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HomeMy WebLinkAbout91-569 CollinsMr. William J. Collins, Jr. 91 -569 M.S.A.D.P. Inc. Act 511 Tax Collectors and Administrators 106 Dekalb Street Bridgeport, PA 19405 Re: Public Employee /Official, FIS, Corporation, Consultant, Independent Contractor, Data Processing Services, Tax Collections and Administration Dear Mr. Collins: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL August 20, 1991 This responds to your letter of July 10, 1991, in which you requested advice from the State Ethics Commission. Issue: Whether the manager of a corporation which acts as an independent contractor in providing data processing services including tax collections and administration to various school districts and municipalities located within the Commonwealth of Pennsylvania is to be considered a public official /employee under the Public Official and Employee Ethics Law ( "Ethics Law "), and therefore, required to comply with the financial reporting and disclosure provisions of the Ethics Law. Facts: You seek the advice of the State Ethics Commission regarding the status of M.S.A.D.P. Inc. relative to filing a Statement of Financial Interests under Act 9 of 1989. (It is noted that your letter referenced former Act 170 of 1978, and you are advised that the present Ethics Law is embodied in Act 9 of 1989, 65 P.S. 5401 et sect.) Although your letter did not state your relation to M.S.A.D.P. Inc., in a telephone conversation with Assistant Counsel for the Commission on August 16, 1991, the contents of which conversation are incorporated herein by reference, you clarified that you are employed as the manager of M.S.A.D.P. Inc. You further clarified that you have submitted your inquiry on your own initiative, without any express authorization to inquire on behalf of M.S.A.D.P. Inc. or other persons involved with that corporation. M.S.A.D.P. Inc. is a corporation which for twenty years has provided data processing services as an independent contractor to Mr. William J. Collins, Jr. August 20, 1991 Page 2 various school districts and municipalities located within the Commonwealth of Pennsylvania. Chief among those services provided is that of Act 511 tax collections and administration, including Earned Income Tax, Occupational Privilege Tax, and Business Privilege /Mercantile Tax. Noting that you have reviewed two Opinions of this Commission, specifically Opinion 80 -016, issued March 12, 1980 and Opinion 80 -033, issued August 20, 1980, you state your belief that you fall under the holding of the former Opinion and would not, therefore, be considered a public official as defined in the Ethics Law. You seek the advice of this Commission in this regard. Discussion: It is initially noted that your inquiry may only be addressed from your perspective as manager and an employee of M.S.A.D.P. Inc. To the extent your inquiry regarded the corporation itself, you are advised that the financial reporting and disclosure provisions of the Ethics Law apply to individuals, not corporations. To the extent your inquiry regarded individuals other than yourself, such would be a third party request which could not be answered by this Commission. Considering your request from your perspective, the issue is whether, in your capacity as an employee and manager of M.S.A.D.P. Inc., you would be considered a public official /employee as defined in the Ethics Law. It is noted that this response relies primarily on your description of M.S.A.D.P. Inc. and its role as set forth in your letter of July 10, 1991. The focus of the inquiry is necessarily directed to M.S.A.D.P. Inc., and its role as an independent contractor in providing data processing services, including tax collections and administration, to various school districts and municipalities located within the Commonwealth of Pennsylvania. M.S.A.D.P. Inc. would indeed appear to fit more closely within the parameters of the Commission's Opinion in Fraas, Opinion 80 -016, which also involved a private, independent contracting tax collection agency with no discretionary duties or authority, employed by many school districts and municipalities for collecting taxes. In contrast, in Flower, Opinion 80 -033, the Commission considered the Carlisle Area Earned Income Tax Bureau which was actually formed by various governmental bodies to employ an Earned Income Tax Officer, to make rules and regulations, and to see that the local Earned Income Tax was collected and distributed to the member districts. The Bureau was composed of one representative from each of the taxing bodies. Furthermore, the Bureau functioned in more than an administrative capacity by exercising Mr. William J. Collins, Jr. August 20, 1991 Page 3 discretion in compromising claims and authorizing legal action. In Flower, the Commission determined that the Carlisle Area Earned Income Tax Bureau itself was a governmental body and therefore was within the parameters of the Ethics Law. Although Fraas and Flower were both decided under former Act 170 of 1978 and would therefore not be controlling, the reasoning of the Commission as set forth in those Opinions would appear to continue to apply under present Act 9 of 1989. In light of M.S.A.D.P. Inc.'s nature as set forth above, you are not to be considered a public official /employee as defined in the Ethics Law. This conclusion is based upon an objective review of the information you have provided from which it appears that M.S.A.D.P. Inc. would not be a governmental body but rather would be a private entity acting as an independent contractor. This conclusion is also consistent with Rogers v. Com., State Ethics Commission, 80 Pa. Commw. 43, 470 A.2d 1120 (1984). Thus, because you are not a public official /employee as defined by the Ethics Law, you would not be subject to the financial reporting and disclosure requirements of the Ethics Law. Accordingly, you would not be required to file the Statement of Financial Interests in your capacity as manager of M.S.A.D.P. Inc. Although you are not subject to the financial reporting and disclosure requirements of the Ethics Law, you are subject to Sections 3(b) and 3(c) of the Ethics Law which apply to everyone. For your information, 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. 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. Conclusion: As manager of M.S.A.D.P. Inc., a corporation which acts as an independent contractor in providing data processing services including Act 511 tax collections and administration to various school districts and municipalities located within the Commonwealth of Pennsylvania, you are not to be considered a public official /employee as defined in the Ethics Law. Accordingly, you would not be subject to the reporting and Mr. William J. Collins,_ Jr. August 20, 1991 Page 4 disclosure requirements of the Ethics Law and need not file a Statement of Financial Interests. Sections 3(b) and (c) of the Ethics Law are applicable to everyone. 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. 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 52.12. 'ncerely, t^%t,-- cy,,,,Ak Vincent J. Dopko, Chief Counsel