HomeMy WebLinkAbout14-005 Fodi
OPINION OF THE COMMISSION
Before: John J. Bolger, Chair
Nicholas A. Colafella, Vice Chair
Raquel K. Bergen
Mark R. Corrigan
Roger Nick
Kathryn Streeter Lewis
Maria Feeley
DATE DECIDED: 4/25/14
DATE MAILED: 5/1/14
14-005
Scot E. Fodi, Township Manager
Middlesex Township
133 Browns Hill Road
Valencia, PA 16059
Dear Mr. Fodi:
This Opinion is issued in response to your letters of February 4, 2014, and March 4,
2014, by which you requested an advisory from this Commission.
I.ISSUE:
Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. §
1101 et seq., would impose prohibitions or restrictions upon a township supervisor with
regard to participating in negotiations and voting on a Marcellus Shale gas lease for
township owned properties where: (1) the supervisor either has a current lease with, or is
or may be negotiating a lease with, Marcellus Shale gas entity(ies) for his private property;
or (2) a business owned by the supervisor has previously had direct or indirect business
dealings involving Marcellus Shale drilling entity(ies).
II.FACTUAL BASIS FOR DETERMINATION:
As the Township Manager for Middlesex Township (“Township”), Butler County,
Pennsylvania, you have been authorized by all three Township Supervisors--namely,
Michael Spreng (“Mr. Spreng”), Donald Marshall (“Mr. Marshall”), and James F. “Hap”
Evans, Jr. (“Mr. Evans”)--hereinafter also collectively referred to as “the Township
Supervisors,” to request an advisory from this Commission on their behalf. You have
submitted facts that may be fairly summarized as follows.
As a Board, the Township Supervisors are interested in entering into a Marcellus
Shale gas lease of Township owned properties. As of February 4, 2014, the Township had
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May 1, 2014
Page 2
been approached by representatives of one leasing company, Range Resources, and had
been presented with “general lease” offering information, but no official offering had been
provided to the Board of Supervisors for its consideration. In addition, the individual
Supervisors have not, on behalf of the Township, actively participated in and/or solicited
offers from any other gas-leasing companies or entities.
The Township Supervisors, individually and collectively, would like to discuss this
option in more detail with you as the Township Manager. The Township Supervisors
would also like to discuss the terms and conditions for such possible leasing and vote to
approve or disapprove lease(s) for Township owned properties in the future.
Mr. Spreng is the Chairman of the Township Board of Supervisors. In a private
capacity, Mr. Spreng currently has a lease with Range Resources – Appalachia LLC for
gas for property he personally owns, which lease is set to expire on or about September
30, 2018. In addition, Mr. Spreng currently owns a business known as “Spreng & Sons
Water Well Drilling and Excavating” (“Spreng & Sons”). Spreng & Sons is located in the
Township. Spreng & Sons has not done any work directly or indirectly for any Marcellus
shale drilling entity in the past three years but previously drilled water wells as a
subcontractor for ARM Drilling Company under a contract with R.E. Gas Development,
LLC.
Mr. Marshall is the Vice Chairman of the Township Board of Supervisors. Mr.
Marshall does not currently have any gas leases in his private capacity. Mr. Marshall has
been contacted by Range Resources but has received no written offers to lease. Mr.
Marshall currently owns and operates a business named “J.W. Marshall, Inc.,” which is
located in the Township. J.W. Marshall, Inc. is engaged in the wholesale purchase and
sale of scrap metals and materials. J.W. Marshall, Inc. has purchased and collected scrap
materials from gas drilling operations in the surrounding areas.
Mr. Evans is the third Member of the Township Board of Supervisors. In a private
capacity, Mr. Evans has a Marcellus Shale gas lease with R.E. Gas Development, LLC for
his personal property, which lease is set to expire on or about August 15, 2018. Mr. Evans
previously had a lease with PC Exploration, Inc. for Marcellus Shale gas on his personal
property, which lease expired on or about September 10, 2013. Mr. Evans owns a
landscaping materials and design business named “ALLGREEN, INC.,” which is located in
the Township. ALLGREEN, INC. has conducted no business with, and has no ongoing
relationship with, any company or entity in the Marcellus Shale gas leasing industry.
You state that to the best of the knowledge of the Township Supervisors, none of
their immediate family members are in negotiations with any Marcellus Shale gas
business, have any current lease with any Marcellus Shale gas business, or are
associated with any Marcellus Shale gas business.
You acknowledge your understanding that a Township Supervisor may not seek or
accept improper influence in violation of Section 1103(c) of the Ethics Act.
Based upon the above submitted facts, you seek guidance as to whether the Ethics
Act would impose prohibitions or restrictions upon a Township Supervisor with regard to
participating in negotiations and voting on a Marcellus Shale gas lease for Township
owned properties where: (1) the Township Supervisor either has a current lease with, or is
or may be negotiating a lease with, Marcellus Shale gas entity(ies) for his private property;
or (2) a business owned by the Township Supervisor has previously had direct or indirect
business dealings involving Marcellus Shale drilling entity(ies). In particular, you ask
whether the fact that a Township Supervisor either has a current lease with, or is or may
be negotiating a lease with, Marcellus Shale gas entities for his private property: (1) would
preclude the Supervisor from participating in negotiations and voting on a possible lease
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May 1, 2014
Page 3
with any gas company; (2) would preclude the Supervisor from participating in negotiations
and voting on a possible lease with just those companies with which the Supervisor has a
lease or with which the Supervisor is negotiating as to a lease; or (3) would not per se
preclude participation in negotiations or voting to approve or disapprove a gas lease.
By letter dated March 18, 2014, you were notified of the date, time and location of
the public meeting at which your request would be considered.
III.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, this 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, this Commission may not issue an Opinion but any
person may then submit a signed and sworn complaint, which will be investigated by this
Commission if there are allegations of Ethics Act violations by a person who is subject to
the Ethics Act. 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.
As Township Supervisors, Mr. Spreng, Mr. Marshall, and Mr. Evans are “public
officials” 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
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May 1, 2014
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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.
"Immediate family."
A parent, spouse, child, brother
or sister.
"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.
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May 1, 2014
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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.
Per 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).
Per the Pennsylvania Supreme Court’s decision in Kistler v. State Ethics
Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a) of the
Ethics Act, a public official/public employee:
… must act in such a way as to put his \[office/public position\]
to the purpose of obtaining for himself a private pecuniary
benefit. Such directed action implies awareness on the part of
the \[public official/public employee\] of the potential pecuniary
benefit as well as the motivation to obtain that benefit for
himself.
Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. 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.” Id., 610 Pa. at 528, 22 A.3d at 231.
Based upon Kistler, the existence of a violation of Section 1103(a) would depend
upon the circumstances in a given case. Raphael, Opinion 13-003.
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 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:
§ 1103. Restricted activities
(b) Seeking improper influence.--
No person shall
offer or give to a public official, public employee or nominee or
candidate for public office or a member of his immediate family
or a business with which he is associated, anything of
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May 1, 2014
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monetary value, including a gift, loan, political contribution,
reward or promise of future employment based on the offeror's
or donor's understanding that the vote, official action or
judgment of the public official or public employee or nominee
or candidate for public office would be influenced thereby.
(c) Accepting improper influence.--
No public
official, public employee or nominee or candidate for public
office shall solicit or accept anything of monetary value,
including a gift, loan, political contribution, reward or promise
of future employment, based on any understanding of that
public official, public employee or nominee that the vote,
official action or judgment of the public official or public
employee or nominee or candidate for public office would be
influenced thereby.
65 Pa.C.S. § 1103(b)-(c).
In applying the above provisions of the Ethics Act to your advisory request, you are
advised as follows.
Spreng & Sons is a business with which Mr. Spreng is associated as owner. J.W.
Marshall, Inc. is a business with which Mr. Marshall is associated as owner. ALLGREEN,
INC. is a business with which Mr. Evans is associated as owner.
As to each of the Township Supervisors—that is, Mr. Spreng, Mr. Marshall, and Mr.
Evans—the Township Supervisor would have a conflict of interest and would violate
Section 1103(a) of the Ethics Act by participating in negotiations and/or voting on a
Marcellus Shale gas lease for Township owned properties if: (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(s) would constitute one or more specific steps to attain that benefit. Kistler, supra.
The submitted facts are insufficient to enable a conclusive determination by this
Commission as to whether a Marcellus Shale gas lease for Township owned properties
would financially impact one or more of the Township Supervisors as to a gas lease for the
Supervisor’s personal property (for example, if the properties would be near each other).
Likewise, the submitted facts are insufficient to enable a conclusive determination
by this Commission as to whether a Marcellus Shale gas lease for Township owned
properties would result in business for Spreng & Sons or J.W. Marshall, Inc. It appears
unlikely that a Marcellus Shale gas lease for Township owned properties would result in
business for ALLGREEN, INC.
In each instance of a conflict of interest, the Township Supervisor(s) with a conflict
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. In the
event of a voting conflict, the disclosure requirements of Section 1103(j) of the Ethics Act
would have to be satisfied by each Supervisor with a conflict. If two of the three
Supervisors would have a conflict of interest, only the non-conflicted Supervisor could
make a motion. Either of the two conflicted Supervisors could then second the motion.
The two conflicted Supervisors could not discuss or advocate as to the motion following
the second. The two conflicted Supervisors could only vote on the motion. Confidential
Opinion, 04-003.
Pursuant to Section 1103(c) of the Ethics Act, each of the Township Supervisors—
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May 1, 2014
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that is, Mr. Spreng, Mr. Marshall, and Mr. Evans—would be prohibited from soliciting or
accepting anything of monetary value based upon an understanding that his vote, official
action or judgment would be influenced thereby.
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.
IV.CONCLUSION:
As Township Supervisors for Middlesex Township (“Township”), Butler County,
Pennsylvania, Michael Spreng (“Mr. Spreng”), Donald Marshall (“Mr. Marshall”), and
James F. “Hap” Evans, Jr. (“Mr. Evans”), hereinafter also collectively referred to as “the
Township Supervisors,” 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) as a Board, the Township Supervisors are interested in entering
into a Marcellus Shale gas lease of Township owned properties; (2) as of February 4,
2014, the Township had been approached by representatives of one leasing company,
Range Resources, and had been presented with “general lease” offering information, but
no official offering had been provided to the Board of Supervisors for its consideration; (3)
the individual Supervisors have not, on behalf of the Township, actively participated in
and/or solicited offers from any other gas-leasing companies or entities; (4) in a private
capacity, Mr. Spreng, who is the Chairman of the Township Board of Supervisors, currently
has a lease with Range Resources – Appalachia LLC for gas for property he personally
owns, which lease is set to expire on or about September 30, 2018; (5) Mr. Spreng also
currently owns a business known as “Spreng & Sons Water Well Drilling and Excavating”
(“Spreng & Sons”), which is located in the Township; (6) Spreng & Sons has not done any
work directly or indirectly for any Marcellus shale drilling entity in the past three years but
previously drilled water wells as a subcontractor for ARM Drilling Company under a
contract with R.E. Gas Development, LLC; (7) Mr. Marshall, who is the Vice Chairman of
the Township Board of Supervisors, does not currently have any gas leases in his private
capacity; (8) Mr. Marshall has been contacted by Range Resources but has received no
written offers to lease; (9) Mr. Marshall currently owns and operates a business named
“J.W. Marshall, Inc.,” which is located in the Township; (10) J.W. Marshall, Inc. is engaged
in the wholesale purchase and sale of scrap metals and materials; (11) J.W. Marshall, Inc.
has purchased and collected scrap materials from gas drilling operations in the
surrounding areas; (12) in a private capacity, Mr. Evans has a Marcellus Shale gas lease
with R.E. Gas Development, LLC for his personal property, which lease is set to expire on
or about August 15, 2018; (13) Mr. Evans previously had a lease with PC Exploration, Inc.
for Marcellus Shale gas on his personal property, which lease expired on or about
September 10, 2013; (14) Mr. Evans owns a landscaping materials and design business
named “ALLGREEN, INC.,” which is located in the Township; (15) ALLGREEN, INC. has
conducted no business with, and has no ongoing relationship with, any company or entity
in the Marcellus Shale gas leasing industry; and (16) to the best of the knowledge of the
Township Supervisors, none of their immediate family members are in negotiations with
any Marcellus Shale gas business, have any current lease with any Marcellus Shale gas
business, or are associated with any Marcellus Shale gas business, you are advised as
follows.
Spreng & Sons is a business with which Mr. Spreng is associated as owner. J.W.
Marshall, Inc. is a business with which Mr. Marshall is associated as owner. ALLGREEN,
INC. is a business with which Mr. Evans is associated as owner.
As to each of the Township Supervisors—that is, Mr. Spreng, Mr. Marshall, and Mr.
Evans—the Township Supervisor would have a conflict of interest and would violate
Section 1103(a) of the Ethics Act by participating in negotiations and/or voting on a
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May 1, 2014
Page 8
Marcellus Shale gas lease for Township owned properties if: (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(s) would constitute one or more specific steps to attain that benefit.
In each instance of a conflict of interest, the Township Supervisor(s) with a conflict
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. In the
event of a voting conflict, the disclosure requirements of Section 1103(j) of the Ethics Act
would have to be satisfied by each Supervisor with a conflict. If two of the three
Supervisors would have a conflict of interest, only the non-conflicted Supervisor could
make a motion. Either of the two conflicted Supervisors could then second the motion.
The two conflicted Supervisors could not discuss or advocate as to the motion following
the second. The two conflicted Supervisors could only vote on the motion.
Pursuant to Section 1103(c) of the Ethics Act, each of the Township Supervisors—
that is, Mr. Spreng, Mr. Marshall, and Mr. Evans—would be prohibited from soliciting or
accepting anything of monetary value based upon an understanding that his vote, official
action or judgment would be influenced thereby.
The propriety of the proposed conduct has only been addressed under the Ethics
Act.
Pursuant to Section 1107(10) of the Ethics Act, the person who acts in good faith on
this Opinion issued to him shall not be subject to criminal or civil penalties for so acting
provided the material facts are as stated in the request.
This letter is a public record and will be made available as such.
By the Commission,
John J. Bolger
Chair