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HomeMy WebLinkAbout07-523 EDWARDSDenise Edwards 215 South Avenue Wilkinsburg, PA 15221 Dear Ms. Edwards: ADVICE OF COUNSEL April 18, 2007 07 -523 This responds to your letter dated February 22, 2007, received March 13, 2007, by which you requested an advisory from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., would present any prohibitions or restrictions upon a borough council president, who owns property located in an area to be redeveloped pursuant to a project undertaken by the borough in cooperation with the county redevelopment authority, with regard to participating in matters before the borough council that would pertain to said redevelopment project. Facts: As President of Council of the Borough of Wilkinsburg ( "Borough ") in Allegheny County, you request an advisory from the State Ethics Commission based upon submitted facts that may be fairly summarized as follows. In 2005, the Allegheny County Redevelopment Authority ( "Redevelopment Authority "), in cooperation with the Borough, undertook a redevelopment project know as the `Peebles Square Project" ("the Project "). The Project is funded through the Department of Housing and Urban Development ( "HUD "). Your home, in which you have resided for the last twenty -five years is located in the area to be redeveloped by the Project. You state that the Redevelopment Authority and HUD have received letters of objection from Borough residents indicating that you have a conflict of interest in the matter. You have submitted copies of correspondence of various dates from Patricia McGrail, Esquire, Solicitor for the Borough, addressed to individuals at the Allegheny County Department of Economic Development and the Allegheny County Law Department. In said correspondence, Ms. McGrail notes that you and your spouse own a home located in the area to be redeveloped by the Project, and she states that she advised you to refrain from participating in meetings, discussions, or decisions with regard to the Project based upon a conflict of interest under the Ethics Act. Ms. McGrail further states that in a written communication with the Borough, you indicated that you Edwards, 07 -523 April 18, 2007 Page 2 own property in the Peebles Square area and that you will not participate in deliberations or decisions with regard to the Project. Ms. McGrail additionally states that you have been advised of the provisions of the Borough's own Code of Ethics and have agreed to comply with its provisions. You have also submitted copies of minutes of Borough Council meetings held between July 2005 and September 2006. In a letter received by the State Ethics Commission on March 14, 2007, Ms. McGrail states that the minutes indicate you did not participate in any votes with regard to the Project. You have been asked by the Redevelopment Authority to obtain an advisory from the State Ethics Commission for purposes of permitting the Project to move forward despite your residence in the Project area. It is noted that you have submitted a copy of correspondence dated February 7, 2007, from Nathan Wetzel of the Allegheny Department of Economic Development (the "Department "), addressed to Ms. McGrail. In said correspondence, Mr. Wetzel references a letter the Department received from HUD by which the Department was requested to obtain an advisory from the State Ethics Commission with regard to the applicability of the Ethics Act to the instant matter. By way of additional correspondence received by the State Ethics Commission on April 16, 2007, Ms. McGrail submitted a copy of a letter dated April 12, 2007, from Dennis Davin, Director of the Department, addressed to John Tolbert of HUD's Pittsburgh office. Mr. Davin's letter indicates, inter alia, your home is one -half of a side - by -side duplex, that the other half of the duplex has already been acquired for the Project, and that the acquisition of your property would be of significant importance to the successful completion of the Project. The letter states that if your property would be purchased, you would generally receive the same interests or benefits received by other owner - occupants of property in the Project area. In this regard, the letter notes that the amount paid to owners of abandoned units ($45,000 per parcel) is higher than the appraisal amount of your parcel ($30,000). However, the letter further notes that an offer price for your property based upon the higher amount was deemed reasonable because, unlike other units purchased, your property is occupied, maintained and habitable. The letter additionally notes that the only other owners of an occupied building in the area received a sales price for a three -unit structure based upon the above noted $45,000 per unit and that they were also offered a relocation allowance. 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. Edwards, 07 -523 April 18, 2007 Page 3 As President of Borough Council, you are a public official as that term is defined in the Ethics Act, and hence you are 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. "Immediate family." A parent, spouse, child, brother or sister. 65 Pa.C.S. § 1102. 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 Edwards, 07 -523 April 18, 2007 Page 4 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 of interest, Section 1103(] 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 is not limited merely to voting, but extends 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 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, you are advised as follows. Pursuant to Section 1103(a) of the Ethics Act, you would generally have a conflict of interest in matters before Borough Council that would financially impact you or an immediate family member. Given that you and your spouse own property located in the area that is to be redeveloped pursuant to the Project, you would specifically have a conflict of interest in matters pertaining to the Project unless one of the exclusions to the statutory definition of "conflict" or "conflict of interest" would be applicable. The statutory definition of "conflict" or "conflict of interest" includes two exclusions, hereinafter referred to as the "de minimis" exclusion and the "class /subclass exclusion." The de minimis exclusion precludes a finding of a conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact upon a public official, a member of his immediate family, or a business with which he or a member of his immediate family is associated, a conflict would not exist and Sections 1103(a) and 1103( of the Ethics Act would not restrict participation in such matter. See, Schweinsburq, Order 900. In that your inquiry involves your participation in a Borough redevelopment project that would include the sale of your property, this exclusion would generally not be applicable. In order for the class /subclass exclusion to apply, two criteria must be met: (1) the affected public official /public employee, immediate family member, or business with Edwards, 07 -523 April 18, 2007 Page 5 which the public official /public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be affected "to the same degree" as the other members of the class /subclass. 65 Pa.C.S. § 1102; see, Graham, Opinion 95 -002 (citing Van Rensler, Opinion 90 -017); Rubenstein, Opinion 01 -007. The first criterion of the exclusion is satisfied where the members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual /business in question and the other members of the class /subclass are reasonably affected to the same degree by the proposed action. Kablack, Opinion 02 -003. In the instant matter, the submitted facts do not enable a conclusive determination as to whether you would be a member of an appropriate subclass or whether you would be affected by matters pertaining to the Project "to the same degree" as other members of such a subclass. Accordingly, you are generally advised that in order for the class /subclass exclusion to apply, there would have to be at least one other property owner owning property in the Project Area: (1) who would be similarly situated to you so as to qualify with you as a member of a subclass; (2) who would not be a member of your immediate family and /or a co -owner of your property; and (3) who would be reasonably affected to the same degree as you would be affected by the Borough Council's action as to such matter. Kablack, supra. When neither the de minimis exclusion nor the class /subclass exclusion would be applicable, you would have a conflict of interest under Section 1103(a) of the Ethics Act in matters before Borough Council pertaining to the Project. 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. 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 Borough Code, 53 P.S. § 46001 et seq., or the Wilkinsburg Borough Code of Ethics. To the extent there would be a conflict between the Ethics Act and the Borough Code or the Wilkinsburg Borough Code of Ethics, the Ethics Act would prevail. See, 65 Pa.C.S. § 1112. Conclusion: As President of Council of the Borough of Wilkinsburg ( "Borough "), 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. Given that you and your spouse own property located in an area that is to be redeveloped pursuant to a redevelopment project known as the "Peebles Square Project" ( "the Project "), you would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act in matters pertaining to the Project unless one of the exclusions to the statutory definition of "conflict" or "conflict of interest" (the "de minimis" exclusion or the "class /subclass exclusion ") would be applicable. In that your inquiry involves your participation in a Borough redevelopment project that would include the sale of your property, the de minimis exclusion would generally not be applicable. The submitted facts do not enable a conclusive determination as to whether the class /subclass exclusion would be applicable. In order for the class /subclass exclusion to apply, there would have to be at least one other property owner owning property in the Project Area: (1) who would be similarly situated to you so as to qualify with you as a member of a subclass; (2) who would not be a member of your immediate family and /or a co -owner of your property; and (3) who would be reasonably affected to the same degree as you would be affected by the Edwards, 07 -523 April 18, 2007 Page 6 Borough Council's action as to such matter. When neither the de minimis exclusion nor the class /subclass exclusion would be applicable, you would have a conflict of interest under Section 1103(a) of the Ethics Act in matters before Borough Council pertaining to the Project. 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