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HomeMy WebLinkAbout08-558 ConfidentialADVICE OF COUNSEL May 27, 2008 08 -558 This responds to your letter dated April 9, 2008, received April 17, 2008, by which you requested confidential 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 you as a County A ( "County ") Council Member with regard to participating in matters before County Council pertaining to a bond issue for a project undertaken by the B Authority, where a firm for which you are a contracted consultant might bid on the construction proposal for the project. Facts: In your capacity as a County Council Member, you request an advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. You first note that a prior confidential advisory, specifically, Confidential Advice, [number], was issued to you based upon facts set forth in an advisory request letter dated [date]. It is administratively noted that Confidential Advice, [number] concluded that you would have a conflict of interest as to the County's approval of financing for a project where a [type of firm] for which you were a contracted consultant, specifically, Firm C, intended to bid on the project, and you stood to financially gain if that firm would be awarded the contract. You state that the particulars of your current situation are the same as those addressed in Confidential Advice, [number], except that the current matter before County Council is a proposed bond issue for a B Authority project (hereinafter, the Project "). You state, If and when that issue is totally approved, my company may bid on the construction proposal." April 9, 2008, Advisory Request Letter, paragraph 3 (Emphasis in the original). You have submitted a letter dated March 21, 2008, from your attorney, in which your attorney has recommended that you abstain from any County Council votes pertaining to the issue, due to a possible conflict of interest based upon your relationship with Firm C. Confidential Advice, 08 -558 May 27, 2008 Page 2 Based upon the above submitted facts, you ask whether you would have a conflict of interest in matters pertaining to the bond issue for the Project, given that Firm C might bid on the construction proposal for the Project. Finally, you note that when the bond issue for the Project was reviously addressed at a County Council meeting, the matter was not put on the agenda until the final minutes of the meeting. You state that although you did not have time to present the County Council secretary with a written notice of your abstention, you publicly declared that you have a conflict of interest as to such matter. You state that you have also prepared a written statement to be put in the minutes for the aforesaid meeting. 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. In this regard, this advisory is issued based upon submitted facts indicating that you continue to work as a contracted consultant with Firm C. 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 County Council Member, 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. (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 Confidential Advice, 08 -558 May 27, 2008 Page 3 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. "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 Confidential Advice, 08 -558 May 27, 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. 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. 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 loeing 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 your inquiry, you are advised as follows. Based upon the submitted facts that: (1) you have an ongoing business relationship with Firm C as a contracted consultant for that firm; (2) County Council is considering a proposed bond issue for the Project; and (3) if and when the issue is totally approved, Firm C might bid on the construction proposal for the Project, you would have a conflict of interest in your capacity as a County Council Member as to matter(s) pertaining to the proposed bond issue for the 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. Act. The propriety of the proposed conduct has only been addressed under the Ethics Confidential Advice, 08 -558 May 27, 2008 Page 5 Conclusion: As a County Council Member for County A ( "County "), 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. Based upon the submitted facts that: (1) you have an ongoing business relationship with [type of firm] Firm C as a contracted consultant for that firm; (2) County Council is considering a proposed bond issue for a B Authority project (hereinafter, the Project "); and (3) if and when the issue is totally approved, Firm C might bid on the construction proposal for the Project, you would have a conflict of interest in your capacity as a County Council Member as to matter(s) pertaining to the proposed bond issue for the 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. 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