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HomeMy WebLinkAbout98-546 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 20, 1998 98 -546 Re: Conflict; Public Official /Employee; Authority Member; Attorney; Clients. This responds to your letters of March 16 and March 25, 1998 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employe Ethics Law would present any prohibition or restrictions upon a member of a county J authority who in his private capacity is an attorney with past and present clients including: the county department of C; D; manufacturers of E and F; and G who provide a variety of C- related services at the county H as well as a neighboring I. Facts: As a prospective Member of the newly- created J Authority (Authority) for County B, you seek an advisory from the State Ethics Commission. In your private capacity, you are an attorney who has practiced in civil litigation for about twenty -six years. You have represented a wide variety of businesses, both directly and through their insurers. Your past and present clients include the County B Department of C; D; manufacturers of E and F; and G who provide a variety of C- related services at the County B H and the I. You state that while serving as a Member of the Authority, you would recuse yourself from any discussion or deliberation that may or could involve interests of companies that you represent /have represented. Based upon the above, you ask whether any conflicts of interest would exist with regard to your proposed service on the Authority. 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. If you would be appointed as a Member of the J Authority (Authority) for County B, you would be a public official as that term is defined in the Public Official Confidential Advice, 98 -546 April 20, 1998 Page 2 and Employe Ethics Law ( "Ethics Law "), and hence you would be 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 familyy 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. "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. Section 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities Confidential Advice, 98 -546 April 20, 1998 Page 3 (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 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 voting 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. Your law firm is a business with which you are associated. Section 3(a) would not operate to preclude your acceptance of the appointment as a Member of the J Authority for County B. However, if you would become a Member of the Authority, there could be many instances where conflicts of interest would exist for you in your public capacity as an Authority Member. It is generally noted that a conflict of interest exists where a public official /public employee, in his official capacity, participates, reviews or passes upon a matter involving a business with which he is associated or its clients. Miller, Opinion No. 89- 024; Kannebecker, Opinion No. 92 -010. A reasonable and legitimate expectation that a business relationship will form may support a finding of a conflict of interest. Amato, Opinion No. 89 -002; Garner, Opinion No. 93 -004; Snyder, Order No. 979 -2, affirmed Snyder v. SEC, 686 A. 2d 843 (Pa. Commw. Ct. 1996), allocatur den., No. 0029 Confidential Advice, 98 -546 April 20, 1998 Page 4 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). The State Ethics Commission has also held that it is a conflict of interest under Section 3(a) for a public official /public employee to pursue a private business opportunity while acting in a public capacity. Metrick, Order No. 1037. In each instance of a conflict of interest, the public official must abstain from participation in his capacity as a public official. The abstention requirement is not limited to mere voting, but extends to any use of authority of office. In Juliante, Order No. 809, the State Ethics Commission recognized that the use of authority of office as defined in the Ethics Law includes, for example, discussing, conferring with others, and lobbying for a particular result. See also, Confidential Opinion, No. 97 -002 at 7 (Citing Juliante, supra). In each instance of a conflict of interest, the public official must also satisfy the disclosure requirements of Section 3(j) set forth above. Based upon the facts which you have submitted, you would clearly have a conflict of interest in matters before the Authority involving your law firm, or involving an ongoing client or a client who is on retainer even if you /your firm would not represent the client as to the specific matter before the Authority. Kannebecker, Opinion No. 92 -010. Under some circumstances, a conflict could also exist as to a former client. Pertinent factors in determining whether a conflict would exist as to a former client would include, for example, the number of prior representations of the client and the period of time over which the representation occurred. Id. The above provisions, precedents, and principles have been set forth to provide guidance as to your prospective appointment to the J Authority for County B. Reference has been made to the above restrictions not to imply that there would be any transgression thereof, but merely to provide a thorough analysis of your inquiry. In providing this Advisory, every possible issue or potential pitfall that may arise for you has not been addressed. Rather, this Advisory has given the overall parameters of the applicable provisions of the Ethics Law. You may of course seek further advice from the State Ethics Commission as circumstances require. 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: If you would be appointed as a Member of the J Authority (Authority) for County B, you would be a public official subject to the provisions of the Public Official and Employe Ethics Law ( "Ethics Law "). Section 3(a) of the Ethics Law would not operate to preclude your acceptance of an appointment as a Member of the Authority. However, you would have to observe the restrictions of the Ethics Law as set forth above. You would have a conflict of interest in matters before the Authority involving your law firm, or involving an ongoing client or a client who is on a retainer regardless of whether you /your firm would represent the client as to the specific matter before the Authority. Under some circumstances, a conflict could also exist as to a former client. In each instance of a conflict of interest, you would be required to fully abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. You may seek further advice from the State Ethics Commission as particular circumstances require. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Confidential Advice, 98 -546 April 20, 1998 Page 5 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. Sincerely, - Vincent J. pko Chief Counsel