HomeMy WebLinkAbout09-546 LambMichael E. Lamb, Esquire
1015 Grandview Avenue
Pittsburgh, PA 15211
Dear Mr. Lamb:
ADVICE OF COUNSEL
May 5, 2009
09 -546
This responds to your letter received April 6, 2009, by which you requested an
advisory from the Pennsylvania State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Pa. .S. §1101 et seq., would impose any prohibitions or restrictions upon an individual
serving as the — Controller of the City of Pittsburgh, who in a private capacity is an
attorney licensed to practice law in Pennsylvania, with regard to engaging in the private
practice of law in general; and whether the Ethics Act would impose any prohibitions or
restrictions upon such individual with regard to serving as an of counsel member of a
law firm that may do business with the City of Pittsburgh or its related authorities,
where: (1) the individual would not be involved with any City or City authority related
work; (2) the individual would receive no compensation for City or City authority related
work; and (3) the individual would not be an equity member sharing in the joint profits of
the law firm.
Facts: As the elected Controller of the City of Pittsburgh (also referred to herein
as the City "), you request an advisory from the Pennsylvania State Ethics Commission
based upon submitted facts that may be fairly summarized as follows.
You state that you were sworn into office as the City Controller on January 7,
2008. You previously served as the Prothonotary and the Deputy Prothonotary of
Allegheny County.
You note that the powers and duties of the City Controller are governed by the
City of Pittsburgh Home Rule Charter. You state that the City Controller has no
authority to approve contracts for the City or its related authorities. You state that the
role of the City Controller in the contracting process is to act as a counter - signator to
verify that funds are appropriated and available to satisfy the contract amount.
In your private capacity, you are an attorney licensed to practice law in
Pennsylvania. You state that you are engaged in the general practice of law, primarily
in the area of estate planning and administration, and you plan to expand your practice
to include matters of public finance.
You plan to become an of counsel" member of the law firm of Campbell and
Levine, LLC ( "the Law Firm "). You state that under your of counsel" agreement with
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May 5, 2009
Page 2
the Law Firm, you will be compensated only for the work you generate or in which you
are actively involved, and you will not hold any equity interest in the Law Firm or share
in its profits.
You state that the Law Firm practices in the area of public finance and from time
to time may seek to represent the City or its related authorities as bond counsel. You
state that while your own ethical obligations and the Rules of Professional Conduct may
bar your participation as to representing the City or its related authorities as bond
counsel, you plan to participate in representing other municipalities, authorities, and
non - profit organizations as bond counsel.
You state that if the Firm would do business with the City or its related
authorities, you would have no contact with such work and would not be compensated
in any way from such work.
Based upon the above submitted facts, you pose the following specific questions:
1. Whether the Ethics Act would impose any prohibitions or restrictions upon
you with regard to engaging in the private practice of law in general; and
2. Whether the Ethics Act would permit you to engage in the practice of law
as an of counsel" member of the Law Firm.
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 further initially noted that, pursuant to the same aforesaid Sections of the
Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If
the activity in question has already occurred, the Commission may not issue an
opinion /advice but any person may then submit a signed and sworn complaint, which
will be investigated by the Commission if there are allegations of Ethics Act violations by
a person who is subject to the Ethics Act. 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 extent you have inquired as to future
conduct, your inquiry may, and shall, be addressed.
As the City Controller, you are a public official subject to the provisions of the
Ethics Act.
Sections 1103(a) and 1103(j) of the Ethics Act provide:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
(j) Voting conflict. - -Where voting conflicts are not
otherwise addressed by the Constitution of Pennsylvania or
by any law, rule, regulation, order or ordinance, the following
procedure shall be employed. Any public official or public
employee who in the discharge of his official duties would be
Lamb, 09 -546
May 5, 2009
Page 3
required to vote on a matter that would result in a conflict of
interest shall abstain from voting and, prior to the vote being
taken, publicly announce and disclose the nature of his
interest as a public record in a written memorandum filed
with the person responsible for recording the minutes of the
meeting at which the vote is taken, provided that whenever a
governing body would be unable to take any action on a
matter before it because the number of members of the body
required to abstain from voting under the provisions of this
section makes the majority or other legally required vote of
approval unattainable, then such members shall be
permitted to vote if disclosures are made as otherwise
provided herein. In the case of a three - member governing
body of a political subdivision, where one member has
abstained from voting as a result of a conflict of interest and
the remaining two members of the governing body have cast
opposing votes, the member who has abstained shall be
permitted to vote to break the tie vote if disclosure is made
as otherwise provided herein.
65 Pa. C. S. §§ 1103(a), (j).
The following terms related to Section 1103(a) 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
immediate family is a director, officer, owner, employee or
has a financial interest.
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May 5, 2009
Page 4
65 Pa.C.S. § 1103(f).
"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.
In each instance of a conflict of interest, the public official /public employee would
be required to abstain fully from participation. The abstention requirement would not be
limited merely to voting, but would extend to any use of authority of office, including, but
not limited to, discussing, conferring with others, and lobbying for a particular result.
Juliante, Order 809.
Subject to certain statutory exceptions, in each instance of a voting conflict,
Section 1103(j) of the Ethics Act requires the public official /public employee to abstain
and to publicly disclose the abstention and reasons for same, both orally and by filing a
written memorandum to that effect with the person recording the minutes.
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.
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
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May 5, 2009
Page 5
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.
Section 1103(f) of the Ethics Act also provides 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.
In applying the above provisions of the Ethics Act to the instant matter, it is noted
that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit
public officials /public employees from having outside business activities or employment;
however, the public official /public employee 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, staff, 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 /public
employee is associated in his private capacity or private client(s). Miller, Opinion 89-
024 Kannebecker, Opinion 92 -010. A reasonable and legitimate expectation that a
business relationship will form may also support a finding of a conflict of interest. Amato,
Opinion 89 -002. In each instance of a conflict of interest, the public official /public
employee would be required to abstain from participation, and in the instance of a voting
conflict, to abstain and fully satisfy the disclosure requirements of Section 1103(j) of the
Ethics Act.
Any business as to which you are a director, officer, owner, or employee or in
which you have a financial interest would be considered a business with which you are
associated. A sole proprietorship or self - employed individual is included within the
definition of the term "business" as set forth in the Ethics Act. 65 Pa.C.S. § 1102; In Re:
Nomination Petition of Paulmier, 594 Pa. 433, 937 A.2d 364 (2007).
Subject to the statutory exceptions to the definition of "conflict" or "conflict of
interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a)
of the Ethics Act, in your capacity as the City Controller, you would have a conflict of
interest in matters that would financially impact you, any business(es) with which you
are associated, or the customer(s) / client(s) of any business(es) with which you are
associated. See, Kannebecker, supra; Miller, supra.
Having established the above general principles, your specific questions are
addressed as follows.
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May 5, 2009
Page 6
Section 1103(a) of the Ethics Act would apply to you in your public capacity as
the City Controller but would not apply to you in your private capacity as an attorney.
Cf., Shaulis v. State Ethics Commission, 574 Pa. 680, 833 A.2d 123 (2003).
Based upon the submitted facts, Section 1103(a) of the Ethics Act would not
prohibit you from engaging in the private practice of law -- either generally or as an of
counsel" member of the Law Firm - -while also serving as the City Controller. Cf.,
Giangrieco, Advice 07 -589; Confidential Advice, 97 -596; Conway, Advice 92 -542.
However, in your public capacity as the City Controller, you generally would have a
conflict of interest in matters that would financially impact you, any business(es) with
which you are associated, or the client(s) of any business(es) with which you are
associated.
To the extent that you would perform work as an independent contractor to the
Law Firm, such business relationship with the Law Firm generally would form the basis
for you to have a conflict of interest in your public capacity in matters involving the Law
Firm. See, Kannebecker, supra; Miller, supra. To the extent that you would be an
employee of the Law Firm, the Law Firm would be a business with which you are
associated, and in your public capacity as the City Controller, you generally would have
a conflict of interest in matters that would financially impact you, the Law Firm, or the
Law Firm's client(s).
In each instance of a conflict of interest, you would be required to abstain fully
from participation. The abstention requirement would extend to any use of authority of
office.
The requirements of Section 1103(f) of the Ethics Act would have to be observed
whenever applicable.
The propriety of the proposed conduct has only been addressed under the Ethics
Act. Specifically not addressed herein is the applicability of the City of Pittsburgh Home
Rule Charter or the Rules of Professional Conduct.
Conclusion: As the Controller of the City of Pittsburgh ( "City "), 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. Based upon the submitted facts that: (1) in your private
capacity, you are an attorney licensed to practice law in Pennsylvania, and you plan to
expand your practice to include matters of public finance; (2) you plan to become an of
counsel' member of the law firm of Campbell and Levine, LLC ( "the Law Firm "); (3)
under your of counsel" agreement with the Law Firm, you will be compensated only for
the work you generate or in which you are actively involved, and you will not hold any
equity interest in the Law Firm or share in its profits; (4) the Law Firm practices in the
area of public finance and from time to time may seek to represent the City or its related
authorities as bond counsel; (5) you plan to participate in representing authorities, non-
profit organizations, and municipalities other than the City as bond counsel; and (6) if
the Firm would do business with the City or its related authorities, you would have no
contact with such work and would not be compensated in any way from such work, you
are advised as follows.
Section 1103(a) of the Ethics Act would apply to you in your public capacity as
the City Controller but would not apply to you in your private capacity as an attorney.
Based upon the submitted facts, Section 1103(a) of the Ethics Act would not prohibit
you from engaging in the private practice of law -- either generally or as an of counsel"
member of the Law Firm - -while also serving as the City Controller. In your public
capacity as the City Controller, you generally would have a conflict of interest in matters
that would financially impact you, any business(es) with which you are associated, or
the client(s) of any business(es) with which you are associated. To the extent that you
would perform work as an independent contractor to the Law Firm, such business
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May 5, 2009
Page 7
relationship with the Law Firm generally would form the basis for you to have a conflict
of interest in your public capacity in matters involving the Law Firm. To the extent that
you would be an employee of the Law Firm, the Law Firm would be a business with
which you are associated, and in your public capacity as the City Controller, you
generally would have a conflict of interest in matters that would financially impact you,
the Law Firm, or the Law Firm's client(s). In each instance of a conflict of interest, you
would be required to abstain fully from participation. The abstention requirement would
extend to any use of authority of office. The requirements of Section 1103(f) of the
Ethics Act would have to be observed whenever applicable.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Pursuant to Section 1107(11) of the Ethics Act, 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