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HomeMy WebLinkAbout94-547 SikorskyJoseph E. Sikorsky, Esquire Houck & Gingrich 23 North Wayne Street P.O. Box 430 Lewistown, PA 17044 STATE. ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, „PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 11, 1994 94 -547 Re: Conflict, Public Official /Employee, Chairman of Municipal Authority, Private Employer, Use of Authority of Office or Confidential Information, Litigation between Authority and Private Employer, Participation in Settlement Discussions. Dear Mr. Sikorsky: This responds to your letter of March 17, 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 Member of a Municipal Authority from participating in settlement negotiations relating to litigation involving the Auth©rity and the private employer of the Member. Facts: You are the Solicitor for the Union Township Municipal Authority (Authority). A question has arisen regarding the participation of Gordon Thomas, Chairman of the Authority, in matters involving his employer, Fairmont Foods (Fairmont). The Authority and Chairman Thomas have directed you to request an advisory from the State Ethics Commission as to whether the Chairman may participate in matters before the Authority involving Fairmont. The Authority is a joint water and sewer authority, The Chairman is employed by Fairmont as a plant engineer. Pursuant to an industrial waste water permit, Fairmont discharges dairy waste into the Authority's sewer system. The Authority's subsequent discharge into the receiving stream is controlled by the Pennsylvania Department of Environmental Resources (DER) and the Environmental Protection Agency (EPA). The permit to Fairmont provides for penalties when the Fairmont discharge exceeds permit limits. The Chairman, as Fairmont plant engineer, is responsible %korsky, Joseph L , Esquire, 9 if,-;547 Apti 1994 Page 2 for A4104111 and certifying the monthly discharge monitoring reports submitted by Fe nont to the Authority. The Authority is subject to fines from DER and EPA whenever its discharge into the receiving stream exceeds its pS2t limits. Fairmont has exceeded its permit limits on numerous occasions. The Authority has also exceeded its discharge limit on numerous occasions, some or most of which may be directly related to Fairmont exceeding its limits. The Authority has fined Fairmont for its violations. Fairmont has objected to the amount of the fine. If an agreement cannot be reached, litigation by the Authority against Fairmont will be necessary. At a recent meeting, representatives of Fairmont met with the Authority regarding the. of the fine. The Authority then went into executive session to discuss the amount of the fine, settlement and /or potential litigation if a settlement could not be reached. The Special Solicitor representing the Authority in this matter asked the Chairman to leave the executive session because of a conflict of interest.. The Chairman asked you for your opinion. You state that you agreed with the Special Solicitor that because of a conflict of interest, the Chairman should not be present for confidential discussions involving the fine or litigation against his employer The Authority and Chairman seek an advisory from the State Ethics Commission regarding the following: 1. Whether the Chairman may be present for confidential Authority discussions involving fines, settlement strategy regarding the fines and potential litigation with his employer or other confidential Authority information related to his employer. 2. What are the ].imitations and general guidelines for any board member participating in any discussion or actions involving Authority business with his or her employer. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P:S. S5407(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 P.S. SS407(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. As a Chairman for the Union Township Municipal Authority, Mr. Sikorsky, Joseph E., Esquire, :.94 -547 April 11, 1994 Page 3 Gordon Thomas, is a public. official as that term is defined under the Law, and hence he is subject to the provisions pf that law. Section 3(a) of the Ethics Law provides: Section 1 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 h imself, 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 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 with which he is .assoiated, " 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. In addition, Sections 3(b) and 3(c) of the Ethics Law provid in part that no person shall offer to a public official/employee Sikorsky, Joseph E., Esquire, 94 -547 April 11, 1994 Page 4 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 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 procedure shall be employed. Any public official or public 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. If a conflict exists, Section 3(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 $raps or supervisor. b the event that the required abstention results in the Sikorsky, Joseph E., Esquire., 94 -54 April 11, 1994 Page 5 inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under Ethics Law, then in that event `participation is permissible provided the disclosure requirements noted above are followed. See,Mlakar, Advice - 9I- 523 -S. You are further advised that the use of authority of office is more than the mere mechanics of voting and encompasses all of the tasks needed to perform the functions of a given position. See, Juliante, Order No. 809. Use pf authority of office includes discussing, conferring with others,• lobbying for a particular result and /or any other use of the authority office in which the result would be a private•pecuniary benefit to a- business with which a public official or a member of his immediate family is associated In applying the Ethics Law to this case, it is noted that the Ethics Law, pursuant to Section 3(a), prohibits a public official from using the authority of office: public office or confidential information received by holding a public office for the private pecuniary benefit of the public official, any member of his immediate family, or any business with' which the public official or a member of his immediate family, or any business with which the public official or a member of his immediate family is associated. It is clear in this case that. Fairmont is a business with which the Chairman is associated. In this case, the Chairman would have a conflict of interest in any matter before the Authority involving Fairmont. Any participation by him could have an impact upon Fairmont, including settlement, which _could impact upon whether Fairmont pays damages or attorneys' fees. See Borland, Order 78.6 and ,Sanders, Order 785 wherein the Commission - found violations of the Ethics Law by township supervisors who used the 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 to pay. This case is analogous_ to Van Rensler; Opinion 90 -017. One of the issues in Van Rensler - was Whether the Ethics Law prohibited school board directors from participating on a negotiating team when members of their immediate families were school district employees represented by the bargaiiiiAg units. The Commission held that the Ethics Law precluded the participation of the directors in the negotiation process. Citing prior opinions under former Act 170` of 1978, the Commission recognized that the underlying reasoning those prior opinions was to insure that public'officials are impartial and that their private interests are sufficiently separated from their Sikorsky, Joseph E., Esquire, 94 -54 April 11, 1994 Page 6 responsibility to the public. Van Rensler, at 4. The Commission cited the definition of "conflict of - interest" in Act .g" of 1989 as specifically prohibiting a public official or employee from using Confidential information obtained through - public office or employment for an immediate family member's private pecuniary benefit. A school board director participating on the negotiating team would be privy to confidential information relating to the family member's bargaining units. The risk of disclosure of that information was held to preclude the school board directors from participating in negotiations where family members are part of the bargaining unit. In so holding., the negotiation process would be free of any influence of such a school board director and the potential for the use of confidential information would be "minimized if not 'eliminated". Id, at 4 -5.' Thus, a fundamental basis for the Van Rensler Opinion was precluding the use of confidential information obtained through the public office as school board director to defeat the bargaining process. In this case, the Chairman may not discuss the existing lawsuit with fellow Authority Members. This activity is tantamount to engaging in negotiations concerning the settlement which is prohibited by the Ethics Law. Such discussion, as with participation in the settlement discussions, risks disclosure of confidential information that the Ethics Law prohibits. The above principles would similarly apply to preclude the Chairman from receiving confidential information even if it would be at an executive session of the Authority or volunteered by some other Member, rather than through participation in the negotiations. See, Russell, Advice 92 -610. He would not transgress Section 3(a) of the Ethics Law, however, by receiving updates concerning negotiations that are discussed in public sessions. Id. In each instance of a conflict of interest, the Chairman is required to abstain from any 13articipation 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, he would further be required to - comply with the disclosure requirements of Section 3(j ) the. Law set forth above. As to your second inquiry, advisories can only address specific fact situations regarding specific public officials. Generic questions regarding generalities cannot be addressed as they are beyond the scope and function of advisories. 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 tie Sikorsky, Joseph E., Esquire,r.9,4 -547 April 11, 1994 Page 7 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 Municipality Authorities Act. Conclusion:' As Chairman for the Union Township Municipal Authority, Mr. Gordon Thomas is a public official subject to the provisions of the Ethics Law. He 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 to a business with which he is associated. Specifically, a conflict of interest would exist in any matter brought before the Authority involving the lawsuit between the Authority and Fairmont. In each instance of conflict, he would be required to abstain from any participation, of any nature whatsoever, including settlement discussions or negotiations, and observe the disclosure requirements of Section 3(j). He may receive information regarding such matters provided such information is not confidential and is available to the public. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(11), 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 committed the acts complained of in reliance on the Advice given. such. This letter is a public record and will be made available as 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.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, ' 0, 44 Vincent 3J Dopko Chief Counsel '^1!4' --