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HomeMy WebLinkAbout84-588 KopkoEdward E. Kopko, Esquire 200 Mahantongo 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 July 10, 1984 ADVICE OF COUNSEL 84-588 Re: Bank Employee; School Board Director; Bank as Depository of School District This responds to your letter of May 22, 1984, in which you, as solicitor for the Minorsville Area School District, requested advice from the State Ethics Commission. Issue: You ask whether a conflict of interest exists where the treasurer of the Board of School Directors of the Minorsville Area School District is also an employee of the Bank which has been designated by the School Board as the depository for school district funds. Facts: As solicitor for the Minorsville Area School District (MASD or the District), you requested advice concerning the conduct of a School Board member. The School Director in question was elected treasurer to the School Board of Directors on May 21, 1984. At that time, the Board also designated a certain bank, hereinafter, the Bank, as the depository for MASD funds. The Board member /treasurer is an employee of this Bank, and you indicate that he has received nothing of value as a result of the appointment of the Bank as the depository for the District. You have, however, requested advice from the State Ethics Commission regarding the application of the State Ethics Act to this situation. Discussion: As an elected official, the School Board Director is a "public official" subject to the provisions of the Ethics Act. See 65 P.S. Section 402. As a public official, this School Director must comply with the provisions of the Ethics Act and the most pertinent provisions in relation to the question you raise are Sections 3(a), 3(b), and 3(c) of the Ethics Act. See 65 P.S. Sections 403(a), (b), and (c) respectively. Edward E. Kopko, Esquire July 10, 1984 Page 2 Section 3(c) of the Ethics Act, 65 P.S. 403(c), provides that no public official, member of his immediate family or any business in which the person or a member of his immediate family is an officer, director, or owner of greater than 5% of the equity at fair market value may contract with a governmental body unless the contract, valued at more than $500, has been awarded through an open and public process. See Howard, 79 -044. Previous Opinions of the Commission have held that the term "governmental body" in Section 3(c) refers to the governmental body with which the public official is "associated ". Ryan, 80 -014 and Lynch, 79 -047. However, the appointment of the Bank as depository may or may not be a "contract" within the purview of this particular Section of the Ethics Act. If designation of this Bank as depository would not amount to a contract between the public official in question and the governmental body with which he is associated, that is, the MASD, then Section 3(c) of the Ethics Act would be inapplicable to the designation of the Bank as depository. Likewise, unless the School Director enjoys one of the relationships set forth in Section 3(c) -- officer, di rector, etc. -- there is no need for this designation to comply or to have complied with the open and public process requirements of Sections 3(c) of the Ethics Act. Under these facts, where the School Director is a mere employee of the Bank, we will conclude that Section 3(c) of the Ethics Act is inapplicable and no open and public process is requi red. As mentioned above, we must also review Section 3(a), 65 P.S. 403(a) which prohibits any public employee or public official from using his public employment or confidential information received through his holding public employment to obtain financial gain for himself or his family or a business with which he is associated. "A business with which he is associated" is defined in the Ethics Act as: Section 2. Definitions. "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. 402. As an employee of the Bank, this School Director, for purposes of this definition must be said to be "associated" with the Bank. Thus, this School Director could not use his public office or his vote to obtain "financial gain" for himself or a member of his immediate family or for the Bank, a business with which he is associated. There is no indication that this School Di rector-Bank empl oyee experienced any financi al gain as a result of the designation of this Bank as depository. However, in order to avoid an appearance that his financial interests conflict with the public trust, the School Director in the future, should abstain when questions regarding appointment /designation of the ■1ASD depository are presented. Edward E. Kopko, Esquire July 10, 1984 Page 3 Finally, we must also consider Section 3(b), 65 P.S. 403(b), which precludes any person from offering a public employee or public official any thing of value, including a promise of future employment, based on the understanding that his official actions would be influenced thereby. Again, in the factual context which you present, there is no indication of any violation of either Section 403(a) or 403(b) of the Ethics Act and we refer to these provisions only for the purpose of providing a complete response to your inquiry. Conclusion: Under the factual circumstances presented in your request - for advice, there is no inherent conflict of interests or appearance of a conflict of interests where a Bank which employs one of the School Directors has been designated as depository for the School District. The conduct of the School Director so employed should be guided and governed by this Advice. Pursuant to Section 7(9) (i i ), 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 full 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 /na Sincerely, Sandra S. Chri tianson General Counsel