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HomeMy WebLinkAbout92-617John C. Herrold, Esquire Griest, Himes, Gettle & Herrold 129 East Market Street" York, PA 17401 Dear Mr. Herrold: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL July 30, 1992 92 -617 Re: Conflict, Public Official /Employee, Township Supervisor, Chairman, Use of Authority of Office or Confidential Information, Vote, Business with which Associated, Clients, Cogeneration Plant. This responds to your letter of June 26, 1992, in which you requested advice from the State Ethics Commission. Issue; Whether the Public Official and Employee Ethics Law presents any prohibition or upon a. township supervisor with regard to a_cogeneration plant involving a corporation which purchases unrelated products from a business with which the supervisor is associated. Facts: As, Solicitor for West Manchester Township, a second class township located in York County, Pennsylvania, you request an advisory on behalf of a Township Supervisor, Mr. Michael J. March. You state that West Manchester Township is governed by a three member Board of Supervisors. Mr. March serves as to the Chairman of the Board of Supervisors. Ygu set forth a complex factual situation which will be quoted from your letter: Formal zoning applications were filed with the Township preliminary to the applications for construction and operation of the cogeneration plant. The zoning applications were filed on June 25, 1992. The cogeneration plant will burn coal to produce steam and electricity. The steam produced by the process will be sold to a local manufacturer. The electricity produced will be sold to Metropolitan Edison Company. York County Energy Partners is a limited partnership. The general John C. Herrold, Esquire July 30, 1992 Page 2 partner of the limited partnership is York County Energy Partners (I), Inc. York County Energy Partners. tI), Inc., is acorporation whose sold stockholder is Air Products Corporation, Inc. The limited partner of the limited partnership is Air Products Gorporati:ca4 Tala. while there are different business entities,, Air Products Corporation, Inc„,. is the moving party behind the proposed cogeneration plant. Mr. March, the Chairman of. the Board, is a shareholder: and employee of Frank Electric Corporation. Frank Electric Corporation is owned by four (4) shareholders. Mr. March owns 10.4% of the outstanding shares. The majority shareholder owns 53.6% of the shares but is not employed by the Corporation. Another individual owns 23.2% of the shares. Likewise, he is not employed by the Corporation. The third shareholder other r than Mr. March is a 12.8% shareholder and is :emp oY eY the Corporation. The other shareholder has a.. right under contract to purchase and become the majority shareholder if the two (2) shareholders not employed by the Corporation decide to sell their shares. Only if that . individual would elect not to purchase the shares could ,Mr. March ever become a majority shareholder in the Corporation. In addition to being a shareholder, Mr. March serves as Secretary /Treasurer of the Corporation. The Corporation is basically managed jointly between Mr. and the other shareholder who is employed by the Corporation. As previously indicated, Air Products Corporation is a participant in York County Energy Partners. Franl Electric Corporation has been supplying motor terminal boxes under a two -year blanket agreement . negotiated in 1991 to mainly Air .Products Gas Generation Group for use in the as generation operations of Air Products. The motor ,tes cninal boxes supplied by Frank Electric are purchased by the Central Purchasing Department of Air Products and may be used by Air Products wherever motors are utilized. The sales engineer for Frank Electric is involved directly with the sales to Air Products. Mr. March is not in direct contact with anyone from Air Products nor does he call on any representative of Air Products. Air Products Corporation is not a major customer of Frank Electric Corporation. For the last f scal year, only 1.55% of total sales of FFrank Electric Corporation were generated by sales to Air'Produ John C. Herrold, Esquire July 30, 1992 Page 3 The normal Control products that are sold by Frank Electric to Air Products could not and would not be used at the cogeneration plant proposed by York County Energy Partners. In.fact, -Frank Electric Corporation does not manufacture control products that would be applicable to the proposed cogeneration plant. This- fact was established by previous contact by the sales engineer of Frank Electric with the Air Products cogeneration group. Mr. March and the other shareholder employed in the Corporation have issued directives to all employees to the effect that Frank].ectric will not bid 'nor :become involved' in any work related to the proposed cogeneration plant in West Manchester Township. : (Letter of ;June - '26, 1992, at 1 -2) . Based upon the above - • circumstances, you request an advisory regarding Mr. March's participation in the decision - making process for the township. You state that no applications have been filed with the Township at — this time, but you anticipate that application's will be filed in the very near future. You indicate your belief that Mr. March would not have a conflict of interest, but specifically-inquire as to his prospective participation:in the consideration of any applications that may be filed by York County Energy Partners. Discussion: As a Member and Chairman of the Board of Supervisors for West Manchester Township in York County, Pennsylvania, Mr. Michael J. March is a public official 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 int conduct that constitutes a conflict of interest The following terme 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 John C. Herrold, Esquire July 30, 1992 Page 4 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 associated." 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. "Financial interest." Any -financial interest in a legal entity engaged in business for profit which comprises more than 5% of the - equity of the business or more than 5% of the assets of the economic interest in indebtedness. In addition, Sections 3(b) and 3(c) of the Ethics Law 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 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_ actiVittes . (j) Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, John C. Herrold, Esquire July 30, 1992 Page 5 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. If a : 'conflict ,exists, Section -3(j) e official /employee to abstain and to (j publicly a dis lose u bthe 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. governmental body- to take action because a majority is unattainable due to the abstention(s), then in that event participation is permissible provided the disclosure requirements noted above are followed. See,.Mlakar, Advice 91-523 - S. In applying the above provisions of the Ethics Law to the circumstances which you have submitted, 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. John C. Herrold, Esquire July 30, 1992 Page 6 In case, Frank Electric Corporation is a business with which Mr. March is associated, Under- the circumstances which you have - submitted, Mr. March would have a conflict of interest as a public official in matters regarding the cogeneration plant, due to the involvement of Air Products Corporation,_ Inc. This conclusion is based upon the Commission's decision in Miller, supra. As noted in Miller Opinion 89-024, matters which come before a public official /public employee involving hts or private clients place the public official /public emplbyee in a situation where he is faced with conflicting interests. In his private capacity, his duties are to the private._ firm and its clients, while in his capacity as a public official /public employee, his primary duty is to act in the best interests of the governmental body with the duty being owed to the public rather than to private clients. Id.; see also, Brooks, Opinion 89 -023. In each instance of a conflict of interest Mr. March would be required to abstain from any participation of any nature .whatsoever and to satisfy the disclosure requirements of Section 3(j) as set forth above. However, given - the Board of Supervisors for West Manchester Township is a three- member board, pursuant to Section 3(j), if after Mr. March has properly abstained and made the requisite disclosures pursuant to Section 3(j), the remaining two Members of the Board cast opposing votes, Mr. March would be permitted to vote to break the tie. 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 .M interpretation of the Ethics Law. Specifically not addresse herein is the applicability of the Second Class Township Code. Conclusion: As a Member and Chairman of the Board of Supervisors for West Manchester Township in York County, Pennsylvania,_Pfr;, Michael J. March is a public official subject to the provisions of the Ethics Law. As a public official, Mr. March. would have a conflict of interest as to matters regarding the cogeneration plant in which Air Products Corporation, Inc., is involved. In each instance of a conflict of interest, Mr. March would be required to abstain from any participation of any nature whatsoever fully satisfy the disclosure requirements of Section 3(j) : as Set forth above. If, after -Mr. March abstains and satisfies .ttxte disclosure xequirements of Section 3(j), the remaining two Members of the Board cast opposing votes, then Mr. March would be permitt+d to vote to break the tie. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. John C. Herrold, Esquire July 30, 1992 Page 7 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 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 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 52.12. ncerely, Vincent J. Dopko Chief Counsel L y 9 •