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HomeMy WebLinkAbout87-621 SchagerMr. Judd A. Schager P.O. Box 108 Emporium, PA 15834 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 October 20, 1987 ADVICE OF COUNSEL 87 - 621 Re: Conflict of Interest, County Commissioner, CPA, Consultant, Ben Franklin Program Grant Dear Mr. Schager: This responds to your letter of September 10, 1987, in which you requested advice from the State Ethics Commission. Issue: You ask whether the State Ethics Act presents any restrictions upon you as a county commissioner when you accept a consultant contract as part of your private practice as a Certified Public Accountant to a client who has received matching funds through the Ben Franklin Grant Program which is administered by the Cameron County Economic Development Office. Facts: In your letter of September 10, 1987, you state that you are a duly elected commissioner of Cameron County and that you are also a Certified Public Accountant in private practice. You also state that the Cameron County Commissioners maintain an office known as the Cameron County Economic Development Office, the director of which filed an application under the Ben Franklin Challenge Grant Program. The application was prepared by the director of the Economic Development Office and submitted to a separate board known as the Incubator Advisory Board, which was established by the Economic Development Office and the members of the Mid Cameron Authority and other local interested citizens. Further, the members of the board are approved by existing members on that board and there are no official appointments by the Cameron County Commissioners. The Incubator Board was structured according to the requirements of the Ben Franklin Grant Program and sets forth policies as to grants and criteria for expenditures under the grant program. Further, the Incubator Board chooses the eligible applicants for a grant project. You Mr. Judd A. Schager October 20, 1987 Page 2 state that an interested applicant would request services under the Ben Franklin Program by contacting the director of the Economic Development Office who then reviews the applications and determines eligibility requirements relative to the Incubator Board's policies. You further state that services to the applicant are approved by the Incubator Board and then that client may choose a consultant who must be qualified to give the required services and also be willing to provide an amount of donated time equal to the amount of billable time as required by the Incubator Board. Further, you state that the services which the consultant may offer must be limited to training personnel, setting up procedures and other management advisory services but cannot be routine accounting or management services. After a consultant provides the services, he then submits a bill to the applicant for approval which is forwarded to the Ben Franklin Program for reimbursement. After the reimbursement is approved by the Incubator Board, the payments are directly made to the consultant. In the instant matter, you state that Advanced Technology Center of Central and Northern Pennsylvania, Inc., has entered into a contract with the Cameron County Economic Development Office which contract requires a local matching grant in the amount of $115,848.00 which may come in cash or in kind services. You note that the commissioners have committed $3,000.00 in in kind services to this contract. Lastly, you note that you have begun providing services to this particular client but have not accepted any payment under the Ben Franklin Program until an opinion is rendered by the State Ethics Commission. The duties and powers of the Board of the Ben Franklin Partnership Fund are provided for in Section 2503 -B of the Administrative Code, 71 P.S. §670.1. The purpose of that board is to promote and encourage scientific research and development in the Commonwealth and also scientific and technological education in Pennsylvania so as to advance the Commonwealth's economic growth and welfare. Further, said Board is authorized to enter contracts, agreements or grants with educational institutions, non - profit institutions and organizations and business enterprises and individuals relative to scientific and technological research. The Board may further enter into matching grant programs with educational institutions or private sector organizations for the purpose of promoting advance technology centers throughout the Commonwealth. A given center may not receive more than 50% of their financial support from the board but they may receive funding from profit and non-profit .groups and organizations including the federal government or local political subdivisions provided the appropriate applications are in accord with the policy and criteria issued by the Board. One of the eligible purposes for which the Board may issue matching grant programs are to facilities which advance technological activities. See 71 P.S. §670.1. Discussion: As a commissioner for Cameron County, you are a public official within the Ethics Act. 65 P.S. §402; 51 Pa. Code §1.1. As such, you are subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. Mr. Judd A. Schager October 20, 1987 Page 3 Section 3(a) of the Ethics Act provides: 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). Section 3(a) basically provides that a public official may not use his office or confidential information to obtain a gain other than compensation as provided for by law. In this instance, that would mean that you could not use your public position as county commissioner or confidential information to obtain clients for your private practice relative to the Ben Franklin Challenge Grant Program. It is assumed for purposes of this advice that you have not engaged in the foregoing activity. It is further provided in Section 3(b): 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). Section 3(b) of the Ethics Act is referenced in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which you must observe, you must neither offer nor accept anything of value on the understanding or with the intention that your official judgment would be influenced thereby. It is assumed such a situation does not exist here. Reference to this Section is added 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. Mr. Judd A. Schager October 20, 1987 Page 4 Lastly, Section 3(d) of the Ethics Act provides: Section 3. Restricted activities. (d) Other areas of possible conflict shall be addressed by the commission pursuant to paragraph (9) of section 7. 65 P.S. 403(d). Generally, the types of activities which the Commission has deemed to be encompassed in Section 3(d) relate to the intent and purpose of the State Ethics Act which was enacted to strengthen the faith and confidence of the people in their government by assuring the public that the financial interests of the holders of public office present neither a conflict nor the appearance of conflict with the public trust. Thus, although there is no per se prohibition to your providing services to the client based upon the facts and circumstances as outlined above and subject to the provisions of Section 3(a) and 3(b) of the Ethics Act, you should not under Section 3(d) of the Ethics Act, participate or vote as county commissioner relative to any matter which would involve directly or indirectly the Ben Franklin Challenge Grant Program. Further, you abstention should be noted of public record and recorded in the minutes; you should also state the reason for your abstention. Lastly, it should be noted that the Ethics Commission has only addressed your question under the Ethics Act; it has not considered the applicability of any other statute, code, ordinance, regulation or any other code of conduct. Conclusion: As a county commissioner, you are a public official subject to the provisions of the Ethics Act. Although there is no per se prohibition upon you as a Certified Public Accountant in your private practice to provide services to a client who has a contract under the Ben Franklin Challenge Grant Program, under the facts and circumstances as outlined above, you must observe the above restrictions regarding abstention from participation together with having that noted in a public meeting, recorded in the minutes together with your statement for the reason of your non participation. 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. Mr. Judd A. Schager October 20, 1987 Page 5 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. Vincent J. Dopko General Counsel