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HomeMy WebLinkAbout98-573 TitusWilliam L. McDaniel RD 3, Box 45 Franklin, PA 16323 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL July 8, 1998 98 -573 Re: Conflict; Public Official /Employee; Borough Council Member; Business; Business with which Associated; Clerk; Salary; Borough Tax Collector. Dear Mr. McDaniel: This responds to your letter of June 3, 1998 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a borough council member who is employed as a clerk by the borough tax collector, and whose salary as clerk is paid directly by the tax collector and not by the borough. Facts: You are the elected Tax Collector for Sugarcreek Borough ( "Borough ") in Venango County, Pennsylvania. In addition to serving as Borough Tax Collector, you engage in various private business activities. Specifically, you do accounting for local businesses; prepare federal, state and local income tax forms; and operate a mail -order enterprise. Tax collection makes up about 20 percent of your work. Susan Titus ( "Titus ") has been employed as your clerk for 15 years. You state that Titus' salary is paid from your "own pocket" and that she receives no compensation from the Borough or from any other political body. Titus was recently elected to serve on the Borough Council. Her term expires December 31, 2002. You have been authorized by Titus to request an advisory from the State Ethics Commission as to whether a conflict would exist with regard to her serving as a Borough Council Member and working as your employee. You have submitted a copy of Titus' job description and 1997 W -2 form, which documents are incorporated herein by reference. It is noted that the said job description bears the heading, "Wm. L. McDaniel's Enterprises," and the W -2 lists both your name and "McDaniel Accounting & Tax Service" as Titus' employer(s). Discussion: It is initially noted that pursuant to Sections 7(10) and 7(1 1) of the Ethics Law, 65 P.S. §§407(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon FAX : (717) 787 -0806 41 Web Site: www.ethics.state.pa.us • e -mail: sec @state.pa.us McDaniel, 98 -573 July 8, 1998 Page 2 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 P.S. § §407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As a Borough Council Member for Sugarcreek Borough, Susan Titus is a public official as that term is defined in the Public Official and Employee Ethics Law ( "Ethics Law "), and hence she is subject to the provisions of that law. 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. The following terms are defined in the Ethics Law as follows: 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 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 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 McDaniel, 98 -573 July 8, 1998 Page 3 anything of monetary value based upon the understanding that the vote, official action, or judgement 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 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities (j) 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. In each instance of a conflict, Section 3(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 Law, 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 Law to the circumstances which you have submitted, Section 3(a) of the Ethics Law would not preclude Titus from serving as a Borough Council Member merely because she is your employee. However, Section 3(a) would impose certain restrictions upon Titus in her capacity as a Borough Council Member. Pursuant to Section 3(a) of the Ethics Law, 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. Thus, in Mc0aniel, 98 -573 July 8, 1998 Page 4 her capacity as a Borough Council Member, Titus would clearly have a conflict of interest in matters before Borough Council which would result in a private pecuniary benefit to Titus herself, a member of her immediate family, or a business with which she or a member of her immediate family is associated. Sole proprietorships, firms, enterprises, and self - employed individuals are specifically included within the Ethics Law's definition of "business." As Titus' private employer(s), you and your private business enterprises would be deemed businesses with which Titus is associated. Therefore, Titus would have a conflict of interest in matters before the Borough involving you (in your private capacity) and /or your businesses. As for matters involving you /your office as Borough Tax Collector, it is clear that a tax collector would not be considered a "business." Nevertheless,.based upon the facts which you have submitted, Titus would have a conflict of interest in matters before Borough Council involving you /your office as Borough Tax Collector. This conclusion is based upon the State Ethics Commission's rulings in Bass(, Opinion No. 86- 007 -R, and Woodring, Opinion No. 90 -001. In Bassi, Opinion No. 86- 007 -R, the State Ethics Commission held inter alia, that a County Commissioner (Edward Peluso) could not enter into a lease with a municipal authority, where one of the members of the authority (Norman Carson) was a county employee directly responsible to the commissioners of the county, unless the execution of the lease was accomplished after an open and public process, with the authority member abstaining from participating in the review and award of said lease, and the county commissioner abstaining from participating in any matter relating to the authority member in his position as a county employee. The Commission stated, inter ... we cannot ignore the fact that Mr. Carson is an authority member and has influence and control over authority decisions. In this respect, Mr. Carson, by voting on the final adoption of a lease, would be voting on a matter directly related to his employer. Even though that employer is another governmental body, we have held, in the past, that a public official may not vote or participate in a matter if it somehow relates to a financial interest which he may have. See, Welz, 86 -001. In the instant situation, Mr. Carson would be called upon to determine the advisability of renting property for the authority. The property which they are seeking to rent is owned by the individual or one of the individuals who currently supervises him and controls his public employment with the county. As a result of this, Mr. Carson, as an authority member, should abstain from participating in any matter relating to this particular lease. See, Bassi, 86 -007 at 3. The Commission further stated: Mr. Peluso as a county commissioner, is, in part, responsible for the general supervision of Mr. Carson. Mr. Carson, on the other hand is an authority member in a position to grant Mr. Peluso a lease which results in Mr. Peluso receiving a financial gain. It may be difficult for the public to perceive how Mr. Paluso's actions as a county official, would not somehow be influenced by this potential leasing arrangement. It may be argued that Mr. Peluso, in dealing with Mr. Carson, to date, has done so in order to effect the favorable outcome of this lease. Additionally, it could be argued that Mr. Carson voted in favor of the lease in order to advance his position as a full -time county employee. The above factual McDaniel, 98 -573 July 8, 1998 Page 5 scenarios, while hypothetical in nature, nonetheless create the types of conflicts of interest that are to be addressed by this Commission. kJ. at 4. In Woodring, Opinion No. 90 -001, the State Ethics Commission reviewed a similar situation. Jesse Woodring, Chairman of the Sunbury Redevelopment Authority, had applied to the City for a rehabilitation grant through the Federal Rental Rehabilitation Program (hereinafter, the "Program "). Kenneth Pick, who was employed as the Executive Director of the Redevelopment Authority (chaired by Woodring) also served as the Community Development Coordinator for Sunbury. In the latter capacity, Pick was administrator in charge of the Program for the City. Pick's functions included administering the Program, reviewing all applications, and determining eligibility. The Commission stated: we are concerned that Mr. Pick, who is an employee of the Redevelopment Authority of which you are Chairman, has the duty of reviewing all applications and determining eligibility in his capacity as Community Development Coordinator for the city. In particular, the potential exists, given the employer - employee relationship between the Redevelopment Authority and Mr. Pick, that your application might be reviewed in a more favorable light than other applications. To forestall such a situation, you must not participate or take any action as to Mr. Pick if your application is approved and you receive benefits. Bassi, Opinion 86 -007. In addition, Section 3(j) of the Ethics Law would require you to publicly note that you would have a conflict as to any matter involving Mr. Pick. In addition, you must file a written memorandum to that effect with the person responsible for recording the minutes. Woodrinq, Opinion No. 90 -001 at 6. Much like the Bassi and Woodrinq rulings discussed above, the facts which you have submitted reflect that in her public position as a Borough Council Member, Titus would exercise some authority which would financially impact upon you in your office as Borough Tax Collector. In her private capacity, Titus would be subject to your authority as her employer. Therefore, for the reasons enunciated in Bassi and Woodring, supra, Titus would have a conflict of interest pursuant to Section 3(a) of the Ethics Law in matters before Borough Council pertaining to you /your office as Borough Tax Collector. In each instance of a conflict of interest, Titus would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. The propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Law has not been considered in that they do not involve an interpretation of the Ethics Law. Specifically not addressed herein is the applicability of the Borough Code. Conclusion: As a Borough Council Member for Sugarcreek Borough, Venango County, Susan Titus ( "Titus ") is a public official subject to the provisions of the Ethics Law. In her capacity as a Borough Council Member, Titus would have a conflict of interest in matters before Borough Council which would result in a private pecuniary McDaniel, 98 -573 July 8, 1998 Page 6 benefit to Titus herself, a member of her immediate family, or a business with which she or a member of her immediate family is associated. As Titus' private employer(s), you and your private business enterprises would be deemed businesses with which Titus is associated. Therefore, Titus would have a conflict of interest in matters before the Borough involving you (in your private capacity) and /or your businesses. Based upon the State Ethics Commission rulings in Bassi, Opinion No. 86- 007 -R, and Woodrinq, Opinion No. 90 -001, Titus would also have a conflict of interest pursuant to Section 3(a) of the Ethics Law in matters before Borough Council pertaining to you /your office as Borough Tax Collector. In each instance of a conflict of interest, Titus would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(11), this 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, providing 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. cerely, * Vincent Dopko Chief Counsel