HomeMy WebLinkAbout10-609 Evans
ADVICE OF COUNSEL
September 10, 2010
Tracey Evans
614 Whitney Avenue
Wilkinsburg, PA 15221
10-609
Dear Ms. Evans:
This responds to your letters dated July 14, 2010, and August 3, 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 present any prohibitions or restrictions upon a borough
council member with regard to performing the duties of such office when, in a private
capacity, she is employed as the executive director of a non-profit community
development corporation.
Facts:
As a Member of Council for the Borough of Wilkinsburg (“the Borough”),
you request an advisory from the Pennsylvania State Ethics Commission. You have
submitted facts, the material portion of which may be fairly summarized as follows.
On June 1, 2010, you were hired as the Executive Director and first employee of
a non-profit corporation named “Wilkinsburg Community Development Corporation”
(“the CDC”). You state that you previously served in a volunteer capacity as the
Secretary of the CDC’s Board of Directors (“Board”) and worked part-time as a
legislative assistant. You have submitted a copy of the CDC’s Articles of Incorporation,
which document is incorporated herein by reference.
The CDC is governed by a ten-Member Board. The Executive Director is a
salaried employee of the CDC and is not a voting Member of the Board. You state that
at the present time, the Borough Mayor serves as President of the CDC and another
Borough Council Member serves on the Board.
You state that the CDC was formed as part of a community effort to apply to the
Pennsylvania Department of Community and Economic Development (“DCED”) New
Communities – Main Street Program. You state that the Borough did not take any
formal action to form the CDC. Current CDC projects focus on the revitalization of the
Wilkinsburg Business District. Funding for the CDC currently comes primarily from a
Neighborhood Partnership Program grant, and additional funding comes from donations
from local businesses and residents, Board Member contributions, and restricted grants
from foundations or the Commonwealth. You state that the Borough has made no
financial contributions to the CDC.
Evans, 10-609
September 10, 2010
Page 2
You state that the Borough and the CDC have a cooperation agreement (“the
Agreement”) regarding a façade improvement grant (“the Grant”) funded by DCED. You
have submitted a copy of the Agreement, which is incorporated herein by reference. It
is noted that pursuant to the Agreement, the Borough agrees to act as the official
applicant for funding for the Grant, and the CDC agrees to plan and implement the
façade renovation program as an independent contractor and not as an employee,
partner, or agent of the Borough. You state that the CDC administers the Grant for the
Borough and charges an application fee to local businesses, but receives no money
from the Borough or the Grant for performing such work.
Based upon the above submitted facts, you pose the following questions:
(1) Whether you would be required to abstain or recuse yourself from votes
related to the CDC or any other matter(s);
(2) Whether you would have a conflict of interest with regard to applications
for grants or funding; and
(3) Whether the State Ethics Commission would have any additional
requirements or recommendations for the instant matter.
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 initially noted that, pursuant to the same aforesaid Sections of the
Ethics Act, 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 a Borough Council Member, 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
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
Evans, 10-609
September 10, 2010
Page 3
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 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.
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.
Evans, 10-609
September 10, 2010
Page 4
A non-profit entity is a “business” as that term is defined by the Ethics Act.
Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708 (2009).
In each instance of a conflict of interest, a public official/public employee would
be required to abstain from participation, which would include voting unless one of the
statutory exceptions of Section 1103(j) of the Ethics Act would be applicable.
Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have
to be satisfied in the event of a voting conflict.
It is noted that Section 1103(a) of the Ethics Act 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, 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 client(s). Miller, Opinion 89-024;
Kannebecker, Opinion 92-010. 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.
Having established the above general principles, your questions are addressed
as follows.
In response to your first and second questions, you are advised as follows. The
CDC is a business with which you are associated in your capacity as Executive
Director. Subject to the statutory exceptions 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, in your capacity as a Borough Council Member, you would have a
conflict of interest as to any matter(s) that would financially impact you or the CDC,
including but not limited to application(s) for grants or funding. Additionally, you
generally would have a conflict of interest as to matter(s) that would affect your
superior(s) within the CDC--including but not limited to the Members of the Board and
the CDC President--because such individual(s) would exercise authority over you with
respect to your employment with the CDC. See, Confidential Opinion, 05-004; Elisco,
Opinion 00-003; Woodring, Opinion 90-001 (involving reciprocity of power).
As noted above, in each instance of a conflict of interest, you would be required
to abstain from participation, which would include voting unless one of the statutory
exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the
disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied
in the event of a voting conflict.
Your third question is general and has been addressed above to the extent that it
can be addressed.
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 the Borough of Wilkinsburg
(“Borough”), 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) on June 1, 2010, you were hired as the Executive Director and
first employee of a non-profit corporation named “Wilkinsburg Community Development
Evans, 10-609
September 10, 2010
Page 5
Corporation” (“the CDC”); (2) the CDC is governed by a ten-Member Board of Directors
(“Board”); (3) the Executive Director is a salaried employee of the CDC and is not a
voting Member of the Board; (4) at the present time, the Borough Mayor serves as
President of the CDC and another Borough Council Member serves on the Board; (5)
the CDC was formed as part of a community effort to apply to the Pennsylvania
Department of Community and Economic Development (“DCED”) New Communities –
Main Street Program; (6) the Borough did not take any formal action to form the CDC;
(7) funding for the CDC currently comes primarily from a Neighborhood Partnership
Program grant, and additional funding comes from donations from local businesses and
residents, Board Member contributions, and restricted grants from foundations or the
Commonwealth; (8) the Borough has made no financial contributions to the CDC; and
(9) the Borough and the CDC have a cooperation agreement regarding a façade
improvement grant funded by DCED, you are advised as follows. The CDC is a
business with which you are associated in your capacity as Executive Director. Subject
to the statutory exceptions 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,
in your capacity as a Borough Council Member, you would have a conflict of interest as
to any matter(s) that would financially impact you or the CDC, including but not limited
to application(s) for grants or funding. Additionally, you generally would have a conflict
of interest as to matter(s) that would affect your superior(s) within the CDC--including
but not limited to the Members of the Board and the CDC President--because such
individual(s) would exercise authority over you with respect to your employment with the
CDC. In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event
of a voting conflict. 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