HomeMy WebLinkAbout02-601 EspositoJoseph J. Carmody, Esquire
225 Wyoming Avenue
West Pittston, PA 18643
Re: Conflict; Public Official /Employee; Borough; Council Members; Reimbursement
By The Borough Of Legal Fees Incurred In Defending Criminal Charges; Official
Conduct.
Dear Mr. Carmody:
ADVICE OF COUNSEL
October 4, 2002
02 -601
This responds to your letters of August 23, 2002, and September 4, 2002, by
which you requested advice from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
1a. =S. § 1101 et seq., presents any prohibition or restrictions upon borough council
members as to receiving reimbursement from the borough for legal fees incurred in
defending allegations of unlawfully loaning borough money to a borough employee.
Facts: As Solicitor for Exeter Borough ( "Borough "), Luzerne County, you seek an
advi on behalf of Borough Council Members Joseph Esposito ( "Esposito ") and John
Petrucci ("Petrucci").
Esposito and Petrucci were recently arrested on charges of unlawfully loaning
Borough money to a Borough employee. You state that the char es, misapplication of
entrusted property (18 P.S. § 4113(a)), and criminal conspiracy (18 P.S. § 903(a)(1))
were dismissed by a district justice. In that you also serve as First Assistant District
Attorney of Luzerne County, you state that you will not be involved in the case.
You ask whether Esposito and Petrucci may be reimbursed by the Borough for
legal fees incurred in the above matter.
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
Carmody, 02 -601
October 4, 2002
Page 2
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.
As Exeter Borough Council Members, Esposito and Petrucci are public officials
as that term is defined in the Ethics Act, and hence they are subject to the provisions of
that 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
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.
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
Carmody, 02 -601
October 4, 2002
Page 3
(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
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 the instant matter, pursuant
to Section 1103(a) of the Ethics Act, 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.
As for the element of a private pecuniary benefit, publicly -paid legal
representation is clearly a pecuniary benefit: if the governmental body pays for the legal
representation, the public official need not pay for it from his own assets.
Various court cases have addressed the issue of whether and when a public
official is entitled to legal representation at taxpayer expense.
In Roofner's Appeal, 81 Pa.Super. 482 (1923), the Pennsylvania Superior Court
determined that it was inappropriate for township supervisors to receive legal
representation at township expense concerning their indictment on a charge of
unlawfully neglecting and refusing to keep up a certain township road which had
become unsafe and dangerous for travel. Noting that the supervisors were charged
with official misconduct or neglect and refusal to perform their legal duties, the Court
held that they were not entitled to representation at township expense:
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October 4, 2002
Page 4
. [T]he power of a municipality or its appropriate officers to employ an
attorney is limited to those matters in which the municipality has some
official duty or which may probably be said to affect its interests. An
attempted employment of an attorney in a matter in connection with which
the municipality has no official duty, or which does not fall within the duties
of the board or official making the contract of employment, does not
render the municipality liable to the attorney for his compensation: Dillon
on Municipal Corporations, Vol. 2, paragraph 824, at page 1246. this as
fundamental principle that public funds shall not be used for private
purposes. The offense for which appellants were indicted was a personal
one: Com. v. John Meany, 8 Pa. Superior Ct. 224. Their obligation to pay
their counsel was personal.... Counsel fees and other expenses incurred
by public officials in defending criminal charges, or charges of official
misconduct, are incurred for a private purpose and cannot, in the absence
of statutory provision therefor be paid from public funds.... When one
accepts a public office he assumes the risk of defending himself even
against unfounded accusations at his own expense.
81 Pa.Super. at 484 485.
In Silver v. Downs, 493 Pa. 50, 425 A.2d 359 (1981), the Pennsylvania Supreme
Court allowed representation by a solicitor in a recall action against two members of the
boards of supervisors. However, that case related to the official activities of township
supervisors in handling township accounts, as to which allegations there was a statutory
right to publicly provided legal counsel. Furthermore, the case specifically did not
involve charges of criminal misconduct.
Matter of Auditor's Report of McKean Township for 1984, 110 Pa.Commw. Ct.
68, 531 A.2d 879 (1987) involved a court's award of counsel fees in a surcharge action
where the supervisors had been ordered by the Court to retain private counsel for their
defense. The power of a court to award counsel fees is not at issue in this case nor is
that power questioned by the SEC.
In Re Birmingham Township, Delaware County, 142 Pa. Commw. Ct. 317, 597
A.2d 253 (1991) held that a supervisor is entitled to a public defense in a recall action
where there is no substantial supporting evidence for allegations of criminal conduct,
but is not entitled to a public defense where it is determined that the official did commit
criminal conduct which results in removal from office.
Stork v. Summers, 158 Pa. Commw. Ct. 65, 630 A.2d 984 (1993) held that a city
treasurer was entitled to a public defense when he acted in his official capacity to refuse
to sign certain checks related to a fund which the treasurer believed had been subject to
fraudulent abuses by the city mayor.
Recently, in R.H. v. State Ethics Commission, 673 A.2d 1004 (Pa. Commw. Ct.
1996), Commonwealth Court affirmed this Commission's decision that certain Township
Supervisors violated Section 3(a) of Act 170 of 1978 when they used the Township
Solicitor, at taxpayer expense, to represent them in a suit which they brought to
challenge the auditor's decision to decrease their annual labor wage for their wor�kin
positions. Although the Petitioners argued that their appeal was not private in nature but
was within their duties as Township Supervisors, the Court did not agree. The Court
stated:
Section 516 of the Code, 53 P.S. §65516, which provides that supervisors'
duties include hiring such persons as may be necessary for the general
conduct of the business of the township, allows supervisors to retain the
township solicitor to represent the township. However, we must agree
Carmody, 02 -601
October 4, 2002
Page 5
with the SEC that the benefits Petitioners sought through the suit against
the Township Auditors were personal to the Petitioners and not necessary
for the general conduct of business of the Township. Therefore, the value
of the legal representation Petitioners received from the Township Solicitor
was financial gain other than compensation provide by law, in violation of
the 1978 Act.
Id., 673 A.2d at 1011 (Emphasis added).
Finally, in In Re: Appeal from the 1987 Auditor's Report of North Huntingdon
Tow�nshi , No. 11 Civil 1988 (Westmoreland Cty. C.P. June 1, 1989), the Common
Pl eas Court held that a township commissioner was not entitled to publicly funded legal
representation in defending himself before the State Ethics Commission as to
allegations that he had received excess reimbursement from the Township for expenses
incurred in attending conferences and conventions. The Court stated, inter alia:
However, in this situation, it would appear that the alleged receipt of
excess reimbursement might be classified as conduct rising to the level of
official misconduct. Certainly, the receipt by Hagan of money to which he
was not entitled constitutes conduct personal in nature. Therefore, Hagan
could not and should not have been represented by the Township solicitor
or private counsel at Township expense.
Nothing contained in the allegations, findings or final order of the
Commission can be construed to come under the umbrella of official
duties. Hagan received money he was not entitled to. Such conduct is
clearly personal in nature.
The Township has also argued that Hagan is entitled to payment of his
legal expenses because he was successful in his defense of the charges
made against him in the Commission proceedings. The basis for this
argument is a Township ordinance that provides for reimbursement of
legal expenses to a commissioner who is successful on the merits in his
defense of charges made against him. This argument is based on the fact
that the order of March, 1987, concerned more serious allegations and
findings against Hagan than the final order of June, 1988.... While it is
true that the outcome in June, 1988, was less serious to Hagan than it
appeared it would have been in March, 1987, the Court would
nevertheless be hardpressed to conclude that Hagan was successful on
the merits in his defense. The Commission found wrongdoing, and Hagan
repaid the money previously retained by him to which he was not entitled.
Such a disposition does not constitute a successful defense on the merits.
Furthermore, the courts have held that whether or not a public official is
entitled to publicly funded representation does not turn on whether he has
been successful on the merits in his defense. Rather, it turns on whether
the charges concern performance of official duties or concern conduct
personal in nature. Therefore, under the conclusions reached earlier in
this Opinion, the Township's argument on this basis must fail.
Id., at 6 -9. The Court directed the Auditor to correct his report, surcharging
Commissioner Hagan for the expenditures that had been made for his legal defense
before the State Ethics Commission.
With regard to whether Esposito and Petrucci would be entitled to reimbursement
from the Borough for legal expenses incurred in defending themselves as to charges of
unlawfully loaning Borough money to a Borough employee, there is nothing in the
Carmody, 02 -601
October 4, 2002
Page 6
Borough Code which authorizes a council member to loan borough money to a borough
employee. Therefore, it would appear that the charges against Esposito and Petrucci
involved activities which were not necessary for the general conduct of municipal
matters and which were not rel to their official duties. Because the allegations
against Esposito and Petruc did not relate to official conduct, but to conduct which was
ers�onal in nature, they would not be entitled to reimbursement from the Borough for
l egal fees incurred in defending themselves. If Esposito and Petrucci were to receive
reimbursement from the Borough, such would clearly constitute a pecuniary benefit
because they would not have to pay the legal fees from their own assets. Furthermore,
the pecuniary benefit that Esposito and Petrucci would receive through the
reimbursement would be a private one contrary to Section 1103(a) of the Ethics Act for
the reasons noted above.
Finally, although you have stated that the charges, misapplication of entrusted
property, and criminal conspiracy, were dismissed by a district justice, as noted in In Re:
Appeal from the 1987 Auditor's Report of North Huntingdon Township, supra, "the
courts have held that whether or not a public official is entitled to publicly funded
representation does not turn on whether he has been successful on the merits in his
defense. Rather, it turns on whether the charges concern performance of official duties
or concern conduct personal in nature." Id.
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 Borough Code.
Conclusion: As Exeter Borough Council Members, Esposito and Petrucci are
public officials subject to the provisions of the Public Official and Employee Ethics Act
( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. With regard to whether Esposito and Petrucci
would be entitled to reimbursement from the Borough for legal expenses incurred in
defending themselves as to charges of unlawfully loaning Borough money to a Borough
employee, there is nothing in the Borough Code which authorizes a council member to
loan borough money to a borough employee. Therefore, it would appear that the
charges against Esposito and Petrucci involved activities which were not necessary for
the general conduct of municipal matters and which were not relatecto their official
duties. Because the allegations against Esposito and Petrucci did not relate to official
conduct, but to conduct which was personal in nature, they would not be entitled to
reimbursement from the Borough for legal fees incurred in defending themselves. If
Esposito and Petrucci were to receive reimbursement from the Borough, such would
clearly constitute a pecuniary benefit because they would not have to pay the legal fees
from their own assets. Furthermore, the pecuniary benefit that Esposito and Petrucci
would receive through the reimbursement would be a private one contrary to Section
1103(a) of the Ethics Act for the reasons noted above. The fact that the charges
against Esposito and Petrucci were dismissed is immaterial. 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
Carmody, 02 -601
October 4, 2002
Page 7
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