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HomeMy WebLinkAbout88-546 VelitskyJoseph J. Velitsky, Esquire County of Carbon Court House Jim Thorpe, PA 18229 STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 April 13, 1988 ADVICE OF COUNSEL This responds to your letter of February 24, 1988, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibition or restrictions upon county commissioners regarding investments of county funds in a trust company or savings and loan association when the county commissioners are associated with those respective institutions. Facts: You state that you are the solicitor for Carbon County and you raise a question concerning the investment of Carbon County monies in local banking institutions. J further state that one of the county commissioners, Luther A. Getz is a Director of the Mauch Chunk Trust Company and that Commissioner Koch is a member of the local advisory board of the First Federal Savings and Loan Association. After noting that Carbon County periodically invests county monies in short term certificates of deposit at local banking institutions which offer the highest available rate of interest, you question whether the county may invest in these institutions in light of the commissioners' associations. You state that the county treasurer solicits quotes on the rate of return of investments and then submits information to the commissioners for their action. You further state that the respective commissioner would not vote on the deposit of monies at the institution with which he is associated. Under these fact and circumstances, you request advice as to whether there would be any restriction under the Ethics Act on the proposed activity. Re: Conflict of Interest, County Commissioners, Investing Funds in Banks with which the Commissioners are Associated Dear Mr. Velitsky: 88 =546 Joseph J. Velitsky, Esquire April 13, 1988 Page 2 Discussion: As commissioners for Carbon County, they are public officials within the definition of that term as set forth in the Ethics Act and the regulations of this Commission. 65 P.S. §402; 51 Pa. Code §1.1. As such, they are subject to the provisions of the Ethics Act. The Act does, however, provide as follows: 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, no public official may use his position or any confidential information obtained therein in order to obtain a financial gain for himself or a member of his immediate family or 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. It is clear. that Mr. Getz as a Director and possibly Mr. Koch are considered to be "associated" with their respective banking institutions as that term is used under the Ethics Act. Under Section 3(a), the Ethics Commission has determined that the use of office by a public official to obtain a gain or benefit for himself 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). Of course, under this provision, a county commissioner may not use his public position to secure any financial gain for himself or for the business which he is associated. See Domalakes, Opinion 85 -010. Joseph J. Vel i tsky, Esquire April 13, 1988 Page 3 Under the public office, funds with his would not precl noted that the should be made above provision of law, as long as the commissioner did not use such as through voting, regarding the investment of county respective banking institution, Section 3(a) of the Ethics Act ude such investments by the county. However, it should be commissioners' abstention regarding voting on the deposit of public record together with the reason for his abstention. 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). Section 3(b) of the Ethics Act must be referenced in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which a public official or employee must observe, a public official or employee must neither offer nor accept anything of value on the understanding or with the intention that his judgment would be influenced thereby. It is assumed such a situation does not exist here. This Section is referenced 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 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. Conclusion: The Commissioners of Carbon County are public officials subject to the provisions of the Ethics Act. Under Section 3(a) of the Ethics Act, the county may invest funds in banking institutions with which these commissioners are associated provided each commissioner does not use public office regarding participating and discussions or voting as to the investments in his respective banking institution. Further, the commissioner must note his abstention of public record together with the reason for his abstention. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Joseph J. Vel i tsky, Esquire April 13, 1988 Page 4 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. Sincerely, Dev Vincent J'. Dopko General Counsel