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HomeMy WebLinkAbout07-544 KrugClinton James Krug 219 Gordon Street DuBoistown, PA 17702 Dear Mr. Krug: ADVICE OF COUNSEL June 13, 2007 07 -544 This responds to your letter dated April 26, 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 the requester, an Air Pollution Control Engineer 11 for the Pennsylvania Department of Environmental Protection ( "DEP "), with regard to purchasing shares of stock in a company presently assigned to him for review and oversight if: (1) said company would be reassigned to another DEP Air Pollution Control Engineer for review and oversight; and (2) the requester would no longer be involved in his official capacity in anything pertaining to said company. Facts: As an Air Pollution Control Engineer 11 with DEP, you request an advisory from the State Ethics Commission based upon facts that may be fairly summarized as follows. You have been employed by DEP for approximately 20 months. You have submitted a copy of your DEP job description and organizational chart, which documents are incorporated herein by reference. A copy of the job classification specifications for your position (job code 14010) has also been obtained and is incorporated herein by reference. In your position, you perform duties relative to various businesses assigned to you, including one particular company (hereinafter referred to as the Company "). As to the Company, you have conducted engineering reviews, approved the installation and operation of certain manufacturing equipment, and informed the Company of various restrictions (regulations) pertaining to the installation and operation of said equipment. You have also required the Company to perform stack testing on some of the new equipment to verify that the equipment was not exhausting excessive amounts of air pollutants into the atmosphere. Krug, 07 -544 June 13, 2007 Page 2 You state that you have not yet issued any of the Company's air quality operating permits. However, because the Company is assigned to you, you will be responsible for the issuance of such permits and the performance of other duties relative to the Company as provided in your DEP job description. Although you currently do not own any shares of stock in the Company, you are considering purchasing shares of stock in the Company. You state that the DEP Environmental Group Manager could reassign the Company to any of five other Air Pollution Control Engineers. You seek advice as to whether you would be permitted to purchase stock in the Company without being subject to any type of disciplinary action (including civil, criminal, or any other type of disciplinary action), if: (1) the Company would be reassigned to another DEP Air Pollution Control Engineer; and (2) you would no longer be involved in your official capacity with anything pertaining to the Company. 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 an Air Pollution Control Engineer II for DEP, you are a public employee subject to the provisions of the Ethics Act. This conclusion is based upon the job description and job classification specifications, which when reviewed on an objective basis, indicate clearly that the power exists to take or recommend official action of a non - ministerial nature with respect to one or more of the following: contracting; procurement; planning; inspecting; administering or monitoring grants; leasing; regulating; auditing; or other activities where the economic impact is greater than de minimis on the interests of another person. 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 Krug, 07 -544 June 13, 2007 Page 3 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 immediate family is a director, officer, owner, employee or has a financial interest. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 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. Sections 1103(b) and 1103(c) of the Ethics Act, pertaining to improper influence, provide as follows: § 1103. Restricted activities (b) Seeking improper influence. —No person shall offer or give to a public official, public employee or nominee or candidate for public office or a member of his immediate family or a business with which he is associated, anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment based on the offeror's or donor's understanding that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. (c) Accepting improper influence. —No public official, public employee or nominee or candidate for public office shall solicit or accept anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment, based on any understanding of that public official, public employee or nominee that the vote, official action or judgment of the public official or public Krug, 07 -544 June 13, 2007 Page 4 employee or nominee or candidate for public office would be influenced thereby. 65 Pa. C. S. §§ 1103(b), (c). Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public employee anything of monetary value and no public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the 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. Having established the above general principles, your specific inquiry shall be addressed. The facts that you have submitted do not enable a conclusive determination as to whether your proposed purchase of stock in the Company would cause you to run afoul of the Ethics Act. This is because the submitted facts do not reveal: your reasons for wanting to purchase stock from the Company; how you learned of the availability of such stock; any confidential information to which you have had access in your public position that would relate to your desire to purchase stock in the Company; whether such stock would be purchased in the stock market or privately; the terms at which such stock would be purchased; your relationship, if any, with the principals /managers of the Company; whether any actions that you took while being assigned to the Company served as an inducement for purchasing stock; and any protections that would be in place to ensure that confidential information received by another Air Pollution Control Engineer who would assume your role as to the Company would not be accessible by you. Based upon the limited submitted facts, you are advised as follows. Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of the public position or confidential information accessed by being in the public position for a private pecuniary benefit. Purchasing stock in the Company through the stock market at terms available to the general public would not constitute a use of the authority of your public position for a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. Purchasing stock in the Company privately or at terms not available to the general public could form the basis for a transgression of Section 1103(b) or Section 1103(c) of the Ethics Act if the transaction would be based upon an improper understanding as to your official action or judgment as a DEP Air Pollution Control Engineer 11. Purchasing or selling stock in the Company based upon public information that would become available to you at the same time and in the same manner as it would become available to the general public would not constitute a use of confidential information for a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. Purchasing or selling stock in the Company based upon confidential information accessed as a result of being a DEP Air Pollution Control Engineer 11 could form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. Purchasing or selling stock in the Company based upon information to which you would have access prior to the general public could form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. See, Riley, Opinion 00 -008, wherein the Commission held that a county warrant enforcement bureau administrator who, by virtue of his public employment, would have direct and immediate access to information pertaining to all outstanding warrants in that county, giving him a financial advantage over others in Krug, 07 -544 June 13, 2007 Page 5 serving county warrants, would have a conflict of interest and hence, could not serve county warrants as a deputy constable for compensation. 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. It is recommended that you consult with an attorney to ensure compliance with other state and federal laws and regulations as well as the Governor's Code of Conduct. Conclusion: As an Air Pollution Control Engineer 11 for the Pennsylvania Department of Environmental Protection ( "DEP "), you are a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. In response to your inquiry of whether the Ethics Act would present any prohibitions or restrictions upon you with regard to purchasing shares of stock in a company (the "Company ") presently assigned to you as a DEP Air Pollution Control Engineer 11 for review and oversight if: (1) the Company would be reassigned to another DEP Air Pollution Control Engineer for review and oversight; and (2) you would no longer be involved in your official capacity in anything pertaining to the Company, you are advised as follows. Purchasing stock in the Company through the stock market at terms available to the general public would not constitute a use of the authority of your public position for a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. Purchasing stock in the Company privately or at terms not available to the general public could form the basis for a transgression of Section 1103(b) or Section 1103(c) of the Ethics Act if the transaction would be based upon an improper understanding as to your official action or judgment as a DEP Air Pollution Control Engineer 11. Purchasing or selling stock in the Company based upon public information that would become available to you at the same time and in the same manner as it would become available to the general public would not constitute a use of confidential information for a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. Purchasing or selling stock in the Company based upon confidential information accessed as a result of being a DEP Air Pollution Control Engineer 11 could form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. Purchasing or selling stock in the Company based upon information to which you would have access prior to the general public could form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. It is recommended that you consult with an attorney to ensure compliance with other state and federal laws and regulations as well as the Governor's Code of Conduct. 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 Krug, 07 -544 June 13, 2007 Page 6 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