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HomeMy WebLinkAbout08-521 BRODHEADDavid J. Brodhead 122 Woodbine Road Shavertown, PA 18708 Dear Mr. Brodhead: ADVICE OF COUNSEL February 27, 2008 08 -521 This responds to your letter received January 29, 2008, by which you requested an advisory from the Pennsylvania 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 township supervisor with regard to participating in matters pertaining to a company that has a contract with the township to provide commercial building inspection services to the township, where the supervisor is employed by such company as a building code official and inspector. Facts: As a Member of the Board of Supervisors ( "Board ") of Kingston Township ( "Township "), located in Luzerne County, Pennsylvania, you request an advisory from the Pennsylvania State Ethics Commission based upon the following submitted facts. You were elected to the Board in November 2005 and were sworn into office in January 2006. The Township currently employs a full -time building code official and inspector, who is limited to performing residential inspections because he is not certified to perform commercial inspections. Prior to your election as a Supervisor, the Township contracted with a private company named "Building Inspection Underwriters, Inc." "BIU ") for the provision of commercial building inspection services. BIU contracts with various municipalities to perform building code enforcement as required by the Uniform Construction Code. Since November 2006, you have been employed full -time as a Building Code Official and Inspector with BIU. You are not an owner or principal of BIU. As an employee of BIU, you are paid a set salary that is not based on the number or type of inspections that you perform. You state that during the interview process with BIU, it was agreed that you would have no "contact" with the Township in your capacity as a building inspector, and that such has been the case since you began employment with Brodhead, 08 -521 February 27, 2008 Page 2 BIU. You note that as a Supervisor, you abstain from any vote pertaining to BIU, such as contract renewals. You ask generally what steps you must follow to avoid any violations of the Ethics Act with respect to matters pertaining to BIU. You specifically ask whether you must abstain from voting on a matter where BIU would receive a financial benefit even though you would not receive a direct p ersonal benefit, such as, for example, where the Board would vote to approve a land plan in which BIU would do the commercial inspections. 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. As a Township Supervisor, you are a "public official" subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act provide: 65 Pa.C.S. §§ 1103(a), (j). § 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. Brodhead, 08 -521 February 27, 2008 Page 3 The following terms pertaining to conflicts of interest under the Ethics Act are defined 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 /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. 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 provides as follows: Brodhead, 08 -521 February 27, 2008 Page 4 65 Pa.C.S. § 1103(f). § 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 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. 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 Brodhead, 08 -521 February 27, 2008 Page 5 (4) public disclosure of the contract awarded and offered and accepted. 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. In applying the above provisions of the Ethics Act to the instant matter, it is noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee 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 No. 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order No. 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity or private client(s). Miller, Opinion 89- 024; Kannebecker, Opinion No. 92 -010. If a private employer or business with which the public official /public employee is associated or a client of the private employer or business would have a matter pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter. Miller, supra; Kannebecker, supra. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation and in the instance of a voting conflict, to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. In applying the above provisions of the Ethics Act to the instant matter, you are advised that BIU is a business with which you are associated in your capacity as an employee of BIU. Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a Supervisor, you would generally have a conflict of interest in matters before the Township that would financially benefit you, BIU, or BIU's customer(s) /client(s). See, Miller, supra; Kannebecker, supra. You would have a conflict of interest in matters before the Board that would financially benefit BIU regardless of whether you would receive a direct personal benefit from such matters. Such matters would include, but would not be limited to, actual or anticipated contract(s) between the Township and BIU. In each instance of a conflict of interest, you would be required to abstain fully from participation. The abstention requirement would extend beyond voting to include any use of authority of office. In each instance of a voting conflict, you would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. You would also be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being a Township Supervisor, to effectuate a private pecuniary benefit to BIU through a detriment to a competitor for Township work. See, Pepper, Opinion 87 -008. In addition, you would generally have a conflict of interest with regard to voting to approve the payment of bills or invoices that BIU would submit to the Township. Brodhead, 08 -521 February 27, 2008 Page 6 As noted above, in each instance of a conflict of interest, you would be required to abstain fully from participation and in the instance of a voting conflict, to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. To the extent BIU would contract with the Township, or would subcontract with a person awarded a contract with the Township, and the value of BIU's contract /subcontract would be $500 or more, the restrictions of Section 1103(f) would be applicable. 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. Specifically not addressed herein is the applicability of the Second Class Township Code. Conclusion: As a Member of the Board of Supervisors ( "Board ") of Kingston Township ( "Township "), located in Luzerne County, Pennsylvania, 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. Building Inspection Underwriters, Inc. ( "BIU" ) is a business with which you are associated in your capacity as an employee of BIU. Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a Township Supervisor, you would generally have a conflict of interest in matters that would financially impact you, BIU, or BTU's customer(s) /client(s). Based upon the submitted fact that the Township has contracted with BIU for the provision of commercial building inspection services, you are advised as follows. You would have a conflict of interest in matters before the Board that would financially benefit BIU regardless of whether you would receive a direct personal benefit from such matters. Such matters would include, but would not be limited to, actual or anticipated contract(s) between the Township and BIU. You would also be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being a Township Supervisor, to effectuate a private pecuniary benefit to BIU through a detriment to a competitor for Township work. You would generally have a conflict of interest with regard to voting to approve the ayment of bills or invoices that BIU would submit to the Township. In each instance of conflict of interest, you would be required to abstain fully from participation. In each instance of a voting conflict, you would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. 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 Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Brodhead, 08 -521 February 27, 2008 Page 7 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