HomeMy WebLinkAbout17-576 SchneeSTATE ETHICS COMMISSION
309 FINANCE BUILDING
PO. BOX 11470
HARRISBURG, PA 17108 -1470
(717) 783 -1610
1 -800- 932 -0936
ADVICE OF COUNSEL
November 29, 2017
To the Requester:
Mr. J. Chadwick Schnee, Esquire
Berks County Solicitor's Office
Dear Mr. Schnee:
17 -576
This responds to your letter dated September 29, 2017, and your email of
November 28, 2017, by which you requested an advisory from the Pennsylvania State
Ethics Commission ( "Commission ").
Issue: Whether, ursuant to Section 1103(a) of the Public Official and Employee
t -Ti—cs Act ( "Ethics Act "), 65 Pa,C.S. § 1103(a), a county commissioner, who has been
asked to serve on the board of directors of a not -for- profit foundation organized for the
purpose of promoting economic development by developing a cycling facility, would
have a conflict of interest with regard to participating in discussions or votes of the
county board of commissioners pertaining to agreements with the foundation, financial
contributions to the foundation, or other matters related to the foundation, if: (1) the
county commissioner would serve on the foundation board of directors in his private
capacity; or (2) the foundation board of directors would authorize the county
commissioner to serve as a director ex officio —that is, by reason of his office as a
county commissioner.
Facts: You have been authorized by Christian Leinbach ( "Mr. Leinbach ") to
request an advisory from the Commission on his behalf. You have submitted facts that
may be fairly summarized as follows.
Mr. Leinbach is a County Commissioner for Berks County, Pennsylvania. Mr.
Leinbach has been asked to serve on the Board of Directors of a newly- formed not -for-
profit entity known as the Velodrome Development Foundation (the "Foundation "). The
Foundation was organized for the purpose of promoting economic development by
developing a cycling facility. You state that the County does not currently have any
agreements with the Foundation and that the County has not provided any funding to
the Foundation. You further state that the County Board of Commissioners may choose
to enter into an agreement with the Foundation or otherwise financially contribute to the
Foundation at some point in the future.
Based upon the above submitted facts, you ask whether, under either of the
following two scenarios, Mr. Leinbach would have a conflict of interest with regard to
participating in discussions or votes of the County Board of Commissioners pertaining to
FAX: (717) 787 -0806 0 Web Site: www. ethics. state. a.us 0 e -mail: ethicsL state. pa. us
Schnee, 17 -576
N vier 29, 2017
Page 2
agreements with the Foundation, financial contributions to the Foundation, or other
matters related to the Foundation:
(1) Mr. Leinbach would serve on the Foundation Board of Directors in his
private capacity; or
(2) The Foundation Board of Directors would authorize Mr. Leinbach to
serve as a Director ex officio —that is, by reason of his office as a County
Commissioner.
Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of
the E ics ct, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester
based upon the facts that the requester has submitted. In issuing the advisory based
upon the facts that the requester has submitted, the Commission does not engage in an
independent investigation of the facts, nor does it speculate as to facts that have not
been submitted. It is the burden of the requester to truthfully disclose all of the material
facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a
defense to the extent the requester has truthfully disclosed all of the material facts.
As a County Commissioner, Mr. Leinbach is a public official subject to the
provisions of the Ethics Act.
Sections 1103(a) and 11036) of the Ethics Act provide:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
0) Voting conflict.- -Where voting conflicts are not
otherwise addressed by the Constitution of Pennsylvania or
by any law, rule, regulation, order or ordinance, the following
procedure shall be employed. Any public official or public
employee who in the discharge of his official duties would be
required to vote on a matter that would result in a conflict of
interest shall abstain from voting and, prior to the vote being
taken, publicly announce and disclose the nature of his
interest as a public record in a written memorandum filed
with the person responsible for recording the minutes of the
meeting at which the vote is taken, provided that whenever a
governing body would be unable to take any action on a
matter before it because the number of members of the body
required to abstain from voting under the provisions of this
section makes the majority or other legally required vote of
approval unattainable, then such members shall be
permitted to vote if disclosures are made as otherwise
provided herein. In the case of a three - member governing
body of a political subdivision, where one member has
abstained from voting as a result of a conflict of interest and
the remaining two members of the governing body have cast
opposing votes, the member who has abstained shall be
permitted to vote to break the tie vote if disclosure is made
as otherwise provided herein.
65 Pa.C.S. §§ 1103(a), Q).
Schnee, 17 -576
oive�er 29, 2017
Page 3
The following terms related to Section 1103(a) are defined in the Ethics Act as
follows:
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employyee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate
family or a business with which he or a member of his
immediate family is associated. The term does not include
an action having a de minimis economic impact or which
affects to the same degree a class consisting of the general
public or a subclass consisting of an industry, occupation or
other group which includes the public official or public
employee, a member of his immediate family or a business
with which he or a member of his immediate family is
associated.
"Authority of office or employment." The actual
power provided by law, the exercise of which is necessary to
the performance of duties and responsibilities unique to a
particular public office or position of public employment.
"Immediate family." A parent, spouse, child, brother
or sister.
"Business." An corporation, partnership, sole
proprietorship, firm, enterprise, franchise, association,
organization, self - employed individual, holding company,
joint stock company, receivership, trust or any legal entity
organized for profit.
"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
has a financial interest.
65 Pa.C.S. § 1102.
Subject to the statutory exclusions to the Ethics Act's definition of the term
"conflict" or "conflict of interest," 65 Pa.C.S. § 1102, a public official/public employee is
prohibited from using the authority of public office /employment or confidential
information received by holding such a public position for the private pecuniary benefit
of the public officiallpublic employee himself, any member of his immediate family, or a
business with which he or a member of his immediate family is associated.
In each instance of a conflict of interest, the public officiallpublic employee would
be required to abstain from participation. The abstention requirement would not be
limited merely to voting, but would extend to any use of authority of office including, but
not limited to, discussing, conferring with others, and lobbying for a particular result.
Juliante, Order 809. Subject to certain statutory exceptions, in each instance of a voting
coons Section 11030) of the Ethics Act would require the public official/public
employee to abstain and to publicly disclose the abstention and reasons for same, both
orally and by filing a written memorandum to that effect with the person recording the
minutes.
Schnee, 17 -676
avem er 29, 2017
Page 4
In ap Iying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
The Ethics Act's definition of the term "business" includes non- rofit entities.
See, Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708 2009). If Mr.
Ueinbach would become a Member of the Foundation Board of irectors, the
Foundation would be a business with which Mr. Leinbach is associated in his capacity
as a Director — regardless of whether Mr. Leinbach would be serving on the Foundation
Board of Directors in his private capacity or as a result of the Foundation Board of
Directors authorizing Mr. Leinbach to serve as a Director ex officio (that is, by reason of
his office as a County Commissioner). Under either scenario, subject to the statutory
exclusions to the definition of "conflict" or "conflict of interest" as set forth in Section
1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics
Act, Mr. Leinbach would have a conflict of interest with regard to participating in
discussion(s) or vote(s) of the County Board of Commissioners pertaining to matter(s)
that would financially impact the Foundation, including but not limited to agreements
with the Foundation or financial contributions to the Foundation.
In each instance of a conflict of interest, Mr. Leinbach would be required to
abstain from participation, which would include voting unless one of the statutory
exceptions of Section 11030') of the Ethics Act would be applicable. Additionally, the
disclosure requirements of Section 1103x) of the Ethics Act would have to be satisfied
in the event of a voting conflict.
The propriety of the proposed conduct has only been addressed under the Ethics
Act; the applicability of any other statute, code, ordinance, regulation or other code of
conduct other than the Ethics Act has not been considered in that they do not involve an
interpretation of the Ethics Act. Specifically not addressed herein is the applicability of
the County Code.
Conclusion: Based upon the submitted facts that: (1) Christian Leinbach ( "Mr.
Leinbach") is a County Commissioner for Berks County, Pennsylvania; (2) Mr. Leinbach
has been asked to serve on the Board of Directors of a newly-formed not-for-profit entity
known as the Velodrome Development Foundation (the "Foundation"); (3) the
Foundation was organized for the purpose of promoting economic development by
developing a cycling facility; (4) the County does not currently have any agreements
with the Foundation, and the County has not provided any funding to the Foundation;
and (5) the County Board of Commissioners may choose to enter into an agreement
with the Foundation or otherwise financially contribute to the Foundation at some point
in the future, you are advised as follows.
As a County Commissioner, Mr. Leinbach is a public official subject to the
provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §
1101 et seq. If Mr. Leinbach would become a Member of the Foundation Board of
Directors, the Foundation would be a business with which Mr. Leinbach is associated in
his capacity as a Director — regardless of whether Mr. Leinbach would be serving on the
Foundation Board of Directors in his private capacity or as a result of the Foundation
Board of Directors authorizing Mr. Leinbach to serve as a Director ex officio (that is, by
reason of his office as a County Commissioner). Under either scenario, subject to the
statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in
Section 1102 of the Ethics Act, 65 Pa.C.S. 5 1102, pursuant to Section 1103(a) of the
Ethics Act, Mr. Leinbach would have a conflict of interest with regard to participating in
discussion(s) or vote(s) of the County Board of Commissioners pertaining to matter(s)
that would financially impact the Foundation, including but not limited to agreements
with the Foundation or financial contributions to the Foundation.
Schnee, 17 -576
aTvember 29, 2017
Page 5
In each instance of a conflict of interest, Mr. Leinbach would be required to
abstain from participation, which would include voting unless one of the statutory
exceptions of Section 1103 ') of the Ethics Act would be applicable. Additionally, the
disclosure requirements of Section 1103 0) of the Ethics Act would have to be satisfied
in the event of a voting conflict. Lastly, the propriety of the proposed conduct has only
been addressed under the Ethics Act.
Pursuant to Section 1107(11) of the Ethics Act, an 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, provided the requester 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 appeal the Advice to the full
Commission. A personal appearance before the Commission will be
scheduled and a formal Opinion will be issued by the Commission.
Any such appeal must be in writingg and must be aactu�all
received at the Commission within thirty (30) days of the date of this
Advice ursuant to 51 Pa. Code § 13.2(h). The appeal may be
received p at the Commission by hand delivery, United States mall,
delivery service, or by FAX transmission (717-787-0806). Failure to
file such an appeal at the Commission within thirty (30) days may
result in the dismissal of the appeal.
Sincerely,
;? —
Robin M. Hittie
Chief Counsel