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HomeMy WebLinkAbout92-539Dear Mr. Cummings:' STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 19, 1992 MicHiel F. Cummings Connor - Helring Financial Resources 1906 Sanderson Avenue Scranton, PA 18509 92 -539 Re: Conflict, Public Official /Employee, Borough Council Member, Use of Authority of Office, Business with which Associated, Insurance Agent, Municipal Pension Consultant, Removal, Former Public Official, Section 3(g). This .responds to your letter of January 10, 1992, in which you requested _advice from the State Ethics Commission. Issue: Whether. the Public Official and Employee Ethics Law presents `any prohibition or restrictions upon a former borough council member who has appealed his court- ordered removal from office, with regard to doing business with the borough in his private capacities as an insurance agent'and municipal pension consultant. Facts: As a former Borough Council Member pursuing an appeal of your removal from office, you seek the advice of the State Ethics Commission with regard to your prospective business dealings with the Borough. In November, 1987, you were re- elected as a Council Member in the Borough of Dunmore. Your term would have been from January, 1988 through December, 1991, but in May, 1989, the Lackawanna County Court of Common Pleas removed you from office for a violation of the Borough Code. You have not served as a Council Member since May, 1989, and at the present time, your term of office has expired. Subsequent to the ruling of the Lackawanna County Court, your attorney filed an appeal requesting that the ruling be reversed. Your appeal is presently pending before the Pennsylvania Supreme Court. You are also an insurance agent and municipal pension consultant. You have posed the following specific inquiries regarding your prospective business dealings-With the Boroughi Mr. Michael F. Cummings February 19, 1992 Page 2 1. Whether the Ethics Law would present prohibitions or restrictions upon your present and future relationship with the Borough of Dihnitiore; Whether you would be prohibited from rendering any professional services such as pension consulting to the Borough of Dunmore for a fee; and 3. Whether you would be prohibited from selling any type of insurance to the Borough of Dunmore where you would be compensated for your services. Based upon all of the above, you request an advisory from this Commission. Discussion: As a Borough Council Member for the Borough of Dunmore, you would be a public official as that term is defined under the Ethics Law, at all times during which you were in office, and hence you would be subject to the provisions of that law. Section 3(a) of the Ethics Law provides: Section 3. Restricted Activities. (a) No public official; or public employee shall 'engage in conduct that constitutes a conflict of interest The following terms are defined in the Ethics Law as follows: 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 dr a business with which he or a member of his immediate family is _ associated. "Conflict" or "conflict 6f interest" does not include an action having a de minimis economic impact or Mr. Michael F. Cummings February 19, 1992 Page 3 which affects to the saute 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 _ officer, owner, employee or has a financial interest. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of - consulting or other services or of supplies, materials, equipment, land or other personal or real property. "Contract" shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters iiI consideration of his current publie5 employment with the Commonwealth er a political subdivision, 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 Mr. Michael F. Cummings February 19, 1992 Page 4 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. Parenthetically, where contracting is otherwise allowed or where there appears to be no expressed prohibitions to such contracting, the above particular provision of law would require that an open and public process must be used in all situations where a public official /employee is otherwise appropriately contracting with his own governmental body in an amount of $500.00 or more. This open and public process would require: (1) prior public notice of the employment or contracting possibility; ( Section 3(f) of the Ethics Law provides: Section 3. Restricted activities (f) No public official or public employee or his spouse or, child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public _employee is. associated or any subcontract valued at $500-or more any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is Commenced within 90 days of the raking of the contract or subcontract. ) sufficient time for a reasonable and prudent Mr. Michael F. Cummings February 19, 1992 Page 5 competitor /applicant to be able to prepare and present an application or proposal; (3) public disclosure of all applications or proposals considered and; (4) public disclosure of the contract awarded and offered and accepted. Section 3(f) of the Ethics Law also requires that the public official /employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract.. Section 3(j) of the Ethics Law provides as follows: 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 Mr. Michael F. Cummings February 19, 1992 Page 6 the tie vote if disclosure is made as Otherwise provided herein. If a conflict exists, Section 3(j) requires the public official /employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In applying the above provisions of the Ethics Law to your circumstances, "it is initially noted that your inquiry, may only be addressed with regard to prospective conduct. A reading of Sections 7(10) and (11) of the Ethics Act makes it clear that an opinion /advice may be given only as to- prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice but any person may then submit 'a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Law violations by a person who is subject to the Ethics Law. It is also initially noted that the application of any given provision of the Ethics Law to you may depend upon,your status at the time as a public official /public employee or former public official /public employee. The ultimate questions of whether you were properly removed from office, and thus, when your service in office would be judically deemed to have terminated, rest with the Courts, and this Advice shall not attempt to decide those questions. At all times during which you held public office, you were subject to Section 3(a) of the Ethics Law set forth above. Pursuant to Section 3(a) of the Ethics Law, a public official/ public 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 a business with which he or a member of his immediate family is associated. Section 3(a) would prohibit you from using the status of your public office or your activities to advance private business opportunities , with the Borough. You could not use the authority of your public office or any confidential information received by being in your public position; either as a means of obtaining or advancing a private business opportunity, or as a means of attempting to eliminate any potential competitors who would . be competing with you for private business opportunities with._ the Borough. See, Pepper, Opinion 87 -008. One example of a prohibited use of authority of public office /employment to obtain a private ::;pecuniary benefit of Mr Michael F. Cummings February 19, 19.92 Page 7 prospective pri business with the Borough would be to structure the Borough's specifications for- its insurance and municipal pension needs so as to favor you and /or any business with which you are associated. The facts which you have submitted do not reveal such conduct by you. However, in the i context of a request for an advice /opinion, there is no independent investigation of the facts by this Commission such as would be performed in the context of a complaint fired with this Commission. To the contrary, the advice /opinion process requires that the 'Commission issue the advice /opinion assuming the submitted facts to be true. It is because of this reliance upon the inquirer for the facts that advices must frequently have stated conditions set forth within them. -- Conditions upon which this Advice is based include, therefore, the conditions that you did not use your official status or activities, the authority of your public office, or any confidential information received by holding your public position to obtain or advance any private business opportunity with the Borough of Dunmore and /or to eliminate competition for such private business opportunities. - In consideringI:your first specific inquiry, you have asked what prohibitions or restrictions the Ethics Law would present with - regard to your present and future relationship with the • Bd'rough of" ° Dunmore . However, the facts which you have submitted -do not reveal your present relationship with the Borough. You have not disclosed whether you have present business dealings with the Borough, nor have you disclosed the circumstances under which any such - relationships have come to exist. Therefore, in response to your first specific inquiry, the necessary response must be that at all times during which you were a public official, you would be required to comply with Sections 3(a), (b), (c), (f), mad (j) set forth above and any private pecuniary benefit which you would prospectively receive as a result of a violation of any of the above sections of the Ethics Law would be prohibited. The restrictions as a former public termination of public- official" subject to Employee Ethics Law. that: -Section of the Ethics Law which would apply to you official will now be addressed. Upon service, you would become a "former public Section 3(g) of the Public Official and Section 3(g) of the Ethics Act provides . Restricted activities. (g) No former public official or public employee shall represent a person, with Mr. Michael F. Cummings February 19, 1992 Page 8 promised or actual compensa }0on, 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 have been associated while working with the Borough of Dunmore 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 cr 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 t:. -the instant matter., we must conclude that the governmental: body with which you have been associated upon termination _,of public service would be the Borough of Dunmore in its entirety. The above is based upon the language of the Ethics. Law, the legislative intent (Lecrislative Journal of House, 1989 Session, No 15 at 290, 291) and the - p nr precedent of this Commission. Thus, in Sirolli, Opinion 9 0 -O0, the Commission found that a former Division Director- of the Department of Public. Welfare (DPW) was . merely rest'r'icted - to the particular Division as was contended but was in fract restricted to all of DPW regarding the one year riapeetelitWibt restriction. Similarly in Sharp, Opinion 90= 009 -R,r ice- was determined that a former legislative assistant to as sca t* � s riatcdir was not merely restricted to that particutilae senator bust= t'o tee entire Senate as his former . governmental= bodk. Therefore, within the first- year -after terCination of service with the Borough of Dunmore, Section 3(g) "of the Ethics Law would apply and restrict representation"' of persons or new employers vis -a -vis the Borough of Dunmore. Mr. Michael F. Cummings February 19, 1992 Page 9 It is noted that Act 9 of 1989 sigri•:Y'ficantly 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- off'i,cial /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 have been associated is the Borough of Dunmore in its entirety. 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 persor» may engage, following 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. Michael F. Cummings February 19, 1992 Page 10 "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. 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. 1 The Commission, in Popovich, 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 or contain the name of .the former public official /employee; 4. Participating in any matters- before governmental body as to acting on behalf of a person; the former 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. In Shay, Opinion 91 -012,. the Commission held that Section-3(g) would prohibit the inclusion of the name of a former-public official /public employee on invoicea submitted by his employer to the former governmental body,even though the invoices pertained to a contract which existed prior to Mr. Michael P. Cummings February 19, 1992 Page 11 termination of public servile Therefore,1 within the first year after termination of service, you should not engage in the type of acti :outlined above. During the one year period of applicability of Section 3(g) following termination of your office, you could 'assist in the preparation of any documents presented to the Borough of 'Dunmore so : long, as : you would not be identified as the 'preparer. You could also counsel any person regarding that person "s appearance before the Borough of Dunmore. Once again, however, the activity in this respect could not be revealed to the Borough of Dunmore. Of course, any ban under the Ethics Law would not prohibit or preclude the making of general informational inquiries of the Borough.,or Dunmore to secure information which is available to the general' public. This could 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 /private business. In considering your and third specific inquiries as to your proposed future conduct of rendering professional services such as pension consulting to the Borough of Dunmore for a fee, and /or selling insurance to the Borough of Dunmore where you would be compensated, . it is clear that at this time you are not holding public. office in that, even if you have been wrongfully removed from office, your term would have expired in December, 1991. If the Courts 'decide that, your service in public office ended in December of 1991 at the scheduled end of your term, you would clearly at this point in time be a "former b public. official" subject to the restrictions of Section 3'(g) ecause the one -year period for applicability of Section 3(g) would commence at the expiration of your term. However, if you were properly removed from office,in May of 1989, that date would constitute the termination of your ho].aing public office and would- commence the one -year period of applicability of Section 3(g).which. would expire one year later in May, 1990. • This Commission cannot predict :how your appeal will ultimately be resolved by the Courts; and therefore in the absence of a definitive judicial decision as to when your public office terminated, this Commission may not definitively state when the one year period of applicability of Section 3(g) would commence to run for you. Thus, this Advice must necessarily conclude, in response to your second and third specific inquiries, that as to your proposed future -reiucTering of professional services and /or selling of insurance to the tOrough of Dunmore, you would only be : restricted by ,etti n 3 (g) of t he Ethics Law as set forth above during 'the one year period following termination of your service as a public c f fiti:a1 annd Mc. Michael F. Cummings February 19, 1992 Page 12 of course, you would at all times be restricted by Sections 3(b) and 3(c) of the Ethics Law which apply 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 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 Borough Code. Conclusion: As a Borough Council Member for the Borough of Dunmore, you would considered a "public official" as defined in the Ethics Law, at all times during which you held that public office. As a public official, you would be required to observe and comply with Sections 3(a), (b),. (c), (f) and (j) set forth above; any prospective private pecuniary benefit resulting from a transgression of any of the above provisions of the Ethics Law would be prohibited. This Advice is expressly conditioned upon the assumption that at no time did you use your official status or activities, the authority of your public office, or any confidential information received by holaing your public position to obtain or advance: any private business opportunity with the Borough of Dunmore and /or to eliminate competition for such private business opportunities. Upon termination of service with the Borough of Dunmore, you would become a "former public official" subject to Section 3(g). of the Ethics Law. The former governmental body is the Borough of Dunmore in its entirety. In rendering prospective' professional services such as pension consulting and /or prospectively selling insurance to the Borough of Dunmore, the restrictions of Section 3(g) as set forth above would apply to you for one year following termination of your office as a Borough Council Member, and those restrictions must be observed during the one year period of applicability of Section 3(g). The restrictions of. Section 3(b) and 3(c) apply to everyone, and you must comply with those sections at all times, regardless of your status as a official or former public official. 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. Putsuant 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. Mr. Michael F. Cummings February 19, 1992 Page 13 such. finally, if you disagree with this Advice or if you have any reason' to challenge same, you may request that the full Commission review this Advice. A personal! appearance before the Commission will be scheduled and a foimal Opinion from the Commission will be issued. Any such appeal must be in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code §2.12. cerely, This letter is a public record aid will be made available as 1 4 Vincent . Dopko Chief Counsel 4