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Home My WebLink About88-623 ArchRobert C. Arch 993 Hazel Drive North Huntingdon, Pa 15642 John Abraham 14521 Route 30 North ,Huntingdon, Pa 15642 Dear Messrs. Arch & Abraham: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL August 31, 1988 88 -623 Re: Conflict of Interest, Municipal Authority Member, Township Manager, Consulting Business, Contracting with other Municipalities This responds to your letter of July 22, 1988, in which you requested advice from the State Ethics Commission. Issue: Whether the State Ethics Act presents any prohibition or restrictions upon either a township manager /secretary or member of a municipal authority from establishing a business which would provide consulting services to other municipalities or to various entities which would be doing business with their municipality. Facts: In your joint letter you advise that you, Robert C. Arch, are the township manager /secretary of North Huntingdon Township and that you, Mr. John Abraham are the Chairman of North Huntingdon Township Municipal Authority which provides sanitary sewage services. You then advise that the two of you are considering the creation of a corporation which would provide consulting services on a contract basis to various municipal governments. You state that you do not intend to resign from your current positions and you want to be sure that you are not placed in a position which would generate a conflict of interest. You conclude by requesting advice as to two questions which you pose under the Ethics Act. First, whether you may under the Robert C. Arch John Abraham August 31, 1988 Page 2 other than North Huntingdon Township. Secondly, whether you may do business with firms, companies, consultants, engineers, attorneys, accountants, etc., which have in the past an are currently doing business with North Huntingdon Township or North Huntingdon Township Municipal Authority. Discussion: You, Robert C. Arch, as a township manager /secretary of North Huntingdon Township are a "public employee" and you, Mr. John Abraham, as Chairman of the North Huntingdon Township Municipal Authority are a "public official" as those terms are respectively defined in the Ethics Act. 65 P.S. S402; 51 Pa. Code §1.1. As such, your conduct is subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. 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. Code §403(a). The term business with which he is associated is defined under the Ethics Act 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 Section 3(a) quoted above, the State Ethics Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law transgresses the above provision of law. Thus, use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak /McCutcheon, Orders No. 128, 129, affirmed McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 Robert C. Arch John Abraham September 1, 1988 Page 3 McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet, Order No. 412 -R, affirmed Yacobet v. State Ethics Commission, Pa. Commw. Ct. , 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own interests; Koslow, Order 458 -R, affirmed Koslow v. State Ethics Commission, Pa. Commw. Ct. , 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 - 015. Section 3(b) of the Ethics Act provides: (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public • employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Section 3(b) of the Ethics Act must be referenced in order to provide a complete response to your inquiry. Under Section 3(b) of the Ethics Act cited above, which a public official or employee must observe, a public official or employee must neither offer nor accept anything of value on the understanding or with the intention that his judgment would be influenced thereby. It is assumed such a situation does not exist here. This Section is referenced not to indicate that any such activity has been or will be undertaken but in an effort to provide a complete response to your inquiry. In applying the above provisions of the Ethics Act to the specific questions which you have posed, Section 3(a) of the Ethics Act would not per se preclude you from establishing a consulting business which would contract with municipal bodies other than Huntingdon Township or Huntingdon Township Municipal Authority. However, you may not use public office or confidential information to obtain such consulting services. For example, you could not use your public position or the status of your public office as the means of obtaining any business. Thus Robert C. Arch John Abraham August 31, 1988 Page 4 reference to your status as a public official or employee. Further, any contacts or business solicitation could not be done at your public office nor could you use township office personnel equipment or supplies in your consulting business. See Dorrance, Order 456. Thus, although Section 3(a) of the Ethics Act would not preclude your outside consulting business, you may not use public office or confidential information as the means, in whole or part, to obtain such business. Further, you, Mr. Abraham, as a public official, should not vote or participate in any matter that comes before the authority if you have reason to believe that your consulting business may enter into a contract with that entity. Thus, although the Ethics Act would not per se preclude your consulting business from entering into contracts with firms, companies, consultants, engineers, attorneys, accountants, etc., which have in the past or currently are doing business with North Huntingdon Township or North Huntingdon Township Municipal Authority, you, Mr. John Abraham, should not vote or participate on any matter concerning those entities which may come before the municipal authority. Further, since you have stated that you would not engage in consulting services with your governmental body, namely either North Huntingdon Township or the North Huntingdon Township Municipal Authority, that issue need not be addressed in this advice. 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: You, Robert C. Arch, as a township manager /secretary of North Huntingdon Township are a "public employee" and you, John Abraham, as the Chairman of the North Huntingdon Township Municipal Authority are a public official subject to the provisions of the State Ethics Act. Under the facts and circumstances outlined above, Section 3(a) of the Ethics Act would not prohibit you from providing consulting services to municipal governments other than your own governmental body subject to the limitations and qualifications noted above. Additionally, Section 3(a) of the Ethics Act would not preclude you from entering into consulting service contracts with entities that may have in the past or currently are doing business with your governmental body subject to the limitations and qualifications noted above. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Robert C. Arch John Abraham August 31, 1988 Page 5 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. such. This letter is a public record and will be made available as 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. opko, General Counsel