HomeMy WebLinkAbout03-509 DecarboRoger M. DeCarbo, Chairman
Lawrence County Commissioners
Lawrence County Government Center
430 Court Street
New Castle, PA 16101 -3593
Dear Mr. DeCarbo:
ADVICE OF COUNSEL
February 19, 2003
03 -509
Re: Conflict; Public Official /Employee; County; Commissioner; Immediate Family
Member; Brother; Spouse; Business With Which Associated; Nursing Home;
Downsizing; Sale; Vote; Three - Member Board.
This responds to your faxed letter of January 15, 2003, by which you requested
advice from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Ha.G.S. § 1101 et seq., would present any prohibition or restrictions upon a county with regard to the sale of the county nursing home to a private, for-profit
entity when: (1) the county commissioner's brother owns one of ten private nursing
homes in the county; (2) the county commissioner's spouse is employed at the
brother's nursing home; and (3) the sale of the county nursing home would not result in
the closing of that facility and displacement of its 80 current patients, but rather, would
result in downsizing that facility from 136 beds to 80 beds.
Facts: As Chairman of the Lawrence County Commissioners, 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 Lawrence County ( "County "), there are 1,000 certified nursing home beds, 850
of which are eligible for patient care. There are ten licensed facilities with a daily bed
occupancy of approximately 600.
The County owns and operates a 136 -bed nursing home ( "County Nursing
Home "), which is located on 38 acres of land. The County Nursing Home's occupancy
rate averages at approximately 70 %.
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February 19, 2003
Page 2
Currently, the County is negotiating for a private entity to purchase the land,
place it on the tax roll, and develop it to potentially create 200 to 300 jobs. The plan is
to downsize the 136 -bed facility to 80 beds through renovations and additions and by
razing the 1925 building, which you describe as antiquated. You state that should this
be accomplished, it would be a significant economic development advantage for the
County residents and would stop the financial drain on the County.
You state that you and one other Commissioner, Commissioner Burick, are the
only Commissioners in favor of selling the County Nursing Home. The third
Commissioner, Commissioner Fosnaught, opposes such a sale to any private, for - profit
entity.
A question has arisen as to whether you would have a conflict of interest in the
matter, given that your brother owns and your spouse is employed by one of the ten
nursing homes in the County. You note that you do not own any stock in your brother's
corporation.
You further note that the sale of the County Nursing Home would not result in the
closing of that facility and displacement of its 80 current patients, but rather, would
result in downsizing that facility from 136 beds to 80 beds.
Based upon the foregoing facts, you ask whether you would have a conflict of
interest with regard to the proposed sale of the County Nursing Home.
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
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 a County Commissioner, 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
DeCarbo 03 -509
February 19, 2003
Page 3
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.
"Immediate family." A parent, spouse, child, brother
or sister.
"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.
"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.
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
DeCarbo 03 -509
February 19, 2003
Page 4
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. Your brother and your
spouse are clearly members of your "immediate family" as that term is defined in the
Ethics Act. Further, the nursing home which is owned by your brother and which
employs your spouse is a business with which both your brother and spouse are
associated.
Pursuant to Section 1103(a) of the Ethics Act, you would be prohibited from
using the authority of your office as a County Commissioner, or confidential information
received by being in your public position, for the private pecuniary benefit of yourself,
your brother, your spouse, or your brother's nursing home. See, e. Gallen, Order
1198, aff'd., Gallen v. State Ethics Commission, No. 1497 C.07200 a. Cmwlth. Ct.
April 802).
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 set forth
above.
Having established the above general principles, your specific inquiry shall now
be addressed.
The question of whether you would have a conflict of interest under Section
1103(a) of the Ethics Act as to sale of the County Nursing Home depends upon whether
there would be a private pecuniary benefit to a business with which you or a member of
your immediate family is associated. If there would be no private pecuniary benefit,
there would be no conflict; if there would be a private pecuniary benefit, there would be
a conflict. In the instant case, a private pecuniary benefit would exist, for example, if the
sale and downsizing of the County Nursing Home would result in an increase in the
occupancy /residency rate of your brother's nursing home. In that there is a factual
insufficiency as to whether such use of authority of office would result in a private
pecuniary benefit, a conclusive determination cannot be made as to whether a conflict
of interest exists.
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February 19, 2003
Page 5
However, the Commission has generally held that a conflict exists in a case if a
public official has a reasonable and legitimate anticipation that his /her contemplated
official action would result in a private pecuniary benefit to himself, a member of his
immediate family, or a business with which he or a member of his immediate family is
associated. See, Amato, Opinion 89 -002. Thus, if you have a reasonable and
legitimate expectation that your voting on the sale of the County Nursing Home would
result in a financial benefit to brother's nursing home as in increasing its
occupancy /residency rate, you would have a conflict of interest under Section 1103(a)
of the Ethics Act.
Assuming you would have a conflict, you would still be permitted to participate
under certain limited circumstances. In Garner, Opinion 93 -004, the Commission
considered the issue of whether, under Section 3(j) of the Ethics Law, a supervisor on a
three member board would be permitted to second a motion even if he had a conflict
where the two remaining supervisors would have opposing views or where one of the
remaining two members would be absent from the meeting.
Citing Juliante, Order 809, the Commission first noted that seconding a motion is
a use of authority of office. Hence an individual with a conflict would not be permitted to
participate, make a motion, second a motion, or vote. See, Garner, supra. However,
the Commission also stated:
[T]he General Assembly in enacting Section 3(j) would not have
allowed a public official /employee on a three member board who has a
conflict to be able to vote unless a second to the motion could be made so
that the matter would be in the posture for a vote. Thus, we believe that
since there is a need for a second to a motion in order to make Section
3(j) of the Ethics Law operative, the General Assembly intended as to
three members [sic] boards for the public official with a conflict to be
allowed to second so that if the other supervisors became deadlocked, the
public official could then vote provided the disclosure requirements are
satisfied.
Garner, at 6.
In light of the foregoing, the Commission concluded that Section 3(j) of the Ethics
Law does allow an individual to second a motion where the two remaining supervisors
have opposing views or where one of the other two supervisors is absent. The
Commission emphasized that its ruling was expressly limited in its application to three
member boards and to the question of seconding a motion.
Applying Garner to the instant matter, under Section 1103(j) of the Ethics Act,
you would be permitted to second a motion to sell the County Nursing Home only in a
situation where, on a three member board, 1) the two remaining Commissioners would
have opposing views; or 2) one of the other two Commissioners would be absent from
the meeting. Allowing you to second the motion in either of the above scenarios would
put the matter in a posture for a vote. Then, only in a situation where the two other
Commissioners would be present and deadlocked would you be permitted to vote to
break the tie provided that the disclosure requirements of Sections 1103(j) would be
satisfied.
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 County Code.
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February 19, 2003
Page 6
Conclusion: As a County Commissioner for Lawrence County ("County"), 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 brother and your spouse are
members of your "immediate family" asJhat term is defined in the Ethics Act. The
nursing home which is owned by your brother and which employs your spouse is a
business with which both your brother and spouse are associated. Pursuant to Section
1103(a) of the Ethics Act, you would be prohibited from using the authority of your
public office as a County Commissioner, or confidential information received by being in
your public position, for the private pecuniary benefit of yourself, your brother, your
spouse, or your brother's nursing home. 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.
The question of whether you would have a conflict of interest under Section
1103(a) of the Ethics Act as to sale of the County Nursing Home depends upon whether
there would be a private pecuniary benefit to a business with which you or a member of
your immediate family is associated. If there would be no private pecuniary benefit,
there would be no conflict; if there would be a private pecuniary benefit, there would be
a conflict. In the instant case, a private pecuniary benefit would exist, for example, if the
sale and downsizing of the County Nursing Home would result in an increase in the
occupancy /residency rate of your brother's nursing home. In that there is a factual
insufficiency as to whether such use of authority of office would result in a private
pecuniary benefit, a conclusive determination cannot be made as to whether a conflict
of interest exists.
If you have a reasonable and legitimate expectation that your voting on the sale
of the County Nursing Home would result in a financial benefit to brother's nursing home
as in increasing its occupancy /residency rate, you would have a conflict of interest
under Section 1103(a) of the Ethics Act
Even if you would have a conflict of interest, Section 1103(j) of the Ethics Act
would allow you to second a motion to sell the County Nursing Home where the two
remaining Commissioners would have opposing views or where one of the other two
Commissioners would be absent. Allowing you to second the motion in either of the
above scenarios would put the matter in a posture for a vote. Then, only in a situation
where the two other Commissioners would be resent and deadlocked would you be
permitted to vote to break the tie provided that the disclosure requirements of Sections
1103(j) would be satisfied.
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
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
DeCarbo 03 -509
February 19, 2003
Page 7
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