HomeMy WebLinkAbout07-557 GobelGeorge S. Gobel, Esquire
502 Fifth Avenue
Suite 305
McKeesport, PA 15132
Dear Mr. Gobel:
ADVICE OF COUNSEL
July 23, 2007
07 -557
This responds to your letter of June 21, 2007, by which you requested advice from
the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
Pa.C.S. § 1101 et seq., would impose any prohibitions or restrictions upon a member of a
borough council with regard to simultaneously serving as solicitor or special /outside
counsel for the borough and receiving compensation for such service.
Facts: You are an appointed Member of Borough Council for the Borough of Liberty
( "Borough ") in Allegheny County. The Borough Council consists of seven Council
Members. You state that the Borough has a population of less than 3,000 people.
You are also an attorney licensed to practice law in the Commonwealth of
Pennsylvania.
You ask whether, under the provisions of the Borough Code and any other
applicable statutes and regulations of the Commonwealth of Pennsylvania, you would be
permitted to be appointed as a compensated Solicitor for the Borough or as a
compensated "Special Counsel" for the Borough as long as you would abstain from voting
on any such appointment.
You state that you are not immediately aware of any statute or code that would
prohibit an appointed member of a borough council from also being appointed as a
compensated solicitor for that municipality as long as said council member would not vote
for the appointment.
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
Gobel, 07 -557
July 23, 2007
Page 2
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.
As a Borough Council Member, 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 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
Gobel, 07 -557
July 23, 2007
Page 3
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, 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, a 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 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 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.
Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows:
§ 1103. Restricted activities
(f) Contract. - -No public official or public employee or
his spouse or child or any business in which the person or his
spouse or child is associated shall enter into any contract
valued at $500 or more with the governmental body with which
the public official or public employee is associated or any
subcontract valued at $500 or more with any person who has
been awarded a contract with the governmental body with
which the public official or public employee is associated,
unless the contract has been awarded through an open and
public process, including prior public notice and subsequent
public disclosure of all proposals considered and contracts
awarded. In such a case, the public official or public employee
Gobel, 07 -557
July 23, 2007
Page 4
65 Pa.C.S. § 1103(f).
shall not have any supervisory or overall responsibility for the
implementation or administration of the contract. Any contract
or subcontract made in violation of this subsection shall be
voidable by a court of competent jurisdiction if the suit is
commenced within 90 days of the making of the contract or
subcontract.
The term "contract" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Contract." An agreement or arrangement for the
acquisition, use or disposal by the Commonwealth or a
political subdivision of consulting or other services or of
supplies, materials, equipment, land or other personal or real
property. The term shall not mean an agreement or
arrangement between the State or political subdivision as one
party and a public official or public employee as the other
party, concerning his expense, reimbursement, salary, wage,
retirement or other benefit, tenure or other matters in
consideration of his current public employment with the
Commonwealth or a political subdivision.
65 Pa.C.S. § 1102.
The term "political subdivision" is defined in the Ethics Act to include boroughs:
§ 1102. Definitions
"Political subdivision." Any county, city, borough,
incorporated town, township, school district, vocational school,
county institution district, and any authority, entity or body
organized by the aforementioned.
65 Pa.C.S. § 1102.
Section 1103(f) does not operate to make contracting with the governmental body
permissible where it is otherwise prohibited. Rather, where a public official /public
employee, his spouse or child, or a business with which he, his spouse or child is
associated, is otherwise appropriately contracting with the governmental body, or
subcontracting with any person who has been awarded a contract with the governmental
body, in an amount of $500.00 or more, Section 1103(f) requires that an "open and public
process" be observed as to the contract with the governmental body. Pursuant to Section
1103(f), an "open and public process" includes:
(1) prior public notice of the employment or contracting possibility;
(2) sufficient time for a reasonable and prudent competitor /applicant to be able
to prepare and present an application or proposal;
(3) public disclosure of all applications or proposals considered; and
(4) public disclosure of the contract awarded and offered and accepted.
Gobel, 07 -557
July 23, 2007
Page 5
Section 1103(f) of the Ethics Act also requires that the public official /public
employee may not have any supervisory or overall responsibility as to the implementation
or administration of the contract with the governmental body.
The following sections of the Borough Code are relevant to your inquiry:
§ 46104. Appointments; incompatible offices
Unless there is incompatibility in fact, any elective or
appointive officer of the borough shall be eligible to serve on
any board, commission, bureau or other agency created by or
for the borough, or any borough office created or authorized by
statute and may accept appointments thereunder, but no
mayor or member of council shall receive compensation
therefor. No elected borough official of a borough with a
population of 3,000 or more may serve as an employe of that
borough. Where there is no incompatibility in fact, and subject
to the foregoing provisions as to compensation, appointees of
council may hold two or more appointive borough offices, but
no mayor or member of council may serve as borough
manager or as secretary or treasurer.... Nothing herein
contained shall affect the eligibility of any borough official to
hold any other public office or receive compensation
therefor....
53 P.S. § 46104 (emphasis added).
§ 46117. Duties of Solicitor; Outside Counsel
(a) The borough solicitor ... shall do every professional
act incident to the office which he may be authorized or
required to do by the council or the mayor....
(b) In the case of a legal dispute between the mayor
and council, or in any other case where representation of the
mayor and council by the borough solicitor would create a
conflict of interest for the borough solicitor, the mayor is
authorized to employ outside counsel at borough expense, not
to exceed two thousand five hundred dollars ($2,500) in any
twelve -month period, to perform necessary legal services.
53 P.S. § 46117 (emphasis added).
§ 46404. Penalty for personal interest in contracts or
purchases
Except as otherwise provided in this act, no borough
official either elected or appointed, who knows or who by the
exercise of reasonable diligence could know, shall be
interested to any appreciable degree either directly or
indirectly in any purchase made or contract entered into or
expenditure of money made by the borough or relating to the
business of the borough, involving the expenditure by the
borough of more than one thousand dollars ($1000) in any
calendar year, but this limitation shall not apply to cases where
such officer or appointee of the borough is an employe of the
Gobel, 07 -557
July 23, 2007
Page 6
person, firm or corporation to which the money is to be paid in
a capacity with no possible influence on the transaction, and in
which he cannot be possibly benefited thereby either
financially or otherwise.... Any official or appointee who shall
knowingly violate the provisions of this section shall be subject
to surcharge to the extent of the damage shown to be thereby
sustained by the borough and to ouster from office, and shall
be guilty of a misdemeanor, and upon conviction thereof shall
be sentenced to pay a fine not exceeding one thousand dollars
($1000), or not exceeding one hundred eighty days'
imprisionment, or both.
53 P.S. § 46404.
In considering the question of simultaneous service, it is initially noted that the
General Assembly has the constitutional power to declare by law which offices are
incompatible. Pa. Const. Art. 6, § 2.
The Borough Code does not appear to expressly prohibit simultaneously service as
a Borough Council Member and as Solicitor or outside counsel for the Borough. Likewise,
based upon the facts that have been submitted, there does not appear to be an inherent
conflict under Section 1103(a) of the Ethics Act that would preclude your simultaneous
service as a Borough Council Member and as Solicitor or outside counsel for the Borough.
(See, e.q., McCain, Opinion 02 -009). Absent a statutorily - declared incompatibility or an
inherent conflict under Section 1103(a), the Ethics Act would not preclude you from
simultaneously serving in the aforesaid positions, but in each instance of a conflict of
interest, you would be required to abstain fully from participation and to satisfy the
disclosure requirements of Section 1103(j) as set forth above.
You are advised that pursuant to Section 1103(a) of the Ethics Act, you would
generally have a conflict of interest in matters before the Borough Council that would
financially impact you or your law firm. You would specifically have a conflict of interest in
matters pertaining to the appointment or potential appointment of yourself as Solicitor or
outside counsel for the Borough. You would also have a conflict of interest in matters
pertaining to any competitor attorneys /firms considered by the Borough for either of the
aforesaid positions. See, Pepper, Opinion 87 -008. As noted, in each instance of a conflict
of interest, you would be required to abstain fully from participation and to satisfy the
disclosure requirements of Section 1103(j) of the Ethics Act.
Turning to the question of whether or to what extent you could receive
compensation as Solicitor or outside counsel for the Borough, you are advised that the
answer to that question hinges upon legal issues under the Borough Code that may not be
resolved by the State Ethics Commission.
First, it is not clear whether the position of Solicitor would be deemed a Borough
office under the Borough Code. (See, 53 P.S. § 46117(a) quoted above.) If the position of
Solicitor would be considered a Borough office, it would appear that Section 46104 of the
Borough Code would prohibit you from receiving any compensation for serving as Solicitor.
Second, if the position of Solicitor would not be considered a Borough office but
would be considered a Borough employment position, it would appear that Section 46104
of the Borough Code would permit you to be compensated as a Borough employee as long
as the Borough population would remain less than 3,000. Parenthetically, it is noted that if
you would serve as Solicitor as a Borough employee, you would in that capacity be
considered a "public employee" subject to the Ethics Act. See, P.J.S. v. Pennsylvania
State Ethics Commission, 555 Pa. 149, 723 A.2d 174 (1999).
Gobel, 07 -557
July 23, 2007
Page 7
Third, if the position of Solicitor would not be deemed a Borough office and you
would serve as Solicitor as an independent contractor, it would appear that Section 46104
of the Borough Code would not prohibit you from receiving compensation for such service.
Likewise, it would appear that Section 46104 of the Borough Code would not prohibit you
from receiving compensation for serving as outside counsel for the Borough. However, it
would appear that Section 46404 of the Borough Code would prohibit you from receiving
more than $1000 in compensation in any calendar year for serving in either of the
aforesaid positions.
Since the State Ethics Commission does not have the express statutory jurisdiction
to interpret the Borough Code, you are generally advised that to the extent the above -
quoted provisions of the Borough Code would prohibit you from receiving compensation
as Solicitor for the Borough, or would limit the amount of compensation that you could
receive as Solicitor or outside counsel for the Borough while serving as a Borough Council
Member, the receipt of unauthorized compensation could form the basis for a conflict of
interest under Section 1103(a) of the Ethics Act.
You are further advised that an agreement or arrangement to provide services as
Solicitor or outside counsel for the Borough in a capacity other than that of a Borough
employee would constitute a "contract" as that term is defined in the Ethics Act. Therefore,
to the extent any contract between you and the Borough for the provision of your services
would be valued at $500 or more, the requirements of Section 1103(f) of the Ethics Act
would have to be satisfied.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act. The State Ethics Commission does not have the statutory jurisdiction to
interpret the Rules of Professional Conduct. It is recommended that you seek legal advice
as to the potential applicability of the Rules of Professional Conduct to your inquiry.
Conclusion: As an appointed Member of Borough Council for the Borough of
Liberty ( "Borough ") in Allegheny County, 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.
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 your law
firm. You may, consistent with Section 1103(a) of the Ethics Act, simultaneously serve in
the positions of Borough Council Member and Solicitor or outside counsel for the Borough,
subject to the restrictions, conditions and qualifications set forth above. You would have a
conflict of interest in matters pertaining to the appointment or potential appointment of
yourself as Solicitor or outside counsel for the Borough. You would also have a conflict of
interest in matters pertaining to any competitor attorneys /firms considered by the Borough
for either of the aforesaid positions. In each instance of a conflict of interest, you would be
required to abstain fully from participation and to satisfy the disclosure requirements of
Section 1103(j) of the Ethics Act. To the extent that the Borough Code would prohibit you
from receiving compensation as Solicitor for the Borough, or would limit the amount of
compensation that you could receive as Solicitor or outside counsel for the Borough while
serving as a Borough Council Member, the receipt of unauthorized compensation could
form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. To the
extent any contract between you and the Borough for the provision of your services would
be valued at $500 or more, the requirements of Section 1103(f) of the Ethics Act would
have to be satisfied. Lastly, the propriety of the proposed course of conduct has only been
addressed under the Ethics Act. It is recommended that you seek legal advice as to the
potential applicability of the Rules of Professional Conduct to your inquiry.
Pursuant to Section 1107(11), this Advice is a complete defense in any enforcement
proceeding initiated by the Commission, and evidence of good faith conduct in any other
Gobel, 07 -557
July 23, 2007
Page 8
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