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HomeMy WebLinkAbout88-667 HafnerClaude Hafner, II, Esquire 201 North 67th Street Harrisburg, PA 17111 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 19, 1988 88 -667 Re: Conflict of Interest, Member of General Assembly, Leasing Space to District Justice Dear Mr. Hafner: This responds to your letter of November 7, 1988, in which you requested advice from the State Ethics Commission. Issue: You ask whether the State Ethics Act presents any restrictions or prohibition upon a member of the General Assembly from purchasing property and leasing same to a District Justice. Facts: You state that you are an attorney representing a member of the General Assembly who owns real estate adjacent to a commercial property. After stating that your client is interested in purchasing the adjacent structure rather than renovating his property, you advise that your client, if he acquires the property, will lease same to a District Justice. You advise that the District Justice will be vacating his current office and hopes to remain in that neighborhood but that a prior arrangement, which the District Justice had, fell through when the landlord attempted to raise the rent. You then state that the District Justice has come to your client expressing an interest in leasing his property. You then state that because of the sum required to renovate, your client became interested in the adjacent property. You conclude by requesting advice from this Commission before your client enters such an agreement to purchase the property or leases same to the District Justice. Claude Hafner, II, Esquire December 19, 1988 Page 2 Discussion: As a Member of the General Assembly, the individual is a "public official" as that term is defined under the Ethics Act. 65 P.S. §402; 51 Pa. Code 51.1. As such, his conduct is subject to the provisions of the Ethics Act and the restrictions therein are applicable to him. 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). 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 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 Claude Hafner, II, Esquire December 19, 1988 Page 3 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). 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 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 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 clearly is intended to be a procedure Claude Hafner, II, Esquire December 19, 1988 Page 4 to be utilized where contracting is otherwise allowed by law. For example, if a particular business transaction were prohibited under Section 3(a) of the State Ethics Act, then Section 3(c) would not allow that contract. Parenthetically, where contracting is otherwise allowed or where there appears to be no expressed prohibitions to such contracting, the above particular provision of law would require that an additional procedure, the open and public process, must be used in all situations where a 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; (4) public disclosure of the contract awarded and offered and accepted. See, Cantor, Opinion 82 -004. Under the above quoted provisions, Section 3(a) of the Ethics Act would not preclude the member of the General Assembly from leasing the office space to the District Justice. See Goodman, Opinion 88 -001; see also Haluska, Advice 88 -608. It is assumed for purposes of this advice that he has not used public office or confidential information to obtain the lease. Additionally, any matters relating to his lease of the office space with District Justice, whether that would involve negotiating the terms of the lease, entering into the lease or resolving any problems that might arise during the term of the lease, could not be handled through his legislative office nor could any of the staff, equipment, or supplies of his legislative office be used relative to the foregoing. See, Dorrance, Order 456. Furthermore, Section 3(a) of the Ethics Act would not preclude the Member of the General Assembly from purchasing the property; however, it is expressly assumed in this regard that he has not used public office or confidential information as a means of obtaining the purchase of the property or of obtaining an advantage in acquiring the property at a lower price. As to Section 3(c) of the Ethics Act, the provisions of that Section Claude Hafner, II, Esquire December 19, 1988 Page 5 would not appear to be applicable in this situation since the judiciary (District Justice) is not his "governmental body" as that term is defined under the Ethics Act. 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. Specifically not addressed in this advice is the applicability of the Legislative Code of Ethics or the State Adverse Interest Act in that they do not involve an interpretation of the State Ethics Act. Conclusion: As a Member of the General Assembly the individual is a public official subject to the provisions of the State Ethics Act. Subject to the limitations as outlined above, he may consistent with the Ethics Act purchase property and lease same to the District Justice. 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 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, An Vincent J. Dopko, General Counsel