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HomeMy WebLinkAbout10-610 Ruggery ADVICE OF COUNSEL September 21, 2010 David A. Pertile, Esquire Hippo, Fleming & Pertile Law Offices 1218 Eleventh Avenue P.O. Box 550 Altoona, PA 16603-0550 10-610 Dear Mr. Pertile: This responds to your letter dated August 10, 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 chairman of a county airport authority board with regard to voting on issue(s) pertaining to a business (“Business 1”) that has a contract to lease ground from and provide various aviation-related services to the county airport authority when: (1) the member and chairman, in a private capacity, is a partner with his two sons in a temporary staffing service (“the Staffing Service”); (2) the Staffing Service does not and will not supply temporary workers to Business 1; (3) the Staffing Service currently supplies four temporary assembly workers to a business (“Business 2”) that supplies roof and floor truss systems for specialized applications; and (4) Business 1 and Business 2 are both subsidiaries of the same organization. Facts: You have been authorized by Donald Ruggery, Sr. (“Mr. Ruggery”), a Member and Chairman of the Board (“Board”) of the Blair County Airport Authority (“Airport Authority”), to request an advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Mr. Ruggery, in his private capacity, is a partner with his two sons in a temporary staffing service known as “Spherion Staffing” (“Spherion”). You state that Spherion currently employs approximately 1,280 individuals working on a daily basis in different locations throughout twenty-four counties in Pennsylvania. Spherion currently supplies four temporary assembly workers to a business named “Seven D Truss, LP” (“Seven D Truss”). Seven D Truss supplies roof and floor truss systems for specialized applications. Seven D Truss is a subsidiary of an organization known as “the DeGol Organization” (“the Organization”). Pertile, 10-610 September 21, 2010 Page 2 Another business named “DeGol Jet Center, Inc.” (“DeGol Jet Center”) is also a subsidiary of the Organization. DeGol Jet Center provides air charter and fixed base operation services. You state that Spherion does not and will not supply temporary workers to DeGol Jet Center. You state that neither Mr. Ruggery nor any business in which he is involved has any further relationship with the Organization or any of its subsidiaries. You further state that it is anticipated that Spherion’s relationship with Seven D Truss and/or the Organization will neither significantly increase nor decrease in the future. You note that Mr. Ruggery considers certain members of the DeGol family to be among his friends and acquaintances. At a recent public meeting, the Airport Authority Board voted to enter into a contract (“the Contract”) with DeGol Jet Center. Pursuant to the Contract, DeGol Jet Center will lease ground from the Airport Authority and provide various aviation-related services at the Altoona-Blair County Airport. You state that Mr. Ruggery abstained from voting on the Contract due to allegations from members of the public that he had ethical conflicts. You ask whether the Ethics Act would prohibit Mr. Ruggery from voting on future issues involving DeGol Jet Center. It is administratively noted that according to Pennsylvania Department of State records, Seven D Truss is a limited partnership of which the Organization is the only listed partner. DeGol Jet Center is a corporation. 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 Chairman of the Airport Authority Board, Mr. Ruggery 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 Pertile, 10-610 September 21, 2010 Page 3 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 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. "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 Pertile, 10-610 September 21, 2010 Page 4 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. The use of authority of office is not limited merely to voting, but extends 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. 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. 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. 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. You are advised that Spherion is a business with which Mr. Ruggery and his two sons are associated in their capacities as owners. Pursuant to Section 1103(a) of the Ethics Act, in his capacity as a Member and Chairman of the Airport Authority Board, Mr. Ruggery generally would have a conflict of interest in matters that would financially impact him, his son(s), Spherion, or Spherion’s customer(s)/client(s), including but not limited to Seven D Truss. See, Kannebecker, supra; Miller, supra. In response to your specific question, you are advised as follows. The submitted fact that Seven D Truss and DeGol Jet Center are both subsidiaries of the Organization in and of itself would not form the basis of a conflict of interest under the Ethics Act for Mr. Ruggery in matters before the Airport Authority Board pertaining to DeGol Jet Center. See, Confidential Opinion, 92-003; cf., Routch, Advice 05-511; Ocker, Advice 94-600; Lowery, Advice 93-559. Accordingly, absent some basis for a conflict of interest such as a private pecuniary benefit to Mr. Ruggery, Mr. Ruggery’s son(s), Spherion, or Spherion’s customer(s)/client(s), Section 1103(a) of the Ethics Act would not restrict Mr. Ruggery from voting on issue(s) before the Airport Authority Board Pertile, 10-610 September 21, 2010 Page 5 pertaining to DeGol Jet Center provided that the latter is a de facto separate corporate entity. The propriety of the proposed conduct has only been addressed under the Ethics Act. Conclusion: As a Member and Chairman of the Board (“Board”) of the Blair County Airport Authority (“Airport Authority”), Donald Ruggery, Sr. (“Mr. Ruggery”) 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. Ruggery, in his private capacity, is a partner with his two sons in a temporary staffing service known as “Spherion Staffing” (“Spherion”); (2) Spherion currently supplies four temporary assembly workers to a business named “Seven D Truss, LP” (“Seven D Truss”); (3) Seven D Truss supplies roof and floor truss systems for specialized applications; (4) Seven D Truss is a subsidiary of an organization known as “the DeGol Organization” (“the Organization”); (5) another business named “DeGol Jet Center, Inc.” (“DeGol Jet Center”) is also a subsidiary of the Organization; (6) Spherion does not and will not supply temporary workers to DeGol Jet Center; (7) neither Mr. Ruggery nor any business in which he is involved has any further relationship with the Organization or any of its subsidiaries; (8) it is anticipated that Spherion’s relationship with Seven D Truss and/or the Organization will neither significantly increase nor decrease in the future; (9) Mr. Ruggery considers certain members of the DeGol family to be among his friends and acquaintances; (10) at a recent public meeting, the Airport Authority Board voted to enter into a contract (“the Contract”) with DeGol Jet Center by which DeGol Jet Center will lease ground from the Airport Authority and provide various aviation-related services at the Altoona-Blair County Airport; and (11) Mr. Ruggery abstained from voting on the Contract due to allegations from members of the public that he had ethical conflicts, you are advised as follows. Spherion is a business with which Mr. Ruggery and his two sons are associated in their capacities as owners. Pursuant to Section 1103(a) of the Ethics Act, in his capacity as a Member and Chairman of the Airport Authority Board, Mr. Ruggery generally would have a conflict of interest in matters that would financially impact him, his son(s), Spherion, or Spherion’s customer(s)/client(s), including but not limited to Seven D Truss. The submitted fact that Seven D Truss and DeGol Jet Center are both subsidiaries of the Organization in and of itself would not form the basis of a conflict of interest under the Ethics Act for Mr. Ruggery in matters before the Airport Authority Board pertaining to DeGol Jet Center. Absent some basis for a conflict of interest such as a private pecuniary benefit to Mr. Ruggery, Mr. Ruggery’s son(s), Spherion, or Spherion’s customer(s)/client(s), Section 1103(a) of the Ethics Act would not restrict Mr. Ruggery from voting on issue(s) before the Airport Authority Board pertaining to DeGol Jet Center provided that the latter is a de facto separate corporate entity. 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. Pertile, 10-610 September 21, 2010 Page 6 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