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HomeMy WebLinkAbout03-529 GerhardsCharles F. Gerhards 547 Springhouse Court Harrisburg, PA 17111 ADVICE OF COUNSEL March 21, 2003 03 -529 Re: Former Public Official /Public Employee; Section 1103(); Executive -Level State Employee; Section 11030); Acting Secretary; Governor's Office of Administration. Dear Mr. Gerhards: This responds to your letter of February 13, 2003, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 § 1101 et seq., presents any restrictions upon employment of an Acting Secretary following termination of service with the Governor's Office of Administration. Facts: In your former capacity as the Acting Secretary of the Governor's Office of Administration ( "OA "), you seek an advisory from the State Ethics Commission. You have submitted facts, which may be fairly summarized as follows. From 1995 to 1999, you served as Director of the Commonwealth Technology Center ( "CTC ") of OA. You state that OA/CTC was primarily responsible for managing the technology used for enterprise applications like the Commonwealth's Personnel /Payroll systems. You further state that ONCTC also operated the statewide telecommunications network. In 1999, Governor Ridge appointed you Deputy Secretary for Information Technology within OA. As Deputy Secretary, you established statewide technology policy and standards and managed any technology initiatives that were considered statewide in nature such as the conversion to a common e-mail system for all agencies, the consolidation of all agency mainframe computers, and the building of a new statewide public safety radio system. You state that as Deputy Secretary, you did not have direct authority over agencies in that there was no formal reporting relationship between agency technology organizations and your office. You state that agencies made their own procurement decisions within the parameters of established policy and standards. For the last six weeks of the Schweiker Administration, you served as the Acting Secretary of OA. Gerhards 03 -529 March 21, 2003 Page 2 On January 24, 2003, you retired from the Commonwealth after 33 years of service. You are now considering a number of options professionally, from starting your own consulting business to working for existing companies. In order to ensure that you are in compliance with the Ethics Act, you pose the following specific inquiries: 1. If you should pursue consulting in the private sector, what contact you may have with OA and /or other State agencies, and specifically, what restrictions apply to you under the Ethics Act; 2. Whether you may advise businesses on the functions of government and other strategies as long as you do not have direct contact with any restricted agency or employee; 3. Whether the Ethics Act would impose any restrictions upon you with regard to meeting with a Commonwealth employee in a social setting either on Commonwealth property or elsewhere; and 4. Whether you may spend some time with the new Deputy Secretary to help with his transition. With respect to this question, you state that your replacement has not been hired as of this date. 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. In the former capacity as Acting Secretary for the Governor's Office of Administration ( "OA "), you would be considered a public official /public employee and an "executive -level State employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa.Code § 11.1. Consequently, upon termination of public service, you became a former public employee and a former executive -level State employee subject to the restrictions of Section 1103(g) and Section 11030) of the Ethics Act. Section 11030) 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. Gerhards 03 -529 March 21, 2003 Page 3 65 Pa.C.S. § 11030). Section 11030) 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 11030) apply even where the business relationship is indirect, such as where the business in question is a client of the new employer, rather than the new employer itself. See, Confidential Opinion No. 94 -011. However, Section 11030) would not restrict you from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a business or a corporation provided and conditioned upon the assumptions that you did not actively participate in recruiting the business or corporation to Pennsylvania, and that you did not actively participate in recruiting or inducing the business or corporation 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 of Pennsylvania to the business or corporation. Unlike Section 11030), 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 ": § 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. Gerhards 03 -529 March 21, 2003 Page 4 The term "Person" is very broadly defined. It includes, inter alia, corporations and other businesses. It also includes the former public employee-hiimself, Confidential Opinion, 93 -005, as well as a new governmental employer. Ledebur, Opinion 95 -007. The term "representation" 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 /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. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits the inclusion of the name of a former public official /public employee on invoices submitted by his new employer to the former governmental body, even though the invoices pertain to a contract that existed prior to termination of public service, Shay, Opinion 91 -012. However, if such a pre- existing contract does not involve 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. A former public official /public employee may assist in the preparation of any 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() 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 /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. The governmental body with which you were associated upon termination of public service is OA in its entirety including, but not limited to the Office for Information Technology. Therefore, for the first year after termination of your service with OA, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before OA. Having set forth the restrictions of Sections 1103(g) and 11030) of the Ethics Act, your specific inquiries shall now be addressed. In response to your first question, Section 1103(g) of the Ethics Act would prohibit you from engaging in prohibited representation before your former governmental body, OA, as detailed above. The restrictions of 1103(g) would not apply to restrict you from having contact with other State agencies as such would not constitute your former governmental body. Gerhards 03 -529 March 21, 2003 Page 5 In response to your second question, Section 1103(g) of the Ethics Act would not preclude you from advising businesses on the functions of government and other strategies as long as such activities would not involve personal appearances before OA; attempts to influence OA; the submission of written documents to OA containing your name; or any other activities involving prohibited representations before OA as outlined above. In response to your third question, the Ethics Act would not prohibit you from meeting with Commonwealth employees in a social setting on Commonwealth property or elsewhere assuming there would be no attempts by you to influence your former governmental body, OA, in contravention of Section 1103(g) of the Ethics Act. Your fourth question asks whether you may provide assistance to the new Deputy Secretary to help with his transition. You do not indicate what the nature of your relationship with OA would be in performing such services. It would seem that you might be considering three types of arrangements: (1) performing such services without compensation; (2) performing such services for compensation under the 95 -day program which allows annuitants to work up to 95 days per fiscal year under certain conditions (see, 71 Pa.C.S. § 5706(a.1); McGlathery, Opinion 00 -004); or (3) performing such services for compensation as an independent contractor. Each of these arrangements shall be considered. First, you are advised that Section 1103(g) of the Ethics Act would not preclude you from performing such services free of charge, because Section 1103(g) only applies to restrict a former public official /public employee when the representation before the former governmental body is with "promised or actual compensation." 65 Pa.C.S. § 1103(g). Second, based upon the assumptions that in performing these duties you would continue to meet the criteria for status as a "public employee" and that you would otherwise qualify for participation in the program, Section 1103(g) of the Ethics Act would not preclude you from performing such services for compensation under the aforesaid 95- day program which allows annuitants to work up to 95 days per fiscal year. Section 1103(g) does not prohibit the rehiring of the former public employee provided that a true public employment relationship exists. See, McGlathery, supra; Long, Opinion 97 -010; Confidential Opinion, 93 -005. However, each time you would enter the 95 -day program, you would become a "public employee" again, and each time you would terminate your service under that program, you would once again became a former public employee subject to the restrictions of Section 1103(gg). McGlathery, Opinion 00 -004. You are cautioned that the restrictions of Section 1103(g) would apply for a full one -year period each time you would become a former public employee. Id. Thus, as a result of participation in the 95 -day program, the one -year period of applicability of Section 1103(g) would begin anew each time you would terminate participation in the 95 -day program. Finally, you are advised that Section 1103(g) of the Ethics Act would preclude you from performing such services for compensation as an independent contractor. To perform such services as an independent contractor would transgress Section 1103(g) because it would necessarily involve prohibited representation before your former governmental body (for example, through personal appearances before your former governmental body or the submission of written documents containing your name to assigned reviewers" who would clear) be DEP staff members). See, Confidential Opinion, 97 -008; Confidential Opinion, 97-007; Confidential Opinion, 93 -0057 Based upon the facts which have been submitted, this Advice has addressed the applicability of Sections 1103(g) and 11030) only. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as rohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 11 and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /employee and no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /employee Gerhards 03 -529 March 21, 2003 Page 6 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 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: Upon termination of service as Acting Secretary for the Governor's Office of Administration ( "OA "), you became a former public official /public employee and a former executive -level State employee subject to the restrictions of Section 1103( and Section 11030) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. S. § 1101 et seq. Under Section 11030) of the Ethics Act, you would not be prohibited from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a business or corporation based upon the assumptions that you did not actively participate in recruiting the business or corporation to Pennsylvania, and that you did not actively participate in recruiting or inducing the business or corporation 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 of Pennsylvania. With regard to Section 1103(g), the restrictions as outlined above must be followed. The former governmental body is OA in its entirety including, but not limited to, the Office of Information Technology. The propriety of the proposed conduct has only been addressed under the Ethics Act. Further, should service be terminated, as outlined above, the Ethics Act would require that a Statement of Financial Interests be filed by no later than May 1 of the year after termination of service. Pursuant to Section 1107(11), 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 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