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HomeMy WebLinkAbout90-598 SchimmelMs. Judith B. Schimmel 90 -598 Pa. Commission on Crime and Delinquency P.O. Box 1167, Federal Square Station Harrisburg, PA 17108 -1167 Re: Conflict, Public Official /Employee, Commission on Crime and Delinquency, Commissioner, Awards, Law Firm as Closing Counsel to Commonwealth Authority, PENNVEST. Dear Ms. Schimmel: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 3, 1990 This responds to your letters of August 28, and August 30, 1990, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a citizen member of the Crime and Delinquency Commission who is a non - majority partner in a law firm from acting in a private capacity as closing counsel to Pennvest, a Commonwealth Authority. Facts: A citizen member of the Pennsylvania Commission on Crime and Delinquency (PCCD) requests an advisory opinion regarding the propriety of employment relative to another executive agency. The member, who is also an attorney at law, is not an ex officio member or a member of one of the classes which must be represented. As a private citizen member the individual receives a per diem of $75 plus expenses for each PCCD meeting attended. Meetings are scheduled quarterly and there have been two special meetings in 1990. PCCD is statutorily empowered by the Act of November 2, 1978, P.L. 1166, as amended, to apply for, receive, allocate and disburse federal and state crime control and juvenile justice awards within the Commonwealth. The manner of disbursement is through competitive grant applications submitted by state agencies or political subdivisions, private non - profit organizations and other qualifying applicants. Virtually all local grants are made to or through the counties with the exception of grants to state agencies. The PCCD member is a non - majority partner in a law firm which has been named closing counsel to a Commonwealth authority which lends money to local political subdivisions. The member does not select loan recipients. At closing on a loan transaction the documents may Ms. Judith B. Schimmel Page 2 disclose financial information about the borrower, the majority of which applicants are municipalities or municipal authorities or combinations thereof. The possibility does exist that a local political subdivision could be both a loan recipient and grant applicant of PCCD. The Commonwealth authority in question is the Pennsylvania Infrastructure Investment Authority ( PENNVEST) which has no relationship to PCCD. It does not appear that PENNVEST could qualify as an applicant for PCCD funds. The citizen member is one of twenty -seven Commissioners of PCCD, the administration of which is managed by an executive director and a paid professional staff with virtually no possibility of this member diverting PCCD funds to either himself or PENNVEST. The PCCD member is being appointed to provide legal services at loan closings for PENNVEST and not for the purpose of becoming a member of that Authority. The compensation to be received will be a fixed amount at closing which is not dependant upon the amount of the loan. In the unlikely event that a PENNVEST borrower were also to be a grant applicant, the only possible inter -play for this member could be that his knowledge of an applicant in one form may make him more less sympathetic to the applicant's position in the other situation. As a proffered example, if a member were to learn that a PENNVEST municipal applicant were in critical financial condition, that member might be inclined to support a PCCD grant application for funds to pay police officers. The vote of that member would have no more effect than that of each of the other members. Finally, it is noted that PCCD regulation, 37 Pa. Code §401.12 requires a member to abstain from participating in the decision making process whenever there exists a conflict or an appearance thereof. Discussion: As member of PCCD, the individual is a public official as that term is defined under the Ethics Law, and hence he is subject to the provisions of that law. Section 3(a) of the Ethics Law provides: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined in the Ethics Law as follows: Section 2. Definitions., "Conflict or conflict of interest." Use by a public official or public employee of the authority of his office or employment or Ms. Judith B. Schimmel Page 3 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. "Conflict" or "conflict of interest" 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 or 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 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. In addition, Sections 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public official /employee anything of monetary value and no public official /employee shall solicit or accept any thing of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has or will be any transgression thereof but merely to provide a complete response to the question presented. In applying the provisions of Section 3(a) of the Ethics Law quoted above to the instant matter, it does not appear that the PCCD member in question would have a conflict based upon the submitted facts. It has been stated, and it is expressly assumed, that the individual has not used the authority of his office as a means of obtaining a private pecuniary benefit for himself or his law firm, the business with which he is associated, through employment by PENNVEST as closing counsel. In addition, it has been expressly stated that there is no way Ms. Judith B. Schimmel Page 4 that this member could divert PCCD funds to his own use. Therefore, based upon the factual representations, no conflict would exist under Section 3(a) of the Ethics Law for this individual or his firm, the business with which he is associated, from serving as closing counsel for a PENNVEST in certain loan transactions. The propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Law has not been considered in that they do not involve an interpretation of the Ethics Law. Specifically not addressed herein is the applicability of the Rules of Professional Conduct. Conclusion: As member of PCCD, the individual is a public official subject to the provisions of the Ethics Law. Based upon the factual representations, Section 3(a) of the Ethics Law would not restrict a member of PCCD or his law firm, a business with which he is associated, from serving as closing counsel for PENNVEST in loan transactions. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(11), this 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, providing the requestor 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 request that the full Commission review this Advice. A personal appearance before the Commission will be scheduled and a formal Opinion from the Commission will be issued. Any such appeal must be in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code 52.12. Sincerely, .0 Vincent' J. Dopko, Chief Counsel