HomeMy WebLinkAbout89-027 ShiptoskiDear Mr. Shiptoski:
I. Issue:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
OPINION. OF THE_.COMMISSION
Before: Robert W. Brown, Vice. Chair
G. Sieber Pancoast
Dennis C. Harrington
James M. Howley
Michael J. Washo
DATE DECIDED: October 26, 1989
DATE MAILED: November 8, 1989
Mr. Richard C. Shiptoski
Attorney at Law
Suite 1300, Northeastern Bank Building
Wilkes- Barre, PA 18701
89 - 027
Re: Public official, Conflict, Voting, Township Commissioners,
Authority of Office, Paid expenses, Travel, Co- generation Plant,
Recycling Company.
This Opinion is issued in response to your request of September
20, 1989.
What restrictions the Public Official and Employee Ethics Law
imposes upon first class township commissioners as to a request by an
energy recycling company to build a co- generation plant in the
township when four of the five commissioners haven taken trips to
tour co- generation plants at the expense of the company.
II. Factual Basis for Determination:
As solicitor, you request an opinion on behalf of the Board of
Commissioners of Newport Township, a township of the first class
located in Northeastern Pennsylvania. A majority of the land in
Newport Township was owned by the now bankrupt Blue Coal Corporation.
During the past year a group of investors, the Energy Recycling Group,
Inc., entered into negotiations for the Blue Coal land holdings.
Although there has not been a real estate closing, it is your
understanding that the Energy Recycling Group Inc. has agreed to
Mr. Richard C. Shiptoski
Page 2
purchase the assets of Blue Coal for approximately 18 million dollars
which would include 15,000 acres of land.
Mr. Michael Sgarlat, one of the individuals involved in the
acquisition of Blue Coal, has approached some of the township
commissioners regarding possible plans to build a co- generation plant,
contingent upon the successful acquisition of the land by Energy
Recycling Group, Inc. Mr. Sgarlat invited officials of Newport
Township to tour a co- generation plant in Cockleysville, Maryland
similar to that which is proposed for Newport Township. Four of the .
five commissioners and the township secretary traveled to
Cockleysville, Maryland by van to tour this plant. The, van was driven
by Mr. Sgarlat's brother at no charge to the township officials. The
tour was a one day trip and each person paid for his own meals. Mr.
Sgarlat further advised the board that he could arrange for them to
tour a more modern co- generation plant near Palm Beach, Florida. Four
of the five commissioners, the township tax collector and an
individual who is a candidate for township commissioner accepted Mr.
Sgarlat's offer and proceeded to Palm Beach to tour a co- generation
plant operated by a concern group known as National Ecology. These
individuals left on Friday, March 17, 1989 and returned Sunday, March
19, 1989. Each individual paid for his own meals; however, the plane
fare and lodging were paid for by Luzerne County Recycling and
Transportation, Inc., 507 River Street, Forty Fort, Pennsylvania, of
which Mr. Michael Sgarlat is President. No information was available
regarding the value of the Maryland trip since there was no capital
outlay in relation thereto. As to the Florida trip, the plane fare
for each individual was between $350 and $400 and the lodging was $75
per room /per night with two persons sharing a room.
Newport Township has received a request from Energy Recycling and
Transportation Inc., to consider being a host community for a co-
generation plant if the Blue Coal property is purchased by Energy
Recycling Corporation. The request is being held in abeyance pending
this advisory opinion request.
John Elmy, Newport Township Secretary, has submitted the
following information regarding the tour of the co- generation plants.
The Blue Coal Corporation was the largest land owner in Newport
Township, owning approximately six thousand acres. Due to the
bankruptcy of Blue Coal in 1976, great financial difficulties arose
in Newport Township. Not only were revenues from the Blue Coal
Corporation as a tax payer lost but also numerous jobs connected with
Blue Coal's operation. Budgetary cut - backs in the township were
necessary as a result of the declining tax base including: laying off
street workers, termination of contracting for refuse collection,
operating the police department by using only part -time policemen and
consolidating the fire department in one central location. The
foregoing occurred at the time when the nat =ion was subject to both
Mr. Richard C. Shiptoski
Page 3
high unemployment rates and high inflation. In 1987, a group of
buyers made an offer to purchase all of the holdings of the Blue Coal
Corporation for 21 million dollars but the proposed transaction
failed.
Thereafter, Mr. Sgarlat, as the representative of North American
Mining Company, suggested purchasing the Blue Coal land in either
Hanover or Newport township in order to set up a co-generation plant
and landfill. Mr. Sgarlat was informed that the Newport Township
Board of Commiss ioners were opposed to a landfill. Mr. Sgarlat then
asked if the board members would be willing to listen to a
- presentation by an associate regarding a recycling operation. A
meeting occurred with Messrs. Sgarlat, Braden, and Davenport, wherein
--Mr. Br aden explained the operation with photographs of a recycling
V lan`t located in Cockleysville, Maryland. The board members
uggested that they would like to see the recycling plant in its
nornal ,operation.
Mr- Sgarlat made the necessary arrangements and on Saturday,
ruary 18, 1989, Commissioners DeLuca, Fudjak, Tarnowski, and
Morgis, together. with Secretary Elmy >tvere driven to the Cockley.•sville
plant a van owned by Mr. Sgarlat' s- V brother. They were met at the
plants by Mr. Braden and of fivers of National. Ecology, the operator of
the plant. The tour reflected the simplicity, cleanliness, and
efficiency of a recycling operation. The commissioners and secretary
concluded that if a recycling plant could work. in Maryland without any
significant negative impact on the community, then it should be able
to operate as well in Pennsylvania which has-been relying on the less
efficient method of solid waste disposal, the sanitary landfill.
During the return trip from Cockleysvil le, Mr, Sgarlat advised
the commissioners that National Ecology had just completed the . most
modern refuse derived fuel, . co-generation plant in the County of„ Palm
Beach, Florida and asked if the board would be interested 'izn touring
the Florida plant. It was believed that an examination of the actual
plant would be more valuable than a lecture €rom ,someone: who :may have
an interest in influencing others to adopt a method, of of
disposal. Since none of the commissioners could afford a `trip of this
nature at their own expense and since the. Newport Township budget
could not support such a trip Mr. Sgarlat, indicated . that ° someone"
would underwrite the expenses -. The _com missionners were directed to
contact Mr. Morgis to determine if trip to Florida ,eoulri,e
arranged. Approximately one week before th.e:. .scheduled: F ..orida:; tour,
Mr. Sgarlat notified gr. Morgis that trip .arrangements ..hid bee made
for a group of ,five people to Palm; Beach, Florida:. for March 8, 1389
Mr., Morgie requested a legal opinio i f coin ,you as township
solicitor on the propriety pf-_ the ,,,,trip,, You _concluded that the
acceptance of the trip could .th ,if any, official
action would be taken regarding the matter in the future..
Mr. Richard C. Shaptoski
Page 4
commissioners concluded that no { decision should be made until such
time as all the available information could be presented at several
public forums, for the purposec,4of :x*ceiving: in-pxit fton the citizens of
Newport township and for ; a, refereladum to be placed .on tke ba :lot, if
necessary,- c
6 -
{ . :" p
On March 18, 1989 the pliowing persons madwthe trip= 8to Palm
Beach, Florida: Messrs crg .. p luca and Fud ak Townshlp l
Commissioners; Mr,. Mori cis, jtowr hip tax collector, stead Mr -1 aulfMpst,
candidate for township eommisel..oiie;r. . Aire fare and - hotel expenses were
paid for by Luzerne' County Recycling -and : ansportation, /nc 4 Forty
Fort, Pennsylvania, ° white ail meals and leizure:' t ,et° a:Ctilitt s < we e*
at . individual expense. Within - -:a week of the tip y an e.nn a cement
appeared in local papers that. Energy Recyc1ingLIG pot uld make an
offer to the Blue. Coal,: bankruptcy trustees : int the W4amohut 0f ' ..
$18,000/000.00 for all .af thes -Blue -Coal lande_:hO1dings .;.. ` I+ essrs .
Sgarlat and Braden ;- are_twc3' prihcipa s-of..that_,firm. - -Thereafter, the
Luzerne County Recycling J, and Transfer Statmon.r, Inc. has:'p eseuted..a
draft of a proposed host;agreeme t to.the,solzcitor for review and
revision by the Newport 'Towns .ip : Board of
Upon your advice as solic tor:. the- ooim:issionersr are requesting
an opinion before-entering tering .into any negotiations-or voting: rthe •.;, a
proposal. You ask whether the move - •enumerated s t,u .tion ° :wou r R , s ;^
constitute a conflict for the missionersundet the. :Ethics lai r
should the commissioners participate or vote 'rega *c .ng: ,t e e4ue. for
the tONIT,1131143, to be a ,host .,:community for a co gendrata.on.- plant. -Tv-
III Disciiss
'11:e Cez ' ss oner.$ .e tort" Township gate . " public of fic alWm as
term- ia.xdefined_untider the- P ubli:c Official and'Empiokee-Zth,tv s
Law. Acc ord.. n y, they= are subject to the provisions =*bf , the .:F° cs
Law. F
Sep tior :3" a) of t"he :Ethics Law..prxwides :.
r - r r
aection 3. Restricted Activities.
(a) c,, No " public, .official •or publi eanp oyee,
shall engage in conduct that constittttes:.4 ,
conflict-of interest. ::r nec. C
4
The .f ollowing.; terms a ,e fined in the Ethos Law:
Section ID�efinxti cans .
-" Conf ict ,-.Sr - 4.00n:f liCt. ofd interest."
public official oX xblic employee of the
authority of his office or employment or any
Mr. Richard C. Shiptoski
Page 5
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.
"Conflict" or "conflict of interest `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 or 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 bylaw, the exercise of
which is necessary to the performance of duties
and responsibilities unique to a particular public
office or position of public employment.
Section 3(b) and 3(c) of the Ethics Law provide in part that no
person shall offer to a public official /employee anything of monetary
and no public official/employee shall solicit or accept any
thing. of monetary value based upon the understanding that the vote.,
ofwf -i a al ' action, or judgement of the public would
influenced thereby.
In attempting to address the question of whether the
commissioners who took the trips have a conflict which would preclude
their participation and voting on a proposal by Energy Recycling Group
for Newport Township to be a host community for a co-generation plant,
we must express our distress over the situation that the commissioners
sought an opinion after, rather than before, they took the two traps.
The appropriate course of action for the commissioners would have
been to seek the guidance of this Commission when the tour was
suggested by. Mr. Sgarlat.
If this Commission were contacted prior to the trips actually
taking place, the current dilemma could have been if the
criteria set forth in Daghir, Opinion. 86 -012 were followed.
In Daahir, we w confronted with the:y whether the °r
members of a school board could accept a trip at the expense of a
potential contractor to tour his facilities. The standards to be
applied in order to determine whether such travel would be in accord
with the Ethics Law were enumerated in Daahir as follows:
Mr., Richard. C. Shiptoski
(1) - The traveling official may not directly -bil-L--Or receive
reirribursement from the vendor or contraztor. • •
(2) Such reimbursement shouid be .arranged by the ven.dor
with the school district.
(3) The nature of the expenses incurred „and the amounts
•paid by the vendor ',should be specifically..'outliried and
enumerated to the s district'. ' - Such - information
should also bez to the publia..2 •
, r
(4-) The nature and extent - .of the travel must.
, in nature. 7
" The following criteria - should be considered -in -relation to
whether. the travel is reasonable.•
a. Is the, trip necessary in 'order to review,
-equipment, material:, facilities which the
governmental body is considering 'purchasing
and which cannot be transported to the
location of the govermtental,body1
b. : 1-s it necessarp for the entir.e, gbvernmental
'bddy to travel=. order rt review' such
equipment ..or materials or is it
• More reasonable for one or two members of the
governmental body to review such items and
report back to the governmental body?
the location and extent of the trip
2 ~ length of time during whiah.-the -
Individual 'travels reasonable-in nature-
to
the duties that are to be performed by the
official while traveling? •
d. Has the vendor supplied additional items
during the' includIng..
entertainment, and other gratuities that are
unreasonable in nature- and in relation. to the
- • official duties that are being- performed?
e. Would the travel, by the official, accord the
. vendor any advantageS. over other vendors?
(5) Public . officials may mot accept travel expenses and
accommodations for spouses of the public official.
(6) The travel must be in accordanoe wath the official
duties and responsibilities of the individuals
Mr. Richard C. Shiptoski
Page 7
involved. The travel must not be related to any
tangential items not related to the official duties and
responsibilities of the public official.
We may not, after the fact, address the question of whether the
taking of the tours was in accord with the Ethics Law since an opinion
addresses prospective conduct only. However, the taking of the two
trips is inter-related to the question of whether a conflict exists as
to voting on the proposal for a co-generation plant. Thus, we are
relegated to applying Daqhir as to these two trips. However, a number
of questions arise as to the Daqhir standards which are not contained
in the submitted facts: whether two tours were necessary, whether
four rather than one designated commissioner should go, whether
someone with a technical background such as the township engineer
should have been directed to tour the facilities, why the tax
collector or secretary should go, why the only private person
attending was a candidate for commissioner, why the Florida trip took
three days for the plant tour, etc.
Because we do not have sufficient information to determine
whether the trips conform to the requirements of Daqhir, we defer any
decision on whether a conflict exists under Sections 3(a), (b) and (c)
as to voting on the proposal for a co-generation plant.
As a matter of information, Section 3(j) of the Ethics Law, in
part, addresses situations where a majority of a municipal body have a
conflict which would affect the ability of that body to function.
Section 3(j) of the Ethics Law provides:
Section 3. Restricted activities.
(j) 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
Mr, Richard C. Shiptos
Page °, t _.
other, legg lly required vote of approval
unattainable, then such Members shall 4e' permitted`
to vote if disclosures are made as otherwise
provided herein In, the case of a three- mem
governing body o political subdivision, wh ere
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.
In this case, if the commissioners have a conflict, Section 3(j)
may have application. If such were the case, the disclosure
requirements dictate that the commissioners, publicly announce any
conflict and in addition, file a written memorandum which details the
nature of any conflict with the 'secretary recording the minutes.
Lastly, the propriety of the proposed conduct has only been
addressed under the Ethics Law; the applicability of any, ether
statute, code, ordinance, or other code of conduct ether than the
Ethics Law has not been considered in that - they,.do' net involve an
interpretation of the Ethics Law.w.
IV. Conclusion:
The Township Commissioners are public" off icials sub3 ec ,� to the
provisions of the Ethics Law. As to commissioners :who ; toured co-
generation plants with travel orKodgini`p,Kovided by the
representative of the Company which proposes to build a plant in the
township, we defer any decision,. pending receipt of further
information as to the conformity of the trips:; with the requirements of
Daghir, Opinion 85 =012, can the issue of ,whether a conflict exists
under Sections 3(a), , (b) and (c) as to voting on .theaproiosal for a
co- generation plant in their township. ` If -a majority of a municipal
body has a conflict, Section `3(j)'of the Ethics Law may have
application which would require that they, publicly announce any
conflict as well as file a written memorandum with the secretary who
records the minutes which °details`the nature of any conflict. Lastly,
the propriety of the proposed conduct has only been sddres ed under
the Ethics Law. « -° >.
Pursuant to Section 7 (9)(i), this_ opinion is a complete defense
in any enforcement proceeding initiated by the Commis. b.t n n and
evidence of good " faith conduct in `'any civil or criminal' proceeding,
providing the requestor has disclosed truthfull ,a. the material
facts and committed the acts card alained /of n reeii a ee °on; the advice
given.
Mr. Richard - C. Shiptoski
Page 9
such.
Finally, any person may reque "st the Commission to reconsider its
Opinion. The reconsideration request must be received at this
Commission within fifteen days of the mailing date of this Opinion.
The person requesting reconsideration should present a detailed
explanation setting forth the reasons why the Opinion requires
reconsideration.
This letter is a public record and will be made available as
By the commission,
Robert W. Brown,
Vice Chair