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HomeMy WebLinkAbout19-506 MuscantePHONE: 717 -783 -1610 TOLL FREE: 1 -800- 932 -0936 r A, STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120 -0400 ADVICE OF COUNSEL February 15, 2019 To the Requester: Mr. Falco A. Muscante, Esquire Maiello Brungo & Maiello, LLP Dear Mr. Muscante: FACSIMILE: 717- 787 -0806 WEBSITE: www.ethlcs.pa.aov 19 -506 This responds to your letter dated January 14, 2019, 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 P—a TS. § 1101 et seq., would impose prohibitions or restrictions upon either a borough council member or a borough treasurer with regard to participating in matters pertaining to the borough's transaction of business with a particular credit union or other financial institutions, where: (1) the borough council member and the borough treasurer are married to each other; and (2) the borough treasurer, in a private capacity, is the manager /chief executive officer of the credit union. Facts: As Solicitor for the Borough of Glassport ("Borough"), you have been auTFo--rized by Terry DiMarco "Mr. DiMarco ") and Rose DiMarco ( "Ms. DiMarco ") to request an advisory from the &ommission on their behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. On December 18, 2018, Borough Council appointed Ms. DiMarco as the Borough Treasurer. Mr. DiMarco, who is Ms. DiMarco's spouse, is a Member of Borough Council. You state that Mr. DiMarco abstained from the vote to appoint Ms. DiMarco as the Borough Treasurer. The position of Borough Treasurer is a compensated position. In a private capacity, Ms. DiMarco is employed as the Manager /Chief Executive Officer of the Copper & Glass Federal Credit Union ( "Credit Union "), which is located in the Borough. The Borough has investment accounts /certificates of deposit with the Credit Union (the "Credit Union Investment Accounts ") Borough Council might determine that It is in the best interests of the Borough to deposit additional funds into the Credit Union Investment Accounts, open additional accounts with the Credit Union, or transact other business with the Credit Union. The Borough also maintains accounts and tax anticipation notes with other financial institutions. Ms. DiMarco, in her role as the Borough Treasurer, might be called upon to make recommendations regarding the Boroughs finances, accounts, and Investments, including recommendations as to the opening and closing of accounts and the transfer of funds between accounts. Ms. DiMarco would not be legally permitted to vote on any Muscante, 19 -506 February 15, 2019 Page 2 actions surrounding the placement of the Borough's accounts with the Credit Union or any other financial institution. Borough Council makes the final decisions on matters regarding the Borough's accounts and investments, and Mr. DiMarco, in his role as a Member of Borough Council, might be called upon to participate in votes pertaining to such matters. Based upon the above submitted facts, the question that is presented by your advisory request is whether the Ethics Act would impose prohibitions or restrictions upon either Mr. DiMarco, in his capacity as a Borough Council Member, or Ms. DiMarco, in her capacity as the Borough Treasurer, with regard to partici , ating in matters pertaining to the Borough's transaction of business with the Credit Union or other financial institutions. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(l 1) 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 rased 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 trut fully disc osed all of the material facts. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion/advice may be given only as to prospective (future) conduct. To the extent that your ingiry relates to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may and shall be addressed. As a Borough Council Member, Mr. DiMarco is a public official subject to the provisions of the Ethics Act. As the Borough Treasurer, Ms. DiMarco is a public official /public employee subject to the provisions of the Ethics Act. Sections 1103(a) and 1103@ 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 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 Muscante, 19 -506 February 15, 2019 Page 3 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), 0). 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. "Immediate family. " A parent, spouse, child, brother or sister. "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. "De minimis economic impact." An economic consequence which has an insignificant effect. 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 Muscante, 19 -506 February 15, 2019 Page 4 of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting, but extends 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. In each instance of a conflict of interest, a public official/public employee 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. 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 applicability 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). In applying the above provisions of the Ethics Act to the instant matter, you are advised as fllows. Mr. DiMarco and Ms. DiMarco, as spouses, are "immediate family" members as defined by the Ethics Act. The Credit Union is a business with which Ms. DiMarco is associated in her capacity as an employee. Pursuant to Section 1103(a) of the Ethics Act, Mr. DiMarco, in his capacity as a Borough Council Member, and Ms. DiMarco, in her capacity as the Borough Treasurer, would each generally have a conflict of interest in matters that would financially impact Mr. DiMarco, Ms. DiMarco, or the Credit Union. Mr. DiMarco and Ms. DiMarco would each specifically have a conflict of interest with regard to participating in matter(s) involving the Borough's transaction of business with the Credit Union or other financial institution(s) if such matter(s) would result in a private pecuniary benefit to Ms. DiMarco and/or the Credit Union that would be greater than de minimis. Mr. DiMarco and Ms. DiMarco would each be prohibited from using the authority of his/her public position, or confidential information accessed or received as a result of being in his/her public position, to effectuate a private pecuniary benefit to the Credit Union through a detriment to a business competitor. See, Pe er, Opinion 87 -008. In each instance of a conflict of interest, the individual with the conflict of interest —that is, Mr. DiMarco as a Borough Council Member or Ms. DiMarco as the Borough Treasurer —would be required to abstain from participation. In each instance of a voting conflict, Mr. DiMarco would be required to abstain from participation 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 Muscante, 19506 February r�15, 2019 Page 5 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 Borough Code. Conclusion. Based upon the submitted facts that: (1) on December 18, 2018, Council or the Borough of Glassport ("Borough") appointed Rose DiMarco ( "Ms. DiMarco ") as the Borough Treasurer; (2) Terry Marco ( "Mr. DiMarco "), who is Ms. DiMarco's spouse, is a Member of Borough Council; (3) Mr. DiMarco abstained from the vote to appoint Ms. DiMarco as the Borough Treasurer; (4) the position of Borough Treasurer is a compensated position; (5) in a private capacity, Ms. DiMarco is employed as the Manager /Chief Executive Officer of the Copper &Glass Federal Credit Union ( "Credit Union "), which is located in the Borough; (6) the Borough has investment accounts /certificates of deposit with the Credit Union (the "Credit Union Investment Accounts "); (7) Borough Council might determine that it is in the best interests of the Borough to deposit additional funds into the Credit Union Investment Accounts, open additional accounts with the Credit Union, or transact other business with the Credit Union; (8) the Borough also maintains accounts and tax anticipation notes with other financia institutions; (9) Ms. DiMarco, in her role as the Borou h Treasurer, might be called upon to make recommendations regarding the Borough's finances, accounts, and investments, including recommendations as to the opening and closing of accounts and the transfer of funds between accounts; (10) Ms. DiMarco would not be legally permitted to vote on any actions surrounding the placement of the Borough's accounts with the Credit Union or any other financial institution; and (11) Borough Council makes the final decisions on matters regarding the Borough's accounts and investments, and Mr. DiMarco, in his role as a Member of Borough Council, might be called upon to participate in votes pertaining to such matters, you are advised as follows. As a Borough Council Member, Mr. DiMarco is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seg. As the Borough Treasurer, Ms. DiMarco is a public official /public employee subject to the provisions of the Ethics Act. Mr. DiMarco and Ms. DiMarco, as spouses, are "immediate family" members as defined by the Ethics Act. The Credit Union is a business with which Ms. DiMarco is associated in her capacity as an employee. Pursuant to Section 1103_ (a) of the Ethics Act, Mr- DiMarco, in his capacity as a Borough Council Member, and Ms. DiMarco, in her capacity as the Borough Treasurer, would each generally have a conflict of interest in matters that would financially impact Mr. DiMarco, Ms. DiMarco, or the Credit Union. Mr. DiMarco and Ms. DiMarco would each specifically have a conflict of interest with regard to participating in matter(s) involving the Borough's transaction of business with the Credit Union or other financial institution(s) if such matter(s) would result in a private pecuniary benefit to Ms. DiMarco and/or the Credit Union that would be greater than de minimis. Mr. DiMarco and Ms. DiMarco would each be prohibited from using the authority of his/her public position, or confidential information accessed or received as a result of being in his /her public position, to effectuate a private pecuniary benefit to the Credit Union through a detriment to a business competitor. In each instance of a conflict of interest, the individual with the conflict of interest —that is, Mr. DiMarco as a Borough Council Member or Ms. DiMarco as the Borough Treasurer —would be required to abstain from participation. In each instance of a voting conflict, Mr. DiMarco would be required to abstain from participation unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 110300 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. Muscante 19 -506 February 15, 2019 Page 6 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 Advice ursuant to 51 Pa. Code § 73.2(h). The appeal may be received p 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 Sincerely, Robin M. ittie Chief Counsel