HomeMy WebLinkAbout10-597 Taylor
ADVICE OF COUNSEL
July 15, 2010
Richard E. Deetz, Esquire
1222 North Fifth Street
Stroudsburg, PA 18360
10-597
Dear Mr. Deetz:
This responds to your letter dated May 27, 2010, 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.C.S. § 1101 et seq., would impose any prohibitions or restrictions upon a member
and chairperson of the board of commissioners of a county housing authority, who in a
private capacity owns a one-third interest in a rental dwelling unit located in a borough
within the county, with regard to participating as a landlord of such rental dwelling unit
under the Housing Choice Voucher Program of the U.S. Department of Housing and
Urban Development as administered by the county housing authority.
Facts:
As Solicitor for the Housing Authority of Monroe County (“Housing
Authority”), you have been authorized by Sharon M. Taylor (“Ms. Taylor”), a Member
and Chairperson of the Board of Commissioners (“Board”) of the Housing Authority, to
request an advisory from the Pennsylvania State Ethics Commission on her behalf.
You have submitted facts that may be fairly summarized as follows.
You state that Ms. Taylor serves as a volunteer on the Housing Authority Board
and that she is not compensated by the Housing Authority in any manner.
Housing Authority staff administer and operate the Section 8 Housing Program,
also known as the Housing Choice Voucher Program, (hereinafter referred to as “the
Voucher Program”) of the U.S. Department of Housing and Urban Development
(“HUD”). Pursuant to the Voucher Program, an income eligible person is qualified for
the issuance of a Section 8 Voucher (“Voucher”) that enables the person to lease a
rental dwelling unit (“Unit”) in the private market with rental support from the Housing
Authority. A proposed lease under the Voucher Program is reviewed by Housing
Authority staff, and if the Unit is found to qualify, the tenant or Voucher holder pays thirty
percent of the Unit rent to the landlord, and the federal government, through the
Housing Authority, pays the remaining seventy percent of the Unit rent to the landlord.
You state that the Housing Authority administers approximately 687 Vouchers and deals
with approximately 456 landlords.
Deetz, 10-597
July 15, 2010
Page 2
Ms. Taylor owns a one-third interest in a Unit (“the Rental Unit”) located in
Stroudsburg Borough, Monroe County, Pennsylvania. It has been proposed that the
Rental Unit be leased under the Voucher Program to a tenant at rent of $700 per month,
including heat. You state that the proposed rent is fair market value for a Unit such as
the Rental Unit. You further state that Ms. Taylor has fully disclosed the proposed lease
of the Rental Unit to the entire Board and the Housing Authority staff.
Based upon the above submitted facts, you ask whether the Ethics Act would
permit Ms. Taylor to participate as a landlord of the Rental Unit under the Voucher
Program. You express your view that the leasing of a single Unit under the Voucher
Program could have a de minimis economic impact.
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 Member and Chairperson of the Housing Authority Board, Ms. Taylor is a
public official as that term is defined in the Ethics Act, and therefore she 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
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.
Deetz, 10-597
July 15, 2010
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.
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.
It is noted that the above statutory definition of the term "conflict" or "conflict of
interest" contains, in pertinent part, an exclusion referred to herein as the "de minimis
exclusion." The de minimis exclusion precludes a finding of conflict of interest as to an
action having a de minimis (insignificant) economic impact. Thus, when a matter that
would otherwise constitute a conflict of interest under the Ethics Act would have an
insignificant economic impact, a conflict would not exist and Section 1103(a) of the
Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburg, Order 900.
The Commission has determined the applicability of the de minimis exclusion on a
case-by-case basis, considering all relevant circumstances. In the past, the Commission
has found amounts ranging from $2 to approximately $500 to be de minimis. In Bixler v.
State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004), the Commonwealth Court
Deetz, 10-597
July 15, 2010
Page 4
of Pennsylvania held that a net profit in the amount of $561.77 resulting from business
transactions between a township supervisor’s employer and the township would fall
within the de minimis exclusion.
Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows:
§ 1103. Restricted activities
(f)Contract.--
No public official or public employee or
his spouse or child or any business in which the person or
his spouse or child is associated shall enter into any contract
valued at $500 or more with the governmental body with
which the public official or public employee is associated or
any subcontract valued at $500 or more with any person
who has been awarded a contract with the governmental
body with which the public official or public employee is
associated, unless the contract has been awarded through
an open and public process, including prior public notice and
subsequent public disclosure of all proposals considered and
contracts awarded. In such a case, the public official or
public employee shall not have any supervisory or overall
responsibility for the implementation or administration of the
contract. Any contract or subcontract made in violation of
this subsection shall be voidable by a court of competent
jurisdiction if the suit is commenced within 90 days of the
making of the contract or subcontract.
65 Pa.C.S. § 1103(f).
The term “contract” is defined in the Ethics Act as follows:
§ 1102. Definitions
"Contract."
An agreement or arrangement for the
acquisition, use or disposal by the Commonwealth or a
political subdivision of consulting or other services or of
supplies, materials, equipment, land or other personal or real
property. The term shall not mean an agreement or
arrangement between the State or political subdivision as one
party and a public official or public employee as the other
party, concerning his expense, reimbursement, salary, wage,
retirement or other benefit, tenure or other matters in
consideration of his current public employment with the
Commonwealth or a political subdivision.
65 Pa.C.S. § 1102.
Section 1103(f) does not operate to make contracting with the governmental
body permissible where it is otherwise prohibited. Rather, where a public official/public
employee, his spouse or child, or a business with which he, his spouse or child is
associated, is otherwise appropriately contracting with the governmental body, or
subcontracting with any person who has been awarded a contract with the
governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an
“open and public process” be observed as to the contract with the governmental body.
Section 1103(f) of the Ethics Act also provides that the public official/public employee
may not have any supervisory or overall responsibility as to the implementation or
administration of the contract with the governmental body.
Deetz, 10-597
July 15, 2010
Page 5
In applying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
The Ethics Act itself would not prohibit Ms. Taylor, in her private capacity, from
participating as a landlord of the Rental Unit under the Voucher Program. However, in
her public capacity as a Member and Chairperson of the Board of the Housing
Authority, Ms. Taylor would have a conflict of interest under Section 1103(a) of the
Ethics Act in matter(s) pertaining to the leasing of the Rental Unit. Additionally, Ms.
Taylor generally would have a conflict of interest under Section 1103(a) of the Ethics
Act in matter(s) pertaining to Housing Authority staff member(s) involved in
administering the Voucher Program as to the Rental Unit. Cf., Woodring, Opinion 90-
001, Elisco, Opinion 00-003, and Confidential Opinion, 05-004 (involving reciprocity of
power).
The de minimis exclusion would not be applicable because, based upon the
submitted facts, Ms. Taylor owns a one-third interest in the Rental Unit, and the Rental
Unit would be rented at the rate of $700 per month including heat.
In each instance of a conflict of interest, Ms. Taylor would be required to abstain
fully from participation. The abstention requirement would not be limited to voting, but
rather would extend to any use of authority of office.
Based upon the submitted facts, it cannot be determined whether Section 1103(f)
would be applicable. Therefore, you are advised that the restrictions and requirements
of Section 1103(f) of the Ethics Act would have to be observed when applicable.
It is administratively noted that the Code of Federal Regulations provides in
pertinent part:
§ 982.161 Conflict of interest.
(a) Neither the PHA nor any of its contractors or
subcontractors may enter into any contract or
arrangement in connection with the tenant-based
programs in which any of the following classes of
persons has any interest, direct or indirect, during
tenure or for one year thereafter:
(1) Any present or former member or officer of the
PHA (except a participant commissioner);
(2) Any employee of the PHA, or any contractor,
subcontractor or agent of the PHA, who
formulates policy or who influences decisions with
respect to the programs;
(3) Any public official, member of a governing body,
or State or local legislator, who exercises
functions or responsibilities with respect to the
programs; or
(4) Any member of the Congress of the United
States.
(b) Any member of the classes described in paragraph
(a) of this section must disclose their interest or
prospective interest to the PHA and HUD.
Deetz, 10-597
July 15, 2010
Page 6
(c) The conflict of interest prohibition under this section
may be waived by the HUD field office for good
cause.
24 C.F.R. § 982.161.
Because this Advice may not interpret the above quoted provision of the Code of
Federal Regulations, it is suggested that Ms. Taylor seek legal advice in that regard.
The propriety of the proposed conduct has only been addressed under the Ethics
Act; the applicability of any other statute, code, ordinance, regulation or other code of
conduct other than the Ethics Act has not been considered in that they do not involve an
interpretation of the Ethics Act. Specifically not addressed herein is the applicability of
the Housing Authorities Law or the Code of Federal Regulations.
Conclusion:
As a Member and Chairperson of the Board of Commissioners
(“Board”) of the Housing Authority of Monroe County (“Housing Authority”), Sharon M.
Taylor (“Ms. Taylor”) 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) Housing Authority staff administer and operate the Section 8
Housing Program, also known as the Housing Choice Voucher Program, (hereinafter
referred to as “the Voucher Program”) of the U.S. Department of Housing and Urban
Development; (2) pursuant to the Voucher Program, an income eligible person is
qualified for the issuance of a Section 8 Voucher (“Voucher”) that enables the person to
lease a rental dwelling unit (“Unit”) in the private market with rental support from the
Housing Authority; (3) a proposed lease under the Voucher Program is reviewed by
Housing Authority staff, and if the Unit is found to qualify, the tenant or Voucher holder
pays thirty percent of the Unit rent to the landlord, and the federal government, through
the Housing Authority, pays the remaining seventy percent of the Unit rent to the
landlord; (4) Ms. Taylor owns a one-third interest in a Unit (“the Rental Unit”) located in
Stroudsburg Borough, Monroe County, Pennsylvania; (5) it has been proposed that the
Rental Unit be leased under the Voucher Program to a tenant at rent of $700 per month,
including heat; (6) the proposed rent is fair market value for a Unit such as the Rental
Unit; and (7) Ms. Taylor has fully disclosed the proposed lease of the Rental Unit to the
entire Board and the Housing Authority staff, you are advised as follows. The Ethics Act
itself would not prohibit Ms. Taylor, in her private capacity, from participating as a
landlord of the Rental Unit under the Voucher Program. However, in her public capacity
as a Member and Chairperson of the Board of the Housing Authority, Ms. Taylor would
have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining
to the leasing of the Rental Unit. Additionally, Ms. Taylor generally would have a
conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining to
Housing Authority staff member(s) involved in administering the Voucher Program as to
the Rental Unit. The “de minimis exclusion” to the definition of “conflict” or “conflict of
interest” as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, would not be
applicable because, based upon the submitted facts, Ms. Taylor owns a one-third
interest in the Rental Unit, and the Rental Unit would be rented at the rate of $700 per
month including heat. In each instance of a conflict of interest, Ms. Taylor would be
required to abstain fully from participation. The abstention requirement would not be
limited to voting, but rather would extend to any use of authority of office. The
restrictions and requirements of Section 1103(f) of the Ethics Act would have to be
observed when applicable. It is suggested that Ms. Taylor seek legal advice as to the
applicability of the Code of Federal Regulations to the proposed conduct. 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
Deetz, 10-597
July 15, 2010
Page 7
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