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HomeMy WebLinkAbout98-561 MillerWilliam N. Miller Superintendent of Schools Tyrone Area School District 1317 Lincoln Ave. Tyrone, PA 16686 -1498 Dear Mr. Miller: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL May 22, 1998 98 -561 Re: Conflict, Public Official /Employee, School, Bank, Director, Business with which Associated, Litigation. This responds to your letter of April 23, 1998 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a school director as to receiving confidential information, participating or voting on potential litigation by the school district against a bank of which he is a member of the board of directors. Facts: As Superintendent of Schools for the Tyrone Area School District (School District), you request an advisory on behalf of Samuel J. Conrad (Conrad), a current member of the Tyrone Area Board of Education (School Board). Conrad is also a member of the Board of Directors for Mid -State Bank, a local banking institution. The School District and Mid -State Bank are actively involved in the alleged "Devon /John Gardner Black fraud case." Mid -State Bank was custodian for the Devon accounts, as well as School District accounts. You assert that a conflict of interest may arise for Conrad due to potential litigation that may be instituted by the School District against Mid -State Bank. You state that, to date, Conrad has not been privy to any School Board discussion regarding Mid -State Bank, nor has he been involved in any discussion with Mid -State Bank regarding the School District. You request an advisory of the State Ethics Commission as to conflicts of interest that may exist for Conrad under the Ethics Law. 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 Miller, 98 -561 May 22, 1998 Page 2 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 a member of the Tyrone Area Board of Education, Samuel J. Conrad is a public official as that term is defined in the Public Official and Employee Ethics Law ( "Ethics Law "), and hence he is 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. 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 Miller, 98 -561 May 22, 1998 Page 3 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. 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. Since Conrad is a member of the Board of Directors of the Mid -State Bank, the Bank is a business with which he is associated as that term is defined under the Ethics Law. Any action that the School District takes regarding potential (or actual) litigation against the Mid -State Bank could have a financial impact upon the Bank. Likewise, any confidential information of the School Board regarding such litigation would be . beneficial to the Bank. Hence, Conrad could not be privy to any confidential information of the School Board as to the potential litigation (or actual if it occurs) against the Bank. In addition, Conrad would have a conflict in such matters, could not participate and must observe the disclosure requirement of Section 3(j) noted 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 Miller, 98 -561 May 22, 1998 Page 4 involve an interpretation of the Ethics Law. Specifically not addressed herein is the applicability of the Public School Code. Conclusion: As a member of the Tyrone Area Board of Education, Samuel J. Conrad is a public official subject to the provisions of the Ethics Law. Conrad could not use confidential information, would have a conflict and could not participate as to potential or actual litigation instituted by the School Board against the Mid -State Bank, a business with which Conrad is associated. The disclosure requirement of Section 3(j) of the Ethics Law must be observed. 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 (301 days may result in the dismissal of the appeal. erel , Vincent . Dopko Chief Counsel