HomeMy WebLinkAbout14-517 Crabtree
ADVICE OF COUNSEL
April 14, 2014
Dean A. Crabtree, Esquire
Koontz & Crabtree
130 West Penn Street
Bedford, PA 15522
14-517
Dear Mr. Crabtree:
This responds to your letters dated February 6, 2014, and February 18, 2014, 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 prohibitions or restrictions upon a member of the
board of a municipal authority with regard to being retained by the municipal authority to
serve as the on-site inspector of a new municipal building project.
Facts:
As Solicitor for the Bedford Township Municipal Authority (“Authority”), you
have been authorized by Kerry Barefoot (“Mr. Barefoot”), who is a Member of the
Authority Board, to request an advisory from the Pennsylvania State Ethics Commission
on his behalf. You have submitted facts that may be fairly summarized as follows.
The Authority was created pursuant to the Municipality Authorities Act, 53
Pa.C.S. § 5601 et seq. Members of the Authority Board are appointed by the Board of
Supervisors of Bedford Township (“Township”).
The Authority and the Township are cooperating on a project to build a new
municipal building (“New Building”) which will provide office space for both entities. The
Authority is in the process of seeking bids to build the New Building.
Mr. Barefoot is a retired public school administrator, and he has a lot of
experience in the construction industry, including overseeing a major school building
construction project for the Bedford Area School District several years ago. You state
that the Authority, and presumably the Township, would like to use Mr. Barefoot’s skill
and have him oversee the construction of the New Building as an on-site inspector. The
Authority believes that it would be advantageous to retain Mr. Barefoot’s services due to
his familiarity with the New Building project, his prior experience with similar or larger
projects, and the level of trust or confidence the Authority would have with his oversight.
The Authority would like to compensate Mr. Barefoot for his services at an hourly rate
equal to or less than that of a third-party inspector.
Based upon the above submitted facts, you seek guidance as to whether the
Ethics Act would impose prohibitions or restrictions upon Mr. Barefoot with regard to
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April 14, 2014
Page 2
being retained by the Authority to serve as the on-site inspector of the New Building
project.
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 Member of the Authority Board, Mr. Barefoot is 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 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
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April 14, 2014
Page 3
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.
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
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
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April 14, 2014
Page 4
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 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.
In applying the above provisions of the Ethics Act to the instant matter, you are
advised as follows.
An agreement or arrangement whereby Mr. Barefoot would be retained by the
Authority to serve as the on-site inspector of the New Building project would constitute a
“contract” as that term is defined in the Ethics Act.
The Ethics Act itself would not prohibit Mr. Barefoot from being retained by the
Authority to serve as the on-site inspector of the New Building project. However, Mr.
Barefoot would have a conflict of interest under Section 1103(a) of the Ethics Act in
matters before the Authority Board pertaining to actual or anticipated contract(s)
between him and the Authority for his services as the on-site inspector of the New
Building project. Mr. Barefoot would also be prohibited from using the authority of his
public position, or confidential information accessed or received as a result of being a
Member of the Authority Board, to effectuate a private pecuniary benefit to himself
through a detriment to a competitor for Authority work. See, Pepper, Opinion 87-008.
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April 14, 2014
Page 5
In each instance of a conflict of interest, Mr. Barefoot 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 and in particular as to any contract between Mr.
Barefoot and the Authority that would be valued at $500 or more.
It is noted that a problem could exist under the Municipality Authorities Act as to
contracting between Mr. Barefoot and the Authority. The Municipality Authorities Act
provides in part:
§ 5614. Competition in award of contracts
. . . .
(e) CONFLICT OF INTEREST.--No member of the
authority or officer or employee of the authority may directly
or indirectly be a party to or be interested in any contract or
agreement with the authority if the contract or agreement
establishes liability against or indebtedness of the authority.
Any contract or agreement made in violation of this
subsection is void, and no action may be maintained on the
agreement against the authority.
53 Pa.C.S. § 5614(e). Because this Advice may not interpret the above quoted
provision of the Municipality Authorities Act, it is suggested that Mr. Barefoot seek legal
advice in that regard.
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:
As a Member of the Board of the Bedford Township Municipal
Authority (“Authority”), Kerry Barefoot (“Mr. Barefoot”) is a public official subject to the
provisions of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101 et seq.
Based upon the submitted facts that: (1) the Authority was created pursuant to the
Municipality Authorities Act, 53 Pa.C.S. § 5601 et seq.; (2) Members of the Authority
Board are appointed by the Board of Supervisors of Bedford Township (“Township”); (3)
the Authority and the Township are cooperating on a project to build a new municipal
building (“New Building”) which will provide office space for both entities; (4) the
Authority is in the process of seeking bids to build the New Building; (5) Mr. Barefoot is
a retired public school administrator, and he has a lot of experience in the construction
industry, including overseeing a major school building construction project for the
Bedford Area School District several years ago; (6) the Authority, and presumably the
Township, would like to use Mr. Barefoot’s skill and have him oversee the construction
of the New Building as an on-site inspector; (7) the Authority believes that it would be
advantageous to retain Mr. Barefoot’s services due to his familiarity with the New
Building project, his prior experience with similar or larger projects, and the level of trust
or confidence the Authority would have with his oversight; and (8) the Authority would
like to compensate Mr. Barefoot for his services at an hourly rate equal to or less than
that of a third-party inspector, you are advised as follows.
An agreement or arrangement whereby Mr. Barefoot would be retained by the
Authority to serve as the on-site inspector of the New Building project would constitute a
“contract” as that term is defined in the Ethics Act. The Ethics Act itself would not
Crabtree, 14-517
April 14, 2014
Page 6
prohibit Mr. Barefoot from being retained by the Authority to serve as the on-site
inspector of the New Building project. However, Mr. Barefoot would have a conflict of
interest under Section 1103(a) of the Ethics Act in matters before the Authority Board
pertaining to actual or anticipated contract(s) between him and the Authority for his
services as the on-site inspector of the New Building project. Mr. Barefoot would also
be prohibited from using the authority of his public position, or confidential information
accessed or received as a result of being a Member of the Authority Board, to effectuate
a private pecuniary benefit to himself through a detriment to a competitor for Authority
work. In each instance of a conflict of interest, Mr. Barefoot 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 and in particular as to
any contract between Mr. Barefoot and the Authority that would be valued at $500 or
more. It is noted that a problem could exist under the Municipality Authorities Act as to
contracting between Mr. Barefoot and the Authority, and therefore, it is suggested that
Mr. Barefoot seek legal advice in that regard. 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