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HomeMy WebLinkAbout95-507 FinneganSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL January 27, 1995 William T. Finnegan, Jr., Esquire Mahler, Shaffer & Pugliese Commonwealth Bank Building 541 Pierce Street Kingston, PA 18704 Re: Conflict, Public Official /Employee, Solicitor, Municipal Insurance Carrier, Law Practice, Private Referrals by Insurance Company. Dear Mr. Finnegan: 95 -507 This responds to your letter of December 30, 1994 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 city solicitor as to the municipal insurance carrier when that insurance company has referred cases to the solicitor for private legal representation. Facts: You have served as Solicitor for the City of Wilkes -Barre for the past seven years, having originally been appointed by the Mayor and approved by City Council with your second four year term expiring at the end of 1995. In a private capacity you perform insurance defense work for the law firm of Mahler, Shaffer & Pugliese in Kingston where you are afforded the opportunity to represent your own clients at that location. Several months ago when Titan Insurance Company became the new insurance carrier for Wilkes- Barre, you did not interview, recommend or take any part in the approval process for Titan as the City's insurance carrier. You state that you did not even know that Titan was being considered as a potential carrier for Wilkes - Barre until City Council was asked to approve Titan as its carrier. The City has recently designated an insurance administrator with the City who handles the processing of claims through the various insurance carriers for the City. Although there are times when you will speak with an insurance agent, you typically interrelate with the law firms which are assigned by the various insurance carriers Finnegan, Jr., William T., Esquire, 95 -507 January 27, 1995 Page 2 with the City. You are currently working on two cases, unrelated to the City of Wilkes- Barre, which have been referred to you by Titan. Although you have not been notified of any additional referrals by Titan, you hope that there will be additional cases in the future. After reciting your understanding of the Ethics Law that you must recuse yourself from any decisions affecting Titan, you state that you have not been involved in any decision making process relative to hiring insurance companies which is an administrative and legislative function. You only foresee a conflict in a situation where an insurance company disclaims coverage and you would be asked to render a decision as to whether a declaratory judgment should be filed. In the past, long before Titan became involved with wilkes- Barre, you referred such types of claims to an independent counsel. Unless there is an absolutely clear cut case that there would be no insurance coverage afforded, citing the example of a punitive damages claim which is clearly not covered by insurance, you would continue to refer this determination to independent counsel. Further if any unforeseen conflict arises, you would recuse yourself from such a determination. You ask advice as to whether you can continue to work with Titan provided you do not participate in any decision making process which would run contrary to the intent of the Ethics Law. 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. As Solicitor for the City of Wilkes- Barre, you are a public official /employee 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. Finnegan, Jr., William T., Esquire, 95 -507 January 27, 1995 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. 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: Finnegan, Jr., William T., Esquire, 95 -507 January 27, 1995 Page 4 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 for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In response to the specific question that you have posed the Ethics Law does not prohibit outside business activities by public officials /employees. The Preamble of the Ethics Law specifically recognizes that public officials /employees are not to be discouraged from maintaining their contacts with their community through their occupations and professions. 65 P.S. §401(b). However, the private interests of a public official /employee must not conflict with the public interest. Pancoe, Opinion 89 -011. Further, whenever the private interests of a public official/ employee do conflict with the public interest, the public interest Finnegan, Jr., William T., Esquire, 95 -507 January 27, 1995 Page 5 is paramount. Crisci, Opinion 89 -013. Therefore you are advised that the Ethics Law does not prohibit your private law business of representing cases referred by Titan for your representation. However, you would as City Solicitor have a conflict as to any matters pertaining to Titan and you must recuse yourself and observe the disclosure requirements of Section 3(j) quoted above. In addition, you would also have a conflict as to any of your law clients that would have matters pending before the City of Wilkes - Barre. Kannebecker, Opinion 92 -010. In addition, you would also have a conflict as to any matters involving the law firm of Mahler, Shaffer & Pugliese involving the City of Wilkes- Barre. 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 New Rules of Professional Conduct. Conclusion: As Solicitor for the City of Wilkes- Barre, you are a public official /employee subject to the provisions of the Ethics Law. Although Section 3(a) of the Ethics Law would not prohibit you in a private capacity from handling referrals by the City's insurance carrier, you as City Solicitor would have a conflict as to any matters involving that insurance carrier, the clients referred to you, the other clients in your law practice and the firm of Mahler, Shaffer & Pugliese. In all instances of conflict, you must recuse yourself and observe the disclosure requirements of Section 3(j) of the Ethics Law outlined above. 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. Finnegan, Jr., William T., Esquire, 95 -507 January 27, 1995 Page 6 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. i cereel r Vincent . Dopko Chief Counsel