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HomeMy WebLinkAbout02-555 SchneiderBernard M. Schneider, Esquire Brucker, Schneider & Porter Suite 320, Weyman Plaza 300 Weyman Road Pittsburgh, PA 15236 Dear Mr. Schneider: ADVICE OF COUNSEL April 24, 2002 02 -555 Re: Conflict; Public Official /Employee; Borough; Council Members; Compensation; Insurance; Private Pecuniary Benefit. This responds to your letter of February 14, 2002, 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 borough council members as to (1) voting to increase their compensation; and (2) making health, hospitalization, medical, and surgical insurance coverage available to themselves at borough expense. Facts: As Solicitor for the Borough of Homestead ( "Borough "), you seek an advisory on behalf of the following members of Borough Council: Evan Baker, William Batts, Marvin Brown, Dorothy Kelly, Joseph Phillips, Cheryl Chapman, and Donald Purifoy (collectively referred to herein as the "Council Members "). The Council Members have requested guidance as to whether they may vote to increase their compensation and make health, hospitalization, medical, and surgical insurance coverage available to themselves. You reference several sections of the Borough Code ("Code "), 53 P.S. § 45101 et seq., specifically, Sections 46001, 46006(6), 46005, 46202(37), and 45111(2). You paraphrase the foregoing Code sections as follows. Section 46001 authorizes the borough council to fix, by ordinance, at any time, and from time to time, the compensation of the council members up to a maximum depending upon the borough's population. 53 P.S. § 46001. Section 46006(6) delineates one of council's duties as the duty to fix the compensation of the borough's officers, appointees and employees. 53 P.S. § 46006(6). Section 46005 gives council Schneider, 02 -555 April 24, 2002 Page 2 the power to make, authorize and ratify expenditures for lawful purposes. 53 P.S. § 46005. Finally, Section 46202(37) gives the borough, through its corporate authorities, the power to make contracts of health, hospitalization, medical and surgical insurance covering borough council members and others. 53 P.S. § 46202(37). You state that Section 1102 of the Ethics Act excludes from the definition of "conflict" or "conflict of interest" an action which affects a subclass of the general public consisting of an industry, occupation or other group which includes the public official. You opine that the legislature, in enacting the above -cited sections of the Code, appears to have made members of borough council members of a subclass of the general public consisting of borough officers, appointees and employees. You further opine that any increase in compensation or extension of benefits must be given or made available to all members of council so that if there is a conflict, it affect [sic] all members." You state that Section 1103(j) of the Ethics Act "permits a public official who is a member of a governing body to vote on a matter that would result in a conflict of interest if the number of members of the body required to abstain from voting under subsection 1103(j) makes the legally required vote of approval unattainable, and such members follow the disclosure procedure of subsection 1003(j)[sic]. 65 Pa.C.S.A § 1003(j) [sic]." Citing, Consumers Educ. and Protective Ass'n v. Schwartz, 495 Pa. 10, 19, n. 13, 432 A.2d 173, 178, n. 13 (1981), and Davis v. Homestead Borough, 47 Pa. Super. 444 (1911), you state that nothing in any other statute or the Pennsylvania Constitution prevents council members from voting to increase their compensation during their existing terms. You state that the legally required vote of approval cannot be obtained if all members have a conflict. Based upon the above, you ask whether any or all of the Council Members would have a conflict as to voting to increase their compensation, and making health, hospitalization, medical, and surgical insurance available to themselves. If the Council Members would have a conflict, you ask whether they may nevertheless vote under Section 1103(j) of the Ethics Act. 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 Council Members for the Borough of Homestead, Evan Baker, William Batts, Marvin Brown, Dorothy Kelly, Joseph Phillips, Cheryl Chapman, and Donald Purifoy (collectively referred to herein as the "Council Members ") are public officials as that term is defined in the Ethics Act, and hence they are subject to the provisions of that 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). Schneider, 02 -555 April 24, 2002 Page 3 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. 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. 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 Schneider, 02 -555 April 24, 2002 Page 4 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. Having established the above, your specific inquiries shall now be addressed. You ask whether the Council Members may (1) vote to increase their compensation; and (2) make health, hospitalization, medical, and surgical insurance available to themselves at borough expense. As to your first question, Section 46001 of the Borough Code provides as follows: § 46001. Organization of council; quorum; compensation; eligibility Members of council may receive compensation to be fixed by ordinance at any time and from time to time as follows: In boroughs with a population of less than five thousand, a maximum of eighteen hundred seventy -five dollars ($1875) a year; in boroughs with a population of five thousand or more but less than ten thousand, a maximum of two thousand five hundred dollars ($2500) a year; in boroughs with a population of ten thousand or more but less than fifteen thousand, a maximum of three thousand two hundred fifty dollars ($3250) a year; in boroughs with a population of fifteen thousand or more but less than twenty -five thousand, a maximum of four thousand one hundred twenty -five dollars ($4125) a year; in boroughs with a population of twenty -five thousand or more but less than thirty -five thousand, a maximum of four thousand three hundred seventy -five dollars ($4375) a year; and in boroughs with a population of thirty -five thousand or more, a maximum of five thousand dollars ($5000) a year. Such salaries shall be payable monthly or quarterly for the duties imposed by the provisions of this act. 53 P.S. § 46001. Based upon Section 46001 of the Borough Code, the Ethics Act would not prohibit the Council Members from voting to increase their salaries, conditioned upon the assumption that the salary increases would be within the range provided for by law relative to the population of the Borough. Such salary increases may take effect during the Council Members' terms in office. See, Didio, Advice of Counsel, 01 -611. Schneider, 02 -555 April 24, 2002 Page 5 As to your second question, the Commission has determined that if a particular statutory enactment prohibits a public official from receiving a financial benefit, then that public official's receipt of such a prohibited benefit, through the authority of public office, is contrary to Section 1103(a) of the Ethics Act. Hessinger, Order 931; Wasiela, Order 932; R.H. v. State Ethics Comm'n, 673, A.2d 1004 (Pa. Commw. 1996), aff'd in part, 1732 C.D. 1994. In order to determine whether the Council Members would transgress the Ethics Act by engaging in the above - described conduct, the provisions of the Borough Code, 53 P.S. § 45101 et seq., must be reviewed. If insurance coverage for a borough council member at borough expense is not permitted by the Borough Code, then a borough council member who receives such insurance coverage would be receiving a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act. If insurance coverage for a borough council member at borough expense is not prohibited, then a borough council member who receives such insurance coverage would not be receiving a private pecuniary benefit and would not have a conflict under Section 1103(a) of the Ethics Act. Section 46202 of the Borough Code provides: § 46202. Specific powers The powers of the borough shall be vested in the corporate authorities. Among the specific powers of the borough shall be the following, and in the exercise of any of such powers involving the enactment of any ordinance or the making of any regulation, restriction or prohibition, the borough may provide for the enforcement thereof and may prescribe penalties for the violation thereof or for the failure to conform thereto: (37) OTHER INSURANCE. To make contracts of insurance with any insurance company, association or exchange, authorized to transact business in the Commonwealth, insuring borough employes, or mayor and council, or any class, or classes thereof, or their dependents, under a policy or policies of insurance covering life, health, hospitalization, medical and surgical service and /or accident insurance, and to contract with any such company, granting annuities or pensions, for the pensioning of borough employes, or any class, or classes thereof, and to agree to pay part or all of the premiums or charges for carrying such contracts, and to appropriate moneys from the borough treasury for such purposes. To make contracts with any insurance company, association or exchange, authorized to transact business in this Commonwealth, insuring any public liability of the borough, and to appropriate moneys from the borough treasury for such purpose. 53 P.S. § 46202(37). The above quoted provision authorizes the borough to make contracts of insurance to provide health, hospitalization, medical, and surgical insurance available to borough council among others. Since such coverage is authorized in Section 46202(37) of the Borough Code, the Council Members may receive such insurance coverage at the Boroughs expense without transgressing Section 1103(a) of the Ethics Act. Based upon the above analysis, your argument concerning the exclusions to conflict and Section 1103(j) are academic and are not addressed. Schneider, 02 -555 April 24, 2002 Page 6 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. Conclusion: As Council Members for the Borough of Homestead, Evan Baker, William Batts, Marvin Brown, Dorothy Kelly, Joseph Phillips, Cheryl Chapman, and Donald Purifoy (collectively referred to herein as the "Council Members ") are public officials subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. As to whether the Council Members may vote to increase their compensation, the Ethics Act would not prohibit them from doing so, conditioned upon the assumption that the increases would be within the range provided for by law relative to the population of the Borough. Such increases may take effect during the Council Members terms in office. As to whether the Council Members may make health, hospitalization, medical, and surgical insurance available to themselves at the Borough's expense, in that such coverage is authorized in Section 46202(37) of the Borough Code, the Council Members may receive such insurance coverage without transgressing Section 1103(a) 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