HomeMy WebLinkAbout04-508 KellyCharles G. Kelly, Sr.
P.O. Box 306
Wampum, PA 16157
ADVICE OF COUNSEL
February 17, 2004
04 -508
Re: Conflict; Public Official /Employee; Exclusion; Class /Subclass; Councilman;
Borough; Borough Employee; Workman's Compensation; Insurance;
Dear Mr. Kelly:
This responds to your letter received on January 15, 2004, by which you
requested advice from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
1Ta.G.S. § 1101 et seq., presents any prohibition or restrictions upon a borough
councilman who is also a borough employee from voting on insurance coverage for
borough employees.
Facts: At the January 12, 2004, council meeting, another councilman raised an
issue as to your voting for an insurance package presented to council. The quote was
for a package of property and liability coverage and Worker's Compensation. The
property and liability coverage is underwritten by St. Paul Insurance and the Worker's
Comp by Guard Insurance. The council member questioned whether you had a
possible conflict of interest on the insurance vote because you, as a councilman and
employee of the Borough of Wampum, are carried under the Worker's Compensation
Insurance Policy. Council took action but you abstained from voting due to uncertainty
of your possible conflict.
After review of the packages, council will vote again on this matter in the near
future. The same insurance covers all council people, borough employees, and fire
department personnel in blanket coverage. No one receives any special benefit
coverage compared to any one else under the policy. The amount of compensation is a
standard rate set by the state which regulates all employees in the borough regarding
how much coverage they may receive. The insurance quotes reflect a savings to the
public.
You seek advice as to whether you may vote on this matter or should abstain
due to a conflict of interest on your part.
Kelly 04 -508
February 17, 2004
Page 2
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.
As a councilman for the Borough of Wampum, you are a public official as that
term is defined in the Ethics Act, and hence you are 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.
"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.
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:
Kelly 04 -508
February 17, 2004
Page 3
§ 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).
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.
Section 1103(a) of the Ethics Act prohibits a public official /public employee from
using the authority of public office /employment or confidential information received by
holding such a public position for the private pecuniary 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.
Under the submitted facts, participation in the insurance policy would be a
conflict. Under Section 1103(a) of the Ethics Act, you would use the authority of office
by participating in actions of council. Further, such action would result in private a
pecuniary benefit consisting of your inclusion under the coverage. Lastly, that
pecuniary benefit would inure to you. Hence, all of the elements of a conflict would
exist.
However, the statutory definition of "conflict" or "conflict of interest" includes two
exclusions, hereinafter referred to as the "de minimis" exclusion and the "class/subclass
exclusion."
The de minimis exclusion precludes a finding of a conflict of interest as to an
action having a de minimis (insignificant) economic impact. Thus, when a matter that
would otherwise constitute a conflict of interest under the Ethics Act would have an
Kelly 04 -508
February 17, 2004
Page 4
insignificant economic impact upon a public official, a member of his immediate family,
or a business with which he or a member of his immediate family is associated, a
conflict would not exist and Sections 1103(a) and 1103(j) of the Ethics Act would not
restrict participation in such matter. See, Schweinsburq, Order 900. In that the inquiry
involves participation in borough insurance, such action would not have a de minimis
economic impact, and therefore, this exclusion would not apply.
In order for the class /subclass exclusion to apply, two criteria must be met: (1)
the affected public official /public employee, immediate family member, or business with
which the public official /public employee or immediate family member is associated
must be a member of a class consisting of the general public or a true subclass
consisting of more than one member; and (2) the public official /public employee,
immediate family member, or business with which the public official /public employee or
immediate family member is associated must be affected "to the same degree" as the
other members of the class /subclass. 65 Pa.C.S. § 1102; see, Graham, Opinion 95 -002
(citing Van Rensler, Opinion 90 -017); Rubenstein, Opinion The first criterion of
the exclusion is satisfied where the members of the proposed subclass are similarly
situated as the result of relevant shared characteristics. The second criterion of the
exclusion is satisfied where the individual /business in question and the other members
of the class /subclass are reasonably affected to the same degree by the proposed
action. Kablack, Opinion 02 -003.
In considering the first criterion, it would appear that the correct identification of
the class /subclass would be the borough personnel who receive the borough insurance
coverage.
Regarding the second criteria concerning being affected to the same degree as
the other members of the class /subclass, the submitted facts state that the other
members of the class /subclass who would be affected to the same degree in that
everyone would receive the same insurance coverage.
Therefore, based upon your factual representation that the members of the
class /subclass would be affected to the same degree as the other members of the
class /subclass, the class /subclass exclusion would apply and you would not have a
conflict of interest under Section 1103(a) of the Ethics Act as to participating in borough
insurance policy coverage.
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 respective municipal code.
Conclusion: As a councilman for Borough of Wampum, you are a public official
subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Pa.C.S. § 1101 et seq.
Participation in the award of the borough insurance policy would be a conflict.
However, the statutory definition of "conflict or "conflict of interest" includes two
exclusions, hereinafter referred to as the "de minimis" exclusion and the "class /subclass
exclusion." The de minimis exclusion would not apply.
In order for the class /subclass exclusion to apply, two criteria must be met: (1) the
affected public official /public employee, immediate family member, or business with which
the public official /public employee or immediate family member is associated must be a
member of a class consisting of the general public or a true subclass consisting of more
than one member; and (2) the public official /public employee, immediate family member,
or business with which the public official /public employee or immediate family member is
associated must be affected "to the same degree' as the other members of the class/
Kelly 04 -508
February 17, 2004
Page 5
subclass. In considering the first criterion, it would appear that the correct identification of
the class /subclass would be the borough personnel who would receive the insurance
coverage.
Therefore, based upon your factual representation that the members of the class/
subclass would be affected to the same degree as the other members of the class/
subclass, the class /subclass exclusion would apply and you would not have a conflict of
interest under Section 1103(a) of the Ethics Act as to participating in borough insurance
policy coverage.
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