HomeMy WebLinkAbout03-006 CohenSamuel Cohen, Esquire
Katz, Cohen & Price, P.C.
Suite 2010
117 South 17 Street
Philadelphia, PA 19103
Re: Public Official /Public Employee; Independent Contractor; Hearing Examiner;
Pennsylvania Liquor Control Board; Lawyer; Assistant Professor, Hospitality
Management; Lodging /Hospitality from Licensees.
Dear Mr. Cohen:
OPINION OF THE COMMISSION
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Daneen E. Reese
Frank M. Brown
Susan Mosites Bicket
Donald M. McCurdy
Michael J. Healey
DATE DECIDED: 6/23/03
DATE MAILED: 7/8/03
03 -006
This Opinion is issued in response to your letter of May 14, 2003, by which you
requested advice from the State Ethics Commission.
I. ISSUE:
Whether a lawyer /independent contractor appointed by the Governor to serve as a
Hearing Examiner for the Pennsylvania Liquor Control Board is a public official /public
employee subject to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §
1101 et seq., and if so, whether he may accept: a gratuitous beverage from a licensee; lodging
and hospitality at a beer festival where he will lecture when the festival is sponsored by a
licensee; gratuitous food /beverages from a host establishment when chairing dinners for a
non - profit organization; a restaurant dinner paid by social friends who are licensees; or an
extra course of food as a gift or for critique from a licensee.
II. FACTUAL BASIS FOR DETERMINATION:
You seek a determination as to whether, in your capacity as an appointed Hearing
Examiner for the Pennsylvania Liquor Control Board (PLCB), you would be considered a
public official /public employee subject to the Ethics Act, and if so, whether the Ethics Act
would impose restrictions or prohibitions upon you with regard to your prospective acceptance
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July 8, 2003
Page 2
of lodging or various forms of hospitality from licensees.
You were appointed to serve as a Hearing Examiner for the PLCB by the Governor.
You state that in that capacity, you are not a Commonwealth employee, but rather, are an
independent contractor with the Commonwealth.
You are also a member of the Bar of the Commonwealth of Pennsylvania and are
actively engaged in the practice of law. Additionally, you are an Assistant Professor in Drexel
University's hospitality management department.
You pose the following scenarios and questions for review by this Commission:
(1) Prior to accepting the position of Hearing Examiner for the PLCB, it was common for
you to be offered a glass of wine, beer or other type of alcoholic beverage at one of the
restaurants you frequent. You ask whether there would be any problem with your
accepting a beverage from a licensee given your new position with the PLCB, and
whether the value of the beverage would make a difference.
(2) As part of your teaching work, for many years you have been asked to speak at a beer
festival sponsored by a licensee of the PLCB. The festival would take place over two
days (Saturday and Sunday), and you would give a one hour lecture each day. You
would receive no monetary payment but would be provided a room at no charge due to
the distance of the festival from your home (approximately 100 miles) as well as the
fact that the consumption of alcoholic beverages is part of the program that you
present. You ask whether you may continue your speaking work at the festival under
these same terms and conditions.
(3)
From time to time, you chair dinners for a non - profit organization called the Chaine des
Rotisseurs. When you are involved with the organization of a dinner, there is a "pre -
event tasting." Sometimes, the participants pay for the dinners but other times the
dinner is provided for free by the host establishment. You ask whether you may accept
a dinner under these circumstances.
(4) You and your wife have many social friends who are in the restaurant business and
who are licensees of the PLCB. When you go out, sometimes these people offer to
pay the entire bill, as do you on other occasions. You ask whether it is permissible for
you to continue to accept such hospitality.
From time to time when you go out to dinner, a licensee will serve a food course to you
that was not ordered, either as a gift or because that person wants your opinion on the
course. You ask whether you may accept the course, noting that sending it back would
represent an insult to many chefs.
(5)
(6) You ask whether there is any source providing guidelines for the acceptance of gifts by
contractors with the Commonwealth.
By letter dated May 20, 2003, you were notified of the date, time and location of the
public meeting at which your request would be considered.
III. 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
that the requestor has submitted. In issuing the advisory based upon the facts that the
requestor has submitted, this 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
requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§
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July 8, 2003
Page 3
1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully
disclosed all of the material facts.
We take administrative notice of the following three points from the Liquor Code, 47
P.S. § 1 -101 et seq., and related Regulations.
First, we take administrative notice that hearing examiners for the PLCB are, as a
matter of law, required to be appointed by the Governor. 47 P.S. § 2- 212(h).
Second, we take administrative notice that hearing examiners for the PLCB are
required to be "learned in the law" (see, 40 Pa. Code § 1.1; 47 P.S. § 2-2070)), but are not
specifically required by the Liquor Code or related Regulations to be members of the Bar of the
Supreme Court of Pennsylvania, as are administrative law judges for the PLCB. 47 P.S. § 2-
212.
Third, we take administrative notice that hearing examiners for the PLCB are
referenced in specific Sections of the Liquor Code that pertain, at least in part, to employees of
the PLCB. See, 47 P.S. §§ 2- 207(f); 2 -212. Although these provisions raise issues as to the
nature of the relationship between hearing examiners and the PLCB, such issues are beyond
our jurisdiction, and hence, our review of the instant request is based upon the submitted fact
that as a Hearing Examiner for the PLCB, you are an independent contractor, not an
employee of the Commonwealth.
We shall now consider your inquiry under the relevant provisions of the Ethics Act.
The provisions of the Ethics Act that are relevant to your request and that shall be
discussed herein apply to persons /individuals falling within the Ethics Act's definitions of the
terms "public official' and "public employee." These terms are defined in the Ethics Act as
follows:
§ 1102. Definitions
"Public official." Any person elected by the public or
elected or appointed by a governmental body or an appointed
official in the executive, legislative or judicial branch of this
Commonwealth or any political subdivision thereof, provided that
it shall not include members of advisory boards that have no
authority to expend public funds other than reimbursement for
personal expense or to otherwise exercise the power of the State
or any political subdivision thereof.
"Public employee." Any individual employed by the
Commonwealth or a political subdivision who is responsible for
taking or recommending official action of a nonministerial nature
with regard to:
(1) contracting or procurement;
(2) administering or monitoring grants or subsidies;
(3) planning or zoning;
(4) inspecting, licensing, regulating or auditing any
person; or
(5)
any other activity where the official action has an
economic impact of greater than a de minimis nature
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Page 4
on the interests of any person.
The term shall not include individuals who are employed by this
Commonwealth or any political subdivision thereof in teaching as
distinguished from administrative duties.
65 Pa.C.S. § 1102. The Regulations of this Commission similarly define the terms "public
official" and public employee and set forth additional criteria for applying the definitions. 51
Pa. Code § 11.1.
In order to qualify as a "public employee" subject to the Ethics Act, an individual must
stand in an employer - employee relationship with the Commonwealth or a political subdivision
of the Commonwealth. See, Ver Ellen, Opinion 03 -005, decided this date. Atrue independent
contractor does not fall within the Ethics Act's definition of "public employee," because the
requisite employer - employee relationship is lacking. Id. Therefore, based upon the submitted
fact that as a Hearing Officer for the PLCB, you are an independent contractor and not a
Commonwealth employee, we determine that you are not to be considered a "public
employee" subject to the Ethics Act.
We shall next consider the definition of "public official." In applying the first portion of
the Ethics Act's definition of "public official" to the facts that you have submitted, a public
official is a person who is: (1) elected by the public; (2) elected or appointed by a
governmental body; or (3) an appointed official in the executive, legislative or judicial branch of
the Commonwealth of Pennsylvania or a political subdivision of the Commonwealth.
Muscalus, Opinion 02 -007. Since the public dd not elect you, we need not consider the first
of these three categories.
In considering the second category, based upon the statutory requirement that hearing
examiners for the PLCB must be appointed by the Governor, 47 P.S. § 2- 212(h), and based
upon the submitted facts, it is clear that you were in fact appointed by the Governor to serve in
such position. Furthermore, the Governor, as a Constitutional officer within the Executive
Department of the Commonwealth (PA CONST. art. IV, Section 1), would be considered a
"governmental body" as that term is defined in the Ethics Act:
§ 1102. Definitions
"Governmental body." Any department, authority,
commission, committee, council, board, bureau, division, service,
office, officer, administration, legislative body or other
establishment in the executive, legislative or judicial branch of a
state, a nation or a political subdivision thereof or any agency
performing a governmental function.
65 Pa.C.S. § 1102 (Emphasis added). Thus, you were appointed by a "governmental body" to
serve as a Hearing Officer for the PLCB. The second category is satisfied.
In considering the remainder of the definition of "public official," it is obvious, and we so
conclude, that you would not fall within the statutory exception for members of purely advisory
boards because, in your capacity as a Hearing Officer for the PLCB, you are not a member of
a board.
Based upon the above, you are advised that as a Hearing Officer for the PLCB, you
are a "public official" as that term is defined by the Ethics Act, and as such, you are subject to
the provisions of the Ethics Act.
At this juncture, we would parenthetically note that not all independent contractors
providing services to the Commonwealth would be considered "public officials" subject to the
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July 8, 2003
Page 5
Ethics Act. To the contrary, we would expect that most of them would not be considered such.
However, you have presented a rather unusual situation in which you have been appointed
by the Governor to serve in a statutory position with the PLCB. Under these circumstances,
the definition of "public official" fits, and the submitted fact that you are an independent
contractor has no legal significance for purposes of applying the Ethics Act.
We shall now consider the specific scenarios and questions that you have presented
for review. The relevant provisions of the Ethics Act are as follows.
Sections 1103(a) and 1103(j) of the Ethics Act provide:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
(j) Voting conflict. - -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 the tie vote if disclosure is made as
otherwise provided herein.
65 Pa.C.S. §§ 1103(a), (j).
The following terms that pertain to conflicts of interest under the Ethics Act are defined
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
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July 8, 2003
Page 6
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.
sister.
"Immediate family." A parent, spouse, child, brother or
65 Pa.C.S. § 1102.
Pursuant to Section 1103(a) of the Ethics Act, 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 private pecuniary 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. In each instance of a conflict, Section
1103(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.
Additionally, we parenthetically note that Sections 1103(b) and 1103(c) of the Ethics
Act, pertaining to improper influence, provide as follows:
§1103. Restricted activities
(b) Seeking improper influence. —No person shall
offer or give to a public official, public employee or nominee or
candidate for public office or a member of his immediate family or
a business with which he is associated, anything of monetary
value, including a gift, loan, political contribution, reward or
promise of future employment based on the offeror's or donor's
understanding that the vote, official action or judgment of the
public official or public employee or nominee or candidate for
public office would be influenced thereby.
(c) Accepting improper influence. —No public official,
public employee or nominee or candidate for public office shall
solicit or accept anything of monetary value, including a gift, loan,
political contribution, reward or promise of future employment,
based on any understanding of that public official, public
employee or nominee that the vote, official action or judgment of
the public official or public employee or nominee or candidate for
public office would be influenced thereby.
65 Pa.C.S. §§ 1103(b), (c).
The term "person" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Person." A business, governmental body, individual,
corporation, union, association, firm, partnership, committee, club
or other organization or group of persons.
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July 8, 2003
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65 Pa.C.S. § 1102. We note Sections 1103(b) and 1103(c) of the Ethics Act not to suggest
that you would engage in such conduct, but merely to provide a complete response to the
questions presented.
In considering the questions that you have posed, we would note generally that there is
no per se prohibition under the Ethics Act as to the receipt of true, "no- strings- attached" gifts
by a public official /public employee. See, Cooper, Opinion 92 -009 (Citing Wolfgang, Opinion
89 -028). Of course, for any given source, a gift or gifts valued in the aggregate at $250 or
more must be disclosed on the Statement of Financial Interests in accordance with Section
1105(b)(6) of the Ethics Act, 65 Pa.C.S. §1105(b)(6). Such disclosure must include the name
and address of the source, the amount of the gift or gifts, and the circumstances of each gift.
Gifts that do not meet the aggregate threshold of $250 need not be disclosed.
As for the question of conflict of interest, there have been various cases before this
Commission in which we have found violations of the Ethics Act when public officials have
accepted gifts and acted upon matters that the donors had pending before the governmental
body. See, e.g , Sickles, Order No. 901; Helsel, Order No. 801; Volpe, Order No. 579 -R;
Smith, Order No. 578 -R. Of course, the acceptance of a gift with a "de minimis" (insignificant)
value would not in and of itself result in a conflict of interest. The decision as to whether a
conflict of interest is presented by the receipt of a gift is determined on a case -by -case basis.
In each instance of a conflict of interest, a public official /public employee would be required to
abstain fully from participation in his public capacity and to satisfy the disclosure requirements
of Section 1103(j) as set forth above.
Turning to your specific questions, your first question is whether, given your new
position with the PLCB, there would be any problem under the Ethics Act with your continuing
to accept beverages from a licensee whose establishment you frequent, and whether the
value of the beverage would make a difference. You are advised that, as noted above, the
Ethics Act itself would not prohibit your acceptance of no- strings- attached gifts of hospitality,
but depending upon the value of the gifts received: (1) you could have a conflict of interest in
matters before you as a PLCB Hearing Officer involving the donor(s); and (2) disclosure of
such gifts could be required on your Statements of Financial Interests filed pursuant to the
Ethics Act.
Your second question notes that as part of your teaching work, for many years you
have been asked to speak at a beer festival sponsored by a licensee of the PLCB. You give a
one -hour lecture on each of the two days of the festival. You receive no monetary payment
but are provided a room at no charge due to the distance of the festival from your home as well
as the fact that the consumption of alcoholic beverages is part of the program that you
present. You ask whether you may continue your speaking work at the festival under these
same terms and conditions now that you are a Hearing Officer for the PLCB. You are advised
that the Ethics Act would not preclude your continued speaking work at the festival under the
above terms and conditions. The lodging and any other thing(s) of value received by you for
such services would constitute "income" as that term is defined in the Ethics Act. 65 Pa.C.S.
1102. The submitted facts do not indicate the value of the lodging /income provided to you
for these services. Depending upon the value, you could have a conflict of interest in matters
before you as a PLCB Hearing Officer involving the sponsoring licensee, due to the above
business relationship. Additionally, to the extent the value of such lodging and any other
income from this source would total in the aggregate $1,300 or more in a given calendar year,
you would be required to disclose the sponsoring licensee as a source of income on your
Statement of Financial Interests filed pursuant to the Ethics Act.
Your third question involves dinners that you chair for a non - profit organization called
the Chaine des Rotisseurs. You state that when you are involved with the organization of a
dinner, there is a "pre -event tasting." Sometimes, the participants pay for the dinners but at
other times the dinner is provided for free by the host establishment. You ask whether you
Cohen 03 -006
July 8, 2003
Page 8
may continue to accept a dinner under these circumstances. You are advised that, as noted
above, the Ethics Act itself would not prohibit your acceptance of no- strings- attached gifts of
hospitality, but depending upon the value of the gifts received: (1) you could have a conflict of
interest in matters before you as a PLCB Hearing Officer involving the donor(s); and (2)
disclosure of such gifts could be required on your Statements of Financial Interests filed
pursuant to the Ethics Act.
The scenario presented as to your fourth question is that you and your wife have many
social friends who are in the restaurant business and who are licensees of the PLCB. When
you go out, sometimes these people offer to pay the entire bill, as do you on other occasions.
You ask whether it is permissible for you to continue to accept such hospitality. Once again,
you are advised that the Ethics Act itself would not prohibit your acceptance of no- strings-
attached gifts of hospitality, but depending upon the value of the gifts received: (1) you could
have a conflict of interest in matters before you as a PLCB Hearing Officer involving the
donor(s); and (2) disclosure of such gifts could be required on your Statements of Financial
Interests filed pursuant to the Ethics Act. As to disclosure, although the Section of the Ethics
Act pertaining to the disclosure of gifts excludes from the disclosure requirement gift(s)
received from a family member or friend "when the circumstances make it clear that the
motivation for the action was a personal or family relationship," 65 Pa.C.S. § 1105(b)(6), this
Commission would generally not consider gift(s) received by a public official/public employee
from person(s) regulated by the governmental body with which he is associated to fall within
this exception. Our conclusion in this regard is supported by Section 1101.1 of the Ethics Act,
which directs that the Ethics Act is to be liberally construed to promote complete financial
disclosure, 65 Pa.C.S. § 1101.1(a), and by case law to the same effect. See, In Re
Nomination Petition of Anastasio, 820 A.2d 880 (Pa. Cmwlth. 2003), aff'd., Pa.
A.2d , Pa. LEXIS 791 (2003); cf., Phillips v. State Ethics
Commission, 470 A.2d 659 Pa. Cmwlth. 1984) ( "The Ethics Act, being remedial legislation, is
to be liberally construed.... Thus coverage under the Act should be broadly, rather than
narrowly, determined; conversely, exclusions under the Act should be narrowly, rather than
broadly, determined." Id., 460 A.2d at 661 (Citation omitted)). Friendship, as opposed to a
family relationship (the other basis for the exclusion under Section 1105(b)(6)), is difficult to
define. The circumstances under which we would find the friendship exclusion to apply as to
gifts from a person regulated by the recipient's governmental body would have to be
compelling circumstances indeed. If regulated persons were generally permitted to be
considered "friends" under this exclusion, the exclusion would swallow the rule and would
render this disclosure requirement meaningless.
The scenario presented as to your fifth question is that from time to time when you go
out to dinner, a licensee will serve a food course to you that was not ordered, either as a gift or
because that person wants your opinion on the course. You ask whether you may accept the
course, noting that sending it back would represent an insult to many chefs. As noted above,
the Ethics Act itself would not prohibit your acceptance of no- strings- attached gifts of
hospitality, but depending upon the value of the gifts received: (1) you could have a conflict of
interest in matters before you as a PLCB Hearing Officer involving the donor(s); and (2)
disclosure of such gifts could be required on your Statements of Financial Interests filed
pursuant to the Ethics Act.
In response to your sixth question as to whether there is any source providing
guidelines for the acceptance of gifts by contractors with the Commonwealth, the necessary
response is that this Commission's jurisdiction is limited to providing guidance under the
Ethics Act. However, we would suggest that you obtain legal advice regarding any applicable
provisions of the Liquor Code.
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.
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July 8, 2003
Page 9
IV. CONCLUSION:
A person appointed by the Governor to serve as a Hearing Officer for the Pennsylvania
Liquor Control Board (PLCB is a "public official" subject to the provisions of the Public Official
and Employee Ethics Act ('Ethics Act "), 65 Pa.C.S. § 1101 et seq. There is no per se
prohibition under the Ethics Act as to the receipt of true, 'no- strings- attached" gifts by a public
official /public employee. Depending upon the value of gifts or income received by a PLCB
Hearing Officer from licensees, the PLCB Hearing Officer: (1) could have a conflict of interest
in matters before him involving such licensees; and (2) could be required to disclose such gifts
or sources of income on his Statements of Financial Interests filed pursuant to the Ethics Act.
In each instance of a conflict of interest, the PLCB Hearing Officer would be required to
abstain fully from articipation in his public capacity and to satisfy the disclosure requirements
of Section 11030) of the Ethics Act. Gift(s) received by a PLCB Hearing Officer from
licensees regulated by the PLCB would generally not fall within the exclusion at Section
1105(b)(6) of the Ethics Act pertaining to non - disclosure of gifts from "friends."
The propriety of the proposed conduct has only been addressed under the Ethics Act.
Pursuant to Section 1107(10), the person who acts in good faith on this Opinion issued
to him shall not be subject to criminal or civil penalties for so acting provided the material facts
are as stated in the request.
This letter is a public record and will be made available as such.
Finally, a party may request the Commission to reconsider its Opinion. The
reconsideration request must be received at this Commission within thirty days of the mailing
date of this Opinion. The party requesting reconsideration must include a detailed explanation
of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §
21.29(b).
By the Commission,
Louis W. Fryman
Chair