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HomeMy WebLinkAbout17-532 Wian3 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 -932 -0936 ADVICE OF COUNSEL May 15, 2017 To the Requester: Mr. Cody Wian Dear Mr. Wan: 17 -532 This responds to your letter dated March 27, 2017, by which you requested an advisory from the Pennsylvania State Ethics Commission ( "Commission "). Issue: Whether Sections 1103(a ) and 1103(f) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §§ 1103(a), 1103(%fl would impose prohibitions or restrictions upon an individual who would be hired as the director of technology for a school district in matter(s) pertaining to contract(s) between the school district and a technology company for the provision of information technology services, where the individual would resign from his employment with, and divest himself of his financial interest in, the technology company prior to becoming employed with the school district. Facts: You request an advisory from the Commission based upon submitted accts that may be fairly summarized as follows. In a private capacity, you hold a fifty percent ownership interest in a technology company named "Greybeard Technology, LLC" ( "the Company "). You are also the Network Solutions Architect for the Company. The Company currently has a contract with the Penns Valley Area School District ( "School District') to provide information technology monitoring and help desk support for the School District. The current contract between the Company and the School District expires effective June 30, 2017. You state that the School District is considering em Toying you on a full -time basis as the Director of Technology effective June 1, 2017. If you would be hired by the School District, you plan to resign from your employment with the Company and divest yourself of any financial interest in the Company effective May 31, 2017. You state that the School District desires to continue its contractual relationship with the Company if you would become employed with the School District. As the Director of Technology for the School District, you would be working with individuals who co -owned the Company with you or were your colleagues at the Company, hereinafter collectively referred to as "your former Company co- FAX: (717) 787 -0806 • Web Site: ww.ethics. state. pa. us • e -mail: ethicslg-state.pams Man, 17 -532 TV al—y 15, 2017 Page 2 owners/colleagues." You state that although you would not technically be supervising your former Company co- ownerslcolleagues, you would be reporting to the School District Superintendent or the School District School Board with regard to the services performed under a contract between the Company and the School District. Based upon the above submitted facts, you pose the following questions: (1) Whether, if you would be hired as the Director of Technology for the School District, the School District would be precluded from continuing and renewing its contractual relationship with the Company; and (2) Whether you would be precluded from working with your former Company co-owners/colleagues and reporting to the School District Superintendent or the School District School Board with regard to the services performed under a contract between the Company and the School District. Discussion: Pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pam 1107(10), (11), advisories are issued to the requester based upon the facts that. the requester has subbmitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. Preliminarily, it is noted that the submitted facts do not .include an official job description for your proposed position as the Director of Technology for the School District. This Advice assumes, without deciding, that if you would be hired as the Director of Technology for the School District, you would in that capacity be a public employee subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act provides: § 1103. Restricted activities (a) Conflict of 'interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employyee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business Wan, 17 -532 Way 15, 2017 Page 3 with which he. or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self- employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business wit h business in which the immediate family is a has a financial interest. 65 Pa.C.S. § 1102. which he is associated." Any person or a member of the person's director, officer, owner, employee or Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office /employment or confidential information received b holding such a public position for the private pecuniary benefit of the public officiallpublic employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting, but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows: § 1103. Restricted activities (f) Contract. - -No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated' shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, 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. In such a case, the public . official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. § 1103(f). The term "contract" is defined in the Ethics Act as follows: Wian, 17 -532 lt ay 15, 2017 Page 4 § 1102. Definitions "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. 65 Pa.C.S. § 1102. Section 1103(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. Rather, where a public official /public employee, his spouse or child, or a business with which. he, his spouse or child is associated, is otherwise appropriately contracting with the governmental body, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an open and public process" be observed as to the contract with the governmental body. Section 1103(f) of the Ethics Act also provides that the public officiallpublic employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. In considering your specific questions, your first question cannot be addressed in this advisory because you have not established legal standing to request an advisory opinion regarding the proposed conduct of the School District/School District School Board. However, it is noted that Section 1103(a) of the Ethics Act- -which applies to restrict the conduct of "public officials" and "public employees " - -does not apply to restrict the conduct of a political subdivision, such as a school district, or a governmental body, such as a school board. In response to your second question, you are advised as follows. Upon being hired as the Director of Technology for the School District, you generally would have a conflict of interest under Section 1103(a) of the Ethics Act in your capacity as a public employee in matters that would financially impact you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. The Company is currently a business with which you are associated in your capacities as an owner and an employee. However, upon resigning from your employment with the Company and divesting yourself of any financial interest in the Company, the Company would noTonger be considered a business with which you are associated. You are advised that absent some basis for a conflict of interest such as a private pecuniary benefit to you, a member of your immediate family, or a business with which you or a member of your immediate family is associated, Section 1103(a) of the Ethics Act would not prohibit you, as the Director of Technology for the School District, from working with your former Company co- owners /colleagues and reporting to the School District Superintendent or the School District School Board with regard to the services performed under a contract between the Company and the School District. Wian, 17 -532 Way 15, 2017 Page 5 The restrictions and requirements of Section 1103(f) of the Ethics Act, 65 Pa-C.S. § 1103(f), must be observed when applicable. However, the restrictions and requirements of Section 1103(f) of the Ethics Act would not be applicable to the current contract between the Company and the School District because such contract was not entered into at a time when you were serving as a School District employee. Cf., Cort, Advice 16 -516. Additionally, Section 1103(f) of the Ethics Act would not be aplicabTe to contract renewals or future contract(s) between the Company and the School District that would be entered into at a time when the Company would not be considered a business with which you are associated. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Public School Code. Conclusion: Based upon the submitted facts that: (1) in a private capacity, you o d a fiff y percent ownership interest in a technology company named `Greybeard Technology, LLC" ( "the Company "); (2) you are also the Network Solutions Architect for the Company; �3� the Compan currently has a contract with the Penns Valley Area Schoo! District "chool District' to provide information technology monitoring and help desk supp ort for the School Dis , ( ) �rict 4 the current contract between the Company and the School District expires effective .tune 30, 2017; (5) the School District is considering employing you on a full -time basis as the Director d Technology effective June 1, 2017; (6) if you would be hired by the School District, you plan to resign from your employment with the Company and divest yourself of any financial interest in the Company effective May 31, 2017; (7) the School District desires to continue its contractual relationship with the Company if you would become employed with the School District; (8) as the Director of Technology for the School District, you would be working with individuals who co -owned the Company with you or were your colleagues at the Company, hereinafter collectively referred to as "your former Company co- owners/colleagues"; and (9) although you would not technically be supervising your former Company co- owners /colleagues, you would be reporting to the School District Superintendent or the School District School Board with regard to the services performed under a contract between the Company and the School District, you are advised as follows. This Advice assumes, without deciding, that if you would be hired as the Director of Technology for the School District, you would in that capacity be a public employee subject to the provisions of the Public Official and Employee Ethics Act "Ethics Act "), 65 Pa.C.S. § 110'1 et seg. Upon being hired as the Director of Technology for the School District, you geeralT would have a conflict of interest under Section 1103(a) of the Ethics Act in your capacity as a public employee in matters that would financially impact you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. The Company is currently a business with which you are associated in your capacities as an owner and an employee. However, upon resigning from your employment with the Company and divesting yourself of any financial interest in the Company, the Company would no conger be considered a business with which you are associated. Absent some basis for a conflict of interest such as a private pecuniary benefit to you, a member of your immediate family, or a business with which you or a member of your immediate family is associated, Section 1103(a) of the Ethics Act would not prohibit you, as the Director of Technology for the School District, from working with your former Company co-own erslcolleagues and reporting to the School District Wian, 17 -532 NTay 15, 2017 Page 6 Superintendent or the School District School Board with regard to the services performed under a contract between the Company and the School District. The restrictions and requirements of Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), must be observed when applicable. However, the restrictions and requirements of Section 1103(f) of the Ethics Act would not be applicable to the current contract between the Company and the School District because such contract was not entered into at a time when you were sewing as a School District employee. Additionally, Section 11.03(f) of the Ethics Act would not be applicable to contract renewals or future contracts) between the Company and the School District that would be entered into at a time when the Company would not be considered a business with which you are associated. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, an 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, provided the requester 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 appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be _a_c_t_uall received at the Commission within thirty (30) days of the date of this vice pursuant to 51 Pa. Code § '3.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 - 787 -0806. Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, M N6E Robin M. Hittie Chief Counsel