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HomeMy WebLinkAbout92-522STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 6, 1992 Mr. Joseph H. Jones, Jr., Solicitor 92-522 Schuylkill County Board of Commissioners Court House Pottsville, PA 17901 Re: Conflict, Public Official /Employee, County Employees, County Administrator, County Director of Real Estate, Salary Increases, Increased Compensation for Oversight of Prison Project. Dear Mr. Jones: This responds to your letters of December 12, 1991 and December 18, 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 {ipon two county public employees, a county administrator and a .county director of real estate, with regard to their prospective acceptance of increased compensation for assuming the county's oversight responsibilities in the construction of a prison facility. Facts: As Solicitor for the Schuylkill County Board of Commissioners, you seek the advice of the State Ethics Commission. The issue which you have presented involves salary increases that were recently approved by the Schuylkill County Board of Commissioners and Salary Board for two County employees, Mr. Robert B. Hoppe ( "Hoppe "), the County Administrator, and Mr. A. Thompson Rhoads ( "Rhoads "), the County Director of Real Estate, for work that they will be performing in monitoring the operational and financial aspects of the construction of a 1,000 cell medium security prison facility under the Commonwealth's state leased prison project. You note that it is your understanding that this issue has been brought to the attention of the Ethics Commission, and you therefore believe that this Commission may have already developed some information regarding the situation. You have provided the following background information, which is set forth herein verbatim: Mr. Joseph H. Jones February 6, 1992 Page 2 The Commonwealth of Pennsylvania, acting through the Department. of General Services and the Department of Corrections, last year solicited proposals from interested counties of the Commonwealth of Pennsylvania for acquisition and construction of four 1,000 cell medium security prison facility (sic) together with all appurtenant related facilities through the issuance of a request for proposals. The request for proposals specified that, coincident with or prior to acquisition and construction of the prison facilities, the Commonwealth would enter into a lease of the prison facilities pursuant to which the Commonwealth would pay leased rentals sufficient to pay the costs of the acquisition and construction of the prison facilities, together with operating costs and expenses and certain other costs and expenses. The Board of County Commissioners in February, 1991, decided to submit a proposal to design, finance and construct a prison facility to lease to the Commonwealth of Pennsylvania under the leased state prison program. A proposal was subsequently drawn and submitted to the Department of General Services. In May, 1991, the ;Commonwealth selected Schuylkill County as one of, four whose proposals were accepted. The proposal submitted by Schuylkill County named the Schuylkill County Redevelopment Authority as the actual developer of the prison facility. The Schuylkill County Redevelopment Authority issued the bonds which were sold to finance the construction of the prison project. The cost of the prison facility being constructed under Schuylkill County's proposal is $119,000.00 (the least expensive of the four to be constructed). Included ;within that amount was the cost of submitting the proposal and for oversight _of the actual construction of the prison facility. Since it was determined that Schuylkill County was in a better position administratively to handle the oversight of the construction of Mr. Joseph H. Jones February 6, 1992 Page 3 the prison facility, the Schuylkill County Redevelopment Authority and Schuylkill County entered into an agreement pursuant to which Schuylkill County agreed to undertake this administrative function. Originally, Schuylkill County intended to employ one or more individuals to perform the oversight function. Subsequently, it was decided that Mr. Robert E. Hoppe, the County Administrator, and Mr. A. Thompson Rhoads, the County Director of Real Estate, both of whom were intimately involved in the Schuylkill County project from the beginning, would be in the best position to handle the oversight responsibilities. It was also decided that an increase in their salaries would be warranted, due to the added responsibilities assigned to them in performing the oversight function. Accordingly, on November 27, 1991 at their regularly scheduled public meeting, the Board of Commissioners of Schuylkill County approved a resolution to enter into agreements with Mr. Hoppe and Mr. Rhoads requiring that they perform the oversight activities and approving salary increases of $30,000.00 in Mr. Hoppe's case and $20,000.00 in Mr. Rhoads' case, to be in ( paid in bi- weekly installments from January 1, 1992 through April 9, 1993, when the construction of the prison facility will be at its zenith. The funds for the payment of these salary increases will be paid from the proceeds of the prison bond issue and are budgeted as construction oversight expenses. The Salary Board of Schuylkill County also approved the increased compensation to be paid to Mr. Hoppe and Mr. Rhoads on that same date at its regularly scheduled meeting. Although Mr. Hoppe and Mr. Rhoads are at present monitoring the progress of the construction of the prison facility, the oversight work they are scheduled to perform will continence January 1, 1992, as will their increased compensation rates. Accordingly, Mr. Joseph H. Jones February 6, 1992 Page 4 the action which is the subject of this request for an advisory opinion has not as yet been implemented. Letter of Jones, December 12, 1991, at 1 -3. Following your recitation of the above facts, you note that you are requesting an advisory as to the propriety of approving the increased compensation to Hoppe and Rhoads for assuming Schuylkill County's oversight responsibilities with respect to the construction of the prison facility, as well as the propriety of the prospective acceptance by Hoppe and Rhoads of salary increases for performing these functions. You ask that it be kept in mind that the oversight functions are an obligation of the County under its cooperation agreement with the Schuylkill County Redevelopment Authority, and that H - lppe and Rhoads, County employees, will be performing those oversight activities in their capacity as employees of Schuylkill County. You further note that if Hoppe and Rhoads were not assigned these responsibilities, others would have to hired to perform them. You have submitted the following documents to provide additional background information in this matter: (1) A two -page summary of related events and dates commencing with the submission of a letter of interest to the Commonwealth on November 14, 1990, through the bond closing on August 8, 1991; (2) A news release of May 7, 1991 from the Office of the Governor announcing four coz including Schuylkill County, for new state prisons; (3) An undated and unsigned copy of a two -page resolution of the Board of County Commissioners of Schuylkill County bearing a date or number of " #2 -26- 91," pertaining to the approval and adoption of a proposal to be submitted to the Commonwealth, by which Schuylkill County, its agents or authorities would undertake acquisition and construction of a 1,000 cell medium security prison facility; (4) A two -page letter dated May 7, 1991 to Hoppe from David L. Jannetta, Secretary of the Commonwealth of Pennsylvania Department of General Services, regarding the selection of the Schuylkill County "Group" as one of four to provide the Department of Corrections with a Mr. Joseph H. Jones February 6, 1992 Page 5 1,000 cell medium security correctional institution, and pertaining to a lease for such a. (5) A news release dated February 26, 1991 pertaining to the approved resolution by which the Schuylkill County Commissioners authorized the County to submit a proposal to design, finance, and construct a 1,000 cell medium security prison facility to lease to the Commonwealth of Pennsylvania; (6) A letter dated November 26, 1991, from you as Solicitor to the County Commissioners and Controller J. Donald Kerns, regarding the desire of the principals of one or more of the companies involved in the construction of the Frackville Prison to make a payment in the amount of $30,000 to Hoppe and $20,000 to Rhoads which you characterized as "bonus : .payments," as to which you stated your opinion that s'ich bonus payments to Hoppe and Rhoads for their work on the Frackville Prison project would be appropriate if made by the County with the approval of the Salary Board, and that the companies desiring to make the payments should make the payments to Schuylkill County which in turn would make the payments to Hoppe and Rhoads after approval of the payments by the Salary Board and subject to withholding for taxes, social security, and pension plan deductions; (7) Copies of numerous newspaper articles pertaining to the proposed payments to. Hoppe and Rhoads; (8) A three -page statement of the Board of Commissioners (it is unclear from the)copy submitted to this Commission whether it was a news release), responding to criticisms of the actions taken by the Commissioners concerning temporary salary increases to Hoppe and Rhoads; (9) An undated excerpt from the minutes of the Schuylkill County Commissioners in which a motion was made, seconded, and unanimously adopted to enter into contractual agreements with Hoppe and Rhoads whereby additional amounts of $30,000 and $20,000 respectively would be paid to Hoppe and Rhoads for services performed in connection with the prison project. Mr. Joseph H. Jones February 6, 1992 Page 6 All of the above documents which you have submitted to this Commission are incorporated herein by reference. Finally, it is noted that in your letter of December 18, 1991, you informed this Commission of a typographical error appearing in your prior letter. You stated that the cost of the prison being built in Schuylkill County is $119,000,000.00, not $119,000.00. Based upon all of the above, you seek an advisory from this Commission. Discussion: There are three points which must initially be noted. First, to the extent your request for advice pertains to past conduct, such is beyond the scope of an advisory. A• reading of Sections 7(10) and (11) of the Ethics Law makes it clear that an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion/advice but any person may then submit a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Law violations by a person who is subject to the Ethics Law. Since the approval of the salary increases by the Board of Commissioners and Salary Board constitutes past conduct, it may not be addressed in the context of an Advice. Second, it is noted that other than Sections 3(b) and (c), discussed below, the restrictions of the Ethics Law which could conceivably pertain to . your request for advice would not apply to governmental bodies such as the Board of County Commissioners and the Salary Board of Schuylkill County. Third, it is noted that this Commission does not have the statutory jurisdiction to rule upon a gov=ernmental body's wisdom or judgement in decisions as to whether: and in what amount salary increases are to be awarded to public employees. The Commission has noted its that due consideration be given to the appropriate utilization of tax revenues, in accordance with the public trust. See, e.cx., Means, Opinion 90 -007 at 5 -6. Having noted the above three points, your inquiry will now be addressed as it pertains to the prospective conduct of Hoppe and Rhoads in accepting the salary increases which the Schuylkill County Board of Commissioners and Salary Board have decided to award to them. As County Administrator for Schuylkill County, Mr. Robert B. Hoppe ( "Hoppe ") is a public employee as.. that term is defined under the Ethics Law, and hence he is subject to the provisions Mr. Joseph H. Jones February 6, 1992 Page 7 of that law. As the County Director of Real Estate for Schuylkill County, Mr. A. Thompson Rhoads ( "Rhoads ") is also a public employee as that term is defined under the Ethics Law, and hence he is also 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 publi.: 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 of 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. In addition, Sections 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public Mr. Joseph H. Jones February 6, 1992 Page 8 official /employee anything of monetary value and no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. 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 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 and to publicly announce the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. Mr. Joseph H. Jones February 6, 1992 Page 9 In applying the above provisions of the Ethics Law to the facts which you have submitted, Section 3(a) of the Ethics Law prohibits a public official /public employee from using the authority of public office /public employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated. Section 3(a) would prohibit Hoppe and Rhoads from using the status or activities of their respective employment positions, the authority of their employment, or any confidential information received by being in their: positions of public employment as a means of structuring an opportunity for additional compensated duties so as to favor themselves and /or to eliminate potential competitors who would compete with them for such employment/ duties. See, Wall, Advice 90 -567 (citing Pepper, Opinion 87 -008). One example of a prohibited use of authority of public office /employment to obtain a private pecuniary benefit of increased compensation would be to use one's input in structuring the Schuylkill County proposal, its agreement with the Schuylkill County Redevelopment Authority, its agreement(s) with the Commonwealth, and /or any job descriptions or other designations of qualifications and skills required for the oversight duties, so as to favor Hoppe and Rhoads. The ,facts which you have submitted do not reveal such conduct. However, in the context of a request for an advice /opinion, there is no independent investigation of the facts by this Commission such as would be performed in the context of a complaint filed with this Commission. To the contrary, the advice /opinion process requires that the Commission issue the advice /opinion assuming the submitted facts to be true. It is because of this reliance upon the inquirer for the facts that Advices must frequently have stated conditions set forth within them. The numerous conditions upon which this Advice is based must therefore include the conditions that neither Hoppe nor Rhoads used their respective public employment statuses or activities, the authority of their public employment, or any confidential information received by holding their positions of public employment as a means of structuring an opportunity for additional compensated duties with Schuylkill County so as to favor themselves and /or to eliminate potential competitors for the employment /duties of performing the oversight functions for the construction of the prison project. This Advice is further based upon the express condition that there are no improper understandings which would transgress Mr. Joseph H. Jones February 6, 1992 Page 10 .a; Sections 3(b) and /or 3(c) of the Ethics Law. If Hoppe and /or Rhoads solicited, were offered, or accepted the above payments based upon the understanding that their vote, official action, or judgement would be influenced, the solicitation, offer and /or acceptance of the payments would contravene Sections 3(b) and /or 3(c) of the Ethics Law and would be strictly prohibited. The facts which you have submitted do not reveal any such prohibited arrangements, and this Advice expressly assumes that there are none, and is conditioned upon there being none. When you issued your legal opinion in your letter of November 26, 1991, the identical amounts of $30,000 and $20,000 were proposed to be paid to Hoppe and Rhoads by the principals of one or more of the companies involved in he construction of the Frackville Prison. Under the facts which! you have submitted to this Commission, the salary increases would be paid from the proceeds of the prison bond issue. The facts do not reveal - whether bonds were sold to these companies or their principals. You are advised that if any prohibited understandings were to exist in contravention of Sections 3(b) and /or 3(c), any indirect arrangements to secure the monetary value for the prohibited understanding(s) would not circumvent the application of Sections 3(b) and 3(c) of the Ethics Law. You are cautioned that the Ethics Law would afford no protection to a person whose request for,an advisory failed to disclose truthfully all of the material f:tc ggle, 65 P.S. §407 (10), (11). Subject to all of the conditions, qualifications and restrictions noted above, the Ethics Law would not preclude Hoppe and /or Rhoads from accepting the temporary salary increases from Schuylkill County for their prospective performance of construction oversight duties related to the prison construction project. 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 applicabilityof the County Code. Conclusion: As the County Administrator for Schuylkill County, Mr. Robert B. Hoppe ( "Hoppe ") is a public employee subject to the provisions of the Ethics Law. As the County Director of Real Estate, Mr. A. Thompson Rhoads ( "Rhoads ") is Mr. Joseph H. Jones February 6, 1992 Page 11 also a public employee and therefore he is also subject to the provisions of the Ethics Law. Subject to the conditions, qualifications, and restrictions noted above, the Ethics Law would not prohibit Hoppe or Rhoads from accepting a temporary salary increase from Schuylkill County for the prospective performance of additional duties in the nature of construction oversight of a prison facility in Schuylkill County. This Advice is expressly conditioned upon the assumptions that there are no understandings which would violate Sections 3(b) and /or 3(c) of the Ethics Law, and that neither Hoppe nor Rhoads used their respective public employment statuses or activities, the authority of public employment, or any confidential information received by being in a position of publictemployment as a means of structuring an opportunity for additional compensated duties with Schuylkill County so as to favor themselves and /or to eliminate potential competition for performing the construction oversight functions. Section 3(a) would not apply to the Board of County Commissioners or the Salary Board of Schuylkill County as governmental bodies in their respective decisions approving such salary increases. 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 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. Sncerely, tr-cam Vincent . Dopko Chief Counsel