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HomeMy WebLinkAbout81-572 ShuffGeoffrey S. Shuff Chief Counsel Department of Commerce South Office Building Harrisburg, PA 17120 Dear Mr. Shuff: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 June 5, 1981 ADVICE OF COUNSEL 81 -572 RE: Pennsylvania Minority Business Development Authority, Loan Applicant This responds to your letter of April 21, 1981 in which you requested advice from the State Ethics Commission. Issue: You requested advice as to whether or not there is any violation of the provisions of the Ethics Act in reviewing or granting the loan application to an individual who is an employee of an organization with whom the Pennsyl- vania Minority Business Development Authority had a techni- cal assistance contract. Facts: The Board of Directors of the Pennsylvania Minority Business Development Authority (hereinafter "PMBDA ") decided at its meeting of March 26, 1981 to table a decision on a $77,000 loan application pending review of this above - referenced question by the State Ethics Commission. The loan application was submitted by one Dorothy L. Hooks for the operation of a restaurant. This individual, Dorothy L. Hooks is an employee of the Greater Pittsburgh Development Commission (hereinafter "GPDC "). Her position with GPDC is that of Executive Secretary to the Director of the Corporation. It is our understanding that GPDC is a private non - profit corporation devoted to promoting minority community develop- ment through loan and other technical assistance. You indicated that GPDC has a technical assistance contract with the Department of Commerce which is administered by the PMBDA. This technical assistance contract requires that GPDC provide support services to those persons who might apply for funds /loans from PMBDA. The services include Geoffrey S. Shuff June 5, 1981 Page 2 the preparation of financial statements, help in setting up bookkeeping systems, periodic business review of operations, assistance in developing proper marketing and sales programs, and helping new businessmen understand how to analyze financial statements and the proper utilization of such statements in making important management decisions. You indicated that GPDC assembled the loan package for Dorothy Hooks which was presented to PMBDA. In addition, r . GPDC will also lend Dorothy Hooks the sum of $25,000 for the project /restaurant in question. Discussion: The basic purpose of the Ethics Act was to insure that those persons serving in public office and holding a public trust would in no way realize personal financial gain through the holding of public office other than the compensation provided by law. See Section 1 of the Ethics Act, 65 P.S. 401. In order to achieve that end, certain regulations were imposed upon persons deemed to be "public employees" and "public officials." In reviewing the situation which you present, we do not discern any application of the Ethics Act to the individual in question, Dorothy L. Hooks. Specifically, Dorothy Hooks does not appear to be an individual employed by the Commonwealth or a political subdivision to whom the Ethics Act would apply. Therefore, the applicability of the Ethics Act to Ms. Hooks and to her activities as an employee of GPDC or as a loan applicant (whose loan package was prepared by GPDC) before your Board does not appear to be a situation which would be within the purview of the restrictions of the Ethics Act. Of course, no person, including Mrs. Hooks may offer anything of value to a public employee or official based on the understanding that the employee /official's action will be influenced thereby. See Section 3(b) of the Ethics Act, 65 P.S. 403(b). We recognize that there may be some question as to the advisability of GPDC holding a technical assistance contract with PMBDA and providing technical services to its own employees for presentation of loan applications to PMBDA. However, under the facts as presented and given that GPDC's only relation with PMBDA appears to be one of a contractual nature, the Ethics Act would not apply to Dorothy Hooks, per se, as a "public employee." Basically, it appears as though Dorothy Hooks is simply an employee of GPDC which is also a contractor of PMBDA.