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HomeMy WebLinkAbout90-561 McWilliamsDear Mr. McWilliams: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 18, 1990 Mr. Robert J. McWilliams, Jr. 90 -561 McWilliams Pharmacy 134 Mill Street Danville, PA 17821 Re: Conflict of Interest, Public Official, Contracting Governmental Body, School Director, Pharmacy This responds to your letter of April 23, 1990, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition upon a school director or a "business with which he is associated" from contracting with the school district. Facts: You are the school director of the Danville Area School District, hereinafter District. Shortly after being appointed to a vacancy of the board, the business manager of the District informed you that the District could no longer purchase anything from the McWilliams Pharmacy of which you are sole proprietor. After noting that the pharmacy has for many years supplied first aid supplies to the nurses' offices film for processing for the year book and other miscellaneous items, you inquire as to whether the supplies or services could not be put out on bid but were advised by the solicitor that such would be prohibited by Section 324 of the Public School Code. You assert that such a restriction on school board members would exclude a large group of the community business people from bringing their experience to local school boards. You reference Act 9 of 1989 and the Preamble regarding the language which states that public officials should not be discouraged from maintaining their contacts with the community through their occupations and professions. You then reference Section 324 of the Public School Mr. Robert J. McWilliams Page 2 Code which provides that a board member may not engage in any business transaction with the District. You compare the Public School Code with the provision of the Ethics Act regarding contracting which you assert allows an individual to do business provided he does not vote on the expenditure involved and provided that the contract, if in excess of $500, is awarded through an open and public process. Finally, you reference the conflict of law provision of the Ethics Act which directs that it prevails over any other statute with a conflicting provision. You conclude by requesting advice as to whether you would have a conflict and as to whether you may do business with the District. Discussion: As school director for Danville District, you are a "public official" as that term the Ethics Law. 65 P.S. 402; 51 Pa. Code 1.1. are subject to the provisions of the Ethics restrictions therein are applicable to you. Section 3(a) of the Ethics Law provides: Restricted Activities No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined under the Ethics Law: "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. Area School is defined in As such, you Law and the Mr. Robert J. McWilliams Page 3 "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. "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. / Under Section 3(a) of the Ethics Law quoted above, a public official may not use the authority of office or confidential information to obtain a private pecuniary benefit for himself, a member of his immediate family or a business with which he is or a member of his immediate family is associated. Generally, the Ethics Law places no per se prohibition upon a public official or business with which he is associated from contracting with his governmental body. Pancoe, Opinion 89 -011. As sole proprietor of McWilliams Pharmacy, it is clear that the foregoing entity is a "business with which - -- associated" as that term is defined under the Ethics Law. Under Sections 3(a), you could not participate or vote on matters involving the contract between your government body and McWilliams Pharmacy, that is, the "business with which - -- associated." In addition, the requirements of Section 3(j) / of the Ethics Law must be followed whereby the reasons for the abstention must be publicly noted as well as a written memorandum to that effect must be filed with the secretary recording the minutes. Therefore, under Section 3(a), you or the "business with which - -- associated" is not precluded from contracting with your governmental body but you could not participate or vote as to the matter of the contract and must comply with the disclosure requirements of Section 3(j) of the Ethics Law. Section 3(f) of the Ethics Act provides: Section 3. Restricted Activities (f) No person shall use for any commercial purpose information copied from statements of financial interests required by Mr. Robert J. McWilliams Page 4 this act from lists compiled from such statements. 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 an amount of $500 or more. The process must be open and public with prior public notice and subsequent public disclosure. In addition, the public official /employee may not have any supervisory or overall responsibility for the implementation or administration of the contract. Thus, 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 an amount of $500 or more. 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. Further, Section 3(f) requires that the public official could not have supervisory or overall responsibility as to the implementation or administration of the contract. Parenthetically, although the contracting in question would not be prohibited under the Ethics Law provided the requirements of Section 3(a), (f) and (j) are satisfied, a problem may exist as to such contracting under the respective code. In the instant situation, the Public School Code provides as follows: No school director shall, during the term of which he was elected or appointed, as a private person engage in any business transaction with the school district in which he is elected or appointed, be employed in any capacity by the school district in which Mr. Robert J. McWilliams Page 5 he is elected or appointed, or receive from such school district any pay for services rendered to the district except as provided in this act. 24 P.S. 3 -324. Since such contracting may be prohibited by the above quoted provision of the Code, but not under the Ethics Law, it is suggested that advice in that regard be sought from your solicitor or from private counsel. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Law 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. Conclusion: As Danville Area School District Director, you are a public official subject to the provisions of the Ethics Law. Under Section 3(a) of the Ethics Law, you or the "business with which - -- associated" may contract with your governmental body but you could not vote or participate in the matter of the contract. The disclosure requirements of Section 3(j) outlined above must be observed. Finally, if the contract is $500 or more, the open and public process as outlined above must be accomplished. You could not have any supervisory or overall responsibilities as to the contract. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Due to the possible application of the above referenced code in this matter, it is suggested that advice be obtained from your solicitor or private counsel in that regard. / Pursuant to Section 7(11), 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 in writing Mr. Robert J. McWilliams Page 6 and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code 2.12. S cerely, 1:J Vincent J. Dopko, Chief Counsel