HomeMy WebLinkAbout07-551ADVICE OF COUNSEL
July 2, 2007
07 -551
This responds to your letters of May 14, 2007, and May 22, 2007, by which you
requested 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 present any prohibitions or restrictions upon a Member of
the Pennsylvania A with regard to leasing or selling commercial property owned by said
Member and the Member's spouse to a tenant or buyer who might seek state grants
and loans to fund the lease or sale.
Facts: You are currently a Member of the Pennsylvania A ( "Legislator"). You
were elected to this position in [Year]. In this position, you serve as a member of the A,
B, C, and D Committees within the Pennsylvania A.
You and your spouse own a commercial facility ( "Facility ") located in F Township,
G County with an address of Address H. This Facility is not in your I.
You purchased the Facility in [Year] and leased it to a family -owned corporation
( "Corporation "). In [Yearl, you sold your controlling share of the Corporation to an
investment group. This investment group agreed to continue to lease the Facility.
However, at this time, the Corporation does not wish to renew the lease. You have
offered the Facility for sale or lease.
A local realtor has found a prospective tenant /buyer (hereinafter referred to as
the Tenant /Buyer ") who is interested in the Facility. The Tenant /Buyer is from out -of-
state. You state that you met the Tenant /Buyer for the first time when the realtor brought
the Tenant /Buyer to look at the Facility on [Month and Date], 2007.
You state that the Tenant /Buyer might be seeking state funds to lease or
purchase the Facility; the Tenant /Buyer was in conversation with individuals within the
Commonwealth prior to considering leasing or purchasing the Facility. You further state
that you are not certain what state funding the Tenant /Buyer would seek, but you have
heard discussions between the Tenant /Buyer and his realtor regarding the Governor's
Action Team, the Pennsylvania Department of Agriculture, the United States
Department of Agriculture, and the Department of Community and Economic
Development. You state that based upon your personal commitment to keep the
Confidential Advice, 07 -551
July 2, 2007
Page 2
process completely independent of your role as a Legislator, you have not made any
inquiry with the Tenant /Buyer as to state funding that he /she might seek.
You state that you neither have had nor will have any involvement with the efforts
of the Tenant /Buyer to secure state funding. You state that you do not know the process
by which any application for state funding would occur nor would you play any role as to
government bodies, officials and /or funding processes as to such state funding for the
Tenant /Buyer, because you have no knowledge of the funds or programs under
consideration by the Tenant /Buyer. You do not sit on any boards or committees that
directly evaluate such applications to secure state funding. As a Legislator and member
of various legislative committees, you may occasionally consider legislation that impacts
state grant programs. However, you state that under no circumstances would you have
any knowledge of how any funding request by the Tenant /Buyer would be impacted by
specific legislative proposals.
Based upon the above submitted facts, you ask whether you would have a
conflict of interest in entering into a lease or purchase agreement for the Facility with the
Tenant /Buyer, who might seek state funding for the lease or purchase.
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 which the requester has submitted. In issuing the advisory based
upon the facts which the requester has submitted, the Commission does not engage in
an independent investigation of the facts, nor does it speculate as to facts which have
not been submitted. It is the burden of the requester to truthfully disclose all of the
material facts relevant to the inquiry. 65 P.S. §§ 1107(10), (11). An advisory only
affords a defense to the extent the requester has truthfully disclosed all of the material
facts.
As a Legislator, 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.
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
Confidential Advice, 07 -551
July 2, 2007
Page 3
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 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 the 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. The use of
authority of office includes more than mere voting; for example, it includes discussing,
conferring with others, and lobbying for a particular result. Juliante, Order 809. In each
instance of a conflict of interest, a public official is required to abstain fully from
participation.
As to state legislators specifically, to the extent the activities of a state legislator
relate to "legislative actions" (introducing, considering, debating, voting, enacting,
adopting, or approving legislation), they are constitutionally controlled and are exempt
from the purview of the Ethics Act and the State Ethics Commission. See, Mann,
Opinion 07 -005; Confidential Opinion, 05 -002; Corri an, Opinion 87 -001. To the extent
your activities would relate to "legislative actions," ection 1103(a) of the Ethics Act
would not apply to such activities. See, Mann, supra; Confidential Opinion, supra;
Corrigan, supra.
Having established the above general principles, you are advised that Section
1103(a) of the Ethics Act would not prohibit you from leasing or selling the Facility to the
Tenant /Buyer where you would not use the authority of your public position or
Confidential Advice, 07 -551
July 2, 2007
Page 4
confidential information received by being in your public office for a private pecuniary
benefit with respect to such lease, sale, or funding of same.
Under the submitted facts, the only "use of authority of office" that you have
noted is possible future involvement in the consideration of legislation that could impact
state grant programs from which the Tenant /Buyer might seek funding to lease or
purchase the Facility. As noted above, the specific activity of considering legislation
would be "legislative action" exempt from the purview of the Ethics Act and the State
Ethics Commission.
Parenthetically, it is noted that to the extent that you would receive income from
the lease or sale of the Facility and such income would be in the aggregate of $1300 or
more for a given calendar year, you would be required to disclose the Tenant /Buyer as
a source of income on your Statement of Financial Interests pursuant to Section
1105(b)(5) of the Ethics Act. 65 Pa.C.S. § 1105(b)(5).
It is commendable that you have raised this important issue for review.
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 Legislative Code of Conduct.
Conclusion: As a Member of the Pennsylvania A ( "Legislator "), 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. Section 1103(a) of the Ethics Act would not prohibit you
from leasing or selling a commercial facility ( "Facility ") to a tenant /buyer
( "Tenant /Buyer ") who might seek state funding where you would not use the authority of
your public position or confidential information received by being in your public office for
a private pecuniary benefit with respect to such lease, sale, or funding of same.
Section 1103(a) of the Ethics Act would not apply to "legislative actions," defined
as the introduction, consideration, debating, voting, enactment, adoption or approval of
legislation. Where your only use of authority of office" would be involvement as a
Legislator in the consideration of legislation that could impact state grant programs from
which the Tenant /Buyer might seek funding to lease or purchase the Facility, such
activity would constitute "legislative action" exempt from the purview of the Ethics Act
and the State Ethics Commission.
If the income from the sale or lease of the Facility would total in the aggregate
$1300 or more for a given calendar year, you would be required to disclose the
Tenant /Buyer as a source of income on your Statement of Financial Interests pursuant
to Section 1105(b)(5) of the Ethics Act.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
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
Confidential Advice, 07 -551
July 2, 2007
Page 5
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