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HomeMy WebLinkAbout02-502 BalmerBarry G. Balmer, President B. G. Balmer and Company Glenloch Corporate Campus 1473 Dunwoody Drive West Chester, PA 19380 -1478 Dear Mr. Balmer: ADVICE OF COUNSEL January 9, 2002 02 -502 Re: Conflict; Public Official /Employee; Director; Chester County Airport Authority; Private Employment or Business; Business With Which Associated; Majority Shareholder of Private Corporation; Aviation Services. This responds to your letter of December 5, 2001, 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 director for a county airport authority who, in his private capacity, is the majority shareholder of a private corporation that maintains a hangar and corporate jet aircraft and provides aviation related services to corporate clients at the county airport. Facts: As a Director for the Chester County Airport Authority ( "Airport Authority "), you seek an advisory from the State Ethics Commission based upon the following submitted facts. The Airport Authority is a political subdivision of Chester County. The Airport Authority is responsible for the management of operations at the Chester County Airport. In your private capacity, you are the majority shareholder of "Global Air Sales & Service, Inc." ("Global Air"), a Pennsylvania corporation. Global Air maintains corporate jet aircraft and provides aviation related services to corporate clients at the Chester County Airport. Global Air maintains a hangar at the Chester County Airport through which it provides these services. It is your view that the Board of Directors of the Airport Authority has not been presented with any issues which have presented a conflict of interest for you. You state that should a conflict arise, you would abstain from voting on that particular issue. Balmer, 02 -502 January 9, 2002 Page 2 You have submitted a copy of a letter dated May 18, 2001, from you to the Airport Authority, to the attention of the Chair, which states as follows: Re: Questions raised at the last Executive Meeting Dear Ms. Ganister: This is to confirm that Barry G. Balmer has no financial interest in Universal Aviation. This will also confirm that B.G. Balmer and Co., Inc. does represent Universal for their insurance coverages. Global Air Sales and Services, Inc. is a corporate aircraft management company. The majority shareholder is Barry G. Balmer. Global Air Sales and Service, Inc. will be building a new hanger in the near future for the purpose of leasing space for corporate aircraft. Hopefully this will help to clarify any questions regarding my position on the Authority. Sincerely, [Signature] Balmer Letter of May 18, 2001. Although the letters which you have submitted reference B.G. Balmer and Co., Inc. and one of its clients, Universal Aviation, you have not raised any issues as to those business interests. Rather, you have posed a narrow inquiry as to whether, in your capacity as a Director for the Airport Authority, you would have a conflict of interest under the Ethics Act due to your status as majority shareholder of Global Air. Since you have posed a narrow inquiry, this Advice shall necessarily be limited to responding to the question posed. 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. It is further noted that, pursuant to the same aforesaid Sections of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), 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 Act violations by a person who is subject to the Ethics Act. 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. In your capacity as a Director for the Airport Authority, you are a public official subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: Balmer, 02 -502 January 9, 2002 Page 3 § 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. As statutorily defined, the use of authority of office /employment is more than the mere mechanics of voting and encompasses all of the tasks needed to perform the functions of a given position. See, Juliante, Order No.809. Use of authority of office includes, for example, discussing, conferring with others, and lobbying for a particular result. Section 1103(j) of the Ethics Act provides as follows: Balmer, 02 -502 January 9, 2002 Page 4 §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) requires the public official /employee to abstain fully 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, you are advised that 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 employee use the authority of his public position - or confidential information obtained by being in that position - 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 pursuit 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, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order No. 800; Pancoe, supra; and (3) the 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. If a business with which the public official /public employee is associated or its client(s) would have matter(s) pending before the governmental body, the public Balmer, 02 -502 January 9, 2002 Page 5 official /public employee would have a conflict of interest as to such matter(s). Miller, Opinion No. 89 -024; see also, Kannebecker, Opinion 92 -010. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. Having identified and explained the pertinent provisions of the Ethics Act, your specific inquiry shall now be addressed. You ask whether, in your capacity as a Director for the Airport Authority, you would have a conflict of interest under the Ethics Act due to your status as the majority shareholder of Global Air. As noted above, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest as to matters before the Airport Authority that would financially impact you, a business with which you are associated, or such a business's client(s). It is clear that Global Air Sales & Service, Inc. ( "Global Air ") is a business with which you, as its majority shareholder, are associated. Therefore, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest as to matters before the Airport Authority that would financially impact you, Global Air, or Global Air's client(s). In each instance of a conflict, you would be required to abstain fully, not just from the vote but also as to other uses of the authority of your public position. See, Juliante, supra. In each instance of a conflict, you would also be required to satisfy the disclosure 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 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 respective municipal code. Conclusion: As a Director for the Chester County Airport Authority ( "Airport Authority "), 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. Pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest as to matters before the Airport Authority that would financially impact you, a business with which you are associated, or such a business's client(s). Global Air Sales & Service, Inc. ( "Global Air") is a business with which you, as its majority shareholder, are associated. Therefore, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest as to matters before the Airport Authority that would financially impact you, Global Air, or Global Air's client(s). In each instance of a conflict, you would be required to abstain fully and to satisfy 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. Balmer, 02 -502 January 9, 2002 Page 6 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