Loading...
HomeMy WebLinkAbout04-005 RossOPINION OF THE COMMISSION Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Donald M. McCurdy Michael J. Healey Paul M. Henry Raquel K. Bergen DATE DECIDED: April 4, 2004 DATE MAILED: April 5, 2004 Re: Challenge to Nomination Petition of Kerry Benninghoff 04 -005 To The Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania: This Opinion is issued in response to an Order of the Supreme Court of Pennsylvania dated April 1, 2004, at docket numbers 40 -42 MAP 2004, directing this Commission to issue and file a disposition with the Court's Prothonotary on or before 12:00 Noon, April 5, 2004, responding to the question of whether State Representative Benninghoff's omission of the Commonwealth of Pennsylvania as a source of income on the Statement of Financial Interests form that he filed as a candidate in the 2004 primary election constitutes an amendable or fatal defect. I. ISSUE: Whether pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., the omission of the Commonwealth of Pennsylvania as a source of income on a State Representative's Statement of Financial Interests form filed in his capacity as a candidate constitutes an amendable or fatal defect. II. FACTUAL BASIS FOR DETERMINATION: Procedurally, this matter arises from a series of lawsuits filed in the Commonwealth Court of Pennsylvania challenging the nomination petitions of three incumbent State Representatives who are candidates in the 2004 primary election, specifically, Kerry Benninghoff, Chris Ross, and William I. Gabig. Our focus is only upon one of those candidates, Kerry Benninghoff. The challenge to Representative Benninghoff's nomination petition was initially heard before a three-judge panel of Commonwealth Court. In a 2 -1 decision issued March 23, 2004, Commonwealth Court determined that Representative Benninghoff's omission of the Commonwealth of Pennsylvania as a source of income on his Statement of Financial Interests Benninghoff, 04 -005 April 5, 2004 Page 2 was a fatal defect to his nomination petition, requiring his removal from the primary ballot. See, In the Matter of The Nomination petition of Kerry Benninqhoff, 2004 WL 594048 (Pa. Cmwlth. March 23, 2004). Appeals were filed to the Supreme Court of Pennsylvania as to all three of the aforesaid petitions. While retaining jurisdiction, the Pennsylvania Supreme Court issued an Order dated April 1, 2004, transferring the Benninghoff case to this Commission. The Court directed that this Commission issue and file a disposition with the Court's Prothonotary on or before 12:00 noon, April 5, 2004, responding to the question of whether Representative Benninghoff's omission of the Commonwealth of Pennsylvania as a source of income on the Statement of Financial Interests form that he filed as a candidate constitutes an amendable or fatal defect. Based upon the Court's directive, this Opinion shall be limited to the specific question raised as to Representative Benninghoff. We would note that in the judicial proceedings, Representative Benninghoff's challenger, Paula F. Smith, argued that the omission of the Commonwealth of Pennsylvania as a source of income was a fatal flaw under Pennsylvania law so as to prevent Representative Benninghoff from appearing on the ballot. Representative Benninghoff took the position that because he disclosed the fact that he is a State Representative in Blocks 4, 5 and 6 of the Statement of Financial Interests, it is understood that the Commonwealth is a source of income for him, such that there is no need to specifically list the Commonwealth in Block 10 of the form. Representative Benninghoff argued in the alternative that the omission constituted an amendable defect. By letters dated April 2, 2004, all parties in interest were notified of the date, time and location of the public meeting at which this matter would be considered. Notice was given by first class mail and also by fax transmission and telephone where available. Notices were sent to the Counsels of record in all three cases. On Friday, April 2, 2004, this Commission received court briefs from Counsel for the three Representatives; a Memorandum from Counsel for the objectors; Position Statements from the Speaker of the House, Senate Republican Caucus, and House Democratic Caucus; and a letter from the House Republican Majority Whip requesting statistics concerning amended candidate Statements of Financial Interests generally, Statements of Financial Interests amended by Representatives, and Statements of Financial Interests filed by Representatives that do not include the Commonwealth of Pennsylvania as a source of income. At the public meeting on Sunday, April 4, 2004, the following individuals appeared and offered commentary: Lawrence J. Tabas, Esquire, Counsel for the three incumbent Representatives; Representatives Benninghoff, Gabig, and Ross; John J. Connelly, Jr., Esquire, Counsel for the objectors; Counsels Reizdan B. Moore and Michael P. Edmiston on behalf of the House Democratic Caucus; and Counsel Stephen C. MacNett on behalf of the Senate Republican Caucus. Attorney Tabas and the three Representatives argued that: Representative Benninghoff did list his status as a Representative on the Statement of Financial Interests form; the failure to list the Commonwealth as a source of income is not a fatal defect; there has been substantial compliance by Representative Benninghoff; the Ethics Act directs disclosure of income other than compensation provided by law; the compensation of Representatives is excluded from the disclosure requirement as a governmentally mandated payment that Representatives may not decline in whole or part; and Section 1104(b)(3) of the Ethics Act recognizes that Statements of Financial Interests may be amended. Attorney Connelly argued that: the Supreme Court only gave the Commission "an opportunity" rather than a directive to respond; the Commission has no jurisdiction to respond to the Supreme Court's directive; the Commission has no jurisdiction after the deadline under Benninghoff, 04 -005 April 5, 2004 Page 3 the Election Code expires; the definition of income, which contains an exclusion as to governmentally mandated payments, is in a separate Section of the law from the filing requirements; through the wording of its Order, the Supreme Court has already recognized that a "defect" exists; the ability to amend Statements of Financial Interests at any time does not impact nomination petition challenges; the Commission's jurisdiction as to Statements of Financial Interests is as to enforcement but not as to whether there is a fatal defect; only the Courts may determine whether there is a fatal defect; the Statement of Financial Interests form as promulgated by the Commission requires the disclosure of governmental employers as sources of income; and the Commission Regulations specifically require financial disclosure in multiple categories when applicable. Counsels Moore and Edmiston argued: the General Assembly decided any policy questions when it promulgated the Ethics Act; even though the Supreme Court has so ordered, the Commission has no Jurisdiction in this matter; although this matter "appears "to be before the Commission, it is an Election Code matter that is not within the province of this Commission; a Statement of Financial Interests has "two lives," one before the State Ethics Commission and one as to nomination petitions; nomination petitions require a certainty in time and are locked in time as of the Election Code deadline; allowing amendments to nomination petitions is contrary to such certainty and results in the inability of the Department of State and Courts to do their jobs; the Commission may only address an issue under the Ethics Act and not the Election Code; the failure to timely file or the filing of a deficient Statement of Financial Interests is a fatal defect under the clear and unambiguous language of the law; and the definition of income, which includes an exclusion as to governmentally mandated payments, is in a separate Section of the law from the filing requirements. Counsel MacNett argued: the purpose of the Ethics Act is to provide disclosure in an attempt to reveal conflicts, but a Representative's salary does not implicate the conflict concern; the Commission is the independent agency charged with having the initial opportunity to address an issue under the Ethics Act; the 1989 amendment to the Ethics Act dealt only with the failure to file as a fatal defect, not nondisclosure; and any ambiguity in the Statement of Financial Interests form between listing the governmental body as a source of income but excluding governmentally mandated payments is resolved by the definition of income, which excludes such payments as noted on the form. III. DISCUSSION: We have been directed to render a disposition as to whether State Representative Benninghoff's omission of the Commonwealth of Pennsylvania as a source of income on the Statement of Financial Interests form that he filed as a candidate in the 2004 primary election constitutes an amendable or fatal defect. Initially, we address the questions that have been raised as to whether this Commission has jurisdiction to respond to the Supreme Court's directive. We determine that we do have such jurisdiction for the following reasons. First, we may issue a response to the Supreme Court in the context of the Ethics Act itself, which we are duty bound to interpret and which forms the basis for the challenge to Representative Benninghoff's nomination petition. Second, although it has been argued that the Court only gave this Commission the "opportunity" to respond, the argument is dispelled by the Order that specifically directs that this Commission "shall issue and file a disposition with the prothonotary ...." We shall, as we must, comply with the Supreme Court's Order within the confines of our jurisdiction under the Ethics Act. However, this Opinion is not a disposition of the challenge to the nomination petition, which is an Election Code matter beyond our jurisdiction and for the Courts to decide. Before we begin our analysis we note that the House Republican Majority Whip submitted a letter of inquiry requesting certain information as delineated above. Given the time constraints, it was not possible for this Commission to comply with the request. Moreover, we Benninghoff, 04 -005 April 5, 2004 Page 4 determine that the request went beyond the scope of the Supreme Court's directive and was not relevant to the specific matter involving Representative Benninghoff. We begin our analysis by reviewing the relevant provisions of the Ethics Act. Sections 1104 and 1105 of the Ethics Act provide, in pertinent part, as follows: § 1104. Statement of financial interests required to be filed (b) Candidate.- - (1) Any candidate for a State -level public office shall file a statement of financial interests for the preceding calendar year with the commission on or before the last day for filing a petition to appear on the ballot for election. A copy of the statement of financial interests shall also be appended to such petition. (3) No petition to appear on the ballot for election shall be accepted by the respective State or local election officials unless the petition has appended thereto a statement of financial interests as set forth in paragraphs (1) and (2). Failure to file the statement in accordance with the provisions of this chapter shall, in addition to any other penalties provided, be a fatal defect to a petition to appear on the ballot. § 1105. Statement of financial interests (a) Form. —The statement of financial interests filed pursuant to this chapter shall be on a form prescribed by the commission. All information requested on the statement shall be provided to the best of the knowledge, information and belief of the person required to file and shall be signed under oath or equivalent affirmation. (b) Required information. —The statement shall include the following information for the prior calendar year with regard to the person required to file the statement: (5) The name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. However, this provision shall not be construed to require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges. 65 Pa.C.S. §§ 1104(b)(1), (3); 1105(a), (b)(5). The key term "income" is defined in the Ethics Act as follows: § 1102. Definitions Benninghoff, 04 -005 April 5, 2004 Page 5 "Income." Any money or thing of value received or to be received as a claim on future services or in recognition of services rendered in the past, whether in the form of a payment, fee, salary, expense, allowance, forbearance, forgiveness, interest, dividend, royalty, rent, capital gain, reward, severance payment, proceeds from the sale of a financial interest in a corporation, professional corporation, partnership or other entity resulting from termination or withdrawal therefrom upon assumption of public office or employment or any other form of recompense or any combination thereof. The term refers to gross income and includes prize winnings and tax - exempt income. The term does not include gifts, governmentally mandated payments or benefits, retirement, pension or annuity payments =unded totally by contributions of the public official or employee, or miscellaneous, incidental income of minor dependent children. 65 Pa.C.S. § 1102 (Emphasis added). A straightforward application of the above provisions establishes that reportable direct or indirect sources of income totaling in the aggregate $1,300 or more must be included on the Statement of Financial Interests form as prescribed by this Commission. However, the Ethics Act specifically excludes from the definition of "income " - -and consequently from the related disclosure requirements at Section 1105(b)(5) of the Ethics Act--"governmentally mandated payments or benefits." 65 Pa.C.S. § 1102. As a matter of law, governmentally mandated payments are not reportable income. Thus, the omission of governmentally mandated payments or benefits, which are are not reportable income as the Ethics Acts defines the term income," would not be a defect as to the Statement of Financial Interests. In the instant matter, the compensation and benefits that Representative Benninghoff receives as an incumbent legislator are set by statute. See, 65 P.S. § 366.4. Moreover, it has been factually represented that Representatives may not decline such payments. It is difficult to imagine how payments or benefits could be more governmentally mandated than to be prescribed by statute. Therefore, we conclude that Representative Benninghoff was not required to list the Commonwealth of Pennsylvania as a source of income on his Statement of Financial Interests. We would emphasize that this conclusion is compelled by the aforesaid exclusion, but that such exclusion will be narrowly construed by this Commission. In addressing the arguments that have been proffered, we have already addressed the jurisdiction issue. As for the argument that the listing of one's status as a Representative is sufficient, we would note that listing one's employment or profession on the Statement of Financial Interests form does not obviate the requirement for listing sources of compensation unless excluded from the statutory definition of income. As for the arguments that the definition of income, which contains the exclusion as to governmentally mandated payments, is in a separate Section (Section 1102) of the Ethics Act from the filing requirement as to sources of income (Section 1105(b)(5)), such arguments fail because, other than the definition itself, the filing requirement at Section 1105(b) (5) is the only reference to income that appears in the Ethics Act. Finally, we must address the argument that we are precluded from finding no defect based upon the wording of the Courts Order, specifically: ". . . whether Benninghoff's Benninghoff, 04 -005 April 5, 2004 Page 6 omission constitutes an amendable or fatal defect ...." We do not read the Court's Order to be so narrow as to require an either /or choice between the options of an amendable defect or a fatal defect. Instead, we read it as encompassing the question of whether there is a defect at all. The necessary conclusion of this Commission is that Representative Benninghoff's omission of the Commonwealth of Pennsylvania as a source of income on the Statement of Financial Interests form that he filed as a candidate in the 2004 primary election was not a defect as to the Statement of Financial Interests. The compensation and benefits that Representative Benninghoff receives from the Commonwealth of Pennsylvania are governmentally mandated payments or benefits specifically excluded from the Ethics Act's definition of the term "income" and from the related disclosure requirements at Section 1105(b)(5) of the Ethics Act. In that the other arguments that have been raised would only have import if there were a defect, we need not address such arguments. The propriety of the proposed conduct has only been addressed under the Ethics Act. IV. CONCLUSION: Representative Benninghoff's omission of the Commonwealth of Pennsylvania as a source of income on the Statement of Financial Interests form that he filed as a candidate in the 2004 primary election was not a defect as to the Statement of Financial Interests. The compensation and benefits that Representative Benninghoff receives from the Commonwealth of Pennsylvania are prescribed by statute and therefore are governmentally mandated payments or benefits specifically excluded from the Ethics Act's definition of the term "income" and from the related disclosure requirements at Section 1105(b)(5) of the Ethics Act. The propriety of the proposed conduct has only been addressed under the Ethics Act. This letter is a public record and will be made available as such. By the Commission, Louis W. Fryman Chair Commissioner Michael J. Healey, Esquire dissents.