Loading...
HomeMy WebLinkAbout07-505 CONFIDENTIALADVICE OF COUNSEL February 5, 2007 07 -505 This responds to your letter of January 2, 2007, by which you requested a confidential 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 supervisor, who is employed as an A with a B, as to participating in matters involving a developer's proposed development of a tract of land in the township or the settlement of litigation pertaining to that tract of land where: (1) as part of the settlement of the litigation, the township would grant the developer a certain number of transferable development rights to be used elsewhere in the township; (2) the developer would use the transferable development rights to develop several other tracts to the maximum density permitted by the township; and (3) the supervisor's B would perform services for the owners of those several other tracts with respect to the sale of those tracts to the developer. Facts: You are a Supervisor for Township C ( "Township ") in County D. You have continuously served in that capacity since you were sworn into office in [date]. You have been employed as an A with E since [date]. You have submitted extensive facts, which may be fairly summarized as follows. A developer, F, is developing a tract of land in the Township consisting of approximately [number] acres, which is commonly known as the G tract. F filed a conditional use application that proposed to build [number] residential dwellings on the G tract. In [date], while sitting as a Supervisor, you participated in conditional use hearings, which culminated in a decision that denied F's conditional use application. F appealed the denial of its conditional use application. You have submitted a case summary outlining the details of the case. The appeal was first to the County D Court of Common Pleas and then to the Commonwealth Court of Pennsylvania. It is noted that the Commonwealth Court ultimately held that the Board of Supervisors did not err in denying the conditional use application on two grounds. You state that the matter was finally concluded when the Pennsylvania Supreme Court denied an intervenor's writ of certiorari. You state that F has since addressed the various deficiencies in its plan, and that F asserts that [number] units can be built on the G tract now that the plan has been Confidential Advice, 07 -505 February 5, 2007 Page 2 revised. You state that the Township's land use planner, in reviewing the Township zoning ordinance, agrees that a total of [number] development rights exists on the G tract. In [date], the Township was approached by H, an I, with regard to the G tract. At the request of H, the Township agreed to submit an application to Commonwealth Agency J for a grant to purchase a [number] acre parcel ( "Parcel K ") of the G tract for use as L. Parcel K has been appraised at $[amount]. The grant application proposes that Commonwealth Agency J would fund one -half of the property's purchase price. The Township would have to agree to fund the remainder of the purchase price in order to acquire the property. The Township expects to receive approval /rejection of the grant application sometime in [date]. F has agreed to sell Parcel K of the G tract to the Township at its appraised value, assuming that Commonwealth Agency J agrees to fund one -half of the purchase price. However, F will not sell Parcel K unless the sale is part of a comprehensive resolution of the development proposals for and litigation involving the development of the G tract. You have submitted a letter from a different B outlining the proposed terms. F proposes that: (1) F would sell Parcel K to the Township for $[amount]; (2) the Township would agree to permit F to build [number] residential dwellings on the residual of the G tract; and (3) the parties would stipulate that F would have [number] transferable development rights ( "TDRs" ) for use elsewhere in the Township, and that the Township would be granted [number] TDRs from F. In addition to the proposed development of the G tract, F seeks to develop [number] other tracts in the Township that are owned by Y (hereinafter the "Y tracts"). Y has been a client of E since [date]. E is [performing type of services for] Y in the sale of the [number] tracts to F. You state that E does not stand to gain any pecuniary benefits regardless as to if and when F ultimately settles on the Y tracts, as E's Z have already been paid in full. The Township has approved each of three conditional use applications that F filed for the Y tracts, and land development plans for the tracts are ongoing. You state that prior to the scheduling of the first conditional use hearing, you announced that you had a conflict of interest and would not be participating in the matter. You further state that you did not participate in any discussions or decisions on the conditional use applications for the Y tracts, and that you will not vote on final plan approval for the Y tracts. In order to develop the Y tracts to the maximum density permitted by the Township's approval of the conditional use applications, F must obtain [number] TDRs. If F does not obtain the [number] TDRs, then the Y tracts will consist of [number] less dwelling units than was permitted by the Township. Therefore, F desires to transfer TDRs from the G tract to the Y tracts. You state that it is possible you could be the "swing vote" as to whether the Township should agree to fund up to $[amount] to purchase Parcel K of the G tract for use as L. You express your view that it does not appear you would have a conflict of interest in voting to fund said purchase. However, you ask whether you would by implication articipate in the matters with regard to the Y tracts by voting for the purchase of Parcel K of the G tract and stipulating as part of settlement of the G tract litigation that F would have [number] TDRs to use elsewhere in the Township. You further ask whether your involvement in settling the G tract litigation could be construed as a conflict of interest on account of an increased density of dwelling units being made available for the Y tracts. Confidential Advice, 07 -505 February 5, 2007 Page 3 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 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. As a Supervisor for Township C, you are a public official subject to the provisions of the Ethics 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. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, Confidential Advice, 07 -505 February 5, 2007 Page 4 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. Section 1103(j) of the Ethics Act provides as follows: (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). 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. 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 Confidential Advice, 07 -505 February 5, 2007 Page 5 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. In Kannebecker, Opinion 92 -010, the State Ethics Commission determined that a township supervisor, who in his private capacity was an attorney, would have a conflict of interest as to matters before the township involving ongoing client(s) or client(s) for whom he was on retainer, even if he would not represent such client(s) as to the matter pending before the township. The Commission determined that as a general rule, a conflict would not exist as to former client(s), but that under certain circumstances, a conflict could exist as to former client(s) depending upon factors such as the number of prior representations of the given client and the period of time over which such occurred. In considering the above, given that you are employed as an A with E, E is a business with which you are associated. Pursuant to Section 1103(a) of the Ethics Act, as a Township Supervisor, you would generally have a conflict of interest in matters that would financially benefit yourself, E, or E's clients. See, Kannebecker, supra. You would specifically have a conflict of interest in matters involving Y or the Y tracts. In applying Section 1103(a) of the Ethics Act to your specific inquiries, you are advised that there are insufficient facts to enable a conclusive determination as to whether your participation in the Township's proposed partial funding of the purchase of Parcel K as part of the overall settlement of issues and litigation with regard to the proposed development of the G tract would constitute a conflict of interest. As part of the comprehensive resolution of said litigation, the Township would grant F [number] TDRs to be used elsewhere within the Township. Under the submitted facts, there is a reasonable expectation that F would transfer the TDRs to the Y tracts to maximize the development of those tracts. See, Amato, Opinion 89 -002. However, the submitted facts do not indicate to what extent, if any, transferal of the TDRS to the Y tracts would have a financial impact on Y or the terms of the sale of the Y tracts to F. Therefore, you are generally advised that to the extent Y would financially benefit from transferal of the TDRs to the Y tracts, you would have a conflict of interest under Section 1103(a) as to participating in the proposed resolution of issues and litigation between the Township and F involving the G tract. As noted above, 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. 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 Second Class Township Code. Conclusion: As a Supervisor for Township C ( "Township "), 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. E, with which you are employed as an A, would be considered a business with which you are associated. Pursuant to Section 1103(a) of the Ethics Act, you would generally have a conflict of interest in matters that would financially impact yourself, E, or E's clients. You would specifically have a conflict of Confidential Advice, 07 -505 February 5, 2007 Page 6 interest in matters that would financially impact Y, a client of E. To the extent that Y would financially benefit from a proposed resolution of issues and litigation between the Township and a developer, F, involving a tract known as the G tract, with the resolution including the Township granting F transferable development rights that F desires to transfer to the tracts of land being sold by Y to F, you would have a conflict of interest under Section 1103(a) as to participating in matters in furtherance of such resolution, including but not limited to the Township's partial funding of the purchase of a [number acre parcel ( "Parcel K ") of the G tract for use as L. In each instance of a conflict of interest, you would be required to abstain from participation and to fully 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 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