HomeMy WebLinkAbout20-517 BalavagePHONE: 717-783-1610
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STATE ETHICS COMMISSION
FINANCE BUILDING
613 NORTH STREET, ROOM 309
HARRISBURG, PA 17120-0400
ADVICE OF COUNSEL
March 16, 2020
To the Requester:
Mr. James J. Balavage
FACSIMILE: 717-787-0806
WEBSITE: www.ethics.pa.c�ov
20-517
Dear Mr. Balavage:
This responds to your undated letter received February 21, 2020, by which you
requested an advisory from the Pennsylvania State Ethics Commission ("Commission").
Issues:
(1) Whether the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. §
1101 et sec ., would impose prohibitions or restrictions upon an individual who has
been appointed by the Board of Supervisors of Jackson Township, Luzerne
County, Pennsylvania, to serve as Jackson Township's voting Member of the
Board of the Back Mountain Community Partnership, with regard to voting on
issues as instructed to do so by the Jackson Township Board of Supervisors,
where: (a) the Back Mountain Community Partnership consists of seven
municipalities that operate under an intergovernmental cooperation agreement; (b)
Jackson Township and Kingston Township, Luzerne County, Pennsylvania, are
members of the Back Mountain Community Partnership; (c) the Individual is the
Chief of Police for Jackson Township; and (d) the individual is a newly -elected
Supervisor for Kingston Township; and
(2) Whether the Ethics Act would impose prohibitions or restrictions upon a newly -
elected Supervisor for Kingston Township, who: (a) is collecting a defined benefit
pension from the Kingston Township Police Pension Fund; and (b) served as a
Member of the Board of Trustees of the Kingston Township Police Pension Fund
prior to being elected as a Kingston Township Supervisor, with regard to being
reappointed as a Member of the Board of Trustees of the Kingston Township
Police Pension Fund by the Kingston Township Board of Supervisors.
Facts: You seek guidance from the Commission with regard to the following two
scenarios.
Scenario One
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You have served as the Chief of Police for Jackson Township since November
2014. You were recently elected as a Supervisor for Kingston Township for a term of
office beginning on January 6, 2020,
Jackson Township and Kingston Township are members of the Back Mountain
Community Partnership ("BMCP"), which consists of seven municipalities that operate
under an intergovernmental cooperation agreement. The BMCP cooperates in many
activities for the public interest of its member municipalities; You state that the BMCP
applies for grant funding for projects, participates in certain community projects, and
engages in other activities that bring about the betterment of the Back Mountain region.
In January 2020, the Jackson Township Board of Supervisors appointed you to
serve as Jackson Township's voting Member of the Board of the BMCP. You state that
you will not earn any extra money for serving on the Board of the BMCP, that you do not
receive any type of pecuniary benefit from the BMCP, and that neither you nor a member
of your immediately family has any financial interest in the BMCP.
As a Member of the BMCP Board, you will attend the BMCP's monthly meetings.
Generally, when an issue is brought up at a BMCP meeting, each municipality's voting
Member of the BMCP Board will take information regarding the issue back to that
municipality's board or council for discussion and guidance, and a vote on the issue will
be taken at a subsequent meeting. You state that as Jackson Township's voting Member
of the BMCP Board, you will take direction from the Jackson Township Board of
Supervisors. You state that you will have no independence of thought when it comes to
voting on an issue and that you will vote on an issue based upon instructions given to you
by the Jackson Township Board of Supervisors.
Based upon the above submitted facts, you pose the following questions:
(1) Whether you would have a conflict of interest as Jackson Township's voting
Member of the BMCP Board with regard to voting on an issue as instructed
to do so by the Jackson Township Board of Supervisors; and
(2) If you would have a conflict of interest with regard to voting on an issue as
instructed to do so by the Jackson Township Board of Supervisors, what
would be the basis for such conflict of interest, and would you be required
to file an appropriate memorandum each time you would abstain from a
vote.
Scenario Two
On September 30, 2014, you retired from your employment as the Chief of Police
for Kinggston Township. You are collecting a defined benefit pension from the Kingston
Township Police Pension Fund ("Police Pension Fund" ), which is administered by Riggs
Asset Management (the "Administrator"), and your monthly pension payment is deposited
directly into your checking account by an investment company. You state that Kingston
Township has no responsibilities regarding your pension entitlement.
The Police Pension Fund currently has assets of approximately $4 million. The
Kingston Township Board of Supervisors previously agreed to not require the active
police officers of Kingston Township to contribute to the Police Pension Fund. Kingston
Township is at times required to make contributions to the Police Pension Fund from the
Kingston Township General Fund.
The Kingston Township Board of Supervisors appoints at least one Kingston
Township Supervisor to the Board of Trustees of the Police Pension Fund. The
Administrator sends a representative to each quarterly meeting of the Board of Trustees
B arc M h 16, 20� 7 20
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to advise the Board of Trustees of the condition of the fund, the changes in investments
which have taken or will take place, and the market predictions upon which the
Administrator bases its decisions. You state that the Trustees listen to the Administrator's
presentation, vote to accept the Administrator's report, and sign documents if necessary.
You state that the Kingston Township Board of Supervisors is informed by the Kingston
Township Manager —who is a Trustee —and/or the Kingston Township Supervisor who is
serving as a Trustee as to what is transpiring with the Police Pension Fund. You state
that the Kingston Township Board of Supervisors has no direct control over the decisions
made by the Administrator. You further state that to your knowledge, the Kingston
Township Board of Supervisors has never instructed the Administrator to make any
changes or diverge from the Administrator's presentation that was made to the Trustees
and has never instructed the Administrator to buy, sell, or adjust any part of the Police
Pension Fund to the advantage or detriment of the Trustees or the members of the Police
Pension Fund.
You served as a Member of the Board of Trustees of the Police Pension Fund for
more than 20 years. Your term as a Trustee expired on December 31, 2019, and the
Kingston Township Manager invited you to continue serving as a Trustee. Although you
accepted the invitation, at the January 6, 2020, reorganization meeting of the Kingston
Township Board of Supervisors, it was suggested that the motion to reappoint you as a
Trustee be tabled so that an advisory could be sought with regard to your potential
reappointment as a Trustee.
Based upon the above submitted facts, you seek guidance as to whether the Ethics
Act would impose any prohibitions or restrictions upon you with regard to being
reappointed as a Member of the Board of Trustees of the Police Pension Fund.
Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107( 1) of
e tics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester b ased
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.
It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics
Act, an opinion/advice may be given only as to prospective (future) conduct. To the extent
that your inquiry relates to conduct that has already occurred, such past conduct may not
be addressed in the context of an advisory opinion. However, to the extent your inquiry
relates to future conduct, your inquiry may and shall be addressed.
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
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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 re uired 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:
§ 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.
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
byy holding such a public position for the private pecuniary benefit of the public
ofFiciallpublic employee himself, any member of his immediate family, or a business with
which he or a member of his immediate family is associated.
In each instance of a conflict of interest, the public official/public employee would
be required to abstain from participation. The abstention requirement would not be limited
merely to voting, but would extend 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. Subject to certain statutory exceptions, in each instance of a voting conf ict, Section
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11030of the Ethics Act would require the public official/public 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.
Per the Pennsylvania Supreme Court's decision in Kistler v. State Ethics
Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a) of the
Ethics 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
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
cct, a public officiallpublic 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.
A conflict of interest would not exist to the extent the "de minimis exclusion" and/or
the "class/subclass exclusion" set forth within the Ethics Act's definition of the term
"conflict" or "conflict of interest," 65 Pa.C.S. § 1102, would be applicable.
The de minimis exclusion precludes a finding of conflict of interest as to an action
having a de minimis (insignificant) economic impact. Thus, when a matter that would
otherwise constitute a conflict of interest under the Ethics Act would have an insignificant
economic impact, a conflict would not exist and Section 1103(a) of the Ethics Act would
not be implicated. See, Kolb, Order 1322; Schweinsburq, Order 900.
In order for the class/subclass exclusion to apply, two criteria must be met: (1) the
affected public official/public employee, immediate family member, or business with which
the public officiallpublic employee or immediate family member is associated must be a
member of a class consisting of the general public or a true subclass consisting of more
than one member; and Q the public officiallpublic employee, immediate family member,
or business with which public officiallpublic employee or immediate family member is
associated must be affected "to the same degree' in no way differently than the other
members of the class/subclass. 65 Pa.C.S. § 1 102; see, Kabl-ack, Opinion 02-003;
Rubenstein, Opinion 01-�007. The first criterion of the exclusion is satisfied where the
members of the proposed subclass are similarly situated as the result of relevant shared
characteristics. The second criterion of the exclusion is satisfied where the
individual/business in question and the other members of the class/subclass are
reasonably affected to the same degree by the proposed action. Kablack, supra.
In applying the above provisions of the Ethics Act to each of the two scenarios you
have presented, you are advised as follows.
Scenario One
As the Chief of Police for Jackson Township, you are a public official/public
employee subject to the provisions of the Ethics Act. As a Member of the BMCP Board
and as a Supervisor for Kingston Township, you are a public official subject to the
provisions of the Ethics Act.
In your official capacity as a Member of the BMCP Board, you would have a conflict
of interest and would transgress Section 1103(a) of the Ethics Act by participating/voting
on an issue if: (1) you would be consciously aware of a private pecuniary benefit for you,
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a member of your immediate family, or a business with which you or a member of your
immediate family is associated; (2) your action(s) would constitute one or more specific
steps to attain that benefit; (Pthics
neither the de minimis exclusion nor the class/subclass
exclusion set forth within the Act's definition of "conflict" or "conflict of interest," 65
Pa.C.S. § 1102, would be applicable; and (4) your voting would not fall within a statutory
exception of Section 11030) of the Ethics Act.
In each instance of a conflict of interest, you would be required to abstain from
partici ation, which would include voting unless one of the statutory exceptions of Section
1103Q� of the Ethics Act would be applicable. Additionally, you would be required to
satisfy the disclosure requirements of Section 1103Q) of the Ethics Act each time a voting
conflict would arise, such that prior to the vote being taken, you would be required to
publicly announce and disclose the nature of your 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. 65 Pa.C.S. § 11030).
Scenario Two
As a Supervisor for Kingston Township, you are a public official subject to the
provisions of the Ethics Act.
The Ethics Act would not prohibit you from being reappointed as a Member of the
Board of Trustees of the Police Pension Fund. If you would be reappointed as a Member
of the Board of Trustees of the Police Pension Fund, you would in that capacity be a
public official subject to the provisions of the Ethics Act.
As to each of your public capacities —that is, as a Kingston Township Supervisor
or as a Member of the Board of Trustees of the Police Pension Fund —you would have a
conflict of interest under Section 1103(a) of the Ethics Act in matter(s) that would
financially impact you, a member of your immediate family, or a business with which you
or a member of your immediate family is associated unless the de minimis exclusion or
the class/subclass exclusion would be applicable.
In each instance of a conflict of interest, you would be required to abstain from
partici ation, which would include voting unless one of the statutory exceptions of Section
1103(j) 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.
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.
Conclusion: Based upon the submitted facts, you are advised as follows.
Scenario One
As the Chief of Police for Jackson Township, Luzerne County, Pennsylvania, you
are a public official/public employee subject to the provisions of the Public Official and
Employee Ethics Act ("Ethics Act"), 65 Pa.C.S.§ 1101 et seq. As a Member of the Board
of the Back Mountain Community partnership ("BMCP" Fand as a Supervisor for Kingston
Township, Luzerne County, Pennsylvania, you are a public official subject to the
provisions of the Ethics Act.
In your official capacity as a Member of the BMCP Board, you would have a conflict
of interest and would transgress Section 1103(a) of the Ethics Act by participating/voting
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Page 7
on an issue 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; (2) your action(s) would constitute one or more specific
steps to attain that benefit; (Pthics
neither the de mmimis exclusion nor the class/subclass
exclusion set forth within the Act's definition of "conflict" or "conflict of interest," 65
Pa.C.S. § 1102, would be applicable, and (4) your voting would not fall within a statutory
exception of Section 11030) of the Ethics Act.
In each instance of a conflict of interest, you would be required to abstain from
partici ation, which would include voting unless one of the statutory exceptions of Section
1103(j) of the Ethics Act would be applicable. Additionally, you would be required to
satisfy the disclosure requirements of Section 1103Q) of the Ethics Act each time a voting
conflict would arise, such that prior to the vote being taken, you would be required to
publicly announce and disclose the nature of your 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.
Scenario Two
As a Supervisor for Kingston Township, you are a public official subject to the
provisions of the Ethics Act. The Ethics Act would not prohibit you from being reappointed
as a Member of the Board of Trustees of the Police Pension Fund. If you would be
reappointed as a Member of the Board of Trustees of the Police Pension Fund, you would
in that capacity be a public official subject to the provisions of the Ethics Act.
As to each of your public capacities —that is, as a Kingston Township Supervisor
or as a Member of the Board of Trustees of the Police Pension Fund —you would have a
conflict of interest under Section 1103(a) of the Ethics Act in matter(s) that would
financially impact you, a member of your immediate family, or a business with which you
or a member of your immediate family is associated unless the de minimis exclusion or
the class/subclass exclusion would be applicable.
In each instance of a conflict of interest, you would be required to abstain from
mtici ation, which would include voting unless one of the statutory exceptions of Section
30) 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.
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 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 actuaHX received
at the Commission within thirty (30) days of the date of this Advice
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pursuant to 59 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 f717-787-0806}. Failure to file such an apneal at
the Commission within thirty (30) days may result in the dismissal of
the appeal.
Sincerely,
Robin M. Hittie
Chief Counsel