Loading...
HomeMy WebLinkAbout07-560Tony Ceoffe Lawrenceville United 4825 Butler Street Pittsburgh, PA 15201 Dear Mr. Ceoffe: ADVICE OF COUNSEL July 27, 2007 07 -560 This responds to your letter of June 20, 2007, by which you requested 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 constable relative to serving as executive director of a non - profit organization involved in community issues. Facts: You state that you are currently the Executive Director of Lawrenceville United, a resident - driven grass -roots organization dedicated to protecting the quality of life for residents of Lawrenceville. Lawrenceville United is a registered 501(c)(3) non- profit corporation. You receive a salary as Executive Director of Lawrenceville United. You state that you are seeking an open elected Constable position in your community. You seek advice as to whether your service as Executive Director of Lawrenceville United would result in prohibitions or restrictions under the Ethics Act if you would become a Constable. 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. Ceoffe, 07 -560 July 27, 2007 Page 2 Upon becoming a Constable, you would be a "public official" as that term is defined in the Ethics Act, and hence you would be subject to the provisions of the Ethics Act. 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. See, e.q., Legree, Order 1225. 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, 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 /public 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, a public official /public employee is required to abstain fully from participation in his public capacity. Ceoffe, 07 -560 July 27, 2007 Page 3 In applying the above provisions of the Ethics Act to your inquiry, it is noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit public officials from having outside business activities or employment; however, the public official may not use the authority of his public 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, 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 is associated in his private capacity or private client(s). Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010. You are advised that under the submitted facts, Lawrenceville United would be considered a "business" as that term is defined in the Ethics Act. Based upon prior rulings of the State Ethics Commission, the submitted fact that Lawrenceville United is a non - profit corporation would not disqualify it from being encompassed within the aforesaid definition of "business." See, Soltis - Sparano, Order 1045; McConahy, Opinion 96 -006. The State Ethics Commission is aware of the ruling of the Supreme Court of Pennsylvania in In re Nomination Petition of Carroll, 586 Pa. 624, 896 A.2d 566 (2006). In Carroll, in the narrow context of a challenge to a candidate's nomination petition, the Supreme Court held that a candidate's omission from his Statement of Financial Interests of his presidency of a non - profit corporation from which he received no compensation was not a fatal defect to his nomination petition. In reaching this conclusion, the Court reviewed the definition of the term "business" as set forth in the Ethics Act. (See, definition of the term "business" set forth above). The Court noted that the "organized for profit" reference at the end of the definition was subject to two possible interpretations —an interpretation that would construe the reference as modifying all preceding forms of business listed in the definition (such that only for - profit entities would qualify as "businesses ") and another interpretation that would construe it as applying only to the last antecedent example (such that non - profit entities would qualify as "businesses "). Having apparently been erroneously informed that the State Ethics Commission had no rulings as to whether non - profit entities would be considered "businesses" under the Ethics Act, the Court construed the definition in the way most favorable to the candidate, such that the candidate was viewed as not having been required to list his presidency of the non- profit corporation on his Statement of Financial Interests. Contrary to the inaccurate information that was apparently supplied to the Supreme Court in the Carroll case, the Commission has long held that a non - profit corporation is a "business" as that term is defined in the Ethics Act. In Soltis - Sparano, Order 1045 (decided in 1997) the Commission specifically interpreted the language at the end of the definition of the term "business" and concluded that: The word "or" is disjunctive, and furthermore, the repeated use of the word "any" precludes any interpretation that the final phrase "legal entity organized for profit" modifies the initial word "corporation:" Any corporation, ... or any legal entity organized for profit." The clear and unambiguous statutory language is that any corporation, including a non - profit corporation, is a "business." Ceoffe, 07 -560 July 27, 2007 Page 4 Soltis - Sparano, Order 1045, at 31. The following are additional decisions in which the Commission has held that a non - profit corporation is a "business" within the meaning of that term as defined by the Ethics Act: Confidential Opinion, 89 -007 (decided in 1989); McConahy, Opinion 96 -006 (decided in 1996); Maduka, Order 1277 (decided in 2003). In reviewing Carroll, supra, the State Ethics Commission has stated that challenges to candidate nomination petitions involve unique considerations, and that at this time, there is no indication that the Supreme Court's ruling in the Carroll case would have any applicability outside the scope of election - related challenges. Kravetsky, Order 1420. In the instant matter, which is not an election - related case, the necessary conclusion under the aforementioned Commission rulings is that Lawrenceville United would qualify as a "business" under the Ethics Act. Given that you serve as the salaried Executive Director of Lawrenceville United, Lawrenceville United is a business with which you are associated. If you would become a Constable, Section 1103(a) of the Ethics Act would not prohibit you from remaining the salaried Executive Director of Lawrenceville United in your private capacity. However, pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a Constable, you would generally have a conflict of interest in matters that would financially impact you or Lawrenceville United. You would specifically be prohibited from using the authority of the public position as Constable, or confidential information received by being Constable, for the private pecuniary benefit of yourself or Lawrenceville United. In each instance of a conflict of interest, you would be required to abstain fully from participation in your capacity as a public official. 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. Conclusion: Upon becoming a Constable, you would be a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Lawrenceville United, a 501(c)(3) non - profit corporation, is a business with which you as its salaried Executive Director are associated. If you would become a Constable, Section 1103(a) of the Ethics Act would not prohibit you from remaining the salaried Executive Director of Lawrenceville United in your private capacity. However, pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a Constable, you would generally have a conflict of interest in matters that would financially impact you or Lawrenceville United. You would specifically be prohibited from using the authority of the public position as Constable, or confidential information received by being Constable, for the private pecuniary benefit of yourself or Lawrenceville United. In each instance of a conflict of interest, you would be required to abstain fully from participation in your capacity as a public official. 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 Ceoffe, 07 -560 July 27, 2007 Page 5 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