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HomeMy WebLinkAbout23-559 ConfidentialPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: 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 December 22, 2023 23-559 This responds to your letter dated November 22, 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 sec ., would impose prohibitions or restrictions upon an individual employed as the [Position 1] and [Position 2] of the [Political Subdivision] as a result of his service as an independent contractor to a vendor that provides [Type of Services] to the [Political Subdivision]. Brief Answer: The Ethics Act would not impose prohibitions or restrictions upon the individual, in his private capacity, with respect to working as an independent contractor to the vendor that provides [Type of Services] to the [Political Subdivision]. However, in his public capacity as the [Position 1] and [Position 2] of the [Political Subdivision], the individual generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. The individual's status as an independent contractor to the vendor would not satisfy the Ethics Act's definition of the term "business with which he is associated." 65 Pa.C.S. 6 1102. Facts: You have been authorized by the [Governing Body] of the [Political Subdivision] to request a confidential advisory from the Commission. You have submitted facts that may be fairly summarized as follows. Confidential Advice, 23-559 December 22, 2023 Page 2 The [Political Subdivision] was organized under [the Law]. The [Political Subdivision] provides [Type of Services] to several communities within [Geographical Area]. On [Date], the [Political Subdivision] hired an individual ("the Individual") to serve as the [Political Subdivision's] [Position 1]. As [Position 1], the Individual had no duties that brought him within the definition of the term "public employee" as defined in the Ethics Act. Effective [Date], the [Political Subdivision] entered into a contract with a vendor ("the Vendor") for the provision of [Type of Services] to the [Political Subdivision]. The contract will remain in effect through [Date]. On [Date], the Vendor retained the Individual as an independent contractor for a separate division of the Vendor to perform work on a matter completely unrelated to the work that the Vendor performs for the [Political Subdivision]. The work that the Individual performs for the Vendor involves [Particular Work] and is not the same type of work that the Vendor performs for the [Political Subdivision]. The amount of work that the Individual performs for the Vendor ranges from one to ten hours per week, and the Vendor pays the Individual for his services. The Vendor employees who work with the [Political Subdivision] do not work with the Individual in his role as an independent contractor to the Vendor. The Vendor employees who work with the Individual in his role as an independent contractor to the Vendor do not do any work for or interact with anyone from the [Political Subdivision]. On [Date], the [Political Subdivision] [Governing Body] appointed the Individual to serve as [Position 1] and Interim [Position 2] of the [Political Subdivision]. On [Date], the [Political Subdivision] [Governing Body] appointed the Individual to serve as [Position 1] and [Position 2] of the [Political Subdivision]. The Individual's current role includes responsibility for contracting and procurement and administering grants and subsidies. The [Political Subdivision's] [Position 3] reports to the Individual. The [Position 3] is responsible for overseeing the Vendor's work. The Individual does not participate in matters related to the contract between the [Political Subdivision] and the Vendor. The [Position 3] reports directly to the [Political Subdivision] [Governing Body] on matters related to the Vendor. The question that is presented by your advisory request is whether the Ethics Act would impose prohibitions or restrictions upon the Individual as a result of his service as an independent contractor to the Vendor. 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. An advisory opinion only affords a defense to the extent the requester has truthfully disclosed all material facts. In issuing an advisory opinion, 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 Confidential Advice, 23-559 December 22, 2023 Page 3 burden of the requester to truthfully disclose all material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). 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 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. Confidential Advice, 23-559 December 22, 2023 Page 4 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" or 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. 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 the [Position 1 ] and [Position 2] of the [Political Subdivision], the Individual is a public official/public employee subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act (pertaining to conflict of interest) imposes restrictions upon the Individual in his capacity as the [Position 1] and [Position 2] of the [Political Subdivision], rather than upon him in his private capacity. Therefore, Section 1103(a) of the Ethics Act would not impose prohibitions or restrictions upon the Individual, in his private capacity, with respect to working as an independent contractor to the Vendor. In his public capacity as the [Position 1] and [Position 2] of the [Political Subdivision], the Individual generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. The Vendor would not be considered a business with which the Individual is associated because the Individual is not a director, officer, owner, employee, or holder of a financial interest in the Vendor. Cf., Confidential Advice 13- 554/13-1501, at 6 ("For the Firm to be considered a business with which the State Legislator is associated, the State Legislator would have to be a director, officer, owner, employee or holder of a financial interest in the Firm. Status as an independent contractor would not satisfy the Ethics Act's definition of the term `business with which he is associated.' 65 Pa.C.S. § 1102."). 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. Pursuant to Section 1107(11) of the Ethics Act, an Advice of Counsel 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. Confidential Advice, 23-559 December 22, 2023 Page 5 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