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HomeMy WebLinkAbout08-545 ConnellyThomas S. Nanovic, Esquire Nanovic Law Offices 57 Broadway P.O. Box 359 Jim Thorpe, PA 18229 -0359 Dear Mr. Nanovic: ADVICE OF COUNSEL April 30, 2008 08 -545 This responds to your letter of March 24, 2008, and your faxed transmission of March 27, 2008, by which you requested advice 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, whose son is employed by a corporation, with regard to voting to award a township contract to the aforesaid corporation. Facts: As Solicitor for Penn Forest Township ( "Township "), located in Carbon ounty, Pennsylvania, you have been authorized by Township Supervisor Harry C. Connelly ( "Connolly ") to request an advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. The Township is a second class township governed by a five - member Board of Supervisors ( "Board'). You state that the Township does not have employees or equipment to repair and maintain the Township's roads and related facilities such as culverts, swales and the like. Instead, each year the Township awards a contract for the supply of materials to be used on the Township's roads and another contract for the supply of equipment and labor to repair and maintain the Township's roads. You state that since each contract is publicly bid and is awarded to the lowest responsible bidder, it is possible for both contracts to be awarded to the same contractor. For minor repairs or maintenance on Township roads costing $4,000 or less, the Township roadmaster is authorized by the Board to select and schedule the work to be done. The roadmaster reports such work to the Supervisors either before or after the work is completed. The roadmaster is not authorized to use more materials or equipment and labor than was contracted for by the Township. Nanovic /Connolly, 08 -545 April 30, 2008 Page 2 For repairs or maintenance at a single location that would cost more than $4,000, the Township either obtains quotes (for amounts from $4,001 to $10,000) or awards contracts through the public bid process (for amounts exceeding $10,000). Connolly's son is employed by a corporation ( "the Corporation ") that bids to supply the materials and /or the equipment and labor to repair and maintain the Township's roads. You state that Connolly's son is paid on an hourly basis, and his pay does not depend upon whether the Township awards contracts to the Corporation. You note that Connolly and his son do not reside in the same household. Based upon the above submitted facts, you ask whether Connolly would be permitted to vote to award a contract to the Corporation if the contract would be awarded through a public bid process and the Corporation would be the lowest responsible bidder. 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint, which will be investigated by the Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall be addressed. As a Township Supervisor, Connolly is a public official subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act provide: § 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 Nanovic /Connolly, 08 -545 April 30, 2008 Page 3 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. 65 Pa.C.S. §§ 1103(a), (j). 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. "Immediate family." A parent, spouse, child, brother or sister. "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 Nanovic /Connolly, 08 -545 April 30, 2008 Page 4 of the public official /public employee himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated. If a business with which the public official /public employee or immediate family member is associated or a private customer /client would have a matter pending before the governmental body, the public official /public employee would generally have a conflict of interest as to such matter. Kannebecker, Opinion 92 -010; Miller, Opinion 89- 024. A reasonable and legitimate anticipation 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 fully from participation. The abstention requirement would not be limited merely to voting, but would extend 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, pertaining to contracting, provides as follows: § 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. 65 Pa. C. S. § 1103(f). 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 Nanovic /Connolly, 08 -545 April 30, 2008 Page 5 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 (4) public disclosure of the contract awarded and offered and accepted. When Section 1103(f) of the Ethics Act is applicable, it 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, you are advised that Connolly's son is a member of Connolly's "immediate family" as that term is defined in the Ethics Act. The Corporation is a business with which Connolly's son is associated in his capacity as an employee of the Corporation. Subject to the statutory exceptions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, Connolly, as a Township Supervisor, would have a conflict of interest in matters that would financially impact his son, the Corporation, or the Corporation's customer(s) /client(s). See, Kannebecker, supra; Miller, supra. In response to your specific inquiry, you are advised as follows. Pursuant to Section 1103(a) of the Ethics Act, Connolly would generally have a conflict of interest in matters before the Board pertaining to actual or anticipated contract(s) between the Township and the Corporation. To the extent there would be a reasonable and legitimate anticipation that the Township would award a contract to the Corporation, Connolly would have a conflict of interest in related matters, such as preparing or approving the specifications for such contract. Where the Corporation would bid for a Township contract, Connolly would have a conflict of interest as to such contract and could not participate in reviewing or selecting bids or proposals or awarding the contract. Connolly also would be prohibited from using the authority of his public position, or confidential information accessed or received as a result of being a Township Supervisor, to effectuate a private pecuniary benefit to the Corporation through a detriment to a competitor for a Township contract. See, Pepper, Opinion 87 -008. Nanovic /Connolly, 08 -545 April 30, 2008 Page 6 In each instance of a conflict of interest, Connolly 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, Connolly would be required 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. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. To the extent the Corporation would contract with the Township, or would subcontract with a person awarded a contract with the Township, and the value of the Corporation's contract /subcontract would be $500 or more, the restrictions of Section 1103(f) would be applicable. The ropriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Second Class Township Code. Conclusion: As a Supervisor for Penn Forest Township ( "Township "), located in Carbon County, Pennsylvania, Harry C. Connolly ( "Connolly ") is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Connolly's son is a member of Connolly's "immediate family" as that term is defined in the Ethics Act. A certain corporation ( "the Corporation ") that employs Connolly's son and that bids to supply the materials and /or the equipment and labor to repair and maintain the Township's roads is a business with which Connolly's son is associated in his capacity as an employee of the Corporation. Subject to the statutory exceptions to the definition of "conflict" or "conflict of interest" as set forth in the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, Connolly, as a Township Supervisor, would have a conflict of interest in matters that would financially impact his son, the Corporation, or the Corporation's customer(s) /client(s). Pursuant to Section 1103(a) of the Ethics Act, Connolly would generally have a conflict of interest in matters before the Board pertaining to actual or anticipated contract(s) between the Township and the Corporation. To the extent there would be a reasonable and legitimate anticipation that the Township would award a contract to the Corporation, Connolly would have a conflict of interest in related matters, such as preparing or approving the specifications for such contract. Where the Corporation would bid for a Township contract, Connolly would have a conflict of interest as to such contract and could not participate in reviewing or selecting bids or proposals or awarding the contract. Connolly also would be prohibited from using the authority of his public position, or confidential information accessed or received as a result of being a Township Supervisor, to effectuate a private pecuniary benefit to the Corporation through a detriment to a competitor for a Township contract. In each instance of a conflict of interest, Connolly 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, Connolly would be required 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. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. To the extent the Corporation would contract with the Township, or would subcontract with a person awarded a contract with the Township, and the value of the Corporation's contract /subcontract would be $500 or more, the restrictions of Section 1103(f) would be applicable. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, 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 Nanovic /Connolly, 08 -545 April 30, 2008 Page 7 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. 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