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HomeMy WebLinkAbout07-012 CONFIDENTIALThis Opinion is issued in response to your letters dated April 10, 2007, and June 1, 2007, by which you requested a confidential advisory from this Commission. I. ISSUE: OPINION OF THE COMMISSION Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Nicholas A. Colafella DATE DECIDED: 6/11/07 DATE MAILED: 6/29/07 07 -012 Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., would impose any restrictions upon an A following termination of service with Governmental Body B; and whether Section 1103(f) of the Ethics Act would require that an "open and public process" be observed as to a subcontract valued at $500 or more that a spouse of a public employee would seek to enter into with a person who has been awarded a contract with the governmental body with which the public employee is associated. II. FACTUAL BASIS FOR DETERMINATION: You request an advisory on behalf of Employee 1 and her spouse, Employee 2, who are both employed by Governmental Body B. You pose three specific inquiries, the first of which is based upon the following submitted facts. Employee 1 is currently employed as an A in Unit C of Governmental Body B. Employee 1's main job responsibility is to act as the highest ranking H on a Governmental Body B D project. You have submitted copies of Employee 1's job description and the organization chart for the D Division of Unit C, which documents are incorporated herein by reference. A copy of the job classification specifications for Employee 1's position (job code [number]) has been obtained and is incorporated herein by reference. Employee 2's current job title is E, and he is employed as an F Specialist in Unit C of Governmental Body B. Employee 2's job responsibilities include reviewing and approving F plans for Governmental Body B D projects in G County and performing the Confidential Opinion, 07 -012 June 29, 2007 Page 2 subsequent K with respect to such F projects for compliance with contract plans and specifications. You state that at present, Employee 2's jurisdiction is limited to G County. You have submitted copies of Employee 2's position description and organization chart, which documents are incorporated herein by reference. A copy of the job classification specifications for Employee 2's position (job code [number]) has been obtained and is incorporated herein by reference. Employee 1 desires to resign from her position with Governmental Body B and establish a private 1 firm to provide D K services to public and private entities in Pennsylvania, through both direct contracts with such entities and subcontracts with other! firms that provide similar services. Employee 2 intends to continue his employment with Governmental Body B indefinitely. You state that Employee 2 is not now and would not in the future be involved in any manner with the selection process by which Governmental Body B D K contracts are awarded. You note that Section [number] of the L Code, [cite], provides that it is an M if an N or 0 in the employ of the P [quote]. You state that Employee 2 would have no ownership, employment or contractual relationship with his spouse's firm. You state that it is Employee 1's understanding that if she would be considered a "public employee" as that term is defined by the Ethics Act, the post- termination restrictions at Section 1103(g) of the Ethics Act, 65 Pa.C.S. § 1103(g), would prohibit her from personally appearing before or negotiating with Governmental Body B, lobbying Governmental Body B, or bidding to perform D K services for Governmental Body B for a one -year period following termination of her employment with Governmental Body B. Your first specific inquiry is whether Employee 1 individually and /or any business that she might own would be permitted during the one -year period of applicability of Section 1103(g) of the Ethics Act to perform D K services on a Governmental Body B project as a subcontractor to another private firm where: (1) Employee 1 would not have negotiated or bid on the contract between the private firm and Governmental Body B; and (2) Employee 1 would not make any personal appearances before Governmental Body B personnel. Your second specific inquiry is based upon the following submitted facts. You state that virtually all federal, state and local government entities routinely utilize minority contracting goals and requirements in order to assist the economic development of minority owned firms, also known as "Disadvantaged Business Enterprises" ( "DBEs "). Pennsylvania has established a Unified Certification Program (the "UCP ") for certifying DBEs. A firm certified as a DBE is eligible to participate in federally - assisted [types of contracts] covered by the DBE program. Governmental Body B is one of five governmental bodies that serve as certifying participants under the UCP. The DBE certification process for Governmental Body B is administered by J, which is a separate unit from those that administer D projects. You have submitted a copy of the organization chart for Governmental Body B, which is incorporated herein by reference. You state that any business owned by Employee 1 would qualify to be certified as a DBE. Certification as a DBE would qualify a business owned by Employee 1 to perform D K services as a DBE for many other governmental entities during the one -year period following termination of employment in which Employee 1 would be restricted from performing such services for Governmental Body B. You state that the certification Confidential Opinion, 07 -012 June 29, 2007 Page 3 process itself typically requires at least several months to complete. Based upon the above facts, you ask whether Employee 1 would be permitted to apply for DBE certification through Governmental Body B's J prior to the expiration of the one -year period of applicability of Section 1103(g) of the Ethics Act. You assert that under this Commission's decision in Anderson, Opinion 83 -014, such activity would be permitted. Your third specific inquiry is based upon the following submitted facts. As is the normal practice among 1 firms, Employee 1 would seek to obtain subcontracts with other 1 firms that had been awarded D K contracts by governmental bodies, including Governmental Body B. You state that in the context of public D projects, including Governmental Body B D projects, subcontracts are not typically awarded through the same open and public process utilized by the governmental entity in awarding direct contracts. You note that if Employee 2 would be considered a "public employee" as that term is defined by the Ethics Act, Employee 1 would be considered a spouse of a public employee. You further note that pursuant to Section 1103(f) of the Ethics Act, 65 Pa.C.S. 1103(f), where a spouse of a public employee seeks to enter into a contract valued at $500 or more with the governmental body with which the public employee is associated, an "open and public process" must be observed as to the contract with the governmental body. You ask whether Section 1103(f) of the Ethics Act would require that an "open and public process" be observed as to a subcontract valued at $500 or more that Employee 1 would seek to enter into with any person who has been awarded a contract with Governmental Body B. By letter dated May 10, 2007, you were notified of the date, time and location of the executive meeting at which your request would be considered. At the executive meeting on June 11, 2007, you appeared and offered commentary, some of which duplicated information in your prior written submissions. The material portion of the supplemental information offered in your commentary at the meeting may be fairly summarized as follows. You stated that pursuant to federal requirements and /or state goals, various government contracts involving federal or state funds, including but not limited to Governmental Body B contracts, may require that DBEs be awarded a specific percentage of the contract work. Certification as a DBE does not by itself guarantee that a business will obtain government contracts or subcontracts; rather, a business certified as a DBE is entitled to compete with other DBEs for contract work set aside for DBE participation. A DBE may also bid on government contracts that do not require DBE participation. You stated that the DBE certification process would be the same whether Employee 1 would submit her application for DBE certification to Governmental Body B or any of the other governmental bodies that administer the DBE program. Citing Anderson, Opinion 83 -014, you contended that Section 1103(g) of the Ethics Act would not prohibit Employee 1 from applying for DBE certification through Governmental Body B because: (1) Employee 1's DBE certification application would be processed by a unit of Governmental Body B wholly separate from the unit in which she is employed; and (2) in applying for certification as a DBE, Employee 1 would not be representing another person before Governmental Body B but rather would be acting on behalf of herself. Confidential Opinion, 07 -012 June 29, 2007 Page 4 111. 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. In their respective capacities as an A and an E for Governmental Body B, Employee 1 and Employee 2 would each be considered a "public 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. This conclusion is based upon the job description and job classification specifications for each individual's position, 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. Consequently, upon termination of public service, Employee 1 would become a "former public employee" subject to Section 1103(g) of the Ethics Act. While Section 1103(g) does not prohibit a former public employee from accepting a position of employment, it does restrict the former 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. Confidential Opinion, 07 -012 June 29, 2007 Page 5 "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 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 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 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 employee may assist in the preparation of any documents presented to his former governmental body. However, the former public employee may not be identified on documents submitted to the former governmental body. The former 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 employee with regard to representation before his former governmental body. The former public employee is not restricted as to representation before other agencies or entities. However, the "governmental body with which a public employee is or has been associated" is not limited to the particular subdivision of the agency or other governmental body where the public 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 Employee 1 would be deemed to have been associated upon termination of public service would be Governmental Body B in its entirety, including but not limited to Unit C. Therefore, for the first year after termination of service with Governmental Body B, Section 1103(g) of the Ethics Act would apply and Confidential Opinion, 07 -012 June 29, 2007 Page 6 restrict "representation" of "persons" before Governmental Body B. 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 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 term "contract" is defined in the Ethics Act 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; Confidential Opinion, 07 -012 June 29, 2007 Page 7 (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. Where a public official /public employee, his spouse or child, or a business with which he, his spouse or child is associated, seeks to enter into a subcontract valued in the amount of $500 or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated, Section 1103(f) of the Ethics Act does not require that the subcontract itself be awarded through an open and public process. Sayers, Order 1075; Johnson, Order 1187. Having established the above general principles, we shall address your specific inquiries. In response to your first specific inquiry, you are advised that although Section 1103(g) of the Ethics Act would not generally prohibit Employee 1 from performing D K services as a subcontractor to a private I firm, Section 1103(g) would restrict Employee 1's conduct as a subcontractor to the extent that such conduct would constitute prohibited "representation" before Governmental Body B. Although the submitted facts provide that Employee 1 would not make any personal appearances before Governmental Body B personnel when performing D K services on a Governmental Body B project as a subcontractor, such personal appearances would be but one example of the activities that would constitute prohibited representation before Governmental Body B. As a practical matter, it would appear to be difficult if not impossible for Employee 1 to perform the functions of an H of a Governmental Body B project under a subcontract with a private I firm without engaging in other activities that would constitute prohibited representation before Governmental Body B, such as for example, through the submission to Governmental Body B of documents including her name. Cf., Stanisic, Opinion 98 -004; Long, Opinion 97 -010. As to your second specific inquiry, you are advised as follows. By its own terms, Section 1103(g) of the Ethics Act only applies to restrict a former public employee from representing a person before her former governmental body when the representation is with "promised or actual" compensation. In submitting an application for DBE certification to Governmental Body B, Employee 1 would be acting on behalf of a person, i.e., herself or a business that she would own, on a matter before her former governmental body. As such, Employee 1 would be engaging in representation before her former governmental body. However, the submitted facts do not reflect that Employee 1 would be promised or would receive any compensation from any source for engaging in the proposed representation. In addition, the submitted facts do not suggest any basis for concluding that Employee 1 would receive any financial benefit merely from the certification of her business as a DBE. As such, the necessary conclusion is that the proposed representation by Employee 1 would not be with "promised or actual compensation." Therefore, under the submitted facts, you are advised that Section 1103(g) of the Ethics Act would not restrict Employee 1 from engaging in the limited activity of submitting an application for certification as a DBE to Governmental Body B's J. Confidential Opinion, 07 -012 June 29, 2007 Page 8 In response to your third specific inquiry, you are advised as follows. Since Employee 2 would be considered a "public employee" as that term is defined by the Ethics Act, Employee 1 would be considered the spouse of a public employee. Therefore, the requirements of Section 1103(f) of the Ethics Act would have to be observed where Employee 1 or a business with which she would be associated would seek to enter into a subcontract valued at $500 or more with any person awarded a contract with Governmental Body B. Section 1103(f) of the Ethics Act would require that an "open and public process" be observed as to the main contract, but would not require that an "open and public process" be observed as to such a subcontract. See, Sayers, supra; Johnson, supra. This Commission does not have statutory jurisdiction to answer the question that you have posed under the L Code. 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 L Code or the Q. IV. CONCLUSION: An A employed with Governmental Body B in Unit C would be considered a "public employee" subject to the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101 et seq. ( "Ethics Act "). Upon termination of service with Governmental Body B, the A would become a "former public employee" subject to Section 1103(g) of the Ethics Act. The former governmental body would be Governmental Body B in its entirety including, but not limited to, Unit C. For the first year after termination of service with Governmental Body B, Section 1103(g) of the Ethics Act would apply and restrict the former A from engaging in any activity that would constitute prohibited representation before Governmental Body B. Section 1103(g) of the Ethics Act would not restrict the former A from engaging in the limited activity of submitting an application for certification as a "Disadvantaged Business Enterprise" to Governmental Body B's J. The restrictions as to representation outlined above must be followed. The spouse of the A, who is an E employed with Governmental Body B, would be considered a "public employee" as that term is defined by the Ethics Act. The requirements of Section 1103(f) of the Ethics Act would have to be observed where the former A or a business with which she would be associated would seek to enter into a subcontract valued at $500 or more with any person awarded a contract with Governmental Body B. Section 1103(f) of the Ethics Act would require that an "open and public process" be observed as to the main contract, but would not require that an "open and public process" be observed as to such a subcontract. 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 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 Confidential Opinion, 07 -012 June 29, 2007 Page 9 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair