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HomeMy WebLinkAbout18-556 LogsdonPHONE: 717 -783 -1610 TOLL FREE: 1 -800- 932 -0936 To the Requester: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120 -0400 ADVICE OF COUNSEL October 26, 2018 Mr. Sean W. Logsdon, Esquire Donald G. Karpowich, Attorney -at -Law, P.C. Dear Mr. Logsdon: FACSi M I LE: 717- 787 -0806 WEBSITE: www.ethics.pa.gov 18 -556 This responds to your letter dated August 16, 2018, by which you requested an advisory from the Pennsylvania State Ethics Commission ( "Commission "). Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act' :) 65 7a--C-S. 1101 et seq., would permit a towing and auto body repair business (`Auto Business') to perform repairs to a damaged township police vehicle, where: (1) the Auto Business is operated b dividual who is a member and chairperson of the township board of supervisors; �2)ai�inTurance would cover the costs for repairs to the township police vehicle; and (3) a contract for repairs to the township police vehicle would be between the Auto Business and the insurance company, which would pay the Auto Business for the repairs. Facts: You have been authorized by Brian Kisenwether ( "Mr. Kisenwether ") to request an advisory from the Commission regarding his business. You have submitted facts that may be fairly summarized as follows. Mr. Kisenwether is a Member and Chairperson of the Board of Supervisors of Butler Township ( "Township "), located in Luzerne County, Pennsylvania. A Township police vehicle was recently damaged, and insurance would cover the costs for repairs to the Township police vehicle. A contract for repairs to the Township police vehicle would be between the repair facility and the insurance company ( "Insurance Company "), which would pay the repair facility for the repairs. In a private capacity, Mr: Kisenwether operates a towing and auto body repair business (the "Auto Business ") in the Township. You state that a question has arisen as to whether the Auto Business may perform the repairs to the Township police vehicle. Based upon the above submitted facts, you ask whether the Ethics Act would permit the Auto Business to perform the repairs to the Township police vehicle. The advisory request does not pose any questions regarding Mr. Kisenwether's conduct as a Township Supervisor. Logsdon, 18 -556 c0 #ober 26, 2018 Page 2 Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of e Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. It is further initially noted that this Advice is limited to addressing the narrow question posed regarding the prospective conduct of the Auto Business. Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows: § 1103. Restricted activities (f) Contract. - -No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, 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. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. § 1103(f). The following terms related to Section 1103(f) are defined in the Ethics Act as follows. § 1102. Definitions "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "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 has a financial interest. "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a polEticaI subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term shall not mean an agreement or L,oc sdon, 18 -556 c0 tober 26, 2018 Page 3 arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. 65 Pa.C.S. § 1102. Section 1103(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. Rather, where a public official /public employee, his spouse or child, or a business with which he, his spouse or child is associated, is otherwise appropriately contracting with the governmental body, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an open and public process" be observed as to the contract with the governmental body. Section 1103(f) of the Ethics Act also provides that the public official /public employee may not have any supervisory, or overall responsibility as to the implementation or administration of the contract with the governmental body. Where a public official /public employee, his spouse or child, or a business with which he, hisspouse or child is associated, seeks to enter into a subcontract valued in the amount of $p500 or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated, Section 1103(f) of the Ethics Act does not require that the subcontract itself be awarded through an open and public process. Savers, Order 1075; Johnson, Order 1187; Confidential O_ pinion, 07012. In ap lying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member and Chairperson of the Township Board of Supervisors, Mr. Kisenwether is a public official subject to the provisions of the Ethics Act. The Auto Business is a business with which Mr. Kisenwether is associated in his private capacity. The Ethics Act would not prohibit the Auto Business from performing he repairs to the Township police vehicle subject to the condition that the requirements of Section 1103(f) of the Ethics Act would be observed if applicable. To the extent that the Auto Business would be entering into a subcontract with the Insurance Company under a contract awarded by the Township, if such subcontract would be valued at $500 or more, the requirements of Section 1103(f) of the Ethics Act would apply to such subcontract, including the requirement that an open and public process would have been observed as to the contract between the Insurance Company and the Township. Section 1103(f) of the Ethics Act would not require that such subcontract itself be awarded through an open and public process. Log sdon, 18 -556 October 26, 2018 Page 4 Finally, it is parenthetically noted that the Commission has not exercised Jurisdiction over a private business entity with respect to enforcing Section 1103( Means, Opinion 04 -007. The Ethics Act provides for a judicially- imposed remedy where a business runs afoul of Section 1103(f), and the Commission has determined that it was the intention of the General Assembly for the courts, not the Commission, to enforce Section 1103(f) of the Ethics Act as to a business entity that transgresses Section 1103(f) of the Ethics Act. Id. The propriety of the proposed conduct of the Auto Business 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 herein is the applicability of the Second Class Township Code. Conclusion: Based upon the submitted facts that: (1) Brian Kisenwether ( "Mr. isenwet er ") is a Member and Chairperson of the Board of Supervisors of Butler Township ( "Township "), located in Luzerne County, Pennsylvania; (2) a Township police vehicle was recently damaged, and insurance would cover the costs for repairs to the Township police vehicle; (3) a contract for repairs to the Township police vehicle would be between the repair facility and the insurance company ( "Insurance Company "), which would pay the repair facility for the repairs; (4) in a private capacity, Mr. Kisenwether operates a towing and auto body repair business (the "Auto Business ") in the Township; and (5} a question has arisen as to whether the Auto Business may perform the repairs to the Township police vehicle, you are advised as follows. As a Member and Chairperson of the Township Board of Supervisors, Mr. Kisenwether is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The Auto Business is a business with which Mr. Kisenwether is associated in his private capacity. The Ethics Act would not prohibit the Auto Business from performing the repairs to the Township police vehicle subject to the condition that the requirements of Section 1103(f) of the Ethics Act would be observed if applicable. To the extent that the Auto Business would be entering into a subcontract with the Insurance Company under a contract awarded by the Township, if such subcontract would be valued at $500 or more, the requirements of Section 1103(f) of the Ethics Act would apply to such subcontract, including the requirement that an open and public process would have been observed as to the contract between the Insurance Company and the Township. Section 1103(f) of the Ethics Act would not require that such subcontract itself be awarded through an open and public process. The Ethics Act rovides for a judicially- imposed remedy where a business runs afoul of Section 1103(f), and the Pennsylvania State Ethics Commission ( "Commission ") has determined that it was the intention of the General Assembly for the courts, not the Commission, to enforce Section 1103(f) of the Ethics Act as to a business entity that transgresses Section 1103(f) of the Ethics Act. This Advice is limited to addressing the narrow question posed regarding the prospective conduct of the Auto Business. Lastly, the propriety of the proposed conduct of the Auto Business has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, an 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, provided the requester 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. Lo sdon, 18 -556 October 26, 2018 Page 5 Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writingg and must be actual! received at the Commission within thirty (30) days of the date Advice pursuant to 59 Pa. Code § 93.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (797 -787 - 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Robin M. Hattie Chief Counsel