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HomeMy WebLinkAbout07-010 ADAMSOPINION OF THE COMMISSION Honorable Barbara Adams General Counsel Commonwealth of Pennsylvania Office of General Counsel 225 Main Capitol Building Harrisburg, PA 17120 Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella Reverend Scott Pilarz DATE DECIDED: 4/30/07 DATE MAILED: 5/1/07 07 -010 Re: DiBerardinis Dear General Counsel Adams: This Opinion is issued in response to your advisory request dated April 26, 2007. I. ISSUE: Whether, pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., the Secretary of Conservation and Natural Resources would have a conflict of interest under Section 1103(a) of the Ethics Act with respect to a proposed grant from the Department of Conservation and Natural Resources to a non - profit organization by which the Secretary's wife is employed, and whether the restrictions of Section 1103(f) of the Ethics Act would apply as to the proposed grant. II. FACTUAL BASIS FOR DETERMINATION: As General Counsel of the Commonwealth of Pennsylvania, you request an advisory from this Commission with respect to Secretary of Conservation and Natural Resources Michael DiBerardinis. You note your legal standing to request this advisory both on behalf of the Commonwealth, as the employer of Secretary DiBerardinis, and on Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 2 behalf of the Honorable Edward G. Rendell, Governor, as the appointing authority for the Secretary of Conservation and Natural Resources. You have submitted facts that may be fairly summarized as follows. The Secretary of Conservation and Natural Resources ( "Secretary ") is a statutory office within the Executive Department of the Commonwealth. The Secretary is the head of the Department of Conservation and Natural Resources ( "DCNR "). 71 P.S. § 66. You note that as head of DCNR, the Secretary is required, "either personally, by deputy, or by the duly authorized agent or employee of the department, ... [to] exercise the powers and perform the duties by law vested in and imposed upon the department." Id. DCNR's Bureau of Recreation and Conservation ( "Bureau ") awards hundreds of grants each year to municipalities and non - profit organizations for a variety of projects. The Bureau publishes a manual each year that informs prospective grant applicants about the types of grants that are available, eligibility requirements for grantees, selection criteria for grant applications, and conditions placed on the use of grant funds. You state that staff members of the Bureau's regional offices are responsible for rating and ranking the grant applications submitted during each grant cycle based upon criteria established and published in the annual grants manual. The regional offices submit their recommendations for funding to the Bureau staff in the central office in Harrisburg for review. The central office staff checks the ratings for accuracy and overall consistency and submits the list of ranked projects and recommended funding to the Bureau Director for review. The Bureau Director, in turn, provides the list of grants to be funded to the Deputy Secretary for review. Before publicly announcing the grant awards, the list of grants is reviewed with the DCNR Secretary and is provided to the Governor's Office. Pursuant to its mandate under the Conservation and Natural Resources Act, 71 P.S. § 1340.101, to provide focused management of the Commonwealth's recreation, natural and river environments, DCNR awards grants known as "C2P2 grants" through its "Community Conservation Partnerships Program" ( "Program "). The Program is administered by six regional offices within the Bureau. You state that DCNR has the authority and receives funding to award these grants through a number of state statutes. DCNR also receives federal funding for grants. You state that DCNR makes grants under the Program through an open and competitive process with prior public notice. The Pennsylvania Horticultural Society ( "PHS ") has previously received funding from DCNR through a C2P2 grant. Specifically, in October 2003, during the open publicly announced application period, PHS submitted a grant application to DCNR for a C2P2 grant pursuant to the Program. The Southeastern Regional Office of the Bureau received 77 grant applications during this period, including the PHS application. The PHS application was for a tree cover project in Southeastern Pennsylvania. You state that the aforesaid PHS application was rated and ranked by the Bureau based upon the criteria published in the agency grants manual and used to evaluate all grants. You state that the PHS project received a very high rating because the project would address an important problem - the decline of tree cover in urban areas — as documented in a study completed in March 2003 by "American Forests," a national non- profit citizen conservation organization. DCNR was able to fund the top 48 projects proposed in the Southeast Region during this grant cycle, including the PHS project. On the basis of its ranking, the PHS grant application was recommended by the Bureau's regional and central office staff and Bureau Director for funding. The Deputy Secretary concurred with this recommendation, as did the Secretary. Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 3 DCNR awarded PHS an Environmental Stewardship grant in the amount of $500,000 for the tree cover program, which program is called " TreeVitalize." The initial award was subsequently supplemented by additional funds through amendments to the original grant agreement. Currently, a total of $1.5 million has been awarded through this grant to PHS. Other funding sources, including DEP, have also provided financial support to TreeVitalize. Over a four year period, the TreeVitalize public - private partnership has generated an estimated $8 million, including direct funding and in -kind services, to support planting 20,000 shade trees; restoring 1,000 acres of forests along streams and water protection areas; and training 2,000 citizens to plant and care for trees. PHS is a not - for - profit membership organization with an overall mission of "motivat[ing] people to improve the quality of life and create a sense of community through horticulture." (Adams Letter of April 26, 2007, at 3 (quoting PHS web site)). PHS has 14,000 members and many volunteers and sponsors. It manages numerous programs, activities, and events. The revenue of PHS exceeds $20 million annually, and its assets total nearly $50 million. You estimate that during the three year period (2004 -2006) in which DCNR provided grant funds to PHS, the total revenue and support received by PHS would have been in excess of $60 million, with $1.5 million or 2.5% provided by DCNR through the TreeVitalize grant. The Secretary's wife, Joan Reilly, has been employed by PHS for approximately nine years. Ms. Reilly is currently employed as one of 14 managers within PHS. Specifically, she is one of the three directors of a PHS program called "Philadelphia Green," an urban greening program that supports the development and care of community gardens, neighborhood parks and high - profile public green spaces in Philadelphia. Ms. Reilly is not a board member, official or principal of any kind in PHS. She does not have the authority to enter into contracts or grants on behalf of PHS. Philadelphia Green does not manage and has no direct involvement with the TreeVitalize program. You note that PHS previously received one other grant from DCNR, specifically a $50,000 grant to stabilize vacant lands on American Street Corridor in 2001. In 2006, DCNR held an open application period for C2P2 grants from May 6 through September 29 and a supplemental open application period for planning and acquisition projects from October 2, 2006, through April 13, 2007. The Bureau conducted eight workshops and breakout sessions throughout the Commonwealth in May and June 2006 focusing on the C2P2 funding for recreation and conservation programs. PHS has submitted a request for an additional $500,000 in funding for the TreeVitalize project. You state that the request has been reviewed by Bureau staff and management and, because of the success of the TreeVitalize project to date, has been recommended for funding. However, DCNR has decided to not move forward with an amendment to the grant to provide this additional funding to PHS until an opinion or advice from this Commission has been received. You ask whether it would be a violation of Section 1103(f) of the Ethics Act for DCNR to provide an additional $500,000 in funding to PHS to continue work on the TreeVitalize project when PHS employs the Secretary's wife as a director in the unrelated PHS "Philadelphia Green" program. With respect to this question, you note the open and competitive process used by DCNR in the award of C2P2 grants under the Program. You also state that the Secretary has no supervisory or overall responsibility for the implementation or administration of any grant. You further ask whether Section 1103(a) of the Ethics Act would permit the Secretary to participate in the grant process as to the aforesaid PHS application for Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 4 additional funding for the TreeVitalize project. It is your view that the additional grant funding to PHS would be permissible under Section 1103(f) of the Ethics Act and would not constitute a conflict of interest for the Secretary under Section 1103(a) of the Ethics Act. You state that if the grant is regarded as a contract for purposes of Section 1103(f) of the Ethics Act, then PHS may enter into the grant if: (1) the grant is awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded; and (2) the Secretary has no supervisory or overall responsibility for the implementation or administration of the contract. It is your view that the DCNR grant process meets the "open and public process" required by Section 1103(f) of the Ethics Act. You state that DCNR solicits applications for grants through a public process in which notices are published in the Pennsylvania Bulletin and the Department's website advertising the availability of grants, advising how applications, instructions and guidelines can be obtained, and setting the deadline for the submission of applications. You state that the Department accepts applications from all qualified applicants and reviews and scores the applications through a competitive process, based upon pre - established criteria. In accordance with DCNR policy for all DCNR grants, the appropriate Bureau Director provides the list of grants to be funded to the Deputy Secretary for review. Before publicly announcing the grant awards, the list of grants is reviewed with the DCNR Secretary and provided to the Governor's Office. DCNR publicly announces grant awards and makes grant agreements with successful applicants available to the public upon request. DCNR will, upon request, make available the names of unsuccessful applicants, the amounts applied for, and descriptions of the proposed projects. You further state that the Secretary has no role, supervisory or otherwise, in the implementation or administration of grants, including the PHS grant. These tasks are carried out by the staff of DCNR and the programs associated with the particular grant, under the supervision of the respective Bureau Directors and the Deputy Secretary. The Secretary reviews the award of all grants after they are recommended by Bureau staff, the Bureau Director and the Deputy Secretary. The Secretary does not sign the grants. As for Section 1103(a) of the Ethics Act, you assert that the established framework for the solicitation and approval of future grants or amendments to existing grants contains the appropriate checks and balances to ensure that the Secretary is not in a position to use the authority of his office to influence a particular award for the private pecuniary benefit of himself, his wife, or PHS. You contend that PHS as a non - profit organization will not realize any financial gain from an amendment nor will the Secretary or his wife realize any financial gain to which he or his wife are not already entitled. You contend that the potential prospective grant to PHS would have a de minimis economic impact, such that no conflict of interest would exist. You note that the Ethics Act defines the term "de minimis economic impact" as an "economic consequence which has an insignificant effect." 65 Pa.C.S. § 1102. You assert that the economic impact would be de minimis both as to PHS and as to the Secretary's wife, who has no responsibility for implementation of the TreeVitalize project, receives no direct compensation through the DCNR grant, and has not received any bonus, pay increase or other preferential treatment from PHS because of the grant. In support of your view that no conflict of interest would exist, you cite the following case law: Pulice v. State Ethics Commission, 713 A.2d 161 (Cmwlth. Ct. 1998), petition for allowance of appeal denied, 557 Pa. 642, 732 A.2d 1211 (1998); Bartholomew v. State Ethics Commission, 795 A.2d 1073 (Pa. Cmwlth. 2002); Kraines v. State Ethics Commission, 805 A.2d 677 (Pa. Cmwlth. 2002). You also cite Davies, Order 443, and Morris, Advice 84 -618. Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 5 By letter dated April 27, 2007, you were notified of the date, time and location of the public meeting at which your request would be considered. At the public meeting on April 30, 2007, Linda Barrett, Esquire, Deputy General Counsel, appeared on your behalf and offered commentary, some of which duplicated information in your prior written submissions. The material portion of the supplemental information offered in Ms. Barrett's commentary at the meeting may be fairly summarized as follows. Ms. Barrett states that the procedures involving the solicitation, evaluation, and awarding of DCNR grant funds have been in place for many years. The Program disseminates monies to organizations pursuant to statutes aimed at targeting various environmental problems or concerns that have been identified by the Legislature. Ms. Barrett states that the priorities for DCNR under this grant program are to a large extent set by State and Federal priorities, which establish the funding sources. Ms. Barrett asks this Commission to keep in mind the intended outcome of the grant program, which is to promote continuing environmental stewardship benefiting the people of Pennsylvania as well as future generations. Ms. Barrett contends that spouses and children of many Commonwealth officials work for or are associated with businesses with which the Commonwealth needs to do business. Based upon that contention, Ms. Barrett argues that the Ethics Act does not preclude an award of a grant to a non - profit organization such as PHS with which a spouse of a public official is associated. Ms. Barrett asserts that such grant awards are permitted as long as the appropriate safeguards are in place. Ms. Barrett further asserts that such safeguards are in place in this instance. Ms. Barrett contends that there is no basis for concluding that the Secretary will abuse or has abused his influence in any way to ensure that PHS would be identified for possible funding, or that his spouse would receive a personal benefit to which she would not be entitled. Ms. Barrett states that Ms. Reilly, as an employee of PHS, receives her compensation regardless of whether a grant is awarded to PHS by DCNR. Ms. Barrett further contends that the requirements of Section 1103(f) of the Ethics Act are satisfied by the DCNR grant process. Ms. Barrett notes her belief that a particular organization such as a non - profit like PHS would not be prohibited from applying for a grant from DEP and /or DCNR, as long as the criteria for the particular grant proposal(s) under consideration would be met. III. 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, this 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. It is further noted that, pursuant to Sections 1107(10) and (11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), an opinion /advice may be given only as to prospective (future) conduct. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 6 extent you have inquired as to future conduct, your inquiry may and shall be addressed. The Secretary is a "public official" and an "executive -level State employee" as those terms are defined by the Ethics Act, and hence the Secretary is subject to the provisions of the Ethics Act. See, Confidential Opinion, 94 -010. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 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 pertaining to conflicts of interest are defined in the Ethics Act as follows: 65 Pa.C.S. § 1102. § 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. "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. Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 7 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. Section 1103(f) of the Ethics Act imposes certain restrictions as to contracting and subcontracting: § 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 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. 65 Pa.C.S. § 1103(f). 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) of the Ethics Act provides in part that no public official /public employee or his spouse or child or business with which the public official /public employee or his spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated unless the contract is awarded Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 8 through an open and public process including prior public notice and subsequent public disclosure. In applying the above provisions of the Ethics Act to the important questions that you have presented, we are guided by the following fundamental principles. Public office is a public trust. 65 Pa.C.S. § 1101.1(a). Insofar as public officials and public employees are concerned, the public trust is paramount over private interests. Hutchins, Order 1320; Mohr, Order 1293; Urtz, Order 1274; Billetdeaux, Order 1222; Summers, Order 1174; Kannebecker, Opinion 92 -010; Crisci, Opinion 89 -013; see also, 1 Pa.C.S. § 1922. The Ethics Act is remedial legislation, and both the General Assembly and the Pennsylvania Supreme Court have declared that the Ethics Act is to be liberally construed to advance public trust in government. In promulgating the Ethics Act, the General Assembly declared that the people of the Commonwealth of Pennsylvania have the right to be assured that the financial interests of those who hold public office or who seek to hold public office do not conflict with the public trust, and that the Ethics Act is to be liberally construed to promote complete financial disclosure in accordance with the requirements of the Ethics Act: § 1101.1. Purpose (a) Declarations. - -The Legislature hereby declares that public office is a public trust and that any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust. In order to strengthen the faith and confidence of the people of this Commonwealth in their government, the Legislature further declares that the people have a right to be assured that the financial interests of holders of or nominees or candidates for public office do not conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this chapter shall be liberally construed to promote complete financial disclosure as specified in this chapter. Furthermore, it is recognized that clear guidelines are needed in order to guide public officials and employees in their actions. Thus, the General Assembly by this chapter intends to define as clearly as possible those areas which represent conflict with the public trust. 65 Pa.C.S. § 1101.1. Similarly, the Pennsylvania Supreme Court has declared that the Ethics Act, as remedial legislation, must be liberally construed, Maunus v. State Ethics Commission, 518 Pa. 592, 598, 544 A.2d 1324, 1327 (1988), and that "[t]he duty of government to establish and promote standards of the highest order is perhaps its most compelling obligation, in view of the public trust reposed within its auspices." Id., 518 Pa. 592, 600, 544 A.2d 1324, 1328 (1988). With the above principles in mind, we shall apply the relevant provisions of the Ethics Act to your request. In applying Section 1103(a) of the Ethics Act to the submitted facts, we determine that the Secretary would have a conflict of interest with regard to the proposed DCNR grant to PHS, but that there is a means by which the Secretary would be able to avoid transgressing Section 1103(a) of the Ethics Act as to such grant. Our analysis is as follows. Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 9 First, to the extent the Secretary would have official involvement as to the proposed PHS grant, such action would constitute a use of authority of office. As you have noted, as head of DCNR, the Secretary is statutorily required, "either personally, by deputy, or by the duly authorized agent or employee of the department, ... [to] exercise the powers and perform the duties by law vested in and imposed upon the department." Id. Additionally, you have factually submitted that the DCNR grant process includes review by the Secretary of the award of all grants after they are recommended by Bureau staff, the Bureau Director and the Deputy Secretary. Thus, official action taken by the Secretary as to the proposed PHS grant from DCNR, including participation in the review or approval process, would constitute a use of the authority encompassed within the Secretary's official position. Further, we determine that the Secretary would have a conflict of interest as to participating in the review and /or approval of the proposed grant to PHS because the Secretary's wife is an employee of PHS. It is our view that PHS, a non - profit corporation, is a "business" as that term is defined in the Ethics Act, and that it is a business with which the Secretary's wife, as an employee, is associated. We note that we are aware of the recent ruling of the Pennsylvania Supreme Court in In re Nomination Petition of Carroll, 586 Pa. 624, 896 A.2d 566 (2006). In Carroll, in the narrow context of a challenge to a candidate's nomination petition, the Court reviewed the definition of the term "business" as set forth in the Ethics Act and questioned whether the definition would include or exclude non - profit organizations: § 1102. Definitions "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. 65 Pa.C.S. § 1102. The Court noted that the "organized for profit" reference in the definition was subject to two possible interpretations —an interpretation that would construe the reference as modifying all preceding forms of business listed in the definition (such that only for - profit entities would qualify as "businesses ") and another interpretation that would construe it as applying only to the last antecedent example (such that non - profit entities would qualify as "businesses "). Having apparently been erroneously informed that this Commission had no rulings as to whether non - profit entities would be considered "businesses" under the Ethics Act (See, Carroll, 586 Pa. 624, 633 -634, 896 A.2d 566, 571 (2006)), the Court construed the definition narrowly, in the way most favorable to the candidate, and held that a candidate's omission from his Statement of Financial Interests of his presidency of a non - profit corporation from which he received no compensation was not a fatal defect to his nomination petition. The Court's decision in Carroll was based upon inaccurate information as to the status of this Commission's rulings and was also inconsistent with the Court's own prior mandate that the Ethics Act, as remedial legislation, must be liberally construed, Maunus v. State Ethics Commission, 518 Pa. 592, 598, 544 A.2d 1324, 1327 (1988). Contrary to the inaccurate information that was apparently supplied to the Supreme Court in the Carroll case, this Commission has long held that a non - profit corporation is a "business" as that term is defined in the Ethics Act. In Soltis - Sparano, Order 1045 (decided in 1997) we specifically interpreted the language at the end of the definition of the term "business" and concluded that: The word "or" is disjunctive, and furthermore, the repeated use of the word "any" precludes any interpretation Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 10 that the final phrase "legal entity organized for profit" modifies the initial word "corporation:" Any corporation, ... or any legal entity organized for profit." The clear and unambiguous language is that any corporation, including a non - profit corporation, is a "business." Soltis - Sparano, Order 1045, at 31. The following are additional decisions in which this Commission has held that a non - profit corporation is a "business" within the meaning of that term as defined by the Ethics Act: Confidential Opinion, 89 -007 (decided in 1989); McConahy, Opinion 96 -006 (decided in 1996); Maduka, Order 1277 (decided in 2003). All of these rulings are public documents that are available on the Commission's web site in a searchable electronic library and are also available in libraries throughout the Commonwealth. On its face, we do not read the Carroll case as having definitively decided the status of non - profits under the Ethics Act. Additionally, we note that challenges to candidate nomination petitions involve unique considerations, and at this time, there is no indication that the Supreme Court will extend its ruling in the Carroll case beyond the scope of election - related challenges. See, Kravetsky, Order 1420. The status of a non - profit organization as a "business" as that term is defined in the Ethics Act has significant and far - reaching implications beyond election - related challenges, as is clearly evidenced by the instant matter. In the instant matter, the submitted facts establish that PHS is a not - for - profit membership organization. (Adams Letter of April 26, 2007, at 3). The term "organization" is one of the categories of entities qualifying as a "business" under the Ethics Act definition. Because the phraseology at the end of the definition of the term "business," specifically, or legal entity organized for profit," 65 Pa.C.S. § 1102 (emphasis added), does not modify the preceding terms in the definition such as "organization," we hold that PHS is a "business" as that term is defined by the Ethics Act. We further hold that PHS is a business with which the Secretary's wife, a member of the Secretary's immediate family, is associated. Ms. Reilly's status as an employee of PHS is sufficient to qualify PHS as a "business with which she is associated." The prospective grant to PHS would constitute a pecuniary benefit to PHS. This conclusion is based upon the fact that but for the proposed grant monies from DCNR, PHS would have $500,000 less available to perform the mission it has undertaken. Cf., Suroviec, Opinion 07 -1003 (regarding the mission of an organization). The pecuniary benefit would be considered private because there is no authorization in law that would permit the Secretary of DCNR to participate in awarding grants to a non - profit organization employing his spouse. You assert that the economic impact would be de minimis both as to PHS and as to the Secretary's wife, who has no responsibility for implementation of the TreeVitalize project, receives no direct compensation through the DCNR grant, and has not received any bonus, pay increase or other preferential treatment from PHS because of the grant. We find that the prospective grant amount, $500,000, would not be de minimis. Obviously the amount is significant enough to PHS that it applied for the grant. It is also clear from the submitted facts that successful work by a grant recipient under an initial grant award advances the prospects of subsequent additional financial support from DCNR. The economic impact upon PHS would be sufficient to support a conflict of interest, and so we need not address any economic impact upon the Secretary's wife. The cases and Commission Order and Advice cited in support of your position as to conflict of interest do not alter our view in the instant matter. Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 11 Having concluded that the Secretary would have a conflict of interest with regard to the proposed DCNR grant to PHS, you are advised that the Secretary would be required to abstain fully from matters pertaining to the grant or to grant applications of competitors for the Program grant monies. See, Pepper, Opinion 87 -008. Recently in Dobrowolski, Opinion 07 -002, this Commission approved a "conflict of interest avoidance mechanism" for avoiding a conflict of interest, which could be applied in the instant matter. In Dobrowolski, the requester was an independent contractor who, through a business involving herself and certain immediate family members, provided limited van transportation services to a school district. The school district was interested in hiring Ms. Dobrowolski as an employee, specifically, a transportation coordinator /clerk. As proposed, the employment position would have included responsibilities as to both bus and van transportation providers. Ms. Dobrowolski was interested in the employment position, but she was also interested in continuing to contractually provide the limited van transportation services. We concluded that Section 1103(a) of the Ethics Act would not prohibit Ms. Dobrowolski from being employed as the school district's transportation coordinator /clerk under certain conditions, which included, inter alia, that her superiors in the school district would reallocate all matters and work involving van transportation services within the school district to persons who would not be subordinates within Ms. Dobrowolski's chain of command, and that there would be no means by which Ms. Dobrowolski could use the authority of the employment position or confidential information accessed as a result of being in that position for a prohibited private pecuniary benefit. You are similarly advised that there is a means by which the Secretary would be able to avoid transgressing Section 1103(a) of the Ethics Act as to the prospective grants that are in question. Specifically, the Governor could designate someone not within the Secretary's chain of command to perform the Secretary's role as to the prospective grants in question, as well as the grant applications of competitors for the Program grant monies. Cf., Dobrowolski, supra; Pepper, supra. We note that the Secretary himself could not make such a designation. See, Confidential Opinion, 02 -004 (holding that where there is no pre- existing conflict mechanism in place specifying how and by whom a public official's authority is to be exercised in the event of a conflict of interest, the public official's delegation of such authority to a subordinate would itself constitute a use of authority of office in contravention of Section 1103(a) of the Ethics Act). Under such a "conflict of interest avoidance mechanism," the Secretary would need to be removed /insulated from any involvement in the grant process in question as well as any access to confidential/non - public information involving the grant process, such as, for example, ratings, evaluations and recommendations by DCNR staff members involved in the grant process. Turning to Section 1103(f) of the Ethics Act, we have previously held that the restrictions of Section 1103(f) are applicable to a grant process involving a "contract" as that term is defined in the Ethics Act. See, Confidential Opinion, 03 -007; Confidential Opinion, 01 -005. In the instant matter, the grant would be for the TreeVitalize project, which involves the planting of trees and the education of citizens about the care of trees and the environment. We conclude that such services would be services to the Commonwealth and would fall within the definition of contract under the Ethics Act. This conclusion is based upon the fact that DCNR is mandated under the Conservation and Natural Resources Act, 71 P.S. § 1340.101, to provide focused management of the Commonwealth's recreation, natural and river environments, and the TreeVitalize program assists DCNR in achieving that mandate. Therefore, the restrictions of Section 1103(f) of the Ethics Act would apply as to the proposed grant to PHS. In reviewing the DCNR grant process as detailed in the submitted facts, we conclude that it would constitute an "open and public process, including prior public notice Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 12 and subsequent public disclosure of all proposals considered and contracts awarded" as required by Section 1103(f) of the Ethics Act. The "prior public notice" component of the DCNR grant process is exemplary. The "subsequent public disclosure" component is adequate to satisfy the requirements of Section 1103(f) in light of the public announcement as to grant awards, the public availability upon request of grant agreements, and the public availability upon request of the relevant information as to unsuccessful grant applicants /applications. Section 1103(f) of the Ethics Act would require that the Secretary not have any supervisory or overall responsibility for the implementation or administration of the PHS grant contract. 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. IV. CONCLUSION: Secretary of Conservation and Natural Resources Michael DiBerardinis ( "Secretary ") is a "public official" and an "executive -level State employee" subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The Secretary's wife is a member of his immediate family. The Pennsylvania Horticultural Society ( "PHS "), a not - for - profit membership organization, is a "business" as that term is defined in the Ethics Act. The Secretary would have a conflict of interest under Section 1103(a) of the Ethics Act as to a proposed grant from the Department of Conservation and Natural Resources ( "DCNR ") to PHS because PHS employs the Secretary's wife. PHS is a business with which the Secretary's wife is associated. The Secretary would be required to abstain fully from matters pertaining to the proposed grant to PHS or to grant applications of competitors for the program grant monies. The Secretary would be able to avoid transgressing Section 1103(a) of the Ethics Act as to the proposed grant if the Governor would designate someone not within the Secretary's chain of command to perform the Secretary's role as to the proposed PHS grant as well as the grant applications of competitors for the grant program grant monies. The Secretary himself could not make such a designation. Under such a "conflict of interest avoidance mechanism," the Secretary would need to be removed /insulated from any involvement in the grant process in question as well as any access to confidential /non - public information involving the grant process. The restrictions of Section 1103(f) of the Ethics Act would apply as to the proposed grant to PHS. The DCNR grant process as detailed in the submitted facts would constitute an "open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded" as required by Section 1103(f). Section 1103(f) would require that the Secretary not have any supervisory or overall responsibility for the implementation or administration of the PHS grant contract. Act. The propriety of the proposed conduct has only been addressed under the Ethics Pursuant to Section 1107(10) of the Ethics Act, the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the Adams /Rendell (Re: DiBerardinis), 07 -010 May 1, 2007 Page 13 mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair