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HomeMy WebLinkAbout87-652 TaylorMs. Linda S. Taylor 779 Barclay Drive Bedford, PA 15522 f.: • STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 December 23, 1987 ADVICE OF COUNSEL 87 - 652 Re: Public Employee, Contracting, PennDot, Spousal Business Dear Ms. Taylor: This responds to your letter of December 7, 1987, in which you requested advice from the State Ethics Commission. Issue: You ask whether, as an employee of the Pennsylvania Department of Transportation, your husband may engage in contracting under .certain circumstances with that Department. Facts: You are a Clerical Supervisor II, serving with the Pennsylvania Department of Transportation, hereinafter PennDot, at the Bedford County Maintenance District. You state that you supervise the clerical employees who pay PennDot bills but you do not authorize payments or purchases since the county maintenance manager and his assistant are the only individuals who sign vendor payment checks. From your job description /specification, which is incorporated herein by reference, you not only coordinate and direct all clerical activities, but you also generally assign and review the work of subordinates who process invoices, requisitions, payroll, accounting transfers and related matters. Your responsibilities also include the maintenance of records and the preparation of reports. You are also required to handle personnel matters, review and forward mail and telephone inquiries. Lastly, you review the payroll and perform such other duties as are necessary or required. You state that your husband John M. Taylor is the sole proprietor of Taylor Auto Electric, a business which repairs alternators, generators and starters. You further state that the work is paid for by a Direct Purchase Authorization without bidding or contract. Under these circumstances, you ask whether Taylor Auto Electric may under the State Ethics Act be permitted to do business with PennDot. Ms. Linda S. Taylor December 23, 1987 Page 2 Discussion: For the purpose of this advice, it is assumed that you are a public employee within the definition of that term as set forth in the State 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 regarding 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 assocated, the Ethics Act does not totally prohibit a public official or employee from engaging in business activities or contracting, in general, with the body the official or employee serves. 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 form 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: 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. The information provided in the instant situation clearly shows that your spouse or his business is seeking to contract with PennDot. 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 Clerical Supervisor II to secure financial gain for your spouse or his 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 PennDot to award the contract in question to your husband's 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. Ms. Linda S. Taylor December 23, 1987 Page 3 Section 3(c) of the State Ethics Act provides as follows: 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). The Act further provides as follows: Section 2. Definitions. "Immediate family." A spouse residing in the person's household and minor dependent children. 65 P.S. 402. As is clear from the foregoing, your husband is a member of your immediate family and, thus, any contract entered into between your governmental body and your husband must be done through an open and public process if that contract is in excess of $500. See Howard, 79 -044. The contracting provisions of the State Ethics Act would not prevent your husband from obtaining a contract with a governmental body other than the one by which you are employed. In the instant situation, if your husband seeks to contract with the PennDot Maintenance District wherein you are employed, open and public process requirements of the State Ethics Act would be applicable in the instant situation. See Bryan, 80 -014; Lynch, 79 -047. The Act as set forth above, however, does not present any absolute prohibition on your husband's attempt to obtain a contract with PennDot. It should be emphasized, that even though Section 3(c) of the Ethics Act presents no absolute prohibition to the contract between PennDot and your husband's business, certain requirements as to the open and public process must be met. In its Opinions in Howard, 79 -044 and Fields, 82 -006, the Commission stated that an open and public process is met by applying the following standards: 1. prior public notice of the employment or contracting possibility; Ms. Linda S. Taylor December 23, 1987 Page 4 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 mat, the Commission has adopted a "reasonableness test" which means that reasonable and prudent competitors of your husband's business should be provided a sufficient time within which to submit their proposals and, of course, shculd have had prior notice of the opportunity to secure such a contract or employment. However, it should be noted that the above requirements are applicable only when your husband is contracting with the PennDot Maintenance District wherein you are employed. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct has not been considered. Conclusion: Under the facts as have been set forth above, it is assumed that you are a public employee as that term is defined in the Ethics Act. In light of the fact that a member of your immediate family is attempting to enter into a contract with your current governmental body, then Sections 3(a) and 3(c) of the State Ethics Act are applicable when and only when your spouse is contracting with the PennDot Maintenance District wherein you are employed. 1. you should not have anything to do with the 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 PennDot 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, ir: that nothing of value can be offered, accepted or solitcited in exchange for or to influence official judgment. Lastly, you question has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct has not been considered. Ms. Linda S. Taylor December 23, 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, Vincent J. `Do pko, General Counsel