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HomeMy WebLinkAbout89-597 PodolinskiMs. Laura W. Podolinski Executive Director Uniontown Downtown Business District Authority Room 210 City Hall 20 North Gallatin Avenue Uniontown, PA 15401 Dear Ms. Podolinski: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 27, 1989 89 -597 Re: Grant Program, Participation by Public Employee, Immediate Family, Sister. This responds to your letter of October 5, 1989, in which you requested advice from the State Ethics Commission. Issue: Whether under the Public Official and Employee Ethics Law the sister of the executive director of a municipal authority may seek funding through an authority program to purchase a business when the monies are private and are neither matched nor leveraged by public funds. Facts: The Downtown Business District Authority is a municipal authority in the City of Uniontown, Pennsylvania which is partially funded through the City of Uniontown Community Development Block Grant (CDBG) as a public service activity. The Downtown Business District Authority, hereinafter Authority, has spearheaded the development of a loan pool program for the central business district in the City of Uniontown. As the Executive Director of the Authority, you are the initial contact for the program, but the determination of approving or rejecting any loan application is strictly decided by the four financial institutions involved. The funds loaned through the program are private monies which are neither matched nor leveraged by public funds. Your sister and an unrelated partner are seeking funding to purchase an existing downtown business. The funding which they seek would fall under the loan types that are available throughout the existing loan pool program. You conclude by requesting advice as to whether the Ethics Law would impose any restrictions in regard to this matter. Ms. Laura W. Podolinski Page 2. Discussion: As the executive director of the Downtown District Authority for the City of Uniontown, you are employee as that term is defined under the Ethics Law. you are subject to the provisions of the Ethics Law restrictions therein are applicable to you. Section 3(a) of the Ethics Law: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. In addition Section 3(f) of the Ethics Law provides: Section 3. Restricted activities. (f) No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, 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. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection ,shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. Business a public As such, and the Section 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public official /employee anything of monetary value and no public official /employee shall solicit or accept any thing of monetary value based upon the understanding Ms. Laura W. Podolinski Page 3 that the vote, official action, or judgement of the public official /employee would be influenced thereby. The following terms are defined under the Ethics Law: Section 2. Definitions. "Conflict or conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member or his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Immediate family." A parent, spouse, child, brother or sister. As to Section 3(a) quoted above, it is clear that you as a public employee may not use the authority of office to obtain a private pecuniary benefit for yourself or a member of your immediate family. Since your sister is a member of your immediate family as that term is defined under the Ethics Law, the restriction of 3(a) would apply. Therefore, although Section 3(a) of the Ethics Law would not prohibit your sister from applying for private funding through the Authority, you could not participate in any fashion regarding her particular application. In addition, under Section 3(j) of the Ethics Law, you would be required to publically announce your conflict as to your sister's application and file a memorandum to that effect with your superiors or if done in a public meeting, with the person Ms. Laura W. Podolinski Page 4 recording the minutes. In summary, although Section 3(a) of the Ethics Law would not prohibit your sister from participating in the program, you could not use the authority of office or any confidential information to aid her to obtain that private pecuniary benefit. As to the matter of participation by public of in grant/rehabilitation programs, the Commission has determined that participation is conditional upon the public official /employee playing no rule in establishing the criteria under which the program is to operate, playing no role in establishing or implementing of the criteria for selections as to participation, playing no role in the process of selecting or reviewing applications and using no confidential information regarding the application to obtain the funds or grants. Wolf, Opinion 89 -030. Turning to the application of Section 3(f) of the Ethics Law to the instant matter, that provision of law imposes certain requirements when a public official /employee or member of his immediate family who seeks to contract with the public official /employee's governmental body, if the contract is five hundred dollars or more: that there be an open a public process including prior public notice and subsequent public disclosure of all proposals followed by the recusal of the public official /employee as to any supervisory or overall responsibility as to the administration of the contract in question. From the facts outlined above, it is not clear whether there will be any "contract" between your sister and the authority; however, if this were to occur, the provisions of 3(f) of the Ethics Law would apply and the above outlined requirements would have to be followed. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed is the applicability of the Municipality Authorities Act. Conclusion: As executive director of a municipal authority, you are a public employee subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would not prohibit your sister as a member of your immediate family from applying for funding to purchase an existing downtown business when the funding is by private monies from financial institutions but not matched or leveraged public funds. However, you must adhere to Ms. Laura W. Podolinski Page 5 the requirements of Section 3(a) and 3(j) of the Ethics Law as outlined above as well as Section 3(f) of the Ethics Law if the activity would constitute a contract of $500 or more between a member of the immediate family of a public employee and the governmental body. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. 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 in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code §2.12. Sincerely, Vincent J. Dopko, Chief Counsel