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HomeMy WebLinkAbout85-576 FeltonRobert J. Felton, Esquire Jack, Kookogey & Felton 144 West Spring Street P.O. Box 346 Titusville, PA 16354 Dear Mr. Felton: Malting Address State Ethics Commission 308 Finance Building P. 0. Box 11470 Harrisburg, Pa. 17108 -1470 August 22, 1985 ADVICE OF COUNSEL 85 -576 Re: Township Supervisors, Conflict of Interests, Construction Contract This responds to your letter of'Jul y 31, 1985, wherein you request the advice of the State Ethics Commission. Issue: Whether the Ethics Act presents any restrictions upon township supervisors activities in relation to a construction contract when one supervisor is the son of the construction company's owner and is also employed by that company and when the wife of another supervisor is a part -time employee of the company. Facts: You represent Hickory Township, a township of the second class in Forest County. You have been asked by the township board of supervisors to obtain the opinion of the State Ethics Commission regarding the propriety of certain construction contracts that will be awarded by the township. You indicate that a contractor, who is located in the township area, submits bids on contracts for the supplying of gravel and other road materials and services. One of the three township supervisors is the son of the company's owner and is also employed as a laborer for the business. The wife of a second supervisor is employed as a bookkeeper for the company. You ask whether it is appropriate for the township to award a contract to the company under these circumstances. Discussion: As township supervisors, these individuals are public officials as that term is defined in the State Ethics Act, and their conduct as such must, therefore, conform to the requirements of the State Ehtics Act. 65 P.S. §401, et. seq.; Sowers, 80 -050. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Robert J. Felton, Esquire August 22, 1985 Page 2 The Ethics Act provides, in part, that: Section 3. Restricted activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Additionally, that Act defines member of ones immediate family as follows: Section 2. Definitions. "Immediate family." A spouse residing in the person's household and minor dependent children. 65 P.S. 402. The Act also defines business with which one is associated as follows: Section 2. Definitions. "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 holder of stock. 65 P.S. 402. Clearly, the relationships involved herein, fall within the above classification. The first supervisor as an "employee" is directly associated with the business. The wife of the second supervisor is a member of his immediate family who is employed by the company. This supervisor is, therefore, also associated with this business under the Act. The Commission has ruled on a number of occasions that pursuant to Section 3(a) a public official must abstain from participating in any official actions such as the one involved herein. See Sowers, 80 -050; Brazil, 85 -556; Downs, 85 -554; Phillips, 85 -553. Thus, both supervisors must abstain from participating in the award of this contract as well as the drafting of specification, bid propsals, etc. Robert J. Felton, Esquire August 22, 1985 Page 3 In addition, the Ethics Act provides: Section 3. Restricted activities. (c) No public official or public employee or a member of his immediate family or any business 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). In the instant situation, it appears that neither of the supervisors or members of their immediate family as defined in the Act are officers, owners . or directors of the business in question, thus, Section 3(c) would not be applicable. The Ethics Commission, however, is also empowered to address other areas of possible conflict pursuant to Section 3(d). 65 P.S. §403(d). Fritzinger, 80 -008; Yaw, 85 -011. The parameters of the type of activity encompassed by this provision are generally reviewed in light of the preamble to the Ethics Act which enunciates the legislative intent of the Act. A public official or employee, pursuant to this provision, is to ensure that their personal financial interests present neither a conflict nor the appearance of a conflict with the public trust. 65 P.S. §401. Such a conflict may exist where an individual represents one or more adverse interests, Alfano, 80 -007, where an individual serves in positions that are incompatible or conflicting; Nelson, 85 -009, or where such an official or employee accepts compensation to which he is not entitled. Domalakes, 85 -010. In situations such as the one presented herein, the Commission has determined that the definitional limitations applicable to these Sections of the Act are not relevant to questions addressed under the above provision. Leete, 82 -005. As such, the Commission has placed restrictions upon various actions of public officials and employees when acting upon matters that fall outside of the previously cited definition. O'Reilly, 83 -012. Thus, it would be advisable in this situation to apply the open and public process requirements of the Ethics Act. It appears that the township will seek bids for this contract and that bid process should conform to the open and public process requirements of the Ethics Act. Robert J. Felton, Esquire August 22, 1985 Page 4 Generally, in this respect, the Ethics Act would require the following: 1. prior public notice of the employment or contracting possibility; 2. sufficient time for a reasonable and prudent competitor /applicant to be able to prepare and present an application or proposal; 3. public disclosure of all applications or proposals considered; and 4. public disclosure of the contract awarded or offered and accepted. See also Cantor, 82 -004. In this respect, the supervisors will avoid even the appearance of a conflict. Conclusion: As township supervisors, the individuals involved herein are public officials within the parameters of the Ethics Act. As such, their conduct must conform to the requirements thereof. They must abstain from all participations in the award of the construction contract and they should conform to the open and public process requirements of the 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. 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 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. JJC /sfb Since ly, John J. Con no General •unsel 7.