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HomeMy WebLinkAbout23-515 HoverPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: Benjamin Hover Dear Mr. Hover: 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 March 13, 2023 23-515 This responds to your correspondence dated February 6, 2023, received February 13, 2023, by which you requested an 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 president of a borough council would have a conflict of interest with regard to participating in discussions or votes of borough council on the payment of compensation to a firm that is a human resources consultant to the borough or on personnel decisions involving advice or recommendations of the firm, where the owner of the firm is the treasurer of a political committee formed to raise money to support the individual's candidacy for reelection to borough council. Brief Answer: The firm owner's service as the treasurer of the political committee in and of itself would not form the basis of a conflict of interest for the individual in matters pertaining to the firm. Accordingly, the individual would not have a conflict of interest and would not violate Section 1103(a) of the Ethics Act by participating in discussions or votes of borough council on compensation for the firm or on personnel decisions involving advice or recommendations of the firm unless: (1) the individual would be consciously aware of a private pecuniary (financial) benefit for himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated; (2) the individual's action(s) would constitute one or more specific steps to attain that benefit; Hover, 23-515 March 13, 2023 Page 2 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.1 Facts: You request an advisory from the Commission based upon submitted facts, the material portion of which may be fairly summarized as follows. You are a Member and President of Council for the Borough of Lansdowne ("Borough"). In 2020, Borough Council voted unanimously to engage Delco Business Solutions (the "Firm"), which is owned by Michael Diaz ("Mr. Diaz"), as a human resources consultant to assist with the process for hiring a Chief of Police for the Borough. The Firm provided such services under a temporary contract that lasted through approximately November 21, 2020. Borough Council subsequently decided to retain the Firm's services to assist the Borough Manager and the Borough Chief of Police with hiring, developing performance evaluations and a process for evaluating all Borough employees, creating revisions to Borough policy, conducting human resource trainings, and ensuring compliance with all legal requirements pertaining to employment rights. Borough Council unanimously voted to approve a contract with the Firm for the provision of such services beginning March 29, 2021. The Borough pays the Firm a monthly retainer fee to conduct business with the Borough. The majority of the work conducted by the Firm and Mr. Diaz involves interaction with Borough staff with occasional interaction with Borough Council Members during personnel discussions and evaluations. In the fall of 2022, you formed a political committee, Friends of Benjamin Hover (the "Committee"), to raise money to support your candidacy for reelection to Borough Council in 2023. Mr. Diaz, who has significant experience as a treasurer for multiple campaigns, volunteered to assist with the Committee after you had an informal discussion with him in a social setting. Mr. Diaz is Treasurer of the Committee, which is an unpaid position. You state that Mr. Diaz has not contributed to your reelection campaign nor is he expected to do so. Based upon the above submitted facts, you pose the following questions: (1) Whether Mr. Diaz's role as Treasurer of the Committee would cause you to have a conflict of interest with regard to participating in discussions or votes of Borough Council on the payment of compensation to the Firm or on personnel decisions involving the Firm's advice or recommendations; and (2) Whether the Firm's/Mr. Diaz's role as a consultant to the Borough would necessitate Mr. Diaz's resignation as Treasurer of the Committee. Discussion: 1 Action that has a de minimis (insignificant) economic impact or that 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, does not constitute a conflict of interest. Hover, 23-515 March 13, 2023 Page 3 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 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 Hover, 23-515 March 13, 2023 Page 4 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. 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 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. 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 Hover, 23-515 March 13, 2023 Page 5 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: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member and President of Borough Council, 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 Borough Council 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. In response to your first question, you are advised as follows. Mr. Diaz's service as Treasurer of the Committee in and of itself would not form the basis of a conflict of interest for you in matters before Borough Council that would involve the Firm. Accordingly, you would not have a conflict of interest and would not violate Section 1103(a) of the Ethics Act by participating in discussions or votes of Borough Council on the payment of compensation to the Firm or on personnel decisions involving the Firm's advice or recommendations unless: (1) you would be consciously aware of a private pecuniary (financial) benefit for yourself, a member of your immediate family, or a business with which you or a member of your immediate family is associated; (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. Your second question cannot be addressed in this advisory because: (1) you have not established legal standing to request an advisory as to Mr. Diaz's conduct; and (2) your second question appears to relate to sources of law other than the Ethics Act (such as the Borough Code or the Pennsylvania Election Code). 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. Hover, 23-515 March 13, 2023 Page 6 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