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HomeMy WebLinkAbout07-532 SegalLarry Segal 6 Lantern Lane Wayne, PA 19087 ADVICE OF COUNSEL May 8, 2007 07 -532 Dear Mr. Segal: This responds to your letters dated February 15, 2007, and March 23, 2007, 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 present any restrictions upon employment of the Executive Director of the Governor's Office of Housing and Community Revitalization following termination of service with the Commonwealth. Facts: As the former Executive Director of the Governor's Office of Housing and C ommunity Revitalization (hereinafter also referred to as "Office of Housing "), you request an advisory from the State Ethics Commission based upon submitted facts that may be fairly summarized as follows. Executive Order No. 2003 -11 ( "the Executive Order "), signed by Governor Edward G. Rendell on September 10, 2003, established the Office of Housing as well as the Governor's Housing Cabinet (hereinafter also referred to as "Housing Cabinet "). You have submitted a copy of Executive Order No. 2003 -11, which is incorporated herein by reference. It is administratively noted that per the Executive Order, the Executive Director of the Office of Housing also served as a member and chair of the Housing Cabinet. It is further administratively noted that the Executive Order provided for its own expiration three years after its effective date. On September 10, 2003, Governor Rendell appointed you as the Executive Director of the Office of Housing, and you served in that capacity until January 26, 2007. You state that while you reported directly to Governor Rendell, you were not formally considered to be a member of his cabinet or senior staff. You state that you were technically considered an employee of the Pennsylvania Housing Finance Agency ("PHFA"). You and your staff had offices at PHFA, received paychecks from PHFA, and had PHFA e -mail addresses. You state that you have not been able to locate a formal job description for your former position, and you believe that it is possible that a formal job description may Segal, 07 -532 May 8, 2007 Page 2 never have been generated. You state that the Executive Order defined your role and responsibilities. You state that your role as Executive Director was to make suggestions and advise the Governor, and that you had: (1) no direct authority to make funding decisions; and (2) no programmatic, oversight, reporting or other decision- making authority over state programs or projects. You state that the Office of Housing is no longer in existence due to the expiration of the Executive Order. You performed the duties prescribed by the Executive Order until your resignation from Commonwealth employment on January 26, 2007. Upon leaving Commonwealth employment, you established your own real estate development and consulting firm in Berwyn, Pennsylvania. You hope to engage in redevelopment real estate projects as either a developer or consultant. You seek guidance as to whether the Ethics Act would impose any restrictions upon you following termination of your service with the Commonwealth. You ask that it be assumed for purposes of this advisory that you are a former public official /public employee as well as a former executive -level employee as those terms are defined in the Ethics Act. You state that you consider the Governor's Office (including the Office of Administration and the Office of the Budget) and PHFA to be the former governmental body with which you were associated. 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. It is assumed, for purposes of this advisory, that in your former capacities as the Executive Director of the Office of Housing and Chair of the Housing Cabinet, you were a public official /public employee and an "executive -level State employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Based upon the aforesaid assumption, upon termination of public service, you became a former public official /public employee and a former executive -level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Ethics Act. Section 1103(i) restricts former executive -level State employees as follows: § 1103. Restricted activities (i) Former executive -level employee. - -No former executive -level State employee may for a period of two years from the time that he terminates employment with this Commonwealth be employed by, receive compensation from, assist or act in a representative capacity for a business or corporation that he actively participated in recruiting to this Commonwealth or that he actively participated in inducing to open a new plant, facility or branch in this Commonwealth or that he actively participated in inducing to expand an existent plant or facility within this Commonwealth, provided that the above prohibition shall be invoked only when the recruitment Segal, 07 -532 May 8, 2007 Page 3 or inducement is accomplished by a grant or loan of money or a promise of a grant or loan of money from the Commonwealth to the business or corporation recruited or induced to expand. 65 Pa.C.S. § 1103(i). Section 1103(i) restricts the ability of a former executive -level State employee to accept employment or otherwise engage in business relationships following termination of State service, under certain narrow conditions. The restrictions of Section 1103(i) apply even where the business relationship is indirect, such as where the business in question is a client of a new employer, rather than the new employer itself. See, Confidential Opinion, 94 -011. However, Section 1103(i) would not restrict you from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a new employer or other business or corporation provided and conditioned upon the assumptions that you did not actively participate in recruiting such new employer, business or corporation to Pennsylvania, and that you did not actively participate in inducing such new employer, business or corporation to open or expand a plant, facility, or branch in Pennsylvania, through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania. Unlike Section 1103(i), Section 1103(g) does not prohibit a former public official /public employee from accepting a position of employment. However, it does restrict the former public official /public employee with regard to "representing" a "person" before the governmental body with which he has been associated ": § 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," 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 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 Segal, 07 -532 May 8, 2007 Page 4 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 new 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: (1) personal appearances before the former governmental body or bodies; (2) attempts to influence; (3) submission of bid or contract proposals which are signed by or contain the name of the former public official /employee; (4) participating in any matters before the former governmental body as to acting on behalf of a person; and (5) lobbying. Popovich, Opinion 89 -005. Listing one's name as the person who will provide technical assistance on a proposal, document, or bid, if submitted to or reviewed by the former governmental body, constitutes an attempt to influence the former governmental body. Section 1103(g) also generally prohibits the inclusion of the name of a former public official /public employee on invoices submitted by his new employer to the former governmental body, even though the invoices pertain to a contract that existed prior to termination of public service, Shay, Opinion 91 -012. However, if such a pre - existing contract does not involve the unit where the former public employee worked, the name of the former public employee may appear on routine invoices if required by the regulations of the agency to which the billing is being submitted. Abrams/Webster, Opinion 95 -011. A former public official /public employee may assist in the preparation of any documents presented to his former governmental body. However, the former ublic official /public employee may not be identified on documents submitted to the former governmental body. The former public official /public employee may also counsel any person regarding that person's appearance before his former governmental body. Once again, however, the activity in this respect should not be revealed 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 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 /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. The governmental body with which you would be deemed to have been associated upon termination of public service would include PHFA and the Governor's Office in its entirety, including, but not limited, to the Executive Offices, the Office of Administration and the Office of the Budget. The former governmental body would not include the Office of Housing or the Housing Cabinet to the extent they no longer exist. The former governmental body would include any successor governmental bodies that would assume roles previously performed by the Office of Housing or the Housing Cabinet. See, Bielicki, Opinion 95 -012. Segal, 07 -532 May 8, 2007 Page 5 Therefore, for the first year after termination of Commonwealth employment, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before your former governmental body as delineated above. Based upon the facts that have been submitted, this Advice has addressed the applicability of Sections 1103(g) and 1103(i) only. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /employee and no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /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. Lastly, 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. Conclusion: It is assumed, for purposes of this advisory, that in your former capacities as the Executive Director of the Office of Housing and Community Revitalization ( "Office of Housing ") and Chair of the Governor's Housing Cabinet ("Housing Cabinet "), you were a public official /public employee and an "executive -level State employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. Based upon the aforesaid assumption, upon termination of public service, you became a former public official /public employee and a former executive -level State employee subject to the restrictions of Section 1103(g) and Section 1103(i) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Under Section 1103(i) of the Ethics Act, you would not be prohibited from being employed by, receiving compensation from, assisting, or acting in a representative capacity for a new employer or other business or corporation based upon the assumptions that you did not actively participate in recruiting such new employer, business or corporation to Pennsylvania, and that you did not actively participate in inducing such new employer, business or corporation to open or expand a plant, facility, or branch in Pennsylvania through a grant or loan of money or a promise of a grant or loan of money from the Commonwealth of Pennsylvania. With regard to Section 1103(g), the restrictions as outlined above must be followed. The governmental body with which you would be deemed to have been associated upon termination of public service would include PHFA and the Governor's Office in its entirety, including, but not limited, to the Executive Offices, the Office of Administration and the Office of the Budget. The former governmental body would not include the Office of Housing or the Housing Cabinet to the extent they no longer exist. The former governmental body would include any successor governmental bodies that would assume roles previously performed by the Office of Housing or the Housing Cabinet. For the first year after termination of Commonwealth employment, Section 1103(g) of the Ethics Act would apply and restrict "representation" of "persons" before your former governmental body as delineated above. Further, since service has been terminated, as outlined above, the Ethics Act would require that a Statement of Financial Interests be filed by no later than May 1 of the year after termination of service. 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 Segal, 07 -532 May 8, 2007 Page 6 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, Robin M. Hittie Chief Counsel