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HomeMy WebLinkAbout91-006 AmanMr. Charles J. Swick Shafer, Swick, Bailey, Irwin & Stack 360 Chestnut Street P.O. Box 594 Meadville, PA 16335 Dear Sirs: I. Issue: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Helena G. Hughes, Chair Robert W. Brown, Vice Chair Dennis C. Harrington James M. Howley Daneen E. Reese Roy W. Wilt Austin M. Lee DATE DECIDED: May 24, 1991 DATE MAILED: . Tune 10. 1991 II. Factual Basis for Determination: Mr. George M. Amen, III 91 -006 Morgan, Lewis & Brockius 2000 One Logan Square Philadelphia, PA 19103 -6993 Re: Conflict, Simultaneous Service, Municipal Authority Member and Municipal Authority Employee, Expenses, Appeal of Advice, Intervention. This Opinion is issued pursuant to the appeal of the Advice of Counsel, No. 91 -517 issued on February 22, 1991. Whether a municipal authority member under the Public Official and Employee Ethics Law is permitted to simultaneously serve as an employee of the authority and receive a salary and reimbursable expenses. The issue which you presented was originally processed as a request for an advice of counsel and as a result on February 22, 1991, Advice of Counsel No. 91 -517 was issued. That advice concluded that the Public Official and Employee Ethics Law would prohibit a member of the board of a municipal authority from also serving or being employed as an employee of the authority with compensation and /or reimbursable expenses. On March 8, 1991, this Commission received your letter of March 6, 1991, wherein you appealed the above Advice. In addition, a Mr. Charles J. Swick Mr. George M. Aman III Page 2 Petition to Intervene was received on March 11, 1991, by the Pennsylvania Municipal Authorities Association (PMAA). By letter dated March 25, 1991, both the requestor and intervenor were notified of the date, time and location of the public meeting. In the appeal of advice, the requestor does not delineate the nature of his objection to the Advice. The Petition to Intervene by PMAA recites that the association is non - profit with a membership of 465 municipal authorities incorporated under the Municipality Authorities Act of 1945, as amended. It is then asserted in the Petition that the "Advice incorrectly interprets the [Municipality Authority] Act and, therefore, must be revised." Factually, the original letter of request posed the question as to whether a Conneaut Lake Joint Municipal Authority member could also serve as an employee of the authority and receive compensation by salary or reimbursable expenses. In the requestor's brief, the following facts have been supplied. The Conneaut Lake Joint Authority hired a board member to serve as an authority employee in the position of sewer inspector. The board member was hired because the (other) board members felt that his experience and qualifications enabled him to serve as sewer inspector. The board member has temporarily resigned pending disposition of the appeal of Advice 91 -517. In addition, some authority members have acted in part -time positions as a temporary plant superintendent pending the hiring of an individual for that position. Finally, some board members have received expenses and have sought reimbursement in carrying out authority functions such as mileage reimbursement, payment for meals relative to legitimate board activities and functions, expenses incurred as a result of meetings with engineers and other expenses received by traveling for site inspections as to various board matters. No explanation has been provided as to why the above facts were not originally submitted in the advisory request which merely contained the following general statement as "to whether a board member can be an employee of the Authority and be compensated by salary and /or reimbursement of expenses." Likewise, no explanation has been proffered as to why an advisory was requested when the conduct had already occurred. The requestor's brief makes two generalized arguments that the Municipality Authorities Act, Section 306C allows members to be appointed as officers, agents and employees and secondly that members are entitled to appropriate compensation and expenses for services performed as to authority business. Mr. Charles J. Swick Mr. Georgia M. Amen III Page 3 The intervenor in its brief argues that Advice 91 - 517 declared a position of employment by a board member to be incompatije which is beyond the jurisdiction of an administrative agency, that such employment is permitted under the Municipal Authorities Act, that such employment is allowable based upon prior Commission precedent such as Routch, Opinion 80 -019, Brown, Order 249 and various opinions /orders which do not involve authority members and finally that a distinction exists between compensation which provides a financial benefit versus reimbursement for expenses which restores the status quo for out -of- pocket expenditures. We shall make a comprehensive review of this case in light of the above arguments. III. Discussion: Initially, we must determine whether intervention should be granted as to the petition of the PMAA. Intervention is governed by the Administrative Rules of Procedure. 1 Pa. Code 35.27. S35.27. Initiation of intervention. Participation in a proceeding as a party intervener may be initiated as follows: (1) By the filing of a notice of intervention by another agency of the Commonwealth which is authorized by statute to participate in the proceeding. (2) By order of the agency upon petition to intervene. %35.28. Eligibility to intervene. (a) Persons. A petition to intervene may be filed by a person claiming a right to intervene or an interest of such nature that intervention is necessary or appropriate to the administration of the statute under which the proceeding is brought. The right or interest may be one of the following: (1) A right conferred by statute of the United States or of this Commonwealth. Mr. Charles J. Swick Mr. George M. Amax: III Page 4 1 Pa. Code 35.28. 1 Pa. Code 35.29. (2) An interest which may be directly affected and which is not adequately represented by existing parties, and as to which petitioners may be bound by the action of the agency in the proceeding. The following may have an interest: consumers, customers or other patrons served by the applicant or respondent; holders of securities of the applicant or respondent; employees of the applicant or respondent; competitors of the applicant or respondent. (3) Other interest of such nature that participation of the petitioner may be in the public interest. (b) Commonwealth. The Commonwealth or an officer or agency thereof may intervene as of right in a proceeding subject to this part. §35.29. Form and contents of petitions to intervene. Petitions to intervene shall set out clearly and concisely the facts from which the nature of the alleged right or interest of the petitioner can be determined, the grounds of the proposed intervention, and the position of the petitioner in the proceeding, so as fully and completely to advise the parties and the agency as to the specific issues of fact or law to be raised or controverted, by admitting, denying or otherwise answering, specifically and in detail, each material allegation of fact or law asserted in the proceeding, and citing by appropriate reference the statutory provisions or other authority relied on. In reviewing the timely Petition to Intervene, we believe that the PMAA which represents 465 municipal authorities incorporated under the Municipality Authorities Act is eligible to intervene under the above criteria. PSATS, Opinion 84- 001 -R. Accordingly, we grant intervention to the PMAA. Turning to the issue before us, we must determine whether a municipal authority board member may simultaneously serve as an Mr. Charles J. Swick Mr. George M. Aman III Page 5 authority employee. Municipal authority board members and in particular the members of the board of the Conneaut Lake Joint Municipal Authority are "public officials" as that term is defined in the Ethics Law and hence they are subject to the provisions of the Ethics Law. 65 P.S. 5402; 51 Pa. Code S1.1. The disposition of the above issue must be decided by applying Section 3(a) of the Ethics Law which provides: Section 3(a) of the Ethics Law provides: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 P.S. 403(a). The following terms are defined under the Ethics Law: Section 2. 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. "Conflict" or "conflict of interest" 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 or his immediate family or a business with which he or a member of his immediate family is associated. Section 2. Definitions. "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. Mr. Charles J. Swick Mr. George M. Arran III Page 6 In addition, Sections 3(b) and 3(c) of the Ethics Law 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 any thing of monetary value based upon the understanding that official /employee would be influenced thereby. In resolving the question before us, we must review the Municipal Authorities Act to the extent that it impacts upon the Ethics Law regarding the issue of whether the board member would be using the authority of office to obtain a private pecuniary benefit for himself. Confidential Opinion, 91 -001. In this regard, we have held that if a pecuniary benefit is prohibited by law, then the receipt of that benefit through the use of authority of office would be a private pecuniary benefit for the public official /employee contrary to Section 3(a) of the Ethics Law. Confidential Opinion, 91 -001. The Municipality Authorities Act provides in part as follows: "Every Authority is hereby granted, and shall have and may exercise all powers necessary or convenient for the carrying out of the aforesaid purposes, including but without limiting the generality of the foregoing, the following rights and powers: 53 P.S. 306B (f) To make by -laws for the management and regulation of its affairs. (g) To appoint officers, agents, employees and servants, to prescribe their duties and to fix their compensation." The Municipality Authorities Act further provides: B. Members shall hold office until their successors have been appointed, andy may succeed themselves, and, except members of the boards of Authorities organized or created by a school district or school districts, shall receive such salaries as may be determined by the governing body or bodies of the municipality or municipalities, but none of such salaries shall be increased or diminished by such governing body or Mr. Charles J. Swick Mr. George M. Arran I1I Page 7 bodies during the term for which the member receiving the same shall have been appointed.... C. A majority of the members shall constitute a quorum of the board for the purpose of organizing the Authority and conducting the business thereof and for all other purposes, and all action may be taken by vote of a majority of the members present, unless in any case the by -laws shall require a larger number. The board shall have full authority to manage the properties and business of the Authority and to prescribe, amend and repeal by -laws, rules and regulations governing the manner in which the business of the Authority may be conducted, and the powers granted to it may be exercised and embodied. The board shall fix and determine the number of officers, agents and employees of the Authority and their respective powers, duties and compensation and may appoint to such office or offices any member of the board with such powers, duties and compensation as the board may deem proper..." (Emphasis added) 53 P.S. 309B, C. Advice 91 -517 concluded that since there was no authorization in the Municipality Authorities Act which would allow board members to simultaneously serve as authority employees, such was not provided for by law and consequently such would be prohibited by Section 3(a) of the Ethics Law as a private pecuniary benefit. There are no prior Commission opinions on this precise issue. The cases cited by the intervenor are not on point in that they do not involve cases involving the issue of employment by a board member of an authority or, as in the Routch or Brown, cases, supra involve questions under the contracting section of Act 170 of 1978 but not Section 3(a). Absent prior precedent, our determination must be made by reviewing the language of the Municipality Authorities Act, 53 P.S. 309, supra. The Municipality Authorities Act does indeed authorize a municipal authority board with the power to "...fix and determine the number of offices, agents and employees of the Authority and their respective powers, duties and compensation..." but then provides that the board "... may appoint to such office or offices any member of the board with such powers, duties and compensation as the board may deem proper." The conundrum with which we are faced revolves around a determination of the significance as to the absence of the word Mr. Charles J. Swick Mr. George M. Amon III Page 8 "employees" (and "agents ") from the latter phraseology. 53 P.S. 509. Does the omission of "employees" arise to a flat prohibition as to employment by an authority board member or does such omission merely indicate a lack of specific authorization which may compel a different result. Under the circumstances, we or are constrained to a terminus that an authority board member is not prohibited from being an employee of the authority. The following qualifications are adjunct to our decision. First, the board member could not use the authority of office by participating in /or voting in favor of his own appointment or in other matters concerning his employment such as salary raises, reviewing questions concerning his job performance, etc. Koslow, Order 458 -R, affirmed Koslow v. State Ethics Commission, 116 Pa. Commw. 19, 540 A.2d 1374 (1988). Secondly, we expressly assume for purposes of this opinion that the concerns raised in Confidential Advice 90 -527, affirmed Confidential Opinion 90 -012, do not exist in the present case. In this regard, we do note that only one board member who has experience and qualifications has been appointed to the position of sewer inspector. Subject to the two qualifications noted above, the board member would not be prohibited in the position of employment. Turning to the matter of compensation and reimbursable expenses, we agree that there is a distinction between the foregoing terms. Although it is argued that the advice confused the terms, we wonder whether the genesis of any confusion occurred in the letter of request which asked whether the board member /employee could "be compensated by salary and /or reimbursement of expenses." The failure to articulate the request in sufficient factual detail becomes apparent when the intervenor's brief is reviewed which recites: "...[the question posed) must have [been] intended to cover reimbursement for expenses. Intervenor's brief at p. We conclude by agreeing that board members /employees may receive compensation as well as legitimate "reasonable reimbursement for expenses which the officer incurred while on business in his position as an officer of the authority." Requestor's brief at p. 6. As a postscript to this opinion, we must express two concerns. First, we have learned from the requestor's brief that he did not disclose the fact that the board member already engaged in the conduct in question when the request was submitted. The non - disclosure of that fact causes concern since advisory opinions are issued as to future prospective conduct but not as to past action. Secondly, we restate our concern that the initial advisory request did not set forth in sufficient factual detail the relevant circumstances of the case as well as the precise question(s) asked. See Bassi, Opinion 86- 007-R. If such were done in this case, a great deal of time and effort could have been avoided by all concerned. Mr. Charles J. Swick Mr. George M. Amen III Page 9 such. Advice of Counsel 91 -517 is reversed. IV. Conclusion: Board members of a municipal authority are public officials subject to provisions of the Ethics Law. Section 3(a) of the Ethics Law would not prohibit a municipal authority board member from simultaneously serving in a compensated position of employment with the authority and receiving a salary and legitimate reimbursable expenses as to authority business. Advice of Counsel, 91 -517 is reversed. Pursuant to Section 7(10), the person who acts in good faith on this opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as Finally, any person may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within fifteen days of the mailing date of this Opinion. The person requesting reconsideration should present a detailed explanation setting forth the reasons why the Opinion requires reconsideration. By the %Commission Helena G. Hughes, Chair