HomeMy WebLinkAbout88-504 StineSTATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PA 17120
TELEPHONE: (717) 783 -1610
February 4, 1988
ADVICE OF COUNSEL
D. Michael Stine, Esquire
204 East Broad Street
Tamaqua, PA 18252
Re: Conflict of Interest, Township Superisor, Contracting with the Township
Dear Mr. Stine:
88 -504
This responds to your letter of January 5, 1988, in which you requested
advice from the State Ethics Commission.
Issue: Whether the State Ethics Act presents any prohibitions upon a township
contracting with a company whose owner is one of the members of the township
board of supervisors.
Facts: In your letter you state that you are the solicitor for West Penn
Township, Schuylkill County, wherein a recently elected township supervisor,
who began his duties on Janaury 4, 1988, is the owner of a maintenance garage
which has in the past performed repairs on township vehicles. You state that
a concern has arisen as to whether the township could continue to use the
garage for repairing township vehicles in light of the fact that the owner is
now one of the members of the board of supervisors. You then pose two
questions under the Ethics Act. First, whether it would be permissible under
the Ethics Act to continue using the garage for the repair of township
vehicles when the owner of the garage is a member of the board of supervisors.
Secondly, you ask whether the maintenance garage could be used for repairs if
the township supervisor /owner would abstain from any action regarding repairs
at the garage.
Discussion: Initially, it should be noted that a member of a township board
of supervisors is a "public official" as that term is defined in the State
Ethics Act. 65 P.S. §402. As such, his conduct must conform to the
requirements of that law. Volpe Order, 579 -R.
Generally, the State Ethics Act places no per se or absolute prohibition
upon a public official's employment in a business that contracts with his
governmental body.
D. Michael Stine, Esquire
February 4, 1988
Page 2
The Act does, however, provide 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).
Within the above provision of law, no public official may use his
position or any confidential information obtained therein in order to obtain a
financial gain for himself or a member of his immediate family or a business
with which he is associated. The 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.
Under this provision, the Ethics Commission has determined that the use
of office by a public official to obtain a gain or benefit for himself or a
business with which he is associated which is not provided for in law
constitutes a "financial gain other than compensation provided for by law."
These determinations have been appealed to the Commonwealth Court of
Pennsylvania which has affirmed the orders of the Commission. See
McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529 (1983). See also
Yocabet v. State Ethics Commission, Pa. Commw. , 531 A.2d 536 (1987).
Thus, under this provision, a township supervisor may not use his public
position to secure any financial gain for his maintenance garage which is a
business with which he is associated. See Domalakes Opinion, 85 -010.
In the instant situation, under Section 3(a) of the Ethics Act, although
there would be no per se prohibition against the township supervisor from
serving and also being the owner of the maintenance garage, he could not use
his public position such as participating or voting with regard to any action
that relates to his private business.
In addition to the foregoing provision of law, the State Ethics
Commission may address other areas of possible conflicts of interest. 65 P.S.
§403(d). The parameters of the types of activities encompassed by this
provision of law may generally be determined by reviewing the purpose and
intent of the Ethics Act. Similarly, under Section 3(d) of the Ethics Act,
D. Michael Stine, Esquire
February 4, 1988
Page 3
the township supervisor could neither vote nor participate on any matter which
related to the maintenance garage and he must note his abstention of public
record together with the reasons for his abstention.
In addition to the foregoing, 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).
In relation to the above provision of law, the State Ethics Commission
has generally determined that this provision is a procedure to be used when a
public official or employee contracts with his own governmental body in excess
of $500. Brian Opinion, 80 -014; Lynch Opinion, 79 -047. The Commission,
however, has also determined that the above provision of law is not a general
authorization for a public official to contract with his own governmental body
where such is otherwise prohibited by law. The above provision of law clearly
is intended to be a procedure to be utilized where contracting is otherwise
allowed by law. For example, if a particular business transaction was
prohibited under Section 3(a) of the State Ethics Act, this particular
provision of law would not authorize that transaction. Additionally, if a
particular code prohibits a public official from being interested in a
contract, this provision would not allow that interest.
Parenthetically, where contracting is otherwise allowed or where there
appears to be no expressed prohibition to such contracting, the above
particular provision of law would require that an additional procedure be
utilized when such business is transacted. This procedure, the open and
public process, must be used in all situations were a public official is
otherwise appropriately contracting with his own governmental body in excess
of $500. This open and public process 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 and present an application or proposal;
D. Michael Stine, Esquire
February 4, 1988
Page 4
(3) public disclosure of all applications or proposals considered and;
(4) public disclosure of the contract awarded and offered and accepted.
See, Cantor Opinion, 82 -004.
In the instant situation, under Section 3(c) of the Ethics Act, the
maintenance garage with which the township supervisor is associated would not
be prohibited from contracting under the Ethics Act provided the above process
would be followed.
Lastly, the propriety of the proposed conduct has only been addressed
under the Ethics Act.
Conclusion: A member of a township board of supervisors is a public official
subject to the provisions of the Ethics Act. Under Section 3(a) of the Ethics
Act, a township supervisor may not use his public office through participating
or voting regarding matters relating to a business with which he is
associate, that is, a maintenance garage of which he is which does repair
work for the township. Under Section 3(d) of the Ethics Act, the township
supervisor must abstain regarding matters involving the maintenance garage and
must note his abstention of public record together with the reason for his
abstention. Under Section 3(c) of the Ethics Act, the maintenance garage with
which the township supervisor is associated may contract with the township
provided the requirements outlined above are satisfied.
Lastly, the propriety of the proposed conduct has only been addressed
under the Ethics Act.
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 crimi nal 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. Dopko
General Counsel