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HomeMy WebLinkAbout06-502 LommaAnthony C. Lomma, Esquire 305 Cherry Street Scranton, PA 18505 Dear Mr. Lomma: ADVICE OF COUNSEL January 5, 2006 06 -502 Re: Simultaneous Service, Chairman of County Railroad Authority and Chief Executive Officer of County Railroad Authority; Former Public Official /Public Employee; County Director of Transportation; Section 1103(g); Section 1103(a). This responds to your letter of December 1, 2005, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., would impose any prohibition or restrictions upon an individual who presently serves as a county director of transportation and as chairman of the county railroad authority and the county transit system authority, with regard to accepting employment with the county railroad authority as its chief executive officer while continuing to serve as chairman of the county railroad authority and the county transit system authority but resigning from the position of county director of transportation. Facts: As Solicitor for both the Lackawanna County Railroad Authority ( "Railroad Authority ") and the County of Lackawanna Transit System Authority ( "Transit System Authority "), you seek an advisory on behalf of James Finan ( "Finan "), who serves as Chairman of both authorities. You have submitted facts, the material portions of which may be fairly summarized as follows. In addition to serving as Chairman of the Railroad Authority and Chairman of the Transit System Authority, Finan is employed by Lackawanna County ( "County ") as its Director of Transportation. As Director of Transportation for the County, Finan serves as Director of the Lackawanna County Coordinated Transportation System ( "LCCTS ") and as Director of the "Transportation Council." The LCCTS is a para- transit bus system that provides six -day bus service to qualified disabled and elderly clients. The Transportation Council was created by the County to handle all transportation matters. The Transportation Council is composed of the Railroad Authority, the Transit System Authority, and the County para- transit and selected highway issues. Finan receives all of his compensation and benefits from the County. Both the Railroad Authority and the Transit System Authority were formed pursuant Lomma - Finan, 06 -502 January 5, 2006 Page 2 to the Municipality Authorities Act over twenty (20) years ago. The Railroad Authority handles all railroad transportation issues and currently operates, through a contracted operator, a general freight service throughout the County and Monroe County. The Transit System Authority, which was organized for the purpose of operating the County's public transportation bus service, currently operates a six -day public bus service throughout the County. The Transit System Authority is presently developing an Intermodal Transportation Center. Final plans are being developed and the project will be placed for bids in the near future. At the present time, there are two major initiatives involving the Railroad Authority and the County. First, the Railroad Authority is seeking to expand its operations and obtain new customers for its freight lines. The County and Railroad Authority are presently pursuing a merger with Monroe and Luzerne Counties for the rail part of the County's operations. Second, the Railroad Authority and the County are in negotiations with New Jersey Transit Authority to bring a new passenger line to Scranton. The County, the Railroad Authority and the Transit System Authority are proposing that Finan become employed full -time as the Chief Executive Officer of the Railroad Authority. As CEO, Finan would receive his salary and benefits from the Railroad Authority, which would bill the Transit Authority for a portion of his compensation. As part of this arrangement, Finan would terminate his employment with the County as Director of Transportation, but would remain a member /chairman of the Railroad Authority and the Transit System Authority. You state that if Finan would be permitted to be employed by the Railroad Authority as its CEO and remain a member of both authorities, he would continue with his current daily operational duties at both authorities and para- transit, and he would continue to chair both authorities and the Transportation Council. He would assume additional duties including supervising staff, spearheading the merger talks with Luzerne and Monroe Counties, negotiating with New Jersey Transit on the passenger line, and dealing directly with developers and potential new customers wishing to locate or build along the Railroad Authority's lines. Based upon the foregoing facts, you ask whether Finan may remain Chairman of the Railroad Authority and Chairman of the Transit System Authority if he becomes employed as CEO of the Railroad Authority. You cite the Commission's decision in Swick/Aman, Opinion 91 -006, in support of your contention that such would be permissible. You acknowledge that as a member of the authorities, Finan would be required to abstain from voting on any matters that would affect his proposed employment with the Railroad Authority. It is noted that you have submitted a copy of the By -laws of the Railroad Authority. 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 Chairman of the Railroad Authority and the Transit System Authority, Finan is a "public official" as that term is defined in the Ethics Act and hence Finan is subject to the provisions of the Ethics Act. 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Further, as the County Director of Transportation, Finan is a public official /public employee subject to the Ethics Act. Based upon a factual insufficiency regarding the positions of Director of the Lomma - Finan, 06 -502 January 5, 2006 Page 3 LCCTS and Director of the Transportation Council, it cannot be determined whether Finan is a public official /public employee subject to the Ethics Act in those particular capacities. 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 pertaining 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 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. Lomma - Finan, 06 -502 January 5, 2006 Page 4 "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. 65 Pa. C. S. § 1102. You have asked whether Finan may remain Chairman of the Railroad Authority and Chairman of the Transit System Authority if he becomes employed as CEO of the Railroad Authority. You have cited the Commission's decision in Swick/Aman, Opinion 91 -006, in support of your contention that such would be permissible. In Swick/Aman, supra, the State Ethics Commission determined that the Municipality Authorities Act would not preclude simultaneous service as a municipal authority board member and authority employee. However, the Commission's decision that such simultaneous service as an authority board member and employee would be permitted under the Ethics Act was subject to two qualifications. First, the Commission held that the board member could not use the authority of office" by participating in or voting in favor of his own appointment or in other matters concerning his employment. Swick/Aman, supra, at 8. Second, the Commission determined that such employment positions would have to be legitimate, and not a mere machination to enable the authority board members to set their own compensation for duties performed as board members, rather than as bona fide employees. Id. (Citing Confidential Advice, 90 -527, affirmed, Confidential Opinion, 90 -012). Thus, although authority board members may fix the number of authority employees and may prescribe the powers /duties and compensation of authority employees, authority members may not be compensated as authority employees for duties that they would properly perform as board members. Based upon the Commission's decision in Swick/Aman, supra, the Ethics Act would not preclude Finan from being employed and receiving compensation as Chief Executive Officer of the Railroad Authority, conditioned upon the assumption that such employment position would be legitimate. As Chairman of the Railroad Authority, Finan could not participate in or vote in favor of his own appointment /hiring or in other matter(s) that would financially impact him. In each instance of a conflict of interest, Finan would be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j) as set forth above. You are advised that there is another concern raised by your inquiry, specifically, the prospective applicability to Finan of the post - employment restrictions of Section 1103(g) of the Ethics Act. You are advised that following his resignation from County employment, Finan would become a former public official /public employee and would be subject to the post - employment restrictions of Section 1103(g) of the Ethics Act. Section 1103(g) of the Ethics Act is a "revolving- door" provision that imposes strict prohibitions upon a former public official /public employee with regard to "representing" a "person" before the governmental body with which he has been associated." Upon resigning from County employment, Finan would become a former public official /public employee subject to Section 1103(g) of the Ethics Act as to his former County employment. The fact that Finan would have continued involvement with the Railroad Authority and the Transit System Authority would not preclude the applicability of Section 1103(g) as to Finan's former County employment, because the County would be considered a completely separate governmental body from the Railroad Authority and Transit System Authority. See, Commonwealth v. Lucas, 534 Pa. 293, 632 A.2d 868 (1993); Commonwealth v. Erie Metropolitan Transit Authority, 444 Pa. 345, 281 A.2d 882 (1971). See also, Moore, Opinion 05 -010. Section 1103(g) of the Ethics Act provides as follows: Lomma - Finan, 06 -502 January 5, 2006 Page 5 § 1103. Restricted activities (g) Former official or employee. - -No former public official or public employee shall represent a person, with promised or actual compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 Pa.C.S. § 1103(g) (Emphasis added). The terms "represent," "person," "governmental body," and "governmental body with which a public official or public employee is or has been associated" are specifically defined in the Ethics Act as follows: §1102. Definitions "Represent." To act on behalf of any other person in any activity which includes, but is not limited to, the following: personal appearances, negotiations, lobbying and submitting bid or contract proposals which are signed by or contain the name of a former public official or public employee. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. "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. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. 65 Pa.C.S. § 1102. The term "person" is very broadly defined. It includes, inter alia, corporations and other businesses. It also includes the former public employee himself, Confidential Opinion, 93 -005, as well as a governmental employer. Ledebur, Opinion 95 -007. The term "representation" is also broadly defined to prohibit acting on behalf of any person in any activity. Examples of prohibited representation include, inter alia: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; and (3) lobbying. Popovich, Opinion 89 -005. A former public official /public employee may assist in the preparation of any documents presented to his former governmental body. However, the former public official /public employee may not be identified on documents submitted to the former governmental body. The Ethics Act would not prohibit or preclude making general informational inquiries to the former governmental body to secure information which is Lomma - Finan, 06 -502 January 5, 2006 Page 6 available to the general public, but this must not be done in an effort to indirectly influence the former governmental body or to otherwise make known to that body the representation of, or work for the new employer. Section 1103(g) only restricts the former public official /public employee with regard to representation before his former governmental body. The former public official/ public employee is not restricted as to representation before other agencies or entities. However, the "governmental body with which a public official /public employee is or has been associated" is not limited to the particular subdivision of the agency or other governmental body where the public official /public employee had influence or control but extends to the entire body. See, Legislative Journal of House, 1989 Session, No. 15 at 290, 291; Sirolli, Opinion 90 -006; Sharp, Opinion 90- 009 -R. Upon resigning from his position as the County's Director of Transportation, the governmental body with which Finan would be deemed to have been associated would be the Lackawanna County Department of Transportation in its entirety including, but not limited to, any subdivisions and offices within the Department of Transportation. Therefore, for the first year after termination of service as the County's Director of Transportation, Section 1103(g) of the Ethics Act would apply to Finan and would restrict his "representation" of "persons " — including but not limited to the Railroad Authority and the Transit System Authority -- before the Lackawanna County Department of Transportation. It is unclear from the submitted facts whether Finan as a member /chairman or CEO of the Railroad Authority, member /chairman of the Transit System Authority Board, or Director of the Transportation Council, would have occasion to interact with the County Department of Transportation. Therefore, you are generally advised that during the first year following Finan's resignation from County employment as the County's Director of Transportation, to the extent Finan's activities would constitute prohibited representation before the County Department of Transportation, Finan would transgress Section 1103(g) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Conclusion: As Chairman of the Lackawanna County Railroad Authority ( "Railroad Authority ") and as Chairman of the County of Lackawanna Transit System Authority ( "Transit System Authority "), James Finan ( "Finan ") is a "public official" as that term is defined in the Ethics Act and hence Finan is subject to the provisions of the Ethics Act. Further, as the Lackawanna County ( "County ") Director of Transportation, Finan is a public official /public employee subject to the Ethics Act. Based upon a factual insufficiency regarding the positions of Director of the Lackawanna County Coordinated Transportation System ( "LCCTS ") and Director of the County's Transportation Council, it cannot be determined whether Finan is a public official /public employee subject to the Ethics Act in those particular capacities. Within the parameters of Sections 1103(a) and 1103(j) of the Ethics Act and subject to the conditions, restrictions, and qualifications set forth above, the Ethics Act would not prohibit Finan as Chairman of the Railroad Authority from being employed by and receiving compensation from the Railroad Authority as Chief Executive Officer of the Railroad Authority. However, if Finan would terminate his employment with the County, he would become a former public official /public employee subject to the post - employment restrictions of Section 1103(g) of the Ethics Act. Pursuant to Section 1103(g) of the Ethics Act, during the first year following Finan's resignation from County employment, Section 1103(g) of the Ethics Act would apply and would restrict Finan from the "representation" of "persons " — including but not limited to governmental bodies such as the Railroad Authority and the Transit System Authority -- before his former governmental body, specifically, the County Department of Transportation, for promised or Lomma - Finan, 06 -502 January 5, 2006 Page 7 actual compensation. Lastly, the propriety of the proposed course of conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), this 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