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HomeMy WebLinkAbout10-611 BUZZATTO ADVICE OF COUNSEL September 24, 2010 Mark H. Buzzatto, DDS 115 Yorktown Road McMurray, PA 15317 10-611 Dear Dr. Buzzatto: This responds to your letter dated August 11, 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 school director, who in a private capacity is the managing director of a business consulting firm, with regard to providing free business consulting services to the school district. Facts: As a School Director for the Peters Township School District (“School District”), located in Washington County, Pennsylvania, you request an advisory from the Pennsylvania State Ethics Commission based upon submitted facts that may be fairly summarized as follows. In a private capacity, you are the Managing Director of a business consulting firm named “General Service Systems Management Consultants” (“GSS”). You state that you specialize in organization development and continuous process improvement. You state that you would like to offer free business consulting services to the School District. In particular, you want to help the School District develop a point of focus for improvement, determine the optimum method to collect data, perform a statistical analysis of the data, create a report providing useful information, draw conclusions based upon such information, and suggest improvement interventions. You state that the School District would be a pro bono client of GSS and would be treated the same as any other client, with the exception that a fee would not be charged and payment would not be accepted. Based upon the above submitted facts, you ask whether the Ethics Act would permit you to provide the aforesaid business consulting services to the School District as a pro bono client of GSS, and if so, whether the following activities would be permissible: (1) generating reports for the School District that display the GSS logo or cite GSS and/or you as the author of the reports; (2) stating in conversations and Buzzatto, 10-611 September 24, 2010 Page 2 referencing or citing in documents or on the GSS website that the School District is your and/or GSS’s pro bono client; (3) writing and sharing a case study that reflects the experiences and results of the relationship between the School District and GSS; and (4) receiving an endorsement or testimonial from the School District School Board and/or the School District Superintendent. 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 a School Director for the School District, 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: Buzzatto, 10-611 September 24, 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. 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 conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. 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, Buzzatto, 10-611 September 24, 2010 Page 4 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. 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 applying the above provisions of the Ethics Act to the instant matter, you are advised that GSS is a business with which you are associated in your capacity as the Managing Director. Pursuant to Section 1103(a) of the Ethics Act, in your capacity as a School Director, you generally would have a conflict of interest in matters that would financially impact you, GSS, or your/GSS’s client(s). See, Kannebecker, supra; Miller, supra. As noted above, in each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. You are further advised that Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity as the Managing Director of GSS, from providing business consulting services to the School District as a pro bono client of GSS or from engaging in the following activity(ies) related to the provision of such services: (1) generating reports for the School District that display the GSS logo or cite GSS and/or you as the author of the reports; (2) stating in conversations and referencing or citing in documents or on the GSS website that the School District is your and/or GSS’s pro bono client; (3) writing and sharing a case study that reflects the experiences and results of the relationship between the School District and GSS; or (4) receiving an endorsement or testimonial from the School District School Board and/or the School District Superintendent. 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. It is suggested that you seek legal advice as to the applicability of the Public School Code of 1949 as amended. Conclusion: As a School Director for the Peters Township School District (“School District”), located in Washington County, Pennsylvania, 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 a private capacity, you are the Managing Director of a business consulting firm named “General Service Systems Management Consultants” (“GSS”); (2) you would like to offer free business consulting services to the School District; and (3) the School District would be a pro bono client of GSS and would be treated just as any other client, with the exception that a fee would not be charged and payment would not be accepted, you are advised as follows. GSS is a business with which you are associated in your capacity as the Managing Director. Pursuant to Section 1103(a) of the Ethics Act, in your capacity as a School Director, you generally would have a conflict of interest in matters that would financially impact you, GSS, or your/GSS’s client(s). In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity as the Managing Director of GSS, Buzzatto, 10-611 September 24, 2010 Page 5 from providing business consulting services to the School District as a pro bono client of GSS or from engaging in the following activity(ies) related to the provision of such services: (1) generating reports for the School District that display the GSS logo or cite GSS and/or you as the author of the reports; (2) stating in conversations and referencing or citing in documents or on the GSS website that the School District is your and/or GSS’s pro bono client; (3) writing and sharing a case study that reflects the experiences and results of the relationship between the School District and GSS; or (4) receiving an endorsement or testimonial from the School District School Board and/or the School District Superintendent. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. It is suggested that you seek legal advice as to the applicability of the Public School Code of 1949 as amended. 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