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HomeMy WebLinkAbout04-565 HannaJerry F. Hanna, Esquire P.O. Box 1093 Pocono Pines, PA 18350 Re: Conflict; Public Official /Employee; Township; Supervisor; Member; Environmental Advisory Council; Part -time Township Employee; Open Space; Real Estate Agent; Independent Contractor; Business Relationship. Dear Mr. Hanna: ADVICE OF COUNSEL June 23, 2004 04 -565 This responds to your letter of May 18, 2004, by which you requested advice from the State Ethics Commission. Issue: Whether under the Public Official and Employee Ethics Act ( "Ethics Act "), 65 F'a.C.S. § 1101 et seq., a township supervisor who is also a member of the township's open space committee and a part -time township employee may: (1) continue to serve on the open space committee; (2) continue to be involved with open space acquisitions as a township employee; and (3) vote on township decisions regarding acquisitions of potential open space properties, where in a private capacity, the township supervisor works as an independent contractor for a real estate agency that has been engaged by the township to assist in the township's search for real property that may be available for acquisition as open space. Facts: As Solicitor for Coolbaugh Township, Monroe County, you seek an advisory on behalf of Gratz Washenik (Washenik"), a Township Supervisor. You have submitted facts, which may be fairly summarized as follows. Coolbaugh Township ( "Township ") is a Township of the Second Class. Since January 2000, Washenik has served as a Township Supervisor and as a member of the Coolbaugh Township Environmental Advisory Council ( "EAC "), the Township's Open Space committee that serves as a fact finding body and recommending entity for the Board of Supervisors ( "Board "). In addition, Washenik has been employed by the Township on a part -time basis in an administrative capacity and has been working on various projects including the Township's current search for Open Space properties. In a private capacity, Washenik is licensed through the Pennsylvania Real Estate Commission as a real estate sales person and is an independent subcontractor for Hanna/Washenik 04 -565 June 23, 2004 Page 2 Wilkins & Associates Real Estate ( "Wilkins & Associates' Washenik is neither a stock holder nor a participant in any type of profit sharing with ilkins & Associates and only receives financial remuneration on transactions in which he directly participates. You state that Washenik's license is with and is overseen by Thomas R. Wilkins, the broker of record for Wilkins & Associates. The Board has assigned the EAC to assist in searching for real property in the Township that may be available for acquisition as Open Space in conjunction with a county wide program overseen and funded by the Monroe County Commissioners. The EAC has designated several parcels for possible acquisition, with the decision to actually acquire such parcels lying within the discretion of the Board. In furtherance of such acquisitions, the Board has engaged Wilkins & Associates to act on its behalf. You state that Washenik has abstained from participating in the discussions and vote regarding the "hiring" of Wilkins & Associates, and has disclosed his interest both orally and in a written memorandum presented to the Board. You state that at the time the Board engaged Mr. Wilkins, the Supervisors had full knowledge that he would be acting as a dual agent as to one property, which is listed with his firm, and as a buyer's agent as to another property, which is not listed with his firm. You further state that Washenik is not in any way partici Dating in the acquisition of these two properties at Wilkins & Associates. You note that Washenik will not receive any financial remuneration from the designated Open Space acquisitions in question. Based upon the foregoing facts, you pose the following specific inquiries. 1. Whether Washenik may continue to serve on the EAC and take part in its recommendations to the Board of Supervisors; 2. Whether Washenik may continue to deal with potential Open Space acquisitions in his administrative capacity as a part -time Township employee; and 3. Whether Washenik may vote on Township decisions to acquire or not acquire Open Space properties. 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, 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 that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall be addressed. Before your three inquiries relating to Washenik's conduct as a member of the EAC, Township employee, and Township Supervisor may be addressed, a preliminary Hanna/Washenik 04 -565 June 23, 2004 Page 3 determination must be made as to his status as a "public official" or a "public employee" in those respective capacities. As to Washenik's membership on the EAC, based upon your factual statements that the EAC "serves as a fact finding body and recommending entity for the Board of Supervisors" and that "the decision to actually acquire real estate lies with the Board of Supervisors," it would appear that the EAC on which Washenik serves is a purely advisory body. Under the Ethics Act and Regulations, members of boards that are purely advisory and do not have the authority to expend public funds (other than to reimburse personal expenses) or to otherwise exercise the power of the State or any political subdivision thereof, are not public officials, but are subject to Sections 1103(b)) and 1103(c), which apply to everyone. Therefore, conditioned upon the assumption that the EAC is limited to performing advisory functions only, and that the EAC does not have the authority to expend public funds (other than to reimburse personal expenses) or to otherwise exercise the power of the State or any political subdivision thereof, Washenik as an EAC member would not be considered a ' public official" subject to the conflict of interest provisions of the Ethics Act. Given that Washenik, as an EAC member would not be considered a "public official," your first specific inquiry as to whether he may continue to serve on the EAC and take part in its recommendations to the Board need not be addressed. With respect to Washenik's part -time employment with the Township, the Ethics Act defines the term "public employee" as follows: § 1102. Definitions "Public employee." Any individual employed by the Commonwealth or a political subdivision who is responsible for taking or recommending official action of a nonministerial nature with regard to: (1) contracting or procurement; (2) administering or monitoring grants or subsidies; (3) planning or zoning; (4) inspecting, licensing, regulating or auditing any person; or (5) any other activity where the official action has an economic impact of greater than a de minimis nature on the interests of any person. The term shall not include individuals who are employed by this Commonwealth or any political subdivision thereof in teaching as distinguished from administrative duties. 65 Pa.C.S. § 1102. You have provided very limited facts regarding Washenik's job responsibilities as a part -time Township employee, stating only that Washenik "works in an administrative capacity on various projects of the Township including the current search for Open Space properties" and that Washenik "deal[s] with potential Open Space Acquisitions." It shall be assumed for purposes of this advisory that Washenik's job responsibilities with respect to Open Space acquisitions are such that he has the ability to take or recommend official action with respect to any of the activities outlined in subparagraphs Hanna/Washenik 04 -565 June 23, 2004 Page 4 (1) through (5) within the definition of "public employee" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, and thus, he is a "public employee" subject to the Ethics Act. As a Township Supervisor, Washenik clearly is a "public official" as that term is defined under the Ethics Act, and hence he is subject to that Act. Having established that as a part -time Township employee, Washenik is a "public employee," and as a Township Supervisor, Washenik is a "public official," the relevant provisions of the Ethics Act shall be set forth below. 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. 65 Pa.C.S. § 1102. "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. Hanna/Washenik 04 -565 June 23, 2004 Page 5 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). 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. Based upon the submitted facts, it would appear that Wilkins & Associates is not a business in which Washenik is a director, officer, owner, employee, or holds a Hanna/Washenik 04 -565 June 23, 2004 Page 6 financial interest. Therefore, Wilkins & Associates would not be considered a business with which Washenik is associated. However, given that Washenik works for Wilkins & Associates as an independent contractor, a business relationship exists between Washenik and Wilkins & Associates. Therefore, Washenik would generally have a conflict of interest as to matters that would come before him in his capacity as a Township employee or a Township Supervisor that would financially impact himself or Wilkins & Associates. See, Miller, Opinion 89 -024; Snyder v. State Ethics Commission, 686 A.2d 843 (Pa. Commw. alloc. den., 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). In each instance of a conflict, Washenik would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Having established the above general principles, your second and third inquiries shall now be addressed. In response to your second inquiry, the Ethics Act may or may not preclude Washenik from continuing to "deal with potential Open Space acquisitions in his administrative capacity as a part -time employee of the Township. As noted above, the submitted facts are very limited and generalized with respect to Washenik's actual job responsibilities. Therefore, this advice must necessarily be limited to the following general guidance. Section 1103(a) of the Ethics Act would preclude Washenik from using the authority of his Township employment or confidential information for the private pecuniary benefit of himself, a member of his immediate family, a business with which he or a member of his immediate family is associated, business client(s), or Wilkins & Associates. To the extent Washenik would use the authority of his Township employment or confidential information for a private pecuniary benefit, he would run afoul of Section 1103(a) of the Ethics Act. Where a conflict of interest would exist, Washenik could not, in an effort to remove himself from the conflict, take action to delegate his job responsibilities to a subordinate. Because the subordinate would be in a subservient position, the act of substituting a subordinate in and of itself would constitute a use of authority of office by Washenik in derogation of Section 1103(a) of the Ethics Act. However, where there would be a pre - existing mechanism in place for the delegation of Washenik's authority in the event of a conflict, he would not run afoul of Section 1103(a) in that there would be no use of authority of office. Confidential Opinion, 02 -004. The submitted facts do not indicate whether there is a pre- existing mechanism in place for delegation of Washenik's authority as a Township employee in the event of a conflict. Assuming there is no pre- existing mechanism in place specifying how and by whom Washenik's authority is to be exercised in the event of a conflict, his delegation of such authority to a subordinate would itself be a use of authority of office contrary to Section 1103(a) of the Ethics Act. Id. In response to your third inquiry, Washenik would clearly have a conflict of interest as to voting on potential acquisitions that would involve his services as a real estate agent or the services of Wilkins & Associates. Washenik could also have a conflict of interest as to voting on acquisitions that would not involve his services as a real estate agent or those of Wilkins & Associates if certain conditions would exist. For example, if the Township would have limited funding such that only certain parcels could be purchased, a conflict would exist even as to action to eliminate competing parcels where such action would assure or increase the possibility that the Township would chose those parcels involving Washenik's services as a rear estate agent or the services of Wilkins & Associates. See, Pepper, Opinion 87 -008. Hanna/Washenik 04 -565 June 23, 2004 Page 7 In each instance of a conflict of interest, Washenik would be required to abstain from participation and to fully satisfy the disclosure requirements under 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 Coolbaugh Township ( "Township "), Gratz Washenik ( "Washenik" 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. It shall be assumed for purposes of this advisory that as a part -time Township employee, Washenik is a "public employee" subject to the Ethics Act. Based upon the submitted facts, it would appear that the Coolbaugh Township Environmental Advisory Council ( "EAC ") on which Washenik serves is a purely advisory body; therefore, as a member of the EAC, Washenik would not be considered a "public official" subject to the Ethics Act. Under the submitted facts, Wilkins & Associates Real Estate ( "Wilkins & Associates ") would not be considered a business with which Washenik is associated. However, given that Washenik works for Wilkins & Associates as an independent contractor, a business relationship exists between Washenik and Wilkins & Associates. Therefore, Washenik would generally have a conflict of interest as to matters that would come before him in his capacity as a Township employee or a Township Supervisor that would financially impact himself or Wilkins & Associates. As to the question of whether Washenik may continue to "deal with" potential Open Space acquisitions in his administrative capacity as a part -time employee of the Township, only general guidance may be given due to the limited facts. Section 1103(a) of the Ethics Act would preclude Washenik from using the authority of his Township employment or confidential information for the private pecuniary benefit of himself, a member of his immediate family, a business with which he or a member of his immediate family is associated, business client(s), or Wilkins & Associates. To the extent Washenik would use the authority of his Township employment or confidential information for a private pecuniary benefit, he would run afoul of Section 1103(a) of the Ethics Act. Where a conflict of interest would exist, Washenik could not, in an effort to remove himself from the conflict, take action to delegate his job responsibilities to a subordinate. Because the subordinate would be in a subservient position, the act of substituting a subordinate in and of itself would constitute a use of authority of office by Washenik in derogation of Section 1103(a) of the Ethics Act. However, where there would be a pre - existing mechanism in place for the delegation of Washenik's authority in the event of a conflict, he would not run afoul of Section 1103(a) in that there would be no use of authority of office. Assuming there is no pre- existing mechanism in place specifying how and by whom Washenik's authority is to be exercised in the event of a conflict, his delegation of such authority to a subordinate would itself be a use of authority of office contrary to Section 1103(a) of the Ethics Act. As to the question of whether Washenik may vote on Township decisions to acquire or not acquire Open Space properties, Washenik would clearly have a conflict of interest as to voting on potential acquisitions that would involve his services as a real estate agent or the services of Wilkins & Associates. Washenik could also have a conflict of interest as to voting on acquisitions that would not involve his services as a real estate agent or those of Wilkins & Associates if certain conditions would exist. In each instance of a conflict of interest, Washenik would be required to abstain from participation and to fully satisfy the disclosure requirements under Section 1103(j) of the Ethics Act. Hanna/Washenik 04 -565 June 23, 2004 Page 8 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