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HomeMy WebLinkAbout21-530 ConfidentialPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov ADVICE OF COUNSEL May 27, 2021 21-530 This responds to your letter received [REDACTED], by which you requested a confidential advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the general issue presented below: Issue: Facts: Would the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa. C.S. § 1101 et seq., prohibit you as a [MEMBER/CHAIR] of the [BOARD], from serving in a volunteer capacity with [ENTITY], a nonpartisan political organization focused on [MISSION]? Brief Answer: NO. Based upon the submitted facts, Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity, from engaging in volunteer activities on behalf of [ENTITY], to the extent that there would be no private pecuniary benefit to you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. You request an advisory from the Commission based upon submitted facts that may be fairly summarized as follows: On [DATE REDACTED] you were voted to be the Chair of the [BOARD] (Board). [COUNTY] is governed by a [CHARTER], and the Board consists of [REDACTED] citizens, [REDACTED] of whom are appointed by the [COUNTY]. These [REDACTED] members, in turn, appoint the [REDACTED] Member who serves as the Chair. At the time of your appointment to the Board, you served in a volunteer capacity with [ENTITY]. [ENTITY] was founded in [DATE REDACTED] by representatives from the [ENTITY 1], [ENTITY 2], [ENTITY 3], [ENTITY 4], and others concerned about accountable Confidential Advice, 21-530 May 27, 2021 Page 2 government. [ENTITY] is officially a project of the [ENTITY 1], a nonpartisan political organization which [ENGAGES IN MISSION 1]. [ENTITY] receives no funding from political action committees (PACs) or political parties and is endorsed by a wide range of local and statewide organizations. [ENTITY] is part of the [ENTITY 1]. Shortly following your appointment to the Board, several residents of the County expressed concerns during the public comment portion regarding your volunteer work with [ENTITY], prompting you to resign from the organization. Prior to your resignation, you held the positions of [POSITION 1] and [POSITION 2] of [ENTITY]. You seek an advisory from the Pennsylvania State Ethics Commission as to whether or not your service as a volunteer for [ENTITY] would constitute a conflict of interest, to the extent that it does not, you indicate a willingness to again volunteer with the organization. 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 requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester 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 requester has truthfully disclosed all of the material facts. It is further noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion/advice may be given only as to prospective (future) conduct. To the extent that your inquiry relates to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may and shall be addressed. As a [MEMBER/CHAIR] of the [BOARD] (Board), you are a public official as that term is defined in the Ethics Act and are therefore subject to the provisions of the Ethics Act. Sections 1103(a) and 0) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. — No public official or public employee shall engage in conduct that constitutes a conflict of interest. 0) Voting conflict. — Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order Confidential Advice, 21-530 May 27, 2021 Page 3 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. 65 Pa.C.S. § 1103(a),O). The following terms related to Section 1103(a) 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. Confidential Advice, 21-530 May 27, 2021 Page 4 "Immediate family." A parent, spouse, child, brother or sister. "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. 65 Pa.C.S. § 1102. 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 him/herself, any member of his/her immediate family, or a business with which he/she or a member of his/her immediate family is associated. The definition of the term "business" as set forth in the Ethics Act includes a non-profit corporation. Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708 (2009). The use of authority of office is not limited merely to voting but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting, unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. Per the Pennsylvania Supreme Court's decision in Kistler v. State Ethics Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a) of the Ethics Act, a public official/public employee: Confidential Advice, 21-530 May 27, 2021 Page 5 ... must act in such a way as to put his [office/public position] to the purpose of obtaining for himself a private pecuniary benefit. Such directed action implies awareness on the part of the [public official/public employee] of the potential pecuniary benefit as well as the motivation to obtain that benefit for himself. Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics Act, a public official/public employee "must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit." Id., 610 Pa. at 528, 22 A.3d at 231. Based upon the submitted facts, [ENTITY] is not a business with which you are associated because you are not a director, officer, owner, employee, or holder of a financial interest in [ENTITY]. Since [ENTITY] is not a business with which you are associated, you are advised that you would not have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) before the Board that would financially impact [ENTITY]. Furthermore, you would not have a conflict as to volunteering with [ENTITY] to the extent you do not use the authority of your public office or confidential information obtained, as a [MEMBER/CHAIR]of the [BOARD], for the private pecuniary benefit of yourself, a member of your immediate family, or a business with which you or a member of your immediate family is associated. To the extent that you would be a "director, officer, owner, employee, or holder of a financial interest" in [ENTITY], same would be considered a "business with which you are associated." Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a [MEMBER/CHAIR] of the Board, you would have a conflict of interest in matters that would financially impact [ENTITY]. In each instance of a conflict of interest, you would be required to abstain from participation in your public capacity as a [MEMBER/CHAIR] of the [BOARD]. Section 1103(a) of the Ethics Act would only restrict you in your capacity as a public official. Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer or give to a public official/public employee anything of monetary value and no public official/public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official/public 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. Lastly, in addition to complying with the other substantive disclosure requirements for Statements of Financial Interests set forth in Section 1105 of the Ethics Act, 65 Pa.C.S. § 1105, to the extent you would be an officer, director or employee of [ENTITY], you would be required to disclose on your annual Statement of Financial Interests your position as an "office, directorship or employment of any nature whatsoever in any business entity" pursuant to Section 1105(b)(8) of the Ethics Act, 65 Pa.C.S. § 1105(b)(8). Confidential Advice, 21-530 May 27, 2021 Page 6 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. Conclusion: As a [MEMBER/CHAIR] of the [BOARD] (Board), you are a public official as that term is defined in the Ethics Act and are therefore subject to the provisions of the Ethics Act. The Pennsylvania Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et seq., would not prohibit you, in your private capacity, from engaging in volunteer activities on behalf of [ENTITY], to the extent that there would be no private pecuniary benefit to you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. In the event you would at some future point be a "director, officer, owner, employee, or holder of a financial interest" in [ENTITY], same would be considered a "business with which you are associated." Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a [MEMBER/CHAIR] of the Board, you would have a conflict of interest in matters that would financially impact [ENTITY]. In each instance of a conflict of interest, you would be required to abstain from participation in your public capacity as a [MEMBER/CHAIR] of the Board. Section 1103(a) of the Ethics Act would only restrict you in your capacity as a public official. Pursuant to Section 1107(11) of the Ethics Act, 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 requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. 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. Re Brian D. Chief Co!