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To the Requester:
STATE ETHICS COMMISSION FACSIMILE: 717-787-0806
FINANCE BUILDING WEBSITE: wwA .ethics.pajov
613 NORTH STREET, ROOM 309
HARRISBURG, PA 17120-0400
ADVICE OF COUNSEL
February 27, 2020
20-507
This responds to your letters received January 6, 2020, and January 14, 2020, by
which you requested an advisory from the Pennsylvania State Ethics Commission
("Commission's.
Issue: Whether the Public Official and Employee Ethics Act ("Ethics Act"), 65
75—T'S. § 1101 et sect., would impose prohibitions or restrictions upon a newly -elected
[type of political subdivision] A, who serves on the board of directors of a B that provides
services to the [type of political subdivision], with regard to participating in discussions,
votes, or other actions of the [ty e of political subdivision] [governing body] involving Cs
from the B or Ds or Es for F for type of purposes].
Facts: You request a confidential advisory from the Commission based upon
sTtted facts that may be fairly summarized as follows.
You ,were recently elected as an A for [name of political subdivision] ("the Political
Subdivision__}, (name of county], Pennsylvania, for a term of office beginning in [month,
year]. The Political Subdivision operates under the G.
The Political Subdivision is served by multiple Bs, including the name of
company] (the "Compan "). You serve on the Board of Directors of the Company,
which Is located in the Political Subdivision.
The Political Subdivision [governing body] receives Cs from Hs, including the
Company, that service the Political Subdivision on an annual basis. The most recent
Political Subdivision I provided J to the Company for [certain itemsj. The Political
Subdivision has discussed initiating Ds or Es for F for [type of purposes].
Based upon the above submitted facts, you pose the following questions:
(1) Whether the Ethics Act would impose prohibitions or restrictions upon you
with regard to participating in discussions, votes or other actions of the
Political Subdivision [governing body] involving Cs from the Company,
(2) Whether the Ethics Act would impose prohibitions or restrictions upon you
with regard to participating in discussions, votes, or other actions of the
Political Subdivision [governing body] involving Ds or Es for F; and
Confidential Advice, 20-507
February
Page 2
(3) Whether the answers to the above questions would be different if you
would cease serving on the Board of Directors of the Company and would
become a K of the Company or an advisor to the Company Board of
Directors.
It is administratively noted that per the website of the Pennsylvania Department
of State, the Company is a non-profit corporation.
Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11)
of the Ethcs Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester
based upon the facts that the requester has submitted. In issuing the advisory based
upon the facts that the requester has submitted, the Commission does not engage in an
independent investigation of the facts, nor does it speculate as to facts that have not
been submitted. It is the burden of the requester to truthfully disclose all of the material
facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a
defense to the extent the requester has truthfully disclosed all of the material facts.
As a Political Subdivision A, you are a public official subject to the provisions of
the Ethics Act.
Sections 1103(a) and 11030) of the Ethics Act provide:
§ 1103. Restricted activities
(a) Conflict of interest. --No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
0) 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 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(a), 0).
The following terms related to Section 1103(a) are defined in the Ethics Act as
follows:
Confidential Advice, 20-507
February
Page 3
§ 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 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.
"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.
65 Pa.C.S. § 1102.
Subject to the statutory exclusions to the Ethics Act's definition of the term
"conflict" or "conflict of interest," 65 Pa.C.S. § 1102, 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 use of authority of office is not limited merely to voting, but extends to any
use of authority of office including, but not limited to, discussing, conferring with others,
and lobbying for a particular result. Juliante, Order 809.
In each instance of a conflict of interest, a public official/public employee would
be required to abstain from participation, which would include voting unless one of the
statutory exceptions of Section 11030) of the Ethics Act would be applicable.
Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have
to be satisfied in the event of a voting conflict.
Per the Pennsyylvania Supreme Court's decision in Kistler v. State Ethics
Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate ection 03 a of t e
t ics Act, a public official/public employee:
... must act in such a way as to put his office/public position]
to the purpose of obtaining for himself a private pecuniary
benefit. Such directed action implies awareness on the part
Confidential Advice, 20-507
February
Page 4
of the [public official/public employee] of the potential
pecuniary benefit as well as the motivation to obtain that
benefit for himself.
Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics
c� public official/public employee "must be consciously aware of a private pecuniary
benefit for himself, his family, or his business, and then must take action in the form of
one or more specific steps to attain that benefit." Id., 610 Pa. at 528, 22 A.3d at 231.
Having established the above general principles, your specific questions shall
now be addressed.
In response to your first and second questions, you are advised as follows.
The Company is a business with which you are associated in your capacity as a
Director. See, Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708 (2009)
(Holding tTiat the Ethics Acts a inition o the term "business" includes non-profit
entities). You generally would have a conflict of interest under Section 1103(a) of the
Ethics Act as a Political Subdivision A in matter(s) that would financially impact the
Company. You specifically would have a conflict of interest with regard to participatin
in discussion(s), votes) or other action(s) of the Political Subdivision [governing body]
involving Cs from the CCompany.
You further would have a conflict of interest with regard to participating in
discussion(s), vote(s), or other action(s) of the Political Subdivision [governing body]
involving Ds or Es for F if: (1) you would be consciously aware of a private pecuniary
benefit for you, a member of your immediate family, or a business with which you or a
member of your immediate family is associated, such as the Company, (2) your
action(s) would constitute one or more specific steps to attain that benefit; and (3)
neither of the statutory exclusions to the definition of conflict" or "conflict of interest" as
set forth in the Ethics Act, 65 Pa.C.S. § 1102, would be applicable. Cf., Kistler, supra.
In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
In response to your third question, you are advised as follows.
If you would cease serving on the Board of Directors of the Company and would
become a K of the Company or an advisor to the Company Board of Directors, the
Company would no longer be considered a business with which you are associated.
Under such circumstances, unless there would be a basis for a conflict of interest such
as a private pecuniary benefit to you, a member of your immediate family, or a business
with which you or a member of your immediate family is associated, you would not have
a conflict of interest under Section 1103(a) of the Ethics Act with regard to participatin
in discussion(s), vote(s�) or other action(s) of the Political Subdivision [governing body]
involving Cs from the Company or Ds or Ens for F.
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 G.
Conclusion: Based upon the submitted and administratively noted facts that: (1)
you were recently elected as an A for [name of political subdivision] ("the Political
Subdivision"), [name of county], Pennsylvania, for a term of office beginning in [month,
Confidential Advice, 20-507
February
Page 5
year]; (2) the Political Subdivision operates under the G; 3) the Political Subdivision is
served by multiple Bs, including the [name of company] (the "Company"); (Udivision;
ou serve
on the Board of Directors of the Company, which is locatted in the Political
(5} the Political Subdivision [governing body] receives Cs from Hs, including the
CCompany, that service the PolAc'al Subdivision on an annual basis; (6) the most recent
Political Subdivision I provided J to the Company for [certain items]; and (7) the Political
Subdivision has discussed initiating Ds or Es for F for [type of purposes], you are
advised as follows.
As a Political Subdivision A, 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 seq.
The Company is a business with which you are associated in your capacity as a
Director. You generally would have a conflict of interest under Section 1103(a) of the
Ethics Act as a Political Subdivision A in matter(s) that would financially impact the
Company. You specifically would have a conflict of interest with regard to participatin
in discussion(s), vote(s) or other action(s) of the Political Subdivision [governing bodyl
involving Cs from the Company.
You further would have a conflict of interest with regard to participating in
discussion(s), vote(s), or other action(s) of the Political Subdivision [governing body]
involving Ds or Es for F if: (1) you would be consciously aware of a private pecuniary
benefit for you, a member of your immediate family, or a business with which you or a
member of your immediate family is associated, such as the Company; (2) your
action(s) would constitute one or more specific steps to attain that benefit; and (3)
neither of the statutory exclusions to the definition of conflict" or "conflict of interest" as
set forth in the Ethics Act, 65 Pa.C.S. § 1102, would be applicable.
In each instance of a conflict of interest, you would be required to abstain from
participation, which would include voting unless one of the statutory exceptions of
Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure
requirements of Section 11030) of the Ethics Act would have to be satisfied in the event
of a voting conflict.
If you would cease serving on the Board of Directors of the Company and would
become a K of the Company or an advisor to the Company Board of Directors, the
Company would no longer be considered a business with which you are associated.
Under such circumstances, unless there would be a basis for a conflict of interest such
as a private pecuniary benefit to you, a member of your immediate family, or a business
with which you or a member of your immediate family is associated, you would not have
a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating
in discussion(s), vote(s) or other action(s) of the Political Subdivision [governing body]
involving Cs from the Company or Ds or Es for F.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Pursuant to Section 1107(11) of the Ethics Act, 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 requester 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 it 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.
Confidential Advice, 20-507
February
Page 6
Any such appeal must be in writingg and must be act- - i
received at the Commission within thirty (30) days of the date o this
Advicepursuant to 51 Pa. Code § 13.2(h). The appeal may be
received at the Commission by hand deliverryy, 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,
. .G-- 0 1 1.
Robin M. Hiitie
Chief Counsel