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HomeMy WebLinkAbout09-567 BarrettJohn A. Hiscott, Esquire RR1, Box 1376 Stroudsburg, PA 18360 -9626 Dear Mr. Hiscott: ADVICE OF COUNSEL August 5, 2009 09 -567 This responds to your letter dated June 11, 2009 (postmarked June 18, 2009, and received June 23, 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 § 1101 et seq., would impose any prohibitions or restrictions upon a township supervisor with regard to participating in matter(s) before the township board of supervisors involving an individual and entities owned by or affiliated with the individual where: (1) the township supervisor filed a defamation lawsuit against multiple defendants, including the individual and an entity owned by or affiliated with the individual; (2) the township supervisor entered into a settlement agreement that resolved the lawsuit; and (3) the settlement agreement contains a confidentiality clause. Facts: As Solicitor for Smithfield Township ( "Township "), located in Monroe ounty, Pennsylvania, you have been authorized by Township Supervisor Brian E. Barrett ( "Mr. Barrett ") to request an advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. You first note that a prior advisory was issued to you by the State Ethics Commission on behalf of Mr. Barrett. It is administratively noted that Hiscott, Advice 06 -517, was issued to you based upon facts set forth in an advisory request letter dated January 17, 2006. The submitted facts provided, in pertinent part, that Mr. Barrett filed a defamation lawsuit ("the Lawsuit ") against Ralph Wunder, LTS Builders, LLC, Larry T. Simon ( "Mr. Simon "), The Better Life for Smithfield Township Committee, and Gateway Abstract, Inc. docketed to No. 9583 Civil 2005. You asked whether it would be appropriate for Mr. Barrett to abstain from voting on matters involving LTS Builders, LLC, and if so, whether it would be appropriate for Mr. Barrett to vote in the event of a tie between the other two Supervisors or the lack of a majority of Supervisors due to one or two additional abstentions. Advice 06 -517 noted that the submitted facts did not indicate whether the Lawsuit was pending or final. The Advice stated, in part, as follows: Hiscott, 09 -567 August 5, 2009 Page 2 Assuming that the action is pending, given that Barrett is an adverse party in litigation against or involving LTS Builders, LLC, Barrett would generally have a conflict of interest in all matters before the Township involving LTS Builders, LLC. In each instance of a conflict, Barrett would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Assuming the action is final and Barrett is no longer in litigation against LTS Builders, LLC, Section 1103(a) of the Ethics Act would not prohibit him from participating in discussions and votes pertaining to matters involving LTS Builders, LLC including, but not limited to, land development and subdivision projects conditioned upon the assumptions that: (1) Barrett would not, in a private capacity, be an adverse party in any other legal action(s) against or involving LTS Builders, LLC; and (2) any such participation by Barrett as a Township Supervisor would not involve the prospect of a private pecuniary benefit prohibited by Section 1103(a). Hiscott, Advice 06 -517, at 6 -7. The Advice further addressed the limited circumstances under which Section 1103(j) of the Ethics Act would permit Mr. Barrett to participate in the event a conflict of interest would exist under the Ethics Act. With respect to your current advisory request, you state that Mr. Barrett entered into a settlement agreement ( "the Settlement Agreement ") that resolved all litigation. The Settlement Agreement contains a confidentiality clause. The Lawsuit was concluded by the filing of a Praecipe to Settle, Discontinue and End on February 17, 2009. You state that entities owned by or affiliated with Mr. Simon have issues before the Township Board of Supervisors pertaining to subdivision and land development, zoning and building, storm water management, and other matters. The aforesaid entities include LTS Builders, LLC, and entities named "Synchium" and "Penn Regional Business Center III." Based upon the above submitted facts, and in light of the Settlement Agreement and confidentiality clause, you pose the following specific questions: 1. Whether it would be appropriate for Mr. Barrett to abstain from voting on matters before the Township Board of Supervisors involving Mr. Simon and entities owned by or affiliated with him; and 2. If the answer to the first question is yes, whether it would be appropriate for Mr. Barrett to vote under the limited circumstances set forth in Section 1103(j) of 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. As a Township Supervisor, Mr. Barrett is a public official subject to the provisions of the Ethics Act. Hiscott, 09 -567 August 5, 2009 Page 3 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. "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. Hiscott, 09 -567 August 5, 2009 Page 4 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 addition, Sections 1103(b) and 1103(c) of the Ethics Act, 65 Pa.C.S. §§ 1103(b), (c), provide in part that no person shall offer or give to a public official /public employee anything of monetary value and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. In applying the above provisions of the Ethics Act to the instant matter, you are advised that generally, where a public official is involved in litigation, matters pertaining to or affecting the litigation or a third party litigant present a conflict of interest for the public official. See, DeLano, Opinion 88 -008; Golla, Opinion 88 -004; cf., McCullough, Advice 07- 534; —waft, Advice 07 -524; Hiscott, Advices 06 -517 and 06- 517 -S. Even where litigation would not be a factor, a public official would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact the public official, a member of his immediate family, or a business with which he or a member of his immediate family is associated, unless the de minimis exclusion or the class /subclass exclusion contained within the above definition of "conflict" or "conflict of interest" would be applicable. Having established the above general principles, your specific questions shall now be addressed. With regard to your first specific question, the submitted facts do not provide any details with regard to the terms of the Settlement Agreement. Therefore, this advisory must necessarily be limited to providing the following general guidance. If the terms of the Settlement Agreement would form the basis for an ongoing conflict of interest for Mr. Barrett in matter(s) before the Township Board of Supervisors involving Mr. Simon and /or entities owned by or affiliated with Mr. Simon, Mr. Barrett would be required to abstain fully from participation in such matter(s) and in each instance of a voting conflict, to abstain fully and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The disclosure requirements of Section 1103(j) would not necessitate disclosing the terms of the Settlement Agreement. As for your second specific question, you are advised that when Mr. Barrett would have a conflict of interest under the Ethics Act, Mr. Barrett would not be permitted to vote except under the limited circumstances set forth in Section 1103(j) of the Ethics Act. Hiscott, 09 -567 August 5, 2009 Page 5 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 or case law as to bias. Conclusion: As a Supervisor for Smithfield Township ( "Township "), located in Monroe County, Pennsylvania, Brian E. Barrett ( "Mr. Barrett ") 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. Based upon the submitted facts that: (1) Mr. Barrett filed a defamation lawsuit ( "the Lawsuit ") against Ralph Wunder, LTS Builders, LLC, Larry T. Simon ( "Mr. Simon "), The Better Life for Smithfield Township Committee, and Gateway Abstract, Inc.; (2) Mr. Barrett entered into a settlement agreement ( "the Settlement Agreement ") that resolved all litigation; 3 the Settlement Agreement contains a confidentiality clause; and (4) entities owned by or affiliated with Mr. Simon have issues before the Township Board of Supervisors pertaining to subdivision and land development, zoning and building, storm water management, and other matters, you are advised as follows. If the terms of the Settlement Agreement would form the basis for an ongoing conflict of interest for Mr. Barrett in matter(s) before the Township Board of Supervisors involving Mr. Simon and /or entities owned by or affiliated with Mr. Simon, Mr. Barrett would be required to abstain fully from participation in such matter(s) and in each instance of a voting conflict, to abstain fully and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The disclosure requirements of Section 1103() would not necessitate disclosing the terms of the Settlement Agreement. Wien Mr. Barrett would have a conflict of interest under the Ethics Act, Mr. Barrett would not be permitted to vote except under the limited circumstances set forth in Section 1103(j) of the Ethics Act. 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