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HomeMy WebLinkAbout88-545 RovitoVincent V. Rovito, Jr., Esquire Four West Independence Street Shamokin, PA 17872 STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PA 17120 TELEPHONE: (717) 783 -1610 April 12, 1988 ADVICE OF COUNSEL 88 - 545 Re: Former Public Official; Section 3(e), Housing Authority Board, Inspections as an Independent Contractor Dear Mr. Rovito: This responds to your letters of February 16 and February 19, 1988, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act presents any restrictions or prohibitions upon a former housing authority board member, following the termination of his service, in obtaining a contract to perform inspections as an independent contractor with his former governmental body. Facts: You state that you are the solicitor for Northumberland County Housing Authority and represent the former director, Daniel L. Venn. After Mr. Venn resigned on February 1, 1988, following a number of years of service with the Housing Authority Board, hereinafter Board, you state that the directors made a policy change whereby housing inspections would be let under contract rather than being done "fn house. You state that the inspections are performed to determine whether homes meet HUD guideline and eligibility requirements. You then state that although Mr. Venn had no prior knowledge of the policy change regarding inspections, he has contacted the Board to seek employment as an independent contractor to make the inspections. It is then stated by you the U.S. Department of Housing and Urban Development (HUD) has indicated that they have not objection to Mr. Venn obtaining the position if he is the successful candidate. You state that Mr. Venn has sufficient qualifications to do the job and that as an independent contractor he would receive no benefits from the Authority. You further note that HUD has determined that they would waive their requirements and that it was only necessary for a determination to be made by the Authority's solicitor. In this regard, Mr. Kirk L. Gray, the Regional Director of the Office of Public Housing, HUD, advised by letter of March 17, 1988 that a waiver of Section 515(a) of the Vincent V. Rovito, Jr. Esquire April 12, 1988 Page 2 Annual Contributions Contract was granted as to the one year waiting period for Mr. Venn. In a supplemental letter with attachments, you also state that there would be savings to the Authority if Mr. Venn would perform this work as an independent contractor. After stating that it costs the Authority approximately $35 per unit for an inspection, where a reinspection is not necessary, Mr. Venn would be paid $10 per inspection. After noting that the Authority inspects approximately 30 units per month, you state that the cost of inspections on an in house basis would be approximately $1,050 per month whereas it would only be $300 per month if Mr. Venn performed the work as an independent contractor, thus, saving approximately $750 per month. You then conclude by expressing your view that Section 3(e) of the Ethics Act would not appear to restrict Mr. Venn's activities on a theory that he is merely seeking employment for himself, that he is not representing any one before the board and that he would be employed as an independent contractor. Discussion: As a director for the Authority, he is to be considered a "public employee" within the definition of that term as set forth in the Ethics Act and the regulations of this Commission. 65 P.S. §402; 51 Pa. Code §1.1. Consequently, upon termination of this employment, he would become a "former public employee" subject to Section 3(e) of the Ethics Act. Section 3(e) of the Ethics Act provides that: Section 3. Restricted activities. (e) No former official or public employee shall represent a person, with or without compensation, on any matter before the governmental body with which he has been associated for one year after he leaves that body. 65 P.3: 403. Initally, it is noted that the "governmental body" with which Mr. Venn was associated was the Authority. The Ethics Act would not affect his ability to appear before agencies or entities other than with respect to the Authority. Likewise, there is no general limitation on the type of employment in which he may engage, following his departure from the Authority. It is noted, however, that the conflicts of interest law is primarily concerned with financial conflicts and violations of the public trust. The intent of the law generally is that during the term of a person's public employment he must act consistently with the public trust and upon departure from the public sector, that individual should not be allowed to utilize his association with the public sector, officials or employees to secure for himself or a new employer, treatment or benefits that may be obtainable only because of his association with his former public employer. See Anderson, Opinion 83 -014; Zwikl, Opinion 85 -004. Vincent V. Rovito, Jr., Esquire April 12, 1988 Page 3 In respect to the one year representation restriction the Ethics Commission has promulgated regulations to define "representation" as follows: Section 1.1. Definitions. Representation - -- Any act on behalf of any person including but not limited to the following activities: personal appearances, negotiating contracts, lobbying, and submitting bid or contract proposals which are signed by or contain the name of the former public official or public employe. 51 Pa. Code 1.1. The Commission, in its opinions, has also interpreted the term "representation" as used in Section 3(e) of the Ethics Act to prohibit: 1. Personal appearances before the governmental body or bodies with which he has been associated, including, but not limited to, negotiations or renegotiations of contracts; 2. Attempts to influence; 3. Participating in any matters over which he had supervision, direct involvement, or responsibility while employed; 4. Lobbying, that is representing the interests of any person or employer before his governmetal body in relation to legislation, regulations, etc. See Russell, Opinion 80 -048 and Seltzer, Opinion 80 -044. In the instant situation, the activity which Mr. Venn contemplates consists of performing inspections as an independent contractor through a contract with his former employer, the Authority. Such contemplated conduct is the precise activity which Section 3(e) of the Ethics Act was designed to prohibit or restrict, namely representation before his former governmental body, the Authority. The fact that Mr. Venn would not be representing some other person or entity before the Authority does not take the contemplated activity out of the restricion of Section 3(e) of the Act. Thus, the State Ethics Commission in the Toohey, Opinion 83 -003 decided that a public official could not even represent his own personal interests, as opposed to representing another or a firm, in order to acquire a contract with his former governmental body. Further, in Kreger, Order 595, The Ethics Commission found that a former member of a municipaT authority violated Section 3(e) of the Ethics Act, as well as violated Sections 3(a) and 3(c), when he negotiated a contract and appeared before his governmental body within one year after he resigned as Authority member. See also Wolpert, Order 169, wherein the Ethics Commission found that a school director violated Section 3(e) of the Ethics Vincent V. Rovito, Jr., Esquire April 12, 1988 Page 4 Act when he contracted with his school district within one year after he terminated his service. Therefore, under Section 3(e) of the Ethics Act, Mr. Venn may not appear before his governmental body and enter into a contract as an independent contractor for inspections with his governmental body, the Authority. 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 other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Conclusion: As Director of the Authority, Mr. Venn is to be considered a "public employee" subject to the provisions of the Ethics Act. Under Section 3(e) of the Ethics Act, he may not for a period of one year after he terminates his service with the Authority enter into a contract with that Authority to perform housing inspections as an independent contractor. Lastly, the propriety of his 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 . Dopko General Counsel