HomeMy WebLinkAbout80-501 BrowningTO:
STATE ETHICS COMMISSION
P. 0. Box 1179
Harrisburg, PA 17108
January 21, 1980
ADVICE OF CHIEF COUNSEL
Robert P. Browning
Oliver, Price & Rhodes
Attorneys At Law
1200 Scranton National Bank
Scranton, PA 18503
RE: School Directors Disclosing Security
FACTS:
80 -501
On October 5, 1979, Robert P. Browning, Council for
a school district, requested an advisory opinion from the
Commission.
He advised that a member of the Board of School
Directors buys and sells securities, but always registers
them in the "street name."
Mr. Browning inquired whether his client must disclose
the name of each company in which he has owned securities
during the preceding year, or is this limited to those
securities held at the end of the year?
DISCUSSION:
The issue is what securities must be reported on the
Statement of Financial Interest.
First, we have adopted a de minimis standard as to
question 9 in the Act which requires the public official
to list "financial interest in any legal entity in business
or profit." Therefore, a school director would list only
those stocks of which he had 5% interest in the company in
Question 9 of the Financial Interest Statement.
Question number 5 requires the listing of sources of
income. A School director must aggregate the total income
from the shares of stock that he and his wife own, and if the
dividend income plus capital gains equals or exceeds $500,
that security must be listed in number 5. It need not
be listed in number 9 unless the 5% de minimis requirement
is met.
Robert P. Browning
January 21, 1980
Page 2
As to the income question, the test is one of total
income, and not time of ownership. As to Financial Interest
Statement Question 9, if at any time during the year the total
holdings of the School Director in a given company equal or
exceed 5% of the equity of that company, disclosure would be
required.
CONCLUSION:
DRM /rdp -2
If the stock is a mutual fund, only the mutual fund
need be listed if it meets the threshold requirements of
questions 5 & 9.
Listing the brokerage house alone would not meet
the disclosure requirements.
At the present time the State Ethics Commission has
been enjoined by Justice Nix of the Pennsylvania Supreme
Court from requiring School Directors to file any
Statements of Financial Interest with the State Ethics
Commission, pending the outcome of the School Directors
case.
The name of any security must be listed in Question
5 if the dividend plus capital gain of that security, or
mutual fund, equal or exceeds $500 or more. Question 9
only requires the listing of securities which the
public official or public employee has a 5% interest.
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 crimnal proceeding, providing the
requestor has disclosed truthfully all the material facts
and committed the acts complained of in reliance on the
advice given.
A personal appearance before the Commission and a
formal opinion will be issued upon your request, if you
feel this reply does not suffice.
This letter is a public record and will be made
available as such.
DAVID RITTENHOUSE MORRISON
Chief Counsel