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HomeMy WebLinkAbout02-572 DeiterDavid Deiter 614 Park Road Ambridge, PA 15003 Re: Conflict; Public Official /Employee; Borough; Council Member; President; Business With Which Associated; Bank; Paying Agent; Bond Issue; Voting; Bill Lists; Payments to Business With Which Associated. Dear Mr. Deiter: ADVICE OF COUNSEL June 24, 2002 02 -572 This responds to your letter of April 26, 2002, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Ha.GS. § 1101 et seq., presents any prohibition or restrictions upon a borough council president with regard to council action to pay bills on a bill list, when such bills include semi- annual bond payments to his employer, a bank, as paying agent for a bond issue that predates his employment with the bank. Facts: As a Member and President of Ambridge Borough Council ( "Borough cil ), you seek an advisory from the State Ethics Commission. You have submitted facts which may be fairly summarized as follows. You have served as a member of Borough Council for approximately the past five years. In your private capacity, you have been employed for the past 1 1/2 years by "National City Bank." Prior to your employment with National City Bank, the Borough of Ambridge ( "Borough ") engaged in a capital improvement project. The project was financed through a bond issue underwritten by "National City Investments, Inc." National City Investments, Inc. is a corporate entity that is separate and apart from National City Bank. However, per the terms and conditions of the bond obligation, the Borough is required to issue semi- annual payments to National City Bank, Corporate Trust Department, as paying agent on the bond issue. The paying agent then issues payments to the bond holders. You state that at every monthly Borough Council meeting, all of the Borough's current bills are routinely paid by a motion to "pay all of the bills of the Borough." On a Defter, 02 -572 June 24, 2002 Page 2 semi - annual basis, the aforesaid semi - annual bond payments are included in the Borough's monthly bill list. Each month, you have voted affirmatively to pay all of the bills of the Borough, including the aforesaid semi - annual bond payments. You state that the Borough Solicitor has opined that in so doing, you have not violated the Ethics Act. However, you seek an advisory from the State Ethics Commission as to the propriety of your actions under 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, 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 your inquiry also contemplates future conduct, that portion of your inquiry may, and shall be addressed. As a Member and President of Borough Council, you are 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 Defter, 02 -572 June 24, 2002 Page 3 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, 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. 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 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. Defter, 02 -572 June 24, 2002 Page 4 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 your inquiry, it is reiterated- - so that there will be no misunderstanding - -that the propriety of your past conduct cannot and will not be addressed in this advisory. This advisory is strictly limited to reviewing prospective conduct. You are generally advised that 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. National City Bank, as your employer, is a business with which you are associated. Therefore, you would generally have a conflict of interest in matters before Borough Council that would result in a financial benefit to National City Bank. In this instance, it would seem likely that National City Bank as paying agent could derive some financial benefit for performing its functions as to the aforesaid bond issue, which would suggest a potential conflict of interest for you. On the other hand, it would also seem possible that the Borough's semi - annual bond payments could be routine, pre -set, and not subject to dispute or adjustment, in which case a conflict of interest would not arise for you in voting to pay them. See, Krushinski, Order 168. Given the lack of sufficient facts to determine with certainty whether a conflict of interest would exist for you, this Advice must necessarily be limited to advising as follows: With regard to prospective actions by Borough Council, if the semi - annual bond payments by the Borough to the Corporate Trust Department of your employer, National City Bank, relative to the bond issue predating your employment with the bank, would be routine, pre -set, and not subject to dispute or adjustment, you would not transgress Section 1103(a) of the Ethics Act by voting to approve such payments as part of Borough bill lists. If, on the other hand, the Borough Council could exercise some discretion as to the said semi - annual bond payments, you would have a conflict of interest under Section 1103(a) and would be precluded from participating as to the payment of the semi - annual bond payments even if they would be contained on bill lists. 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 Borough Code. Conclusion: As a Member and President of Ambridge Borough Council ('Borough Council "), 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. National City Bank, as your employer, is a business with which you are associated. You would generally have a conflict of interest in matters before Borough Council that would result in a financial benefit to National City Bank. With regard to prospective actions by Defter, 02 -572 June 24, 2002 Page 5 Borough Council, if the semi - annual bond payments by the Borough of Ambridge ( "Borough ") to the Corporate Trust Department of your employer, National City Bank, relative to the bond issue predating your employment with the bank, would be routine, pre -set, and not subject to dispute or adjustment, you would not transgress Section 1103(a) of the Ethics Act by voting to approve such payments as part of Borough bill lists. If, on the other hand, the Borough Council could exercise some discretion as to the said semi - annual bond payments, you would have a conflict of interest under Section 1103(a) and would be precluded from participating as to the payment of the semi - annual bond payments even if they would be contained on bill lists. 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