HomeMy WebLinkAbout82-548 AllenMr. Heath L. Allen
Keefer, Wood, Allen and Rahal
210 Walnut Street
P.O. Box 1226
Harrisburg, PA 17108
Mailing Address:
STATE ETHICS COMMISSION
P.O. BOX 1 179
HARRISBURG, PA 17108
TELEPHONE: (717) 783 -1610
May 26, 1982
ADVICE OF COUNSEL
82 -548
RE: PSC Commissioner, Real Estate Interest, DGS Possible Tenant
Dear Mr. Allen:
This responds to your letter of May 10, 1982 in which you, on behalf of
Mr. John C. Tuten, have requested advice from the State Ethics Commission.
Issue: Is a conflict of interest presented when a Commissioner of the Pennsy-
lvania Securities Commission (PSC) who holds an option to purchase real
estate, exercises that option as part of a private business transaction, since
a potential logical tenant for the property would be another state agency?
Facts: Mr. John C. Tuten serves as Commissioner on the Pennsylvania Secur-
ities Commission. He also holds an option to purchase real estate in
Harrisburg. The realty is located near the State Capitol. He and /or members
of his immediate family would be participating in a partnership to purchase
and rennovate this real estate, a vacant twelve -story office building. A
logical tenant for the building would be a state agency leasing this space via
the Commonwealth's Department of General Services (DGS).
Mr. Tuten has informed you that he will play no active role in lease
negotiations with the Commonwealth. In fact, negotiations will be handled by
partners in the ownership entity who are not related by blood or marriage to
Mr. Tuten. Mr. Tuten is confident that DGS has no plans to move the Pennsy-
lvania Securities Commission offices from their current location in the Educa-
tion Building to the real estate on which he holds an option. Additionally,
the interest of Mr. Tuten and /or members of his immediate family would be less
than 50% of the ownership entity.
Discussion: As a Commissioner serving on the Pennsylvania Securities Commis-
sion Mr. Tuten is a public official subject to the Ethics Act. 65 P.S. §401
et seq. For several reasons, however, the lease transaction in which he is
interested in participating will present no conflict of interest in violation
of the Act.
State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania
Mr. Health L. Alien
May 26, 1982
Page 2
Section 3(c) of the Act states:
No public official or public employee or a member of his
immediate family or any business in which the person or a
member of the person's immediate family is a director,
officer-., owner or holder of stock exceeding 5% of the
equity :t fair market value of the business ehall enter
into any contract valued at $500 or more with a
governmental body unless the contract has heen awarded
through an open and public process, including prior public
notice and s!JI public disclosure of all proposals
considered end contracts awarded,..
In order for Section 3(c) to apply, the public official rr st have a
business interest relative to the governmental body with which he is
associated. Williams, 79 -012. The governmental body with which Mr. Tuten is
eoscciaced is the Pennsylvania Securities Commission. The governmental body
in which Mr, Tuten, as a party to the lease, has a potential business interest
is the Department of General Services. Because the two bodies are completely
distir t from one another, no actual or apparent conflict of interest could
exist should the option be exercised and the DGS' lease be mace. See Trace, 7 9-
067. Thus Section 3(c) does not apply.
Conclusion: As a Commissioner on the Pennsylvania Securities Commission, Mr.
Tuten would not be involved in a conflict of interest or an appearance thereof
when he and /or members of his immediate family participate in a partnership to
purchase and renovate real estate which is subsequently leased to the Depart-
ment of General Services.
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 "Fetter is a public record and will be made available as such.
Finally, if you disagree with this Advice or if you have any eeason 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 issueC. You should make such a request or
indicate your disapproval of this Advice within the eext 30 days.
BF• /:•dp
cc: Robert M. Lam, Chairman
Walter Baron, Secretary
Sin , rely,
Sa dra S. Ch stianson
General Counsel
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