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HomeMy WebLinkAbout98-512 DempstarMichael J. Dempster Houston Harbaugh Two Chatham Center Twelfth Floor Pittsburgh, PA 15219 -3463 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 10, 1998 98 -512 Re: Conflict, Public Official /Employee, School, School Board Member, Attorney, Client, Real Estate, Developer, Tax Increment Financing District, Business with which Associated. Dear Mr. Dempster: This responds to your letter of January 9, 1998 by which you requested advice from the State Ethics Commission. Whether the Public Official and Employe Ethics Law presents any prohibition or restrictions upon a school director's participation in a tax increment financing district when his law firm represents a developer who has approached the school district regarding participation in a tax increment financing district. Facts: You are a School Director in the Chartiers Valley School District in Allegheny County. You are also a shareholder and an officer of a law firm organized as a Pennsylvania professional corporation. A client of your law firm is engaged in the business of real estate development. One of your co- shareholders represents this developer who has approached the Chartiers Valley School District about participation in a tax increment financing district. You seek advice as to whether your law firm's involvement with this developer would prevent you from voting on the issue of the School District's participation in a tax incremental financing district. 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 Dempster, Advice 98 -512 February 10, 1998 Page 2 affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As a School Director for the Chartiers Valley School District, you are a public official as that term is defined in the Public Official and Employe Ethics Law ( "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. "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, officer, owner, employee or has a financial interest. Dempster, Advice 98 -512 February 10, 1998 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. The law firm for which you are a shareholder and officer is a business with which you are associated. Generally, you would have a conflict of interest in matters before the Chartiers Valley School Board which involve your law firm and /or its client(s). See, Kannebecker, Opinion No. 92 -010; Miller, Opinion No. 89 -024. With regard to the tax increment financing district specifically, based upon the Iimted facts which have been submitted, the necessary conclusion is that you would have a conflict of interest because of your firm's client's interest in same. The facts as submitted do not reflect any basis for applying either of the statutory exceptions to the definition of conflict of interest. Dempster, Advice 98 -512 February 10, 1998 Page 4 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 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 or the Rules of Professional Conduct. Conclusion: As a School Director for the Chartiers Valley School District, you are a public official subject to the provisions of the Ethics Law. Generally, you would have a conflict of interest in matters before the Chartiers Valley School Board which involve your law firm and /or its client(s). Specifically, you would have a conflict of interest in matters involving a tax incremental financing district because of your firm's client's interest in same. 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. 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 1. 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 S erely, Vincent J. op o Chief Coun