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HomeMy WebLinkAbout83-577 DreadMr. Richard A. Dread 6C Lynnebrook Apartments Millersville, PA 17551 Dear Mr. Dread: Madmg Address: STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 July 19, 1983 ADVICE OF COUNSEL 83 -577 RE: PennDot Equal Opportunity Development Analyst II; Private Construction Firm; Bidding; Section 3(c) This responds to your letter of June 20, 1983, in which you requested advice from the State Ethics Commission. Issue: You would like to know whether you as a PennDot Equal Opportunity Development Analyst II would encounter any conflicts of interests if your private construction corporation attempted to contract with PennDot and other state agencies. Facts: You are employed as an Equal Opportunity Development Analyst II in the Department of Transportation. You work directly with contractors to insure compliance with state and federal affirmative action guidelines. You also assist contractors in their efforts to contract work out to minority and women business enterprises. Other examples of your work include reviewing agency operating procedures and practices to eliminate discrimination, conducting on -site reviews of state contractor project sites and /or agency facilities to insure compliance of civil rights legislation, and investigating and resolving cases of alleged discrimination. You are also responsible for advising and counseling management and supervisory personnel to insure compliance with equal opportunity goals and objectives. You state that you have no responsibility for awarding contracts, however, you do have access to past bidding proposals, sub - contract awards, and other required paperwork. You further state that you are considering forming or joining, or have formed or joined, a construction firm or corporation, hereinafter the "firm ", of which you would serve as president and major stockholder. In this regard, you would like the State Ethics Commission to advise you on whether any conflicts of interest would arise if this construction firm bids jobs with state agencies, including PennDot. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Mr. Richard A. Dread July 19, 1983 Page 2 Discussion: As an Equal Opportunity Development Analyst II with PennDot, you are a "public employee" and are assumed to be generally subject to the requirements of the Ethics Act, 65 P.S. 401 et seq. While the Act contains some restrictions against contracting with the governmental body with which you are associated, see Section 3(c), the Act does not prohibit a person from engaging in outside employment on his own time Essentially, the Ethics Act precludes any'employment which would constitute a cunflict of interest with your employment. The Ethics Commission has defined "conflict of interest" as existing where an individual represents twc or more persons whose interests are adverse to each other. See Alfano, 80 -007. In your situation, it does not appear that the interests of PennDot and the firm will necessarily be adverse to each other. Accordingly, serving as an Equal Opportunity Development Analyst II concurrently with associating with the private firm would not be a per se conflict of interest under the Ethics Act. You should, however, be aware of some of the restrictions applicable to your under the Act. Section 3(a), 65 P.S. 403(a), prohibits any public employee from using his public employment or confidential information received through public employment to obtain financial gain for himself or his family or a business with which he is associated. A "business" with which you are "associated" is defined in the Ethics Act as: "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or holder of stock. 65 P.S. 403(a). As president or stock - holder in the firm you would be deemed "associated" with this firm. Thus, you could not use your access to past bidding proposals, sub - contract awards, information, or data in order to obtain financial gain for yourself or this firm. In addition, Section 3(b), 65 P.S. 403(b), precludes any person from offering a public employee any thing of value, including a promise of future employment, based on the understanding that his official actions would be influenced thereby. These restrictions are cited not to indicate any violations of the Ethics Act in the situation in which you describe, but to serve as a point of reference and guide for conduct in general. We must also review Section 3(c) of the Ethics Act. Section 3(c), 65 P.S. 403(c), provides that no public employee, membee of his immediate family or any business in which the person or a member of his immediate family is an officer, director or owner of greater than 5% of the equity at fair market value may contract with the governmental body unless the contract, valued at Mr. Richard A. Dread July 19, 1983 Page 3 more than $500, has been awarded through an open and public process. See Howard, 79 -044. 'Previous Opinions of the Commission have held, however, that the term "governmental body" in Section 3(c) refers to the governmental body with which that public official or employee was "associated." Ryan, 80 -014 and Lynch, 79 -047. You are "associated ", at most, with PennDot. Therefore, the 'open and public process" limitations of Section 3(c) apply only if you and the firm contract with PennDot in an amount in excess of $500 in the course of your operations. You or the firm could, however, contract with any other state agency with which you were not considered to be "associated" without undertaking the open and public process set forth in Section 3(c). It must be emphasized that there is no absolute prohibition against the firm contracting with PennDot -- the governmental body with which you are associated -- provided that any contract valued in excess of $500 is awarded in an open and public process. In its opinion in Howard, 79 -044, the Commission stated that an open and public process must meet the following criteria: 1. prior public notice; and 2. public disclosure of all proposals considered; and 3. public disclosure of the award of the contract. If these standards are complied with, the firm could contract even with PennDot in excess of $500 should the opportunity present itself. Conclusion: As a public employee, you must comply with the requirements of Sections 3(a) and (b) in not using confidential information gained through your public employment to obtain financial gain, and in not accepting any thing of value in return for favorable official actions. Under Section 3(c), you or your business may contract even with PennDot if the contract, valued at greater than $500, is awarded through an open and public process, as described above: 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. Mr. Richard A. Dread July 19, 1983 Page 4 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 will be scheduled and a formal Opinion from the Commission will be issued. Any such appeal must be made, in writing, to the Commission within 15 days of service of this Advice pursuant to 51 Pa. Code 2.12. CW /rdp Bruce K. Dowman, Acting inspector General Thomas D. Larson, Secretary Sincerely, Sandra S. Chr' tianson General Couns'el