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HomeMy WebLinkAbout11-555 Flatt ADVICE OF COUNSEL October 6, 2011 Dr. Ronald E. Flatt 315 North Duffy Road Butler, PA 16001 11-555 Dear Dr. Flatt: This responds to your letter dated August 17, 2011 (postmarked August 23, 2011, and received August 25, 2011), 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 township supervisor with regard to participating in matters pertaining to the township ordinance that regulates mineral extraction, when the township supervisor’s mother has received an inquiry about leasing her property to a horizontal deep gas extraction company. Facts: You request an advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. You are a Supervisor for Center Township (“Township”), located in Butler County, Pennsylvania. You state that early this year, the Township Board of Supervisors, generally compelled by activity generated by Marcellus Shale extraction, began the task of updating the Township ordinance that regulates mineral extraction. The aforesaid task is near completion. Your mother recently informed you that she had received a letter dated June 16, 2011, which inquired as to whether she had any desire to lease her property to a horizontal deep gas extraction company. You state that your mother had not answered the aforesaid inquiry as of the date you submitted your advisory request. Based upon the above submitted facts, you seek guidance as to whether the Ethics Act would impose any prohibitions or restrictions upon you with regard to participating in matter(s) pertaining to the Township ordinance that regulates mineral extraction. 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 Flatt, 11-555 October 6, 2011 Page 2 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 Township Supervisor, you are a public official as that term is defined in the Ethics Act, and therefore you are 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. 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 Flatt, 11-555 October 6, 2011 Page 3 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. 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. In applying the above provisions of the Ethics Act to the submitted facts, you are advised as follows. Your mother is a member of your “immediate family” as that term is defined by the Ethics Act. You generally would have a conflict of interest under Section 1103(a) of Flatt, 11-555 October 6, 2011 Page 4 the Ethics Act in matters that would financially impact you, a member of your immediate family such as your mother, or a business with which you or a member of your immediate family is associated. In order to violate Section 1103(a) of the Ethics Act, a public official/public employee “must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit.” Kistler v. State Ethics Commission, Pa. , , 22 A.3d 223, 231 (2011). Therefore, under the submitted facts, you would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by participating in matter(s) pertaining to the Township ordinance that regulates mineral extraction unless you would be consciously aware of a private pecuniary benefit for your mother, such as a financial impact on potential or actual gas extraction lease transaction(s) involving your mother, and your official action would constitute one or more specific steps to attain that benefit. Even if, by participating in matter(s) pertaining to the Township ordinance that regulates mineral extraction, you would be taking official action to attain such a pecuniary benefit, you nevertheless would not transgress Section 1103(a) of the Ethics Act if one of the two exclusions to the statutory definition of the term "conflict" or "conflict of interest" (referred to herein as the "de minimis exclusion" and the "class/subclass exclusion") would be applicable. Based upon the submitted facts, it cannot be conclusively determined whether either of the exclusions would be applicable. Therefore, this advisory must be limited to providing the following general advice as to the exclusions. The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. See, Kolb, Order 1322; Schweinsburg, Order 900. The Commission determines 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. See, Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004). In order for the class/subclass exclusion to apply, two criteria must be met: (1) the affected public official/public employee, immediate family member, or business with which the public official/public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official/public employee, immediate family member, or business with which the public official/public employee or immediate family member is associated must be affected "to the same degree" (in no way differently) than the other members of the class/subclass. 65 Pa.C.S. § 1102; see, Kablack, Opinion 02-003; Rubenstein, Opinion 01-007. The first criterion of the exclusion is satisfied where the members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual/business in question and the other members of the class/subclass are reasonably affected to the same degree by the proposed action. Kablack, supra. In order for the class/subclass exclusion to apply under the submitted facts, your mother would have to be part of an appropriate subclass that would include at least one other property owner: (1) who would be similarly situated as the result of relevant shared characteristics; (2) who would not be a member of her immediate family and/or a co-owner of her property; and (3) who would be reasonably affected to the same degree by Township action as to the Township ordinance which regulates mineral extraction. Kablack, supra. 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 Flatt, 11-555 October 6, 2011 Page 5 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 Second Class Township Code. Conclusion: As a Supervisor for Center Township (“Township”), located in Butler County, Pennsylvania, 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) early this year, the Township Board of Supervisors, generally compelled by activity generated by Marcellus Shale extraction, began the task of updating the Township ordinance that regulates mineral extraction; (2) the aforesaid task is near completion; (3) your mother recently informed you that she had received a letter dated June 16, 2011, which inquired as to whether she had any desire to lease her property to a horizontal deep gas extraction company; and (4) your mother had not answered the aforesaid inquiry as of the date you submitted your advisory request, you are advised as follows. Your mother is a member of your “immediate family” as that term is defined by the Ethics Act. You generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact you, a member of your immediate family such as your mother, or a business with which you or a member of your immediate family is associated. Under the submitted facts, you would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by participating in matter(s) pertaining to the Township ordinance that regulates mineral extraction unless you would be consciously aware of a private pecuniary benefit for your mother, such as a financial impact on potential or actual gas extraction lease transaction(s) involving your mother, and your official action would constitute one or more specific steps to attain that benefit. E ven if, by participating in matter(s) pertaining to the Township ordinance that regulates mineral extraction, you would be taking official action to attain such a pecuniary benefit, you nevertheless would not transgress Section 1103(a) of the Ethics Act if one of the two exclusions to the statutory definition of the term "conflict" or "conflict of interest" (referred to herein as the "de minimis exclusion" and the "class/subclass exclusion") would be applicable. Based upon the submitted facts, it cannot be conclusively determined whether either of the exclusions would be applicable. The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. In order for the class/ subclass exclusion to apply under the submitted facts, your mother would have to be part of an appropriate subclass that would include at least one other property owner: (1) who would be similarly situated as the result of relevant shared characteristics; (2) who would not be a member of her immediate family and/or a co-owner of her property; and (3) who would be reasonably affected to the same degree by Township action as to the Township ordinance which regulates mineral extraction. 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. Flatt, 11-555 October 6, 2011 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