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HomeMy WebLinkAbout04-559 FitzpatrickMichael G. Fitzpatrick Bucks County Commissioner Administration Building 55 East Court Street Doylestown, PA 18901 ADVICE OF COUNSEL May 27, 2004 04 -559 Re: Conflict; Public Official /Employee; County; Commissioner; Legislation; Act; Keystone Opportunity Improvement Zone; Township; School District; Waste management; Business; Law Firm; Business with which associated; Property; Sale; Representation; Local Personal Property Tax; Tax Abatement. Dear Mr. Fitzpatrick: This responds to your letter of May 5, 2004, and a supplemental letter received on May 26, 2004, requesting 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 county commissioner as to participating on a county approval to designate property as a Keystone Opportunity Improvement Zone (KOIZ) when the owner of the property may sell other property it owns to a waste management company that has been represented from time to time by the law firm with which the commissioner is associated. Facts You are an elected County Commissioner in the County of Bucks, having e»appointed by the Board of Judges of Bucks County in January 1995, elected in November 1995 and re- elected in November of 1999 and 2003. You are also a licensed attorney in the Commonwealth of Pennsylvania and the State of New Jersey. You are associated with the law firm of Saul Ewing LLP in its Philadelphia office as special counsel but not as an equity partner in the firm. As a county commissioner, you may be asked to vote on a matter related to a KOIZ, as per Act 217 of 2002, as amended by Act 51 of 2003 (Act). The Act details a series of governmental approvals in order for a specific property to qualify for special state and local tax abatements. One such property under consideration for KOIZ designation is owned by United States Steel Corporation (USS) and is located in Falls Township, Bucks County. The first required approval of property occurred when Executive Order 2002 -13 of December 2002 designated 1258.90 acres of USS property as a KOIZ sub -zone. As per Section 301.1 of the Act, local political subdivisions are required to pass ordinances Fitzpatrick, 04 -559 May 27, 2004 Page 2 approving the special status for parcels designated by the Governor. A successful completion of the KOIZ process enables parties with a legal interest in property to receive state and local tax abatements. The local approval process requires consideration by both Falls Township and the Pennsbury School District. If the township and school district grant approval of the KOIZ designation, the County Board of Commissioners will then need to vote on the designation. County approval is necessary given that a portion of the local real property tax collected by Falls Township is payable to the county. USS owns a total of 2574 acres in Falls Township. Of that acreage, 1314 acres are outside of the proposed KOIZ. USS contemplates donating up to 50 acres of the excluded property to Bucks County for use such as a homeland security training area. Of the remaining 1265 acres that are not within the proposed KOIZ, USS intends to offer to sell 264 acres to Waste Management for gravel and construction materials and 252 acres for possible development within its contiguous solid waste facility. Since that property of USS is situate outside of the proposed KOIZ, no approval by the County Board of Commissioners is required. From "time to time ", your law firm has represented Waste Management in legal matters. However, Saul Ewing LLP does not represent USS. You state that you have never represented Waste Management and have no familiarity with any details of any of the firm's legal matters with Waste Management. You further state that you derive no income or benefit from the representation of Waste Management nor do you have any personal or pecuniary interest in the KOIZ designation. You seek an advisory as to any restrictions that would apply to your participation in a vote on the designation of the KOIZ for USS, given your "employment relationship" with Saul Ewing LLP. By letter of May 26, 2004, Attorney M. Joel Bolstein on your behalf requested an expedited review of this matter. The proffered reason is that the vote on the KOIZ as to the designation of the USS site is scheduled for May 28, 2004, which is the last possible day under the Act to designate the KOIZ site, noting that the process was begun in 2000 and was extended by the Governor in 2003. Since the designation will lapse on June 1, 2004, unless the three taxing bodies approve the designation, the last possible day for the vote under the legislation is May 28, 2004, with the paperwork submitted to DCED by the close of business on that day. Given the above circumstances Mr. Bolstein requests an expeditious review so that your advisory request, which was not received until May 7, 2004, can be processed and issued in time for you to vote on the KOIZ designation. 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. Further, pursuant to Sections 1107(10) and (11) of the Ethics Act, 65 Pa.C.S. §1107(10), (11), an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice, but any person may then submit a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct which has already occurred, such past conduct may not be addressed in the context of an advisory opinion. Fitzpatrick, 04 -559 May 27, 2004 Page 3 As a Commissioner for Bucks County, 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. "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 Fitzpatrick, 04 -559 May 27, 2004 Page 4 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). 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, Pavlovic, Opinion 02 -005. 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. 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 Fitzpatrick, 04 -559 May 27, 2004 Page 5 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). Mill 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 the instant matter, you are "special counsel" to the law firm of Saul Ewing LLP and are in an employment relationship with the firm. Therefore, Saul Ewing LLP is a business with which you are associated. Under clear Commission precedent, you would have a conflict of interest in matters before you as a County Commissioner that would financially impact Saul Ewing LLP or its client(s). Miller, supra; Kannebecker, supra. The conflict as to a client of the firm would exist regardless of whether you ever personally represented the client. Likewise, the conflict would exist regardless of whether the firm would be representing the client on the specific matter before you as a County Commissioner. Kannebecker, supra. Thus, two questions necessarily arise: (1) does Waste Management stand in a client relationship with Saul Ewing LLP; and (2) will the KOIZ designation financially impact Waste Management? In considering the first question, the full Commission in Kannebecker, supra, determined that a township supervisor, who in his private capacity was an attorney, would have a conflict of interest as to matters before the township involving ongoing client(s) or client(s) for whom he was on retainer, even if he would not represent such client(s) as to the matter pending before the township. The Commission determined that as a general rule, a conflict would not exist as to former client(s), but that under certain circumstances, a conflict could exist as to former client(s) depending upon factors such as the number of prior representations of the given client and the period of time over which such occurred. No specific facts have been proffered as to the attorney - client relationship between Saul Ewing LLP and Waste Management. Indeed, you have stated that you do not have any familiarity with the details of the Saul Ewing LLP relationship with Waste Management. However, your statement that "[f]rom time to time, Saul Ewing LLP has represented Waste Management in legal matters" would seem to indicate an ongoing client relationship between Saul Ewing LLP and Waste Management, forming the basis for a conflict of interest for you under the Kannebecker criteria. In considering the second question, although the submitted facts reflect that the USS property which is the subject of the proposed KOIZ designation is separate from the other USS property in the township that may possibly be sold to Waste Management, the submitted facts do not reveal whether there is a connection between the KOIZ designation and the potential sale to Waste Management, for example, whether the sale to Waste Management is conditioned upon the KOIZ designation. Fitzpatrick, 04 -559 May 27, 2004 Page 6 Given the limited facts, only general guidance may be given. You are advised that if the action by the County board on the KOIZ designation of USS would impact upon the sale of other property of USS to Waste Management, you would have a conflict of interest under Section 1103(a) of the Ethics Act. In such a case, you would be required to abstain fully from any use of the authority of your public office, including but not limited to voting, and you would further be required to satisfy 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 County Code and the Rules of Professional Conduct. Conclusion: As a Commissioner for Bucks County, 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. In your capacity as a County Commissioner, you would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to a proposed County approval to designate property as a Keystone Opportunity Improvement Zone (KOIZ) if the action by the County Board on the KOIZ designation would impact upon the sale of other property to Waste Management, a client of the law firm with which you are associated. In each instance of a conflict, you must abstain fully and must satisfy 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