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HomeMy WebLinkAbout83-574 MeyerhoffMailing Address: STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (7171 783 -1610 July 18, 1983 ADVICE OF COUNSEL Mr. Alfred Meyerhoff, Chairman Hempfield Township Municipal Authority R.D. #6, Box 501 Municipal Building Greensburg, Pennsylvania 15601 RE: Abstention; Employees; Sewage Facility Contract Dear Mr. Meyerhoff: 83 -574 This responds to your letter of September 7, 1982, in which you, as Chairman of the Board of Hempfield Township Municipal Authority, requested advice from the State Ethics Commission. Issue: You ask whether the Authority may enter into a contract with Westinghouse Electric Corporation where three of your five Board members are also employees of the Corporation, and whether those three members may participate in discussions and /or votes on the matter if it should come before the Board. Facts: Three out of five members of the Hempfield Township Municipal Authority Board are also employed by Westinghouse Electric Coporation. You state that none of them qualifies as a director, officer, owner or holder of stock as set forth in Section 403(c) of the Ethics Act. The Authority is a Sewer Authority which services primarily the Township of Hempfield, but also services portions of the joining municipalities. Westinghouse Electric Corporation hereinafter, Westinghouse, maintains an extensive facility at what is known as the Waltz Mill site. Tentative inquiries have been made by Westinghouse relating to the feasiblity of closing down its current sewer treatment plan and entering into an agreement with the Authority for constriction of facilities which would transport sewage to existing Authority facilities. You question whether the Authority may enter into such a contract in light of the fact that three out of five members of its Board are Westinghouse employees. You are concerned with whether and how those members would be able to participate in consideration of the matter if it does come before the Board. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Mr. Alfred Meyerhoff, Chairman July 18, 1983 Page 2 According to ycur Solicitor, Donald J. Snyder, Jr., three out of five members of the Board, i.e., a majority of the Board, is needed in order to vote officially or to enter into a binding contract. See 53 P.S. 309(c). In this regard, while the three members who are Westinghouse employees might be willing to abstain from participation in matters concerning Westinghouse, the other two members could not act to legally bind the Authority because a majority of at least three members, according to the Solicitor, is needed to take a binding vote. Discussion: Initially, the Ethics Commission notes that non- compensated appointed officials such as Authority Board members had been generally excluded from the definition of "public official" of the Ethics Act (65 P.S. 402) until the Supreme Court's ruling in Snider v. State Ethics Commission, Pa. , 436 A.2d 4593 (1981) cast doubt upon that exc usion. Whi a the Commission has not finally ruled upon the impact of this decision and has not held non - compensated members of board of authorities to be "public officials ", we will provide our response assuming that this response is requested merely for guidance and that the Authority members are not clearly covered by the Ethics Act, Thus, the Authority need not mandatorily follow this Advice, but this advice merely constitutes our non - binding decision and discussion in relation to the requirements of the Ethics Act. Under the restrictions of Section 3(a), a public official could not genreally use his office or any confidential information obtained therefrom, 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, in this case the business by which he is employed, Westinghouse. Likewise, under Section 3(b), a public official could not accept any thing of value, including the promise of future or continued employment, based on the understanding that his official action would be influenced thereby. We assume no such circumstances are present for the purpose of this response. Thus, we mainly address the propriety of the Westinghouse- employee voting as an Authority Board member on Westinghouse submissions under Section 1 of the Ethics Act. With regard to this issue, the Ethics Commission has ruled that is the duty of a public official to abstain from participation in a matter submitted by a present employer of the official and to make public the reason for such abstension because such participation would present a conflict or the appearance of a conflict with the public trust as prohibited by Section 1 of the Ethics Act, 65 P.S. 401. See Knox, 81 -009; Coyle; 80-020; and Ransavage, 79 -028. The question arises, however, when, as here, a public body is incapicated from taking official action on a subject by virtue of the fact that at least three out of its five members would normally be precluded from participation because of their employment with Westinghouse. In such a case, abstention by the three members would have the effect of depriving Mr. Alfred Meyerhoff, Chairman July 18, 1983 Page 3 Westinghouse of a forum in which to be heard or which could decide the matter. In such a unique case, the Ethics Commission believes that the common law "rule of necessity" may be applicable. as discussed in a recent Commission Opinion, i.e., Hahalis, 83 -009. In Hahalis, four out of five members of the Lower Sausun Township Board of Supervisors were employees of the Bethlehem Steel Corporation and would thus, under normal circumstances, be precluded from participating in matters concerning Bethlehem which were brought before the Board. Applying the law of federal and state courts, the Commission ruled that a limited application for common law rule of the necessity was reasonable. Such an application in Hahalis allowed normally disqualified members to participate in voting in addition to normally qualified members. The Commission also ruled that in such a situation, the Township should give advance notice to the public that Bethlehem matters would be considered and which might require the application of the rule of necessity and that the public record should show the reasons for the application of this rule. Applying Hahalis to the case at hand, the Commission notes that under 53 P.S. 309(c), the solicitor has concluded that a majority of the Board, that is, at least three out of five members of the Board, is necessary for a binding vote to be taken. We will not herein question this conclusion and base this Advice on this assumption. We note, however, that the rule of necessity is entirely inapplicable when there exists, a method of providing a qualified tribunal to decide the question even after the exclusion from the tribunal of disqualified members. For the purposes of this opinion, the Commission assumes that no alternative exists by which the Board of Supervisors may form a quorum or be able to vote and to take official action without the participation of the three Westinghouse employees, and we hold that the rule of necessity, under such circumstances, could be applied to allow participation /voting by these other wise disqualified officials. Unrestricted application of the rule of necessity, however, could result in a situation where all three of the members who would normally be disqualified would constitute the quorum while the two members not normally disqualified are not present. While such a result might permissible, the Ethics Commission believes that in keepin with l the e letter and spirit of the Ethics Act, the votes of the normally disqualified members -- applying the rule of necessity -- must be tempered by the participation of members who have no conflict of interest and, therefore, are not disqualified with the respect to the subject matter. Thus, the Commission has limited the application of the rule of necessity to situations where obtaining a quorum or majority is possible only when normally disqualified members are allowed to vote in addition to members not disqualified and do not have a conflict of interest in the matter at hand. Mr. Alfred Meyerhoff, Chairman July 18, 1983 Page 4 Specifically, in the present situation in Hempfield Township, assuming that three members of tie Authority Board would constitute a majority or quorum and that three out of r °ve members of the Board would normally be disqualified from participating, the two remaining members without a conflict of interest must be included in the voting majority, whether that majority consists at the meeting of three, four, or five members. It should also be noted that where only two members would be disqualified, the rule of necessity is inapplicable because of a quorum of three non - disqualified members can be obtained thus, enabling the body to transact official business. Thus, the two Board members do not have a conflict of interest, must be included in a quorum of at least three out of five members of the Board, 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 the body may transact official business. Conclusion: Under the Ethics Act, members of the Hempfield Township Municipal Authority Board must adhere to the guidelines and restrictions of the Ethics Act, notably Sections 1, 3(a), and 3(b), if they are deemed to be "public officials." Assuming these members wish to voluntarily abide by the Ethics Act, if they are not clearly "public officials, their conduct should be guided by the above discussion. 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 servicecf this Advice pursuant to 51 Pa. Code 2.12-, CW /rdp Sincerely, 4 ndra S. Chris ianson General Couns