Voters will decide whether to amend Lackawanna County’s main governing law to ban county employees from trading stocks or placing prediction market bets based on insider information obtained in their official duties.
Despite concerns the question is too broad and could face legal challenges before the Nov. 3 election, the county Board of Elections voted 3 to 0 to place a question on the ballot to let voters decide on amending the county home rule charter.
County commissioners Bill Gaughan, Thom Welby and Chris Chermak, who make up the board, took the advice of county Solicitor Chris Caputo and elections board Solicitor Anthony Lomma.
The solicitors said the board could only determine if the petitions urging a ballot question had enough voter signatures and were filed on time.
The answer to both matters was yes. Action Together NEPA officials, who organized the drive to get the question on the ballot, filed, on time, petitions with 16,297 signatures, well above the required 8,894, Caputo said. A court would likely address concerns about the question assuming someone challenges it, officials said.
Proposed Lackawanna County Nov. 3 Insider Stock Trading Ballot Question:
“Shall the Lackawanna County Home Rule Charter be amended to require specifically that the Lackawanna County Conflict of Interest and Code of Ethics prohibit County elected officials and employees from engaging in individual stock trades or predication market bets based on nonpublic information obtained in the course of their official County service and provide annual reporting of ethics complaints and stock trades involving County, state, and federal elected officials representing the County?”
Duplication concerns
Chermak said he’d feel more comfortable if the question only covered county employees and raised doubts about the need for it.
“I thought all this stuff was in place already at the state and both federal levels,” he said. “You know we take an oath here as far as elected officials to follow all the codes of ethics and everything else that goes on with this. The second part of the question is, isn't this more of an ethics policy revision?”
“I don't think it was thought out,” he said. “I just have a problem trying to dictate to the federal level and at the state level that they have to comply with something that the county is putting in place.”
Lomma said he thinks the state Ethics Act covers “what the amendment is trying to cover.”
“There's also the Pennsylvania Securities Law, which covers that. Whether you're an elected official or not, you cannot do insider trading,” he said. “So, there's two statewide statutes that already cover it. Plus, there's the federal SEC (Securities and Exchange Commission) laws that cover it, too.”
Lomma also pointed to a provision in the existing charter. The charter contains requirements for managing county personnel, but exempts six categories of employees, including the ones who work in the judicial system.
“I don't know if the county commissioners could dictate over judicial branch. Judges sort of don't like that,” he said.
The other laws could preempt the charter requirement, Caputo agreed.
“The preemption question is a substantive legal issue,” he said.
Reporting stock trades
Caputo and Lomma also raised concerns about another part of the suggested amendment requiring the county solicitor to produce:
- An annual report that includes all ethics complaints filed against county, state and federal elected officials who represent county residents.
- A summary of individual stock trades “by volume” made by federal and state officials who represent county residents.
Caputo said the provision could be viewed as “overly broad” and require the solicitor and commissioners “to complete acts that (they) might not have the authority to complete.”
“And that, again, is a substantive legal issue,” he said.
Though the board only had to decide if the question could go on the ballot, the question could face a legal challenge in court, officials said.
“I also believe that if there are substantive legal issues that have to be determined, they would be determined by the Court of Common Pleas after any individual would have the opportunity to object to the referendum being placed on the ballot,” Caputo said.
And the president, too?
Lomma said he counted 135 elected officials the provision could cover, including local judges, state appeals court judges, the nation’s president and vice president, and state and federal representatives and senators.
“The county would have to report on items that, according to the statute's (the question’s) public record, (are) publicly available,” he said.
Welby credited the petition signers with good intentions considering “so many irregularities and so many issues that elected officials and appointed officials have done regarding insider trading throughout this country.”
“And it is criminal in my opinion, and their desire and want to deal with that, to address that and to arrest, so to speak, that is commendable,” he said. “I do question ... how we would get the president of the United States to do a report for our county, and then if such a thing were possible, how many counties and parishes are there in the United States that then could ask the same thing?”
The amendment does not require the president to provide the county a report.
Reluctant yes votes
Chermak said he voted reluctantly in favor of putting the question on the ballot to give someone time to challenge it in court.
“Hopefully that will get cleaned up in the courts,” he said.
Welby said he felt the same.
“The wording in this I don't agree with, but what the reality is we have 16,000 signatures by residents of Lackawanna County that want this on the ballot,” he said. “And with that, while I object to it, I support the intention of those 16,000 signatories. And yeah, I believe this should be on the ballot, or before it gets to the ballot, decided by the courts as to the validity of the different elements of it.”
Gaughan did not comment on the matter during the meeting, but said Chermak and Welby raised valid concerns, but the board played a role limited to placing the question on the ballot.
Everyone favors strong ethics provisions and banning insider stock trading, he said.
The election board will develop a “plain language statement” that voters can read to understand what the ballot question means.
In a news release, Action Together NEPA Executive Director Alisha Hoffman-Mirilovich called the vote "a victory for every voter who signed a petition, talked to a neighbor, and refused to accept that corruption is just part of the job."
The news release did not address the legal questions the board raised. In a text, Hoffman-Mirilovich declined to comment on the legal questions.
Previously, she said the group thoroughly vetted the question.
“We've gone through all of the legal, like the different language,” she said. “We’ve gone through this fully, so we don't have any concerns for that ... This has been vetted through multiple sources.”
The group also successfully filed signatures to place a similar question on the Luzerne County election ballot. The county Board of Elections and Registration is scheduled to meet Wednesday at 6 p.m. to vote on a plain language statement, elections director Emily Cook said.
