HomeMy WebLinkAbout14-534 Korns
ADVICE OF COUNSEL
July 23, 2014
Michael T. Korns, Esquire
Avolio Law Group, LLC
135 W. Pittsburgh Street
Greensburg, PA 15601
14-534
Dear Mr. Korns:
This responds to your letter dated May 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 a county
commissioner, who in a private capacity is a licensed insurance broker, a registered
stockbroker, and a licensed investment advisor, with regard to providing investment or
insurance services to various municipalities and authorities within or outside of the
county.
Facts:
You request an advisory from the Pennsylvania State Ethics Commission
on behalf of Robert Tyler Courtney (“Mr. Courtney”). You have submitted facts, the
material portion of which may be fairly summarized as follows.
Mr. Courtney is a County Commissioner for Westmoreland County (“County”),
Pennsylvania. In a private capacity, Mr. Courtney is a licensed insurance broker, a
registered stockbroker, and a licensed investment advisor.
You ask whether the Ethics Act would permit Mr. Courtney to provide investment
or insurance services to the following entities:
(1) Municipalities and authorities within the County that might do business
with the County government;
(2) Municipalities and authorities within the County that might from time-to-
time make requests for grants, loans, or other forms of assistance from
the County government;
(3) Municipalities and authorities within the County that might from time-to-
time make requests for grants, loans, or other forms of benefits or
assistance from authorities or boards which have members appointed by
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July 23, 2014
Page 2
the County Board of Commissioners but are not directly controlled by the
County Board of Commissioners;
(4) Municipalities and authorities within the County that participate in the
Westmoreland County Land Bank, which has members appointed by the
County Board of Commissioners but is not directly controlled by the
County Board of Commissioners; and
(5) Municipalities and authorities outside of the County.
You state that Mr. Courtney currently does not have any clients that fall under
any of the five categories enumerated above.
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 County Commissioner, Mr. Courtney is 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.
Korns, 14-534
July 23, 2014
Page 3
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.
"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.
It is noted that Section 1103(a) of the Ethics Act does not prohibit public
officials/public employees from having outside business activities or employment.
However, subject to the statutory exclusions to the Ethics Act’s definition of the term
“conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, the public official/public employee
may not use the authority of his public position--or confidential information obtained by
being in that position--for the advancement of his own private pecuniary benefit or that
of a business with which he is associated. Pancoe, Opinion 89-011. Examples of
conduct that could form the basis for a conflict of interest under Section 1103(a) of the
Ethics Act would include the pursuit of a private business opportunity in the course of
public action (Metrick, Order 1037) and the participation in an official capacity as to
matters involving the business with which the public official/public employee is
associated in his private capacity or private client(s) (Miller, Opinion 89-024;
Kannebecker, Opinion 92-010). A reasonable and legitimate expectation that a business
relationship will form may support a finding of a conflict of interest (Amato, Opinion 89-
002).
In each instance of a conflict of interest, the public official/public employee would
be required to abstain from participation. The abstention requirement would extend to
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July 23, 2014
Page 4
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 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.
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
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. Reference is made to these provisions of the law not to imply that there has
been or will be any transgression thereof but merely to provide a complete response to
the question presented.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes
restrictions upon public officials and public employees. Therefore, Section 1103(a)
would impose restrictions upon Mr. Courtney in his capacity as a public official, rather
than in his private capacity.
The Ethics Act would not prohibit Mr. Courtney, in his private capacity as a
licensed insurance broker, a registered stockbroker, and a licensed investment advisor,
from providing investment or insurances services to:
Municipalities and authorities within the County that might do business with the
County government;
Municipalities and authorities within the County that might from time-to-time
make requests for grants, loans, or other forms of assistance from the County
government;
Municipalities and authorities within the County that might from time-to-time
make requests for grants, loans, or other forms of benefits or assistance from
authorities or boards which have members appointed by the County Board of
Commissioners but are not directly controlled by the County Board of
Commissioners;
Municipalities and authorities within the County that participate in the
Westmoreland County Land Bank, which has members appointed by the County
Korns, 14-534
July 23, 2014
Page 5
Board of Commissioners but is not directly controlled by the County Board of
Commissioners; or
Municipalities and authorities outside of the County.
However, at such times as Mr. Courtney would have a business relationship with or
would have a reasonable expectation of developing a business relationship with any
particular municipality(ies) or authority(ies), Mr. Courtney would have a conflict of
interest and would violate Section 1103(a) of the Ethics Act by participating in his official
capacity as a County Commissioner in matter(s) involving such municipality(ies) or
authority(ies) 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; (2) his action(s) would constitute one or more
specific steps to attain that benefit; and (3) neither of the statutory exclusions to the
definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. §
1102, would be applicable.
As noted above, in each instance of a conflict of interest, Mr. Courtney 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.
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 County Code.
Conclusion:
As a County Commissioner for Westmoreland County,
Pennsylvania, Robert Tyler Courtney (“Mr. Courtney”) 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. Section 1103(a) of the Ethics Act, pertaining to conflict of interest,
imposes restrictions upon public officials and public employees. Therefore, Section
1103(a) would impose restrictions upon Mr. Courtney in his capacity as a public official,
rather than in his private capacity.
The Ethics Act would not prohibit Mr. Courtney, in his private capacity as a
licensed insurance broker, a registered stockbroker, and a licensed investment advisor,
from providing investment or insurances services to:
Municipalities and authorities within the County that might do business with the
County government;
Municipalities and authorities within the County that might from time-to-time
make requests for grants, loans, or other forms of assistance from the County
government;
Municipalities and authorities within the County that might from time-to-time
make requests for grants, loans, or other forms of benefits or assistance from
authorities or boards which have members appointed by the County Board of
Commissioners but are not directly controlled by the County Board of
Commissioners;
Municipalities and authorities within the County that participate in the
Westmoreland County Land Bank, which has members appointed by the County
Board of Commissioners but is not directly controlled by the County Board of
Commissioners; or
Korns, 14-534
July 23, 2014
Page 6
Municipalities and authorities outside of the County.
However, at such times as Mr. Courtney would have a business relationship with or
would have a reasonable expectation of developing a business relationship with any
particular municipality(ies) or authority(ies), Mr. Courtney would have a conflict of
interest and would violate Section 1103(a) of the Ethics Act by participating in his official
capacity as a County Commissioner in matter(s) involving such municipality(ies) or
authority(ies) 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; (2) his action(s) would constitute one or more
specific steps to attain that benefit; and (3) neither of the statutory exclusions to the
definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. §
1102, would be applicable. In each instance of a conflict of interest, Mr. Courtney 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. 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