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HomeMy WebLinkAbout92-515Mr. Dennis R. Biondo, Esquire Jack Hickton & Associates 701 Washington Road Mt. Lebanon, PA 15228 Dear Mr. Biondo: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL January 23, 1992 92-515 Re: Conflict, Public Official /Employee, Borough Council Member, Business with Which Associated, Clients. This responds to your letter of December 9, 1991, 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 Mr. Regis J. Zezulewicz, Jr. as a Borough Council Member who also works for an employee benefit firm when that firm serves private clients which do business with the Borough and which receive regular payments from the Borough for services rendered, Facts: As Solicitor for the Borough of Castle Shannon ( "Borough ") in Allegheny County, Pennsylvania you seek the advice of the State Ethics Commission on behalf of Mr. Regis J. Zezulewicz, Jr., who was elected to serve as a Member of the Borough Council beginning in January, 1992. Mr. Zezulewicz has notified you of a potential conflict of interest related to the relationship between his employer, Coordinated Group of Companies, Inc. (CGC) and certain other companies which do business with the Borough. You have submitted a copy of a letter from Mr. Zezulewicz addressed to you dated November 26, 1991 which describes the relationship between his employer and those companies, which letter is incorporated herein by reference. It is noted that in his letter, Mr. Zezulewicz references his attendance at the Newly Elected Officia'l'Is course- sponsored by the Local Government Academy and. particularly the session pertaining to the Ethics. Law : which .presumably led -him to seek advice from you and from- this! Commission based upon the - following. 7- . ". Mr.. Dennis R. Biondo, Esq. January 23, 1992 Page 2 CGC is an employee benefit firm. Mr. Zezulewicz is employed by CGC as an "account executive" and he is not a shareholder or principal of the corporation. Part of Mr. Zezulewicz's income is derived from fees /commissions that CGC will receive for various services rendered, such as the adjudication of medical /dental claims, cafeteria plans, and the like. Mr. Zezulewicz perceives possible conflicts as to three clients of CGC. The first is the firm which serve's as the Borough Engineer, which Mr. Zezulewicz references as "Kimball Engineering, Inc.," and which you reference as "L. Robert Kimball and Associates." For purposes of this Advice the 'firm shall hereinafter be designated "L. Robert 'Kimball and Associates" or "Kimball." For the - past four years and prior to his taking office in 1992, Mr. Zezulewicz has controlled and administered Kimball''s employee benefit /cafeteria plan. Mr. Zezulewicz acknowledges that he receives, as compensation, a percentage of the fee charged to Kimball by CGC for such services. Since Kimball is currently retained as the Borough's engineering firm, Mr. Zezulewicz notes that there would be many times throughout his term that he would need to vote to compensate Kimball for services rendered. Mr. Zezulewicz questions whether he would need to disclose and abstain when his vote is required or whether there is another procedure to be followed. The second CGC client as to which Mr. Zezulewicz perceives a possible conflict of interest is the HDH Group, Inc.: (HDH), an insurance broker from which the Borough purchases 'liability insurance. CGC has a working relationship with HDH. Mr. Zezulewicz is the designated CGC account executive who handles HDH's referred clients. As a case is written, both HDH and Mr. Zezulewicz receive compensation from CGC for services rendered. Noting that the Borough compensates HDH for services which are not related to Mr. Zezulewicz's employer in any way, Mr. Zezulewicz questions whether in his capacity as a public official he would have a conflict of interest as to HDH. The third CGC client to be considered is Blue Cross /Blue Shield which provides medical benefits coverage for the Borough employees through the Municipal Employers Insurance Trust. Mr. Zezulewicz is an agent for. Blue Cross /Bliie = Shield, and as such, he has placed various corporations with this non - profit organization. The commission that Blue Cross /Blue Shield forwards to CGC is transferred to Mr. Zezulewicz at a certain designated :percentage. Mr. Zezulewicz notes that none of the income which he receives from Blue Cross /B..ue Shield is connected with the Borough's business. Noting that he places business with, and receives compensation from Blue Cross /Blue Shield, but none related to the Borough, Mr. Zezulewicz questions whether in Mr. Dennis R. Biondo, Esq. January 23 1992 Page 3 his capacity as a public official he would have a conflict of interest as to Blue Cross /Blue Shield. As to all three. of the above CGC clients, you note that these companies receive regular payments from the Borough, directly or indirectly, for the services which they provide. Based upon all of the above, you seek an advisory as to whether. a "conflict of interest "' exists or would exist if Mr. Zezulewicz :.in action as a Member of Council were to vote or participate" in deliberations matters related to the above three . firms which provide services for the Borough. You ask generally whether the Ethics Law .would otherwise preclude Mr. Zezulewicz from.voting or participating in deliberations related to these three companies. You, further inquire as to whether Mr. Zezulewicz or his employer or any of the above three companies which do business with the Borough woubd be prohibited from maintaining their relationship with each other or with the Borough. Finally,- you ask ;what, if any, disclosure Mr. Zezulewicz would be required to -make regarding these matters. Discussion: As a Borough Council Member for the Borough of Castle Shannon ("Borough"), Allegheny County, Pennsylvania, Mr. Regis J. Zezulewicz, Jr. is a public:cfficial as that term is defined under the Ethics Law, and hence he is 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 . am or a business Mt. Dennis R. Biondo, Esq. January 23, 1992 Page 4 with which .he or a member of his immediate family is associated. "Conflict" or "conflict of interests" does noc: include an action lowing, a de min - imis economic impact or which affects- to the same degree a. class consisting csf bier- general' ` public: "or a s.uhc:.las.s cams istkna of: an industry, occupation. ar other' group: which includes the pub lic of cia.t or public employee, a member of his immediate family or a business' with which 1 or. a member of his immediate' .' family is associated. d. "AtthOrity of office or employment . " The actual power ' provided by.- „ the ezercise: of which is necessary to, the performance of duties and . resp sibi itries unr;iqu.e to:. a particular public... office or position of public employment.. "Business with-• which he is: astoaistelt .." Any businejsS 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!,',t.:) . :of. the 'Ethics. Law provide: in_ part that no person shall offer to at public official /employee anything of monetary value and non public official/employee shall' solicit or accept anything of monetary value based upon the understanding that thse vote, official action, or judgement of the public of ficsi ]'Jemp1oyee would: be influenced thereby. Reference is. made .. tow these promi:sions of to law not- to imply that. there has bee= or will be any transgression thereof but merely- to provide a complAte respense to the question presented. Section. 3 of the Ethicts Law provides as follows: Se _4. Restri cteci ac vities .. (j) Where voting: contlisflts are: not otherwise addressed by' the Constitution of Ms. Dennis R. Biondo, Esq. January 23, 1992 Page 5 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. X f .. a conflict - exists , Section 3(j) requires the public official /employee to. abstain as well as file a written memorandum to thot effect% with the person recording the minutes or :.supervisor. c V . In applying t ie above provisions of the Ethics Law to they various questions which you have raised, each inquiry shall be - addressed seriatim. First, as to whether Mr. Zezulewicz would have a conflict of interest in matters involving Kimball, HDH, and /or Blue Cross /Blue Shield as clients of his employer, CGC, the necessary conclusion is that in his capacity as a public official, Mr. Zezulewicz would have a conflict of interls,'t as . 14 matters pertaining to each of the above clients or hi5 .;private: employer. Mr. Dennis R. Biondo, Esq. January 23, 1992 Page 6 Section 3(a) of the Ethics Law prohibits a public official /public employee from using the authority of office or confidential information . received by holding a public position for the private pecuniary. benefit of himself, a member of his immediate family, or s. business with which he or a member of his immediate family is associated. CGC, as Mr. Zezulewicz's employer, is by definition . "business with which he is associated. Pursuant to this Commission's prior decision in Miller, Opinion 89-024, Mr. Zezulewicz would have a conflict of interest in his official capacity as to matters pertaining to his employer, CGC, and /or its clients. As noted. in Miller, matters which come before a public official /public employee involving his private employer and /or' its clients place the public official /public employee in a situation, where he is faced with conflicting interests. In his capacity as an employee of a private firm, his duty is owed to the private employer and to its clients, while in his capacity: as a public official /public employee, his primary duty is to act in the best interest of the governmental body with the duty being owed to the public rather than to private clients. Furthermore, applying the reasoning noted in Miller, suara, at 3, persons seeking the approval of the governmental body would probably favor doing .business in a private capacity with a firm which employs a member of the governmental body, knowing that the public official /public employee might then be in a position to act favorably toward them. Fox All of the above reasons., the Ethics Law would prohibit Mr. Zezulewicz from voting, participating in deliberations, or otherwise using the authority of office, in matters pertaining to CGC; Kimball; EDH; Blue Cross /Blue Shield; and /or any other client (s) of CGC. Mr Zezulewicz must divest himself from any participation in such matters, and in each instance where a conflict of interest arises, Mr. Zezulewicz: must observe the disclosure requirements of Section 3(j) as set forth above. Turning, to your inquiry as to whether Mr. Zezulewicz or his employer or any of the above three clients of LAC which do business with the Barozgh would be prohibited from maintaining their relationship with each aver or the Borough, you are advised that Section '3(a) of the Ethics Law does it apply to private individuals or entitles, but rather applies only to public officials /public employees. likewise, the restrictions of Section 3(a) would only appl7 to restrict .Mr. Zezulewicz in his public capacity as a : public official al and would place ono restrictions upon Mr. Zezulewicz with regard to his private Mr. Dennis R. Biondo, Esq. January 23, 1992 Page 7 capacity as an employee of CGC or with regard to his relationships with his employer and /or its clienPs. Your final specific inquiry which pertains to the disclosure requirements of the Ethics Law has been addressed above in the context of the analysis of Section 3(j) of the Ethics Law. As set forth above, in each instance of a ccrflict of interest, Mr. Zezulewicz would be required to abstain from any participation of any nature whatsoever and to publicly announce his abstention and the reason for same, both orally and in a written memorandum filed with the secretary recording the minutes. It is further noted in passing that Mr. Zezulewicz should not use any Borough resources or facilities in order to further the interest of CGC and /.or any of its clients, including but not limited: to: use of telephone, staff equipment, research materials, personnel, or any time for which he is being paid as a public :official. 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 Borough Code. Conclusion: As a Borough Council Member for the Borough of Castle Shannon, Allegheny County, Pennsylvania, Mr. Regis J. Zezulewicz, Jr. is a public official subject to the provisions of the -Ethics Law. Coordinated Group of Companies, Inc. (CGC), the private firm which employs Mr Zezulewicz, is a business with which _he: is associated. Iri his capacity as a public official, Mr. Zezulewicz would have a conflict . of. interest as to any matter involving his private employer, CGC, and/Or any of its client(s), including but not limited to L. Robert Kimball &- Associates, MDR Group, Inc., and Blue Cross /Blue Shield. ,In each instance of a conflict -of interest, Mr. Zezulewicz would be required to abstain from any participation of any nature whatsoever 'and to publicly announce his abstention and the reasons for same, both orally and in a written memorandum filed with the secretary recording the minutes. Mr. Zezulewicz may not use any 'Borough ' facilities to further the business interests of CGC and /or any of its client(s). Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. P ursuant 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 Mr. Dennis R. Biondo, Esq. January 23, 1992 Page 8 truthfully, all the material facts and committed the acts complained of in reliance on the Advice given. such,.. This letter is a public record and will be made available as Pinally, if you disagree this Advice or if you, have any reason ' • tcr. 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 frot the Cbmmission 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 §2 very truly yours, Vincent T pko , Chief Counsel