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Home My WebLink About22-531 Hafner-Dillion-Pellegrino PHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE: 717-787-0806 TOLL FREE: 1-800-932-0936 FINANCE BUILDING WEBSITE: www.ethics.pa.gov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL September 1, 2022 To the Requester: Mr. C.J. Hafner, II Chief Counsel Democrat Legal Staff 535 Main Capitol Harrisburg, PA 17120 22-531 Dear Mr. Hafner: 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 seq., permit a state legislatorserving in the Pennsylvania Senate, who in a private capacity is a co-director and a co-owner of a for-profit limited liability company, to hire the other co-director and co-owner of the limited liability company as a part-time member of the state legislator’s staff? Brief Answer: YES. The Ethics Act would permit the state legislator to hire the other co- director and co-owner of the limited liability company as a part-time member of the state legislator’s staff. Facts: You request an advisory from the Commission on behalf of Pennsylvania State Senator Jimmy Dillon (“Senator Dillon”) and Frank Pellegrino (“Mr. Pellegrino”). You have submitted facts that may be fairly summarized as follows. Hafner, 22-531 September 1, 2022 Page 2 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 and Mr. Pellegrino are the co-directors and co-owners of the Academy. Mr. Pellegrino is married to Senator Dillon’s niece. Senator Dillon would like to hire Mr. Pellegrino as a part-time member of Senator Dillon’s staff. If hired, Mr. Pellegrino would be a Special Assistant to Senator Dillon, and his duties would be to represent Senator Dillon at community events in State Senate District 5 and to assist Senator Dillon with special projects in State Senate District 5. Mr. Pellegrino would accept a salary from the Pennsylvania Senate. Mr. Pellegrino has his own benefits that are not paid for by the Academy, and he would not accept any benefits from the Pennsylvania Senate. Based upon the above submitted facts, you ask whether the Ethics Act would permit Senator Dillon to hire Mr. Pellegrino as a part-time member of Senator Dillon’s staff, and if so, whether the Ethics Act would impose any prohibitions or restrictions upon Mr. Pellegrino with respect to performing the duties of his proposed part-time position as a Special Assistant to Senator Dillon. 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 relevant to 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, 22-531 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 capacitiesand 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. In each instance of a conflict of interest, the public official/public employee would be required to abstain from participation. The abstention requirement 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. Conclusion: Hafner, 22-531 September 1, 2022 Page 4 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. The Ethics Act would not prohibit Senator Dillon from hiring Mr. Pellegrino as a part-time member of Senator Dillon’s staff. As the submitted facts do not include a position description for Mr. Pellegrino’s proposed position with Senator Dillon’s staff, this Advice assumes, without deciding, that if Mr. Pellegrino would be hired as a Special Assistant to Senator Dillon, he would in that capacity be a public employee subject to the provisions of the Ethics Act. The Academy is a business with which Mr. Pellegrino is associated in his capacities as a co-director and aco-owner. As a Special Assistant to Senator Dillon, Mr. Pellegrino generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact him or the Academy. In each instance of a conflict of interest, Mr. Pellegrino would be required to abstain from participation. 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. Any such appeal must be in writing and must be actually receivedat 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