Loading...
HomeMy WebLinkAbout03-565 DeBordJames W. DeBord Executive Policy Director Pennsylvania Department of Revenue Executive Office 1133 Strawberry Square Harrisburg, PA 17128 -1100 Dear Mr. DeBord: ADVICE OF COUNSEL July 1, 2003 03 -565 Re: Conflict; Public Official /Employee; Executive Policy Director; Pennsylvania Department of Revenue; Business; Client; Slot Machine Gaming; Horse Racing; Report; Prior Employment. This responds to your letter of June 4, 2003, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., presents any prohibition or restrictions upon an Executive Policy Director for the Pennsylvania Department of Revenue as to participation in matters regarding the potential for the legalization of slot machine gaming when in his prior private employment, his firm prepared a report for a client regarding the potential benefits to the horse racing industry if slot gaming were legalized and when that client in turn supplied the report to its own client that is seeking a horse racing license in Pennsylvania. Facts: You are currently serving as the Executive Policy Director for the Pennsylvania Department of Revenue since April 28, 2003. You have enclosed an organizational chart of the Department of Revenue as a reference, which is incorporated by reference. In your position you have the responsibility for conducting research on various public policy issues as they relate to the Department of Revenue and writing various documents pertaining to the public policy issues you deal with that have included briefing memos, reports, letters and e- mails. In recent weeks you have dealt with, in a limited capacity, the gaming issue, in the context of the possible legalization of slots in Pennsylvania. To date, the extent of your work has been to review drafts of the legislative proposals regarding the DeBord, 03 -565 Date Page 2 legalization of slots, and the testimony of the Secretary of Revenue regarding his testimony in favor of the legislation of slots before the Senate Finance Committee. To date, you have not made any specific recommendations as to the content of the legislative proposals, and made only minor changes to the Secretary's testimony. Those suggested changes did not relate to the official position of the administration on the gaming issue; you made stylistic changes only concerning the flow of testimony. Prior to your Commonwealth employment, you worked for a firm that had a client, Public Affairs Consultants (PAC), a Harrisburg, PA based consulting firm that deals in real estate and regulatory matters. In 2002/2003, (prior to your employment with the Department of Revenue) PAC hired your firm to prepare a research report on the horse racing industry in Pennsylvania, including the potential benefits for that industry if slots were legalized. The payment for that research work came directly from PAC which was the only business entity with which your firm signed a contract for the research project. However, PAC gave the research report to its client, Centaur Gaming (Centaur) of Indianapolis, IN. Centaur, operates horseracing tracks in other states and seeks a horse racing license in Pennsylvania. If granted that license, Centaur would likely benefit from the legalization of slot machines in Pennsylvania. You state that you did not have any direct business dealings with Centaur during the course of preparing the research report or any time thereafter. All work done by you or your firm during that time period was done only with PAC. You currently have no involvement with the awarding of horse racing licenses, a matter that would directly benefit Centaur. Through your request, you intend to make the Commission aware of the work that you have done in the past, so that you might receive an advisory as to the current work you perform on the gaming issue. You want to make certain that there are no conflicts of interest between your former work and current role at the Department of Revenue. Since you have been asked to review matters dealing with the potential legalization of slots, you seek advice from the State Ethics Commission on the work you had previously done for a client of your research firm prior to your employment with the Department of Revenue. 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. Pursuant to Sections 1107(10) and (11) of the Ethics Act, an opinion /advice may only be given as to future conduct. If the activity has already occurred, the Commission may not issue an opinion /advice but may investigate the matter if a signed and sworn complaint alleging violations of the Ethics Act is filed with the Commission. As an Executive Policy Director for the Pennsylvania Department of Revenue, you are a public employee as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: DeBord, 03 -565 Date Page 3 § 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 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 member of his immediate family or a business with which he or a member of his immediate family is associated. "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. In addition, Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /employee anything of monetary value 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 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. Section 1103(j) of the Ethics Act provides as follows: § 1103. Restricted activities (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 DeBord, 03 -565 Date Page 4 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(j). 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. Section 1103(a) of the Ethics Act prohibits a public official /public employee 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 responding to your request, you are advised that past conduct is not addressed in advisories, only future /perspective conduct. Consequently, this advice cannot and will not address the propriety of your past conduct. In applying Section 1103(a) of the Ethics Act as to your perspective conduct, you would have a conflict generally as to any matter that would result in a private pecuniary benefit to you, an immediate family member, or business with which you or an immediate family member is associated. As to Centaur, since it appears from the submitted facts that you have no financial interest in that business entity, you would not have a conflict as to matters that Centaur would have before the Department of Revenue. 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. Specifically not addressed herein is the applicability of the Governor's Code of Conduct. Conclusion: As an Executive Police Director for the Pennsylvania Department of Revenue, you are a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. In applying Section 1103(a) of the Ethics Act as to your perspective conduct, you, as Executive Policy Director, would have a conflict generally as to any matter that would result in a private pecuniary benefit to you, an immediate family member, or business with which you or an immediate family member is associated. As to Centaur Gaming that may have matters pending before the Department of Revenue, since it appears from the facts that you have no financial interest in that business entity, you would not have a conflict as to DeBord, 03 -565 Date Page 5 Centaur. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. 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