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HomeMy WebLinkAbout18-002 Mattleman Kaplan>r k4 r 6 i4 , nit ?. ,�` i `'• PHONE: 717- 783 -1610 STATE ETHICS COMMISSION FACSIMILE: 717 - 787 -0806 TOLL FREE: 1- 800 -932 -0936 FINANCE BUILDING WEBSITE: www.ethicspa.gov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 OPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Melanie DePalma Monique Myatt Galloway Shelley Y. Simms DATE DECIDED: 2120118 DATE MAILED: 2122118 18 -002 To the Requester: Ellen Mattleman Kaplan Chief Integrity Officer City of Philadelphia Office of the Mayor Dear Ms. Kaplan: This Opinion is issued in response to your letter dated January 29, 2018, and your email of February 12, 2018, by which you requested an advisory opinion from the Pennsylvania State Ethics Commission ( "Commission "). I. ISSUE: Whether Members of the Educational Nominating Panel and Members of the Board of Education of the School District of Philadelphia would be subject to the restrictions and requirements of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et se q.; and whether individuals nominated by the Educational Nominating Panel for potential service on the Board of Education would be considered "nominees for purposes of filing Statements of Financial Interests pursuant to the Ethics Act. II. FACTUAL BASIS FOR DETERMINATION: You request an advisory from this Commission on behalf of the Honorable James F. Kenney, Mayor of the City of Philadelphia ( "City "). You have submitted facts that may be fairly summarized as follows. The Commonwealth of Pennsylvania has been in control of the School District of Philadelphia ( "School District") since 2001. After Mayor Kenney called for the School District to return to local control in November 2017, steps were taken to dissolve the existing governing body of the School District in order to reestablish the Board of Education of the School District of Philadelphia ( "Board of Education "). Mattleman Kaplan, 18 -002 February 22, 2018 Page 2 Pursuant to the Philadelphia Home Rule Charter, the Board of Education is charged with the administration, management and operation of the School District. The powers and duties of the Board of Education as set forth in the Philadelphia Home Rule Charter include, but are not limited to, the following: (1) appointing and setting the compensation of the Superintendent of Schools; (2) adopting an annual operating budget and annual revenue estimate; (3) adopting a capital program and capital budget for the School District; (4) levying school taxes; (5) creating and incurring indebtedness against the School District and issuing bonds to secure the same; (6) adopting regulations governing employment with the School District; and (7) entering into cooperative agreements relating to joint tax collection, joint purchasing of supplies, equipment and contractual services, use of recreational and park equipment and facilities, capital budgeting, capital programming, and other matters. See, Philadelphia Home Rule Charter, Article XII, Section 12 -300 et seg. Regarding the composition and selection of the Members of the Board of Education, the Philadelphia Home Rule Charter provides, in pertinent part, as follows: § 12 -201. Members of the Board; Method of Selection. There shall be nine members of the Board of Education who shall be appointed by the Mayor from lists of names submitted to him by the Educational Nominating Panel, or, if enabling legislation is enacted by the General Assembly of the Commonwealth, elected on a non - partisan basis by the qualified voters of the city, all as more fully set forth in later sections of this Chapter. There shall also be a non - voting student advisory member of the Board of Education and alternate appointed by the Board from among the students enrolled in the Philadelphia public schools.... Philadelphia Home Rule Charter, Article XII, Section 12 -201. Pertinent to the instant matter, under the Philadelphia Home Rule Charter, the City Mayor shall appoint and convene an Educational Nominating Panel whenever a vacancy occurs in the membership of the Board of Education. Philadelphia Home Rule Charter, Article XII, Section 12- 207(a). With respect to the establishment of the Educational Nominating Panel, the Philadelphia Home Rule Charter provides, in pertinent part, as follows: a12 -206. Educational Nominating Panel; Method of election. (a) The Mayor shall appoint an Educational Nominating Panel consisting of thirteen (13) members. Members of the Panel shall be registered voters of the City and shall serve for terms of four years from the dates of their appointment. Philadelphia Home Rule Charter, Article XII, Section 12- 206(a). The Members of the Educational Nominating Panel are drawn from certain types of City --wide organizations or institutions and the citizenry at large. Id., Article XII, Section 12- 206(b) -(d). Based upon the submitted facts, the procedures set forth in the Philadelphia Home Rule Charter for the election of Members of the Board of Education are not at issue in this matter. Mattlernan Kaplan, 18 -002 February 22, 2018 Page 3 Regarding the function of the Educational Nominating Panel, the Philadelphia Home Rule Charter provides, in pertinent part, as follows: § 12 -207. The Educational Nominating Panel; Duties and Procedure. (b) The Panel shall within forty (40) days [of being appointed and convened by the Mayor] submit to the Mayor three names of qualified persons for every place on the Board of Education which is to be filled. If the Mayor wishes an additional list of names, the Mayor shall so notify the Panel within ten (10) days. Thereupon the Panel shall within ten 10) days send to the Mayor an additional list of �hree qualified persons for each place to be filled. The Mayor shall within twenty (20) days make an appointment ... from either list for each place to be filled. (d) The Educational Nominating Panel shall invite business, civic, professional, labor, and other organizations, as well as individuals, situated or resident within the City to submit for consideration by the Panel the names of persons qualified to serve as members of the Board of Education. Philadelphia Home Rule Charter, Article X11, Section 12- 207(b), (d). You state that Mayor Kenney has appointed a thirteen- Member Educational Nominating Panel to recommend to him nominees for his consideration for appointment to the Board of Education. The final date for the submission of nominees to Mayor Kenney is February 28, 2018. Because there is a full complement of nine seats to be filled on the Board of Education, the Educational Nominating Panel will initially send Mayor Kenny a list containing three names for each available seat, for a total of twenty - seven names for his consideration. If Mayor Kenney would desire an additional list of names for his consideration, the Educational Nominating Panel would send him a second list with twenty -seven more names. You state that depending upon whether Mayor Kenney would request a list of additional names from the Educational Nominating Panel, at least eighteen and up to forty -five individuals whose names would be submitted to him for consideration would not be seated on the Board of Education. You reference Section 1104(c) of the Ethics Act, 65 Pa.C.S. § 1104(c), which requires all nominees for state - level, county - level, or local office to file a Statement of Financial Interests at least ten days before the official or body vested with the power of confirmation shall approve or reject the nomination. You state that the City's Law Department contends that the names on lists provided by the Educational Nominating Panel to Mayor Kenney would not constitute "nominees" as defined by Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, but rather would constitute proposed appointments or recommendations which the Mayor would not "finally confirm" or "reject' under the language of the Philadelphia Home Rule Charter. You state that no single name would be submitted for an up -or -down vote. You state that the City's Law Department asserts that no important governmental purpose would be served by requiring all individuals whose names would appear on the aforesaid list(s) submitted to Mayor Kenney to file Statements of Financial Interests. Mattleman Ka Ian, 18 -002 February 22, 2018' Page 4 You present arguments that those individuals who would not be appointed as Members of the Board of Education would face a significant loss of privacy if they would be required to file Statements of Financial Interests, which are public records, and that only those individuals who would ultimately be appointed as Members of the Board of Education should be required to file Statements of Financial Interests pursuant to the Ethics Act. Based upon the submitted facts, you request an advisory opinion as to whether Members of the Educational Nominating Panel and Members of the Board of Education would be subject to the restrictions and requirements of the Ethics Act. You further ask whether individuals nominated by the Educational Nominating Panel for potential service on the Board of Education would be considered "nominees" for purposes of filing Statements of Financial Interests pursuant to the Ethics Act. By letter dated February 13, 2018, you were notified of the date, time and location of the public meeting at which your request would be considered. At the public meetin, on February 20, 20'18, you appeared and offered commentary, which may be fairly summarized as follows. You stated that although the process for selecting potential Members of the Board of Education may change in the future, the Commission is being asked to issue an Opinion based upon the current process. You noted that under the current process, the individuals under consideration for appointment to the Board of Education have submitted r6sumes, and that the individuals whose names appear on the list(s) for submission to the Mayor also will provide additional information and will be subject to a background check. It would be possible for such individuals to withdraw their names from consideration; it would also be possible for such individuals to be removed from consideration as a result of background checks. You confirmed that the Mayor must choose individuals from among those named on the aforesaid list(s) for appointment to the Board of Education and that the Mayor may not request a third or fourth list. You stated that the concern with requiring all individuals whose names appear on the list(s) submitted to the Mayor to file a Statement of Financial Interests is that the Statement of Financial Interests is a ublic record. You reiterated the argument that such individuals should not be considered nominees in the traditional meaning of the word. You asserted that there is no "confirmation," but rather, "mayoral appointments" based upon "recommendations." Although it is your view that only the nine individuals ultimately appointed to the Board of Education should be required to file Statements of Financial Interests pursuant to the Ethics Act, you acknowledgged that the information provided on the Statement of Financial Interests form might provide a basis for identifying potential conflicts of interest during the process prior to appointment. You further stated that some of the individuals who will be named on the list(s) may already file Statements of Financial Interests in other capacities. Ill. DISCUSSION: It is in itially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 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, this 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. Mattlernan Kaplan, 18 -002 February 22, 2018 Page 5 The response to your inquiry regarding Members of the Educational Nominating Panel and Members of the Board of Education hinges upon an application of the statutory definition of the term "public official" set forth in the Ethics Act. The term "public official" is defined in the Ethics Act as follows: § 1102. Definitions "Public official." Any person elected by the public or elected or appointed by a governmental body or an appointed official in the executive, legislative or judicial branch of this Commonwealth or any political subdivision thereof, provided that it shall not include members of advisory boards that have no authority to expend public funds other than reimbursement for personal expense or to otherwise exercise the power of the State or any political subdivision thereof. 65 Pa.C.S. § 1102. The Regulations of the State Ethics Commission similarly define the term "public official" and set forth the following additional criteria that are used to determine whether the advisory board exception applies: (i) The following criteria will be used to determine if the exception in this paragraph is applicable: (A) The body will be deemed to have the power to expend public funds if the body may commit funds or may otherwise make payment of moneys, enter into contracts, invest funds held in reserves, make loans or grants, borrow money, issue bands, employ staff, purchase, lease, acquire or sell real or personal property without the consent or approval of the governing body and the effect of the power to expend public funds has a greater than de minimis economic impact on the interest of a person. (B) The body will be deemed to have the authority to otherwise exercise the power of the Commonwealth or a political subdivision if one of the following exists: (1) The body makes binding decisions or orders adjudicating substantive issues which are appealable to a body or person other than the governing authority. (11) The body exercises a basic power of government and performs essential governmental functions. (Ill) The governing authority is bound by statute or ordinance to accept and enforce the rulings of the body. (IV) The body may compel the governing authority to act in accordance with the body's decisions or restrain the governing authority from acting contrary to the body's decisions. (V) The body makes independent decisions which are effective without approval of the governing authority. Mattleman Kaplan, 18 -002 February 22, 2018 Page 6 (VI) The body may adopt, amend and repeal resolutions, rules, regulations or ordinances. (VII) The body has the power of eminent domain or condemnation. (VIII)The enabling legisiation of the body indicates that the body is established for exercising public powers of the Commonwealth or a political subdivision. (ii) The term does not include judges and inspectors of elections, notary publics and political' party officers. (iii) The term generally includes persons in the following offices: (A) Incumbents of offices filled by nomination of the Governor and confirmation of the Senate. (B) Heads of executive, legislative and independent agencies, boards and commissions. (C) Members of agencies, boards and commissions appointed by the General Assembly or its officers. (D) Persons appointed to positions designated as officers by the Commonwealth or its political subdivisions. (E) Members of municipal, industrial development, housing, parking and similar authorities. (F Members of zoning hearing boards and similar quasi - judicial bodies. (G) Members of the public bodies meeting the criteria in paragraph (i)(A). 51 Pa. Code § 11.1. In applying the Ethics Act's definition of the term "public official," the first portion of the definition provides that a public official is a person who is: (1) elected by the public; (2) elected or appointed by a governmental body; or (3) an appointed official in the executive, legislative or judicial branch of the Commonwealth of Pennsylvania or a political subdivision of the Commonwealth. Muscalus, Opinion 02 -007. When the first portion of the definition is met, status as a public official subject to the Ethics Act is established, unless the exclusion for members of purely advisory boards is applicable. Eiben, Opinion 04 -002. The fact that Members of the Educational Nominating Panel and Members of the Board of Education are appointed by the City Mayor satisfies the first portion of the definition. This is because the Mayor, as an officer in the executive branch of the City ,(Philadelphia Home Rule Charter, Article III, Section 3 -100), would be considered a `governments body" as the Ethics Act defines that term: § 1102. Definitions Mattleman Kaplan. 18 -002 February 22, 2018 Page 7 "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental unction. "Political subdivision." Any county, city, borough, incorporated town, township, school district, vocational school, county institution district, and any authority, entity or body organized by the aforementioned. 65 Pa.C.S. § 1102 (Emphasis added). Cf., Cohen, Opinion 03 -006. As for the remainder of the definition, the necessary conclusion is that neither Members of the Educational Nominating Panel nor Members of the Board of Education would fall within the statutory exception for members of purely advisory boards lacking authority to expend public funds other than reimbursement for personal expense or to otherwise exercise the power of the State or a political subdivision. With regard to the Educational Nominating Panel, the Philadelphia Home Rule Charter provides the Educational Nominating. Panel with the authority to provide the City Mayor with lists of names of persons qualified to serve as Members of the Board of Education. The Mayor must make his appointments from those lists. The power of the Educational Nominating Panel to determine which persons' names shall be submitted to the City Mayor for consideration for appointment to the Board of Education —and therefore to include or exclude persons from the opportunity to hold such public office — goes beyond a purely advisory function. Cf., Area Loan Or anizations Under Capital Loan Fund Act, Opinion 95 -006 at 11 -12 (Holding, inter alia, t hat the power to eliminate app icants from governmental programs goes beyond a purely advisory function.) With respect to the Board of Education, the Philadelphia Home Rule Charter empowers the Board of Education to, inter alias (1) appoint and set the compensation of the Superintendent of Schools; (2) acTopt an annual operating budget and annual revenue estimate; (3) adopt a caps a .program and capital budget for the School District; (4) levy school taxes; (5) create and incur indebtedness against the School District and issue bonds to secure the same; (6) adopt regulations governing employment with the School District; and (7) enter into cooperative agreements relating to joint tax collection, joint purchasing of supplies, equipment and contractual services, use of recreational and park equipment and facilities, capital budgeting, capital programming, and other matters. Thus, the Board of Education is not purely advisory in that it has legal authority to exercise basic powers of government and it performs essential government functions. Therefore, based upon the provisions of the Ethics Act, this Commission's Regulations, and this Commission's Opinions, the necessary conclusion is that Members of the Educational Nominating Panel and Members of the Board of Education are "public officials" subject to the Ethics Act and the Regulations of the State Ethics Commission. Turning to your inquiry as to whether individuals nominated by the Educational Nominating Panel for potential service on the Board of Education would be considered "nominees for purposes of filing Statements of Financial Interests pursuant to the Ethics Act, we initially note that Section 1104(c) of the Ethics Act provides as follows: § 1104. Statement of financial interests required to be filed. Mattleman Ka [an, 18 -002 February 22, 2018 Page 8 (c) Nominee. —Each State -level nominee for public office shall file a statement of financial interests for the preceding calendar year with the commission and with the official or body that is vested with the power of confirmation at least ten days before the official or body shall approve or reject the nomination. Each nominee for a county-level or local office shall file a statement of financial interests for the preceding calendar year with the governing authority of the political subdivision in which he or she is a nominee and, if different, with the official or body that is vested with the power of confirmation at least ten days before the official or body shall approve or reject the nomination. 65 Pa.C.S. § 1104(c). On its face, Section 1104(c) of the Ethics Act requires all nominees for state- level, county - level, or local office to file a Statement of Financial Interests at least ten days before the official or body vested with the power of confirmation shall approve or reject the nomination. The Ethics Act defines the term "nominee" as follows: § 1102. Definitions "Nominee." Any person whose name has been submitted to a public official or governmental body vested with the power to finally confirm or reject proposed appointments to public office or employment. 65 Pa.C.S. § 1102. Based upon the submitted facts, the necessary conclusion is that individuals who would be nominated by the Educational Nominating Panel for potential service on the Board of Education would be considered "nominees" as that term is defined by the Ethics Act. Membership on the Board of Education is a position of public office. Pursuant to the Philadelphia Home Rule Charter, the Educational Nominating Panel submits to the City Mayor, who is a public official and governmental body, lists of names of qualified persons for positions to be filled on the Board of Education. The City Mayor makes appointments to the Board of Education from the lists submitted by the Educational Nominating Panel. As the Philadelphia Home Rule Charter does not provide for review or approval of the City Mayor's appointments by another public official or governmental body, the City Mayor's appointments constitute final confirmation or rejection of the proposed appointments. Therefore, individuals nominated by the Educational Nominating Panel for potential service on the Board of Education would be considered "nominees" for purposes of filing Statements of Financial Interests pursuant to the Ethics Act and would be required to meet the filing deadline applicable to nominees. That deadline is at least 10 days prior to the Mayor's selection of any of the proposed nominees. We note that this Commission does not have the authority to legislate an exclusion to the financial disclosure requirements of the Ethics Act for persons who would be nominated for but not appointed to public office or employment. Cf., Mertz a_r, 0Opinion 06 -002; McCain, Opinion 02 --009; Yatron, Opinion 02 -008; Rubenstein, Opinion 007; Ziegler, pinion 98 -001; boffin pis 97 -010 and 97- 1�R R Richardson, Opinion 93 -006. We further note that the assertion that the financial disclosure requirements of the Ethics Act violate a right of privacy was considered and rejected by Mattteman Kaplan, 18 -002 February 22, 2018 Page 9 the Pennsylvania Supreme Court in Snider v. Thornburgh, 496 Pa. 159, 436 A.2d 593 (1981). Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. IV. CONCLUSION: Based upon the submitted facts: (1) Members of the Educational Nominating Panel and Members of the Board of Education of the School District of Philadelphia are "public officials" subject to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et sec., and the Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et sew.; and (2) individuals nominated by the Educational Nominating Panel for potential service on the Board of Education of the School District of Philadelphia would be considered "nominees" for pur poses of filing Statements of Financial Interests pursuant to the Ethics Act and would be required to meet the filing deadline applicable to nominees. That deadline is at least 10 days prior to the Mayor's selection of any of the proposed nominees. The propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(10), the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. By t e Commission, 4A I Ni olas A. Colafella Chair Commissioner Michael A. Schwartz recused himself from this matter.