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HomeMy WebLinkAbout81-614 MassaMeiling Address. STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 September 2, 1981 ADVICE OF COUNSEL Joseph A. Massa, Jr., Esquire 400 Market Street Warren, Pennsylvania 16365 RE: School Board Member, Conflicts of Interest Dear Mr. Massa: State Ethics Commission 309 Finance Building • Harrisburg, Ponnsy)vania 81 -614 This responds to your letter of June 8, 1981, in which you requested an opinion from the Ethics Commission. Issue: You request advice as to whether the Ethics Act prohi- bits a School Board member to serve on the board of directors of one of the banks which is a depository for funds of the School District. Facts: You informed us that one of the members of the School Board is a prominent executive in a local manufacturing company. He is also a member of the board of directors of Penn Bank. The School District uses this bank as a depository for a portion of its budget funds at the beginning of the school year. 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. Id §402. School Board members are public officials and must conform their conduct to the Ethics Act. The statute does not preclude a School Board member from sitting on the board of directors of a bank that the District uses as a depository. There is no inherent conflict of interest, because as defined by the Commission in its opinion in Alfano, 80 -007 "A conflict of interest exists when an individual represents two or more persons whose interest is adverse to each other." Although there is no inherent conflict of interest in the situation you describe we note that serveral of the provisions of the Act are applicable. Joseph A. Massa, Jr., Esquire September 2, 1981 Page 2 Section 3(a) of the Ethics Act states that no public official may use his office or confidential information received through holding public office to obtain financial gain for himself or a business with which he is associated. 65 P.S. §403(a). The School Board member cannot use that office or confidential information received through the School Board to obtain financial gain for the bank with which he is associated. Also, the member may not accept anything of value, including a promise of future employment as a bank director, based on any understanding that his official actions would be influenced thereby. 65 P.S. §403(b). In Section 3(c) of the Act, the Legislature commanded that no public official or any business in which the person is a director shall enter into any contract valued at more than $500 with a,governmental body unless the contract is awarded in an open and public process. 65 P.S. §403(c). If the nature of the agreement between the bank and the School Board is a contractual one and is valued at more than $500 the depository must be appointed in a manner allowing for: (1) Prior public notice; and (2) public disclosure of all proposals considered; and (3) public disclosure of the award of the contract. Howard, 79 -044. Further the member should abstain from discussions and the vote on the appointment of the depository and place the reason for his abstention on the public record. Sowers, 80 -050. Conclusion: There is no inherent conflict of interest in a School Board member sitting on the board of directors of a bank the School District uses as a depository. The School Board member must not use his public office or confidential informa- tion received by serving on the School. Board to obtain financial gain for himself or the bank. Nor may he accept any offer of future employment as a bank director based on any understanding that his official actions as a School Board member would be influenced thereby. If the depository agreement between the School District and the bank is considered a contract and is valued at more than $500 the contract must be let in an open and public process providing for: (1) Prior public notice; and (2) public disclosure of all proposals considered; and (3) public disclosure of the award of the contract. Joseph A. Massa, Jr., Esquire September 2, 1981 Page 3 The School Board member should refrain from discussing and /or voting on the award of the contract and place the reason for his abstention on the public record. 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, S.ndra S. %ristianson General Counsel