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HomeMy WebLinkAbout22-530 Hafner-DillonPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: Mr. C.J. Hafner, 11 Chief Counsel Democrat Legal Staff 535 Main Capitol Harrisburg, PA 17120 Dear Mr. Hafner: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov ADVICE OF COUNSEL September 1, 2022 22-530 This responds to your letter dated August 2, 2022, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the general issue presented below: Issue: Would the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et SeMc ., impose prohibitions or restrictions upon a state legislator serving in the Pennsylvania Senate as a result of the state legislator's private activity as a co -director and a co-owner of a for -profit limited liability company? Brief Answer: Section 1103(a) of the Ethics Act (pertaining to public officials/public employees and conflict of interest) would not impose restrictions upon the state legislator's private activity as a co -director and a co-owner of a for -profit limited liability company. However, Section 1103(a) of the Ethics Act would prohibit the state legislator from using his status as a state legislator or otherwise using the authority of his public office —subject to an exemption for "legislative actions" —or using Commonwealth resources or facilities or confidential information accessed or received as a result of being in his public position in furtherance of a pecuniary benefit for himself or the limited liability company, which is Hafner, 22-530 September 1, 2022 Page 2 a business with which the state legislator is associated in his capacities as a co -director and a co-owner. Facts: You request an advisory from the Commission on behalf of Pennsylvania State Senator Jimmy Dillon ("Senator Dillon"). You have submitted facts that may be fairly summarized as follows. Senator Dillon was elected to the Pennsylvania Senate in a special election held on May 17, 2022, to fill a vacancy in State Senate District 5, which represents the northeast section of the City of Philadelphia. Senator Dillon was sworn into office on June 7, 2022. Senator Dillon was born and raised in northeast Philadelphia. Senator Dillon attended the University of Notre Dame on a basketball scholarship, and he played professional basketball in Finland. In 2007, Senator Dillon started Hoops 24/7 Basketball Academy ("the Academy"). The Academy became a limited liability company in 2013, and it is a for -profit entity. Senator Dillon is a co -director and a co-owner of the Academy. Based upon the above submitted facts, you ask what prohibitions, restrictions, and requirements the Ethics Act would impose on Senator Dillon as a result of his private activity as a co -director and a co-owner of the Academy. 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 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 material facts relevantto the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all material facts. Section 1103(a) of the Ethics Act provides: § 1103. Restricted activities (a) Conflict of interest. --No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The following terms related to Section 1103(a) are defined in the Ethics Act as follows: Hafner, 22-530 September 1, 2022 Page 3 § 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 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. The term 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. "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. Section 1103(a) of the Ethics Act, which restricts public officials/public employees in their public capacities and not their private capacities, does not prohibit public officials/public employees from having outside business activities or employment. However, subject to the statutory exclusions to the definition of the term "conflict" or "conflict of interest" (i.e., the "de minimis exclusion" and the "class/subclass exclusion), 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office/employment or confidential information received by holding such a public position for the advancement of his own private pecuniary (financial) benefit or that of a business with which he is associated. Pancoe, Opinion 89-011. To the extent the activities of a state legislator relate to "legislative actions" (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the Commission. See, Mann, Opinion 07-005; Confidential Opinion, 05-002; Corrigan, Opinion 87-001. Hafner, 22-530 September 1, 2022 Page 4 Sections 1104 and 1105 of the Ethics Act, 65 Pa.C.S. §§ 1104, 1105, provide for the filing of annual Statements of Financial Interests by public officials/public employees. Section 1105(b) of the Ethics Act and its subsections detail the financial disclosure that a person required to file the Statement of Financial Interests form must provide. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. In his capacity as a Member of the Pennsylvania Senate, Senator Dillon is a public official subject to the provisions of the Ethics Act. The Academy is a business with which Senator Dillon is associated in his capacities as a co -director and a co-owner. Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes restrictions upon public officials and public employees. Therefore, Section 1103(a) of the Ethics Act imposes restrictions upon Senator Dillon in his capacity as a public official (i.e., a state legislator), rather than upon him in his private capacities as a co -director and a co-owner of the Academy. Section 1103(a) of the Ethics Act would prohibit Senator Dillon from using his status as a state legislator or otherwise using the authority of his public office —subject to the exemption for "legislative actions" delineated above —or using Commonwealth resources or facilities or confidential information accessed or received as a result of being in his public position in furtherance of a pecuniary benefit for himself or the Academy. Cf., Confidential Opinion, 20-002; Confidential Opinion, 19-003. As a state legislator, Senator Dillon is required to file annual Statements of Financial Interests in compliance with Sections 1104 and 1105 of the Ethics Act. Senator Dillon would be required to satisfy all applicable disclosure requirements of Section 1105(b) of the Ethics Act with respect to the filing of his Statements of Financial Interests. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. 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. 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. Hafner, 22-530 September 1, 2022 Page 5 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, Bridget K. Guilfoyle Chief Counsel