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HomeMy WebLinkAbout87-611 CallithenMr. Henry L. Callithen A & H Callithen 307 Saint Clair Street Bridgeville, PA 15017 Dear Mr. Callithen: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 September 4, 1987 ADVICE OF COUNSEL 87 -611 Re: Public Employee, Contracting, State Correctional Institution This responds to your letter of August 5, 1987, in which you requested advice from the State Ethics Commission. Issue: You ask whether as a Lieutenant with the State Correctional Institution you or your business may engage in contracting under certain circumstances with the Commonwealth of Pennsylvania. Facts: You are currently a Lieutenant at the State Correctional Institution at Pittsburgh, hereinafter Institution. Both you and your wife, who is a registered nurse and retiree from state employment, have started a business selling general merchandise at both the retail and wholesale level. You advise that your wife is currently operating the business and that you and she are considering the possibility of being a vendor to the Commonwealth of Pennsylvania. You state that you have sent a letter to the Commissioner of the Department of Corrections for approval of such "dual employment." You ask whether there would be a conflict of interest by either you or your wife in undertaking this business venture. Discussion: Initially, the Ethics Commission notes that as a Corrections Officer 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" is 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. • Mr. Henry L. Callithen September 4, 1987 Page 2 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, it has been provided that you are a director, officer, owner, or employee or holder of stock of the business which would seek to contract with the Institution. As such, then 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 Corrections Officer to secure financial gain for your business and could not use any confidential information acquired 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 Institution to award the contract in question to your business. 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 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, facts have been provided to establish that you or a member of your immediate family is either an officer, director, or owner of greater than 5% of the equity at fair market value of the business in question. Given the foregoing, the previous Opinions Mr. Henry L. Callithen September 4, 1987 Page 3 of the Commission, which have held that the term "governmental body" in Section 3(c) of the Ethics Act refers to the governmental body with which the individual public employee /official is "associated," must be reviewed. Bryan, 80 -014 and Lynch, 79 -047. The "governmental body" with which you are associated is the Institution. Therefore, the open and public process requirements of Section 3(c) of the Ethics Act would apply if and when your business would seek to contract with the Institution in an amount in excess of $500 or more. Therefore, the " open and public process" limitations of Section 3(c) of the Ethics Act apply if you and /or this business contracts with the Institution in an amount of $500 or more. You and/ or this business /company could, however, contract with any governmental body other than the Institution with which you are not considered to be "associated" without undertaking the open and public process set forth in Section 3(c) of the Ethics Act. It should be emphasized, that even though Section 3(c) of the Ethics Act presents no absolute prohibition to the contract between the Institution and your business, certain requirements as to the open an public process must be met. In its Opinions in Howard, 79 -044 and Fields, 82 -006, the Commission stated...ttiat an 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 your business 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. Since you have not indicated that the Institution will advertise for proposals or bids in relation to this contract, although that should occur since the Institution is part of the Commonwealth, it is nevertheless necessary to say that the open and public process requirements of the Ethics Act require that the conditions outlined above are satisfied. Mr. Henry L. Callithen September 4, 1987 Page 4 Although it is noted that you have posed your inquiry as to the applicability of the Ethics Act not only to your conduct but that of your wife, this advice can only address the coverage of the Ethics Act as to your specific conduct under it. If your wife desires to obtain advice as to the application of the Ethics Act to the restrictions imposed upon her as a former public employee, she may so request. However, for informational purposes, enclosed is a copy of the Hodge Advice, No. 85 -562, which concerns the subject of restrictions by a former public employee before the governmental body with which he was associated. It must be understood that that Advice is not to be taken as controlling to your wife's situation; it is simply supplied for general information purposes so as to give an indication as to how the Commission has responded to the general question concerning representation restrictions by a former governmental employee. Lastly, it must be noted that this advice is issued solely under the Ethics Act and should not be understood to serve as a clearance to operate as outlined above under any other statutes, codes, ordinances, regulations, etc., other than the Ethics Act. Conclusion: Under the facts and circumstances outlined above, you are a "public employee" as that term is defined in 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, the Institution, the requirements of Section 3(a), 3(b), and Section 3(c) mandate that: 1. You should not have anything to do with the Institution decisions, or votes, discussions regarding 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 Institution to this business; 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, in that nothing of value can be offered, accepted or solicited in exchange for or to influence official judgment. Although this advice can only address the question as to the application of the Ethics Act to your conduct, your wife, as a former state employee may contact this Commission for an advice as to the restrictions imposed upon her in her current status as a former public employee relative to the restrictions which are imposed upon her for the one year period after the termination of her service. Mr. Henry L. Callithen September 4, 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 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. Sincerely, ti,���,, • Vincent J. Dopko General Counsel