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Home My WebLink About86-534 DotterMr. Gerald L. Dotter 634 Center Street Jim Thorpe, PA 18229 Dear Mr. Dotter: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 4, 1986 Re: Contracting, Public Employee, Family Memhers 86 - 534 This responds to your letter of March 6, 1986, wherein you requested the advice of the State Ethics Commission. Issue: Whether the brother of a public employee may submit bids to obtain a contract from the governmental body employing said public employee. Facts: You advise that you are currently employed by the Pennsylvania Department of Transportation as the Assistant County Maintenance Manager in District 5 -0. You further advise that your hrother, the owner of the Penn Forest Garage, in Jim Thorpe, Pennsylvania, is interested in being added to the department's bidding list. Being added to this list would allow your brother to submit proposals regarding rental equipment contracts that are put out by the Pennsylvania Department of Transportation. Your brother is the owner of the Penn Forest Garage and you have indicated that you have no interest, financial or otherwise, in this company. Your brother does not live with you and is not dependent upon you. You further advise that in your position with the Pennsylvania Department of Transportation you have no duties or responsibilities in relation to the award of the rental equipment contracts. You have requested the advice of the State Ethics Commission in relation to this issue and you seek a determination as to whether the State Ethics Act presents any prohibition upon your brother bidding on the aforementioned contracts. Discussion: At the outset, it must he noted that the State Ethics Commission may address your question only within the purview of the State Ethics Act. 65 P.S. 5401 et. seq. As such, this Commission will not address this issue under any other code of conduct, such as the State Adverse Interest Act, the Governor's Code of Conduct or any internal codes of a similar nature. Mr. Gerald L. Dotter April 4, 1986 Page 2 Generally, as an Assistant County Maintenance Manager employed by the Pennsylania Department of Transportation, you are a public employee as that term is defined in the State Ethics Act. 65 P.S. i$402. As such, your conduct must conform to the requirements of the State Ethics Act. Generally, the State Ethics Act provides as follows: Section 3. Restricted activities. (a) No public official or public employee shall use his public office or any confidential information received through his holdi ng public office to obtain financial gai n other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Within the above provision of law, no public official may use his position in order to obtain any financial gain for himself or any member of his immediate family or for any business with which he is associated. A member of one's immediate family is defined as follows: Section 2. Definitions. "Immedi ate family." A spouse residi ng i n the person's household and minor dependent children. 65 P.S. 402. Additionally, the State Ethics Act defines business with which one is associated as follows: Section 2. Definitions. "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. 402. Pursuant to the facts which you have provided, your brother is not a member of your immediate family within the above definition and you do not appear to be associated with this particular entity as you have no interest in the company and are not employed by the company. These factors combined with the fact that you have no duties or responsibilities in relation to the award of a contract by the Pennsylvania Department of Transportation, would indicate that this section of the State Ethics Act would not present any prohibition upon your brother's submission of bids to the department. In any event, should you have such an interest in the Penn Forest Garage, you may not use your position or any confidential information obtained in that positon to benefit your brother or his business. Mr. Gerald L. Dotter April 4, 1986 Page 3 In addition to the foregoing, the State Ethics Act contains certain restrictions in relation to the award of contracts to public employees. Section 3. Restricted activities. (c) 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 at fair market value of the business shall enter into any 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. Any contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract. 65 P.S. 403(c). In the instant situation, you have provided information that indicates that you are neither an officer, director, or owner of more than 5% of the equity at fair market value of the business in question. Additionally, it does not appear as though you or any member of your immediate family would be personally contracting with the department. As such, it does not appear as though the open and public process requirements of Section 3(c) would be applicable in the instant situation. In any event, should you stand in the relation to this company as set forth above, the above provision of law would not prohibit your brother from submitting bids in relation to contracts awarded by the department. While no absolute prohibition will be placed upon you brother, there may be certain standards which must be met in relation to the award of this contract if you stand in the relation to this business as set forth in Section 3(c) of the Act. These standards would include the f o l l owi ng: 1. Prior public notice of the employment or contracting possibility; 2. Sufficient time for a reasonable and prudent competitor /applicant to be able to prepare and present an application or proposal; 3. Public disclosure of all applications or proposals considered; 4. Public disclosure of the contract awarded or offered and accepted. See Howard, 79 -044; Fields, 82 -006; Cantor, 82 -004. In addition to the foregoing, Section 403(d) of the State Ethics Act authorizes this Commission to address other areas of possible conflict. In the event that you, as a public employee, would have some role in relation to the business that would be obtained by your brother should he be successful in his bidding attempts, then as a public employee you may not participate to any Mr. Gerald L. Dotter April 4, 1986 Page 4 degree in the department's actions related to the negotiation, award, approval or monitoring or administration of this particular contract. In this way, you would avoid all possible conflicts of interests. Finally, in order to be complete, we note that all public officials and employees must comply with Section 3(b) of the State Ethics Act which prohibits said officials or employees from offering or accepting anything of value based upon the understanding that their official conduct would be influenced thereby. C. Conclusion: The State Ethics Act presents no per se or absolute prohipition upon a brother of a public employee bidding on and receiving a contract with the governmental entity with which the employee is associated. If you, as a public employee, have any duties in relation to your governmental body's award or monitoring of this contract you must abstain from participation therein. Additionally, if you have any interest in the company that is bidding on this contract or in the work that is to be performed by this company, you must comply with the open and public process requirements of Section 3(c) and the abstention requirements of Section 3(a) of the State Ethics Act. Finally, we note that the State Ethics Commission does not address any restrictions that may be placed upon you or your brother's attempts to bid on this contract under other provisions of law as noted previously. 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 w i l l 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. Si ncerely, C� L o n 3. .ntino Gene Counsel