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HomeMy WebLinkAbout22-526 Mueller PHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE: 717-787-0806 TOLL FREE: 1-800-932-0936 FINANCE BUILDING WEBSITE: www.ethics.pa.gov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL August 1, 2022 To the Requester: Emily J. Mueller, Esquire GRB Law 22-526 DearMs. Mueller: This responds to your correspondence dated June 28, 2022, by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to the general issues presented below: Issues: 1. Would a Commissioner for Harrison Township (“Township”) have a conflict of interest under Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), with regard to participating in discussions, votes, or other actions of the Township Board of Commissioners pertaining to the appropriation of funds for Citizens Hose Co., a volunteer fire department which provides services for the Township, when the Township Commissioner is a Member of the Board of Directors and President of Citizens Hose Co.? Brief Answer: YES. Because Citizens Hose Co. is a business with which the Township Commissioner is associated in his capacities as a Director and an officer (i.e., President), the Township Commissioner generallywould have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in discussions, votes, or other actions of the Township Board of Commissioners pertaining to the appropriation of funds for Citizens Hose Co. 2. Would the Township Commissioner have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in discussions, votes, or other actions of the Township Board of Commissioners pertaining to the appropriation of funds for Citizens Hose Ambulance Service, Inc., which is owned by Citizens Hose Co., when the Township Mueller, 22-526 August 1, 2022 Page 2 Commissioner is employed as the Emergency Medical Service Supervisor for Citizens Hose Ambulance Service, Inc.? Brief Answer: YES. Because Citizens Hose Ambulance Service, Inc. is a business with which the Township Commissioner is associated in his capacity as an employee, the Township Commissioner generallywould have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in discussions, votes, or other actions of the Township Board of Commissioners pertaining to the appropriation of funds for Citizens Hose Ambulance Service, Inc. Facts: Yourequest an advisory from the Commission on behalf of James Erb (“Mr. Erb”). You have submitted facts, the material portion of which may be fairly summarized as follows. Mr. Erb is serving his first term as a Township Commissioner. The Township Board of Commissioners consists of five Members. Citizens Hose Co. is one of the volunteer fire departments that provide services to the Township. Citizens Hose Co. owns Citizens Hose Ambulance Service, Inc. (“Citizens Hose Ambulance”). The Township did not create Citizens Hose Co. or Citizens Hose Ambulance, and each entity is separate and distinct from the Township. While the Township annually appropriates funds for Citizen Hose Co., the Township and its officials and employees do not exercise control over Citizens Hose Co. or Citizens Hose Ambulance. Mr. Erb is a general member, Member of the Board of Directors, and President of Citizens Hose Co. Mr. Erb does not receive any compensation for serving in his various capacities with Citizens Hose Co. Mr. Erb is also employed as the Emergency Medical Service (“EMS”) Supervisor for Citizens Hose Ambulance. Mr. Erb’s job responsibilities with Citizens Hose Ambulance include determining staffing needs, creating staff schedules, and purchasing products used on a daily basis. Based upon the above submitted facts, you pose the following questions: 1. Would Mr. Erb have a conflict of interest with regard to providing the other Township Commissioners with documentation related to the financial status of Citizens Hose Co. for consideration on the issue of whether the Township should appropriate funds for Citizens Hose Co.; 2. Would Mr. Erb have a conflict of interest with regard to participating in discussions of the Township Board of Commissioners on the issue of whether the Township should appropriate funds for Citizens Hose Co.; 3. Would Mr. Erb have a conflict of interest with regard to voting on the issue of whether the Township should appropriate funds for Citizens Hose Co.; Mueller, 22-526 August 1, 2022 Page 3 4. Would Mr. Erb have a conflict of interest with regard to providing the other Township Commissioners with documentation related to thefinancial status of Citizens Hose Ambulance for consideration on the issue of whether the Township should appropriate funds for Citizens Hose Ambulance; 5. Would Mr. Erb have a conflict of interest with regard to participating in discussions of the Township Board of Commissioners on the issue of whether the Township should appropriate funds for Citizens Hose Ambulance; and 6. Would Mr. Erb have a conflict of interest with regard to voting on the issue of whether the Township should appropriate funds for Citizens Hose Ambulance? Discussion: Pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all material facts. Sections 1103(a) and 1103(j) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. -- No public official or public employee shall engage in conduct that constitutes a conflict of interest. (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 Mueller, 22-526 August 1, 2022 Page 4 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(a), 1103(j). The following terms related to Section 1103(a) 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, joint 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. Subject to the statutory exclusions to the Ethics Act’s definition of the term “conflict” or “conflict of interest” (i.e., the de minimis exclusion and the class/subclass exclusion), 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office or confidential information received by holding such a public position for the private pecuniary (financial) 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. The use Mueller, 22-526 August 1, 2022 Page 5 of authority of office is not limited merely to voting but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. A conflict of interest would not exist to the extent the "de minimis exclusion" and/or the “class/subclass” exclusion set forth within the Ethics Acts definition of the term " conflict" or "conflict of interest," 65 Pa. C. S. § 1102, would be applicable. The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact.Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact, a conflict would not exist, and Section 1103(a) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburg, Order 900. In order for the class/subclass exclusion to apply, two criteria must be met: (1) the affected public official/public employee, immediate family member, or business with which the public official/public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official/public employee, immediate family member, or business with which the public official/public employee or immediate family member is associated must be affected "to the same degree" (in no way differently) than the other members of the class/subclass. 65 Pa.C.S. § 1102; see, Kablack, Opinion 02-003; Rubenstein, Opinion 01-007. The first criterion of the exclusion is satisfied where the members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual/business in question and the other members of the class/subclass are reasonably affected to the same degree by the proposed action. Kablack, supra. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Township Commissioner, Mr. Erb is a public official subject to the provisions of the Ethics Act. Under the submitted facts, Citizens Hose Co. is a business with which Mr. Erb is associated in his capacitiesas aDirectorand an officer (i.e., President), and Citizens Hose Ambulance is a business with which Mr. Erb is associated in his capacity as an employee. Pursuant to Section 1103(a) of the Ethics Act, Mr. Erb generally would have a conflict of interest as a Township Commissioner in matters that would financially impact him, Citizens Hose Co., or Citizens Hose Ambulance. Mueller, 22-526 August 1, 2022 Page 6 As to each business with which Mr. Erb is associated (i.e., Citizens Hose Co. andCitizens Hose Ambulance), unless the de minimis exclusion or the class/subclass exclusion set forth within the Ethics Act’s definition of “conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, would be applicable, Mr. Erb would have a conflict of interest with regard to: (1) providing the other Township Commissioners with documentation related to the financial status of that business for consideration on the issue of whether the Township should appropriate funds for that business; (2) participating in discussions of the Township Board of Commissioners on the issue of whether the Township should appropriate funds for that business; or (3) voting on the issue of whether the Township should appropriate funds for that business. In each instance of a conflict of interest, Mr. Erb would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, 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 requester 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 receivedat 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. Respectfully, Bridget K. Guilfoyle Chief Counsel