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HomeMy WebLinkAbout84-550 CrisciRaymond L. Crisci Account Executive Merrill Lynch Pierce, Fenner & Smith Inc. Slite 402, Wilkes -Barre Center Public Square Wilkes- Barre, PA 18701 Dear Mr. Crisci: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 April 23, 1984 ADVICE OF COUNSEL 84 -550 RE: Pennsylvania State Association of Boroughs; Board of Directors; Board of Trustees; Representation This responds to your letter of February 28, 1984, in which you requested advice from the State Ethics Commission. Issue: You ask whether you, an Account Executive with Merrill Lynch, a representative to the Board of Directors of the Pennsylvania State Association of Boroughs (PSAB), and a Borough Councilman, may make an investment presentation to the PSAB Board of Retirement Trustees. Facts: You are a member of the West Pittston Borough Council (WPBC or the Borough) and you represent the Luzerne County Boroughs Association (LCBA) as a representative to the Board of Directors of the Pennsylvania State Association of Boroughs (PSAB), hereinafter the Board of Directors. The PSAB has a municipal retirement plan in which the Borough does not participate. This plan is governed by the five - member Board of Trustees, which Board of Trustees, hereinafter the Retirement Trustees, is appointed by the Board of Directors of the PSAB. You are employed as an Account Executive with Merrill Lynch and you would like to make a presentation to the Retirement Trustees on investments. You would like to know whether, if the Retirement Trustees decide to invest with Merrill Lynch, you would have any conflicts as an elected official or as a representative to the PSAB Board of Directors. You have, therefore, requested advice from the State Ethics Commission. Raymond L. Crisci April 23, 1984 Page 2 Discussion: Although not clearly reflected in your request for advice, we will assume that the Board of Directors and the Board of Trustees of the PSAB neither are the same entity nor have the same membership. We will further assume that as representative for LCBA, you serve the Board of Directors of the PSAB and not the Retirement Trustees, except that they are appointed by the PSAB Board of Directors. Based on these assumptions, the Commission will endeavor to answer the questions you present. However, should any of these assumptions be incorrect, please advise. The Pennsylvania State Ethics Act, 65 P.S. 401 et seq., was enacted to insure the public that "the financial interests of holders or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust." As a West Pittston Borough Council member, you are a "public official" within the purview of the Ethics Act. In this regard, our response is limited to the question presented under the provisions of the State Ethics Act, and does not address any inherent incompatibility in your proposed activity under any code or statute other than the Ethics Act. Under the facts as you have presented them, you should be aware of the restrictions placed upon you by Sections 3(a) and 3(b) of the Ethics Act. See 65 P.S. 403(a) and (b). Section 403(a) of the Act provides: (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). As an employee of Merrill Lynch, Merrill Lynch is considered a "business" with which you are "associated" as that term is defined in the Ethics Act as follows: "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 holder of stock. 65 P.S. 402. As an employee of Merrill Lynch, you are required to abstain as a public official on any matters regarding Merrill Lynch which come before the West Pittston Borough Council and perhaps with respect to the Luzerne County Boroughs Association and the Board of Directors of the Pennsylvania State Association of Boroughs. However, the Retirement Trustees appear to be distinct from the Board of Trustees of the PSAB and the LCBA. Thus, even if you were associated with the LCBA and the Board of PSAB, the Act would not place any prohibition on your making an investment presentation to the Raymond L. Crisci April 23, 1984 Page 3 Retirement Trustees. However, should the Retirement Trustees decide to invest with Merrill Lynch, because you sit on the Board of Directors of PSAB as a result of your role as Borough Councilman, you would have to abstain from any discussions or votes taken by the PSAB Board of Directors regarding such investments. Likewise, you would have to abstain from discussions or votes on those same or related investments should the questions come before the LCBA or the WPBC. Because WPBC does not participate in the PSAB plan(s), this latter possibility seems remote. However, should WPBC consider participating in a plan which you have been instrumental and successful in having the Retirement Trustees accept, you should refrain from WPBC discussions and decisions regarding such participation. This abstention will eliminate any appearance of a conflict with the public trust should this situation arise. Conclusion: The activity which you have proposed is not prohibited by the Ethics Act, but you should be aware that as a public official, your conduct must conform to the guidelines of Sections 3(a) and 3(b) as discussed above. By doing so, you should successfully avoid any conflict or appearance of a conflict of interest with the public trust as an elected official or representative to the PSAB Board of Directors. 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. 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. CW /rdp This letter is a public record and will be made available as such. Sin -rely, Sandra S. Ch/ stianson General Counsel