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HomeMy WebLinkAbout24-527 Confidential 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 3, 2024 To the Requester: 24-527 This responds to your letter dated March 19, 2024, by which you requested a confidential advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to the issues presented below: Issues: (1) Whethera member of a borough council, who is employed with a \[Type of Political Subdivision\], would have a conflict of interest pursuant to Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), with regard to voting on the approval of a monthly bill list that would include payments to the \[Type of Political Subdivision\]. Brief Answer: NO. The borough council member generally would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. Because the borough council member’s employer is a “political subdivision” and not a “business” as defined by the Ethics Act, the borough council member would not have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financially impact the \[Type of Political Subdivision\], such as voting on the approval of a monthly bill list that would include payments to the \[Type of Political Subdivision\]. (2) Whether a member of a borough council would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to voting on the approval of a monthly bill list that would include a standard monthly payment to a business with which the borough council member is employed, where the borough council member abstained from voting on budget items related to those payments. Confidential Advice, 24-527 April 3, 2024 Page 2 Brief Answer: NO. Based upon Commission precedent, the borough council member would not have a conflict of interest with regard to voting on the approval of a monthly bill list that would include a pre-fixed, routine and uncontested standard monthly payment to his employer. Facts: Youhave been authorized by \[Individual 1\] and \[Individual 2\] to request a confidential advisory from the Commission on their behalf. You have submitted facts that may be fairly summarized as follows. \[Individual 1\] and \[Individual 2\] are Members of Council for \[the Borough\], located in \[County\], Pennsylvania. \[Individual 1\] serves as \[Officer\] of Borough Council. \[Individual 1\] is employed with the \[Type of Political Subdivision\] \[Unit\] as a \[Position\]. \[Individual 2\] is employed with \[the Company\] as a \[Position\]. The Borough makes monthly payments to the \[Type of Political Subdivision\] in the amounts of \[Amount 1\] for \[a Piece of Equipment\] and \[Amount 2\] for \[Other Equipment\]. The Borough also makes a monthly payment in the amount of \[Amount 3\] to \[the Company\] for the use of the \[Service\]. When the Borough adopted its budget, the payments to the \[Type of Political Subdivision\] and \[the Company\] were approved by a line item vote. \[Individual 1\] and \[Individual 2\] each abstained from voting on budget items related to payments to be made to his employer. Prior to a regular monthly meeting, Borough Council receives an itemized list containing bills submitted to the Borough during the prior month. At the end of each monthly meeting, Borough Council approves the monthly bill list by one vote. The monthly bill list includes bills from the \[Type of Political Subdivision\] and \[the Company\] for the aforesaid amounts. \[Individual 1\] and \[Individual 2\]have been abstaining from voting on the approval of the monthly bill list and completing paperwork to explain the reasons for their abstentions. Based upon the above submitted facts, you ask whether \[Individual 1\] and \[Individual 2\] have a conflict of interest with regard to voting on the approval of the monthly bill list, and if so, whether the conflict of interest could be avoided if the monthly payments to their employers would be removed from the monthly bill list and voted on separately by Borough Council. 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. Confidential Advice, 24-527 April 3, 2024 Page 3 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: § 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 Confidential Advice, 24-527 April 3, 2024 Page 4 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. “Political subdivision.” Any county, city, borough, incorporated town, township, school district, vocational school, county institution district, and any authority, entity or body organized by the aforementioned. 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 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. Confidential Advice, 24-527 April 3, 2024 Page 5 Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As Members of Borough Council, \[Individual 1\] and \[Individual 2\]are public officials subject to the provisions of the Ethics Act. Pursuant to Section 1103(a) of the Ethics Act, \[Individual 1\] and \[Individual 2\] would each generally have a conflict of interest as a Borough Council Member in matters that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. With respect to \[Individual 1\], sincehis employer, the \[Type of Political Subdivision\], is a “political subdivision” and not a “business” as defined by the Ethics Act, \[Individual 1\] would not have a conflict of interest under Section 1103(a) of the Ethics Act in matters before Borough Council that would financially impact the \[Type of Political Subdivision\]but that would not financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. A pecuniary (financial) benefit flowing solely to a governmental entity would not form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. See, Confidential Opinion, 01-005; McCarrier/Anderson, Opinion 98-008; Warso, Order 974. Accordingly, as the submitted facts do not indicate the existence of a basis for a conflict of interest such as a private pecuniary benefit to \[Individual 1\], a member of his immediate family, or a business with which he or a member of his immediate family is associated, \[Individual 1\] would not have a conflict of interest under Section 1103(a) of the Ethics Act with regard to voting on the approval of a monthly bill list that would include payments to the \[Type of Political Subdivision\]. With respect to \[Individual 2\], \[the Company\] is a business with which he is associated as an employee. Pursuant to Section 1103(a) of the Ethics Act, \[Individual 2\] generally would have a conflict of interest in matters before Borough Council that would financially impact him or \[the Company\]. However, based upon Commission precedent holding that the approval of pre-fixed, routine, and uncontested bills/obligations does not in and of itself arise to the level of a violation of Section 1103(a) of the Ethics Act, \[Individual 2\] would not have a conflict of interest with regard to voting on the approval of a monthly bill list that would include the \[Amount 3\] monthly payment to \[the Company\]. See, Pizonka/Rieder/Rittenhouse, Opinion 09-007; Yezzi, Order 825 at 58; Krushinski, Order 168; Brooks, Opinion 89-023; Maholick, Opinion 90-010. 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. Confidential Advice, 24-527 April 3, 2024 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 maybe 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