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HomeMy WebLinkAbout00-559 BrouseRobert 0. Brouse 206 Walnut Street Mifflinburg, PA 17844 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL April 7, 2000 Re: Conflict; Public Official /Employee; Commissioner; County; Bond; Corporation; Non - Profit; Business with which Associated; Board. Dear Mr. Brouse: This responds to your letter of March 2, 2000, 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 et seq., presents any prohibition or restrictions upon a county commissioner as to serving upon the board of a non - profit corporation which seeks to develop an industrial park where the county made a large bond issue for funds to develop an industrial park on property owned by that corporation. Facts: Shortly after taking office as a Union County Commissioner in January, 2000, you were requested to serve as a Director for the Great Streams Commons Industrial Development Corporation (GSC). Your understanding is that GSC is a private, non - profit, corporation which was established for the development of an industrial park to be located in Union County. GSC is not a municipal authority or a county authority. You believe that it would not be appropriate for you to serve as a Director of GSC; however, the other County Commissioners do not consider it to be a problem. GSC does have a connection to Union County government. Approximately eighteen months ago, Union County issued a county bond in the amount of $1,325,000. The monies from this bond are dedicated to the development of the industrial park on the real estate owned by GSC. The GSC Board of Directors oversees and directs the improvements and marketing of the proposed park. You are concerned that your presence on the GSC Board of Directors may present a conflict of interest in regard to your duties as a County Commissioner. Since the County is the primary source of funds for the development project, you feel it is imperative for you to remain entirely dedicated to the interests of Union County. It is unclear to you how to fulfill your duty to the County and simultaneously fulfill your duty to GSC as a Director. FAX: (717) 787 - 0806 • Web Site: www.ethics.state.pa.us • e - mail: ethics@state.pa.us 00 -559 Brouse, 00 -559 April 7, 2000 Page 2 You also have concerns as to the Sunshine Act as it might apply to the meetings of the Board of Directors at which you might be present. You believe that the Sunshine Act would apply to these meetings because you would be present and voting upon issues which would affect Union County. You have submitted a copy of a "letterhead" from a prior meeting which lists the Union County Commissioners as Directors. You request an advisory from the State Ethics Commission on these issues. 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. Second, the issue of whether you should serve as a Board Member of GSC is beyond the scope of the Ethics Act which regulates your conduct as a public official but not as a Board Member of a private non - profit corporation. Third, since the State Ethics Commission does not administer the Sunshine Act, no advice may be given as to the application of that law. It is suggested that you contact legal counsel on such issues. As Commissioner for Union County, you are a public official as that term is defined in the Ethics Act, and hence you are /is subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: Section 1103. Restricted activities. 65 Pa.C.S. §1103(a). (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 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 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 impactor 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 Brouse, 00 -559 April 7, 2000 Page 3 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. 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. In addition, Sections 1103(b) and 1 103(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 1 103. 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 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 Brouse, 00 -559 April 7, 2000 Page 4 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. Turning to your inquiry, GSC would be a "business" with which you would be associated. First, the definition of the term "business" as set forth in the Ethics Act is very broad. Novak, Opinion No. 91 -009. GSC as a corporation is within that definition. Second, the fact that GSC is non - profit organization would not disqualify it as a "business." The word "or" toward the end of the definition of "business" is disjunctive, and the repeated use of the word "any" precludes any interpretation that the final phrase "legal entity organized for profit" modifies the preceding forms of entities in the list. See, Soltis - Sparano, Order No. 1045 at 31 (Citing, Confidential Opinion, No. 89 -007; McConahy, Opinion No. 96 -006). Since GSC is a "business" as that term is defined in the Ethics Act, it is clearly a business with which you would be associated because you would be a Member of the Board of Directors. A conflict of interest not only 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 but also where he does so as to the clients of the business. Miller, Opinion No. 89 -024; Kannebecker, Opinion No. 92 -010. A reasonable and legitimate expectation that a business relationship will form may also 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), alloc. den., No. 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). In each instance of a conflict of interest, the public official /public employee must abstain from participation in his public capacity. The abstention requirement is not limited merely to voting, but extends to any use of authority of office. In Juliante, Order No. 809, the Commission recognized that the use of authority of office as defined in the Ethics Act includes, for example, discussing, conferring with others, and lobbying for a particular result. In each instance of a conflict of interest, the public official must also satisfy the disclosure requirements of Section 1103(j) set forth above. The Ethics Act would not prohibit you from serving in a private capacity on the Board of Directors of GSC. However, as noted, it would be a business with which you are associated, even though non - profit. Consequently, you would have a conflict under Section 1103(a) of the Ethics Act as a County Commissioner regarding any financial matters involving that business, and you must abstain and observe the disclosure requirements of Section 1 103(j). Brouse, 00 -559 April 7, 2000 Page 5 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 County Code. Conclusion: As a Commissioner for Union County, 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 sea. Although the Ethics Act would not prohibit you from serving in a private capacity on the Board of Directors of the Great Streams Commons Industrial Development Corporation (GSC), it would be a business with which you are associated. You would have a conflict under Section 1103(a) of the Ethics Act as a County Commissioner regarding any financial matters involving GSC, and you must abstain and observe the disclosure requirements of Section 1103(j). Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), 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 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 (30) days may result in the dismissal of the appeal. Sing�'er ly, Vincent J. i• pko Chief Counsel l