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HomeMy WebLinkAbout93-556 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL May 4, 1993 93 -556 Re: Conflict, Public Official /Employee, Member of Borough Council, President of Borough Holiday Association, Contributions of Utility to Association, Utility Seeking to Purchase Company from Borough, Voting on Sale. This responds to your letter of April 12, 1993, in which you requested confidential advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions on a borough council member from voting on the sale of a borough owned company to a utility when the utility also makes financial contributions to a borough holiday association of which that borough council member is incorporator and president. Facts: You are a Member of the Borough Council of Borough A, County B, serving in the fourth year of a four -year term. You are currently running for re- election, unopposed in the primary election. You are the founder (incorporator) and president of Association C ( "Association "), a non - profit corporation founded in Date D, to present Holiday E activities for Borough A. Neither you nor any other officers or members of the Association receive compensation for your services. However, you are reimbursed for expenses incurred on behalf of the Association. The Association is not an agency of the Borough, but does have a cooperative relationship with the Borough. For example, the Association has obtained insurance by means of a rider on the Borough's insurance policy. The Association solicits area businesses for contributions as a way to pay for the expenses of its events. You request an advisory as to whether, if a business contributes to the Association, and that same business seeks to purchase a company from the Borough, you must abstain from voting Confidential Advice No. 93 -556 May 4, 1993 Page 2 on that matter. You restate that the utility that seeks to make a contribution to the Association is the same utility that seeks to purchase Company F owned by the Borough. Based upon the above, you request a confidential advisory from the State Ethics Commission. Discussion: It is initially noted that your request for advice may only be addressed with regard to prospective conduct. A reading of Section 7(10) and 7(11) of the Ethics Law makes it clear that an opinion or advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion or advice but any person may then submit a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Law violations by a person who is subject to the Ethics Law. It is further noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. S407(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 P.S. 5407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. Finally, this advisory is limited to the question raised and this advisory does not address any other question or conduct. As a Member of the Borough Council of Borough A, 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 Confidential Advice No. 93 -556 May 4, 1993 Page 3 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 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." 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. "Gift." Anything which is received without consideration of equal or greater value. "Gift" shall not include a political contribution otherwise reported as required by law or a commercially reasonable loan made in the ordinary course of business. In addition, Sections 3(b) and 3(c) of the Ethics Law provide: Section 3. Restricted activities (b) No person shall offer or give to a Confidential Advice No. 93 -556 May 4, 1993 Page 4 public official, public employee or nominee or candidate for public office or a member of his immediate family or a business with which he is associated, anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment based on the offeror's or donor's understanding that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. (c) No public official, public employee or nominee or candidate for public office shall solicit or accept, anything of monetary value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding of that public official, public employee or nominee that the vote, official action, or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. 65 P.S. SS403(b), (c). 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 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 Confidential Advice No. 93 -556 May 4, 1993 Page 5 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 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. See, Mlakar, Advice 91-523 - S. In applying the provisions of the Ethics Law to the instant matter, it is clear that the Association is a business with which you are associated. Thus, the issue is reduced to whether the public official/ employee would have a conflict if he would have official involvement with the utility which made contributions to a business with which that public official /employee is associated. In Wolfgang, Opinion No. 89 -028, it was held that a contribution to a candidate for office in and of itself, without any additional facts, would not create a per se conflict if the individual was elected to that office. However, there have been various cases before the Commission in which the Commission has found violations based upon particular facts where public officials have accepted gifts from individuals and subsequently acted upon matters which the donors had pending before -the governmental body. See, Volpe, Order No. 579 - R; Smith, Order No. 578 - R; and Feller, Order No. 576 -R. In the instant case, the contribution to the Association does Confidential Advice No. 93 -556 May 4, 1993 Page 6 not create a conflict of interest subject to the following qualifications. First, it is assumed that no understanding as prescribed by. Sections 3(b) and (c) of the Ethics Law exists. Second, it is assumed that the public official /employee is not using the status or position of his public office to encourage any particular company to contribute. As to Sections 3(b) and (c) of the Ethics Law, the fact that the company has made a contribution to the Association does not per se create an "understanding" between the contributor and the public official which would be prohibited by these two Sections of the Ethics Law. On the submitted facts, we have no evidence to indicate that any understanding exists between the receipt of the contribution by the Association and your future voting. Therefore, based upon the facts as you presented them and based upon the express assumption that no understanding exists which would contravene Sections 3(b) and (c) of the Ethics Law, the Ethics Law would not restrict your voting on the issue of the sale of Company F to the utility. 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 Borough Code or any applicable statute, rule or regulation regarding non - profit corporations. Conclusion: As Member of the Borough Council for Borough A, County B, you are a public official subject to the provisions of the Ethics Law. Association C ( "Association ") is a business with which you are associated. The contribution to the Association by a utility which is seeking to purchase Company F from the Borough does not per se create a conflict of interest. Based upon the assumption that there are no understandings which would contravene Sections 3(b) and (c) of the Ethics Law, the Ethics Law would not restrict your voting on such issues. 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. 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 Confidential Advice No. 93 -556 May 4, 1993 Page 7 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 §13.2(h). V1ncent \ . Ddpko Chief Counsel