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HomeMy WebLinkAbout04-527 FrederickADVICE OF COUNSEL April 6, 2004 James B. Alexander, Esquire Alexander, Garbarino, Neely & Hindman, L.L.P. 415 Wood Street, P.O. Box 766 Clarion, PA 16214 Dear Mr. Alexander: 04 -527 Re: Conflict; Public Official /Employee; Township; Supervisor; Drilling Company; Business With Which Associated; Landfill; Ongoing Business Relationship. This responds to your faxed letter of March 5, 2004, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Ha.G.S. § 1101 et seq., presents any prohibition or restrictions upon a township supervisor with regard to participating in matters before the township involving a request by a corporation to expand a landfill, when a business with which the supervisor is associated has an ongoing business relationship with that corporation. Facts: On behalf of Clyde E. Frederick ( "Frederick "), a Supervisor for Farmington Tomship ( "Township "), Clarion County, you seek an advisory from the State Ethics Commission. You have submitted facts, which may be fairly summarized as follows. In a private capacity, Frederick is President and a full -time employee of Frederick Drilling Company and Sons, Inc. ( "Frederick Drilling"), a family -owned well - drilling business. Frederick owns 1/3 of all outstanding stock in Frederick Drilling. Frederick Drilling was initially hired by County Environmental, Inc. ( "County Environmental "), which owns and operates a large sanitary landfill in the Township, to plug some old wells on its property. Since that time, over approximately 12 years, Frederick Drilling has been hired through the competitive bid process to drill monitoring wells at County Environmental. It is your understanding that Frederick Drilling has undertaken drilling activities on approximately 5 occasions and has drilled approximately 35 wells at a cost of roughly $2,000 per well. Frederick anticipates that Frederick Drilling will take on similar work for County Environmental in the future. Alexander /Frederick 04 -527 April 6, 2004 Page 2 You state that Frederick does not own any interest in County Environmental. You further state that Frederick has no connection with County Environmental apart from the wells. Questions regarding County Environmental's landfill frequently come before the Township Board of Supervisors. County Environmental is currently seeking approval from the Board to significantly expand the area of its operations. Based upon the foregoing facts, you ask whether Frederick would have a conflict of interest and would have to abstain as to matters before the Board of Supervisors involving County Environmental. 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 Township Supervisor, Frederick is a public official as that term is defined in the Ethics Act, and hence Frederick 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. Alexander /Frederick 04 -527 April 6, 2004 Page 3 "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 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). Alexander /Frederick 04 -527 April 6, 2004 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 your inquiry, it is noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interest 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 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 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, Gorman, Order 1041, or private client(s). Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010. If the private employer or business with which the public official /public employee is associated or a private client would have a matter pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter. Miller, supra; Kannebecker, supra. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official/ public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. The abstention requirement would not be limited merely to voting, but would extend 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 considering the above, Frederick Drilling would be considered a business with which Frederick is associated. Pursuant to Sections 1103(a) and 1103(j) of the Ethics Act, as a Township Supervisor, Frederick would generally have a conflict of interest and could not participate as to matters that would financially benefit himself, a business with which he or a member of his immediate family is associated, such as Frederick Drilling, or business client(s). Frederick would specifically have a conflict of interest as to matters before the Township involving County Environmental given that he anticipates that Frederick Drilling will perform additional work for County Environmental in the future. See, Amato, supra. In each instance of a conflict, Frederick would be required to abstairom participating and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. 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 Farmington Township ( "Township "), Clyde E. Frederick ( "Frederick ") is a public official subject to the provisions of the Public Official Alexander /Frederick 04 -527 April 6, 2004 Page 5 and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Frederick Drilling would be considered a business with which Frederick is associated. Pursuant to Sections 1103(a) and 1103(1) of the Ethics Act, as a Township Supervisor, Frederick would generally have a conflict of interest and could not participate as to matters that would financially benefit himself, a business with which he or a member of his immediate family is associated, such as Frederick Drilling, or business client(s). Frederick would specifically have a conflict of interest as to matters before the Township involving County Environmental given that he anticipates that Frederick Drilling will perform additional work for County Environmental in the future. In each instance of a conflict, Frederick would be required to abstain from participating and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. 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