HomeMy WebLinkAbout89-545 MascaraFrank R. Mascara, Chairman
Board of County Commissioners
County of Washington
Commonwealth of Pennsylvania
Courthouse Square, Room 702
Washington, PA 15301
Dear Mr. Mascara:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
May 31, 1989
89 -545
Re: FIS, Public. Official, County Commissioner, Financial
Reporting Requirements
This responds to your letter of April 28, 1989 in which you
requested advice from the State Ethics Commission.
Issue: What requirements the Ethics Act imposes upon a Public
Official regarding the listing of various financial interests on
the Statement of Financial Interests.
Facts: You state that you are a County Commissioner in
Washington County and that you have four questions concerning
whether certain items of financial interest should be listed on
your Statement of Financial Interests. As to the first item, you
note that your wife and yourself are guarantors on your son's
auto loan during 1987. After stating that your son makes all the
loan payments, you question whether you are required to report
this annually under Item 1 as creditors. As to the second item,
you state that you and your wife are co- owners of a piece of
property with another son who sold the property under Article of
Agreement. You state that until January , 1989 you received no
rents or payments under the agreement. You inquire as to whether
you have to report this as an outstanding debt and secondly
whether you would report this on Item 11 of the Statement of
Financial Interest as income under the Articles of Agreement
consisting of the repayment to you of the original down payment
that you made to assist your son' -in purchasing the home.
Thirdly, you state that you sold a. piece of property in 1983
wherein the purchase price was deferred for several years. You
referenced Advice of Counsel 87 -575, wherein you were advised
that capital gains from the sale of real estate would have to be
Frank R. Mascara
May 31, 1989
Page 2
reported on Item 11 on the Statement of Financial Interest; you
then inquire as to whether amounts carried as deferred income
either as installment sale or notes due would be reportable and,
if so, where. Finally, you inquire as to whether the interest
earned but not received from the Washington County Employees'
Retirement Fund would be reportable on Item 11 of the Statement
of Financial Interest.
Discussion: As
"public official"
P.S. S402; 51 Pa.
the provisions of
applicable to you
a Commission for Washington County, you are a
that term is defined under the Ethics Act. 65
Code S1.1. As such, your conduct is subject to
the Ethics Act and the restrictions therein are
Section 4(a) of the Ethics Act provides:
Section 4. Statement of financial interests
required to be filed.
(a) Each public employee employed by the
Commonwealth shall file a statement of
financial interests for the preceding
calendar year with the department, agency or
bureau in which he is employed no later than
May 1, of each year that he holds such a
position and of the year after he leaves such
a position. Any other public employee shall
file a statement of financial interests with
the governing authority of the political
subdivision by which he is employed no later
than May 1 of each year that he holds such a
position and of the year after he leaves such
a position. 65 P.S. S404(a).
In addition, "Section 5 S(b), S4, and S5" of the Ethics
provide:
Section 5. Statement of financial interests.
(b) The statement shall include the following
information for the prior calendar year with
regard to the person required to file the
statement and the members of his immediate
family:
(4) The name and address of each creditor to
whom is owed in excess of $5,000 and the
interest rate thereon. However, loans or
credit extended between members of the
immediate family and mortgages Securing real
Act
Frank R. Mascara
May 31, 1989
Page 3
property which is the principle residence of
the person filing or of his spouse shall not
be included:
(5) The name and address of any person who
is the director indirect source of income
totalling in the aggregate $500 or more.
However, this provision shall not be
construed to require the divulgence of
confidential information protected by statute
or existing professional codes of ethics.
65 P.S. . S405(b)(4),(5)
Additionally, the term "income" is defined under the Ethics
Act as follows:
Section 2. Definitions
"Income." Any money or thing of value
received,or to be received as a claim on
future services, whether in the form of a
fee, salary,- expense, allowance, forbearance,
forgiveness, interest, dividend, royalty,
rent, capital gain or any other form of
recompense - or any combination thereof.
65 P.S. S402.
Under the Regulations of the State Ethics Act, "income" is
defined as follows:
Income - As defined in the act, but the term
refers to gross income; prize winnings
constitute income, not gifts; the term
includes tax exempt income. The term does
not include social security; welfare, general
assistance, domiciliary care programs;
retirement, pension, and annuity payments
funded totally by contributions of the
public official /employe; unemployment
compensation, including employer and union
funded programs; worker's compensation; or
miscellaneous, incidental income of minor
dependent children from newspaper routes,
babysitting, lawn- mowing, and the like. 51
Pa: Code 1.1.
The above provisions of the Ethics Act will now be applied
to the four specific questions that you pose regarding the
listing of certain financial interest in the Statement of
Financial Interests form. As to the first item, since you and
Frank R. Mascara
May 31, 1989
Page 4
your wife have signed as guarantors for your son's loan, you
would become liable for the loan in the event that there would be
a default. Consequently the individual or firm or institution
which has loaned the money would be a creditor as to your son and
also to you and your. wife. Therefore, in the event that the
liability exceeds $5,000, you are required to list the name of
the lender together with the applicable rate of interest under
Item 10 in the Statement of Financial Interests.
As to the second item concerning the property which is co-
owned by you, your wife, and your son, it appears from the facts
that the property in question is not your primary residence. It
appears that you have advanced a down payment for your son whom
you assisted in purchasing the home. Therefore, if you and your
wife are co- owners and the house is mortgaged, you are required
to list the lender as a creditor provided the liability exceeds
$5,000. Additionally, you are required to list the rate of
interest under Item 10. As to the subsidiary question of whether
you would have to report income which is a repayment of the
original down payment you made to your son, the answer to that
question would turn upon the financial arrangements in the
Articles of Agreement. If the situation exists that you are
merely receiving a repayment of an advancement that you made to
your son without any additions or interest to the original
amount, then in that case you would not be receiving any income
but merely a return of the money you advanced to your son and in
that event you would not have to list the item under Direct or
Indirect Sources of Income. However, if the payment was in the
form of a loan and you are receiving repayment consisting of
principle and interest, then you would be required to list that
item under Direct or Indirect Sources of Income provided it
exceeds $500 or more.
As to your third item regarding whether deferred income
which would either be as an installment sale or notes due, you
are advised that such would be reported on Item 10 under Direct
or Indirect Sources of Income provided that it is $500 or more as
per the filing requirements.
Lastly, regarding your fourth inquiry, the interest from
the Washington County Employees' Retirement Fund would not be
reported on Item 10 under Direct or Indirect Sources of Income
since the definition of income in the regulations of the State
Ethics Commission specifically excludes such interest provided
the retirement payments are totally funded by your contributions
as per the regulation.
Conclusions: As a Washington County Commissioner, you are a
public official subject to the provisions of the Ethics Act.
Frank R. Mascara
May 31, 1989
Page 5
Section
you owe
thereon
indirect
more.
5(b)(4) and (5) require that you list all creditors whom
in excess of $5,000 together with the interest rate
and further that you are required to list all direct or
sources of income totally in the aggregate of $500 or
Pursuant to Section 7(9)(ii), 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 request that the full
Commission review this Advice. A personal appearance before the
Commission will be scheduled and a formal Opinion from the
Commission will be issued. Any such appeal must be in writing
and must be received at the Commission within 15 days of the date
of this Advice pursuant to 51 Pa. Code S2.12.
Sincerely,
,
Vincent incent J. Dopko,
General Counsel