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HomeMy WebLinkAbout96-619 RayJesse Ray James Daughenbaugh Snyder Township Supervisors R.D. 3, Box 119 Tyrone, PA 16686 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 17, 1996 96 -619 Re: Conflict, Public Official /Employee, Supervisor, School District, Business With Which Associated, School Bus Transportation Company. Dear Mr. Ray and Mr. Daughenbaugh: This responds to your respective letters of November 6, 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 Township Supervisors regarding participation in the School District's proposed development of a new elementary school where the Supervisors are the owner and employee of a company which provides school bus transportation to the School District. Facts: You are both Supervisors in Snyder Township, Blair County, Pennsylvania. Jesse Ray (Ray) is the sole shareholder of Rayco Transportation Company, Inc. (Rayco), a Pennsylvania corporation whose only business consists of owning and operating school buses which transport students to and from the Tyrone Area Schools and school activities. Rayco has a contract with the Tyrone Area School District for these services. James Daughenbaugh (Daughenbaugh) is employed by Rayco as a school bus driver. Daughenbaugh states that his gross earnings from Rayco in 1995 were $5,762 and his 1996 earnings thus far are substantially the same. Rayco is not his sole source of income. The Tyrone Area School District owns land in Snyder Township where it plans to develop a new elementary school. The School District has submitted an application to the Township Board of Supervisors for approval of the proposed elementary school under the Snyder Township Subdivision and Land Development Ordinance. Ray states that there may . be other matters which would come before the Board concerning the Rav /Dauahenbaugh, 96 -619 December 17, 1996 Page 2 proposed elementary school, however, the exact nature of such matters is unknown at this time. You request an advisory concerning whether it would be a conflict of interest for you to vote on the subdivision and land development application of the Tyrone Area School District in light of your respective positions as shareholder and employee of Rayco. 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 Supervisors for Snyder Township, Blair County, you both are public officials as that term is defined under the Ethics Law, and hence you are both 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. Rav /Dauahenbaugh, 96 -619 December 17, 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. "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 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. Rav /Daughenbauah, 96 -619 December 17, 1996 Page 4 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. In applying the above provisions of the Ethics Law to the circumstances which you have submitted, pursuant to Section 3(a) of the Ethics Law, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Rayco is a business with which both of you are associated, Ray through his status as sole shareholder and Daughenbaugh through his status as an employee. The State Ethics Commission has held that a public official /public employee generally has a conflict of interest in matters that involve business clients. Kannebecker, Opinion 92 -010; Miller, Opinion 89 -024. In Kannebecker, the Commission stated: The concern under the Ethics Law is that you as a township supervisor would look favorably on a matter submitted for action by your . . . clients so as to engender a continued private business relationship with those clients. In this regard, how can the people be assured that your financial interests do not conflict with the public trust. 65 P.S. §401. Kannebecker, Opinion 92 -010. The Tyrone Area School District is a client of Rayco. Therefore, each of you would have a conflict of interest in your capacities as Supervisors in the matters concerning the proposed elementary school. It is noted that depending upon facts which have not been submitted, there may also be an additional, independent basis for finding a conflict of interest through the prospect of additional compensation to Rayco for transportation services should the proposed elementary school be built. In any event, in each instance of a conflict of interest, the public official /public employee is required to abstain from participation and to satisfy the disclosure requirements of Section 3(j). You have not indicated whether your Board consists of 3 or 5 members. If it is a 3- member board, abstentions by both of you would obviously leave an insufficient number of members to act. Pursuant to an exception set forth in Section 3(j) above, and conditioned upon your first abstaining and making the requisite disclosures, the two of you could then vote on matters involving the proposed elementary school. However, if the Board is a 5- member board, you could not invoke the exception and vote unless enough of the other members had a conflict under the Ethics Law so as to leave an insufficient number of members to act. Any use of the exceptions for voting conflicts must be in accordance with the precise procedures set forth in Section 3(j) as noted above. Rav/Dauahenbaugh, 96-619 December 17, 1996 Page 5 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 Second Class Township Code. Conclusion: As Supervisors for Snyder Township in Blair County, Pennsylvania, you both are public officials subject to the provisions of the Ethics Law. Given your respective statuses as sole shareholder and employee of Rayco, each of you would have a conflict of interest in matters pertaining to the proposed elementary school for the Tyrone Area School District, which School District is a client of Rayco. In each instance of a conflict of interest, you would be required to abstain from participation and to satisfy the disclosure requirements of Section 3(j). Any use of the exceptions for voting conflicts under Section 3(j) must be in accordance with the procedures set forth in Section 3(j). 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 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. i incerely, tom Vincent J.'Dopko Chief Counsel 040