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HomeMy WebLinkAbout05-557 FerloADVICE OF COUNSEL June 28, 2005 C.J. Hafner, 11 Chief Counsel to the Senate Democratic Leader Senate Box 203022 The State Capitol Harrisburg, PA 17120 -3022 05 -557 Re: Public Official; General Assembly; Senator; Governmental Body; Trip to Taiwan Paid for By Government of Taiwan; Travel; Transportation; Lodging; Hospitality; Gift; Statement of Financial Interests. Dear Attorney Hafner: This responds to your letter of June 1, 2005, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101 et seq. ( "Ethics Act ") presents any prohibition or restrictions upon a Member of the general Assembly with regard to traveling to Taiwan at the expense of the Government of Taiwan; and whether such expenses for the trip must be reported on his Statement of Financial Interests. Facts: As Chief Counsel to the Senate Democratic Leader, you seek an advisory on behalf of Senator Jim Ferlo ( "Senator Ferlo") based upon the following submitted facts. By way of other legislators, Senator Ferlo has received an invitation from the economic and cultural officers of Taiwan to visit their country. You state that all expenses for the trip to Taiwan will be covered by the government of Taiwan. You note that the government of Taiwan has not registered as a principal and has not hired a lobbyist. Senator Ferlo serves on the Senate Community and Economic Development Committee, which oversees economic development legislation and regulations. The Standing Committees are established in rules adopted pursuant to Article 11, Section 11 of the Pennsylvania Constitution. Ferlo, 05 -557 June 28, 2005 Page 2 You state that you are aware that Section 1105(b)(7) of the Ethics Act makes an exception for reporting for "expenses reimbursed by a government[al] body." 65 Pa.C.S. § 1105(b)(7). You note that the Ethics Act's broad definition of `government[al] body" includes a nation." You also cite several Commission rulings on this issue. Based upon the foregoing facts, you pose the following specific inquiries: (1) Whether Senator Ferlo would transgress the Ethics Act if he would travel to Taiwan; (2) If the Ethics Act would not prohibit Senator Ferlo from traveling to Taiwan, whether he must disclose the cost of the trip on his Statement of Financial Interests; and; (3) If Senator Ferlo must disclose the cost of the trip on his Statement of Financial Interests, how such expenses should be reported. 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 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 requester has truthfully disclosed all of the material facts. As a Member of the Pennsylvania State Senate, Senator Jim Ferlo is a "public official" as that term is defined in the Ethics Act, and hence Senator Ferlo is subject to the financial disclosure requirements of the Ethics Act. Section 1104 of the Ethics Act provides, in pertinent part: §1104. Statement of financial interests required to be filed (a) Public official or public employee. - -Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the commission no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Persons who are full -time or part -time solicitors for political subdivisions are required to file under this section. 65 Pa.C.S. §1104 (a). Section 1105 of the Ethics Act provides as follows: § 1105. Statement of financial interests (a) Form. - -The statement of financial interests filed pursuant to this chapter shall be on a form prescribed by the Ferlo, 05 -557 June 28, 2005 Page 3 commission. All information requested on the statement shall be provided to the best of the knowledge, information and belief of the person required to file and shall be signed under oath or equivalent affirmation. (b) Required information. - -The statement shall include the following information for the prior calendar year with regard to the person required to file the statement: (1) Name, address and public position. (2) Occupation or profession. (3) Any direct or indirect interest in any real estate which was sold or leased to the Commonwealth, any of its agencies or political subdivisions or purchased or leased from the Commonwealth, any of its agencies or political subdivisions or which was the subject of any condemnation proceedings by the Commonwealth, any of its agencies or political subdivisions. (4) The name and address of each creditor to whom is owed in excess of $6,500 and the interest rate thereon. However, loans or credit extended between members of the immediate family and mortgages securing real property which is the principal or secondary residence of the person filing shall not be included. (5) The name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. However, this provision shall not be construed to require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges. (6) The name and address of the source and the amount of any gift or gifts valued in the aggregate at $250 or more and the circumstances of each gift. This paragraph shall not apply to a gift or gifts received from a spouse, parent, parent by marriage, sibling, child, grandchild, other family member or friend when the circumstances make it clear that the motivation for the action was a personal or family relationship. However, for the purposes of this paragraph, the term "friend" shall not include a registered lobbyist or an employee of a registered lobbyist. (7) The name and address of the source and the amount of any payment for or reimbursement of actual expenses for transportation and lodging or hospitality received in connection with public office or employment where such actual expenses for transportation and lodging or hospitality exceed $650 in the course of a single occurrence. This paragraph shall not apply to expenses reimbursed by a governmental body or to expenses reimbursed by an organization or association of public officials or employees of political subdivisions which the public official or employee serves in an official capacity. Ferlo, 05 -557 June 28, 2005 Page 4 (8) Any office, directorship or employment of any nature whatsoever in any business entity. (9) Any financial interest in any legal entity engaged in business for profit. (10) The identity of any financial interest in a business with which the reporting person is or has been associated in the preceding calendar year which has been transferred to a member of the reporting person's immediate family. (c) Reporting amounts. -- Except where an amount is required to be reported pursuant to subsection (b)(6) and (7), the statement of financial interests need not include specific amounts for the items required to be listed. (d) Cost -of- living adjustments. - -On a biennial basis the commission shall review the dollar amounts set forth in this section and may increase these amounts to such rates as are deemed reasonable for assuring appropriate disclosure. The commission shall publish any such adjusted threshold amounts in the Pennsylvania Bulletin. Section 1105(b)(6) of the Ethics Act requires the filer to disclosure on the Statement of Financial Interests the name and address of the source and the amount of any gift(s) valued in the aggregate at $250 or more and the circumstances of each gift. The filer is not required to disclose gifts from a family member or friend (with the term "friend" excluding a registered lobbyist or employee of a registered lobbyist) when the circumstances make it clear that the motivation for the action was the personal /family relationship. Section 1105(b)(7) of the Ethics Act requires the filer to list the name and address of the source and the amount of any payment for or reimbursement of actual expenses for transportation /lodging /hospitality received in connection with public office or employment where such actual expenses exceed $650 in the course of a single occurrence. This disclosure requirement excludes expenses reimbursed by a governmental body or by an organization or association of public officials or employees of political subdivisions which the public official or employee serves in an official capacity. The Ethics Act defines the following relevant terms as indicated: § 1102. Definitions "Gift." Anything which is received without consideration of equal or greater value. The term shall not include a political contribution otherwise reported as required by law or a commercially reasonable loan made in the ordinary course of business. "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). Ferlo, 05 -557 June 28, 2005 Page 5 In the instant matter, based upon the submitted facts, the Ethics Act would not prohibit Senator Ferlo from traveling to Taiwan at the expense of the Government of Taiwan. However, pursuant to Sections 1105(b)(6) and (7) of the Ethics Act, Senator Ferlo might be required to disclose various gifts or payments /reimbursements of transportation /lodging /hospitality for this trip on his Statement of Financial Interests. To illustrate the requirement for disclosure of gift(s) pursuant to Section 1105(b)(6), you are advised that in the event Senator Ferlo would receive a gift or gifts as defined by the Ethics Act from the Government of Taiwan or from non - governmental sources (other than family or friends), then pursuant to Section 1105(b)(6) of the Ethics Act, source for source, Senator Ferlo would be required to disclose on his Statement of Financial Interests the name and address of the source and the amount of gift(s) valued in the aggregate at $250 or more and the circumstances of each gift. Thus, if the Government of Taiwan would give to Senator Ferlo a statue valued at $1,000, and a citizen of Taiwan would give to Senator Ferlo a painting valued at $500, Senator Ferlo would be required to disclose the name and address of each such source, the amount of the gifts, and the circumstances under which he received the gifts. However, if Senator Ferlo would receive from a family member a gift of new luggage valued at $300 to take on the trip, he would not be required to disclose the gift of the luggage because gifts from a family member or friend (with the term "friend" excluding a registered lobbyist or employee of a registered lobbyist) need not be disclosed if the circumstances make it clear that the motivation for the action was the personal /family relationship. To illustrate the requirement for disclosure of payments /reimbursements for transportation /lodging /hospitality received in connection with public office or employment pursuant to Section 1105(b)(7), you are advised that because this particular trip would be in connection with Senator Ferlo's public office, any reimbursement by a "governmental body" of actual expenses for transportation, lodging, or hospitality received by Senator Ferlo as to the trip would not have to be reported on Senator Ferlo's Statement of Financial Interests. 65 Pa.C.S. § 1105(b)(7). You are cautioned that the Section 1105(b)(7) exclusion permitting non - disclosure as to such reimbursements by a governmental body would not apply to payments /reimbursements provided by a source other than a governmental body either directly or through a governmental body as a pass - through. Thus, if the Government of Taiwan would reimburse the expenses for Senator Ferlo's hotel room, or for his meals, such reimbursements would not be required to be disclosed on Senator Ferlo's Statement of Financial Interests. However, if a private corporation would be the true donor of such items, Senator Ferlo would be required to disclose the name and address of the source and the amount of any such payment or reimbursement. 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. Conclusion: As a Member of the Pennsylvania State Senate, Senator Jim Ferlo 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., and particularly the requirements for filing Statements of Financial Interests, 65 Pa.C.S. §§ 1104, 1105. Based upon the submitted facts, the Ethics Act would not prohibit Senator Ferlo from traveling to Taiwan at the expense of the Government of Taiwan. Senator Ferlo would be required to comply with the requirements for disclosure on his Statement of Financial Interests of gifts or payments /reimbursements of transportation /lodging /hospitality received in connection the trip. Section 1105(b)(6) of the Ethics Act requires the filer to disclosure on the Statement of Financial Interests the name and address of the source and the amount of any gift(s) valued in the aggregate at $250 or more and the circumstances of each gift. The filer is not required to disclose gifts from a family member or friend (with Ferlo, 05 -557 June 28, 2005 Page 6 the term "friend" excluding a registered lobbyist or employee of a registered lobbyist) when the circumstances make it clear that the motivation for the action was the personal /family relationship. Section 1105(b)(7) of the Ethics Act requires the filer to list the name and address of the source and the amount of any payment for or reimbursement of actual expenses for transportation /lodging /hospitality received in connection with public office or employment where such actual expenses exceed $650 in the course of a single occurrence. This disclosure requirement excludes expenses reimbursed by a governmental body, such as the Government of Taiwan, or by an organization or association of public officials or employees of political subdivisions which the public official or employee serves in an official capacity. 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 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. Sincerely, Vincent J. Dopko Chief Counsel