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HomeMy WebLinkAbout08-007 CASTOROPINION OF THE COMMISSION Dear Mr. Castor: I. ISSUE: Bruce L. Castor, Jr., Commissioner Montgomery County, PA Court House P.O. Box 311 Norristown, PA 19404 -0311 Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella DATE DECIDED: 12/4/08 DATE MAILED: 12/12/08 08 -007 This Opinion is issued in response to your advisory request letters dated August 13, 2008, and September 11, 2008. Whether, pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., a county commissioner would have a conflict of interest under Section 1103(a) of the Ethics Act with respect to arrangements for the collection of the county's delinquent taxes, where: (1) the county is currently under contract with a firm ( "the Contractor ") for the collection of the county's delinquent taxes; (2) the contract is expiring and the county commissioners will have to decide whether to renew the contract or utilize another entity or the county treasurer's office to collect delinquent taxes; (3) the county commissioner is a partner in a law firm that is representing a client in a lawsuit against the Contractor in a matter unrelated to the contract; and (4) the law firm's client does not seek to contract with the county to collect the county's delinquent taxes. II. FACTUAL BASIS FOR DETERMINATION: As a Commissioner for Montgomery County ( "the County "), Pennsylvania, you request an advisory opinion from this Commission based upon the following submitted facts. You have served as a County Commissioner since January 2008. You previously Castor, 08 -007 December 12, 2008 Page 2 served as the District Attorney or an Assistant District Attorney for the County. In a private capacity, you have been a partner in the law firm of Elliott Greenleaf & Siedzikowski, P.C. (hereinafter referred to as the Law Firm ") since January 2008. Before you became a County Commissioner, the County awarded a contract to collect delinquent taxes to a company named "Xspand, Inc." ( "Xspand "). The County's contract with Xspand will end as of December 31, 2008. You state that the County Commissioners will have to decide whether to renew the aforesaid contract, award a contract to another company, or resume the prior practice of having the County Treasurer's Office collect delinquent taxes. The Law Firm represents a firm named "Municipal Revenue Services" ( "MRS "). MRS is a competitor of Xspand. You state that this representation was undertaken before you became a partner in the Law Firm. The Law Firm represents MRS in a lawsuit against Xspand over an issue pertaining to the collection of delinquent taxes for Norristown, Pennsylvania. MRS alleges that because of political connections with principals at Xspand, a former County Commissioner and a current County Commissioner other than you used their influence with local Norristown officials to convince Norristown to abandon its plans to hire MRS and to instead hire Xspand. The Law Firm is currently litigating the issue of whether the aforesaid former County Commissioner and current County Commissioner are subject to being deposed on such matter. You state that when you began your employment as a partner with the Law Firm, the Law Firm's chairman directed that you have no access to or discussions on any matter related to the Xspand litigation. You state that you have followed those instructions, and that you have no involvement with the Law Firm's litigation against Xspand. You have submitted a letter to you dated September 10, 2008, from Mark J. Schwemler, an attorney with the Law Firm. In said letter, Mr. Schwemler states that the Law Firm was representing MRS in a legal action against Xspand and Bear Stearns & Company, Inc. at the time you began employment with the Law Firm. Mr. Schwemler notes that the Law Firm's representation of MRS is ongoing. Mr. Schwemler states that MRS has never sought to contract with the County to collect delinquent taxes and will not seek to do so in the future. Based upon the above submitted facts, you ask whether you would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to the County's arrangements for the collection of the County's delinquent taxes, and in particular, the decision of whether to renew the County's contract with Xspand. By letter dated October 6, 2008, 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 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 County Commissioner, you are a public official subject to the provisions of the Castor, 08 -007 December 12, 2008 Page 3 Ethics Act. See, McCarrier /Anderson, Opinion 98 -008; Thompson, Opinion 99 -005. 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 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 Section 1103(a) 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 Castor, 08 -007 December 12, 2008 Page 4 the performance of duties and responsibilities unique to a particular public office or position of public employment. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. 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 addressing your inquiry under the Ethics Act, Section 1103(a) generally does not prohibit public officials /public employees from having outside business activities or employment. However, a public official /public employee may not use the authority of the public position - -or confidential information obtained by being in that position - -for the advancement of the public official's /public employee's own private pecuniary benefit or that of a business with which he or she is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, Metrick, Order 1037; (2) the use of governmental facilities, such as governmental telephones, postage, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity (Gorman, Order 1041; Rembold, Order 1303; Wilcox, Order 1306), or private client(s) (Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010). If a private employer or business with which the public official /public employee is associated or a client of the private employer or business would have a matter pending before the governmental body, the public official /public employee generally would have a conflict of interest as to such matter. Miller, supra; Kannebecker, supra. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation and in the Castor, 08 -007 December 12, 2008 Page 5 instance of a voting conflict, to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The Law Firm is a business with which you are associated in your capacity as a partner. Subject to the statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, in your capacity as a County Commissioner, you would have a conflict of interest in matters that would financially impact you, the Law Firm, or the Law Firm's client(s). See, Kannebecker, supra; Miller, supra. In applying Section 1103(a) of the Ethics Act to the instant matter, it is our determination that the involvement of MRS, a Law Firm client, in litigation against Xspand in a matter unrelated to the County's contract with Xspand, would not in and of itself form the basis for a conflict of interest for you in matters before the County Board of Commissioners pertaining to arrangements for the collection of the County's delinquent taxes, or in particular, the County's contract with Xspand. Therefore, you are advised that absent some basis for a conflict of interest such as a private pecuniary benefit to you, the Law Firm, or the Law Firm's client(s), Section 1103(a) of the Ethics Act would not prohibit you from participating in the County's arrangements for the collection of the County's delinquent taxes, and in particular, the decision of whether to renew the County's contract with Xspand. The propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Montgomery County Home Rule Charter or the Rules of Professional Conduct. IV. CONCLUSION: As a Commissioner for Montgomery County ( "the County "), Pennsylvania, you are a public official subject to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The law firm of Elliott Greenleaf & Siedzikowski P.C. (hereinafter referred to as the Law Firm ") is a business with which you are associated in your capacity as a partner. Subject to the statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, in your capacity as a County Commissioner, you would have a conflict of interest in matters that would financially impact you, the Law Firm, or the Law Firm's client(s). Under the submitted facts that: (1) before you became a County Commissioner, the County awarded a contract to collect delinquent taxes to a company named "Xspand, Inc." ( "Xspand "), which contract will end as of December 31, 2008; (2) the County Commissioners will have to decide whether to renew such contract, award a contract to another company, or resume the prior practice of having the County Treasurer's Office collect delinquent taxes; (3) the Law Firm represents a competitor of Xspand named "Municipal Revenue Services" ( "MRS "); (4) the Law Firm represents MRS in a lawsuit against Xspand over an issue pertaining to the collection of delinquent taxes for Norristown, Pennsylvania; and (5) MRS has never sought to contract with the County to collect delinquent taxes and will not seek to do so in the future, you are advised as follows. The involvement of MRS, a Law Firm client, in litigation against Xspand in a matter unrelated to the County's contract with Xspand, would not in and of itself form the basis for a conflict of interest for you in matters before the County Board of Commissioners pertaining to arrangements for the collection of the County's delinquent taxes, or in particular, the County's contract with Xspand. Absent some basis for a conflict of interest such as a private pecuniary benefit to you, the Law Firm, or the Law Firm's client(s), Section 1103(a) of the Ethics Act would not prohibit you from participating in the County's arrangements for the collection of the County's delinquent taxes, and in particular, the decision of whether to renew the County's contract with Xspand. Castor, 08 -007 December 12, 2008 Page 6 Act. The propriety of the proposed conduct has only been addressed under the Ethics 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