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HomeMy WebLinkAbout16-2001 JonasDETERMINATION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Kathryn Streeter Lewis Maria Feeleyy Melanie De alma DATE DECIDED: 1/21/16 DATE MAILED: 1/29/16 Marc D. Jonas, Esquire Eastburn and Gray, P.C. 60 East Court Street P.O. Box 1389 Doylestown, PA 18901 -0137 Dear Mr. Jonas: This is in response to your letters dated February 24, 2015, and April 2, 2015, by which you requested a determination from this Commission pursuant to Section 1512(a.5)(1) of the Pennsylvania Race Horse Development and Gaming Act ( "Gaming Act "), 4 PaWS. § 1512(a.5)(1). ISSUE: Whether service as members of the board of directors of the Montgomery County Development Corporation ( "MCDC ") would bring the subjects of the instant determination request within the definitions of the terms `executive -level public employee" or "public official" as set forth in the Gaming Act at 4 Pa.C.S. §§ 1103, 1512(b), and therefore cause them to be subject to the restrictions of the Gaming Act at 4 Pa.C.S. § 1512(a), (a.1) and (a.2). II. FACTUAL BASIS FOR DETERMINATION: As Solicitor of the MCDC, you seek a determination of this Commission on behalf of certain members of the MCDC board of directors ( "the Inquiring MCDC Directors ") who have authorized your request. The material facts that you have submitted may be fairly summarized as follows. In 1959, the earliest form of local economic development organization was established by the Commissioners of Montgomery County ( "County ") as the "Montgomery County Planning Commission - Industrial Development Committee." In 1961, the organization's ten - person committee voted to restructure to better benefit the community. The newly formed organization became the "Montgomery County Industrial Jonas, 16 -2001 January 29, 2016 Page 2 Development Committee" ( "MCIDC "), with a ten - person board of directors and its first executive director and secretary. By late 1963, the MCIDC Board concluded that its structural ties to the County government rendered it legally ineligible to participate in the direct loan program of the Pennsylvania Industrial Development Authority ( "PIDA "). The MCIDC Board recommended that the County Commissioners reorganize MCIDC into a private, independent, nonprofit industrial development corporation to separate itself from the County government. In October 1964, MCIDC was incorporated as the "Montgomery County Industrial Development Corporation." In 1967, the organization became eligible to participate in the PIDA program. In July 2009, the organization changed its name to the "Montgomery County Economic Development Corporation" ( "MCEDC'). In 2014, MCEDC merged its operations into MCDC, another non - profit corporation incorporated on August 6, 1984, for the purpose of promoting the economic development of Montgomery County. In conjunction with the aforesaid merger, MCDC reestablished itself as a member organization and revised its bylaws. MCDC is a 501(c)(3) development corporation. It is a membership based organization that consists of approximately 800 members. No MCDC members are employees of MCDC. You have submitted copies of the Articles of Incorporation, certain resolutions, and current Bylaws of MCDC. It is noted that although MCDC was originally created by the County, any person or legally constituted business entity may now become a member of MCDC by applying and paying the membership fee. Each member is entitled to one vote at all membership meetings of the corporation. The board of directors of MCDC consists of 17 directors, with eight directors elected by the County Board of Commissioners and nine directors elected by the members of MCDC. Vacancies on the board of directors are filled by the County Commissioners. MCDC considers itself to be a private, non - profit, non - governmental organization. MCDC contends that it is not a "governmental body" under the Gaming Act. You assert that because MCDC is not overseen or controlled by a governmental entity, it is not an agent thereof. MCDC is the certified Area Loan Organization for the Department of Community and Economic Development ( "DCED ") as well as the certified loan provider for PIDA in the County. PIDA provides low- interest loans and lines of credit through certified economic development organizations ( "CEDOs ") for eligible businesses that commit to creating and /or retaining jobs and for the development of industrial parks and multi - tenant facilities. All loan applications for PIDA financing must be submitted through a CEDO. DCED has approved MCDC as a CEDO. MCDC reviews and approves /rejects PIDA loan applications. MCDC reviews and approves all PIDA loan applicants before a loan package is submitted to the PIDA review board, which then accepts or rejects the loan package. MCDC also administers approved PIDA loans. The submitted facts state that MCDC members are not involved in the development of law, regulation or policy relating to a licensed entity or other matters under the Gaming Act. In or about 2014, DCED /Local Share Account ( "LSA ") appproved a $200,000.00 grant to be utilized by a business located in the County named "Blommer Chocolates." Per LSA guidelines, MCDC was the applicant on behalf of Blommer Chocolates and received the loan on its behalf in October 2014. The loan was provided from funds received under the Gaming Act. You state that per DCED, the funds for this loan were collected from certain gaming facilities pursuant to the Gaming Act and held in a DCED Jonas, 16 -2001 January 29, 2016 Page 3 account to be used exclusively for grants to the County, to economic development authorities or redevelopment authorities within the County for grants for economic development projects, community improvement projects and other projects in the public interest. This particular grant was approved pursuant to DCED's LSA grant program for the purpose of site improvement work by Blommer Chocolates. You seek a determination from this Commission as to whether the Inquiring MCDC Directors would be within the definitions of the terms "executive -level public employee" or "public official" as set forth in the Gaming Act at 4 Pa.C.S. §§ 1103, 1512(b), and therefore subject to the restrictions of the Gaming Act at 4 Pa.C.S. § 1512(a), (a.1) and (a.2). The answer to your question would also establish whether the Inquiring MCDC Directors' positions on the MCDC board of directors would be subject to inclusion on the list of government positions meeting the aforesaid definitions, which list is maintained by this Commission pursuant to Section 1512(a.5)(2) of the Gaming Act, 4 Pa.C.S. § 1512(a.5)(2). By letter dated August 31, 2015, you were notified of the date, time and location of the public meeting at which your request would be considered. At the public meeting of October 7, 2015, another attorney from your law firm appeared in order to answer questions of the Commissioners. You were then asked to submit written answers to various questions, and by letter dated December 23, 2015, you did so. You state that the County did not issue a resolution approving the merger of MCEDC with MCDC. You have submitted a copy of a Memorandum of Understanding between MCDC and MCEDC, which you state was executed in furtherance of the merger. You state that the County was a party to the aforesaid agreement for the sole purpose of indemnification. You further state that MCDC is not an agent of either PIDA or DCED, but rather, administers the County Loan Program in the County. You have submitted a copy of the County Loan Program Funding Agreement. You state that applicants in the County are required to submit loan applications to PIDA through the County's website, and that such loan applications are reviewed by MCDC and are only rejected by MCDC if they fail to meet the County Loan Program Guidelines ( "Guidelines "). You have submitted a copy of the Guidelines. An application that satisfies the requirements in the Guidelines is submitted to PIDA by MCDC, and PIDA then approves or denies the loan. You state that MCDC is simply vetting the applicants at the first level. Finally, you have submitted a copy of the Local Share Account Grant Contract between the Commonwealth of Pennsylvania and MCDC for the grant utilized by Blommer Chocolates. By letter dated December 22, 2015, you were notified of the date, time and location of the public meeting at which your request would again be considered. III. DISCUSSION: It is initially noted that determinations under Section 1512(a.5)(1) of the Gaming Act are issued by the State Ethics Commission to the requester based upon the facts that the requester has submitted. 4 Pa.C.S. § 1512(a.5)(1). In issuing the determination 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. Id. A determination only affords a defense to the extent the requester has truthfully disclosed all of the material facts. Id. Jonas, 16 -2001 January 29, 2016 Page 4 We initially determine that the Inquiring MCDC Directors would not be considered "executive -level public employees" under the following definition of that term set forth in Section 1103 of the Gaming Act- "Executive-level public employee. " - -The term shall include the following: (1) Deputy Secretaries of the Commonwealth and the Governor's Office executive staff. (2) An employee of the executive branch whose duties substantially involve licensing or enforcement under this part, who has discretionary power which may affect or influence the outcome of a Commonwealth agency's action or decision or who is involved in the development of regulations or policies relating to a licensed entity. The term shall include an employee with law enforcement authority. (3) An employee of a count or municipality with discretionary powers which may affect or influence the outcome of the county's or municipality's action or decision related to this part or who is involved in the development of law, regulation or policy relating to matters regulated under this part. The term shall include an employee with law enforcement authority. (4) An employee of a department, agency, board, commission, authority or other governmental body not included in paragraph (1), (2) or (3) with discretionary power which may affect or influence the outcome of the governmental body's action or decision related to this part or who is involved in the development of regulation or policy relating to matters regulated under this part. The term shall include an employee with law enforcement authority. 4 Pa.C.S. § 1103. Paragraph 1 of the above definition of the term "executive -level public employee" would not apply to the Inquiring MCDC Directors because it lists particular public positions that they do not hold. Paragraphs 2, 3, and 4 of the above definition would not apply to the Inquiring MCDC Directors because they are not MCDC employees. Therefore, the Inquiring MCDC Directors would not be considered "executive -level public employees" as Section 1103 of the Gaming Act defines that term. We shall now consider whether the Inquiring MCDC Directors would be considered "public officials" under the following definition of that term set forth in Section 1512(b) of the Gaming Act: "Public official. " - -The term shall include the following: (1) The Governor, Lieutenant Governor, a member of the Governor's cabinet, Treasurer, Auditor General and Attorney General of the Commonwealth. (2) A member of the Senate or House of Representatives of the Commonwealth. Jonas, 16 -2001 January 29, 2016 Page 5 (3) An individual elected or appointed to any office of a county or municipality that directly receives a distribution of revenue under this part. (4) An individual elected or appointed to a department, agency, board, commission, authority or other governmental body not included in paragraph (1), (2) or (3) that directly receives a distribution of revenue under this part. (5) An individual elected or appointed to a department, agency, board, commission, authority, county, municipality or other overnmental body not included in paragraph (1), (2) or (3) with discretionary power which may influence or affect the outcome of an action or decision and who is involved in the development of regulation or policy relating to a licensed entity or who is involved in other matters under this part. The term does not include a member of a school board or an individual who held an uncompensated office with a governmental body prior to January 1, 2006, and who no longer holds the office as of January 1, 2006. The term includes a member of an advisory board or commission which makes recommendations relating to a licensed facility. 4 Pa.C.S. § 1512(b) Paragraphs 1 and 2 of the above definition of the term "public official" would not apply to the Inquiring MCDC Directors because they list particular public positions that the Inquiring MCDC Directors do not hold. Paragraph 3 of the above definition of the term "public official" would not apply to the Inquiring MCDC Directors because MCDC is not a county or municipal office. With regard to Paragraphs 4 and 5 of the above definition of the term "public official," we note that neither the Gaming Act nor the Pennsylvania Gaming Control Board's Regulations under the Gaming Act define the term "governmental body." 4 Pa.C.S. §§ 1103 1512(b); 58 Pa. Code § 401a.1, et sec . Additionally, the Statutory Construction Act does not define the term "governmental body," 1 Pa.C.S. § 1991, and the Public Official and Employee Ethics Act's definition of the term "governmental body " 65 Pa.C.S. § 1102, does not apply to the instant inquiry under the Gaming Act (Benestad, Determination 13 -2003 There are no applicable Pennsylvania judicial decisions defining the term "governmental body." Although it appears that MCDC might perform at least a quasi - governmental function, in the absence of an applicable statutory, regulatory, or judicially approved definition that would include a non - profit member organization as a "governmental body " we conclude that, for purposes of this Commission's duties under Section 1512 of the Gaming Act, the MCDC is not a "governmental body." Therefore, neither Paragraph 4 nor Paragraph 5 of the above definition of the term "public official" would apply to the Inquiring MCDC Directors. Because none of the five numbered paragraphs within the above definition of the term "public official" would apply to the Inquiring MCDC Directors, the Inquiring MCDC Directors would not be considered "public officials" as that term is defined in Section 1512(b) of the Gaming Act. Jonas, 16 -2001 January 29, 2016 Page 6 The determination of this Commission is that based upon the submitted facts, service as members of the board of directors of the MCDC would not bring the Inquiring MCDC Directors within the definition of the term "executive -level public employee" as set forth in Section 1103 of the Gaming Act, 4 Pa.C.S. § 1103, or within the definition of the term "public official" as set forth in Section 1512(b) of the Gaming Act, 4 Pa.C.S. § 1512 b , and therefore would not cause them to be subject to the restrictions of Section 1512�a�, (a.1) and (a.2) of the Gaming Act, 4 Pa.C.S. § 1512(a), (a.1) and (a.2). This determination is limited to addressingg the specific question posed under Section 1512(a.5)(1) of the Gaming Act, 4 Pa.C.S. § 1512(a.5)(11). The Public Official and Employee Ethics Act, 65 Pa.C.S. 1101 et sec ., contains a different definition for the term "public official" (see 65 Pa.C.S. § 1102) . This determination under the Gaming Act does not address or impact status under the Public Official and Employee Ethics Act. IV. CONCLUSION: Based upon the submitted facts, service as members of the board of directors of the Montgomery County Development Corporation ( "MCDC ") would not bring the MCDC Directors on whose behalf you have inquired within the definition of the term "executive -level public employee" as set forth in Section 1103 of the Pennsylvania Race Horse Development and Gaming Act ( "Gaming Act "), 4 Pa.C.S. § 1103, or within the definition of the term "public official as set forth in Section 1512(b) of the Gaming Act, 4 Pa.C.S. § 1512(b) , and therefore would not cause them to be subject to the restrictions of Section 1512(a), (a.1) and (a.2) of the Gaming Act, 4 Pa.C.S. § 1512(a), (a.1) and (a.2). An individual who relies in good faith on a determination issued by this Commission as to such individual pursuant to Section 1512(a.5)(1) of the Gaming Act shall not be subject to any penalty for an action taken in reliance on the determination, provided that all material facts are accurately set forth in the request for a determination. This determination is a public record and will be made available as such. By the Commission, Nicholas A. Colafella Chair