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Home My WebLink About88-579 BuntWilliam R. Bunt, Esquire Perry County Commissioners Box 37 New Bloomfield, PA 17068 Dear Mr. Bunt: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 9, 1988 88 - 579 Re: Conflict of Interest, County Commissioner, Contracting with County This responds to your letter of May 10, 1988, requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act presents any upon a County Commissioner from submitting a bid to regarding the lease of office space in realty which the County Commissioner. Facts: As solicitor for Perry County, you state that one of the County Commissioners owns realty in the area where the county is considering leasing office space for a district justice. The lease of the office space will be put out on bid and one commissioner is interested in submitting a bid to the county. You note that Perry County is a ninth class county and request advice under the Ethics Act as to whethar the County Commissioner may submit a bid for lease of his property to the county. Discussion: Initially, it should be noted that a County Commissioner is a "public official" as that term is defined in the State Ethics Act. 65 P.S. S402. As such, his conduct must conform to the requirements of that law. Huff, Opinion 84 -015. Generally, the State Ethics Act places no per se or absolute prohibition upon a public official's employment in a business that contacts with his governmental body. in which you prohibition the county is owned by William R. Bunt, Esquire June 9, 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 Dbtained 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. Of course under this provision, a County Commissioner may not use his public position to secure any financial gain for himself or for a business with which he is associated. See Domalakes, Opinion 85 -010. In this respect, the Commission has determined if a particular statutory enactment prohibits an official's receipt of a particular benefit, then that official's receipt of such a prohibited benefit, in and through his public office, would also be a use of his office in violation of the Act. The Commission has been called upon, on various occasions, to determine whether a specific benefit or financial gain is prohibited by law. See, Allen, Advice 86 -518. In order to determine whether a particular benefit or gain is strictly prohibited by law, the provisions of the enabling legislation of the governmental body in question must be reviewed. In the instant situation, the County Code provides as follows: William R. Bunt, Esquire June 9, 1988 Page 3 S1806. County Officers Not to Be Interested in Contracts No elected or appointed county officer shall be in any wise, either directly or indirectly personally interested in any contract to which the county is a party, or in the construction of any public work or improvement made or undertaken under the authority of the county commissioners, or receive any reward or gratuity from any person so interested. No such officer shall purchase directly or indirectly any property sold at a tax or municipal claim sale. Any person violating the provisions of this section shall be guilty of a misdemeanor, and, upon conviction, shall be sentenced to pay a fine not exceeding five hundred dollars ($500) and may, by decree of the court, be removed from office. 16 P.S. S1806. The County Code does not appear to contain any exception to the above provision that is applicable in the instant situation. This Commission has, in the past, determined that where a public official owns, operates, or has a vested financial interest in a business entity, the public official or his business entity would be prohibited from receiving compensation for providing services or transacting business. See Weaver, Opinion 85 -014. As such, and based upon prior rulings of this Commission, the County Commissioner would appear to be prohibited from receiving any funds from the county for services rendered or in relation to the lease of the office space. Because that financial gain appears to be prohibited by law then his receipt of this financial gain in and through public office, would also appear to.be prohibited by Section 3(a) of the State Ethics Act. See, Fyda, Order 438 -R. In addition to the foregoing, the State Ethics Act provides as follows: Section 3(c) of the Ethics Act provides: (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 William R. Bunt. Esquire June 9, 1988 Page 4 at $500 or more with a governmental boc.y 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. Bryan, Opinion 80 -014; Lynch, Opinion 79-047. The commission, however, has also determined that the abwe 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 would not authorized 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 requ_.re that an additional procedure be utilized when such business is transacted. This procedure, the open and 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 : ontracting 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. William R. Bunt, Esquire June 9, 1988 Page 5 Thus, in the event that contracting would be allowed, the above process must be employed. Lastly, it must be noted that the propriety of the proposed course of conduct has only been addressed under the Ethics Act. Conclusion: The County Commissioner is a public official subject to the provisions of the Ethics Act. Based upon the information provided herein, the Ethics Act would prohibit him from leasing office space to the county and receiving any financial gain that is strictly prohibited by law. A County Commissioner, who received such compensation for himself, would be receiving a financial gain that is strictly prohibited by law. Such would, thus, be received in and through public office and would not be in accord with the State Ethics Act. Parenthetically, in the event that there had been no such prohibition upon the receipt of this compensation, then the Ethics Act, generally, would not have precluded in and of itself this contracting possibility. However, the County Commissioner could not participate in any actions relating to the county's lease of the office space and all contracting or business transactions must be accomplished through an open and public process as set forth above. 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 criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained o•c 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 former Opinion from the William R. Bunt, Esquire June 9, 1988 Page 6 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