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HomeMy WebLinkAbout10-521 Miller ADVICE OF COUNSEL January 15, 2010 John R. Miller, III, Esquire Miller Kistler & Campbell 124 North Allegheny Street Bellefonte, PA 16823-1695 10-521 Dear Mr. Miller: This responds to your letter dated November 20, 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.C.S. § 1101 et seq., would present any prohibitions or restrictions upon a member of a municipal authority board with regard to performing duties as a municipal authority board member where said individual, in a private capacity, is employed with an engineering firm that is the appointed engineering firm for the municipal authority. Facts: As Solicitor for a municipal authority (hereinafter referred to as “the Authority”), you have been authorized by an Authority Board Member (hereinafter referred to as “the Board Member”) to request an advisory from the Pennsylvania State Ethics Commission on his behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. The Authority owns and operates a sewage collection system and treatment plant. A local engineering firm (“the Firm”) is the appointed engineering firm for the Authority. You state that the Authority does not bid engineering services and that the Firm is appointed by the Authority based on past experience. The Firm is not on retainer, but rather, is paid by the Authority for work that the Firm performs on an as needed basis and for preparing certain reports that must be filed with the Pennsylvania Department of Environmental Protection and other agencies on a regular basis. You state that the Board Member, who recently lost his job, has found employment with the Firm effective January 1, 2010. You state that the Board Member will not be an officer or shareholder of the Firm and will only be an employee with no ownership interest in the Firm. The Board Member will be performing duties as a project manager for the Firm. Based upon the above submitted facts, you ask whether the Board Member would have a conflict of interest under the Ethics Act with regard to performing duties as an Authority Board Member while employed with the Firm. Miller, 10-521 January 15, 2010 Page 2 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 Member of the Authority Board, the Board Member on whose behalf you have inquired is a public official subject to 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 are defined in the Ethics Act as follows: Miller, 10-521 January 15, 2010 Page 3 § 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. 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 Miller, 10-521 January 15, 2010 Page 4 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 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. It is noted that Section 1103(a) of the Ethics Act 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, 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 Miller, 10-521 January 15, 2010 Page 5 associated in his private capacity or private client(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 generally would 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 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 Firm is a business with which the Board Member is associated in his capacity as an employee of the Firm. Section 1103(a) of the Ethics Act would not prohibit the Board Member from performing duties as a Member of the Authority Board while being employed by the Firm. However, pursuant to Section 1103(a) of the Ethics Act, in his public capacity as a Member of the Authority Board, the Board Member generally would have a conflict of interest in matters that would financially impact him, the Firm, or the Firm’s customer(s)/client(s). See, Kannebecker, supra; Miller, supra. In each instance of a conflict of interest, the Board Member would be required to abstain fully from participation and in each instance of a voting conflict, to abstain fully and to 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 when applicable. The propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Municipality Authorities Act. Conclusion: The municipal authority (“the Authority”) Board Member (“the Board Member”) on whose behalf you have inquired 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. The local engineering firm (“the Firm”) that is the appointed engineering firm for the Authority is a business with which the Board Member is associated in his capacity as an employee of the Firm. Section 1103(a) of the Ethics Act would not prohibit the Board Member from performing duties as a Member of the Authority Board while being employed by the Firm. However, pursuant to Section 1103(a) of the Ethics Act, in his public capacity as a Member of the Authority Board, the Board Member generally would have a conflict of interest in matters that would financially impact him, the Firm, or the Firm’s customer(s)/client(s). In each instance of a conflict of interest, the Board Member would be required to abstain fully from participation and in each instance of a voting conflict, to abstain fully and to 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 when 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 . Miller, 10-521 January 15, 2010 Page 6 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