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Kenneth Kistler v. Commonwealth of Pennsylvania

June 22, 2011

KENNETH KISTLER, APPELLEE
v.
COMMONWEALTH OF PENNSYLVANIA, STATE ETHICS COMMISSION, APPELLANT



Appeal from the Order of the Commonwealth Court entered 10/17/08 at No. 1352 CD 2007, which reversed the decision of the Ethics Commission dated 6/29/07 at No. 04-037 The opinion of the court was delivered by: Mr. Justice McCAFFERY

CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, GREENSPAN, JJ.

ARGUED: December 1, 2009

OPINION

The State Ethics Commission (hereinafter "the Commission") appeals from the order of the Commonwealth Court reversing the Commission's determination that Kenneth Kistler (hereinafter "Appellee") had violated two provisions of the Public Official and Employee Ethics Act (hereinafter "Ethics Act").*fn1 We affirm.

The following summary of the relevant facts is excerpted from the Commonwealth Court opinion and the Commission's final adjudication. Kistler v. State Ethics Commission, 958 A.2d 1092 (Pa.Cmwlth. 2008); Final Adjudication of the State Ethics Commission, dated 6/29/07 (hereinafter "Commission's Adjudication"). Appellee was a member of the Carbon-Lehigh Intermediate Unit (hereinafter "CLIU") Board of Directors (hereinafter "the Board"),*fn2 serving, from January 1998 until March 18, 2002,*fn3 as chairman of the building committee, which was charged with pursuing the Board's interest in various construction projects. In addition, Appellee is the owner and president of two businesses, Kistler Building Supply, Inc., and Kistler Pole Building Company.

In late 1999, the Board began to explore the possibility of constructing a garage in which to house its buses. Staff member Robert J. Keegan, Jr., was placed in charge of the garage construction project, and in June 2001, he began discussions concerning the project with Dale Roth, an architect who had previously worked for the CLIU. Sometime between February 2002, and March 18, 2002, Mr. Roth told Appellee that the design for the planned garage might involve a pole building,*fn4 and Appellee agreed to provide pricing and planning information for the project. Subsequently, Appellee informed the executive director of the CLIU that he was resigning from the building committee because of his possible business involvement with construction of the garage. At the March 18, 2002 meeting of the Board, Appellee's resignation from the building committee was accepted. The solicitor for the CLIU opined that, although Appellee could properly participate in the construction of the garage, he should abstain from any votes of the Board relating to that project. The Board, with Appellee abstaining, voted to make Mr. Roth's architectural firm, known as Roth Marz Partnership, its agent in pursuing a lease-purchase agreement for the proposed garage site.

In May 2002, Mr. Roth made an initial commitment to Appellee that Kistler Pole Building Company, Appellee's business, would be chosen to construct the garage. The construction arrangements were formalized on July 12, 2002, with a written contract between Kistler Pole Building Company and Cornerstone LLC, another of Mr. Roth's businesses. At its July 15, 2002 meeting, the Board, with Appellee again abstaining, approved a sales agreement, a lease agreement, and an option agreement with Cornerstone LLC. Appellee filed two conflict of interest abstention memoranda, both dated August 19, 2002, explaining that he had abstained from Board votes on March 18, 2002, and July 15, 2002, because of his company's possible participation in the construction of the garage. Kistler Pole Building Company started construction of the garage in September 2002, and completed the project in February 2003.

While planning the garage construction, the Board was also occupied with a second facility, the Lehigh Learning and Adjustment School (hereinafter "the School"). On June 17, 2002, after it became apparent that the building in which the School was then housed had a mold problem, the Board terminated its lease and authorized Mr. Roth to pursue construction of a new facility. Appellee voted in favor of both of these actions. In April 2003, after Appellee learned that Mr. Roth was considering a pole building design for the School, Appellee ceased any involvement with the Board on the School project. At a meeting on October 20, 2003, the Board authorized Mr. Roth to begin construction of the School, and on May 17, 2004, the Board approved a lease agreement between Mr. Roth and the CLIU for the School. Appellee abstained from both votes. On June 17, 2004, Appellee and Mr. Roth executed an agreement under which Kistler Pole Building Company would construct the building for the School.

By letter dated August 4, 2004, the Commission notified Appellee that he was being investigated for possible violations of the Ethics Act. Appellee contacted counsel, specifically, the law firm of the CLIU solicitor, to inquire as to whether he would be in violation of the Ethics Act if he were to fulfill his contractual obligations to construct the School. In a letter dated August 27, 2004, counsel opined that Appellee had not violated the Ethics Act. Appellee then began construction of the School in September 2004, and completed it in January 2005.

The Commission held hearings concerning its allegations against Appellee, and thereafter concluded that Appellee had unintentionally violated the Ethics Act via three actions. First, the Commission determined that Appellee had violated subsection 1103(a), the conflict of interest provision, on June 17, 2002, when he had voted to authorize Mr. Roth to pursue construction of the School while simultaneously seeking a subcontract from Mr. Roth for construction of the garage. In addition, the Commission determined that Appellee had violated subsection 1103(f) by entering into subcontracts with Mr. Roth's businesses for construction of the garage and the School, respectively on July 12, 2002, and on June 17, 2004, because the Board had not solicited and accepted competitive bids prior to awarding the contracts to Mr. Roth. The Commission concluded that all the alleged violations were unintentional because Appellee had voted and had entered into the subcontracts in reliance on the solicitor's legal advice.

The Commonwealth Court reversed in a published opinion in which it concluded that Appellee had not intended his June 17, 2002 vote on the School to lead to his subcontract with Mr. Roth for construction of the garage, and that there was no evidence that the vote did indeed lead to the garage subcontract. Kistler, 958 A.2d at 1100 & n.15. In addition, the Commonwealth Court concluded that the Ethics Act, with its requirement of "an open and public process" in subsection 1103(f), did not mandate use of a competitive bidding process. Id. at 1098.

We granted the Commission's Petition for Allowance of Appeal as to the following questions:

a. Whether a public official may violate § 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1103(a), despite lacking the intent to use his office for private pecuniary gain.

b. Whether § 1103(f) of the Public Official and Employee Ethics Act requires competitive bidding.

Kistler v. State Ethics Commission, 972 A.2d 482 (Pa. 2009).

Both of the questions presented are issues of statutory interpretation, specifically of the Ethics Act. Statutory interpretation is a question of law, for which our standard of review is de novo, and our scope is plenary. St. Elizabeth's Child Care Center v. Department of Public Welfare, 963 A.2d 1274, 1276 (Pa. 2009); see Malt Beverages Distributors Ass'n v. Pennsylvania Liquor Control Board, 974 A.2d 1144, 1154 (Pa. 2009) (citing Seeton v. Pennsylvania Game Commission, 937 A.2d 1028, 1037 (Pa. 2007) for the proposition that "while courts traditionally accord the interpretation of the agency charged with administration of the act some deference, the meaning of a statute is essentially a question of law for the court").

The object of all statutory interpretation is to ascertain and effectuate the intention of the General Assembly, giving effect, if possible, to all provisions of the statute. 1 Pa.C.S. § 1921(a). In general, the best indication of legislative intent is the plain language of a statute. Malt Beverages, supra at 1149. "When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." 1 Pa.C.S. § 1921(b). Words of the statute are to be construed according to their "common and approved usage." 1 Pa.C.S. § 1903(a).

The first issue on appeal is whether a public official who does not have the intent to use his or her office for private pecuniary gain may nonetheless violate subsection 1103(a) of the Ethics Act. Subsection 1103(a) bars a public official from engaging in conduct that constitutes a conflict of interest, where conflict of interest is defined in relevant part as the "[u]se by a public official . of the authority of his office . for the private pecuniary benefit of himself . or a business with which he . is associated." 65 Pa.C.S. § 1102 (emphasis added). There is no explicit intent element in subsection 1103 or in the definition of conflict of interest. However, the lack of an explicit intent element does not end our inquiry, as we must consider the plain meaning of the entire statutory text.

As the Commonwealth Court has previously emphasized, to violate subsection 1103(a), a public official must "use" his or her office for private pecuniary benefit. Kraines v. Pennsylvania State Ethics Commission, 805 A.2d 677, 681 (Pa. Cmwlth. 2002). The word "use" is not defined in the Ethics Act. The dictionary definition of the noun "use" is "[t]he act of using or putting to a purpose[, e.g.,] the use of a car;" analogously, the definition of the verb "use" is "1. [t]o bring or put into service or action: employ[, e.g.,] use a pen [or] use your imagination[, or] 2. to put to some purpose: avail oneself of[, e.g.,] use the bus to get to work." Webster's II New College Dictionary, Houghton Mifflin Co., 1995, at 1215. Thus, the common and approved usage of the word "use," which must guide our inquiry, indicates an action directed toward a purpose. Accordingly, to violate subsection 1103(a), a public official must act in such a way as to put his office to the purpose of obtaining for himself a private pecuniary benefit. Such directed action implies awareness on the part of the public official of the potential pecuniary benefit as well as the motivation to obtain that benefit for himself.

That the General Assembly intended such an interpretation of subsection 1103(a) is strengthened by a declaration in the Ethics Act's purpose provision: "The Legislature hereby declares that public office is a public trust and that any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust." Pa.C.S. ยง 1101.1(a) Purpose (emphasis added). The dictionary defines "effort" as "[e]xertion of physical or mental energy to do something." Webster's II New College Dictionary at 360. In other words, an effort is an activity directed toward a goal. Accordingly, pursuant to the Ethics Act, violation of the public trust arises from activity directed toward the goal of realizing personal ...


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