HomeMy WebLinkAbout12-514
ADVICE OF COUNSEL
March 7, 2012
12-514
This responds to your letter of January 17, 2012 (postmarked January 20, 2012,
and received January 23, 2012), by which you requested 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 a Public
Official A who serves on a three-Member Governmental Body B with regard to
participating in a public hearing or vote on a C for two Ds, where: (1) the Ds have
different owners; (2) one of the Ds is owned by the Public Official A’s [various in-laws],
who also own a family business that employs the Public Official A; and (3) the Ds are E
with each other and with the Public Official A’s Relative F’s and Relative G’s H.
Facts:
As a Public Official A for Political Subdivision I, you request a confidential
advisory from the Pennsylvania State Ethics Commission based upon the following
submitted facts.
The Political Subdivision I Governmental Body B (hereinafter, “the Board”)
consists of three Members. The Board has received a C for two Ds (hereinafter referred
to as “D-1” and “D-2”). D-1 includes approximately [number] Js. D-2 includes [number]
Js. D-1 and D-2 are K. The C requests L, which, if approved, could allow M on
approximately [number] Ns.
D-1 and D-2 have different owners. D-2 is owned by your [various in-laws]
(hereinafter collectively referred to as “the In-Laws”) who also own a family business
(hereinafter referred to as “the Family Business”) that employs you. Additionally, D-1
and D-2 are E with each other and with your Relative F’s and Relative G’s H.
The Board has the authority to approve or deny the C. A public hearing has
been scheduled on the C for [date].
You pose the following questions:
(1) Whether, pursuant to the Ethics Act, you would be permitted to participate
in any public hearing or vote on the C;
(2) If you would have a conflict of interest as to the C, whether you would be
required to announce such conflict at a public meeting; and
Confidential Advice, 12-514
March 7, 2012
Page 2
(3) If you would have a conflict of interest as to the C, and the other two
Board Members would deadlock as to the C, whether you would be
permitted to state your conflict and then vote to break the tie vote.
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.
In this regard it is noted that the facts that you have submitted refer to your
Relative F’s and Relative G’s “H,” without specifying the applicable meaning of that
term. Given the context of your inquiry, this Advice assumes that the applicable
meaning refers to an ownership interest of your Relative F and Relative G.
As a Public Official A for Political Subdivision I, 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
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:
Confidential Advice, 12-514
March 7, 2012
Page 3
§ 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.
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.
The Pennsylvania Supreme Court has held that 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).
A conflict of interest does not exist if one of the two exclusions to the Ethics Act’s
definition of the term "conflict" or "conflict of interest" (referred to herein as the "de
minimis exclusion" and the "class/subclass exclusion") is applicable.
Confidential Advice, 12-514
March 7, 2012
Page 4
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 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 Sections 1103(a) and 1103(j) of the Ethics Act to your inquiry, you are
advised as follows.
Your Relative F is a member of your immediate family as that term is defined by
the Ethics Act. Your Relative G and the In-Laws are not members of your immediate
family. (See, Pulice v. State Ethics Commission, 713 A.2d 161 (Pa. Cmwlth. 1998),
allocatur denied, 557 Pa. 642, 732 A.2d 1211 (1998)). The Family Business is a
business with which you are associated in your capacity as an employee.
Under the submitted facts, there are at least two financial impacts of the C that
would potentially form the basis for a conflict of interest under the Ethics Act.
First, it appears that the C would financially impact your Relative F--a member of
your immediate family--as an owner of O that is E to both D-1 and D-2. The submitted
facts do not quantify such financial impact. The submitted facts do not provide
information as to any other E Os. Based upon the submitted facts, a conclusive
determination cannot be made as to whether the de minimis exclusion or class/subclass
exclusion would be applicable as to the financial impact of the C upon your Relative F.
However, you are advised that as co-owners of their H, your Relative F and Relative G
would not constitute a class/subclass so as to trigger applicability of the class/subclass
exclusion. In order for the class/subclass exclusion to be applicable as to the economic
impact upon your Relative F, your Relative F would have to be part of an appropriate
subclass that would include at least one other O owner: (1) who would not be a
member of your immediate family or a co-owner of your Relative F’s O; (2) who would
be similarly situated as the result of relevant shared characteristics; and (3) who would
be reasonably affected to the same degree by the Board’s action as to the C.
Second, the C clearly would financially impact the In-Laws who own both D-2
and the Family Business where you are employed. Although the In-Laws are not
Confidential Advice, 12-514
March 7, 2012
Page 5
members of your immediate family, they presumably exercise authority over your
employment with the Family Business. Per Pennsylvania State Ethics Commission
precedent, a public official/public employee generally would have a conflict of interest in
matters pertaining to a person who, in a different capacity, has authority or control over
the public official/public employee. See, Confidential Opinion, 05-004; Elisco, Opinion
00-003; Woodring, Opinion 90-001 (involving reciprocity of power).
Based upon the submitted facts, you are advised that you would have a conflict
of interest and would transgress Section 1103(a) of the Ethics Act by participating in
your official capacity in matter(s) pertaining to the C for D-1 and/or D-2, to the extent
that: (1) you would be consciously aware of a private pecuniary benefit for yourself
(such as with respect to your employment), a member of your immediate family (such
as your Relative F), or a business with which you or a member of your immediate family
is associated (such as the Family Business), and your action would constitute one or
more specific steps to attain that benefit (Kistler, supra); and (2) at least one financial
impact forming the basis for a conflict of interest would not fall within either the de
minimis exclusion or the class/subclass exclusion .
In each instance of a conflict of interest, you would be required to abstain from
participation in your official capacity. The requirement to abstain would preclude
participation in your official capacity in a public hearing on the C. The requirement to
abstain would also preclude participation in a Board vote on the C, unless a statutory
exception of Section 1103(j) of the Ethics Act would be applicable. Because the Board
consists of three Members, if the other two Board Members would cast opposing votes,
you would be permitted to vote to break the tie vote as long as you would have initially
abstained and fully satisfied the disclosure requirements of Section 1103(j) of the Ethics
Act. See, Pavlovic, Opinion 02-005.
Based upon the facts that have been submitted, this Advice has addressed the
applicability of Sections 1103(a) and 1103(j) of the Ethics Act only. It is noted that
Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer
or give to a public official/public employee 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.
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
P.
Conclusion:
As a Public Official A for Political Subdivision I, 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) the Political
Subdivision I Governmental Body B (hereinafter, “the Board”) consists of three
Members; (2) the Board has received a C for two Ds (hereinafter referred to as “D-1”
and “D-2”); (3) D-1 includes approximately [number] Js, and D-2 includes [number] Js;
(4) D-1 and D-2 are K; (5) the C requests L, which, if approved, could allow M on
approximately [number] Ns; (6) D-1 and D-2 have different owners; (7) D-2 is owned by
your [various in-laws] (hereinafter collectively referred to as “the In-Laws”) who also own
a family business (hereinafter referred to as “the Family Business”) that employs you;
(8) D-1 and D-2 are E with each other and with your Relative F’s and Relative G’s H; (9)
the Board has the authority to approve or deny the C; and (10) a public hearing has
been scheduled on the C for [date], you are advised as follows.
Confidential Advice, 12-514
March 7, 2012
Page 6
Your Relative F is a member of your immediate family as that term is defined by
the Ethics Act. Your Relative G and the In-Laws are not members of your immediate
family. The Family Business is a business with which you are associated in your
capacity as an employee. You would have a conflict of interest and would transgress
Section 1103(a) of the Ethics Act by participating in your official capacity in matter(s)
pertaining to the C for D-1 and/or D-2, to the extent that: (1) you would be consciously
aware of a private pecuniary benefit for yourself (such as with respect to your
employment), a member of your immediate family (such as your Relative F), or a
business with which you or a member of your immediate family is associated (such as
the Family Business), and your action would constitute one or more specific steps to
attain that benefit; and (2) at least one financial impact forming the basis for a conflict of
interest would not fall within either the de minimis exclusion or the class/subclass
exclusion to the definition of “conflict” or “conflict of interest” set forth at Section 1102 of
the Ethics Act, 65 Pa.C.S. § 1102 .
In each instance of a conflict of interest, you would be required to abstain from
participation in your official capacity. The requirement to abstain would preclude
participation in your official capacity in a public hearing on the C. The requirement to
abstain would also preclude participation in a Board vote on the C, unless a statutory
exception of Section 1103(j) of the Ethics Act would be applicable. Because the Board
consists of three Members, if the other two Board Members would cast opposing votes,
you would be permitted to vote to break the tie vote as long as you would have initially
abstained and fully satisfied the disclosure requirements of Section 1103(j) of the Ethics
Act.
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