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HomeMy WebLinkAbout86-573 ActonJohn T. Acton, Esquire 726 Fitzwatertown Road Willow Grove, PA 19090 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 June 18, 1986 ADVICE OF COUNSEL 86 - 573 Re: Conflict of Interest, Municipal Authority Member, Employee of Firm Appearing before the Authority Dear Mr. Acton: This responds to your letter of May 29, 1986, wherein you requested the advice of the State Ethics Commission. Issue: Whether an employee of a local engineering firm, that appears before a municipal sewer authority, may be appointed as a member of the authority. Facts: You indicate that you serve as Solicitor for a Pennsylvania Municipal Sewer Authority. You advise that a registered surveyor, who is a principal in a local engineering firm, has just been appointed as a member of the board of the municipal authority. The firm, by which this member of the authority is employed, represents a numher of local developers and, as part of that representation, the firm prepares development plans for these clients. These plans include sewer plans that are submitted to the authority for approval. After approval is ohtained, the sewer system is installed in accordance with the plans under the authority's supervision. When the work is successfully completed, the installed systems are accepted by the authority. You have requested the advice of the State Ethics Commission in relation to whether any conflict of interest is occasioned by virtue of the foregoing factual situation. Discussion: It is now clear, that members of municipal authorities are public officials within the definition of that term as set forth in the State Ethics Act, and as set forth in various court opinions. 65 P.S. X Forney v. State Ethics Commission, 56 Pa. Commw. Ct. 539, 425 A.2d 66, (1981); Snider v. Thornburgh, 496 Pa. 324, 437 A.2d 1, (1981). As such, the conduct of this individual must conform to the requirements of the Act. See, Dice, 85 -021. John T. Acton, Esquire June 18, 1986 Page 2 Generally, the State Ethics Act provides as follows: 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). Within the above provision of law, no public official may use his public position i n order to obtain a fi nanci al gain for himself or for a business with which he is associated other than the compensation that is provided for by law. Such a public official may not use confidential information obtained in his public position for similar purposes. 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. From the facts, as outlined in your letter of request, it is clear that the member of the municipal authority is associ ated with the engineering firm within the definition of the State Ethics Act. As such, while the Ethics Act places no per se prohibition upon simultaneous service by a public official in a position of private employment, the Act would restrict this individual's conduct insofar as his public duties are involved. Within the previously cited provisions of the State Ethics Act, this public official may not participate in any matter that relates to plans prepared by the firm with which he is associated. Similarly, he must not act or participate in a matter that involves a client of that firm. The public official's abstention in such matters would include his non - participation in all discussions, decisions, considerations and votes regarding matters that are submitted to the sewer authority i n which his firm i s involved. His abstention, i n such matters, should be publicly noted and appropriately recorded in the authority's mi nutes. John T. Acton, Esquire June 18, 1986 Page 3 In addition to the foregoi ng requi rement, it is also requi red that this individual not use, to the benefit of his private employer, any confidential information that has been obtained through his position on the sewer authority. Also, it is advised that this particular public official would be better advised not to appear before the authority on which he serves as a public official in order to represent his private employer. Such representation of his private employer, before the governmental body which he serves, would occasion a conflict of interest which this Commission is authorized to address pursuant to the provisions of the State Ethics Act. 65 P.S. §403(d). Finally, while your letter of request does not appear to indicate that the following provision of the Ethics Act is applicable, we do advise that in the event that this engineering firm seeks to obtain any contract or business with the authority or act as the authority's engineer. The award of such business or contract to this engineering firm must be accomplished through an open and public process. 65 P.S. §403(c). The open and public process requi rement would requi re prior public notice of the contracting possibility, within a sufficient period of time to allow other competing companies to submit proposals, public announcement of all proposals received and public announcement of the proposal finally awarded. In addition to the foregoing, the public official who is associated with the company may not participate in the authority's decision to any extent insofar as the award of such a contract is concerned. As previously noted, by your letter of request does not indicate that this provision of law is applicable at this time, we included in this advice in order to provide a complete response to your question. Conclusion: The State Ethics Act places no per se prohibition upon an employee or owner of a local engi neeri ng firm from simultaneously servi ng as a member of a municipal sewer authority. As a public official, this individual may not participate, to any extent, in any matter, that is presented to the authority by his private employer or on behalf of clients represented by his private employer. His abstention, in such matters, should be publicly noted and recorded. Additionally, in the event that this private employer would attempt to contract with the municipal sewer authority, the award of such contract must be accomplished through and open and public process as set forth 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 crimi nal proceedi ng, 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. John T. Acton, Esqui re June 18, 1986 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 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 n ohn J. nti Gener. Counsel