HomeMy WebLinkAbout12-525 Perry
ADVICE OF COUNSEL
April 11, 2012
Wayne Perry
3104 Trapper Drive
South Park, PA 15129
12-525
Dear Mr. Perry:
This responds to your letter dated February 15, 2012 (postmarked February 16,
2012, and received February 21, 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 permit a community newspaper to continue to do
business with a school district if the individual who publishes the community newspaper
would become a school director for the school district, and if so, whether the restrictions
of Section 1103(a) of the Ethics Act (pertaining to conflict of interest) and Section
1103(f) of the Ethics Act (pertaining to contracting) would be applicable in such
circumstances.
Facts:
You request an advisory from the Pennsylvania State Ethics Commission
based upon submitted facts that may be fairly summarized as follows.
You state that you are seeking a position as a School Director for the South Park
School District (“School District”), as one of the current School Directors will be
resigning from the School District School Board. The School District serves only South
Park Township (“Township”).
You publish a community newspaper named the “Park News” (the “Newspaper”),
which is mailed directly to all Township residents. You state that the Paper is a one-
man operation and that it is basically operated as a community service.
Since the inception of the Newspaper in 1980, the School District has published
the minutes of its monthly meetings and various other news releases in the Newspaper.
You state that the Newspaper discounts its normal billing to help keep the cost to the
School District at a minimum and that the Newspaper offers the School District the least
expensive way to disseminate such information to the Township’s residents. You
further state that depending upon the amount of information the School District submits
for publication, the Newspaper receives revenue from the School District in the amount
of $300 to $500 per month, and that such revenue, while not a major amount, helps to
cover the Newspaper’s expenses.
Perry, 12-525
April 11, 2012
Page 2
You ask whether the Ethics Act would permit the Newspaper to continue to do
business with the School District if you would become a School Director for the School
District.
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.
If you would become a School Director for the School District, you would in that
capacity be a public official subject to 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
Perry, 12-525
April 11, 2012
Page 3
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.
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.
Examples of conduct that would be prohibited under Section 1103(a) of the
Ethics Act would include the pursuit of a private business opportunity in the course of
public action (Metrick, Order 1037) and 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
Perry, 12-525
April 11, 2012
Page 4
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
“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.
Perry, 12-525
April 11, 2012
Page 5
It is administratively noted that the Public School Code of 1949 as amended
(“Public School Code”) provides in pertinent part:
§ 3-324. Not to be employed by or do business with
district; exceptions
(a) No school director shall, during the term for which he
was elected or appointed, as a private person engaged in
any business transaction with the school district in which he
is elected or appointed, be employed in any capacity by the
school district in which he is elected or appointed, or receive
from such school district any pay for services rendered to the
district except as provided in this act…
….
(c) It shall not be a violation of this section for a school
district to contract for the purchase of goods or services from
a business with which a school director is associated to the
extent permitted by and in compliance with 65 Pa.C.S. Ch.
11 (relating to ethics standards and financial disclosure).
24 P.S. §§ 3-324(a), (c). On its face, Section 3-324(c) of the Public School Code
permits contracting between school districts and businesses with which school directors
are associated as long as the requirements of the Ethics Act are observed.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
The Newspaper is a business with which you are associated in your capacity as
its publisher (i.e., employee and/or owner).
An agreement or arrangement whereby you/the Newspaper would publish
minutes, news releases, or any other information for the School District would constitute
a “contract” as that term is defined in the Ethics Act.
As long as the restrictions and requirements of the Ethics Act would be observed,
the Ethics Act would not prohibit the Newspaper from continuing to do business with the
School District if you would become a School Director. However, in your public capacity
as a School Director, 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 School
District and you/the Newspaper. 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 School Director, to effectuate a private pecuniary benefit to you/the Newspaper
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
Newspaper to the School District.
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.
Perry, 12-525
April 11, 2012
Page 6
The restrictions and requirements of Section 1103(f) of the Ethics Act would have
to be observed as to any contract between you/the Newspaper and the School District
that would be valued at $500 or more.
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:
If you would become a School Director for the South Park School
District (“School District”), you would in that capacity be a public official subject to the
provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. §
1101 et seq. The community newspaper named the “Park News” (the “Newspaper”) is
a business with which you are associated in your capacity as its publisher (i.e.,
employee and/or owner). An agreement or arrangement whereby you/the Newspaper
would publish minutes, news releases, or any other information for the School District
would constitute a “contract” as that term is defined in the Ethics Act. As long as the
restrictions and requirements of the Ethics Act would be observed, the Ethics Act would
not prohibit the Newspaper from continuing to do business with the School District if you
would become a School Director. However, in your public capacity as a School
Director, 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 School District and
you/the Newspaper. 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
School Director, to effectuate a private pecuniary benefit to you/the Newspaper 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 you/the Newspaper to the School District. 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. The restrictions and
requirements of Section 1103(f) of the Ethics Act would have to be observed as to any
contract between you/the Newspaper and the School District that would be valued at
$500 or more. 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
Perry, 12-525
April 11, 2012
Page 7
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