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HomeMy WebLinkAbout06-587 Cernic, Jr.Ed Cernic, Jr., Controller County of Cambria 200 South Center Street Ebensburg, PA 15931 Dear Mr. Cernic: ADVICE OF COUNSEL September 29, 2006 06 -587 This responds to your letters of August 7, 2006 and August 29, 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 prohibitions, restrictions, or financial disclosure requirements upon a county controller who also serves on the county retirement board with regard to using complimentary travel and lodging offered to him as the winner of a drawing at a Pennsylvania Association of Public Employee Retirement Systems ( "PAPERS ") conference, when: (1) the complimentary travel and lodging would be for attendance at an out -of -state informational conference pertaining to pension funds and obligations of retirement board members; (2) the donor of the prize would be PAPERS, an association that includes both public retirement systems and service providers as members; and (3) the out -of -state conference would be produced by a conference organizer that had involvement in organizing PAPERS and that produces the PAPERS annual conference. Facts: You are the Controller of Cambria County ( "County "). In your capacity as the ontroller, you also serve on the County Retirement Board ( "Retirement Board ") as the Secretary and as a voting member. In April 2006, you attended a conference held by PAPERS. PAPERS is an association with a membership consisting of approximately forty public retirement systems as voting "participating members' and thirty service providers to the public pension plan community as non - voting "associate members." At the conference, you were picked, by way of a drawing, to attend an informational conference scheduled to be held in Arizona in December 2006. You were informed that the travel and lodging expenses to attend the conference would be paid by PAPERS and that there would be no cost to the County. The Arizona conference is independent of PAPERS and is produced by Information Management Network ( "IMN "). The conference is held to update individuals on their obligations as members of retirement boards and to provide information on critical pension issues and fiduciary responsibilities. Cernic, 06 -587 September 29, 2006 Page 2 Included with your submission is an e-mail dated August 15, 2006, from the IMN Senior Vice President of Business Development to you, which indicates the following. IMN was involved in the organization of PAPERS. IMN is also the producing agent for the PAPERS annual conference. IMN would never be in a position to do any type of business with the County Controller's Office or the Retirement Board, as it is nothing more than a facilitator of educational forums for public pension plans. You ask whether the Ethics Act would prohibit you or another individual serving on the Retirement Board from accepting the complimentary travel and lodging from PAPERS. 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. It is also initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may only be given to the person whose conduct is in question, his authorized representative, or, when applicable, his appointing body or employer. To the extent you have inquired as to the conduct of other members of the Retirement Board without their express permission, you are considered a third party without legal standing. Therefore, this advisory must necessarily be limited to addressing only your prospective conduct. As the County Controller, 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. 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 Cernic, 06 -587 September 29, 2006 Page 3 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: § 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. Cernic, 06 -587 September 29, 2006 Page 4 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. In the instant case, it appears based upon the totality of the submitted facts that you attended the PAPERS conference at County expense. Under the Commission's reasoning as set forth in Stefanko, Opinion 90 -015, the complimentary travel and lodging awarded by the drawing at the PAPERS conference belongs to the County (see, Stefanko, supra, holding that any frequent flyer credits or award certificates received by or due a public official or public employee in connection with official travel paid for by his governmental employer would be the property of that employer). In the instant matter, but for your status as a public official, you would not have been in the position to attend the PAPERS conference where you were chosen for the award of complimentary travel and lodging. Your attendance at the PAPERS conference at the County's expense would be considered to have been in aid of the performance of your duties as a public official, and therefore a use of "authority of office or employment." The award of complimentary travel and lodging for attendance at the IMN conference is a pecuniary benefit belonging to the County. See also, Confidential Advice, 91 -528 (concluding that where a public employee was awarded a computer software prize while attending an open house in the performance of his duties as a public employee, the prize belonged to the governmental employer). The County, by way of the Retirement Board, would be responsible for determining who would be the recipient of the complimentary travel and lodging. In the context of this advisory, based upon submitted facts, it cannot be determined whether the Arizona conference would sufficiently relate to your official duties for the County so as to avoid any potential for a private pecuniary benefit. See, Fiorello, Order No. 1363 at 84. Therefore, in order to avoid a possible conflict of interest under Section 1103(a) of the Ethics Act, you should abstain from participation in the Retirement Board's determination as to who shall be the recipient of the complimentary travel and lodging, and also satisfy the disclosure requirements of Section 1103(j) of the Ethics Act as to your abstention. Parenthetically, it is noted that in the event the Retirement Board would determine that you would be the recipient of the complimentary travel and lodging, then depending upon the particular payment arrangements, you could be required, pursuant to the following provision of the Ethics Act, to disclose on your Statement of Financial Interests form the source and amount of the travel and lodging expenses paid by PAPERS: § 1105. Statement of financial interests (b) Required information. - -The statement shall include the following information for the prior calendar year with regard to the person required to file the statement: (7) The name and address of the source and the amount of any payment for or reimbursement of actual expenses for transportation and lodging or hospitality received in connection with ublic office or employment where such actual expenses for transportation and lodging or hospitality exceed $650 in the course of a single occurrence. This paragraph shall not apply to expenses reimbursed by a governmental body or to expenses Cernic, 06 -587 September 29, 2006 Page 5 reimbursed by an organization or association of public officials or employees of political subdivisions which the public official or employee serves in an official capacity. To illustrate the requirement for disclosure of payments /reimbursements for transportation /lodging /hospitality received in connection with public office or employment pursuant to Section 1105(b)(7), you are advised that if the expenses for the complimentary travel and lodging would be paid directly to you by PAPERS or would be reimbursed to you by PAPERS and the amount of the payments /reimbursement would exceed $650, you would be required to disclose the name and address of the source (PAPERS) and the amount of such payments /reimbursement. However, if PAPERS would submit a payment for the complimentary travel and lodging to the County and the County would then pay for your travel and lodging, you would not be required to disclose a source or amount on your Statement of Financial Interests as Section 1105(b)(7) does not require disclosure of expenses reimbursed by a governmental body. 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 the Controller for Cambria County ( "County "), 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. Complimentary travel and lodging offered to you as the winner of a drawing at the Pennsylvania Association of Public Employee Retirement Systems ( "PAPERS') conference, which you attended in your official County capacity at County expense, belongs to the County. The County, by way of the County Retirement Board ( "Retirement Board "), would be responsible for determining who would be the recipient of the complimentary travel and lodging. In order to avoid a possible conflict of interest under Section 1103(a) of the Ethics Act, you should abstain from participation in the Retirement Board's determination as to who shall be the recipient of the complimentary travel and lodging and also satisfy the disclosure requirements of Section 1103(j) of the Ethics Act as to your abstention. If the Retirement Board would determine that you would be the recipient of the complimentary travel and lodging and the expenses for the complimentary travel and lodging would exceed $650 and either be paid directly to you by PAPERS or reimbursed to you by PAPERS, you would be required to disclose the name and address of the source (PAPERS) and the amount of such payments /reimbursement. If instead PAPERS would submit a payment for the expenses for the complimentary travel and lodging to the County and the County would then pay for your travel and lodging, you would not be required to disclose the source or amount on your Statement of Financial Interests as Section 1105(b)(7) does not require disclosure of expenses reimbursed by a governmental body. 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 Cernic, 06 -587 September 29, 2006 Page 6 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