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HomeMy WebLinkAbout82-531 SmithLawrence H. Smith Director of Administration Grumman Emergency Products, Inc. 1723 Seibel Drive, NE Roanoke, Virginia 24012 Dear Mr. Smith: Mailing Address: STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 April 12, 1982 ADVICE OF COUNSEL Re: "Discount Program," Section 3(b) of the Ethics Act This responds to your letter of March 16, 1982, in which you request an Opinion from the Pennsylvania State Ethics Commission. Issue: You asked whether or not it would violate the Pennsylvania State Ethics Act for your company to institute a "discount" program in relation to the Fire Expo 1982. Facts: Your company is a Virginia Corporation manufacturing fire trucks which are sold nationally through a network of independent sales representatives, including 5 residents of the State of Pennsylvania. The majority of your sales are achieved through competitive bidding although there are instances where trucks are bought as a result of direct negotiations. Your company wishes to institute a "discount" program at the Fire Expo 1982 to be held in Lancaster Pennsylvania on May 13, 1982. Basically, this "discount" program would be advertised through trade magazines and /or via a direct mail campaign including the registration form to be used at the Fire Expo. However, to participate in the "discount" program persons attending the Fire Expo must personally drop the registration form into a "hopper" at the Grumman booth at the Expo. Incidentally, you indicate that the Expo will basically be a convention of persons interested in fire protection throughout the Commonwealth including volunteer and municipal fire departments. During the Expo Grumman will select ten registration forms to be picked at random. The ten selected "winners" will be awarded a $1000 discount on a specified Grumman fire truck model purchased by the winner's organization before December 31, 1982. All Pennsylvania purchasers of fire trucks will be eligible to present registration forms at the Expo in order to have a chance to be selected as one of the ten 'winners" of the "discount." Discussion: The State Ethics Act would have limited impact on the question you present. This impact, however, would be most profound under Section 3(b) of the Ethics Act which provides as follows: State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania 82 -531 Lawrence A. Smith April 12, 1982 Page 2 No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Initially, it should be noted that the State Ethics Act would apply to your company as a "person" as that term is defined in the Ethics Act and would preclude your company from offering any thing of value to a public official based on the understanding that that official's conduct would be influenced thereby. Thus, the provisions of the Ethics Act in relation to your company would be applicable only to those municipal fire departments whose personnel would be considered "public employees" or whose purchasing decisions would be made by "public officials." This would exclude from our jurisdiction members of volunteer fire companies typically. However, as stated above the "discount," which is an obvious "thing of value," could not be offered to any of the municipal fire departments, should they win the drawing you propose, with the understanding that their official conduct, to purchase the Grumman fire truck, would be influenced thereby. Thus, the discount cannot be used by Grumman to influence the judgment of a public official or public employee pursuant to Section 3(b). In order to insure that this discount is not being used to influence the official judgment of the purchasers of municipal fire equipment, we would require that any use of the discount must be made only in conjunction with the open and public process as described in Section 3(c) of the Ethics Act. This would mean that the discount could only be applied by one of the "winners" to the purchase of a fire truck or Grumman fire equipment where the proposed purchase would be made only after prior public notice of the attempted purchase and subsequent public disclosure of all proposals considered and contracts awarded. Our insistance on this mode of application of the discount will hopefully insure that the discount is only being applied after the public officials excercise their judgment to purchase the fire truck or fire equipment in question. Of course, as stated above, the application of this open and public process would not be necessary to those "winners" of the discount other than municipal fire departments. Conclusion: The "discount" program which you propose does not per se violate the provisions of the State Ethics Act so long as the application of any "discount" by any municipal fire department "winner" occurs only after that fire department has selected your company to be awarded a contract for the puschase of fire trucks or fire equipment after an open and public process. Lawrence A. Smith April 12, 1982 Page 3 This requirement of an open and public process prior to the application o any "discount" would not apply to a volunteer 'rir-e company where t=!,e decision to purchase fire trucks or fire equipment is made b" persons other than "public eil pl oyees' or "public officials.' 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 re uestor has disclosed truthfully all the material facts and committed the acts complained of in reiance on the Advice given. This letter i:, 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. SSC /na Sincerely, ndra S. Chris ianson General Counsel