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HomeMy WebLinkAbout98-621 YoderChristopher J. Foust, Esquire 131 Broadway St. Milton, PA 17847 Dear Mr. Foust: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL December 11, 1998 FAX : (717) 787 -0806 • Web Site: www.ethics.state.pa.us • e -mail: sec@state.pa.us 98 -621 Re: Conflict; Public Official /Employee; Borough Council Member; Volunteer Fire Company; Member; Officer; Business with which Associated; Use of Authority of Office; Real Estate Tax for Fire Protection. This responds to your letters of November 9 and 13, 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 with regard to voting on a two mill real estate tax for fire protection which is to be allocated to the local volunteer fire company, when the borough council member is a member or officer of the fire company. Facts: As Solicitor for the Borough of Turbotville ("Borough") in Northumberland County, Pennsylvania, you have been authorized by Borough Council Members David W. Hans ( "Hans "), Jay Yoder ( "Yoder "), and Carl Reiss ( "Heiss ") to request an advisory from the State Ethics Commission on their behalf. In addition to serving as Borough Council Members, Hans, Yoder, and Heiss are members of the Turbotville Volunteer Fire Company ( "Fire Company "). The Fire Company is a non - profit corporation with its facility located in the Borough. Some of these three Council Members are also officers of the Fire Company. You state that they are active in the management of the Fire Company, but do not receive payment from the Fire Company for their services. Borough Council is proposing to institute a two mill real estate tax for fire protection at its December 7, 1998 regular meeting. The proceeds of the tax would be paid to the Fire Company, pursuant to the provisions of the Borough Code. You ask for an advisory as to whether Hans, Yoder, and Heiss would have conflicts of interest in this matter. 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 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 Foust, 98 -621 December 11, 1998 Page 2 material facts relevant to the inquiry. 65 P.S. § §407(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. As Members of the Turbotville Borough Council, David W. Hans, Jay Yoder, and Carl Heiss are public officials as that term is defined in the Public Official and Employee Ethics Law ( "Ethics Law "), and hence they are 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. Section 3(j) of the Ethics Law provides as follows: Foust. 98 -621 December 11, 1998 Page 3 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 -5. In applying the above provisions of the Ethics Law to the instant matter, 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. Depending upon the circumstances in a given case, a fire company may be viewed as part of a governmental body, such as a borough, or as a private entity meeting the definition of "business" as set forth in the Ethics Law. If a fire company is part of the governmental body in which the public official /public employee serves, it may generally be said that a private pecuniary benefit to the fire company alone would not present a conflict of interest for the public official. Only if there were additional circumstances, such as if the public official /public employee or a member of his immediate family would also derive a private pecuniary benefit, could there be a conflict of interest. If, on the other hand, the fire company is a "business," there is the potential for a conflict of interest solely based upon a private pecuniary benefit to the fire company, because the fire company is then an entity separate from the governmental body. The issue becomes whether the fire company is a "business with Foust 98 -621 December 11, 1998 Page 4 which [the public official /public employee] is associated," as that term is defined in the Ethics Law. That definition would include any business for which the public official /public employee or a member of his immediate family is a director, officer, owner, employee, or has a financial interest. Among the most significant factors in determining the status of a fire company is the degree to which the fire company is funded and controlled by the governmental body, see 53 P.S. §65704, or alternatively raises its own funds and governs itself. The facts which you have submitted do not address the relationship between the Borough of Turbotville and the Turbotville Volunteer Fire Company. Therefore, it is impossible to determine whether the Fire Company is part of the Borough or is a business with which Hans, Yoder, and Heiss are associated. It is noted that regardless of the status of the Fire Company, to the extent any of these three Council Members would receive a private pecuniary benefit from official action as to the Fire Company's Workers' Compensation insurance or relief funds, the exceptions to the definition of "conflict of interest" include official action "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 ... a member of his immediate family ....' 65 P.S. §402. Conditioned upon the assumption that these individuals would benefit from the Fire Company's Workers' Compensation insurance or official action as to relief funds to the same degree as the other firefighters and/or officers, these individuals would not have a conflict of interest as to such matters in that they would be within the aforesaid exception to the definition of conflict of interest. The matter of the two mill real estate tax for fire protection shall now be addressed. Based upon the limited facts which have been submitted, if the Fire Company is part of the Borough, the proposed two mill real estate tax for fire protection would not present a conflict of interest for any of the three Council Members on whose behalf you have inquired. The only pecuniary benefit would flow to a governmental body and therefore, the elements for a conflict of interest would not be met. On the other hand, if the Fire Company is a "business" as defined by the Ethics Law, those Council Members who are its officers would have conflicts of interest as to the proposed two mill real estate tax for fire protection. The tax would result in a private pecuniary benefit for the Fire Company, a business with which they are associated. In each instance of a conflict of interest, those Council Members would be required to abstain from any participation of any nature and to publicly disclose the nature of the conflict, both orally at the public meeting and in a written memorandum filed with the secretary to be placed with the minutes. The Council Members who are strictly members of the Fire Company and who do not serve as officers of the Fire Company would not have a conflict of interest in the matter of the two mill real estate tax for fire protection. The fire company would not be a business with which such individuals are associated as defined in the Ethics Law. 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. Foust, 98 -621 December 11, 1998 Page 5 Conclusion: As Members of Borough Council for the Borough of Turbotville, David W. Hans, Jay Yoder, and Carl Heiss are public officials subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would restrict all three Council Members from using the authority of office, or confidential information obtained by being in their public positions, for a private pecuniary benefit for themselves, for member(s) of their immediate families, or for business(es) with which they or member(s) of their immediate families are associated. The class /subclass exception to the definition of conflict of interest would apply in instances where the private pecuniary benefit derived would be to a class or subclass affecting such person(s) or entity(ies) to the same degree as the other members of the class /subclass. Based upon the facts which have been submitted, it cannot be determined whether the Turbotville Volunteer Fire Company ( "Fire Company ") is part of the Borough of Turbotville ("Borough") or is a "business" as defined by the Ethics Law. Based upon the submitted facts, if the Fire Company is part of the Borough, the proposed two mill real estate tax for fire protection would not present a conflict of interest for any of the three Council Members on whose behalf you have inquired. However, if the Fire Company is a "business" as that term is defined by the Ethics Law, those Council Members who are officers of the Fire Company would have conflicts of interest in matters which would result in a private pecuniary benefit to the Fire Company, such as the proposed two mill real estate tax for fire protection. In each instance of a conflict of interest, such Council Members would be required to abstain from any participation and to publicly disclose the abstention and the reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. Council Members who are strictly members of the Fire Company and who do not serve as officers of the Fire Company would not have a conflict of interest in the matter of the two mill real estate tax for fire protection. 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. S,jncerely, Vincent 1'. Dop o Chief Counsel