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HomeMy WebLinkAbout06-520 Williams, Jr.James N. Williams, Jr. 1429 Pennsylvania Avenue Pittsburgh, PA 15233 Dear Mr. Williams: ADVICE OF COUNSEL February 24, 2006 06 -520 Re: Conflict; Public Official /Employee; Government Affairs Officer; Allegheny County Controller's Office; Immediate Family Member; Spouse; Application to Distribute Slot Machines; Pennsylvania Race Horse Development and Gaming Act. This responds to your letter of January 24, 2006, 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., would impose prohibitions or restrictions upon a prospective Government Affairs Officer for the Allegheny County Controller's Office with regard to holding such position or performing the duties of such position when his spouse is involved with a group or entity that has submitted an application pursuant to the Pennsylvania Race Horse Development and Gaming Act ( "Gaming Act "), 4 Pa.C.S. § 1101 et seq., for the distribution of slot machines in Western Pennsylvania. Facts: You are an applicant for the position of Government Affairs Officer with the Allegheny County Controller's Office. You state that if you would be hired /appointed to the position, your job duties would include the following: reporting to the Allegheny County Controller; being responsible for governmental activities between the City of Pittsburgh and Allegheny County; coordinating programs with the County Controller's Office; implementing strategies to provide a positive interface between the City, County and other municipal governments; and monitoring and evaluating legislation and regulations for impact on the Controller's Office. You state that your spouse is "part of" New Centuries Entertainment, which you describe as a "team' that has submitted an application for the distribution of slot machines in Western Pennsylvania. In order for your employment as Government Affairs Officer to be confirmed, the Allegheny County Controller would like an opinion indicating that there is no conflict of interest. Therefore, you have requested an advisory from the State Ethics Commission to address the Controller's concerns. 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 Williams, 06 -520 February 24, 2006 Page 2 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. The question that you have posed is whether the Ethics Act would impose prohibitions or restrictions upon you with regard to holding the position of Government Affairs Officer for the Allegheny County Controller's Office or performing the duties of such position given your spouse's involvement with New Centuries Entertainment, a group or entity that has submitted an application pursuant to the Gaming Act for the distribution of slot machines in Western Pennsylvania. It is noted that the facts that you have submitted do not specify the nature of New Centuries Entertainment or the precise nature of your wife's involvement with it. If you would be hired /appointed to the position of Government Affairs Officer for the Allegheny County Controller's Office, then in that position, you would be subject to the Ethics Act either as a "public employee" or as a "public official," as those terms are defined by the Ethics Act: § 1102. Definitions "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 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. "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. 65 Pa.C.S. § 1102. Based upon the limited information that you have provided as to your prospective position, it is impossible to definitively determine whether only one or both of the above definitions would apply, but in any event, at least one of these Williams, 06 -520 February 24, 2006 Page 3 definitions would apply such that you would be subject to the provisions of the Ethics Act. In order to provide a complete response to your inquiry, numerous provisions of the Ethics Act and the Gaming Act must be noted. 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 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 Williams, 06 -520 February 24, 2006 Page 4 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. "Immediate family." A parent, spouse, child, brother or sister. "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. 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. See, e.q., Freind, Order 800; Metrick, Order 1037; Gorman, Order 1041; Rembold, Order 1303; Wilcox, Order 1306. Subject to certain voting conflict exceptions, Section 1103(j) of the Ethics Act requires a public official /public employee with a conflict of interest 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. Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /public employee anything of monetary value and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public 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(f) of the Ethics Act pertaining to contracting provides as follows: § 1103. Restricted activities (f) Contract. - -No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through Williams, 06 -520 February 24, 2006 Page 5 65 Pa.C.S. § 1103(f). an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. The Ethics Act defines the term "contract" as follows: § 1102. Definitions "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. 65 Pa.C.S. § 1102. Section 1103(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. Rather, where a public official /public employee, his spouse or child, or a business with which he, his spouse or child is associated, is otherwise appropriately contracting with the governmental body, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an "open and public process" be observed as to the contract with the governmental body. Pursuant to Section 1103(f), an "open and public process" includes: (1) prior public notice of the employment or contracting possibility; (2) sufficient time for a reasonable and prudent competitor /applicant to be able to prepare and present an application or proposal; (3) public disclosure of all applications or proposals considered; and (4) public disclosure of the contract awarded and offered and accepted. Section 1103(f) of the Ethics Act also requires that the public official /public employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. Administrative notice is taken of the following provisions of the Gaming Act: § 1512. Public official financial interest (a) General Rule.— Except as may be provided by rule or order of the Pennsylvania Supreme Court, no Williams, 06 -520 February 24, 2006 Page 6 executive -level State employee, public official, party officer or immediate family member thereof shall have, at or following the effective date of this part, a financial interest in or be employed, directly or indirectly, by any licensed racing entity or licensed gaming entity or any holding, affiliate, intermediary or subsidiary company, thereof, or any such applicant, nor solicit or accept, directly or indirectly, any complimentary service or discount from any licensed racing entity or licensed gaming entity which he knows or has reason to know is other than a service or discount that is offered to members of the general public in like circumstances during his or her status as an executive -level State employee, public official or party officer and for one year following termination of the person's status as an executive -level State employee, public official or party officer. (b) Definitions. —As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Financial interest." Owning or holding securities exceeding 1 % of the equity or fair market value of the licensed racing entity or licensed gaming entity, its holding company, affiliate, intermediary or subsidiary business. A financiaf interest shall not include any such stock that is held in a blind trust over which the executive -level State employee, public official, party officer or immediate family member thereof may not exercise any managerial control or receive income during the tenure of office and the period under subsection (a). "Immediate family." A parent, spouse, minor or unemancipated child, brother or sister. "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 Commonwealth or any political subdivision or commissioner of any authority or joint state commission. 4 Pa. C. S. § 1512. § 1103. Definitions "Applicant." Any person, officer, director or key employee, who on his own behalf or on behalf of another, is Williams, 06 -520 February 24, 2006 Page 7 applying for permission to engage in any act or activity which is regulated under the provisions of this part... . "Licensed gaming entity" or "slot machine licensee." A person that holds a slot machine license pursuant to this part. "Person." Any natural person, corporation, foundation, organization, business trust, estate, limited liability company, licensed corporation, trust, partnership, limited liability partnership, association or any other form of legal business entity. "Slot machine license." A license issued by the Pennsylvania Gaming Control Board authorizing a person to place and operate slot machines pursuant to this part and the rules and regulations under this part. "Supplier." A person that sells, leases, offers or otherwise provides, distributes or services any slot machine or associated equipment for use or play of slot machines in this Commonwealth. 4 Pa. C. S. § 1103. The specific question that you have posed shall now be addressed, that is, whether the Ethics Act would impose prohibitions or restrictions upon you with regard to holding the position of Government Affairs Officer for the Allegheny County Controller's Office or performing the duties of such position given your spouse's involvement with New Centuries Entertainment, a group or entity that has submitted an application for the distribution of slot machines in Western Pennsylvania pursuant to the Gaming Act. You are advised that the fundamental question of whether, under the submitted facts, you may hold the position of Government Affairs Officer for the Allegheny County Controller's Office must be answered under the Gaming Act itself. It is the Gaming Act, not the Ethics Act, which imposes restrictions as to persons serving in certain public positions based upon certain gaming - related circumstances. The State Ethics Commission does not have the statutory jurisdiction to interpret the Gaming Act, and therefore, the State Ethics Commission does not have the jurisdiction to determine whether the Gaming Act would prohibit you from serving as Government Affairs Officer for the Allegheny County Controller's Office. It would be for the appropriate reviewing body —a court, or perhaps the Pennsylvania Gaming Control Board —to make such determinations. However, in order to rovide a complete response to your inquiry under the Ethics Act, this Advice shall address the foreseeable impact of either of the two possible scenarios. If fiursuant to the Gaming Act, you could not lawfully serve as a Government Affairs Officer for the Allegheny County Controller's Office, the resulting impact under the Ethics Act would be that any pecuniary benefit that you would receive as a result of unlawful service in that position would be unauthorized in law and therefore a prohibited Williams, 06 -520 February 24, 2006 Page 8 private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. See, Hoak/McCutcheon v. State Ethics Commission, 466 A. 2d 283 (Pa. Commw. Ct. 1983); cf., Confidential Opinion, 03 -003; Smith, Opinion 04 -014. If, pursuant to the Gaming Act, you could lawfully serve as Government Affairs Officer for the Allegheny County Controller's Office, the Ethics Act would likewise not prohibit you from holding the position, although you would be required to comply with the restrictions and requirements of Sections 1103(a) and 1103(j) of the Ethics Act, as well as the restrictions of Section 1103(f) of the Ethics Act when applicable. With regard to potential conflicts of interest under Section 1103(a) of the Ethics Act, although it is clear that your spouse is a member of your immediate family, under the limited submitted facts it is not clear whether New Centuries Entertainment would be considered a business with which your spouse is associated. Thus, only general guidance may be given to you as to potential conflicts of interest. You are advised that as a Government Affairs Officer for the Allegheny County Controller's Office, you would generally have a conflict of interest in matters that would financially benefit yourself, a member of your immediate family, or a business with which you or a member of your immediate family is associated. In each instance of a conflict of interest, you would be required to abstain fully and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Act. The propriety of the proposed conduct has only been addressed under the Ethics Conclusion: If you would be hired /appointed to the position of Government Affairs Officer for the Allegheny County Controller's Office, then in that position, you would be subject to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., either as a "public employee' or as a "public official" as those terms are defined by the Ethics Act. In response to your inquiry as to whether the Ethics Act would impose prohibitions or restrictions upon you with regard to holding the position of Government Affairs Officer for the Allegheny County Controller's Office or performing the duties of that position when your spouse is involved with a group or entity that has submitted an application for the distribution of slot machines in Western Pennsylvania pursuant to the Pennsylvania Race Horse Development and Gaming Act ( "Gaming Act "), 4 Pa.C.S. § 1101 et seq., you are advised as follows. The State Ethics Commission does not have the statutory jurisdiction to address the fundamental question of whether the Gaming Act would prohibit you from holding the position of Government Affairs Officer for the Allegheny County Controller's Office. That question must be answered under the Gaming Act itself, which Act the State Ethics Commission does not have jurisdiction to interpret. If, pursuant to the Gaming Act, you could not lawfully serve as a Government Affairs Officer for the Allegheny County Controller's Office, the resulting impact under the Ethics Act would be that any pecuniary benefit that you would receive as a result of unlawful service in that position would be unauthorized in law and therefore a prohibited private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. If, pursuant to the Gaming Act, you could lawfully serve as Government Affairs Officer for the Allegheny County Controller's Office, the Ethics Act would likewise not prohibit you from holding the position, although you would be required to comply with the restrictions and requirements of Sections 1103(a) and 1103( of the Ethics Act, as well as the restrictions of Section 1103(f) of the Ethics Act when applicable. 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 Williams, 06 -520 February 24, 2006 Page 9 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