Loading...
HomeMy WebLinkAbout87-527 WingardMr. J. L. Wingard 320 Pine Avenue Altoona, PA 16602 STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 7834610 March 27, 1987 ADVICE OF COUNSEL 87 -527 Re: Conflict of Interest City Council Member, Employee, Corporation Contracting With City Dear Mr. Wingard: This responds to your letter of February 23, 1987, wherein you requested the advice of the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibitions upon a city councilmember's association with a private corporation that transacts business with the city. Facts: You advise that you have recently been appointed to the Altoona City Council. Your appointment was made in order to fill the unexpired term of a recently deceased council member. There are approximately ten months remaining in this term of office. You will receive salary and benefits consistent with the Third Class City Code. You also indicated that you are currently working for IDA, Inc. on a part -time basis. IDA currently has contracts with Altoona in relation to a community development block grant program. You indicate that you would abstain from voting on any council issue which involves contractual committments with IDA. You indicate that these contracts in the past have been subject to prior public notice and full public disclosure. You further indicate that there may be times while you are fulfilling your obligations to the city, that you will be at meetings or involved in conversations that impact upon economic development strategy, blight removal or structural renovation activity. These aforementioned subjects may occasionally include IDA as a former, current, or future participant. in the city's plan for revitalization. You indicate that IDA will not compensate you while you are performing services that are being compensated by the city of Altoona. You have indicated to IDA that you will be working a minimum of 15 hours per week for them, with additional hours a possibility if such is required. Your position with IDA is Housing Rehabilitation Coordinator, You have requested the advice of the State Ethics Commission regarding whether the State Ethics Act would present any prohibitions upon your contemplated activity. Discussion: As a member of city council in a city of the third class, you are clearly a public official as that term is defined in the State Ethics Act. 65 P.S. §402. As such, your conduct must conform to the requirements of that law. Berry, 419. Mr. J. L. Wingard March 27, 1987 Page 2 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 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). As can be noted from above, no public offical may use his public position in order to obtain a financial gain for a business with which he is associated. The 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. As an employee of IDA, Inc. you clearly are associated with that business within the parameters of the above definition. As such, you may not use your public position in order to obtain a financial gain for that entity. Within this restriction the commission has determined in the past, that a public official could not participate or otherwise perform any activity as a public official that relates to a business with which he is associated. Thus, as a member of the third class city council, you would be prohibited from participating in any action relating to the review, consideration, discussion or voting on any matter in which IDA is involved. Your abstention in such matters should be publicly noted and recorded in council documents. See Martzall, 528. In addition to the foregoing, it should be noted, that this Commission has also determined that in relation to situations, such as the one presented herein, you should not, as a public official, participate as a representative of IDA in any presentions or applications that are made to the city. While ycu have not indicated that you would be doing such in your letter of requests, we have provided this particular information in order to provide a -,.Jmplete response to your request. See Rider, 490; 490R In addition to the foregoing, it should be noted that the State Ethics Act provides as follows: Mr. J. L. Wingard March 27, 1987 Page 3 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). Generally, this provision of law applies where the public official is associated with a company as indicated above, and that company attempts to contract with the governmental official's public body. In the instant situation, it does not appear as though you are an officer, director or owner of greater than 5% of the equity at fair market value of the IDA corporation. Therefore, Section 3(c) of the State Ethics Act, would most likely not be applicable. In the event, however, that you do stand in the relationship, as set forth above, the open and public process must be utilized. See Howard, 79 -044; Linch, 79 -047. The open and public process as set forth in the State Ethics Act and in the opinions of this Commission, would require: 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 or 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. Cantor, 82 -004. Once again, of course, your abstention as a public official must be publicly noted and recorded. Furthermore, the Commission has determined, that if the body with which the public employee or official is associated is in any way involved in the administration of a grant program or selecting who among the applicants should receive assistance or funding, the public employee or official within the governmental body who is making an application to participate in such a program or obtain such funding, must abstain from all discussions, decisions, Mr. J. L. Wingard March 27, 1987 Page 4 votes, recommendations on the applications in which he is interested. In addition to the applications that are submitted by other similarily situated individuals who are seeking to obtain said funding or participate in the program. Essentially, the commission sought to eliminate the possibility that a public official or public employee, who is seeking such funds or seeking to participate in these grant programs, would be in a position to ensure that grant funds or the program benefits would be available to be applied for by his own company. Finally, while this Commission is not empowered to address the various municipal codes that are applicable, we do note that the Third Class City Code provides as follows: No person, consultant, firm or corporation contracting with a city for purposes of rendering personal or professional services to the city shall share with any city officer or employee, and no city officer or employee shall accept, any portion of the compensation or fees paid by the city for the contracted services provided to the city except under the following terms or conditions: 1. Full disclosure of all relevant information regarding the sharing of the compensation or fees shall be made to the council of the city. 2. The council of the city must approve the sharing of any fee or compensation for personal or professional services prior to the performance of said services. 3. No fee or compensation for personal or professional services may be shared except for work actually performed. 4. No shared fee or compensation for personal or professional services may be paid at a rate it excess of that commensurate for similar personal' or profession& services. 53 P.S. §36901. You may wish to seek the advice of an appropriate city official in relation to this particular provision of the code. Conclusion: While the State Ethics Acts would present no prohibition upon your contemplated activity, as a public official you are required to abide by the provisions of the State Ethics Act. As such, you may not participate in any matter, discussion, decision, or consideration of a situation that relates to the company by which you are employed. Additionally, your conduct should conform to the requirements of the State Ethics Act as noted in the above advice. Mr. J. L. Wingard March 27, 1987 Page 5 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 requester 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 mad.,, in writing, to the Commission within 15 days of service of this Advice pu"rsuaAl; to 51 Pa. Code 2.12. Si ncerely ahn J. 'ontino Acting General Counsel