Loading...
HomeMy WebLinkAbout26-503 YoderPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: Dr. Adam J. Yoder Dear Dr. Yoder: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 304 HARRISBURG, PA 17120-0400 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov ADVICE OF COUNSEL January 21, 2026 26-503 This responds to your letter dated January 6, 2026, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the general issue presented below: Issue: Whether the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101, et seg., would impose prohibitions or restrictions upon an individual who is a member of a city council with regard to engaging in private consulting activities while he is serving as a public official. Brief Answer: The Ethics Act would not prohibit the individual from engaging in private consulting activities while he is serving as a member of the city council. However, in his capacity as a member of the city council, the individual generally would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in matters that would financially impact him or his consulting business. Facts: You request an advisory from the Commission based upon submitted facts that may be fairly summarized as follows. You are a Member of Council for the City of Williamsport ("City"), which is located in Lycoming County, Pennsylvania. As a Member of City Council, your duties include voting on Yoder, 26-503 January 21, 2026 Page 2 ordinances, regulations and City budgets, overseeing and approving contracts and agreements, and interacting with City administrators, departments, and appointed officials. As part of your education, you earned a Doctor of Business Administration focused on municipal governance and economic develop and a Master of Business Administration concentrated on finance. You are in the process of establishing a consulting firm ("the Firm") that would operate as Northway Intelligence. The Firm would specialize in municipal governance, economic development, and organizational strategy and would offer various consulting services to local municipalities, counties, and economic development organizations. The Firm's activities would also involve the development of a subscription -based Municipal Intelligence newsletter providing insights derived from AI -powered analysis of meeting minutes of Third Class City governments and municipal and county governments. The Firm would be structured as a sole proprietorship or single -member limited liability company with no employees at the outset. You plan to operate the Firm part-time for approximately twelve to fifteen hours per week. In order to avoid potential conflicts of interest, you propose that the Firm will not provide consulting services to: (1) the City; (2) Lycoming County in support of any project or initiative in which the City is actively involved in decision making or funding; or (3) any organization or entity in support of any project or initiative in which the City is actively involved in decision making or funding. You assert that these restrictions would ensure complete separation between your consulting activities and any entity over which you have governmental responsibility or with which the City conducts business. You further propose that: (1) you will provide complete transparency by disclosing all consulting clients and engagements to City Council when requested; (2) you will recuse yourself from any City Council votes, discussions, or committee actions that could directly or indirectly impact any of your consulting clients; (3) you will not use City facilities, equipment, staff time, or confidential information in connection with your consulting business, and all of your consulting work will be performed using personal resources during non -City working hours; and (4) you will not represent any consulting client in matters before the City or Lycoming County, and you will not advocate on behalf of any consulting client in connection with matters that could come before City Council. Based upon the above submitted facts, you pose the following questions: (1) Whether the proposed exclusions with regard to the entities to which the Firm will not provide consulting services would provide adequate mitigation of potential conflicts of interest under the Ethics Act; (2) Whether there would be additional restrictions, disclosures, or safeguards that the Commission would recommend to ensure full compliance with the Ethics Act while you would be operating the Firm; (3) Whether you would be prohibited from providing consulting services to a municipality or economic development organization located outside of Lycoming Yoder, 26-503 January 21, 2026 Page 3 County that participates in a regional initiative or intergovernmental agreement that includes the City; and (4) Whether there would be any circumstances under which the proposed Municipal Intelligence newsletter, which could include analysis of the City's public meeting minutes, could create conflicts of interest and if so, what additional safeguards should be implemented. Discussion: Pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester 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 requester to truthfully disclose all material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all material facts. Sections 1103(a) and 11030) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. -- No public official or public employee shall engage in conduct that constitutes a conflict of interest. 0) 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 bled 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 Yoder, 26-503 January 21, 2026 Page 4 vote to break the tie vote if disclosure is made as otherwise provided herein. 65 Pa.C.S. §§ 1103(a), 11030). The following terms related to Section 1103(a) 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. Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest" (i.e., the "de minimis exclusion" and the "class/subclass exclusion"), 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office or confidential information received by holding such a public position for the private pecuniary (financial) 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. The use of authority of office is not limited merely to voting but extends to any use of authority of Yoder, 26-503 January 21, 2026 Page 5 office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. Sections 1103(b) and 1103(c) of the Ethics Act, 65 Pa.C.S. §§ 1103(b), 1103(c), provide in part that no person shall offer or give to a public official/public employee anything of monetary value and no public official/public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official/public employee would be influenced thereby. Sections 1104(a) and 1105(b) of the Ethics Act, 65 Pa.C.S. §§ 1104(a), 1105(b), provide for the filing of annual Statements of Financial Interests ("SFIs") by public officials/public employees. Section 1105(b)(2) of the Ethics Act requires the filer to disclose on the SFI his occupation orprofession. Subjectto certain statutory exceptions, Section 1105(b)(5) of the Ethics Act requires the filer to disclose on the SFI the name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. Section 1105(b)(8) of the Ethics Act requires the filer to disclose on the SFI any office, directorship or employment in any business entity. Section 1105(b)(9) of the Ethics Act requires the filer to disclose on the SFI any financial interest in any legal entity engaged in business for profit. The term "financial interest" is defined in the Ethics Act as "[a]ny 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. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member of City Council, you are a public official subject to the provisions of the Ethics Act. The Ethics Act would not prohibit you, in your private capacity, from establishing the Firm for the purpose of providing consulting services to local municipalities, counties, and economic development organizations. However, if you would establish the Firm, it would be considered a business with which are associated as its owner, and pursuant to Section 1103(a) of the Ethics Act, you generally would have a conflict of interest in matters before City Council that would financially impact you or the Firm. In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. Yoder, 26-503 January 21, 2026 Page 6 Turning to your specific questions, you are advised as follows. In response to your first and second questions, you are advised that to the extent the proposed exclusions with regard to the entities to which the Firm will not provide consulting services would ensure complete separation between your consulting activities and any entity over which you have governmental responsibility or with which the City conducts business, the proposed exclusions would avoid the potential for you to have a conflict of interest in performing the duties and responsibilities of your position as a Member of City Council. You are further advised that if you would operate the Firm under the proposed restrictions, disclosures, and safeguards, in order to be in full compliance with the Ethics Act, you would be required to disclose on your SFL (1) your occupation or profession as a consultant; (2) the name and address of the Firm as a direct or indirect source of income if the disclosure threshold of $1,300 or more would be met; (3) your employment with the Firm; and (4) any financial interest that you would have in the Firm. See, Sections 1105(b)(2), 1105(b)(5), 1105(b)(8), and 1105(b)(9) of the Ethics Act. In response to your third question, you are advised that you would not be prohibited from providing consulting services to a municipality or economic development organization located outside of Lycoming County that participates in a regional initiative or intergovernmental agreement that includes the City. If you would provide such consulting services, you would not have a conflict of interest under Section 1103(a) of the Ethics Act as a Member of City Council with regard to participating in matters related to the regional initiative or intergovernmental agreement unless such matters would financially impact you or the Firm. Turning to your fourth question, you are advised that Section 1103(a) of the Ethics Act would not prohibit you from publishing the Municipal Intelligence newsletter subject to the conditions that you would not use City resources, staff, facilities, or equipment, or confidential information received as a result of being in your public position, in furtherance of the publication of the Municipal Intelligence newsletter. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, 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 requester 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 Yoder, 26-503 January 21, 2026 Page 7 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. Respectfully, Bridget K. Guilfoyle Chief Counsel