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HomeMy WebLinkAbout84-549 CummingsMichael Cummings 1219 Clay Avenue Dunmore, PA 18510 Dear Mr. Cummings: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 April 17, 1984 ADVICE OF COUNSEL RE: Dunmore Borough Council, Section 3(e) 84 -549 This responds to your letter received March 22, 1983, in which you requested advice from the State Ethics Commission. Issue: You ask whether, if you resign from your post as a member of Dunmore Borough Council, you would face any restrictions with respect to your affiliation with an Insurance Agency. Facts: You currently serve as a member of the Dunmore Borough Council, hereinafter, the Council or the Borough. You indicate that you plan to resign from the Council. You indicate that the Borough is currently seeking competitive price proposals and submissions for the purchase of life insurance coverage for the Borough policeman. The Borough, following the solicitation of these proposals, intends to award the contracts in an open and public process. You indicate that you are currently affiliated with an insurance agency which desires to bid on these contracts. In the event that the contracts where awarded to this agency, you wonder whether you would be prohibited from accepting commissions with regard to the contact after your resignation from Borough Council. You indicate that in the whole process of the award of the contracts, you, as a Councilmember, would abstain from voting on the award of these contracts because of your relationship and affiliation with the insurance agency. Michael Cummings April 17, 1984 Page 2 Discussion: It is clear that as an elected Borough Councilman within the Dunmore Borough you are currently a "public official" as that term is defined in the State Ethics Act. See 65 P.S. 402. As such, your conduct must conform to the requirements of the State Ethics Act both while you remain in office and for the one -year period following the resignation from Council, as will be discussed more fully below. We will initially discuss the requirements of the Ethics Act which apply to you while you are still serving on Borough Council. Under the provisions of the Ethics Act, it is clear that you are "associated with" the insurance agency as those terms are defined in the State Ethics Act. In this conclusion, we assume that you are at least an employee of this agency. As such, you may not, as a public official, use your public office or any confidential information received through your holding of public office to secure financial gain for this business (the insruance agency) with which you are associated. Accordingly, it would be required that you abstain from the Borough Council's consideration and votes on the award of the contracts in which the insurance agency with which you are associated or employed would be interested. Your indication that you would abstain from participation on Council's consideration of these contracts is consistent with the requirements of the Ethics Act. In addition, we should point out the provisions of Section 3(c) of the Ethics Act which provides that: (c) No public official or public employee or a member of his immediate family or any 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 egr'ity 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). If you stand in the relation to the agency of director, officer, owner or holder of stock of the agency exceeding 5% of the equity at fair market value of the agency, you must also insure that the open and public process requirements of Section 3(c) of the Ethics Act are met. Insofar as you indicate that the Borough is already seeking competitive prices and submissions for the purchase of life insurance, the requirements of Section 3(c) of the Ethics Act would be met, assuming that you stand in one of the relationships to the agency as outlined in Section 3(c) of the Ethics Act and that this Section of the Ethics Act would be applicable. Michael Cummings April 17, 1984 Page 3 Finally, upon your resignation as a Borough Councilman, you would be required to observe the requirements of Section 3(e) of the Ethics Act as follows: (e) No former official or public employee shall represent a person, with or without compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 P.S. 403(e). Under this provision in the Ethics Act, it is clear that you may not personally appear and represent any person, including the agency, before the Borough Council for a period of one -year after you have resigned from Borough Council. However, the fact that you may face personal restrictions in that you would not be permitted to "represent" the agency following your resignation from office, does not preclude the agency, at the present time, from seeking the contract with Council. As long as the open and public process of the Ethics Act is met, if Section 3(c) of the Ethics Act is applicable and you properly abstain as set forth above in order to comply with the requirements of Section 3(a) of the Ethics Act, the contract can be made. Then, even after your resignation from Council, this contract can continue and there are no opinions of the Ethics Commission which would indicate that this contract would be required to be terminated following your resignation from office. Likewise, there are no opinions of the Ethics Commission which would indicate that you would be precluded from receiving commissions with respect to this contract. This response also assumes that you will not engage in any negotiation or re- negotiaion of this contract within the first year after you resign from Borough Council because this would represent prohibited "representation" under Section 3(e) of the Ethics Act. However, you could, even in light of Section 3(e) and following your resignation from Borough Council, he able to administer, rather than to negotiate or re- negotiate this contract. Administration of this contract, even following your termination of service with the Borough, would not be considered to be prohibited under Section 3(e) of the Ethics Act. Conclusion: While you are serving as a Borough Councilmember, your conduct must conform to the requirements of Section 3(a) and Section 3(c), if applicable, of the Ethics Act insofar as the Borough may seek to contract with the insurance agency with which you are associated. Likewise, following your resignation from Borough Council, your conduct must conform to the requirements of Section 3(e) of the Ethics Act as discussed above, but the Ethics Act would not preclude you, per se, from accepting commissions with respect to the contract of insurance, if awarded, as outlined above. Michael Cummings April 17, 1984 Page 4 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. 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. SSC /rdp This letter is a public record and will be made available as such. Si cerely, Sandra S. C Pistianson General Counsel