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HomeMy WebLinkAbout09-575 GILLENHerbert F. Rubenstein, Esquire Suite 107 25 West Skippack Pike Broad Axe, PA 19002 -5152 Dear Mr. Rubenstein: ADVICE OF COUNSEL October 26, 2009 09 -575 This responds to your letter dated September 11, 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: (1) a township council member, who in a private capacity is a member of a fire company located in the township, with regard to participating in the approval of the township's annual budget, where the township pays the premiums for the fire company's workers' compensation insurance and disburses funds to the fire company through the township's annual budget; or (2) a township council member, who in a private capacity is the treasurer of a non - profit Little League organization located in the township, with regard to participating in the approval of the township's annual budget, where such budget would include disbursements to the Little League organization. Facts: You request an advisory from the Pennsylvania State Ethics Commission on behalf of Vince Gillen ("Mr. Gillen ") and Sheldon Simpson ( "Mr. Simpson "), who serve as Township Council Members for Plymouth Township ( "the Township ") located in Montgomery County, Pennsylvania. You have submitted facts that may be fairly summarized as follows. Mr. Gillen is a non - voting member of the Harmonville Fire Company ( "Fire Company "). The Fire Company is a non - profit organization located in the Township. The Township pays the premiums for the Fire Company's workers' compensation insurance and disburses funds to the Fire Company through the Township's annual budget. Mr. Gillen is covered by the Fire Company's workers' compensation insurance in connection with duties that he performs when he responds to fires with the Fire Company. Mr. Simpson is the Treasurer of a non - profit Little League organization (hereinafter referred to as the LLO ") located in the Township. The Township disburses funds to the LLO through the Township's annual budget. Rubenstein, 09 -575 October 26, 2009 Page 2 You state that Mr. Gillen and Mr. Simpson abstained from voting on the Township's budget for 2009. Based upon the above submitted facts, you ask whether, pursuant to the Ethics Act, Mr. Gillen or Mr. Simpson would be prohibited from participating in the approval of the Township's annual budget. 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 Township Council Members, Mr. Gillen and Mr. Simpson 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. Rubenstein, 09 -575 October 26, 2009 Page 3 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 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 65 Pa.C.S. § 1102. In each instance of a conflict of interest, the public official /public employee with the conflict 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. Rubenstein, 09 -575 October 26, 2009 Page 4 In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As to each Township Council Member (that is, Mr. Gillen or Mr. Simpson), pursuant to Section 1103(a) of the Ethics Act, the Township Council Member generally would have a conflict of interest in matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. Based upon the submitted facts, the Fire Company would not be considered a business with which Mr. Gillen is associated because Mr. Gillen is not a director, officer, owner, employee, or holder of a financial interest in same. Cf., Bitzel, Advice 08 -504. Mr. Gillen's membership in the Fire Company would not in and of itself form the basis for a conflict of interest for him under the Ethics Act in matters pertaining to the Fire Company. Absent some basis for a conflict of interest such as a private pecuniary benefit to Mr. Gillen, a member of his immediate family, or a business with which he or a member of his immediate family is associated, Section 1103(a) of the Ethics Act would not prohibit or restrict Mr. Gillen from participating in the approval of the Township's annual budget. Under the submitted facts, official action as to the Fire Company's workers' compensation insurance or disbursements to the Fire Company would not form the basis for a conflict of interest for Mr. Gillen conditioned upon the assumption that Mr. Gillen would benefit from such action to the same degree as the other members of the Fire Company (see, "class /subclass" exclusion to the definition of conflict of interest, 65 Pa.C.S. § 1102; cf., Foust, Advice 98 -621). The question of whether conflict(s) of interest would arise for Mr. Simpson as a Township Council Member in matters involving the LLO would primarily hinge upon a determination of whether the LLO is a "business." The State Ethics Commission has long held that a non - profit corporation may be considered a "business" as that term is defined by the Ethics Act (see, discussion in Confidential Opinion, 07 -018, at 7 -9; see also, Soltis - Sparano, Order 1045; McConahy, Opinion 96 -006). However, the question of whether a non - profit corporation /organization may be considered a "business" as that term is defined by the Ethics Act is the subject of current litigation ( "the Litigation "), in which the Commonwealth Court of Pennsylvania has answered the question in the negative and the Supreme Court of Pennsylvania has granted Petitions for Allowance of Appeal to decide the issue (see, Rendell v. Pennsylvania State Ethics Commission, 938 A.2d 554 (Pa. Commw. Ct. 2007), allocatur granted, 598 Pa. 557, 958 A.2d 1044 (2008)). If the final outcome of the Litigation would be that a nonprofit corporation /organization would fall within the Ethics Act's definition of the term "business," then the LLO would be considered a "business" with which Mr. Simpson is associated in his capacity as Treasurer of the LLO, and, subject to the statutory exclusions to the definition of "conflict" or "conflict of interest" set forth in the Ethics Act, 65 Pa.C.S. § 1102, Mr. Simpson would have a conflict of interest as a Township Council Member in matters that would financially impact the LLO. To the extent the LLO would be considered a "business" with which Mr. Simpson is associated, and the annual Township budget would include disbursements to the LLO, Mr. Simpson would have a conflict of interest with regard to the annual Township budget, unless disbursements to the LLO would be considered and voted on separately from the rest of the budget in which case Mr. Simpson's conflict of interest as to the budget would be limited to such disbursements to the LLO. If the final outcome of the Litigation would be that a nonprofit corporation /organization would not fall within the Ethics Act's definition of the term "business," then absent some other basis for a conflict of interest, Mr. Simpson would Rubenstein, 09 -575 October 26, 2009 Page 5 not have a conflict of interest in matters that would financially impact the LLO such as the annual Township budget. In each instance of a conflict of interest, a Township Council Member on whose behalf you have inquired would be required to abstain fully from participation 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 propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Township's Home Rule Charter. Conclusion: As Township Council Members for Plymouth Township, located in Montgomery County, Pennsylvania, Vince Gillen ( "Mr. Gillen ") and Sheldon Simpson ("Mr. Simpson ") are public officials subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. As to each Township Council Member (that is, Mr. Gillen or Mr. Simpson), pursuant to Section 1103(a) of the Ethics Act, the Township Council Member generally would have a conflict of interest in matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. Based upon the submitted facts that: (1) Mr. Gillen is a non - voting member of the Harmonville Fire Company ("Fire Company "); (2) the Fire Company is a non - profit organization located in the Township; (3) the Township pays the premiums for the Fire Company's workers' compensation insurance and disburses funds to the Fire Company through the Township's annual budget; (4) Mr. Gillen is covered by the Fire Company's workers' compensation insurance in connection with duties that he performs when he responds to fires with the Fire Company; (5) Mr. Simpson is the Treasurer of a non - profit Little League organization (hereinafter referred to as the LLO ") located in the Township; and (6) the Township disburses funds to the LLO through the Township's annual budget, you are advised as follows. The Fire Company would not be considered a business with which Mr. Gillen is associated because Mr. Gillen is not a director, officer, owner, employee, or holder of a financial interest in same. Mr. Gillen's membership in the Fire Company would not in and of itself form the basis for a conflict of interest for him under the Ethics Act in matters pertaining to the Fire Company. Absent some basis for a conflict of interest such as a private pecuniary benefit to Mr. Gillen, a member of his immediate family, or a business with which he or a member of his immediate family is associated, Section 1103(a) of the Ethics Act would not prohibit or restrict Mr. Gillen from participating in the approval of the Township's annual budget. Under the submitted facts, official action as to the Fire Company's workers' compensation insurance or disbursements to the Fire Company would not form the basis for a conflict of interest for Mr. Gillen conditioned upon the assumption that Mr. Gillen would benefit from such action to the same degree as the other members of the Fire Company. The question of whether conflict(s) of interest would arise for Mr. Simpson as a Township Council Member in matters involving the LLO would primarily hinge upon a determination of whether the LLO is a "business." The question of whether a non - profit corporation /organization may be considered a "business' as that term is defined by the Ethics Act is the subject of current litigation ( "the Litigation "), in which the Commonwealth Court of Pennsylvania has answered the question in the negative and the Supreme Court of Pennsylvania has granted Petitions for Allowance of Appeal to decide the issue (see, Rendell v. Pennsylvania State Ethics Commission, 938 A.2d 554 (Pa. Commw. Ct. 2007), appeal granted, 598 Pa. 557, 958 A.2d 1044 (2008)). If the final outcome of the Litigation would be that a nonprofit corporation /organization would fall within the Ethics Act's definition of the term `business," then the LLO would be considered a "business" with which Mr. Simpson is associated in his capacity as Treasurer of the LLO, and, subject to the statutory exclusions to the definition of Rubenstein, 09 -575 October 26, 2009 Page 6 "conflict" or "conflict of interest" set forth in the Ethics Act, 65 Pa.C.S. § 1102, Mr. Simpson would have a conflict of interest as a Township Council Member in matters that would financially impact the LLO. To the extent the LLO would be considered a "business" with which Mr. Simpson is associated, and the annual Township budget would include disbursements to the LLO, Mr. Simpson would have a conflict of interest with regard to the annual Township budget, unless disbursements to the LLO would be considered and voted on separately from the rest of the budget in which case Mr. Simpson's conflict of interest as to the budget would be limited to such disbursements to the LLO. If the final outcome of the Litigation would be that a nonprofit corporation /organization would not fall within the Ethics Act's definition of the term "business," then absent some other basis for a conflict of interest, Mr. Simpson would not have a conflict of interest in matters that would financially impact the LLO such as the annual Township budget. In each instance of a conflict of interest, a Township Council Member on whose behalf you have inquired would be required to abstain fully from participation 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. 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