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HomeMy WebLinkAbout86-553 GibbleMr. John R. Gihble 563 Hemlock Lane Lebanon, PA 17042 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 May 8, 1986 ADVICE OF COUNSEL RE: Public Employee, Department of Public Welfare, Contracting Dear Mr. Gibble: 86 -553 This responds to your letter of April 8, 1986, in which you requested advice from the State Ethics Commission. Issue: Whether a Medical Assistance Program Specialist III employed hy the Pennsyl ani a Department of Public Welfare may be employed hy a consulting firm doing business with the Commonwealth. Facts: You are a Medical Assistance Program Specialist III, serving with the Pennsylvania Department of Public Welfare, hereinafter, the Department, and as such requested advice from the State Ethics Commission. In your position with the Department you are assigned to the Office of Medical Assistance, Bureau of Medical Assistance Operations, Division of MAMIS Operations. As chief of the Reference Files Section in that division, you are responsible for maintaining reference files, preparing pendent claims, resolution procedures and monitoring policy clarification requirements. You serve as project coordinator for the Department. You also are responsible for reviewing /analyzing departmental policy, rules and regulations governing medical assistance programs. You participate in the establishment of goals and objectives for the section as a member of the MAMIS Operations executive staff. You are involved in developing plans to accomplish goals and objectives. You also perform as a liaison and interact with other bureau staff members involved in operational and procedural review and measurement of program effectiveness. You advise that you have recently became involved with a managment consulting firm, Sonaman Associates International, Inc. and have requested the advice of the State Ethics Commission in relation to your involvement with this organization. Sonaman Associates generally is involved in providing support services to businesses including management expertise, systems evaluations, and data analysis. You have requested the advice of the State Ethics Commission as to whether you would he allowed to prepare proposals or hids for Sonaman Associates regarding contracts that they may attempt to obtain from the Department. You have also requested advice as to Mr. John R. Gibble May 8, 1986 Page 2 whether you would be permitted to work on a contract that Sonaman Associates currently has with DPW, including research and the preparation of reports. You further requested to know any other limits that may be placed upon you based upon the above factual situation in relation to Sonaman's contracts with the Department as well as with other Commonwealth departments. Discussion: Initially, it is noted that as a Medical Assistance Program Specialist you are a public employee within the definition of that term under the Ethics Act. See 65 P.S. 402. As such, you are subject to provisions of the Ethics Act and must conform your conduct to the requirements of the Act. See 65 P.S. 401 et seq. While the Ethics Act contains some restrictions against contracts between the business with which a "public official" or "public employee" i s associated and the governmental body with which the official or employee is associated, the Ethics Act does not totally prohibit a public official or employee or his family or business from engaging in business activities or contracting, in general with the body the official or employee serves. Section 3(a) of the Ethics Act does provide that no public official or public employee shall use his public office or any confidential information obtained through holding of a public office or position to acquire financial gain for himself, his immediate family, or a business with which he is associated. See 65 P.S. 403(a). A "business with which he is associated" is defined in the Ethics Act as follows: "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. For purposes of this Advice, we have been provided with facts indicating that you will become employee of the business which would seek to contract with the Department. As such, you would be "associated" with this business and would be required to observe the prohibitions set forth in Section 3(a) of the Ethics Act. This means that you could not use your position as a Medical Assi stance Program Speci al i st to secure fi nanci al gain for Sonaman Associ ates and could not use any confidential information acqui red through the holding of public office or employment to the benefit of that business. Thus, primarily, you should not participate in any decisions, discussions, or recommendations that would lead the Department to award the contract in question to Sonaman Associates International , Inc. Mr. John R. Gibble May 8, 1986 Page 3 Section 3(b) of the Ethics Act also states that no person shall give to a public official or employee nor shall any public official or employee accept anything of value, i ncludi ng the promise of future employment, based on the understanding that the official's vote, action, or judgment would be influenced thereby. See 65 P.S. 403(b). You must be cognizant of this requirement and observe this provision of the Ethics Act. Reference to this Section is made not to indicate that any violation or potential violation exists but merely to provide a complete review of the Sections of the Ethics Act which may be generally applicable to these circumstances. Further, Section 3(c) of the Act states that no public official, member of his immediate family, or a business in which the person or member of his immediate family is an officer, director, or owner of greater than 5% of the equity at fair market value may contract in an amount in excess of $500 with a governmental body unless the contract has been awarded through an open and public process. See Howard, 79 -044. In this advice it appears as though you personally will not be contracting with the Department of Public Welfare and it also appears as though you are neither an officer, director, or owner of greater than 5% of the stock as set forth above of Sonaman Associates International, Inc. As such, Section 3(c) of the State Ethics Act would not be applicable and would not require that the open and public process be observed in this situation. In the event that you do stand in the relationship to Sonaman Associates International, Inc. as set forth above, Section 3(c) of the State Ethics Act would require that the open and public process, as outlined below, be employed prior to the award of any contract to that company. The open and public process is met by applying the following standards: 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; and 4. public disclosure of the contract awarded or offered and accepted. See also Cantor, 82 -004. In determining whether the requirements of Section 3(c) of the Ethics Act had been met, the Commission has adopted a "reasonableness test" which means that reasonable and prudent competitors of Sonaman Associates International, Inc. should be provided a sufficient time within which to submit their proposals and, of course, should have had prior notice of the opportunity to secure such a contract or employment. Mr. John R. Gibble May 8, 1986 Page 4 It is important to note at this point that the advice contained herein relates only to requirements that are imposed under the provisions of the State Ethics Act. The State Ethics Commission generally does not have the authority to interpret other provisions of law that may be applicable to your situation. In any event, we do feel obligated to make note of certain provisions of the State Adverse Interest Act so that you may have a complete response to the question you have posed. The State Adverse Interest Act provides that "no State employee shall have an adverse interest in any contract with the State agency by which he is employed. 71 P.S. §776.5. That Act further provides that: "No State employee except in the performance of his duties as such employee, shall for remuneration directly or indirectly represent any other person upon any matter pending before or involving any State agency ". 71 P.S. §776.7. The Act defines State employee as follows : "An appointed officer or employee i n the service of a State agency and who receives an salary or wage for such service. The Act also defines adverse interest as: "Be the party to a contract as herein defined other than the Commonwealth or a State agency or be a stockholder, partner, member, agent, representative, or employee of such party. Because of the above provisions of law, you are advised that you should seek further advice of the appropriate authority in order to have an interpretation of these provisions of law and of any restrictions that may be imposed upon you thereby. Conclusion: Under the facts as have been set forth above, you are a "public employee" as that term is defined in the Ethics Act and must conform to the requirements of the Ethics Act. Assuming that you stand in the relationship to the business involved as set forth in either Section 3(a) or Section 3(c) of the Ethics Act and that business seeks to contract with the governmental body with which you are associated, Sonaman Associates, International, Inc., the requirements of Section 3(a), 3(b), and Section 3(c) mandate that: 1. you should not have anything to do with the the Department decisions, or votes, discussions regardi ng the awarding of this contract or work; 2. an open and public process, as described above, must be undertaken prior to any such award of a contract by the Department to this busi ness; 3. no confidential information acquired or received through the holding of your public position be used to obtain advantages or financial gain for this business; and 4. the requirements of Section 3(b) of the Ethics Act must be observed, i n that nothing of value can be offered, accepted or solicited i n exchange for or to influence official judgment. Mr. John R. Gibble May 8, 1986 Page 5 You are also advised that you should seek the advice of an appropriate authority in relation to any obligations or restrictions that may be imposed upon you by virtue of the State Adverse Interest Act or any other applicable provisions of law such as the Governor's Code of Conduct. Pursuant to Section 7(9)(ii), this Advice is a complete defense in any enforcement proceedi ng initiated by the Commission, and evidence of good faith conduct i n any other civil or crimi nal proceedi ng, providi ng 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 will be scheduled and a formal Opinion from the Commission w i l l 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 nc- v` v7 o n J onti no Gen- al Counsel