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HomeMy WebLinkAbout22-532 RowanPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov ADVICE OF COUNSEL September 6, 2022 To the Requester: Mark A. Rowan, Esquire Dear Mr. Rowan: 22-532 This responds to your correspondence dated July 25, 2022, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the general issue presented below: Issue: Would four Members of Council for Everson Borough ("Borough"), each of whom is an officer (i.e., President, Vice -President, Treasurer, or Chaplain) of the Everson Volunteer Fire Department ("Volunteer Fire Department"), 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 voting on matters that would financially impact the Volunteer Fire Department? BriefAnswer: YES. Because the Volunteer Fire Department is a business with which each of the four Borough Council Members is associated in his capacity as an officer, the four Borough Council Members generally would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to voting on matters that would financially impact the Volunteer Fire Department. Facts: You have been authorized by Eric Christner ("Mr. Christner"), Charles Leighty ("Mr. Leighty"), Joe Lane ("Mr. Lane"), and Jason Frazier ("Mr. Frazier") to request an advisory from the Commission on their behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. Rowan, 22-532 September 6, 2022 Page 2 Borough Council consists of seven Members. Mr. Christner, Mr. Leighty, Mr. Lane, and Mr. Frazier are Members of Borough Council, and each of them is an officer (i.e., President, Vice - President, Treasurer, or Chaplain) of the Volunteer Fire Department, which is a 501(c)(3) non- profit corporation. None of the officers of the Volunteer Fire Department are paid any salary or receive any remuneration for serving as officers or members of the Volunteer Fire Department. The Volunteer Fire Department is the primary responder to fire emergencies in the Borough. The Borough pays one-half of the cost of workers' compensation insurance for the Volunteer Fire Department, and a neighboring municipality pays the other half. The Volunteer Fire Department derives approximately 97% of its operating revenue from fundraising. The Borough has no power to appoint the officers of the Volunteer Fire Department. The Borough was recently considering purchasing radios for the Volunteer Fire Department at a cost of approximately $21,000. The money to pay for the radios was to come from approximately $76,000 in COVID-19 pandemic relief funds that the Borough was to receive. A Borough Council Member who is not an officer of the Volunteer Fire Department subsequently moved to give the entire amount of COVID-19 pandemic relief funds to the Volunteer Fire Department to assist it with a revenue shortfall caused by fundraising issues related to the pandemic. When a question arose as to whether the four Borough Council Members who are officers of the Volunteer Fire Department would have a conflict of interest with regard to voting on a motion to pay for the radios for the Volunteer Fire Department or a motion to give all of the COVID-19 pandemic relief funds to the Volunteer Fire Department, action on the proposed uses of the COVID-19 pandemic relief funds was postponed. The question that is posed by your advisory request is whether the four Borough Council Members who are officers of the Volunteer Fire Department would have a conflict of interest with regard to voting on matters that would financially impact the Volunteer Fire Department, including but not limited to a motion to pay for the radios for the Volunteer Fire Department or a motion to give all of the COVID-19 pandemic relief funds to the Volunteer Fire Department. 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 11030) 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. Rowan, 22-532 September 6, 2022 Page 3 0) 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(a), 11030). 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. Rowan, 22-532 September 6, 2022 Page 4 "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 Pennsylvania Supreme Court has held that the definition of the term "business" as set forth in the Ethics Act includes non-profit entities. Rendell v. State Ethics Commission, 603 Pa. 292, 983 A.2d 708. The use 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 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As Members of Borough Council, Mr. Christner, Mr. Leighty, Mr. Lane, and Mr. Frazier are public officials subject to the provisions of the Ethics Act. Under the submitted facts, the Volunteer Fire Department is a business with which each of the aforesaid four Members of Borough Council is associated in his capacity as an officer (i.e., President, Vice -President, Treasurer, or Chaplain). See, Rendell, supra. Pursuant to Section 1103(a) of the Ethics Act, Mr. Christner, Mr. Leighty, Mr. Lane, and Mr. Frazier would each generally have a conflict of interest as a Borough Council Member in matters that would financially impact the Volunteer Fire Department. Mr. Christner, Mr. Leighty, Rowan, 22-532 September 6, 2022 Page 5 Mr. Lane, and Mr. Frazier would each specifically have a conflict of interest with regard to voting on a motion to pay for the radios for the Volunteer Fire Department or a motion to give all of the COVID-19 pandemic relief funds to the Volunteer Fire Department. In each instance of a conflict of interest, the Borough Council Member(s) with the conflict of interest would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. It is noted that Section 11030) of the Ethics Act contains a voting conflict exception that would enable a member of a seven -member board such as Borough Council to vote despite a conflict of interest where the following conditions are met: (1) the board must be unable to take any action on the matter before it because the number of members required to abstain from voting under the provisions of the Ethics Act makes the majority or other legally required vote of approval unattainable; and (2) prior to voting, such members with conflicts under the Ethics Act must disclose their conflicts as required by Section 11030). When both of these conditions are met, such that the exception is applicable, the exception allows for voting only —it does not permit other forms of participation, such as discussing the matter that is the subject of the vote. Pavlovic, Opinion 02-005. 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 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. Respectfully, Bridget K. Guilfoyle Chief Counsel