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Home My WebLink About84-638 Pellegrini_ - _ : A �:• (:} t:. }. i�i t :::� 308 }} F i. 1 i ri t.. c D . i 1. i_7 i i g p„ 0 e Box S. .1. 1 t C HLrrisburg, 17108-1470 December 27, 1984 ADVICE OF COUNSEL Mr. D. R. Pellegrini, City Solicitor Department of Law City of Pittsburgh 313 City - County Building Pittsburgh, PA 15219 Re: City Council Member, Pittsburgh Water and Sewer Authority, 84 -638 Dear Mr. Pellegrini: This responds to your letter of December 7, 1984, in which you, as solicitor for the City of Pittsburgh, requested Advice from the State Ehtics Commission. Issue: You ask whether a member of City Council of the City of Pittsburgh hereinafter, the Council, may engage in marketing of products to contractors including the Pittsburgh Water and Sewer Authority. Facts: You indicate that as city solicitor, and we assume, with the consent of the Councilmember in question, you have been ask to seek a formal Opinion from the Ethics Commission concerning a proposed contract. The contracting in question would be entered into between the Councilmember, Michele Madoff, and Instituform East Incorporated, hereinafter, the Corporation. Basically, Councilmember Madoff and the Corporation would undertake a contract whereby she would engage in marketing of products of the Corporation to contractors including, in certain instances, the Pittsburgh Water and Sewer Authority, hereinafter the Authority. The Authority is an Authority created by the City of Pittsburgh under the Municipal Authorities Act. The Corporation manufacturers and installs a lining system for sewer pipes. The City of Pittsburgh, hereinafter the City, has a management agreement with.the Authority to act as a contruction manager for water and sewer projects within the City. The contracts themselves, however, are competitively bid and awarded by the Authority. In this response we will also assume that the City has no jurisdiction to undertake or approve the contracts made by the Authority. Mr. D. R. Pellegrini December 27, 1984 Page 2 You indicate, that you, as solicitor, have reviewed the applicable City Ordinances and state laws, including the Ethics Act and you are of the opinion that such activity by Councilmember Madoff would not represent a conflict of interest or preclude that Councilmember from entering into the marketing contract with the Corporation as outlined above. However, you wish you have our formal Opinon as to the propriety of this conduct under the Ethics Act and have, accordingly, with the consent of the Councilmember in question, presented this to our attention for response. Discussion: Initially, we note that our jurisdiction and the power of the Ethics Commission under the Ethics Act is stricly limited to responding to questions under the Ethics Act. Thus, this Commission has no authority to interpret or enforce the provision of other codes, laws, etc. such as the conflict of interest provision of the Municipalities Authorities Act or any home rule charter, for example. Therefore, this response should not be construed as "clearance" act under any regulations, ordinance, charters, laws, etc. other than the Ethics Act, However, under the Ethics Act we can provide a response to your inquiry. As an elected official, this Councilmember, Michele Madoff, is a "public official" as that term is defined in the State Ethics Act. Therefore, she is subject to the provisions of the State Ethics Act and must comply with the provisions of that act. Most pertinent provisions of the Ethics Act in relation to the question you raised are Sections 3(a), (b), and (c), 65 P.S. 403(a), (b), and (c), respectively. We will review these provisions below. Section 3(c) of the Ethics Act provides that no public official, a member of his immediate family or a business with which the person or a member of his immediate family is an officer, director, or owner of greater than five percent of the equity at fair market value may contract with a governmental body unless the contract, if valued at more than $500 has been awarded through an open and public process. See Howard, 79 -004. From the facts outlined above it is apparent that Councilmember Madoff does not stand in the relationship to the Corporation of being an officer, director, or owner of greater than five percent of the equity at fair market value of the Corporation. Therefore, Section 3(c) of the Ethics Act is inapplicable and would place no restrictions upon the ability of this Corporation to contract with the City itself or the Authority. Essentially, Section 3(c) of the Ethics Act is triggered when an official or a member of his immediate family seeks to contract with the "governmental body" with which that public official is "associated." See Ryan, 80 -014, and Lynch, 79 -047. A key factor in analyzing this situation in light of Section 3(c) is also the fact that the City and the Authority are separate and distinct governmental bodies. As a member of City Council Michele Madoff would be deemed to be associated with the City Council and not the Authority. Thus, the provisions of Section 3(c) of the Ethics Act would not preclude this contract between the Corporation and the Authority. Likewise, even if Section Mr. D. R. Pellegrini December 27, 1984 Page 3 3(c) of the Ethics Act were applicable you indicate that these contracts are or would be competitively bid and awarded and this process would suffice to comply with the "open and public process" requirements of Section 3(c), in any event. We must also consider the impact of Section 3(a) of the Ethics Act on this situation. Section 3(a) of the Ethics Act provides as follows: Section 3. Restricted activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Basically, Section 3(a) of the Ehtics Act will preclude Councilmember Madoff from using her public office to secure gain for a "business with which she is associated." The definition of "business with which she is associated" includes a business by which she is employed. See 65 P.S. 402. However, in her role as Councilmember there does not appear to be a direct relation between contracts made between the Authority and the Corporation and the ability of Councilmember Madoff to use her position as a member of council to the benefit of the Corporation with respect to these contracts with the Authority. As such, Section 3(a) would not preclude Councilmember Madoff from engaging in marketing of the Corporation's products to contractors in general and the Authority, in particular. There would be no inherent conflict in such a situation under the Ethics Act. Finally, we must assume, of course, that in this situation the requirements of Section 3(b) of the Ethics Act have also been met. Section 3(b) of the Ethics Act provides as follows: Section 3. Restricted activities. (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Mr. D. R. Pellegrini December 27, 1984 Page 4 Section 3(b) of the Ethics Act would be implicated if, as a member of City Council , this individual were to accept or solicit anything of value, including the promise of future employment, based on the understanding that her official conduct as a member of City Council would be influenced thereby. We mention this Section of the Ethics Act not to imply any impropriety or to suggest that the Commission believes that Section 3(b) of the Ethics Act has or will be implicated in this situation, but merely to provide a complete response to your question and to reiterate our assumption that Section 3(b) of the Ethics Act has been complied within this matter. Conclussion: Under the factual circumstances presented in your request, there is no inherent conflict of interest or appearance of conflict of interest for this member of the City Council to engage in the marketing of products to contractors on behalf of this Corporation even where those ccontractors may include the Authority. 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 made, in writing, to the Commission within 15 days of service of this Advice pursuant to 51 Pa. Code 2.12. SSC /sfd Si cerely, c77` 1414W— Sandra S. hr,istianson General Counsel