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HomeMy WebLinkAbout02-582 ConfidentialADVICE OF COUNSEL August 2, 2002 02 -582 Re: Conflict; Public Official /Employee; Township; Council Member; Attorney; Law Firm; Private Clients; Subdivision /Land Development. This responds to your letter of July 1, 2002, by which you requested a confidential advisory from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., presents any prohibition or restrictions upon a township council member who is ifso an associate attorney in a private law firm as to matters before the council involving current or former clients of the law firm. Facts: As a member of the law firm that serves as Solicitor to Township A ownship"), you seek a confidential advisory from the State Ethics Commission on behalf of Township Council Member B. You have submitted facts, which may be fairly summarized as follows. The Township operates under a Home Rule Charter. A copy of the Home Rule Charter has been submitted and is incorporated herein by reference. The Township Council is the governing body of the Township. In a private capacity, Township Council Member B is an associate attorney —but not a artner —employed ed by a law firm, referred to hereinafter as "the Law Firm." Township Council Member B and several other attorneys employed by the Law Firm represent individuals and corporations engaged in the business of drafting, filing and securing approval of subdivision and land development plans. You pose the following specific questions: 1. What are Township Council Member B's responsibilities under the Ethics Act if a present client of the Law Firm applies for a subdivision or land development in the Township, but is represented by other counsel? 2. What are Township Council Member B's responsibilities under the Ethics Act if a present client of the Law Firm applies for a subdivision or land development in the Township, represented by other counsel, if Township Confidential Advice 02 -582 August 2, 2002 Page 2 Council Member B has never been directly involved with the representation of the individual or entity making application to the Township Council? 3. What are Township Council Member B's responsibilities under the Ethics Act if an applicant before the Township Council has previously utilized the services of the Law Firm, but has no current matters with the Law Firm? 4. What are Township Council Member B's responsibilities under the Ethics Act if an applicant before the Township Council has previously utilized the services of the Law Firm, but has not done so for a period of one year or more? 5. Given that the Law Firm is a rather large firm with several locations, would the answers to the above questions change if Township Council Member B has never been involved in the representation of the Law Firm client and has no reasonable expectation of ever being involved in the representation of that client? 6. If Township Council Member B discovers the existence of a potential conflict after the Township Council has completed its review of a particular land development application, what steps should be taken to come into compliance with the Ethics Act? (With regard to this question, you state that because of the size of the Law Firm, and the use by land developers of different corporate entities or partners for each project, Township Council Member B is concerned about her potential lack of awareness that an applicant before Council may also have involvement with an entity represented by a member of the Law Firm.) 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 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. Township Council Member B is a public official subject to the provisions of the Ethics 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 Confidential Advice 02 -582 August 2, 2002 Page 3 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, 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. 65 Pa.C.S. § 1102. In addition, Sections 1103(b) and 1103(c) of the Ethics Act 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 anything of monetary value based upon the understanding that the vote, official action, or judgment 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 1103(j) of the Ethics Act provides as follows: § 1103. Restricted 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 Confidential Advice 02 -582 August 2, 2002 Page 4 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 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, it is noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not 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 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 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, Gorman, Order 1041, or private client(s). Miller, Opinion 89 -024. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official /pub iployee would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. The abstention requirement would not be limited merely to voting, but would extend 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 Kannebecker, Opinion 92 -010, the Commission considered whether the Ethics Act would impose any restrictions upon a township supervisor as to individuals who had matters pending before the township when the supervisor was an attorney for those individuals in unrelated matters. The Commission held: We believe that you would have indeed have a conflict as to an ongoing client or a client who is on a retainer even if you would not represent the client as to a matter pending before the Township. However, as to former or past clients, we do not believe as a general rule that you would have a conflict. Under certain circumstances, a conflict could exist as to past clients; such would depend upon Confidential Advice 02 -582 August 2, 2002 Page 5 factors like the number of prior representations of any given client and the period of time over which that occurred. Kannebecker, at 5 (Emphasis added). In considering the above, it is clear that the Law Firm would be considered a business with which Township Council Member B, as an employee, is associated. The fact that Township Council Member B is not a partner in the Law Firm is irrelevant for purposes of applying the Ethics Act to your inquiry. As a general rule, pursuant to Section 1103(a) of the Ethics Act, Township Council Member B would have a conflict of interest as to matters that would come before the Township Council when such matters would pertain to Township Council Member B, the Law Firm, or the Law Firm's client(s). See, Kannebecker, supra. As noted above, in each instance of a conflict, TownshipCduncil Member B would be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Having established the above general principles, your specific questions enumerated above shall be addressed. In response to your first and second questions, you are advised that if a present client of the Law Firm would apply for a subdivision or land development in the Township, even if represented by other counsel, Township Council Member B would have a conflict of interest and would be required to abstain fully and to make the requisite disclosures pursuant to Section 1103 of the Ethics Act. For purposes of the Ethics Act, it would make no difference if Township Council Member B had never been directly involved with the representation of the individual or entity making application to the Township Council. In response to your third and fourth questions, based upon Kannebecker, supra, Township Council Member B generally would not have a conflict of interest under Section 1103(a ) of the Ethics Act as to former client(s) of the Law Firm. However, as noted above, Township Council Member B could have a conflict as to former client(s) depending upon factors including the number of prior representations of such client(s), and the period of time over which such representations occurred. Id. Thus, Township Council Member B could have a conflict as to an applicant before — Council who would have previously utilized the services of the Law Firm, but: (a) would not have any current matters with the Law Firm; or (b) would not have utilized the Law Firm for a period of one year or more, depending upon the unique factual circumstances surrounding that applicant. When a conflict would exist, Township Council Member B would be required to abstain and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. In response to your fifth question, you are advised that it would make no difference for purposes of applying the Ethics Act to your first four questions if Township Council Member B would have never been involved in the representation of the Law Firm client and would have no reasonable expectation of ever being involved in the representation of that client. In response to your sixth question, you are advised that if Township Council Member B unknowingly engages in conduct that constitutes a conflict of interest and later discovers the conflict, there are no steps that can be taken to "undo" the violation of the Ethics Act. The State Ethics Commission has held that a public official /public employee who has violated the Ethics Act cannot, through subsequent acts, nullify or negate such violation. See, Dovidio, Order 1202. However, remedial measures may be considered by the Commission as mitigating factors. Confidential Advice 02 -582 August 2, 2002 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 in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Township's Home Rule Charter. Conclusion: Township Council Member B 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. The law firm by which Township Council Member B is employed (the "Law Firm ") is a business with which Township Council Member B is associated. Township Council Member B would have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) before the Township Council involving a client of the Law Firm. Township Council Member B generally would not have a conflict of interest under Section 1103(a) of the Ethics Act in matters pertaining to former client(s) of the Law Firm, but could have a conflict in matters pertaining to former client(s) de ending upon factors including the number of prior representations of such client(s), and the period of time over which such representations occurred. In each instance of a conflict, Township Council Member B would be required to abstain fully and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. A public official /public employee who has violated the Ethics Act cannot, through subsequent acts, nullify or negate such violation. 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