HomeMy WebLinkAbout11-545 CONFIDENTIAL
ADVICE OF COUNSEL
August 24, 2011
11-545
This responds to your letter dated June 8, 2011, and the letter of [name of
attorney] dated July 22, 2011, requesting a confidential 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 borough
council members with regard to receiving reimbursement from the borough for out-of-
pocket expenses that such council members incur for medical insurance or life
insurance coverage provided by an employer or through a union retirement plan.
Facts:
As Solicitor for [name of borough] (“Borough”), located in [name of
county], Pennsylvania, you have been authorized by certain Members of Borough
Council (hereinafter referred to as “the Council Members”) to request a confidential
advisory from the Pennsylvania State Ethics Commission on their behalf. You have
submitted facts that may be fairly summarized as follows.
A prior Borough Council enacted a resolution setting forth a policy that the
Borough would provide insurance coverage to the Members of Borough Council and the
Borough Mayor up to a maximum cost of [amount] per year per elected official. Each of
the Council Members is provided medical insurance or life insurance coverage by an
employer or through a union retirement plan. The Council Members have requested
that in lieu of being enrolled in the Borough insurance plan, the Borough reimburse each
of the Council Members for out-of-pocket expenses incurred for receiving the aforesaid
medical insurance or life insurance coverage.
Based upon the above submitted facts, you ask whether the Ethics Act would
permit each of the Council Members to be reimbursed by the Borough for out-of-pocket
expenses incurred for medical insurance or life insurance coverage provided by an
employer or through a union retirement plan.
You have proffered your own analysis of the legal issues that you have raised.
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
Confidential Advice, 11-545
August 24, 2011
Page 2
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 Members of Borough Council, the Council Members on whose behalf you
have inquired are public officials subject to 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.
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
Confidential Advice, 11-545
August 24, 2011
Page 3
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.
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.
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.
Although the State Ethics Commission does not have the statutory jurisdiction to
interpret the Borough Code, Section 46202(37) of the Borough Code must be
considered in order to determine whether the aforesaid proposed reimbursement by the
Borough of out-of-pocket expenses incurred by the Council Members for medical
insurance or life insurance coverage provided by an employer or through a union
retirement plan would be considered a private pecuniary benefit without authorization in
law. See, Thompson, Opinion 99-005.
Section 46202(37) of the Borough Code provides:
§ 46202. Specific powers
The powers of the borough shall be vested in the
corporate authorities. Among the specific powers of the
borough shall be the following, and in the exercise of any of
such powers involving the enactment of any ordinance or the
making of any regulation, restriction or prohibition, the
borough may provide for the enforcement thereof and may
prescribe penalties for the violation thereof or for the failure
to conform thereto:
….
(37) OTHER INSURANCE. To appropriate such
amount as may be necessary to secure insurance or
compensation for volunteer firemen of companies duly
recognized by the borough, by motion or resolution, killed or
injured while going to, returning from, or attending fires, or
while performing their duties as special fire police. To make
contracts of insurance with any insurance company,
association or exchange, authorized to transact business in
the Commonwealth, insuring borough employes, or mayor
and council, or any class, or classes thereof, or their
Confidential Advice, 11-545
August 24, 2011
Page 4
dependents, under a policy or policies of insurance covering
life, health, hospitalization, medical and surgical service
and/or accident insurance, and to contract with any such
company, granting annuities or pensions, for the pensioning
of borough employes, or any class, or classes thereof, and
to agree to pay part or all of the premiums or charges for
carrying such contracts, and to appropriate moneys from the
borough treasury for such purposes. To make contracts with
any insurance company, association or exchange,
authorized to transact business in this Commonwealth,
insuring any public liability of the borough, and to appropriate
moneys from the borough treasury for such purpose.
….
53 P.S. § 46202(37) (Emphasis added).
On its face, Section 46202(37) of the Borough Code expressly authorizes a
borough to pay part or all of the premiums/charges for medical insurance or life
insurance coverage provided to a borough council member under insurance contracts
made by the borough. There is no authorization in law for a borough to pay part or all of
the premiums/charges for medical insurance or life insurance coverage provided to a
borough council member under insurance contracts not made by the borough.
Therefore, the Council Members’ receipt of reimbursement from the Borough for out-of-
pocket expenses incurred for medical insurance or life insurance coverage under
insurance contracts not made by the borough--such as, for example, coverage provided
by a private employer or union retirement plan--would constitute a private pecuniary
benefit and would transgress Section 1103(a) of the Ethics Act to the extent the
remaining element of a use of authority of office would occur.
The propriety of the proposed conduct has only been addressed under the Ethics
Act.
Conclusion:
The Members of Borough Council for [name of borough]
(“Borough”) on whose behalf you have inquired (hereinafter referred to as “the Council
Members”) are public officials 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) a prior Borough Council enacted a resolution setting forth a
policy that the Borough would provide insurance coverage to the Members of Borough
Council and the Borough Mayor up to a maximum cost of [amount] per year per elected
official; (2) each of the Council Members is provided medical insurance or life insurance
coverage by an employer or through a union retirement plan; and (3) the Council
Members have requested that in lieu of being enrolled in the Borough insurance plan,
the Borough reimburse each of the Council Members for out-of-pocket expenses
incurred for receiving the aforesaid medical insurance or life insurance coverage, you
are advised as follows. On its face, Section 46202(37) of the Borough Code, 53 P.S. §
46202(37), expressly authorizes a borough to pay part or all of the premiums/charges
for medical insurance or life insurance coverage provided to a borough council member
under insurance contracts made by the borough. There is no authorization in law for a
borough to pay part or all of the premiums/charges for medical insurance or life
insurance coverage provided to a borough council member under insurance contracts
not made by the borough. Therefore, the Council Members’ receipt of reimbursement
from the Borough for out-of-pocket expenses incurred for medical insurance or life
insurance coverage under insurance contracts not made by the borough--such as, for
example, coverage provided by a private employer or union retirement plan--would
constitute a private pecuniary benefit and would transgress Section 1103(a) of the
Ethics Act to the extent the remaining element of a use of authority of office would
occur. Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Confidential Advice, 11-545
August 24, 2011
Page 5
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