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HomeMy WebLinkAbout96-546 KonesniMrs. Lisa Konesni 107 Belmont Road Butler, PA 16001 Dear Mrs. Konesni: April 24, 1996 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL 96 -546 Re: Conflict, Public Official /Employee, School District, Member, Non - profit Foundation, Foundation created by School District, Sales, Sales Representative, Business with which Associatted, Sales to Foundation. This responds to your letter of March 25, 1996 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 member of a School District Board as to the sale of jewelry from a company in which she is a sales representative to a non- profit foundation which was created by the School District. Facts: You are a Member of the Board of School Directors of the Butler Area School District (Board). Several years ago, the Board created a 501(c)(3) non - profit foundation known as The Golden Tornado Foundation (Foundation) which raises private funds to support School District activities and to benefit the children in the School District. The Foundation's Board of Directors consists of a total of nine members, two of which are appointed by the Board. You are not a member of the Foundation's Board. You state that occasionally the Board will assist the Foundation by providing accounting or support services through the School District. In a private capacity, you are also a sales representative for JewelWay International, Inc. (JewelWay). You have had discussions with Members of the Foundation's Board regarding the sale of jewelry through JewelWay to the Foundation for the purpose of a public raffle. You state that while you will not receive any direct compensation from JewelWay for this sale, you may ultimately benefit by way of credit toward your goal of providing a network of purchasers to JewelWay. When you have reached the minimum sales objectives through the network compensation plan, you will then receive financial renumeration based on the total participation. You state that it is possible that you will receive no benefit from this transaction but that it is also possible that this sale may at some point in the future play a small part in your ultimate compensation from JewelWay. Konesni, 96 -546 April 24, 1996 Page 2 Through participation in this plan, you state that the Foundation would also benefit in that it would become part of the network plan and would receive compensation and /or residual income. Your specific question is whether your position as a Member of the Board of School Directors would in any way prohibit or restrict your participation in the sale of jewelry through JewelWay to the Foundation. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(1 1) 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 a Member of the Board of School Directors for the Butler Area School District, 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 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. Konesni, 96 -546 April 24, 1996 Page 3 "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. In applying the provisions of Section 3(a) of Act 9 of 1989 to the instant matter, JewelWay is a business with which you are associated as that term is defined in the Ethics Law. A business client of JewelWay could be the Foundation. 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. Thus, a public official /employee could not perform private business using governmental facilities or personnel. In particular, the governmental telephones, postage, staff, equipment, research materials, personnel or any other property could not be used as a means, in whole or part, to carry out private business activities. In addition, the public official /employee could not during government working hours, solicit or promote such business activity. Pancoe, supra. Similarly, Section 3(a) would expressly prohibit the use of confidential information received by holding public office/ employment for such a prohibited private pecuniary benefit. Therefore, although Section 3(a) of the Ethics Law would not preclude you in a private capacity from selling jewelry to the Foundation, you would have a conflict as a Board Member as to matters involving both the Foundation and JewelWay. Parenthetically, it is factually assumed that the Foundation is a separate entity and not part of the School District. The Commission has held that a public official /public employee not only has a conflict as to matters involving a business with which associated that come before his governmental body but also the clients of such business. In Kannebecker, Opinion ' No. 92 -010, the Commission concluded that a Township Supervisor would have a conflict as to individuals who had matters pending before the Township when the Supervisor was an attorney for those individuals in unrelated matters and the attorney /client relationship was on -going or the client was on a retainer. See, also, Miller, Opinion 89 -024. Konesni, 96 -546 April 24, 1996 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 for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. As to all such instances of conflict the requirements of Section 3(j) noted above must be satisfied. 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 Member of the Board of School Directors for the Butler Area School District, you are a public official subject to the provisions of the Ethics Law. Although Section 3(a) of the Ethics Law would not prohibit a Board Member in a private capacity of selling jewelry as a sales representative of a company to a Foundation created by the School District, the Board Member would have a conflict as a public official as to matters involving the Foundation and company and must observe the disclosure requirements of Section 3(j) of the Ethics Law. 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 Konesni, 96 -546 April 24, 1996 Page 5 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 such. 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 §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 J Dopko Chief Counsel