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Home My WebLink About07-500 BECKOWITZJoanne Beckowitz, Chairperson Elizabeth Township Board of Commissioners 522 Rock Run Road Elizabeth, PA 15037 Dear Ms. Beckowitz: ADVICE OF COUNSEL January 3, 2007 07 -500 This responds to your letters of November 16, 2006, and November 28, 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 township commissioners with regard to participating in the township's non - uniformed pension plan. Facts: As Chairperson of the Board of Commissioners ( "Board ") of Elizabeth Township ("Township"), you have been authorized by the Board to request an advisory from the State Ethics Commission as to the following. You state that since the early 1980's, the Commissioners have had a mandatory pension plan whereby the Commissioners make contributions to the Township's Non - Uniformed Pension Plan ( "Pension Plan "). You pose the following specific inquiries: 1. Whether it would be appropriate under the Ethics Act for the Commissioners to continue to make mandatory contributions to the Township's Pension Plan. 2. Whether it would be legal for the Township's Pension Plan to continue to make disbursements to retired Commissioners if the current Commissioners would cease to make contributions to the Pension Plan. 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 Beckowitz, 07 -500 January 3, 2007 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 that your inquiries relate to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent that your inquiries relate to future conduct, your inquiries may and shall be addressed. It is also noted that you have established legal standing to request this advisory only as to yourself and those particular Township Commissioners who have authorized you to submit your inquiry. Hereinafter any references in this Advice to "a Township Commissioner" or "Township Commissioners" are expressly limited to you and those specific Township Commissioners who have authorized your inquiry. As Commissioners for Elizabeth Township ( "Township "), a First Class Township, you and the other Township Commissioners are public officials 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. 65 Pa.C.S. §§ 1103(a), (j). (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. Beckowitz, 07 -500 January 3, 2007 Page 3 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 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. 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. Although the State Ethics Commission does not have the statutory jurisdiction to interpret laws other than the Ethics Act, such other laws become relevant when it is necessary to determine whether a public official /public employee may receive a pecuniary benefit under the Ethics Act. In such cases, other laws must be considered to determine whether the pecuniary benefit is permitted under the Ethics Act as authorized in law or is prohibited as a private pecuniary benefit without authorization in law. A financial gain to a public official /public employee that is other than compensation provided for by law is a private pecuniary benefit. Thompson, Opinion 99 -005, at 3 -4. In the instant matter, the First Class Township Code provides the following authority to a township board of commissioners: § 56563. Insurance ... and to make contracts of insurance with any insurance company, or nonprofit hospitalization corporation, or nonprofit medical service corporation, authorized to transact business within the Commonwealth, insuring its employes or Beckowitz, 07 -500 January 3, 2007 Page 4 commissioners, or any class or classes thereof, or their dependents, under a policy or policies of group insurance covering life, health, hospitalization, medical and surgical service, or accident insurance, and may contract with any such company, granting annuities or pensions, for the pensioning of such employes, or any class or classes thereof ....The commissioners are hereby authorized, enabled and permitted to deduct from the employe's or commissioner's pay, salary or compensation such part of the premium or charge, as is payable by the employe or commissioner, and as may be so authorized by the employe or commissioner in writing. Such insurance shall be uniformly applicable to those covered and shall not give eligibility preference to, or improperly discriminate in favor of, commissioners.... 53 P.S. § 56563 (Emphasis added). On its face, Section 56563 of the First Class Township Code limits the authorization for pension plans to pension plans for township employees. Having set forth the relevant provisions of the Ethics Act and the First Class Township Code, your specific inquiries shall be considered. In considering your first specific inquiry, the question may be more accurately phrased as follows: To what extent would the Ethics Act permit a Township Commissioner to participate in and receive disbursements from the Pension Plan? The submitted facts do not indicate whether you or the other Township Commissioners are employees of the Township or meet the eligibility requirements for participating in the Pension Plan. Therefore, you are generally advised as follows. Section 1103(a) of the Ethics Act would not prohibit a Township Commissioner from participating in and receiving disbursements from the Township's Pension Plan subject to the conditions that: (1) the Township Commissioner would be permitted to participate in the Pension Plan pursuant to the First Class Township Code; and (2) the Township Commissioner would meet all eligibility requirements for participation in the Pension Plan. Your second specific inquiry may not be addressed because the State Ethics Commission does not have the statutory jurisdiction to provide advisory opinions regarding proposed actions by pension plans. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Conclusion: As Township Commissioners for Elizabeth Township ( "Township "), you and the other Township Commissioners who have authorized your inquiry are public officials subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Section 1103(a) of the Ethics Act would not prohibit a Township Commissioner from participating in and receiving disbursements from the Township's Non - Uniformed Pension Plan ( "Pension Plan ") subject to the conditions that: (1) the Township Commissioner would be permitted to participate in the Pension Plan pursuant to the First Class Township Code; and (2) the Township Commissioner would meet all eligibility requirements for participation in the Pension Plan. The State Ethics Commission does not have the statutory jurisdiction to provide advisory opinions regarding proposed actions by pension plans. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Beckowitz, 07 -500 January 3, 2007 Page 5 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, Robin M. Hittie Chief Counsel