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HomeMy WebLinkAbout86-508 GrovesMr. William C. Groves, Secretary Cumherland Township Supervisors 100 Municipal Road Carmichaels, Pennsylvania 15320 Dear Mr. Groves: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 January 31, 1986 ADVICE OF COUNSEL 86 - 508 Re: Township Supervisor, Trucking Contract, Conflict of Interest This responds to your letter of December 28, 1985, wherein you requested the advice of the State Ethics Commission. Issue: Whether the State Ethics Act presents any restrictions regarding the award of a trucking contract by a township to a company with which one of the township supervisors has a business relationship. Facts: You currently serve as a member of the board of township supervisors in Cumherland Township, Greene County, Pennsylvania. You are the secretary of the township board of supervisors. You advise that you are half owner of a trucking company, Bailey Trucking P.U.C. Inc. You indicate that Cumherland Township does not have enough bottom ash for the winter. Mr. Ralph Burwell is engaged in the ash hauling husiness. You advised that when Mr. Rurwell is not hauling ash, he hauls coal for Bailey Trucking Inc. under a lease arrangement. You also advised that when Mr. Rurwell has a large ash haul your company, Bailey Trucking, provides trucking services for him. According to your letter, only certain haulers are permitted to haul ash from Hatfield Power Station. All of these trucks that are permitted to haul from the power plant have at one time worked for Railey Trucking. Rased upon your husiness relationship with Mr. Rurwell, you now request the advice of the Ethics Commission regarding the potential contract hetween Mr. Rurwell and Cumherland Township. Specifically, you ask whether any restrictions would be placed upon this arrangement. Discussion: As a township supervisor you are a public official as that term is defined in the State Ethics Act. 65 P.S. X402. As such, your conduct must conform to the requirements of the Act. Sowers, 80 -050. Mr. William C. Groves January 31, 1986 Page 2 Your letter does not specifically indicate what, if any function, Rai ley Trucking will play in relation to the contract hetween the township and tlr. Burwell. As a result, we will review this matter under two specific factual situations. First, we will assume that the contract will be specifcally between the township and Mr. Burwell's company. First, we will assume that Bailey Trucking will perform no services in relation to this contract and will receive no henefits therefor. Secondly, we will review this matter under the assumption that Bailey Trucking will provide services to Burwell in the form of hauling ashes from the power plant. We will assume, for this purpose, that your company will act more or less as a sub- contractor to Mr. Burwell and that your company will be compensated for this service. Generally, the State 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). Within this provision of law, you may not use your public position in order to obtain any financial gain for yourself or for a business with which you are associated. You may not use confidential information obtained in your public position for similar purposes. A business with one is associated is defined in the Act as follows: 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. According to the facts that have been provided, it appears as though you are not associated with Mr. Burwel l's company within the definition of the foregoing provision. You are not an officer, owner, or employee of that company. Under the first factual situation, there would be no prohibition on a township's award of the hauling contract to Mr. Rurwel l . If Bailey P.U.C. Inc. is performing no service in relation to this contract and if your company will receive no benefits therefrom, Section 3(a) of the Act will present no prohibition upon the award of this contract. Mr. William C. Groves January 31, 1985 Page 3 Similarly, the Ethics Act provides as follows: Section 3. Restricted activities. (c) No puhlic 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 equity 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 puhlic 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). Within this provision of the law, it is clear that no puhlic official, member of his immediate family or 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 in an amount in excess of $500 with a governmental body unless the contract has been awarded through an open and public process. Howard, 79 -044. This Commission has previously determined that this provision of the law would only apply to contracts between a public official and his own governmental body. See Bryan, 80 -014; Lynch, 79 -047. In a situation where the public official is attempting to contract with his own governmental body the open and public process must be employed. That process would include prior public notice of the employment or contracting possibility; sufficient time for a reasonable and prudent competitor or applicant to be able to prepare and present an application or proposal; public disclosure of all applications or proposals considered and public disclosure of the contract awarded or offered and accepted. See Fields, 82-006; Cantor, 82 -004. Under the factual situation as outlined above, it is clear that you are not an owner of Mr. Burwell's company and that under the first factual situation where Bailey P.U.C. could be providing no services and receiving no compensation. Thus, there would be no 3(c) prohibition or restrictions upon Mr. Burwell's contract with the township. In addition to the foregoing, the State Ethics Act also authorizes this Commission to address other areas of possible conflict. 65 P.S. 6403(d). Generally, such a conflict develops where a public official attempts to serve one or more interests that are adverse. Alfano, 80 -007, Domalakes, 85 -010. The types of activity that are encompassed by this provision of law are generally determined through a review of the intent of the State Ethics Act. That intent is to ensure that the financial interests of their public officials do not conflict with the puhlic trust. 65 P.S. .401. Within this provision of law, it is advised that even if the contract between Mr. Burwell and the township does not involve Bailey Trucking and even if Bailey Trucking Fir. William C. (;roves January 31, 1q R6 Page 4 will provide no services for Mr. Burwell in relation to this contract, you should abstain from participating in the township's decision and vote to award this contract. This is particularly so, in that you have had business and financial dealings with Mr. Burwell in the past which would most likely continue in the future. Because of this financial relationship with Mr. Burwell a conflict of interest could develop and that it could he perceived as though you are awarding this contract to Mr. Burwell in order to secure future private business transactions. You should, thus, abstain from participating in the decision to award this contract even if Bailey P.II.C. has no relationship to the contract. In addition to the foregoing, we do note that the 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). We make reference to this provision of the Act not to imply that there has or will be any violation thereof, but in order to provide a complete response to your question. We now must review the current situation under the second factual assumption. As noted previously, Section 3(a) of the Act would prohibit a public official from using his public position in order to obtain any financial gain for himself or a business with which he is associated. Technically, you are not associated with Mr. Burwell's company as provided for in the State Ethics Act, however, if your company will be hauling ashes under Mr. Burwell's contract with the township, or if there is a reasonable expectation that such will occur, you must not participate in the township's decision to award this contract. This is so, in that such participation would be a use of your public office to obtain a financial gain for your company, in that you would be aware of the fact that your company would he receiving a benefit from this contract. Thus, under the second factual situation, you may not participate in the decision to award the contract. Additionally, you must make known publicly your abstention, the reasons for the abstention and such should be recorded in the appropriate township minutes. See Witmer, 83 -580. Mr. Wil li am C. Groves January 31, 1986 Page 5 In addition to the foregoing, it is further advised that if Bailey P.II.C. will be operating in a sub- contractor basis for Mr. Burwell, or will otherwise receive any benefit under Mr. Burwell's business relationship with the township under both Section 3(c) and 3(d) of the State Ethics Act an open and public process should be employed. As a result, the award of this contract should he completed in accordance with the open and public process as previously outlined in this advice. Also, as noted, you may not participate in the award of this contract. Conclusion: As a township supervisor you are a public official within the purview of the State Ethic Act. A. If your company will provide no services in relation to the 'township's contract for the hauling of ashes, no prohibitions are placed upon the general award of this contract by the township. Because of your prior business relationships and financial dealings with the contractor, you must abstain from participating in the decision to award this contract and your abstention and the reasons therefore, should be publicly announced, and recorded. B. In the event that your private company will participate in the contract and in the event that you or your company will receive compensation for such participation, the contract must be awarded through an open and public process as defined in this advice. Additionally, you may not participate in the award of that contract to any extent. 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 he 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. Sincer nt i no Gen' . Counsel