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HomeMy WebLinkAbout21-506 BiaPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL February 17, 2021 To the Requester: The Honorable Joseph Bia II Mayor of the City of Arnold Dear Mayor Bia: FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov 21-506 This responds to your letter dated January 12, 2021, received January 21, 2021, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"). Issue: Would the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et seq., prohibit you from serving in a compensated position as a Member of the Board of Directors of a startup company that has a leasing agreement with the City of Arnold ("City") for space in the City's municipal building? Brief Answer. NO. The Ethics Act would not prohibit you from serving as a Member of the Board of Directors; however, once you become a Member of the Board, the company is then a business with which you are associated, and as Mayor you would have a conflict of interest in any matter that would financially impact you or the company. Facts: You request an advisory from the Commission based upon submitted fact that may be fairly summarized as follows: Bia, 21-506 Feebruary 17, 2021 Page 2 You are the Mayor of the City of Arnold. A startup company ("Company") that is moving into the City has a two-year leasing agreement with the City for space in the City's municipal building while the Company's facilities are under construction. As City Mayor, you voted in favor of the lease agreement. The Company is interested in purchasing property that does not belong to the City. The Company's business model does not seek any funding from the City. The Chief Executive Officer of the Company has approached you with an opportunity to serve in a compensated position as a Member of the Board of Directors of the Company. You ask whether the Ethics Act would prohibit you from serving in a compensated position as a Member of the Company's Board of Directors. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. As the City Mayor, you are a public official subject to the provisions of the Ethics Sections 1103(a) and 11030) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. -- No public official or public employee shall engage in conduct that constitutes a conflict of interest. 0) Voting conflict. -- 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 Bia, 21-506 Feebruary 17, 2021 Page 3 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. 65 Pa.C.S. §§ 1103(a), 0). The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. 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. The term 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. 65 Pa.C.S. § 1102. Bia, 21-506 Feebruary 17, 2021 Page 4 Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office/employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official/public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. Section 1103(a) of the Ethics Act would not prohibit you from serving in a compensated position as a Member of the Company Board of Directors. However, once you become a Member of the Company's Board of Directors, the Company would be considered a business with which you are associated and pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest in your capacity as the City Mayor in matters that would financially impact you or the Company. In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Conclusion: Based upon the submitted facts, you are advised as follows. As the City Mayor, you are a public official subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et seq. Section 1103(a) of the Ethics Act would not prohibit you from serving in a compensated position as a Member of the Company Board of Directors. However, once you become a Member of the Company Board of Directors, the Company is a business with which you are associated. Pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest in your capacity as the City Mayor in matters that would financially impact you or the Company. Bia, 21-506 Feebruary 17, 2021 Page 5 In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. The propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717-787-0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, rian D. a isin Chief Cou el