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HomeMy WebLinkAbout92-528Dear Mr. White: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 7, 1992 Mr. Harry Faber White, II Law Offices of Jorden and White 92 -528 966 South Main Street Meadville, PA 16335 Re: Conflict, Public Official /Employee, Township Supervisor, Use of Authority of Office, Vote, Contracting With Township. This responds to your letters of December 9, 1991 and December 16, 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 a township supervisor_ with regard to a contract to which he, his wife, and the township are parties, which contract was entered into before he became a supervisor. Facts: As Solicitor of Venango Township in Erie County, Pennsylvania, you seek an advisory from the State Ethics Commission on behalf of Mr. John Pfadt, a Township Supervisor. In September, 1983, Mr. Pfadt and his wife, Patricia Pfadt, as residents of Venango Township, entered into a "gravel agreement" with the Township. In 1983, the Supervisors were extremely worried about the fact that all the "good gravel" in Venango Township had for the most part been mined or was already owned by commercial mining companies which were selling gravel at a substantially greater price than that embodied in the Pfadt contract. Additionally in 1983, the Township was besieged by contractors seeking to purchase any and all gravel they could for the construction of Route 17 in New York State, also known as the Southern Tier Expressway, which was being constructed at that time with the western terminus approximately 3 to 5 miles from Venango Township. The central location of the Pfadt pit was also Mr. Harry Faber White, II February 7, 1992 Page 2 beneficial to the Township because it would significantly reduce trucking and other costs. You state that the agreement was not formally bid out in that it was in the nature of a "grant of a profit" to the Township, and as such, involved an interest in real property, as opposed to personal property, and due to the fact that it was based on similar prior agreements entered into by Venango Township with Mr. Pfadt in the late 1970's. You have submitted a rough draft of the agreement, which 3- page document is incorporated herein by reference. You note there were several minor changes to the agreement when it was ultimately voted on and passed by the Board of Supervisors, but those changes related to price per cubic yard, payment dates, and a minimum purchase requirement for the township of 12,000 cubic yards during each year of the agreement. To your knowledge, the above were the only changes made to the copy of the agreement which you have furnished. The agreement took effect January 1, 1985 and is to last for a period of 20 years thereafter. The agreement required the Pfadts to reserve a minimum of 300,000 cubic yards of gravel for the Township's use. The agreement also provided for a down payment for the aforesaid gravel in the sum of $30,000, which down payment was paid over the first three years of the agreement. _The _, agreement _. required_ the to assume .._ the cost . and risk of obtaining all state, local and federal permits and any necessary bonds, and also placed upon the sellers the burden of removing all the overburden from the gravel and also of reclaiming the gravel pit'to appropriate DER regulations. The Township has purchased gravel from the Pfadt's pursuant to this contract since 1985 at a price the Supervisors believe to be lower than any other available gravel and from the aforesaid central location which has kept trucking expenses to a minimum. The contract contains a provision that the price shall be reviewed every three years to ascertain if it comports with the fair market value of other gravel being sold in the Township. Mr. Pfadt was elected as a Supervisor of Venango Township on November 7, 1991. You ask whether Mr. Pfadt and his wife may continue selling gravel to the Township while Mr. Pfadt is a Supervisor. You state as obvious that Mr. Pfadt realizes that he cannot vote on any matters relative to this agreement, even to approve the bills for the payment of gravel. You state that Mr. Pfadt further realizes that under the Ethics Law, he would have to make a disclosure in the minutes and orally at the meeting as Mr. Harry Faber White, 11 February 7, 1992 Page 3 to why he is not voting on this contract. You note that he is more than willing to comply with all of these requirements. Your personal feeling is that since the contract predated Mr. Pfadt's election by approximately seven years, and since, by everyone's admission, the contract is a "good deal" for the Township, and since Mr. Pfadt would be willing not to vote in any way on any matter relative to this contract, that he would not be in violation of the Ethics Law. You reference a prior telephone call to this office in which you indicated that there is a paragraph in the Second Class Township Code which also restricts the ability of supervisors to have interests in contracts to which the township is a party. You state that you were informed that this Commission does not have the authority to enforce or interpret the provisions of the Second Class Township Code or to determine this issue under that Code. Noting that Supervisor Pfadt is to take office on January 1, 1991, and would like to start his term on an appropriate basis, you seek an expedited opinion from this Commission. Discussion: As a Supervisor for Venango Township, Erie County, Pennsylvania, Mr. John Pfadt is a public official as that term is defined under the Ethics Law, and hence he is 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.thg 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 the private pecuniary benefit of himself, a member of his immediate family or a business Mr. Harry Faber White, II February 7, 1992 Page 4 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 respc.nEibilities unique to a particular public office or position of public employment. "Immediate family." A parent, spouse, child, brother or sister. "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. "Contract" shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. 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 anything 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 been or will be any transgression Mr. Harry Faber White, II February 7, 1992 Page 5 thereof but merely to provide a complete response to the question presented. Section 3(f) of the Ethics Law provides: Section 3. Restricted activities (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, 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. Parenthetically, where contracting is otherwise allowed or where there appears to be no expressed prohibitions to such contracting, the above particular provision of law would require that an open and public process must be used in all situations where a public official /employee is otherwise appropriately contracting with his own governmental body in an amount of $500.00 or more. This open and public process would require: (1) prior public notice of the employment or contracting possibility; (2) sufficient time for a reasonable and prudent competitor /applicant to be able to prepare and present an application or proposal; Mr. Harry Faber White, II February 7, 1992 Page 6 (3) public disclosure of all applications or proposals considered and; ( public disclosure of the contract awarded and offered and accepted. Section 3(f) of the Ethics Law also requires that the public official /employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract. 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 foliowj 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. Mr. Harry Faber White, II February 7, 1992 Page 7 If a conflict exists, Section 3(j) requires the public official /employee to abstain and to publicly disclose the abstention and the reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In applying the above provisions of the Ethics Law to the question which you have presented, Section 3(a) of the Ethics Law prohibits a public official /public employee from using the authority of public office /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) of the Ethics Law does not prohibit public officials /public employees from contracting with their governmental body. Nor does Section 3(a) of the Ethics Law prevent a public official /public employee from performing contractual obligations to the governmental body undertaken prior to the assumption of office. However, in his official capacity as a Township Supervisor, it is clear that Mr. Pfadt would have a conflict of interest in matters involving his contract with the Township. In all such matters, in would be necessary that Mr. Pfadt remove himself from any participation of any nature whatsoever 'in the process, including but not limited to voting, takirg part in discussions, lobbying for a particular result, or any other use of the authority of office. In each instance of a conflict of interest, Mr. Pfadt would be required to observe the disclosure requirements of Section 3(j) set forth above. As to Section 3(f) of the Ethics Law quoted above, it is clear that with Mr. Pfadt being a Superviscr of Venango Township, any contracting to be done between Venango Township, Mr. Pfadt and /or Mrs. Pfadt would be subject to Section 3(f), and the restrictions of Section 3(f) would have to be fully satisfied. 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 Second Class Township Code. Mr. Harry Faber White, II February 7, 1992 Page 8 Conclusion: As a Supervisor for Venango Township in Erie County, Pennsylvania, Mr. John Pfadt is a public official subject to the provisions of the Ethics Law. Mr. Pfadt must observe the restrictions of Section 3(a) of the Ethics Law. Mr. Pfadt would have a conflict of interest as to matters before the Board of Supervisors involving the contract whereby Mr. and Mrs. Pfadt agreed to sell gravel to the Township. In each instance of a conflict of interest, Mr. Pfadt would be required to abstain from any participation of any nature whatsoever, including but not limited to voting, taking part in discussions, lobbying for a particular result, and /or any other use of the • authority of office, and he would also be required to observe the disclosure requirements of Section 3(j) set forth above. The restrictions of Section 3(f) must be fully satisfied as.Eto any contracting between the Township, Mr. Pfadt and /or Mrs. Pfadt, where the contract is valued at $500 or more. 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 aisclosed 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 hat 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 §2.12. Sincerely, Vincent . Dopko Chief Counsel