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HomeMy WebLinkAbout12-553 Gutshall ADVICE OF COUNSEL August 1, 2012 Mark A. Gutshall LandStudies, Inc. 315 North Street Lititz, PA 17543 12-553 Dear Mr. Gutshall: This responds to your letter of June 18, 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 restrictions upon an individual in his capacity as a Member of the Lancaster County Clean Water Consortium (“Clean Water Consortium”) Steering Committee if the Clean Water Consortium would contract for the services of LandStudies, Inc. (“LandStudies”), a business with which the individual is affiliated in his private capacity, in connection with obtaining grant funding for a project; and whether the Ethics Act would impose any restrictions upon the individual in his capacity as a Member of the Board of Directors of the Conservation Foundation of Lancaster County (“Conservation Foundation”) if LandStudies would bid on ecological restoration projects related to a grant received by the Conservation Foundation. Facts: You seek an advisory from the Pennsylvania State Ethics Commission based upon submitted facts, the material portion of which may be fairly summarized as follows. You serve on the Clean Water Consortium Steering Committee. You also serve on the Board of Directors of the Conservation Foundation. You have submitted printouts of various web pages from the Clean Water Consortium’s website at www.lccwc.com and a copy of the bylaws of the Conservation Foundation, which documents are incorporated herein by reference. In your role with the Clean Water Consortium, you are managing a project (“Project”) with Tetra Tech. Grant opportunities to fund the Project are available through the National Fish and Wildlife Foundation (“NFWF”). In a private capacity, you are affiliated with LandStudies, which is one of three in- state Technical Service Providers pre-approved by NFWF. The Clean Water Gutshall, 12-553 August 1, 2012 Page 2 Consortium may seek LandStudies’ services in connection with obtaining grant funding from NFWF for the Project. The Conservation Foundation is the recipient of an NFWF grant which plans to provide ecological restoration projects within the Little Conestoga River Watershed. The Clean Water Consortium has asked you to serve as either a committee member or committee co-chair on the implementation committee related to the restoration of the Little Conestoga River because of your technical knowledge and understanding of the issues. You state that you, doing business as LandStudies, intend to bid on the aforesaid ecological restoration projects. You seek guidance as to whether you would have a conflict of interest under the Ethics Act with regard to: (1) the potential provision of LandStudies’ services to the Clean Water Consortium in connection with obtaining grant funding from NFWF for the Project; or (2) bidding by LandStudies on ecological restoration projects related to an NFWF grant received by the Conservation Foundation. Discussion: 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 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 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. It is further noted that the submitted facts are insufficient to enable a conclusive determination as to whether, in your capacities as a Member of the Clean Water Consortium Steering Committee and as a Member of the Board of Directors of the Conservation Foundation, you would be considered a “public official” as that term is defined by the Ethics Act. See, 65 Pa.C.S. § 1102 This Advice assumes, without deciding, that as a Member of the Clean Water Consortium Steering Committee and as a Member of the Board of Directors of the Conservation Foundation, you are 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 Gutshall, 12-553 August 1, 2012 Page 3 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 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. Gutshall, 12-553 August 1, 2012 Page 4 "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 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: Gutshall, 12-553 August 1, 2012 Page 5 § 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 provides that the public official/public employee, in his public capacity, 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. To the extent that, as a Member of the Clean Water Consortium Steering Committee and/or as a Member of the Board of Directors of the Conservation Foundation, you would be a public official subject to the Ethics Act, you generally would have a conflict of interest as a public official in matters that would financially impact you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. The submitted facts do not identify your relationship with LandStudies. You are advised that LandStudies is a business with which you or a member of your immediate family is associated to the extent that you or a member or your immediate family is a director, officer, owner, or employee of LandStudies or has a financial interest in LandStudies. To the extent that you are a public official subject to the Ethics Act and LandStudies is a business with which you or a member of your immediate family is associated, you would have a conflict of interest as a public official in matters pertaining to bids/bidding by LandStudies as well as actual or anticipated contracts involving LandStudies. You would also be prohibited from using the authority of your public position(s), or confidential information accessed or received as a result of holding your public position(s), to effectuate a private pecuniary benefit to LandStudies through a detriment to a business competitor. See, Pepper, Opinion 87-008. In each instance of a conflict of interest, you would be required to abstain fully 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. Gutshall, 12-553 August 1, 2012 Page 6 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. Conclusion: This Advice assumes, without deciding, that as a Member of the Lancaster County Clean Water Consortium (“Clean Water Consortium”) Steering Committee and as a Member of the Board of Directors of the Conservation Foundation of Lancaster County (“Conservation Foundation”), 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 your role with the Clean Water Consortium, you are managing a project (“Project”) with Tetra Tech; (2) grant opportunities to fund the Project are available through the National Fish and Wildlife Foundation (“NFWF”); (3) in a private capacity, you are affiliated with a business named “LandStudies, Inc.” (“LandStudies”), which is one of three in-state Technical Service Providers pre-approved by NFWF; (4) the Clean Water Consortium may seek LandStudies’ services in connection with obtaining grant funding from NFWF for the Project; (5) the Conservation Foundation is the recipient of an NFWF grant which plans to provide ecological restoration projects within the Little Conestoga River Watershed; (6) the Clean Water Consortium has asked you to serve as either a committee member or committee co-chair on the implementation committee related to the restoration of the Little Conestoga River because of your technical knowledge and understanding of the issues; and (7) you, doing business as LandStudies, intend to bid on the aforesaid ecological restoration projects, you are advised as follows. To the extent that, as a Member of the Clean Water Consortium Steering Committee and/or as a Member of the Board of Directors of the Conservation Foundation, you would be a public official subject to the Ethics Act, you generally would have a conflict of interest as a public official in matters that would financially impact you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. The submitted facts do not identify your relationship with LandStudies. LandStudies is a business with which you or a member of your immediate family is associated to the extent that you or a member or your immediate family is a director, officer, owner, or employee of LandStudies or has a financial interest in LandStudies. To the extent that you are a public official subject to the Ethics Act and LandStudies is a business with which you or a member of your immediate family is associated, you would have a conflict of interest as a public official in matters pertaining to bids/bidding by LandStudies as well as actual or anticipated contracts involving LandStudies. You would also be prohibited from using the authority of your public position(s), or confidential information accessed or received as a result of holding your public position(s), to effectuate a private pecuniary benefit to LandStudies through a detriment to a business competitor. In each instance of a conflict of interest, you would be required to abstain fully 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 Gutshall, 12-553 August 1, 2012 Page 7 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