HomeMy WebLinkAbout94-520 JonesFrank W. Jones, Esquire
787 Pine Valley Drive
Pittsburgh, PA 15239
Dear Mr. Jones:
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOAC 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
March 7, 1994
§4 -520
Re; Conflict, Public Official /Employee, School Board Member, Use
of Authority of Office or Confidential Information, Lawsuit
filed against the School District and Board Members
individually, Settlement, Vote.
This responds to your letters of November 30, 1993, January 6,
1994 and January 27, 1994 in 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 school board member
with regard to voting to settle a lawsuit brought agaix1. t the
school district and the school board member individually.
Facts: You are the Solicitor for the Plum Borough School District.
A question has arisen concerning a potential conflict of interest
as to two members of the School Board. In your letter dated
January 27, 1994, you state that these two members have
affirmatively requested that you seek this advisory.
Litigation was commenced against the school district and the
two school board members individually in the United States DiStridt
Court for the Western District of Pennsylvania alleging
discrimination on the basis of sex, 42 U.S.C., S 2000e -2 and 2000e-
3, and intentional infliction of emotional distress. Further, the
lawsuit alleges discrimination under 42 U.S.0 5 1983, conspiracy
under 42 U.S.C. S 1985, defamation and invasion of privacy.
The parties have been discussing the possibility of
settlement, however, in the event a settlement cannot be reached,
you believe the trial will be scheduled in mid - 1994.
You state that the question which has arisen deals with the
Jones, Frank W., Esquire, 94- 52:0 -
March 7, 1994
Page 2
right of the individual defendants who are board members to vote on
any motion to approve a settlement. You refer to Section 3(a) of
the Public Official and Employee Ethics Law which prohibits a
public official from engaging in any conduct that constitutes a
"conflict of interest ". You believe. that the question to be
resolved is whether the board members' vote on a motion to settle
this litigation constitutes "conflict of interest ".
There are some additional factors which you believe may be
important. The primary defense for this case is being handled by
counsel for the District's errors and omissions insurance carrier.
There is also counsel appearing on behalf of the general liability
carrier for the Di strict. In addition, you have participated as
counsel for the District. Both individual defendant board members
have been apprised of their right to retain independent counsel.
One board miser has consulted -with his counsel, but that attorney
has not formally' entered an appearance. The other board member may
have consulted with counsel, but no appearance of counsel has yet
been entered.
You state that it is also important to know that the insurance
carriers have issued- "reservation of rights" letters. In these
letters, the carriers have stated that certain counts in the action
are not covered by insurance. It is anticipated, however, that any
verdict rendered (except a verdict against the individual board
nleMbers only) will covered by insurance. A verdict against the
individuals, myths other hand, would be their sole responsibility,
A Settlement in the case would: relieve all defendants of
liability. Both individual board members would then be free of any
personal- liability'in the case. The issue, therefore, is whether
these individuals can vote to approve a settlement which primarily
inures - to - the ,benefit of the District, but indirectly inures to
their benefit because it eliminates potential exposure to
damages.
Based upon the above you. request an advisory from the State
.Ethics Commission.
Discussion: It is initially noted that pursuant to Sections 7(10)
and 7(11) of the Ethics Law, 65 P.S. 55407(10), (11), advisories
. ate issued' to the requestor 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 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 P.S. 55407(10), (11). An
advisory only affords a defense to the extent the requestor has
truthfully disclosed all of the material facts.
Jones, Frank W., Esquire, 94 -52Q.
March 7, 1994 ...:.
Page 3
As board members for Plum Borough School District, the two
individuals are public officials as that term is defined under the
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 ininimis 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.
In addition, Sections 3(b) and 3(c) of the Ethics Laver 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 judgement of the
public official /employee would be influenced thereby. Reference is
made to these provisions of the Law not to imply that there has
Jones, Frank W., Esquire, 94 -520
March 7, 1994
Page 4
been or will be any transgression thereof but merely to provide a
complete response to the question presented.
Section 3(j) of the Ethics Law provides as follows:
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 Rrocedure
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.wote 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, the, such members shall be
permitted to vote if disclosures are ntade 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 . therwise . provided herein
If p conflict exists, Section 1(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 in that event participation is
permissible provided the disclosure requirements noted above are
followed §e&L, MTAkar, Advice S1-523-S.
Jones, Frank W., Esquire, 94 -520
March 7, 1994
Page 5
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.
In this case, it is clear that the two School Board Members
who are individual defendants in the lawsuit would have a conflict
of interest in any matter before the Board involving the lawsuit.
Any participation by these Members could have an impact on the
litigation, including settlement, which derivatively could impact
upon whether the Board Members pay damages or attorneys' fees. See
Borland, Order 786 and Sanders, Order 785 wherein the Commission
found violations of the Ethics Law by township supervisors who used
the township solicitor, paid for by township funds, to bring action
against the township auditors. The use of office resulted in a
financial gain. Since they did not have to pay personally, they
were enhanced by the out -of- pocket expenses they would otherwise
have had to pay.
In each instance of a conflict of interest, the Board Members
required to abstain from any participation of any nature
whatsoever, including but not limited to taking part in
discussions, voting, lobbying for a particular result, or any other
use of the authority of office. In each instance of a conflict of
interest, you would further be required to comply with the
disclosure requirements of Section 3(j) of the Ethics Law set forth
above.
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 Pennsylvania Public School Code.
Conclusion: As School Board Members for the Plum Borough School
District, these Members are public officials subject to the
provisions of the Ethics Law. They would have .a "conflict of
interest" as to any matter where the use of authority of .office
: would result in the receipt of a private pecuniary benefit.
Specifically, a conflict of interest would exist. in any matter
brought before the School Board involving the lawsuit in which
these Board Members are named as defendants. In each instance of
conflict, they would be required to abstain from any participation
of any nature whatsoever, and the disclosure requirements of
Section 3(j) would have to be observed. Lastly, the propriety of
the proposed conduct has only been addressed under the Ethics Law.
Jones, Frank W., Esquire, t a kw k > ;
March 7, 1994
Page 6
Pursuant to Section 7(11), this Advice is a complete defense
in any enforcement proceeding init.iated by the Commission, and
evidence of good faith conduct 4.n 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 An writing and • must- be actually
received at the Commission within fifteen (15) 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).
cerely,
r
."Vincent J. Dopko
Chief Counsel