HomeMy WebLinkAbout95-002 GrahamSTATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
OPINION OF THE COIMISSION
Before: Daneen E. Reese, Chair
Roy W. Wilt
Austin M. Lee
Allan M. Kluger
John R. Showers
Rev. Joseph G. Quinn
Boyd E. Wolff
DATE DECIDED: 02/24/95
DATE MAILED: 03/10/95
95 -002
Donald P. Graham, Esquire
Attorneys at Law
Cranberry Professional Park
501 Smith Drive, Suite 3
Cranberry Township, PA 16066
Re: Conflict, Public Official /Employee, Borough Council Member,
Business with which Associated, Business Client,
Class /Subclass, Appeal of Advice.
Dear Mr. Graham:
This Opinion is issued pursuant to the appeal of Advice of
Counsel, No. 94 -629 issued November 18, 1994.
I. ISSUE:
Whether a borough council member who is employed by a public
utility which provides exclusive electrical service for the borough
would have a conflict of interest under the Public Official and
Employee Ethics Law in matters pertaining to the expansion of a
physical plant of a commercial customer of the utility, where some
of such matters would not be unique to that customer but would
apply to all industrial districts in the borough.
II. FACTUAL BASIS FOR DETERMINATION:
You initially presented this particular matter by your letters
dated October 12, 1994 and October 19, 1994 in which you sought an
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 2
advisory from the State Ethics Commission as to two Harmony Borough
Council Members, Timothy Sapienza and Charles Beighey. Your letter
referenced a prior Advice which had been issued to you (Advice No.
94 -565) regarding various other Harmony Borough officials on issues
of conflicts of interest as to anticipated official action on the
plans of Paragon Trade Brands, Inc. ( "Paragon ") -- a manufacturer
of disposable diapers -- to expand its physical plant located in
Harmony Borough. At that time, you anticipated such official
action to include a site plan review of any proposed plant
expansions; a request to vacate a street; and a request for
rezoning. See, Advice of Counsel No. 94 -565, at 1 -2.
The facts which you subsequently submitted as to Mr. Sapienza
were brief and are set forth verbatim:
I am at this time requesting a second advisory
opinion on this matter concerning another Council member.
Specifically, Timothy Sapienza has been appointed to
replace Anna Kanigowski on the Borough Council.
Following his appointment to that position, a resident
raised a question as to whether Mr. Sapienza had a
conflict of interest in regards to the Paragon Trade
Brands vote. The alleged conflict of interest involves
Mr. Sapienza's employment as a manager at Pennsylvania
Power Company. Pennsylvania Power Company is the
electrical supplier to the Paragon Trade Brands plant.
The resident questioned whether Mr. Sapienza as a manager
of Pennsylvania Power Company has a conflict of interest
in voting on matters involving Paragon. As you will
recall, Council could be required to vote on a request
for an amendment to the Zoning Ordinance, a site plan, a
petition to vacate a street and now, a conditional use
request that has been submitted by Paragon.
I would request you kindly review whether Mr.
Sapienza in his position as a manager of Penn Power
Company, which supplies power to the Paragon Trade Brands
plant, has a conflict of interest.
Letter from Donald P. Graham, Esquire to State Ethics Commission
dated October 12, 1994 at 1.
Advice of Counsel No. 94 -629 was issued to you on November 18,
1994. As to Mr. Sapienza, the Advice concluded -- based upon the
facts which you had submitted -- that Mr. Sapienza would have a
conflict on matters involving Paragon. The Advice noted that
Pennsylvania Power Company (PPC), as Mr. Sapienza's employer, is a
"business with which he is associated" as defined in the Ethics Law
and that Paragon is supplied by PPC and is a client or vendee of
PPC. The Advice cited prior decisions of this Commission in
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 3
Miller, Opinion 89 -024 and Kannebecker, Opinion 92 -010. Those
Opinions held, inter alia, that a public official has a conflict of
interest in matters pertaining to his private employer /business
and /or its clients.
On December 1, 1994, this Commission received your FAX
transmission, whereby you appealed the above Advice. Of the two
Council Members who had posed questions addressed by Advice of
Counsel No. 94 -629, only Mr. Sapienza appealed. The appeal was
only from the portion of Advice of Counsel No. 94 -629 which dealt
with Mr. Sapienza.
The Appeal of Advice stated that PPC is a public utility
authorized by the Public Utility Commission with a service area
that includes all of Harmony Borough. Mr. Sapienza is employed by
PPC as a construction foreman in which capacity he basically
directs repair crews and work crews in performing work on the power
lines.
The Appeal of Advice raised the following arguments:
1. That the Advice of Counsel failed to consider the nature
of the role of Sapienza's employer, PPC, as a
Pennsylvania public utility which supplies no products
other than electricity (or products incidental thereto),
and which provides exclusive electrical service for all
of Harmony Borough;
2. That Miller, Opinion 89 -024, and Kannebecker, Opinion 92-
010 cited in Advice of Counsel No. 94 -629 are
distinguishable because their issues were related to
clients of a public official's business which clients
were a subset of the community, rather than the entire
community;
3. That although it is clear that a public official should
abstain from voting on a matter involving his or her
client, as the official's relationship with that person
is more intimate and preferential than with the general
public, this logic should not apply to PPC because it
provides service to the entire Borough rather than only
a few customers in the Borough;
4. That under various Pennsylvania case law which you cite,
but which you acknowledge is not factually "on point"
with this case, a municipal officer should disqualify
himself from any proceeding in which he has a personal or
pecuniary interest that is immediate and direct, and that
any private pecuniary benefit inuring to PPC as a result
of Sapienza's vote on the Paragon issue would be so
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 4
5. That under the Advice of Counsel, any person working for
a public utility or large corporation could never vote on
any development since the development would necessarily
inure to the benefit of that employer, and that the
intent of the Ethics Law could not have been so broad but
that there must be some direct benefit; and
6. That the Ethics Law was designed to prevent a public
official from voting as to a client but was not designed
to prevent a public official from voting on an issue
which is not unique to a client, and that the
class /subclass exception to the definition of "conflict"
or "conflict of interest" applies in this case because
the issue to be voted upon is not unique to Paragon but
rather applies to all industrial districts in the
Borough.
By letter dated December 1, 1994, the receipt of your appeal
was acknowledged, and by letter dated January 27, 1994, you were
notified of the date, time and location of the public meeting at
which your appeal was to be considered.
III. DISCUSSION:
remote as to preclude categorization of his interest as
immediate or direct;
As a Borough Council Member for Harmony Borough, Pennsylvania,
Mr. Timothy Sapienza (Sapienza) is a public official as that term
is defined under Act 9 of 1989, and he is subject to the provisions
of the Ethics Law.
We must determine whether, as a Borough Council Member who is
employed by the PPC, Sapienza would have a conflict of interest as
to matters pertaining to the plans of Paragon -- a PPC customer --
to expand its physical plant in Harmony Borough, which matters
would include a request for an amendment to the Borough's Zoning
Ordinance, a site plan, a petition to vacate a street, and a
conditional use request.
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.
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 5
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.
"Business." Any corporation,
partnership, sole proprietorship, firm,
enterprise, franchise, association,
organization, self - employed individual,
holding company, joint stock company,
receivership, trust or any legal entity
organized for profit.
"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.
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
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 6
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.
In applying the above provisions of the Ethics Law to the
facts which you submitted in your original request for an advisory,
Advice of Counsel No. 94 -629 concluded that a conflict of interest
would exist for Mr. Sapienza in matters pertaining to Paragon. We
shall now address the arguments which you have raised in your
appeal.
First, as for the nature of PPC as a public utility which
supplies only electricity and products incidental thereto and which
provides exclusive electrical service for all of Harmony Borough,
there are no exceptions to the definitions of "business," "business
with which he is associated" or "conflict or conflict of interest"
based upon such factors, and we may not legislate such exceptions
for you.
As for the second and third arguments noted above,although Mr.
Sapienza's employer is a public utility which serves the entire
Borough and does not have to compete for clients, there are other
aspects to the element of a private pecuniary benefit than currying
favor with clients. Quite simply, in a case such as this, a public
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 7
utility which supplies electricity would receive a private
pecuniary benefit from the plant expansion of a commercial customer
through a greater use of electricity by the commercial customer.
We also must reject your fourth argument. You argue that
there would be no violation of Section 3(a) of the Ethics Law in
this case because you believe there would not be an immediate and
direct private pecuniary benefit to PPC. As noted above, we
believe that the approval of the proposed plant expansion would
result in a private pecuniary benefit to PPC through an increased
use of electricity by Paragon. But furthermore, the case law which
you cite as requiring an "immediate" and "direct" personal or
pecuniary interest did not interpret the Ethics Law. As we stated
in Kannebecker, Opinion 92 -010:
. . . we reject the assertion that a conflict only occurs
when the pecuniary benefit is immediate or direct. The
foregoing common law rule has not been adopted by the
General Assembly as to the statutory definition of
conflict contained in Section 3 (a) of the Ethics Law, the
latter definition being the one we must follow. . . . the
General Assembly would have used the language direct or
immediate pecuniary interest if that was indeed the
intent.
Id. at 5.
Your fifth argument, for the most part, merely repeats and
combines various of your other arguments addressed above and below.
However, you have also argued that the interpretation of the Advice
of Counsel would result in repeated conflicts of interest for a
public official employed by a public utility or large corporation.
Even if that were so, we would not view the restrictions of Section
3(a) any differently. The fact that a public official might have
repeated conflicts of interest as a result of his personal
circumstances would not compel or enable us to allow him to
participate despite his conflicts.
Your sixth argument has some merit. We note that it was not
until you appealed the Advice that you mentioned certain additional
facts and argued the applicability of the class /subclass exclusion
to the definition of "conflict" or "conflict of interest." Your
letter of Appeal stated -- for the first time -- that "The issue to
be voted upon is not unique to Paragon, applying to all industrial
districts in the Borough." (Letter from Donald P. Graham to State
Ethics Commission dated December 1, 1994 at 2).
You have not provided all of the material facts to enable us
to determine, item by item, which matters would fall within the
exclusion. Therefore, we may only give general guidance. As to
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 8
any given matter, for the exclusion to apply, two criteria must be
met: (1) Paragon must be a member of a true subclass consisting of
more than one member; and (2) Paragon cannot be affected in anyway
differently than the other members of the subclass. See, Van
Rensler, Opinion 90 -017. Based upon your affirmative
representations and the additional facts submitted by your letter
of appeal, we conclude that the class /subclass exclusion may indeed
apply to some matters related to the proposed Paragon expansion.
For example, the facts are not before us but it may very well be
that the proposed amendment to the Zoning Ordinance would meet the
requirements for applying the class /subclass exclusion. On the
other hand, we do not believe -- nor can we imagine how you could
argue -- that the exception would apply to a site plan.
Without all of the material facts pertaining to each proposed
official action, our ability to guide you is limited to the above
general parameters. Pursuant to Sections 7(10) and 7(11) of the
Ethics Law, 65 P.S. § §407(10), (11), advisories are issued to the
requestor based upon the facts which the requestor has submitted.
In issuing the advisory based upon the facts which the requestor
has submitted, the Commission does not engage in an independent
investigation of the facts, nor does it speculate as to facts which
have not been submitted. It is the burden of the requestor to
truthfully disclose all of the material facts relevant to the
inquiry. 65 P.S. § §407(10), (11). An advisory only affords a
defense to the extent the requestor has truthfully disclosed all of
the material facts.
We would also add that had your initial advisory request
sufficiently set forth the material facts in this case, a great
deal of time and effort could have been saved by all concerned.
Swick /Arran, Opinion 91 -006.
Advice of Counsel No. 94 -629 is reversed as to those matters
where the class /subclass exclusion would apply. Advice of Counsel
No. 94 -629 is affirmed as to all other matters involving the
proposed Paragon expansion.
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.
IV. CONCLUSION:
A borough council member is a "public official" subject to the
provisions of the Ethics Law. A borough council member who is
employed by a public utility would have a conflict of interest as
to matters involving the proposed plant expansion of a commercial
Graham, Donald P., Esquire, 95 -002
March 10, 1995
Page 9
customer of the utility, except as to those matters where the
class /subclass exclusion to the definition of "conflict or conflict
of interest" would apply. Advice of Counsel No. 94 -629 is affirmed
in part and reversed in part.
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,
et
Daneen E. Reese
Chair