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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 •