Loading...
HomeMy WebLinkAbout23-509 ConfidentialVW t PHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 February 6, 2023 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov 23-509 This responds to your correspondence dated January 10, 2023, received January 20, 2023, by which you requested a confidential advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the issue presented below. Issue: Whether, pursuant to Section 1103(a) of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa,C.S. § 1103(a), an individual serving as a Member and Chairman of the Board of the [Authority], which owns the [Facility], would have a conflict of interest with regard to participating in discussions, votes, or other actions of the Authority Board pertaining to a tenant of the [Facility Structure], where in a private capacity, the individual [Has a Business Relationship] with the tenant. Brief Answer: Section 1103(a) of the Ethics Act, which restricts public official s/public employees in their public capacities and not their private capacities, does not prohibit the individual from having business relationships, such as his business relationship with the tenant of the [Facility Structure]. However, in his public capacity as a Member and Chairman of the Authority Board, the individual would have a conflict of interest and would violate Section 1103(a) of the Ethics Act by participating in discussions, votes, or other actions of the Authority Board pertaining to the tenant if: (1) the individual would be consciously aware of a private pecuniary (financial) benefit for himself; (2) the individual's action(s) would constitute one or more specific steps, to attain that benefit; and (3) neither of the statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C,S, § 1102, would be applicable. I I Action that has a de ininimis (insignificant) economic impact or that affects to the same degree a class consisting of flic general public or a subclass consisting of all industry, occupation or other group which includes the public official or public employee, a member ofifis immediate family, or a business with which lie or a member of Ilis immediate family is associated, does not constitute a conflict of interest. Confidential Advice, 23-509 February 6, 2023 Page 2 Facts: You request a confidential advisory from the Commission based upon submitted facts that may be fairly summarized as follows. You are a Member and Chairman of the Board of the Authority, which owns the [Facility]. The Authority Board makes basic fiscal decisions and acts on various matters related to [Operating the Facility]. [The Entity], which is not related to you in any way, is a tenant of the [Facility Structure]. You [Have a Business Relationship] with [the Entity]. The question that is presented by your advisory request is whether, in your capacity as a Member and Chairman of the Authority Board, you would have a conflict of interest with regard to participating in discussions, votes, or other actions of the Authority Board pertaining to [the Entity] . 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. 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 Confidential Advice, 23-509 February 6, 2023 Page 3 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), I1030). 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. Confidential Advice, 23-509 February 6, 2023 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. 65 Pa.C.S. § 1102. Section 1103(a) of the Ethics Act (pertaining to conflict of interest), which restricts public officials/public employees in their public capacities and not their private capacities, does not prohibit public officials/public employees from having outside business activities or relationships. However, 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 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. .luliante, 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. Per the Pennsylvania Supreme Court's decision in Kistler v. State Ethics Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a) of the Ethics Act, a public official/public employee: ... must act in such a way as to put his [office/public position] to the purpose of obtaining for himself a private pecuniary benefit. Such directed action implies awareness on the part of the [public official/public employee] of the potential pecuniary benefit as well as the motivation to obtain that benefit for himself. Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics Act, a public official/public employee "must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit." Id., 610 Pa. at 528, 22 A.3d at 231. Conclusion: Confidential Advice, 23-509 February 6, 2023 Page 5 In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member and Chairman of the Authority Board, you are a public official subject to the provisions of the Ethics Act. Pursuant to Section 1103 (a) of the Ethics Act, you generally would have a conflict of interest in matters before the Authority Board that would financially impact you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. Under the submitted facts, [the Entity] is not a business with which you are associated for purposes of the Ethics Act. Your business relationship with [the Entity] would not in and of itself form the basis of a conflict of interest for you in matters before the Authority Board that would involve [the Entity]. You are advised that as a Member and Chairman of the Authority Board, you would have a conflict of interest and would violate Section 1103(a) of the Ethics Act by participating in discussions, votes, or other actions of the Authority Board pertaining to [the Entity] if: (1) you would be consciously aware of a private pecuniary (financial) benefit for yourself; (2) your action(s) would constitute one or more specific steps to attain that benefit; and (3) neither of the statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, would be applicable. In each instance of a conflict of interest, you 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. 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 Confidential Advice, 23-509 February 6, 2023 Page 6 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