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HomeMy WebLinkAbout09-559 ConfidentialADVICE OF COUNSEL June 5, 2009 09 -559 This responds to your faxed letters dated March 26, 2009, and May 6, 2009, by which you requested a confidential 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 member of a municipal authority board with regard to working as an employee of the municipal authority or as an independent contractor to the municipal authority. Facts: As Solicitor for [name of municipality], located in [name of county], Pennsylvania, you have been authorized by Individual A, a Member of the Board of the [name of municipal authority] (hereinafter referred to as the Authority "), to request a confidential advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts that may be fairly summarized as follows. You state that the Authority is considering contracting with Individual A to have him [perform certain services] on a part -time basis. You state that Individual A would perform such services as an employee of, or an independent contractor to, the Authority. You note your understanding that Individual A would be precluded from discussing and voting upon a contractual relationship between the Authority and himself. Based upon the above submitted facts, you ask whether the Ethics Act would permit Individual A to work part -time for the Authority as either an employee of the Authority or as an independent contractor to the Authority. 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 Confidential Advice, 09 -559 June 5, 2009 Page 2 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 Member of the Authority Board, Individual A 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 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 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 Confidential Advice, 09 -559 June 5, 2009 Page 3 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. 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 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 Confidential Advice, 09 -559 June 5, 2009 Page 4 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. 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 Swick/Aman, Opinion 91 -006, the State Ethics Commission held that Section 1103(a) of the Ethics Act would not prohibit a municipal authority board member from simultaneously serving in a compensated position of employment with the authority. The Commission concluded, however, that an authority board member could not use the authority of office by participating in or voting in favor of his own appointment to a position of employment with the authority, or by participating /voting in other matters concerning his employment such as salary raises, questions concerning his job performance, and the like. Having established the above general principles, your specific question shall now be addressed. You are advised that Section 1103(a) of the Ethics Act would not prohibit Individual A from simultaneously serving as a Member of the Authority Board and as a compensated employee of the Authority. Swick/Aman, supra. However, Individual A would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in the appointment of himself to a position of employment with the Authority. Swick/Aman, supra. If appointed as an Authority employee, Individual A generally would have a conflict of interest in any matter(s) before the Authority Board pertaining to his Authority employment or to individual(s) who would exercise authority over him with respect to his Authority employment. In each instance of a conflict of interest, Individual A 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, Individual A would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. You are further advised that the Ethics Act itself would not prohibit Individual A, in his private capacity, from seeking to contract to provide services to the Authority as an independent contractor. However, in his public capacity as an Authority Board Member, Individual A would have a conflict of interest under Section 1103(a) of the Ethics Act in matters pertaining to actual or anticipated contract(s) between the Authority and himself. In each instance of a conflict of interest, Individual A 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, Individual A would be Confidential Advice, 09 -559 June 5, 2009 Page 5 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. To the extent Individual A would contract with the Authority, or would subcontract with a person awarded a contract with the Authority, and the value of the contract /subcontract would be $500 or more, the restrictions of Section 1103(f) would be applicable. Parenthetically, although the contracting in question would not be prohibited under the Ethics Act itself where the requirements of Sections 1103(a), 1103(f), and 1103(j) of the Ethics Act would be satisfied, a problem could exist as to such contracting under the Municipality Authorities Act. It is administratively noted that the Municipality Authorities Act provides in pertinent part: § 5614. Competition in award of contracts (e) CONFLICT OF INTEREST. -- No member of the authority or officer or employee of the authority may directly or indirectly be a party to or be interested in any contract or agreement with the authority if the contract or agreement establishes liability against or indebtedness of the authority. Any contract or agreement made in violation of this subsection is void, and no action may be maintained on the agreement against the authority. 53 Pa.C.S. § 5614(e). Because this Advice may not interpret the above quoted provision of the Municipality Authorities Act, it is suggested that Individual A seek legal advice in that regard. 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. Conclusion: As a Member of the Board of the [name of municipal authority] (hereinafter referred to as the Authority "), Individual A 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. Based upon the submitted facts that: (1) the Authority is considering contracting with Individual A to have him [perform certain services] on a part -time basis; and (2) Individual A would perform such services as an employee of, or an independent contractor to, the Authority, you are advised as follows. Section 1103(a) of the Ethics Act would not prohibit Individual A from simultaneously serving as a Member of the Authority Board and as a compensated employee of the Authority. However, Individual A would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in the appointment of himself to a position of employment with the Authority. If appointed as an Authority employee, Individual A generally would have a conflict of interest in any matter(s) before the Authority Board pertaining to his Authority employment or to individual(s) who would exercise authority over him with respect to his Authority employment. The Ethics Act itself would not prohibit Individual A, in his private capacity, from seeking to contract to provide services to the Authority as an independent contractor. However, in his public capacity as an Authority Board Member, Confidential Advice, 09 -559 June 5, 2009 Page 6 Individual A would have a conflict of interest under Section 1103(a) of the Ethics Act in matters pertaining to actual or anticipated contract(s) between the Authority and himself. In each instance of a conflict of interest, Individual A 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, Individual A 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. Although the contracting in question would not be prohibited under the Ethics Act itself where the requirements of Sections 1103(a), 1103(f), and 1103(j) of the Ethics Act would be satisfied, a problem could exist as to such contracting under the Municipality Authorities Act, and therefore, it is suggested that Individual A seek legal advice in that regard. 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