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HomeMy WebLinkAbout09-511 RadolecB. Todd Radolec, P.E. Penn Development Services, L.P. P.O. Box 110 Uniontown, PA 15401 Dear Mr. Radolec: ADVICE OF COUNSEL February 19, 2009 09 -511 This responds to your faxed letter dated January 15, 2009, 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 member of the board of a county airport authority, who, in his private capacity, is employed as vice president of engineering with a company, with regard to participating in matters pertaining to the award of an authority contract, when the member's employer intends to submit a bid for the project. Facts: As a Member of the Board of the Fayette County Airport Authority ( "Authority "), you request an advisory from the Pennsylvania State Ethics Commission based upon facts that you and Jeffrey S. Proden, Esquire, have submitted, the material portion of which facts may be fairly summarized as follows. In a private capacity, you are employed as Vice President of Engineering with a company named "Penn Development Services, L.P." ( "the Company "). The aforesaid position is a designated position within the Company's engineering department and not an official corporate office. You state that all of the Company official corporate offices are held by individuals not associated with the Authority. The Company is engaged in the business of general contracting and project development. You state that the Company intends to submit a bid for an upcoming project ( "the Project ") for runway improvements for the Authority. The Authority will publicly advertise the Project for bids and will award the Project to the lowest bidder. You state that you would have no involvement on behalf of the Authority with matters pertaining to the Project and would abstain from any votes or other decision making process involving the Project. You further state that you have no ownership interest in the Company and would receive no additional financial or other benefit from any work undertaken by the Company for the Authority. Radolec, 09 -511 February 19, 2009 Page 2 Based upon the above submitted facts, you ask whether the Ethics Act would impose any restrictions upon you if the Company would submit a bid for the Project. 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 an Authority Board 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 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 related to Section 1103(a) 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 Radolec, 09 -511 February 19, 2009 Page 3 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. 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. Subject to certain statutory exceptions, 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. 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 Radolec, 09 -511 February 19, 2009 Page 4 65 Pa.C.S. § 1103(f). 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: "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. § 1101. 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. Section 1103(f) of the Ethics Act also provides 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 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 client(s). Miller, Opinion 89- 024; Kannebecker, Opinion 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 Radolec, 09 -511 February 19, 2009 Page 5 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 abstain and 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 the Company is a business with which you are associated in your capacity as an employee (Vice President of Engineering). Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as an Authority Board Member, you generally would have a conflict of interest in matters that would financially impact you, the Company, or the Company's client(s). See, Kannebecker, supra; Miller, supra. As to your specific inquiry, you are advised that pursuant to Section 1103(a) of the Ethics Act, in your public capacity as an Authority Board Member, you would have a conflict of interest in matters pertaining to actual or anticipated contract(s) between the Authority and the Company, including but not limited to such involving the Project. In each instance of a conflict of interest, you would be required to abstain fully from participation. The abstention requirement would not be limited to voting, but rather would extend to any use of authority of office. At such times as there would be a reasonable expectation of a business relationship forming between the Authority and the Company as to a particular project, including but not limited to the Project, you would have a conflict of interest and could not participate in related matters, such as, for example, drawing up contract specifications for such project. Where the Company would bid on the Project or other work for the Authority, you would have a conflict of interest and could not participate in reviewing or selecting bids or proposals or awarding the contract(s). You would also be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being an Authority Board Member, to effectuate a private pecuniary benefit to the Company through a detriment to a business competitor. See, Pepper, Opinion 87- 008. In addition, you generally would have a conflict of interest with respect to voting to approve the payment of any bills or invoices that would be submitted by the Company to the Authority. 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 abstain fully and 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 the Company would contract with the Authority, or would subcontract with a person awarded a contract with the Authority, and the value of the Company'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 Municipality Authorities Act, 53 Pa.C.S. § 5601 et seq. Conclusion: As a Member of the Board of the Fayette County Airport Authority ("Authority "), 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. Penn Development Services, L.P. ( "the Company ") is a business with which you are associated in your capacity as an employee (Vice President of Engineering). Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as an Authority Board Member, you generally Radolec, 09 -511 February 19, 2009 Page 6 would have a conflict of interest in matters that would financially impact you, the Company, or the Company's client(s). Based upon the submitted fact that the Company intends to submit a bid for an upcoming project ( "the Project ") for runway improvements for the Authority, you are advised as follows. Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as an Authority Board Member, you would have a conflict of interest in matters pertaining to actual or anticipated contract(s) between the Authority and the Company, including but not limited to such involving the Project. At such times as there would be a reasonable expectation of a business relationship forming between the Authority and the Company as to a particular project, including but not limited to the Project, you would have a conflict of interest and could not participate in related matters, such as, for example, drawing up contract specifications for such project. Where the Company would bid on the Project or other work for the Authority, you would have a conflict of interest and could not participate in reviewing or selecting bids or proposals or awarding the contract(s). You would also be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being an Authority Board Member, to effectuate a private pecuniary benefit to the Company through a detriment to a business competitor. You generally would have a conflict of interest with respect to voting to approve the payment of any bills or invoices that would be submitted by the Company to the Authority. 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 abstain and 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) 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