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HomeMy WebLinkAbout89-538 SchubertMr. Michael A. Schubert 2220 Highland Court Harrisburg, PA 17110 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL May 3, 1989 89 -538 Re: Public Employee, Pennsylvania Turnpike Commission, Contracting with General Assembly or local government Dear Mr. Schubert: This responds to your letter of April 3, 1989, in which you requested advice from the State Ethics Commission. Issue: You ask whether as a employee of the Turnpike Commission you or a business you represent may engage in contracting under certain circumstances with the General Assembly or local government. Facts: You are a public employee, serving with the Pennsylvania Turnpike Commission, hereinafter the PTC. As an employee of the PTC you state that you represent a company which produces computer software design to aid legislators and local government officials relative to delivering constituent services. You request advice as to what conflicts might occur if you were to offer this software to members of the General Assembly or local government officials in your spare time. Discussion: Initially, the Ethics Commission notes that as a PTC employee you are a public employee within the definition of that term under the Ethics Act. See 65 P.S. §402. As such, you are subject to provisions of the Ethics Act and must conform your conduct to the requirements of the Act. See 65 P.S. §401 et. seq. While the Ethics Act contains some restrictions against contracts between the business with which a "public official" or "public employee" is associated and the governmental body with which the official or employee is associated, the Ethics Act does not totally prohibit a public official or employee or his family or business from engaging in business activities or contracting, in general with the body the official or employee serve;. Mr. Michael A. Schubert May 3, 1989 Page 2 Section 3(a) of the Ethics Act does provide that no public official or public employee shall use his public office or any confidential information obtained through holding of a public office or position to acquire financial gain for himself, his immediate family, or a business with which he is associated. See 65 P.S. §403(a). A "business with which he is associated" is defined in the Ethics Act as follows: "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. S402. For purposes of this Advice, we have been provided with facts to establish or can assume that you are a director, officer, owner, or employee or holder of stock of the business which would seek to contract with the members of the General Assembly or local government official. As such, then you would be "associated" with this business and would be required to observe the prohibitions set forth in Section 3(a) of the Ethics Act. This means that you could not use public position as a means to secure financial gain for computer software business and could not use any confidential information acquired through the holding of public office or employment to the benefit of that business. Thus, you could not use your office or the equipment or supplies or personnel of PTC to conduct your private business activities since such activity would be in contravention to the Ethics Act. See Dorrance, Order 456; Cohen, 610 -R Section 3(b) of the Ethics Act also states that no person shall give to a public official or employee nor shall any public official or employee accept anything of value based on the understanding that the official's vote, action, or judgment would be influenced thereby. See 65 P.S. §403(b). You must be cognizant of this requirement and observe this provision of the Ethics Act. Reference to this Section is made not to indicate that any violation or potential violation exists but merely to provide a complete review of the Sections of the Ethics Act which may be generally applicable to these circumstances Further, Section 3(c) of the Act states that no public official, member of his immediate family, or a business in which the person or member of his immediate family is an officer, director, or owner of greater than 5% of the equity at fair market value may contract in an amount in excess of $500 with a governmental body unless the contract has been awarded through an open and public process. See Howard, Opinion 79 -044. In this Advice we have been provided with facts to establish or can assume that you are either an officer, director, or owner of Mr. Michael A. Schubert May 3, 1989 Page 3 greater than 5% of the equity at fair market value of the business in question. Given this, we must review the previous Opinions of the Commission which have held that the term "governmental body" in Section 3(c) of the Ethics Act refers to the governmental body with which the individual public employee /official is "associated. Bryan, Opinion 80 -014 and Lunch, Opinion 79 -047. The "governmental body" with which you are associated is PTC. Therefore, the open and public process requirements of Section 3(c) of the Ethics Act would apply if and when your business would seek to contract with the PTC in an amount in excess of $500 or more. However, Section 3(c) would not have application to the General Assembly or to local government since they are not the "governmental body" with which you are associated. Therefore, the "open and public process" limitations of Section 3(c) of the Ethics Act apply only.if you and /or this business contracts with PTC in an amount of $500 or more. You and /or this business /company could, however, contract with any governmental body other than PTC with which you are not considered to be "associated" without undertaking the open and public process set forth in Section 3(c) of the Ethics Act. It should be emphasized, that even though Section 3(c) of the Ethics Act presents no absolute prohibition to the contract between you and PTC, certain requirements as to the open and public process must be met. In its Opinions in Howard, Opinion 79 -044 and Fields, Opinion 82 -006, the Commission stated that an open and public process is met by applying the following standards: 1. prior public notice of the possibility; 2. sufficient time for a competition /applicant to be an application or proposal. 3. public disclosure of all considered; and employment or contracting reasonable and prudent able to prepare and present applications or proposals 4. public disclosure of the contract awarded or offered and accepted. See also Cantor, Opinion 82 -004 In determining whether the requirements of Section 3(c) of the Ethics Act had been met, the Commission has adopted a "reasonableness test" which means that reasonable and prudent competitors of your business should be provided a sufficient time within which to submit their proposals and, of course, should Mr. Michael A. Schubert May 3, 1989 Page 4 have had prior notice of the opportunity to secure such a contract or employment. Conclusion: Under the facts as have been set forth above, you area "public official /employee" as those terms are defined in the Ethics Act and must conform to the requirements of the Ethics Act. Assuming that you stand in the relationship to the business involved as set forth in either Section 3(a) or Section 3(c) of the Ethics Act and that business seeks to contract with the governmental body with which you are associated, the PTC, the requirements of Section 3(a), 3(b), and Section 3(c) mandate that: such. 1. You should not have anything to do with the decisions, or votes, discussions regarding the awarding of this contract or work; 2. an open and public process, as described above, must be undertaken prior to any such award of a contract by the PTC to this business; 3. no confidential information acquired or received through the holding of your public position be used to obtain advantages or financial gain for this business; and 4. the requirements of Section 3(b) of the Ethics Act must be observed, in that nothing of value can be offered, accepted or solicited in exchange for or to influence official judgment. Section 3(c) of the Ethics Act would not restrict your contracting with the General Assembly on local government since they are not the "governmental body" with which you are associated. Lastly, the property of the proposed conduct has only been addressed under the 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. This letter is a public record and will be made available as Finally, if you disagree with this Advice or if you have any reason to challenge same, you may request that the full Mr. Michael A. Schubert May 3, 1989 Page 5 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 in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code S2.12. Sincerely, Vincent J. Dopko, General Counsel