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HomeMy WebLinkAbout85-612 DiehlJames P. Diehl, Esquire 1 Norwegian Plaza Pottsville, PA 17901 Issues: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 January 6, 1q86 ADVICE OF COUNSEL 85 - 612 Re: Township Supervisors, Conflict of Interest, Rank, Township Depository Dear Mr. Diehl: This responds to your letter of December 3, 1985, wherein you requested ' the advice of the State Ethics Commission. A. Whether a township supervisor may participate in the decision to select a depository for the township funds, when the supervisor is a memher of an advisory board of the bank heing considered as the depository. R. Whether a township supervisor may participate in the decision to select a hank as a depository for township funds, when the supervisor's daughter is employed by the bank under consideration. C. Whether a township supervisor may participate in the decision to select a township solicitor, when the supervisor's spouse is employed by the law firm heing considered for said position. . Facts: You have indicated that you are the representative for the officials of Porter Township, and have in this capacity keen requested to obtain the advice of the State Ethics Commission. You indicate that the township hoard of supervisors annually designates a financial institution in which to deposit the funds of the township. You indicate that there is only one hank located within the territorial houndaires of the township. One of the members of the hoard of township supervisors is also a memher of an advisory hoard at this particular bank. You do not indicate the nature of this advisory hoard or duties performed by the supervisor in his position on that hoard. You further advise that the nine -teen year old daughter of one of the township supervisors is currently employed by the bank as a teller. You indicate that this James P. Diehl ,:Esquire January 6, 1986 Page 2 daughter is currently residing in the household of the supervisor. You do not indicate whether the supervisors in the above factual situation are the same individual. You ask, however, whether such supervisors may participate in the decision to appoint a financial institution as the depository for the township funds. Additionally, you indicate that the township will select a law firth for the position of township solicitor. You indicate that the spouse of a township supervisor is a secretary employed by a law firm that is being considered for that position. You indicate that no additional financial remuneration will he received by this secretary as a result of the law firms appointment as solicitor. You request the advice of the State Ethics Commission as to whether this supervisor may participate in the decision to appoint the law firm to the position of township solicitor. Discussion: Generally, as township supervisors, these individuals are considered public officials as that term is defined in the State Ethics Act. 65 P.S. .$402. As such, their conduct must conform to the requirements of the Act. Sowers, 80 -050. Generally, the State Ethics Act provides as follows: Section 3. Restricted activities. (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). The Act also defines business with which one is associated as follows: Section 2. Definitions. 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. The Act further defines a member of ones immediate family as follows: Section 2. Definitions. "Immediate family." A spouse residing in the person's household and minor dependent children. 65 P.S. 402. James P. Diehl, - Esquire January 6, 1986 Page 4 provided sufficient information to determine if that individual is considered an officer, director, or owner of greater than 5% of the equity at fair market value of the bank. If that individual does stand in the relationship as set forth in Section 3(c), the designation of the hank as the township depository should he done through and open and puhlic process. This process would require that there he puhlic notice of the contracting possibility, sufficient time for a reasonable and prudent competitor to be able to prepare and present an application or proposal, puhlic disclosure of all applications or proposals considered, and public disclosure of the contract awarded or offered and accepted. Additionally, the township supervisor who stands in a relationship as set forth above should not participate in the decision to designate the bank with which he is associated as the township depository. With relation to the final question that you have posed, the same provisions of law, as set forth must he considered. Initially, with relation to Section 3(a) of the Act, the wife of the township supervisor, who is employed by the hank, is within the definition of business with which associated. That definition specifically includes a member of the official's immediate family, including the spouse who is employed by an entity seeking to do business with the township. Thus, under Section 403(a) of the Act, this individual should not participate in the discussions or vote to appoint the township solicitor. The above restriction would also be in compliance with the general intent and purpose of the Ethics Act as set forth in Section 1, which mandates that the financial interest of a puhlic official should not conflict nor appear to conflict with the public trust. See 65 P.S. 6401. With relation to the other Sections of the Ethics Act, particularly Section 403(c) of the Act, this provision of the law would not be applicable so as to require an open and public process. This is so, particularly in light of the situation, that the spouse of the supervisor involved in this situation is not an officer, director, or holder of stock in excess of 5% of the fair market value of the law firm from which the solicitor will be appointed. Thus, the requirements of Section 403(c) of the Act, would not apply. Conclusion: Under the foregoing provisions of the State Ethics Act, a township supervisor, who is a member of an advisory board for a bank for which the township seeks to designate as a township depository, should abstain from participating in the decision to appoint said bank to that position. If the supervisor stands in the relationship as set forth in Section 403(c) of the Act, this designation must be accomplished during an open and puhlic process. Additionally, there is no prohibition upon a township supervisor's participation in a decision to appoint a bank as a depository for township funds even though a township supervisor's daughter is an employee of that bank. As long as the township official's daughter is not somehow uniquely dames P. Diehl , - -Esquire January 6, 1986 Page 3 within the above provisions of law, a township supervisor may not use his position or any confidential information obtained in that position to ohtain a financial gain for himself or for a hank which is within the definition of a business with which he is associated. You do not indicate in your letter of request the nature of the position held by the particular supervisor in question. However, if that supervisor stands in the relationship as set forth in the above definition, the supervisor may not participate in the township's decision to appoint the bank as the township's depository. See Kopko, 84 -588; Chimicles, 83 -508. As can also he observed from the foregoing, the daughter of the township supervisor does not appear to be within the definition of one's immediate family as provided for in the Act. This is so, because the daughter would not be considered a minor dependent. The Commission has in the past, however, addressed similar issues under �403(d) which allows the Commission to address other areas of possible conflict. See 65 P.S. 5403(d). Within this provision of law, as well as under Section 1 of the Act, 65 P.S. .$401, the definitional restrictions set forth in the other sections of the Act are not applicable. See Johnson /O'Reilly, 83 -012. As such,the Commission has determined that a public official should not vote on matters that directly and immediately effect individuals outside of the relationship of immediate family, including adult sons, brothers, and adult daughters. See Leete, 82 -005; Cumherledge, No. 216 -R. However, if the financial interest will not be immediate or direct, or if there is no financial gain to be realized by the relative of the public official, then the Ethics Act would not prohibit that official from participating in the consideration of a matter that involves a business that employs the official's relative in some minor capacity. See Savage, 82 -539. Thus, unless there is some direct connection between the township supervisor's vote and a direct financial benefit to that supervisor's adult daughter, the Ethics Act would not prohibit this official from participating in the decision to appoint that bank as the township's depository.. 83 -508. Finally, the question that you have posed regarding the appointment of the bank as the township depository must also he considered under Section 403(c) of the State Ethics Act. That Section provides that no public official, member of his immediate family or any business in which the person or a member of his immediate family is an officer, director, or owner of greater than 5% of the equity at fair market value may contract with a governmental body unless the contract is valued at more than $500 has been awarded through an open and public process. See 65 P.S. 5403(c); Howard, 79 -044. The Commission has determined that the term governmental body in Section 3(c) refers to the governmental body with which the public official is associated. Ryan, 80 -014; Lynch, 79 -047. In the foregoing situation, it is clear that the daughter of the township supervisor does not stand in the relationship as set forth in 3(c). In relation to the township supervisor, who is a member of an advisory hoard. You have not James P. Di ehl , ..Esqui re January 6, 1986 Page 5 affected by the township's desgination of the bank as a despository, said supervisor may participate in the townships action. Finally, a township supervisor whose spouse is employed by a law firm that is being considered as the appointed township solicitor, must abstain from participating in the township's decision in that matter. 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 he 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 he made, in writing, to the Commission within 15 days of service of this Advice pursuant to 51 Pa. Code 2.12. JJC /sfb Sind,,..,, ohn J. Co General .•unsel