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HomeMy WebLinkAbout10-589 MCLANAHAN ADVICE OF COUNSEL June 23, 2010 J. Michael Dorezas, Esquire Evey Black 401-03 Allegheny Street P.O. Box 415 Hollidaysburg, PA 16648 10-589 Dear Mr. Dorezas: This responds to your letter dated May 13, 2010, by which you requested an advisory from the Pennsylvania State Ethics Commission. Issue: Whether, pursuant to the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., a borough council member would have a conflict of interest with regard to voting as to whether to enter into a construction contract and accept a grant pertaining to a proposed new building to house a public library, where: (1) the council member’s spouse serves as a volunteer on the public library’s fund- raising campaign and has solicited individuals to make contributions/pledges for the building project; and (2) the council member’s spouse is not a member of the public library’s board of directors or any committee of the public library. Facts: You have been authorized by Michael W. McLanahan (“Mr. McLanahan”), a Member of Council for Hollidaysburg Borough (“Borough”), located in Blair County, Pennsylvania, to request an advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. The Borough and the Hollidaysburg Area Public Library (“the Library”) filed a joint application and were awarded a Keystone Recreation Park and Conservation Fund Grant (“the Grant”) in the amount of $575,000.00 through the office of the Commonwealth Libraries. The Borough and the Library were notified of the award of the Grant in January 2010. The Grant is to be utilized in the construction of a proposed new building (“the Building”) to house the Library. You state that the Grant requires that the Borough, and not the Library, shall be the grantee. The Grant further requires that the Borough shall be responsible for compliance with all terms of the Grant and sign all construction documents for the erection of the Building. You state that if the Borough accepts the Grant and proceeds with the Building’s construction, the Borough will obligate itself to certain conditions regarding the payment in full of Building construction contracts, the use and possession Dorezas, 10-589 June 23, 2010 Page 2 of the Building, and the availability of sufficient funds for the operation and maintenance of the Library in future years. The estimated cost to construct the Building is $3,721,700.00. The Library is raising all of the funds for the Building project, less the amount of the Grant. The Library will own the Building, which will be constructed on land owned by the Library. You state that the Library is a 501(c)(3) non-profit entity. Mr. McLanahan’s spouse currently serves as a volunteer on the Library’s fund- raising campaign and has solicited individuals to make contributions or pledges to the Building project. Mr. McLanahan’s spouse is not a member of the Library’s Board of Directors and does not serve on any committee of the Library. Based upon the above submitted facts, you ask whether Mr. McLanahan would have a conflict of interest with regard to voting as to whether to enter into the construction contract for the Building and accept the Grant. 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 Borough Council Member, Mr. McLanahan is a public official as that term is defined in the Ethics Act, and therefore he is 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 Dorezas, 10-589 June 23, 2010 Page 3 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. "Immediate family." A parent, spouse, child, brother or sister. "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. 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. Dorezas, 10-589 June 23, 2010 Page 4 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 advocating 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, you are advised as follows. Mr. McLanahan’s spouse is a member of his “immediate family” as that term is defined in the Ethics Act. 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, Mr. McLanahan would have a conflict of interest in matters before Borough Council that would financially impact him, his spouse, or a business with which he or his spouse is associated. In each instance of a conflict of interest, Mr. McLanahan would be required to abstain 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. Based upon the submitted facts, the Library is not a business with which Mr. McLanahan’s spouse is associated. The aforesaid volunteer service of Mr. McLanahan’s spouse would not in and of itself form the basis for a conflict of interest for Mr. McLanahan under the Ethics Act in matters pertaining to the Library. Accordingly, you are advised that absent some basis for a conflict of interest such as a private pecuniary benefit to Mr. McLanahan, 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. McLanahan from voting as to whether to enter into the construction contract for the Building and accept the Grant. The propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Borough Code. Conclusion: As a Member of Council for Hollidaysburg Borough (“Borough”), Michael W. McLanahan (“Mr. McLanahan”) 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. Mr. McLanahan’s spouse is a member of his “immediate family” as that term is defined in the Ethics Act. 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, Mr. McLanahan would have a conflict of interest in matters before Borough Council that would financially impact him, his spouse, or a business with which he or his spouse is associated. In each instance of a conflict of interest, Mr. McLanahan would be required to abstain 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. Based upon the submitted facts that: (1) the Borough and the Hollidaysburg Area Public Library (“the Library”) were awarded a Keystone Recreation Park and Conservation Fund Grant (“the Grant”) through the office of the Commonwealth Libraries to be utilized in the construction of a proposed new building (“the Building”) to house the Library; (2) Mr. McLanahan’s spouse currently serves as a volunteer on the Library’s fund-raising campaign and has solicited individuals to make contributions/pledges to the Building project; and (3) Mr. McLanahan’s spouse is not a member of the Library’s Board of Directors and does not serve on any committee of the Library, you are advised as follows. The Library is not a business with which Mr. McLanahan’s spouse is associated. The aforesaid volunteer service of Mr. Dorezas, 10-589 June 23, 2010 Page 5 McLanahan’s spouse would not in and of itself form the basis for a conflict of interest for Mr. McLanahan under the Ethics Act in matters pertaining to the Library. Absent some basis for a conflict of interest such as a private pecuniary benefit to Mr. McLanahan, 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. McLanahan from voting as to whether to enter into the construction contract for the Building and accept the Grant. 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