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HomeMy WebLinkAbout98-608 ScottRobert W. Scott, Esquire Ehmann, Van Denbergh & Trainor Two Penn Center Plaza, Ste. 725 Philadelphia, PA 1 91 02 -1 707 Dear Mr. Scott: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL October 20, 1998 Re: Public Official /Public Employee; Solicitor; Retained /Employed; Municipality; Zoning Hearing Board; Bond Counsel. This responds to your letter of September 18, 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 municipal Solicitor who is retained by — as opposed to being an employee of — the governmental body, with regard to simultaneously serving as bond counsel to the municipality. Facts: You are the Solicitor for a municipality's "quasi- judicial Zoning Hearing Board," in which position you provide counsel to and draft the findings of fact and opinions of the Zoning Hearing Board. You are paid on an hourly basis by the municipality. The municipality intends to borrow money in the municipal bond market and the municipality will need to retain bond counsel in connection with the municipal bond financing transaction. The bond counsel will have to draft the financing documents, to "opine that interest on the bonds is exempt from Federal income tax," and to conclude that the financing is properly adopted and approved in accordance with the municipality's debt ordinance. As a member of a red -book listed law firm which concentrates in municipal bond law, you would like to be a candidate for the said bond counsel position. You request an advisory from the State Ethics Commission as to whether the Ethics Law would preclude you, as a Solicitor for the Zoning Hearing Board, from also serving as bond counsel for the municipality. 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 FAX : (717) 787 -0806 • Web Site: www.ethics.state.pa.us • e -mail: sec @state.pa.us 98 -608 Scott, 98 -608 October 20, 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. In 1997, the status of Solicitors under the Public Official and Employee Ethics Law ( "Ethics Law "), Act 9 of 1989, P.L. 26, 65 P.S. §401 t seq., was addressed by the Commonwealth Court of Pennsylvania. In P.J.S. v. State Ethics Commission, 697 A.2d 286 (Pa. Commw. Ct. 1997), appeal pending, No. 0091 M.D. Appeal Docket 1997, the Commonwealth Court of Pennsylvania held, inter Alia, 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 1 105 (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 municipality 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: ... (T]his 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 Ballou, 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: 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. I/), 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. Scott, 98 -608 October 20, 1998 Page 3 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. Id., at Note 10. The State Ethics Commission filed a Petition for Allowance of Appeal in the C.P.C. case, which Petition was denied. See, 704 A.2d 640 (Pa. 1997). From the facts which you have submitted, it appears that as Solicitor of the municipality Zoning Hearing Board, you are not an employee of the said governmental body, but rather are retained. Therefore, based upon C.P.G., 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, p_11 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 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" shalt 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. 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 respective municipal code or the Rules of Professional Conduct. Conclusion: Based upon the submitted facts that as Solicitor of the municipality Zoning Hearing Board, you are retained by — as opposed to being an employee of — the municipality, 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. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Scott, 98 -608 October 20, 1998 Page 4 Pursuant to Section 7(111, 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 `1. Dopko Chief Counsel