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HomeMy WebLinkAbout90-511 KopkoMr. Edward E. Kopko First Federal Building 111 East Norwegian Street Pottsville, PA 17901 Dear Mr. Kopko: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108-1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 15, 1990 90 - 511 Re: Conflict, Public Official, Contracting with Governmental Body, Township Supervisor, Municipal Association, Trash Disposal Company. This responds to your letter of January 8, 1990 in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition upon a township supervisor /municipal association member or a "business with which he is associated" from contracting with the municipal association. Facts: You represent an elected official who is a supervisor in a second class township which is turn is a member of landfill association comprised of numerous municipalities. Membership with the association is limited to only the participating municipalities; the officers, directors and members of the association are represented by elected officials from each respective municipality. The association is desirous of entering into a contract with a company for the removal and disposal of trash and municipal waste. Your client has the opportunity to acquire stock in the company that will contract with the association. You inquire as to whether his stock ownership in the corporation would be prohibited by the Ethics Law. Discussion: As a supervisor for second class township, the individual is a "public official" as that term is defined in the Ethics Law. 65 P.S. 5402; 51 Pa. Code 51.1. As such, he is Mr. Edward E. Kopko Page 2 subject to the provisions of the Ethics Law and the restrictions therein are applicable to him. Section 3(a) of the Ethics Law provides: Restricted Activities No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined under the Ethics Law: "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. "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 has a financial interest. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more Mr. Edward E. Kopko Page 3 than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. 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 or no public official /employee shall solicit or accept any thing of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Generally, the Ethics Law places no per se prohibition upon a public official's association with a business that contracts with his governmental body. Under Section 3(a) of the Ethics Law quoted above, a public official /employee is not perse precluded from outside business interests provided those private interests do not conflict with his public position. Pancoe, 89- 011. Therefore, assuming that the individual has not used the authority of office or confidential information to either obtain the stock or to obtain the stock at a better price or some similar private pecuniary benefit through the use of authority of office, the individual would not be precluded from acquiring stock in the company. Further, in the event that the individual would acquire the stock, he may be restricted as both a township supervisor and a municipal association member from voting or- participating as to that company. Since you have not supplied information as to the extent of the stock ownership, it can not be discerned as to whether his ownership is five percent or greater as per the definition of financial interests under the Ethics Law. In addition, if the individual does have a five percent or more interest in the stock, which would create a conflict as to his voting or participating regarding that company, the requirements of Section 3(j) of the Ethics Act must be followed which requires a public disclosure of the conflict as well as filing a written memorandum to that effect with the secretary recording the minutes. In addition to the foregoing, Section 3(f) of the Ethics Law provides as follows: (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 Mr. Edward E. Kopko Page 4 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. In relation to the above provision of law, the State Ethics Commission has generally determined that this provision is a procedure to be used when a public official or employee contracts with his own governmental body in an amount of $500 or more. The above provision of law clearly is intended to be a procedure to be utilized where contracting is otherwise allowed by law. The above particular provision of law would require that an additional procedure, the open and public process, must be used in all situations where a public official is otherwise appropriately contracting with his own governmental body in an amount of $500 or more. This open and public process would require: (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 and offered and accepted. Thus, in the event that contracting would be allowed, the above process must be employed. Further, Section 3(f) provides that the public official could not have supervisory or overall responsibility as to the implementation or administration of contract. Once again, since information has not been supplied as Mr. Edward E. Kopko Page 5 to the extent of the stock ownership, it can not be determined whether the individual has a financial interests in the company so that the company would be a business with which he is associated as that term is defined under the Ethics Act. If such is the case, the above provisions of Section 3(f) must be adhered to. 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 Law. Specifically not addressed is the applicability of the respective municipal code. Conclusion: As a township supervisor and municipal association . member, the individual is a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would not prohibit the individual from obtaining stock in a company that would contract for trash disposal with the municipal association of which the supervisor is a member provided the individual did not use the authority of office or confidential information to obtain the stock or obtain the stock at a better price. If the stock ownership creates a financial interest in the company, then that would be a business with which he is associated and Section 3(a) of the Ethics Law would restrict - his participation and voting regarding matters of that company. In addition, the requirements of Section 3(j) of the Ethics Law as outlined above must be observed. In the event that the individual had a financial interest as that term is defined under the Ethics Law, Section 3(f) of the Ethics Law would be applicable and the requirements as outlined above must be adhered to. 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. 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 14 Mr. Edward E. Kopko Page 6 Commission will be issued.• . Any such appeal mult-be in Wriiinctriiti. and must be received at the Commission Within .15 days of the .date of this Advice pursuant to 51 Pa. .Code S2.12. • S rely, 1.1 Insicent 4. opk Chief Counsel .