HomeMy WebLinkAbout10-604 Kurtyka
ADVICE OF COUNSEL
July 22, 2010
Ronald Kurtyka
Kurtyka Enterprises, Inc.
P.O. Box 115
100 Price Street
Rices Landing, PA 15357
10-601
Dear Mr. Kurtyka:
This responds to your letters dated May 21, 2010, June 8, 2010, and June 22,
2010, 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 impose any prohibitions or restrictions upon a member
and vice chairman of a municipal authority board, who in a private capacity is the owner
and president of a construction, excavation, and land development company that has a
contract to provide construction inspection services on an as-needed basis to the
engineering firm which serves as the appointed engineering consultant to the municipal
authority, with regard to: (1) participating in his public capacity in matters pertaining to
the engineering firm; (2) inspecting projects of the municipal authority for the
engineering firm in his private capacity; or (3) contracting through his company to
provide services to the municipal authority.
Facts:
As a Member and Vice Chairman of the Board (“Board”) of the Dry Tavern
Sewer Authority (“Authority”), you request an advisory from the Pennsylvania State
Ethics Commission based upon submitted facts that may be fairly summarized as
follows.
In 2007, the Authority Board appointed a firm named “Widmer Engineering”
(“Widmer”) as the Authority’s engineering consultant. The Authority subsequently
began to enter into various contracts with Widmer related to planning, grant writing,
design, contract administration, construction inspection, and general professional
services as needed.
On January 7, 2008, the Jefferson Township Board of Supervisors appointed you
to serve a five-year term on the Authority Board.
In a private capacity, you are the owner and president and an employee of a
construction, excavation, and land development company named “Kurtyka Enterprises,
Inc.” (“Company”). You state that the number of Company employees varies depending
upon the workload and that you are currently the sole employee of the Company.
Kurtyka, 10-601
July 22, 2010
Page 2
You state that on April 15, 2010, you became aware through a telephone call
from Widmer that the Company was being considered for a construction inspector
position with Widmer even though you had not applied for such a position with Widmer.
On April 21, 2010, you interviewed with Widmer. On May 3, 2010, the Company
accepted a position as a sub-consultant to Widmer to provide construction inspection
services on an as-needed basis. You state that on May 4, 2010, the Company
contracted with Widmer to provide the aforesaid services, and you began providing
such services as a Company employee. You state that in providing on-site inspection
services for various construction projects, your duties include daily interaction with
contractors, verifying compliance of construction activities with construction documents,
verifying types of materials used, measuring and verifying quantities for payment
estimates, resolving all types of construction issues as they arise, and documenting the
construction progress.
You state that you have not played any role in any matter(s) before the Board
involving or pertaining to Widmer since you became aware on April 15, 2010, that the
Company was being considered for the construction inspector position with Widmer.
Based upon the above submitted facts, you seek guidance as to whether the
Ethics Act would impose any prohibitions or restrictions upon you with regard to
engaging in the following activities as a Member and Vice Chairman of the Authority
Board:
(1) Voting to approve or reject any contracts or contract modifications
between the Authority and Widmer;
(2) Voting to approve or reject any payments or reimbursements from the
Authority to Widmer;
(3) Voting to approve or reject any payment requisitions to various funding
sources that include payments or reimbursements to Widmer;
(4) Voicing your opinion regarding any contract, contract scope, contract
modification, payment, reimbursement, or other issue between the
Authority and Widmer;
(5) Voting to approve or reject any payment or payment requisitions to
contractors where the design and/or contract documents were prepared
by Widmer; or
(6) Performing any other duty(ies).
You further seek guidance as to whether the Ethics Act would impose any
prohibitions or restrictions upon you/the Company with regard to bidding on or entering
into a contract with the Authority or inspecting any Authority project(s) for Widmer.
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. To
the extent that your inquiry relates to conduct that has already occurred, such past
Kurtyka, 10-601
July 22, 2010
Page 3
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 Member and Vice Chairman of the Authority Board, you are a public official
as that term is defined in the Ethics Act, and therefore you are 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
Kurtyka, 10-601
July 22, 2010
Page 4
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 advocating 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
Kurtyka, 10-601
July 22, 2010
Page 5
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
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
Kurtyka, 10-601
July 22, 2010
Page 6
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 the owner and president and as an employee. Subject to the statutory exclusions 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 Member
and Vice Chairman of the Authority Board, you would have a conflict of interest in
matters that would financially impact you, the Company, or the Company’s client(s),
including but not limited to Widmer. Such matters would include: (1) voting on contracts
or contract modifications between the Authority and Widmer; (2) voting on payments or
reimbursements from the Authority to Widmer; (3) voting on payment requisitions to
various funding sources that include payments or reimbursements to Widmer; or (4) any
other matter(s) that would financially impact Widmer.
You are further advised that unless there would be some basis for a conflict of
interest such as a private pecuniary benefit to you, a member of your immediate family,
the Company, or the Company’s client(s), Section 1103(a) of the Ethics Act would not
prohibit you from voting on payment(s) or payment requisition(s) to contractor(s) where
the design and/or contract documents were prepared by Widmer.
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. You would be prohibited from voicing
your opinion in your capacity as a Member and Vice Chairman of the Authority Board
with regard to matter(s) in which you would have a conflict of interest, as such
activity(ies) would constitute a use of authority of office.
You are advised that the Ethics Act itself would not prohibit you, in your private
capacity as the owner, president and employee of the Company, from inspecting
Authority project(s) for Widmer or contracting to perform work for the Authority.
However, in your public capacity as a Member and Vice Chairman of the Authority
Board, you 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 you/the
Company. At such times as there would be a reasonable and legitimate anticipation
that the Authority would award a contract to you/the Company, you would have a
conflict of interest in related matters, such as preparing or approving the specifications
for such contract. Where you/the Company would bid for an Authority contract, you
would have a conflict of interest as to such contract and could not participate in
reviewing or selecting bids or proposals or awarding the contract. You would also be
prohibited from using the authority of your public position, or confidential information
accessed or received as a result of being a Member/Vice Chairman of the Authority
Board, to effectuate a private pecuniary benefit to yourself/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 you/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. If, while serving as a Member of the Authority Board, you/the
Company would enter into a contract with the Authority, or would subcontract with a
person awarded a contract with the Authority, and the value of the contract/subcontract
Kurtyka, 10-601
July 22, 2010
Page 7
would be $500 or more, the restrictions of Section 1103(f) of the Ethics Act would be
applicable.
It is noted that a problem could exist under the Municipality Authorities Act as to
contracting between you/the Company and the Authority. The Municipality Authorities
Act provides in 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 you 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 and Vice Chairman of the Board (“Board”) of the Dry
Tavern Sewer 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.
Based upon the submitted facts that: (1) in 2007, the Authority Board appointed a firm
named “Widmer Engineering” (“Widmer”) as the Authority’s engineering consultant, and
the Authority subsequently began to enter into various contracts with Widmer related to
planning, grant writing, design, contract administration, construction inspection, and
general professional services as needed; (2) on January 7, 2008, the Jefferson
Township Board of Supervisors appointed you to serve a five-year term on the Authority
Board; (3) in a private capacity, you are the owner and president and an employee of a
construction, excavation, and land development company named “Kurtyka Enterprises,
Inc.” (“Company”); (4) the number of Company employees varies depending upon the
workload, and you are currently the sole employee of the Company; (5) on April 15,
2010, you became aware through a telephone call from Widmer that the Company was
being considered for a construction inspector position with Widmer even though you
had not applied for such a position with Widmer; (6) on April 21, 2010, you interviewed
with Widmer, and on May 3, 2010, the Company accepted a position as a sub-
consultant to Widmer to provide construction inspection services on an as-needed
basis; (7) on May 4, 2010, the Company contracted with Widmer to provide the
aforesaid services, and you began providing such services as a Company employee;
(8) in providing on-site inspection services for various construction projects, your duties
include daily interaction with contractors, verifying compliance of construction activities
with construction documents, verifying types of materials used, measuring and verifying
quantities for payment estimates, resolving all types of construction issues as they
arise, and documenting the construction progress; and (9) you have not played any role
in any matter(s) before the Board involving or pertaining to Widmer since you became
aware on April 15, 2010, that the Company was being considered for the construction
inspector position with Widmer, you are advised as follows.
Kurtyka, 10-601
July 22, 2010
Page 8
The Company is a business with which you are associated in your capacity as
the owner and president and as an employee. Subject to the statutory exclusions 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 Member and
Vice Chairman of the Authority Board, you would have a conflict of interest in matters
that would financially impact you, the Company, or the Company’s client(s), including
but not limited to Widmer. Such matters would include: (1) voting on contracts or
contract modifications between the Authority and Widmer; (2) voting on payments or
reimbursements from the Authority to Widmer; (3) voting on payment requisitions to
various funding sources that include payments or reimbursements to Widmer; or (4) any
other matter(s) that would financially impact Widmer. Unless there would be some
basis for a conflict of interest such as a private pecuniary benefit to you, a member of
your immediate family, the Company, or the Company’s client(s), Section 1103(a) of the
Ethics Act would not prohibit you from voting on payment(s) or payment requisition(s) to
contractor(s) where the design and/or contract documents were prepared by Widmer.
The Ethics Act itself would not prohibit you, in your private capacity as the owner,
president and employee of the Company, from inspecting Authority project(s) for
Widmer or contracting to perform work for the Authority. However, in your public
capacity as a Member and Vice Chairman of the Authority Board, you 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 you/the Company. At such times
as there would be a reasonable and legitimate anticipation that the Authority would
award a contract to you/the Company, you would have a conflict of interest in related
matters, such as preparing or approving the specifications for such contract. Where
you/the Company would bid for an Authority contract, you would have a conflict of
interest as to such contract and could not participate in reviewing or selecting bids or
proposals or awarding the contract. You would also be prohibited from using the
authority of your public position, or confidential information accessed or received as a
result of being a Member/Vice Chairman of the Authority Board, to effectuate a private
pecuniary benefit to yourself/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 you/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 fully and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act.
You would be prohibited from voicing your opinion in your capacity as a Member and
Vice Chairman of the Authority Board with regard to matter(s) in which you would have
a conflict of interest, as such activity(ies) would constitute a use of authority of office.
The requirements of Section 1103(f) of the Ethics Act would have to be observed
whenever applicable. It is noted that a problem could exist under the Municipality
Authorities Act as to contracting between you/the Company and the Authority, and
therefore, it is suggested that you 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.
Kurtyka, 10-601
July 22, 2010
Page 9
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