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HomeMy WebLinkAbout95-606 SpanglerSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 11, 1995 John H. Spangler, Esquire Parke, Barnes, Spangler & Bortner 126 West Miner Street West Chester, PA 19382 -3281 95 -606 Re: Conflict, Public Official /Employee, Housing Authority, Executive Director, Consultant, Interfaith Community Development Corporation. Dear Mr. Spangler: This responds to your letters of August 14, and September 6, 1995 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 the executive director of a county housing authority who is a consultant to a corporation that could seek funding for its housing projects. Facts: The Board of Commissioners of the Housing Authority of the County of Chester, the appointing authority in this case, has voted four members in favor, and none against, with one member absent, to the inquire about the conduct of Troy Chapman (Chapman) who has recently been appointed Executive Director of CCHA. CCHA, organized under the Pennsylvania Housing Authorities Act, manages approximately 507 units of public housing and also administers the Section 8 Housing Program, both of which are October 11, 1995 Page 2 Federal Housing programs. The appointing authority for CCHA is a five member board presently made up of Mr. Dinniman, Mrs. Simmons, Mr. Eastburn, Mr. Hemcher, and Mr. Sanchez with the operations managed by Chapman. Chapman is appointed by the Board of Commissioners. Priscilla Roberts and Louise Wallner have raised a question of conflict of interest as to Chapman. You do not believe there is a conflict, but state that a conflict could occur as a result of competing applications for funding. CCHA is aware of the need to avoid conflicts. The letter of Roberts /Wallner dated 7/24/95 questions the ability of Chapman to act independently /objectively given that he is a consultant for ICDC, the Interfaith Community Development Corporation, which had a matter before the Zoning Board for the conversion of a hotel into a 30 unit low income transitional housing project. The letter states that in ICDC's grant application to PA Housing Finance Agency (PHFA) a different target group was listed. A conclusion is proffered that Chapman is more interested in acquiring a grant as a developer than in meeting the needs of the community in the County. The letter suggests that Chapman would be in a position to make funding recommendations for awards to ICDC which the community does not want or need. The objectivity of Chapman to oversee his own government housing development is questioned. The sensitivity and concern of Chapman for the community needs is also raised in the context of the 800 apartment units that are rented to minorities vis -a -vis Chapman's mission. The letter concludes by stating that since Chapman is making a profit as a developer, he should not be Executive Director of CCHA. 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 October 11, 1995 Page 3 advisory only affords a defense to the extent truthfully disclosed all of the material facts. As Executive Director for CCHA, Chapman is as that term is defined under the Ethics Law, 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. 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. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a the requestor has a public employee and hence he is The following terms are defined in the Ethics Law as follows: October 11, 1995 Page 4 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. 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 before it because the number of members of the body required to abstain from voting under the October 11, 1995 Page 5 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 provisions of Section 3(a) of the Ethics Law to the instant matter, although Chapman would not be prohibited from serving as CCHA's Executive Director under the Ethics Law, he would have a conflict of interest as to matters involving a business with which he is associated or business in which he has a financial interest as those terms are defined above. In such cases, Chapman could not participate and must observe the disclosure requirements of Section 3(g) as set forth above. In addition, Chapman would have a conflict in cases where his participation in a matter would eliminate a competitor to a business with which he is associated or has a financial interest whereby his elimination of the competing business /person would result in a pecuniary benefit, such as a grant award, to the business with which Chapman is associated. In Pepper, Opinion 87- 008, the Commission ruled that a negative vote /recommendation as to a competitor's application which would work to the benefit of the public official /employee, his immediate family or businesses with which he is associated is a prohibited conflict under the Ethics Law. The propriety of the proposed conduct has only been addressed October 11, 1995 Page 6 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 Executive Director for CCHA, Chapman is a public employee subject to the provisions of the Ethics Law. Under Section 3(a) of the Ethics Law, Chapman would have a conflict as to matters involving all businesses with which he is associated or in which he has a financial interest and could not participate in such matters and must observe the disclosure requirements of Section 3(j) as stated above. In addition, Chapman would have a conflict of interest in matters where his negative vote against any business or person would eliminate such business /person as a competitor if such would work to the financial advantage of a business with which Chapman is associated or has a financial interest. 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 thirty (30) days of the date of this Advice pursuant to 51 Pa.Code October 11, 1995 Page 7 §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). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Vincent`. Dopko Chief Counsel