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HomeMy WebLinkAbout06-589 ConnDavid F. Conn, Esquire Rudolph, Pizzo & Clarke, LLC Four Neshaminy Interplex Suite 105 Trevose, PA 19053 Dear Mr. Conn: ADVICE OF COUNSEL October 10, 2006 06 -589 This responds to your letter of September 8, 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 an officer and a principal of an insurance company, from accepting business for his insurance company from a law firm that regularly represents applicants before the township board of supervisors with regard to land use issues, and whether the township supervisor must abstain from voting on a land use application when his insurance company has accepted business from the law firm of the attorney who is representing the applicant before the township board of supervisors. Facts: As Solicitor for Northampton Township ( "Township ") in Bucks County (" ounty "), you request an advisory on behalf of George Komelasky ( "Komelasky "), who is a Township Supervisor. In addition to serving as a Township Supervisor, Komelasky is an officer and one of several principals of an insurance company (the "Company "). Komelasky was recently contacted by an attorney (the "Attorney") a law firm (the "Firm ") located in the County. The Attorney indicated that the Firm is interested in purchasing its insurance needs through the Company. Any fees charged to the Firm would be paid to the Company. Komelasky would not be directly paid any fees, and he would not receive a direct benefit from the Firm's business with the Company. The Firm and the Attorney have regularly represented applicants before the Township Board of Supervisors with respect to land use issues. It is anticipated that the Firm and the Attorney will continue to represent applicants before the Board of Supervisors. However, it is not anticipated that the Attorney or any other partners in the Firm will themselves be applicants before the Board of Supervisors. Conn /Komelasky, 06 -589 October 10, 2006 Page 2 Based upon these facts, the following specific inquiries are posed: (1) Would the Ethics Act prohibit or restrict Komelasky from accepting business for the Company from the Firm? (2) If the Company would accept business from the Firm, would Komelasky be required to abstain from voting on a land use application before the Board of Supervisors where the applicant is represented by an attorney from the Firm? 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, Komelasky 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. Conn /Komelasky, 06 -589 October 10, 2006 Page 3 "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. 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. Conn /Komelasky, 06 -589 October 10, 2006 Page 4 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 noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position - -or confidential information obtained by being in that position- -for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, Metrick, Order 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity or private client(s). Miller, Opinion 89- 024; Kannebecker, Opinion 92 -010. If a private employer or business with which the public official /public employee is associated or a client of the private employer or business would have a matter pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter. Miller, supra; Kannebecker, supra. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. The abstention requirement would not be limited merely to voting, but would extend 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. In considering the above, the Company would be considered a business with which Komelasky, as an officer and a principal, is associated. Pursuant to Section 1103(a) of the Ethics Act, as a Supervisor, Komelasky would generally have a conflict of interest in matters that would financially impact himself, the Company, or the Company's client(s). See Miller, supra; Kannebecker, supra. In each instance of a conflict, Komelasky would be required to abstain from participating and to satisfy the disclosure requirements under Section 1103(j) of the Ethics Act. Having established the above general principles, your specific inquiries shall be addressed. As to whether it would be permissible under the Ethics Act for Komelasky to accept business for the Company from the Firm, you are advised that your inquiry cannot be addressed within the statutory parameters of the Ethics Act, Sections 1107(10), (11), because the inquiry relates to Komelasky's conduct in his private capacity, over which the Commission has no jurisdiction. The Ethics Act regulates the conduct of a public official in his public capacity. However, pursuant to Section 1103(a) of the Ethics Act, Komelasky would generally have a conflict of interest in his public capacity as a Supervisor in matters that would involve himself, an immediate family member, or a business with which he or a member of his immediate family is associated, and he would specifically have a conflict of interest in matters that would involve the Company or the Company's clients. See Miller, supra; Kannebecker, supra. In each instance of a conflict of interest, Komelasky would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Conn /Komelasky, 06 -589 October 10, 2006 Page 5 As to your second inquiry, you are advised that if the Company would accept business from the Firm, Komelasky would have a conflict of interest under Section 1103(a) of the Ethics Act as to matters before the Board of Supervisors involving the Firm. See Miller, supra; Kannebecker, supra. Komelasky would specifically have a conflict of interest where an attorney from the Firm would be representing an applicant before the Board of Supervisors with respect to land use issues. In each instance of a conflict, Komelasky would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. 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 respective municipal code. Conclusion: As a Supervisor for Northampton Township ( "Township "), Komelasky 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. The insurance company (the "Company ") of which Komelasky is an officer and a principal would be considered a business with which Komelasky is associated. The question of whether it would be permissible under the Ethics Act for Komelasky to accept business for the Company from a law firm (the "Firm" that regularly represents applicants before the Board of Supervisors cannot be addressed within the statutory parameters of the Ethics Act, Sections 1107(10), (11), because the inquiry relates to Komelasky's conduct in his private capacity rather than to his conduct in his capacity as a public official. However, pursuant to Section 1103(a) of the Ethics Act, Komelasky would generally have a conflict of interest in his public capacity as a Supervisor in matters that would involve himself, an immediate family member, or a business with which he or a member of his immediate family is associated, and he would specifically have a conflict of interest in matters that would involve the Company or the Company's clients. If the Company would accept business from the Firm, Komelasky would have a conflict of interest under Section 1103(a) of the Ethics Act as to matters before the Board of Supervisors involving the Firm. Komelasky would specifically have a conflict of interest where an attorney from the Firm would be representing an applicant on land use issues before the Board of Supervisors. In each instance of a conflict of interest, Komelasky would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. 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 Conn /Komelasky, 06 -589 October 10, 2006 Page 6 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