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HomeMy WebLinkAbout14-510 Kaczmarcik ADVICE OF COUNSEL March 21, 2014 Paul M. Kaczmarcik, Ed.D. 60 Plum Avenue Carbondale, PA 18407 14-510 Dear Dr. Kaczmarcik: This responds to your letter dated January 27, 2014, 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 prohibitions or restrictions upon an individual serving as a school director, who previously retired from employment with the school district, with regard to: (1) voting on payments for an early retirement incentive paid to the individual by the school district in four equal yearly installments; (2) voting on payments for the school district’s monthly medical insurance bill or quarterly life insurance bill, where the individual receives from the school district medical insurance coverage for himself and his wife and a life insurance policy as part of his retirement package; or (3) serving on school board committees which deal with the topic of negotiations with the service personnel and/or teachers of the school district. Facts: You request an advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. You are a newly elected School Director for the Carbondale Area School District (“School District”). Two years ago, you retired from the School District after nearly four decades of working in several professional employment capacities. Upon retirement, you became eligible for the provisions (“Provisions”) of an early retirement incentive that was part of the School District’s Act 93 Professional Compensation Plan dated May 17, 2010. Pursuant to the Provisions, you receive an early retirement incentive paid to you in four equal yearly installments (hereinafter referred to as “the Early Retirement Incentive Installments”), beginning in January 2013 and ending in January 2016. As part of your retirement package, you also receive Blue Cross and Blue Shield medical insurance for you and your wife until you reach age 65, as well as a life insurance policy which covers you until your death, under School District medical and life insurance policies covering current and former employees. You ask whether the Ethics Act would impose prohibitions or restrictions upon you with regard to voting on payments for the Early Retirement Incentive Installments, Kaczmarcik, 14-510 March 21, 2014 Page 2 the School District’s monthly medical insurance bill, or the School District’s quarterly life insurance bill. You further ask for clarification as to your ability to serve on a variety of School District School Board committees that deal with the topic of negotiations with the service personnel and/or teachers of the School District. 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 School Director for the School District, 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 are defined in the Ethics Act as follows: § 1102. Definitions Kaczmarcik, 14-510 March 21, 2014 Page 3 "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. 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. 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. It is noted that the above statutory definition of the term "conflict" or "conflict of interest" contains two exclusions, referred to herein as the "de minimis exclusion" and the "class/subclass exclusion." The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact, a conflict would not exist and Section 1103(a) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburg, Order 900. 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 Kaczmarcik, 14-510 March 21, 2014 Page 4 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. The submitted facts suggest--but do not enable a conclusive determination--that the class/subclass exclusion might be applicable as to one or more of the expenditures about which you have inquired. It is further noted that the approval of pre-fixed, routine, uncontested bills does not in and of itself rise to the level of a violation of Section 1103(a) of the Ethics Act. See, Krushinski, Order 168; Yezzi, Order 825 at 58; Brooks, Opinion 89-023; Maholick, Opinion 90-010. The submitted facts suggest--but do not enable a conclusive determination--that one or more of the expenditures about which you have inquired might be pre-fixed, routine, and uncontested. In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. You generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters before the School District School Board that would financially impact you, a member of your immediate family such as your wife, or a business with which you or a member of your immediate family is associated. However, you would not have a conflict of interest with regard to voting on payment(s) for the Early Retirement Incentive Installments, the School District’s monthly medical insurance bill, or the School District’s quarterly life insurance bill as long as: (1) the class/subclass exclusion would be applicable as to such expenditure(s); or (2) such expenditure(s) would be pre-fixed, routine, and uncontested. As noted above, in each instance of a conflict of interest, you 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. You are further advised that based upon the submitted facts, Section 1103(a) of the Ethics Act generally would not prohibit you from serving on School District School Board committee(s) dealing with the topic of negotiations with the service personnel and/or teachers of the School District. 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 Public School Code. Conclusion: Based upon the submitted facts that: (1) you are a newly elected School Director for the Carbondale Area School District (“School District”); (2) two years ago, you retired from the School District after nearly four decades of working in several professional employment capacities; (3) upon retirement, you became eligible for the provisions (“Provisions”) of an early retirement incentive that was part of the School District’s Act 93 Professional Compensation Plan dated May 17, 2010; (4) pursuant to the Provisions, you receive an early retirement incentive paid to you in four equal yearly installments (hereinafter referred to as “the Early Retirement Incentive Installments”), beginning in January 2013 and ending in January 2016; and (5) as part of your retirement package, you also receive Blue Cross and Blue Shield medical insurance for you and your wife until you reach age 65, as well as a life insurance policy which covers Kaczmarcik, 14-510 March 21, 2014 Page 5 you until your death, under School District medical and life insurance policies covering current and former employees, you are advised as follows. As a School Director for the School District, 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. You generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters before the School District School Board that would financially impact you, a member of your immediate family such as your wife, or a business with which you or a member of your immediate family is associated. However, you would not have a conflict of interest with regard to voting on payment(s) for the Early Retirement Incentive Installments, the School District’s monthly medical insurance bill, or the School District’s quarterly life insurance bill as long as: (1) the class/subclass exclusion would be applicable as to such expenditure(s); or (2) such expenditure(s) would be pre-fixed, routine, and uncontested. In each instance of a conflict of interest, you 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. Section 1103(a) of the Ethics Act generally would not prohibit you from serving on School District School Board committee(s) dealing with the topic of negotiations with the service personnel and/or teachers of the School District. 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