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HomeMy WebLinkAbout13-509 Deitrick ADVICE OF COUNSEL February 26, 2013 William H. Deitrick, District Manager Union County Conservation District Union County Government Center th 155 North 15 Street Lewisburg, PA 17837 13-509 Dear Mr. Deitrick: This responds to your letters of July 20, 2012, and December 28, 2012, by which you requested an advisory from the Pennsylvania State Ethics Commission. Issues: (1)Whether a member of a county conservation district board of directors would have a conflict of interest pursuant to Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), in matters involving a Nutrient Management Plan (“NMP”) if: (a) such member is listed on the NMP as a potential manure importer; or (b) a lending institution with which such member is associated or to which such member belongs provides or may provide financing/funding to the agricultural operation/landowner submitting the NMP; and (2)Whether a member of an agricultural land preservation board would have a conflict of interest pursuant to Section 1103(a) Ethics Act in matters involving a farm’s application for approval of the purchase of a conservation easement on the farm, where the farm may or may not acquire its funding from a lending institution with which such member is associated. Facts: You have been authorized by the nine Members of the Board of Directors (“Board”) of the Union County Conservation District (“Conservation District”) and by the seven Members of the Union County Agricultural Land Preservation Board (“Agland Preservation Board”) to request an advisory from the Pennsylvania State Ethics Commission on their behalf. You seek guidance with regard to the following five scenarios. Scenario One A Member of the Conservation District Board also serves on the board of a lending institution (“Lending Institution 1”). Lending Institution 1 is financing an Deitrick, 13-509 February 26, 2013 Page 2 agricultural operation (the “Agricultural Operation”). The Agricultural Operation’s NMP must come before the Conservation District Board for a vote and subsequent approval or disapproval under a delegation agreement with the Commonwealth. You note that the Member may or may not have knowledge of individual loan applications depending upon the internal procedures of Lending Institution 1. You seek guidance as to whether the Member would have a conflict of interest with regard to voting on the Agricultural Operation’s NMP. Scenario Two A Member of the Conservation District Board serves on the Conservation District’s NMP review committee (the “NMP Committee”). The NMP Committee makes recommendations to the Conservation District Board for the approval or disapproval of an NMP. You ask whether the Member would have a conflict of interest with regard to participating in the NMP Committee’s review of a given farming operation’s NMP if the Member would be on such NMP’s list of potential manure importers. Scenario Three A Member of the Conservation District Board does not serve on the NMP Committee. You seek guidance as to whether the Member would have a conflict of interest with regard to voting on a given NMP before the Conservation District Board if the Member would be on such NMP’s list of potential manure importers. Scenario Four Some lending institutions are farmer-owned cooperatives. A Member of the Conservation District Board is also a general member of a farmer-owned financial cooperative (“Cooperative”) that may be funding a landowner (“Landowner”). You ask whether the Member would have a conflict of interest with regard to voting on the NMP for the Landowner’s farm. Scenario Five A Member of the Agland Preservation Board is associated with a lending institution (“Lending Institution 2”) through service on the board of Lending Institution 2 and/or through employment with Lending Institution 2. You seek guidance as to whether the Member would have a conflict of interest with regard to participating in the Agland Preservation Board’s action(s) on a farm’s application for approval of the purchase of a conservation easement on the farm, where such farm may or may not acquire its funding from Lending Institution 2. 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. The nine Members of the Conservation District Board and the seven Members of the Agland Preservation Board on whose behalf you have inquired are public officials subject to the provisions of the Ethics Act. See, Pepper, Opinion 87-008; Abrahamsen, Opinion 92-004. Deitrick, 13-509 February 26, 2013 Page 3 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. "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. Deitrick, 13-509 February 26, 2013 Page 4 "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. Per State Ethics Commission precedent, a public official/public employee generally would have a conflict of interest in his official capacity in matters involving a business client. See, Kannebecker, Opinion 92-010; Miller, Opinion 89-024. A conflict of interest under Section 1103(a) of the Ethics Act may also be based upon an ongoing business relationship (Kitner, Order 1542; Burchfield, Order 1492; Johnson, Order 1338; Confidential Opinion, 06-001; Kannebecker, supra; Miller, supra), 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). 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, 610 Pa. 516, 528, 22 A.3d 223, 231 (2011). 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. Having established the above general principles, your specific questions shall now be addressed. In response to your first specific question/scenario, you are advised as follows. Lending Institution 1 is a business with which the Member is associated in his capacity as a director. Pursuant to Section 1103(a) of the Ethics Act, the Member generally would have a conflict of interest in matters before the Conservation District Board that would financially impact the Member, Lending Institution 1, or clients/customers of Lending Institution 1. However, the Member would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by voting on the Agricultural Operation’s NMP unless the Member would be consciously aware of a private pecuniary benefit for the Member or Lending Institution 1, and his official action would constitute one or more specific steps to attain that benefit. Deitrick, 13-509 February 26, 2013 Page 5 With regard to your second and third specific questions/scenarios, you are advised as follows. A Member serving on the NMP Committee would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by participating in the NMP Committee’s review of an NMP on which the Member would be listed as a potential manure importer unless the Member would be consciously aware of a private pecuniary benefit for the Member and his official action would constitute one or more specific steps to attain that benefit. Similarly, a Member would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by voting on an NMP before the Conservation District Board on which the Member would be listed as a potential manure importer unless the Member would be consciously aware of a private pecuniary benefit for the Member and his official action would constitute one or more specific steps to attain that benefit. In response to your fourth specific question/scenario, you are advised as follows. Based upon the submitted facts, the Cooperative is not a business with which the Member is associated because the Member is not a director, officer, owner, employee, or holder of a financial interest in same. The Member’s general membership in the Cooperative would not in and of itself form the basis for a conflict of interest for the Member under the Ethics Act in matters that would financially impact the Cooperative. Accordingly, you are advised that absent some basis for a conflict of interest such as a private pecuniary benefit to the Member, a member of his immediate family, or a business with which he or a member of his immediate family is associated, Section 1103(a) of the Ethics Act would not prohibit the Member from voting on the NMP for the Landowner’s farm. With regard to your fifth specific question/scenario, you are advised as follows. Lending Institution 2 is a business with which the Member is associated in his capacity as a director and/or employee. Pursuant to Section 1103(a) of the Ethics Act, the Member generally would have a conflict of interest in matters before the Agland Preservation Board that would financially impact the Member, Lending Institution 2, or clients/customers of Lending Institution 2. However, the Member would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by participating in the Agland Preservation Board’s action(s) on a farm’s application for approval of the purchase of a conservation easement on such farm unless the Member would be consciously aware of a private pecuniary benefit for the Member or Lending Institution 2, and his official action would constitute one or more specific steps to attain that benefit. 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 Conservation District Law and the Agricultural Area Security Law. Conclusion: The nine Members of the Board of Directors (“Board”) of the Union County Conservation District (“Conservation District”) and the seven Members of the Union County Agricultural Land Preservation Board (“Agland Preservation Board”) on whose behalf you have inquired are public officials 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) a Member of the Conservation District Board also serves on the board of a lending institution (“Lending Institution 1”); (2) Lending Institution 1 is financing an agricultural operation (the “Agricultural Operation”); and (3) the Agricultural Operation’s Nutrient Management Plan (“NMP”) must come before the Conservation District Board for a vote and subsequent approval or disapproval under a delegation agreement with the Commonwealth, you are advised as Deitrick, 13-509 February 26, 2013 Page 6 follows. Lending Institution 1 is a business with which the Member is associated in his capacity as a director. Pursuant to Section 1103(a) of the Ethics Act, the Member generally would have a conflict of interest in matters before the Conservation District Board that would financially impact the Member, Lending Institution 1, or clients/customers of Lending Institution 1. However, the Member would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by voting on the Agricultural Operation’s NMP unless the Member would be consciously aware of a private pecuniary benefit for the Member or Lending Institution 1, and his official action would constitute one or more specific steps to attain that benefit. Based upon the submitted fact that the Conservation District’s NMP review committee (the “NMP Committee”) makes recommendations to the Conservation District Board for the approval or disapproval of an NMP, you are advised as follows. A Member serving on the NMP Committee would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by participating in the NMP Committee’s review of an NMP on which the Member would be listed as a potential manure importer unless the Member would be consciously aware of a private pecuniary benefit for the Member and his official action would constitute one or more specific steps to attain that benefit. Similarly, a Member would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by voting on an NMP before the Conservation District Board on which the Member would be listed as a potential manure importer unless the Member would be consciously aware of a private pecuniary benefit for the Member and his official action would constitute one or more specific steps to attain that benefit. Based upon the submitted facts that: (1) some lending institutions are farmer- owned cooperatives; and (2) a Member of the Conservation District Board is also a general member of a farmer-owned financial cooperative (“Cooperative”) that may be funding a landowner (“Landowner”), you are advised as follows. The Cooperative would not be considered a business with which the Member is associated because the Member is not a director, officer, owner, employee, or holder of a financial interest in same. The Member’s general membership in the Cooperative would not in and of itself form the basis for a conflict of interest for the Member under the Ethics Act in matters that would financially impact the Cooperative. Absent some basis for a conflict of interest such as a private pecuniary benefit to the Member, a member of his immediate family, or a business with which he or a member of his immediate family is associated, Section 1103(a) of the Ethics Act would not prohibit the Member from voting on the NMP for the Landowner’s farm. Based upon the submitted fact that a Member of the Agland Preservation Board is associated with a lending institution (“Lending Institution 2”) through service on the board of Lending Institution 2 and/or through employment with Lending Institution 2, you are advised as follows. Lending Institution 2 is a business with which the Member is associated in his capacity as a director and/or employee. Pursuant to Section 1103(a) of the Ethics Act, the Member generally would have a conflict of interest in matters before the Agland Preservation Board that would financially impact the Member, Lending Institution 2, or clients/customers of Lending Institution 2. However, the Member would not have a conflict of interest or transgress Section 1103(a) of the Ethics Act by participating in the Agland Preservation Board’s action(s) on a farm’s application for approval of the purchase of a conservation easement on such farm unless the Member would be consciously aware of a private pecuniary benefit for the Member or Lending Institution 2, and his official action would constitute one or more specific steps to attain that benefit. 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. Deitrick, 13-509 February 26, 2013 Page 7 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