name as the person who will provide technical assistance on such proposal, document, or bid, if submitted to or reviewed by the former governmental body constitutes an attempt to influence the former governmental body. Section 3(g) would also prohibit in general the inclusion of the name of a former public official /public employee on invoices submitted by his new employer to the former Vilim/Kester, 96 -502 January 30, 1996 Page 11 governmental body, even though the invoices pertain to a contract which existed prior to termination of public service. shay, Opinion 91 -012. However, in the event of work performed on a contract already awarded and not involving 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. Therefore, within the first year after termination of service, Ms. Rester should not engage in any of the prohibited activities outlined above. Ms. Rester may assist in the preparation of any documents presented to L &I. However, Ms. Rester may not be identified on documents submitted to L &I. Ms. Rester may also counsel any person regarding that person's appearance before L &I. Once again, however, the activity in this respect should not be revealed to L &I. Of course, any ban under the Ethics Law would not prohibit or preclude the making of general informational inquiries of L &I to secure information which is available to the general public. 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 a new employer. In addition, the term "Person" is defined as follows under the Ethics Law: Section 2. Definitions. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. In applying the definition of "Person" quoted above, the Commission has held that the term includes a former public employee representing himself in providing consulting services to his former governmental body. Confidential Opinion 93 -005. Further, the term "Person" includes a new government employer which is represented by the former public employee before his former governmental employer. I,edebur, Opinion 95 -007. As to the applicability of Section 3(a) and Section 3(g), it is noted that an exception could not be carved out for Ms. Kester by this Commission simply because she may be the most qualified person for the job of Executive Director at SILC. The Ethics Law is interpreted, applied and enforced in an equitable and uniform fashion. Furthermore, Sections 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public official /employee and no public official /employee shall solicit or accept anything of Vilim /Rester, 96 -502 January 30, 1996 Page 12 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 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 Law; 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 Law. Specifically not addressed herein is the applicability of the Governor's Code of Conduct. Conclusion: As the SILC Coordinator, classified as a Vocational Rehabilitation Specialist II, for the Department of Labor & Industry, Office of Vocational Rehabilitation, Ms. Rester would be considered a "public employee" as defined in the Ethics Law. Pursuant to Section 3(a), Ms. Rester could not use the authority of her public position or confidential information obtained by being in that position, to advance an opportunity of employment with the Statewide Independent Living Council (SILC). Upon termination of service with the Department of Labor & Industry, Ms. Rester would become a "former public employee" subject to Section 3(g) of the Ethics Law. The former governmental body would be the Department of Labor & Industry in its entirety, including but not limited to the Office of Vocational Rehabilitation. The restrictions as to representation outlined above must be followed. The propriety of the proposed conduct has only been addressed under the Ethics Law. Further, should service be terminated, as outlined above, the Ethics Law also requires that a Statement of Financial Interests be filed for the year following termination of service. Pursuant to Section 7(11), this 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, providing 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. Vilim/Rester, 96 -502 January 30, 1996 Page 13 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, Pnited 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. erely, Tie Vincent J. Dopko Chief Counsel