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HomeMy WebLinkAbout99-641 CargnoniJack S. Cargnoni 1290 Washington Pike Bridgeville, PA 15057 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 December 22, 1999 FAX: (717) 787 -0806 • Web Site: www.ethics.state.pa.us • e -mail: ethicsOstate.pa.us 99 -641 Re: Conflict; Public Official /Employee; Commissioner; Township; Litigation; Settlement; Consent Agreement; Vote. Dear Mr. Cargnoni: This responds to your letter of November 3, 1999 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 aeeq., presents any prohibition or restrictions upon a township commissioner as to: 1) voting on a motion to approve a property owner's construction project where a business with which the commissioner is associated assigned its interest in certain land to the property owner for no consideration; and 2) voting on a consent agreement to settle litigation arising out of the board of commissioner's initial denial of said property owner's request for a curative amendment if, on five - member board, the vote is two in favor and two against, and the commissioner is disqualified from voting on the matter. Facts: You are an elected Township Commissioner for the Township of Collier ( "Township "), a First Class Township located in Allegheny County. You are also a one -third shareholder in Collier Development Company, a Pennsylvania Corporation ( "CDC "). CDC is a family owned corporation engaged in land development in Allegheny County. Several years ago, CDC entered into a written buy -sell agreement ( "Agreement ") with the Kirwan Heights Volunteer Fire Department ( "Fire Department "), which is in the Township. At that time, CDC agreed to purchase a parcel of land from the Fire Department. The Agreement provided that CDC could assign its option to purchase the parcel. Prior to the closing, CDC assigned its interest in the Agreement to Mark Silverman, doing business as A.J. Convenience, for no consideration. A.J. Convenience and /or Mark Silverman exercised the option and purchased the parcel of land for the price listed in the Agreement. A.J. Convenience then presented a curative amendment to the Board of Commissioners seeking to construct a gasoline service station and fast food restaurant Cargnoni, 99 -641 December 22, 1999 Page 2 on the property. This matter was denied by the Board and is presently on appeal to the Court of Common Pleas of Allegheny County. You state that you do not have any business arrangements with Mark Silverman or any financial interests or business arrangements with or in A.J. Convenience. Further, you maintain that CDC did not receive any profit on the assignment of the Agreement to Silverman /A.J. Convenience and that CDC did not purchase the property in question. Finally, you state that CDC does not have any interest in the property at this time. You request an advisory as to the following: 1. Whether you may vote on a motion to approve the A.J. Convenience project; 2. Whether you may vote to settle the litigation by means of a consent agreement that would allow the property to be developed along the lines that A.J. Convenience desires; and 3. Whether you may vote on the matter if it comes before the five - member Board of Commissioners if the vote is two in favor and two against and you are otherwise disqualified from voting. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§1107(10), (1 1), 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 Pa.C.S. §§1107(10), (1 1). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As a Commissioner for Township of Collier, you are a public official as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Section 1 103(a) of the Ethics Act provides: Section 1 103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The following terms are defined in the Ethics Act as follows: Section 1102. 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 Cargnoni, 99 -641 December 22, 1999 Page 3 65 Pa.C.S. §1102. immediate family or a business with which he or a member of his immediate family is associated. The term 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, officer, owner, employee or has a financial interest. In addition, Sections 1103(b) and 1103(c) of the Ethics Act 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 judgment of the public official /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. Section 1 103(j) of the Ethics Act provides as follows: Section 1103. Restricted activities. (j) Voting conflict. - -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 Cargnoni, 99 -641 December 22, 1999 Page 4 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. 65 Pa.C.S. §1103(j). In each instance of a conflict, Section 1103(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 Act, 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 Act to the instant matter, pursuant to Section 1103(a) of the Ethics Act, 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. You state that you are a one -third shareholder in Collier Development Company ( "CDC "). Hence, CDC is a business with which you are associated. The specific inquiries which you have posed shall now be addressed. With respect to your first inquiry, it is not clear from the facts which you have submitted whether, in the initial transaction between CDC and the Fire Department, CDC paid any consideration to the Fire Department. As for the second transaction between CDC and Silverman /A.J. Convenience, you state that CDC "assigned its interest in the buy -sell agreement, without consideration of any kind." Hence, it can only be assumed that if CDC did, in fact, pay any consideration to the Fire Department, the latter transaction either resulted in a financial loss to CDC or an even exchange at best. Based upon your specific factual representation that CDC received no- consideration from the assignment of its interest in the buy -sell agreement to Mark Silverman /A. J. Convenience, no conflict of interest would exist as to matters involving Silverman /A.J. Convenience conditioned upon the assumption that there would in fact be no use of authority of office or confidential information by you for a prohibited private pecuniary benefit and no reasonable expectation of a financial relationship developing with Silverman /A.J. Convenience in the future. See, Amato, Opinion 89 -002. However, absent any actual or attempted private pecuniary benefit, the essential elements for a violation of Section 1 103(a) would not exist. Cargnoni, 99 -641 December 22, 1999 Page 5 In response to your second inquiry, you do not specify who the defendants in the litigation are. However, you are advised that if you are individually named as a defendant in the lawsuit, (rather than named as a Township Commissioner), you, as a Township Commissioner, would have a conflict of interest in any matter before the Township involving the lawsuit including, but not limited to, discussions or debates on the lawsuit and discussions and votes regarding the defense, compromise or settlement of the lawsuit. Likewise, you could not discuss with or attempt to influence the other Board Members regarding the defense, compromise or settlement of the lawsuit. Any participation by you could have an impact on the litigation, including settlement, which derivatively could impact upon whether you pay damages or attorneys' fees. See, Borland, Order 786 and Sanders, Order 785 wherein the Commission found violations of the Ethics Law by supervisors as township employees who used the township solicitor, paid for by the township funds, to bring action against the township auditors so that they would not have out -of- pocket expenses they would otherwise have had to pay. In response to your third inquiry, Mlakar, supra, makes it clear that it is only when the governmental body is unab /e to take official action because the majority or other legally required vote is unattainable due to the number of members required to abstain, that such abstaining members will be permitted to vote if proper disclosures are made. Thus, in the case of the Collier Township Board of Commissioners, a five member board, three Commissioners would have to have a conflict under the Ethics Act in order to make the majority or other legally required vote "unattainable." Only in such an instance would you be permitted to vote on the matter under the voting exception of Section 1 103(j) of the Ethics Act. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the First Class Township Code. Conclusion: As a Commissioner for Township of Collier, you are a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et mi. You would not have a conflict of interest as to voting to approve the construction project of A.J. Convenience based upon your representation that CDC, a business with which you are associated, received no consideration from the assignment of its interest in the buy -sell agreement to Silverman /A.J. Convenience and conditioned upon the assumption that there would in fact be no use of authority of office or confidential information by you for a prohibited private pecuniary benefit. If you are individually named as a defendant in the lawsuit, rather than named as a Township Commissioner, you would have a conflict of interest as to any matter brought before the Collier Township Board of Commissioners involving the litigation in question including, but not limited to, discussions or debates on the lawsuit and discussions and votes regarding the defense, compromise or settlement of the lawsuit. Likewise, you could not discuss with or attempt to influence the other Board Members regarding the defense, compromise or settlement of the lawsuit. Any participation by you could have an impact on the litigation, including settlement, which derivatively could impact upon whether you pay damages or attorneys' fees. Since the Collier Township Board of Commissioners is a five - member board, three Commissioners would have to have a conflict under the Ethics Act in order to make the majority or other legally required vote of approval "unattainable." Only in such an instance would you be permitted to vote on the matter under the voting conflict exception of Section 1103(j) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Cargnoni, 99 -641 December 22, 1999 Page 6 Pursuant to Section 1 107(1 1), an 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, provided 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. Vincent 7. Do ko Chief Counsel