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HomeMy WebLinkAbout18-555 SchneePHONE: 717 -783 -1610 TOLL FREE: 1- 800 - 932 -0936 STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120 -0400 ADVICE OF COUNSEL October 19, 2018 To the Requester: Mr, J. Chadwick Schnee, Esquire First Assistant County Solicitor Berks County Solicitor's Office Dear Mr. Schnee: FACSIMILE: 717- 787 -0806 WEBSITE: www.ethics.pa.gov 18 -555 This responds to your letter dated August 20, 2018, by which you requested an advisory from the Pennsylvania State Ethics Commission ( "Commission "). Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.7S. § 1101 et sec.., would impose prohibitions or restrictions upon an individual serving as a Member and Chairman of the Board of Commissioners of Berks Count ( "County "), Pennsylvania, with regard to directly soliciting businesses, including: (1) vendors to the County; (2) vendors to the County Commissioners Association of Pennsylvania, of which the County is a Member and with which the County has various contracts; and (3) businesses that may have a preexisting relationship with the individual and may know him only in his private capacity, for donations for the individual's campaign for election as Second Vice President of the National Association of Counties, of which the County is also a Member. Facts: You have been authorized by Christian Y. Leinbach ( "Mr. Leinbach ") to request an advisory from the Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Mr. Leinbach is a Member and Chairman of the County Board of Commissioners, which consists of three Members. The County is a third class county under the County Code, 16 P.S. § 101 et seq. Pursuant to Section 440 of the County Code, 16 P.S. § 440, the County is a Member of the County Commissioners Association of Pennsylvania ( "CCAP "), which is a nonprofit organization. The County 1 as various contracts with CCAP and its affiliated organizations and will likely engage in additional such contracts in the future. As permitted by Section 446 of the County Code, 16 P.S. § 446, the County is also a Member of the National Association of Counties ("NACo "). Mr. Leinbach is running for the office of Second Vice President of NACo. The election campaign for Second Vice President began on October 1, 2018, and will culminate at the NACo Annual Convention in July 2019. Only elected county officials Schnee, 18 -555 19, 2018 Page 2 may run for the office of NACo Second Vice President. Pursuant to NACo guidelines, a candidate for Second Vice President may raise up to $25,000.00 to be used for non - travel- related campaign expenditures and may raise additional funds for travel expenses. Mr. Leinbach would like to raise donations for his campaign for election as Second Vice President by giving speeches to CCAP and other entities, including vendors to the County and vendors to CCAP. Some of the businesses that Mr. Leinbach intends to solicit for donations may have a preexisting relationship with him and may know him only in his private capacity. Donations to Mr. Leinbach would be made with the understanding that Mr. Leinbach, as a County Commissioner, would not in any way be influenced by such donations. Mr. Leinbach proposes to have CCAP collect all donations and make all disbursements from a designated CCAP account that would have revenue and expenses posted online for public access at any time. Based upon the above submitted facts, you ask whether Mr. Leinbach could directly solicit businesses, including: (1) vendors to the County; (2) vendors to CCAP; and (3) businesses that may have a preexisting relationship with him and may know him only in his private capacity, for donations for his campaign for election as Second Vice President of NACo without running afoul of Sections 1103(a), 1103(c), and 1103(d) of the Ethics Act (pertaining to conflict of interest, accepting improper influence, and honoraria, respectively). Discussion: It is initial) noted that pursuant to Sections 1107(10) and 1107(11) of e Ethics Act, 65 Pa.C.S. y§§ 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 on that the requester has submitted, the Commission does not en age 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. As a Member and Chairman of the County Board of Commissioners, Mr. Leinbach is a public official 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. (j) 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 Schnee, 18 -555 comber 19, 2018 Page 3 approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise pprovided herein. 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), Q). 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 family 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 industry, 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 It 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. Schnee, 18 -555 comer 19, 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 con ict, 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. It is noted that the above statutory definition of the term "conflict" or "conflict of interest" contains, in pertinent part, an exclusion referred to herein as the "de minimis exclusion." 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. The Commission has determined the appbility of the de minimis exclusion on a case -by -case basis, considering all relevant circumstances. In the past, the Commission has found amounts ranging from $2 to approximately $1,300 to be de minimis. See. Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004). Per Commission precedent, the Ethics, Act does not prohibit a ublic officiallpublic employee from accepting "no- strings- attached" gifts, transportation, lodging or hospitality (also generically referred to herein as "items' from a donor. Cf., Cooper, Opinion 9-009. However, such item(s) received by a public official /puB c employee may form the basis for a conflict of interest pursuant to Section 1103(a) of the Ethics Act if the public official/public employee takes action in furtherance of the interests of the donor. While the receipt of an item of de minimis value would not, in and of itself, create a conflict of interest as to action involving the donor (see, etc ., Cohen, Opinion 03 -006; Stieh, Advice 93-503), the decision as to whether a conflict of Interest is presented by t -fie receipt of item(s) is determined on a case -by -case basis. Generally, when a public official or public employee has received item(s) that would form the basis for a conflict of interest under the Ethics Act, the public official/public employee must abstain from acting in matters pertaining to the donor. Re a rdless of whether a conflict of interest exists, depending upon the value of the item(s received, the public official or public employee may be required to disclose his receip of such item(s)on his Statement of Financial Interests pursuant to Sections 1104 and 1105 of the Ethics Act, 65 Pa.C.S. §§ 1104, 1105. Subject to certain statutory exceptions not applicable to this matter, Section 1105(b)(6) of the Ethics Act requires the filer to disclose on the Statement of Financial Interests the name and address of the source and the amount of any gift or gifts valued in the aggregate at $250 or more and the circumstances of each gift Sections 1103(b) and 1103(c) of the Ethics Act, 65 Pa.C.S. §§ 1103(b), (c), provide in part that no person shall offer or give to a public official/public employee anything of monetary value and no public official/public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official/public employee would be influenced thereby. See, ,eg., Kasaback, Order 993; Helsel, Order 801; Volpe, Order 579 -R; Smith, Order 578 -R. Section 11 03(4) of the Ethics Act prohibits a public official/public employee from accepting an honorarium: § 1103. Restricted activities. Schnee, 18 -555 c�er 19, 2018 Page 5 (d) Honorarium. - -No public official or public employee shall accept an honorarium. 65 Pa.C.S. § 1103(d). The Ethics Act defines the term "honorarium" as follows: § 1102. Definitions "Honorarium." Payment made in recognition of published works, appearances, speeches and presentations and which is not intended as consideration for the value of such services which are nonpublic occupational or professional in nature. The term does not include tokens presented or provided which are of de minimis economic impact. 65 Pa.C.S. 1102. A monetary payment would not fall within the exception to the definition of `honorarium" for "tokens' of a de minimis economic impact. Crompton, Opinion 09 -002. Finally, the Ethics Act defines the term "gift" as that term is defined in Section 13A03 of Pennsylvania's lobby'n disclosure law ( "Lobbying Disclosure Law "), 65 Pa.C.S. § 13A03 see, 65 Pa.C.S. � 1102): § 13A03. Definitions. "Gift." Anything which is received without consideration of equal or greater value. The term shall not include a political contribution otherwise reportable as required by law or a commercially reasonable loan made in the ordinary course of business. The term shall not include hospitality, transportation or lodging. 65 Pa.C.S. § 13A03. In ap lying the above provisions of the Ethics Act to the instant matter, you are advised as follows. Unlike a candidate seeking election to a public office, Mr. Leinbach's campaign for the position of Second Vice President of NACo is inextricably linked to his current public office. This is because, but for being an elected County official (Commissioner), r. Leinbach could not seek election to the position of Second Vice President of NACo. Because Mr. Leinbach's campaign for the position of Second Vice President of NACo is inextricably linked to his current public office, donation(s) to Mr. Leinbach for that campaign, hereinafter referred to as "NACo Campaign Donations," would constitute prohibited Honoraria if such donation(s) would constitute payment(s) made in recognition of Mr. Leinbach's published works, appearances, speeches or presentations. The Ethics Act would not prohibit Mr. Leinbach from directly soliciting or accepting NACo Campaign Donations that would not constitute prohibited honoraria from: (1) vendors to the County; (2) vendors to CCAP; (3) businesses that may have a preexisting relationship with him and may know him only in his private capacity; or (4) other businesses, subject to the condition that there would be no improper influence prohibited by Sections 1103(b)- 1103(c) of the Ethics Act. Per Commission precedent, Schnee, 18555 c�TeW 19, 2018 Page 6 where a vendor/business would make NACo Campaign Donations) to Mr. Leinbach: (1) unless the value of such NACo Campaign Donation(s) would be de minimis, Mr. Leinbach could have a conflict of interest under Section 1103(a) of the Ethics Act in matter s before before the County Board of Commissioners involving such vendor/business; and (2) depending upon the value of such NACo Campaign Donation(s), Mr. Leinbach may be required to disclose such NACo Campaign Donation(s) on his Statements of Financial Interests filed pursuant to the Ethics Act. If Mr. Leinbach would become Second Vice President of NACo, NACo would be a business with which Mr. Leinbach is associated in his capacity as an officer, and subject to the statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in Section 1 102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(-) of the Ethics Act, Mr. Leinbach would have a conflict of interest in his capacity as a Member and Chairman of the County Board of Commissioners in matter(s) that would financially impact NACo. In each instance of a conflict of interest, Mr. Leinbach would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103 0) 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 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 County Code. Conclusion; Based upon the submitted facts that: (1) Christian Y. Leinbach ( "Mr. Leinbach") s a Member and Chairman of the Board of Commissioners of Berks County ("County "), Pennsylvania; (2) the County Board of Commissioners consists of three Members; (3) the County is a third class county under the County Code, 16 P.S. § 101 et se .; (4) pursuant to Section 440 of the County Code, 16 P.S. § 440, the County is a Member of the County Commissioners Association of Pennsylvania ( "CCAP "), which is a nonprofit organization; (5) the County has various contracts with CCAP and its affiliated organizations and will likely engage in additional such contracts in the future; (6) as permitted by Section 446 of the County Code, 16 P.S. § 446, the County is also a Member of the National Association of Counties ( "NACo "); O Mr. Leinbach is running for the office of Second Vice President of NACo; (8) the election campaign for Second Vice President began on October 1, 2018, and will culminate at the NACo Annual Convention in July 2019; (9 only elected county officials may run for the office of NACo Second Vice President; (10) pursuant to NACo guidelines, a candidate for Second Vice President may raise up to $25,000.00 to be used for non - travel - related campaign expenditures and may raise additional funds for travel expenses; (11) Mr. Leinbach would like to raise donations for his campaign for election as Second Vice President by giving speeches to CCAP and other entities, including vendors to the County and vendors to CCAP; (12) some of the businesses that Mr. Leinbach intends to solicit for donations may have a preexisting relationship with him and may know him only in his private capacity; (13) donations to Mr. Leinbach would be made with the understanding hat Mr. Leinbach, as a County Commissioner, would not in any way be influenced by such donations; and (14) Mr. Leinbach proposes to have CCAP collect all donations and make all disbursements from a designated CCAP account that would have revenue and expenses posted online for public access at any time, you are advised as follows. As a Member and Chairman of the County Board of Commissioners, Mr. Leinbach is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 110, et s_e . Unlike a candidate seeking election to a public office, Mr. Leinbach's campaign for the position of Second Vice President of Schnee, 18 -555 6ZGF- r 19, 2018 Page 7 NACo is inextricably linked to his current public office. This is because, but for being an elected County official (Commissioner), Mr. Leinbach could not seek election to the position of Second Vice President of NACo. Because Mr. Leinbach's campaign for the position of Second Vice President of NACo is inextricably linked to his current ppublic office, donation(s) to Mr. Leinbach for that campaign, hereinafter referred to as "NACo Campaign Donations," would constitute prohibited honoraria if such donation(s) would constitute payment(s) made in recognition of Mr. Leinbach's published works, appearances, speeches or presentations. The Ethics Act would not prohibit Mr. Leinbach from directly soliciting or accepting NACo Campaign Donations that would not constitute prohibited honoraria from: (1) vendors to the County; (2) vendors to CCAP; (3) businesses that may have a preexisting relationship with him and may know him only in his private capacity; or (4) other businesses, subject to the condition that there would be no improper influence prohibited by Sections 1103(b)-1103(c) of the Ethics Act. Per Commission precedent, where a vendor /business would make NACo Campaign Donations) to Mr. Leinbach: (1) unless the value of such NACo Campaign Donation(s) would be de minimis, Mr. Leinbach could have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) before the County Board of Commissioners involving such vendorlbusiness; and (2) depending upon the value of such NACo Campaign Donation(s), Mr. Leinbach may be required to disclose such NACo Campaign Donation(s) on his Statements of Financial Interests filed pursuant to the Ethics Act, If Mr. Leinbach would become Second Vice President of NACo, NACo would be a business with which Mr. Leinbach is associated in his capacity as an officer, and subject to the statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, Mr. Leinbach would have a conflict of interest in his capacity as a Member and Chairman of the County Board of Commissioners in matter(s) that would financially impact NACo. In each instance of a conflict of interest, Mr. Leinbach would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103 °) 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. 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 actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 59 Pa. Code § 93.2(h). 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 Schnee, 18 -555 c�Fe-r 19, 2018 Page 8 file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, .' T Robin M. Hittie Chief Counsel