Court Opinion

ID: 9695119
Source: CourtListenerOpinion
Date Created: 2023-08-25 18:07:35.688754+00
Date Added: 2024-06-11T18:20:08.531822
License: Public Domain

DISSENTING OPINION BY
Judge COHN JUBELIRER.
I respectfully disagree with the majority. I believe that the definition of “business” in Section 1102 of the Public Official and Employee Ethics Act (Ethics Act), 65 Pa.C.S. § 1102, should be read as including non-profit entities. I do not believe the Ethics Act requires the Governor to appoint a person outside a department head’s chain of command in order for that department head to avoid a conflict of interest. Therefore, I would grant each party’s application for summary relief in part and deny each in part.
First, I believe that the definition of “business” in Section 1102 of the Ethics Act should, for purposes of the conflict of interest provision found at Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), be interpreted to include non-profit entities. As the Supreme Court recognized in In re Carroll, 586 Pa. 624, 638 n. 10, 896 A.2d 566, 574 n. 10 (2006), the definition of “business” found in Section 1102 is ambiguous with regard to whether non-profit organizations fall within the definition. Where statutory language is ambiguous, courts may consider the intent of the Legislature. Section 1921(c) of the Statutory Construction Act of 1972, 1 Pa.C.S. § 1921(c). This intent may be discerned from, among other things, “[t]he mischief to be remedied.... [t]he object to be attained.... [and t]he consequences of a particular interpretation.” 1 Pa.C.S. § 1921(c)(3)-(4), (6). Each of these factors weighs in favor of holding that, for purposes of the Ethics Act’s conflict of interest provision, the term “business” includes non-profit entities. The mischief the Ethics Act seeks to remedy is the conflict of the financial interests of public officials with their public duties, and the object the Ethics Act seeks to obtain is public confidence in government:
In order to strengthen the faith and confidence of the people of this Commonwealth in their government, the Legislature further declares that the people have a right to be assured that the financial interests of holders of or nominees or candidates for public office do not conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this chapter shall be liberally construed to promote complete financial disclosure as specified in this chapter.
Section 1101.1(a) of the Ethics Act; 65 Pa.C.S. § 1101.1(a) (emphasis added). A liberal construction of the definition of “business,” seeking to assure the people of this Commonwealth that the financial interests of public officers do not conflict with the public trust, would include nonprofit organizations in the definition of “business” for purposes of the conflict of interest provision at Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a). Nonprofit organizations include not only small, community organizations, but also large, state-wide, and even national organizations with significant economic influence and political clout. Employees and officers of non-profit organizations may receive substantial income from those organizations. See, e.g., Aramony v. United Way of America, 254 F.3d 403, 409 (2d Cir.2001) (United Way of America paid its CEO over $350,000 in 1990.); Powell v. American Red Cross, 518 F.Supp.2d 24, 29 n. 3 (D.D.C.2007) (The American Red Cross pays nurses in its employ up to $87,000 per *218year.). It is inconsistent to allow one public official who earns $90,000 from a corporation as its employee or officer to conduct the Commonwealth’s business with that corporation while a different public official earning a similar salary may not conduct Commonwealth business with a different corporation merely because one corporation is non-profit and the other is for-profit. Both officials will be subject to the same appearance of impropriety and the same pecuniary strain on their loyalties to their public duties. The only consistent rule is, for purposes of Section 1103(a)’s conflict of interest provision, to read the ambiguous definition of “business” in Section 1102 as including non-profit entities.
I respectfully disagree with the majority’s view that we are bound in this matter by Carroll and its progeny. The issue presented in Carroll was whether this Court erred in disqualifying Carroll from appearing on the ballot because he failed to “disclose non-financial associations on a Statement of Financial Interests.” Carroll, 586 Pa. at 637, 896 A.2d at 573. The non-profit entity at issue in Carroll was the “Timothy J. Carroll’s Mayors Club of Dallas Borough” (Mayors Club), a charitable organization which Carroll created “to fund community projects.” Id. at 628-29, 896 A.2d at 568-69. Carroll received no financial benefit from the organization. Quite the opposite, he donated the salary from his position as the Mayor of Dallas Borough to the Mayors Club. Id. at 629, 896 A.2d at 569. The Supreme Court stressed that “[t]he [Ethics] Act could not be any clearer that the concern is with financial interests,” and that it did not, therefore, “require Carroll to disclose his ‘interest’ in the non-profit Mayors Club.” Id. at 640, 896 A.2d at 575.
This case, however, shows that even though an organization is non-profit, individuals may still have a financial interest in it. DEP Secretary McGinty’s husband was paid by PEC for his consulting work, and PEC received a $291,102 grant from DEP. DCNR Secretary DiBerardinis’s wife is a paid employee of PHS, and PHS received a $1.5 million “TreeVitalize” grant from DCNR. The Secretaries’ spouses and the organizations which pay them for their work have strong financial interests in the agency grants. Thus, the concern with financial interests, which was not present in the small, non-profit “Mayors Club” in Carroll, is definitely present in the non-profit corporations involved here. In this case, we are determining whether there is a conflict of interest when large financial grants are given by government agencies to non-profit corporations who employ the spouses of the Secretaries of those government agencies. I believe that, under the Ethics Act, and under the Supreme Court’s decision in Carroll, that is a different inquiry. Given the Supreme Court’s emphasis on financial interests in Carroll, it follows that these non-profit entities with great financial interests in government grants should be considered businesses for purposes of the conflict of interest provisions of the Ethics Act.
Moreover, the cases to which the majority cites — Carroll; Pilchesky v. Cordaro, 592 Pa. 15, 922 A.2d 877 (2007); and In re Nominating Petition of Brady, 923 A.2d 1206 (Pa.Cmwlth.) petition for allowance of appeal denied, 591 Pa. 738, 921 A.2d 498 (2007) — are all election cases involving statements of financial interest. In cases involving statements of financial interest, both the Ethics Act and the Pennsylvania Election Code1 (Code) apply, and the two are to be read in pari materia. In re Nomination Petition of Paulmier, 594 Pa. 433, 442, 937 A.2d 364, 369 (2007). There*219fore, in election cases, the Ethics Act’s mandate to promote full disclosure is tempered by the Code’s purpose of protecting voter choice. Id. In this context, the Supreme Court’s choice in Carroll to construe the definition of “business” in Section 1102 not to apply to non-profit entities may be read as a compromise between the purpose of the Ethics Act and that of the Code. The Court, thus, did not disqualify a candidate for failing to disclose purely volunteer activities with a non-profit organization. In the context of considering conflicts of interest, however, there is no interest in protecting voter choice. The only purpose at issue is that of the Ethics Act, which is to assure the people of this Commonwealth that the financial interests of their representatives and public servants will not conflict with their duties to the Commonwealth.
Because I would find that the definition of “business” includes the types of entities involved in this case, I would, therefore, also reach another issue raised in this case, which the majority does not reach. In its advisory opinions to the Secretaries, the Commission stated that in order for each Secretary to avoid a conflict of interest, the Governor could “designate someone not within the Secretary’s chain of command to perform the Secretary’s role as to” the grantmaking processes at issue in each case. (McGinty Opinion, Opinion 07-009, at 12; DiBerardinis Opinion, Opinion 07-010, at 12.) In each opinion, the Commission also stated that neither Secretary could have any role in selecting the person who would discharge the Secretary’s duties. I do not believe that when a department head is subject to a conflict of interest under the Ethics Act, the Ethics Act requires that the Governor appoint an individual outside that head’s chain of command in order for the head to avoid the conflict. I believe that it is sufficient for the head to allow the duties which subject him to the conflict of interest to be performed by the person next in authority to the head, so long as that individual is not, himself, subject to a conflict of interest. It is a conflict of interest for a public official to use his authority “for the private pecuniary benefit of himself’ or a related business. 65 Pa.C.S. § 1102. I agree that the Commission can determine that participation in the grantmaking process would be a use of the department head’s authority. However, where the department head recuses himself and instead appoints an individual within his chain of command to perform his duties in relation to the grant, so long as he does not attempt to influence or direct the individual with regard to how those duties should be performed, he would not be “using” his authority. Such recusal would be consistent with other parts of the Ethics Act, such as Section 1103(j), which allows a public official otherwise required to vote on a matter to recuse himself when participating in the vote would constitute a conflict of interest. Moreover, we note that conflicts of interest, as defined in the Ethics Act, are not imputed from an individual’s superior to that individual. Therefore, since the individual to whom the department head’s authority devolves would not be conflicted, it is difficult to see how the department head himself would be subject to a conflict of interest in allowing such devolution by re-cusing himself.
For these reasons, I would grant the application for summary relief filed by Petitioners in part, deny it in part, and I would grant the application for summary relief filed by the Commission in part and deny it in part.
Judge LEAVITT joins in this dissenting opinion.

. Act of June 3, 1937, P.L. 1333, as amended 25 P.S. §§ 2600-3591.