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HomeMy WebLinkAbout81-536 VerteranoFrank G. Verterano, Esq. Suite 400 Kennedy Square West 12 West Washington Street New Castle, PA 16101. Dear Mr. Verterano: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 March 31, 1981 ADVICE OF COUNSEL RE: Conflict of Interest, Township Supervisors, Contractors 81 -536 This responds to your letter of Janaury 21, 1981, in which you requested an opinion from the Ethics Commission. Issue: In your letter you requested advice as to whether a Township Supervisor may bid on a contract for construction of the Township water system. Facts: You advised us that a Township Supervisor desires to bid on construction of the Township water system, when funds for that system are received from the government. The water system will be managed by a municipal water authority. The Authority will award contracts to work on the system. Members of the Authority will be appointed by the Township Supervisors. The Township Supervisor in question has refrained from voting on any matter relating to the water system but has not placed his reason for the abstention on the public record. The Supervisor will not participate in the appointment of members of the municipal water authority. The Supervisor is willing to resign his position to bid on the construction of the water system. Discussion: In your letter you cite the Second Class Township Code, 53 P.S. §65802(f) to the effect that no Township official shall be interested to any appreciable degree in a contract for work for the Township valued at more than $300 a year. The Ethics Commission's jurisdiction is limited by the Ethics Act, 65 P.S. §401 et seq. Therefore, this Advice only addresses the requirements of the Ethics Act. Questions raised by other statutes must be addressed by other agencies or solictors. A Township Supervisor is clearly a public official as that term is used in the Act. A public official is "Any elected or appointed official in the Executive, Legislative or Judicial Frank G. Verterano, Esq. March 31, 1981 Page 2 Branch of the State or any political subdivision thereof...." 65 P.S. §402. As a public official, the Ethics Act governs the Supervisor's conduct. The Act does not, however, require that the Supervisor resign his position to bid on construction of the water system. The Commission spoke to a similar factual situation in its Opinion in Sowers, 80 -050, and did not require resignation of a Supervisor who expected to get work from a land developer presenting plans and appearing before the Board of Supervisors. Similarly, the Supervisor in question need not resign. The holding in Sowers was that the Supervisor could not vote in matters where he has or could expect to benefit by employment and to place the reason for his abstention on the public record. The Supervisor you mention is to be commended for abstaining from voting on water project matters but should place the reason for his abstention on the public record. Along with the abstention and public disclosure of the reason for such abstention, the Ethics Act imposes several additional duties upon the Supervisor in the position you describe. The Supervisor must not use his public office or confidential information obtained through holding public office to obtain financial gain for himself, his immediate family or a business with which :ae is associated. 65 P.S. §403(a). Thus the Supervisor may not use his public office or confidential information received while in office to obtain a contract or to prepare a bid for the contract. Sowers, 80 -050. Further, Section 3(c) of the Act, 65 P.S. 403(c) provides that no public official or business in which the public official or a member of his immediate family is a director, officer or holder of stock exceeding 5% of the fair market value equity of the business shall enter into a contract valued at more than $500 with a "governmental body" unless the contract has been awarded through an open and public process. The Commission has defined "open and public process" as: (1) Prior public notice about the contract; and (2) public disclosure of all proposals considered; and (3) public disclosure of the award of the contract. Howard, 79 -044. A reasonableness test is employed to determine whether the criteria of an "open and public process" have been satisfied. "Essentially, there should be sufficient time for a reasonble and prudent competitor of the public official... to be able to prepare and submit a proposal." Id. If these requirements are met the Supervisor may contract will the municipal water authority whether the contract is awarded by the Township or the municipal water authority and regardless of whether the Authority or the Township is the governmental body with which the supervisor is "associated." March 31, 1981 Page 3 The Supervisor, however, should note that the limitations discussed above only apply per se when the Supervisor is contracting with the governmental body with which he is " associated." See 65 P.S. §403(c). As a Township Supervisor, the individual in question is technically "associated with" the Board of Supervisors only for the purposes of Section 3(c), 65 P.S. §403(c); See, e.g., Geeseyy, 80 -046. Thus, the Supervisor may contract with the Water Authority without complying with the requirements of an open and public process set forth in the statute. But, if the open and public requirements are met,-any contract would conform to the requirements of the Ethics Act. Conclusion: As a public official a Township Supervisor must comply with the Ethics Act when seeking a contract with the Township or water authority. The Ethics Act does not require the Supervisor to resign his position to seek a contract. The Supervisor must: (1) continue to abstain from voting on matters relating to the water system where he expects to bid or secure work on the water system construction; and (2) place the reason for his abstention on the public record; and (3) refrain from using his public office to obtain such construction contracts; (4) refrain from using confidential information received through holding public office to bid on or obtain a contract. The "governmental" body with which the Supervisor is associated is the Board of Supervisors. The statutory restric- tions upon the Supervisor's contracts strictly apply only to contracts with the governmental body the Supervisor is associated with -- the Township. Because the Supervisor is not associated with the Water Authority he may contract with the authority without reference to Section 3(c) of the Act, 65 P.S. §403(c). But, if the open and public requirements are met with relation to a contract with the Authority, all possible ques- tions of any conflict would be alleviated. 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. (5) obtain a contract with the Township only if the contract was awarded through an open and public process. Frank G. Verterano, Esq. March 31, 1981 Page 4 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 Sin erely, Sa dra S. C istianson General Co sel