HomeMy WebLinkAbout14-557 Handley
ADVICE OF COUNSEL
November 19, 2014
Thomas D. Handley
128 West Emaus Street
Middletown, PA 17057-1410
14-557
Dear Mr. Handley:
This responds to your undated letter postmarked October 14, 2014, received
October 15, 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 require an individual serving as a borough council
member, who is in negotiations to sell his residential property to an industrial and
commercial development authority organized by the borough council, to resign from
borough council if: (1) he would sign a conditional agreement for the sale of such
property; (2) he would sell such property and would continue to reside in the borough
ward he represents; or (3) he would sell such property and would move out of the
borough ward he represents.
Facts:
You request an advisory from the Pennsylvania State Ethics Commission
based upon submitted facts that may be fairly summarized as follows.
In January 2014, you took office as a Member of Council for the Borough of
Middletown (“Borough”), in which capacity you represent the First Ward of the Borough.
In or about March 2013, Borough Council organized the Middletown Borough
Industrial and Commercial Development Authority (“Authority”) pursuant to the
Economic Development Financing Law, 73 P.S. § 371 et seq. You state that Borough
Council and/or the Authority have announced plans to acquire a portion of real estate in
the Borough. It has been stated at public meetings and announced in Borough
publications that the Authority intends to purchase such real estate for several different
purposes, including building first a museum and later a hotel. Several months ago, a
representative from a Maryland firm was at a Borough Council meeting to discuss
building a hotel on such real estate.
Your residential property is part of the real estate which the Authority intends to
purchase. You state that after you contacted the Authority to find out its intentions, you
began negotiations primarily through your attorney for the sale of your residential
property to the Authority. You further state that all discussions regarding an agreement
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November 19, 2014
Page 2
to sell your residential property to the Authority have included several conditions,
including certain property inspections requested by the Authority, which must be met
before either party must close on the transaction, and that as such, entering into an
agreement does not guarantee the sale will go through. You express your
understanding that no money from the Borough general fund would be used in a
transaction by which the Authority would acquire your residential property.
You state that you have recused yourself from any Borough Council discussions
regarding the Authority as to any item remotely related to the area where your
residential property is located. You further state that after the negotiations to sell your
residential property to the Authority began, you received an email from the Borough
Solicitor which suggested that you must resign from Borough Council upon entering into
an agreement with the Authority.
You have not yet determined where you would move to if your residential
property would be sold to the Authority. You state that your options include finding a
suitable home in the First Ward of the Borough, in which case it would be your intention
to retain your seat on Borough Council. You further state your understanding that you
would be required to resign from Borough Council if you would move out of the First
Ward due to the sale of your residential property.
Based upon the above submitted facts, you ask whether you would be required
to resign from Borough Council if:
(1) you would sign a conditional agreement for the sale of your residential
property to the Authority;
(2) you would sell your residential property to the Authority and would
continue to reside in the First Ward of the Borough; or
(3) you would sell your residential property to the Authority and would move
out of the First Ward.
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.
It is further initially noted that this Advice is limited to addressing the narrow
question posed.
As a Borough Council Member, 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
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November 19, 2014
Page 3
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.
65 Pa.C.S. § 1102.
Subject to the statutory exclusions to the Ethics Act’s definition of the term
“conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, 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
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November 19, 2014
Page 4
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.
Having established the above general principles, you are advised as follows.
The Ethics Act would not require you to resign from Borough Council if you would
sign a conditional agreement for the sale of your residential property to the Authority.
As to whether you would be required to resign from Borough Council as a result of a
change in your residency due to the sale of your residential property, the answer to
such question falls under the Borough Code and not the Ethics Act.
The application of the Ethics Act to the submitted facts regarding a change in
your residency would be limited to prohibiting the use of the authority of public office to
receive compensation to which you would not be entitled. Therefore, you are advised
that if you would not be lawfully entitled to receive compensation as a Borough Council
Member as a result of a change in your residency due to the sale of your residential
property, the Ethics Act would prohibit you from taking action to receive such
compensation.
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 Borough Code or the Economic Development Financing Law.
Conclusion:
Based upon the submitted facts that: (1) in January 2014, you took
office as a Member of Council for the Borough of Middletown (“Borough”), in which
capacity you represent the First Ward of the Borough; (2) in or about March 2013,
Borough Council organized the Middletown Borough Industrial and Commercial
Development Authority (“Authority”) pursuant to the Economic Development Financing
Law, 73 P.S. § 371 et seq.; (3) Borough Council and/or the Authority have announced
plans to acquire a portion of real estate in the Borough; (4) it has been stated at public
meetings and announced in Borough publications that the Authority intends to purchase
such real estate for several different purposes, including building first a museum and
later a hotel; (5) several months ago, a representative from a Maryland firm was at a
Borough Council meeting to discuss building a hotel on such real estate; (6) your
residential property is part of the real estate which the Authority intends to purchase; (7)
after you contacted the Authority to find out its intentions, you began negotiations
primarily through your attorney for the sale of your residential property to the Authority;
(8) all discussions regarding an agreement to sell your residential property to the
Authority have included several conditions, including certain property inspections
requested by the Authority, which must be met before either party must close on the
transaction, and as such, entering into an agreement does not guarantee the sale will
go through; (9) you express your understanding that no money from the Borough
general fund would be used in a transaction by which the Authority would acquire your
residential property; (10) you have recused yourself from any Borough Council
discussions regarding the Authority as to any item remotely related to the area where
your residential property is located; (11) after the negotiations to sell your residential
property to the Authority began, you received an email from the Borough Solicitor which
suggested that you must resign from Borough Council upon entering into an agreement
with the Authority; (12) you have not yet determined where you would move to if your
residential property would be sold to the Authority; (13) your options include finding a
suitable home in the First Ward of the Borough, in which case it would be your intention
to retain your seat on Borough Council; and (14) you state your understanding that you
Handley, 14-557
November 19, 2014
Page 5
would be required to resign from Borough Council if you would move out of the First
Ward due to the sale of your residential property, you are advised as follows.
As a Borough Council Member, 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.
The Ethics Act would not require you to resign from Borough Council if you would sign a
conditional agreement for the sale of your residential property to the Authority. As to
whether you would be required to resign from Borough Council as a result of a change
in your residency due to the sale of your residential property, the answer to such
question falls under the Borough Code and not the Ethics Act. The application of the
Ethics Act to the submitted facts regarding a change in your residency would be limited
to prohibiting the use of the authority of public office to receive compensation to which
you would not be entitled. Therefore, you are advised that if you would not be lawfully
entitled to receive compensation as a Borough Council Member as a result of a change
in your residency due to the sale of your residential property, the Ethics Act would
prohibit you from taking action to receive such compensation. 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