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HomeMy WebLinkAbout84-590 KingPeter J. King, Esquire Twenty Chatham Square Pittsburgh, PA 17104 Dear Mr. King: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 July 17, 1984 ADVICE OF COUNSEL 84 -590 RE: Bank as Depository, School District, School Director, Part -time Bank Employee This responds to your letter of June 20, 1984, in which you requested advice from the State Ethics Commission. Issue: You ask whether a conflict of interest exists where the member of a school board is a part -time employee of the bank which has been designated by a school board as depository for the school district funds. Facts: You indicate that you are solicitor for a school district, hereinafter, the School District. At a recent meeting of the School Board the question of the selection of a depository for the School District funds was considered. You indicate that the vote of one of the School Board members was challenged on the basis that this School Board member serves as a part -time teller for one of the Pittsburgh banks, hereinafter, the Bank. You do not indicate whether this particular Pittsburgh Bank was the bank ultimately selected as the depository for the School District funds, but we will assume that this Pittsburgh Bank with which this individual serves as a part -time teller is also one of the banks which may be selected as the depository. You reviewed the School Code and determined that, in your opinion, the fact that one of the School Board members was employed by one of the banks on a part -time basis does not disqualify him from casting a deciding vote as to the selection of the School District depository. You indicate that there is a provision of the School Code, Section 324, which provides that a member of the School Board may not vote if the member is employed by that firm bidding on a contract with the School District and the bid was designed to exclude other firms or persons from bidding on such a contract. However, in this case, you indicate that the School District had asked various banks interested in being designated as the depository for the School District funds, to submit proposals with respect to this designation. Peter J. King, Esquire July 17, 1984 Page 2 Finally, you indicate that the board member in question is not an officer of the Bank and is not even a full -time ernployee of the Bank. This individual School Board member works on a part -time schedule for the Bank in the capacity of a teller. Discussion: As an elected official, the School Board director in question is a "public official" as that term is defined in the State Ethics Act and is therefore subject to the provisions of the State Ethics Act. As a public official, this School Director must comply with the provisions of the Ethics Act. The most pertinent provisions of the Ethics Act in relation to the question you raise are Section 3(a), (b), and (c) 65 P.S. 403(a), (b) and (c) respectively. Section 3(c) of the Ethics Act 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 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 ". See 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 the designation of this Bank as depository would not amount to a contract between the public official and the governmental body with which he is associated, that is the School District, than Section 3(c) of the Ethics Act would be inapplicable to the designation of the Bank as depository. Likewise, unless the School or a member of his immediate family enjoys one of the relationships set forth in Section 3(c) -- officer, director, etc. -- there is nu need for this designation to comply with or to have complied with the open and public process requirements of Section 3(c) of the Ethics Act. Under these facts, where the School Director is a mere part -time employee of the Bank, it is clear that the provisions of Section 3(c) of the Ethics Act are inapplicable and no open and public process would have been required. In any event, you indicate that solicitation for proposals was made and this is sufficient to indicate that this process of selection of the depository for the School District complied with the provisions of Section 3(c) of the Ethics Act. As mentioned above, we must also review Section 3(a) of the Ethics Act, 65 P.S. 403(a). This Section prohibits any public official or public employee from using his public employment or office or confidential information received through his holding of public office to obtain financial gain for himself or his family or a business with which he is associated. The definition of a "business with which he is associated" is set forth in the Ethics Act as follows: Peter J. King, Esquire July 17, 1984 Page 3 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. There is no indication that the Bank would not be a "business" with which this School Director must be deemed to be a "associated with simply because he works only on a part -time basis as opposed a full time basis. Specifically, the definition in the Ethics Act does not distinguish a part -time employee from a full -time employee but speaks only in terms of the person being employed by a "business". Thus, we can but conclude that this Bank would be a business with which the School Director would be associated as set forth in this definition. Thus, the School Director could not use his public office or his vote to obtain "financial gain" for himself or for a member of his immediate family or for the Bank, a business with which he is associated". There is no indication that this School Director - Bank employee experienced any financial gain as a result of the designation of this bank as depository. Thus, there would be no violation of Section 3(a) apparent in this situation. However, every public official must, in accordance with Section 1 of the Ethics Act, also assure the public that his financial interests do not present a conflict or an appearance of a conflict with the public trust. Under this particular provision of the Ethics Act it would be advisable if the School Director to obtain from voting when questions regarding the appointing or designation of the Bank as depository are presented. Finally, we must also consider Section 3(b) of the Ethics Act, 65 P.S. 403(b). Section 3(b) precludes any person from offering a public official anything of value, including a promise of future employment, based upon 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 Section 3(b) of the Ethics Act. 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, there is no inherent conflict of interest or appearance of a conflict where the Sank which also employs one of the School Board directors on a part -time basis is considered for designation as the depository for the School District funds. The conduct of the School Director employed, however, should be guided and governed by this advice. Peter J. King, Esquire July 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. 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 S. dra S. Chri ianson General Cou . -1