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HomeMy WebLinkAbout06-569 FilbeyGary R. Filbey 1274 Jefferson Road P.O. Box 12 Jefferson, PA 15344 Dear Mr. Filbey: ADVICE OF COUNSEL June 20, 2006 06 -569 This responds to your letter of May 16, 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., would impose any prohibition or restrictions upon a water authority board member with regard to participating in employee- related matters of the authority where the authority board member is an authority employee and member of the United Steel Workers of America, the union to which all authority employees except salary employees belong. Facts: As a Member of the Board of the Southwestern Pennsylvania Water Authority ( "Authority ") you request an advisory from the State Ethics Commission based upon the following submitted facts. In addition to serving as a Member of the Authority Board, you are also employed by the Authority as a utility worker. You state that you are a member of the United Steel Workers of America ( "USWA ") and that all employees of the Authority are members of the USWA except for salary employees. You note that all Authority secretaries are USWA members but are covered by a separate contract. You ask whether the Ethics Act would impose any prohibition or restrictions upon you as an Authority Board Member with regard to participating in employee - related matters of the Authority such as hiring, dismissal, or problems that might arise, given that you are an Authority employee and member of the union to which all Authority employees except salary employees belong. 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 Filbey, 06 -569 June 20, 2006 Page 2 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint, which will be investigated by the Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall be addressed. As a Member of the Authority Board, you are a public official as that term is defined in the Ethics Act, and hence you are subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) 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. (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(a), (j). The following terms pertaining to conflicts of interest under the Ethics Act are defined as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or Filbey, 06 -569 June 20, 2006 Page 3 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. "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. 65 Pa. C. S. § 1102. 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. The above statutory definition of "conflict" or "conflict of interest" includes two exclusions, hereinafter referred to as the "de minimis" exclusion and the "class /subclass exclusion." The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact, a conflict would not exist and Section 1103(a) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburq, Order 900. In order for the class /subclass exclusion to apply, two criteria must be met: (1) the affected public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official /public employee, immediate family member, or business with which the public official /public employee or Filbey, 06 -569 June 20, 2006 Page 4 immediate family member is associated must be affected "to the same degree" (in no way differently) than the other members of the class /subclass. 65 Pa.C.S. § 1102; see, Kablack, Opinion 02 -003; Graham, Opinion 95 -002 (citing Van Rensler, Opinion 90- 017); Rubenstein, Opinion 01 -007. The first criterion of the exclusion is satisfied where the members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual /business in question and the other members of the class /subclass are reasonably affected to the same degree by the proposed action. Kablack, supra. Subject to certain voting conflict exceptions, Section 1103(j) of the Ethics Act requires a public official /public employee with a conflict of interest 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. The abstention requirement is not limited merely to voting, but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. Sections 1103(b) and 1103(c) of the Ethics Act, pertaining to improper influence, provide as follows: § 1103. Restricted activities (b) Seeking improper influence. —No person shall offer or give to a public official, public employee or nominee or candidate for public office or a member of his immediate family or a business with which he is associated, anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment based on the offeror's or donor's understanding that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. (c) Accepting improper influence. —No public official, public employee or nominee or candidate for public office shall solicit or accept anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment, based on any understanding of that public official, public employee or nominee that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. 65 Pa.C.S. §§ 1103(b), (c). The term "person" is defined in the Ethics Act as follows: § 1102. Definitions "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. 65 Pa.C.S. § 1102. Reference is made to Sections 1103(b) and 1103(c) of the Ethics Act not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. Filbey, 06 -569 June 20, 2006 Page 5 In applying the above provisions of the Ethics Act to the instant matter, you are advised that Section 1103(a) of the Ethics Act would not prohibit you from participating in employee - related matters of the Authority such as hiring, dismissal, or problems that might arise, except to the extent such participation would result in a private pecuniary benefit to you, a member of your immediate family, or a business with which you or a member or your immediate family is associated. In applying the statutory definition of the term "business with which he is associated" to the submitted facts, the necessary conclusion is that the USWA is not a business with which you are associated because you are not a director, officer, owner, employee, or holder of a financial interest in the USWA. The fact that you are a USWA member is insufficient in and of itself to make the USWA a business with which you are associated. With regard to the negotiation or approval of employment contracts with Authority employees, you are advised as follows. Pursuant to Section 1103(a) of the Ethics Act, you could not participate in negotiations of contracts that would apply to you as an Authority employee, nor could you have access to confidential information that would pertain to or impact such negotiations. See, Van Rensler, Opinion 90 -017; Mattie, Advice 91 -508. You would also be prohibited from voting to approve the finalized contract that would apply to you as an Authority employee unless the two prerequisites for applying the class /subclass exclusion would be met. Van Rensler, supra. Such prerequisites would require that: (1) there would be a true subclass consisting of you and at least one other utility worker employed by the Authority who would not be a member of your immediate family and with whom you would be similarly situated as the result of relevant shared characteristics; and (2) you and the other members of the subclass would be reasonably affected to the same degree by the proposed contract. See, Kablack, supra. As for employee contracts not affecting you or any members of your immediate family, Section 1103(a) of the Ethics Act would not restrict you from having involvement with the negotiation or approval of such contracts conditioned upon the assumptions that: (1) there would be no opportunity for you to pass on confidential information to the representatives of the union for such other employees; and (2) there would be no reasonable and legitimate expectation that the terms or benefits granted under such contracts would impact contracts applicable to you as an Authority employee. See, Dirvonas, Advice 06 -527; Amato, Opinion 89 -002. The State Ethics Commission does not have the statutory authority to interpret laws other than the Ethics Act. However, it is noted that the Public Employee Relations Act provides in part as follows: § 1101.1801. Conflict of interest (a) No person who is a member of the same local, State, national or international organization as the employe organization with which the public employer is bargaining or who has an interest in the outcome of such bargaining which interest is in conflict with the interest of the public employer, shall participate on behalf of the public employer in the collective bargaining processes with the proviso that such person may, where entitled, vote on the ratification of an agreement. 43 P.S. § 1101.1801(a). It is recommended that you obtain legal advice regarding the above section of the Public Employee Relations Act. Filbey, 06 -569 June 20, 2006 Page 6 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 Municipality Authorities Act of 1945. Conclusion: As a Member of the Board of the Southwestern Pennsylvania Water 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. In response to the question of whether the Ethics Act would impose any prohibition or restrictions upon you as an Authority Board Member with regard to participating in employee - related matters of the Authority given that you are an Authority employee and member of the United Steel Workers of America ( "USWA "), the union to which all Authority employees except salary employees belong, you are advised as follows. Section 1103(a) of the Ethics Act would not prohibit you from participating in employee - related matters of the Authority except to the extent such participation would result in a private pecuniary benefit to you, a member of your immediate family, or a business with which you or a member or your immediate family is associated. The USWA is not a business with which you are associated because you are not a director, officer, owner, employee, or holder of a financial interest in the USWA. Pursuant to Section 1103(a) of the Ethics Act, you could not participate in negotiations of contracts that would apply to you as an Authority employee, nor could you have access to confidential information that would pertain to or impact such negotiations. You would also be prohibited from voting to approve the finalized contract that would apply to you as an Authority employee unless the two prerequisites for applying the class /subclass exclusion would be met. Such prerequisites would require that: (1) there would be a true subclass consisting of you and at least one other utility worker employed by the Authority who would not be a member of your immediate family and with whom you would be similarly situated as the result of relevant shared characteristics; and (2) you and the other members of the subclass would be reasonably affected to the same degree by the proposed contract. As for employee contracts not affecting you or any members of your immediate family, Section 1103(a) of the Ethics Act would not restrict you from having involvement with the negotiation or approval of such contracts conditioned upon the assumptions that: (1) there would be no opportunity for you to pass on confidential information to the representatives of the union for such other employees; and (2) there would be no reasonable and legitimate expectation that the terms or benefits granted under such contracts would impact contracts applicable to you as an Authority employee. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. It has been recommended that you obtain legal advice regarding the conflict of interest provision of the Public Employee Relations Act at 43 P.S. § 1101.1801(a). 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 Filbey, 06 -569 June 20, 2006 Page 7 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