HomeMy WebLinkAbout15-539 Shearer
ADVICE OF COUNSEL
June 22, 2015
Joseph R. Shearer
21056 Route 75S
Port Royal, PA 17082
15-539
Dear Mr. Shearer:
This responds to your letter dated April 23, 2015, by which you requested an
advisory from the Pennsylvania State Ethics Commission (“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 school director,
who in a private capacity is employed as a substitute bus driver with a bus company
that has a multiyear contract with the school district, with regard to participating in
discussions, deliberations, or votes pertaining to: (1) the contract between the school
district and the bus company; or (2) the approval of drivers whom the bus company
intends to hire and assign to routes in the school district.
Facts:
You request an advisory from the Commission based upon submitted
facts that may be fairly summarized as follows.
You are a School Director for the Juniata County School District (“School
District”). In a private capacity, you are employed as a substitute bus driver with a
company named “Rohrer Bus” (the “Company”). You state that you have no ownership
interest in the Company or role in management at the Company.
The School District has a multiyear contract (the “Contract”) with the Company
for the provision of transportation and related services for School District students. You
state that you voted on the Contract at a time when you were not an employee of the
Company.
The School District School Board approves drivers whom the Company intends
to hire as employees and assign to routes in the School District.
Based upon the above submitted facts, you pose the following questions:
(1) Whether you would be prohibited from participating in discussions,
deliberations, or votes on any proposed early termination of the Contract
if, for example, the Company would breach the terms and conditions of the
Contract and fail to remedy the breach within any applicable cure period;
Shearer, 15-539
June 22, 2015
Page 2
(2) Whether you would be prohibited from participating in discussions,
deliberations, or votes on any proposed alteration of or amendment to the
Contract;
(3) Whether you would be prohibited from participating in discussions,
deliberations, or votes on any proposed extension or renewal of the
Contract;
(4) Whether you would be prohibited from participating in discussions,
deliberations, or votes on the approval of any driver whom the Company
intends to hire and assign to routes in the School District;
(5) Whether you would be prohibited from participating in discussions,
deliberations, or votes on the approval of yourself as a School District-
approved driver for the Company if, for example, you would discontinue
your current employment with the Company and then at a later date seek
to be rehired and reassigned by the Company as a substitute driver for
routes in the School District; and
(6) Whether there would be an issue if you would serve as a substitute driver
on routes in the School District, on routes in another school district, or for
some other purpose that would further the Company’s interests.
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.
It is further initially 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 you have inquired as to conduct that has already occurred, such past conduct
may not be addressed in the context of an advisory opinion. However, to the extent you
have inquired as to future conduct, your inquiry may, and shall, be addressed.
As a School Director for the School District, 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
with the person responsible for recording the minutes of the
Shearer, 15-539
June 22, 2015
Page 3
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.
"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.
Subject to the statutory exclusions to the Ethics Act’s definition of the term
“conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, 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
Shearer, 15-539
June 22, 2015
Page 4
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. Thus, a public official’s
participation in negotiations, meetings, discussions, deliberations, written and electronic
communications, and/or vote(s) may satisfy the element of “use of authority of office.”
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:
§ 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.
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June 22, 2015
Page 5
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 Public School Code provides in 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 Company is a business with which you are associated in your capacity as an
employee. Subject to the statutory exclusions to the definition of “conflict” or “conflict of
interest” as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to
Section 1103(a) of the Ethics Act, you would have a conflict of interest as a School
Director in matters that would financially impact you or the Company.
Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity
as an employee of the Company, from serving as a substitute driver on routes in the
School District, on routes in another school district, or for some other purpose that
would further the Company’s interests.
However, in your public capacity as a School Director, you generally would have
a conflict of interest pursuant to Section 1103(a) of the Ethics Act with regard to
matter(s) pertaining to contract(s) between the School District and the Company,
including but not limited to: (1) the oversight of work performed by the Company relative
to the Contract; (2) the approval of driver(s) whom the Company intends to hire and
assign to routes in the School District; (3) the approval of yourself as a School District-
approved driver for the Company; (4) any proposed alteration of or amendment to the
Contract; (5) any proposed extension, renewal, or early termination of the Contract; and
(6) future contract(s) between the School District and the Company.
Shearer, 15-539
June 22, 2015
Page 6
In addition, you generally would have a conflict of interest with regard to voting to
approve payment(s) to the Company.
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.
You are further advised that the restrictions and requirements of Section 1103(f)
of the Ethics Act would have to be observed whenever applicable. Section 1103(f)
would not be applicable to the current Contract given that the Contract was not entered
into at a time when the Company would be considered a business with which you are
associated. Cf., Lewis, Advice 13-587; Bowers, Advice 07-588; Burkhart, Advice 03-
535. However, renewal(s) of the Contract or future contract(s) between the School
District and the Company valued at $500 or more would be subject to the restrictions
and requirements of Section 1103(f) of the Ethics Act to the extent that: (1) you would
be a School Director; and (2) the Company would remain a business with which you are
associated.
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:
Based upon the submitted facts that: (1) you are a School Director
for the Juniata County School District (“School District”); (2) in a private capacity, you
are employed as a substitute bus driver with a company named “Rohrer Bus” (the
“Company”); (3) you have no ownership interest in the Company or role in management
at the Company; (4) the School District has a multiyear contract (the “Contract”) with the
Company for the provision of transportation and related services for School District
students; (5) you voted on the Contract at a time when you were not an employee of the
Company; and (6) the School District School Board approves drivers whom the
Company intends to hire as employees and assign to routes in the School District, you
are advised as follows.
As a School Director for the School District, 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. The Company is a business with which you are associated in your
capacity as an employee. Subject to the statutory exclusions to the definition of
“conflict” or “conflict of interest” as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S.
§ 1102, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of
interest as a School Director in matters that would financially impact you or the
Company.
Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity
as an employee of the Company, from serving as a substitute driver on routes in the
School District, on routes in another school district, or for some other purpose that
would further the Company’s interests. However, in your public capacity as a School
Director, you generally would have a conflict of interest pursuant to Section 1103(a) of
the Ethics Act with regard to matter(s) pertaining to contract(s) between the School
District and the Company, including but not limited to: (1) the oversight of work
performed by the Company relative to the Contract; (2) the approval of driver(s) whom
the Company intends to hire and assign to routes in the School District; (3) the approval
of yourself as a School District-approved driver for the Company; (4) any proposed
alteration of or amendment to the Contract; (5) any proposed extension, renewal, or
early termination of the Contract; and (6) future contract(s) between the School District
and the Company. In addition, you generally would have a conflict of interest with
regard to voting to approve payment(s) to the Company.
Shearer, 15-539
June 22, 2015
Page 7
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 whenever applicable. Section 1103(f) would not be applicable to the
current Contract given that the Contract was not entered into at a time when the
Company would be considered a business with which you are associated. However,
renewal(s) of the Contract or future contract(s) between the School District and the
Company valued at $500 or more would be subject to the restrictions and requirements
of Section 1103(f) of the Ethics Act to the extent that: (1) you would be a School
Director; and (2) the Company would remain a business with which you are associated.
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