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HomeMy WebLinkAbout18-521 CoylePHONE: 717 -783 -1610 TOLL FREE: 1- 800- 932 -0936 To the Requester: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120 -0400 ADVICE OF COUNSEL April 3, 2018 Jeane Coyle, Chair Board of Directors Bucks County Opportunity Council, Inc. Dear Ms. Coyle: FACSIMILE: 717- 787 -0806 WEBSITE: www.ethics.pa.gov 18 -521 This responds to your letter dated February 5, 2018, by which you requested an advisory from the Pennsylvania State Ethics Commission ( "Commission "). Issue: Whether, as a Member and Chair of the Board of Directors of the Bucks County Opportunity Council, Inc., you would be considered a "public official" subject to the Public Official and Employee Ethics Act (the "Ethics Act "), 65 Pa.C.S. § 1101 et se q., and the Regulations of the State Ethics Commission, 51 Pa. Code § 11.1 et and particularly, the requirements for filing Statements of Financial Interests. Facts: You seek a determination as to whether, in your capacity as a Member anT-?,'hair of the Board of Directors of the Bucks County Opportunity Council, Inc. ( "Council "), you would be considered a "public official" subject to the Ethics Act and the Regulations of the State Ethics Commission and therefore would be required to file Statements of Financial Interests. You have submitted copies of: (1) the Council's Articles of Incorporation dated June 1965; (2) the Council's Bylaws as amended November 2015; (3) a copy of the Council's Pennsylvania Tax Exemption Certificate; and (4) a Determination Letter from the Internal Revenue Service dated December 6, 2000. The Council is a non- profit 501(c)(3) organization. The incorporators of the Council, who also served as the original members of the Council's Board of Directors, were nvate individuals. Council Articles of Incorporation, at 3 -4. Successors on the Board of Directors, as well as any other members ot the Council, were to be elected by the Board of Directors. Id., at 4 -5. The Council Bylaws as amended November 2015 provide that the Council Board of Directors is to be composed of elected ublic officials or those they nominate as their representatives, low- income individuals, and representatives of the private sector, "as required by the [Pennsylvania Department of Community and Economic Development]. Council Bylaws, Article III, Sections 3.2-3.2 - C. Council Directors are not compensated but may be reimbursed for expenses "actually and reasonably incurred on behalf of the organization." Council Bylaws, Article III, Section 3.4. Per the 1965 Articles of Incorporation, the stated purposes of the Council included "to combat poverty, through cooperation with the United State Government in Coyle, 18 -521 pn 2018 Page 2 accordance with the `Economic Opportunity Act of 1964 "' and "to receive and dispense public and private funds; to contract or enter into agreements with local, state or federal governments to assist in the operation or administration of governmental operated programs to carry out the purposes for which the [Council] is formed and to take any other act or actions as may be necessary or convenient in promoting and carrying out the purposes of the Economic Opportunity Act of 1964." Council Articles of Incorporation, at 1 -3. Per the Council Bylaws as amended November 2015, "[t]he purposes of the [ m Council are exclusively charitable as set forth in the Articles of Incorporation of the [Council]." Council Bylaws, Article I. The " rogra and servi ce purpose of the Council is: "To help low- income people in Bucks County by connecting them to the resources and programs necessary to improve their quality f life." Id., Article II, Section 2.1. The "business purpose" of the Council includes "[tlo have the right to form or reform the organizational structure necessary to achieve its goals." Id., Article II, Section 2.2. Per the Council Bylaws, the Board of Directors has the authority to dissolve the Council, in which case "the appropriate funding sources, if any, shall be notified within ten (10) days." Id., Article V, Section 5.2. Discussion: It is initial[ noted that pursuant to Sections 1107(10) and 1107(11) o ac the s 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, 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. In 1980, the Commission reviewed the status of Members of the Council Board of Directors and determined that as such, they were not public officials subject to the version of the Ethics Act then in effect, specifically, Act 170 of 1978: Act 170 applies to "public officials" and "public employees" of the Commonwealth and political subdivisions thereof. It is the Commission's opinion that as a private, non - profit corporation, the Board of Directors and employees of the Bucks County Opportunity Council are not covered by the provisions of Act 170. Members of the Board who are public officials are subject to Act 170 by reason of the public office they hold. Roe er, Opinion 80 -031, at paragraph 2. Under Act '170 of 1978, the term "public off c al"was defined as set forth immediately below and was different than the definition that applies today: Section 2. Definitions. "Public official." Any elected or appointed official in the Executive, Legislative or Judicial Branch of the State 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. "Public official" shall not include any apppointed official who receives no compensation other tF�an reimbursement for actual expenses. Coyle, 18 -521 April 3, 2018 Page 3 Act 170 of 1978, Section 2. In 1989, the Ethics Act was reenacted and amended, and the definition of the term "public official" was changed, such that a person elected or appointed by a "governmental body" could fall within the definition of the term "public official." Act 9 of 1989, Section 1. The current definitions of the terms "public official" and "governmental body" provide as follows: § 1102. Definitions "Public official." Any person elected by the public or elected or appointed by a governmental bodv or an appointe 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. "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 function. 65 Pa.C.S. § 1102 (Emphasis added)' In applying the Ethics Act's current definition of the term "Public official," the first tortion of the definition provides that a public official is a "person' who: (1) is elected by he public; (2) is elected or appointed by a governmental body; or (3) is 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. As a Member and Chair of the Council Board of Directors, you are not elected by the ublic. Therefore, the first category contained within the definition of the term "public official" would not apply to you. Additionally, the third category contained within the definition of the term "public official" would not apply to you. As a Member and Chair of the Council Board of Directors, you are not an appointed official in the executive, legislative or udicial branch of the Commonwealth of Pennsylvania, and, based upon the submifted facts, the Council is not a political subdivision of the Commonwealth as the Ethics Act defines the term "political subdivision." 65 Pa.C.S. § 1102. Based upon the submitted facts, this Advice cannot conclusively determine whether the second category contained within the definition of the term "public official" — that is, the category for a person who is elected or appointed by a "governmental body" —would apply to you. Members of the Council Board of Directors are elected by that Board. Therefore, the question arises as to whether the Council may be considered a "governmental body" as the Ethics Act defines that term, specifically as an "agency performing a governmental function." 65 Pa.C.S. § 1102. In this regard, the 1 The Regulations of the Commission similarly define the term "public official" and set forth additional criteria that are used to determine whether the advisory board exception applies. 51 Pa. Code § 11.1. Coale, 18 -521 April 3, 2018 Page 4 1966 Articles of Incorporation included among, the stated purposes of the Council certain references to the Economic Opportunity Act of 1964 and to receiving and dispensing public funds and entering into contracts /agreements with local, state or federal governments to assist in the operation or administration of governmental operated programs. Council Articles of Incorporation, at 2 -3. However, the submitted facts are insufficient to enable a conclusive determination as to whether the Council currently performs governmental function(s).2 Therefore, you are advised that if factually, the Council does not perform governmental functions(s), then, in your capacity as a Member and Clair of the Council's Board of Directors, you would not be considered a "public official" subject to the Ethics Act, 66 Pa.C.S. § 1101 et seq., and the Regulations of the Commission, 51 Pa. Code § 11.1 et seq., and you would not be required to file Statements of Financial Interests pursuant to the Ethics Act. However, if the Council does perform function(s) that could be considered governmental function(s), it is recommended that you submit all of the material facts in that regard and request a supplemental advisory based upon such additional material facts.3 Conclusion: If factually, the Bucks County Opportunity Council, Inc. ("Council") does not perform governmental functions(s), then, in your capacity as a Member and Chair of the Council's Board of Directors, you would not be considered a "public official" subject to the Public Official and Employee Ethics Act (the "Ethics Act "), 65 Pa.C.S. § 110 et sue., and the Regulations of the Pennsylvania State Ethics Commission, 51 Pa. Code 11.1 et seq., and you would not be required to file Statements of Financial Interests pursuant to the Ethics Act. However, if the Council does erform function(s) that could be considered governmental function), it is recommended that you submit all of the material facts in that regard and request a supplemental advisory based upon such additional material facts. 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 an yy 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 writing and must be actuall received at the Commission within thirtyy (30) days of the date vice pursuant to 59 Pa. Code §'73.2(h). The appeal may be 2 It is additionally noted that the Commission has not conclusively determined whether a non - profit entity not formed by a governmental entity such as a political subdivision may be considered an "agency" within the meaning of the Ethics Act's definition of the term "governmental body." See, McCarrier /Anderson, Opinion 98 -008 at 5 -6; Biemiller, Advice 08-553 at 5. 3 The additional material facts that would need to be supplied would provide a complete explanation of the current involvement of the Council with governmental function(s) /program(s) and would detail which government programs the Council is involved with, the duties /authority of the Council under such programs, whether the Council enters into contract(s)lagreement(s) with and/or acts as an agent of any governmental entity(ies), whether the Council has the power to eliminate applicants from governmental programs, and whether the Council may reject loan /grant applications for governmental funds or otherwise prevent such applications from being forwarded to other entity(ies). Coyle, 18 -521 April 3, 2018 Page 5 received at the Commission by hand delivery, United States mail, 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. Sincer ly, Robin M. Hittie Chief Counsel