HomeMy WebLinkAbout02-597 GouldPhyllis Gould, Research
Insurance Committee
House of Representatives
Commonwealth of Pennsylvania
Room 139, Ryan Office Building
Harrisburg, PA 17120
Dear Ms. Gould:
ADVICE OF COUNSEL
September 12, 2002
02 -597
Re: Conflict, Research Analyst; House of Representatives; General Assembly; Board
Member; Nonprofit Corporation; Non - compensated.
This responds to your letters of July 29, 2002, and August 12, 2002, by which you
requested advice from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §
1101 et seq., imposes any prohibition or restrictions upon a legislative research analyst from
serving without compensation as a board member of a nonprofit corporation.
Facts: Since 1985 you have been employed as a Legislative Research Analyst for the
Insurance Committee(R) in the House of Representatives. Your duties include assisting on
insurance matters that come before all members of the Republican Caucus; representing
Republican legislative members at meetings and other business gatherings; speaking at
legislative functions on insurance- related matters; researching and compiling data for use in the
development and enactment of insurance legislation and regulations; coordinating legislative
activities with the Pennsylvania Insurance Department; and personally contacting legislators'
constituents in order to assist them in resolving their insurance questions or problems.
You plan to serve as a member of the Board of Directors of Agents Helping Agents, Inc.
(AHA), a nonprofit corporation formed to assist insurance agents and brokers to address and
overcome their alcohol or substance abuse. As a board member, you would serve as a volunteer
with no financial compensation in that position.
Since you worked in the insurance industry prior to your employment with the House of
Representatives, you would value the opportunity to be a board member of the AHA, given your
prior insurance background. You plan to continue your employment in the House of
Representatives while serving as an AHA Board Member.
Gould 02 -597
September 12, 2002
Page 2
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, 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 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 Legislative Research Analyst for the Insurance Committee in the House of
Representatives, you are a "public employee" as that term is defined in the Ethics Act and hence
you are subject to the provisions of the Ethics Act. 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1.
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 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 conflicts of interest under the Ethics Act are defined 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
f
of ce 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
Gould 02 -597
September 12, 2002
Page 3
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." Any corporation, partnership, sole
proprietorship, firm, enterprise, franchise, association, organization,
self - employed individual, holding company, joint stock company,
receivership, trust or any legal entity organized for profit.
"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 Pa.C.S. § 1102.
In applying the above provisions of the Ethics Act to your inquiry, it is noted that Section
1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit public officials /public
employees from having outside business activities or employment; however, the public
official /public employee may not use the authority of his public position - -or confidential
information obtained by being in that position - -for the advancement of his own private pecuniary
benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of
conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private
business opportunity in the course of public action, Metrick, Order 1037; (2) the use of
governmental facilities, such as governmental telephones, postage, staff, equipment, research
materials, or other property, or the use of governmental personnel, to conduct private business
activities, Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity as to
matters involving the business with which the public official /public employee is associated in his
private capacity, Gorman, Order 1041, or private client(s). Miller, Opinion 89 -024; Kannebecker,
Opinion 92 -010.
If the private employer or business with which the public official /public employee is
associated or a private client would have a matter pending before the governmental body, the
public official /public employee would have a conflict of interest as to such matter. Miller, supra;
Kannebecker, supra. A reasonable and legitimate expectation that a business relationship will
form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each
instance of a conflict of interest, the public official /public employee would be required to abstain
from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above.
The abstention requirement would not be limited merely to voting, but would extend to any use of
authority of office including, but not limited to, discussing, conferring with others, and lobbying for
a particular result. Juliante, Order 809.
Under the facts which you have submitted, Section 1103(a) of the Ethics Act would not
preclude you from board membership with AHA subject to the restrictions and qualifications as
noted above. However, AHA is a business with which you are associated. The fact that AHA is a
nonprofit corporation does not remove it from the definition of "business" under the Ethics Act.
See, Solts - Sparano, Order 1045. Further, since you will be a board member of AHA, it will be a
"business with which he is associated" as that term is defined under the Ethics Act. Accordingly,
you would have a conflict as a legislative research analyst in matters involving AHA, may not
participate in such matters, and must observe the disclosure requirements of Section 1103(j)
Gould 02 -597
September 12, 2002
Page 4
noted above.
This Advice is limited to addressing the applicability of Section 1103(a) 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.
Conclusion: As a Legislative Research Analyst for the Insurance Committee for
House of Representatives, you are a "public employee" subject to the provisions of the Public
Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Although Section
1103(a) of the Ethics Act, would not preclude your service without compensation as a member of
the Agents Helping Agents, Inc. Board of Directors, subject to the restrictions, conditions and
qualifications set forth above, it is a business with which you are associated under the Ethics Act.
As such, you would have a conflict as a legislative research analyst in matters involving AHA,
may not participate in such matters, and must observe the disclosure requirements of Section
1103(j) noted above. Lastly, the propriety of the proposed course of conduct has only been
addressed under the Ethics Act.
Pursuant to Section 1107(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, provided 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.
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.
Sincerely,
Vincent J. Dopko
Chief Counsel