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HomeMy WebLinkAbout18-557 ConfidentialPHONE: 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 October 26, 2018 FACSIMILE: 717- 787 -0806 WEBSITE: wwW.ethics.Pa.gOv 18 -557 This responds to your letters dated August 3, 2018, and August 22, 2018, by which yop requested a confidential advisory from the Pennsylvania State Ethics Commission ( "Commission "). Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa—T.S. § 1101 et seg., would impose prohibitions or restrictions upon an individual serving as an A for [name of political subdivision] (the "Political Subdivision) with regard to participating in votes or other actions of the Political Subdivision [governing body] pertalning to matters involving two volunteer fire companies located In the Political Subdivision, where: (1) both of the volunteer fire companies are recognized and designated as fire companies for the Political Subdivision and annually receive funds from the Political Subdivision; (2) the individual is a B but not a C of one of the volunteer fire companies; and (3) the individual is the D of an E that sells F to fire companies, including both of the volunteer fire companies. Facts: You have been authorized by Individual G to request a confidential advisory from the Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Individual G is an A for the Political Subdivision, which is located in [name of county], Pennsylvania. [Name of volunteer fire company] ( "Volunteer Fire Company 1.') and another volunteer fire company ( "Volunteer Fire Company 2 ") are located in the Political Subdivision. Volunteer Fire Company 1 and Volunteer Fire Company 2 are recognized and designated as fire companies for the Political Subdivision. Volunteer Fire Company 1 and Volunteer Fire Company 2 annually receive funds from the Political Subdivision pursuant to the H. Individual G is a B but not a C of Volunteer Fire Company 1. Individual G is also the D of an E ( "the Business ") that sells F to fire companies, Including Volunteer Fire Company 1 and Volunteer Fire Company 2. The funds that Volunteer Fire Company 1 and Volunteer Fire Company 2 annually receive from the Political Subdivision could be used to purchase F from the Business. Confidential Advice, 18 -557 October 26, 2018 Page 2 Based upon the above submitted facts, the question that is presented is whether Individual G would have a conflict of interest with regard to participating in votes or other actions of the Political Subdivision [governing body] pertaining to matters involving Volunteer Fire Company 1 and/or Volunteer Fire Company 2. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of Me 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 disclosed all of the material facts. As a Political Subdivision A, Individual G 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. 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 permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing bod of a political subdivision, where one member has abstained from voting as a result of a conflict of interest and the remaining wo 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), 0). The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. Definitions Confidential Advice, 18 -557 October 26, 2018 Page 3 "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 ower provided by law, the exercise of which is necessary to he 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. 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 coict, Section 1103(j} of the Ethics Act would require the public official/public employee to abstain e 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 thics 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 Confidential Advice, 18 -557 October 26, Page 4 pecuniary benefit as well as the motivation to obtain that benefit for himself. Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics Act, a public 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. Having established the above general principles, you are advised as follows. Even if Volunteer Fire Company 1 would be considered a "business" as that term is defined in the Ethics Act (which cannot be determined based upon the limited submitted facts), Volunteer Fire Company 1 would not be considered a business with which Individual G is associated because he is not a director, officer, owner, employee, or holder of a financial interest in Volunteer Fire Company 1. However, the Business is a business with which Individual G is associated in his capacity as the D. Individual G would have a conflict of interest under Section 1103(x) of the Ethics Act with regard to participating in vote(s) or other action(s) f the Political Subdivision [governing body] pertaining to matter(s) involving Volunteer Fire Company 1 and/or Volunteer Fire Company 2 if: (1) he would be consciously aware of a private pecuniary benefit for himself or the Business; M his action(s) would constitute one or more specific steps to attain that benefit; and neither the de minimis exclusion nor 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. Cf. Kistler, supra. As noted above, in each instance of a conflict of interest, Individual G would be required to abstain from participation, which would include voting unless one of the statutory exceptions. of Section 11030) 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 H. Conclusion: Based upon the submitted facts that: (1) Individual G is an A for name o political subdivision] (the "Political Subdivision "), located in [name of county], ennsylvania; (2) name of volunteer fire company] ( "Volunteer Fire Company 1 ") and another volunteer fire company ( "Volunteer Fire Company ") are located in the Political Subdivision; (3) Volunteer Fire Company 1 and Volunteer Fire Company 2 are recognized and designated as fire companies for the Political Subdivision; (4) Volunteer Fire Company 1 and Volunteer Fire Company 2 annual /y receive funds from the Political Subdivision pursuant to the H; (5) Individual G is a B but not a C of Volunteer Fire Company 1; (6) Individual G is also the D of an E ( "the Business ") that sells F to fire companies, including Volunteer Fire Company 1 and Volunteer Fire Company 2; and (7) the funds that Volunteer Fire Company 1 and Volunteer Fire Company 2 annually receive from the Political Subdivision could be used to purchase F from the Business, you are advised as follows. As a Political Subdivision A, Individual G is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 110'1 et seg. Even if Volunteer Fire Company 1 would be considered a "business" as that term is defined in the Ethics Act (which cannot be determined based upon the limited submitted facts), Volunteer Fire Company 1 would not be considered a business Confidential Advice, 18 -557 October 26, 2018 Page 5 with which Individual G is associated because he is not a director, officer, owner, employee, or holder of a financial interest in Volunteer Fire Company 1. However, the Business is a business with which Individual G is associated in his capacity as the D. Individual G would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in vote(s) or other actions of the Political Subdivision ]governing body] pertaining to matter(s) involving Volunteer Fire Company 1 and/or Volunteer Fire Company 2 if: (1) he would be consciously aware of a private pecuniary benefit for himself or the Business; 2 his action(s) would constitute one or more specific steps to attain that benefit, and (3) neither the de minimis exclusion nor 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. In each instance of a conflict of interest, Individual G would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11038 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(13) of the Ethics Acts 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 51 Pa. Code § 73.2(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 We such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, ti obin M. Hittie Chief Counsel