Loading...
HomeMy WebLinkAbout11-556 Gaines ADVICE OF COUNSEL October 19, 2011 David S. Gaines, Esquire Campbell, Miller, Williams, Benson, Etter & Consiglio, Inc. 720 South Atherton Street State College, PA 16801-4669 11-556 Dear Mr. Gaines: This responds to your letter dated September 1, 2011, 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 an individual with regard to being appointed as a member of a municipal authority board where the individual’s spouse heads a contracting company that has a subcontract to perform work on an ongoing sewer extension project overseen by the municipal authority. Facts: As Solicitor for the Alexandria Borough – Porter Township Joint Sewer Authority (“Authority”), you request an advisory from the Pennsylvania State Ethics Commission on behalf of Richard Brown (“Mr. Brown”), a potential appointee to the Authority Board. You have submitted facts that may be fairly summarized as follows. There is a vacant seat on the Authority Board. You state that the Supervisors for Porter Township would like to appoint Mr. Brown to the Authority Board and that Mr. Brown consents to this plan. Mr. Brown’s spouse heads a contracting company (“Company”) that has a subcontract to perform work on an ongoing sewer extension project (“Project”) overseen by the Authority. You state that the Company is already performing work on the Project and is being paid approximately $1,000.00 per week for such work. The narrow question that you have posed is whether Mr. Brown would run afoul of the Ethics Act, and in particular Section 1103(f) of the Ethics Act (pertaining to contracting), if he would be appointed as a Member of the Authority Board while the Company has a subcontract to perform work on the Project. You state your view that Mr. Brown’s appointment to the Authority Board would not cause him to run afoul of the Ethics Act because the subcontract would predate Mr. Brown’s appointment to the Authority Board. 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 Gaines, 11-556 October 19, 2011 Page 2 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 this Advice is limited to addressing the narrow question posed. If Mr. Brown would be appointed as a Member of the Authority Board, he would in that capacity be 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 Gaines, 11-556 October 19, 2011 Page 3 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. "Immediate family." A parent, spouse, child, brother or sister. "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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 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(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 Gaines, 11-556 October 19, 2011 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 requires 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 applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. The Company is a business with which Mr. Brown’s spouse is associated to the extent that she is a director, officer, owner, or employee of the Company or has a financial interest in the Company. The Ethics Act would not prohibit Mr. Brown from being appointed as a Member of the Authority Board while the Company has a subcontract to perform work on the Project. If Mr. Brown would be appointed as a Member of the Authority Board, he would in that capacity be a public official subject to the Ethics Act, and pursuant to Section 1103(a) of the Ethics Act, Mr. Brown generally would have a conflict of interest in matters before the Authority Board that would Gaines, 11-556 October 19, 2011 Page 5 financially impact him, his spouse, or a business with which he or his spouse is associated. As noted above, in each instance of a conflict of interest, Mr. Brown 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. The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. 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. Specifically not addressed herein is the applicability of the Municipality Authorities Act, 53 Pa.C.S. § 5601 et seq. Conclusion: Based upon the submitted facts that: (1) there is a vacant seat on the Board of the Alexandria Borough – Porter Township Joint Sewer Authority (“Authority”); (2) the Supervisors for Porter Township would like to appoint Richard Brown (“Mr. Brown”) to the Authority Board, and Mr. Brown consents to this plan; (3) Mr. Brown’s spouse heads a contracting company (“Company”) that has a subcontract to perform work on an ongoing sewer extension project (“Project”) overseen by the Authority; and (4) the Company is already performing work on the Project and is being paid approximately $1,000.00 per week for such work, you are advised as follows. The Company is a business with which Mr. Brown’s spouse is associated to the extent that she is a director, officer, owner, or employee of the Company or has a financial interest in the Company. The Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would not prohibit Mr. Brown from being appointed as a Member of the Authority Board while the Company has a subcontract to perform work on the Project. If Mr. Brown would be appointed as a Member of the Authority Board, he would in that capacity be a public official subject to the Ethics Act, and pursuant to Section 1103(a) of the Ethics Act, Mr. Brown generally would have a conflict of interest in matters before the Authority Board that would financially impact him, his spouse, or a business with which he or his spouse is associated. In each instance of a conflict of interest, Mr. Brown 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. The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed whenever 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 . 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. Gaines, 11-556 October 19, 2011 Page 6 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