HomeMy WebLinkAbout09-562 ConfidentialADVICE OF COUNSEL
July 15, 2009
09 -562
This responds to your letter dated May 29, 2009, by which you requested a
confidential 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 impose any prohibitions or restrictions upon an A, who in
a private capacity is employed as a licensed [type of professional] with a [type of firm],
with regard to participating in or voting on matters pertaining to appeals by citizen
group(s) from the [type of municipality]'s approval of a land developer's subdivision
plans, requests by the developer for modification of its subdivision plans, or the repeal
of an amendment to a joint municipal zoning ordinance which increased the density of
development permitted for the land at issue, when: (1) the developer is partnered with a
home builder to develop some building lots covered by the developer's subdivision
plans; and (2) the home builder is a former client of a former employer of the A.
Facts: As an A for [name of municipality] (hereinafter referred to as "Municipality
1"), located in [name of county], Pennsylvania, you request a confidential advisory from
the Pennsylvania State Ethics Commission. You have submitted extensive facts that
may be fairly summarized as follows.
Municipality 1 is governed by a [number] member B. You state that all decisions
regarding planning and zoning matters are made by the B.
Municipality 1 is part of a joint zoning plan ("the Joint Zoning Plan ") governed by
a joint municipal zoning ordinance ( "the Joint Zoning Ordinance ") that was adopted by
Municipality 1 and the adjacent municipalities of [name of municipality] (hereinafter
referred to as "Municipality 2 ") and [name of municipality] (hereinafter referred to as
"Municipality 3 "). You have submitted a copy of an Agreement entered into by the three
Municipalities with respect to the Joint Zoning Ordinance, which document is
incorporated herein by reference.
You state that a zoning ordinance or amendment becomes part of the Joint
Zoning Ordinance once such zoning ordinance or amendment is passed by each of the
three Municipalities. Each Municipality has its own Subdivision and Land Development
Ordinance. You state that plans for subdivision and land development in Municipality 1
are reviewed against both the Joint Zoning Ordinance and Municipality 1's Subdivision
and Land Development Ordinance.
You state that during the last [number] years, both Municipality 1 and Municipality
2 have reviewed and approved a subdivision and land development application ( "the
Application ") submitted by a developer named [name of developer] (hereinafter referred
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July 15, 2009
Page 2
to as "Developer 1 "). The proposed development involves approximately number]
acres and includes tracts owned by several different property owners. Developer 1's
proposal included the sale of [number] acres (hereinafter referred to as "Tract 1 ") to the
C for a D and the development of [number] large tracts for single family dwellings. You
state that all properties in question are located in the Joint Zoning Plan's E District,
which district has the lowest density available under the Joint Zoning Plan.
You state that during the Application approval process, each of the three
Municipalities adopted a zoning amendment that created an overlay district known as
the [name of overlay district] (hereinafter referred to as the Overlay District"). The
Overlay District permits higher densities than those normally permitted in the E District,
subject to the requirement that a D be established on Tract 1.
You state that the Application was filed under the Overlay District regulations.
Developer 1's plans provided for relatively dense single family developments on two
parcels known as [name of tract] (hereinafter referred to as 'Tract 2 ") and [name of
tract] (hereinafter referred to as "Tract 3 "). Tract 2 is located in both Municipality 1 and
Municipality 2. You state that in October 2007, in your capacity as a Municipality 1 A,
you voted to approve Developer 1's subdivision plans. Upon the approval of Developer
l's subdivision plans by all three Municipalities, Developer 1 conveyed Tract 1 to the C.
You state that citizen group(s) subsequently filed appeals, including appeals of
the validity of the ordinance creating the Overlay District and appeals of the approval of
Developer 1's subdivision plans.
You state that the B of Municipality 2 has drafted a zoning ordinance amendment
("the Repealing Amendment ") to repeal the amendment which created the Overlay
District. You further state that if the Repealing Amendment would be adopted by all
three Municipalities, and any one of the citizen group appeals would be successful,
Developer 1's only option would be to develop the property remaining after the
conveyance of Tract 1 under the more restrictive requirements of the E District.
You state that during the subdivision review process, it became known that
Developer 1 intended to enter into a joint venture with another regional home builder
named [name of developer] (hereinafter referred to as "Developer 2 ") to develop some
of the building lots in Developer 1's subdivision plans. You express your belief that
Developer 1 and Developer 2 became partners in such venture in the fall of 2008.
In a private capacity, you are a licensed [type of professional]. At the time of the
approval of Developer 1's subdivision plans, you were employed by a F firm (hereinafter
referred to as "Business 1"). You state that in response to a G, Developer 2 asked
Business 1 to [provide certain services]. You state that for a number of reasons,
Developer 2 currently does not use the services of Business 1.
You are currently employed with a new F firm (hereinafter referred to as
"Business 2 ") that is not related to Business 1. You state that at this time, you are not
employed by any business providing F services to Developer 1 or Developer 2. You
further state that you are not actively soliciting business from Developer 1 or Developer
2, and you have no reasonable immediate possibility of providing F services to
Developer 1 or Developer 2, but you would be expected by your employer to render
such services if the opportunity to do so presented itself.
You note your understanding that you may not participate in or vote on any
matter before the Municipality 1 B that would involve any client or any person or entity
where there would be a reasonable possibility that such person or entity might become
a client.
Confidential Advice, 09 -562
July 15, 2009
Page 3
Based upon the above submitted facts, you pose the following specific questions:
1. Whether the Ethics Act would permit you to participate in the discussion
and vote on the proposed Repealing Amendment;
2. Whether the Ethics Act would permit you to participate in the discussions
and votes on any requests that Developer 1 might have for modification to
its approved subdivision plans for Tract 2 or Tract 3 or for ancillary
approvals such as, for example, approval of a Pennsylvania Department
of Environmental Protection planning module;
3. If the trial court would rule in favor of the citizen group(s) and against
Developer 1 in the various appeals filed following the approval of
Developer 1's subdivision plans, whether the Ethics Act would permit you
to vote to appeal the trial court's ruling(s) or to vote to authorize
Municipality 1's Solicitor to enter an appearance in an appeal filed by
another party (with the proviso that the Solicitor not file a brief or actively
advocate any position); and
4. Where the Municipality 1 B would complete the review of a particular land
development application, and you would thereafter discover the existence
of a potential conflict of interest because the applicant before the B may
have involvement with your employer, what steps would you be required
to take to come into compliance with the Ethics Act.
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. 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 an A for Municipality 1, you are 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
Confidential Advice, 09 -562
July 15, 2009
Page 4
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.
"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.
Confidential Advice, 09 -562
July 15, 2009
Page 5
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 applying the above provisions of the Ethics Act to the instant matter, it is noted
that Section 1103(a) of the Ethics Act pertaining to conflict of interest does not prohibit
public officials /public employees from having outside business activities or employment;
however, the public official /public employee may not use the authority of his public
position - -or confidential information obtained by being in that position- -for the
advancement of his own private pecuniary benefit or that of a business with which he 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, staff, 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 or private clients(s). Miller, Opinion 89-
024; Kannebecker, Opinion 92 -010.
If a business with which the public official /public employee or immediate family
member is associated or a private customer /client 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. Kannebecker, Opinion 92 -010; Miller, Opinion 89-
024. 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
fully from participation, and in the instance of a voting conflict, to abstain and fully satisfy
the disclosure requirements of Section 1103(j) of the Ethics Act.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised as follows. Business 2 is a business with which you are associated in your
capacity as an employee of Business 2. Pursuant to Section 1103(a) of the Ethics Act,
you generally would have a conflict of interest in matters before the Municipality 1 B that
would financially impact you, Business 2, Business 2's customer(s) /client(s), or potential
customer(s) /client(s) of Business 2 where there would be a reasonable and legitimate
expectation that a business relationship would form.
Your specific inquiries shall now be addressed.
In response to your first, second, and third specific inquiries, you are advised as
follows. The submitted fact that Developer 2 is a former customer /client of Business 1,
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July 15, 2009
Page 6
your previous employer, and is in a business relationship with Developer 1 to develop
some of the building lots in Developer 1's subdivision plans, in and of itself would not
form the basis of a conflict of interest for you under Section 1103(a) of the Ethics Act in
matters pertaining to Developer 1. Accordingly, you are advised that absent some basis
for a conflict of interest such as a private pecuniary benefit to you, Business 2, or
Business 2's customer(s) /client(s), or a reasonable and legitimate expectation of a
business relationship forming between Business 2 and Developer 1 or Developer 2,
Section 1103(a) of the Ethics Act would not prohibit you from participating in the
discussion(s) or vote(s) on: (1) the proposed Repealing Amendment; (2) any requests
that Developer 1 might have for modification to its approved subdivision plans for Tract
2 or Tract 3 or for ancillary approvals; or (3) appealing trial court ruling(s) in lawsuits
filed by citizen group(s) following the approval of Developer 1's subdivision plans or
authorizing Municipality 1's Solicitor to enter an appearance in an appeal filed by
another party.
In each instance of a conflict of interest, you 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, you would be
required to abstain fully 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 response to your fourth specific inquiry, you are generally advised that if a
public official /public employee engages in conduct that constitutes a conflict of interest,
there are no steps that can be taken to "undo" the violation of the Ethics Act. The State
Ethics Commission has held that a public official /public employee who has violated the
Ethics Act cannot through subsequent acts nullify or negate such violation. See,
Dovidio, Order 1202. However, remedial measures may be considered by the Se
Ethics Commission as mitigating factors.
The ropriety of the proposed conduct has only been addressed under the Ethics
Act. Specifically not addressed herein is the applicability of the H.
Conclusion: As an A for [name of municipality] ( "hereinafter referred to as
"Municipality 1), located in [name of county], Pennsylvania, you are a public official
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) Municipality 1 is part of
a joint zoning plan ( "the Joint Zoning Plan ") governed by a joint municipal zoning
ordinance ( "the Joint Zoning Ordinance ") that was adopted by Municipality 1 and the
adjacent municipalities of [name of municipality] (hereinafter referred to as "Municipality
2 ") and [name of municipality] (hereinafter referred to as "Municipality 3 "); (2) a zoning
ordinance or amendment becomes part of the Joint Zoning Ordinance once such zoning
ordinance or amendment is passed by each of the three Municipalities; (3) plans for
subdivision and land development in Municipality 1 are reviewed against both the Joint
Zoning Ordinance and Municipality 1's Subdivision and Land Development Ordinance;
(4) during the last [number] years, both Municipality 1 and Municipality 2 have reviewed
and approved a subdivision and land development application "the Application ")
submitted by a developer named [name of developer] (hereinafter referred to as
"Developer 1"); (5) Developer 1's proposal included the sale of [number] acres
(hereinafter referred to as "Tract 1") to the C for a D and the development of single
family dwellings on [number] large tracts located in the Joint Zoning Plan's E District,
which district has the lowest density available under the Joint Zoning Plan; (6) during
the approval process of the Application, each of the three Municipalities adopted a
zoning amendment that created an overlay district known as the [name of overlay
district] (hereinafter referred to as the Overlay District "), which Overlay District permits
higher densities than those normally permitted in the E District, subject to the
requirement that a D be established on Tract 1; (7) Developer 1's plans provided for
Confidential Advice, 09 -562
July 15, 2009
Page 7
relatively dense single family developments on two parcels known as [name of tract]
(hereinafter referred to as "Tract 2 ") and [ name of tract] (hereinafter referred to as "Tract
3"); (8) upon the approval of Developer 1 's subdivision plans by all three Municipalities,
Developer 1 conveyed Tract 1 to the C; (9) citizen group(s) subsequently filed appeals,
including appeals of the validity of the ordinance creating the Overlay District and
appeals of the approval of Developer 1's subdivision plans; (10) the B of Municipality 2
has drafted a zoning ordinance amendment ( "the Re ealing Amendment ") to repeal the
amendment which created the Overlay District; (11) Developer 1 entered into a joint
venture with another regional home builder name dd [name of developer] (hereinafter
referred to as "Developer 2 ") to develop some of the building lots in Developer 1's
subdivision plans; (12) in a private capacity, you are a licensed [type of professional];
(13) at the time of the approval of Developer 1's subdivision plans, you were employed
by a F firm (hereinafter referred to as "Business 1 "); (14) in response to a G, Developer
2 asked Business 1 to [provide certain services]; (15) Developer 2 currently does not
use the services of Business 1; (16) you are now employed with a new F firm
(hereinafter referred to as "Business 2 ") that is not related to Business 1; and (17) at this
time, you are not employed by any business providing F services to Developer 1 or
Developer 2, you are not actively soliciting business from Developer 1 or Developer 2,
and you have no reasonable immediate possibility of providing F services to Developer
1 or Developer 2, but you would be expected by your employer to render such services
if the opportunity to do so presented itself, you are advised as follows.
Business 2 is a business with which you are associated in your capacity as an
employee of Business 2. Pursuant to Section 1103(a) of the Ethics Act, you generally
would have a conflict of interest in matters before the Municipality 1 B that would
financially impact you, Business 2, Business 2's customer(s) /client(s), or potential
customer(s) / client(s) of Business 2 where there would be a reasonable and legitimate
expectation that a business relationship would form. The submitted fact that Developer
2 is a former customer /client of Business 1, your previous employer, and is in a
business relationship with Developer 1 to develop some of the building lots in Developer
1's subdivision plans, in and of itself would not form the basis of a conflict of interest for
you under Section 1103(a) of the Ethics Act in matters pertaining to Developer 1.
Absent some basis for a conflict of interest such as a private pecuniary benefit to you,
Business 2, or Business 2's customer(s) /client(s), or a reasonable and legitimate
expectation of a business relationship forming between Business 2 and Developer 1 or
Developer 2, Section 1103(a) of the Ethics Act would not prohibit you from participating
in the discussion(s) or vote(s) on: (1) the proposed Repealing Amendment; (2) any
requests that Developer 1 might have for modification to its approved subdivision plans
for Tract 2 or Tract 3 or for ancillary approvals; or (3) appealing trial court ruling(s) in
lawsuits filed by citizen group(s) following the approval of Developer 1's subdivision
plans or authorizing Municipality 1's Solicitor to enter an appearance in an appeal filed
by another party. In each instance of a conflict of interest, you 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, you would
be required to abstain fully 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. If a public official /public employee engages in conduct that
constitutes a conflict of interest, there are no steps that can be taken to "undo" the
violation of the Ethics Act. However, remedial measures may be considered by the
State Ethics Commission as mitigating factors.
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
Confidential Advice, 09 -562
July 15, 2009
Page 8
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