HomeMy WebLinkAbout80-588 BrodishC
C
TO:
FACTS:
Jay D. Brodish
31 Pine Valley Road
Doylestown, PA 18901
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
March 24, 1980
ADVICE OF CHIEF COUNSEL
Advice # 80 -588
RE: Various Business Interests of a School Board Director
On January 19, 1979, Jay Brodish wrote the Commission
and asked for a written advice with respect to the relationship
between his various business interests and his position as
school board director.
He is a partner in Price Waterhouse and Company, although
he holds less than 5% interest in the company. He is also
a partner in the Bucks County Investors, owning in excess of
5% interest in this business.
He is also a school board director of the Central Bucks
School District.
Because of these various business interest, Mr. Brodish
has abstained from participating in any discussions relating
to the employment of an accounting firm. Bucks County Investors
has never had any dealings with the Central Bucks School District.
Mr. Brodish asked six questions, which in summary are:
(1) How does his relationship to Price Waterhouse and Company
affect his service as school board director?
(2) Must he abstain from voting with respect to matters
involving vendors, if such organizations are known to
Mr. Brodish's clients of the Philadelphia Office of
Price Waterhouse and Company?
(3) May Mr. Brodish participate in discussions with respect
to matters involving vendors to the Central Bucks School
District, if such organizations are known by him to be
clients of the Philadelphia Office of.Price Waterhouse
and Company?
C
C
Jay D. Brodish
March 24, 1980
Page 2
(4) If Bucks County Investors receives a loan from a
lending institution which the Central Bucks School
District is also dealing with, may Mr. Brodish
participate in negotiations or discussions with such
lending institutions as a member of the school board?
Mr. Brodish advises that he would not participate in
any contracts between Bucks County Investors and the
Central Bucks School District.
DISCUSSION:
(5) How does Act 170 affect his service on the school board
if his wife's uncle has designated Mr. Brodish as
executor of the estate and trustee of certain assests
which he presently maintains? Mr. Brodish advises that
his wife's uncle is an officer and holds voting stock
in a vendor of the Central Bucks School District.
(6) What loans must Mr. Brodish report on the Financial
Interest Statement?
At the present time no school director is required to
file a Statement of Financial Interests with the State Ethics
Commission, pending resolution of Snyder v. Thornburgh, now
on appeal to the Supreme Court.
School board directors are public officials, and are
subject to the State Ethics Act.
Section 3(c) of the Act states:
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
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 public notice and
subsequent public disclosure of all proposals considered
and contracts awarded.
The issue is how should Section 3(c), 65 P.S. 403(c), be
applied with respect to Price Waterhouse and Company, the
clients of Price Waterhouse and Company, and Bucks County
Investors.
C
C
Jay D. Brodish
March 24, 1980
Page 3
As to contracts between Bucks County Investors and
the Central Bucks School District, such contracts must be
awarded through an open and public process, including prior
public notice and subsequent public disclosure of all
proposals considered and contracts awarded, Section 3(c).
Section 3(d) permits the Commission to address other
areas of possible conflict. We, therefore, hold that Mr. Brodish
should not participate in school board discussion involving
the employment of an accounting firm, the employment of Price
Waterhouse and Company, or in contracts with clients of
Price Waterhouse and Company, unless the contract is awarded
through an open and public process, including prior public
notice and subsequent public disclsoure of all proposals
considered and contracts awarded.
CONCLUSION:
Any contracts of $500 or more between the Central Bucks
School District and Price Waterhouse and Company, clients of
the Philadelphia Price Waterhouse and Company or Bucks County
Investors must be awarded through an open and public process,
including prior public notice and subsequent public disclosure
of all proposals considered and contracts awarded. Mr. Brodish
should continue to abstain from participating in discussions
involving these various business interests.
The fact that his wife's uncle, a vendor of the
Central Bucks School District, asked Mr. Brodish to be
executor of his estate and trustee of certain assests does
not require Mr. Brodish to refrain from participating in
any discussions involving his uncle's business.
Section 5(b)(4) requires that Mr. Brodish report
"the name and address of each creditor to whom is owed in
excess of $5000 and the interest rates thereon. Mortgage
loans for a personal residence need not be reported. All
other loans in excess of $5000 should be reported.
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.
C
Jay D. Brodish
March 24, 1980
Page 4
DRM /rdp -1
A personal appearance before the Commission and a
formal opinion will be issued upon your request if you
feel this reply does not suffice.
This letter is a public record and will be made
available as such.
DAVID RITTENHOUSE MORRISON
Chief Counsel