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HomeMy WebLinkAbout90-599 PalumboSTATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108-1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 15, 1990 90 -599 Mr. Louis F. Palumbo 117 Mission Mead Drive New Castle, PA 16105 Re: Conflict, Public Official /Employee, DPW, County Assistance Office, Business with Which Associated. Dear Mr. Palumbo: This responds to your letter of September 6, 1990, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a public employee in a County Assistance Office from becoming associated with a corporation, one of the incorporators of which leases property to the Department of General Services. Facts: You are currently employed by the Department of Public Welfare (DPW), Lawrence County Assistance Office as an IMA III and seek advice regarding a possible conflict as to a business venture you are contemplating. Upon graduating from Illinois University, your son considered renovating an old building in the downtown area to be used as an art gallery supplemented by low and moderate income housing. He located a good site which was owned by George Zambelli. Your son and Mr. Zambelli formed a corporation with preliminary renovating plans for the building. No monetary expenditures have been made by the corporation at this point in time. After your son obtained a position in New York City, the plans for development slowed to the point that he was considering not pursing the project on a full time basis. Your son is now contemplating opening an art gallery but maintaining New York as his regular residence. Such action necessitated another partner for the project which you considered to be a good business opportunity. Mr. Zambelli owns a few properties in the downtown area, one of which is leased by DPW on a temporary basis for the Lawrence County Assistance Office wherein you serve as an Income Maintenance Manager III in charge of operations. DPW leases a small office from Zambelli to house a seasonal energy assistance program on a month to month basis fpr the past several years because the space in your current office is inadequate. That lease was the nearest and mist- Mr. Louis F. Palumbo Page 2 reasonable space that could be obtained on a temporary basis. The lease which is between Zambelli and the Department of General Services will not be renewed or continued after this year as the energy space will be incorporated with the total office space which is presently being rebid. In this regard Zambelli is not bidding on the total office space lease. The Lawrence County Assistance Office space is contracted on a bid subject to approval by the Welfare Bureau of Administrative Services Division of Office Services and the Division of Management Consulting Services, at which time a contract will be entered between the State Office of Property and Supplies with the approval of the real estate division. Your job description does not include property leasing. You would like to be a partner in the business project which would not require working during working hours. The management of the units and all record keeping would be done evenings and weekends and all maintenance would be contracted. In addition, the tenants would be selected by the local housing authority and referred for housing. In addition to the art gallery, commercial space in the building would be rented to the private sector. You believe this would be a good opportunity to supplement your income with minimal involvement; you desire to become an equity partner to do some part -time management. In light of your business relationship with Mr. Zambelli who is concluding a lease as to property with DPW, you request an advisory opinion as to whether you may pursue this business opportunity. Discussion: As Income Maintenance Manager for the Department of Pubic Welfare, Lawrence County Assistance Office, you are a public employee as that term is defined under the Ethics Law, and hence you are subject to the provisions of that law. 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. 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 • Mr. Louis F. Palumbo Page 3 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. "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. 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. Reference is made to these provisions of the law not to imply that there has or will be any transgression thereof but merely to provide a complete response to the question presented. In applying the above provisions of the Ethics Law to the instant matter, we note that Section 3(a) of the Ethics Law does not prohibit public officials /employees from outside business activities; however, the public official /employee may not use the authority of office for the advancement of his own personal financial gain. Thus, although you would not be prohibited under Section 3(a) of the Ethics Law from engaging in an activity which would involve providing management services to the corporation, tivq, incorporator of which currently has a lease with the Department, you could not perform your private business using governmental facilities or personnel. In particular you could Mr. Louis F. Palumbo Page 4 not use the telephone, postage, staff, equipment, research materials, personnel or any other printed /drafted material as a means, in whole or part, to carry out private business activities. In addition, you could not during government working hours, solicit or promote such business activity. Subject to the qualifications noted above, Section 3(a) of the Ethics Law would not prohibit you from entering into the private business arrangement. In the event that Mr. Zambelli would have some contact or involvement with you in your capacity as an Income Maintenance Manager for the Lawrence County Assistance Office, you could not participate in such matter and must file a written memorandum to that effect as per the requirements of Section 3(j) of the Ethics Act with your supervisor. 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 herein is the applicability of the Governor's Code of Conduct. Conclusion: As an Income Maintenance Manager for Lawrence County Assistance Office, you are a public employee subject to the provisions of the Ethics Law. Although Section 3(a) of the Ethics Law would not preclude you from becoming associated with a business, the incorporator of which currently leases property to the Department of Public Welfare, you could not use the authority of office to obtain such business and such business activity may not be conducted using government facilities or personal. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. 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. 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 Cgmimisston 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. Louis F. Palumbo Page 5 and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code 52.12. S erely, ncent Dopko, Chief Counsel