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HomeMy WebLinkAbout16-516 Cort ADVICE OF COUNSEL February 25, 2016 Susan M. Cort 114 Java Avenue Hershey, PA 17033 16-516 Dear Ms. Cort: This responds to your letter dated January 18, 2016, 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 an individual with regard to performing the duties of her newly-elected position as a township supervisor, where the individual has a contract with the township to provide communications consulting services to the township. Facts: You request an advisory from the Commission based upon submitted facts that may be fairly summarized as follows. You were recently elected as a Supervisor for Derry Township (“Township”), and on January 4, 2016, you took office as a Township Supervisor. In January 2014, the Township engaged you as a consultant to assist the Township with its communications program. Pursuant to a contract (“the Contract”) with the Township, you provide communications consulting services to the Township and help the Township communicate key messages to its residents. You work at the request of the Township, and on average, you bill the Township between $500 and $1000 per month for your services. There is no expiration date for the provision of your services to the Township, and either party may terminate your services at any time for any reason. Based upon the above submitted facts, the question that is presented is whether the Ethics Act would impose prohibitions or restrictions upon you with regard to performing the duties of your position as a Township Supervisor. 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 Cort, 16-516 February 25, 2016 Page 2 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 Township Supervisor, 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 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 Cort, 16-516 February 25, 2016 Page 3 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 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. 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. Examples of conduct that could form the basis for a conflict of interest 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, the public official/public employee would be required to abstain from participation. The abstention requirement would not be limited merely to voting, but would extend 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. Subject to certain statutory exceptions, in each instance of a voting conflict, Section 1103(j) of the Ethics Act would require the public official/public employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. 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 Cort, 16-516 February 25, 2016 Page 4 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 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. 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 you in your private capacity. Section 1103(a) of the Ethics Act would not restrict you, in your private capacity, from providing communications consulting services to the Township. However, in your Cort, 16-516 February 25, 2016 Page 5 public capacity as a Township Supervisor, you generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining to contract(s) between the Township and you, including but not limited to the oversight of work performed by you relative to the Contract or participating in matter(s) involving renewal of the Contract or future contract(s) between the Township and you. You would further have a conflict of interest with regard to voting to approve payment(s) to yourself. As noted above, 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 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 you were serving as a Township Supervisor. Cf., Ernst, Advice 16-503; Lewis, Advice 13-587; Shipley, Advice 11-559. However, renewal(s) of the Contract or future contract(s) between the Township and you 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 you would be a Township Supervisor. 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. Specifically not addressed herein is the applicability of the Second Class Township Code. Conclusion: Based upon the submitted facts that: (1) you were recently elected as a Supervisor for Derry Township (“Township”), and on January 4, 2016, you took office as a Township Supervisor; (2) in January 2014, the Township engaged you as a consultant to assist the Township with its communications program; (3) pursuant to a contract (“the Contract”) with the Township, you provide communications consulting services to the Township and help the Township communicate key messages to its residents; (4) you work at the request of the Township, and on average, you bill the Township between $500 and $1000 per month for your services; and (5) there is no expiration date for the provision of your services to the Township, and either party may terminate your services at any time for any reason, you are advised as follows. As a Township Supervisor, 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. 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 you in your private capacity. Section 1103(a) of the Ethics Act would not restrict you, in your private capacity, from providing communications consulting services to the Township. However, in your public capacity as a Township Supervisor, you generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining to contract(s) between the Township and you, including but not limited to the oversight of work performed by you relative to the Contract or participating in matter(s) involving renewal of the Contract or future contract(s) between the Township and you. You would further have a conflict of interest with regard to voting to approve payment(s) to yourself. 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 Cort, 16-516 February 25, 2016 Page 6 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 you were serving as a Township Supervisor. However, renewal(s) of the Contract or future contract(s) between the Township and you 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 you would be a Township Supervisor. 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