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HomeMy WebLinkAbout05-604 GornishADVICE OF COUNSEL December 13, 2005 Gerald Gornish, Chief Counsel Commonwealth of PA Public School Employees' Retirement System 5 North Fifth Street 5 Floor Harrisburg, PA 17101 Dear Mr. Gornish: 05 -604 Re: Conflict; Public Official; Chairman; Pennsylvania Public School Employees' Retirement Board; Collective Bargaining Officer. This responds to your letter of November 10, 2005, 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., any , presents an prohibition or restrictions upon a chairman of the Pennsylvania Public School Employees' Retirement Board with regard to voting to uphold a policy of the Public School Employees Retirement System that the members are entitled to retirement credit based only on the compensation they would have received from the school district had they not been on leave, when the chairman is a school district employee on leave as an officer of a local collective bargaining organization. Facts: As Chief Counsel for the Commonwealth of Pennsylvania Public School Employees' Retirement Board ("PSERB"), you seek an advisory on behalf of the PSERB Chairman, Roger H. May ("May"). You have submitted facts, the material portions of which may be fairly summarized as follows. PSERB is currently considering a matter involving four individuals ( "Claimants ") who were on leave from their employment with a school district as officers of collective bargaining organizations. Each of the Claimants received a salary as a collective bargaining officer that was substantially higher than that which they would have received had they not been on leave from the school district. You state that under Section 8102 of the Public School Employees Retirement Code, members are authorized to receive credit for service and salary while on an approved leave of absence only in limited circumstances, one of which is for service full -time as an officer Gornish /May, 05 -604 December 13, 2005 Page 2 of a collective bargaining organization. You further state that in such a case, Section 8102 requires that the school employer fully compensate the member, and the collective bargaining organization fully reimburse the school employer, for salary, wages, pensions and retirement contributions and benefits as if [the member] were in full -time active service." The Claimants seek to have the compensation they received during their leaves for service with the collective bargaining organizations considered as their compensation for retirement compensation purposes. Procedurally, the Claimants' brought their appeal before a Hearing Examiner in accordance with the General Rules of Administrative Practice and Procedure, 1 Pa. Code, Part II. Claimants stipulated that the Public School Employees Retirement System ( "PSERS ") has consistently interpreted the phrase as if [the member] were in full -time active service" to permit credit for retirement purposes of only the salary that the member would have earned from the school employer had the leave not been taken, not any additional salary that the member may receive from the collective bargaining organization while the member is on leave. The Hearing Examiner concluded that PSERS' interpretation of the Retirement Code and its application to the facts presented was correct and recommended that PSERB deny the Claimants' requests. Claimants filed exceptions to the Hearing Examiner's recommendations and requested oral argument. On September 23, 2005, oral argument was held on Claimants' Exceptions to the Hearing Examiner's Opinion and Recommended Order, after which, PSERB discussed the case in executive session. Immediately thereafter, PSERB voted on a proposed resolution to reject the Hearing Examiner's recommendation and a proposed resolution to accept the Hearing Examiner's recommendation. Both votes were six to six with Chairman May abstaining. As a result of the tie votes, the matter was tabled to PSERB's next meeting. Prior to PSERB's next meeting on November 4, 2005, May asked you for a written opinion regarding his obligation to abstain, claiming that he would not have a conflict since he intends to vote to support the Hearing Examiner's recommendation, which upholds PSERS' policy that the Claimants are entitled to retirement credit based only on the compensation they would have received from the school district had they not been on leave. You note that May abstained because he is employed as a history teacher for the Williamsport School District, but has also been on leave as the local collective bargaining organization's president since January 2003. However, unlike the Claimants, May's compensation from the collective bargaining organization and his retirement benefits are precisely in the amount he would receive as a full -time teacher. After quoting the Ethics Act's definition of "conflict" or "conflict of interest" under Section 1102 as well as Sections 1103(a) and 1103(j) of the Ethics Act, you make the following points. First, May's intended vote would not result in a private pecuniary benefit to himself. In fact, even if May would vote in favor of Claimants, such would not result in a private pecuniary benefit to himself unless he would thereafter negotiate a change in compensation with the collective bargaining organization he represents to an amount in excess of that which he would receive as a teacher. Second, the class /subclass exclusion may have application since there are approximately 75 -100 active PSERS members who are union officers on leave under Section 8102 of the Retirement Code. Third, it would appear that under Section 1103(j) of the Ethics Act, the nature of the vote rather than the issue on which the vote is taken, is the focus of the conflict. Fourth, it would appear that if May's vote would not result in a conflict, PSERS' Bylaws would permit him to vote, provided such would be permitted by the Ethics Act. Based upon the foregoing facts, you ask whether a conflict of interest would result if May would vote to accept the Hearing Examiner's recommendation. Gornish /May, 05 -604 December 13, 2005 Page 3 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 PSERB Chairman, May is a public official as that term is defined in the Ethics Act, and hence he is 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. 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: Gornish /May, 05 -604 December 13, 2005 Page 4 § 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. As to the question you have posed, you state that May intends to vote to approve the Hearing Officer's recommendation to uphold PSERS' policy that members are entitled to retirement credit based only on the compensation they would have received from the school district had they not been on leave. Based upon the facts that have been submitted, May's vote would not result in a private pecuniary benefit to himself. Absent a private pecuniary benefit to May, he would not have a conflict under Section 1103(a) of the Ethics Act and could vote to approve the Hearing Officer's recommendation. 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 Public School Code of 1949 and the Public School Employees Retirement Code. Gornish /May, 05 -604 December 13, 2005 Page 5 Conclusion: As Chairman of the Pennsylvania Public School Employees' Retirement Board ( "PSERB "), Roger H. May ( "May ") 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. May would not have a conflict of interest under Section 1103(a) of the Ethics Act with regard to voting to approve the Hearing Officer's recommendation to uphold PSERS' policy that members are entitled to retirement credit based only on the compensation they would have received from the school district had they not been on leave. May would not have a conflict because his vote would not result in a private pecuniary benefit to himself. Absent a private pecuniary benefit to May, he would not have a conflict under Section 1103(a) of the Ethics Act and could vote to approve the Hearing Officer's recommendation. 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. 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