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HomeMy WebLinkAbout09-509 BarnhardtChristine M. Sadler, Esquire First Assistant County Solicitor County of Berks Services Center, 13 Floor 633 Court Street Reading, PA 19601 -3584 Dear Ms. Sadler: ADVICE OF COUNSEL February 17, 2009 09 -509 This responds to your letter dated January 14, 2009, 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 Commissioner for Berks County, Pennsylvania, with respect to voting on funding requests for the Berks Economic Partnership, when the Commissioner is an honorary, non - voting member of the Board of Directors of the Berks Economic Partnership; and whether the Commissioner would be required to disclose on his annual Statement of Financial Interests such position on the Board of Directors of the Berks Economic Partnership. Facts: As the First Assistant County Solicitor for Berks County ( "County "), Pennsylvania, you have been authorized by County Commissioners Mark C. Scott, Christian Leinbach, and Kevin Barnhardt (collectively referred to hereinafter as the County Commissioners" or the Commissioners ") to request an advisory from the Pennsylvania State Ethics Commission on their behalf. You have submitted facts that may be fairly summarized as follows. The Commissioners are currently regular voting Members of the Board of Directors of the Berks Economic Partnership (BEP "). The BEP Board of Directors has proposed that the Commissioners' status be changed to honorary, non - voting Members of the Board of Directors. In support of your advisory request, you have submitted a copy of an email dated December 19, 2008, from Deb Haffner with BEP, to the BEP Board of Directors. It is noted that said email sets forth proposed changes to BEP's bylaws and provides, in pertinent part, as follows: Sadler, 09 -509 February 17, 2009 Page 2 The proposed amendment to Section 3.01a is as follows: Section 3.01. Number and Qualifications of Directors. a. The BOD shall consist of thirty -six (36) members. (4) Three (3) of the members of the BOD shall be designated Honorary Members (as defined herein) and shall retain membership in the BOD for such period as set forth in Section 3.02. The proposed new Section 3.02 is as follows: Section 3.02. Honorary Members of the BOD. Each of the Berks County Commissioners shall be given automatic, non- voting membership in BEP ( "Honorary Members'). Honorary Members shall retain membership for so long as they serve as Berks County Commissioners. Such honorary membership shall have only the rights set forth in this Article 111. Honorary Members shall be entitled to receive notice of and attend all regular and special meetings of the BOD, as set forth below. Honorary Members shall not have any other rights as members of the BOD, including, but not limited to, the right to vote. December 19, 2008, Email of Deb Haffner, at 1. The email sets forth additional proposed bylaws changes that would provide that Honorary Members would not be counted for purposes of establishing a quorum of BEP Directors. Id. at 2. You state that the BEP currently receives substantial funding from the County as part of the annual budget process. You further state that the Commissioners currently abstain from voting on such funding requests after appropriate disclosure and only vote when the Board of Commissioners is unable to take any action because the number of abstaining members makes the majority unattainable. Based upon the above submitted facts, you pose the following specific questions: 1. Whether, following a change in their status to honorary, non - voting Members of the BEP Board of Directors, the Commissioners would be required to abstain from voting on requests for funding for BEP; and 2. Whether, following a change in their status to honorary, non - voting Members of the BEP Board of Directors, the Commissioners would be required to disclose on their annual Statements of Financial Interests ( "SFIs ") their honorary memberships on the BEP Board of Directors. 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. Sadler, 09 -509 February 17, 2009 Page 3 The County Commissioners are public officials 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 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 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. Sadler, 09 -509 February 17, 2009 Page 4 "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. "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. In each instance of a conflict of interest, the public official /public employee would be required to abstain fully from participation. The abstention requirement would not be limited merely to voting, but would extend 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. Subject to certain statutory exceptions, 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. Having established the above general principles, your specific questions shall now be addressed. Preliminarily, the submitted facts are insufficient to enable a conclusive determination as to whether the BEP would be considered a "business" as that term is defined by the Ethics Act. Therefore, this advisory must necessarily be limited to providing the following general guidance. With respect to your first specific question, you are advised that to the extent the BEP would be considered a "business" as that term is defined by the Ethics Act, as to each Commissioner, the BEP would be a business with which he is associated in his capacity as either a voting member or an honorary, non - voting member of the BEP Board of Directors. The Ethics Act does not exclude from the definition of "business with which he is associated" an honorary, non - voting director of a business. The State Ethics Commission does not have the legal authority to carve out exceptions to the Ethics Act that do not have a statutory basis. See, e.q., Confidential Opinion, 07 -001; Ziegler, Opinion 98 -001; Richardson, Opinion 93 -006. Sadler, 09 -509 February 17, 2009 Page 5 As to each Commissioner, subject to the statutory exceptions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, pursuant to Section 1103(a) of the Ethics Act, the Commissioner would have a conflict of interest in matters before the County Board of Commissioners that would financially impact a business with which he is associated, including but not limited to funding requests for such a business. Subject to the exceptions set forth in Section 1103(j) of the Ethics Act, in each instance of a voting conflict, the Commissioner would be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j). In response to your second specific question, you are advised that to the extent the BEP would be considered a "business" as that term is defined by the Ethics Act, each Commissioner, as either a voting member or an honorary, non - voting member of the BEP Board of Directors, would be required to disclose on his annual SFI such position as an "office, directorship or employment ... in any business entity" pursuant to Section 1105(b)(8) of the Ethics Act, 65 Pa.C.S. § 1105(b)(8). The propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Berks County Home Rule Charter. Conclusion: As Commissioners for Berks County, Pennsylvania, Mark C. Scott, Christian Leinbach, and Kevin Barnhardt (collectively referred to hereinafter as the Commissioners ") are public officials subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Based upon the submitted facts that: (1) the Commissioners are currently regular voting Members of the Board of Directors of the Berks Economic Partnership ( "BEP "); (2) the BEP Board of Directors has proposed that the Commissioners' status be changed from voting Members to honorary, non - voting Members; and (3) the BEP currently receives substantial funding from the County as part of the annual budget process, you are advised as follows. The submitted facts are insufficient to enable a conclusive determination as to whether the BEP would be considered a "business" as that term is defined by the Ethics Act. Therefore, this advisory must necessarily be limited to providing the following general guidance. To the extent the BEP would be considered a "business" as that term is defined by the Ethics Act, as to each Commissioner, the BEP would be a business with which he is associated in his capacity as either a voting member or an honorary, non - voting member of the BEP Board of Directors. The Ethics Act does not exclude from the definition of "business with which he is associated" an honorary, non- voting director of a business. As to each Commissioner, subject to the statutory exceptions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, pursuant to Section 1103(a) of the Ethics Act, the Commissioner would have a conflict of interest in matters before the County Board of Commissioners that would financially impact a business with which he is associated, including but not limited to funding requests for such a business. Subject to the exceptions set forth in Section 1103(j) of the Ethics Act, in each instance of a voting conflict, the Commissioner would be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j). To the extent the BEP would be considered a "business" as that term is defined by the Ethics Act, each Commissioner, as either a voting member or an honorary, non - voting member of the BEP Board of Directors, would be required to disclose on his annual Statement of Financial Interests such position as an "office, directorship or employment ... in any business entity" pursuant to Section 1105(b)(8) of the Ethics Act, 65 Pa.C.S. § 1105(b)(8). Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Sadler, 09 -509 February 17, 2009 Page 6 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