HomeMy WebLinkAbout18-535 ConfidentialPHONE: 717 - 783 -1610
TOLL FREE: 1 -800- 932 -0936
To the Requester:
f
4'
STATE ETHICS COMMISSION
FINANCE BUILDING
613 NORTH STREET, ROOM 309
HARRISBURG, PA 17120 -0400
ADVICE OF COUNSEL
May 25, 2018
FACSIMILE: 717- 787 -0806
WEBSITE: www.ethics.12a.gov
18 -535
This responds to your letter dated May 7, 2018, by which Vou requested a
confidential advisory from the Pennsylvania State Ethics Commission ('Commission").
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
FMS. � 1101 et se q., would impose prohibitions or restrictions upon either o two
individuals serving as As for Political Subdivision B, each of whom is a member of the C
of the D known as E, with regard to participating in votes or other actions of the Political
Subdivision B F pertaining to E.
Facts: You have been authorized by Mr. G and Mr. H to request a confidential
a vtsory from the Commission on their behalf. You have submitted facts, the material
portion of which may be fairly summarized as follows.
Mr. G has served as a Political Subdivision B A since [year], and he is currently
the [officer] of the Political Subdivision B F. Mr. H took office as a Political Subdivision
B A in the beginning of year], and he is currently the Political Subdivision B [officer].
The Political Subdivision B F consists of [number] Members.
Since month] of [year], Mr. H and his wife have owned an I in a D known as E.
Since [month of [year], Mr. G has owned an I in E. E has [number] Js.
Mr. G and Mr. H are members of the C of E. Neither individual is on the Board of
the C or an officer of the C.
All owners of Is in E pay a K to the C, which is responsible for [various matters].
The Ls of E, including [certain features], will be owned and maintained by the C after the
M of E turns the Ls over to the C.
E has one N and an O that is P to Q. E has Rs that include an S which was
installed by the M. The S is to be T to Political Subdivision B.
Based upon the above submitted facts, you seek guidance as to whether Mr. G
or Mr. H would have a conflict of interest with regard to participating in votes or other
actions of the Political Subdivision B F pertaining to:
(1) The issue of whether the Rs have been completed according to the Us
and Vs;
Confidential Advice, 18 -535
May 25,
Page 2
(2) The issue of whether the Political Subdivision B F should [take certain
action regarding the Rs];
(3) The issue of whether the Political Subdivision B F should [take additional
subsequent action regarding the Rs];
(4) The issue of whether the Ls were W pursuant to the Us and Vs approved
by Political Subdivision B;
(5) The issue of whether Political Subdivision B should [take certain action
regarding the 01; or
(6) Other matters involving E.
You further seek guidance as to whether Mr. G and Mr. H would be permitted to
participate in votes or other actions of the Political Subdivision B IF despite having a
conflict of interest if the Political Subdivision B F would be unable to take action as to
matter(s) pertaining to E as a result of an additional Political Subdivision B A also
having a conflict of interest as to such matter(s).
Discussion: It is initially 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, 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 disc osed all of the material facts.
As Political Subdivision B As, Mr. G and Mr. H are public officials subject to the
provisions of the Ethics Act.
Sections 1103(a) and 11030) 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
Confidential Advice, 18 -535
May 25,
Page 3
permitted to vote if disclosures are made as otherwise
Edherein. 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), (j).
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 employee 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
amily 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 industryry, 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.
"Business." Any 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.
Confidential Advice, 18 -535
Ma 25, 2018
Page 4
In each instance of a conflict of interest, the public official /public 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
co —nom 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.
Per the Pennsylvania Supreme Court's decision in Kistler v. State Ethics
Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a ) of the
Ethics Act, a public official/public employee:
... must act in such a way as to put his office /public position]
to the purpose of obtaining for himself a private pecuniary
benefit. Such directed action implies awareness on the part
of the [public official/public employee] of the potential
pecuniary benefit as well as the motivation to obtain that
benefit for himself.
Kistler, su ra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(x) of the Ethics
Act, a pu lic official/public employee "must be consciously aware of a private pecuniary
benefit for himself, his family, or his business, and then must take action in the form of
one or more specific steps to attain that benefit." Id., 610 Pa. at 528, 22 A.3d at 231.
A conflict of interest would not exist to the extent the "de minimis exclusion"
and/or the "class /subclass exclusion" set forth within the Ethics Act's definition of the
term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, would be applicable.
The de minimis exclusion precludes a finding of conflict of interest as to an action
having a de minimis (insignificant) economic impact. Thus, when a matter that would
otherwise constitute a conflict of interest under the Ethics Act would have an
insignificant economic impact, a conflict would not exist and Section 1103(a) of the
Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburg, Order 900.
In order for the class /subclass exclusion to apply, two criteria must be met: (1)
the affected public official/public employee, immediate family member, or business with
which the public official /public employee or immediate family member is associated
must be a member of a class consisting of the general public or a true subclass
consisting of more than one member; and (2 ) the public official /public employee,
immediate family member, or business with which the public official/public employee or
immediate family member is associated must be affected "to the same degree" (in no
way differently) than the other members of the class/subclass. 65 Pa.C.S. § 1102; see,
Kablack, Opinion 02 -003; Rubenstein, Opinion 01 -007. The first criterion of the
exc usion is satisfied where the members of the proposed subclass are similarly
situated as the result of relevant shared characteristics. The second criterion of the
exclusion is satisfied where the individual /business in question and the other members
of the class/subclass are reasonably affected to the same degree by the proposed
action. Kablack, supra.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised as fllows.
As to each individual ( "the Individual ") on whose behalf you have inquired - -that
is, Mr. G or Mr. H —the C is not a business with which the Individual is associated
because he is not a director, officer, owner, employee, or holder of a financial interest in
Confidential Advice, 18 -535
May 25,
Page 5
the C. Since the C is not a business with which the Individual is associated, he would
not have a conflict of interest under Section 1103(a ) of the Ethics Act in matter(s) before
the Political Subdivision B F that would financially impact the C but that would not
financially impact him, a member of his immediate family, or a business with which he or
a member of his immediate family is associated.
Absent some basis for a conflict of interest such as a private pecuniary benefit to
the Individual, a member of his immediate family, or a business with which he or a
member of his immediate family is associated, the Individual would not have a conflict of
interest under Section 1103(a) of the Ethics Act in his capacity as a Political Subdivision
B A with regard to participating in votes or other actions of the Political Subdivision B F
pertaining to:
(1) The issue of whether the Rs have been completed according to the Us
and Vs;
(2) The issue of whether the Political Subdivision B F should [take certain
action regarding the Rs];
(3) The issue of whether the Political Subdivision B F should [take additional
subsequent action regarding the Rs];
(4) The issue of whether the Ls were W pursuant to the Us and Vs approved
by Political Subdivision B;
(5) The issue of whether Political Subdivision B should [take certain action
regarding the O]; or
(6) Other matters involving E.
Where the Individual's action in his capacity as a Political Subdivision B A in
matter(s) pertaining to E would result in a private pecuniary benefit to him, a member of
his immediate family, or a business with which he or a member of his immediate family
is associated, he would have a conflict of interest unless the de minimis exclusion or
class /subclass exclusion to the definition of "conflict" or "conflict of interest," 65 Pa.C.S.
a1102, would be applicable. In each instance of a conflict of interest, the Political
ubdivision B A(s) with the conflict of interest would be required to abstain from
partici ation, which would include voting unless a voting conflict exception of Section
11 030) of the Ethics Act would be applicable. AdditionalEy, the disclosure requirements
of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting
conflict.
Section 11030) of the Ethics Act contains two voting conflict exceptions. The
voting conflict exception for breaking a tie vote despite a conflict of interest is available
exclusively to members of three - member governing bodies who first abstain and
disclose their conflicts as required by Section 11030} of the Ethics Act. See, Pavlovic,
Opinion 02 -005. The only voting conflict exception that enables a mem er— —a
[number] - member board such as the Political Subdivision B F to vote despite a conflict
of interest requires that the following conditions be met: (1) the board must be unable to
take any action on the matter before it because the number of members required to
abstain from voting under the provisions of the Ethics Act makes t e maworitV or of er
legally required vote of approval unattainable; an (2) prior to voting, such members
with conflicts under the Ethics Act must disclose their conflicts as required by Section
11030). When both of these conditions are met, such that the exception is applicable,
the exception allows for voting only —it does not permit other forms of participation, such
as discussing the matter that is the subject of the vote. Pavlovic, supra.
Confidential Advice, 18 -535
May 25,
Page 6
Therefore, pursuant to Sections 1103(a) and 11030) of the Ethics Act, the
Political Subdivision B A(s) with a conflict of interest with regard to matter(s) pertaining
to E would not be permitted to vote on such matter(s) unless so many Members of the
Political Subdivision B F would have conflicts of interest un er the Ethics Act as to such
matters that there would not be enough non-conflicted Members left to take action.
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 X.
Conclusion: Based upon the submitted facts that: (1) Mr. G has served as an A
or Political Subdivision B since [year], and he is currently the [officer] of the Political
Subdivision B F; (2) Mr. H took office as a Political Subdivision B A in the beginning of
[year], and he is currently the Political Subdivision B [officer]; (3) the Political
Subdivision B F consists of [number] Members; (4} since [month] of [year], Mr. H and
his wife have owned an I in a D known as E; O since [month] of [year], Mr. G has
owned an I in E; (6) E has [number] Js; (7) Mr. G and Mr. H are members of the C of E;
(8) neither individual is on the Board of the C or an officer of the C; (9) all owners of Is in
E pay a K to the C, which is responsible for (various matters,; (10) the Ls of E, including
[certain features], will be owned and maintained by the C after the M of E turns the Ls
over to the C; (11) E has one N and an O that is P to Q; (12) E has Rs that include an S
which was installed by the M; and (13) the S is to be T to Political Subdivision B, you
are advised as follows.
As Political Subdivision B As, Mr. G and Mr. H are public officials subject to the
provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §
1101 et seq. As to each individual 'the Individual ") on whose behalf you have
inquired —that is, Mr. G or Mr. H ---the C is not a business with which the Individual is
associated because he is not a director, officer, owner, employee, or holder of a
financial interest in the C. Since the C is not a business with which the Individual is
associated, he would not have a conflict of interest under Section 1103(a) of the Ethics
Act in matter(s) before the Political Subdivision B F that would financially impact the C
but that would not financially impact him, a member of his immediate family, or a
business with which he or a member of his immediate family is associated.
Absent some basis for a conflict of interest such as a private pecuniary benefit to
the Individual, a member of his immediate family, or a business with which he or a
member of his immediate family is associated, the Individual would not have a conflict of
interest under Section 1103(a) of the Ethics Act in his capacity as a Political Subdivision
B A with regard to participating in votes or other actions of the Political Subdivision B F
pertaining to:
(1) The issue of whether the Rs have been completed according to the Us
and Vs;
(2) The issue of whether the Political Subdivision B F should [take certain
action regarding the Rs];
(3) The issue of whether the Political Subdivision B F should [take additional
subsequent action regarding the Rs];
(4) The issue of whether the Ls were W pursuant to the Us and Vs approved
by Political Subdivision B;
Confidential Advice, 18535
May 25, 2018
Page 7
(5) The issue of whether Political Subdivision B should [take certain action
regarding the O]; or
(6) Other matters involving E.
Where the Individual's action in his capacity as a Political Subdivision B A in
matter(s) pertaining to E would result in a private pecuniary benefit to him, a member of
his immediate family, or a business with which he or a member of his immediate family
is associated, he would have a conflict of interest unless the de minimis exclusion or
class /subclass exclusion to the definition of "conflict" or "conflict of interest," 65 Pa.C.S.
§ 1102, would be applicable. In each instance of a conflict of interest, the Political
Subdivision B A(s) with the conflict of interest would be- required to abstain from
partici ation, which would include voting unless a voting conflict exception of Section
1103(I� of the Ethics Act would be applicable. Additionally, the disclosure requirements
of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting
conflict.
The only voting conflict exception that enables a member of a [number]- member
board such as the Political Subdivision B F to vote despite a conflict of interest requires
that the following conditions be met: (1) the board must be unable to take an action on
the matter before it because the number of members required to abstain from votin
under the provisions of the Ethics Act makes the maiority or other legally required vote
of approval unattainable; and (2) prior to voting, such members with conflicts under the
Ethics Act must disclose their conflicts as required by Section 11030). When both of
these conditions are met, such that the exception is applicable, the exception allows for
voting onlrit does not permit other forms of participation, such as discussing the
matter that is the subject of the vote.
Therefore, pursuant to Sections 1103(a) and 11030) of the Ethics Act, the
Political Subdivision B A(s) with a conflict of interest with regard to matter(s) pertaining
to E would not be permitted to vote on such matter(s) unless so many Members of the
Political Suba-ivision B F would have conflicts of interest under the Ethics Act as to such
matters that there would not be enough non-conflicted Members left to take action.
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 writing and must be actuall
received at the Commission within thirty (30) days of the dates
vice pursuant to 51 Pa. Code § 1'3.2(p). The appeal may be
received at the Commission by hand delivery, United States mail,
delivery service, or by FAX transmission (717-787-0806). Failure to
Confidential Advice, 18 -535
May 25,
Page 8
file such an appeal at the Commission within thirty (30) days may
result in the dismissal of the appeal.
Sincerely,
\
XRoli:in�M. Hittie
Chief Counsel