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HomeMy WebLinkAbout88-511 ByrneDennis J. Byrne, Esquire 131 W. Miner Street West Chester, PA 19382 -3281 Dear Mr. Byrne: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 February 17, 1988 ADVICE OF COUNSEL 88 - 511 Re: Conflict of Interest, Township Supervisor, Rule of Necessity, Representation of a Partnership one of whose Members Purchased Realty Interest for which Development Plans may be Submitted to Township This responds to your letter of January 8, 1988, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibitions upon a township supervisor from acting upon a development plan submitted to the township when the supervisor legally represents a partnership, one of whose member has a realty interests on which the development plan may be submitted before the township. Facts: You state that you are an elected township supervisor in Penn Township, Chester County, as well as a practicing attorney in West Chester, Pennsylvania. You further state that prior to your election as second class township supervisor, you were engaged in representing a partnership which constructed a medical office building in Penn Township. You also state that although the partnership continues to operate the medical office building for which you provide legal services, you do not represent any of the managing partners in their individual capacities. You further state that one of the managing partners together with a third party whom you do not represent has purchased an interest in real estate in Penn Township for which it is anticipated that these two individuals will submit a development plan before the township which would require supervisor action. It is further stated by you that one of the other supervisors in the township has a conflict of interest in that he has been engaged to market the property after the development plan has been acted upon by the board of supervisors. You state that you anticipate that this other member of the board will recuse himself regarding the development plan which would result in two members of the three member board being left to act upon said development plan. You then question whether you would have to recuse yourself in light of legal fees that you may receive as a result of services provided to the partnership. You state that you would prefer to avoid recusing yourself but you would not want the above mentioned fees to be considered as a gain other than compensation as provides Dennis J. Byrne, Esquire February 17, 1988 Page 2 for by law under Section 3(a) of the Ethics Act. You conclude by requesting advice as to your duties as a public official under the Ethics Act relative to this development plan, by asking whether you can avoid rocusal , if required under the Ethics Act, by resigning as attorney for the partnership and by asking what additional steps are necessary for you to comply with the Ethics Act. Discussion: As a township supervisor for Penn Township, you are a "public official" as that term is defined in the Ethics Act. See Volpe, 579 -R; 65 P.S. §402; 51 Pa. Code §1.1. As such, your conduct is subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. Section 3(a) of the Ethics Act provides: 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). Section 3(a) basically provides that a public official may not use his public office or confidential information to obtain a financial gain other than compensation as provided for by law for himself or a business with which he is associated. Under this provision, the Ethics Commission has determined that the use of office by a public official to obtain a gain or benefit for himself or a business with which he is associated which is not provided for in law constitutes a "financial gain other than compensation provided for by law." These determinations have been appealed to the Commonwealth Court of Pennsylvania which has affirmed the Orders of the Commission. See McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529 (1983). See also Yocabet v. State Ethics Commission, Pa. Commw. _ , 531 A.2d 536 (1987). Thus, under this provision, a public official may not use his public position to secure any financial gain for himself or a business with which he is associated unless it is provided for by law. Domalakes Opinion, 85 -010. The Ethics Commission has determined that the above provision applies to situations where a public official's interest in a private outside matter is indirect as well as direct. See Welz Opinion, 86 -001, wherein the Commission determined that a township supervisor could not participate in matters submitted before the township board when that supervisor had a business relationship with the entity making the submission. In the instant situation, you have a business relationship with the partnership one of whose members is a co- investor in real estate for which development plans will be submitted to the township. Therefore, when any matter concerning this partner would come Dennis J. Byrne, Esquire February 17, 1988 Page 3 before the township such as the development plans for the realty in which this partner invested, you should not use your public office by participating in that matter under Section 3(a) of the Ethics Act. Similarly, Section 3(d) of the Ethics Act provides: Section 3. Restricted activities. (d) Other areas of possible conflict shall be addressed by the commission pursuant to paragraph (9) of section 7. 65 P.S. 403(d). Under Section 3(d) of the Ethics Act, the Commission has applied this provision of law, in part, by referencing the preamble to the Ethics Act, the stated purpose of which is to strengthen the faith and confidence of people in their government by assuring the public that the financial interests of the holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. 65 P.S. 401. Thus, under Section 3(d) of the Ethics Act, you would have to abstain from participating in matters concerning the development plans for this realty and you would have to note your abstention of public record as well as the reason for your abstention. Notwithstanding, the above provisions of the Ethics Act and the accompanying analysis, it is noted that another supervisor may have a conflict of interest regarding voting upon these development plans. The Ethics Commission has determined that in situations where a majority of public officials of a governmental body are in a conflict of interest situation and their combined recusal would result in their governmental body being unable to function, a "rule of necessity" has been applied by the Commission in these situations provided certain conditions are met. Although public officials must normally abstain in voting or participating in matters wherein they have a conflict of interest, the "rule of necessity" operates where the governmental body could not function in light of the conflicts of several members of that governmental body. If there is no provision for the substitution of third parties for the officials who have a conflict of interest or if there is no provision for an alternative forum, then the "rule of necessity" would operate because the governmental body would be unable to otherwise function. The Commission opined in the Hahalis Opinion, 83 -009, that if there is no provision for substitution of parties or an alternative forum, the normally disqualified members, under the "rule of necessity," could participate in forming a quorum; additionally they could vote provided the normally qualified member or members was present. In addition, the Commission opined that the governmental body must give advance notice to the public that matters will be considered which require the application of the "rule of necessity" and further that the public record should show the reason for the application of the rule. Dennis J. Byrne, Esquire February 17, 1988 Page 4 In the instant case, if there is no provision for a substitution of a third party when you and the other member have a conflict and if there is no provision for an alternative forum, then the "rule of necessity" would allow you to participate provided all of the above conditions are met. Regarding the possibility of your resignation as attorney for the partnership to avoid recusal, such action, provided it is a total and absolute termination of your relationship with the partnership and, of course, with the particular individual partner that has the interest in the realty, would then not preclude you from participating regarding these development plans. Parenthetically, if you were to resign as attorney for the partnership, there could be no basis for the "rule of necessity" because only one supervisor, but not a majority, would then have a conflict. Section 3(b) of the Ethics Act provides: Section 3. Restricted activities. (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Reference to Section 3(b) of the Ethics Act is made in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which you must observe, you must neither offer nor accept anything of value on the understanding or with the intention that your official judgment would be influenced thereby. It is assumed such a situation does not exist here. Reference to this Section is added not to indicate that any such activity has been or will be undertaken but in an effort to provide a complete response to your inquiry. Lastly, the propriety of your proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, regulation, or ordinance or other code of conduct other than the Ethics Act has not been considered. Specifically, not addressed is the applicability of the Second Class Township Code. Dennis J. Byrne, Esquire February 17, 1988 Page 5 Conclusion: As a second class township supervisor for Penn Township, you are a public official subject to the provisions of the Ethics Act. Under Section 3(a) and 3(d) of the Ethics Act, you may not participate regarding development plans which would be submitted to the township when one of the co- owners of the realty is a member in a partnership for which you provide legal representation. However, .i if you and a second supervisor both have a conflict which would warrant the application of the "rule of necessity ", then you could participate provided there is no provision for a substitution of a third party or an alternative forum to decide the issue and the third member who has no conflict is present and all of the other conditions in terms of prior public notice and disclosure are satisfied. In addition, you would not be precluded from voting if you would completely terminate your relationship with the partnership as outlined above. Lastly, the propriety of your proposed conduct has only been addressed under the Ethics Act. 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 challenge same, you may request that the full Commission revi A personal appearance before the Commission will be scheduled Opinion from the Commission will be issued. Any such appeal writing, to the Commission within 15 days of service of this to 51 Pa. Code 2.12. Sincerely, 1,„c;,) cy/Lt) Vincent J. Dopko General Counsel any reason to ew this Advice. and a formal must be made, in Advice pursuant