Loading...
HomeMy WebLinkAbout82-514 CorneliusDear Mr. Cornelius: Mailing Address: STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 February 16, 1982 ADVICE OF COUNSEL Mr. Richard Cornelius Executive Director Housing Authorities of Bradford, Sullivan, and Tioga Counties Blossburg, PA 16912 82 -514 RE: Restricted Activity, Participation in Housing Programs This advice responds to your letter of November 11, 1981 in which you, as the Director of the Bradford, Sullivan, and Tioga Counties Housing Authorities, and of the Redeve- lopment Authority of Tioga County, requested an opinion from the State Ethics Commission. Issue: Does the Ethics Act, particularly Section 3(c), bar a public official, who owns 5% or more of property proposed for use in a federally funded, state - operated housing program, from contracting with the state agencies admini- stering the program? Does such a prohibition apply if the governmental body with which the official is associated does not bear an official relationship to the state agencies? Does the prohibition, if any, apply to any or all of the following examples that you presented: (a) A councilmember in Borough A, County B, proposes to participate as a landlord, in County B's Renters Assistance Program for a dwelling unit located in Borough A? State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Mr. Richard Cornelius February 16, 1982 Page 2 (b) A council member .r. : orough A, County B proposed to a landlord in County B's Renters Assistance Program for a dwelling unit in County B outside Borough A? (c) A counoie member in Borough A, County B proposed to part :_ci.. ate as a landlord in County B's Renters .Assistal e Program for a Dwelling Unit in County C? (d) A council me rcber. in Borough A, Cove.ty B proposes his unit for a federal grant and: (i) Borough A is the grantee; (ii) County B is the grantee; (iii) County B is the grantee on behalf of Borough A? (e) A school district superintendent proposes his unit, located in the school district, for parti- cipation in the funding program? Facts: You are Executive Director of the Housing Authorities of the Counties of Bradford, Sullivan and Tioga, and for the Tioga County Redevelopment Authority. These Commonwealth agencies operate two federal programs funded by the Depart- ment of Housing and Urban Development (HUD). Under the Renters Assistance Program (RAP), your agency receives federal funds and advertises for landlords and /or tenants interested in participation in the program. Tenants initiate action by applying to the County Authorities of the Ccunty. Authorities process applications as they are received. If the tenant's eligibility is certified, your agency offers contracts to the landlord, offering to pay the difference between market value rent and 25% of the tenant's income. Value of the contracts often exceeds $500. Your staff reports monthly to the Housing Authority Board, presenting information about participants and how much money they receive. Pursuant to 65 P.S. 5251, the meetings are open to the public. Through the Renters Rehabilitation Program (RRP), local housing authorities, such as the one you direct, administer the HUD grants in conjunction with the Township, Borough, and County recipients. You develop program policy at public meetings. You implement it by inviting landlords to apply Mr. Richard Cornelius February 16, 1982 Page 3 for grants or low interest loans to improve their property. In return, the landlords agree to rent to low income tenants. Again, staff reports to the Housing Authority Boards about program participation are open to the public. Discussion: Initially, the State Ethics Commission advises that its jurisdiction is strictly limited by the Ethics Act itself, 65 P.S. §401 et seq. This advice interprets only the Ethics Act. It does not discuss federal law or regula- tions affecting the activities of the hypothetical program participation whom you describe. Members of Borough Councils and School District super- intendents are public officials or public employees subject to the requirements and restrictions of the Ethics Act. Thus, their conduct while in office must conform to the guidelines established in Section 3 of the Act. Section 3(a) and 3(c) are particularly applicable here: No public official... shall use his public office... to obtain financial gain other_than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated... 65 P.S. 403(a). No public official... or any business in which the person... 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 with a governmental body unless the contract has been awarded through an open and public process. 65 P.S. §403(a) As applied to the HUD programs, the Act would require that grant contracts valued at over $500 be awarded through an open and public process if the contract is between the official and the governmental body with which he is associated.. In this case, the governmental bodies involved in the RAP grant program are the County Housing and Rede- velopment Authorities. Thus, the open process requirement applies only to those public officials and public employees who are associated with those authorities. Mr. Richard Cornelius February 16, 1982 Page 4 Council members in Borough A, County B are not associated with the Authorities -- the governmental bodies administering this program. Rather, the governmental body with which they are associated is Borough A Council. Thus, they are not barred from or limited in the extent of their participation in RAP. With regard to RRP, the authorities may develop a program /policy cooperatively with the County and the Borough. In this situation, however, the Act would require the Borough A Council member to go through an open and public contracting process only if Borough A Council is partici- pating in the RRP development. If the Borough A Council is not involved in the program, then the Act places no addi- tional requirements on the participating Council member, since the contract would not be one between the official and the governmental body with which he is associated. The Act places no restrictions on the ability of a School District Superintendent to participate, as a landlord, in the funding program unless there would be a contract. mvolving $500 or more between the School District and the Superintendent. The governmental body with which he is associated is not the County Housing or Redevelopment Authorities, nor the County, nor the Borough Council, but the School District itself. Your description of the RAP and RRP shows no involvement by the School District in the programs. Thus, under these facts, there is no application of the open End public requirements of Section 3(c) of the Ethics Act. All public officials, of course, remain subject to the 3(a limitations against using one's office to obtain financial gain other than compensation provided by law. This prohibition applies to both Borough Council members and School District Superintendents. Thus, none of the public officials or public employees involved could use their public office or confidential information to their own gain. However, it is only when they seek to or do contract with the governmental body with which they are associated, that the open and public contracting requirements of Section 3(c) of the Ethics Act would apply, It is the relationship of the parties to the proposed contract to one another, not the location of the property, which is crucial to determining the applicability of Section 3(c) of the Act. Mr. Richard Cornelius February 16, 1982 Page 5 Conclusion: Section 3(c) of the Ethics Act would require a public official or employee to enter contracts over $500 for HUD or Authority funds through an open and public process only when the contract would be between that official /employee and the governmental body with which he is associated. Section 3(c) typically (because the School District does not appear to be party to the contract) would not apply to a School District Superintendent's participation in either program. The prohibitions set by Section (a), as discussed above, apply to both Borough Council members and School District Superintendents. 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. BF /rdp Sincerely, Ar4eo 071 S ndra S. C istianson eneral Counsel