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HomeMy WebLinkAbout17-504 Steigerwaltr � � I` C - �F 4 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1 -800- 932 -0936 ADVICE OF COUNSEL February 2, 2017 To the Requester: Kevin Steigerwalt, Borough Manager Borough of Tamaqua 17 -504 Dear Mr. Steigerwalt: This responds to your letter dated December 5, 2016, by which you requested an advisory from the Pennsylvania State Ethics Commission ( "Commission "). Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.-C S. § 1101 et se q., would impose prohibitions or restrictions upon an individual with regard to performing the duties of his public position as a Member of Council for the Borough of Tamaqua, where: (1) as an independent contractor, the individual serves as the Executive Director of the Tamaqua Area Community Partnership, a non - profit 501(c)(3) charitable organization (2) the Tamaqua Area Community Partnership is seeking funding from the Pennsylvania City Revitalization and Improvement Zone Program in connection with its acquisition of a property located in the Tamaqua Historic District; and (3) the proposed funding would be provided by the Tamaqua Community Revitalization and Improvement Zone Contracting Authority. Facts: You request an advisory from the Commission on behalf of Micah Gursky T'M_rGursky "), who is a Member of Council for the Borough of Tamaqua ( "Borough "). You have submitted facts that may be fairly summarized as follows. In a capacity as an independent contractor, Mr. Gursky serves as the Executive Director of the Tamaqua Area Community Partnership ( "the Partnership "), which is a non - profit 501(c)(3) charitable organization. The Partnership is seeking funding from the Pennsylvania City Revitalization and Improvement Zone ( "CRIZ) Program in connection with the Partnership's acquisition of a property ( "the Property ") located at 24 West Broad Street, Tamaqua, Pennsylvania. The Property is a contributing property in the Tamaqua Historic District, and the Partnership owns a historic preservation easement on the Property. You have submitted various materials in support of your advisory request, including copies of: (1) an overview of the CRIZ Program ( "the Program Overview ") from the website of the Pennsylvania Department of Community and Economic Development; (2) the Partnership's application ( "the Application ") for funding from the FAX: (717) 787 -0806 • Web Site: www.ethics.state.pa.us • e -mail: ethics@ - state.pa.us Steigerwalt, 17 -504 February 2, 2017 Page 2 CRIZ Program in relation to the Partnership's acquisition of the Property; and (3) an unexecuted agreement ( "the Agreement ") between the Partnership and the Tamaqua Community Revitalization and Improvement Zone Contracting Authority ( "Contracting Authority ") pertaining to the Partnership's request for funding from the CRIZ Program. Per the Program Overview, the CRIZ Program is administered by various Commonwealth agencies. The focus of the CRIZ Program is to provide opportunity to spur new growth, helping to revive downtowns and create fobs for residents. Funds from the CRIZ Program may be used only for certain purposes, and funding is issued via a contracting authority. Pursuant to the Application, the Partnership is requesting $38,129.16 in CRIZ financing assistance in relation to the Partnerships acquisition of the Property, which the Partnership plans to redevelop s mixed use commercial and residential. The Application states, in part, that the Partnership contracts for Executive Director /Management Services through a consultant contract with Mr. Gursky, The Application further states that Mr. Gursky is a Borough Council Member and "has been integrally involved in the development and establishment of Tamaqua's City Revitalization." Application, at 4. The Agreement notes that the Contracting Authority is authorized to approve funding for projects that meet the standards of the CRIZ Program. Pursuant to the Agreement, the Contracting Authority would provide financial assistance in the amount of $38,129.16 to the Partnership in relation to the Partnership's acquisition of the Property. The Agreement provides, in pertinent part, as follows: ARTICLE III. INTEREST OF GRANTEE The iPartnership] covenants that it presently has no interest, and shall not acquire any interest, direct or indirect (as defined by the Public Official and Employee Ethics Act ...) which would conflict in any manner or degree with the performance of its activities hereunder. The [Partnership] further covenants that, in the performance of this Agreement, it will not knowingly employ or contract for services from any person having such interest. Agreement, at 4. Based upon the above submitted. facts, you ask whether Mr. Gursky's continuing simultaneous service as a Borough Council Member and the Executive Director of the Partnership would pose a conflict of interest under the Ethics Act if the Partnership's request for CRIZ financing assistance in relation to its acquisition of the Property would be approved. 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, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. To the extent that your inquiry relates to conduct that has already occurred, such past Stei erwaEt, 17 -504 r e u ary 2, 2017 Page 3 conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may and shall be addressed. As a Member of Borough Council, Mr. Gursky is a public official subject to the provisions of the Ethics Act. Sections 1103(a) and 11030) 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. 0) 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 pprovided 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 "Conflict" or "conflict of interest." Use by a public official or public employyee 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 Steigerwalt, 17 -504 ebrF uary 2, 2017 Page 4 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. "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 if 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 officiallpublic 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 not be limited merely to. voting, but 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. Subject to certain statutory exceptions, in each instance of a voting cow Section 11030) of the Ethics Act would require the public official/public employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. 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 I 103(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 otential 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 officiallpublic employee "must be consciously aware of a private pecuniary St�eigerwalt, 17 -504 e rF b uary 2, 2017 Page 5 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 applying the above provisions of the Ethics Act to your inquiry, 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, not businesses or governmental bodies. Therefore, Section 1103(a) would impose restrictions upon Mr. Gursky in his capacity as a public official, rather than upon the Partnership. Under the submitted facts, Section 1103(a) of the Ethics Act would not prohibit Mr. Gursky from continuing to serve as the Executive Director of the Partnership if the Partnership's request for CRIZ financing assistance in relation to its acquisition of the Property would be approved. Although there is no basis in the submitted facts to conclude that the Partnership is a business with which Mr. Gursky is associated as the Ethics Act defines that term, Mr. Gursky has a business relationship with the Partnership as an independent contractor serving as the Partnership's Executive Director. Mr. Gursky would have a conflict of interest and would violate Section 1103(a) of the Ethics Act in his official capacity as a Member of Borough Council by participating in matter(s) involving the Partnership 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. 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: As a Member of Council for the Borough of Tamaqua ( "Borough "), Micah urs y ( "Mr. Gursky ") 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. Based upon the submitted facts, 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, not businesses or governmental bodies. Therefore, Section 1103(a) would impose restrictions upon Mr. Gursky in his capacity as a public official, rather than upon the Tamaqua Area Community Partnership ( "the Partnership "), for which Mr. Gursky, in a capacity as an independent contractor, serves as the Executive Director. Under the submitted facts, Section 1103(a) of the Ethics Act would not prohibit Mr. Gursky from continuing to serve as the Executive Director of the Partnership if the Partnership's request for financing assistance from the Pennsylvania City Revitalization and Im rovement Zone Program in relation to the Partnership's acquisition of a propert y locateT at 24 Vilest Broad Street, Tamaqua, Pennsylvania, would be approved. Although there is no basis in the submitted facts to conclude that the Partnership is a business with which Mr. Gursky is associated as the Ethics Act defines that term, Mr. Gursky has a business relationship with the Partnership as an independent contractor serving as the Partnership's Executive Director. Mr. Gursky would have a conflict of interest and would violate Section 1103(x) of the Ethics Act in his official capacity as a St�eigerw�ait, 17 -504 e rF b uary 2, 2017 Page 6 Member of Borough Council by participating in matter(s) involving the Partnership 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. 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 actual! 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, ' Vr U (/ /• RoN�inM. Hittie Chief Counsel