Loading...
HomeMy WebLinkAbout05-601 CONFIDENTIALADVICE OF COUNSEL December 6, 2005 05 -601 Re: Conflict; Public Official; County Commissioner; Business With Which Associated; Three - Member Board; Vote. This responds to your letter of November 1, 2005, by which you requested a confidential 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 three county commissioners with regard to voting to approve funding for a non - profit corporation when all three commissioners serve as directors for that non - profit corporation. Facts: As First Assistant County Solicitor for A County, you seek a confidential advisory on behalf of County Commissioners B, C, and D. You have submitted facts that may be fairly summarized as follows. Commissioners A, B and C are Directors of a non - profit corporation entitled E. The mission of E is to F. E has requested a [number] -year funding commitment from the County for implementation of their master plan. You state that in order for this funding to be approved, two out of the three Commissioners must approve this action at a public meeting. You note that given the Commissioners' conflicts, none of them can vote on this issue without transgressing the Ethics Act. You emphasize that neither A, B nor C receive any pecuniary gain from their roles as Directors. You pose the following specific inquiries: 1. Whether A, B and C may vote on E's request for funding provided they make the proper disclosures under Section 1103(j) of the Ethics Act; and 2. Whether A, B and C would still have a conflict if their positions with E would change to "Honorary Director" or "Ex- Officio Director" without voting rights. 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 (CONFIDENTIAL - NOT TO BE DISSEMINATED TO THE PUBLIC) Confidential Advice, 05 -601 December 6, 2005 Page 2 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 Commissioners for A County, B, C and D 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. 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, 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. (CONFIDENTIAL - NOT TO BE DISSEMINATED TO THE PUBLIC) Confidential Advice, 05 -601 December 6, 2005 Page 3 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, it is generally noted that under Section 1103(a) of the Ethics Act a conflict of interest exists where a public official /public employee, in his official capacity, participates, reviews or passes upon a matter involving a business with which he is associated and /or private clients. Miller, Opinion No. 89 -024; Kannebecker, Opinion No. 92 -010. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion No. 89 -002; Garner, Opinion No. 93 -004; Snyder, Order No. 979 -2, affirmed Snyder v. SEC, 686 A.2d 843 (Pa. Commw. Ct. 1996), alloc. den., No. 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). The (CONFIDENTIAL - NOT TO BE DISSEMINATED TO THE PUBLIC) Confidential Advice, 05 -601 December 6, 2005 Page 4 State Ethics Commission has also held that it is a conflict of interest under Section 1103(a) for a public official /public employee to pursue a private business opportunity in the course of public action. Metrick, Order No. 1037. In each instance of a conflict of interest, the public official /public employee must abstain from participation in his public capacity. The abstention requirement is not limited merely to voting, but extends to any use of authority of office. In Juliante, Order No. 809, the Commission recognized that the use of authority of office as defined in the Ethics Act includes, for example, discussing, conferring with others, and lobbying for a particular result. In each instance of a conflict of interest, the public official must also satisfy the disclosure requirements of Section 1103(j) set forth above. In the instant matter, E would be considered a business with which B, C and D as Directors, are associated. Pursuant to Section 1103(a) of the Ethics Act, B, C and D would generally have a conflict in matters that would result in a financial benefit to themselves or E. B, C and D would specifically have a conflict of interest in approving funding for E as such action would result in a financial benefit to a business with which they are associated. However, because the Board of Commissioners would be unable to take action on the matter because all three Commissioners would be required to abstain from voting due to their conflict, thus making the majority or other legally required vote of approval unattainable, B, C and D would be permitted to vote if they would make the proper disclosures as provided in Section 1103(j) of the Ethics Act. A change in title to "Honorary Director" or "Ex- Officio Director" without voting rights would have no legal consequence. 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. Conclusion: As Commissioners for A County, B, C and D are "public officials" subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. E would be considered a business with which B, C and D as Directors, are associated. Pursuant to Section 1103(a) of the Ethics Act, B, C and D would generally have a conflict in matters that would result in a financial benefit to themselves or E. B, C and D would specifically have a conflict of interest in approving funding for E as such action would result in a financial benefit to a business with which they are associated. However, because the Board of Commissioners would be unable to take action on the matter because all three Commissioners would be required to abstain from voting due to their conflict, thus making the majority or other legally required vote of approval unattainable, B, C and D would be permitted to vote if they would make the proper disclosures as provided in Section 1103(j) of the Ethics Act. A change in title to "Honorary Director" or "Ex- Officio Director" without voting rights would have no legal consequence. 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 requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. An adapted version of this letter will be made available as a public record. (CONFIDENTIAL - NOT TO BE DISSEMINATED TO THE PUBLIC) Confidential Advice, 05 -601 December 6, 2005 Page 5 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 (CONFIDENTIAL - NOT TO BE DISSEMINATED TO THE PUBLIC)