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HomeMy WebLinkAbout08-001 ROUZERRichard Rouzer 158 Rustic Drive Shippensburg, PA 17257 Dear Mr. Rouzer: 2007. I. ISSUE: OPINION OF THE COMMISSION Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella DATE DECIDED: 1/29/08 DATE MAILED: 2/5/08 08 -001 This Opinion is issued in response to your advisory request dated November 15, Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., would require a school director to disclose on his Statement of Financial Interests an inheritance received from a family member. II. FACTUAL BASIS FOR DETERMINATION: You are a School Director for the Shippensburg Area School District. On August 8, 2007, you received an inheritance due to the death of your father. You ask whether you would be required to disclose on your Statement of Financial Interests the inheritance you received from your father. By letter dated December 10, 2007, you were notified of the date, time and location of the public meeting at which your request would be considered. III. 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 Rouzer, 08 -001 February 5, 2008 Page 2 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 a School Director for the Shippensburg Area School District, you are a public official subject to the provisions of the Ethics Act, including the requirements for filing Statements of Financial Interests. Cf., Defelice, Order 1093. Section 1104(a) of the Ethics Act provides: § 1104. Statement of financial interests required to be filed 65 Pa.C.S. § 1104(a). (a) Public official or public employee. - -Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the commission no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Persons who are full -time or part -time solicitors for political subdivisions are required to file under this section. Section 1105 of the Ethics Act sets forth the substantive disclosure requirements for Statements of Financial Interests. Of the financial disclosure categories, the categories pertaining to direct /indirect sources of income or gifts could arguably apply to an inheritance. Section 1105(b) provides, in pertinent part, as follows: § 1105. Statement of financial interests (b) Required information. - -The statement shall include the following information for the prior calendar year with regard to the person required to file the statement: (5) The name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. However, this provision shall not be construed to require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges. Rouzer, 08 -001 February 5, 2008 Page 3 65 Pa.C.S. §§ 1105(b)(5), (6). 65 Pa.C.S. § 1303- A/13A03. (6) The name and address of the source and the amount of any gift or gifts valued in the aggregate at $250 or more and the circumstances of each gift. This paragraph shall not apply to a gift or gifts received from a spouse, parent, parent by marriage, sibling, child, grandchild, other family member or friend when the circumstances make it clear that the motivation for the action was a personal or family relationship. However, for the purposes of this paragraph, the term "friend" shall not include a registered lobbyist or an employee of a registered lobbyist. The Ethics Act defines the term "income" as follows: § 1102. Definitions "Income." Any money or thing of value received or to be received as a claim on future services or in recognition of services rendered in the past, whether in the form of a payment, fee, salary, expense, allowance, forbearance, forgiveness, interest, dividend, royalty, rent, capital gain, reward, severance payment, proceeds from the sale of a financial interest in a corporation, professional corporation, partnership or other entity resulting from termination or withdrawal therefrom upon assumption of public office or employment or any other form of recompense or any combination thereof. The term refers to gross income and includes prize winnings and tax - exempt income. The term does not include gifts, governmentally mandated payments or benefits, retirement, pension or annuity payments funded totally by contributions of the public official or employee, or miscellaneous, incidental income of minor dependent children. 65 Pa.C.S. § 1102. The Ethics Act defines the term "gift" as that term is defined in Section 1303 -A of Pennsylvania's lobbying disclosure law ( "Lobbying Disclosure Law "), 65 Pa.C.S. § 1303 -A / 13A03 (see, 65 Pa.C.S. § 1102). The definition of "gift" is as follows: § 1303 -A. Definitions. "Gift." Anything which is received without consideration of equal or greater value. The term shall not include a political contribution otherwise reportable as required by law or a commercially reasonable loan made in the ordinary course of business. The term shall not include hospitality, transportation or lodging. Rouzer, 08 -001 February 5, 2008 Page 4 Section 1105(b)(5) of the Ethics Act requires the filer to include on the Statement of Financial Interests the name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. Section 1105(b)(6) of the Ethics Act requires the filer to disclose on the Statement of Financial Interests the name and address of the source and the amount of any gift or gifts valued in the aggregate at $250 or more and the circumstances of each gift. The filer is not required to disclose gifts from a family member or friend (with the term "friend" excluding a registered lobbyist or employee of a registered lobbyist) when the circumstances make it clear that the motivation for the action was the personal /family relationship. Having established the above general principles, you are advised as follows. An inheritance received from a family member would ordinarily be considered a gift that would not have to be disclosed on the Statement of Financial Interests as per Section 1105(b)(6) of the Ethics Act. An inheritance received from a family member would not be considered "income" for purposes of financial disclosure under the Ethics Act unless the inheritance would be expressly designated as a payment for, or in recognition of, services. There are no facts before us to suggest any basis for concluding that the inheritance you received upon the death of your father would fall under the Ethics Act's definition of the term "income." Therefore, under the submitted facts, you are advised that you would not be required to disclose the inheritance from your father on your Statement of Financial Interests conditioned upon the assumption that the inheritance was not expressly designated as a payment for, or in recognition of, services. It is parenthetically noted that regardless of whether a given inheritance would itself be subject to disclosure on the Statement of Financial Interests form, related information might need to be disclosed. For example, where the investment of an inheritance would generate income, the filer would be required to disclose on the Statement of Financial Interests any source of such investment income in the amount of $1,300.00 or more. 65 Pa.C.S. § 1105(b)(5). As another example, receipt of an inheritance consisting of a financial interest in a business would necessitate disclosure on the Statement of Financial Interests of the financial interest in the business. 65 Pa.C.S. § 1105(b)(9). Act. Act. The propriety of the proposed conduct has only been addressed under the Ethics IV. CONCLUSION: A school director is a "public official" subject to the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101 et seq. ( "Ethics Act "), including the requirements for filing Statements of Financial Interests. An inheritance received from a family member would ordinarily be considered a gift that would not have to be disclosed on the Statement of Financial Interests as per Section 1105(b)(6) of the Ethics Act. An inheritance received from a family member would not be considered "income" for purposes of financial disclosure under the Ethics Act unless the inheritance would be expressly designated as a payment for, or in recognition of, services. Based upon the submitted facts, the school director would not be required to disclose an inheritance from his father on his Statement of Financial Interests conditioned upon the assumption that the inheritance was not expressly designated as a payment for, or in recognition of, services. The propriety of the proposed conduct has only been addressed under the Ethics Rouzer, 08 -001 February 5, 2008 Page 5 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 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair