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HomeMy WebLinkAbout94-594-S2 KriznerFrank P. Krizner, Esquire County Solicitor County of Butler P.O. Box 1208 Butler, PA 16003 -1208 Dear Mr. Krizner: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 19, 1995 94- 594 -S2 Re: Conflict, Public Official /Employee, County Commissioner, Member of County Retirement Board, Early Retirement Incentive Program, Participation by Public Official /Employee, Supplemental Advice. This responds to your letters dated March 14 and March 30, 1995, in which you requested a second supplemental advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law would prohibit or restrict a county commissioner who is a member of the county retirement board from voting and participating as to his own election for early retirement incentive program and secondly, whether Section 3(j) of the Ethics Law would permit such voting by the commissioner if one or more members of the five member retirement board has a conflict. Facts: You seek a third advice as to the conduct of County Commissioner James Green regarding an Early Retirement Incentive Program. Previously, Advice of Counsel No. 94 -594 was issued on August 22, 1994. Thereafter, Supplemental Advice No. 94 -594 -S was issued on September 26, 1994. Advice No. 94 -594 provided the general parameters under which James Green as Chairman of the Butler County Board of Commissioners and Retirement Board would be able to apply for an early retirement with the Advice delineating specific conditions that had to be met before such participation would be permissible under the Ethics Law. Thereafter, Advice No. 94 -594 -S dealt with the issue of Commissioner Green voting and participating in the preparation of the Early Retirement Incentive Program under the factual circumstance where he publicly stated that he would not opt for the Early Retirement Plan. Those two Krizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 2 prior Advices of Counsel are incorporated herein by reference as if set forth fully herein. You now write on behalf of Commissioner Green relative to his participation in the Butler County Early Retirement Incentive Program of 1994. You considered filing a declaratory judgement action on the question but believe that such a proceeding would not be proper in that it would be more appropriate for the State Ethics Commission to address this issue. You present the following factual outline which reflects your view as to the events leading up to this third request on your part: "1. On July 8, 1994, the Governor signed House Bill 358 which became Act 71 of 1994, known as the Early Retirement In- centive Act. 2. On July 13, 1994, each member of the Butler County Re- tirement Board was advised by Norman Pickering, Senior Vice President of Hay /Huggins Company of the new Act and of the related time limitations for participation. (Hay/ Huggins is engaged by the Retirement Board as its actuary) 3. On July 18, 1994, Commissioner Green recognized a possi- ble problem with the implementation of the Act as it re- lated to two Retirement Board members and wrote to John J. Contino for advice. The question presented was: "In view of the fact that two members of the Retirement Board will be voting on an incen- tive package from which they would benefit if they take the early retirement, may they cast a vote, or must they abstain from voting ?" 4. On July 20, 1994, the Ethics Commission declined to ad- dress the issue because the request was not made by an authorized person. 5. On July 22, 1994, Commissioner Green again submitted the following request: "As a member of the Retirement Board who will be voting on the incentive package from which I would benefit if I took advantage of the early retirement under provisions of Act 71, may I cast a vote, or must I abstain from Krizner, Frank P., Esquire, 94- 594 -S2. April 19, 1995 Page 3 voting ?" 6. On July 26, 1994, Commissioner Green was notified that an "advice" would be issued at a later date. 7. On August 12, 194, at a duly advertised regular quar- terly meeting of the Retirement Board, Commissioner Green, as Chairman of the Retirement Board, referenced the information received from Hay /Huggins on July 25, 1994, regarding the new retirement incentive legislation and opened the floor for discussion and questions. 8. At the Retirement Board meeting, after discussion, a motion was made to "authorize the expenditures to Hay/ Huggins for the implementation of the early retirement program." Commissioner Green seconded the motion. Upon voting there was an abstention by a board member who could participate in the program, one opposed, one absent and two voted for the motion including Commissioner Green. The abstaining board member was advised by her solicitor to abstain. Commissioner Montgomery was on vacation. 9. Commissioner Green asked my advice before his action and I advised him that since the motion was only to pay for an information gathering study regarding the retirement incentive program, in my opinion, there would be no con- flict of interest for Commissioner Green to participate in the vote. 10. At the same meeting a further motion was made to: "authorize Maher Duessel (the County's inde- pendent auditors) to provide a proposal to make an initial evaluation and in -house com- prehensive study ?" Commissioner Green seconded the motion. As in the prior vote, there was one abstention, one absent, one opposed and two affirmative votes, one of which was Commissioner Green's. (It must be noted that the Retirement Board is a five - member board.) 11. On August 23, 1994, Commissioner Green confirmed in writ- ing the action taken by the Retirement Board regarding Maher Duessel's requested proposal to study the proposed incentive program and their costs to conduct the study and regarding the services to be provided by Hay /Huggins Rrizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 4 in conjunction with the study to be done by Maher Duessel. 12. On August 24, 1994, Commissioner Green received "the Ad- vice of Counsel" 94 -594 dated August 22, 1994. (Reference Paragraph 6 above) 13. "Advice of Counsel" 95 -594 set forth five requirements that a public official who wishes to participate in an early retirements program must observe. (Reference Para- graph 6 above) 14. On August 25, 1994, Commissioner Green conveyed to all Retirement Board members the "Advice of Counsel." 15. On August 30, 1994, Commissioner Green advised Mr. Dopko, Chief Counsel of the Ethics Commission, that he agreed with the answer presented by Advice of Counsel 94 -594 but asked for further clarification. 16. By letter dated September 2, 1994, Commissioner Green was informed that a Supplement to the Advice of Counsel 94- 594 would be issued at a later date. 17. On September 2, 1994, the secretary of the Retirement Board was requested by the abstaining Retirement Board member to make a notation to the official minutes of the August 12, 1994, meeting regarding the reason for the abstention. 18. On September 12, 1994, at a regular session of the Board of Commissioners, Resolution No. 94 -24 providing for Early Retirement Incentive for Butler County was passed. Commissioner Green made a public statement regarding his planned inactivity with the program and his reason for abstention in any vote. A written notice of his inten- tion to abstain from participating in the development of the program was also submitted. Commissioner Green did not vote on the motion. The motion was passed two yes votes and one abstention. (It is to be noted the Board of Commissioners is a three member board.) 19. By letter dated September 26, 1994, a supplemental Advice of Counsel 95 -594 -S was transmitted. Commissioner Green was advised, that his assumption, that a public renounc- ing of benefits of the Early Retirement Program would permit him to vote on the matter at the Retirement Board meeting, was correct. (See item #16) 20. On October 3, 1994, at a special meeting of the Butler Krizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 5 County Retirement Board the matter of the approval of Resolution of the Butler County Board of Commissioners, 94 -24, was brought to the floor. After significant on the record discussion a vote was called for on a motion to approve the resolution. 21. At this point, the question for the consideration of the Ethics Commissioner arises. In order to vote at this time, the other Board Member who could participate in the Early Retirement Incentive Program renounced her right to all benefits. From the comments at the :meeting it became evident therefore that the vote would be split evenly two for, two against with the one abstention of Commissioner Green. There would not be a majority vote either way and the motion would be defeated by less than a majority vote by inaction. 22. Commissioner Green recognized this scenario, publicly renouced[sic] his right to participate in the Early Retirement Program as the other qualified Board Member had done and proceeded to vote in favor of the approval of the Resolution 94 -24. "I make the declaration now and will provide this board with a coy[sic] of the Ethics Commission advice as well as my statement that I withdraw any interest . . ." (Minutes of Retirement Board meeting of October 3, 1994) The motion to approve the Resolution 94 -24 was a three to two vote. 23. On October 4, 1994, Commissioner Green sent memo to the secretary of the Retirement Board his withdrawal from the benefits of the County tirement Incentive Program. "I will not participate in the Early Retire- ment Incentive Program as provided by Act 71 of 1994." passed on a written regarding Early Re- 24. On my advice, Commissioner Green wrote to the Ethics Com- mission on October 6, 1994, asking for a clarification of your Advice of Counsel and Supplement as it pertains to a tie vote on a five member board with one abstention for Ethics Commission reasons relating to a conflict of interest. 25. On October 12, 1994, Mr. Dopko responded to Commissioner Green's request for clarification and declined to comment Krizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 6 for two reasons. First, an advice was declined because Commissioner Green did not inquire about his duties and secondly, the request was not for future consideration. 26. On October 24, 1994, Commissioner Green again made his request for clarification in terms that he believed were in accord with Mr. Dopko's letter of October 12, 1994. 27. Again on November 30, 1994, Commissioner Green wrote to Mr. Dopko concerning his participation in the Early Re- tirement Incentive Program. This letter was prompted by action of Mr. Norm Pickering of Hay /Huggins. 28. On December 5, 1994, Commission[sic] Green was again informed that the Ethics Commission had declined to provide the clarification he sought. 29. On December 29, 1994, Commissioner Green made his elec- tion under the Butler County Early Retirement Program which action qualified him for participation." The Retirement Board now has before it the matter of Commissioner Green's election to participate in the Early Retirement Program and must decide whether to honor or reject that election. You state that protracted litigation could occur which would involve an interpretation of the provisions of the Ethics Law and Section 3(j) of the Ethics Law as applied to five - member boards. After quoting Section 3(j) of the Ethics Law in part, you state that there are two areas of interpretation under the Ethics Law: the effect of the exception to the general rule in Section 3(j) that permits a party to vote on a matter as to which they will benefit, where the majority or other legally required vote is unattainable because of abstentions legally required or otherwise; and second, the implied effect of the provision relating to a three - member board as to action taken by a five - member board. After concluding that one of the above two issues will determine the course of conduct of the Retirement Board as to Commissioner Green, you state that you can speculate and develop an opinion on these issues but believe that this Commission was created to advise and guide public officials in such areas. You argue that Commissioner Green has kept his options open with respect to Early Retirement participation by his timely election and that the critical time will not be reached until Commissioner Green actually retires in December of 1995 at which time it must be decided if he is entitled to the incentive program as per the resolution of the Board of Commissioners. After asserting that Commissioner Green mistakenly renounced his rights to the incentive in order to vote for the program, you conclude that he should be entitled to claim the incentive. You state that the issue is Rrizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 7 whether he was required by the Act to renounce his incentive rights in order to vote for the program that provides benefits that would apply to him as a member of the targeted potential retirees. In a second letter of March 30, 1995, you state that Commissioner Green was contacted by Norm Pickering, the actuary of the Butler County Retirement Program, who advised Commissioner Green that after review of Act 171 of 1995 and the correspondence from the Commission, the view of Pickering is that there would be no conflict. You further state that Pickering intends to advise the Butler County Retirement Board that he is processing the necessary paperwork in response to Commissioner Green's application to participate in the Butler County Early Retirement Incentive Program. After conceding that Mr. Pickering is not an authority regarding an interpretation of conflict of interest, you note that Pickering is an authority on Retirement Board matters. You note that Pickering has advised Commissioner Green that he has been voting for many years on pension board matters that increase benefits for employees which include elected officials and himself. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. § §407(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. § §407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. Additionally, it is noted that a question exists regarding Commissioner Green's election in this case in that Commissioner Green has previously indicated that he would not participate in the Early Retirement Incentive Program which formed the factual basis for issuing Advice 94- 594 -S. That or any advisory only provides a defense to the extent that the material facts are truthfully disclosed as noted above. Further, there has been certain past action in this case which is not addressed in this advisory format which is limited to future prospective conduct only. Finally, it is noted that as to item number 26 listed in the facts, there is no record of the receipt of Mr. Green's letter of October 24, 1994 which explains the lack of any response. As Commissioner for Butler County and the Retirement Board, James Green 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: Rrizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 8 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 of his immediate family or a business with which he or a member of his immediate family is associated. 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. 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 Rrizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 9 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 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) from conflict under the Ethics Law, then in that event participation is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91 -523 -S wherein it was noted: "Thus, in order for this provision to be operative, it is necessary that a sufficient number of public officials who may have a conflict under the Ethics Law would abstain so that the majority or legally required vote could not be attained. To be specific, in the case of a five member board, three public officials would have to have a conflict under the Ethics Law in order for this provision to become operative; in the case of seven member board, it would be necessary for four public officials to have a conflict under the Ethics Law in order for this Section to become operative. Conversely, in a five member board, the fact that one or two members would have a conflict under the Ethics Law would be insufficient basis under 3(j) for these members to vote after disclosure since a majority or legally required Krizner, Frank P., Esquire, 94- 594 -S2 April 19, 1995 Page 10 Id at 4. vote could still be attainable despite their abstention. Further, the fact that the abstention by one member would result in a 2 -2 deadlock as to the remaining four member [s] is not a circumstance under Section 3(j) which would allow voting. Such a situation would be similar to a case where a five member board would be deadlocked due to a resignation or absence of one of the board members." In this case, Commissioner Green would have a conflict in participating or voting as to his own election to opt for the Early Retirement Program. Such participation or voting constitutes a use of authority of office, Juliante, Order 809. Further, that use of authority of office would result in a private pecuniary benefit consisting of the retirement benefit which would accrue to Commissioner Green himself. Therefore, such action would be prohibited under Section 3(a) of the Ethics Law. As to the five member board, Section 3(j) of the Ethics Law would only have application if three or more members of the board had conflicts under the Ethics Law. See, Mlakar, supra. Finally, the exclusionary provisions of Section 3(a) of the Ethics Law would not have application in this matter. First, the Early Retirement Program benefit would not be a de minimis matter. See Schweinsberq, Order 900. Further, the matter of Commissioner Green's election is individual to him and therefore does not affect a class or a subclass consisting of a group, occupation or industry with more than one member. See Davis, Opinion 89 -012. Therefore, Commissioner Green has a conflict, must abstain and must observe the disclosure requirements of Section 3(j). 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 Commissioner for Butler County for Butler County Retirement Board, James Green is a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would prohibit James Green from participating in voting upon the acceptance or rejection of his election to participate in the Early Incentive Retirement Program. If the Retirement Board consisting of five members is deadlocked, Section 3(j) would only have application if three or more members of that Board would have a conflict under the Ethics Law. The disclosure requirements of Section 3(j) of the Ethics Law as noted above would have to be Krizner, Frank P., Esquire, 94- 594 -52 April 19, 1995 Page 11 satisfied. 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 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 513.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAS transmission (717- 787 - 0806). Failure to file such an appeal at the Commission within fifteen (15) days may result in the dismissal of the appeal. cerely, Vincent J. �••k Chief Counse