HomeMy WebLinkAbout89-013 CrisciDear Mr. Crisci:
1989.
I. Issue:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
OPINION OF THE COMMISSION
Before: Helena G. Hughes, Chair
W. Thomas Andrews
G. Sieber Pancoast
Dennis C. Harrington
Michael J. Washo
Date Decided: July 28, 1989
Date Mailed: August 8. 1989
Raymond L. Crisci 89 -013
Resident Manager and Vice President
Merrill Lynch
Wilkes -Barre Center, Suite 402
39 Public Square
Wilkes - Barre, Pennsylvania 18701
Re: Conflict, Public Official, Municipal Authority Member, Brokerage
Firm Manager, City Pension Fund, Authority Employee Voting As
City Mayor to Award City Pension Fund, Business With Which He is
Associated
This Opinion is issued in response to your request of June 16,
Whether the Public Official and Public Employee Ethics Law
restricts an uncompensated member of a municipal authority who is a
manager of a brokerage firm from prospecting city officials as to the
firm's becoming custodian for the city pension fund when an employee
of the municipal authority is the city mayor who will vote on the
award to a custodian.
II. Factual Basis for Determination:
You serve as a member of the Wyoming Valley Sanitary Authority.
You also are the Manager of the Merrill Lynch Office in Wilkes -Barre
wherein you have full management responsibility,for 22 employees. The
firm has approximately 15,000 clients with accompanying assets of
approximately 4 hundred million dollars. In addition, you and an
associate, Peter Butera, CPA, have approximately 2600 personal
clients with over 110 million in assets. You and your associate are
Raymond L. Crisci
Page 2
currently prospecting officials in the city of Pittston to have
Merrill Lynch become the custodian and manager of the City Uniformed
Pension Fund which is currently being managed by a local bank. As
Chairman of the 20 member board of the Wyoming Valley Sanitary
Authority you do not vote unless there is a tie. You have not made
any motions in the two years that you have held the position as
Chairman. The City of Pittston is a third class city with an elected
mayor and four council members who will vote on the possible change in
management for the city pension fund. The Mayor of Pittston is Thomas
Walsh who is a plumber by trade and was hired by the Wyoming Sanitary
Authority in January of 1989 as a temporary paid maintenance employee.
In your capacity as Chairman you did not vote on the hiring of Mr.
Walsh although you agree with it. You state that your first
responsibility is to Merrill Lynch to try to obtain new accounts
rather than to the Wyoming Valley Sanitary Authority wherein you serve
in a volunteer uncompensated capacity. If Merrill Lynch is successful
in becoming custodian and broker of record, Merrill Lynch directly and
you indirectly would share in the financial compensation for this
account. The four members of Council of Pittston and the Mayor will
be the five individuals who will vote and make this decision as to
whether Merrill Lynch will become custodian for the city pension fund.
After expressing your feeling that you are not using office or
confidential information to obtain business for Merrill Lynch, you
request the advice of this Commission.
III. Discussion:
As Chairman of the Wyoming Valley Sanitary Authority, you are a
public official as that term is defined under the Public Official and
Employee Ethics Law of June 26, 1989, Act 9 of 1989. Accordingly, you
are subject to the provisions of the Ethics Law and the restrictions
therein are applicable to you.
Section 3(a) of the Ethics Law provides:
Section 3. Restricted Activities.
(a) No public official or public employee
shall engage in conduct that constitutes a
conflict of interest.
The following terms are defined under the Ethics Law:
Section 2. 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
Raymond L. Crisci
Page 3
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.
"Conflict" or "conflict of interest" 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 or 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 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.
The clear intendment of Section 3(a) of the Ethics Law is to
prohibit public officials /employees from using the authority of office
for the advancement of their own personal financial gain. As is noted
in the Preamble of the Ethics Law:
"... public office is public trust and ... any
effort to realize personal financial gain through
public office other than compensation provided by
law is a violation of that trust."
In addition, Sections 3(b) and 3(c) of the Ethics Law provide in
part that no person shall offer to a public official /employee anything
of monetary value or no public official /employee shall solicit or
accept any thing of monetary value based upon the understanding that
the vote, official action, or judgement of the public
official /employee would be influenced thereby. It is assumed that
you, as Chairman of the Authority, have not attempted to exert
influence on Mr. Walsh in his capacity as authority employee regarding
the matter of the City Pension Fund.
In applying the above provisions of the Ethics Law to the instant
matter, our concern must focus upon whether you as Chairman of the
Authority might use the authority of office for the benefit of the
Authority employee who in turn might look favorably as to his voting,
as Mayor, on the proposal by the business with which you are
Raymond L. Crisci
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associated. Clearly, Merrill Lynch is a business with which you are
associated since you are employed by that firm as a Manager. Since
you have stated that you did not hire Mr. Walsh, it does not appear
that you used the authority of office in employing Mr. Walsh as
Authority employee. As to your prospecting the officials of the City
of Pittston on behalf of Merrill Lynch, you would be requesting the
members of Council and in particular Mr. Walsh, the Mayor who is also
an employee of the Authority, to allow Merrill Lynch to become
custodian and manager of the city pension fund. Our concern relates
to the possibility that such prospecting on your part might influence
the Mayor /Authority employee to vote to award the management of the
City pension fund to Merrill Lynch because you, as Authority Chairman,
and the other Authority members are his employer. In order to
alleviate this problem, it will be necessary for you to inform Mr.
Walsh in your prospecting that you as Authority Chairman will abstain
from participation in any Authority matter which would have a
financial impact upon him if Merrill Lynch becomes custodian and
manager of the City pension fund. Further, in the event that Merrill
Lynch becomes custodian and manager of the City Pension Fund, then you
as Chairman of the Authority must publicly announce and disclose of
public record the nature of your interest in a written memorandum
filed with the secretary of the Authority pursuant to the requirements
of Section 3(j) of the Ethics Law. You must also outline, in said
memorandum, the fact that you will not be participating in any matter
involving Mr. Walsh as an authority employee.
Additionally, you have advised this Commission specifically and
most directly that your first loyalty is to your private employer and
not the governmental body on which you serve or the public. This is
at odds with the stated purpose of the Ethics Law. With this line now
clearly marked, we feel obligated to advise you in the clearest
language possible that you must exercise the utmost caution in any
action that you take that may be at variance with the provisions of
the Law.
Also, it is specifically noted herein that we do not now address
any issue regarding the contemplated activities of Mr. Walsh as the
City Mayor and this opinion is not to be construed as such.
Therefore, under the above facts and circumstances, Section 3(a)
of the Ethics Act would not restrict you as Chairman of the Authority
from pursuing the private endeavor as Manager of Merrill Lynch as to
prospecting the officials of the City of Pittston to have Merrill
Lynch become custodian and manager of the City Uniformed Pension
Fund, subject to the qualifications noted above.
Lastly, the propriety of the proposed conduct has only been
addressed under the Ethics Law; the applicability of any other
statute, code, ordinance, regulation or other code of conduct other
Raymond L. Crisci
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than the Ethics Act has not been considered in that they do not
involve an interpretation of the Ethics Law.
IV. Conclusions
As Chairman of the Wyoming Valley Sanitary Authority you are a
public official subject to the provisions of the Public Official and
Employee Ethics Law. The Ethics Law would not restrict you as a
public official from engaging in private enterprise in your capacity
of Manager for Merrill Lynch from prospecting officials of the City of
Pittston to have Merrill Lynch become custodian and manager of the
City Uniformed Pension Fund under circumstances where an Authority
employee is the Mayor of the City who will vote to determine whether
Merrill Lynch's proposal is acceptable. You must inform the Mayor
that you, as Authority Chairman, will abstain from participating in
any Authority matter which will have a financial impact upon him as
Authority employee if Merrill Lynch becomes custodian and manager of
the city pension fund. If Merrill Lynch is successful in becoming
custodian and manager of the Fund, you must publicly announce and
disclose the nature of your interest as to the Fund in a written
memorandum with the secretary of the Authority. Lastly, the propriety
of the proposed conduct has only been addressed under the Ethics Law.
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.
such.
This letter is a public record and will be made available as
Finally, any person may request the Commission to reconsider its
Opinion. The reconsideration request must be received at this
Commission within fifteen days of the mailing date of this Opinion.
The person requesting reconsideration should present a detailed
explanation setting forth the reasons why the Opinion requires
reconsideration.
By th Commissi n,
1
ena G. Hughes
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