HomeMy WebLinkAbout12-516 Smith
ADVICE OF COUNSEL
March 9, 2012
Galen Smith, Tyrone Township Supervisor
85 Smith Road
York Springs, PA 17372
12-516
Dear Mr. Smith:
This responds to your letter dated January 25, 2012 (postmarked January 27,
2012, and received January 30, 2012), 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 who, in a private capacity, is a local farmer, with regard to participating in or
voting on matter(s) before the township board of supervisors involving: (1) a
corporation to which the township supervisor sells most of his harvested crops, and
which is owned by two brothers (the “Brothers”) and their families; (2) another
corporation that does not have a business relationship with the township supervisor, but
that is owned by one of the Brothers and his family; or (3) an egg producer with which
the township supervisor engaged in a one-time business transaction in 2011, and which
makes its agricultural scale available as a free service to the general public for use in
weighing agricultural products.
Facts:
As a Supervisor for Tyrone Township (“Township”), you request an
advisory from the Pennsylvania State Ethics Commission based upon submitted facts
that may be fairly summarized as follows.
You are a local farmer, and you produce corn and soy beans. You primarily sell
your harvested crops to a corporation named “Agricultural Commodities, Inc.” (“ACI”),
which owns mills located in the Township. You state that the sales price for crops is set
daily using the commodity prices from the Chicago Board of Trade and that there is no
negotiation over the sales price. You are not obligated to sell crops to ACI, and ACI is
not obligated to buy crops from you. ACI typically does not have matters that come
before the Township Board of Supervisors.
ACI is owned by two brothers (the “Brothers”) and their families. One of the
Brothers and his family own another corporation named “Soy Energy, Inc.” (“Soy
Energy”). You state that you do not have a business relationship with Soy Energy. Soy
Energy has a land development plan (the “Plan”) pending before the Township.
Smith, 12-516
March 9, 2012
Page 2
While you sell most of your corn and soy beans to ACI, you state that in a one-
time transaction in 2011, you sold one trailer load of corn worth approximately
$6,000.00 to “Hillandale Gettysburg, L.P.” (“Hillandale”), an egg producer located within
the Township. Hillandale makes its agricultural scale available as a free service to the
general public for use in weighing agricultural products, and you make use of the scale.
Hillandale has a number of issues presently before the Township Board of Supervisors.
You seek guidance as to whether the Ethics Act would impose any prohibitions
or restrictions upon you with regard to participating in or voting on any matters before
the Township Board of Supervisors that would involve: (1) ACI; (2) Soy Energy--
including but not limited to the Plan; or (3) Hillandale--including but not limited to land
development, subdivision, and zoning issues.
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 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.
Smith, 12-516
March 9, 2012
Page 3
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
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.
"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.
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).
Smith, 12-516
March 9, 2012
Page 4
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 facts that you have
submitted, you are advised as follows.
A conflict of interest under Section 1103(a) of the Ethics Act may be based upon
an ongoing business relationship (Kitner, Order 1542; Burchfield, Order 1492; Johnson,
Order 1338; Confidential Opinion, 06-001; Kannebecker, Opinion 92-010; Miller,
Opinion 89-024), or a reasonable and legitimate expectation that a business relationship
will form (Gerhard, Order 1460; Mann, Opinion 07-005; Moore, Opinion 04-004;
Confidential Opinion, 00-006; Amato, Opinion 89-002). As a general rule, a conflict
would not exist as to former customer(s)/client(s), but under certain circumstances, a
conflict could exist as to former customer(s)/client(s) depending upon factors such as
the number of prior business transactions and the period of time over which such
occurred. See, Kannebecker, supra.
You have a significant, ongoing business relationship with ACI. Therefore, 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 or voting on matter(s)
before the Township Board of Supervisors involving ACI to the extent that: (1) you
would be consciously aware of a private pecuniary benefit for yourself, a member of
your immediate family, or a business with which you or a member of your immediate
family is associated; and (2) your action would constitute one or more specific steps to
attain that benefit (Kistler, supra).
Per the submitted facts, you do not have a business relationship with Soy
Energy. The submitted fact that Soy Energy is owned by one of the Brothers and his
family would not be sufficient, in and of itself, to establish a conflict of interest for you in
matter(s) before the Township Board of Supervisors involving Soy Energy. Cf., Pertile,
Advice 10-610; Ocker, Advice 94-600; see also, Confidential Opinion, 92-003.
Therefore, you are advised that you would not have a conflict of interest with regard to
matter(s) before the Township Board of Supervisors involving Soy Energy subject to the
condition that you would not be consciously aware of any private pecuniary benefit for
yourself, a member of your immediate family, or a business with which you or a member
of your immediate family is associated, and your action would not constitute one or
more specific steps to attain such a benefit (Kistler, supra).
Based upon the submitted facts that your only business transaction with
Hillandale was a one-time transaction in 2011 and that your use of Hillandale’s
agricultural scale is limited to the use Hillandale provides as a free service to the
general public, you are advised that you would not have a conflict of interest under
Section 1103(a) of the Ethics Act with regard to participating in your official capacity or
voting on matter(s) before the Township Board of Supervisors involving Hillandale. Cf.,
Kannebecker, supra; Burke, Advice 99-548.
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 Second Class Township Code.
Conclusion:
As a Supervisor for Tyrone Township (“Township”), you are a public
official subject to the provisions of the Public Official and Employee Ethics Act (“Ethics
Smith, 12-516
March 9, 2012
Page 5
Act”), 65 Pa.C.S. § 1101 et seq. Based upon the submitted facts that: (1) in a private
capacity, you are a local farmer, and you produce corn and soy beans; (2) you primarily
sell your harvested crops to a corporation named “Agricultural Commodities, Inc.”
(“ACI”), which owns mills located in the Township; (3) the sales price for crops is set
daily using the commodity prices from the Chicago Board of Trade, and there is no
negotiation over the sales price; (4) you are not obligated to sell crops to ACI, and ACI
is not obligated to buy crops from you; (5) ACI is owned by two brothers (the “Brothers”)
and their families; (6) one of the Brothers and his family own another corporation named
“Soy Energy, Inc.” (“Soy Energy”); (7) you do not have a business relationship with Soy
Energy; (8) in a one-time transaction in 2011, you sold one trailer load of corn worth
approximately $6,000.00 to “Hillandale Gettysburg, L.P.” (“Hillandale”), an egg producer
located within the Township; and (9) Hillandale makes its agricultural scale available as
a free service to the general public for use in weighing agricultural products, and you
make use of the scale, you are advised as follows.
You would have a conflict of interest and would transgress Section 1103(a) of the
Ethics Act by participating in your official capacity or voting on matter(s) before the
Township Board of Supervisors involving ACI to the extent that: (1) you would be
consciously aware of a private pecuniary benefit for yourself, a member of your
immediate family, or a business with which you or a member of your immediate family is
associated; and (2) your action would constitute one or more specific steps to attain that
benefit. The submitted fact that Soy Energy is owned by one of the Brothers and his
family would not be sufficient, in and of itself, to establish a conflict of interest for you in
matter(s) before the Township Board of Supervisors involving Soy Energy. You would
not have a conflict of interest with regard to matter(s) before the Township Board of
Supervisors involving Soy Energy subject to the condition that you would not be
consciously aware of any private pecuniary benefit for yourself, a member of your
immediate family, or a business with which you or a member of your immediate family is
associated, and your action would not constitute one or more specific steps to attain
such a benefit. Based upon the submitted facts that your only business transaction with
Hillandale was a one-time transaction in 2011 and that your use of Hillandale’s
agricultural scale is limited to the use Hillandale provides as a free service to the
general public, you are advised that you would not have a conflict of interest under
Section 1103(a) of the Ethics Act with regard to participating in your official capacity or
voting on matter(s) before the Township Board of Supervisors involving Hillandale.
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
Smith, 12-516
March 9, 2012
Page 6
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