The URL can be used to link to this page

Home My WebLink About12-507 Marshall ADVICE OF COUNSEL February 6, 2012 Alvin B. Marshall, Esquire Lipkin, Marshall, Bohorad & Thornburg, P.C. 1940 West Norwegian Street P.O. Box 1280 Pottsville, PA 17901-7280 12-507 Dear Mr. Marshall: This responds to your letters dated December 20, 2011, and December 23, 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 an individual who serves as a county commissioner with regard to performing the duties of his public position when: (1) as a county commissioner, the individual is a director of a nursing home owned and operated by the county; and (2) in a private capacity, the individual is a director of a nursing home owned and operated by a diocese of the Roman Catholic Church. Facts: You have been authorized by George F. Halcovage, Jr. (“Mr. Halcovage”) to request an advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. On November 8, 2011, Mr. Halcovage was elected as a County Commissioner for Schuylkill County (“County”), Pennsylvania. The County owns and operates a critical care facility named “Rest Haven Nursing Home” (“Rest Haven”), which is licensed by the Commonwealth of Pennsylvania (“Commonwealth”). As a County Commissioner, Mr. Halcovage is a director of Rest Haven. In a private capacity, Mr. Halcovage is a director of a critical care nursing facility named “Seton Manor Nursing Home” (“Seton Manor”), which is licensed by the Commonwealth. Seton Manor is located in the County and is owned and operated by the Diocese of Allentown of the Roman Catholic Church. You state that Rest Haven and Seton Manor compete for patients. Each of the aforesaid nursing homes advertises for patients and has private pay, Medicaid, and Medicare Part A patients. Marshall, 12-507 February 6, 2012 Page 2 Based upon the above submitted facts, you request an advisory as to whether Mr. Halcovage would have a conflict of interest under the Ethics Act with regard to performing the duties of his position as a County Commissioner while simultaneously serving as a director of Seton Manor in his private capacity. 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 County Commissioner, Mr. Halcovage 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 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 Marshall, 12-507 February 6, 2012 Page 3 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. 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, the 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. 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 Marshall, 12-507 February 6, 2012 Page 4 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 applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. Seton Manor is a business with which Mr. Halcovage is associated in his capacity as a 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, Mr. Halcovage would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act in his capacity as a County Commissioner as to matter(s) that would financially impact Seton Manor, whether directly or indirectly, such as through a detriment to Rest Haven as a business competitor. See, Pepper, Opinion 87-008. As noted above, in each instance of a conflict of interest, Mr. Halcovage 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. 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 County Code. Conclusion: Based upon the submitted facts that: (1) on November 8, 2011, George F. Halcovage, Jr. (“Mr. Halcovage”) was elected as a County Commissioner for Schuylkill County (“County”), Pennsylvania; (2) the County owns and operates a critical care facility named “Rest Haven Nursing Home” (“Rest Haven”), which is licensed by the Commonwealth of Pennsylvania (“Commonwealth”); (3) as a County Commissioner, Mr. Halcovage is a director of Rest Haven; (4) in a private capacity, Mr. Halcovage is a director of a critical care nursing facility named “Seton Manor Nursing Home” (“Seton Manor”), which is licensed by the Commonwealth; (5) Seton Manor is located in the County and is owned and operated by the Diocese of Allentown of the Roman Catholic Church; (6) Rest Haven and Seton Manor compete for patients; and (7) each of the aforesaid nursing homes advertises for patients and has private pay, Medicaid, and Medicare Part A patients, you are advised as follows. As a County Commissioner, Mr. Halcovage 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. Seton Manor is a business with which Mr. Halcovage is associated in his capacity as a 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, Mr. Halcovage would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act in his capacity as a County Commissioner as to matter(s) that would financially impact Seton Manor, whether directly or indirectly, such as through a detriment to Rest Haven as a business competitor. In each instance of a conflict of interest, Mr. Halcovage 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 Marshall, 12-507 February 6, 2012 Page 5 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