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HomeMy WebLinkAbout00-530 DeBlasioSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 - 932 -093 ADVICE OF COUNSEL February 28, 2000 Senator W. Thomas Andrews, Esquire Mansell & Andrews 25 North Mill Street, Suite 403 00-530 New Castle, PA 16101 -3791 Re: Conflict; Public Official /Employee; Member; City Council; Municipal Pension Fund; Vote; Immediate Family Member; School Board. Dear Mr. Andrews: This responds to your letter of February 24, 2000 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et am., presents any prohibition or restrictions .upon city council members as to voting to invest funds through an investment firm that employs a school board member when that school board member exercises authority over the employment of the council members or their spouses who are school board employees. Facts: You are the Solicitor for the City of New Castle Municipal Pension Fund the ("Pension Fund"). The New Castle City Council NCouncil") Municipal Pension Ordinance ("City shall collectively A be the provides Tru see the Pension Fund. City Council consists of five Members/Trustees, two of whom are Richard DeBlasio ( "DeBlasio ") and Mark Elisco ( "Elisco "). DeBlasio's wife is a principal and DeBlasio is an assistant principal in the New Castle Area School System. Approximately 25% of the Pension Fund has been invested through Goldman - Sachs and its Sales Representative, David Domenick ( "Domenick "). Domenick is an elected Member of the New Castle Area School Board which employs DeBlasio's wife and Elisco. Neither DeBlasio's wife nor Elisco is in a bargaining unit or protected by any union contract. You request to voting qst advisory with regard to oh whether Blasio or Elisco would have a conflict 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 which the requester 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 FAX: (717) 787 -0806 • Web Site: www.ethics.state oa us • e-mail: ethics @state.pa.us Andrews, 00 -530 February 28, 2000 Page 2 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. As Members of the New Castle City Council, DeBlasio and Elisco are public officials as that term is defined in the Ethics Act, and hence are subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: Section 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: Section 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. "Immediate family." A parent, spouse, child, brother or sister. 65 Pa.C.S. §1102. In addial of offer to a Sections 1 public official/ mployee anything of monetary value and no public official/ employee person sal/ offer to a employee shall solicit or accept anything of monetary alof the d pub /c the understanding that the vote, official action, or judgment official /employee would be influenced thereby. Reference is made to these provisions of the law not to provide a imply that response been o the question presentedression thereof but Andrews, 00-530 00 February 28, Page 3 Section 1103(j) of the Ethics Act provides as follows: Secti.n 11 $ Res ri te. 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. 65 Pa.C.S_ §1103(j)- In each instance of a conflict, Section 1103(j) requires the public same, both orally lly an ab nd by a writttenlimemorandum to that effect with c disclose the abstention and s the person same, both ora ay 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, Mla ar, Advice 91- 523 -S. In applying the above provisions of the Ethics Act to the instant matter, pursuant to Section 1103(a) of the Ethics Act, pi e b m a yee is bia prohibited from using the authority of public benefit information received by holding ee hirn elf, anytmember of his im me ate family, or of the public official/public emp lo Y a business with which he or a member of his immediate family is associated. Since the term "immediate family" is defined to include a parent, spouse, child, brother or sister delineated above, a Section 1103(a) (a) of the if Ethics Act would prohibit DeBlasio from participating in actions of City Council that would result in a financial benefit to his Andrews, 00 -530 February 28, 2000 Page 4 wife. Section 1103(a) of the Ethics Act would also prohibit Elisco from participating in actions of City Council that would result in a financial benefit to himself. Having established the above principles, your question shall now be addressed. DeBlasio and Elisco would have a conflict of interest with regard to voting to invest funds through Domenick because Domenick, as a School Board Member, would determine whether DeBlasio's wife or Elisco would serve in their respective positions with the New Castle Area School System. This conclusion is based upon the State Ethics Commission's rulings in Bassi, Opinion No. 86 -007 -R and Woodrinq, Opinion No. 90 -001. In Bassi, Opinion No. 86- 007 -R, the State Ethics Commission held, inter alia, that a County Commissioner (Edward Paluso) 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 alia: 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. Paluso 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. Paluso a lease which results in Mr. Paluso 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. Paluso, 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 scenarios, while hypothetical in nature, nonetheless create the types of conflicts of interest that are to be addressed by this Commission. Id. 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 Andrews, 00 -530 February 28, 2000 Page 5 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. The facts which you have submitted reflect that as Members of City Council, DeBlasio and Elisco exercise authority over decisions regarding the Pension Fund, in particular, whether the Pension Fund should be invested through Goldman -Sachs and its Sales Representative, Domenick. In turn, Domenick, as a School Board Member exercises influence and control over School Board matters including matters affecting the employment of DeBlasio's wife and and Elisco. If DeBlasio and Elisco would vote to approve the investment of funds through Domenick, Domenick would receive a financial benefit. Parenthetically, the fact that the employment involves Elisco individually but DeBlasio as to his spouse does not distinguish this case from the above State Ethics Commission decisions. Therefore, for the reasons enunciated in Bassi and Woodrinq, su r , as City Council Members, DeBlasio and Elisco would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act with regard to voting to invest funds through Domenick. In each instance of a conflict of interst, DeBlasio and Elisco would be required to abstain 03( from the Ethics Act as set forth above. m ip o fully t diclosure requirements of Section 1 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 respective municipal code. Conclusion: As Members of the New Castle City Council, Richard DeBlasio ("DeBlasio") and Mark Elisco ("Elisco") are public 65 Pa.C.S. rovisions of the P t seg. the Public c Officiai and Employ ee Ethics Act ( "Ethic DeBlasio's wife is a member of his immediate family. As City Council Members, DeBlasio and Elisco would have a conflict of interest with regard to voting to invest funds through ho Golman-Sachs and its is a Member of the New Sales astle Area School Board. o and Elisco lisco would ("Domenick"), Elisco w have a conflict because they would exercise authority over Pension Fund matters, including whether the Pension Fund should be invested through Domenick Andrews, 00 -530 February 28, 2000 Page 6 who would receive commissions /fees through the sale of funds. Domenick as a School Director, in turn, would exercise authority over the employment of DeBlasio's spouse and Elisco. in each instance of a conflict of interest, DeBlasio and Elisco would be required to abstain and observe the disclosure requirements of Section 1103(j) 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 ce at the Commission within thirty (30) days of the date received this dice pursuant to 51 Pa. Code §13.2(h ). The app y 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 `J: -Dopko Chief Counsel