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Home My WebLink About23-516 Confidential 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 March 14, 2023 To the Requester: 23-516 This responds to your emails received February 14, 2023, and February 15, 2023, by which you requested a confidential advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to the issue presented below: Issue: Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would impose prohibitions or restrictions upon an individual employed as a \[Position\] for the \[Governmental Body Within a Political Subdivision\] with regard to being appointed to the board of a non-profit entity that owns land in the \[Political Subdivision\]. Brief Answer: NO. The Ethics Act would not prohibit the individual from being appointed to the board of a non-profit entity that owns land in the \[Political Subdivision\]. However, if the individual would become a member of the non-profit entity’s board, the non-profit entity would be considered a business with which the individual is associated, and pursuant to Section 1103(a) of the Ethics Act, the individual generally would have a conflict of interest in his public capacity as a \[Position\] in matters that would financially impact him or the non-profit entity. Facts: You request a confidential advisory from the Commission based upon submitted facts that may be fairly summarized as follows. You are employed as a \[Position\] for the \[Governmental Body Within a Political Subdivision\]. Your job duties as a \[Position\] include \[Performing Certain Activities\]. Confidential Advice, 23-516 March 14, 2023 Page 2 As part of your role as a \[Position\], you serve as a \[Sub-Position\]. In this capacity, you \[Perform Additional Activities\]. A \[Public Official\] contacted you to ask about your interest in being appointed by him to the board of a non-profit entity (the “Entity”). The Entity owns land in the \[Political Subdivision\] and operates exclusively within a \[Certain Portion of the Political Subdivision\]. The Entity does not own any land in the area for which you serve as a \[Sub-Position\]. You would not be compensated for serving as a Member of the Entity’s Board. Based upon the above submitted facts, you ask whether the Ethics Act would impose any prohibitions or restrictions upon you with regard to being appointed to the Board of the Entity. Discussion: 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: § 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 Confidential Advice, 23-516 March 14, 2023 Page 3 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. Subject to the statutory exclusions to the Ethics Act’s 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 or confidential information received by holding such a public position for the private pecuniary (financial) benefit of the public official/public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The Pennsylvania Supreme Court has held that the definition of the term “business” as set forth in the Ethics Act includes non-profit entities. Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708. 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: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a \[Position\], you are a public employee subject to the provisions of the Ethics Act. The Entity is a “business” as that term is defined by the Ethics Act. Section 1103(a) of the Ethics Act would not prohibit you from being appointed to the Board of the Entity. However, if you would become a Member of Entity’s Board, the Entity would be considered a business with which you are associated, and pursuant to Section 1103(a) of the Ethics Act, you generally would have a conflict of interest in your public capacity as a \[Position\] in matters that would financially impact Confidential Advice, 23-516 March 14, 2023 Page 4 you or the Entity. In each instance of a conflict of interest, you 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 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