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Home My WebLink About02-543 KellyFrancis X. Dillon, Esquire Begley, Carlin & Mandio, LLP 680 Middletown Boulevard P.O. Box 308 Langhorne, PA 19047 -0308 ADVICE OF COUNSEL April 1, 2002 02 -543 Re: Conflict; Public Official /Employee; Township; Supervisor; Business With Which Associated; Business Clients. Dear Mr. Dillon: This responds to your letter of February 21, 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 a township supervisor as to participating in matters before the township involving a business with which he is associated or its business clients. Facts: As Solicitor for Middletown Township ( "Township "), you seek an advisory on behalf of John Kelly ( "Kelly "), a newly elected Township Supervisor. Kelly owns 50% of Gooch's Best Lawn Service, Inc. ( "GBLS "). One of GBLS's business clients is Penndel- Middletown Emergency Squad (`Penndel "), which receives funding from the Township. GBLS performs lawn services and snow removal services for Penndel. You state that GBLS has received compensation in excess of $500 per year. You ask whether Kelly would have a conflict as to matters before the Township Board of Supervisors involving Penndel and, if so, whether he should refuse to do any further work for Penndel. 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 Dillon /Kelly, 02 -543 April 1, 2002 Page 2 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 Supervisor for Middletown Township, John Kelly ( "Kelly ") is a public official as that term is defined in the Ethics Act, and hence Kelly is 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). 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. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. Dillon /Kelly, 02 -543 April 1, 2002 Page 3 65 Pa.C.S. § 11030). 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, you are advised that Section 1103(a) of the Ethics Act does not generally prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position or confidential information obtained by being in that position for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89- 011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, Metrick Order No. 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order No. 800; Pancoe, supra and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity, such as the review /selection of its bids or proposals, Gorman, Order No. 1041. If a business with which the public official /public employee is associated or its client(s) would have matter(s) pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter(s). Miller Opinion No. 89 -024; see also, Kannebecker Opinion 92 -010. In each instance a conflict of interest, the p�u it c o fficial /public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. Having established the above general principles, your specific inquiry shall now be addressed. To the extent you are seeking guidance as to Kelly's private business decisions, in particular, whether he should refuse to do any further work for Penndel, such is beyond the jurisdiction of the State Ethics Commission and cannot be addressed in this Advice. However, to the extent you are inquiring whether Kelly, in his public capacity as Township Supervisor, would have a conflict of interest as to GBLS or its business clients, you are advised as follows. In the instant matter, it is clear that Gooch's Best Lawn Service, Inc. ( "GBLS" ) is a business with which Kelly, as a 50% owner, is associated. Therefore, as a Township Supervisor, Kelly would have a conflict of interest under Section 1103(a) of the Ethics Act as to matters that would financially impact himself, GBLS, Penndel- Middletown Emergency Squad, or other clients /customers of GBLS. In each instance of a conflict, Kelly would be required to abstain and observe the disclosure requirements of Section 11030) 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 Dillon /Kelly, 02 -543 April 1, 2002 Page 4 interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Second Class Township Code. Conclusion: As a Supervisor for Middletown Township, Kelly 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. Gooch's Best Lawn Service, Inc. ("GBLS") is a business with which Kelly, as a 50% owner, is associated. As a Township Supervisor, Kelly would have a conflict of interest under Section 1103(a) of the Ethics Act as to matters that would financially impact himself GBLS, Penndel- Middletown Emergency Squad, or other clients /customers of GBLS. In each instance of a conflict, Kelly would be required to abstain and observe the disclosure requirements of Section 11030) 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