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HomeMy WebLinkAbout05-501 CollJack Coll 324 Fayette Street Conshohocken, PA 19428 ADVICE OF COUNSEL January 6, 2005 05 -501 Re: Conflict; Public Official; Borough; Council Member; Participation/Vote; Private Business; Customer /Client; De Minimis Exclusion. Dear Mr. Coll: This responds to your letter of November 30, 2004, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., presents any prohibition or restrictions upon a borough council member with regard to voting or otherwise participating upon a matter involving a private customer /client. Facts: As a Council Member for Conshohocken Borough ( "Borough "), you request an advisory from the State Ethics Commission. You have submitted facts that may be fairly summarized as follows. In your private capacity, you are a self - employed custom picture framer and photographer. You state that you have a few long -term customers, including a developer. A long -term customer may generate income for you in the amount of approximately four to five hundred dollars per year. You ask whether you may: (1) continue to do business with customers having matters before Borough Council; and (2) participate /vote on matters involving such customers. 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 that the requestor has submitted. In issuing the advisory based upon the facts that the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts Coll, 05 -501 January 6, 2005 Page 2 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 Borough Council Member, you are a public official as that term is defined in the Ethics Act, and hence you are subject to the provisions of the Ethics 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 relating to conflict of interest 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, joint 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. 65 Pa.C.S. § 1102. 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 Coll, 05 -501 January 6, 2005 Page 3 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. 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 /public 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. The abstention requirement is not limited merely to voting, but extends 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 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, it is noted that Section 1103(a) of the Ethics Act does not prohibit public officials /public employees from having outside business activities or employment; however, the public Coll, 05 -501 January 6, 2005 Page 4 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; Rembold, Order 1303; Wilcox, Order 1306), or private customer(s)/client(s) (Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010). In Kannebecker, supra, the State Ethics Commission 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 clients 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. The Commission has also held that a reasonable and legitimate expectation that a business relationship will form may support a finding of a conflict of interest. Amato, Opinion 89 -002. In the instant matter, your custom framing and photography business would be considered a business with which you are associated. The Ethics Act would not prohibit you in your private capacity from continuing to do business with customers /clients who would have matters before Borough Council. However, pursuant to Section 1103(a) of the Ethics Act, you would generally have a conflict of interest in your public capacity as a Borough Council Member in matters that would financially impact you, your business, or a private customer /client. Thus, if a matter would come before Borough Council involving such a private customer /client, you would generally be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. As a general rule, a conflict would not exist as to former customer(s)/client(s), but under certain circumstances, a conflict could exist as to former customer(s)/client(s) depending upon factors such as the number of prior business transactions involving the given customer /client and the period of time over which such occurred. You are further advised that the de minimis exclusion to the definition of "conflict" or "conflict of interest" precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. See, Kolb, Order 1322; Schweinsburq, Order 900. The Commission has determined the applicability of the de minimis exclusion on a case -by -case basis, considering all relevant circumstances. In the past, the Commission has found amounts ranging from $2 to approximately $300 to be de minimis. Therefore, you are advised that you would not have a conflict of interest as to a customer /client from which you would receive only a de minimis (insignificant) financial benefit. 65 Pa.C.S. § 1102. See, Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004). For a customer /client involved in multiple transactions, the aggregate financial benefit received from such transactions should be considered in order to determine whether the de minimis exclusion would be applicable. Coll, 05 -501 January 6, 2005 Page 5 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 Borough Code. Conclusion: As a Council Member for Conshohocken Borough ( "Borough "), 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. Your custom framing and photography business would be considered a business with which you are associated. Pursuant to Section 1103(a) of the Ethics Act, as a Borough Council Member, you would generally have a conflict of interest in matters that would financially impact you, your business, or private customer(s) /client(s). If a matter would come before Borough Council involving a private customer /client, you would generally be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. As a general rule, a conflict would not exist as to former customer(s) /client(s), but under certain circumstances, a conflict could exist as to former customer(s)/client(s) depending upon factors such as the number of prior business transactions involving the given customer /client and the period of time over which such occurred. You would not have a conflict of interest as to a customer /client from which you would receive only a de minimis (insignificant) financial benefit. For a customer /client involved in multiple transactions, the aggregate financial benefit received from such transactions should be considered in order to determine whether the de minimis exclusion would be applicable. 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