HomeMy WebLinkAbout04-514 Kearney (Attorney Fees)Joseph J. Kearney, Esquire
301 Gabriel Professional Building
29 E. North Street
P.O. Box 51
New Castle, PA 16103 -0051
Re: Conflict; Public Official /Employee; Township; Supervisor; Reimbursement by the
Township of Legal Fees Incurred in Filing an Injunction to Stop Vacancy Board
Meeting, and a Complaint to Determine Whether Vacancy Board Chairman Has
a Conflict of Interest; Official Conduct.
Dear Mr. Kearney:
ADVICE OF COUNSEL
February 23, 2004
04 -514
This responds to your letter of 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
Pa.C.S. § 1101 et seq., presents any prohibition or restrictions upon a township
supervisor as to receiving reimbursement from the township for legal fees incurred in
initiating litigation to stop a vacancy board meeting and to determine whether the
vacancy board chairman has a conflict of interest.
Facts: As Solicitor for Union Township ( "Township "), you seek an advisory on
behalt of Stephen Galizia ( "Galizia "), Chairperson of the Township Board of
Supervisors. You have submitted facts, which may be fairly summarized as follows.
You were appointed Solicitor on January 5, 2004. In May 2003, while you were a
private attorney, Galizia contacted you regarding a Vacancy Board meeting of the
Township. At that time, Galizia was on vacation in Maryland when he learned that the
Vacancy Board would be meeting to name a successor to a supervisor who had died.
Galizia wanted to participate in the Vacancy Board meeting and asked you to file for an
injunction to prevent the meeting from occurring while he was out of state, and to also
look into whether the Vacancy Board Chairman had a conflict of interest as to serving in
that capacity.
You prepared a petition for injunction to stop the Vacancy Board meeting and a
complaint for declaratory judgment as to the conflict of interest issue. The Court
granted the injunction and scheduled two hearings on the issue of whether the Vacancy
Board Chairman had a conflict of interest. The Court concluded, you believe incorrectly,
Kearney /Galizia, 04 -514
February 23, 2004
Page 2
that the State Ethics Commission had sole jurisdiction to determine whether the
Vacancy Board Chairman has a conflict of interest in so serving.
Galizia is now asking the Township to reimburse him for the attorney's fees
which he has paid to you. You ask whether Galizia is entitled to such reimbursement
from the Township under the Ethics Act.
Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of
the Ethics Act, 65 Pa.C.S. §§ 1'107(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 Township Supervisor, Galizia is a public official as that term is defined in the
Ethics Act, and hence he 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.
"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
Kearney /Galizia, 04 -514
February 23, 2004
Page 3
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).
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, pursuant
to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited 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.
The issue of whether a public official may use the authority of his public position
to secure or accept legal representation at the expense of the governmental body is a
very complex issue which hinges upon the nature of his conduct which is in question. If
the public official secures - or even accepts - publicly paid legal representation to which
he is not entitled, he may be found in violation of Section 1103(a) of the Ethics Act.
Publicly -paid legal representation is clearly a pecuniary benefit: if the governmental
body pays for the legal representation, the public official need not pay for it from his own
assets.
Kearney /Galizia, 04 -514
February 23, 2004
Page 4
Various court cases have addressed the issue of whether and when a public
official is entitled to legal representation at taxpayer expense.
In Roofner's Appeal, 81 Pa.Super. 482 (1923), the Pennsylvania Superior Court
stated that a township supervisor is not entitled to township paid legal representation for
his actions which are of a private rather than public nature. The Court determined that it
was inappropriate for township supervisors to receive legal representation at township
expense concerning their indictment on a charge of unlawfully neglecting and refusing
to keep up a certain township road which had become unsafe and dangerous for travel.
Noting that the supervisors were charged with official misconduct or neglect and refusal
to perform their legal duties, the Court held that they were not entitled to representation
at township expense:
. [T]he power of a municipality or its appropriate officers to employ an
attorney is limited to those matters in which the municipality has some
official duty or which may probably be said to affect its interests. An
attempted employment of an attorney in a matter in connection with which
the municipality has no official duty, or which does not fall within the duties
of the board or official making the contract of employment, does not
render the municipality liable to the attorney for his compensation: Dillon
on Municipal Corporations, Vol. 2, paragraph 824, at page 1246. this as
fundamental principle that public funds shall not be used for private
purposes. The offense for which appellants were indicted was a personal
one: Com. v. John Meany, 8 Pa. Superior Ct. 224. Their obligation to pay
their counsel was personal.... Counsel fees and other expenses incurred
by public officials in defending criminal charges, or charges of official
misconduct, are incurred for a private purpose and cannot, in the absence
of statutory provision therefor be paid from public funds.... When one
accepts a public office he assumes the risk of defending himself even
against unfounded accusations at his own expense.
81 Pa.Super. at 484 485.
In Silver v. Downs, 493 Pa. 50, 425 A.2d 359 (1981), the Pennsylvania Supreme
Court allowed representation by a solicitor in a recall action against two members of the
boards of supervisors. However, that case related to the official activities of township
supervisors in handling township accounts, as to which allegations there was a statutory
right to publicly provided legal counsel. Furthermore, the case did not involve
accusations of personal wrongdoing.
Matter of Auditor's Report of McKean Township for 1984, 531 A.2d 879
(Pa.Commw. Ct. 1987) involved a court's award of counsel fees in a surcharge action
where the supervisors had been ordered by the Court to retain private counsel for their
defense. The power of a court to award counsel fees is not at issue in this case nor is
that power questioned by the SEC.
In In Re Birmingham Townshi Delaware County, 597 A.2d 253 (Pa. Commw.
Ct. 1991) Commonwealth Court held that a supervisor is entitled to a public defense in a
recall action where there is no substantial supporting evidence for allegations of criminal
conduct, but is not entitled to a public defense where it is determined that the official did
commit criminal conduct which results in removal from office.
The Commonwealth Court stated:
The Supreme Court in Silver v. Downs established the rule that in a
recall action, those officials facing a possible recall ordinarily have the
right to a defense paid out of township funds. The Supreme Court
implicitly stated however, that when the conduct alleged was of a criminal
nature, the defense should not be available. The two main concerns
addressed by the Supreme Court were that township officials should not
Kearney /Galizia, 04 -514
February 23, 2004
Page 5
be forced out of office in order to avoid the substantial legal costs of
defending their official actions but also that the local government should
not pay for the defense of an official who committed an act of criminal
misconduct while in office. See Silver v. Downs, 493 Pa. at 55 -57, 425
A.2d at 362 -364.
Addressing these concerns, we believe the Supreme Court in Silver
v. Downs envisioned a procedure where if the local government votes to
provide a defense in a recall action, that decision can be challenged by
the electors at a hearing held to determine if substantial evidence exists
that the official in question committed an act of criminal misconduct, fraud,
embezzlement or other criminal conduct found in Silver v. Downs to be of
the type which could not be taken in any official capacity. If substantial
evidence is found to exist to support the allegation of criminal conduct, the
public official should be denied a public defense.
In Re: Birmingham Township, supra, 597 A.2d at 257 (Note omitted). The Court further
noted:
to insure that a public official receives legal representation in
defending his or her official actions, we believe that if the official is denied
a public defense and it is later judicially determined that substantial
evidence did not in fact exist to support the allegation, the official is
entitled to reimbursement from the local government for attorney fees and
costs expended in defending that allegation. Conversely, to foreclose the
possibility that the local government would have to pay for the defense of
a public official's criminal conduct, we believe that if the official is provided
with a public defense and it is later judicially determined that the official did
in fact commit the criminal conduct resulting in his or her removal from
office, the local government is entitled to recover the attorney fees and
costs of defending that particular allegation.
Id., 597 A.2d at 258 (Note omitted).
In Stork v. Summers, 630 A.2d 984 (Pa. Commw. Ct. 1993) the Commonwealth
Court held that a city treasurer was entitled to a public defense when he acted in his
official capacity to refuse to sign certain checks related to a fund which the treasurer
believed had been subject to fraudulent abuses by the city mayor.
Recently, in R.H. v. State Ethics Commission, 673 A.2d 1004 (Pa. Commw. Ct.
1996), Commonwealth Court affirmed this Commission's decision that certain Township
Supervisors violated Section 3(a) of Act 170 of 1978 when they used the Township
Solicitor, at taxpayer expense, to represent them in a suit which they brought to
challenge the auditor's decision to decrease their annual labor wage for their working
positions. Although the Petitioners argued that their appeal was not private in nature
but was within their duties as Township Supervisors, the Court did not agree. The Court
stated:
Section 516 of the Code, 53 P.S. §65516, which provides that
supervisors' duties include hiring such persons as may be necessary for
the general conduct of the business of the township, allows supervisors to
retain the township solicitor to represent the township. However, we must
agree with the SEC that the benefits Petitioners sought through the suit
against the Township Auditors were personal to the Petitioners and not
necessary for the general conduct of business of the Township.
Therefore, the value of the legal representation Petitioners received from
the Township Solicitor was financial gain other than compensation provide
by law, in violation of the 1978 Act.
Id., 673 A.2d at 1011 (Emphasis added).
Kearney /Galizia, 04 -514
February 23, 2004
Page 6
Finally, in In Re: Appeal from the 1987 Auditor's Report of North Huntingdon
Township, No. 11 Civil 1988 (Westmoreland Cty. C.P. June 1, 1989), the Common
Pleas Court held that a township commissioner was not entitled to publicly funded legal
representation in defending himself before the State Ethics Commission as to
allegations that he had received excess reimbursement from the Township for expenses
incurred in attending conferences and conventions. The Court stated, inter alia:
However, in this situation, it would appear that the alleged receipt of
excess reimbursement might be classified as conduct rising to the level of
official misconduct. Certainly, the receipt by Hagan of money to which he
was not entitled constitutes conduct personal in nature. Therefore, Hagan
could not and should not have been represented by the Township solicitor
or private counsel at Township expense.
Nothing contained in the allegations, findings or final order of the
Commission can be construed to come under the umbrella of official
duties. Hagan received money he was not entitled to. Such conduct is
clearly personal in nature.
The Township has also argued that Hagan is entitled to payment of
his legal expenses because he was successful in his defense of the
charges made against him in the Commission proceedings. The basis for
this argument is a Township ordinance that provides for reimbursement of
legal expenses to a commissioner who is successful on the merits in his
defense of charges made against him. This argument is based on the fact
that the order of March, 1987, concerned more serious allegations and
findings against Hagan than the final order of June, 1988.... While it is
true that the outcome in June, 1988, was less serious to Hagan than it
appeared it would have been in March, 1987, the Court would
nevertheless be hardpressed to conclude that Hagan was successful on
the merits in his defense. The Commission found wrongdoing, and Hagan
repaid the money previously retained by him to which he was not entitled.
Such a disposition does not constitute a successful defense on the merits.
Furthermore, the courts have held that whether or not a public official is
entitled to publicly funded representation does not turn on whether he has
been successful on the merits in his defense. Rather, it turns on whether
the charges concern performance of official duties or concern conduct
personal in nature. Therefore, under the conclusions reached earlier in
this Opinion, the Township's argument on this basis must fail.
Id., at 6 -9. The Court directed the Auditor to correct his report, surcharging
Commissioner Hagan for the expenditures that had been made for his legal defense
before the State Ethics Commission.
Having set forth all of the above precedents, some conclusions can be reached.
A public official who is found to have engaged in criminal conduct is not entitled to a
public defense. Otherwise, a public official is entitled to publicly paid legal
representation as to official conduct but not as to conduct which is personal in nature.
In the instant matter, Galizia's initiation of legal action to stop a Vacancy Board
meeting and to determine whether the Vacancy Board Chairman has a conflict of
interest clearly was not necessary to the general conduct of municipal matters. While
Galizia as a Towns >F �p Supervisor may have had an official duty under the Second
Class Township Code to serve as a member of the Vacancy Board, he did not have an
official duty to initiate litigation to try to stop the Vacancy Board Meeting and to
determine whether the Vacancy Board Chairman has a conflict of interest. It is for the
latter reason that Galizia now seeks reimbursement from the Township. Accordingly,
Galizia may not receive reimbursement from the Township for legal expenses that he
Kearney /Galizia, 04 -514
February 23, 2004
Page 7
incurred in connection with litigation that he personally took upon himself to initiate, as
such would be a private pecuniary benefit contrary to Section 1103(a) of the Ethics Act
for the reasons discussed above.
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 Second Class Township Code.
Conclusion: As a Supervisor for Union Township ( "Township "), Stephen Galizia
( "Galizia ") 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. A public official is entitled
to publicly paid legal representation as to official conduct but not as to conduct which is
personal in nature. Galizia's initiation of l to stop a Vacancy Board meeting
and to determine whether the Vacancy Board Chairman has a conflict of interest clearly
was not necessary to the general conduct of municipal matters, and therefore, he is not
entitles to reimbursement of his legal expenses from the Township. 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 w►11
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