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HomeMy WebLinkAbout91-591 BuberPaul Buber and Mike Mehalko Controller's Office Schuylkill County Court House 401 North Second Street Pottsville, PA 17901 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 15, 1991 91 -591 Re: Conflict, Public Official /Employee, Employees of County Controller's Office, Leave of Absence, Private Employment, Business with which Associated, C.P.A. Firm Providing Auditing Services to County. Dear Messrs. Buber and Mehalko: This responds to your letter of September 12, 1991, 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 you as employees of the Schuylkill County Controller's Office, with regard to obtaining leaves of absence from your County employment to work for an external Certified Public Accounting firm which would be providing auditing services to the County. Facts: You have jointly requested an advisory opinion from the State Ethics Commission. As current employees of the Schuylkill County Controller's Office, you were both successful in passing the Certified Public Accountant examination. Each of you wishes to obtain a license from the State Board of Accountancy, but in order to obtain a valid license you must satisfy a one -year experience requirement with a public accounting firm. You state that your employer was supportive with regard to your endeavor. Since the current agreement with an external accounting firm was scheduled to expire, competitive proposals for auditing services were solicited from various accounting firms. The solicitation for competitive proposals included the following language, which you have termed a "disclosure," regarding your quest for experience: Providing a temporary employment opportunity for two individuals who are employed in the Controller's Office and who are interested in satisfying the public Paul Buber and Mike Mehalko October 15, 1991 Page 2 accounting experience requirement under Section 4 of the CPA Law Act. The two individuals are to be compensated at their effective hourly rate. You specifically inquire whether the above "disclosure" is ethical. You have submitted the relevant page of the solicitation for proposals containing the above language, which page is incorporated herein by reference. In order to satisfy the experience requirement for obtaining a valid CPA license, each of you would obtain a leave of absence from your County employment to work for the external CPA firm. You state that while you are employed by the external CPA firm, you understand that you would be prohibited from working on the County's engagement. Therefore, it is your intention to obtain the experience by working with other clients. You further state that you would be employed and be paid by the external CPA firm. You would be abstaining from reviewing the proposals and you would not be influencing the selection of the firm. Based upon all of the above, you ask whether your intended methodology would be acceptable and ethical. Discussion: It is initially noted that you have not indicated your present employment positions in the Schuylkill County Controller's Office, nor have you provided copies of your job descriptions, job classification specifications, or organizational charts. Without such information, a conclusive determination of your statuses as public officials /employees cannot be reached. However, for purposes of this Advice, it shall be assumed that both of you are public officials /employees as defined under the Ethics Law, and hence that both of 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 Paul Buber and Mike Mehalko October 15, 1991 Page 3 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. "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 or employment; however, the public official /employee may not use the authority of office for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. A public official /employee must exercise caution so that his private Paul Buber and Mike Mehalko October 15, 1991 Page 4 business activities do not conflict with his public duties. Crisci, Opinion 89 -013. Thus, a public official /employee could not perform private business using governmental facilities or personnel. In particular, the governmental telephones, postage, staff, equipment, research materials, personnel or any other property could not be used as a means, in whole or part, to carry out private business activities. In addition, the public official /employee could not during government working hours, solicit or promote such business activity. Pancoe, supra. In the event that your private employer or business has a matter pending before your governmental body or if you as part of such official duties must participate, review or pass upon that matter, a conflict would exist. Miller, Opinion 89 -024. In those instances, it will be necessary that you be removed from that process. If a conflict exists, Section 3(j) requires the public official /employee to abstain from participation as well as file a written memorandum to that effect with the person recording the minutes or supervisor. In summary, the Ethics Law would restrict the following: 1. The use of authority of office to obtain any business in a private capacity; 2. utilization of confidential information gained through public position; 3. participating in discussions, reviews, or recommendations on matters which relate to the business /private employer which may come before the governmental body (In such cases you must publicly announce the relationship or advise the supervisor as well as file a written memorandum as per the requirements of Section 3(j) of the Ethics Law, Brooks, Opinion 89 -023); 4. participating in discussions, reviews, or recommendations on matters which directly relate to clients privately served which may have been subject to the review, approval or recommendation by the County; and 5. publicly announcing the relationship with such private clients as to any plans or recommendations that may come before the County for final or further review or approval together with filing a written memorandum as per the requirements of Section 3(j) of the Ethics Law. Brooks, Opinion 89 -023. Paul Buber and Mike Mehalko October 15, 1991 Page 5 Turning to your specific inquiries, your first inquiry as to whether the "disclosure" set forth in the solicitation for proposals is ethical, may not be addressed. The authority of the Ethics Commission to issue an opinion /advice regarding a person's duties under the Ethics Law is limited by statute, to those persons who request it relative to their duties or to the appointing authority of such persons or the employer of such persons at the request of the appointing authority or employer. Further, a reading of Section 7(10) and (11) of the Ethics Law makes it clear that an opinion /advice may be given only as to prospective (future) conduct. It would appear from your letter of inquiry that the "disclosure" is the result of past conduct. This Advice is based upon the assumption that neither of you had any involvement in the inclusion of the "disclosure" in the solicitation for proposals. It is further expressly assumed for purposes of this Advice that neither of you had any involvement in setting the criteria by which the CPA firm is to be selected, nor with regard to aiding any CPA firm seeking the solicited County work. Turning to your second inquiry, conditioned upon the assumptions set forth above, your prospective conduct of obtaining a leave of absence from your County employment to work for the external CPA firm to be chosen by the County in response to its solicitation for competitive proposals for auditing services would appear to be in conformity with the Ethics Law subject to the following restrictions. While employed by the CPA firm, you could not audit any of your own work from the County, although other County auditing functions unrelated to your work as a public official /employee would be permissible. The CPA firm would be a business with which you would be associated under the Ethics Law, during your tenure with the CPA firm. Thus, as a public official /employee you would have a conflict of interest as to the CPA firm and its clients. Miller, Opinion 89 -024. This conflict of interest would not preclude you from the intended employment with the CPA firm during your leave of absence, but would restrict your conduct as set forth above. Upon resuming your public duties, you would be required to abstain as well as file a written memorandum with your supervisor in each matter involving the CPA firm and /or its clients. However, the conflict of interest would not exist with regard to the CPA firm in matters wholly arising after the termination of your service with the CPA firm where the client (s) of the firm involved in such matter, if any, were not clients of the firm during your employment with that firm. The propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other Paul Buber and Mike Mehalko October 15, 1991 Page 6 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 County Code and any ethical codes of conduct which may pertain to the accounting profession. Conclusion: For purposes of this Advice it is assumed that as employees of the Schuylkill County Controller's Office, you are public officials /employees subject to the provisions of the Ethics Law. This Advice is expressly conditioned upon the assumptions that neither Paul Buber nor Mike Mehalko had any involvement of any nature whatsoever in: including in the County's solicitation for proposals the provision regarding employment to these individuals for purposes of their obtaining the requisite experience so that they may obtain licenses from the State Board of Accountancy; setting the criteria by which the County would select an external Certified Public Accounting firm for auditing services; and /or aiding any Certified Public Accounting firm to obtain work with the County. Subject to the above conditions, and the restrictions and qualifications as noted herein, the Ethics Law would not prohibit you from obtaining a leave of absence from your County employment to work for the external CPA firm chosen to do the County work. In the event that the CPA firm and /or its client(s) have matters pending before the County, then you could not participate in such matters and the disclosure requirements of Section 3(j) of the Ethics Law as outlined above must be satisfied. However, you would not have a conflict of interest in matters involving the CPA firm which wholly arise following the termination of your service with the CPA firm where the clients of the firm involved in the matter, if any, were not clients of the firm during your tenure with the CPA firm. 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 Paul Buber and Mike Mehalko October 15, 1991 Page 7 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. Sincerely, Vincent . Dopko Chief Counsel