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HomeMy WebLinkAbout86-600 StoutState Ethics Commission 308 Finance Building P. 0. Box 11470 Harrisburg, Pa. 17108 -1470 September 15, 1986 ADVICE OF COUNSEL Mr. Rohert Stout 86 -600 President of Borough Council Summerville Borough Summerville, Pennsylvania 15864 Re: Grant Program, Participation by Public Official /Employee Dear Mr. Stout: This responds to your letter of August 27, 1986, in which you requested Advice from the State Ethics Commission. Issue: Whether a borough councilmember may participate in a grant program which will be administered by a redevelopment authority and in which the borough council has heen involved. Facts: As the president of horough council, in the Borough of Summerville, you have requested the advice of the State Ethics Commission on behalf of fellow Councilwoman Pauline Shaffer. You indicate that Summerville Borough was awarded a community development grant by the Department of Community Affairs. The grant totalled $148,656.00. One hundred and ten thousand dollars of this grant has been set aside for the rehabilitation of existing homes. You have further advised that the administration of the grant is being carried out by the Jefferson County Redevelopment Authority in cooperation with the borough. The funds that will be allocated to the homeowners for upgrading their property will be in the form of a deferred loan as such funds must be repaid to the borough in the event that there is a deed transfer on the property. The borough's involvement, as you have indicated in your letter of request, has been limited to the passage of a resolution authorizing the filing of the application to receive the grant and the acceptance of the grant. You advise that the redevelopment authority has been mainly responsible for carrying out the administration of the grant as set forth in a cooperation agreement between the borough and the authority. A member of the horough council, Pauline Shaffer, has requested to participate in the State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Mr. Robert Stout September 15, 1986 Page 2 rehabilitation program. This request has gone to the redevelopment authority. You advise that Councilwoman Shaffer has not participated in obtaining the Community Development Funds and the borough has had no responsibility in relation to the administration of this grant. You have requested the advice of the State Ethics Commission on behalf of Ms. Shaffer. Discussion: Initially, we should note that under the Ethics Act our jurisdiction is limited to rulings under the Ethics Act. Thus, we cannot and do not, in this Advice, address the propriety of or answer any questions related to the propriety of your conduct in light of any code, statute (federal or state), regulations, etc. other than the Ethics Act. However, under the Ethics Act we may provide a ruling because the conduct of a borough councilperson is subject to the requirements of that Act because said person is a "public official" as that term is defined in the Ethics Act. See 65 P.S. 402. Under the Ethics Act, we must observe the stated purpose of that Act which is to strengthen the faith and confidence of people and their government by assuring the public that the financial interests of the holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. 65 P.S. 401. There are specific provisions of the Ethics Act which must be reviewed in this situation. Those provisions will be discussed more fully below. The Sections of the Ethics Act which will be discussed are Sections 3(a), (b) and (c) of the Ethics Act, 65 P.S. 403(a), (b) and (c), respectively. We will address the provisions in Section 3(c) of the Ethics Act first. From the facts outlined above, it is not clear whether there will be any "contract" between the councilperson as a public official and the borough. However, if this were to occur, the provisions of Section 3(c) of the Ethics Act would apply and require that any contract in excess of $500 between a public employee or official and a governmental body must be made only after an "open and public process." The State Ethics Commission has interpreted this provision to apply and to require an "open and public process" when the particular public employee or official seeks to contract with the "governmental body" with which he is "associated." See Bryan, 80 -014 and Lynch, 79-047. The governmental body with which the councilperson is 'associatea is the Borough. Thus, assuming for purposes of this advice, that a contract would be made between the borough and the councilperson pursuant to the provisions of this program, Section 3(c) of the Ethics Act would be applicable. If Section 3(c) of the Ethics Act is applicable, it would require the following to be undertaken if a contract in excess of $500 were to be made between that person and the governmental body with which she is associated there must be: 1. prior public notice of the contract possibility; 2. public disclosure of applications and contracts considered; and Mr. Robert Stout September 15, 1986 Page 3 3. public disclosure of the award of the contracts. Assuming that all of the guidelines as to an open and public process mentioned above have been or will be met, if Section 3(c) of the Ethics Act is applicable to this situation, we must next consider the other aspects of the propriety of the proposed conduct under other provisions of the Ethics Act. In this review, we note that we appreciate and recognize the concern that arises where a public program, funded with public monies and administered through a public agency, political subdivision, or governmental body is also available to public officials and /or employees of that agency or governmental body. We recognize the public concern and criticism that may arise if a public official or public employee who serves a governmental body receives benefits under a program of this nature. Thus, we must review this conduct in light of Section 3(a) of the Ethics Act and Section 3(b) of the Ethics Act. Section 3(a) of the 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 holding public office to obtain financial gain 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)., Likewise, we will undertake review of this question in light of Section 3(b) of the Ethics Act which provides as follows: Section 3. Restricted activities. (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Under these Sections of the Ethics Act and the opinions of the Ethics Commission, it is clear that the Ethics Act was primarily designed to restrict' the activity of a public employee or official where a conflict of interests exists and to address situations where the appearance of a conflict with the public trust may arise. However, the opinions of the Ethics Commission indicate that the Ethics Act was not designed nor should it be interpreted to Mr. Robert Stout September 15, 1986 Page 4 preclude public officials or public employees from participating in programs which might otherwise be available to them as citizens. See, Toohey, 83 -003; Balaban, 83 -004; and Coploff /Hendricks, 83 -005. In these cases the Ethics Commission indicated that a public official or public employee or a business with which he is associated could participate in rehabilitation or grant programs so long as that public official or public employee: 1. played no role in establishing the criteria under which the program at issue was to operate, particularly with reference to the structure or administration of the program; 2. played no role in establishing or implementing the criteria by which selections for program participation are to be or were made; 3. played no role in the process of selecting and reviewing applicants or in awarding grants or funds; 4. used no confidential information acquired during the holding of public office or public employment to apply for or to obtain such funds, grants, etc. Furthermore, the Commission's opinions indicate that if the body with which the public employee or official is associated is in any way involved in the administering of the grant program or selecting who, among the applicants should receive assistance or funds, the public employee or official within the governmental body who is making an application to participate in such a program or to obtain such funds, must abstain from all discussions, votes or recommendations on the applications or programs in which he or she is interested. Additionally, such a public official or public employee should also abstain from participating in matters before that governmental body which he or she serves as to the applications of other individuals who may be similarly situated and who are applying for funds or seeking to participate in the program. Essentially, the Commission sought to eliminate the possibility that a public official or public employee who was seeking such funds or seeking to participate in these grant programs would be in a position to insure the grant funds or th., program benefits would be available to be applied for or applied to for his own benefit. Thus, a public official or public employee in such a situation should refrain from participating in making decisions or recommendations about the program and regarding distribution of the limited funds which might be available as a result of such a program. The reason for such abstentions must be placed on the public record. Based upon the facts, as outlined above and as we understand them, we must now apply these principles to this case and particular circumstances. Essentially, we conclude that the councilperson may, under the Ethics Act, participate in the program as outlined above, without resigning from her Mr. Robert Stout September 15, 1986 Page 5 position or relinquishing her role as a public official if the criteria listed above at Numbers 1 -4 are met. Under such circumstances, so long as the required abstentions discussed above are observed, she may apply for and participate in the benefits associated with this program. See, Macko, 85- 570 -A; 85- 570 -B. Finally, we must make reference to Section 3(b) of the Ethics Act in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which must be observed, the councilperson must neither offer nor accept anything of value on the understanding or with the intention that her official judgment would be influenced thereby. We assume such a situation does not exist here. We add reference to this section not to indicate that any such activity has been or will be undertaken but in an effort to provide a complete response to your inquiry. Conclusion: The Ethics Act and the rulings of the Ethics Commission reveal no reason to preclude the councilperson from participating in this program as outlined above. So long as her conduct conforms to the guidelines discussed above, she may participate in this program. If these guidelines are met, she should encounter neither a conflict nor an appearance of conflict with the public trust under the Ethics Act in this situation. 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 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. Since ohn J. ino Gener• Counsel