Provisions of the Pennsylvania
Race Horse Development and Gaming Act
Pursuant to the Pennsylvania Race Horse Development and Gaming Act, 4 Pa.C.S. § 1101 et seq. (“Gaming Act”), the State Ethics Commission has responsibilities for:
(1) Making determinations, upon request, as to whether the duties of particular individuals “substantially involve the development or adoption of regulations or policy, licensing, or enforcement” under the Gaming Act, so as to make such individuals subject to certain “revolving-door” restrictions (4 Pa.C.S. §§ 1201(h)(13)-(14));
(2) Biennially publishing a listing of all State, county, municipal and other government positions meeting the definitions of the terms “public official” or “executive-level public employee” set forth in Section 1512(b) of the Gaming Act, for the purpose of enabling the identification of persons who would be subject to the prohibitions of Section 1512; and
(3) Determining whether to extend deadlines for divestiture of financial interests prohibited under Section 1512 of the Gaming Act.
The following provisions of the Gaming Act set forth or are related to the Commission’s duties under the Gaming Act:
§ 1201. Pennsylvania Gaming Control Board established
(h) Qualifications and restrictions.—
. . .
(13) No employee of the board or individual employed by an independent contractor of the board whose duties substantially involve licensing, enforcement or the development or adoption of regulations or policy under this part shall:
(i) accept employment with an applicant, licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of one year after the termination of the employment relating to the conduct of gaming or contract with the board; or
(ii) appear before the board in any hearing or proceeding or participate in any other activity on behalf of any applicant, licensee, permittee or licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of two years after termination of the employment or contract with the board.
(14) Upon the written request of an employee of the board, the executive branch of the Commonwealth or a political subdivision or of the agency or political subdivision employing an employee, the State Ethics Commission shall determine whether the individual’s duties substantially involve the development or adoption of regulations or policy, licensing or enforcement under this part and shall provide a written determination to the employee to include any prohibition under this paragraph. An individual who relies in good faith on a determination under this paragraph shall not be subject to any penalty for an action taken, provided that all material facts set forth in the request for a determination are correct.
(15) If a member, employee or independent contractor of the board violates any provision of this section, the appointing authority or the board may, upon notice and hearing, remove the person from the board, withdraw the appointment or terminate the employment or contract, and the person shall be ineligible for future appointment, employment or contract with the board and for approval of a license or permit under this part for a period of two years thereafter.
4 Pa.C.S. § 1201(h)(13)-(15).
§ 1512. Financial and employment interests
(a) Financial interests.—Except as may be provided for the judiciary by rule or order of the Pennsylvania Supreme Court, an executive-level public employee, public official or party officer, or an immediate family member thereof, shall not intentionally or knowingly hold a financial interest in an applicant or a slot machine licensee, manufacturer licensee, supplier licensee or licensed racing entity, or in a holding company, affiliate, intermediary or subsidiary thereof, while the individual is an executive-level public employee, public official or party officer and for one year following termination of the individual’s status as an executive-level public employee, public official or party officer.
(A.1) Employment.—Except as may be provided by rule or order of the Pennsylvania Supreme Court, no executive-level public employee, public official or party officer, or an immediate family member thereof, shall be employed by an applicant or a slot machine licensee, manufacturer licensee, supplier licensee or licensed racing entity, or by any holding company, affiliate, intermediary or subsidiary thereof, while the individual is an executive-level public employee, public official or party officer and for one year following termination of the individual’s status as an executive-level public employee, public official or party officer.
(A.2) Complimentary services.—
(1) No executive-level public employee, public official or party officer, or an immediate family member thereof, shall solicit or accept any complimentary service from an applicant or a slot machine licensee, manufacturer licensee, supplier licensee or licensed racing entity, or from any affiliate, intermediary, subsidiary or holding company thereof, which the executive-level public employee, public official or party officer, or an immediate family member thereof, knows or has reason to know is other than a service or discount which is offered to members of the general public in like circumstances.
(2) No applicant, slot machine licensee, manufacturer licensee, supplier licensee or licensed racing entity, or any affiliate, intermediary, subsidiary or holding company thereof, shall offer or deliver to an executive-level public employee, public official or party officer, or an immediate family member thereof, any complimentary service from the applicant or slot machine licensee, manufacturer licensee, supplier licensee or licensed racing entity, or an affiliate, intermediary, subsidiary or holding company thereof, that the applicant or slot machine licensee, manufacturer licensee, supplier licensee or licensed racing entity, or any affiliate, intermediary, subsidiary or holding company thereof, knows or has reason to know is other than a service or discount that is offered to members of the general public in like circumstances.
(A.3) Grading.—An individual who violates this section commits a misdemeanor and shall, upon conviction, be sentenced to pay a fine of not more than $1,000 or to imprisonment for not more than one year, or both.
(A.4) Divestiture.—An executive-level public employee, public official or party officer, or an immediate family member thereof, who holds a financial interest prohibited by this section shall divest the financial interest within three months of the effective date of the restrictions set forth in subsection (a), as applicable. Thereafter, any executive-level public employee, public official, party officer or immediate family member shall have 30 days from the date the individual knew or had reason to know of the violation or 30 days from the publication in the Pennsylvania Bulletin under § 1202(b)(27) (relating to general and specific powers) of the application or licensure of the executive-level public employee, public official, party officer or immediate family member, whichever occurs earlier, to divest the financial interest. The Ethics Commission may, for good cause, extend the time period under this subsection.
(A.5) Ethics Commission—The Ethics Commission shall publish a list of all State, county, municipal and other government positions that meet the definitions of “public official” or “executive-level public employee” under subsection (b). The Office of Administration shall assist the Ethics Commission in the development of the list, which shall be published in the Pennsylvania Bulletin biennially and on the board’s website. Upon request, each public official shall have a duty to provide the Ethics Commission with adequate information to accurately develop and maintain the list. The Ethics Commission may impose a civil penalty under 65 Pa.C.S. § 1109(f) (relating to penalties) upon any public official or executive-level public employee who fails to cooperate with the Ethics Commission under this subsection.
(b) Definitions—As used in this section, the following words and phrases shall have the meanings given to them in this subsection:
“Executive-level public employee.” The term shall include the following:
(1) Deputy Secretaries of the Commonwealth and the Governor’s Office executive staff.
(2) An employee of the Executive Branch with discretionary power which may affect or influence the outcome of a State agency’s action or decision and who is involved in the development of regulations or policies relating to a licensed entity or who is involved in other matters under this part. The term shall include an employee with law enforcement authority.
(3) An employee of a county or municipality with discretionary powers which may affect or influence the outcome of the county’s or municipality’s action or decision and who is involved in the development of law, regulation or policy relating to a licensed entity or who is involved in other matters under this part. The term shall include an employee with law enforcement authority.
(4) An employee of a department, agency, board, commission, authority or other governmental body not included in paragraph (1), (2), or (3) with discretionary power which may affect or influence the outcome of the governmental body’s action or decision and who is involved in the development of regulation or policy relating to a licensed entity or who is involved in other matters under this part. The term shall include an employee with law enforcement authority.
…
“Public official.” The term shall include the following:
(1) The Governor, Lieutenant Governor, a member of the Governor’s cabinet, Treasurer, Auditor General and Attorney General of the Commonwealth.
(2) A member of the Senate or House of Representatives of the Commonwealth.
(3) An individual elected or appointed to any office of a county or municipality that directly receives a distribution of revenue under this part.
(4) An individual elected or appointed to a department, agency, board, commission, authority or other governmental body not included in paragraph (1), (2) or (3) that directly receives a distribution of revenue under this part.
(5) An individual elected or appointed to a department, agency, board, commission, authority, county, municipality or other governmental body not included in paragraph (1), (2) or (3) with discretionary power which may influence or affect the outcome of an action or decision and who is involved in the development of regulation or policy relating to a licensed entity or who is involved in other matters under this part.
The term does not include a member of a school board or an individual who held an uncompensated office with a governmental body prior to January 1, 2006, and who no longer holds the office as of January 1, 2006. The term includes a member of an advisory board or commission which makes recommendations relating to a licensed facility.
4 Pa.C.S. § 1512(a), (A.1), (A.2), (A.3), (A.4), (A.5), (b).
The Gaming Act defines the term “financial interest” as follows:
“Financial interest.” Owning or holding, or being deemed to hold, debt or equity securities or other ownership interest or profits interest. A financial interest shall not include any debt or equity security, or other ownership interest or profits interest, which is held or deemed to be held in any of the following:
(1) A blind trust over which the executive-level public employee, public official, party officer or immediate family member thereof may not exercise any managerial control or receive income during the tenure of office and the period under subsection (a). The provisions of this paragraph shall apply only to blind trusts established prior to the effective date of this paragraph.
(2) Securities that are held in a pension plan, profit-sharing plan, individual retirement account, tax sheltered annuity, a plan established pursuant to section 457 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), or any successor provision, deferred compensation plan whether qualified or not qualified under the Internal Revenue Code of 1986 or any successor provision or other retirement plan that:
(i) is not self-directed by the individual; and
(ii) is advised by an independent investment adviser who has sole authority to make investment decisions with respect to contributions made by the individual to these plans.
(3) A tuition account plan organized and operated pursuant to section 529 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 529) that is not self-directed by the individual.
(4) A mutual fund where the interest owned by the mutual fund in a licensed entity does not constitute a controlling interest as defined in this part.
4 Pa.C.S. § 1512(b).
