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HomeMy WebLinkAbout89-534 EhrgoodSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 27, 1989 Thomas A. Ehrgood, Esquire 89 -534 Ehrgood Associates, P.C. Farmers Trust Building 815 Cumberland Street Lebanon, PA 17042 Re: Bethel Township Industrial Development Authority, Public Official, FIS Dear Mr. Ehrgood: This responds to your letter of March 23, 1989, in which you requested advice from the State Ethics Commission. Issue: You ask whether the non - compensated members of an industrial development authority are to be considered public officials as that term is defined in the Ethics Act, and therefore, whether they are required to file a Statement of Financial Interests pursuant to the Ethics Act. Facts: You advise that you are the attorney for the Bethel Township Development Authority which consists of 5 members who are not salaried. You question whether these individuals are required to file the Statement of Financial Interests under the Ethics Act. It appears that the Bethel Township Industrial Development Authority was formed and operates pursuant to the Industrial and Commercial Development Authority Law of December 29, 1971 P.L. 647 No. 171 as amended 73 P.S. 371 et. seq. The powers, duties, and responsibilities of such authorities are set forth in Section 3 of the Act as follows: (a) Every industrial and commercial development authority incorporated under this act shall be a public instrumentality of the Commonwealth and a public body corporate and politic, and shall be for the purpose of acquiring, holding, constructing, improving, maintaining, owning, financing and leasing, either in the capacity of lessor or lessee, industrial, specialized or commercial development projects. Thomas A. Ehrgood, Esquire April 27, 1989 Page 2 In the event of default by an occupant, an authority may, in its discretion, do any and all acts necessary or convenient to protect the holders of any bonds issued to establish such project or to maintain and preserve the project pending the remedying of such of defaults or the obtaining of a new occupant. 73 P.S. 376(a) The powers of industrial development authorities which are delineated with specificity in subsection (b )of the above cited statute are incorporated herein by reference. Discussion: The question to be answered is whether the members of the Bethel Township Development Authority are to be considered as "public officials" and required to file the Financial Interests Statement of the Ethics Act. Section 2. Definitions. "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. S402. The regulations of the State Ethics Commission similarly define the term public official as above and also set forth that the term includes any individual: Section 1.1 Definitions. Public officials - -- An elected or appointed official in the executive, legislative or judicial branch of the government of the Commonwealth or its political subdivisions. The terms does not include a member of an advisory board who has no authority to spend public funds other than reimbursement for personal expenses or to otherwise exercise the power of the State or a political subdivision thereof. Thomas A. Ehrgood, Esquire April 27, 1989 Page 3 (i) The following criteria will be used to determine if the exception in this paragraph is applicable: (A) The body will be deemed to have the power to expend public funds if the body may commit funds or may otherwise - make payment of monies, enter into contracts, invest funds held in reserves, make loans or grants, borrow money, issue bonds, employ staff, purchase, lease, acquire or sell real or personal property without the consent or approval of the governing body and the effect of the power to expend public funds has a greater than de minimus effect on the interest of a person. (B) The body will be deemed to have the authority to otherwise exercise the power of the State or a political subdivision if one of the following exists: (I) The body makes binding decisions or orders adjudicating substantive issues which are appealable to a body or person other than the governing authority. (II) The body exercises a basic power of government and performs essential governmental functions. (III) The governing authority is bound by statute or ordinance to accept and enforce the rulings of the body. (IV) The body may compel the governing authority to act in accordance with the body's decisions or restrain the governing authority from acting contrary to the body's decisions. (V) The body makes independent decisions which are effective without approval of the governing authority. (VI) The body may adopt, amend and repeal resolutions, rules, regulations, or ordinances. (VII) The body has the power of eminent domain, or condemnation. Thomas A. Ehrgood, Esquire April 27, 1989 Page 4 (VIII) The enabling legislation of the body indicates that the body is established for exercising public powers of the Commonwealth or a political subdivision. 51 Pa. Code §1.1. Preliminarily, its been noted that -the financial disclosure requirements in Section 4(a) of the Ethics Act applies to public officials as well as public employees. Kremer v. State Ethics Commission, 56 Pa. Commw. Ct. 160, 424 A.2d 968 (1981) affirmed, 503 Pa. 358, 469 A.2d 593 (1983). Further, in Snyder v. Thornburgh, 469 Pa. 159, 436 A.2d 593 (1981), the Pennsylvania Supreme Court held the definitional phrase, "public official" unconstitutional insofar as it operated to exempt appointed /non- compensated officials from the Ethics Act coverage. Thus, the court's decision had the effect of removing the appointed non - compensated exclusion from the Ethics Act. Thus, the fact that a given individual is compensated or non - salaried is not dispositive in determining whether he is a public official subject to the filing requirements of the Ethics Act. The question you present must be reviewed under the statute and the regulations of the Commission in conjunction with the duties and obligations as set forth in Section 73 P.S. 736, inter alia, of the Industrial and Commercial Industrial Development Authority Law. The inquiry necessarily focuses on the job itself and not on the individual incumbent in the position, the variable functions of the position, or the manner in which a particular individual occupying a position may carry out those functions. See McClure, Opinion 83 -001; Phillips, Opinion 82 -008; affirmed on appeal, 79 Pa. Cmwith. 491, 470 A.2d 659 (1984); and Mammau v. Ranck, 531 Fed. Supp. 402 (E.D. Pa. Also, in reviewing your question, the Commonwealth Court in its ruling in Phillips, supra, at page 661, directs the Commission to construe coverage of the Ethics Act broadly, rather than narrowly, and conversely directs that exclusions from the Ethics Act should be narrowly construed. Based upon this directive and reviewing the definition of "public official" in the statute and the regulations and opinions of this Commission, in light of the functions and the information available, the conclusion must be that while authority members serve in this capacity, they are "public officials" subject to the financial reporting and disclosure requirements of the State Ethics Act. Since it is clear that the authority has the power to acquire, hold, construct, improve, maintain, own, finance or lease in addition to all of the specific powers delineated in 73 P.S. 376(b), the duties of the authority fall within the statutory definition and regulations of "public official ". 65 P.S. 402; 51 Pa. Code 1.1. Under these Thomas A. Ehrgood, Esquire April 27, 1989 Page 5 circumstances and given the duties and responsibilities of the authority as outlined above, they are public officials as defined in the State Ethics Act and regulations of the Commission. Conclusion: Based upon the above discussion, you are advised that the Bethel Township Industrial Development Authority Members are "public officials" as that term is defined under the Ethics Act and the regulations of this Commission. Accordingly, they must file Statements of Financial Interests for each year in which they hold the position outlined above and for the year following their termination of service. If you have not already done so, a Statement of Financial Interests must be filed within 15 days of this Advice. This Statement of Financial Interests would report information of the prior calendar year. Please file the original of such a statement with this Commission to insure compliance with this Advice, provide the yellow copy to their board and retain the green copy for their records. 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 in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code §2.12. Sincerely, 1 0, /1 Vincent J. Dopko, General Counsel