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HomeMy WebLinkAbout00-003 EliscoOPINION OF THE COMMISSION Dennis A. Elisco, Esquire 318 Highland Avenue Signature Hill New Castle, PA 16101 Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Julius Uehlein Louis W. Fryman John J. Bolger Frank M. Brown Susan Mosites Bicket DATE DECIDED: 4/13/2000 DATE MAILED: 4/28/2000 00 -003 Re: Conflict; Public Official /Employee; Member; City Council; Municipal Pension Fund; Vote; Immediate Family Member; School Board; Appeal; Advice of Counsel Dear Mr. Elisco: This Opinion is issued in response to the appeal of Advice of Counsel, 00 -530, which was issued on February 15, 2000. I. ISSUE: Whether the Public Official and Employee Ethics Act presents any prohibition or restrictions upon two city council members as to voting to invest funds through an investment firm and its sales representative who is a school board member when the one council member is an assistant principal and the other council member's spouse is a principal employed by the school district. II. FACTUAL BASIS FOR DETERMINATION: By letters received March 10, 2000, and March 16, 2000, Mark Elisco ( "Elisco ") and Richard L. DeBlasio ( "DeBlasio ") appealed Advice of Counsel, 00 -530, that was issued on February 28, 2000. For administrative economy, both appeals will be addressed as a consolidated appeal. In a letter dated February 24, 2000, by the Solicitor for the City of New Castle Municipal Pension Fund ("Fund"), advice was sought on behalf of DeBlasio and Elisco, members of the New Castle City Council ( "Council "). The five - member Council collectively serves as Trustee to the Fund. Elisco, 00 -003 April 28, 2000 Page 2 Elisco is an assistant principal and DeBlasio's spouse is a principal in the New Castle Area School System (School District). Approximately 25% of the Fund has been invested through Goldman -Sachs and its sales representative, David Domenick ( "Domenick "). Domenick is a member of the New Castle Area School Board ( "School Board ") which employs Elisco and DeBlasio's spouse. Neither Elisco nor DeBlasio's spouse is in a bargaining unit or protected by any union contract. Advice of Counsel, 00 -530, which was issued on February 28, 2000, determined generally that Section 1103(a) of the Ethics Act would prohibit DeBlasio from participating in actions of Council that would result in a financial benefit to his spouse and also prohibit Elisco from participating in actions of Council that would result in a financial benefit to himself. The Advice concluded that, as Council Members, DeBlasio and Elisco would have a conflict of interest with regard to voting to invest funds through Goldman -Sachs and its Sales Representative, Domenick, who is a Member of the School Board. A conflict was found on the basis that DeBlasio and Elisco could exercise authority over matters regarding the Fund, including whether such Fund should be invested through Domenick, who could be financially benefited through investments as to the Fund. In turn, Domenick, as a School Board Member, could exercise authority over School Board matters including those that financially affect DeBlasio's spouse and Elisco. Finally, the Advice concluded that in each instance of a conflict, DeBlasio and Elisco would be required to abstain and observe the disclosure requirements of Section 1103(j) of the Ethics Act. In both of their Appeals, DeBlasio and Elisco object to the Advice on the basis that DeBlasio =s spouse and Elisco were both appointed to their respective positions in the School District before Domenick was elected to the School Board. In addition, DeBlasio and Elisco state that administrators are protected by their tenure and years of service. Given these additional facts, DeBlasio and Elisco contend that Domenick has no control over the employment of either DeBlasio's spouse or Elisco. Finally, Elisco opines that since Domenick's position as an "investor for the city's pension fund" was granted to him before Elisco became a Council Member, the question of whether a conflict of interest exists is more ambiguous." Elisco states that the vote involving Domenick does not involve an increase or decrease in the amount of money that Domenick would invest; it merely will determine that the City's pension will remain exactly where it is. By letter dated March 27, 2000, you were notified of the date, time, and location of the public meeting at which your appeal was to be considered. You, as Counsel for Elisco and DeBlasio, supplied information by letters dated April 6 and 12, 2000. It is argued that your case is distinguishable from Bassi and Woodrinq, infra, the cases cited in the Advice, because Domenick does not supervise or control the employment of Elisco and DeBlasio's spouse. After noting the tenured status of Elisco and DeBlasio's spouse and the inability to terminate without just cause, you argue that they are not at will" employees, as in Bassi and Woodrinq, but are under the supervision and control of the Superintendent's Office. III. DISCUSSION: Our review of this matter is de novo. We shall initially set forth the pertinent provisions of the Ethics Act which are to be applied in this matter. Section 1103(a) of the Ethics Act provides: Section 1103. Restricted activities. Elisco, 00 -003 April 28, 2000 Page 3 (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 are defined in the Ethics Act as follows: Section 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. sister. "Immediate family." A parent, spouse, child, brother or 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: Section 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 Elisco, 00 -003 April 28, 2000 Page 4 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. 65 Pa.C.S. §1103(j). In applying the above provisions of the Ethics Act to the facts which you have submitted, we find that the conclusion reached in the Advice of Counsel is based upon an application of the pertinent provisions of the Ethics Act and the established precedent of this Commission. As Members of Council, DeBlasio and Elisco are public officials subject to the provisions of the Ethics Act. The facts reflect that as to both the Fund Trustees and School Board, we have superior- subordinate relationships between DeBlasio /Elisco and Domenick. As to the Fund, Domenick is in a subordinate position to DeBlasio and Elisco who are in the superior position as Fund Trustees. From the one arena (Fund Trustees) to the other (School Board), the superior- subordinate relationship between DeBlasio (spouse)/ Elisco and Domenick reverses. At the School Board, Domenick as a School Board Member is in the superior position with DeBlasio's spouse and Elisco in the subordinate positions. This type of reciprocal relationship creates a conflict because, by having one person in a superior position to another person who is a subordinate at the one entity, and then having the roles reversed at the other entity creates a situation where each person might look favorably upon matters that financially impact upon the other. This is the genesis of the conflict in this type of scenario. See, Bassi, Opinion 6- 007 -R, and Woodrinq, Opinion 90 -001, which are cited and explained in the Advice of Counsel. However, it is argued that a conflict does not exist because Elisco and DeBlasio's spouse are already employed in School District positions, assistant principal and principal respectively, for which they have tenure. This argument is based upon a misconception of the nature of the conflict. The conflict exists because of the financial power that DeBlasio and Elisco as Fund Trustees may exert over Domenick as to the administration or investments of the Fund which is the same type of power that Domenick as a School Board Member may exert as to financial matters affecting Elisco and DeBlasio's spouse, such as raises or benefits. In this regard, it has been submitted as fact that neither Elisco nor DeBlasio's spouse are in a bargaining unit or are protected by union contract. We reject the argument that Woodrinq and Bassi are distinguishable as involving at will" employees. The basis for the conflict is not so narrow as to merely include employment but broader so as to include other financial matters, such as raises and benefits. The fact that Domenick's position as an investor for the Fund was granted before Elisco became a Council Member is irrelevant for the reasons noted above. As to the argument that the vote involving the investment of funds through Domenick would not result in an increase or decrease in the amount of money invested, such is not dispositive since circumstances could change. This is why these reciprocal relationships create conflicts. Advice of Counsel, 00 -530, is affirmed. Elisco, 00 -003 April 28, 2000 Page 5 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. IV. CONCLUSION: Council members are public officials subject to the provisions of that Act. A council member's spouse is an immediate family member as that term is defined in the Act. Where one council member is an assistant principal and the other council member's spouse is a principal in the school system, the 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 is a school board member in the school district that employs the assistant principal and principal In each instance of conflict, the council members would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Advice of Counsel 00 -530, is affirmed. Pursuant to Section 1107(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. This letter is a public record and will be made available as such. Finally, any person may request this Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty 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, Daneen E. Reese Chair