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HomeMy WebLinkAbout97-624 GrohJohn H. Groh Assistant Zoning & Code Administrator Township of Millcreek Zoning and Code Enforcement Office Municipal Building 3608 West 26th Street PO Box 8268 Erie, PA 16505 -0268 Dear Mr. Groh: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL November 13, 1997 97 -624 Re: Conflict, Public Official /Employee, Township, Assistant Zoning & Code Administrator, Builder, Purchase of Lot. This responds to your letter of October 13, 1997 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employe Ethics Law presents any prohibition or restrictions upon a Township Assistant Zoning & Code Administrator regarding his purchase of half of a parcel of real estate from a home builder with whom he has official dealings. Facts: As the Assistant Zoning & Code Administrator for Millcreek Township, you request an advisory from the State Ethics Commission. There is a vacant lot situated between your residence and the residence owned by Greg Glazier (Glazier), a home builder to whom you occasionally issue building permits. You state that Glazier has proposed dividing the lot in half, selling half to you and retaining the other half for himself. The purchase price for the one -half portion of the lot is $7,000, which you indicate is its fair market value. All costs incurred for the proposed subdivision are to be split equally between Glazier and yourself. Based upon the above facts, you ask for an advisory as to any concerns that may exist under the Public Official and Employe Ethics Law. You specifically ask whether you would be required to report your purchase of the land on your annual Statement of Financial Interests. Groh, 97 -624 November 13, 1997 Page 2 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 the Assistant Zoning & Code Administrator for Millcreek Township, you are a public official /public employee subject to the provisions of the Public Official and Employe Ethics Law ( "Ethics 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. 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. Groh, 97 -624 November 13, 1997 Page 3 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. In each instance of a conflict, 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 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. Section 3(a) does not operate to restrict the public official /public employee in his private capacity. Thus, Section 3(a) would not preclude you from purchasing the half lot from Glazier. However, Section 3(a) of the Ethics Law does operate to restrict a public official /public employee in his public capacity. Pursuant to Section 3(a) of the Ethics Law, you would have a conflict of interest as to official dealings with Greg Glazier based upon your anticipated purchase of the one -half lot from him. This conclusion is based upon the State Ethics Commission's rulings in Bassi, Opinion No. 86- 007 -R, and Woodrina, Opinion No. 90 -001. Groh, 97 -624 November 13, 1997 Page 4 In Bassi, Opinion No. 86- 007 -R, the State Ethics Commission held, inter alia, that a county commissioner (Edward Paluso) could not enter into a lease with a municipal authority, where one of the members of the authority (Norman Carson) was a county employee directly responsible to the commissioners of the county, unless the execution of the lease was accomplished after an open and public process, with the authority member abstaining from participating in the review and award of said lease, and the county commissioner abstaining from participating in any matter relating to the authority member in his position as a county employee. The Commission stated, inter ... we cannot ignore the fact that Mr. Carson is an authority member and has influence and control over authority decisions. In this respect, Mr. Carson, by voting on the final adoption of a lease, would be voting on a matter directly related to his employer. Even though that employer is another governmental body, we have held, in the past, that a public official may not vote or participate in a matter if it somehow relates to a financial interest which he may have. See, Welz, 86 -001. In the instant situation, Mr. Carson would be called upon to determine the advisability of renting property for the authority. The property which they are seeking to rent is owned by the individual or one of the individuals who currently supervises him and controls his public employment with the county. As a result of this, Mr. Carson, as an authority member, should abstain from participating in any matter relating to this particular lease. See, Bassi, 86 -007 at 3. The Commission further stated: Mr. Paluso as a county commissioner, is, in part, responsible for the general supervision of Mr. Carson. Mr. Carson, on the other hand, is an authority member in a position to grant Mr. Paluso a lease which results in Mr. Paluso receiving a financial gain. It may be difficult for the public to perceive how Mr. Paluso's actions as a county official, would not somehow be influenced by this potential leasing arrangement. It may be argued that Mr. Paluso, in dealing with Mr. Carson, to date, has done so in order to effect the favorable outcome of this lease. Additionally, it could be argued that Mr. Carson voted in favor of the lease in order to advance his position as a full -time county employee. The above factual scenarios, while hypothetical in nature, nonetheless create the types of conflicts of interest that are to be addressed by this Commission. Id,.at4. In Woodring, Opinion No. 90 -001, the State Ethics Commission reviewed a similar situation. Jesse Woodring, Chairman of the Sunbury Redevelopment Authority, had applied to the City for a rehabilitation grant through the Federal Rental Rehabilitation Program (hereinafter, the "Program "). Kenneth Pick, who was employed as the Executive Director of the Redevelopment Authority (chaired by Woodring) also served as the Community Development Coordinator for Sunbury. In the latter capacity, Pick was administrator in charge of the Program for the City. Pick's functions included administering the Program, reviewing all applications, and determining eligibility. The Commission stated: Groh, 97 -624 November 13, 1997 Page 5 we are concerned that Mr. Pick, who is an employee of the Redevelopment Authority of which you are Chairman, has the duty of reviewing all applications and determining eligibility in his capacity as Community Development Coordinator for the city. In particular, the potential exists, given the employer - employee relationship between the Redevelopment Authority and Mr. Pick, that your application might be reviewed in a more favorable light than other applications. To forestall such a situation, you must not participate or take any action as to Mr. Pick if your application is approved and you receive benefits. Bassi, Opinion 86 -007. In addition, Section 3(j) of the Ethics Law would require you to publicly note that you would have a conflict as to any matter involving Mr. Pick. In addition, you must file a written memorandum to that effect with the person responsible for recording the minutes. Woodring, Opinion No. 90 -001 at 6. Similarly, the facts which you have submitted reflect that in your public position, you exercise authority over Glazier. In your private capacity, Glazier is in a position to decide whether to sell you the property adjoining your own, and at what price. Even if you would pay Glazier its fair market value, the acquisition of adjoining property would be expected to enhance the value of your existing property, thereby resulting in a private pecuniary benefit to you. Thus, although Section 3(a) of the Ethics Law would not operate to preclude you from purchasing the half -lot from Glazier, for the reasons enunciated in Bassi and Woodrinq supra, you would have a conflict of interest in your public capacity in matters pertaining to Glazier. In each instance of a conflict of interest, you would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. Turning to your question as to whether the purchase of the land would be subject to disclosure on your annual Statement of Financial Interests, you are advised that a direct or indirect interest in real estate is only required to be disclosed where it is sold or leased to, or purchased or leased from, the Commonwealth, any of its agencies, or political subdivisions; or where it is the subject of any condemnation proceedings by same. Conditioned upon the assumption that such factors would not be present with regard to this real estate transaction between you and Glazier, you would not be required to list the property under the block disclosing "real estate interests." However, if you would obtain financing in order to purchase the property, you could be required to make disclosure pursuant to 65 P.S. §405(b)(4) which requires disclosure of the name and address of each creditor to whom is owed in excess of $5,000 (this amount is increasing to $6,500 effective beginning with the forms that are due to be filed in 1998) and the interest rate thereon, unless the loan or credit is extended between members of immediate family or is a mortgage securing real property which is the principal or secondary residence of the person filing. 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 Groh, 97 -624 November 13, 1997 Page 6 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 the Assistant Zoning & Code Administrator for Millcreek Township, you are a public official /public employee subject to the provisions of the Ethics Law. Pursuant to Section 3(a) of the Ethics Law, you would have a conflict of interest as to official dealings with Greg Glazier based upon your anticipated purchase from him of the one -half lot adjoining your own property. A direct or indirect interest in real estate is only required to be disclosed on the Statement of Financial Interests where it is sold or leased to, or purchased or leased from, the Commonwealth, any of its agencies, or political subdivisions; or where it is the subject of any condemnation proceedings by same. Conditioned upon the assumption that such factors would not be present with regard to this real estate transaction between you and Glazier, you would not be required to list the property under the block disclosing "real estate interests." However, if you would obtain financing in order to purchase the property, you could be required to make disclosure pursuant to 65 P.S. §405(b)(4) which requires disclosure of the name and address of each creditor to whom is owed in excess of $5,000 (this amount is increasing to $6,500 effective beginning with the forms that are due to be filed in. 1998) and the interest rate thereon, unless the loan or credit is extended between members of immediate family or is a mortgage securing real property which is the principal or secondary residence of the person filing. 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. cerely, Vincent J. Dopko Chief Counsel