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HomeMy WebLinkAbout90-550 ConfidentialSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL May 24, 1990 90 -550 Re: Conflict, Public Official /Employee, School Directors, Solicitor, Gifts, Honorarium. This responds to your letter of March 22, 1990, in which you requested a confidential advice from the State Ethics Commission. Issue: You ask whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon school directors or the solicitor regarding giving or receiving gifts from individuals or businesses or associates which may have involvement with the school district. Facts: As the solicitor for the A school district and at the request of each and every member of the board, you request advice under Act 9 of 1989. After referencing a prior letter of May 16, 1989 which was withdrawn by you because there was no provision for confidential advisories under Act 170 of 1978, you resubmit the letter seeking a response to the five factual situations set forth therein subject to the qualification that the response be under Act 9 of 1989. In the May 16, 1989 letter, you pose the following five situations. First, the school district would award an engineering, architectural or bond issue contract to a firm which is not based upon competitive bids but rather on the board's evaluation of the quality of the services to be provided. In the course of the negotiations no reward of any kind was offered to the board or bargained for by the board You inquire as to whether a conflict exists if, after the issuance of the contract, the successful firm invites the board to a dinner and offers to take them to a theatre or athletic contest as a show of appreciation coupled with overnight lodgings due to the event occurring out of town. Second, does a conflict exist -if the school solicitor, who has represented the board for a number of years, takes the board out for a Christmas dinner at a cost of Page 2 approximately $500 to show friendship and appreciation. Third, the board contemplates building a school and athletic field with novel design characteristics. The manufacture of one of the novel design items invites the board to a site where they have constructed a similar structure. You ask whether a conflict exists if the manufacturer, at its expense, provides air transportation, meals and overnight lodging to the board members and administrators to attend the view. Fourth, when certain board members attend a Pennsylvania School Board Association Convention, would a conflict exist if they visit a hospitality room which is provided by a large architectural firm which has extended a general invitation to all school board members attending the convention to visit their hospitality room for alcoholic beverages and snacks. Fifth, at a PSBA convention, the board members in attendance would be invited by a architectural firm to a dinner which would be limited to members -of the _ firm, the board members and spouses. You inquire as to whether such action contravenes the provisions of the Ethics Act. You then submit two additional general inquiries. First, you inquire as to whether the Commission has any general guidelines as to the meaning of de minimus and in this regard you suggest that because gifts of under $200 are not reportable, a gift of less than that amount would be de minimus with regard to a potential violation of Sections 3(a) through 3(d) of the Ethics Act. In addition, you reference the ban on honorarium under Section 3(d) of the Ethics Law and seek examples as to the exclusionary phrase "not intended as a consideration for the value of said services ". After referencing an Advice of Counsel without specifying a name, file number or correct date, you cite Sections 3(b) and 3(c) of the Ethics Law and criticize the advice regarding certain qualifying language as to those two sections relative to the intent of the parties. You then suggest the Commission is "avoiding the issue" by putting such provisions in the advice which you believe may give rise to an inference of improper intent regardless of the true intent of the parties. You conclude by asserting that there are no current factual situations confronting the school district which are comparable to the five items in your letter of May 16, 1989 but note that such matters have come up before and may rise again. Discussion: As directors for the school district, the individuals are public officials as that term is defined under the Ethics Law, and hence they are subject to the provisions of that law. In addition, the solicitor of the school district is a public employee for the purpose of filing the financial interests statements pursuant to Section 4(a) of the Ethics Law. Page 3 The following terms are defined . in the Ethics Law as follows: Section 2. Definitions. "Conflict or conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member or his immediate family or a business with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Immediate family." A parent, spouse, child, brother or sister. "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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. "Honorarium." Payment made in recognition of published works, appearances, speeches and presentations and which is not Page 4 intended as consideration for the value of such services which are nonpublic occupational or professional in nature. The term does not include tokens presented or provided which are of de minimus economic impact. Section 3(a) of the. Ethics Law provides: Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. In addition, Sections 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public official /employee anything of monetary value and no public official /employee shall solicit or accept any thing of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Section 3(d) of the Ethics Law provides: Section 3. Restricted activities. (d)(1) No public official or public employee shall accept an honorarium. (2) This subsection shall not be applied retroactively. Section 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities. (j) Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee, who in the discharge of his official duties, would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is Page 5 taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest, and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. If a conflict exists, Section 3(j) requires the public official /employee to publicly abstain, note the nature of his interest as well as file a written memorandum to that effect with the person recording the minutes. Prior to discussing the seven specific questions you pose, it is necessary to note certain preliminary qualifying statements. First, since advisory opinions relate to prospective conduct, this advice is limited in scope to only future contemplated action and does not have application to any past conduct. Second, since certain of the "hypothetical situations" that you pose are general in nature, this advice as a response must also be limited in general terms. Third, regarding your concerns about that qualifying language which exists in this advice and other advices and opinions, such provisos are necessary since the intent of public officials /employees cannot be discerned; this advice will adhere to the practice of the full Commission of inserting such language in its opinions. In applying the above provisions and definitions of the Ethics Law to the instant matter, subject to the qualifications as noted above, the first two inquiries relate to the propriety of the receipt by board members of dinners or theatre (tickets) or athletic contests (tickets), coupled with overnight accommodations, paid for by engineering, architectural, or /firms awarded bond issue work or by the school district solicitor. To the extent that these items are received by the school board members, they would constitute gifts which must be reported on the Financial Interests Statement if the gift is within the threshold reporting requirements of $200 or more in aggregate. As to the restricted activities section, the Ethics Law would not prohibit the giving by the solicitor or the receipt of these Page 6 gifts by the board directors provided there was not a use of authority of office to obtain this private pecuniary benefit under Section 3(a) of the Ethics Law and provided there was no understanding as set forth in Section 3(b) and 3(c) of the Ethics Law. As to the above matters, it should be noted that the Commission has found violations of Section 3(a) and /or 3(b) of the Ethics Law in instances where public officials received gifts from donors who had involvement with their governmental body and on understanding existed regarding the receipt of the gifts or a financial gain (gift) resulted from the use of office. See Feller, Order 570 -R; Zollo, Order 577; Smith, 578 -R and Volpe, Order 579 -R. As to the third inquiry relative to travel by school directors and administrators to view a site of "novel design items" by a manufacturer relative to a contemplated building project by the school, the Ethics Commission has in Shiptoski, Opinion 89 -027, set forth criteria as to the issue of public officials traveling at the expense of a potential contractor to review his facilities or product. The criteria in Shiptoski, supra, may be summarized as follows: the traveling official may not directly bill or receive reimbursement from the contractor; such reimbursement must be arranged through the governmental body by the contractor; the expenses incurred and the amounts paid by the contractor must be outlined to the governing body and such information must be available to the public; the nature and extent of the travel must be reasonable which in turn is determined by looking at the necessity of the trip, the need for the entire governmental body to travel as opposed to one or two members who can review the items and report back, the location and extent of the trip relative to the duties being performed, the offer of additional items, gifts, gratitude3, or entertainment relative to the official duties being performed and whether such travel would accord that contractor an advantage over competitors; a prohibition as to public officials accepting travel expenses and accommodations for their spouses and finally the travel must be related to the official duties without tangential items not related to the responsibilities of that individual. Parenthetically, Section 5(b)(7) of the Ethies Law requires the listing on the Financial Interests Statement of payments, or reimbursement from non governmental bodies, as to expenses for transportation, lodging or hospitality received in connection with public office where said payments exceed $500. As to your fourth and fifth inquiries regarding school board members visiting a hospitality room at the Pennsylvania_ School Board Association convention by a large architectural firm or accepting invitations to dinner at a PSBA convention along with their wives, the response is the same as to the first two Page 7 inquires you pose in terms of the FIS reporting requirements of gifts and the application of Sections 3(a), (b) and (c) of the Ethics Law and the Financial Interests Statements reporting requirements noted above. j As to the sixth inquiry you pose regarding whether the Commission has guidelines as to a de minimus value, the Commission has not determined, as you suggest, that gifts under $200 would be de minimus with regard to possible violation of Section 3(a) through 3(d) of the Ethics Act. In this regard, in Feller and Zollo, supra, the accepted gifts might be characterized as insubstantial in nature but the Commission found violations in those cases as noted above. Finally, as to the last inquiry you pose regarding the definition of honorarium, although the Commission has an advisory opinion request pending regarding such issue, no advisories have yet been issued. In this regard there was extensive legislative debate on House Bill 75 regarding the ban on honorarium. It is anticipated that the issuance by the Commission of its first opinion on the honorarium issue will supply guidance as to this particular prohibited activity under the Ethics Law. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any 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 Law. Specifically not addressed in this advice is the applicability of the Public School Code or Code of Professional Responsibility. Conclusions School directors are public officials subject to the restrictions of the Ethics Law. A solicitor is required to file the Financial Interests Statement to the extent that school directors receive gifts from donors who have involvement with the school district, the gifts must be reported on the Financial Interest Statement if within the threshold reporting requirements. Further, Section 5(b)(7) requires the reporting of payments or expenses for transportation, lodging or hospitality received in connection with public office from non governmental bodies if more than $500. In addition, Section 3(a) of the Ethics Law would restrict the school directors from using the authority of office to obtain these gifts. Sections 3(b) and 3(c) of the Ethics Law would restrict any understanding between the school directors and the vendors of gifts. Travel by school directors to visit the facilities of a vendor or contractor must meet the requirements of Shiptoski, Opinion, supra. Lastly, the propriety of the proposed conduct has only been addres sed/under the Ethics Law. Page 8 Pursuant to Section 7(9)(ii), this Advice is a complete defense in any enforcement proceeding initiated by the Commmission, and evidence of good faith conduct in any other civil or criminal proceeding, providing 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 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 in writing and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code 2.12. S j„x.cerely, such. Vincent J."bopko, Chief Counsel