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HomeMy WebLinkAbout06-511 KircherMichelle P. Kircher 1101 Stonehenge Drive Reading, PA 19606 Dear Ms. Kircher: ADVICE OF COUNSEL February 3, 2006 06 -511 Re: Conflict; Public Official /Employee; Township Supervisor; County Employee; Sewer Authority Board Member; Board of Directors of Library Association; Governmental Body; Business With Which Associated. This responds to your letter of January 3, 2006, 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 township supervisor who is also a county employee and a sewer authority board member, with regard to: (1) voting as a township supervisor on matters concerning the sewer authority and the county; (2) voting as a sewer authority board member on matters concerning the township; and (3) participating in matters as a township supervisor, sewer authority board member, or a county employee that would financially benefit a library association of which she is a director. Facts: You are a Supervisor of Exeter Township ( "Township "), a township of the second class. You are also a member of the Exeter Sewer Authority ( "Authority "). You state that the Authority, which technically is not an operating Authority, has no revenue. In a telephone conversation with Assistant Counsel in the Legal Division of the State Ethics Commission on February 2, 2006, you provided the following additional information. In addition to the above, you are employed by Berks County ( "County ") as an Administrative Assistant to a Commissioner. Your job duties as an Administrative Assistant include, but are not limited to, answering telephone calls, typing, and purchasing office supplies. Further, you serve as President of the Board of Directors of the Exeter Library Association, a Pennsylvania non - profit corporation that was formed by a group of private citizens. You state that you were appointed to serve on the Library Board by other Library Board members. You state that the Library is housed in a facility owned Kircher, 06 -511 February 3, 2006 Page 2 by the Township and is the recipient of Township and State funds; however, it is not part of the Township and is not governed by the Township. Based upon the foregoing facts, you pose the following questions: 1. Whether as a Township Supervisor, you would transgress the Ethics Act if you would vote on any matters concerning the Authority or Berks County; and 2. Whether as an Authority Board Member, you must abstain from voting on matters concerning the Township. 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 a Township Supervisor and a Sewer Authority Board Member, you are a "public official" as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Based upon insufficient facts, a determination cannot be made as to whether as an Administrative Assistant for the County, you are a "public employee" subject to 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 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 Kircher, 06 -511 February 3, 2006 Page 3 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. "Financial interest." Any 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. "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body, or other establishment in the Executive, Legislative or Judicial Branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Political Subdivision." Any county, city, borough, incorporated town, township, school district, vocational school, county institution district, and any authority, entity or body organized by the aforesaid. 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(f) of the Ethics Act provides as follows: § 1103. Restricted activities Kircher, 06 -511 February 3, 2006 Page 4 (f) Contract. - -No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa. C. S. § 1103(f). Section 1103(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. Rather, where a public official /public employee, his spouse or child, or a business with which he, his spouse or child is associated, is otherwise appropriately contracting with the governmental body, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an "open and public process" be observed as to the contract with the governmental body. Pursuant to Section 1103(f), an "open and public process" includes: (1) prior public notice of the employment or contracting possibility; (2) sufficient time for a reasonable and prudent competitor /applicant to be able to prepare and present an application or proposal; (3) public disclosure of all applications or proposals considered; and (4) public disclosure of the contract awarded and offered and accepted. Section 1103(f) of the Ethics Act also requires that the public official /employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. 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 Kircher, 06 -511 February 3, 2006 Page 5 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. Thus, in your public positions, you would generally have a conflict under Section 1103(a) of the Ethics Act in matters that would financially benefit yourself, an immediate family member, or a business with which you or an immediate family member is associated. For example, as a Township Supervisor, you clearly would have a conflict and could not participate in appointing yourself to the Authority, nor could you vote to set your salary for serving on the Authority. In each instance of a conflict, you would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. In response to your specific questions as to whether as a Township Supervisor or an Authority Board Member, you would have a conflict and be required to abstain on matters concerning the Township, Authority or County, you are advised that while you would have a conflict as to matters that would financially benefit yourself, an immediate family member or a business with which you are associated, you would not have a conflict of interest in using the authority of your office as a Township Supervisor or an Authority Board Member for the pecuniary benefit of the Township, Authority, or County since they are governmental bodies. A pecuniary benefit flowing solely to a governmental body does not form the basis for a conflict of interest under Section 1103(a of the Ethics Act. See, Confidential Opinion, 01 -005; McCarrier, Opinion 98- 008; Warso, Order 974. However, you as a public official or public employee could have a conflict of interest in participating in matters that would financially benefit the Exeter Library Association. The submitted facts indicate that the Exeter Library Association would certainly financially benefit from matters such as budgetary appropriations by the Commonwealth and its political subdivisions. It is also clear that as a Director of the Exeter Library Association, you would be deemed to be "associated" with it. However, Kircher, 06 -511 February 3, 2006 Page 6 an interesting question is presented as to whether the Exeter Library Association is a "business" as defined by the Ethics Act. The Exeter Library Association is a privately formed, non - profit corporation. The State Ethics Commission has previously found non - profit corporations to be within the Ethics Act's definition of "business." Soltis - Sparano, Order No. 1045 at 31; See, also, Confidential Opinion, No. 89 -007; McConahy, Opinion No. 96 -006. Thus, the first issue that arises is whether the Exeter Library Association is a "business." On the other hand, a non - profit corporation may, under some circumstances, be a governmental body. For example, the Commission has held that a non - profit corporation is a "political subdivision" where it has been formed by other political subdivisions (See, Area Loan Organizations under Capital Loan Fund Act, Opinion No. 95 -006; Opinion No. 95- 006 -R), and political subdivisions are within the definition of "governmental body." 65 P.S. §402. While it is clear that the Exeter Library Association is not a political subdivision since it does not qualify under any of the enumerated bodies within that definition, and it is not an "authority, entity, or body" organized by same, the Exeter Library Association is arguably p erforming a governmental function in that it serves the informational, educational and recreational needs of the residents. See, The Library Code, 24 P.S. § 4101 et seq. Thus, the next issue that arises is whether the Exeter Library Association is an "agency performing a governmental function" so as to be within the Ethics Act's definition of "governmental body." The two issues set forth above are significant because, as noted above, if the Exeter Library Association would be strictly a "governmental body," the use of the authority of office as a Township Supervisor for a pecuniary benefit to such "governmental body" would not in and of itself constitute a conflict of interest under the Ethics Act. McCarrier, supra; Warso, supra. On the other hand, if the Exeter Library Association would be a "business," you as a public official or a public employee would have conflicts of interest in matters that would financially benefit the Exeter Library Association, such that Sections 1103(a) and 1103(j) would be implicated. Further, if the Exeter Library Association would be considered a business with which you are associated and not a "governmental body," Section 1103(f) would apply to any contracting. Unfortunately, there are no pertinent judicial rulings regarding the status of the Exeter Library Association. Thus, this advice is necessarily limited to providing you with the general guidance set forth above. 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 Second Class Township Code, the County Code, and the Municipality Authorities Act. Conclusion: As a Supervisor of Exeter Township ( "Township ") and a member of the Exeter Sewer Authority ( "Authority "), 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. Based upon insufficient facts, a determination cannot be made as to whether as an Administrative Assistant for the County, you are a "public employee" subject to the Ethics Act. In your public positions, you would generally have a conflict under Section 1103(a) of the Ethics Act in matters that would financially benefit yourself, an immediate family member, or a business with which you or an immediate family member is associated. For example, as a Township Supervisor, you clearly would have a conflict and could not participate in appointing yourself to the Authority, nor could you vote to set your salary for serving on the Authority. You would not have a conflict of interest in using the authority of your office as a Township Supervisor or an Authority Kircher, 06 -511 February 3, 2006 Page 7 Board Member for the pecuniary benefit of the Township, Authority, or County since they are governmental bodies and a pecuniary benefit flowing solely to a governmental body does not form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. You as a public official or a public employee could have a conflict of interest in participating in matters that would financially benefit the Exeter Library Association depending on whether the Exeter Library Association would be considered a "business" or a "governmental body." If the Exeter Library Association would be strictly a "governmental body," the use of the authority of office as a public official or public employee for a pecuniary benefit to such "governmental body" would not in and of itself constitute a conflict of interest under the Ethics Act. On the other hand, if the Exeter Library Association would be a "business," you as a public official or public employee would have conflicts of interest in matters that would financially benefit the Exeter Library Association, such that Sections 1103(a) and 1103(j) would be implicated. Further, if the Exeter Library Association would be considered a business with which you are associated and not a "governmental body," Section 1103(f) would apply to any contracting. In each instance of a conflict, you would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Because there are no pertinent judicial rulings regarding the status of the Exeter Library Association, this advice is necessarily limited to providing you with the general guidance set forth above. 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