HomeMy WebLinkAbout10-620-C Beichner
ADVICE OF COUNSEL
October 22, 2010
Janet D. Beichner
B & B Glass Center
4327 State Route 257
Oil City, PA 16301
10-620
Dear Ms. Beichner:
This responds to your letters dated September 13, 2010, October 18, 2010, and
October 22, 2010, by which you requested an advisory from the Pennsylvania State
Ethics Commission.
Issue:
Whether the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101
et seq., would impose any prohibitions or restrictions upon a county commissioner, who
in a private capacity is the sole proprietor of a business (“Business”), with regard to: (1)
voting on a bid submitted by the Business to the county; or (2) administering the grant
that would fund a contract resulting from the acceptance of such bid or overseeing the
work that would be done by the Business under such contract.
Facts:
As a Commissioner for Venango County (“County”), Pennsylvania, you
request an advisory from the Pennsylvania State Ethics Commission based upon
submitted facts, the material portion of which may be fairly summarized as follows.
The County is governed by a three-Member Board of Commissioners. There is
currently one vacancy on the County Board of Commissioners, which will be filled on or
about November 19, 2010.
In a private capacity, you are the sole proprietor of a business named “B & B
Glass Center” (“B & B”). In response to a County bid notice (“the Bid Notice”), B & B
recently submitted a bid to provide seven bus shelters to the County, which project is
hereinafter referred to as the “Bus Shelter Project.” You state that the County received
only one other bid in response to the Bid Notice, but said bid was rejected as late.
You state that the Bid Notice indicated that any contract resulting from bids
submitted would be subject to review by the Commonwealth of Pennsylvania
Department of Transportation (“PennDOT”) as well as by the County, since funding for
such contract would include a grant from the Federal Transit Administration and
PennDOT.
You state that the bid submitted by B & B to the County included B & B’s
standard mark-up to provide funding for B & B’s overhead and operation. You state that
the bid did not include any enhancement for you or any of your family members.
Beichner, 10-620
October 22, 2010
Page 2
You state that the Bus Shelter Project has been postponed until next year.
However, because B & B might bid on the Bus Shelter Project again next year, you
seek guidance as to whether the Ethics Act would impose any restrictions upon you, in
your capacity as a County Commissioner, with regard to: (1) voting to accept B & B’s
bid on the Bus Shelter Project; or (2) administering the grant that would fund a contract
resulting from the acceptance of B & B’s bid or overseeing the work that would be done
by B & B under such contract.
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
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 County Commissioner, 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
Beichner, 10-620
October 22, 2010
Page 3
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
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.
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. A reasonable and legitimate expectation that a business
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October 22, 2010
Page 4
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, 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(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
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
Beichner, 10-620
October 22, 2010
Page 5
“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 administratively noted that the County Code provides in pertinent part:
§ 1806. County officers not to be interested in contracts
Restrictions on the involvement of elected and
appointed county officers in any county contract shall be as
prescribed in 65 Pa.C.S. Ch. 11 (relating to ethics standards
and financial disclosure).
16 P.S. § 1806.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised that B & B is a business with which you are associated in your capacity as the
owner. 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 County Commissioner, you would have a conflict
of interest in matters that would financially impact you, B & B, or B & B’s
customer(s)/client(s).
You also would be prohibited from using the authority of your public position, or
confidential information accessed or received as a result of being a County
Commissioner, to effectuate a private pecuniary benefit to yourself/B & B through a
detriment to a business competitor. See, Pepper, Opinion 87-008.
You would have a conflict of interest under Section 1103(a) of the Ethics Act in
matters before the County Board of Commissioners pertaining to the Bus Shelter
Project where you/B & B would have a pending bid or would reasonably expect to
submit a bid on the Bus Shelter Project. If you/B & B would be awarded a contract for
the Bus Shelter Project, you would continue to have a conflict of interest in your official
capacity in matters relating to such project.
Subject to the voting conflict exceptions of Section 1103(j) of the Ethics Act, you
would be required to abstain fully from participation in each instance of a conflict of
interest. Under the submitted facts, you are advised that Section 1103(j) of the Ethics
Act would not allow you to vote on a B & B bid for the Bus Shelter Project unless all of
the following conditions would be met: (1) the other two County Commissioners would
cast opposing votes or one of the other two County Commissioners would also have a
conflict of interest under the Ethics Act; (2) you would initially abstain from the vote; and
(3) you would fully satisfy the disclosure requirements of Section 1103(j) of the Ethics
Act. Cf., Confidential Opinion, 04-003; Garner, Opinion 93-004; DeLuca, Advice 06-
562.
You are further advised that if you/B & B would enter into a contract with the
County for the Bus Shelter Project, Section(s) 1103(a)/1103(f) of the Ethics Act would
prohibit you, in your public capacity as a County Commissioner, from administering the
grant funding such contract or from having any supervisory or overall responsibility for
the implementation or administration of such contract.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Conclusion:
As a Commissioner for Venango County (“County”), Pennsylvania,
you are a public official subject to the provisions of the Public Official and Employee
Beichner, 10-620
October 22, 2010
Page 6
Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. Based upon the submitted facts
that: (1) the County is governed by a three-Member Board of Commissioners; (2) in a
private capacity, you are the sole proprietor of a business named “B & B Glass Center”
(“B & B”); (3) in response to a County bid notice, B & B recently submitted a bid to
provide seven bus shelters to the County, which project is hereinafter referred to as the
“Bus Shelter Project”; (4) the Bus Shelter Project has been postponed until next year;
and (5) B & B might bid on the Bus Shelter Project again next year, you are advised as
follows.
B & B is a business with which you are associated in your capacity as the owner.
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 County Commissioner, you would have a conflict of interest in
matters that would financially impact you, B & B, or B & B’s customer(s)/client(s).
You also would be prohibited from using the authority of your public position, or
confidential information accessed or received as a result of being a County
Commissioner, to effectuate a private pecuniary benefit to yourself/B & B through a
detriment to a business competitor.
You would have a conflict of interest under Section 1103(a) of the Ethics Act in
matters before the County Board of Commissioners pertaining to the Bus Shelter
Project where you/B & B would have a pending bid or would reasonably expect to
submit a bid on the Bus Shelter Project. If you/B & B would be awarded a contract for
the Bus Shelter Project, you would continue to have a conflict of interest in your official
capacity in matters relating to such project.
Subject to the voting conflict exceptions of Section 1103(j) of the Ethics Act, you
would be required to abstain fully from participation in each instance of a conflict of
interest. Under the submitted facts, you are advised that Section 1103(j) of the Ethics
Act would not allow you to vote on a B & B bid for the Bus Shelter Project unless all of
the following conditions would be met: (1) the other two County Commissioners would
cast opposing votes or one of the other two County Commissioners would also have a
conflict of interest under the Ethics Act; (2) you would initially abstain from the vote; and
(3) you would fully satisfy the disclosure requirements of Section 1103(j) of the Ethics
Act.
If you/B & B would enter into a contract with the County for the Bus Shelter
Project, Section(s) 1103(a)/1103(f) of the Ethics Act would prohibit you, in your public
capacity as a County Commissioner, from administering the grant funding such contract
or from having any supervisory or overall responsibility for the implementation or
administration of such contract. 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.
Beichner, 10-620
October 22, 2010
Page 7
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