Loading...
HomeMy WebLinkAbout86-631 McCarthySTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 flecemher 5, 1986 ADVICE OF COUNSEL Michael T. McCarthy, Esquire 86 - 631 Solicitor Borough of Middletown _27 North Front Street Harrishurg, PA 17101 Re: Conflict of Interest, Low Interest Loan Program, Memher, Executive Committee, Sub- Contractor on Rehabilitation Project Dear Mr. McCarthy: This responds to your letter of Septemher 23, 1QR6, wherein you had requested the advice of the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibition upon a memher of a horough executive committee from participating in the approval of low interest loan applications to individuals in a situation where the member may he employed as a suh- contractor on the project for which the loan has heen obtained. Facts: As Solicitor for the Rorough of Middletown, you have requested the advice of the State Ethics Commission in relation to the above issue. You advise that the borough has an executive committee that oversees and approves low interest loan programs for the rehahilitation of homes. As part of the application for a loan, the homeowner suhmits three proposals from contractors in addition to certain information about his income in order to ascertain his ability to repay the loan. One of the memhers of the executive committee is a self - employed contractor and although he would not he one of the contractors whose proposals would he part of the application, he might, in fact, he a suh- contractor for one of those contractors. You have requested the advice of the State Ethics Commission in relation to this situation. Discussion: Initially, from your letter of request, it is not clear as to whether the individual, involved in this situation, is a puhlic official within the purview of the State Ethics Act. If, for example, the member of the executive committee in question is a member of that committee as a result of his service as a horough councilmemher, then he would clearly he a public official within the purview of the State Ethics Act. 65 P.S. &402. If this individual is not a member of borough council and serves in no other position Michael T. McCarthy, Esquire Cecemher 5, 1986 Page 2 then it is not clear whether he is a puhlic official within the purview of the State Ethics Act. Initially, it is noted that the fact that this individual receives no compensation would no longer he determinative of this issue. The fact that a particular appointed official is not compensated, is no longer an exemption from the definition of puhlic official as set forth in the State Ethics Act. The exemption which previously existed for appointed non - compensated officials was invalidated hy the Supreme Court of Pennsylvania in Snider v. Thornhurgh, 469 Pa. 159, 436 A.2d 593, (19R1). This Commission has now implemented that decision through the issuance of an opinion, (lice, R5 -021, and the promulgation of regulations. See, 16 Pa. R. 4653. Pursuant to these regulations and the statutory definition of public official as set forth in the State Fthics Act, an individual would not he a puhlic official if he serves on an advisory hoard which has no power to expend puhlic funds or otherwise exercise the authority of the Commonwealth or a political subdivision thereof. As such, the Commission, pursuant to the aforecited regulations, has set forth certain criteria and standards to help determine if an individual is, in fact, a puhlic official within the purview of the State Ethics Act. Assuming that the individual involved in this situation is, in fact, serving on a hoard that has the power to expend puhlic funds or otherwise has the authority to exercise the power of the political suhdivision, i.e. the borough, then that individual would he a puhlic official within the purview of the State Ethics Act and must conform his conduct to the requirements thereof. The Ethics Act, of course, contains no absolute or per se prohihition upon a puhlic official from participating in rehahilitation programs or from otherwise heing employed in relation to governmental holy projects. See, Toohey, R3 -0(13; Ralahan, R3 -n04. The Ethics Act, of course, provides as follows: Section 3. Restricted activities. (a) No puhlic official or puhlic employee shall use his puhlic office or any confidential information received through his holding puhlic office to obtain financial gain other than compensation provided hy law for himself, a member of his immediate family, or a husiness with which he is associated. 65 P.S. 403(a). Within the ahove provision of law and under similar circumstances, previous advices of this Commission have indicated that if a particular official has a reasonahle helief or expectation that he will have an interest in a contract or has a reasonable helief that his husiness will he approached to perform work in relation to a specific matter which he is heing asked to participate in as a puhlic official, then the individual would he hetter advised to ahstain from participating in that particular situation. This provision, however, would not require that the individual forego participation in such a grant participation program or in the employment possihilities. The only Michael T. McCarthy, Esquire necemher 5, 19R6 Page 3 requirement, within the purview of the State Ethics Act, would he that if the individual has a reasonahle expectation that his individual interests would he financially henefitted by the expenditure or hy the official action, he must, as an official, ahstain from participation therein. See, Widmer, R3 -58ft. Conclusion: While the State Ethics Act presents no per se prohihition upon the member of a horough executive committee from heing employed as a sub- contractor on projects for which low interest horough loans have heen obtained, the Act would require his ahstention in granting loans in relation to any particular project if he has a reasonable expectation that he would he involved in that project as a sub- contractor. His abstention, in such matters, should he publicly recorded in appropriate horough files. This advice, of course, is hased upon the assumption that the individual is a 'public official within the purview of the State Ethics Act and the regulations of the State Ethics Commission. Pursuant to Section 7(9)(ii), this Advice is a complete defense in any enforcement proceeding initiated hy the Commission, and evidence of gond 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 he made availahle 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 he scheduled and a formal opinion from the Commission will he 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. C. ino Central Counsel