Case on conflicts goes to high court

HARRISBURG - Two years ago, a pair of high-profile cabinet secretaries in Gov. Rendell's administration came under public scrutiny after their departments awarded grants to nonprofit groups that employed their spouses.

Yesterday, that controversy landed before the state's highest court, which is being asked to decide whether nonprofit entities should be covered by conflict-of-interest provisions in the state's ethics law.

The case pits Rendell against the state Ethics Commission, which in 2007 ruled that former secretaries Kathleen McGinty and Mike DiBerardinis would have a conflict of interest if they continued giving grants to nonprofit organizations that employed their spouses.

At the time, the commission recommended that Rendell appoint surrogates for the secretaries when their agencies considered grants to such organizations.

The case first went to Commonwealth Court, where a panel of judges disagreed with the Ethics Commission, and was later appealed to the Supreme Court.

John J. Contino, the Ethics Commission's executive director, said yesterday that if nonprofit groups were not covered by the state's ethics act, "it would create a potential loophole" in the law.

That law generally prohibits state workers from using their positions to enrich themselves, their families, or their businesses.

At issue before the court now is whether a nonprofit organization can - or should - be included under the business definition.

Ralph G. Wellington, who was representing the administration yesterday, argued that nonprofit groups do not constitute a business, and that it is not the court's but the legislature's job to change the law if lawmakers believe certain nonprofit organizations should be included.

"The law is what it is," he said.

The House of Representatives, at least, has taken the position in the past that extending conflict-of-interest provisions to nonprofit groups (such as fire departments) would make public officials less likely to volunteer their time to them.

The justices did not rule on the matter yesterday, and it is unclear when they will.

McGinty was the head of the Department of Environmental Protection until last year. DiBerardinis led the Department of Conservation and Natural Resources until earlier this year.

In 2007, the Philadelphia Daily News disclosed that McGinty's husband was a consultant for the Pennsylvania Environmental Council and its subsidiary, Enterprising Environmental Solutions Inc. Both groups had received several million dollars in grants from the Department of Environmental Protection since 2003, when Rendell became governor, to support agricultural conservation, watershed protection, and abandoned-mine cleanups.

It was also disclosed that DiBerardinis' wife runs the parks program of the Pennsylvania Horticultural Society, which had received grants from Conservation and Natural Resources.