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Home My WebLink About81-523 WilsonBenjamin H. Wilson 300 West Stree Road Warminster, PA 18974 STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 March 11, 1981 ADVICE OF COUNSEL RE: Contracting, Municipal Authorities Dear Mr. Wilson: 81 -523 This responds to your letter of February 3, 1981, in which you request an opinion from the Ethics Commission. Issue: You request advice as to whether the Ethics Act prohi- bits a member of a municipal authority from contracting with the authority. You also request advice as to the duties of an individual who has left service as a member of an authority. Facts: You informed us that a member of a municipal authority may wish to do business with that authority. We assume that you are the member in question, because we can render binding advice only if this is the case. Discussion: The Ethics Act, 65 P.S. §401 et seq., defines "public official" as: "Any elected or appointed official in the Executive, Legislative or Judicial Branch of the State or any political subdivision thereof, provided that it shall not include members of advisory boards that have no authority to expend public funds other than reimbursement for personal expense, or to otherwise exercise the power of the State or any political subdivision thereof. 'Public official' shall not include any appointed official who receives no compensation other than reimbursement for actual expenses." 65 P.S. §402. Under this section of the statute and the decision of the Commonwealth Court in Forney v. State Ethics Commission, Pa. Commonwealth Ct. , A.2d (No. 1003 C.D. 1980, February 10, 1981) members of municipal authorities are subject to the Ethics Act. Benjamin H. Wilson March 11, 1981 Page 2 Act 170 also provides that: "Any individual who holds an appointed office in any political subdivision shall not have an interest in any contract or construction in which that political subdivision shall enter or have an interest." 65 P.S. §403(h)(i). This section appears to preclude an appointed member of a municipal authority from contracting with the authority. A previous decision of the Ethics Commission has indicated, however, that Section 3(h)(i) codified at 65 P.S. §403(h)(i) should be read in conjunction with Section 3(c) codified at 65 P.S. §403(c) and be construed as parallel to Section 3(c). See, Nanovic, 80 -041. Section 3(c) of the Act, 65 P.S. §403(c), states that: "No public official... 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 unless the contract has been awarded through an open and public process...." 65 P.S. 403(c). The Commission has held that an open and public process conforms to the following criteria: (1) Prior public notice; and (2) public disclosure of all proposals considered; and (3) public disclosure of the award of the contract. The test of compliance with these criteria is reasonable- ness. There should be sufficient timely notice to enable a prudent competitor of the public official to submit a proposal. Howard, 79 -044. Thus, you may contract with the authority if the safeguards discussed above are observed. As a member of the authority who wishes to contract with the authority, you must be aware that the Ethics Act forbids use of confidential information received through holding public office to obtain financial gain. 65 P.S. 403(a). Thus, you may not use confidential information gained as an authority member to prepare bids on a project or to obtain the award of a contract with the authority. In addition, as a member of the authority, to avoid the appearance of a conflict of interest, you may not vote, recommend, etc. on the award of a contract to Benjamin H. Wilson March 11, 1981 Page 3 yourself, a member of your immediate family or a business with which you are associated. Reasons for abstention must be made public. The Ethics Act also restricts the activities of a person who has left public office. Section 3(e), 65 P.S. §403(e) commands that: "No former official or public employee shall represent a person, with or without compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body." Id. The Commission has interpreted this section to prohibit: (1) personal appearance before the governmental body with which the person was associated, including, but not limited to, negotiations; (2) attempts to influence that governmental body; (3) participation in any manner in any matter over which the person had supervision, direct involvment or res ponsibility while a part of the governmental body; (4) lobbying, i.e. representing the interest of any person as to legislation or regulation by the govern- mental body. See Russell, 80 -048; Seltzer, 80 -044 and Morris, 80 -039. Accordingly, as a member of the municipal authority you may not appear before the authority; attempt to influence the authority; participate in any authority matter over which you had supervisory responsibilities or direct involvment or lobby the authority, for one year after leaving the authority. The opinion of the Commission in Kilareski, 80 -054 also states that a former public employee's signature of a bid proposal or identification of the former public employee as a person who will work on the proposal contract or project is prohibited as an attempt to influence the governmental body with which he was associated. Therefore, a former authority member may not sign proposals submitted to the authority or indicate that he will work on the proposal. The former member may, however, assist in preparing such proposals and may administer a project or contract once awarded. Kilareski 80 -054. These restrictions do not prevent the former authority member from appearing in another forum, such as the governing body of the municipality. Nor do they prohibit the former Benjamin H. Wilson March 11, 1981 Page 4 member from making inquiries of the authority that are also made by the general public. Finally, the restrictions do not prevent an authority member from using knowledge or expertise gained as a member with the exceptions enumerated above. Kilareski, 80 -054. Conclusion: The Ethics Act applies to members of a municipal authority. As a member of an authority, you may contract with the authority if the contract is awarded by an open and public process. Such a process provides for: (1) Prior public notice; and (2) public disclosure of all proposals considered; and (3) public disclosure of the award of the contract. A prudent competitor of the public official should have time to prepare and submit a proposal. Abstention and public disclosure of the reasons therefore should conform to the above discussion. No member of the authority can use confidential information received through holding public office to obtain financial gain or, for example, to assist in preparing a bid on a contract let by the municipal authority. A former member of a municipal authority may not: (1) Appear before the authority; (2) attempt to influence the authority; (3) participate in any manner in any matter over which he had supervisory authority or direct involvement; (4) lobby the authority for one year after leaving the authority. The former member of the authority may not sign a bid proposal or identify himself as a person with an interest in the project to the authority. Such signature or identification is an attempt to influence the authority and is prohibited for one year after leaving the authority. The former member may, however, assist in preparing such proposals immediately upon leaving the authority. The former member may appear in another forum, may make inquiries of the authority for general information, and may use knowledge and expertise gained as an authority member. Nevertheless, use of knowledge and expertise is subject to the previously discussed limitations. Benjamin H. Wilson March 11, 1981 Page 5 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 may be scheduled and a formal Opinion from the Commission will be issued. You should make such a request or indicate your disapproval of this Advice within the next 30 days. SW /rdp Sincerely, a dra S. C stianson General Co sel