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Home My WebLink About88-520 DiefenderferJohn P. Diefenderfer, Esquire One South State Street P. O. Box 70 Newton, Bucks County, PA 18940 Dear Diefenderfer: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 February 24, 1988 ADVICE OF COUNSEL 88 - 520 Re: Conflict of Interest, Retired School Superintendent, Appointment as School Director, Medical Benefits This responds to your letter of January 22, 1988, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act imposes any prohibitions or restriction upon a retired superintendent of schools from subsequently becoming a member of the school board insofar as his continued receipt of medical insurance benefits which were provided at the time of his retirement as school superintendent. Facts: In your letter you state that you represent the School Directors of the Centennial School District, hereinafter District, and you have further advised that you represent the former superintendent of schools who retired approximately four years ago from the District. You further state that as part of the severance contract, the retired superintendent received various insurance coverage consisting of medical, dental, prescription and vision insurance which were payable out of the general fund. You further state that the retired superintendent is entitled to these benefits without performing any present services to the District. After you note that a vacancy has occurred on the School Board, you question whether the retired superintendent may serve as a School Director without forfeiture of these retirement benefits. You then state your view that although the retired superintendent /school director could not vote on any modification or increase of benefits, he would not be precluded as serving in the position of school director. After referencing the State Ethics Act, the regulations of the Ethics Commission and the School Code, you request advice regarding the application of the Ethics Act to the above situation. John P. Diefenderfer, Esquire February 24, 1988 Page 2 Discussion: As a candidate for School Director, the retired superintendent would become a "public official" if so appointed, as that term is defined in the Ethics Act. 65 P.S. §402: 51 Pa. Code §1.1. As such, his conduct would be subject to the provisions of the Ethics Act. Section 3(a) of the Ethics Act provides: Section 3. Restricted activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Section 3(a) basically provides that a public official may not use his public office or confidential information to obtain a financial gain other than compensation as provided for by law for himself or a member of his immediate family. Under this provision, the Ethics Commission has determined that the use of office by a public official to obtain a gain or benefit for himself or a member of his immediate family which is not provided for in law constitutes a "financial gain other than compensation provided for by law." These determinations have been appealed to the Commonwealth Court of Pennsylvania which has affirmed the Orders of the Commission. See McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529 (1983). See also Yocabet v. State Ethics Commission, Pa. Commw. , 531 A.2d 536 (1987). Thus, under this provision, a public official may not use his public position to secure any financial gain for himself or his immediate family unless it is provided for by law. Domalakes Opinion, 85 -010. In the instant situation, the Ethics Act does not contain any prohibition whereby a former public official would be required to give up the benefits received by a severance agreement which was effectuated prior to the inception of his public service. Mazziotti Opinion, 87- 005 -R. Therefore, under Section 3(a) of the Ethics Act, the severance agreement which provided the former superintendent with medical benefits approximately four years ago, at the time of his retirement, would not be affected by the current appointment of the retired superintendent to the School Board. Section 3(b) of the Ethics Act provides: Section 3. Restricted activities. (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is John P. Diefenderfer, Esquire February 24, 1988 Page 3 associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Under Section 3(b) of the Ethics Act cited above, which a public official must observe, he must neither offer nor accept anything of value on the understanding or with the intention that your official judgment would be influenced thereby. It is assumed such a situation does not exist here. Reference to this Section is added not to indicate that any such activity has been or will be undertaken but in an effort to provide a complete response to your inquiry. Section 3(d) of the Ethics Act provides: Section 3. Restricted activities. (d) Other areas of possible conflict shall be addressed by the commission pursuant to paragraph (9) of section 7. 65 P.S. 403(d). However, under Section 3(d) of the Ethics Act, the State Ethics Commission may address other areas of possible conflicts of interest. 65 P.S. §403(d). The parameters of the types of activities encompassed by this provision of law may general ly be determined by reviewing the purpose and intent of the Ethics Act. The Ethics Act was promulgated in order to ensure that the financial interests of public officials do not conflict with the public trust or create the appearance of a conflict with the public trust. Therefore, although the retired superintendent may serve as school board member without forfeiture of his retirement medical benefits, under Section 3(d) of the Ethics Act, he as school director could not participate or vote on matters involving retiree medical benefits and his abstention must be noted of public record together with the reasons for his abstention. Lastly, it must be noted that 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 has not been addressed in this advice. John P. Diefenderfer, Esquire February 24, 1988 Page 4 Conclusion: The retired superintendent upon his appointment to the School Board would become a public official subject to the provisions of the Ethics Act. Under Section 3(a) of the Ethics Act, the retired superintendent would not forfeit the medical benefits which were awarded to him approximately four years ago at his retirement but he could not under Section 3(d) of the Ethics Act as School Board member vote or participate on matters involving retiree benefits and his abstention must be noted of public record together with the reason for his abstention. Lastly, the propriety of the proposed conduct has only been addressed under the 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 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. Sincerely, Vincent J". Dopko General Counsel