HomeMy WebLinkAbout79-048 RetaccoLouis G. F. Retacco, Esquire
Chief Counsel
Treasury Department
Harrisburg, PA 17120
DISCUSSION:
STATE ETHICS COMMISSION
HARRISBURG, PA.
September 5, 1979
OPINION OF THE COMMISSION
RE: Appointment of John T. Sullivan, Deputy State Treasurer
to the Pennsylvania Deposit Insurance Corporation
Board.
FACTS:
On May 30, 1979, you requested an opinion relating to
the appointment of John T. Sullivan, Deputy State Treasurer,
to the Board of Pennsylvania Deposit Insurance Corporation.
On June 18, 1979 you followed up with a memorandum relating
to the statutory authority of the PDIC and office of the State
Treasurer.
79 -048
Act 1, 1978 -255 established the Pennsylvania Deposit
Insurance Corporation Act. The purpose of the Act is to
provide insurance to depositors of the four private banks
which exist in the Commonwealth. Pursuant to Section 3(g) of
the Act, the Treasurer is authorized to make loans to the PDIC,
should PDIC insurance funds be insufficient to cover the
deposits which are insured in the private bank. Pursuant to
Section 3(g) of the Act, the Treasurer may authorize loans to the
PDIC of an amount up to $10,000,000, and further, the Treasurer
is responsible for negotiating these loans at an interest rate
analogous to what the United States Government pays.
John T. Sullivan, the Deputy State Treasurer, may
from time to time, act as Treasurer in the absence of the
Treasurer. There is, therefore, the posssibility of the
Treasurer negotiating with an agency, of which he is a
member, an interest rate relating to a loan to that agency.
Section 1 of Act 170 of 1978 requires that holders of or
candidates for public office present neither a conflict nor
the appearance of`a conflict with the public trust. To have
the State Treasurer authorize a loan for an amount up to
$10,000,000 of state funds and negotiate the interest rate on
that loan - in effect with himself - does constitute an appearance
of conflict with the public trust.
Louis G. F. Retacco, Esquire Page Two
It is the opinion of the Commission that the Pennsylvania
Deposit Insurance Corporation Act does not require the Treasurer
to appoint a member of his agency to the PDIC Board.
CONCLUSION:
The Treasurer should not appoint a member of his agency
to the Pennsylvania Deposit Insurance Corporation Board because
of the appearance of conflict when loans are authorized and
negotiations of interest rates take place between the PDIC and
the office of the Treasury.
This letter is a public record and will be made available
as such.
PA
Paul J. mith
Chairman