HomeMy WebLinkAbout02-623 LomireJohn Lomire
1069 Hildebidle Drive
Collegeville, PA 19426
Dear Mr. Lomire:
ADVICE OF COUNSEL
December 13, 2002
02 -623
Re: Conflict; Public Official /Employee; Chairman; Township Board of Supervisors;
Business With Which Associated; Privatized Cable Television; Ordinance
Regulating Franchised Cable Television; Business Client; Business Competitor;
Vote.
This responds to your letter of November 6, 2002, by which you requested advice
from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Ha.GS. § 1101 et seq., would present any prohibition or restrictions upon the chairman
of a township board of supervisors, who, in his private capacity, owns a business that
provides privatized cable services, with regard to matters before the board involving:
(1) his private business clients; or (2) a company that provides franchise cable television
services in the township.
Facts: As Chairman of the Lower Providence Township ( "Township ") Board of
Supervisors ( "Board "), you seek an advisory from the State Ethics Commission
regarding the conflict of interest provisions of the Ethics Act. You have submitted facts
which may be fairly summarized as follows.
In your public capacity, you have served as a Township Supervisor and as
Chairman of the Township Board since January 2002. The Board consists of 5
Members.
In your private capacity, you are in the business of installing and operating
"privatized cable television" service in retirement communities and multiple dwelling
units. You state that you have been in business for nearly 24 years and have many
clients in the Township and in the Philadelphia area in general.
You distinguish privatized cable television service, which you provide, from
franchised cable television which companies like "Comcast" provide.
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December 13, 2002
Page 2
You state that privatized cable television service is provided on private property,
b invitation of the property owner, and is not in the public right of way regulated by the
Township. Additionally, you state that privatized cable television service is not
regulated by the Communications Act of 1996, except as to guidelines for usable
frequencies and customer service standards.
You liken privatized cable television service to a satellite television service. As a
privatized cable television service provider, your business installs the necessary wiring,
builds the satellite receiver, and distributes television signals to the users. None of your
projects involve the public right of way or franchising.
Additionally, a privatized cable television service like yours is able to provide
services that franchised cable companies do not provide. Unlike franchised cable
companies, your business integrates services between telephone and private cable
electronic gear to produce features such as security cameras, a separate channel for
dinner menus and social activities, and enhanced telephone services with technicians
on site to provide the attending services needed to operate such a system.
In contrast, franchised cable television uses the public rights of way and is
regulated by the Township. Currently, the Township has a franchise agreement with
Comcast.
You assert that you have never been in the franchised cable television business.
You state your view that you are not a competitor to any franchise cable company such
as Comcast. You assert that Comcast does not have the ability to provide the services
that retirement community owners are seeking.
You state that a former supervisor has asserted that you have a conflict of
interest in your capacity as a Township Supervisor as to the following: (1) a retirement
community known as "Shannondell," that is presently being built in the Township and is
one of your business clients; and (2) discussions and voting as to a Township cable
television ordinance regulating franchised cable television.
As for the first asserted area of conflict, you state that Shannondell requested
your services nearly two years ago, before you were elected Township Supervisor. You
state that Shannondell is completely located on private property without any roads
dedicated back to the Township. Shannondell is presently being built, and your
business is currently installing privatized cable television service at Shannondell.
However, you emphasize that Shannondell was voted upon and approved by a former
Board of Supervisors without any involvement on your part.
As for the second asserted area of conflict, you state that the Township cable
television ordinance was drafted to supplement the Township's franchise agreement
with Comcast, so that the Township residents and local school district could enjoy the
benefits of publicly broadcast meetings and a school based "PEG" channel. You state
that the ordinance was fashioned after many other township ordinances.
Based upon the above, you seek guidance as to the conflict of interest provisions
of the Ethics Act and their applicability to your prospective conduct as a Township
Supervisor and Chairman of the Township Board.
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
not been submitted. It is the burden of the requestor to truthfully disclose all of the
Lomire 02 -623
December 13, 2002
Page 3
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.
It is further initially noted that, pursuant to the same aforesaid Sections of the
Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If
the activity in question has already occurred, the Commission may not issue an
opinion /advice but any person may then submit a signed and sworn complaint which will
be investigated by the Commission if there are allegations of Ethics Act violations by a
person who is subject to the Ethics Act. To the extent you have inquired as to conduct
which has already occurred, such past conduct may not be addressed in the context of
an advisory opinion. However, to the extent you have inquired as to future conduct,
your inquiry may, and shall be addressed.
As a Township Supervisor and Chairman of the Township Board, you are a
public official subject to the provisions of the Ethics 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.
"Business." Any corporation, partnership, sole
proprietorship, firm, enterprise, franchise, association,
organization, self - employed individual, holding company, stock company, receivership, trust or any legal entity
organized for profit.
Lomire 02 -623
December 13, 2002
Page 4
"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.
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
(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 applying the above provisions of the Ethics Act to your inquiry, it is noted that
Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit
public officials /public employees from having outside business activities or employment;
however, the public official /public employee may not use the authority of his public
position - -or confidential information obtained by being in that position- -for the
advancement of his own private pecuniary benefit or that of a business with which he is
associated. Pancoe, Opinion 89 -011.
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December 13, 2002
Page 5
Examples of conduct that would be prohibited under Section 1103(a) would
include: (1) the pursuit of a private business opportunity in the course of public action,
Metrick, Order 1037; (2) the use of governmental facilities, such as governmental
telephones, postage, staff, equipment, research materials, or other property, or the use
of governmental personnel, to conduct private business activities, Freind, Order 800;
Pancoe, supra; and (3) the participation in an official capacity as to matters involving the
business with which the public official /public employee is associated in his private
capacity, Gorman, Order 1041, or private client(s), Miller, Opinion 89 -024;
Kannebecker, Opinion 92 -010.
Generally, a conflict of interest exists when a public official /public employee, in
his official capacity, participates, reviews or passes upon a matter involving a business
with which he is associated and /or private clients. Miller, supra; Kannebecker, supra. A
reasonable and legitimate expectation that a business relationship will form may also
support a finding of a conflict of interest. Amato, Opinion No. 89 -002; Garner, Opinion
No. 93 -004; Sn der, Order No. 979 -2, affirmed Snyder v. SEC, 686 A.2d 843 (Pa.
Commw. Ct. alloc. den., No. 0029 M.D. Allocatur Docket 1997 (Pa. December
22, 1997).
In each instance of a conflict of interest, the public official /public employee must
abstain from participation in his public capacity. The abstention requirement is not
limited merely to voting, but extends to any use of authority of office. In Juliante, Order
No. 809, the Commission recognized that the use of authority of office as defined in the
Ethics Act includes, for example, discussing, conferring with others, and lobbying for a
particular result.
In each instance of a conflict of interest, the public official must also satisfy the
disclosure requirements of Section 1103(j) set forth above.
In considering the above, your business is a business with which you are
associated to the extent you are a director, officer, owner, or employee of the business
or have a financial interest in the business. In addition, given that your business is
performing work for Shannondell, Shannondell is your /your business's private client.
Pursuant to Section 1103(a) of the Ethics Act, you would generally have a
conflict of interest as to using the authority of your office as a Township Supervisor, or
confidential information received by being a Township Supervisor, for the private
pecuniary benefit of yourself, a business with which you are associated, or your /your
business s private client(s) /customer(s). See, Miller, supra; Kannebecker, supra.
The facts which you have submitted do not indicate whether Shannondell now
has or in the future will have any matter(s) pending before the Township Board.
Consequently, this Advice is necessarily limited to providing general guidance.
Generally, you would have a conflict of interest under Section 1103(a) of the Ethics Act
as to matters that would financially impact Shannondell. In each instance of a conflict of
interest, you would be required to abstain fully and to satisfy the disclosure
requirements of Section 1103(j) of the Ethics Act.
As for the aforesaid Township cable television ordinance, which would
supplement the Township's franchise agreement with Comcast, it is not clear from the
submitted facts whether you are inquiring as to past conduct or future conduct. As
noted above, past conduct may not be addressed within the context of an advisory.
However, it would appear that even if the particular ordinance about which you
have inquired has already been fully considered and voted upon by the Township
Board, similar matters may arise from time to time during your continued service as a
Lomire 02 -623
December 13, 2002
Page 6
Township Supervisor. Therefore, this particular aspect of your advisory shall be
addressed, but only as to future conduct.
You are advised that Section 1103(a) of the Ethics Act would prohibit you from
using the authority of your public office, or confidential information received by being in
your public position, to effectuate a private pecuniary benefit to yourself or your
business through a detriment to a business competitor. See, Pepper, Opinion 87 -008.
The issue of whether Comcast is your business competitor is a tactual issue which
cannot be resolved within the context of this Advice. You have stated your view that
you are not a competitor to any franchise cable company such as Comcast, because
your business provides privatized cable television services whereas Comcast provides
franchised cable television services. However, the fact that the services which you
provide differ from the services provided by Comcast is not dispositive of the issue. To
the contrary, if your business and Comcast would market your respective services to at
least some of the same prospective clients /customers, with clients /customers choosing
between such services and service providers, then Comcast would be your business
competitor.
Nevertheless, even if Comcast would be your business competitor, an additional
factual issue would remain as to whether your action as a Township Supervisor in any
given instance would effectuate a benefit to you or your business through a detriment to
Comcast. Pepper, Opinion 87 -008. In the absence of any private pecuniary benefit to
you or your business, or any other prohibited private pecuniary benefit as delineated in
Section 1103(a ) of the Ethics Act, a conflict would not exist for you under Section
1103(a) of the Ethics Act.
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 Second Class Township Code.
Conclusion: As a Township Supervisor and Chairman of the Lower Providence
I ownship ("Township") Board of Supervisors ( "Board "), you are a public official subject
to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Pa.C.S. 1101 et seq. Your business which installs and operates "privatized cable
television' service in retirement communities and multiple dwelling units is a business
with which you are associated to the extent you are a director, officer, owner, or
employee of the business or have a financial interest in the business. The retirement
community known as "Shannondell" is your /your business's rivate client. Generally,
you would have a conflict of interest under Section 1103(a) of the Ethics Act as to
matters that would financially impact a business client /customer such as Shannondell.
Section 1103(a) of the Ethics Act would also prohibit you from using the authority of
your public office, or confidential information received by being in your public osition, to
effectuate a private pecuniary benefit to yourself or your business through a detriment to
a business competitor. The issue of whether Comcast is your business competitor is a
factual issue which cannot be resolved within the context of this Advice. In each
instance of a conflict, you would be required to abstain fully and satisfy the disclosure
requirements of Section 1103(j) of the Ethics Act. 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.
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December 13, 2002
Page 7
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 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