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HomeMy WebLinkAbout07-534 OrchowskiCharles P. McCullough Eckert Seamans Cherin & Mellott, LLC U.S. Steel Tower 600 Grant Street, 44 Floor Pittsburgh, PA 15219 Dear Mr. McCullough: ADVICE OF COUNSEL May 15, 2007 07 -534 This responds to your letter dated March 27, 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 township commissioner with regard to participating in matters pertaining to various litigation involving a lease entered into by the township and a communications business where: (1) the township commissioner is a partner in a limited liability corporation that previously provided consulting services to said communications business; and (2) all of the township commissioners have been named as defendants in a lawsuit filed by the communications business. Facts: As Solicitor for Upper St. Clair Township ( "Township ") in Allegheny ounty, you have been authorized by Township Commissioner Robert W. Orchowski ( "Orchowski ") to request an advisory from the State Ethics Commission on his behalf as to the following. Orchowski has been a Member of the Township Board of Commissioners ("Board ") since January 1998. On June 28, 1996, prior to Orchowski's service on the Board, the Township and Crown Communications ( "Crown ") entered into a ground lease of Township property "the Lease") for the purpose of constructing a cell tower. Five Township residents subsequently filed a lawsuit against the Township and Crown with regard to the Lease. The Commissioners were not named as parties to that lawsuit. Thereafter, in 2007, Crown filed a lawsuit against the Township and the Commissioners, including Orchowski, with regard to the cell tower. You state that although there has been vigorous litigation by way of a series of preliminary objections and motions for summary judgment, a trial has not yet been held and the litigation remains outstanding to date. McCullouqh /Orchowski, 07 -534 May 15, 2007 Page 2 You have submitted copies of the Complaints filed by the Township residents and Crown in the Allegheny County Court of Common Pleas relative to the aforementioned lawsuits. You have also submitted an affidavit completed by Orchowski, which is incorporated herein by reference. At some point prior to May 2004, Orchowski formed a consulting business, "Hillcrest Group, LLC" ( "the Corporation "), with two partners, Joseph Pezze ( "Pezze ") and Byron Hoot. During May 2004, the Corporation, through Pezze, provided consulting services to Crown with regard to emergency generator air quality permitting requirements. Although Orchowski did not personally perform any of the services for Crown, the revenues received from Crown were part of the Corporation's revenues. You state that an entity entitled The Deerfield Tower Legal Defense Fund" (hereinafter "Defense Fund ") has been identified as a party in interest in the Township residents' litigation against the Township and Crown, and that the Defense Fund has provided legal counsel for the plaintiffs in said litigation. On February 20, 2007, the Township filed a Writ of Summons against the Defense Fund and certain individuals to preserve the Township's right of recourse against persons who may have tortiously interfered with the Township's contractual relationship with Crown. You state that Orchowski did not participate in the deliberations or vote with regard to the filing of the Writ of Summons. Orchowski states that he has never been a member of or a contributor to the Defense Fund. You have submitted a copy of the Docket Report for the 2007 lawsuit filed by the Township against the Defense Fund in the Allegheny County Court of Common Pleas. Orchowski states that except for the abovementioned revenues for providing consulting services to Crown in May 2004, neither he nor the Corporation has received anything of value from or through any of the parties to the aforementioned lawsuits. Based upon the above submitted facts, you pose the following specific inquiries: 1. Whether Orchowski would be permitted to vote on any matters or participate in any of the Township's deliberations concerning any of the aforementioned lawsuits; and 2. Whether Orchowski would be permitted to attend a p ublic Township meeting and take his seat at the Commissioner's panel during any part of the meeting in which the aforementioned lawsuits would be discussed or deliberated upon, and whether Orchowski would be permitted to participate in a public vote with respect to any such discussions or deliberations. It is administratively noted that in 2005, you obtained an Advice of Counsel under similar facts prior to the filing of the most recent lawsuits by Crown and the Township. See, McCullough, Advice 05 -500. 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 s to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an McCullouqh /Orchowski, 07 -534 May 15, 2007 Page 3 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 Township Commissioner, Orchowski is a public official 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 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 McCullouqh /Orchowski, 07 -534 May 15, 2007 Page 4 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, 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. 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. Examples of conduct that would be prohibited under Section 1103(a) of the Ethics Act would include the participation in an official capacity as to matters involving a business with which the public official /public employee is associated in his private capacity or private clients(s). Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010. A reasonable and legitimate anticipation of the development of a financial /business relationship would also support a finding of a conflict of interest. Adams /Rendell (McGinty), Opinion 07 -009; Amato, Opinion 89 -002. In each instance of a voting 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. 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. 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 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 McCullouqh /Orchowski, 07 -534 May 15, 2007 Page 5 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). 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. In applying Section 1103(a) of the Ethics Act to the submitted facts, you are advised that the Corporation would be a business with which Orchowski, as an owner /partner, is associated. As a general rule, pursuant to Section 1103(a) of the Ethics Act, Orchowski would have a conflict of interest in matters before the Board that would financially impact him, the Corporation, or the Corporation's clients. See, Miller, supra; Kannebecker, supra. In Kannebecker, supra, 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 clients 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. Based upon the Kannebecker decision, you are advised that a conflict generally would not exist for Orchowski as to a former client of the Corporation, but under certain circumstances, a conflict could exist as to a former client of the Corporation depending upon factors such as the number of prior business transactions involving the client and the period of time over which such occurred. Your specific inquiries essentially ask whether Orchowski would have a conflict of interest in matters before the Board pertaining to the aforesaid litigation between the several parties due to the fact that the Corporation previously performed consulting services for Crown on one occasion in May 2004. You are advised that to the extent the Corporation's prior business dealings with Crown were limited to a single, arms - length business transaction completed in May 2004, the past business transaction in and of itself would not form the basis for a conflict of interest for Orchowski now as to the aforesaid litigation. Orchowski would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to matters before the Board pertaining to Crown where: (1) there would be a reasonable and legitimate anticipation that a business relationship would again form between the Corporation and Crown; or (2) there would be some other basis for Orchowski to have a conflict of interest under Section 1103(a) of the Ethics Act as to such matters. See, Adams /Rendell (McGinty), supra; Amato, supra. McCullouqh /Orchowski, 07 -534 May 15, 2007 Page 6 The fact that Crown has sued Orchowski would be the basis for a conflict of interest in matters pertaining to Crown. See, DeLano, Opinion 88 -008; cf., Oswalt, Advice 07 -524; Hiscott, Advice 06 -517. In each instance of a conflict of interest, a public official is generally required to abstain fully from participation and to satisfy the disclosure requirements of Section 1103(j). However, in light of the submitted fact that all of the Township Commissioners have been sued by Crown, Section 1103(j) of the Ethics Act would permit Orchowski to vote in matters pertaining to Crown provided the requirements for disclosure of the conflict would be satisfied. See, Pavlovic, Opinion 02 -005. As for other forms of official participation by Orchowski, since all of the Township Commissioners have been named as Defendants in the Crown lawsuit, it is recommended that Orchowski obtain legal advice regarding the possible applicability of the common law Rule of Necessity. See, Stilp v. Commonwealth, 588 Pa. 539, 905 A.2d 918 (2006); Stroudsburg Area School District v. Kelly, 701 A.2d 1000 (Pa. Cmwlth. 1997). Lastly, it is noted that Sections 1103(b) and 1103(c) of the Ethics Act would prohibit improper influence /understandings with regard to the aforesaid litigation. 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. 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 Township's Home Rule Charter. Conclusion: As a Commissioner for Upper St. Clair Township ( "Township "), Robert Orchowski "Orchowski" 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. Hillcrest Group LLC ( "the Corporation "), a consulting business in which Orchowski is an owner /partner, would be considered a business with which Orchowski is associated. As a general rule, pursuant to Section 1103(a) of the Ethics Act, Orchowski would have a conflict of interest in matters before the Township Board of Commissioners ( "Board ") that would financially impact him, the Corporation, or the Corporation's clients. A conflict generally would not exist as to a former client of the Corporation, but under certain circumstances, a conflict could exist as to a former client of the Corporation depending upon factors such as the number of prior business transactions involving the client and the period of time over which such occurred. To the extent the Corporation's prior business dealings with Crown Communications ("Crown ") were limited to a single, arms - length business transaction completed in May 2004, the past business transaction in and of itself would not form the basis for a conflict of interest for Orchowski now as to litigation involving Crown. Orchowski would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to matters before the Board pertaining to Crown where: (1) there would be a reasonable and legitimate anticipation that a business relationship would again form between the Corporation and Crown; or (2) there would be some other basis for Orchowski to have a conflict of interest under Section 1103(a) of the Ethics Act as to such matters. The fact that Crown has sued Orchowski would be the basis for a conflict of interest in matters pertaining to Crown. In each instance of a conflict of interest, a public official is generally required to abstain fully from participation and to satisfy the disclosure requirements of Section 1103(j). Under the submitted fact that all of the Township Commissioners have been sued by Crown, Section 1103(j) of the Ethics Act would permit Orchowski to vote in matters pertaining to Crown provided the requirements for disclosure of the conflict would be satisfied. As for other forms of official participation by Orchowski, it is recommended that legal advice be McCullouqh /Orchowski, 07 -534 May 15, 2007 Page 7 obtained regarding the possible applicability of the common law Rule of Necessity. Sections 1103(b) and 1103(c) of the Ethics Act would prohibit improper influence /understandings with regard to the aforesaid litigation. 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