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HomeMy WebLinkAbout92-657STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG. PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 17, 1992 Mark A. Longietti, Esquire 92 -657 Routman, Moore, Goldstone & Valentino 194 East State Street P.O. Box 690 Sharon, PA 16146 -0690 Re: Conflict, Public Official /Employee, School Director, Use of Authority of Office or Confidential Information, Accountant, Private Clients, Option to Purchase, Client's Sale of Building to School District. Dear Mr. Longietti: This responds to your letter of November 16, 1992, 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 school director who is also a certified public accountant, with regard to the school district's decision of whether to exercise an option to repurchase a building from the school director's private business clients. Facts: As Solicitor for the Sharon City School District, you request an advisory on behalf of School Director Joseph Evans. You state that several years ago, the Sharon City School District sold an elementary school building to a private individual, Mr. Richard McMahon. Since the point of sale to the present time, Mr. McMahon has operated a private enterprise from the building, known as the Shenango Valley School of Business. Included in the sales agreement between Mr. McMahon and the School District was an option for the School District to repurchase the building. That option must be exercised by the School District by April 1, 1993. You indicate that the School Board is currently considering whether to exercise the option and repurchase the building. Mr. Evans, who was elected to the School Board approximately one year ago, is also a certified public accountant. He is and has Mark A. Longietti, Esquire December 17, 1992 Page 2 been the accountant and financial advisor to Mr. McMahon. You state that as a Member of the School Board, Mr. Evans is concerned about the decision as to whether the School District should exercise its option and repurchase the school building owned by Mr. McMahon, and Mr. Evans would like to get involved in the discussion and the decision. You state that the question which arises is whether Mr. Evans is prohibited by the conflict of interest law from engaging in any discussions concerning repurchase of the building and /or whether he is prohibited from voting on the same issue. You have submitted a copy of a letter dated November 13, 1992, from Mr. Evans detailing his relationship with Mr. McMahon, which document is incorporated herein by reference. The letter states that Mr. and Mrs. Richard P. McMahon, owners of the Shenango Valley School of Business, Incorporated, and the commercial building housing the School of Business, are currently clients of the accounting firm of Evans and Evans, Certified Public Accountants, of which Mr. Joseph Evans is a partner. Listed among the professional services provided by Mr. Evans to these specific clients are personal financial planning and tax planning, and discussions and advisory services over a wide range of personal financial and tax matters as well as corporate operations of the Shenango Valley School of Business, Incorporated. Discussion: As a School Director for the Sharon City School District, Mr. Joseph Evans 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 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 Mark A. Longietti, Esquire December 17, 1992 Page 3 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 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. "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 anything 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 been or will be any transgression thereof but merely to provide a complete response to the question presented. 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, 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 Mark A. Longietti, Esquire December 17, 1992 Page 4 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 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 and 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 or supervisor. In applying the above provisions of the Ethics Law to the circumstances which you have submitted, pursuant to Section 3(a) of the Ethics Law, 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 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. It is clear that Mr. Evans would have a conflict of interest as to the matter of the School District's possible repurchase of the building from Mr. Evans' private business clients, Mr. and Mrs. McMahon and /or the Shenango Valley School of Business, Incorporated. This conclusion is based upon the Commission's prior decisions in Kannebecker, Opinion 92 -010 and Miller, Opinion 89- 024. In Kannebecker, Opinion 92 -010, the Commission held that a township supervisor who was also an attorney would have a conflict of interest in matters before the township involving an ongoing client or a client represented on a retainer basis, even though his legal representation of the client was not related to the matters before the township. See, also, Miller, Opinion 89 -024. Mark A. Longietti, Esquire December 17, 1992 Page 5 In this case, there is no doubt that Mr. and Mrs. McMahon, and their corporation, the Shenango Valley School of Business, Incorporated, are current clients of Mr. Evans' accounting firm. Thus, Mr. Evans would have a conflict of interest in matters before the School District involving his clients, even if those matters were unrelated to the services which he provides to them. In this case, the conflict of interest is even more manifest because the matter before the School Board, the question of whether to repurchase the building from Mr. Evans' clients, would be directly in line with the services which Mr. Evans provides to the clients. In each instance of a conflict of interest, Mr. Evans would be required to abstain from any participation of any nature -- including but not limited to participating in discussions, lobbying for a particular result, exerting influence, and voting -- and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. 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 School Code. Conclusion: As a School Director for the Sharon City School District, Mr. Joseph Evans is a public official subject to the provisions of the Ethics Law. Mr. Evans would have a conflict of interest in his capacity as a School Director with regard to the School District's possible exercise of an option to repurchase a building from his private business clients, Mr. and Mrs. Richard P. McMahon and /or the Shenango Valley School of Business, Incorporated. In each instance of a conflict of interest, Mr. Evans would be required to abstain from any participation and to full satisfy the disclosure requirements of Section 3(j) of the Ethics Law. 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 Mark A. Longietti, Esquire December 17, 1992 Page 6 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. incerely, Vincent . Dopko Chief Counsel