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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