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HomeMy WebLinkAbout07-592 StahlRichard J. Wiest, Esquire Williamson Friedberg & Jones LLC Ten Westwood Road P.O. Box 1190 Pottsville, PA 17901 Dear Mr. Wiest: ADVICE OF COUNSEL November 9, 2007 07 -592 This responds to your letters of October 1, 2007, and October 5, 2007, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., would present any prohibitions or restrictions upon the chairman of a five - member authority board with regard to voting in favor of a motion that would create a salaried employment position with the authority for the chairman, where two board members would vote in favor of the motion and two board members would abstain from voting for reason(s) other than a conflict of interest under the Ethics Act. Facts: As legal counsel to the Pine Grove Joint Treatment Authority ( "Authority "), you have been authorized by John Stahl ( "Stahl "), a Member and Chairman of the Authority Board ( "Board "), to request an advisory from the State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. The Authority was formed pursuant to the Pennsylvania Municipality Authorities Act. The Board is comprised of five Members. At a recent Board meeting where all five Board Members were present, one of the Members made a motion to create the position of Authority Manager ( "Manager "). You state that the motion characterized the Manager position as an exempt, salaried position in order to satisfy federal and state wage and hour laws as well as Pennsylvania workers' compensation requirements. The motion designated Stahl as the individual who would fill the Manager position. A Board Member other than Stahl seconded the aforesaid motion. When a vote was taken, the Board Member who made the motion and the Board Member who seconded the motion voted in favor of the motion. You state that Stahl abstained from voting on the motion based upon his opinion that he had a pecuniary interest in the outcome of the matter. You state that without providing a reason, the remaining two Board Members abstained from voting on the motion. You express your view that neither of these two Board Members had any apparent conflict of interest as to the motion. You state that you advised the Board that Wiest, 07 -592 November 9, 2007 Page 2 the motion failed because the Municipality Authorities Act requires that a majority of the members present at a meeting vote in favor of a motion in order for the motion to carry. You state that since passage of such a motion is necessary to resolve wage and hour and workers' compensation issues that confront the Board, you expect that the motion will be revisited at the next Board meeting. You ask whether the Ethics Act would permit Stahl to vote in favor of a motion that would create a salaried position for him with the Authority where: (1) two Board Members would vote in favor of such motion; and (2) the other two Board Members would abstain from voting on the motion for undisclosed reasons. 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. As a Member and Chairman of the Board, Stahl is 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. 65 Pa.C.S. §§ 1103(a), (j). (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 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. Wiest, 07 -592 November 9, 2007 Page 3 The following terms 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. 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. The use of authority of office is not limited merely to voting, but extends 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. 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. In the event that the required abstention results in the inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under the Ethics Act, then voting is permissible provided the disclosure requirements noted above are followed. See, Pavlovic, Opinion 02 -005. In applying the above provisions of the Ethics Act to your inquiry, it is noted that the State Ethics Commission does not have the express statutory jurisdiction to interpret laws other than the Ethics Act. However, it is necessary at times to review other sources of law in order to properly apply the Ethics Act. In the instant matter, it is noted that the Municipality Authorities Act provides, in pertinent part, as follows: § 5610. Governing body (e) QUORUM. - -A majority of the members shall constitute a quorum of the board for the purpose of organizing and Wiest, 07 -592 November 9, 2007 Page 4 Act. conducting the business of the authority and for all other purposes.... The board shall fix and determine the number of officers, agents and employees of the authority and their respective powers, duties and compensation and may appoint to such office or offices any member of the board with such powers, duties and compensation as the board may deem proper.... 53 Pa.C.S. §§ 5610(d), (e) (Emphasis added). In Swick/Aman, Opinion 91 -006, the State Ethics Commission held that Section 1103(a) of the Ethics Act would not prohibit a municipal authority board member from simultaneously serving in a compensated position of employment with the authority. The Commission concluded, however, that an authority board member could not use the authority of office by participating in or voting in favor of his own appointment to a position of employment with the authority. In Rebottini v. State Ethics Commission, 634 A.2d 743 (Pa. Cmwlth. 1993), allocatur denied, 539 Pa. 682, 652 A.2d 1327 (1994), the Commonwealth Court held, inter alia, that municipal authority board members do not automatically violate Section 1103(a of the Ethics Act merely by participating in a board vote to elect themselves to paid officer positions or to set their salaries. In so holding, the Court noted that the Municipality Authorities Act expressly gives board members the power to create officer positions, appoint board members to officer positions, and set officer salaries. In applying the above to the instant matter, the necessary conclusion is that Section 1103(a) of the Ethics Act would not prohibit Stahl from simultaneously serving as a Member and Chairman of the Board and as a compensated employee of the Authority. Swick/Aman, supra. However, because the above - quoted section of the Municipality Authorities Act does not give an authority board member the power to appoint himself to an em to ee position with the authority - -as opposed to an officer position with the authority -- tahl would have a conflict of interest under Section 1103(a) of the Ethics Act as to voting in favor of his own appointment to a position of employment with the Authority. Swick/Aman, supra; cf., Rebottini, supra. In each instance of a conflict of interest, Stahl would be required to abstain fully from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Turning to your specific inquiry, you are advised as follows. The only exception in Section 1103(j) of the Ethics Act that enables a member of a five - member board to vote despite a conflict of interest requires as a prerequisite that: (1) the board be unable to take any action on the matter before it because the number of members required to abstain from voting under the provisions of the Ethics Act makes the majority or other legally required vote of approval unattainable; and (2) prior to voting, such members with conflicts under the Ethics Act disclose their conflicts as required by Section 1103(j). 65 Pa.C.S. § 1103(j); Pavlovic, supra. That prerequisite is not met when only one or two members of the five - member board have conflicts, or when such members abstain for reasons other than having a conflict of interest under the Ethics Act. Pavlovic, supra; Kotch, Advice 05 -579. You are advised that Section 1103(j) of the Ethics Act would not permit Stahl to vote in favor of a motion that would create a salaried position for him with the Authority where two of the five Board Members would abstain from voting on the motion for reasons other than having a conflict of interest under the Ethics Act. Pavlovic, supra. The propriety of the proposed conduct has only been addressed under the Ethics Wiest, 07 -592 November 9, 2007 Page 5 Conclusion: As a Member and Chairman of the Board ( "Board ") of the Pine Grove Joint Treatment Authority ( "Authority "), John Stahl ("Stahl ") is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Section 1103(a) of the Ethics Act would not prohibit Stahl from simultaneously serving as a Member and Chairman of the Board and as a compensated employee of the Authority. However, Stahl would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to voting in favor of his own appointment to a position of employment with the Authority. In each instance of a conflict of interest, Stahl would be required to abstain fully from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Section 1103(j) of the Ethics Act would not permit Stahl to vote in favor of a motion that would create a salaried position for him with the Authority where two of the five Board Members would abstain from voting on the motion for reasons other than having a conflict of interest under the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), 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