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HomeMy WebLinkAbout88-581 Feeney,% ATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 14, 1988 Mr. Michael F. Feeney, Chairman 88 -581 Office of Commissioners of Berks County Reading, PA 19601 -3584 Re: Conflict of Interest, County Commissiorier, Contracting with County Dear Mr. Feeney: This responds to your letter of May 5, 1988, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibition upon a County Commissioner from entering into contracts with the county under the Job Training Program Act whereby various businesses, of which the Commissioner is a major stockholder, would train unemployed individuals. tcts: You state that as Chairman of the Berks County Board of ,:ounty Commissioners, you would like to enter into three contracts under the Job Training Program Act (JTPA) whereby one of your businesses, of which you are a major stockholder, would train three unemployed individuals. You then advise that the funds received under JTPA offset the wages and the cost of training unemployed individuals. After stating that the funds are not a profit or financial gain to the company providing the training, you note that JTPA regulations do not prohibit such transactions when a public official's /employee's business is a party. You state that the contracts are in excess of $500; however, you then express your view that the Ethics Act requires that the contract be publicly disclosed and bid and that the Ethics Act would supersede Section 1806 of the County Code. You conclude by requesting advice as to whether such contracting is permitted under the Ethics Act. 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. §402. As such, his conduct must conform to the requirements of that law. Huff, Opinion 84 -015. Mr. F1ichz : F. Feeney June 14, 1988 Page 2 Generally, the State Ethics Act places nc. per se or absolute prohibition upon a public official's employment in a business that :ontacts with his governmental body. The Act does, however, provide as fc.]iows: 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 h s 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." R. ;: y 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. Since you are a major stockholder in these businesses, then you would be associated with such businesses as defined under the Ethics Act. The Commission has determined if a particular statutcry 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 mast be reviewed. In the instant situation, the County Code provides as follows: Mr. Michael F. Feeney June 14, 1988 Page 3 51806. 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, cr 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 si111 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. 51806. The County Code does not appear to contain any exception ' --� the above provision that is applicable in the instant situatio. 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 -'oul be prohibited from receiving compensation for providing sexiices or transacting business. See Weaver, Opinion 85 -014. A. s/ich, and based upon prior rulings of this Commission, you as a Cot.n•Ly Commissioner would appear to be prohibited from receiving any funds from the county for services rendered or in relation. to .thy. three contemplated contracts. Because that financial gain appears to be prohibited by law, then your receipt of this financial gain in and through public office, would also appear t, be prohibited by Section 3(a) of the State Ethics Act. See, Fvda, 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 Micnael F. Feeney June 14, 1988 Page 4 5% of the equity a 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. 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 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. Further, it has been determined that Section 12 of the Ethics Act or any other provision would not supersede the respective Code in this regard. See Amer, Advice 87 -654. Parenthetically, where contracting is otherwise allcwed 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 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; (3) public disclosure of all applications or proposals considered and; Mr. Michael F. FE.:aLey June 14, 1)88 Page 5 (4) public disclosure or the contract awarded and offered' and accepted. See, Canto ::, Opinion 82 -004. 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: As a County Commissioner, jou are a public official subject to the provisions of the Ethics Act. Based upon the information provided herein, the Ethics Act would prohibit you through your businesses from entering into contracts with the County. Your receipt of such compensation for yourself through the business with which you are associated would he 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, you could not participate in any actions relating to the award of the contracts 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 33 a co&plete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct .In any other civil or criminal proceeding, providing the requc =tos: has discloses' truthfully all the material facts and commit._d the acts complained of in reliance on the Advice give -1. such. This letter is a public record and will be mach- a r lay iE w Mr. 7, Feeney June 14, 438 Page 6 Finally, if you disagree with this Advice or if yon have any reason to caallenge 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 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, l Vincent J. Dopko, General Counsel