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HomeMy WebLinkAbout94-554 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 14, 1994 94 -554 Re: Conflict, Public Official /Employee, School Board Member, Use of Authority of Office or Confidential Information, Vote, District Tax Abatement Program, Business with which Associated, Contractor. This responds to your letter of March 31, 1994 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 upon a School Board Member who is a Contractor within the School District from voting on a tax abatement program to encourage residential construction within the District. Facts: Your office serves as Solicitor for District A. You -have been asked by B, a District A Member to make this request for advice. B is a duly elected Member of the District A Board of Directors. District A has under consideration the reinstitution -of a residential tax abatement program which previously expired on September 30, 1989. The tax abatement program would abate 100% of the additional real estate taxes for three years that would arise on account of renovations to or new construction of residential dwellings. The purpose of such tax abatement programs is to encourage residential construction within the District and thus enhance the tax base for the long term. B is a self - employed commercial and residential contractor. B performs contracting services both within and without the territorial limits of the District. B does not presently have any contracts, proposals, bids or awards for any residential construction that would be the territory that would be eligible for tax abatement, with the following exceptions: Two Confidential Advice, 94 -554 April 14, 1994 Page 2 drive -way contracts and a contract publicly awarded by a municipal agency for site preparation only (earthmoving and sewer installation) on land designated for future residential construction. An acquaintance may be seeking an estimate from B and other contractors for the construction of a residence that would be within the tax abated territory. Based upon the above you request an advisory from the State Ethics Commission as to the following: (1) Whether the Ethics Act prohibits B from voting on the tax abatement program; and (2) If adopted, may B undertake future residential construction /renovation projects within the abated territory. Discussion: It is initially 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. SS407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. It is further noted that your request for advice may only be addressed with regard to prospective conduct. A reading of Sections 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. As a Board Member for District A, B 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. Confidential Advice, 94 -554 April 14, 1994 Page 3 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 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more 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 anything of monetary value based upon the understanding that the vote,..official action, or judgement of the public official /employee would be influenced thereby. Confidential Advice, 94 -554 April 14, 1994 Page 4 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 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 fot 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) from conflict under the Ethics Law, then in that event participation is permissible provided the disclosure requirements noted above are followed. §Agl Mlakar, Advice 91- 523 -S. You are further advised that the use of authority of office is Confidential Advice, 94 -554 April 14, 1994 Page 5 more than the mere mechanics of voting and encompasses all of the tasks needed to perform the functions of a given position. aut, Juliante, Order No. 809. Use of authority of office includes discussing, conferring with others, lobbying for a particular result and /or any other use of the authority of office in which the result would be a private pecuniary benefit to a business with which a public official or a member of his immediate family is associated. In applying the above provisions of the Ethics Law to the instant matter, it is noted that Section 3(a) of the Ethics Law does not prohibit public officials /employees from outside business activities or employment; however, the public official /employee may not use the authority of office for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. A public official /employee must exercise caution so that his private business activities do not conflict with his public duties. Crisci, Opinion 89 -013. It is further noted that the Ethics Law, pursuant. to Section 3(a), prohibits a public official from using the authority of public office or confidential information received by holding a public office for the private pecuniary benefit of the public official, any member of his immediate family, or any business with which the public official or a member of his immediate family, or any business with which the public official or a member of his immediate family is associated. Here, there does not appear to be any real possibility of an inherent conflict or a private pecuniary benefit inuring to B, a member of his immediate family or a business with which he or a member of his immediate family is associated merely because he is a Member of the School Board and a contractor within the District. Thus, he would not have a conflict of interest in connection with voting on the tax abatement program. This advice is expressly conditioned upon the factual assumption that B has not entered into any contracts which are contingent upon the passage of the tax abatement program. Should such contracts exist or if there are any other . agreements or understandings whereby B would reasonably expect to receive contract work for residential construction based upon his vote in favor of the program, a conflict of interest would exist. See Amato, Opinion 89 -002. In each instance of a conflict of interest, B would be required to abstain from any participation of any nature whatsoever, including but not limited to taking part in discussions, voting, lobbying for a particular result, or any other use of the authority of office. In each instance of a conflict of interest, he would further be required to comply with the disclosure requirements of Section 3(j) of the Ethics Law set forth Confidential Advice, 94 -554 April 14, 1994 Page 6 above. such. 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 Public School Code. Conclusion: As a Board Member for District A, B is a public official subject to the provisions of the Ethics Law. Subject to the restrictions and qualifications set forth above, Section 3(a) of the Ethics Law would not prohibit B from voting on the tax abatement program. Should there be a conflict of interest, then the provisions of Section 3(j) must be followed. 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 Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within fifteen (15) days of the date of this Advice pursuant to 51 Pa.Code §13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717- 787 - 0806). ncerely, V ncent J': Dopko Chief Counsel