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HomeMy WebLinkAbout86-585 ShorallMr. George Shorall, Esquire Frick Building, 12th Floor Pittsburgh, PA 15219 RE: Conflict of Interest, Assistant City Solicitor, Partner in law Firm Acting as Underwriter Counsel Dear Mr. Shorall: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 July 21, 1986 ADVICE OF COUNSEL r 86 -585 This responds to your letter of July 1, 1986, wherein you requested the advice of the State Ethics Commission. Issue: Whether any conflict of interest is presented by virtue of the simultaneous service of your son as a partner in a law firm that is acting as underwriter's co- counsel for a municipal sewer authority while serving as an assistant city solicitor in that same municipality. Facts: You advise that you have recently been appointed as Co- Underwriter's Counsel along with another law firm to represent the lead underwriter, Paine Webber, in a refinancing being arranged under the auspices of the Pittsburgh Water and Sewer Authority as issuer. The Pittsburgh Water and Sewer Authority is an independent municipal authority created under the Pennsylvania Municipal Authorities Act and as such, is independent of the City of Pittsburgh. The Pittsburgh Sewer and Water Authority is represented by their Counsel, Meade J. Mulvihill, Jr. Bond counsel in the matter has also been appointed. You advise that your son, who is a partner in your law firm, is also serving on a part -time basis as an assistant city solicitor in the City of Pittsburgh. Your son in this capacity is responsible for civil litigation in which the city becomes involved. You have requested the advice of the State Ethics Commission as to whether the State Ethics Act presents any prohibitions upon your son's activities insofar as his public employment is concerned. For the purposes of this advice, we will assume that as a part -time city solicitor in the City of Pittsburg, your son is a public employee as that term is defined in the State Ethics Act, 65 P.S. §402. As such, his conduct must conform to the requirements of the State Ethics Act. Generally, the State Ethics Act would present no per se prohibition upon the simultaneous service of a public employee in a position of private employment. See Hershock, 85 -016. Generally, the State Ethics Act provides as follows: Mr. George Shorall, Esquire July 21, 1986 Page 2 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). Within this provision of law, your son may not use his public position or any confidential information obtained through his public position in order to obtain a financial gain for himself or for the law fir by which he is employed. In the instant situation, it does not appear as though your son would be in a position to use his public office to benefit the law fir in any way. Specifically, the City of Pittsburgh, is a separate and distinct entity from the Pittsburgh Water and Sewer Authority. Authorities that have been created under the Pennsylvania Municipal Authorities Act, 53 P. S. §301, are deemed to be separate and distinct from the municipality under which they were created and, in affect, are considered to be entities of the Commonwealth of Pennsylvania. Commonwealth v. Erie Metropolitan Transit Authority, 444 Pa. 345, 281 A.2d 822, (1971). In light of this, the Pittsburgh Water and Sewer Authority is not represented by the office of the Pittsburgh City Solicitor but is rather presented by its own solicitor. We will assume for the purposes of this advice therefore, that the City Solicitor's Office performs no functions in relation to the municipal sewer and water authority and,. therefore, has no responsibilities in relation thereto. As a result, your son would not be able to use his position as an assistant city solicitor to advance the interests of himself or your law firm in relation to this particular project. Thus, insofar as your son performs'no duties or responsibilites in his public position in relation to the Pittsburgh Sewer and Water Authority, there would appear to be no conflict of interests in relation to your appointment as co- underwriter's counsel. See Richards, 376. In addition to Section 403(a) of the State Ethics Act, the Ethics Commission may address other areas of possible conflicts of interests. 65 P.S. 403(d). The parameters of the types of activities encompassed by this particular provision of law are generally determined through reviewing the intent and purpose of the State Ethics Act. Generally, the Act was pranulgated in order to insure the public that the interests of their public officials do not conflict with the public trust. In this respect, you are advised that should a conflict of interest situation develop in the future regarding the firm's representation of the underwriter, the additional advice of this Commission may be necessary. For example, if your law finn Mr. George Shorall, Esquire July 21, 1986 Page 3 were to be called upon to initiate litigation in relation to this situation and for some reason the Pittsburgh Sewer and Water Authority were to receive assistance in defense of that matter from the Pittsburgh Office of City Solicitor, the above provision of law may be implicated. Thus, while there is no per se prohibition upon your acting as co- underwriter's counsel and advising Paine Webber in relation to your dealings with the Pittsburgh Water and Sewer Authority, the activities of your son, as an assistant city solicitor, should be restricted so as to not occasion the type of conflict as outlined above. See Steinman, 84 -006. Conclusion: The State Ethics Act presents no per se prohibition upon the simultaneous service of a public employee in a position of private employment. Ir this particular case, there appears to be no conflict of interest occassioned by your son's service as a part -time assistant city solicitor at the same time that he is a member of a law firm which has been appointed as co- underwriter's counsel to represent an investment company which will act as the lead underwriter for a municipal water and sewer authority located in the same municipality where in the son serves as assistant city solicitor. As an assistant city solicitor, your son should not use his public office or any confidential information obtained through that public office to assist the law firm in their representation of this matter. Similarly, in the event that the office of city solicitor is called upon to perform some task in relation to the Pittsburgh Sewer and Water Authority, the further advice of this Commission may be necessary. 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. Sincere n Genera ounsel