HomeMy WebLinkAbout03-606 FoorDonna S. Weldon, Esquire
Keefer, Wood, Allen & Rahal, LLP
210 Walnut Street
P.O. Box 11963
Harrisburg, PA 17108 -1963
Re: Conflict; Public Official /Employee; School District; School Director; Business With
Which Associated; Insurance Company; Account Representative; Selling
Insurance to School District Employees on School District Property.
Dear Ms. Weldon:
ADVICE OF COUNSEL
December 5, 2003
03 -606
This responds to your letter of October 31, 2003, by which you requested advice
from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
1a. =S. § 1101 et seq., presents any prohibition or restrictions upon a school director
who, in a private capacity, is employed as an account representative for an insurance
company, as to selling insurance to school district employees on school district
property, when the school district has an existing policy which permits such activity.
Facts: Your law firm serves as Solicitor to the Everette Area School District
(School District "). You seek an advisory on behalf of the Board of Directors of the
School District and Sandy Foor ( "Foor "), a School Director, with respect to potential
conflicts of interest as to Foor, and Foor's duties under the Ethics Act.
You have submitted a copy of a legal opinion that you issued to Daniel W.
Koontz, Superintendent of the School District, on October 31, 2003, which legal opinion
is incorporated herein by reference.
The facts set forth in the legal opinion relevant to your inquiry are, in material
part, as follows.
Foor is an Account Representative with AFLAC Insurance AFLAC"). One of
AFLAC's products is cancer insurance, which is sold to School District employees.
Board Policy 615 authorizes payroll deductions from an employee's paycheck for the
purpose of paying for cancer insurance, which is included as an authorized deduction
along with tax- sheltered annuities, association dues, disability insurance, and United
Way. Foor receives a commission on each employee account.
Weldon /Foor 03 -606
December 5, 2003
Page 2
The School District permits the Account Representative to meet with employees
on School District property. In the past, Foor has met with employees on School District
property to market the insurance.
You ask whether the Ethics Act would preclude Foor from selling insurance to
School District employees on School District property.
Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11)
of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requestor
based upon the facts which the requestor has submitted. In issuing the advisory based
upon the facts which the requestor has submitted, the Commission does not engage in
an independent investigation of the facts, nor does it speculate as to facts which have
not been submitted. It is the burden of the requestor to truthfully disclose all of the
material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only
affords a defense to the extent the requestor has truthfully disclosed all of the material
facts.
It is further initially noted that, pursuant to the same aforesaid Sections of the
Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If
the activity in question has already occurred, the Commission may not issue an
opinion /advice but any person may then submit a signed and sworn complaint which will
be investigated by the Commission if there are allegations of Ethics Act violations by a
person who is subject to the Ethics Act. To the extent you have inquired as to conduct
which has already occurred, such past conduct may not be addressed in the context of
an advisory opinion. However, to the extent you have inquired as to future conduct,
your inquiry may, and shall be addressed.
As a School Director, Foor is a public official as that term is defined in the Ethics
Act, and hence Foor is subject to the provisions of that Act.
Section 1103(a) of the Ethics Act provides:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
65 Pa.C.S. § 1103(a).
The following terms 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.
Weldon /Foor 03 -606
December 5, 2003
Page 3
"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.
In addition, Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no
person shall offer to a public official /employee anything of monetary value and no public
official /employee shall solicit or accept anything of monetary value based upon the
understanding that the vote, official action, or judgment of the public official /employee
would be influenced thereby. Reference is made to these provisions of the law not to
imply that there has been or will be any transgression thereof but merely to provide a
complete response to the question presented.
Section 1103(j) of the Ethics Act provides as follows:
§ 1103. Restricted activities
(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(j).
Weldon /Foor 03 -606
December 5, 2003
Page 4
In each instance of a conflict, Section 1103(j) requires the public official/
employee to abstain and to publicly disclose the abstention and reasons for same, both
orally and by filing a written memorandum to that effect with the person recording the
minutes or supervisor.
In the event that the required abstention results in the inability of the
governmental body to take action because a majority is unattainable due to the
abstention(s) from conflict under the Ethics Act, then voting is permissible provided the
disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised that Section 1103(a) of the Ethics Act does not prohibit public officials /public
employees from having outside business activities or employment; however, the public
official /public employee may not use the authority of his public position - or confidential
information obtained by being in that position - for the advancement of his own private
pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion
89 -011. Examples of conduct that would be prohibited under Section 1103(a) would
include: (1) the pursuit of a private business opportunity in the course of public action,
Metrick, Order No. 1037; (2) the use of governmental facilities, such as governmental
telephones, postage, staff, equipment, research materials, or other property, or the use
of governmental personnel, to conduct private business activities, Freind, Order No.
800; Pancoe, supra; and (3) the participation in an official capacity as to matters
involving the business with which the public official /public employee is associated in his
private capacity or private client(s). Miller, Opinion 89 -024; Kannebecker, Opinion No.
92 -010. A reasonable and legitimate expectation that a business relationship will form
may also support a finding of a conflict of interest. Amato, Opinion No. 89 -002; Garner,
Opinion No. 93 -004; Snyder, Order No. 979 -2, affirmed Snyder v. SEC, 686 A.2d 843
(Pa. Commw. Ct. 1996), alloc. den., No. 0029 M.D. Allocatur Docket 1997 (Pa.
December 22, 1997).
As a School Director, Foor would generally have a conflict as to matters before
her that would financially benefit herself, a member of her immediate family, a business
with which Foor or a member of her immediate family is associated, or private client(s).
See, Miller, supra; Kannebecker, supra.
Having established the above general principles, your specific inquiry shall now
be addressed.
The submitted facts indicate that Foor would be using the property of the School
District, of which she is a Board Member, for the purpose of selling insurance on behalf
of her employer, AFLAC, which is a business with which she is associated. The
submitted facts also reflect that there is an existing policy in place which permits the
Account Representative to meet with School District employees on School property.
Without commenting on whether such a policy is appropriate, given that it does exist,
the sale of insurance would not involve a use of authority of office by Foor as a School
Director in that she would be acting as an Account Representative of AFLAC. Absent a
use of authority of office, no conflict of interest would exist as to Foor using the property
of the School District to sell insurance to School District employees on behalf of her
employer, AFLAC. In this regard, Foor must exercise diligence and care to ensure that
she does not convey or give an impression as to her status as a School Director relative
to the sale of insurance to School District employees. See, Guloien, infra.
It is noted that the current policy as stated in the submitted facts does not
address whether the sale of insurance may occur on school time. In this regard, you
are advised that (1) Foor would have to be subject to the precise same constraints as
applied to all others gaining access to School District property under the current policy;
and (2) Foor could not have any additional privileges above and beyond those which
would be accorded to all others gaining access to School District property under the
current policy.
Weldon /Foor 03 -606
December 5, 2003
Page 5
The fact that there is an existing policy in place which permits individuals to meet
with School District employees on School District property to sell insurance
distinguishes this matter from Guloien, Opinion 90 -011, where no such policy existed.
In Guloien, Opinion 90 -011, the full Commission ruled that an insurance
salesman, who was a school board member, would not be precluded from selling
insurance to board members, administrators or teachers of that district provided such
activity did not involve the use of school district property, personnel or supplies:
the Ethics Law does not prohibit your outside business activities.
Smith, Opinion 89 -010. However, the Ethics Law would prohibit you from
utilizing District property, personnel, supplies or equipment relative to
carrying on your private business activities or advancing those interests.
In your capacity as sole proprietor of your insurance business you
would not be precluded from soliciting new clients or renewing contracts of
existing clients who may be employees or officials of the District provided
you do not, in whole or part, use your status as a board director in such
solicitation. Shubeck, Order 663; Glova, Order 325. In particular, you
must exercise diligence and care to insure that you do not convey or give
an impression as to your status as a public official as District school
director relative to the solicitation of clients for your insurance business.
Guloien, at 3, 4.
Given the existing policy of the School District, the necessary conclusion is that
no conflict of interest would exist as to Foor using the roperty of the School District to
sell insurance to School District employees on behalf of her employer, AFLAC.
The propriety of the proposed conduct has only been addressed under the Ethics
Act; the applicability of any other statute, code, ordinance, regulation or other code of
conduct other than the Ethics Act has not been considered in that they do not involve an
interpretation of the Ethics Act. Specifically not addressed herein is the applicability of
the Public School Code.
Conclusion: As a Member of the Board of Directors of the Everett Area School
District ( "School District'), Sandy Foor ( "Foor is a public official subject to the
provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §
1101 et seq. AFLAC, which employs Foor as an Account Representative, is a business
with v hich Foor is associated. As a School Director, Foor would generally have a
conflict as to matters before her that would financially benefit herself, a member of her
immediate family, a business with which Foor or a member of her immediate family is
associated, or private client(s). Given that the School District has an existing policy in
place which allows an Account Representative to meet with School District employees
on School property to sell insurance, the sale of insurance would not involve a use of
authority of office by Foor as a School Director in that she would be acting as an
Account Representative of AFLAC. Absent a use of authority of office, no conflict of
interest would exist as to Foor using the property of the School District to sell insurance
to School District employees on behalf of her employer, AFLAC. Foor must exercise
diligence and care to ensure that she does not convey or give an impression as to her
status as a School Director relative to the sale of insurance to School District
employees. It is noted that the current policy as stated in the submitted facts does not
address whether the sale of insurance may occur on school time. In this regard, you
are advised that (1) Foor would have to be subject to the precise same constraints as
applied to all others gaining access to School District property under the current policy;
and (2) Foor could not have any additional privileges above and beyond those which
would be accorded to all others gaining access to School District property under the
Weldon /Foor 03 -606
December 5, 2003
Page 6
current policy. Lastly, the propriety of the proposed conduct has only been addressed
under the Ethics Act.
Pursuant to Section 1107(11), 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 requestor 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.
Sincerely,
Vincent J. Dopko
Chief Counsel