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HomeMy WebLinkAbout84-566 RakerDavid C. Raker, Esquire 322 Court Street Williamsport, PA 17701 Dear Mr. Raker: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (7171 783-1610 May 18, 1984 ADVICE OF COUNSEL RE: State Police Employee, Contracting 84 -566 This responds to your letter of April 26, 1984, in which you requested advice from the State Ethics Commission. Issue: You ask whether a person who serves as a corporal within the State Police may contract with the Commonwealth under certain circumstances. Facts: You indicate that you are counsel to an individual who serves as a corporal in the Pennsylvania State Police, hereinafter, the Corporal. You indicate that the Corporal has formed a non - profit corporation hereinafter, the Corporation, during his own time. This Corporation is restricted to those activities which meet the criteria of the Internal Revenue Code Section 501(c)(3). The Corporal has 51% controlling interest in this Corporation and is also president of the Corporation. The Corporation purposes to contract with the Commonwealth of Pennsylvania and more specifically, as you informed us on May 11, 1984, with the Department of Transportation. This contract would be to perform and to "conduct" an outdoor exhibition -type public event for and on behalf of the Commonwealth, Department of Transportation. With respect to this exhibition, the Corporal will receive no salary or wage for his work while performing in this exhibition. He will not receive any dividends or profits from the Corporation or from the event as a result of this contract because the Corporation is a non - profit charitable corporation as stated above. The Corporal, however, will be reimbursed for any expenses that may be incurred in performing and conducting this event. Discussion: For purposes of this Advice we will assume that the Corporal in question is a "public employee" as that term is defined in the Ethics Act. Based upon this assumption we will proceed to analyze whether his conduct under these circumstances must conform to certain requirements of the State Ethics Act and to identify any problems or prohibitions or restrictions which might apply under these circumstances. David C. Raker, Esquire May 18, 1984 Page 2 The basic provision of the Ethics Act which will be reviewed is Section 3(c) of the Ethics Act which states as follows: (c) No public official or public employee or a member of his immediate family or any busness in which the person or a member of the person's immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business shall enter into any contract valued at $500 or more with a governmental body 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. Any - contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract. 65 P.S. 403(c). As can be seen from this section of the Ethics Act, a public employee must, if he or a "business" with which he is associated wishes to contract with the governmental body "with which he is associated" must undertake such a contract only after an open and public process. In this case the Corporal is associated with the State Police and not the Department of Transportation. Under the circumstances you have outlined above, if the Corporal wished to contract with the State Police Department and if the Corporation were a "business" as defined in the Ethics Act (Section 2, 65 P.S. 402), he would have to undertake this contract only after an open and public process. However, as outlined above, the contract will be between a non - profit Corporation and the Pennsylvania Department of Transportation. Thus, because the Department of Transportation is not the "governmental agency" with which the Corporal was "associated" and because the Corporation is a not- for - profit entity, there is no application of the requirements or restrictions of Section 3(c) of the Ethics Act to these circumstances. Thus, this contract could be undertaken between the Department of Transportation and the Corporal without observance of or restrictions as set forth in Section 3(c) of the Ethics Act. Likewise, we assume that the Corporal, as a member of the State Police had no role in processing or reviewing or recommending granting or denying the contract as presented to the Pennsylvania Department of Transportation. Thus, there would be no problems under Section 3(a) of the Ethics Act insofar as that Section of the Ethics Act requires that public employees may not use their public employment to secure for themselves or businesses with which they are associated any compensation other than that allowed by law. Again, because this is a non - profit corporation there is a question as to whether or not the Ethics Act would regulate the contract between the Cepartment of Transportation and the Corporation as that corporation may not be a "business" as that term is defined in the State Ethics Act. Consequently, for all the ahove reasons there are no restrictions or prohibitions against the.contract and the performance under that contract as outlined above. David C. Raker, Esquire May 18, 1984 Page 3 Conclusion: Based upon these facts and under the circumstances outlined above, this Corporation which the Corporal owns and controls may undertake the contract with the Department of Transportation without application of restrictions or prohibitions under Sections 3(c) or 3(a) of the State Ethics Act. Pursuant to Section 7(9)(ii), this 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, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. SSC /na 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 request that the full Commission review this Advice. A personal appearance before the full Commission will be scheduled and a formal Opinion from the Commission will be issued. Any such appeal must be made, in writing, to the Commission within 15 days of service of this Advice pursuant to 51 Pa. Code 2.12. cc: Cyril J. Laffey, Deputy Commissioner Sincerely, Sandra S. Chris ianson General Counsel }