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HomeMy WebLinkAbout91-510 FultonSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL January 30, 1991 Mr. Robert C. Fulton, Jr. 91 -510 P.O. Box 566 Adamstown, PA 19501 Re: Conflict, Public Official, Township Supervisor, Use of Authority of Office, Voting, Ordinance, Real Estate Interest of Supervisor, Business with Which Associated. Dear Mr. Fulton: This responds to your letter of December 29, 1990, in which you requested advice from the State Ethics Commission. Issue: You ask whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a supervisor of a Second Class Township from participating in the discussions and /or the vote on a proposed Admission and Amusement Tax Ordinance, when the supervisor owns a campground presently listed for sale to which the ordinance would apply. Facts: You are a supervisor for Brecknock Township which is a Second Class Township in Lancaster County, Pennsylvania. You seek an advisory opinion regarding a possible conflict. You presently own a campground in the township. You have listed the campground for sale because you are planning to retire. A proposed Admission and Amusement Tax Ordinance has been introduced by one of the supervisors, which tax would apply to campgrounds including yours. There are five campgrounds in the township as well as a public golf course, antique and flea markets, and various other businesses which would be subject to the tax. You state your belief that you have the right to participate in the discussions and the vote on the proposed ordinance. You submit that it is your belief that you do not have a conflict of interest because you feel there are a large number of businesses involved. Noting that the ordinance would come up for discussion on January 22, 1991, you seek advice from this Commission, Discussion: As a supervisor for Brecknock Township, you are a public official as that term is defined under the Ethics Law, and hence you are subject to the provisions of that law. Mr. Robert C. Fulton, Jr. Page 2 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 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more Mr. Robert C. Fulton, Jr. Page 3 than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 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. Finally, Section 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities. (j) Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulatioz, 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 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 Mr. Robert C. Fulton, Jr. Page 4 the tie vote if disclosure is made as otherwise provided herein. If a conflict exists, Section 3(j) requires the public official /employee to abstain as well as file a written memorandum to that effect with the person recording the minutes or supervisor. In the event that the required abstention results in the inability of the governmental body to take action because a majority is unattainable due to the abstention(s), then in that event participation is permissible provided the disclosure requirements noted above are followed. In applying the above provisions of the Ethics Law and recent Commission Opinions to the instant matter, it appears that you would have a conflict in participating in the discussions and /or the voting regarding the Admission and Amusement Tax Ordinance. Under the reasoning of the Commission Opinions in Dettra, Opinion 89 -021, and Mihalik, Opinion 90 -002, discussed below, if you were to participate or vote regarding the proposed Admission and Amusement Tax Ordinance, your participation or could result in a private pecuniary benefit to you. This is true regardless of the fact that you have listed the campground for sale, because the pecuniary benefit would result to you as the present owner. It should be noted that the facts, as you have presented them, do not reveal any existing agreements for the sale of the property. Furthermore, your participation or vote regarding the proposed ordinance could directly impact upon the value and marketability of the campground, again resulting in a private pecuniary benefit to you. Your participating in discussions regarding the proposed ordinance and /or your voting on the proposed •ordinance would be a use of authority of your office which would have a direct impact upon the above private pecuniary benefit. The State Ethics Commission considered circumstances similar to those which you have presented in its recent Opinion in Dettra, Opinion 89 -021. In that case, a township supervisor and his brother had sold certain unimproved real estate under an option agreement. In addition to the base consideration, the option agreement provided that the purchaser would pay the supervisor and his brother additional consideration based upon the number of dwelling units the purchaser could build upon the real estate. Under the agreement, the number of dwelling units was to be either two hundred or the maximum number permitted by the governing authority, whichever was greater. Because the final sale price of the real estate was thus contingent upon the number of buildable lots permitted under the zoning ordinance, the Commission held that the supervisor had a conflict and was Mr. Robert C. Fulton, Jr. Page 5 prohibited from participating and voting in any matter related to that real estate, including the proposed zoning ordinance. The supervisor was further required to comply with Section 3(j) of the Ethics Law by publicly announcing and disclosing the nature of his interest at the following public meeting in a written memorandum filed with the secretary recording the minutes. In Mihalik, Opinion 90 -002, a Second Class Township Supervisor and his brother owned 180 acres of land, of which sixty acres were subject to an option to purchase by a partnership. The initial six -month option to purchase was in exchange for $5,000 with three additional six -month options available at $5,000 each and a final six -month option available for $10,000. Any exercise of the option was to be accompanied by an additional payment of $25,000, and the agreed consideration for the sale of the real estate would be $1.3 million dollars. Furthermore, the option agreement provided for the purchase of additional property at a cost of $10,000 per acre in the event the partnership would elect to construct its own sewage treatment or disposal system. By of the Department of Environmental Resources the township was required to develop a plan for a public sewage system. A comprehensive sewage system would increase the value of land which it serviced in the township, including this particular tract. Furthermore, the partners who had purchased the option agreement from the township supervisor and his brother were involved through various other partnerships in the consortium that planned to build and operate the township sewage plant. The Commission held that the township supervisor would have a conflict precluding him from voting on the comprehensive sewage plan. The Commission noted that the value of the real estate owned by the supervisor and his brother would be raised by the sewage plan. Furthermore, the agreement to sell the option to purchase to the partnership was pending, and the Commission concluded that the issue of sewage facilities would - be of primary concern to the partnership. Thus, the supervisor's participation and vote on the sewage plan could impact upon the partnership's decision of whether to exercise the option to purchase the real estate from the supervisor and his brother.. The Commission discounted the supervisor's suggestion that he fit within the exclusionary language of the conflict definition, 65 P.S. S402. Given the pending option to purchase, the fact that the sewage plan would affect the value of the supervisor's land for development purposes, and the extensive real estate holdings of the supervisor and his brother, the Commission concluded that the supervisor and his brother did not fit within the class of typical residential lot owners in the township nor would they be Mr. Robert C. Fulton, Jr. Page 6 affected to the same degree as other land owners in the township. Similarly, in this case, your ability to sell your campground and the sales price could be greatly affected by the proposed ordinance. You could realize a private pecuniary benefit as a result of your participation or voting on the proposed ordinance. Under the reasoning of Dettra and Mihalik you would have a conflict under Section 3(a) of the Ethics Law, and you must therefore abstain from participation and voting on the proposed ordinance. You must also observe the disclosure requirements of Section 3(j) outlined above. However, in the event that the remaining supervisors split on their vote after your abstention, then Section 3(j) would allow you to vote in that instance to break the tie provided the disclosure requirements of Section 3(j) outlined above are followed. 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 respective municipal code. Conclusion: As a township supervisor for Brecknock Township, you are a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would preclude you as a second class township supervisor from participating in discussions regarding a proposed Admission and Amusement Tax Ordinance or voting on such a proposed ordinance when you own a campground which would be subject to the proposed tax. Section 3(j) of the Ethics Law requires that you publicly announce and disclose at the next public meeting the nature of your interest in a written memorandum filed with the secretary who keeps the minutes. In the event that a deadlock would occur due to the abstention of the remaining supervisors, Section 3(j) of the Ethics Law would allow you to vote provided you comply with the disclosure requirements of Section 3(j) as discussed above. 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. Mr. Robert C. Fulton, Jr. Page 7 such. This letter is a public record and will be made available as 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. ncerely, Vincent . Dopko, Chief Counsel