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HomeMy WebLinkAbout86-504 MoyerSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108-1470 TELEPHONE (717) 783 -1610 January 17, 1986 ADVICE OF COUNSEL Samuel G. Moyer, Esquire 86 - 504 64 North Main Street P.O. Box 580 Sellersville, PA 18960 -0580 Re: Conflict of Interest, Borough Councilmemhers, Voting on _Matter Effecting Memhers Dear Mr. Moyer: This responds to your letter of December 13, 1985, wherein you requested the advice of the State Ethics Commission. Issue: Whether any conflict of interest would arise if horough councilmemhers were to participate in a borough decision that would affect a residential area in which a majority of the horough members reside. Facts: As Solicitor for Dublin Borough you have requested the opinion of the State Ethics Commission in regard to the above issue. You advised that a new mayor and five new councilmemhers will take the oath of office on January 6, 1986. You further advised that there are two additional incumbent councilmemhers. Four of the new councilmemhers reside in a housing development known as Dublin Village Greene. This housing development consists of seventy- seven single family homes. These homes are connected to a new public water system which serves these seventy -seven homes in addition to eight other homes on a street adjacent to the housing development. The water system is owned and operated by the Borough of Dublin. There is no separate water authority. Dublin Borough has a population of approximately eighteen hundred individuals. There are approximately three hundred twenty -five single family units in the development in addition to seven hundred other types of units such as apartments. You have further indicated that due to water shortage problems in Dublin Borough, the Delaware River Basin Commission has recommended that the borough expand its public water system. You indicate that if economically feasible, the borough would expand the system to cover Samuel G. Moyer, Esquire January 17, 1986 Page 2 the entire population. This, however, is not being undertaken at this time. The borough is currently considering various options in regard to the water shortage problem. The members of borough council , at some point in time, will be called upon to make decisions regarding the currently existing water system. You indicate that the four members of the council who live in the Dublin Village Greene Devel opment may he perceived to have a di rect interest in deci sions regarding the public water system. For example, you indicate that the public water system is, in part, subsidized by taxes that are paid by all residents. It could be of a benefit to the users of the water system, including the four councilmembers, to maintain low water rents, which they pay, by raising more of the operating costs of the system through taxes. As a result, you have requested the opinion of the Ethics Commission in relation to this issue. • Specifically, you have asked if it would be a conflict of interest for these four councilmembers to vote or participate in matters regarding the development and in particular the public water system. You have pointed out that the four councilmembers constitute a quorum, as well as a majority, of the seven member council. Discussion: Members of borough council are clearly 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 State Ethics Act. See Davis, 84 -012. 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). In addition to the above provision of law, the Ethics Act authorizes the State Ethics Commission to address other areas of possible conflict. 65 P.S. b403(d) . Such a conflict of interest would exist i n a situation where a public official attempts to serve one or more interests that are adverse. See Alfano, 80 -007. Generally, there is no doubt that public officials, including borough councilmembers, are precluded from participating in any matter in which they have a personnel pecuniary interest. See Commonwealth v. Raudenbush, 249 Pa. 86, 99 A. 555, (1915); Eways v. Reading Parking Authority, 385. 592, 124 A.2d 92, (1956); Reckner v. German Township, 341 Pa. 375, 19 A.2d, 402, (1941). This Commission has, within the purview of the State Ethics Act, similarly determined that public officials may not act upon a matter in which they have a personal financial interest. Sowers, 80 -050; King, 85 -02.5. Samuel G. Moyer, Esquire January 17, 1986 Page 3 In the instant situation, we are confronted with a situation where a majority of the members of horough council may have an interest in borough decisions regarding specifically the public water system which services their residential development, and generally other borough decisions regarding that development. On the other hand, however, the members of horough council who reside in this particular department constitute a majority of borough council and if such members where required to abstain from borough decisions in this matter, the horough council would not be able to obtain a quorum and, therefore, the borough would be prohibited from taking official action on any such matters. Initially, it should he noted that in the foregoing situation, it is doubtful whether any conflict of interest truly exist. As noted above, the general law requires public officials to abstain from any matter wherein they • have a financial or pecuniary interest. Case law, however, as well as rulings of the State Ethics Commission indicate that a public official is required to abstain from participation in matters presented to his governmental body where this interest is of a direct nature or the matter involves non - routine items. See Reisinger, 146 -C; Stewart, 79 -070. Generally, courts have held that the pecuniary interests must be direct, immediate and particular as distinct from the interest that might be shared by a larger group or by the public in general. See Reckner v. School District of German Township, supra, and Commonwealth v. Raudenbush, supra, as a reii is ommission has previously ruled for example, that members of a local school board could vote upon a matter involving collective bargaining agreement where the agreement would affect the director's spouse who was employed by the school district. The Commission opined in those decisions that the individual should not participate in the negotiations of the agreement but could vote on the final ratifiation of the agreement where the interest of the wife are effected in no unique way separate and apart from the other members of the bargaining unit. See Krieg, 84 -002; Blaney, 84 -003. Similarly, the Commission has ruled that a member of a city corn-TM-may vote for a tax proposal which could remotely affect that councilmember's private employer where the tax proposal did not affect the employer in any way different than that of the general public. See Markham, 85 -013. There is, therefore, precedent to indicate that where the interest of the public offical are not direct, and immediate, no conflict of interest would exist. In the current situation, the four members of borough council are residents of the development. Action of the borough council may affect this development. All members of borough council, however, are similarly residents of the borough generally. Thus, any action that the borough council may take regarding taxes, improvements, the expenditure of borough money would to some degree affect members of borough council as they are all residents of the borough. Thus, as long as the borough activity does not specifically or directly relate or benefit the borough councilmembers, there appears to be no conflict of interest. Samuel G. Moyer, Esquire January 17, 1986 Page 4 In order to be complete, however, we will address the issue under the assumption that the participation of the four councilmembers would constitute a conflict of interest. In such a situation, this Commission has previously invoked the common law of rule of necessity in order that the governmental unit may properly perform its public function. By invoking the rule of necessity which is discussed below, the members of the borough council will be able to follow certain precautions and guidelines in relation to borough decisions regarding their development. The Commission's use of this particular rule was originally set forth in Hahalis, 83 -009. Perhaps the most succinct statement of the rule of necessity is found in Turner v. American Bar Association, 407 F. Supp. 451 (1975), where the Court dismissed action brought against members of the federal judiciary and others by plaintiffs who claimed they had a constitutional right to have unlicensed •lay counsel assist them in court proceedings. In its discussion, the Court noted, "there is a maxim of law to the effect that where all are disqualified, none are disqualified." Id. at 483, citing Evans v. Gore, 253 U.S. 245 (1920). The Court continued, stating "the theory supporting maxim is that if disqualifcation operates so as to bar justice to the parties and no other tribunal is available, the disqualified judge or judges may, by necessity, proceed to judgment." Id. at 483. From the very necessity of the case has grown the rule that disqualification will not be permitted to destroy the only tribunal with power in the premises. If the law provides for a substitution of personnel on a board or court, or if another tribunal existis to which resort may be had, a disqualified member may not act. But when no such provision is made, the law cannot be nullified or the doors to justice barred because of prejudice or disqualification of a member of a court or a administrative tribunal. Id. at 357. In Kennett v. Levine, 50 Wash. 2d 2.12, 310 P.2d 244 (1957), the Court held that the rule of necessity applied where a public body is given exclusive jurisdiction over a matter and no substitute tribunal is provided by law. See also Loughram v. F.T.C., 143 F.2d 431 (C.C.A. 8th 1944), where only one tribunal is provided by law, that tribunal must be permitted to act under the rule of necessity. It is important to note that the rule of necessity is entirely inapplicable when there exists, as stated above, a method of providing a qualified tribunal, such as by exclusion from the tribunal of disqualified members. See pyatt v. Mayor and Council, 9 N.J. 548, 89 A.2d 1 (1952); appointing a different membership, see Smith v. Dept. of Registration, 412 I11. 332, 106 N.E.2d 722 (1952); counting only the votes of the qualified Samuel G. Moyer, Esquire January 17, 1986 Page 5 members, See Thompson v. City of Long Reach, 41 Cal. 2d 235, 259 P.2d 649 (1953); or resorting to another available tribunal, see Tumey v. Ohio, 273 U.S. 510 (1927). For the purposes of this Opinion, the Commission assumes that none of the alternatives enumerated above exists by which the council may form a quorum or ohtain a majority vote and to take official action, and we hold that the rule of necessity, under these appropriate circumstances, could apply to allow participation /voting by an otherwise disqualified official. In this light, we must discuss what constitutes a quorum, because for purposes of invoking the rule of necessity, a sufficient number of counci lmembers must be disqualified under the Ethics Act for the rule to apply. Unless otherwise specified under Pennsylvania and common law, a quorum of the council would be constituted by a majority if its members, that is at least four out of seven members, and official action could be taken by a •positive vote of the majority of the quorum, for example, three out of four. See f)i Gi aci nto v. City of Allentown, 486 Pa. 436, 406 A.2d 520, 522 (1979) . Unrestricted application of the rule of necessity, however, could result in a situation where all of the three of four members who constitute a quorum would normally be disqualified while the members not normal ly disqualified are not present. While such a result might generally be permissible, the Ethics Commission believes that in keeping with the letter and spirit of the Ethics Act, the votes of the normally disqualified members must be tempered by the vote or possible votes of members who have no conflict of interest and, therefore, are not disqualified with respect to subject matter. In this regard, the Commission believes that application of the rule of necessity must be limited to situations where obtaining a quorum is possible only when normally disqualified members are allowed to vote in addition to members not disqualified and who do not have a conflict of interest in the matter at hand. To illustrate, in the present situation in the borough, at least four members of the council would constitute a quorum. Where four out of seven members of the council would normally be disqualified from participating, the three members without a conflict of interest must be part of those members constituting the voting quorum. This rule of necessity, of course, would be inapplicable if the borough could ohtain a voting quorum (4) of non -di squal i fi ed members. Thus, where there are some council members who do not have a conflict of interest, those members must be included in a quorum of at least four out of seven members of the council, and the rule of necessity may be applied to allow the other normally disqualified members to vote in addition to normally qualified members so that body may transact official business. Samuel G. Moyer, Esquire January 17, 1986 Page 6 Conclusion: Under the State Ethics Act, public officials generally may not participate in any matter wherein they have a pecuniary interest. While there is some question in the instant matter, as to whether the interest of the councilmemhers in the instant situation is of the type that would require their abstention, it is advised that the borough council should proceed in the matter set forth in this advice so as to avoid any potential conflict of interest. Because under the current situation, the disqualification of four members of the borough council would result in the borough's inability to take official action in certain matters. It is advised that the borough should apply a limited application of the common law rule of necessity. Such application would allow the normally disqualified members to participate in forming a quorum and voting in addition to the normally qualified members. In this case where four out of the seven councilmembers are normally disqualified, a quorum may be formed under this application of the rule of •necessity when normally disqualified members may vote so long as the three qualified members are present as part of the quorum and vote. In such a situation the borough should give advance notice to the public that the matters will be considered requiring the application of the rule of necessity and the public record should reflect the reasons for the application of this rule. 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 made, in writing, to the Commission within 15 days of service of this Advice pursuant to 51 Pa. Code 2.12. Si hn J. Cont o General nsel