HomeMy WebLinkAbout16-519 Kilkenny
ADVICE OF COUNSEL
March 25, 2016
Sean P. Kilkenny, Sheriff
Sheriff’s Office
Montgomery County Court House
P.O. Box 311
Norristown, PA 19404-0311
16-519
Dear Sheriff Kilkenny:
This responds to your letters dated January 28, 2016, and February 5, 2016, by
which you requested an advisory from the Pennsylvania State Ethics Commission
(“Commission”).
Issue:
Whether, pursuant to Section 1103(a) of the Public Official and Employee
Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), an individual serving as a county sheriff
would have a conflict of interest in matter(s) pertaining to contract(s) between the
county sheriff’s office and an abstract company for the performance of title searches,
where: (1) the individual was previously an equity shareholder in a law firm; (2) the
individual left the law firm and receives monthly compensation from the law firm
pursuant to a buyout agreement; and (3) an equity shareholder in the law firm is also an
equity shareholder in the abstract company.
Facts:
You request an advisory from the Commission based upon submitted
facts that may be fairly summarized as follows.
On January 4, 2016, you took office as the Sheriff of Montgomery County
(“County”), Pennsylvania.
You are an attorney licensed to practice law in the Commonwealth of
Pennsylvania. From 2007 to 2015, you were an equity shareholder in the law firm of
Friedman-Schuman. In 2015, you left Friedman-Schuman and started your own firm in
which you are the only shareholder. Friedman-Schuman compensates you in the
amount of $2400 per month pursuant to a buyout agreement that you signed when you
left Friedman-Schuman.
Kerry Schuman (“Mr. Schuman”) is an equity shareholder in Friedman-Schuman,
and he is also an equity shareholder in a company named “Elkins Park Abstract, LLC”
(“the Company”). The Company is one of four entities selected by your predecessor,
Sheriff Bono, to do title searches for the Montgomery County Sheriff’s Office (“Sheriff’s
Office”). The Company is on the list to be awarded future title search work by the
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March 25, 2016
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Sheriff’s Office. You state that you have withheld awarding the Company title search
work because of concerns regarding a potential conflict of interest.
Based upon the above submitted facts, the question that is presented is whether
you would have a conflict of interest in matter(s) pertaining to contract(s) between the
Sheriff’s Office and the Company for the performance of title searches.
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 the County Sheriff, 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 related to Section 1103(a) are defined in the Ethics Act as
follows:
§ 1102. Definitions
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March 25, 2016
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"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.
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.
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
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:
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March 25, 2016
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… 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.
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.
Having established the above general principles, you are advised as follows.
The submitted facts do not indicate whether there is a financial connection
between Friedman-Schuman and the Company, and in particular, whether work
performed by the Company for the County Sheriff’s Office would impact the ability of
Friedman-Schuman to make payments to you pursuant to the buyout agreement.
You are advised that you would not have a conflict of interest and would not
violate Section 1103(a) of the Ethics Act in your official capacity as the County Sheriff
by participating in matter(s) pertaining to contract(s) between the Sheriff’s Office and the
Company for the performance of title searches unless: (1) you would be consciously
aware of a private pecuniary benefit for you, a member of your immediate family, or a
business with which you or a member of your immediate family is associated; (2) your
action(s) would constitute one or more specific steps to attain that benefit; and (3)
neither the de minimis exclusion nor the class/subclass exclusion set forth within the
Ethics Act’s definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102,
would be applicable. Cf., Kistler, supra.
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.
Conclusion:
Based upon the submitted facts that: (1) on January 4, 2016, you
took office as Sheriff of Montgomery County (“County”), Pennsylvania; (2) you are an
attorney licensed to practice law in the Commonwealth of Pennsylvania; (3) from 2007
to 2015, you were an equity shareholder in the law firm of Friedman-Schuman; (4) in
2015, you left Friedman-Schuman and started your own firm in which you are the only
shareholder; (5) Friedman-Schuman compensates you in the amount of $2400 per
month pursuant to a buyout agreement that you signed when you left Friedman-
Schuman; (6) Kerry Schuman (“Mr. Schuman”) is an equity shareholder in Friedman-
Schuman, and he is also an equity shareholder in a company named “Elkins Park
Abstract, LLC” (“the Company”); (7) the Company is one of four entities selected by
your predecessor, Sheriff Bono, to do title searches for the Montgomery County
Sheriff’s Office (“Sheriff’s Office”); (8) the Company is on the list to be awarded future
title search work by the Sheriff’s Office; and (9) you have withheld awarding the
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March 25, 2016
Page 5
Company title search work because of concerns regarding a potential conflict of
interest, you are advised as follows.
As the County Sheriff, 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
submitted facts do not indicate whether there is a financial connection between
Friedman-Schuman and the Company, and in particular, whether work performed by the
Company for the County Sheriff’s Office would impact the ability of Friedman-Schuman
to make payments to you pursuant to the buyout agreement. You are advised that you
would not have a conflict of interest and would not violate Section 1103(a) of the Ethics
Act in your official capacity as the County Sheriff by participating in matter(s) pertaining
to contract(s) between the Sheriff’s Office and the Company for the performance of title
searches unless: (1) you would be consciously aware of a private pecuniary benefit for
you, a member of your immediate family, or a business with which you or a member of
your immediate family is associated; (2) your action(s) would constitute one or more
specific steps to attain that benefit; and (3) neither the de minimis exclusion nor the
class/subclass exclusion set forth within the Ethics Act’s definition of the term "conflict"
or "conflict of interest," 65 Pa.C.S. § 1102, would be applicable. 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