Loading...
HomeMy WebLinkAbout84-571 DeHaasMr. Ernest P. DeHaas, III., Esquire Coldren, DeHaas & Radcliffe Gallatin Bank Building P.O. Box 1327 Uniontown, PA 15401 Mailing Address: STATE ETHICS COMMISSION P.O. BOX 1179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 May 31, 1984 ADVICE OF COUNSEL 84 -571 RE: Fayette County Airport Authority, Contracting, Voting Dear Mr. DeHaas: This responds to your letter of May 9, 1984, in which you requested advice from the State Ethics Commission. Issue: You ask whether certain members of the Fayette County Airport Authority, hereinafter, the Authority may appropriately, under the provisions of the State Ethics Act, cast certain votes without giving rise to a conflict or an appearance of a conflict of interest. Facts: You indicate that you are solicitor for the Authority. The Authority is a municipal authority organized under the Municipalities Authorities Act, of 1945, as amended. As solicitor, you have been asked to review the minutes of a meeting held by the Authority on November 10, 1983. At this November 10, 1983 meeting the Authority reviewed and ruled upon two matters. These will be discussed further below. The first matter involved a proposal to reduce the fuel charge of Standard Machine and Equipment (SME) a corporation which acts as the "Fixed Base Operator" of the Authority's airport pursuant to a written agreement. This reduction in fuel charge from 3.5 cents to 1.5 cents per gallon was to begin on the date of the motion and to compromise the 3.5 cents per gallon owed by SME under its agreement on the basis of 1.75 cents per gallon. With regard to this first situation you indicate that one of the members of the Authority Board, Commissioner Sandy has a brother -in -law, Frank Carlow, who is the major shareholder, officer and director of SME. In this circumstance, some of the members of the Board have challenged the legality of the Board action with respect to this Authority decision. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Mr. Ernest P. DeHaas, III., Esquire May 31, 1984 Page 2 The second item which was reviewed by the Authority at its November 10, 1983 meeting involved a written request from Anthony Crane Rental, Inc., hereinafter, Crane. Crane is a corporation which leases ground from the Authority on which Crane constructed a building used as an aircraft hanger. Crane requested that the Authority grant permission for Crane to install a fuel tank for Crane's use on the Authority's property. For purposes of this review we will assume, as has been outlined in your request, that this permission was granted and similarly that the reduction in the fuel charge ,for SME was likewise approved. However, as with this fuel charge reduction, a question was presented with respect to the Authority's decision to grant permission to Crane to install this fuel tank. Specifically, with respect to the Crane, certain members of the Board of the Authority have alleged a conflict of interest exists in that two of the members of the Board, who voted with the majority to grant permission to Crane as requested, Commissioner Sandzimier and Evanseck, are both employed by Crane. You indicate that as solicitor you reviewed the provisions of the Municipalities Authorities Act of 1945. You indicate that in this review you have found very few provisions which relate to voting and which address the question of conflicts of interest in voting procedures or in the conduct of the Authority's business in general. You have, furthermore, expressed the opinion to the Authority that the votes, as outlined above, and the action of the Authority did not violate the Municipalities Authorities Act. However, in your review you also suggested to the Authority that the challenged votes and any future votes in similar situations may present a conflict under the State Ethics Act. For that reason and to avoid any appearance of a conflict of interest you recommended to the Authority that they request an opinion from the State Ethics Commission and as a result you have presented this request for Advice. Discussion: The Ethics Act governs the conduct of all public officials who are elected or appointed as officials in the executive, legislative, or judicial branches of the State or any political subdivison thereof. The definition of persons covered by the State Ethics Act and required to file Statements of Financial Interests pursuant to Section 4 of the State Ethics Act and subject to the other restricted activities provisions (Section 3) of the Ethics Act includes those persons within the category of "public official ". A "public official" is defined in the Act as follows: "Public official." Any elected or appointed official in the Executive, Legislative or Judicial Branch of the State or any political subdivision thereof, provided that it shall not include members of advisory boards that have no authority to expend public funds other than reimbursement for personal expense, or to otherwise exercise the power of the State or any political subdivision thereof. "Public official" shall not include any appointed official who receives no compensation other than reimbursement for actual expenses. 65 P.S. 402. Mr. Ernest P. DeHaas, III., Esquire May 31, 1984 Page 3 Generally, the Ethics Commission has not applied the financial reporting and disclosure provisions of the State Ethics Act to persons who are appointed as officials but who are not compensated for such service. We have confirmed with your office that the individuals serving as members of this Authority Board are unpaid. We will assume, for purposes of this review and discussion that this information is correct. Given this information we advise that the State Ethics Commission, while recognizing the ruling of the State Supreme Court in Snyder v. State Ethics Commission, 436 A.2d 593 (1981), has not applied this ruling to persons other than the school directors who were subject to the suit which gave rise to that ruling. However, the Commission is continuing its review of the question of the impact of this decision upon groups of unpaid appointed persons other than school directors and if regulations would be adopted that would apply this ruling to persons other than school directors such persons as might be affected by such an application would be notified through publication of such change by way of regulation or policy statement through the Pennsylvania Bulletin and otherwise. Hence, at present, the Commission has not applied the Ethics Act or considered unpaid appointed officials to be within the definition of "public officials" subject to the requirements of the State Ethics Act. Persons such as the unpaid appointed individuals who serve as the members of the Board of this Authority, therefore, need not comply with the requirements of financial reporting and disclosure nor with the other provisions of the State Ethics Act. The precise answer to your question lies in the fact that these unpaid appointed members of this Authority, should not, at this point, be considered "public officials" whose conduct would be subject to regulation under the Ethics Act. I should mention that even if these individuals were subject to the requirements of the State Ethics Act, there is no ruling of the Ethics Commission which would indicate that a "public official" would be required to abstain from those situations which might affect the interests of a company in which the official's brother -in -law would be a major shareholder, officer, or di rector. Li kewi se, there is no ruling of the State Ethics Commission which indicates that in the context of granting "permission" as opposed to a situation which would represent a "contract ", that even those public officials who may be employed by the entity or business seeking the "permission" would be required to abstain from participation as public officials. Typically, decisions of the Ethics Commission indicate that an employee of an entity seeking a zoning change, or a contract may have to abstain from participation where that request or contract may affect the interests of their employer. However, it is not clear that the "permission" sought by Crane in the above fact situation represents a situation which is substantially similar to those decisions which have ennuciated these concepts and required abstention. Nevertheless, given our conclusion that these members of the Authority are not considered "public officials" in the first instance, it is unnecessary to pursue this question further. Mr. Ernest P. DeHaas, III., Esquire May 31, 1984 Page 4 Finally, it should be noted that the Ethics Commission has not issued any opinions which would indicate that, in any event, the votes or the actions taken by a body would be "void" as a result of any action taken which might be said to constitute a "conflict of interest ". Typically, the Commission, by way of opinion or advice indicates whether actions are consistent or inconsistent with the requirements of the State Ethics Act but the question of whether an action is void or not is a question to be addressed and answered by the appropriate solicitor, the courts, or entities other than the State Ethics Commission. Conclusion: The members of this Authority who are unpaid are not to be considered "public officials" subject to the requirements and restrictions of the State Ethics Act. Accordingly, these individuals in voting, as outlined above, could not be said to have created a conflict of interest or the appearance of same under the State Ethics Act. Pursuant to Section 7(9)(ii), this 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, providing the requestor 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 request that the full Commission review this Advice. A personal appearance before the full Commission will be scheduled and a formal Opinion from the Commission will be issued. Any such appeal must be made, in writing, to the Commission within 15 days of service of this Advice pursuant to 51 Pa. Code 2.12. SSC /na Sincerely, Sandra S. Chri ianson General Counsel L