HomeMy WebLinkAbout88-505 BowmanDean A. Bowman, Esquire
Law & Finance Building
133 West Main Street
Somerset, PA 15501
Dear Mr. Bowman:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PA 17120
TELEPHONE: (717) 783 -1610
February 4, 1988
ADVICE OF COUNSEL
88 -505
Re: Conflict of Interest, PennDot Employee, Sale of Snow Removal Machine to
PennDot
This responds to your letter of January 6, 1988, in which you requested
advice from the State Ethics Commission.
Issue: Whether the Ethics Act imposes any restrictions upon a county
maintenance manager of PennDot from selling to PennDot a snow removal machine
of which he is a co- inventor.
Facts: In your letter you state that you represent Mr. Ronald Nicodemus, who
is a county maintenance manger for PennDot in Somerset County. You further
state that although Mr. Nicodemus has worked in his current position since May
of 1985, he has worked for PennDot for many years. You note that Mr.
Nicodemus is a co- inventor of a machine that could assist the Commonwealth and
municipal governments in snow removal and that it is possible that PennDot
could become a purchaser of this equipment. You note that Mr. Nicodemus, in
his current position, has no authority relative to purchasing this type of
equipment, any decisions on which would be made at the central office level.
You note that only one machine (prototype) has been constructed which is in a
patent pending status. In the event that the machine is manufactured or
marketed and if Mr. Nicodemus should receive royalties from the manufacturer
or profits from the sales, you inquire as to whether there would be a conflict
of interest if the machine would be sold to the Commonwealth of Pennsylvania.
Discussion: As a county maintenance manager for PennDot, Mr. Nicodemus is a
"public employee" as that term is defined in the Ethics Act. 65 P.S. §402.
As such, he is subject to the provisions of the Ethics Act and the
restrictions therein are applicable to him.
Dean A. Bowman. Esquire
February 4, 1988
Page 2
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 employee may not use public
office or confidential information to obtain a financial gain other than
compensation as provided for by law for himself or a member of his immediate
family or a business with which he is associated. Under this provision, the
Ethics Commission has determined that the use of office by a public employee
to obtain a gain or benefit for himself or a member of his immediate family
which is not provided for in law constitutes a "financial gain other than
compensation provided for by law." See McCutcheon v. State Ethics Commission,
77 Pa. Commw. 529 (1983). See also Yocabet v. State Ethics Commission,
Pa. Comm. , 531 A.2d 536 (1987). Thus, under this provision, a public
employee may not use his public position to secure any financial gain for
himself or his immediate family or a business with which he is associated with
other than that which is provided for in law.
Under Section 3(a) above, the Commission has held that it would be
improper for a public official to use the facilities, personnel, equipment,
postage, stationery or other benefits of the public office to advance personal
interests. See Dorrance Order, No. 456. Therefore, under Section 3(a) of the
Ethics Act, if Mr. Nicodemus did not work on or develop the snow removal
machine during the working hours of his public employment and did not use any
of the facilities or personnel or equipment of his public employment to
invent, develop or construct the snow removal machine, then Section 3(a) of
the Ethics Act would not preclude Mr. Nicodemus from receiving royalties or
profits from the sale of the snow removal machine.
If Mr. Nicodemus would become associated with a business which would be
selling the snow removal machine, then Section 3(c) of the Ethics Act would be
implicated.
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.
Dean A. Bowman, Esquire
February 4, 1988
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).
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 employee contracts with his own governmental body in excess of $500.
Bryan 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 employee 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 employee 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 employee 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;
(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.
Dean A. Bowman, Esquire
February 4, 1988
Page 4
Thus, in the event that contracting
must be employed. Therefore, under Sect
Nicodemus would be associated with a bus
removal machine to his governmental body
the Ethics Act would have to be followed
would be allowed, the above process
ion 3(c) of the Ethics Act, if Mr.
iness that would be selling the snow
, the requirements of Section 3(c) of
In addition to the foregoing, the Ethics Act authorizes the State Ethics
Commission to address other areas of possible conflicts of interests. 65 P.S.
§403(d). The parameters of the types of activities encompassed by this
particular provision of law are generally determined through a review of the
intent of the State Ethics Act. Generally, the State Ethics Act was
promulgated in order to insure the public trust that the interests of their
employees do not conflict with the public trust. 65 P.S. of interest develops whenever a public employee �attemptsGtoeserve� one a
or more interests that are adverse. See Nelson /McElrath Opinion, 85 -009R.
Under Section 3(d) of the Ethics Act, if Mr. Nicodemus were to advertise
or attempt to sell his snow removal machine: he could not use his public
office as a contact point or meeting place; he could not use the facilities,
personnel, equipment, or other benefits of his public employment; he could not
reveal or use his public office or the status of his public employment as an
aid to making sales. Although the Ethics Act would not prohibit Mr. Nicodemus
from selling his snow removal machine, subject to the limitations of Sections
3(a) and 3(c) supra, it would preclude him from using his public employment to
benefit him in the sale of the snow removal machine. Thus, the Ethics Act
would not prohibit him from selling his snow removal machine but he would have
to sell it in his capacity as a private individual without any reference or
use of his public employment to effecuate the sales.
Lastly, your question has only been addressed under the Ethics Act; the
applicability of any other statute, code, regulation, ordinance, or code of
conduct other than the Ethics Act has not been considered.
Conclusion: As a county maintenance manager for PennDot, Mr. Nicodemus is a
"public employee" subject to the provisions of the Ethics Act. Although the
Ethics Act would not per se prohibit Mr. Nicodemus from selling the snow
removal equipment subject to the limitations and restrictions in Sections 3(a)
and 3(c) of the Ethics Act as outlined above, he must observe the restrictions
outlined above under Section 3(d) of the Ethics Act. Lastly, the propriety of
the proposed course of 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 criminal proceeding, providing the requestor has
disclosed truthfully all the material facts and committed the acts complained
of in reliance on the Advice given.
Dean A. Bowman, Esquire
February 4, 1988
Page 5
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, DIA
Vincent J. opko
General Counsel