HomeMy WebLinkAbout00-616 ConfidentialADVICE OF COUNSEL
October 17, 2000
00 -616
Re: Conflict; Public Official /Employee; Township Supervisor; Immediate Family; Son;
Wife; Business With Which Associated; Lease; Sale of Real Estate; Developer;
Subdivision /Land Development; Rezoning Application; Conditional Use; Vote.
This responds to your letter of September 11, 2000 by which you requested a
confidential advisory from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Pa. .S. §1101 et seq., presents any prohibition or restrictions upon a township
supervisor as to matters relating to a certain parcel or a certain developer when: 1) the
developer has an agreement to purchase a tract of land which includes the parcel, and
the supervisor's son wants to lease and eventually buy that parcel; (2) the parcel is
adjacent to land owned by the supervisor, and if leased /bought by the son, would be
used for additional parking for a business operated by the supervisor and his son; (3) the
developer's permission would be required for the lease of such parcel to occur pending
the developer's purchase of the tract; and (4) the developer will seek to subdivide the
tract and may, in the future, convey title to the said parcel to the supervisor's son.
Facts: As Solicitor to Township A ( "the Township ") in County B, Pennsylvania, you
seek an advisory on behalf of C, a Township Supervisor. You have submitted facts
which may be fairly summarized as follows.
C and his wife own land situate on Route D in the Township on which C and his
adult son operate an E business. At the present time, C's son is interested in leasing a
certain three± acre parcel ( "the Parcel ") which is adjacent to the E business, to use for
additional parking. Ultimately, C's son would like to purchase the Parcel in fee.
The Parcel is part of a larger tract of land ( "the Tract ") which is subject to an
agreement of sale between F, the seller, and G, the purchaser. G is a large real estate
developer.
Because F is the legal owner of the Parcel, any lease at the present time would be
with F. However, you state that since G is the equitable owner, G would have to consent
to any such lease. At this time, G would be willing to do so.
Confidential Advice, 00 -616
October 17, 2000
Page 2
When G takes title to the Tract, it will then be in a position to convey title of the
Parcel to C's son. G intends to subdivide the Tract into four parcels, one of which would
be the Parcel.
In conjunction with the subdivision plan, G will submit a rezoning application to,
inter alia, facilitate the construction of a new municipal sewer plant, Township
recreational lands, and commercial uses. You state that it is your understanding that G's
said rezoning application will not include the Parcel, since the Parcel is already zoned for
commercial use.
G is also involved in other projects in the Township including the following:
1. The development of a 200 -unit single - family subdivision west of the Tract,
which has already received final plan approval from the Board of Supervisors. You state
that the Board must still approve the escrow submission and may from time to time be
required to take action with regard to other matters associated with that development.
2. A conditional use application for a portion of another large property that will
eventually require subdivision and land development approvals from the Board.
3. A large planned residential development ( "PRD ") that will be jointly
developed by G and three other developers, and that will be the subject of future
hearings and approvals before the Township Board of Supervisors.
You state that neither G nor C wish to enter into any arrangement which would
subject either party to criticism or allegations of impropriety, or which would possibly
require C to recuse himself from deliberating and voting on matters affecting G and its
various property interests in the Township. You ask for an advisory as to whether C may
participate in Board actions concerning any of G's projects described above.
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 which the requester has submitted. In issuing the advisory based upon
the facts which the requester 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 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 a Township Supervisor for Township A, C is a "public official" as that term is
defined in the Ethics Act, and hence, C is subject to the provisions of that Act.
Section 1103(a) of the Ethics Act provides as follows:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
65 Pa.C.S. §1103(a).
The following terms pertaining to Section 1103(a) are defined in the Ethics Act as
follows:
§ 1102. Definitions
Confidential Advice, 00 -616
October 17, 2000
Page 3
"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.
In addition, Sections 1103(b) and 1103(c) of the Ethics Act 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 judgment 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.
Section 1103(j) of the Ethics Act provides as follows:
§ 1103. Restricted activities
(j) 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
Confidential Advice, 00 -616
October 17, 2000
Page 4
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(j).
In each instance of a conflict, Section 1103(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 the event that the required abstention results in the inability of the governmental
body to take action because a majority is unattainable due to the abstention(s) from
conflict under the Ethics Act, then voting is permissible provided the disclosure
requirements noted above are followed. See, Mlakar, Advice 91- 523 -S.
The above provisions of the Ethics Act shall now be applied to your inquiry.
Subject to certain exceptions delineated in the definition of "conflict" or "conflict of
interest" above, it is a conflict of interest under Section 1103(a) of the Ethics Act for a
public official /public employee to use 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. In each instance of a conflict of interest, the public official /public employee
would be required to abstain fully and to fully satisfy the disclosure requirements of
Section 1103(j) set forth above.
The term immediate family is defined to include a parent, spouse, child, brother, or
sister. Because C's wife and son are within the familial relationships delineated above,
they are both members of C's immediate family. The E business is a business with which
C and his son are associated.
Pursuant to Section 1103(a) of the Ethics Act, C would be prohibited from using
the authority of his office as a Township Supervisor or confidential information received
by being in that position for the private pecuniary benefit of himself, his wife or son, or the
E business. If a matter would come before the Township Board of Supervisors that
would result in a financial gain to C, his wife or son, or the E business, C would have a
conflict of interest under the Ethics Act and would be required to abstain fully and to
satisfy the disclosure requirements of Section 1103(j) of the Ethics Act as set forth above.
Turning to the specific matters that would be before the Board of Supervisors
involving the Parcel, the Tract, or G, you are advised as follows.
C would have a conflict of interest with regard to G's application to subdivide the
Tract which includes the Parcel. Such subdivision would advance the plans of C's son to
lease and ultimately purchase the Parcel to be used for additional parking for the
aforesaid E business. The lease /acquisition of the Parcel would financially benefit C, his
son, and the E business. The fact that the lease has not yet been signed is of no legal
consequence. A conflict of interest may be based upon an existing financial relationship
or a financial relationship which can be reasonably and legitimately anticipated. Amato,
Confidential Advice, 00 -616
October 17, 2000
Page 5
Opinion 89 -002; Garner, Opinion 93 -004. Because C would have a conflict of interest as
to the subdivision of the Tract, he would be required to abstain fully from participation,
including, but not limited to, taking part in discussions, votes, lobbying for a particular
result, or any other use of authority of office. See, Juliante, Order 809. Further, C would
be required to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act.
As for G's other projects in the Township, including the rezoning of the Tract and
the other projects enumerated in the Facts above as items 1 -3, based upon the submitted
facts, C would have a conflict of interest under the Ethics Act as to all such matters. This
conclusion is based upon the State Ethics Commission's rulings in Bassi, Opinion No. 86-
007-R, Woodring, Opinion No. 90 -001, and Elisco, Opinion 00 -003.
In Bassi, Opinion No. 86- 007 -R, the State Ethics Commission held, inter alia, that
a County ommissioner (Edward Paluso) could not enter into a lease with a municipal
authority, where one of the members of the authority (Norman Carson) was a county
employee directly responsible to the commissioners of the county, unless the execution
of the lease was accomplished after an open and public process, with the authority
member abstaining from participating in the review and award of said lease, and the
county commissioner abstaining from participating in any matter relating to the authority
member in his position as a county employee. The Commission stated, inter alia:
. we cannot ignore the fact that Mr. Carson is an authority member and
has influence and control over authority decisions. In this respect, Mr.
Carson, by voting on the final adoption of a lease, would be voting on a
matter directly related to his employer. Even though that employer is
another governmental body, we have held, in the past, that a public official
may not vote or participate in a matter if it somehow relates to a financial
interest which he may have. See, Welz, 86 -001. In the instant situation, Mr.
Carson would be called upon to determine the advisability of renting
property for the authority. The property which they are seeking to rent is
owned by the individual or one of the individuals who currently supervises
him and controls his public employment with the county. As a result of this,
Mr. Carson, as an authority member, should abstain from participating in
any matter relating to this particular lease.
See, Bassi, 86 -007 at 3. The Commission further stated:
Mr. Paluso as a county commissioner, is, in part, responsible for the
general supervision of Mr. Carson. Mr. Carson, on the other hand, is an
authority member in a position to grant Mr. Paluso a lease which results in
Mr. Paluso receiving a financial gain. It may be difficult for the public to
perceive how Mr. Paluso's actions as a county official, would not somehow
be influenced by this potential leasing arrangement. It may be argued that
Mr. Paluso, in dealing with Mr. Carson, to date, has done so in order to
effect the favorable outcome of this lease. Additionally, it could be argued
that Mr. Carson voted in favor of the lease in order to advance his position
as a full -time county employee. The above factual scenarios, while
hypothetical in nature, nonetheless create the types of conflicts of interest
that are to be addressed by this Commission.
Id. at 4.
In Woodrin , Opinion No. 90 -001, the State Ethics Commission reviewed a similar
situation. Jesse Woodring, Chairman of the Sunbury Redevelopment Authority, had
applied to the City for a rehabilitation grant through the Federal Rental Rehabilitation
Program (hereinafter, the "Program "). Kenneth Pick, who was employed as the
Executive Director of the Redevelopment Authority (chaired by Woodring) also served as
the Community Development Coordinator for Sunbury. In the latter capacity, Pick was
Confidential Advice, 00 -616
October 17, 2000
Page 6
administrator in charge of the Program for the City. Pick's functions included
administering the Program, reviewing all applications, and determining eligibility. The
Commission stated:
. we are concerned that Mr. Pick, who is an employee of the
Redevelopment Authority of which you are Chairman, has the duty of
reviewing all applications and determining eligibility in his capacity as
Community Development Coordinator for the city. In particular, the
potential exists, given the employer - employee relationship between the
Redevelopment Authority and Mr. Pick, that your application might be
reviewed in a more favorable light than other applications. To forestall such
a situation, you must not participate or take any action as to Mr. Pick if your
application is approved and you receive benefits. Bassi, Opinion 86 -007.
In addition, Section 3(j) of the Ethics Law would require you to publicly note
that you would have a conflict as to any matter involving Mr. Pick. In
addition, you must file a written memorandum to that effect with the person
responsible for recording the minutes.
Woodrinq, Opinion No. 90 -001 at 6.
In Elisco, Opinion 00 -003, the Commission similarly held that where a City
Council Member was an Assistant Principal and another City Council Member's spouse
was a Principal in a certain School District, both Council Members would have a conflict
of interest with regard to voting to invest pension funds through an investment company
and its sales representative who was a School Director in that School District.
As was the case in the rulings cited above, the facts which you have submitted
reflect that in his public position, C exercises authority over matters before the Township
Board of Supervisors involving G. In its private capacity, G is in a position to control
whether the Parcel is leased or sold to C's son. Therefore, for the reasons enunciated in
Bassi, Woodrinq, and Elisco, supra, C would have a conflict of interest pursuant to
ection 1103(a) of the Ethics Act in all of the aforesaid matters pertaining to G, including
the rezoning of the tract and the matters itemized in the Facts above as items 1 -3. For
these matters not directly pertaining to the Parcel, C's conflict of interest would continue
to exist until such time as ownership of the Parcel would be conveyed to C's son.
In each instance of a conflict of interest, C would be required to abstain from
participation and to fully satisfy the disclosure requirements of Section 1103(j) as set forth
above.
The propriety of the proposed conduct has only been addressed under the Ethics
Act; the applicability of any other statute, code, ordinance, regulation or other code of
conduct other than the Ethics Act has not been considered in that they do not involve an
interpretation of the Ethics Act. Specifically not addressed herein is the applicability of
the Second Class Township Code.
Conclusion: As a Township Supervisor for Township A ( "the Township "), C is a
public official subject to the provisions of the Public Official and Employee Ethics Act
( "Ethics Act "), 65 Pa.C.S. §1101 et seq. C's wife and son are members of C's immediate
family. The E business operated by C and his son is a business with which C and his
son are associated. Pursuant to Section 1103(a) of the Ethics Act, C would be prohibited
from using the authority of his office as a Township Supervisor or confidential information
received by being in that position for the private pecuniary benefit of himself, his wife or
son, or the aforesaid E business.
Under the submitted facts that: (1) G, a large real estate developer, is party to a
sales agreement by which it plans to purchase a certain tract of land ( "the Tract ") which
Confidential Advice, 00 -616
October 17, 2000
Page 7
includes a certain parcel ( "the Parcel ") adjacent to property owned by C and his wife; (2)
C's son wants to lease and ultimately purchase the Parcel to be used for additional
parking for the E business operated by C and his son; (3) G's permission would be
required for the lease of such parcel to occur pending its purchase of the Tract; and (4) G
will seek to subdivide the Tract and may, in the future, convey title to the Parcel to C's
son, C would have a conflict of interest under the Ethics Act as to G's application to
subdivide the Tract.
C would also have a conflict of interest pursuant to Section 1103(a) of the Ethics
Act as to the rezoning of the Tract and in all of the other matters pertaining to G itemized
in the Facts above as items 1 -3. For these matters not directly pertaining to the Parcel,
C's conflict of interest would continue to exist until such time as ownership of the Parcel
would be conveyed to C's son.
In each instance of a conflict, C would be required to abstain fully and to fully
satisfy the disclosure requirements of Section 1103(j) of the Ethics Act set forth above.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Pursuant to Section 1107(11), 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 §13.20. 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,
Vincent J. Dopko
Chief Counsel