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HomeMy WebLinkAbout05-574 DeVittorioJames H. DeVittorio, Esquire 13 South Broad Street P.O. Box 411 Ridgway, PA 15853 Dear Mr. DeVittorio: ADVICE OF COUNSEL September 8, 2005 05 -574 Re: Conflict; Public Official /Employee; Township; Board of Supervisors; Three - Member Board; Business With Which Associated; Three - Member Board; Voting Conflict Exception; Vote. This responds to your letter of July 25, 2005, by which you requested advice from the State Ethics Commission. Issue: Whether, pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., a township supervisor on a three - member board may co -sign a check payable to a vendor when the supervisor has a conflict of interest as to the particular vendor and has abstained from voting to authorize payment to that vendor; and whether two township supervisors on the same three - member board may vote on the matter of the township contributing funds to a business with which they are associated. Facts: As Solicitor for the Fox Township Board of Supervisors ( "Board ") located in Elk County, Pennsylvania, you seek an advisory on behalf of Michael E. Keller ( "Keller "), Randy J. Gradizzi ("Gradizzi"), and Gerry F. Zimmerman ( "Zimmerman "), who make up the three - member Board. You describe the following two factual scenarios relative to which you pose the following issues for consideration. Scenario A: One of the Board members has a conflict of interest as to a particular vendor and abstains from a vote to authorize payment to that vendor. The remaining two supervisors vote to authorize payment to the vendor. As to the foregoing, you as whether the conflicted Board member may perform an "administrative function" by providing one of the three signatures on the paycheck to the vendor. Scenario B: The three - member Board consists of an officer /director of the Township Ambulance Corporation, a non - profit corporation ( "Ambulance Corporation ") an employee [of the Ambulance Corporation] /EMT who makes regular "runs" with the DeVittorio, 05 -574 September 8, 2005 Page 2 ambulance; and a Board member who has no connection whatsoever with the Ambulance Corporation. A representative of the Ambulance Corporation approaches the Board requesting that the Board consider contributing funds to assist the Ambulance Corporation with capital improvements in the form of a new ambulance garage or building. As to the foregoing, you ask how the Board should handle voting with respect to the Ambulance Corporation's request. 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 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 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 requester has truthfully disclosed all of the material facts. As Township Supervisors, Keller, Gradizzi and Zimmerman are "public officials" as that term is defined in the Ethics Act, and hence they 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, DeVittorio, 05 -574 September 8, 2005 Page 3 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. 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. DeVittorio, 05 -574 September 8, 2005 Page 4 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 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). 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. Having established the above general principles, your specific inquiries shall now be addressed. With regard to Scenario A, you have factually represented that one of the Board Members has a conflict of interest as to a particular vendor. It is noted, however, that you have not specified what the basis is for that conflict- -i.e., whether, the vendor is a business with which the Board Member or an immediate family is associated or has a financial relationship. Based upon the limited facts, you are generally advised that pursuant to Section 1103(a) of the Ethics Act, the Board Member would be prohibited from using the authority of his office for a private pecuniary benefit of the vendor. Co- signing checks payable to the vendor would constitute a use of authority of office. See, Juliante, Order 809. The use of authority of office would result in a private pecuniary benefit to the vendor contrary to Section 1103(a) of the Ethics Act. See, Luzier, Order 1300; Findley, Order 1103. In each instance of a conflict of interest, the Board Member would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act set forth above. Despite the conflict, the Board Member would still be permitted to participate under certain limited circumstances. In Garner, Opinion 93 -004, the Commission considered the issue of whether, under Section 3(j) of the Ethics Law, a supervisor on a three member board would be permitted to second a motion even if he had a conflict where the two remaining supervisors would have opposing views or where one of the remaining two members would be absent from the meeting. Citing Juliante, Order 809, the Commission first noted that seconding a motion is a use of authority of office. Hence an individual with a conflict would not be permitted to participate, make a motion, second a motion, or vote. See, Garner, supra. However, the Commission also stated: [T]he General Assembly in enacting Section 3(j) would not have allowed a public official /employee on a three member board who has a conflict to be able to vote unless a second to the motion could be made so that the matter would be in the posture for a vote. Thus, we believe that since there is a need for a second to a motion in order to make Section 3(j) of the Ethics Law operative, the General Assembly intended as to three members [sic] boards for the public official with a conflict to be allowed to second so that if the other supervisors became deadlocked, the DeVittorio, 05 -574 September 8, 2005 Page 5 public official could then vote provided the disclosure requirements are satisfied. Garner, at 6. In light of the foregoing, the Commission concluded that Section 3(j) of the Ethics Law does allow an individual to second a motion where the two remaining supervisors have opposing views or where one of the other two supervisors is absent. The Commission emphasized that its ruling was expressly limited in its application to three member boards and to the question of seconding a motion. In applying Garner to the facts in Scenario A, you are advised that under Section 1103(j) of the Ethics Act, the conflicted Board Member would be permitted to second a motion only in a situation where, on a three member board, 1) the two remaining Board Members would have opposing views; or 2) one of the other two Board Members would be absent from the meeting. Allowing the conflicted Board Member to second the motion in either of the above scenarios would put the matter in a posture for a vote. Thereafter, if the other two Board Members would cast opposing votes, the conflicted Board Member would be permitted to vote to break the tie provided he satisfied the disclosure requirements of Sections 1103(j). However, as noted above, the Board Member could not co -sign checks due to his conflict and would have to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. With regard to Scenario B, you state that one Board Member is an officer /director of the Ambulance Corporation, while another Board Member is an employee of the Ambulance Corporation. As to these two Board Members, the Ambulance Corporation would be considered a business with which they are associated. Pursuant to Section 1103(a) of the Ethics Act, these two Board Members would generally have a conflict of interest in their public capacities in matters that would financially impact themselves, the Ambulance Corporation or private customer(s) /client(s). The two Board Members would specifically have a conflict of interest as to voting on the Ambulance Corporation's request for funding from the Township, as such action by the Board Members would constitute a use of authority of office for a private pecuniary benefit of a business with which they are associated. In each instance of a conflict of interest, the two Board Members would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act set forth above. Given that two of the three Board Members have a conflict, neither of them would be permitted to make a motion. However, the remaining Board Member without a conflict, may choose to make a motion. Because the non - conflicted member may not second his /her own motion, and that it would be otherwise impossible for a second to occur, either of the two conflicted members, if he or she so chooses, may second the motion. The two conflicted members may not discuss or advocate as to the motion following the second. The two conflicted members may only vote on the motion. Confidential Opinion, 04 -003. Regarding the issue on voting on a seconded the motion, given that the Board of Supervisors would be unable to take official action because the majority or other legally required vote would be unattainable due to the two conflicted Board Members, the two conflicted Board Members would be permitted to vote if they would make the proper disclosures as required by Section 1103(j) of the Ethics Act. See, Pavlovic, Opinion 02- 005. Section 1103(j) does not give conflicted officials the authority to otherwise participate, as for example, discussing or advocating as to the issue. Id. 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 DeVittorio, 05 -574 September 8, 2005 Page 6 involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Second Class Township Code. Conclusion: Michael E. Keller ( "Keller"), Randy J. Gradizzi ( "Gradizzi "), and Gerry F. Zimmerman ( "Zimmerman "), as Members of the Fox Township Board of Supervisors ( "Board "), are "public officials" subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act"), 65 Pa.C.S. § 1101 et seq. With regard to Scenario A described above, the Board Member who has a conflict as to a particular vendor would not be permitted to co -sign checks payable to that vendor and would have to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Under Section 1103), the conflicted Board Member could second a motion only in a situation where, 1) the two remaining Board Members would have opposing views; or 2) one of the other two Board Members would be absent from the meeting. Thereafter, if the other two Board Members would cast opposing votes, the conflicted Board Member would be permitted to vote to break the tie provided he satisfied the disclosure requirements of Sections 1103(j). With regard to Scenario B described above, the Ambulance Corporation would be considered a business with which two of the Board Members are associated. Therefore, these two Board Members would have a conflict of interest in their public capacities in matters that would financially impact themselves, the Ambulance Corporation or private customer(s) /client(s), including the matter of voting on the Ambulance Corporation's request for funding from the Township. In each instance of a conflict of interest, the two Board Members would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act set forth above. Given that the two Board Members have a conflict, neither of them could make a motion; only the remaining Board Member without a conflict could make a motion. Thereafter, either of the two conflicted members could second the motion, but could not discuss or advocate as to the motion following the second. Finally, the two conflicted members could vote on the seconded motion if they would make the proper disclosures as required by Section 1103(j) of 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 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 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