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HomeMy WebLinkAbout91-574 DaddonaDear Mayor Daddona: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 The Honorable Joseph S. Daddona Mayor, City of Allentown Allentown, PA 18101 ADVICE OF COUNSEL September 6, 1991 91 -574 Re: Conflict, Public Official, Mayor, Chairman of the Board, Allentown Economic Development Corporation, Encouragement of Private Manufacturing Venture in City. This responds to your letter of July 30, 1991, 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 you as Mayor of the City of Allentown and Chairman of the Board of the Allentown Economic Development Corporation, with regard to encouraging potential private investors to participate in helping a new manufacturing company get started in the City, where your conduct would include writing letters on official stationery inviting potential private investors to attend a presentation on said venture. Facts: As Mayor of the City of Allentown, you seek the advice of the State Ethics Commission with regard to your prospective conduct in attracting a high -tech electronic device manufacturing firm to the City of Allentown. The venture would involve manufacturing a new invention much in demand by the defense industry. You note that there are obvious economic development benefits for the City of Allentown to justify your encouragement of such a new manufacturing venture in the City, and indeed other cities are offering inducements. You expressly assure this Commission that other than the favorable notoriety the City and your office would likely receive by becoming the home and world headquarters for this new device, you personally would benefit in no way from this venture. You advise that in your capacity'as Mayor, you also serve as Chairman of the Board of a private non - profit corporation whose The Honorable Joseph S. Daddona September 6, 1991 Page 2 purpose it is to encourage businesses to expand and locate in Allentown, specifically the Allentown Economic Development Corporation( "AEDC "). On many occasions in the past, AEDC, which is partially funded through a grant from the City, has requested that you write letters, make telephone calls and engage in personal meetings with companies seeking to expand in Allentown, or to attract new businesses to Allentown. Up until now, the financing for these businesses has always been through bank loans or other conventional means. However, the president of the corporation which you presently seek to attract to the City for manufacture of the electronic device wishes to sell shares in his corporation to private investors in order to raise the necessary capital to begin his operation. You state that it is this new aspect of going after private or corporate investment dollars (carrying potential risks that you believe invariably accompany such ventures) which has caused you to inquire with this Commission. Based upon the above, you ask whether it would be appropriate under the Ethics Law for you to encourage potential investors, both individual and corporate, to participate in this venture so as to help this new company get started in Allentown. You specifically inquire as to whether it would be ethical for you, as Mayor of the City of Allentown, on your official stationery, to write letters inviting potential private investors to =a presentation on the venture. It is noted that a previous advice, Advice 91 -531, was issued to you regarding an unrelated matter. Discussion: As Mayor of the City of Allentown, 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. 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 Honorable Joseph S. Daddona September 6, 1991 Page 3 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. 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. Turning to your specific inquiry, it is initially noted that you -have submitted a general inquiry, and thus this Advice is necessarily general in its response., Generally, it would appear to be a legitimate function of your position as Mayor of the City of Allentown to encourage manufacturing companies to the City. The fact that private investors could be involved would not alter The Honorable Joseph S. Daddona September 6, 1991 Page 4 the legitimacy of your involvement for the sake of benefiting the City. Thus, your prospective conduct would not constitute a conflict of interest based upon your expressed assurance and representation that you personally would not derive any private pecuniary benefit from this venture, and conditioned further upon the assumption that no member of your immediate family and no business with which you or a member of your immediate family is associated would obtain a private pecuniary benefit from the proposed use of your authority of office and /or confidential information received through your holding public office. In this regard, it is specifically noted that AEDC would be a business with which you are associated, but the facts as you have submitted them do not reveal any private pecuniary benefit to AEDC. Because your general request for advice necessitated this general response, you may, of course, seek further advice from this Commission should specific questions arise. 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 note addressed herein is the applicability of the respective municipal code. Conclusion: As Mayor of the City of Allentown, you are a public official subject to the provisions of the Ethics Law. The Allentown Economic Development Corporation, of which you are Chairman of the Board in your capacity as Mayor, is a business with which you are associated as defined by the Ethics Law. As Mayor, your prospective conduct of encouraging the participation of individual and corporate potential investors to help a new manufacturing firm get started in Allentown, which conduct would include issuing letters on official stationery inviting such potential private investors to attend a presentation on the venture, would not constitute a conflict of interest. This Advice is conditioned upon your expressed assurance and representation to this Commission that you personally would derive no private pecuniary benefit from this venture, and is further conditioned upon the assumption that no member of your immediate family, and no business with which you or a member of your immediate family is associated, would derive any private pecuniary benefit from your use of the authority of your office and /or confidential information received through your holding public office. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. The Honorable Joseph S. Daddona September 6, 1991 Page 5 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. 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 §2.12. Sincerely, Vincent T. Dopko Chief Counsel