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HomeMy WebLinkAbout88-006 McCarthyMr. James J. McCarthy, Jr. 30 E. Market Street Apartment #1 Bethlehem, PA 18018 Dear Mr. McCarthy: I. Issue: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION DATE DECIDED: 8/18/88 DATE MAILED: 9/13/88 Whether a city director of community development who holds a real estate sales license may under the State Ethics Act engage in the listing or the sale of properties either within or outside of the corporate limits of the city. 88 -006 Re: Conflict of Interest; Public Employee; Director of Community Development; Holding Real Estate Sales License; Appeal of Advice of Counsel This responds to your appeal of the Advice of Counsel (88 -561) issued May 12, 1988. II. Factual Basis for Determination: By letter of March 14, 1988, you requested advice of the State Ethics Commission as to whether you as the Director of Community Development of the City of Bethlehem could maintain and utilize a real estate license and engage in the listing and sales of property both within and outside of city limits. Pursuant to your letter of request, Advice of Counsel No. 88 -561 was issued wherein you were advised that under Sections 3(a) and 3(d) of the Ethics Act you would be precluded from listing and making sales as a real estate agent while you served in the position of City Director for Community Development for Bethlehem. By letter of May 16, 1988, you appealed the Advice of Counsel to this Commission. By letter of July 19, 1988, you were advised as to the time and location of the Commission public meeting. James J. McCarthy Page 2 • Factually, you state that you serve in the City of Bethlehem as the Director of Community Development, a mayor appointed cabinet level position. In this position you administer the City Department which is involved in planning, zoning, development, building and housing inspections, public and environmental health and emergency medical services functions and you also manage most of the city's federal and state grant programs with the exception of the utilities area. You further advise that on May 8, 1984, you were issued a Pennsylvania Real Estate Sales License through the firm of Valley Real Estate in Bethlehem. After you were issued the license, you became actively engaged in part -time real estate sales in Bethlehem as well as in the Lehigh Valley Area. When the license was issued, you were aware of the State Ethics Act and disclosed your real estate activity to the former Mayor, Mr. Marcincin. In addition, you contacted the then city solicitor who reviewed the matter and issued an opinion wherein you were advised as to what procedures you should follow so as to avoid the potential for a conflict or the appearance thereof. You further provided information indicating that your real estate activity in the last four years has not involved the City, that you have not represented real estate interests of any party having a contractual relationship with the City and that you have not represented any private party before any board, authority or commission within the City. Your position as a real estate salesperson is in the nature of an independent contractor and you have no propriety interest in the Valley Real Estate Firm or any other real estate business. No grievance or complaint has been filed against you either before the Pennsylvania Real Estate Commission or the local Board of Realtors, and you state that your sole compensation consists of real estate commissions on properties listed, sold or leased through Valley Real Estate. In addition, you note that you have disclosed your real estate derived income on your Statement of Financial Interests and that your real estate sales activities have been done on your own personal time. You were reappointed by the current mayor, and at that time it was suggested that you either resign your public position if you wish to continue in your real estate sales activity or that you escrow your real estate license during your tenure as a publiC employee. The new mayor requested a review of the matter by the current city solicitor who issued an opinion on February 2, 1988, wherein he advised that there was a conflict in your holding an active real estate license and engaging in the listing and selling of real estate either within or outside the corporate limits of the City of Bethlehem. You do not agree with the latter opinion and you state that you do not intend to use public office or any confidential information to obtain an improper financial gain. You advise that you have not and will not have any interest in a contract in which the City is directly or indirectly involved. As a result of the foregoing, you request an opinion from this Commission as to whether you may, in the position of community development director, be allowed to engage in the listing and sale of properties within and outside of the corporate limits of the City of Bethlehem. James J. McCarthy Pace 3 Your counsel has indicated that you are not an investor in real estate and that you do not own real estate either for investment or management. Your counsel further advises that you have not engaged in any transaction and will not engage in any transaction where any discretionary action is required by any department under your supervision or within the purview of your authority. Likewise, your counsel asserts that you are not the city planner or zoning officer and that you do not have any direct control or power to direct the cti_vi of the city planning commission or zoning hearing board. You intend not to accept any client where you think that you have the potential for a conflict. You also state that in your fourteen years of service, you have not been privy to any confidential information through your public employment. You advise that when any plans are presented, they are matured, there has been a wide range of Involvement with the plans and all subsequent actions on the plans are public. You do have access to some confidential information which relates to personnel matters, budgeting matters and litigation. You conclude stating that although the city olanner or zoning officer are peoole who e:-ercise some level of discretion, you as Community Development Director :er_el_' manage the city's development program which is funded by st =:tie end federal monies. Yon have submitted a job description for the position of Communi Development Director which is incorporated herein by reference and T.hi_c:h provides inter alia: "The employee in this class directs and supervises the activities of . i:he Community Development Department, consisting of the Bureaus of Planning, Inspections, Health and the Divisions of Housing Rehabilitation and Emergency Medical Services. The Community Development Director provides professional and technical advice to the bureau supervisors, and participates in those areas of work requiring his resources and knowledge. r_ he Director receives directives and c;eneral administrative supervision from the Mayor; however, he exercises considerable iiideoen_dence and initiative in work performance and supervision of staff. The work is reviewed through conferences, reports and results obtained." 111. Discussion: As Director of Community Development of the City of Bethlehem, you are a "public employee" as that term is defined under the Ethics Act. CS P.S. 402; 51 Pa. Code §1.1. As such, your conduct must conform to the requirements of the Ethics Act. James J. McCarthy Page 4 Section 3(a) of the Ethics Act provides: Section 3. Restricted Activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. Code §403(a). Section 3(b) of the Ethics Act provides: Section 3(b) of the Ethics Act provides: (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. §403(b). Specifically, the Ethics Act provides that no public official may use his public office or confidential information received through his holding public office to obtain financial gain for himself or'a business with which he is associated and no public official may receive anything of value on the understanding that his official conduct will be influenced thereby. See Section 3(a) and 3(b) of the Ethics Act, 65 P.S..S403(a) and (b). Under Section 3(a) quoted above, this Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law as part of the authorized compensation transgresses the above provision of law. Hoak /McCutcheon, Orders No. 128, 129, affirmed McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, A.2d (1983); Yacobet, Order No. 412 -R, affirmed Yacobet v. State Ethics Commission, James J. McCarthy Page 5 Pa. Commw. Ct. , 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own financial interests; Koslow, Order 458 -R, affirmed Koslow v. State Ethics Commission, Pa. Commw. Ct. 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. This Commission has previously applied Section 3(a) to situations where public officials /employees seek to serve in simultaneous positions or attempt to obtain private employment. In Alfano, Opinion 80 -007, this Commission determined that a public official /employee could not serve the interests of one or more persons or entities when those interests were adverse to each other. It was decided in Johnson, Opinion 86 -004, that a public official /employee could not serve in two positions where a statutory incompatibility exists. Further, in Nelson, Opinion 85 -009, it was determined that a public official could not serve in two positions when there was an inherent incompatibility as to the two positions. However, absent an inherent conflict, incompatibility or continued adversity of interest, the general rule of this Commission is that there is no per se prohibition upon a public official /employee engaging in outside employment. Goodman, Opinion 88 -001. Such an inherent conflict would develop in any situation where the official duties of the public servant are so inextricably entwined with that which he or she attempts to do in another position that it is virtually impossible for said person to carry out the official functions. Obviously, such situations depend upon the facts and circumstances of a given situation and determination must be made on a case by case basis. Section 3(d) of the Ethics Act provides: Section 3. Restricted activities. (d) Other areas of possible conflict shall be addressed by the commission pursuant to paragraph (9) of Section 7. 65 P.S. §403(d). The parameters of the types of activities encompassed by this provision of law may generally be determined by reviewing the purpose and intent of the Ethic Act. The Ethics Act was promulgated in order to ensure that the financial interests of public officials do not conflict with the public trust. As such, this Commission has previously determined that such a conflict would arise when a public official attempts to serve one or more interests that are adverse. See Alfano, supra; Fritzenger, Opinion 80 -008. Within the above provision of law, this Commission has previously addressed questions regarding simultaneous service by one individual in incompatible positions. See Nelson, supra. The Ethics Commission has also James J. McCarthy Page 6 determined that any public official must forego any compensation that he or she had already accrued in situations where a conflict exists. King, Opinion 85 -025. In Norris, Opinion 80 -053, this Commission considered the question of whether a public employee who served as both the borough planner, zoning officer and director of economic development had an inherent incompatibility relative to his private employment as a licensed real estate salesman. Although no inherent conflict was found as to his position of director of economic development, an inherent incompatibility and conflict and appearance of conflict was found as to either his position of borough planner or zoning officer. Based upon the statements that you have made concerning your duties and responsibilities as Community Development Director, it would appear that your position is similar to that of the director of economic development in Norris, supra. You have stated that the positions of zoning officer and city planner are held by other independent individuals who are appointed by the Mayor. In contrast, you indicate that your function is to manage the City's development programs. Therefore, based upon your duties and responsibilities as City Development Director, as you have represented them, this Commission finds that there is no inherent conflict occasioned by virtue of your dual roles as a public employee and a private real estate sales agent. As in Norris, no such inherent conflict exists either within or outside of city limits. Although you in your present position may hold the real estate sales license and engage in real estate sales activities both within and outside of the corporate limits of Bethlehem, the Ethics Act does impose certain restrictions upon your conduct. Since the potential exists that you may at some time have access to confidential information which could have a financial impact on realty within and in the surrounding area of Bethlehem, you are advised that you may not use public office or confidential information for yourself or any business with which you are associated. Further, you must abstain in such situations and make a public disclosure of any matter that would come before the City involving any of your existing clients or any individuals who you reasonably could foresee would become clients, (for example, relatives, friends, business acquaintences, etc.). Lastly, because of the executive level of your positions and your ability to interact with other levels of government, this Commission must caution you that you have a special duty and heavy burden to insure that you do not through confidential information or use of office put yourself in a position of conflict or the appearance thereof. If any such situations occur, any argument that you had no intent to transgress the Ethics Act will be of no avail. See Yocabet v. State Ethics Commission, Pa. Commw. Ct. , 531 A.2d 536 (1987). James J. McCarthy Page 7 Lastly, the propriety of your 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. IV. Conclusion: As Director of Community Development you are a public employee subject to the provisions of the Ethics Act. Although there is no inherent conflict under Sections 3(a) and 3(d) of the Ethics Act regarding your position as Director of Community Development and as a real estate sales agent within or outside of the corporate limits of Bethlehem, you must not use public office or confidential information to obtain a financial gain, other than compensation provided for by law, for yourself or a business with which you are associated. Additionally, you must abstain and publicly disclose any situation that would come before the City of Bethlehem involving your private clients or individuals who you could reasonably expect would become your clients. Lastly, you have a special duty and heavy burden to insure that you do not use public office or confidential information to your benefit or the benefit of a business with which you are associated. Lastly, the propriety of your proposed conduct has only been addressed under the State Ethics Act. The Advice of Counsel is reversed. Pursuant to Section 7(9)(i), this opinion is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any civil or criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance of the evidence of the advice given. This letter is a public record and will be made available as such. Finally, any person may request within 15 days of service of the opinion that the Commission reconsider its opinion. The person requesting reconsideration should present a detailed explanation setting forth the reasons why the opinion requires reconsideration. By the Commission, Joseph W. Marshall, III Chairman