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HomeMy WebLinkAbout21-531 Miller PHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE: 717-787-0806 TOLL FREE: 1-800-932-0936 FINANCE BUILDING WEBSITE: www.ethics.pa.gov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL June 16, 2021 21-531 To the Requester: Dear Mr. Glenn R. Miller: This responds to your correspondence dated May 10, 2021, (received May 24, 2021) by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”) seeking guidance as to the questions summarized below: Issue: 1. Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would impose any restrictions upon a former public official/public employee concerning the creation of a non-profit entity whose sole purpose is to support the former governmental entity? Brief Answer: YES. For the first year following the end of public office/public employment, Section 1103(g) of the Ethics Act would restrict one’s ability to “represent” any “person” before their former governmental entity. 2. Does Section 1103(g) of the Ethics Act apply when no compensation would be provided to the former public official/employee? Brief Answer: NO. Section 1103(g) of the Ethics Act does not apply to restrict a former public official/employee when the representation does not involve promised or actual compensation or when payment to the former public official/employee is limited to reimbursement for reasonable and necessary actual expenses. Miller, 21-531 June 16, 2021 Page 2 Facts: In submitting the request for an advisory from the Commission you provided a factual basis which is summarized as follows: On April 24, 2021 you retired from the Pennsylvania Department of Education where you had served since 2015 as the Deputy Secretary, Commissioner for Libraries, and State Librarian. In this position, you oversaw the activities and funding administrated by Pennsylvania Department of Education’s Office of Commonwealth Libraries. You state that you were aware of the limitations concerning contacting former colleagues and prohibitions against lobbying following separation from public office/employment. You have indicated that you have neither the interest nor desire to engage in any lobbying activities; however, you do plan to explore the establishment of a nonprofit organization for the purpose of promoting and supporting what you have described as “one of the Commonwealth’s most under-appreciated public assets- the State Library of Pennsylvania.” You envision the nonprofit organization to be completely separate and apart from the State Library of Pennsylvania and the Department of Education. The nonprofit would be established by individuals who believe in the mission of the State Library and wish to see it enhanced and strengthened in the future as a resource for the public, as well as governmental agencies. At this time, you have taken no action related to the establishment of the nonprofit as described above; however, the idea remains a desire of yours to accomplish in the future. You have stated that you would not receive any compensation by serving as an officer/director/employee of the nonprofit – you would strictly be volunteering your time. Prior to your retirement, you spoke with representatives from Department of Education’s Office of Chief Counsel as to your duties and responsibilities pursuant the Ethics Act upon separation of governmental service. Pursuant your discussion with Chief Counsel’s office, you submitted the instant request for an advisory. Discussion: Pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all the material facts. As the Deputy Secretary, Commissioner for Libraries, and State Librarian, you were a “public employee” as well as an “executive-level State employee” as those terms are defined by the Ethics Act. As a “public official/public employee” and as an “executive-level State employee” you were subject to the Ethics Act and the Regulations of the Pennsylvania State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Upon termination of Commonwealth Miller, 21-531 June 16, 2021 Page 3 employment/service, you became a former public official/employee and former executive-level State employee 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: § 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 a 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 a business subject to the conditions that you did not actively participate in recruiting such business to Pennsylvania, and that you did not actively participate in inducing such business 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. The factual scenario for which you seek advice, i.e. the creation of a nonprofit entity to support the State Library, does not appear to invoke any prohibitions or restrictions upon you pursuant Section 1103(i) (65 Pa.C.S. §1103(i)). 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.” Miller, 21-531 June 16, 2021 Page 4 § 1103. Restricted activities (g) Former official or employee.--No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 Pa.C.S. § 1103(g) (Emphasis added). The terms “represent,” “person,” and “governmental body with which a public official or public employee is or has been associated” are specifically defined in the Ethics Act as follows: § 1102. Definitions “Represent.” To act on behalf of any other person in any activity which includes, but is not limited to, the 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, including a nonprofit business/entity. See, Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708 (2009) (Holding that the Ethics Act’s definition of the term “business” includes nonprofit entities.) It also includes the former public official/public employee himself, Confidential Opinion, 93-005, as well as a new governmental employer. Ledebur, Opinion 95-007. The term “represent” is also broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (3) submission of bid or contract proposals which are signed by or contain the name of the former public official/public employee; (4) participating in any matters before the former governmental body as to acting on behalf of a person; and (5) lobbying. Popovich, Opinion 89-005. Miller, 21-531 June 16, 2021 Page 5 A former public official/public employee may assist in the preparation of documents presented to his former governmental body. However, the former public official/public employee may not be identified on documents submitted to the former governmental body. The former 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/public employee had influence or control but extends to the entire body. See, Legislative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion 90-006; Sharp, Opinion 90-009-R. Applying the foregoing to the specific facts presented, the governmental body with which you are deemed to have been associated upon separation with Pennsylvania Department of Education is the Department of Education and/or any subordinate office reporting to the Department of Education, including but not limited to the Office of Commonwealth Libraries. (See McAlister, Advice 09-501). Therefore, for the first year following separation, Section 1103(g) of the Ethics Act would apply and restrict “representation” of a “person” before the Department of Education and any subordinate offices reporting to the Department of Education. The submitted facts do not specify the duties that you would be undertaking as to the yet formed nonprofit; however, given its proposed mission, it is presumed that you would be appearing before officials, employees and/or representatives of the Department of Education, including but not limited to the Office of Commonwealth Libraries. The term “represent” prohibits acting on behalf of any person in any activity, including personal appearances and participating in matters before the former governmental body. However, it has been submitted that you personally would not receive any compensation during your service/association with the nonprofit. Section 1103(g) of the Ethics Act does not apply to restrict a former public official/employee when the representation does not involve promised or actual compensation or when payment to the former public official/employee is limited to reimbursement only for reasonable and necessary actual expenses. Cf., Confidential Opinion, 07-012; Moore, Opinion 04-004; Confidential Opinion, 97-012; Antico, Order 1061. Based upon the above, you are advised that Section 1103(g) of the Ethics Act would not prohibit you from formulating the nonprofit. Based upon the submitted facts, you may immediately appear before the Department of Education, including but not limited to the Office of Commonwealth Libraries, and represent yourself and/or the nonprofit, provided you would not Miller, 21-531 June 16, 2021 Page 6 accept any compensation from the nonprofit, including any payment intended to compensate, reward, etc., you for your employment/service to the nonprofit prior to April 24, 2022. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation, or other code of conduct other than the Ethics Act has not been considered. Conclusion: As the former Deputy Secretary, Commissioner for Libraries, and State Librarian, you are a “former public employee” and “former executive-level State employee” subject to Section 1103(g) and (i) of the Ethics Act. Your former governmental body would be the Department of Education and/or any subordinate office, including but not limited to the Office of Commonwealth Libraries. Section 1103(g) of the Ethics Act does not restrict a former public employee when the representation does not involve promised or actual compensation or payment of reimbursement for reasonable and necessary actual expenses. As such, Section 1103(g) of the Ethics Act would not prohibit you from representing the nonprofit before the Department of Education and/or any subordinate office, including but not limited to the Office of Commonwealth Libraries. Pursuant to Section 1107(11) of the Ethics Act, an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717-787-0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Respectfully, Brian D. Jacisin Chief Counsel