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HomeMy WebLinkAbout84-612 SynderJohn D. Snyder, III Lamb, Windle & McErlane, P.C. 26 East Market Street Box 565 West Chester, PA 19380 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 September 27, 1984 ADVICE OF COUNSEL 84 -612 Re: Industrial Development Authority; Statements of Financial Interests Dear Mr. Snyder: This responds to your letter of July 24, 1984, in which you requested Advice from the State Ethics Commission. Issue: You ask whether the officers of an industrial development authority are required to file a Statement of Financial Interests under the State Ethics Act. Facts: Initially, I note that we assumed that you are asking this question as solicitor for the industrial development authority in question. If not, please advice. As solicitor, you ask whether the officers of an industrial development authority, hereinafter, the Authority, are required under the State Ethics Act to file Statements of Financial Interests. You indicate that the officers of the Authority are not paid directly by the Authority. These individuals, however, hereinafter referred to as the members or officers, are salaried employees of an industrial development corporation, hereinafter, the Corporation. This Corporation carries out administrative support for the Authority but the Corporation has no income other than from the Authority. Under these circumstances you request advice as to whether the members are required to comply with the financial reporting and disclosure provisions of the State Ethics kt. Additionally, you wish to know if the result and our conclusion would be any different, should the Corporation have income other than from the Authority. Discussion: The applicable provisions which we must review in the Ethics kt are contained in Section 2 of the Ethics Act and the definition of "public official" as follows: John D. Snyder, III September 27, 1984 Page 2 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. 402. Further, the Ethics Commission has promulgated regulations which define a "public official" as used in Section 2 of the Act to include, in part, the following: Section 1.1. Definitions. Public officials - -- (i) Any elected or appointed official in the exeuctive, legislative, or judicial branch of the government of the Commonwealth or any of its political subdivisions. (ii) The term does not include the following: (A) Any 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 any political subdivision thereof. (B) Any appointed official who receives no compensation other than reimbursement for actual expenses. (C) Any political party officer. (D) Judges and inspectors of elections and notary publics. (iii) Persons in the offices listed below are generally considered public officials: John D. Snyder, III September 27, 1984 Page 3 (A) All incumbents of offices filled by nomination of the governor and confirmation of the Senate. (B) All compensated heads of executive, legislative, and independent agencies, boards, and commissions. (C) All persons who report directly to heads of executive, legislative, and independent agencies, boards, and commissions except clerical personnel. (0) All compensated members of agencies, boards, and commissions appointed by the General Assembly or its officers. (E) School Superintendents and assistant superintendents. (F) All persons appointed to positions designated as officers by code, charter, or the like of the Commonwealth or its political subdivisions. 51 Pa. Code 1.1. The regulations go on to define the term "political subdivision" as follows: Section 1.1. Definitions. Political subdivision - -- Any county, city, borough, incorporated town, township, school district, vocational school, county institution district, and any entity or body organized by the aforementioned. 51 Pa. Code 1.1. Taking these definitions and regulations into consideration, we conclude that if the members of the Authority and Corporation are otherwise within the definition of "public official" they are public officials subject to the financial reporting and disclosure requirements of the State Ethics Act. See Sacavage, 84 -586. However, because these members as members of the Authority, receive no compensation except for possible reimbursement for expenses, we must find that as members of the Authority, they are excluded from the definition of "public official ". We recognize that the Supreme Court's ruling in Snider v. State Ethics Commission, 436 A.2d 593 (1981) cast some doubt as to the extent of this exclusion in the definition of "public official ". However, the State John D. Snyder, III September 27, 1984 Page 4 Ethics Commission has not applied the Snider ruling to any appointed, uncompensated group of persons other than to the School Board Directors at issue in Snider. Accordingly, there is no precedent or regulation which would draw such other compensated appointed members of an Authority into the purview of the definition of "public official ". If such a ruling or regulation is promulgated in the future, you would be so advised, in advance, of its effectiveness by way of notice of publication in the Pennsylvania Bulletin. Having decided that, as members of the Authority, these individuals are not to be considered "public officials" subject to the finanical reporting and disclosure requirements of the State Ethics Act, however, does not answer the question of whether, as members of the Corporation, they are to be considered "public officials ". It is our understanding that this Authority was created under the Industrial and Commercial Development Authority Law, 73 P.S. 371 - 380. As such, the Authority is an agency of the Commonwealth and a part of its sovereignty. Forney v. State Ethics Commission, 56 Pa. Cmwlth. 539, 425 A.2d 66 (1981). However, the Corporation was created by an authority which is not one of the bodies identified in the definition of "political subdivision" in our regulations cited above. While the Corporation, which pays these members, is not a "political subdivision" because it is neither a county, city, borough, incorporated town, township, school district, vocational school, county institution district, or any entity or body organized by one of these entities, we must recognize that it was created by the Authority, an agency of the Commonwealth. There is no reason to exclude the officials serving this Corporation which is a creature of a part of the Commonwealth (the Authority) especially where entities created by a "political subdivision" could be comprised of "public officials" . Thus, because these members are paid as members of the Corporation, they would necessarily be within the purview of the definition of "public official" in the State Ethics Act or regulations by virtrue of the fact they are paid appointed officials of an entity created by the Commonwealth. There is no reason to believe that the result of our analysis and our conclusion would be any different should the Corporation have income other than from the Authority. Conclusion: These persons, as outlined above, are not to be considered "public officials" subject to the finanical reporting and disclosure requirements of the State Ethics Act, by virtue of their unpaid service with the Authority. Nevertheless, as paid officials of the Corporation, they serve an entity created by the Commonwealth, they are other than advisory and as such they are "public officials" subject to the financial reporting and disclosure requirements of 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. John D. Snyder, III September 27, 1984 Page 5 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, andra S. Chr'stianson General Counsel