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HomeMy WebLinkAbout23-518 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 April 6, 2023 To the Requester: Emily J. Mueller, Esquire 23-518 Dear Ms. Mueller: This responds to your letter dated March 8, 2023, by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to theissue presented below: Issue: Whether an individual serving as a member of a borough zoning hearing board, who in a private capacity as a registered investment advisor with a firm provides investment advisory services to a local attorney and other clients, would have a conflict of interest with regard to participating in matters involving an application before the borough zoning hearing board where: (1) the applicant would be represented by the local attorney; or (2) the applicant would be represented by the local attorney, and the local attorney would be providing legal services to the individual at that time. Brief Answer: The individual would not have a conflict of interest and would not violate Section 1103(a) of the Ethics Act by participating in matters involving an application where the local attorney would be representing the applicant or would additionally be providing legal services to the individual at that time unless: (1) the individual would be consciously aware of a private pecuniary benefit for himself or the firm, which is a business with which the individual is associated in his capacity as an employee; (2) his action(s) would constitute one or more specific steps to attain that benefit; and (3) neither of the statutory Mueller, 23-518 April 6, 2023 Page 2 exclusions to the definition of “conflict” or “conflict of interest” as set forth in the Ethics 1 Act, 65 Pa.C.S. § 1102, would be applicable. Facts: You have been authorized by James Wiltman (“Mr. Wiltman”) to request an advisory from the Commission on his behalf. You have submitted facts that may be fairly summarized as follows: Mr. Wiltman is a Member of the Zoning Hearing Board of Sewickley Borough (“Borough”). Borough Council appointed Mr. Wiltman to the Borough Zoning Hearing Board in January 2023. The Borough Zoning Hearing Board, which consists of five Members, has the authority to rule upon requests for variances or special exceptions, appeals of determinations of the Borough Zoning Officer, and challenges to the substantive validity of the Borough Zoning Ordinance. In a private capacity, Mr. Wiltman is employed as a registered investment advisor with Wells Fargo Clearing Services, LLC (“the Firm”). Mr. Wiltman provides investment advice to various clients, including a local attorney (“the Local Attorney”) who represents applicants before the Borough Zoning Hearing Board. Mr. Wiltman has managed the Local Attorney’s investments for ten years. The Local Attorney compensates the Firm for the investment advisory services that Mr. Wiltman provides to the Local Attorney. Although the Local Attorney has provided legal services to Mr. Wiltman in the past, the Local Attorney is not currently providing any legal services to Mr. Wiltman. Based upon the above submitted facts, you pose the following questions with regard to Mr. Wiltman’s ability to participate in matters before the Borough Zoning Hearing Board where the applicant would not be a client of Mr. Wiltman: (1) Whether Mr. Wiltman would have a conflict of interest with regard to voting on an application before the Borough Zoning Hearing Board where the applicant would be represented by the Local Attorney; (2) Whether Mr. Wiltman would have a conflict of interest with regard to voting on an application before the Borough Zoning Hearing Board where the applicant would be represented by the Local Attorney, and the Local Attorney would be providing legal services to Mr. Wiltman at that time; and (3) In the event of a conflict of interest, whether Mr. Wiltman would be precluded from: (a) asking questions about the application during the Borough Zoning Hearing Board’s public hearing on the application; (b) providing comments on the application during the public hearing; or (c) participating in an executive session held by the Borough Zoning Hearing Board with respect to the application. 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. Mueller, 23-518 April 6, 2023 Page 3 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 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: Mueller, 23-518 April 6, 2023 Page 4 § 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 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. 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: Mueller, 23-518 April 6, 2023 Page 5 … 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: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member of the Borough Zoning Hearing Board, Mr. Wiltman is a public official subject to the provisions of the Ethics Act.The Firm is a business with which Mr. Wiltman is associated in his capacity as an employee. Mr. Wiltman would not have a conflict of interest and would not violate Section 1103(a) of the Ethics Act by participating in matters involving an application where the Local Attorney would be representing the applicant or would additionally be providing legal services to Mr. Wiltman at that time unless: (1) Mr. Wiltman would be consciously aware of a private pecuniary benefit for himself or the Firm; (2) his 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, Mr. Wiltman would be required to abstain from participation, which would include: (1) asking questions about the application during the Borough Zoning Hearing Board’s public hearing on the application; (2) providing comments on the application during the public hearing; (3) participating in an executive session held by the Borough Zoning Hearing Board with respect to the application; and (4) 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. Mueller, 23-518 April 6, 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 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