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HomeMy WebLinkAbout82-539 SavagePeter J. Savage, Esquire Savage & Killian Suite 1266 United Penn Bank Building Wilkes- Barre, PA 18701 Dear Mr. Savage: Mailing Address: STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 May 7, 1982 ADVICE OF COUNSEL 82 -539 RE: Brother, Daughter, Bank as Depository of School District This responds to your communication of April 20, 1982 in which you requested advice from the State Ethics Commission. Issue: You ask whether there would be conflict of interest if a School Director were to vote for the appointment of a Bank as depository under the circumstances presented. Facts: As Solicitor for the School District you request advice concerning the conduct of a School Director. The School Director in question has a brother and 19 year old daughter employed by a local Bank. The School District wishes to appoint the Bank as depository for the School District. Neither the School Director, his spouse, his brother, his 19 year old daughter, nor any other of his minor depen- dent children is a director, officer, owner, or holder of stock exceeding 5% of the equity at fair market value of the financial institution which might be selected as depository for the School District. In addition, none of these persons would realize any financial gain if the Bank in question were designated as depository. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Peter J. Savage, Esquire May 7, 1982 Page 2 Discussion: As an elected official a School Director would be a "public official" subject to the provisions of the Ethics Act; See Section 2, 65 P.S. 402. As a public official a School Director must comply with the provisions of the Ethics Act. The most pertinent provisions in relation to the question you raise are Section 3(c) of the Ethics Act and Section 3(a) of the Ethics Act. See 65 P.S. 403(c) and 403(a) respectively. Section 3(c) of the Ethics Act requires that no public official or a member of his immediate family (spouse residing in the person's household and minor dependent children) or a business in which the public official or member of the official'E: immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business shall contract with the governmental body with which the public official is associated in an amount above $500 absent an open and public process. The appointment of a Bank as depository may not be such a "contract" which would be within the purview` of this particular Section of the Ethics Act. In any event, the designation of this Bank as depository would not entail a contract between the public official (School Director) in question or a member of his immediate family or a business with which any of these persons are directors, officers, owners, or holder of stock e 5% of the equity at fair market value given the facual situation which you present. Thus, Section 3(c) of the Ethics Act would be inapplicable to the proposed desig- nation of the Bank as depository and there is no need for this designation to comply with the open and public require- ments of Section 3(c) of the Ethics Act. Likewise, in the factual context which you present in which neither the public official, his wife, his brother nor his 19 year old daughter would realize any financial gain as a result of the designation of the Bank as depository, there is no violation of Section 3(a). Specifically, the public official (School Director) in question could not be said to be using his public office or his vote to obtain "financial gain" fog himself or a member of his immediate family or business with which he is associated. This is particularly true where the public official's brother is not within the purview of the definition of his "immediate family" nor is the daughter to be considered a "minor." While the Commission in a recent decision Leete, 82 -005 ruled that an official could not vote to specifically increase the salary of her brother, there is no such direct relationship apparent in this case. Peter J. Savage, Esquire May 7, 1982 Page 3 Thus, there is no prohibition under Section 3(a) or any appearance of an impropriety under Section 1 of the Ethics Act in the School Director's voting on the appointment of this Bank as depository for the School District. Conclusion: Under the factual circumstances presented there is no conflict of interest or appearance of a conflict of interest for the School Director to vote for a Bank as depository for the School District. 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 may be scheduled and a formal Opinion from the Commission will be issued. You should make such a request or indicate your disapproval of this Advice within the next 30 days. SSC /rdp Sincerely, Sandra S. Chr stianson General Counsel