HomeMy WebLinkAbout08-551 JohnsonAnders M. Johnson
1852 Route 819
Greensburg, PA 15601
Dear Mr. Johnson:
ADVICE OF COUNSEL
May 9, 2008
08 -551
This responds to your letter dated March 1, 2008, postmarked March 31, 2008,
and received April 2, 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 impose any prohibitions or restrictions upon a township
supervisor, who in a private capacity, is engaged in a variety of excavating and
earthmoving related businesses within the township, with regard to entering into an
agreement to provide a contractor with sandstone and a clean fill dump site for a
replacement project for a township bridge, where: (1) the township entered into a project
agreement with the Commonwealth of Pennsylvania Department of Transportation
( "PennDOT ") for the replacement of the township bridge; (2) the township did not
regulate or participate in the bidding process of the bridge replacement contract and
instead, all matters associated with the bidding and award of such contract were
handled through PennDOT; (3) in December 2007, PennDOT awarded the bridge
replacement contract to the aforesaid contractor; and (4) the township supervisor did
not participate in the project's design, the bidding process, or the award of the bridge
replacement contract to the aforesaid contractor.
Facts: As a Supervisor for the Township of Salem ( "Township "), located in
Westmoreland County, Pennsylvania, you request an advisory from the Pennsylvania
State Ethics Commission based upon submitted facts that may be fairly summarized as
follows.
You were elected to office in 1999 and began serving as a Township Supervisor
in January 2000.
In early 2001, the Township entered into a Project Agreement with PennDOT for
the replacement of a bridge along Old William Penn Highway in the Township. The
Project Agreement was approved by the Township Board of Supervisors ( "Board').
The Project Agreement provided for reimbursement from federal and state funds
for the costs of replacing the aforesaid bridge. You state that as the net effect of the
Johnson, 08 -551
May 9, 2008
Page 2
Project Agreement, the Township would pay only five percent (5%) of the overall project
cost. While Gibson Thomas Engineering, the former Township Engineer, was
responsible for the layout and design of the replacement bridge, the overall project was
overseen by PennDOT engineers. You state that you did not participate in the project's
design.
You state that with respect to the letting and award of bids for construction
companies to perform the bridge replacement work, the original Project Agreement
provided in part as follows:
The Commonwealth, except as set forth below, will
advertise for bids, open bids and award the construction
contract in the name of the municipality in accordance with
applicable state and federal laws and requirements.... The
municipality will enter into the contract and shall issue the
notice to proceed. The municipality may handle the letting
and award procedure if it has procedures, which have been
approved by the Commonwealth.
Advisory Request Letter of Johnson, at 1.
You state that the Township did not regulate or participate in the bidding process
of the bridge replacement contract (hereinafter referred to as the Bridge Contract ").
Instead, all matters associated with the bidding and award of the Bridge Contract were
handled through PennDOT. In December 2007, PennDOT awarded the Bridge
Contract to an entity named "Plum Contracting." Plum Contracting was the lowest
responsible bidder for the Bridge Contract, and the Board had no authority to either
approve or reject the award of the Bridge Contract. You state that you did not
participate in the bidding process or in the award of the Bridge Contract to Plum
Contracting.
It is noted that although the submitted facts state certain official actions you have
not taken, the submitted facts do not disclose what official action, if any, you have taken
with respect to the bridge replacement project, the Project Agreement, or other related
matters.
In a private capacity, you are engaged in a variety of excavating and earthmoving
related businesses within the Township. Your principal business location is
approximately three miles from the site of the bridge replacement project. As part of
your business, you have a mining license from the Pennsylvania Department of
Environmental Protection to quarry sandstone. You sell sandstone, shale, and clean fill
dirt, and you receive clean fill on your property.
You state that representatives of Plum Contracting have recently contacted you
to obtain quotes for the purchase of sandstone for use in the bridge replacement project
and to solicit the use of your property as a site to dump fill removed from the project
construction site. You further state that you provided a quote in response to Plum
Contracting's request, but you have not entered into an agreement with Plum
Contracting to provide the aforesaid materials or to permit your property to be used as a
dump site. You acknowledge that you would receive a financial benefit from entering
into such an agreement with Plum Contracting. You additionally state that your quote is
consistent with the prices charged by similar businesses in the area, but your quote
could be more appealing to Plum Contracting due to the proximity of your property to
the project construction site and the resultant reduction in transportation costs.
Based upon the above submitted facts, you ask whether the Ethics Act would
permit you to enter into an agreement with Plum Contracting to provide sandstone and
a clean fill dump site for the bridge replacement project.
Johnson, 08 -551
May 9, 2008
Page 3
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 that your inquiry relates to
conduct that has already occurred, such past conduct may not be addressed in the
context of an advisory opinion. However, to the extent your inquiry relates to future
conduct, your inquiry may, and shall be addressed.
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:
§ 1103. Restricted activities
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
65 Pa.C.S. §§ 1103(a), (j).
(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.
Johnson, 08 -551
May 9, 2008
Page 4
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.
"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.
"Financial interest." Any financial interest in a legal
entity engaged in business for profit which comprises more
than 5% of the equity of the business or more than 5% of the
assets of the economic interest in indebtedness.
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, a 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
Johnson, 08 -551
May 9, 2008
Page 5
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:
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;
Johnson, 08 -551
May 9, 2008
Page 6
(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, it is noted
that Section 1103(a) of the Ethics Act pertaining to conflicts of interests 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 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 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 clients(s). Miller, Opinion 89-
024; Kannebecker, Opinion 92 -010.
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, supra; Miller, 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 fully from
participation and in the instance of a voting conflict, to abstain and 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 any business as to which you are a director, officer, owner, or employee or
in which you have a financial interest would be considered a business with which you
are associated. 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, in your capacity as a Township Supervisor, you would
have a conflict of interest in matters that would financially impact you, any business(es)
with which you are associated, or the customer(s) /client(s) of any business(es) with
which you are associated. See, Kannebecker, supra; Miller, supra.
In response to your specific inquiry, you are advised as follows. The elements of
a violation of Section 1103(a) of the Ethics Act would not be met as a result of you /your
business entering into an agreement ( "the Subcontract ") with Plum Contracting to
provide sandstone and a clean fill dump site for the bridge replacement project subject
to the conditions that: (1) you have not used the authority of office as a Township
Supervisor in matters pertaining to the bridge replacement project at a time when you
had a reasonable expectation that you would enter into a subcontract with Plum
Contracting or would otherwise receive a private pecuniary benefit related to the bridge
replacement project; and (2) you have not used confidential information received as a
result of being a Township Supervisor in furtherance of securing a private pecuniary
benefit in relation to the bridge replacement project. If you would enter into the
Johnson, 08 -551
May 9, 2008
Page 7
Subcontract with Plum Contracting, then pursuant to Section 1103(a) of the Ethics Act,
you would generally have a conflict of interest in matters pertaining to Plum Contracting,
the Bridge Contract, or the bridge replacement project.
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 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.
As for Section 1103(f) of the Ethics Act, per the submitted facts, the Township
and Plum Contracting would be the parties to the Bridge Contract. You are advised that
to the extent the Subcontract would be valued at $500 or more, Section 1103(f) of the
Ethics Act would not prohibit you or a business with which you are associated from
entering into the Subcontract with Plum Contracting subject to the condition that the
requirements of Section 1103(f) of the Ethics Act as to an open and public process have
been satisfied as to the Bridge Contract. If you or a business with which you are
associated would enter into the Subcontract with Plum Contracting, Section 1103(f) of
the Ethics Act would prohibit you in your capacity as a Township Supervisor from having
any supervisory or overall responsibility as to the implementation or administration of
the Bridge Contract.
It is parenthetically noted that the Second Class Township Code provides as
follows:
§ 68102. Letting contracts
(i) No township official, either elected or appointed, or
township employe who knows, or who by the exercise of
reasonable diligence could know, shall be interested to any
appreciable degree, either directly or indirectly, in any
contract for the sale or furnishing of any supplies or
materials for the use of the township or for any work to be
done for the township involving the payment by the township
of more than five hundred dollars ($500) in any year unless
the contract is awarded through the public bid process. This
limitation does not apply if the officer or appointee of the
township is an employe of the person, firm or corporation to
which the money is to be paid in a capacity with no possible
influence on the transaction and the officer cannot possibly
be benefited thereby, either financially or otherwise. If a
supervisor is within this exception, the supervisor shall so
inform the board of supervisors and refrain from voting on
the payments and shall in no manner participate in the
contract. Any official or appointee who knowingly violates
this provision is subject to surcharge to the extent of the
damage shown to be sustained by the township, is ousted
from office or employment and commits a misdemeanor of
the third degree.
53 P.S. § 68102(i).
Because the State Ethics Commission does not have the statutory jurisdiction to
interpret the Second Class Township Code, it is suggested that you seek legal advice
as to its applicability.
Johnson, 08 -551
May 9, 2008
Page 8
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 the Township of Salem ( "Township "), located in
Westmoreland 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.
Any business as to which you are a director, officer, owner, or employee or in which you
have a financial interest would be considered a business with which you are associated.
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, in your capacity as a Township Supervisor, you would have a conflict of interest in
matters that would financially impact you, any business(es) with which you are
associated, or the customer(s) /client(s ) of any business(es) with which you are
associated. Based upon the submitted facts that: (1) in early 2001, the Township
entered into a Project Agreement with the Commonwealth of Pennsylvania Department
of Transportation ( "PennDOT ") for the replacement of a bridge along Old William Penn
Highway in the Township; (2) the Project Agreement was approved by the Township
Board of Supervisors ( "Board'); (3) the former Township Engineer was responsible for
the layout and design of the replacement bridge, and the overall project was overseen
by PennDOT engineers; (4) you did not participate in the projects design; (5) the
Township did not regulate or participate in the bidding process of the bridge
replacement contract (hereinafter referred to as the Bridge Contract "), and instead, all
matters associated with the bidding and award of the Bridge Contract were handled
through PennDOT; (6) in December 2007, PennDOT awarded the Bridge Contract to an
entity named "Plum Contracting "; (7) the Township Board of Supervisors had no
authority to either approve or reject the award of the Bridge Contract; (8) you did not
participate in the bidding process or in the award of the Bridge Contract to Plum
Contracting; (9) representatives of Plum Contracting have recently contacted you to
obtain quotes for the purchase of sandstone for use in the bridge replacement project
and to solicit the use of our property as a site to dump fill removed from the project
construction site; and (10 you would receive a financial benefit from entering into such
an agreement with Plum ontracting, you are advised as follows.
The elements of a violation of Section 1103(a) of the Ethics Act would not be met
as a result of you /your business entering into an agreement ( "the Subcontract ") with
Plum Contracting to provide sandstone and a clean fill dump site for the bridge
replacement project subject to the conditions that: (1) you have not used the authority
of office as a Township Supervisor in matters pertaining to the bridge replacement
project at a time when you had a reasonable expectation that you would enter into a
subcontract with Plum Contracting or would otherwise receive a private pecuniary
benefit related to the bridge replacement project; and (2) you have not used confidential
information received as a result of being a Township Supervisor in furtherance of
securing a private pecuniary benefit in relation to the bridge replacement project. If you
would enter into the Subcontract with Plum Contracting, then pursuant to Section
1103(a) of the Ethics Act, you would generally have a conflict of interest in matters
pertaining to Plum Contracting, the Bridge Contract, or the bridge replacement project.
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 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. To the
extent the Subcontract would be valued at $500 or more, Section 1103(f) of the Ethics
Act would not prohibit you or a business with which you are associated from entering
into the Subcontract with Plum Contracting subject to the condition that the
requirements of Section 1103(f) of the Ethics Act as to an open and public process have
been satisfied as to the Bridge Contract. If you or a business with which you are
Johnson, 08 -551
May 9, 2008
Page 9
associated would enter into the Subcontract with Plum Contracting, Section 1103(f) of
the Ethics Act would prohibit you in your capacity as a Township Supervisor from having
any supervisory or overall responsibility as to the implementation or administration of
the Bridge Contract.
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
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