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HomeMy WebLinkAbout06-612 WagenmannRonald G. Wagenmann Township Manager Upper Merion Township 175 West Valley Forge Road King of Prussia, PA 19406 -1802 Dear Mr. Wagenmann: ADVICE OF COUNSEL December 27, 2006 06 -612 This responds to your letter of November 21, 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 or restrictions upon a township manager who anticipates purchasing a new home from a developer that does business in the township and that is presently involved in litigation with the township. Facts: You are the Township Manager of Upper Merion Township ( "Township ") in Montgomery County. A Township ordinance requires you to reside within the Township. Twenty -four years ago, you purchased your current Township residence from Gambone Brothers Development Corporation (`Gambone "), which you describe as a "long -time developer" in the Township. You and your spouse anticipate purchasing a new home from Gambone in the future. The home would be in a subdivision that was approved by the Township Board of Supervisors in 2005. The subdivision is currently commencing construction. You state that the price of the new home would be determined after you and your spouse would meet with Gambone's sales agents. You note that the Township, represented by its Solicitor, is currently involved in litigation with Gambone with regard to the construction of a retaining wall at a different project. You state that at a televised business meeting of the Township Board of Supervisors, you made a public announcement indicating that you and your spouse might purchase a new home from Gambone at a fair market value price. You have submitted a copy of your public statement. It is noted that in your public statement, you indicated that when the Board approved the Gambone subdivision in 2005, you informed the Board that you and your spouse were interested in possibly purchasing a home in that subdivision when it commenced construction. Wagenmann, 06 -612 December 27, 2006 Page 2 You state that the Township Planner, the Planning Commission, and the Township Engineer review all subdivision and land development plans for the Township. The Township Planner makes recommendations to the Township Board of Supervisors for the Board's final approval. You state that as per the Pennsylvania Uniform Construction Code, the Township Codes Enforcement Department is responsible for conducting construction inspections. The developer is responsible for obtaining all necessary permits and paying all applicable fees. You request an advisory as to whether your purchase of a new home in the Township from Gambone would raise any concerns under the Ethics Act. 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 further noted that, pursuant to Sections 1107(10) and (11) 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 the Township Manager, you are a public official /public employee 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 Wagenmann, 06 -612 December 27, 2006 Page 3 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 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. 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 each instance of a conflict, Section 1103(j) of the Ethics Act requires the public official /public 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. The abstention requirement would not be limited to merely 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. 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 Wagenmann, 06 -612 December 27, 2006 Page 4 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 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. In applying Section 1103(a) of the Ethics Act to your inquiry, you are advised that Section 1103(a) would not prohibit you in your private capacity from purchasing a new home from Gambone. However, your purchase of a home from Gambone, a developer that does business in the Township and that is involved in litigation with the Township, would present the potential for conflicts of interest to arise for you in your capacity as Township Manager. The Commission has determined that in some situations, conflicts of interest may exist based upon business relationships. See, e.q., Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010; Snyder, Order 979 -2, affirmedyder v. State Ethics Commission, 686 A.2d 843 (Pa. Commw. 1996), alloc. den., No. 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). Additionally, "reciprocity of power" may form the basis for a conflict of interest under Section 1103(a) of the Ethics Act, such as when a public official /public employee has official duties or authority as to a person or entity that, in some other context, may exercise influence or control over the public official /public employee, member(s) of his immediate family, or businesses with which he or member(s) of his immediate family are associated. See, Confidential Opinion, 05 -004; Elisco, Opinion 00 -003; Woodrinq, Opinion 90 -001; Bassi, Opinion 86- 007 -R. In each instance of a conflict of interest, you would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Wagenmann, 06 -612 December 27, 2006 Page 5 However, since the requisite elements of a conflict of interest under Section 1103(a) include a prohibited private pecuniary benefit, it would be ossible for you to avoid a conflict of interest in matters pertaining to Gambone if the following conditions would be satisfied: (1) your purchase of a new home /property from Gambone would occur in an arms - length transaction; (2) the price that you and your wife would pay for the home and property would be no less than the true fair market value of same; (3) the transaction would occur under commercially reasonable terms that Gambone would routinely make available to the general public; and (4) there would be no other basis for a conflict of interest than the particular anticipated transaction that you have disclosed. If you and your wife decide to purchase a home from Gambone, it is recommended that you obtain professional /legal advice to ensure that the above conditions are satisfied. 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 the Township Manager for Upper Merion Township ("Township "), you are a public official /public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The Ethics Act would not prohibit you in your private capacity from purchasing a new home from Gambone Brothers Development Corporation ("Gambone"), a developer that does business in the Township and that is presently involved in litigation with the Township. However, your purchase of a home from Gambone would present the potential for conflicts of interest to arise for you in your capacity as Township Manager. In each instance of a conflict of interest, you would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. It would be possible for you to avoid a conflict of interest in matters pertaining to Gambone if the following conditions would be satisfied: (1) your purchase of a new home /property from Gambone would occur in an arms - length transaction; (2) the price that you and your wife would pay for the home and property would be no less than the true fair market value of same; (3) the transaction would occur under commercially reasonable terms that Gambone would routinely make available to the general public; and (4) there would be no other basis for a conflict of interest than the particular anticipated transaction that you have disclosed. 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 Wagenmann, 06 -612 December 27, 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, Robin M. Hittie Chief Counsel