HomeMy WebLinkAbout13-534 Eckhart
ADVICE OF COUNSEL
May 15, 2013
Glenn Eckhart
Lehigh County Controller
511 East Federal Street
Allentown, PA 18103
13-534
Dear Mr. Eckhart:
This responds to your undated letter received April 1, 2013, and your faxed
transmission received May 15, 2013, 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 require a county controller to disclose, as gifts on his
Statement(s) of Financial Interests, contributions to or disbursements from a
Pennsylvania non-profit corporation set up to pay the county controller’s legal bills in
relation to a quo warranto action seeking to remove the county controller from office.
Facts:
As the Lehigh County Controller (“County Controller”), you request an
advisory from the Pennsylvania State Ethics Commission based upon submitted facts
that may be fairly summarized as follows.
In November 2011, you were elected as the County Controller. On December
31, 2011, you resigned from the office of Lehigh County Commissioner, and on January
3, 2012, you were sworn into office as the County Controller.
On March 30, 2012, the Lehigh County District Attorney filed a quo warranto
action seeking to remove you from the office of County Controller. You state that you
then hired legal counsel for $10,000.00, with no money out of pocket and with the
thought of raising money to pay for your legal defense. In October 2012, your attorney
set up a Pennsylvania non-profit corporation (“the Corporation”) to pay your legal bills.
As of the time you submitted your undated advisory request letter received April
1, 2013, $6,925.00 had been raised and paid directly to the Corporation to pay your
legal bills. You state that several people, including one individual who may be a
registered lobbyist, gave more than $250.00 and that you consider them all to be
friends. You further state that your attorney has been getting paid by contributions that
have been made to the Corporation. You additionally state that on December 19, 2012,
the court ruled in your favor.
Eckhart, 13-534
May 15, 2013
Page 2
Based upon the above submitted facts, you ask what you would be required to
disclose in block 11—GIFTS of the Statement of Financial Interests form, and in
particular, whether you would be required to disclose your attorney as the source of a
gift.
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 the County Controller, you are a public official subject to the Ethics Act,
including the requirements for filing Statements of Financial Interests.
Section 1104(a) of the Ethics Act provides:
§ 1104. Statement of financial interests required to be
filed
(a)Public official or public employee.--
Each public
official of the Commonwealth shall file a statement of
financial interests for the preceding calendar year with the
commission no later than May 1 of each year that he holds
such a position and of the year after he leaves such a
position. Each public employee and public official of the
Commonwealth shall file a statement of financial interests for
the preceding calendar year with the department, agency,
body or bureau in which he is employed or to which he is
appointed or elected no later than May 1 of each year that
he holds such a position and of the year after he leaves such
a position. Any other public employee or public official shall
file a statement of financial interests with the governing
authority of the political subdivision by which he is employed
or within which he is appointed or elected no later than May
1 of each year that he holds such a position and of the year
after he leaves such a position. Persons who are full-time or
part-time solicitors for political subdivisions are required to
file under this section.
65 Pa.C.S. § 1104(a).
Section 1105 of the Ethics Act sets forth the substantive disclosure requirements
for Statements of Financial Interests. Section 1105(b) provides, in pertinent part, as
follows:
§ 1105. Statement of financial interests
(b) Required information.--
The statement shall
include the following information for the prior calendar year
with regard to the person required to file the statement:
. . . .
(6) The name and address of the
source and the amount of any gift or gifts
Eckhart, 13-534
May 15, 2013
Page 3
valued in the aggregate at $250 or more and
the circumstances of each gift. This paragraph
shall not apply to a gift or gifts received from a
spouse, parent, parent by marriage, sibling,
child, grandchild, other family member or friend
when the circumstances make it clear that the
motivation for the action was a personal or
family relationship. However, for the purposes
of this paragraph, the term "friend" shall not
include a registered lobbyist or an employee of
a registered lobbyist.
. . . .
65 Pa.C.S. § 1105(b)(6).
The Ethics Act defines the term “gift” as that term is defined in Section 13A03 of
Pennsylvania’s lobbying disclosure law, 65 Pa.C.S. § 13A03 (see, 65 Pa.C.S. § 1102).
The definition of “gift” is as follows:
§ 13A03. Definitions.
"Gift."
Anything which is received without
consideration of equal or greater value. The term shall not
include a political contribution otherwise reportable as
required by law or a commercially reasonable loan made in
the ordinary course of business. The term shall not include
hospitality, transportation or lodging.
65 Pa.C.S. § 13A03.
The Ethics Act defines the terms “source,” “person,” and “business” as follows:
§ 1102. Definitions
"Source."
Any person who is a provider of an item
reportable under section 1105 (relating to statement of
financial interests).
"Person."
A business, governmental body,
individual, corporation, union, association, firm, partnership,
committee, club or other organization or group of persons.
"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.
65 Pa.C.S. § 1102 (Emphasis added).
Section 1105(b)(6) of the Ethics Act requires the filer to disclose on the
Statement of Financial Interests the name and address of the source and the amount of
any gift or gifts valued in the aggregate at $250 or more and the circumstances of each
gift. The filer is not required to disclose gifts from a family member or friend (with the
term “friend” excluding a registered lobbyist or employee of a registered lobbyist) when
the circumstances make it clear that the motivation for the action was the
personal/family relationship.
Eckhart, 13-534
May 15, 2013
Page 4
In applying the above general principles to the instant matter, you are advised
that disbursements from the Corporation to pay your legal bills would constitute gifts to
you. Under the submitted facts, the source of such gifts would be the Corporation itself,
not the donors who made contributions to the Corporation. Cf., Corey, Opinion 08-005;
Cooper, Opinion 92-009. Accordingly, if disbursements from the Corporation to pay
your legal bills would be valued in the aggregate at $250 or more for a given calendar
year, then you would be required to disclose such gifts on your Statement(s) of
Financial Interests, identifying the Corporation itself as the source of the gift(s) and
listing the address of the Corporation and the amount of the gift(s) received in the
calendar year. Corey, supra; Cooper, supra. The date of a given disbursement would
be the date that particular gift would be deemed to have been received by you.
You are further advised that based upon the submitted facts, your attorney would
not be considered the source of a gift subject to disclosure on your Statement(s) of
Financial Interests.
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.
Conclusion:
As the Lehigh County Controller (“County Controller”), 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., including the requirements for filing
Statements of Financial Interests. Based upon the submitted facts that: (1) in
November 2011, you were elected as the County Controller; (2) on December 31, 2011,
you resigned from the office of Lehigh County Commissioner, and on January 3, 2012,
you were sworn into office as the County Controller; (3) on March 30, 2012, the Lehigh
County District Attorney filed a quo warranto action seeking to remove you from the
office of County Controller; (4) you then hired legal counsel for $10,000.00, with no
money out of pocket and with the thought of raising money to pay for your legal
defense; (5) in October 2012, your attorney set up a Pennsylvania non-profit corporation
(“the Corporation”) to pay your legal bills; (6) as of the time you submitted your undated
advisory request letter received April 1, 2013, $6,925.00 had been raised and paid
directly to the Corporation to pay your legal bills; (7) several people, including one
individual who may be a registered lobbyist, gave more than $250.00, and you consider
them all to be friends; (8) your attorney has been getting paid by contributions that have
been made to the Corporation; and (9) on December 19, 2012, the court ruled in your
favor, you are advised as follows.
Disbursements from the Corporation to pay your legal bills would constitute gifts
to you. The source of such gifts would be the Corporation itself, not the donors who
made contributions to the Corporation. If disbursements from the Corporation to pay
your legal bills would be valued in the aggregate at $250 or more for a given calendar
year, then you would be required to disclose such gifts on your Statement(s) of
Financial Interests, identifying the Corporation itself as the source of the gift(s) and
listing the address of the Corporation and the amount of the gift(s) received in the
calendar year. The date of a given disbursement would be the date that particular gift
would be deemed to have been received by you. Your attorney would not be
considered the source of a gift subject to disclosure on your Statement(s) of Financial
Interests. 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.
Eckhart, 13-534
May 15, 2013
Page 5
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