HomeMy WebLinkAbout800-R FreindIn re: Stephen F. Freind
STATE ETHICS ,.COMMISSION_
308 FINANCE 81.11; 1NG
HARRISBURG, PENNSYLVANIA 'I712O
G 3
File Docket: 88- 101 - C; 90- 012 -C2
Date Decided: August 3, 1991
Date Mailed :.. September 3, 1991
Before: Robert W. Brown, Chair r
Dennis C. Harrington, Vice Chair
James M. Howley
Daneen E. Reese
Roy W. Wilt
Austin M. Lee
James P. Gallagher
The State Ethics Commission received a request for
reconsideration on June 25, 1991, with respect. to Order 800 issued on
June 10, 1991. Pursuant to Section 2.38 of the regulations of the
Commission, the discretion of the $ Ethics Commission to grant
reconsideration is properly invoked a s follows:
(b) Any party may ask the Commission to reconsider an order
within 15 days of service of the order. The person
requesting reconsideration should present a detailed
explanation setting forth the reason why the order should
be reconsidered. Reconsideration may be granted at the
discretion of the Commission only where any of the following
occur:
(1) A material error of law has been made.
(2) A material error of facts has been made.
(3) New facts or evidence are provided which would
lead to reversal or modification of the order and
where these could not be or were not discovered
previously by the exercise of due diligence.
51 Pa. Code $2.38(b).
This adjudication of the Commission is hereby issued which sets
forth the Discussion and Reconsideration Order.
This Reconsideration Order and Order,800 are final and shall be
made available as public documents on the fifth (5th). business day
following the date of issuance of this Order.
.ADJUDICATION
Discussion :. Stephen F. Freind, hereinafter Freind, has timely
requested reconsideration of Freind Order 800 issued on June 10, 1991.
Int the foregoing tlyderi we detertined that Freind as a State
Representative for the 166th:d.agislative District violated Section
3(a) of Act °1;70 by:using his district office and attendant facilities
to conduct a private law practice and to engage in reelection
campaign activities :f ..antt:-i 'urtlier that he violated Section 3(a) of Act 9
of 1989 by utilizing his district office and attendant facilities to
engage in the 1990 reelectionesampaign activities. Finally, we
directed Freind to separate his . private law practice from his
legislative district office' within ninety days of issuance of the
above Order.
In requesting reconsideration, Freind raises two legal arguments
in support of his claim for - reconsideration: Cessar, Opinion 82 -002
authorizes a "dual purpose" district office if appropriate repayment
is made for personal use and_tsecondly equitable estoppel applies since
Cessar and other. opinionS have induced Freind to justifiably rely
upon Commission decisions -in operating his district legislative
office for a "dual purpose:".
Since Freind also proffers various related arguments as to the
two foregoing claims he raises for reconsideration, we will initially
consider the two general points followed by a seriatim analysis of
each of the related points raised by Freind.
As to the first general argument for reconsideration concerning
Cessar, Friend asserts that this Commission has now acknowledged in
the base Order "that Cessar stands for the clear and unequivocal
principle that a dual purpose district office system (with
appropriate repayment for personal use of that system) does not
violate Section 3(a) of the Ethics Act." Freind concludes that it
would be unfair and inequitable for this Commission to find him in
violation of this act for conduct which the Commission has previously
sanctioned through an opinion (Cessar).
The assertion by Freind, that the dicta rejection of Cessar in
the base Order somehow stands for the principle that a "dual purpose"
district office with appropriate repayment does not violate Section
3(a), is unsupported by our decision. The proscription against such
"dual purpose" use becomes obvious when the remainder of the sentence
containing the "reject that dicta" language is reviewed: "... and
reaffirm the result [in Cessar] that the use of district office for
campaign purposes is prohibited by the Ethics law." Freind, at 46.
As to the argument that Cessar could provide reliance to Freind
to engage in such activities, we do not accept such a claim because a
clear reading of Cessar reveals that' opined that it was
inappropriate under the Ethics Law to utilize a district office for
the conduct of campaign reelection activities. Any such argument is
immediately dispelled when one reads the conclusion in Cessar:
Freind, 88- 101 -C; 90- 012 -C2
Page 3
"The use of district office for the conduct of campaign
(reelection) activity, even assuming for the sake of
discussion that completely accurate and verifiable
payment actual costs and expenses were made,
constitutes an appearance of a conflict with the public
trust in that you would appear to be using your public'
Office for your personal office for your personal gain
as a candidate ... It would be, therefore, improper t�
use your district office in the manner suaaested,
because to do so would create an appearance of a
conflict of interest." (Emphasis Added)
Cessar at 5.
This Commission in Cessar and other opinions has advised that
members of the General Assembly may not use their district offices for
non- legislative activities, such as reelection campaign. activities.
As to the second general argument that equitable estoppel is
applicable because Freind claims to have relied upon Cessar, 'such
alleged reliance upon dicta in Cessar is misplaced. This Commission
is, no more bound by its own dicta than would be a court. ,We agree
.wfth the Pennsylvania Supreme Court's position in declining 'to
" consider . `ourselves bound by non - decisional statements or
"parenthetical illustrations" in inexact areas, not immediately before
the Commission. See, Brown v. Commonwealth, 399 Pa. 156, 159 A.2d 881
(1960); Hunsberaer v. Bender, 407 Pa. 185, 180A.2d 4(1962). The very
nature of dicta negates any precedential effect iipon the body
enunciating it: "Statements of.rules.of law must be considered - as
those applicable to the particular facts of that case, and,all other
legal conclusions stated therein regarded as mere `obiter dicta' and
not of binding authority." 1 Standard Pennsylvania Practice 2d.
Section 2:126 at 241 (Footnotes omitted). Statements which go beyond
the case do not control the decision in a subsequent matter when the
very issue is raised and considered to its full extent. Id. at 242.
Most clearly, Freind cannot breathe life into the Cessar dicta
given that Cessar found that a state representative could not use his
district office for the conduct of campaign reelection activity, - even
assuming that an appropriate accounting system for reimbursement or
payment could be devised, given the appearance of 'conflict with'the
public trust.
Freind's illogic that the Commission is equitably estopped from
discarding its own dicta is rejected. If such were"thecase, there
would be no such thing as "dicta" and every gratuitous comment by a
court or other tribunal would be stare decisis.,
Furthermore, the doctrine of equitable estoppel simply is
inapplicable to dicta. Equitable estoppel arises
Freind, 88- 101 -C; 90- 012 -C2
Page 4
. . . "when a party has intentionally or
negligently misrepresented some material fact,
knowing or having reason to know that another, will
justifiably rely on that misrepresentat3:on, and;;_
where that other has been induced to act to his .
detriment because he did justifiably-rely on that
representation."
Fair Acres Geriatric Center v. Coal --, Department of Public Welfare, 107
Pa. Commw. 293, 528.;Ate2d4048 -; 1014 (Pa. Coimn . Ct 1987), alloc.
den., 518 Pa. 628, 543- A.2d .:1..39 _.(Citation omitted) . By definition a
court's or agency's dicta is .: not binding upon it and therefore . could
not possibly induce r jusifiable reliance."
Were we to ignore the fact that the doctrine of equitable
estoppel has absolutely no application to dicta, Freind would fail to
meet his burden of approving equitable estoppel by clear and
convincing evidence. See, Bavush v. W.C.A.B. (Conemauah Tp.), 111 Pp.
Commw. 617, Ct., 534 A.2d 853, 857. The elements for equitable
simply do not exist in this case. There is no evidence of
justifiable reliance. To the contrary, Freind's proferred testimony
emphasizes that he is an accomplished legal scholar. The Commission
is confident that Freind knows dicta when he sees it, and knows that
it has no binding authority. Furthermore, Freind could not
justifiably rely upon Cessar's dicta by exalting it over the actual
holding in that case which is adverse to Freind's position. Finally,
Freind would not be able to establish the element of "no duty of
inquiry", See, Bavush, supra, 528 A.2d at 1014 -1015, given that Cessar
prohibited engaging in campaign reelection activities - out of the
district office despite the - - Cessar-dicta. In any event, Freind could
not rely on Cessar which was decided approximately,five after he
moved his law office to Brookline Boulevard. (Fact Finding 4b., .
Freind, Order 800).
Friend errs when he suggests that the Commission has reversed a
prior "position" by overruling the Cessar dicta. While even
established agency positions may be changed as long as the ; agency,
adequately explains its new position,. Butler Countv Memorial Hospital
v. Heckler, 780 F.2d 352, 355 (3rd Cir. 1985) (Note 3) (Citing Motor
Vehicle Manufacturers Association v. State Farm Mutual Automobile r
Insurance Co., 463 U.S. 29, 42 -43, 1 S.Ct. 2856, 2866 -67, 77 L.adj2d
443 (1983) ; other citation omitted) , the Cessar comments as mere: ldicta
never constituted a position of the Commission.
�.c
We will now proceed to consider, on a point by point basis, :the
various other related arguments which Freind makes in his o v
reconsideration request. ,... �?
,13
Initially, Freind suggests that the two complaints .-giving rise to
the base Order should be dismissed in order - to implement what he
characterizes as a new Commission policy and secondly that there be a
Freind, 88- 101 -C; 90- 012 -C2
Page 5
prospective rather than a retroactive application by delaying the
implementation of our decision to December 1992 which ip, .after the
close of the current legislative tern. W
dismiss a complaint since we; are duty bound underCstutory� awytoot
make a final determination 1
under Section '$(a) ,.of Act 170 . of 1978 as
well as an Act 9 of 1989, 65' P _40,8(f) We therefore simply cannot
dismiss the complaints but rather,mus. gender our decision because.
complaints have been filed, an inve4q fit##'on has been 'conducted, a
hearing has been held and a record ,,h s, be made.
not a "new policy" as argued ap 's11ence Here is no Our t o fn is
prospective versus a retroactive - the ti a of a
a
of a required determinati -application - cation but rather the rendering
determination_ after the receipt of a complaint and
investigation. As to the ` ` '
delayed to December 1, 1992 urather o t h an a the h 90 1 d y period i n
the base order, we believe that the three month period provides
adequate time. In this regard, it must be noted that Order 800 does
"riot relate to the legislative activities occurring in the district
office but rather directs that the private law practice be removed
from that legislative district office. Finally,
courts have recognized certain latitude in thi�Commissioneinhat the
imposing sanctions in our decisions. For example, in Hoak /McCutchepp
v. State Ethics Commission 77 Pa. Commw.
Commonwealth Court rejected an argument that the�Commission2was�bound,
to impose a treble penalty under Section 9 of Act 170 of 1978 when the
Commission through the exercise of discretion sought to impose
straight restitution upon the public officials in that case.
Freind again raises the issue of Cessar, -and asserts that none of
our prior adjudications involved "dual purpose facilities involving
private payments for personal use of these facilities ". Freind argues
that Cessar stands for the proposition that a "dual purpose" district
office does not violate Section 3(a) of the Ethics Act. As noted
above, our holding in Cessar is that a member of the General As.&e b1y
may not use his district legislative office for campaign reelection
activities.
After referencing a statement in a brief of the 'h4
division that there was no wrongful motivation /intentional wrongdoing
on the part of the respondent, Freind argues that his district office,
equipment and services are privately leased,.th he was authorized to
use the resources for reasonable public \private purposes, that he .
acted in accord with the rules of the Pennsylvania House of
Representatives in seeking (partial) re
supplemented the public salary of s'dirict office h staff
he paid for the business and cam ac that
out of his own pocket. Freind then that . underathefabovet ies
scenario, the operation of a,7 "dual purpose" office with prorated
payments resulted in a financial-benefit to the Commonwealth while at
the same time allowing ,him.to_ ie available to his constituents.
The term "dual purpose" office is not a term of art which has
been used by this Commission in our adjudications but is a term which
u��
Freind, 88- 101 -C; 90- 012 -C2
Page 6
has been advanced by Freind. Secondly, we fail to see any
distinction between our prior cases which held that it was c ont r a r y
to the Ethics Act to conduct private reelection campaign
in a district office and the instant case where we head inrOrdert800
that it is contrary to the Ethics Act toLc nductacamo campaign of
financial gain /private pecuniary
-activities and a private law prac benefit, such arguments have already
been considered and rejected in the base Order.
Freind cites Cessar, Bell, Opinion 84 -013, Hafer, Opinion 90 -013
as prior precedent for authorizing the utilization of district office
for such activities within the ambit of Section 3(a) of the Ethics
Law. Once again, such arguments were analyzed and rejected in the
a
base Order and we will not duplicate our analysis herein. We are
loss as to the statements that the base Order is a first time ruling
that a "dual purpose" office contravenes the Ethics Law regardless of
appropriate reimbursement, and that such order reverses our prior
position as enunciated in Cessar. As noted in both Cessar and the
other adjudications cited in Order 800, we have held that such
activities are contrary to the Ethics Law.
Parenthetically, Freind's reference to our decisions in
Romanelli. Opinion 79 -006; Corman, Opinion 79 -013; and Capabianca
Opinion 89- 014 -R2 is misplaced since
thosdcisons involved
taict
totally different question as to the propriety i
offices by legislators who own the buildings. Since these opinions
are irrelevant to the issue at hand, we will not discuss them.
Freind raises the issue of equitable estoppel which has been
addressed in detail above. Freind suggests that it was reasonable for
him to rely upon Cessar which was published by this Commission to
assist legislators and other public officials to conform their conduct
to the Ethics Act. We certainly do not quarrel that our adjudications
not only render a decision as to the specific facts in any given case
but also serve a purpose of advising public officials as to standards
of ethical conduct. However, we cannot avoid repetition in saying
that the decision, the conclusion, the determination in Cessar t eas
that members of the General Assembly could not use district of;f i:aes
for campaign reelection activities. It.belies logic to -accept a
statement that a decision by this Commission which advised a public
official not to engage in an activity somehow has become a "trap" for
public officials who trust in the word of this Commission's decision
which advised not to engage in such conduct.
It is then asserted that -ou n,
r tilling will .result ::i greater
cost to taxpayers and result in " the inability toAserve s tconstituents
with a degree of accessibility and efficiency. two
points, we do not challenge, as noted in the. base Order, that the
combination of the district-office and private law,practice mould
make Freind readily accessible to his
ccoAti uen i- j _ a j on accept
the conclusion that such be a greater
Freind, 88- 101 -C; 90- 0.2 -C2
Page 7
the Commonwealth of Pennsylvania. 'We have found however in Order 800
that such activity t Section 3(a) of Act 170 of 1978 and
.Act 9 of 1989. .� :5 : i.
' T :G;3 s
Upon review of the Ord i. M oni junction: with the a *gunie4tz' which
have been made, no "new infOtmmma tion ". h~as' bediV shiown Which would -
warrant reconsideration.
C is
In re: Stephen F. Freind
J `-
Reconsideration Order (800) -R
: File Docket: 88- 001 -C;90- 012 -C2
: Date Decided: August 23, 1991
: Date Mailed: September 3, 199/
1. The request by Stephen F. Freind to reconsider Order 800
issued on June 10, 1991 is denied.
BY THE COMMISSION,
DENNIS C. HARRINGTON, VI
Commissioner Robert W. Brown did not participate in this matter
because he acted as single, presiding officer and recused himself
pursuant to 51 Pa. Code §2.34(d)