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HomeMy WebLinkAbout89-533 HahalisGeorge A. Hahalis, Esquire 531 Main Street Suite 201 Bethlehem, PA 18018 Dear Mr. Hahalis: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 27, 1989 89 -533 Re: Public Official /Employee, Solicitor, Partner in Investment with Head of Township Council This responds to your letter of March 20, 1989, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act presents any restrictions or prohibitions upon a township solicitor from entering into an investment opportunity as a partner with the head of township council. Facts: After noting that you are the township solicitor, you indicate that the head of the township council, while vacationing, came across an investment opportunity which appears to be Timber Ridge Inc., from the caption of your letter. You then indicate that the head of council has asked you to participate as a partner with him in this property which is not located within the Commonwealth of Pennsylvania. You conclude by requesting advice as to whether a conflict would arise if you would enter into this business arrangement with him. Discussion: In the instant matter it is necessary to determine whether you are a public official or public employee as those terms are defined under the Ethics Act. See 65 P.S. 5402. In this regard, the status of the typical part -time county /municipal solicitor was considered by the Pennsylvania Supreme Court in Ballou v. State Ethics Commission, 496 Pa. 127, 436 A.2d 186 (1981). Preliminarily, it should be noted that the Supreme Court only addressed the narrow question as to whether such part -time local solicitors who were on retainer with a governmental body were deemed to be "public employees" as the term is defined under the Ethics Act so as to be required to file the Statement of Financial Interests. After analogizing the position of such solicitors to that of a consultant, the Court concluded that this particular category of solicitor was not a p b1ic official /employee under the Ethics Act: George A. Hahalis, Esquire April 27, 1989 Page 2 "04] Unlike a public employee, a solicitor has no enforceable right to continue in his position for the tenure of his appointment. Our cases have held that, as a consequence of the solicitor's confidential relationship with the appointing body which he serves, the solicitor is removable at the will of the appointing power. Even if appointed for a fixed term and salary, the solicitor has no contractual right to recover any resulting loss in compensation. See Snvderwine v. Cralev, Pa. 349, 254 A.2d 16 (1969; Neaf v. Allentown, 424 Pa. 597, 227 A.2d 888 (1967)." "Further, unlike a public official, the solicitor is responsible only to the appointing body, and may act only pursuant to that body's authorization. He owes no independent duties to the public, and excersises none of the powers of sovereignty. In speaking of a county solicitor, this Court has stated: "No functions of government are delegated to him. Nor can be lawfully exercise any powers of sovereignty. He serves as counsel to the commissioners in the discharge of their public duty just as any privately employed attorney serves his clients. His duties are to advise the commissioners and to represent the county in litigation authorized by them or instituted against the county." "His duties are important in the sense that the advice and actions of an attorney always entail grave responsibility; but they are performed for the board. He has no direct connection with, or responsibility to, the public; he is entirely subordinate to the board; they may follow his advice or disregard it; he cannot control their actions; he cannot perform their duties; his appointment is for no definite term, and he can be recalled at any time; he has no grave and important duties involving a function of government in their performance..." "Commonwealth ex. rel Foreman v. Hampson, 393 Pa. 467, 473 & 474 -75, 143 A.2d 369 372 -73 (1958), quoting Alworth v. County of Lackawanna, 85 Pa. Super. 349, 352 (1925). See also, Wiest v. Northumblerand County, 115 Pa. Super. 577, 176 A. 74 (1935)." Id. at 134, 135." Id. at 189, 190. Assuming that your position is in the nature of the typical part -time solicitor, you as township solicitor would not be considered a public official /employee under the Ethics Act based upon the holding in the Ballou, supra, and consequently, Section 3(a) of the Ethics Act would not preclude you from the investment opportunity since the George A. Hahalis, Esquire April 27, 1989 Page 3 subsections of Section 3 of the Ethics Act regarding restricted activities only apply to public officials or employees, with the exception of 3(b) which applies to all persons: Section 3(b) of the Ethics Act provides: (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 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). It should be specifically noted that the foregoing does :cot address the question as to whether you are not entitled to enter into this investment opportunity under the new rules of professional conduct in that the propriety of your proposed conduct has only been addressed under the Ethics Act. - ,Similarly, 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: Assuming your position of township solicitor is in the nature of the typical part -time solicitor, you are not a public official /employee as defined under the Ethics Act and consequently Section 3(a) of the Ethics Act would not prohibit you from entering into an investment opportunity as a partner with the head of the township council. However, this advice does not address the propriety of such arrangement under the new rules of professional conduct since that does not involve an interpretation of the Ethics Act. Thus, 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. George A. Hahalis, Esquire April 27, 1989 . Page 4 such. This letter is a public record and will be made available as 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 in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code 52.12. Sincerely, Vincent . Dopko, General Counsel