Loading...
HomeMy WebLinkAbout08-592 DonatelliGuy A. Donatelli, Esquire Lamb McErlane PC 24 East Market Street Box 565 West Chester, PA 19381 -0565 Dear Mr. Donatelli: ADVICE OF COUNSEL October 31, 2008 The Township is governed by a five - member Board of Supervisors ( "Board "). 08 -592 This responds to your letters of September 16, 2008, and September 26, 2008, 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 present any prohibitions or restrictions upon a township supervisor and his spouse with regard to entering into a license agreement with the township to permit the township to use a portion of property owned by the supervisor and his spouse (collectively, the landowners ") to store and access the Township's road salt during the winter of 2008 -2009, where: (1) the township would pay no consideration to the landowners; (2) the township would indemnify the landowners for any damages the township would cause to the property and would identify the landowners as additional insureds on the township's insurance policies; (3) the township would plow and salt the landowners' driveway for the purpose of accessing the road salt; (4) the township would make temporary improvements to the property pad site to accommodate the salt, which improvements would be removed at the conclusion of the agreement; (5) the value of the license agreement to the landowners, if any, is believed not to exceed $500; (6) the supervisor would abstain from voting on the license agreement and would disclose the reasons for such abstention; (7) the license agreement would be awarded through an open and public process; and (8) the supervisor would have no supervisory or overall responsibility as to the implementation or administration of the license agreement. Facts: As Solicitor for West Pikeland Township ( "Township "), located in Chester ounty, Pennsylvania, you have been authorized by Township Supervisor William Cracas ( "Mr. Cracas ") and his spouse, Janna Brown Cracas ( "Mrs. Cracas "), to request an advisory from the Pennsylvania State Ethics Commission on their behalf. You have submitted facts that may be fairly summarized as follows. Donatelli, 08 -592 October 31, 2008 Page 2 On December 27, 2007, the Township sold the Township building ( "the Building "), which had served as the Township's road salt storage facility. The buyers of the Building agreed to store the Township's road salt at the Building through April 2008. In April 2008, the Township transferred its road salt to a facility owned by East Pikeland Township, which had offered to store the road salt for the summer of 2008. You state that the Township has been placed on notice that East Pikeland Township would like to return the road salt to the Township at the end of September 2008. Despite the Township's efforts, it has been unable to locate a storage facility for the road salt within its boundaries. You state that the Township is considering entering into a license agreement ( "the Agreement ") with Mr. Cracas and Mrs. Cracas for storage of the Township's road salt on property ( "the Property ") owned by Mr. and Mrs. Cracas (hereinafter collectively referred to as the Landowners"). You have attached a copy of the Agreement, which is incorporated herein by reference. You state that the Agreement would allow the Township to use a portion of the Property to store and access the Township's road salt during the winter of 2008 -2009. Pursuant to the Agreement, the Township: (1) would pay no consideration to the Landowners for use of the Property; (2) would indemnify the Landowners for any damages caused to the Property by the Township and would identify the Landowners as additional insureds on the Township's insurance policies; (3) would plow and salt the Landowners' driveway for the purpose of accessing the road salt; and (4) would make temporary improvements (that is, concrete blocks and tarps) to the Property pad site to accommodate the salt, which improvements would be removed upon expiration of the Agreement. You state that the value of the Agreement to the Landowners, if any, is not believed to exceed $500. You state that in order to ensure compliance with the Ethics Act, Paragraph 2 of the Agreement has been drafted to include the following conditions: 2. Conditions Precedent to Effectiveness. This License shall not become effective until the following conditions are met: a. that the Township provide public notice of the possibility of this license agreement prior to the License taking effect; Agreement, at 2 -3. b. that there be sufficient time for a reasonable and prudent competitor or applicant to prepare and present an application or proposal; c. that the Township disclose all applications or proposals considered; d. that the Township disclose the license awarded and offered and accepted; e. Licensor abstain[s] from any vote on the License and disclose[s] the reasons for same, and; f. Licensor William P. Cracas shall have no supervisory or overall responsibility as to the implementation or administration of the license with the Township. Donatelli, 08 -592 October 31, 2008 Page 3 Section 3 of the Agreement provides for the license granted to the Township to expire, at the latest, at 11:59 p.m. on May 1, 2009. Based upon the above submitted facts, you ask whether the Ethics Act would permit the Landowners to enter into the Agreement with the Township if the conditions set forth in Paragraph 2 of the Agreement would be met. 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 noted that, pursuant to the same aforesaid Sections of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), 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 that your inquiry relates to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may and shall be addressed. As a Township Supervisor, Mr. Cracas 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. (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 Donatelli, 08 -592 October 31, 2008 Page 4 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 conflicts of interest under the Ethics Act are defined in Section 1102 of 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. "Immediate family." A parent, spouse, child, brother or sister. 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. Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows: Donatelli, 08 -592 October 31, 2008 Page 5 65 Pa.C.S. § 1103(f). § 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 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 requires 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, you are advised that pursuant to Section 1103(a) of the Ethics Act, Mr. Cracas would generally have a conflict of interest in matters that would financially impact him or his spouse. Turning to your specific inquiry, you are advised as follows. Donatelli, 08 -592 October 31, 2008 Page 6 Section 1103(a) of the Ethics Act would not prohibit the Landowners from entering into the Agreement with the Township. If the total financial benefit to the Landowners from the agreement would not exceed $500, as the submitted facts suggest, such financial benefit would be de minimis and would not form the basis for a conflict of interest under the Ethics Act. See, Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004). If the total financial benefit to the Landowners from the Agreement would not be de minimis, Mr. Cracas, in his capacity as a Township Supervisor, would have a conflict of interest in matters pertaining to the Agreement and any competitor properties considered by the Township for salt storage purposes. See, Pepper, Opinion 87 -008. In each instance of a conflict of interest, Mr. Cracas would be required to abstain fully from participation. The abstention requirement would extend beyond voting to include any use of authority of office. In each instance of a voting conflict, Mr. Cracas would be required 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. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. Fulfillment of the conditions set forth in Paragraphs 2 (a) through (d) of the Agreement would result in an open and public process as to the Agreement. The ropriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Second Class Township Code. Conclusion: As a Supervisor for West Pikeland Township ( "Township "), located in Chester County, Pennsylvania, William Cracas ( "Mr. Cracas ") 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. Pursuant to Section 1103(a) of the Ethics Act, Mr. Cracas would generally have a conflict of interest in matters that would financially impact him or his spouse, Janna Brown Cracas ( "Mrs. Cracas "). Based upon the submitted facts that: (1) the Township is considering entering into a license agreement "the Agreement ") with Mr. Cracas and Mrs. Cracas for storage of the Township's road salt on property ( "the Property ") owned by Mr. and Mrs. Cracas (hereinafter collectively referred to as the Landowners "); (2) the Agreement would allow the Township to use a portion of the Property to store and access the Township's road salt during the winter of 2008 -2009; (3) pursuant to the Agreement, the Township: (a) would pay no consideration to the Landowners for use of the Property; (b) would indemnify the Landowners for any damages caused to the Property by the Township and would identify the Landowners as additional insureds on the Township's insurance policies; (c) would plow and salt the Landowners' driveway for the purpose of accessing the road salt; and (d) would make temporary improvements (that is, concrete blocks and tarps) to the Property pad site to accommodate the salt, which improvements would be removed upon expiration of the Agreement; and (4) the value of the Agreement to the Landowners, if any, is not believed to exceed $500, you are advised as follows. Section 1103(a) of the Ethics Act would not prohibit the Landowners from entering into the Agreement with the Township. If the total financial benefit to the Landowners from the agreement would not exceed $500, as the submitted facts suggest, such financial benefit would be de minimis and would not form the basis for a conflict of interest under the Ethics Act. If the total financial benefit to the Landowners from the Agreement would not be de minimis, Mr. Cracas, in his capacity as a Township Supervisor, would have a conflict of interest in matters pertaining to the Agreement and any competitor properties considered by the Township for salt storage purposes. In each instance of a conflict of interest, Mr. Cracas would be required to abstain fully from participation. The abstention requirement would extend beyond voting to include any use of authority of office. In each instance of a voting conflict, Mr. Cracas would be Donatelli, 08 -592 October 31, 2008 Page 7 required 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. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. Fulfillment of the conditions set forth in Paragraphs 2 (a) through (d) of the Agreement would result in an open and public process as to the Agreement. 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