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HomeMy WebLinkAbout02-504 ConfidentialADVICE OF COUNSEL January 11, 2002 02 -504 Re: Conflict; Public Official /Employee; General Assembly; Representative; Legislative District Office; Property Owned by Representative; Reimbursement; Property Taxes; Building Insurance. This responds to your letter of December 10, 2001, by which you requested a confidential advisory from the State Ethics Commission. Issue: Whether, pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., a Member of the House of Representatives who maintains a Legislative District Office at a property owned by the Member may receive reimbursement from the Commonwealth for the portion of the property tax and building insurance expenses attributable to the portion of the property used for legislative purposes. Facts: As A for the Pennsylvania House of Representatives, you seek a confidential advisory from the State Ethics Commission on behalf of Representative B. You have submitted a copy of a memorandum dated [date] from Representative B regarding the propriety of receiving reimbursements for certain expenses for a property that Representative B owns and utilizes both for a Legislative District Office and for a rental property. In the memorandum, Representative B references his understanding that per a State Ethics Commission ruling, he would not be able to receive rental payments from the Commonwealth for the district office located in his building, but that he would be entitled to reimbursements for utilities such as electric, water, sewage, heating oil /gas, and the like, provided that there would be separate meters or billing for the Legislative District Office space and the apartment located within the same building. Representative B specifically inquires as to the propriety of receiving reimbursement from the Commonwealth for a portion of the property taxes and building insurance for the property. Representative B states that unfortunately, the county, school district and borough supply him with a single tax bill for the entire building Likewise, the building insurance is based upon a single premium. Representative B states his view that since the Legislative District Office occupies approximately two- Confidential Advice, 02 -504 January 11, 2002 Page 2 thirds of the square footage of the property, the property taxes and building insurance should be prorated for purposes of reimbursement by the Commonwealth. Representative B maintains that he does not stand to financially benefit from such reimbursement for property taxes and insurance, which he notes would not increase the value or resale value of the property. Representative B further contends that the reimbursement of these expenses paid to taxing bodies and an insurance company could not be construed as the provision of taxpayer funds to him. Based upon the above, you ask whether Representative B may receive reimbursement for property tax and building insurance expenses for the portion of his property that is utilized for legislative purposes, based upon the percentage of the entire property that is used for his Legislative District Office. 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 a Member of the Pennsylvania House of Representatives, Representative B is a public official subject to the provisions of the Ethics Act. 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 Confidential Advice, 02 -504 January 11, 2002 Page 3 the performance of duties and responsibilities unique to a particular public office or position of public employment. 65 Pa. C. S. § 1102. 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. Having set forth the above general principles, your specific inquiry shall now be addressed. Pursuant to Section 1103(a) of the Ethics Act, and based upon the Commission's rulings in Cappabianca, Opinion 89- 014 —R, and Harper, Opinion 94 -001, you are advised that B may not receive reimbursements for property taxes, building insurance expenses, or for that matter, utilities, for the portion of his property used as his Legislative District Office. In Cappabianca, Opinion 89- 014 —R, the Commission held that a Member of the General Assembly would be prohibited under the Ethics Law from charging his legislative district account with rent for a district office in a building he owned. The Commission determined that although rent for legislative office space is ordinarily an authorized expense, the member, in choosing his own building to house the legislative office and receiving rent for the space, would be using the authority of his office for a private pecuniary benefit in contravention of Section 3(a) of the Ethics Law. In Harper, Opinion 94 -001, following the rationale of Cappabianca, supra, the Commission held that a former Member of the House of Representatives would be prohibited by Section 3(a) of the Ethics Law from seeking reimbursement for utility services attributable to the portion of her private residence that was used as a Legislative District Office. The Commission stated, inter alia: A]ny reimbursement attributable to that portion of the residence used as a egislative district office would be a private pecuniary benefit to the extent that it would affect or would not require out of pocket expenses. Since that private pecuniary benefit would inure to you personally, such activity would be contrary to Section 3(a) of the Ethics Law. Id. at 4. See also, Freind, Order 800. Similarly, in the instant matter, but for a Commonwealth reimbursement, Representative B as the property owner would have to pay all of the property taxes and building insurance himself. Thus, the reimbursement of even a prorated portion of the expenses would constitute a private pecuniary benefit to the Representative in that he would not have to fully bear such expenses. In Harper, supra, the Commission parenthetically noted that the version of House Rule 14 then in effect would also prohibit the reimbursement of utility expenses to the former Member, because she did not have separate meters for the Legislative District Office. As for the instant inquiry, it is parenthetically noted that the current version of House Rule 14 does not appear to include: (1) any provision for a Member's Home Office Expenses; or (2) any provision for property taxes or building insurance as allowable expenses for a Legislative District Office, perhaps because such expenses typically would be paid by the property owner /landlord (private citizen) rather than by the tenant (State Representative). Confidential Advice, 02 -504 January 11, 2002 Page 4 You are advised that in seeking reimbursement(s) from the Commonwealth for all or any portion of the property taxes, building insurance expenses, or utilities for his Legislative District Office located on his own property, Representative B would be using the authority of his public office for a private pecuniary benefit in contravention of Section 1103(a) 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 Legislative Code of Conduct. Conclusion: As a Member of the Pennsylvania House of Representatives, Representative B is 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, Representative B may not receive reimbursements for property taxes, building insurance expenses, or utilities for the portion of his property used as his Legislative District Office. 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