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HomeMy WebLinkAbout99-001 McMasterOPINION OF THE COMMISSION James M. McMaster, Esquire Smith & McMaster, P.C. 301 South State Street P.O. Box 39 Newtown, PA 18940 -0039 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: 2/26/99 DATE MAILED: 3/10/99 99 -001 Re: Conflict, Public Official /Employee, Township, Supervisor, Development, President, Preservation Foundation, Non - Profit, Business With Which Associated, Township Funding; Appeal of Advice. Dear Mr. McMaster: This Opinion is issued pursuant to the appeal of Titterton, Advice of Counsel, No. 97- 638 which was issued on December 23, 1997. I. ISSUE: Whether the Public Official and Employee Ethics Act presents any prohibition or restrictions upon a township supervisor who is the president of an entity which initially sought to participate in a township fund but through a subsequent restructuring will not participate, so that such action will be taken by another entity in which the supervisor has no interest. II. FACTUAL BASIS FOR DETERMINATION: By a faxed transmission received January 21, 1998, you, as Counsel for John D. Titterton ( "Titterton "), timely appealed Titterton, Advice of Counsel No. 97 -638, issued December 23, 1997. The following represents the chronology of facts and events in this case, which began with Titterton's initial letter requesting an advisory, wherein he provided the following facts. Titterton was elected as a Township Supervisor for Upper Makefield Township in Bucks County. Titterton took office on January 1, 1998 on the Upper Makefield Township Board of Supervisors, which is a five - member Board. In a private capacity, Titterton has served for the past two years as President of a local non - profit citizens' group, the Washington Crossing Preservation Foundation ( "WCPF "). The McMaster/Titterton, 99 -001 March 10, 1999 Page 2 WCPF has been active in opposing the development of a 22 -acre tract of vacant commercial land in the Village of Washington Crossing in Upper Makefield Township. The WCPF reached an agreement with the developer whereby the developer would sell his interest in the land to the WCPF. The WCPF planned to approach several private and public funding sources in order to raise the funds needed to acquire this land. One of the public funding sources which the WCPF planned to approach is Upper Makefield Township. Upper Makefield Township recently created a fund to acquire tracts of land for open space preservation. In early 1998, the WCPF planned to approach the Township with a request to participate in that funding. Titterton would have been a Member of the Board if the WCPF made its request for open space funds. Titterton would not have made the WCPF's presentation to the Board. Titterton stated that he campaigned against the development, and intends to vote in a manner consistent with that position if he does not have a conflict of interest under the Ethics Act. Titterton stated that if the Board would approve the use of Township funds for this transaction, neither he nor any of his relations would gain financially, either directly or indirectly. Titterton lives at least a mile away from the tract of land in question and none of his relatives own property in that area. Titterton stated that neither his property value nor the property values of any of his relatives would be affected by this transaction. Titterton also stated that he has no business dealings whatsoever with any party directly or indirectly connected with this transaction. Advice of Counsel, No. 97 -638 was issued which noted that, upon taking office as a Supervisor for Upper Makefield Township, Titterton would be a public official subject to the restrictions of the Public Official and Employee Ethics Law (Act 9 of 1989). The Advice of Counsel outlined the restrictions of Sections 3(a), 3(f) and 3(j) of the Ethics Law. The Advice concluded that the WCPF is a business with which Titterton (as its President) is associated, and that in his capacity as a Township Supervisor, Titterton would have a conflict of interest as to the Township's fund for acquiring tracts of land for open space preservation, not only as to the WCPF's request to participate, but also as to such requests from competitors for such funds. The Advice of Counsel stated that in each instance of a conflict of interest, Titterton would be required to abstain from participation and to full satisfy the disclosure requirements of Section 3(j). Specifically, the Advice of Counsel cautioned that Titterton must use no confidential information and must play no role in: the establishment of the program's criteria; the implementation of the program's criteria for selecting applicants; the selection or review of applicants; and /or the administration of the program, until the WCPF's participation as to the fund would be fully completed. He was further advised that the requirements of Section 3(f) of the Ethics Law, to the extent applicable, would have to be observed. The letter by which you, as Titterton's attorney, appealed the Advice of Counsel did not delineate the nature of the objection to the Advice of Counsel. Rather, you simply indicated that in your opinion, the Advice was not correct under the Ethics Law and that Titterton was exercising his right to appeal. By letter dated April 16, 1998, you were notified of the date, time and location of the public meeting at which the appeal was to be considered. At the public meeting on May 1, 1998, you appeared and offered the following commentary. The WCPF is a 501(c)(3) organization that is devoted to public purposes. The property at issue is closely affiliated with George Washington's historic crossing of the Delaware during the Revolutionary War. The WCPF is attempting to save the property from being developed as a shopping center. Titterton has led the battle against the developer for the past three years. McMaster/Titterton, 99 -001 March 10, 1999 Page 3 In October, 1997, the developer entered into an option agreement that would enable WCPF or its assignee to purchase the land. Per the agreement, the WCPF has 18 months to obtain the financing. Titterton states that the WCPF has "accomplished the impossible" in getting the developer to agree to sell the land. At this juncture, Titterton is engaged in fundraising, in both the public and private arena. Titterton states that he has been making it very clear that there is no connection between such contributions and other issues before the Board of Supervisors. Before Titterton became a Township Supervisor, the voters of Upper Makefield Township voted to have an open space fund, and they voted for a bond issue. Subsequently, Titterton ran for office as a Township Supervisor. You state that it was clear to all that Titterton was one of the open space advocates, and in fact, his position on that issue was one of his platforms. He was elected by the voters 4 -1. You contend that the open space preservation is clearly what the citizens wanted, and that the Advice of Counsel would essentially prohibit Titterton from voting as to that main issue because he was involved in the community organization that brought the issue to the forefront. You believe that such would neither be intended nor required by the Ethics Law. You note that a possible solution to the problem would be for Titterton to resign as President of the WCPF and then vote. You state that if this Commission would require Titterton to do so, it would be defeating one of the purposes of the Ethics Law and what you believe to be "common sense." The Township's fund for open space preservation has existed for about 12 years. Decisions as to the use of the fund are to be made by the Board of Supervisors, based upon recommendations of the "Environmental Advisory Council," which reviews proposed properties based upon established criteria. Several specific properties have already been considered under the program, but no monies have yet been spent. You acknowledge that there is competition for the Township funds. However, you stress that the agreement that the WCPF has with the developer is to purchase the property for use as public open space in perpetuity. No development whatsoever could occur on this property, nor would this space be used by the WCPF for some purpose of its own. You contend that the WCPF would not receive any benefit in this matter other than the benefit that every other citizen of Upper Makefield Township would receive. In this regard, you invoke one of the exceptions in the definition of conflict of interest, 65 P.S. §402/(65 Pa.C.S. 1102). Specifically, you contend that there would not be a conflict of interest because the WCPF is a member of the general public, and would receive no greater benefit in this matter than any other member of the general public. Moreover, you state that neither Titterton nor his family would receive any economic benefit in this matter. You note that the stated purpose of the Ethics Law (65 P.S. §401/65 Pa.C.S. §1101) recognizes the importance of citizen officials maintaining their contacts with their occupations or professions. You contend that everyone recognizes that civic organizations are not where conflicts of interest arise, and that is why the Statement of Financial Interests form does not require disclosure of civic organizations. You contend that if the Advice of Counsel is upheld, the stated purpose of the Ethics Law will be controverted. You assert that if the definition of "business" in the Ethics Law would be interpreted to include charitable organizations, a Township Supervisor would not be allowed to vote on the general budget if any portion of it would go to a civic organization on which he would serve, such as a fire company, little league, and the like. You do not believe that such is what the Ethics Law says or is intended to accomplish. McMaster/Titterton, 99 -001 March 10, 1999 Page 4 With regard to how this transaction would be structured, Titterton states that the original plan was to convey the land to the Department of Conservation and Natural Resources ( "DCNR "). According to Titterton, the WCPF was negotiating with DCNR to have the property incorporated into the Delaware Canal State Park. You state that at this time, the most likely title holder for the land would be the Delaware Canal State Park, but it could alternatively be Upper Makefield Township, Bucks County, or the Historical Museum Commission, which owns the adjoining Washington Crossing State Park. Titterton characterizes the WCPF as a "conduit" in this transaction. You, as counsel for Titterton, state that in the way the transaction is likely to happen, the WCPF would not receive any money, but rather, the money would go to the developer without passing through the hands of the WCPF. However, you continue to maintain that even if the WCPF would receive the money in order to pass it on to the developer, the WCPF would not be receiving any private pecuniary benefit from that money, but rather would be using it to purchase land that would immediately become public open space. Specifically, it is your view that any pecuniary benefit would not be "private" since you believe it would flow to the public generally. At the public meeting on May 1, 1998, both you and Titterton were receptive to a restructuring of the acquisition so as to satisfy the requirements of the Ethics Act in terms of a conflict by Titterton. Since the transaction had not been finalized at that time, we proposed and you agreed to continue this matter generally, pending the formulation of such a plan. In your letter of January 13, 1999, you have submitted the following additional information. In consultation with various state officials in connection with applications for grants to help fund the purchase of the property, and following contact with several groups from a list provided by DCNR of organizations prequalified to apply for state grants for land preservation, the WCPF's interest in the agreement concerning the purchase of the 22 -acre site has been assigned to the Wildlands Conservancy, Inc. ( "WCI "). Neither Titterton, nor any member of his family, are or have been an employee, officer, director, or member of WCI. WCPF now is no longer an applicant for any type of funding from Upper Makefield Township or for any local, county, or state grants. The proposal to acquire the 22 -acre tract of land at issue calls for WCI to obtain the funding for the purchase through various local, county, state, and possibly federal grant programs. Subject to certain conservation easements or restrictions, the title to the property would be conveyed to the Commonwealth for inclusion in Delaware Canal State Park. You have enclosed copies of the cover sheets for two state grant programs to which WCI has applied and a copy of the letter you sent to the Township advising of the change in the applicant for the local open space funds. It is your understanding, based upon the Commission's executive session deliberation at its May 1, 1998 meeting which you attended, that Titterton "should now be free to participate in and vote on issues related to Upper Makefield Township's Open Space Plan and Fund, and in particular he can vote on any application for funds requested by Wildlands Conservancy." You also believe that the changed circumstances may well render ... [your] appeal moot." Because circumstances have changed after the original Advice of Counsel, you would be willing to accept a letter from the Commission, without the need for a formal decision on your previous appeal. You would be willing to withdraw your appeal upon receipt of such a letter. You ask that, if it is necessary for the entire issue to be addressed by the Commission, that the Commission do so as soon as possible, given the time limits for various grant programs and the need for Upper Makefield Township to make a decision on this project in the very near future. The issue has been included on the agenda for the January 20, 1999 meeting of the Township Board of Supervisors. You state: "My client was elected in large part based on his commitment to preserve open space in general and this parcel in particular and McMaster/Titterton, 99 -001 March 10, 1999 Page 5 he definitely wants to participate in the discussions and decision the Township will be making." You appeared at the public meeting of this Commission on February 26, 1999 and provided the following additional information. At a January 20, 1999 public meeting of the Board of Supervisors, without Titterton participating, a vote was taken which approved an allocation of $500,000 of Township open space funds for the project. On or about February 23, 1999, WCI was notified by the Department of Conservation and Natural Resources (DCNR) that WCI would receive a grant of $750,000 under the Keystone Program for the purchase of the property. The Delaware Regional Planning Commission on February 25, 1999 recommended and forwarded to the state advisory board a grant request through the transportation department, which is a T21 federal program for historical projects. One other application will involve the Township, which is a matching grant that the Bucks County Commissioners have available for municipalities for local land acquisition for open space. That particular application will be before the Township Board of Supervisors this month. All of the grants will go to WCI which will purchase the property from the developer and then deed the property to DCNR for addition to the Delaware State Park. You conclude by stating that neither Titterton nor any member of his family has any interest in WCI. Our review of this matter is de novo. III. DISCUSSION: As a Township Supervisor for Upper Makefield Township, John D. Titterton ( "Titterton ") is a "public official" subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq. /Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101 et seq. Section 1103(a) of the Ethics Act provides as follows: Section 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 elements of a conflict of interest are set forth in the statutory definition which provides 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. 65 Pa.C.S. §1102. McMaster/Titterton, 99 -001 March 10, 1999 Page 6 The following terms that are pertinent to Section 1103(a) are defined in the Ethics Act as follows: Section 1102. Definitions. "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. Section 1103(f) of the Ethics Act provides as follows: Section 1103. Restricted activities. (f) Contract. - -No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. §1103(f). The terms "contract" and "person" which are pertinent to Section 1103(f) are defined in the Ethics Act as follows: Section 1102. Definitions. "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, McMaster/Titterton, 99 -001 March 10, 1999 Page 7 reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. 65 Pa.C.S. §1102. Finally, 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 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 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. In applying the above provisions of the Ethics Act to the circumstances which you have submitted, pursuant to Section 1103(a) of the Ethics Act, 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. In reviewing the Advice, the WCPF is a business with which Titterton is associated. The Advice of Counsel correctly noted that this Commission considers the definition of the McMaster/Titterton, 99 -001 March 10, 1999 Page 8 term "business" to be very broad, Novak, Opinion No. 91 -009, and that the WCPF would at least be an "organization" within that definition so as to qualify it as a "business." The Advice of Counsel was also correct in its conclusion that the fact that the WCPF is non - profit would not remove it from consideration as a "business." In Soltis - Sporano, Order No. 1045, we specifically held that the use of the word "or" toward the end of the definition of "business" is disjunctive, and that the repeated use of the word "any" precludes any interpretation that the final phrase "legal entity organized for profit" modifies a preceding form of entity in the definition. Id. at 31 (Citing Confidential Opinion No. 89 -007; McConahy, Opinion No. 96 -006). Therefore, despite the submitted fact that the WCPF is Anon - profit,@ it is clear that the WCPF is a "business" within the statutory definition in the Ethics Act, and that it is considered a business with which Titterton as an officer is associated. As to the additional facts that have been submitted, WCI is not a business with which Titterton is associated based upon your factual representation that neither Titterton nor any member of his immediate family has any interest in WCI. Although Titterton would have a conflict generally as to WCPF, he would not have a conflict as to WCI. Since the acquisition of the 22 -acre tract will be made by WCI and not WCPF, Titterton would have no conflict on matters involving WCI, or the Township Open Space Plan and Fund, provided that such action by Titterton could not result in a private pecuniary benefit to WCPF, Titterton, a member of his immediate family or any business with which he or a member of his immediate family is associated. An example of a conflict would be if guidelines for entitlement to the Fund were established or modified so as to favor any request by WCPF or eliminate competing applicants. See, Pepper, Opinion 87 -007. To restate, Titterton could vote on matters involving WCI in that neither he, nor any immediate family member, has a financial interest or holds any position with WCI, based upon the factual representations made above. In any instances of conflict, Titterton must abstain and observe the requirements of Section 1103(j) of the Ethics Act. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of the Second Class Township Code has not been considered. Advice of Counsel, No. 97 -638 is modified based upon additional submitted facts. IV. CONCLUSION: A township supervisor is a public official subject to the provisions of the Ethics Act. A local non - profit citizens' group for which the township supervisor serves as president is a "business with which he is associated" as defined in the Ethics Act. Another entity in which neither the supervisor nor any member of his immediate family has a financial interest is not a business with which associated under the Ethics Act. The supervisor would have a conflict as to matters concerning the local non - profit citizens' group but not as to the entity in which he has no financial interest, where that entity has received an assignment to purchase a tract of land from the local non - profit citizens' group and may apply for funds through the township or other federal, state, or local governmental bodies. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Advice of Counsel No. 97 -638 is modified based upon additional submitted facts. 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, 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 McMaster/Titterton, 99 -001 March 10, 1999 Page 9 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