Loading...
HomeMy WebLinkAbout95-626 BrownJames W. Brown 819 Mandy Lane Camp Hill, PA 17011 Dear Mr. Brown: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O, BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 18, 1995 95 -626 Re: Former Public Official; Section 3(g); Executive -Level State Employee; Section 3(i); Chief of Staff to Governor; PSERS; SERS. This responds to your letter of November 14, 1995, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any restrictions upon employment of a former public official following termination of service as Chief of Staff to the Governor of Pennsylvania and the Pennsylvania Public School Employes' Retirement System ( PSERS). Facts: You were Chief of Staff to the Governor of Pennsylvania from January 1, 1989 to December 2, 1994. As part of your duties, you served as the designee of the Secretary of Education to PSERS. In that capacity, you attended PSERS board meetings, voted on matters before the board and served on various committees. Your official dealings with PSERS ended on or before December 2, 1994, the date you resigned as Chief of Staff and entered the private sector. You are currently serving as a member of the board of the Pennsylvania State Employes' Retirement System (SERS), having been nominated for this position by the Governor and confirmed by the Senate. This term will end in November 1996. PSERS and SERS are independent legal entities which were established by separate state statutes. You have recently been invited to become a managing director of a fund (the Fund) which, as a limited partnership, manages money for institutional investors. The Fund is managed by a general James W. Brown, 95 -626 December 18, 1995 Page 2 partner and the investors are limited partners. As a managing director of the general partner, you would receive a salary and a percentage of the Fund's profits. The Fund is seeking investors and has approached PSERS as a possible investor /limited partner. Your current status with regard to the Fund vis -a -vis PSERS is that you have no legal relationship with the Fund, having signed no partnership agreement or any other legal document relating to the Fund. You do not receive any salary or benefits from the Fund nor do you have any interest in the Fund's profits. You have not represented the Fund in any dealings with PSERS and have not discussed the Fund or related matters with anyone from PSERS. You have not appeared before PSERS, its board or employees, regarding the Fund nor have you attempted to influence PSERS' decision on this matter in any way. Your name does not appear in any bid or contract proposals or .other materials submitted to PSERS by the Fund. You state that you intend to maintain the above status with regard to PSERS and the Fund until December 2, 1995. You note in your letter that the Fund has not approached SERS as a possible investor /limited partner and will not do so while you are a member of the SERS board. Your inquiry relates only to PSERS, specifically whether you are subject to any restrictions regarding your desire to become a managing director of the Fund at some date after December 2, 1995. Discussion: As a former Chief of Staff for the Governor, you are considered a "public official" 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. §402; 51 Pa. Code §11.1. This conclusion is based upon '''the job description, which when reviewed on an objective basis, indicates 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. - In addition, you are an executive's - level state employee as that term is defined under the Ethics Law, and hence you are subject to the requirements of Section 3(i) of the Ethics Law, infra. Section 3(a) of the Ethics Law provides: Sec ion 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest.- James W. Brown, 95 -626 December 18, 1995 Page 3 The following terms are defined in the Ethics Law as follows: $ectipn 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 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. "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. "Executive-level State employee." The Governor, Lieutenant Governor, cabinet members, deputy secretaries, the Governor's office staff, any State employee with discretionary powers which may affect the outcome of a State agency's decision in relation to a private corporation or business or any employee who by virtue of his job function could influence the outcome of such a decision. 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 been or will be any transgression thereof but merely to provide a complete response to the question presented. James W. Brown, 95 -626 December 18, 1995 Page 4 Section 3(i) of the Ethics Law provides: Section 3. Restricted,. ct ,ivities (i) No former executive -level State employee may for a period of two years from the time that he terminates his State employment be employed by, receive compensation from, assist or act in a representative capacity for a business or corporation that he actively participates in recruiting to the Commonwealth of Pennsylvania or that he actively participated in inducing to open a new plant, facility or branch.in the Commonwealth or that he actively participated in inducing to expand an existent plant or facility within the 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. 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 you from using the position or emoluments of your public position'or confidential information to advance an opportunity of private employment with the Fund. Once again, it is not that you have engaged in such conduct and the foregoing is provided to give a complete response to your inquiry. As to Section 3(i) of the Ethics Law, you are subject to that provision of law since you are an executive -level state employee. However,_ Section 3(i) would not restrict you from the position of 'employment with.t Fund provided you did not actively participate in recrui.ting'or inducing the Fund to open a new facility or branch in' the.commmonwea.lth or. participate in inducing the Fund to expand an existing plant, or facility that was accomplished by a grant or loan of money or a 'promise' of a grant or loan of money from the Commonwealth of Pennsylvania to the Fund: - James W. Brown, 95 -626 December 18, 1995 Page 5 The facts do not indicate whether you actively participated in recruiting or inducing the Fund to open a new facility or branch or expand through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth. Conditioned upon the assumption that there has been no active participation by you in such recruitment or inducement of the Fund to open or expand a facility or branch through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania, you would not be prohibited from accepting the position of employment with the Fund. Upon termination of public service, you would become a "former public official" subject to Section 3(g) of the Public Official and Employee Ethics Law. 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. Initially, to answer your request the governmental body with which you were associated while working with the Governor's Office 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. In applying the above definition to the instant matter, we must conclude that the governmental body with which you were associated upon termination of public service would be (2). The above is based upon the language of the Ethics Law, the legislative intent (lJegislative Journal of House, 1989 Session, No. 15 at 290, James W. Brown, 95 -626 December 18, 1995 Page 6 291) and the prior precedent of this Commission. Thus, in Sirolli, 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 the Governor's Office, Section 3(g) of the Ethics Law would apply and restrict representation of persons or new employers vis- a-vis the executive branch of the Commonwealth of Pennsylvania, PSERS and any other agencies as to which you were a member or acted in the Governor's stead or otherwise exercised influence, control or discretionary authority, hereafter collectively referred to as the executive branch /PSERS. 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..." Legislative Journal of House, 1989 Session, No. 15 at 290, 291. Therefore, since the Ethics :Law must be construed to ascertain and effectuate the intent of. the General Assembly under 1 Pa. C.S.A. §1901, it is clear that the governmental body with which you were associated is executive branch / PSERS. 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 departure from their governmental body. It is noted, however, that the conflicts of interest law is primarily concerned with financial James W. Brown, 95 -626 December 18, 1995 Page 7 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 tray 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 Popovich, Opinion 89 -0 05, 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 bef=ore the fatter goverrrth Iital body in relation to legislation, regulat:.ione et -. The. Commission has also held that lis=ting name as the person who. will provide technical aseietai e 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 / on invoices submitted by his new employer t o the emformer James W. Brown, 95 -626 December 18, 1995 Page 8 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, you should not engage in any of the prohibited activities outlined above. You may assist in the preparation of any documents presented to Executive Branch /PSERS. However, you may not be identified on documents submitted to Executive Branch /PSERS. You may also counsel any person regarding that person's appearance before Executive Branch / PSERS. Once again, however, the activity in this respect should not be revealed to Executive Branch /PSERS. Of course, any ban under the Ethics Law would not prohibit or preclude the thaking of general informational inquiries of Executive Branch /PSERS 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 the 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 . onfidential.Opinion 93 - 005, the Commission held that Section 3 precludes a former public official /employee from providing consulting services to his former governmental body for a pef i.bd o.f one year after termination of service in that the prohJbitidn against representing a person includes the former public :of f .E ial /employee representing himself. As to your specific inquiry, you would not be prohibited from becoming a managing director of the Fund provided your conduct conforms to Sections '3(a), 3 (.g) and 3 (i) as detailed above. This advice does not address any issues relative to SERS. Lastly, the 'propriety of the proposed conduct has only been addressed under the Ethict :Law; the applicability of any other statute cbde, brdinance, regulation or other code of conduct other James W. Brown, 95 -626 December 18, 1995 Page 9 than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Law. Conclusion: As former Chief of Staff for the Governor, you are considered a "public official" and an executive -level state employee subject to the provisions of the Ethics Law. Under Section 3(i) of the Ethics Law, you would not be prohibited from accepting a position of employment with the Fund based upon the assumption that you did not actively participate in inducing or recruiting said company to open or expand a facility or branch through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania. Upon termination of service with the Governor's Office, you would become a "former public official" subject to Section 3(g) of the Ethics Law. The former governmental body is the executive branch of the Commonwealth of Pennsylvania, PSERS and any other agencies as to which you were a member or acted in the Governor's stead or otherwise exercised influence, control or discretionary authority. 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 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 Corny ission. 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 513.2(h) . The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission ( 787 - 0806). Failure to file such. James W. Brown, 95 -626 December 18, 1995 Page 10 such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Vincent J.'.opko Chief Counsel rely,