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HomeMy WebLinkAbout07-541 DePasqualeRepresentative Eugene A. DePasquale House of Representatives 111A East Wing Capitol P.O. Box 202095 Harrisburg, PA 17120 -2095 Dear Representative DePasquale: ADVICE OF COUNSEL May 29, 2007 07 -541 This responds to your memo of April 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 prohibitions or restrictions upon a Member of the House of Representatives with regard to serving as a board member for civic /non- profit organizations. Facts: You are a Member of the Pennsylvania House of Representatives. You request guidance as to whether the Ethics Act would impose any prohibitions or restrictions upon you with regard to serving on the South George Street Community Partnership Board and the Susan P. Byrnes Health Education Center Government Advisory Board. You state that the South George Street Community Partnership is a non - profit organization dedicated to the revitalization of the South George Street neighborhoods. This organization works to build the local environment for the community while preserving the historic value of the neighborhood. It also links people to resources and services that improve quality of life issues. You state that the Susan P. Byrnes Health Education Center is an organization dedicated to promoting healthy lifestyles within the community through teaching theaters, outreach, e- learning, and Wellness Works corporate programming. The organization seeks to instill an appreciation of the human body and gives citizens the necessary tools to make healthy living choices. Both organizations were created before you became a member of the House of Representatives. Neither of the aforesaid boards was created by a Member of the Pennsylvania General Assembly. DePasquale, 07 -541 May 29, 2007 Page 2 You state that if any conflict of interest would occur in the future, you would follow all appropriate procedures. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. As a Member of the Pennsylvania House of Representatives, you are a public official as that term is defined in the Ethics Act, and hence you are subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: § 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 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 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. "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 DePasquale, 07 -541 May 29, 2007 Page 3 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 is prohibited from using the authority of public office or confidential information received by holding such a public position for the private pecuniary benefit of the public official, himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office includes more than mere voting; for example, it includes discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official is required to abstain fully from participation. In applying the above provisions of the Ethics Act to your inquiry, it is noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit public officials from having outside business activities or employment; however, the public official may not use the authority of his public position - -or confidential information obtained by being in that position - -for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, Metrick, Order 1037; (2) the use of governmental facilities, such as governmental telephones, postage, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official is associated in his private capacity or private client(s). Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010. In the instant matter, the South George Street Community Partnership and the Susan P. Byrnes Health Education Center would qualify as "businesses" under the Ethics Act. Pursuant to prior rulings of the State Ethics Commission, the fact that one or both of these particular organizations might be non - profit organizations would not disqualify them from being encompassed within the definition of "business" under the Ethics Act. See, Soltis - Sparano, Order 1045; McConahy, Opinion 96 -006. The State Ethics Commission is aware of the recent ruling of the Supreme Court of Pennsylvania 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 Supreme Court 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. In reaching this conclusion, the Court reviewed the definition of the term "business" as set forth in the Ethics Act. (See, definition of the term "business" set forth above). The Court noted that the "organized for profit" reference at the end of 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 the State Ethics Commission had no rulings as to whether non - profit entities would be considered "businesses" under the Ethics Act, the Court construed the definition in the way most favorable to the candidate, such that the candidate was viewed as not having been required to list his presidency of the non- profit corporation on his Statement of Financial Interests. DePasquale, 07 -541 May 29, 2007 Page 4 Contrary to the inaccurate information that was apparently supplied to the Supreme Court in the Carroll case, the 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) the Commission 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 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 decisions in which the 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 (de in 2003). The Commission also addressed this issue earlier this year in Adams /Rendell (Re: DiBerardinis), Opinion 07 -010, in which the Commission found that the Secretary of Conservation and Natural Resources 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 to a not - for - profit organization that employs the Secretary's wife. In reviewing Carroll, supra, the State Ethics Commission has stated that challenges to candidate nomination petitions involve unique considerations, and that at this time, there is no indication that the Supreme Court's ruling in the Carroll case would have any applicability outside the scope of election - related challenges. Adams /Rendell (Re: DiBerardinis), Opinion 07 -010, supra; Kravetsky, Order 1420. In the instant matter, which is not an election - related case, the necessary conclusion under the aforementioned Commission rulings is that the South George Street Community Partnership and the Susan P. Byrnes Health Education Center would qualify as "businesses" under the Ethics Act. It is not clear from the submitted facts whether both boards on which you wish to serve are governing boards of the respective organizations. Therefore, you are advised that to the extent your proposed service on the South George Street Community Partnership Board and /or the Susan P. Byrnes Health Education Center Government Advisory Board would make you a director of the South George Street Community Partnership and /or the Susan P. Byrnes Health Education Center respectively, each such organization for which you would be a director would be a business with which you would be associated. Section 1103(a) of the Ethics Act would not prohibit you from becoming a board member for these organizations in your private capacity. However, pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a State Representative, you could have a conflict of interest under the Ethics Act in matters that would financially impact these organizations. In each instance of a conflict of interest, you would be required to abstain fully from participation. However, as to state legislators specifically, to the extent the activities of a state legislator relate to "legislative actions" (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the State Ethics Commission. See, Mann, Opinion 07 -005; Confidential Opinion, 05 -002; Co�rri an, Opinion 87 -001. Thus ction 1103(a) of the Ethics Act would not apply to you when you are engaged in "legislative actions.' It is commendable that you have raised this important issue for review. DePasquale, 07 -541 May 29, 2007 Page 5 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 Legislative Code of Conduct. Conclusion: As a Member of the Pennsylvania House of Representatives, you are a public official subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act "), 65 Pa.C.S. § 1101 et seq. To the extent your proposed service on the South George Street Community Partnership Board and /or the Susan P. Byrnes Health Education Center Government Advisory Board would make you a director of the South George Street Community Partnership and /or the Susan P. Byrnes Health Education Center respectively, each such organization for which you would be a director would be a business with which you would be associated. Section 1103(a) of the Ethics Act would not prohibit you from becoming a board member for these organizations in your private capacity. However, pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a State Representative, you could have a conflict of interest under the Ethics Act in matters that would financially impact these organizations. In each instance of a conflict of interest, you would be required to abstain fully from participation. However, as to state legislators specifically, to the extent the activities of a state legislator relate to "legislative actions" (introducing, considering, debating, voting, enacting, adopting, or approving legislation), they are constitutionally controlled and are exempt from the purview of the Ethics Act and the State Ethics Commission. Thus, Section 1103(a) of the Ethics Act would not apply to you when you are engaged in "legislative actions." Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 - 787 - 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Robin M. Hittie Chief Counsel