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HomeMy WebLinkAbout87-537 BlumleCharles A. Blumle 404 North Maple Street Emporium, PA 15834 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 April 2, 1987 ADVICE OF COUNSEL 87 - 537 Re: Conflict of Interest, Municipal Authority Member Leasing Space, Building Managed by Authority Dear Mr. Blumle: This responds to your letter of March 2, 1987, wherein you requested the advice of the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibition upon a member of a municipal authority having an interest in a corporation that leases space in a building managed by the municipal authority. Facts: On April 6, 1981, you were appointed to the Emporium Municipal Authority. In December of 1985 this municpal authority expanded to encompass part of an adjoining township and the authority changed its name to the Mid- Cameron Authority. At that time, the authority was involved in the renovation of a sewer plant and lines. In May 1986, Emporium Borough Council requested that the Mid- Cameron Municipal Authority expand its activities to include the management of the Emporium Trade Center, a multi- tenant /incubator complex. This industrial complex was purchased from North American Philips with funds provided by the Department of Community Affairs Block Grant Program. You further advised that you have a financial interest in a company, Keystone Automatic Technology. This company has expanded and has expressed an interest in buying or leasing a larger building. One of the areas where this company would seek to relocate, includes certain buildings located in the Emporium Trade Center. You advised that you have not taken part in any discussions, negotiations, or voting as an authority member in relation to leasing of space by Keystone Automatic. As a result of the foregoing, you have requested the advice of the State Ethics Commission regarding whether there would be a conflict of interests in your company's leasing of space with the Mid - Cameron Authority when you serve as a member of that authority. Discussion: As a member of a municipal authority you are clearly a public official as that term is defined in the State Ethics Act. 65 P.S. §402. As such, your conduct must conform to the requirements of that law. Dice, 85 -021. The Ethics Act provides, in part, as follows: Charles A. Blumle April 2, 1987 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 the above provision of law, this Commission has determined that no public official may participate in any matter before his governmental body in which he has a direct financial interest. Similarly, such a public official may not participate in any matter involving a business with which he is associated. The Act 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. You clearly are associated with Keystone Automatic Technology, Inc. as set forth within the above definition of the Ethics Act. Therefore, you as an authority member, may not use your public position or any confidential information obtained therein to secure a benefit for that company. Prior Commission opinions require your abstention in any matter, consideration, discussions, or decisions by the authority in relation to the business with which you are associated. Your abstention in such matters, must be publicly noted and appropriately recorded in authority minutes. See Sowers, 80 -050. While the Ethics Act would place no absolute prohibitions on the location of your business entity in this complex, the Ethics Act does authorize this Commission to address other areas of possible conflicts of interests. 65 P.S. §403(d). A conflict of interest would be occasioned whenever a public official attempts to serve one or more interests that are adverse. See Alfano, 80 -008. While this Commission cannot invision every potential conflict of interest that may arise, you are advised that you should abstain from participating in any matter that would benefit the company with which you are associated. You have not provided any specific details regarding the duties and the responsibilities of the authority in relation to the daily management of the complex. If you are called upon, on a routine basis, to make decisions regarding the Emporium Trade Center and these decisions would impact upon the companies that are leasing space in that complex, including the business with which you are associated, then you must abstain from participating therein. Charles A. Blumle April 2, 1987 Page 3 For example, if the authority must make a decisions as to whether to renovate the buildings in which your business is located, you may not particpate in that decision. Similarly, if the authority is responsible for allocating funds in relation to the trade center, and decisions must be made between competing interests, not only must you abstain from participating in a decision to award those funds to the benefit of your own company, you must similarly abstain from considering whether to award such funds to an entity that is in competition with your own. See Balaban, 83 -004; Coploff /Hendricks, 83 -005. Essentially, the Commission in the prior cited opinions, sought to eliminate the possibility that a public official or public employee who is seeking such funds or seeking to participate in the benefits of a particular program, would be in a position to ensure the grant of such funds or that the program benefits would be available to be applied for or applied to his own benefit. Thus, a*public official or employee, in such a situation, should refrain from participating in making decisions, or recommendations about the program or the distribution of limited funds which might be available as a result of such program. Once again, the reasons for such abstention must be placed on the public record. Finally, as previously noted, this Commission can not invision every potential conflict of interest that may arise. In the event that a situation should develop, wherein you are placed in a situation of serving one or more interest that are adverse, you must seek the further advice of this Commission or abstain from participating in such matters. Conclusion: While the State Ethics Act places no per se prohibition on the contemplated activites as set forth in your letter of request, you, as a public official, must conform to the requirements of the State Ethics Act. As such, you may not participate in any matter that relates to the financial interest or that will be to the financial benefit of the business with which you are associated. Similarly, in the event that you are called upon as a member of the municipal authority to make decisions regarding competing interests of which your business is one, you must similarly abstain from participating therein. Your abstention in such matters must be publicly noted and appropriately recorded. 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. Charles A. Blumle April 2, 1987 Page 4 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 ncerely, John Contino Acting General Counsel