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HomeMy WebLinkAbout92-009 CooperSamuel T. Cooper, III, Esquire Gross, Casper & Cooper 3003 North Front Street Harrisburg, PA 17110 -1224 STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG. PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Dennis C. Harrington Roy W. Wilt Austin M. Lee Allan M. Kluger DATE DECIDED: December 10, 1992 DATE MAILED: December 15, 1992 92 -009 Re: Conflict, Public Official /Employee, Illness, Blind Trust, Solicitation, Gifts, Vendors, Municipal Contracts with Vendors. Dear Mr. Cooper: This Opinion is issued in response to your request on September 2, 1992. I. ISSUE: Whether the Public Official and Employee Ethics Law imposes any prohibition or restrictions upon a public official /public employee who is the beneficiary of a blind trust established to pay expenses related to his illness, where donors to the trust include vendors who contract with his governmental body. II. FACTUAL BASIS FOR DETERMINATION: You seek an advisory as to a client who is both an elected public official and public employee who became ill and was hospitalized as a result of a defective heart condition. Upon returning home from a short stay in the hospital, your client was readmitted to another hospital after his medical condition worsened. Your client has a doubtful prognosis concerning his ability to return to work. It is possible that your client may Samuel T. Cooper, III, Esquire December 15, 1992 Page 2 undergo transplant surgery which may adversely his ability to work in any capacity. Due to your client's medical condition, he is unable to work as a public employee since the occurrence of his illness. As a current update, you note that your client has now returned to work on a very limited basis but the immediate medical prognosis is that he will need a heart transplant in the next year. As a result of his physical condition, your client is in a precarious financial position in that he and his wife are unable to fully pay their living expenses. Your client has been approached by friends who are elected and appointed officials and employees as well as private individuals in order to donate money and solicit funds to offset the daily current expenses and any uncovered medical expenses. Consideration is being given to the creation of a blind trust in a depository institution which would be funded by contributions from the client's friends as well as solicitations from others. The blind trust would be structured with a time certain termination date. Although there is no targeted goal in terms of the amount of contributions, anything received over $25,000 would be reported to the Department of State as required by law. Contributions would be given anonymously without any indication of the identities of the donors, some of whom are vendors who conduct business with the municipality in which your client is an elected official. Your client will vote periodically on contracts involving such vendors. You seek to protect your client as must as possible from any claims or appearance of favoritism on his part as to such vendor contributors. It is anticipated that your client would submit his bills to the trustee or manager of the blind trust who would pay the bills and keep accurate records of the fund as well as meet any other legal or regulatory requirements regarding such trust funds. In the event of either the death or recovery of your client, any remaining funds would be paid in equal amounts to the respective heart funds of two hospitals to which he has been admitted for treatment. In that you have a particular concern that the proposed arrangement would not violate any restriction of the Ethics Law, you seek an advisory opinion as to the blind trust which is in place but not operational until approval has been obtained from this Commission. III. DISCUSSION: As a public official /employee as those terms are defined under Act 9 of 1989 and the current regulations of the Commission, your client would be subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law provides: Section 3. Restricted Activities. Samuel T. Cooper, III, Esquire December 15, 1992 Page 3 65 P.S. §402. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined in the Ethics Law as follows: 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 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 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. "Gift." Anything which is received without consideration of equal or greater value. "Gift" shall not include a political contribution otherwise reported as required by law or a commercially reasonable loan made in the ordinary course of business. 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 and no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has Samuel T. Cooper, III, Esquire December 15, 1992 Page 4 been or will be any transgression thereof but merely to provide a complete response to the question presented. Section 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities. (j) 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 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. If a conflict exists, Section 3(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. In applying the matter, it is clear trust by your client There is no per se receipt of gifts by provisions of the Ethics Law to the instant that the receipt of any funds from a blind would constitute a gift under the Ethics Law. prohibition under the Ethics Law as to the a public official /employee. See, Wolfgang, Samuel T. Cooper, III, Esquire December 15, 1992 Page 5 Opinion 89 -028. Since the receipt of the funds would be a gift, your client as a public official /employee would be required to list the blind trust under the category of gifts on his financial interests statements. In particular he would have to identify the source as the blind trust as well as the address of the depository institution which holds the res of the trust together with the amount of the gifts that he has received in the particular reporting year. See, Section 5(b)(6) of the Ethics Law, 65 P.S. §405(b)(6). The issue before us reduces to whether the public official/ employee would have a conflict if he would have official involvement with the donors to the blind trust. In this regard it is noted that there would be solicitation of vendors who have contracts with the governmental body wherein the public official serves. However, the trust would be a blind trust so that the contributions would be given anonymously without any indication as to the identity of any given donor. We have held in Wolfgang, supra, that a contribution to a candidate for office in and of itself without any additional facts would not create a per se conflict if the individual was elected to that office. However, there have been various cases before this Commission where we have found violations based upon particular facts where public officials have accepted gifts from vendors or individuals and subsequently acted upon matters which the donors had pending before the governmental body. See, Volpe, Order 579 -R; Smith, Order 578 -R; Feller, Order 576 -R. In the instant matter we believe that the establishment of the blind trust which preserves the anonymity of any donors would be sufficient to insulate the public official /employee from a conflict subject to the following qualifications. First, it is assumed that no understanding as prescribed by Sections 3(b) and (c) of the Ethics Law exists. Second, it is assumed that the public official /employee in question is not using the status or position of his public office to encourage any particular vendor to contribute. Third, it is assumed that the anonymity status will continue; if at some point the public official /employee becomes aware of the contribution by any given individual who would have contracts or other pending matters with his governmental body, the public official at that time should seek additional advice from this Commission as to whether a conflict would exist under such circumstances. Further, if the Commission should receive a complaint and commence an investigation as to allegations of use of authority of office or understandings by the public official/ employee vis -a -vis contributors to the blind trust, provision should be made as to the blind trust that information as to the names of contributors and the amounts of their respective contributions be available to the Commission upon request in Samuel T. Cooper, III, Esquire December 15, 1992 Page 6 furtherance of an investigation. 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 than the Ethics Law has not been considered in that they do not involve an interpretation of the Ethics Law. Specifically not addressed herein is the applicability of the respective municipal code or the Governor's Code of Conduct. IV. CONCLUSION: A public official for the municipality and a public employee is subject to the provisions of the Ethics Law. Disbursements from a blind trust for a public official /employee who has become seriously ill constitute gifts to that individual which must be reported on the Statement of Financial Interests. The payment of expenses from the blind trust which is funded by donations or solicitations from friends or vendors who have contracts with the municipality does not per se create a conflict as to any action by the public official /employee with vendors before his governmental body. Provision should be made as to the blind trust that information as to the names of contributors and the amounts of their respective contributions be available to the Commission upon request in furtherance of an investigation should an investigation ever occur. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(10), the person who acts in good faith on this opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. 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 the Commission, James M. How Chair