HomeMy WebLinkAbout12-509 Phiel
ADVICE OF COUNSEL
February 10, 2012
Randy L. Phiel, Adams County Commissioner
917 Fairfield Road
Gettysburg, PA 17325
12-509
Dear Mr. Phiel:
This responds to your letters dated December 28, 2011, and January 6, 2012, 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 county
commissioner, who in a private capacity is a 50% non-working equity owner in a
business that repairs and services vehicles, with regard to the proposed future servicing
by such business of vehicle(s) owned and/or funded by: (1) the county; (2) a transit
authority which has a minority number of its board members appointed by the county; or
(3) a drug task force which is supervised by the district attorney of the county.
Facts:
As a newly elected County Commissioner for Adams County (“County”),
Pennsylvania, you request an advisory from the Pennsylvania State Ethics Commission
based upon submitted facts that may be fairly summarized as follows.
Your term as a County Commissioner began January 1, 2012.
Since 1999 you have been a 50% non-working equity owner in a local business
complex named “R&S Exxon Service Center” (“R&S”). R&S includes an auto service
center, a car wash, and a convenience store. You state that your business partner,
Stephen Hemler, Sr. (“Mr. Hemler”), is the on-site and hands-on working general
manager of R&S and that you have never taken part in R&S’ day-to-day operations.
You further state that you have never taken a paycheck, draw, dividend, or financial
distribution from any aspect of R&S. Mr. Hemler and two full-time mechanics service
and repair a variety of vehicles as part of R&S’ operations.
In 2011, R&S received gross income in the amount of $8,640.90 from the
County’s general fund for repairs and services for County-owned vehicles from various
County departments.
R&S has also serviced vehicles owned by the York-Adams Transit Authority
(“Transit Authority”), which was recently formed by the merger of the Adams County
Transit Authority and the York County Transit Authority. The County appoints a minority
number of members of the Transit Authority Board. You state that as a County
Commissioner, you would not have any direct or indirect decision-making authority
Phiel, 12-509
February 10, 2012
Page 2
concerning any aspect of Transit Authority operations, including the day-to-day
management of buses used within the County’s geographic limits.
In 2011, the Adams County Drug Task Force (“Drug Task Force”) utilized R&S
for occasional service and repair work on Drug Task Force vehicles totaling a few
thousand dollars. The Drug Task Force is supervised by the Adams County District
Attorney (“District Attorney”) and has a dedicated fund which is not part of the County
funds managed by the County Board of Commissioners but rather is administered by
the District Attorney.
You state that the aforementioned business relationships were in place long
before you considered running for public office and that the income generated from
those relationships is a very small percentage of R&S’ gross business income.
Based upon the above submitted facts, you seek guidance as to whether the
Ethics Act would impose any prohibitions or restrictions upon you with respect to the
proposed future servicing by R&S of vehicle(s) owned and/or funded by the County, the
Transit Authority, or the Drug Task Force. You further seek guidance regarding the
“necessity or merit” of putting out an hourly rate contract to multiple shops for the
servicing of County vehicles, with your recusal from the competitive process or payment
approval.
You state that R&S has not performed any work on vehicles owned and/or
funded by the County, the Transit Authority, or the Drug Task Force since January 1,
2012, and that no such work will be performed pending the issuance of an advisory to
you.
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 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
Phiel, 12-509
February 10, 2012
Page 3
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
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.
"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.
Phiel, 12-509
February 10, 2012
Page 4
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. 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. 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 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 terms “contract” and “governmental body with which a public official or public
employee is or has been associated" are 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
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February 10, 2012
Page 5
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.
"Governmental body with which a public official
or public employee is or has been associated."
The
governmental body within State government or a political
subdivision by which the public official or employee is or has
been employed or to which the public official or employee is
or has been appointed or elected and subdivisions and
offices within that governmental body.
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 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 as follows.
R&S is a business with which you are associated in your private capacity as an
owner.
Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes
restrictions upon public officials and public employees. Therefore, Section 1103(a)
would impose restrictions upon you in your capacity as a public official, rather than upon
R&S.
In order to violate Section 1103(a) of the Ethics Act, a public official/public
employee “must be consciously aware of a private pecuniary benefit for himself, his
family, or his business, and then must take action in the form of one or more specific
steps to attain that benefit.” Kistler v. State Ethics Commission, __ Pa. __, __, 22 A.3d
223, 231 (2011).
Phiel, 12-509
February 10, 2012
Page 6
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, you would have a conflict of interest in matters before the County
Board of Commissioners that would financially impact R&S.
You are advised that an agreement or arrangement for the provision of vehicle
repair services by R&S to the County would constitute a contract as that term is defined
in the Ethics Act. In your public capacity as a County Commissioner, 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 County and R&S.
At such times as there would be a reasonable and legitimate anticipation that the
County would award a contract to R&S, you would have a conflict of interest in related
matters, such as preparing or approving the specifications for such contract. Where
R&S would bid for a County 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
County Commissioner, to effectuate a private pecuniary benefit to R&S 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 R&S to the
County.
Matter(s) before the County Board of Commissioners involving the Transit
Authority or the District Attorney/Drug Task Force could present a conflict of interest for
you under the Ethics Act, for example, where such matter(s) could result in a pecuniary
benefit to R&S through continued or increased business transactions. A violation of
Section 1103(a) would occur if you would be consciously aware of a private pecuniary
benefit for R&S and, as a public official, you would take action in the form of one or
more specific steps to attain that benefit. Kistler, supra.
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.
As for Section 1103(f) of the Ethics Act, you are advised that the governmental
body with which you are associated, hereinafter collectively referred to as “your
governmental body,” includes the County Board of Commissioners and all agencies,
bureaus, and departments under the County Board of Commissioners, but excludes the
judiciary, the independently elected County row offices and the Transit Authority. Cf.,
Henry, Advice 03-579. To the extent R&S would contract with your governmental body,
or would subcontract with a person awarded a contract with your governmental body,
and the value of R&S’ contract/subcontract would be $500 or more, the restrictions and
requirements of Section 1103(f) would have to be observed.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
Conclusion:
As a County Commissioner for Adams County (“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) your term as a County Commissioner began January 1, 2012;
(2) since 1999 you have been a 50% non-working equity owner in a local business
Phiel, 12-509
February 10, 2012
Page 7
complex named “R&S Exxon Service Center” (“R&S”); (3) in 2011, R&S received gross
income in the amount of $8,640.90 from the County’s general fund for repairs and
services for County-owned vehicles from various County departments; (4) R&S has also
serviced vehicles owned by the York-Adams Transit Authority (“Transit Authority”); (5)
the County appoints a minority number of members of the Transit Authority Board; (6)
as a County Commissioner, you would not have any direct or indirect decision-making
authority concerning any aspect of Transit Authority operations, including the day-to-day
management of buses used within the County’s geographic limits; (7) in 2011, the
Adams County Drug Task Force (“Drug Task Force”) utilized R&S for occasional service
and repair work on Drug Task Force vehicles totaling a few thousand dollars; (8) the
Drug Task Force is supervised by the Adams County District Attorney (“District
Attorney”) and has a dedicated fund which is not part of the County funds managed by
the County Board of Commissioners but rather is administered by the District Attorney;
and (9) the aforementioned business relationships were in place long before you
considered running for public office, and the income generated from those relationships
is a very small percentage of R&S’ gross business income, you are advised as follows.
R&S is a business with which you are associated in your private capacity as an
owner. Section 1103(a) of the Ethics Act would impose restrictions upon you in your
capacity as a public official, rather than upon R&S. A violation of Section 1103(a) of the
Ethics Act would occur if you would be consciously aware of a private pecuniary benefit
for R&S and, as a public official, you would take action in the form of one or more
specific steps to attain that benefit. 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, you would have a conflict of interest in
matters before the County Board of Commissioners that would financially impact R&S.
An agreement or arrangement for the provision of vehicle repair services by R&S to the
County would constitute a contract as that term is defined in the Ethics Act. In your
public capacity as a County Commissioner, 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 County and R&S. At such times as there would be a
reasonable and legitimate anticipation that the County would award a contract to R&S,
you would have a conflict of interest in related matters, such as preparing or approving
the specifications for such contract. Where R&S would bid for a County 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 County Commissioner, to effectuate a
private pecuniary benefit to R&S through a detriment to a business competitor. 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 R&S to the County.
Matter(s) before the County Board of Commissioners involving the Transit
Authority or the District Attorney/Drug Task Force could present a conflict of interest for
you under the Ethics Act, for example, where such matter(s) could result in a pecuniary
benefit to R&S through continued or increased business transactions. A violation of
Section 1103(a) would occur if you would be consciously aware of a private pecuniary
benefit for R&S and, as a public official, you would take action in the form of one or
more specific steps to attain that benefit.
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.
As for Section 1103(f) of the Ethics Act, the governmental body with which you
are associated, hereinafter collectively referred to as “your governmental body,”
Phiel, 12-509
February 10, 2012
Page 8
includes the County Board of Commissioners and all agencies, bureaus, and
departments under the County Board of Commissioners, but excludes the judiciary, the
independently elected County row offices and the Transit Authority. To the extent R&S
would contract with your governmental body, or would subcontract with a person
awarded a contract with your governmental body, and the value of R&S’
contract/subcontract would be $500 or more, the restrictions and requirements of
Section 1103(f) would have to be observed. 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.
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