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HomeMy WebLinkAbout91-560 ReederMr. Harvey B. Reeder, Esq. 504 Penn Street Huntingdon, PA 16652 Dear Mr. Reeder: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL July 16, 1991 91 -560 Re: Conflict, Grant Program, Participation by Public Official /Employee, Borough Council Member, Borough Contract with Department of Community Affairs, Borough Council Member's Eligibility to Receive Monies under Contract for Improvement of Real Estate This responds to your letters of June 4, 1991, June 10, 1991, and June 13, 1991 in which you requested advice from the State Ethics Commission. Issue: Under the Public Official and Employee Ethics Law, whether and under what terms and conditions a Borough Council Member would be eligible to receive monies for improvement of his real estate under a contract between the Borough and the Commonwealth of Pennsylvania, Department of Community Affairs whereby the Commonwealth will provide to the Borough as contractor the sum of $75,000.00 for certain improvements of facades of the downtown area where the Borough Council Member's real estate is located. Facts: The Borough of Mount Union is a municipality of approximately 3,000 persons and is situated in an economically depressed area of Central Pennsylvania. As Solicitor for the Borough of Mount Union you seek the advice of the State Ethics Commission regarding the eligibility of a Borough Council Member to receive monies for improvement of his real estate under a contract between the Borough of Mount Union and the Commonwealth of Pennsylvania, Department of Community Affairs. Under the contract the Commonwealth will provide to the Borough as contractor the sum of $75,000.00. The funds from this project will be utilized for certain improvements of facades of the downtown area of the Borough. At least one member of the Mount Union Borough Council owns real estate in what has been designated as the project area. You have submitted a copy of the Harvey B. Reeder July 16, 1991 Page 2 contract between the Borough and the Department of Community Affairs which contract is incorporated herein by reference. You state that while the contract would not specifically preclude a member of the Borough Council from participating in the project, there are certain "contractual integrity" provisions that would require compliance. To ensure that there would be no problems with conflict of interest, you ask the Ethics Commission to issue a written opinion as to whether a Member of Borough Council would be eligible to receive monies under this contract for improvement of his real estate, and if so, under what terms and conditions. You acknowledge that any dealings with a Member of the Borough Council would have to be done in an open and public process. Discussion: Initially it is noted that your inquiry is only addressed under the Ethics Law; the applicability of any other statute, code, regulation or other code of conduct or the applicability of any "contractual integrity" provisions of the contract between the Borough of Mount Union and the Department of Community Affairs has not been considered in that they do not involve an interpretation of the Ethics Law. As a Borough Council Member for the Borough of Mount Union, the Borough Council Member is a "public official" as that term is defined in the Ethics Law and hence he is subject to the provisions of that Law. 65 P.S. 5402; 51 Pa. Code §1.1. Sections 3(a) and 3(f) of the Ethics Law provide: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. (f) 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, Harvey B. Reeder July 16, 1991 Page 3 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. 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 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 Harvey B. Reeder July 16, 1991 Page 4 the tie vote if disclosure is made as otherwise provided herein. If a conflict exists, Section 3(j) requires the public official /employee to abstain as well as file a written memorandum to that effect with the person recording the minutes or supervisor. 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 or 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. The following terms are defined in the Ethics Law: 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 Harvey B. Reeder July 16, 1991 Page 5 unique to a particular public office or position of public employment. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. "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 the Ethics Law, we must observe the stated purpose of that Act which is to strengthen the faith and confidence of people in their government by assuring the public that the financial interests of the holders of or candidates for public office do not present a conflict with the public trust. In applying the above quoted provisions of the Ethics Law to the instant matter, we will first consider the provisions of Section 3(f) of the Ethics Law. Since the Mount Union Borough Council is the government body with which the Council Member is associated, Section 3(f) would apply in this case. Assuming that a contract or sub- contract would be made between the Borough Council Member and the Mount Union Borough Council pursuant to the provisions of this Program, Section 3(f) of the Ethics Law would impose the following requirements if the contract or sub - contract is $500.00 or more: 1. prior public notice of the contract possibility; 2. public disclosure of applications and contracts considered; 3. public disclosure of the award of the contracts; and 4. no supervisory or overall responsibility for the Harvey B. Reeder July 16, 1991 Page 6 implementation or administration of the contract or sub- contract by the public official /employee. We will now address the propriety of the proposed conduct under Section 3(a) of the Ethics Law. In this review, we note and recognize the concern that arises where a public program, funded with public monies and administered through a public agency, political subdivision, or governmental body is also available to public officials or employees of that agency or governmental body. We recognize the public concern and criticism that may arise if a public official or public employee who serves a governmental body receives benefits under a program of this nature. It is clear that the Ethics Law, and in particular Section 3(a), was primarily designed to restrict the activity of a public official or employee from using the authority of office for private pecuniary benefit. However, we believe that as a general rule the Ethics Law was not enacted nor should it be interpreted to preclude public officials or employees from participating in programs which might otherwise be available to them as citizens. Wolff, Opinion 89 -030; Woodrina, Opinion 90 -001. In order to insure that a public official or employee is not in a conflict when he seeks to participate in a rehabilitation or grant program, he must observe the following: 1. play no role in establishing the criteria under which the program is to operate, particularly with reference to the structure or administration of the program; 2. play no role in establishing or implementing the criteria by which selections for program participation are to be made; 3. play no role in the process of selecting and reviewing applicants or in awarding grants or funds; 4. use no confidential information acquired during the holding of public office or public employment to apply for or to obtain such funds, grants, etc., and 5. abstain, publicly disclose and file a memorandum with the person responsible for recording the minutes under Section 3(j) of the Ethics Law in cases where the public official/ employee is associated with administering the grant or rehabilitation program not only as to his own application but as to similarly situated individuals with whom the public official /employee might be competing for available Harvey B. Reeder July 16, 1991 Page 7 funds. In cases where Section 3(f) is applicable, the public official /employee would be prohibited from any supervisory or overall responsibility as to the contract or program. Through application of the above criteria, we seek to eliminate the possibility that a public official /employee who is seeking such funds or seeking to participate in these programs would be in a position to insure that the grant funds or the program benefits would be available for his own benefit. Thus, a public official or public employee in such a situation should refrain from participating in making decisions or recommendations about the program and regarding distribution of the limited funds which might be available as a result of such a program. Expressly conditioned upon the assumption that the Borough Council Member acts in conformance with the above criteria, the Borough Council Member may apply for and participate in the benefits associated with the Program. 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 Borough Code or the applicability of the "contractual integrity" provisions of the contract between the Borough of Mount Union and the Commonwealth of Pennsylvania, Department of Community Affairs. Conclusion: As a Borough Council Member for the Borough of Mount Union, the Borough Council Member is a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would not preclude the Borough Council Member from receiving monies for improvement of his real estate located in the designated project area under the contract between the Borough of Mount Union and the Department of Community Affairs, provided that the Borough Council. Member played no role in establishing the criteria under which the program would operate; played no role in implementing the criteria for selecting applicants; played no role in selecting or reviewing applicants; used no confidential information and finally had no involvement with the administration of the program. The abstention and disclosure requirements of Section 3(j) of the Ethics Law must be observed. The requirements of Section 3(f) of the Ethics Law noted above, to the extent applicable, must be complied with. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Harvey B. Reeder July 16, 1991 Page 8 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 and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code S2.12. ncerely, 0 4 Vincent . Dopko, Chief Counsel