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HomeMy WebLinkAbout21-516 Cook PHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE: 717-787-0806 TOLL FREE: 1-800-932-0936 FINANCE BUILDING WEBSITE: www.ethics.pa.gov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL April 9, 2021 To the Requesters: Ms. Kelly L. Cook Ms. Renee Martin-Nagle 21-516 Dear Ms. Cook and Ms. Martin-Nagle: This responds to correspondence dated February 24, 2021, and Ms. Martin- March 11, 2021, by which an advisory was requested from the Pennsylvania State Ethics Commission (Commission), seeking guidance as to the issue presented below: Issue: Whether, pursuant to Section 1103(a) of the Public Official and Employee Ethics Act (Ethics Act), 65 Pa.C.S. § 1103(a), an individual who is a Member of a Municipal Authority Board, who in her private capacity also is an attorney and independent contractor to the Law Firm which is representing the Municipal Authority in a lawsuit, would have a conflict of interest with regard to participating in discussions or votes of the Board on issues that would financially impact the Law Firm, such as whether to settle the lawsuit via mediation or proceed to litigation? Brief Answer: NO. Based upon the submitted facts, the Law Firm is not a business with which the Board Member is associated for purposes of the Ethics Act, and therefore, the Board Member would not engage in a conflict of interest by participating in discussions or 1 votes of the Board on issues that would financially impact the Law Firm. 1 However, status as an independent contractor alone does not insulate a public official/employee from a conflict of interests. In Snyder v. State Ethics Commission, 686 A.2d 843 (Pa. Commw. Ct. 1996), a conflict of interests was established when Snyder, as a township supervisor, repeatedly voted in favor of various development projects seeking approval from the township. At the time of his vote, Snyder knew or had a reasonable expectation that he was to serve as a subcontractor on those same projects he was voting to approve. Snyder was found to have used his public office to facilitate a pecuniary gain for himself/his business despite his status as an independent contractor. Cook, 21-516 April 9, 2021 Page 2 Facts: You request an advisory from the Commission based upon the following submitted facts. Ms. Martin-Nagle is a Member of the Board of the Ebensburg Municipal Authority (Authority). The Authority Board consists of five Members. The Authority is being sued (the Lawsuit) with regard to a complaint involving a sewer contractor. The Lawsuit involves the amount of $2.1 million. The Authority has retained the law firm of Eckert Seamans (Law Firm) to provide legal representation to the Authority with respect to the Lawsuit. In her private capacity, Ms. Martin-Nagle is an attorney. After the Authority retained the Law Firm, Ms. Martin-Nagle accepted a position with the Law Firm. Ms. Martin-Nagle serves as an independent contractor to the Law Firm. Ms. Martin-Nagle, in her capacity as an Authority Board Member, wishes to participate in meetings between the Authority Board and the Law Firm during which the Authority Board may dis decisions, such as whether to settle the Lawsuit in mediation or proceed to litigation, would financially impact the Law Firm. You ask whether Ms. Martin-Nagle would have a conflict of interest with regard to participating in discussions or votes of the Authority Board on issues that would financially impact the Law Firm. Discussion: Pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester 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 requester has truthfully disclosed all of the material facts. Sections 1103(a) and 1103(j) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. -- No public official or public employee shall engage in conduct that constitutes a conflict of interest. (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 Cook, 21-516 April 9, 2021 Page 3 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(a), (j). The following terms related to Section 1103(a) 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, Cook, 21-516 April 9, 2021 Page 4 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. 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. The use of authority of office is not limited merely to voting but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. Kistler v. State Ethics Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a) of the Ethics Act, a public official/public employee: purpose of obtaining for himself a private pecuniary benefit. Such directed action implies awareness on the part of the \[public official/public employee\] of the potential pecuniary benefit as well as the motivation to obtain that benefit for himself. Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics Act, a ate pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific Id., 610 Pa. at 528, 22 A.3d at 231. In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As an Authority Board Member, Ms. Martin-Nagle is a public official subject to the provisions of the Ethics Act. As a public official, Ms. Martin-Nagle is restricted from using the authority of her public office for the private pecuniary (financial) benefit of herself, a member of Cook, 21-516 April 9, 2021 Page 5 her immediate family, or a business with which she or a member of her immediate family is associated. Based upon the submitted facts, the Law Firm is not a business with which Ms. Martin- Nagle is associated because she is not a director, officer, owner, employee, or holder of a financial definition of the t(See Confidential Advice 13-554/13- is associated, the State Legislator would have to be a director, officer, owner, employee or holder of a financial interest in the Firm. Status as an independent contractor would not satisfy the Ethics Id. at 6. (See also Steigerwalt, Advice 17-504; Casey, Advice 14-539; Say, Advice 12-526). You are advised that Ms. Martin-Nagle would not have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in discussions or votes of the Authority Board on issues that would financially impact the Law Firm, such as whether to settle the Lawsuit in mediation or proceed to litigation, as the submitted facts do not indicate that the use of the authority of her office would financially impact her, a member of her immediate family, or a business with which she or a member of her immediate family is associated. 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, this advisory does not address any applicability of the Municipality Authorities Act. Conclusion: As an Authority Board Member, Ms. Martin-Nagle is a public official subject to the provisions of the Ethics Act. As a public official, Ms. Martin-Nagle is restricted from using the authority of her public office for the private pecuniary (financial) benefit of herself, a member of her immediate family, or a business with which she or a member of her immediate family is associated. Based upon the submitted facts, the Law Firm is not a business with which Ms. Martin- Nagle is associated because she is not a director, officer, owner, employee, or holder of a financial interest in the Law Firm. Ms. Martin-Nagle would not have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in discussions or votes of the Authority Board on issues that would financially impact the Law Firm, such as whether to settle the Lawsuit in mediation or proceed to litigation, as the submitted facts do not indicate that the use of the authority of her office would financially impact her, a member of her immediate family, or a business with which she or a member of her immediate family is associated. Pursuant to Section 1107(11) of the Ethics Act, 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 requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. Cook, 21-516 April 9, 2021 Page 6 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, Brian D. Jacisin Chief Counsel