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HomeMy WebLinkAbout82-533 JohnsonMr. Horace A. Johnson Myers, Myers, Flower & Johnson Third and Market Streets P.O. Box 125 Lemoyne, PA 17043 Dear Mr. Johnson: Mailing Address: STATE ETHICS COMMISSION P.Q. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 April 21, 1982 ADVICE OF COUNSEL 82 -533 RE: Contracting, Township and Private Company, Company Office is Township Supervisor This responds to your letter of March 11, 1982 in which you requested an opinion from the State Ethics Commission. Issue: Does the Ethics Act preclude a Township from contracting to buy petroleum products from a chemical company, under a "piggyback" purchase provision in a prior contract between the Commonwealth and the company, which contract was awarded in an open and public bidding process, when a Township Supervisor owns all the stock and is an officer of the company? Facts: You informed us that an individual owns all the stock in and is an officer of a chemical company. The individual is also a Township Supervisor. The chemical company submitted a bid to the Commonwealth of Pennsylvania to sell petroleum products to the Commonwealth. The Commonwealth awarded the contract to the company through the openly advertised bid process. The contract between the Commonwealth and the Company permits "piggyback" purchases by municipalities. This means that a municipality may buy the petroleum products at the same price as charged to the Commonwealth. The Township has exercised its right to buy petroleum products from the company as a piggyback purchase. Discussion: The Ethics Act, 65 P.S. §401 et seq., states that its purpose is to strengthen the faith and confidence of the people of the State in their government by assuring that the financial interests of holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Mr. Horace Johnson April 21, 1982 Page 2 In furthering that purpose, the Act provides, in part, that no public official or any business in which the offical is an officer or holder of stock exceeding 5% of the equity at fair market value of the business shall enter into a contract valued at $500 or more with a governmental body unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. 65 P.S. 403(c). A Township Supervisor is a "public official" for the purpose of the Ethics Act. See 65 P.S. 402. Thus, because of his simultaneous position as sole stockholder and officer of the chemical company, the Supervisor's company can contract with the Township only if the contract is awarded after the requisite open and public process. Due to the "piggyback" provision, the Township has a contract with the Supervisor's company under which the Township purchases petroleum from the Supervisor's company. However, the bidding process used by the Commonwealth in awarding the master contract to the Supervisor's company is sufficient, in these circumstances, to meet the open and public requirements of Section 3(c) of the Ethics Act. The Township's subsequent "purchase -off" the master contract does not violate the Act. Conclusion: Because the master contract between the Commonwealth and the company was awarded through a bidding process, the Township's subsequent contract with the company, via the "piggyback" provisions to purchase products, from the Supervisor's company is in accord with the open and public requirements of Section 3(c). 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, ti64( A/4-X017, Sandra S. Chr'stianson General Counsel