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HomeMy WebLinkAbout89-548 LeymarieSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 5, 1989 Edward Leymarie, Jr. 89 -548 Borough of Ellwood City 525 Lawrence Avenue Ellwood City, PA 16117 Re: Grant Program, Participation by Public Official /Employee, Borough Council, CDBG Grant Dear Mr. Leymarie: This responds to your letter of May 5, 1989, in which you requested advice from the State Ethics Commission. Issue: Whether a borough councilmen may participate in a grant program administered by the borough. Facts: After advising that the Borough of Ellwood City is a recipient of the Small Cities Program Community Development Block Grant, you state that Council on June 17, 1986 adopted a code of conduct with respect to Borough officials, agents and employees which exempted them from being recipients of any of these funds. You then cite federal regulations which provide that it is a conflict of interest for borough officials to receive such funds. You further note that there is a provision whereby a public official may request a variance from the provision. In addition, you enclose a copy of Volume 49 of the Federal Register, Section 70.611, which defines conflict of interest. Thereafter, you note that on October 5, 1987 a resolution of Borough Council was enacted which would permit George Barberio to request a variance for participation in the program. After advising that you reviewed the Ethics Act and Borough Code, you state that you can find no direct financial conflict of interest, if Mr. Barberio receives any of these funds under the Pennsylvania law. You then pose a question under the Ethics Act as to whether a council member may participate as a recipient in a federal grant money program in the municipality in which the council member is an officer assuming that the council member is qualified to receive the funds. Discussion: Initially, we should note that under the Ethics Act Edward Leymarie, Jr. June 5, 1989 Page 2 our jurisdiction is limited to rulings under the Ethics Act. Thus, we cannot and do not, in this Advice, address the propriety of or answer any questions related to the propriety of Council member's conduct in light of any code, statute, (federal or state), regulations, etc. other than the Ethics Act. However, under the Ethics Act we may provide a ruling because the council member's conduct is subject to the requirements of that Act because he is or we assume, for purposes of this response that he is a "public official" as that term is defined in the Ethics Act. See 65 P.S. S402. Under the Ethics Act, we must observe the stated purpose of that Act which is to strengthen the faith and confidence of people and their government by assuring the public that the financial interests of the holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. See Section 1 of the Ethics Act, 65 P.S. S401. There are specific provisions of the Ethics Act which must be reviewed in this situation. Those provisions will be discussed more fully below. The Sections of the Ethics Act which will be discussed are Section 3(a), (b) and (c) of the Ethics Act, 65 P.S. S403(a), (b) and (c), respectively. We will address the provisions in Section 3(c) of the Ethics Act first. From the facts outlined above, it is not clear whether there will be any "contract" between the council member as public official and the borough. However, if this were to occur, the provisions of Section 3(c) of the Ethics Act would apply and require that any contract in excess of $500 between a public employee or official and a governmental body must be made only after an "open and public process." The State Ethics Commission has interpreted this provision to apply and to require an "open and public process" when the particular public employee or official seeks to contract with the "governmental body" with which he is "associated." See Bryan, Opinion 80 -014 and Lvnch, Opinion 79 -047. The governmental body with which he is "associated" is the borough. Thus, assuming, for purposes of this advice, that a contract would be made between the borough and council member pursuant to the provisions of this Program, Section 3(c) of the Ethics Act would be applicable. If Section 3(c) lof the Ethics Act is applicable, it would require the following to be undertaken if a contract in excess of $500 were to be made there must be : 1. prior public notice of the contract possibility; 2. public disclosure of applications and contracts considered; and Edward Leymarie, Jr. June 5, 1989 Page 3 3. public disclosure of the award of the contracts. Assuming that all of the guidelines as to an open and public process mentioned above have been or will be met, if Section 3(c) of the Ethics Act is applicable to your situation, we must next consider the other aspects of the propriety of the council members proposed conduct under other provisions of the Ethics Act. In this review, we note that we appreciate and recognize the concern that arises where the public program, funded with public monies and administered through a public agency, political subdivision, or governmental body is also available to public officials and /or employees of that agency or governmental body. We recognize the public concern and criticism that may arise if a public official or public employee who serves a governmental body receives benefits under a program of this nature. Thus, we must review this conduct in light of Section 3(a) of the Ethics Act and Section 3(b) of the Ethics Act. 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. S403(a). Section 3(b) of the Ethics Act provides: (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. S403(b). Section 3(c) of the Ethics Act provides: (c) No public official or public employee or a member of his immediate family or any Edward Leymarie, Jr. June 5, 1989 Page 4 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). Under these Sections of the Ethics Act and the Opinions of the Ethics Commission, it is clear that the Ethics Act was primarily designed to restrict the activity of a public employee or official where a conflict of interests exists and to address situations where the appearance of a conflict with the public trust may arise. However, the Opinions of the Ethics Commission indicate that the Ethics Act was not designed nor should it be interpreted to preclude public officials or public employees from participating in programs which might otherwise be available to them as citizens. See Toohev, Opinion 83 -003; Balaban, Opinion 83 -004 and Coploff /Hendricks, Opinion 83 -005. In these cases the Ethics Commission indicated that a public official or public employee or a business with which he is associated could participate in rehabilitation or grant programs so long as that public official or public employee: 1. played no role in establishing the criteria under which the program at issue was to operate, particularly with reference to the structure or administration of the program; 2. played no role in establishing or implementing the criteria by which selections for program participation are to be or were made; 3. played no role in the process of selecting and reviewing applicants or in awarding grants or funds; 4. used no confidential information acquired during the holding of public office or public employment to apply for or to obtain such funds, grants, etc. Furthermore, the Commission's Opinions indicate that if the Edward Leymarie, Jr. June 5, 1989 Page 5 body with which the public employee or official is associated is in any way involved in the administering of the grant program or selecting who, among the applicants should receive assistance or funds, the public employee or official within the governmental body who is making an application to participate in such a program or to obtain such funds, must abstain from all discussions, votes or recommendations on the applications or programs in which he or she is interested. Additionally, such a public official or public employee should also abstain from participating in matters before that go rnmental body which he or she serves as to the applications of other individuals who may be similarly situated and who are applying for funds or seeking to participate in the program. Essentially, the Commission sought to eliminate the possibility that a public official or public employee who was seeking such funds or seeking to participate in these grant programs would be in a position to insure the grant funds or the program benefits would be available to be applied for or applied to for his own benefit. Thus, a public official or public employee in such a situation should refrain from participating in making decisions or recommendations about the program and regarding distribution of the limited funds which might be available as a result of such a program. The reason for such abstentions must be placed on the public record. Based upon the facts as outlined above and as we understand them, we must now apply these principles to this case and particular circumstances. Essentially, we conclude that the council member may participate in the Program, as outlined above, without resigning from his position or relinquishing his role as a public official. This is especially true where, as outlined above, the council member would meet the criteria listed above at Number 1 -4. Under such circumstances, so long as the required abstentions discussed above are observed the council member may apply for and participate in the benefits associated with this Program. Finally, we must make reference to Section 3(b) of the Ethics Act in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which the council member must observe, he must neither offer nor accept anything of value on the understanding or with the intention that his official judgment would be influenced thereby. We assume such a situation does not exist here. We add reference to this Section not to indicate that any such activity has been or will be undertaken but in a effort to provide a complete response to your inquiry. Edward Leymarie, Jr. June 5, 1989 Page 6 Conclusion: The Ethics Act and the rulings of the Ethics Commission reveal no reason to preclude the council member from participating in this Program as outlined above. So long as his conduct conforms to the guidelines discussed above, he may participate in this Program. If these guidelines are met he should encounter neither a conflict nor an appearance of conflict with the public trust under the Ethics Act in this situation. 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. such. 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 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 52.12. Sincerely, Vincent J. Dopko, General Counsel