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HomeMy WebLinkAbout94-004 SaurmanThe Honorable George E. Saurman 360 Mattison Avenue Ambler, PA 19002 Dear Mr. Saurman: I. ISSUE: 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 Joseph W. Marshall, III DATE DECIDED: 09/13/94 DATE MAILED: 09/21/94 94 -004 Re: Conflict, Public Official, Representative, General Assembly, Lease, Automobile, Legislative Business, Purchase or Lease at Expiration of Lease and Term of Office. This Opinion is issued in response to your advisory request on July 8, 1994. Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a member of the General Assembly who is not seeking re- election from leasing or purchasing the vehicle which he leased for legislative business and for which he received Commonwealth reimbursement. II. FACTUAL BASIS FOR DETERMINATION: You lease a 1991 Buick Park Avenue from Rorer Buick which will have been driven at least 80,000 miles at the expiration of the lease in December, 1994. Except for the last month of the lease which is in its fourth and final year, you have received or expect to receive legislative reimbursement for use of the Buick in connection with legislative business as per the House Rules and Expense Account Guidelines. You are not seeking reelection for office as a Representative Saurman, George E., 94 -004 September 21, 1994 Page 2 from the 151st Legislative District and your current term will expire on November 30, 1994. You seek an advisory as to whether you may obtain an extension of the lease without legislative reimbursement or may purchase the leased vehicle out of personal funds after the lease expires. If you are permitted to continue the lease or purchase the vehicle with your personal funds after retirement, you inquire as to what standards the Ethics Law imposes upon you in connection with either transaction. You prefer to retain the car because you have personally driven and maintained it in a way that gives you confidence in its reliability. Conversely, you have no assurance that another used car of comparable make and year will have been maintained in equally good condition. You have had no discussions with individuals at Rorer Buick regarding this matter and will not do so until you have received this Commission's direction with regard to your questions. You have supplied a photocopy of your lease for the vehicle which is incorporated herein by reference. The document appears to be a standard form lease for a vehicle with the delineation of the vehicle, its options and payment schedules with a grouping of provisions concerning matters of insurance, warranties, maintenance, loss or destruction of the vehicle, excessive wear, and scheduled termination. In addition, clause 10 of the lease provides as follows: "OPTION TO PURCHASE. You will have the option to purchase the vehicle only at the scheduled end of the Lease. To do so, you must notify Lessor at least 15 days before the scheduled end of the Lease. The purchase price will be $7,548.00. You must also pay any official fees and taxes related to the purchase." You have also supplied a photocopy of your memo to the Comptroller dated February 14, 1991 wherein you state: "I will not buy the 1991 Buick Park Avenue at the end of my lease." III. DISCUSSION: As a Representative for the General Assembly, you are a public official as that term is,defined under the Ethics Law, and hence you are subject to the provisions of that law. 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 in the Ethics Law as follows: Saurman, George E., 94 -004 September 21, 1994 Page 3 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. 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 been or will be any transgression thereof but merely to provide a complete response to the question presented. In applying Section 3(a) of the Ethics Law to the instant matter, we are guided by our prior precedent in Cappabianca, Opinion 89- 014 -R, wherein we held that a member of the General Assembly could not select his own travel agency for airline tickets as to travel for legislative business in that the tickets would generate a commission to his agency. We also held that the representative could not rent a portion of realty that he owned for a legislative district office for which he would receive reimbursement from the Commonwealth. The linchpin of our decision in Cappabianca was based upon the use of authority of office by the representative who would select the travel agency and the location of his legislative district office by virtue of his position as an elected representative and receive reimbursement from the Saurman, George E., 94 -004 September 21, 1994 Page 4 Commonwealth of Pennsylvania which would be a pecuniary benefit consisting of the commissions received by his travel agency and the rental received for the legislative district office. We concluded that such activities were not authorized in law and hence would yield a private pecuniary benefit. In the instant matter the question becomes whether such use of authority of office, the right to lease a vehicle for legislative purposes, would result in a private pecuniary benefit. To assist us in that determination, it is necessary to review what is allowable in law as to the lease of such a vehicle. The Rules of the House of Representatives state in part: RULE 14 Members' and Employees' Expenses Such allowable expenses of members may be used for any legislative purpose or function, including but not limited to the following: (1) Travel expense on legislative business. (d) Car rental; voucher and receipt from rental agency but reimbursement not to exceed in any month an amount as may be approved from time to time by the Committee on Rules. Any amount in excess of the said amount shall be paid by the person renting the car. In no event shall other than American manufactured cars be rented. In addition, the Expense Account Guidelines of the House of Representatives provide in part: (g). Members are permitted to be reimbursed by the Chief Clerk from the Incidental Expense Account (001- 042 - 070), or similar accounts under his exclusive control, for car rental payments; for up to 95% of the actual vehicle operating expenses; or for mileage for use of the member's personal or leased vehicle. Payments under the authority of this section to be paid by the Chief Clerk shall not exceed in the aggregate $650 per month per member. Car rental payments may be made for American Manufactured cars only. Said leased vehicle payments plus operating and mileage expenses in excess of $650 per month may be reimbursed from the Members' Accountable Expenses. In the event the rental amount exceeds $650 per month, any excess amount must be paid by the member and cannot be reimbursed from any other account under his or Saurman, George E., 94 -004 September 21, 1994 Page 5 her control. Reimbursement of excess mileage on leased vehicles may be made on leases terminating on or after December 1, 1986, subject to the following limitations: (i) The excess mileage liability must have been actually incurred and due and owing at the time reimbursement is requested due to termination of the vehicle lease either prematurely or by virtue of its term and may not include any charges incurred as a penalty. (ii) Excess mileage reimbursement may only be made for usage within a period during which the lessee of the vehicle was a member. In the event the excess mileage charges are incurred for periods including one(s) during which the lessee was not a House member, reimbursement is limited to that portion of the excess mileage charges determined by multiplying the amount of the charges by a fraction, the numerator of which shall be the actual duration of House membership during the lease period and the denominator of which shall be the actual period the lease was in force. (iii) Reimbursement of excess mileage may not exceed the difference between authorized House maximum reimbursement for vehicle leases and the actual reimbursements made for the period of house membership while the lease was in effect. (iv) If the limitation in (iii) above and Section II(f) applies, the unreimbursed excess mileage for the applicable period may be reimbursed from the member's Accountable Expense account. (h) A member may, in lieu of the provisions outlined above for reimbursement of leased vehicles, elect to be reimbursed on a legislative use basis for up to 95% of the actual expenses of the vehicle in accordance with requirements established by the Comptroller of the House. Members who receive reimbursement for actual operating expenses shall have their session mileage payments deducted from their actual expense reimbursements. The Rules of the House and Expense Account Guidelines do allow for the lease of a vehicle for legislative use subject to certain limitations, one of which is a maximum reimbursement of $650.00 per month for the lease. Saurman, George E., 94 -004 September 21, 1994 Page 6 In the specific facts of this case, we conclude that the purchase of this vehicle at the expiration of your term in office would not be prohibited by the Ethics Law provided that the purchase of the vehicle would be at "arms length" based upon the fair market value of the vehicle at the time of purchase. Turning to the issue of whether you may alternatively enter into another lease of the vehicle after the expiration of the current lease, we find that such a lease would not be prohibited by the Ethics Law provided, once again, that it would be at "arms length" based upon the fair market value of the vehicle at the time of the subsequent lease. See Olasz, Order 851. Our rationale focused upon the requirement in the Ethics Law that there may not be a use of the authority of office to obtain a private pecuniary benefit; if the purchase price or subsequent lease is at arms length and based upon fair market value of the vehicle, as we factually assume, there could be no private pecuniary benefit and hence no conflict under the Ethics Law. Lastly, we must note that you have agreed 1991 memo to the Comptroller of the House purchase this vehicle. Although that issue making our determination under the Ethics Law, matter since it may be an issue for the House 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 is the applicability of the Legislative Code of Conduct. IV. CONCLUSION: A member of the General Assembly is a public official subject to the provisions of the Ethics Law. A representative is not prohibited under Section 3(a) of the Ethics Law from purchasing or entering a subsequent lease of a vehicle that was leased for legislative business, with Commonwealth reimbursement, provided the purchase or subsequent lease is at arms length based upon the fair market value of the vehicle. The propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(10) on this opinion issued to him civil penalties for so acting stated in the request. such. in your February 14, that you would not is not before us in we do reference the of Representatives. , the person who acts in good faith shall not be subject to criminal or provided the material facts are as This letter is a public record and will be made available as Saurman, George E., 94 -004 September 21, 1994 Page 7 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, /e James M. Howle Chair