HomeMy WebLinkAbout82-525 CareyMr. Ralph P. Carey
Suite 400
United Penn Bank Building
Scranton, PA 18503
Dear Mr. Carey:
Mailing Address:
STATE ETHICS COMMISSION
P.O. BOX 1 179
HARRISBURG, PA 17108
TELEPHONE: (717) 783 -1610
March 9, 1982
ADVICE OF COUNSEL
82 -525
RE: Corporate Stockholder - County Engineer - Corporate
Contract with County
This responds to your letter of January 25, 1982 in
which you requested advice from the State Ethics Commission.
Issue: Does the Ethics Act bar a corporation, the principal
stockholder of which is a County Engineer from sub - contracting
with a private developer in the latter's contract to complete
a Borough project?
May the Corporation become a party to the Borough
contract as a joint developer?
Facts: You represent the Scandale Construction Company,
Inc. of Scranton, Pennsylvania. Mr. Nicholas C. Scandale
principal stockholder of the corporation, is also official,
appointed Engineer for Lackawanna County.
The Lackawanna County Housing Authority has an agreement
with a private developer. The developer is having some
difficulty in completing the project; Scandale Construction
is considering assisting the developer in this regard.
Lackawanna County Commissioners appoint the members of
the Lackawanna County Housing Authority. Authority members
independently execute all housing project contracts with the
various developers, including the developer involved in the
instant situation.
State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania
Mr. Ralph P. Carey
March 9, 1982
Page 2
You question the propriety of Scandale Construction's
potential involvement with the developer in its completion
of the Housing Authority contract.
Discussion: As Engineer for Lackawanna County, Mr. Scandale
is a public employee subject to the Ethics Act, 65 P.S. 401
et seq. Section 3(c) of the Act states in part that no
public employee or any business in which he is a 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.
The Ethics Commission has interpreted this provision to
prohibit the employee's contracting with the governmental
body with which he is associated. See Norris, 80 -053 and
Williams, 79 -012. In this case, the governmental body with
which Mr. Scandale, as County Engineer, is associated is
Lackawanna County. However, the governmental body with
which the developer has contra.ct.ed and with which Scandale
Construction is contemplating involvement is the Lackawanna
County Housing Authority. The State Ethics Commission has
ruled that an Authority is a distinct legal entity from the
municipality which created the Authority.
While the Act would prohibit Mr. Scandale or Scandale
Construction from entering into contracts valued at $500 or
more with Lackawanna County it does not preclude him or his
business entering into a contract with the private developer
or with the County Housing Authority, because Mr. Scandale
is not "associated" with the Authority under the facts as
you present them.
Conclusion: The governmental body with which Mr. Scandale
is associated is Lackawanna County. The County Housing
Authority is a separate and distinct legal entity or govern-
mental body independent of the County, and Section 3(c) of
the Ethics Act does not preclude Mr. Scandale's contracting
in some manner -- as sub - contractor with the developer or as
joint developer with the Authority. Furthermore, the Act
clearly does not bar him or his business from contracting
with the private developer.
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.
Mr. Ralph P. Carey
March 9, 1982
Page 3
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,
1/J
Safidra S. istianson
General Cou sel