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HomeMy WebLinkAbout01-506 PoustFrank Poust R. D. 4, Box 4143 Duncannon, PA 17020 Dear Mr. Poust: ADVICE OF COUNSEL January 12, 2001 01 -506 Re: Conflict; Public Official /Employee; Township; Supervisor; Business With Which Associated; Sewage Enforcement Officer; Sewage Systems; Percolation Test Holes. This responds to your letter of December 7, 2000, by which you requested advice 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 participating in matters involving the township sewage enforcement officer when the supervisor is engaged in a private business of designing sewage systems and excavating percolation test holes. Facts: You are a Township Supervisor in Watts Township, Perry County. You state that you are forming a "side business" designing sewage systems and excavating percolation test holes. You ask what measures you must take as a Supervisor to ensure that you will not have a conflict of interest in matters involving the Township Sewage Enforcement Officer ( "SEO ") given your private business activities. 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 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 Pa.C.S. § §1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As Township Supervisor for Watts Township, you are a public official as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Poust, 01 -506 January 12, 2001 Page 2 Section 1103(a) of the Ethics Act provides: $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 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 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. Poust, 01 -506 January 12, 2001 Page 3 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 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 instant matter, 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. Section 1103(a) of the Ethics Act does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position — or confidential information — for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the ursuit of a private business opportunity in the course of public action, Metrick, Order No. 1037; (2 the use of governmental facilities, such as governmental telephones, postage, staff, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Friend, Order No. 800; Pancoe, supra; and (3) the Poust, 01 -506 January 12, 2001 Page 4 participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity, such as the review /selection of its bids or proposals, Gorman, Order No. 1041. Your "side business" would be a business with which you are associated, assuming that said business would be one in which you would be a director, officer, owner or employee or have a financial interest. Pursuant to Section 1103(a) of the Ethics Act, if a matter involving the business with which you are associated would come before the Township Board of Supervisors, you would have a conflict of interest as to such matter and would be required to abstain and observe the disclosure requirements of Section 1103(j) of the Ethics Act. Having established the above principles, your inquiry shall now be addressed. In your submitted facts, you do not delineate the involvement of the SEO to your "side business." Therefore, only general guidance may be given. Certain situations could arise wherein you would have a conflict of interest as to the SEO. For example, you would have a conflict if your business would be hired /retained to design sewage systems and excavate percolation test holes as to which the SEO would perform reviews, tests and approvals. This conclusion is based upon the State Ethics Commission's rulings in Bassi, Opinion 86- 007 -R, and Woodrinq, Opinion 90 -001. 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, Poust, 01 -506 January 12, 2001 Page 5 while hypothetical in nature, nonetheless create the types of conflicts of interest that are to be addressed by this Commission. Id. at 4. In Woodrinq, 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 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. In applying the above principles to the instant matter, you as Township Supervisor, would exercise authority over the appointment /reappointment /employment of the Township SEO. The SEO, in turn, would exercise control over the review, testing and approval of the services you would perform such as the design of sewage systems and the excavation of percolation test holes. Therefore, for the reasons enunciated in Bassi and Woodrinq, supra, you would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act in matters pertaining to the SEO or to any project or plan involving your business. See, also, Miller, Opinion 89 -024; Kannebecker, Opinion 92- 010, wherein the Commission held that a conflict of interest not only exists where a public official /public employee, in his official capacity, participates, reviews or passes upon a matter involving a business with which he is associated, but also where he does so as to the clients of the business. Hence, you would also have a conflict as to business clients and any matter that those clients would have before the Board. In each instance of a conflict of interest, you 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 Poust, 01 -506 January 12, 2001 Page 6 interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the respective municipal code. Conclusion: As Township Supervisor for Watts Township, 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. Your "side business" would be a business with which you would be associated, assuming that said business would be one in which you would be a director, officer, owner or employee or have a financial interest. Pursuant to Section 1103(a) of the Ethics Act, if a matter involving the business with which you are associated would come before the Township Board of Supervisors, you would have a conflict of interest as to such matter. You would also have a conflict as to business clients and any matters that those clients would have before the Board. Certain situations could arise where you would have a conflict of interest as to the SEO. For example, you would have a conflict if your business would be hired /retained to design sewage systems and excavate percolation test holes as to which the SEO would perform reviews, tests and approvals. As Township Supervisor, you would exercise authority over the appointment /reappointment /employment of the Township SEO. The SEO, in turn, would exercise control over the review, testing and approval of the services you would perform such as the design of sewage systems and the excavation of percolation test holes. Therefore, for the reasons enunciated in Bassi and Woodrinq, supra, you would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act in matters pertaining to the SEO or to any project or plan involving your business. In each instance of a conflict, you would be required to abstain and observe the disclosure requirements of Section 1103(j) of the Ethics Act. 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 requestor 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, Vincent J. Dopko Chief Counsel