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HomeMy WebLinkAbout12-524 Ewald ADVICE OF COUNSEL April 10, 2012 Carl Ewald, Esquire Law Offices of Robert W. Scott, P.C. 205 North Monroe Street P.O. Box 468 Media, PA 19063 12-524 Dear Mr. Ewald: This responds to your letter of February 15, 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 Media Borough (“Borough”) Council Member with regard to: (1) accepting gratuitous accommodations and an educational conference in the Dominican Republic from a non- profit corporation named “Fair Trade USA,” where, in June 2006, Fair Trade USA certified the Borough as the first Fair Trade Town in the United States, there is no other relationship between Fair Trade USA and the Borough, and it is not expected that the Borough will have any future business with Fair Trade USA; and (2) receiving a reimbursement of airfare for the aforesaid trip from a local non-profit corporation named “America’s First Fair Trade Town Committee (“AFFTTC”), where AFFTTC is a wholly separate corporation from Fair Trade USA and is separate from the Borough, and where the Borough has provided donations to AFFTTC in the past and expects to consider similar donations in the future. Facts: As Borough Solicitor, you have been authorized by Borough Council Member Kent Davidson (“Mr. Davidson”) to request an advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Fair Trade USA, a non-profit corporation, is the main certifier of fair trade in the United States. Fair Trade USA has certified the Borough as the first Fair Trade Town in the United States. You state that other than the aforesaid certification, there is no relationship between Fair Trade USA and the Borough. You further state that it is not expected that the Borough will have any future business with Fair Trade USA. Fair Trade USA has offered to host Mr. Davidson on an educational trip (“Trip”) to the Dominican Republic, where he would attend conferences and presentations about fair trade’s impact on poverty. You state that the Trip’s accommodations and amenities would be in rustic to primitive conditions and that the ground-based costs of the Trip Ewald, 12-524 April 10, 2012 Page 2 would be $1,225.00. Fair Trade USA has offered to cover the ground-based costs of the Trip for Mr. Davidson. Airfare is not included in the cost of the Trip. A local non-profit corporation named “America’s First Fair Trade Town Committee” (“AFFTTC”) has offered to reimburse Mr. Davidson for his airfare for the Trip. The submitted facts do not include the amount of such airfare reimbursement. You state that AFFTTC is a wholly separate corporation from Fair Trade USA and that AFFTTC is separate from the Borough. You state that Fair Trade USA and AFFTTC share information and that Fair Trade USA provides support and services to AFFTTC, including trip opportunities. The Borough has provided donations to AFFTTC in the past and expects that it will consider similar donations in the future. In particular, the Borough donated $1,000.00 to AFFTTC in both 2010 and 2011, and a donation in the amount of $2,500.00 is budgeted for 2012. Borough Council approved an additional $2,500.00 for 2012 for a fair trade concert that will be held in the Borough later this year. You state that a similar concert was held in 2008 and that in-kind support may have been provided during that concert. You state that Mr. Davidson will attend the Trip whether the costs are picked up by one or more of the non-profit organizations (Fair Trade USA or AFFTTC) or he pays for the Trip and airfare himself. Based upon the above submitted facts, you pose the following questions: (1) Whether the Ethics Act would prohibit Mr. Davidson from accepting the free accommodations and educational conference offered by Fair Trade USA in connection with the Trip; (2) Whether the Ethics Act would prohibit Mr. Davidson from accepting reimbursement from AFFTTC for airfare in connection with the Trip; and (3) Whether the acceptance of the free accommodations and educational conference offered by Fair Trade USA and/or the airfare reimbursement from AFFTTC would create a conflict of interest for Mr. Davidson that would prevent him from voting on future allocations to AFFTTC. It is administratively noted that per the Borough web site, the certification of the Borough as the first Fair Trade Town in the United States occurred in June 2006. 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. 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. If the activity in question has already occurred, the Commission may not issue an opinion/advice. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall, be addressed. Ewald, 12-524 April 10, 2012 Page 3 As a Member of Borough Council, Mr. Davidson 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 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. Ewald, 12-524 April 10, 2012 Page 4 "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. 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 as the "de minimis exclusion" and the "class/subclass exclusion") is applicable. 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. Per State Ethics Commission precedent, the Ethics Act does not prohibit a public official/public employee from accepting “no-strings-attached” gifts, transportation, lodging or hospitality (also generically referred to herein as “items”) from a donor. Cf., Cooper, Opinion 92-009. However, such item(s) received by a public official/public employee may form the basis for a conflict of interest pursuant to Section 1103(a) of the Ethics Act if the public official/public employee takes action in furtherance of the interests of the donor. While the receipt of an item of de minimis value would not, in and of itself, create a conflict of interest as to action involving the donor (see, e.g., Stieh, Advice 93-503), the decision as to whether a conflict of interest is presented by the receipt of item(s) is determined on a case-by-case basis. Recently, the Pennsylvania Supreme Court 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). Generally, when a public official or public employee has received item(s) that would form the basis for a conflict of interest under the Ethics Act, the public official/public employee must abstain from acting in matters pertaining to the donor. In the event of a voting conflict, the public official/public employee must abstain and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Regardless of whether a conflict of interest exists, depending upon the value of the item(s) received, the public official or public employee may be required to disclose his receipt of such item(s) on his Statement of Financial Interests, pursuant to Sections 1104 and 1105 of the Ethics Act, 65 Pa.C.S. §§ 1104, 1105. In addition, Sections 1103(b) and 1103(c) of the Ethics Act, 65 Pa.C.S. §§ 1103(b), (c), provide in part that no person shall offer or give to a public official/public employee anything of monetary value and no public official/public employee shall solicit Ewald, 12-524 April 10, 2012 Page 5 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. Item(s) received by a public official/public employee may form the basis for a violation of Section 1103(b) or Section 1103(c) of the Ethics Act if there is an understanding that the vote, official action or judgment of the public official/public employee will be influenced thereby. See, e.g., Kasaback, Order 993; Helsel, Order 801; Volpe, Order 579-R; and Smith, Order 578-R. Your specific questions shall now be addressed. In response to your first question, you are advised that based upon the submitted and administratively noted facts, the Ethics Act would not prohibit Mr. Davidson from accepting from Fair Trade USA the gratuitous accommodations and educational conference in connection with the Trip subject to the condition that there would be no improper influence as prohibited by Sections 1103(b)-(c) of the Ethics Act. Turning to the proposed airfare reimbursement from AFFTTC, the submitted facts do not indicate the amount of such reimbursement. Therefore, it cannot be determined with certainty whether the airfare reimbursement would fall within the de minimis exclusion to the definition of “conflict” or “conflict of interest” set forth at Section 1102 of the Ethics Act. In response to your second question, you are advised as follows. The Ethics Act would not prohibit Mr. Davidson from accepting reimbursement from AFFTTC for airfare in connection with the Trip subject to all of the following conditions: (1) either Mr. Davidson has not used the authority of his public office or confidential information accessed by being a Borough Council Member in matter(s) involving AFFTTC at time(s) when he knew or had a reasonable expectation that he would receive gratuity(ies) from AFFTTC (cf., Desmond, Opinion 08-004), or the amount of such airfare reimbursement would fall within the de minimis exclusion to the definition of “conflict” or “conflict of interest” set forth at Section 1102 of the Ethics Act; and (2) there would be no improper influence as prohibited by Sections 1103(b)-(c) of the Ethics Act. In response to your third question, you are advised as follows. The acceptance of the gratuitous accommodations and educational conference offered by Fair Trade USA would not create or form a basis for a conflict of interest for Mr. Davidson that would prevent him from voting on future allocations to AFFTTC. If Mr. Davidson would accept the airfare reimbursement from AFFTTC, then unless such reimbursement would fall within the de minimis exclusion to the definition of “conflict” or “conflict of interest” set forth at Section 1102 of the Ethics Act, Mr. Davidson would have a conflict of interest and would transgress Section 1103(a) of the Ethics Act by voting on future allocations from the Borough to AFFTTC to the extent that: (1) he would be consciously aware of a private pecuniary benefit for himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated; and (2) his action would constitute one or more specific steps to attain that benefit (Kistler, supra). Finally, it is noted that the financial disclosure requirements of Sections 1104 and 1105 of the Ethics Act must be fully satisfied by Mr. Davidson. 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 Borough Code. Conclusion: As a Member of Council for Media Borough (“Borough”), Kent Davidson (“Mr. Davidson”) 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. Based upon Ewald, 12-524 April 10, 2012 Page 6 the submitted facts that: (1) a non-profit corporation named “Fair Trade USA” certified the Borough as the first Fair Trade Town in the United States; (2) other than the aforesaid certification, there is no relationship between Fair Trade USA and the Borough, and it is not expected that the Borough will have any future business with Fair Trade USA; (3) Fair Trade USA has offered to host Mr. Davidson on an educational trip (“Trip”) to the Dominican Republic, where he would attend conferences and presentations about fair trade’s impact on poverty; (4) the ground-based costs of the Trip would be $1,225.00, and Fair Trade USA has offered to cover these costs for Mr. Davidson; (5) airfare is not included in the cost of the Trip, and a local non-profit corporation named “America’s First Fair Trade Town Committee” (“AFFTTC”) has offered to reimburse Mr. Davidson for his airfare for the Trip; (6) AFFTTC is a wholly separate corporation from Fair Trade USA, and AFFTTC is separate from the Borough; (7) Fair Trade USA and AFFTTC share information, and Fair Trade USA provides support and services to AFFTTC, including trip opportunities; and (8) the Borough has provided donations to AFFTTC in the past and expects that it will consider similar donations in the future, and additionally based upon the administratively noted fact that per the Borough web site, the certification of the Borough as the first Fair Trade Town in the United States occurred in June 2006, you are advised as follows. The Ethics Act would not prohibit Mr. Davidson from accepting from Fair Trade USA the gratuitous accommodations and educational conference in connection with the Trip subject to the condition that there would be no improper influence as prohibited by Sections 1103(b)-(c) of the Ethics Act, 65 Pa.C.S. §§ 1103(b)-(c). The Ethics Act would not prohibit Mr. Davidson from accepting reimbursement from AFFTTC for airfare in connection with the Trip subject to all of the following conditions: (1) either Mr. Davidson has not used the authority of his public office or confidential information accessed by being a Borough Council Member in matter(s) involving AFFTTC at time(s) when he knew or had a reasonable expectation that he would receive gratuity(ies) from AFFTTC, or the amount of such airfare reimbursement would fall within the de minimis exclusion to the definition of “conflict” or “conflict of interest” set forth at Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102; and (2) there would be no improper influence as prohibited by Sections 1103(b)-(c) of the Ethics Act. The acceptance of the gratuitous accommodations and educational conference offered by Fair Trade USA would not create or form a basis for a conflict of interest for Mr. Davidson that would prevent him from voting on future allocations to AFFTTC. If Mr. Davidson would accept the airfare reimbursement from AFFTTC, then unless such reimbursement would fall within the de minimis exclusion to the definition of “conflict” or “conflict of interest” set forth at Section 1102 of the Ethics Act, Mr. Davidson would have a conflict of interest and would transgress Section 1103(a) of the Ethics Act by voting on future allocations from the Borough to AFFTTC to the extent that: (1) he would be consciously aware of a private pecuniary benefit for himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated; and (2) his action would constitute one or more specific steps to attain that benefit. The financial disclosure requirements of Sections 1104 and 1105 of the Ethics Act must be fully satisfied by Mr. Davidson. 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. Ewald, 12-524 April 10, 2012 Page 7 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