HomeMy WebLinkAbout98-508 ZimmermanRandall E. Zimmerman
Barron & Zimmerman
119 West Market Street
P.O. Box 591
Lewistown, PA 17044
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783-1 610
ADVICE OF COUNSEL
January 30, 1998
98 -508
Re: Public Official /Public Employee; Solicitor; Retained/Employed; Conflict of
Interest; Immediate Family; Spouse; Secretary- Treasurer; Borough.
Dear Mr. Zimmerman:
This responds to your letters of November 3, 1997, December 11, 1997, and
January 27, 1998, 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 Borough's Secretary- Treasurer and /or its retained
Solicitor where those individuals are husband and wife.
Facts: You have been retained as the Solicitor of Mifflintown Borough in Juniata
County for the past 19 years. You state that you are not an employee of the Borough,
but rather, the Borough has appointed you as Solicitor on a yearly basis. Per a written
agreement, you serve at will, and the Borough may terminate your representation at
any time and for any reason: You generally attend four to six council Meetings per
year and undertake other work as it arises for the Borough. You bill the Borough as
the work is done and are paid on an hourly basis without any withholding being made.
The Borough has recently hired your wife, Nancy L. Zimmerman, as a part-time
Secretary- Treasurer. You state that the Borough hired your wife through normal hiring
procedures that did not in any way involve you.
You ask whether your wife's employment with the Borough creates a conflict
of interest with regard to your continuing to represent the Borough.
On behalf of your wife, you ask whether problems would arise for your wife
under the Ethics Law based upon your service as Borough Solicitor. You note that
your .bills are reviewed by the Council Members and that any checks issued to your law
firm are signed not only by the Secretary- Treasurer, but also by a Council Member.
Zimmerman, 98- 508
January 30, 1998
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.
Your inquiry as to yourself as Borough Solicitor shall first be addressed.
In 1997, the status of Solicitors under the Public Official and Employe Ethics
Law ( "Ethics Law "), Act 9 of 1989, P.L. 26, 65 P.S. §401 el seq., was clarified by
the appellate courts of Pennsylvania,
In P.J.S. v. State Ethics Commission, 697 A.2d 286 (Pa. Commw. Ct. 1997),
appeal pendina, No. 0091 M.D. Appeal Docket 1997, the Commonwealth Court of
Pennsylvania .held, jnter a that the conflict of interest provisions of the Ethics Law
do apply to solicitors who are public employees and are not just on retainer.
However, in C.P.C. v. State Ethics Commission, 698 A.2d 155 (Pa. Commw.
Ct. 1997), based upon an analysis of prior precedents including Ballou v. State Ethics
Commission, 496 Pa. 127, 436 A.2d 186 (1981), Maunus v. State Ethics
Commission, 518 Pa. 592, 544 A.2d 1324 (1988), and P.J.S v. State Ethics
Commission, 669 A.2d 1105 (Pa. Commw. Ct. 1996), the Commonwealth Court of
Pennsylvania set forth its view that a municipal Solicitor who is retained by — as
opposed to being an employee of — the governmental body is not a "public official"
or "public employee" as defined in the Ethics Law and is not subject to the conflict of
interest provisions of the Ethics Law. The Court stated:
... [Tiflis court pointed out in P.J.S. that the General Assembly did not
add or include "solicitors" in its definitions of "public employees" or
"public officials" whose conduct is regulated by section 3 of the Ethics
Act. id. As such, this court stated that it could not conclude that it was
clearly the General Assembly's intent to include "solicitors," who are not
normally full -time public employees, but more like consultants, among the
class of persons required to comply with the regulations regarding ethical
and professional conduct under section 3 of the Ethics Act. Id.
Based upon our review of the pleadings in this case and our
analysis of Ba//ou, Maunus and P.J.S., we conclude that CPC's conduct
is not governed by the provisions of the Ethics Act and that he is not
subject to the jurisdiction of the Commission.
C.P.C. v. State Ethics Commission, supra, 698 A.2d at 159. The Court further stated,
in a footnote:
Zimmerman, 98- 508
January 30, 1998
Page 3
We note that on July 3, 1997, this court issued its decision in
P.J.S. v. Pennsylvania State Ethics Commission, 697 A.2d 286 (Pa.
Cmwlth. '1997) (P.J.S. /1), this court reiterated that the conflict of
interest provisions of section 3 of the Ethics Act apply to solicitors who
are public employees and not just on retainer. P.J.S. was hired as a full -
time solicitor for the City of Erie, was placed on the City payroll, was
paid a salary and received the same benefits as other employees of the
City. Like the Commonwealth attorneys in Maunus, P.J.S.'s status with
the City was that of an employee rather than a consultant on retainer or
an independent contractor. Accordingly, this court determined that
P.J.S. was a public employee who was covered by section 3 of the
Ethics Act.
The present case is distinguishable from P.J.S. // in that CPC is not
a full -time, salaried employee of the borough who receives the same
benefits as other borough employees. Rather, CPC is a legal advisor or
consultant on retainer to the borough. As such, his conduct is not
covered by section 3 of the Ethics Act.
11., at Note 10.
The State Ethics Commission filed a Petition for Allowance of Appeal in the
C.P.C. case, which Petition was denied. .No. 614 M.D. Allocatur Docket '1997 (Pa.
December 2, 1997).
The facts which you have submitted indicate that as Solicitor of Mifflintown
Borough you are not an employee of the said governmental body, but rather are
retained. Therefore, based upon C.P.C., supra, you would not be considered a "public
official" or a "public employee" subject to the Ethics Law and specifically, Section 3(a)
of the Ethics Law.
However, a Solicitors are required to file Statements of Financial Interests. 65
P.S. §404(a); Foster, Opinion No. 98 -002. Therefore, you would be required to file
Statements of Financial Interests providing full disclosure as required by Sections 4
and 5 of the Ethics Law, each year the aforesaid position as Solicitor is held and the
year following termination of service in said position.
Moreover, it is the State Ethics Commission's view that every "person" is
subject to Section 3(b) of the Ethics Law. Foster, Opinion No. 98 -002. Section 3(b)
of the Ethics Law essentially provides that no "person" shall offer or give to a public
official, public employee, or nominee or candidate for public office, or to a member of
such an individual's immediate family, or to a business with which such an individual
is associated, anything of monetary value based upon the offeror's /donor's
understanding that the vote, official action, or judgement of the public official, public
employee, or nominee or candidate for public office would be influenced thereby. The
State Ethics Commission has held that a Solicitor, though not himself a public
official /public employee, may not engage in such conduct in his capacity as a
"person." Foster, supra. Of course, 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 your inquiry in light of the aforesaid developments in
case law.
Zimmerman, 98- 508
January 30, 1998
Page 4
Your inquiry as to your wife as the part-time Secretary/Treasurer for Mifflintown
Borough shall now be addressed.
As Secretary- Treasurer for Mifflintown Borough, your wife , Nancy Zimmerman,
is a public official subject to the provisions of the 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.
"Immediate family." A parent, spouse, child, brother
or sister.
"Business." Any corporation, partnership, sole
proprietorship, firm, enterprise, franchise, association,
organization, self - employed , individual, holding company,
joint stock company, receivership, trust or any legal entity
organized for profit.
"Business with which he.. is associated." Any
business in which the person or a member of the person's
immediate family is a director, office owner, employee or
has a financial interest.
Zimmerman, 98- 508
January 30, 1998
Page 5
"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.
"Contract." An agreement or arrangement for the
acquisition, use or disposal by the Commonwealth or a
political subdivision of consulting or other services or of
supplies, materials, equipment, land or other personal or real
property. "Contract" shall not mean an agreement or
arrangement between the State or political subdivision as
one party and a public official or public employee as the
other party, concerning his expense, reimbursement, salary,
wage, retirement or other benefit, tenure or other matters
in consideration of his current public employment with the
Commonwealth or a political subdivision.
Section 3(f) of the Ethics Law provides as follows:
Section 3. Restricted activities
(f) No public official or public employee or his
spouse or child or any business in which the person or his
spouse or child is associated shall enter into any contract
valued at $ 500 or more with the governmental body with
which the public official or public employee is associated or
any subcontract valued at $500 or more with any person
who has been awarded a contract with the govemmental
body with which the public official or public employee is
associated, unless the contract has been awarded through
an open and public process, including prior public notice and
subsequent public disclosure of all proposals considered and
contracts awarded. In such a case, the public official or
public employee shall not have any supervisory or overall
responsibility for the implementation or administration of the
contract. Any contract or subcontract made in violation of
this subsection shall be voidable by a court of competent
jurisdiction if the suit is commenced within 90 days of the
making of the contract or subcontract.
Section 3(f) does not operate to make contracting with the governmental body
permissible where it is otherwise prohibited. Rather, where a public official /public
employee, his spouse or child, or a business with which he, his spouse or child is
associated, is otherwise appropriately contracting with the governmental body, or
subcontracting with any person who has been awarded a contract with the
governmental body, in an amount of $500.00 or more, Section 3(f) requires that an
"open and public process" be observed as to the contract with the govemmental body.
Pursuant to Section 3(f), an "open and public process" includes:
(1) prior public notice of the employment or contracting possibility;
Zimmerman, 98 508
January 30, '1998
Page 6
(2) sufficient time for a reasonable and prudent competitor /applicant to be
able to prepare and . present an application or proposal;
(3) public disclosure of all applications or proposals considered; and
(4) public disclosure of the contract awarded and offered and accepted.
Section 3(f) of the Ethics Law also requires that the public official /employee may
not have any supervisory, or overall responsibility_ as to the implementation or
administration of the contract•with the governmental body.
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 app lY 9 in 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. As the husband of the Borough's Secretary/Treasurer, you are a
member of her immediate family.
Therefore, as Secretary/Treasurer for Mifflintown Borough, your wife would
have a conflict of interest in matters involving a financial benefit for you and /or your
firm. Such matters would include, but would not be limited to, payments to you
i r , 98- 508
Janus 0, 1998
Page 7
and /or your firm. In each instance of a conflict of interest, your wife would be
required to abstain from participation and to fully satisfy the disclosure requirements
of Section 3(j) as set forth above.
Furthermore, with regard to contracting or subcontracting involving you /your
firm and the Borough, in light of your wife's status as a public official with the
Borough, the requirements of Section 3(f) would have to be observed where such
contract or subcontract would be valued at $500 or more.
Parenthetically, although the contracting in question would not be prohibited
under the Ethics Law provided the requirements of Sections 3(a), 3(f), and 3(j) are
satisfied, a problem may exist as to such contracting under the respective code.
In the instant situation, the Borough Code provides as follows:
§46404. Penalty for ; personal interest in contracts or
purchases
Except as otherwise .provided in this act, no borough
official either elected or appointed, who knows or who by
the exercise of reasonable diligence could know, shall be
interested to any appreciable degree either directly or
indirectly in any purchase made or contract entered into or
expenditure of money made by the borough or relating to
the business of the borough, involving the expenditure by
the borough of more than one thousand dollars ($1000) in
any calendar year, but this limitation shall not apply to
cases where such officer or appointee of the borough is an
employe of the person, firm or corporation to which the
money is to be paid in a capacity with no possible influence
on the transaction, and in which he cannot be possibly
benefited thereby either financially or otherwise. But in the
case of a councilman or mayor, if he knows that he is
within the exception just mentioned he shall so inform
council and shall refrain from voting on the expenditure or
any ordinance relating thereto, and shall in no manner
participate therein. Any official or appointee who shall
knowingly violate the provisions of this section shall be
subject to surcharge to the extent of the damage shown to
be thereby sustained by the borough and to ouster from
office, and shall be guilty of a misdemeanor, and upon
conviction thereof shall be sentenced to pay a fine not
exceeding one thousand dollars ($1000), or not exceeding
one hundred eighty days' imprisonment, or both.
53 P.S. §46404.
Since such contracting may be prohibited by the above quoted provision, it is
suggested that you seek legal advice in that regard.
This Advice is limited to addressing the applicability of Sections 3(a) and 3(f) of
the Ethics Law. It is expressly assumed that there has been no use of authority of
Zimmerman, 98- 508
January 30, 1998
Page 8
office for a private pecuniary benefit as prohibited by Section 3(a) of the Ethics Law.
Further, you are advised that Sections 3(b) and 3(c) of the Ethics Law provide in part
that no person shall offer to a public official /public employee and no public
official /public employee shall solicit or accept anything of monetary value based upon
the understanding that the vote, official action, or judgment of the public official /public
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.
Lastly, 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 Rules of Professional Conduct.
Conclusion: Based upon the submitted facts that as Solicitor of Mifflintown
Borough, you are retained by — as opposed to being an employee of — that Borough,
you would not be considered •a public official /public employee subject to the Ethics
Law. Consequently, Section 3(a) of the Ethics Law would not apply to you in the said
capacity as Solicitor. However, all Solicitors are required to file Statements of
Financial Interests pursuant to Sections 4 and 5 of the Ethics Law. Furthermore,
Section 3(b) of the Ethics Law applies to all "persons" including "persons" who happen
to be Solicitors, regardless of whether they are public officials /public employees;
As Secretary/Treasurer for Mifflintown Borough, your wife, Nancy Zimmerman,
is a public official subject to the provisions of the Ethics Law. As Secretary/Treasurer
for Mifflintown Borough, your wife would have a conflict of interest in matters
involving a financial benefit you and /or your firm. Such matters would include, but
would not be limited to, payments to you and /or your firm. In each instance of a
conflict of interest, your wife would be required to abstain from participation and to
fully satisfy the disclosure requirements of Section 3(j) as set forth above. The
restrictions of Section 3(f) of the Ethics Law must be observed as to any contract or
subcontract valued at $500 or more involving you /your firm and the Borough. Lastly,
the propriety of the proposed conduct has only been addressed' under the Ethics Law.
It is suggested that legal advice be obtained with regard to the possible applicability
of the Borough Code.
Pursuant to Section= 7(11), this Advice is a complete defense in any enforcement
proceeding initiated by the Commission, arid 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.
Zimmerman, 98- 508
January 30, 1998
Page 9
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,
fi
Vincent J.: +opko
Chief Counsel
7