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HomeMy WebLinkAbout98-010 FaldowskiOPINION OF THE COMMISSION Damon J. Faldowski, Esquire Phillips & Faldowski, P.C. 29 E. Beau St. Washington, PA 15301 Dear Mr. Faldowski: Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Allen M. Kluger Julius Uehlein Louis W. Fryman John J. Bolger Frank M. Brown DATE DECIDED: 10/9/98 DATE MAILED: 10/20/98 98 -010 Re: Conflict; Public Official /Employee; Second Class Township; Supervisor; Partnership; Business; Corporation; Security Services; Mall Expansion; Business with which Associated; Son; Immediate Family; Contract; Transfer. This Opinion is issued in response to your advisory request letters of September 8 and September 10, 1998. I. ISSUE: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a township supervisor in matters related to a mall expansion, where: the supervisor and his son previously co -owned a partnership which submitted a proposal to perform security services at the mall construction site; immediately thereafter, the supervisor conveyed his ownership interest in the business to his son; and the proposal was subsequently accepted. II. FACTUAL BASIS FOR DETERMINATION: As Solicitor for North Franklin Township, Washington County, you request an advisory from the State Ethics Commission on behalf of John S. Petronka, Chairman of the North Franklin Township Board of Supervisors. Chairman Petronka and his son, Christopher J. Petronka, were previously co- owners of a partnership business known as "Sentinel Security & Investigations Services," located in Washington, PA. You state that in March, 1998, it was decided that John Petronka would convey his ownership interest in the business to his son, Christopher. On June 16, 1998, the Internal Revenue Service issued an Employer Identification Number to "Sentinel Security & Investigations, Inc." You have submitted a copy of the Notice from the Internal Revenue Service, which is incorporated herein by reference. Faldowski, 98 -010 October 20, 1998 Page 2 On June 22, 1998, Christopher Petronka filed Articles of Incorporation with the Pennsylvania Department of State for "Sentinel Security & Investigations, Inc." You have submitted a copy of the first page of the Articles of Incorporation, which page is incorporated herein by reference. It is noted that the Articles of Incorporation specify an effective date of July 1, 1998. It is further noted that although you state that the Articles of Incorporation list Christopher J. Petronka as the sole shareholder and officer, such information is not reflected on the single page which you have submitted to this Commission. Christopher Petronka is listed as the sole incorporator. For several years, Crown American Financing Partnership ( "Crown American ") has owned and operated the Franklin Mall in North Franklin Township. You state that due to economic circumstances, it was decided that Crown American would expand the mall. As part of this expansion, Crown American requested bids for daily security services at the construction site. On June 10, 1998, Christopher Petronka submitted a proposal to Crown American to provide such security services. You have submitted a copy of that proposal, which is incorporated herein by reference. It is noted that the said proposal is by "Sentinel Security & Investigation Services" - the partnership that was co -owned by Chairman Petronka - and is signed by Christopher J. Petronka as "Co- Owner." Crown American accepted the aforesaid proposal for security services. A purchase order dated July 13,1998 was sent to Christopher Petronka, confirming the scope of work and terms of payment. You have submitted a copy of the purchase order, which is incorporated herein by reference. The purchase order was directed to "Christopher Petronka B Co- Owner, Sentinel Security Investigation." The purchase order was confirmed by Christopher Petronka with the designation of "owner" of "Sentinel Security." You state that at the time the proposal was accepted, the business entity had changed from a partnership to a corporation, with Christopher Petronka as sole shareholder and officer. Based upon the above, you ask whether John S. Petronka, as a Member and Chairman of the Board of Supervisors of North Franklin Township, may participate and vote in matters related to the expansion of Franklin Mall. By letter dated September 24, 1998, you were notified of the date, time, and location of the public meeting at which your request for an advisory Opinion was to be considered. III. DISCUSSION: It is initially noted that 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Law, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Law violations by a person who is subject to the Ethics Law. To the extent you have inquired as to conduct which has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall be addressed. Faldowski, 98 -010 October 20, 1998 Page 3 As a Supervisor for North Franklin Township, John S. Petronka is a public official as that term is defined in the Public Official and Employee Ethics Law ( "Ethics Law "), and hence he is subject to the provisions of that law. 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. 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. sister. "Immediate family." A parent, spouse, child, brother or "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. In addition, Sections 3(b) and 3(c) of the Ethics Law 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 judgement 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 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities Faldowski, 98 -010 October 20, 1998 Page 4 (j) 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 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 each instance of a conflict, Section 3(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. Section 3(a) of the Ethics Law prohibits a public official /public employee 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. Sentinel Security & Investigations, Inc. is a business with which a member of John S. Petronka's immediate family - specifically, his son - is associated. Given that the business with which Chairman Petronka's son is associated has a contract with Crown American to provide security services as to the mall expansion, Chairman Petronka would have a conflict of interest in matters before the Board of Supervisors of North Franklin Township which would relate to the Franklin Mall expansion. In each instance of a conflict of interest, Chairman Petronka would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. Our decision follows Snyder, Order No. 979 -2, aff'd., Snyder v. State Ethics Commission, 686 A.2d 843 (1996), alloc. den. No. 29 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). In Snyder, supra, which is analogous to the instant case on its facts, we found that a Township Supervisor violated Section 3(a) of the Ethics Law by participating and voting on development issues before the Board of Supervisors when his business had actual or anticipated business relationships as to such developments. Commonwealth Court, in affirming our decision, noted: We are likewise unconvinced by the fact that Snyder's vote was never controlling or necessary for a quorum. Snyder violated the Ethics Law by discussing and voting on issues in which he had a private pecuniary interest, not by affecting the outcome of those votes. Similarly, it is irrelevant whether Snyder improperly used his influence as a Supervisor to gain the Colonial Faldowski, 98 -010 October 20, 1998 Page 5 Commons and Blue Meadow contracts; Snyder may have been able to obtain the jobs even if he were not a Supervisor, but as a Supervisor, he should not have considered and voted on issues involving his personal business dealings. Snyder v. State Ethics Commission, 686 A.2d at 849 (Emphasis added). The fact that Sentinel Security & Investigations, Inc. is now wholly owned by Chairman Petronka's son does not distinguish the instant case from Snyder. The Court's holding and admonition in Snyder apply equally in this case. The Ethics Law's definition of conflict is not limited to merely include business(es) with which the public official himself is associated, but, rather, it extends to include any business with which a member of his immediate family is associated. Thus, the conveyance of John S. Petronka's own ownership interest in the company to his son would have no effect whatsoever upon an application of Section 3(a) of the Ethics Law. You are advised that John S. Petronka would have a conflict and could not participate or vote in matters involving his son's business. Such matters would include the Franklin Mall expansion, just as Snyder's conflicts involved the developments with which he had business dealings. 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 township supervisor is a public official subject to the provisions of the Ethics Law. The supervisor would have a conflict and could not participate or vote in matters involving his son's business. Such matters would include a mall expansion for which the son's business would have a contract to provide services. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. 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. This letter is a public record and will be made available as such. Finally, a party may request the 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 party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). By the Commission, Daneen E. Reese Chair Commissioner Allan M. Kluger did not participate in this matter.