HomeMy WebLinkAbout85-580 VelitskyMr. Joseph J. Velitsky
Carbon County Solicitor
Courthouse
Jim Thorpe, PA 18229
State Ethics Commission
308 Finance Building
P. 0. Box 11470
Harrisburg, Pa. 17108 -1470
September 9, 1985
ADVICE OF COUNSEL
85 - 580
Re: County Commissioner, Bank Director, Bank as Depository of County
Dear Mr. Velitsky:
This responds to your letter of August 20, 1985, wherein you requested
the advice of the State Ethics Commission.
Issue: Whether, the County may use as a depository a bank fon which one of
the county commissioners sits as a member of the board of directors.
Facts: As Solicitor for Carbon County, you have requested the advice of the
State Ethics Commission. Carbon County Commissioner Charles Wildoner is also
a member of the Board of Directors of the Mauch Chunk Trust Company, a local
banking institution. You indicate that Carbon County is currently receiving a
federal appropriation for a block grant program. These funds are to be
deposited in an interest earning account while the program work is being
performed. You also indicate that various banks were polled in order to
ascertain the interest rates and the Mauch Chunk Trust Company quoted the
highest rate of interests. You now ask whether these funds, as well as
general county funds, may be deposited into this bank and what, if any,
restrictions are placed upon Commissioner Wildoner under the State Ethics
Act.
Discussion: As a County Commissioner, Mr. Wildoner is a public official as
that term is defined in the State Ehtics Act and, as such, his conduct must
conform to the requirements thereof. 65 P.S. §402; Steinman, 84 -006.
Generally, the Ethics Act provides that:
Section 3. Restricted activities.
(a) No public official or public employee shall use his
public office or any confidential information received
Mr. Joseph J. Velitsky
September 9, 1985
Page 2
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).
The Act further provides:
Section 2. Definitions.
"Bu:,iness with which he is essociata." Any business in
whi ;h 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, as a director of the trust company, this commissioner is "associated"
vith that business as defined above. As such, he may not use his position to
obtain any financial gain for that business. The deposit of funds in a
banking institution is a financial gain for that business. Thus, Commissioner
Wildoner must abstain from all participation in the discussions, review and
decision of which banking institution will be selected. Menacker, 83 -540;
Kopko, 84 -588. This would be applicable not only to the deposit of the block
grant funds but to all county funds deposited in a bank.
In addition to the foregoing, Section 3(c) of the Ethics Act, 65 P.S.
403(c), provides that no public official, member of his immediate family or
any business in which the person or a member of his immediate family is an
officer, director, or owner of greater than 5% of the equity at fair market
value may contract with a governmental body unless the contract, valued at
more than $500, has been awarded through an open and public process. See
Howard, 70 -044. Previous opinions of the Commission have held that the term
"governmental body" in Sectin 3(c) refers to the governmental body with which
the public official is "associated ". Ryan, 80 -014 and Lynch, 79 -047.
- While it can be argued that the depcsit of funds in a bank is not the
type of contract envisioned by the above provision of law, the intent of the
Ethics Act is to ensure that the financial interests of public officials do
not conflict or appear to conflict with the public trust. In this respect, it
would appear that a liberal construction of Section 3(c) would require that
the open and public process be employed in this situation. It is noted that
such a liberal construction of the Act so as to promote complete disclosure is
authorized in the Act. 65 P.S. §401.
The open and public process would include the following:
1. prior public notice of the employment or contracting possibility;
Mr. Joseph J. Velitsky
September 9, 1985
Page 3
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 porposals considered; and
4. public disclosure of the contract awared or offered and accepted.
See also Cantor, 82 -004.
You have noted that the county has already reviewed various proposals and this
is one element that meets the above requirement. The county should publicly
disclose these proposals when makeing a final decision in this matter. Also
the Commissiners' abstention and the reasons, therefore, should be publicly
disclosed and appropriately recorded in the county minutes.
Conclusion: There is no absolute prohibition upon the deposit of county
funds into a bank where one of the county commissioners is a member of the
board of directors for said bank. Such commissioner, as a public official,
must conform his conduct to the requirements of the Ethics Act as set forth
herein.
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
Si ncer
ohn J. - •ntino
Gen • Counsel