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HomeMy WebLinkAbout19-552 HallePHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL December 18, 2019 To the Requester: Mr. William M. Halle Dear Mr. Halle: FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov 19-552 This responds to your letter dated November 12, 2019, received November 18, 2019, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"). Issue: Whether the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.-S. § 1101 et seq., would impose prohibitions or restrictions upon an individual serving as: (1) a School Director for the Butler Area School District "School District"); ((2) a Member of the Butler County Area Vocational Technical School ("Vocational 1 echnical School") Joint Operating Committee; and (3) a Member of the Board of Midwestern Intermediate Unit IV ("Intermediate Unit IV"), who in a private capacity is the founder and chief executive officer of a 501(c)(3) corporation that provides programs which serve children from multiple school districts, with regard to: (a) the corporation entering into cooperative programming agreements with the School District or other school districts, the Vocational Technical School, or Intermediate Unit IV; or (b) the corporation purchasing or accepting as a donation building(s) owned by the School District or Intermediate Unit IV. Facts: You request an advisory from the Commission based upon the following suuUmitted facts. Since December 2011, you have served as both a School Director for the School District and a Member of the Vocational Technical School Joint Operating Committee. Since July 2014, you have served as a Member of the Board of Intermediate Unit IV. In a private capacity, you are the founder and Chief Executive Officer of a 501(c)(3) corporation named ' Grace Youth and Family Foundation" (the "Corporation"). The Corporation provides programs that serve children from multiple school districts. The School District and Intermediate Unit IV each own buildings that might be placed for public or private sale. The School District and Intermediate Unit IV might also seek to donate their buildings to a public non-profit entity for the purpose of operating programming that would directly benefit their students. Based upon the above submitted facts, the following questions are presented by your advisory request: Halle, 19-552 e�cember 18, 2019 Page 2 (1) Whether the Ethics Act would impose prohibitions or restrictions upon you with regard to the Corporation entering into cooperative programming agreements with the School District or other school districts, the Vocational Technical School, or Intermediate Unit IV; and (2) Whether the Ethics Act would impose prohibitions or restrictions upon Cuith regard to the Corporation purchasing or accepting as a donation building(s) owned by the School District or Intermediate Unit IV. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully discllosed all of the material facts. In each of your capacities as a School Director for the School District, a Member of the Vocational Technical School Joint Operating Committee, and a Member of the Board of Intermediate Unit IV, you are a public official subject to the provisions of the Ethics Act. Sections 1103(a) and 11030) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. --No public official or public employee shall engage in conduct that constitutes a conflict of interest. 0) Voting conflict. --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. 65 Pa.C.S. §§ 1103(a), 0). Halle, 19-552 member 18, 2019 Page 3 The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. 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 fecuniary benefit of himself, a member of his immediate amily or a business with which he or a member of his immediate family is associated. The term 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. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "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. 65 Pa.C.S. § 1102. Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, a public official/public employee is prohibited 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 officiallpublic employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting, but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows: § 1103. Restricted activities Halle, 19-552 e�cember 18, 2019 Page 4 (f) Contract. --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. 65 Pa.C.S. § 1103(f). The term "contract" is defined in the Ethics Act as follows: § 1102. Definitions "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. The term 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. 65 Pa.C.S. § 1102 Section 1103(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. Rather, where a public official/public employee, his spouse or child, or a business with which he, his spouse or child is associated, is otherwise appropriately contracting with the governmental body, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an open and public process" be observed as to the contract with the governmental body. Section 1103(f) of the Ethics Act also provides that the public official/public employee may not have any supervisory, or overall responsibility as to the implementation or administration of the contract with the governmental body. In ap lying the above provisions of the Ethics Act to the instant matter, you are advised as follows. The Corporation is a business with which you are associated in your private capacity. As long as the restrictions and requirements of the Ethics Act would be observed, the Ethics Act would not rohibit the Corporation from: (1) entering into cooperative programming agreement(s� with the School District or other school districts, the Vocational Technical School, or Intermediate Unit IV, or (2) purchasing or acceptingg as a donation building(s) owned by the School District or Intermediate Unit IV. Halle 19-552 member 18, 2019 Page 5 However, in each of your public positions as a School Director for the School District, a Member of the Vocational Technical School Joint Operating Committee, and a Member of the Board of Intermediate Unit IV, you generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining to cooperative programming agreement(s) with the Corporation or the sale or donation of building(s) to the Corporation. You would also be prohibited from using the authority of any of your three aforesaid public positions, or confidential information accessed or received as a result of being in any of your public positions, to effectuate a private pecuniary benefit to the Corporation through a detriment to a competitor of the Corporation, such as in matter(s) involving cooperative programming agreement(s) or the salpe or donation of building(s). In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed as to any contract(s) between the Corporation and: (1) the School District; (2 the Vocational Technical School; or (3) Intermediate Unit IV, that would be valued at �500 or more. (See, Kistler v. State Ethics Commission, 610 Pa. 516, 22 A.3d 223 (2011), regarding the requirements for an open and public process.") The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Public School Code, and in particular, Section 3-324 of the Public School Code, 24 P.S. § 3-324. Conclusion: Based upon the submitted facts that: (1) since December 2011, you have served as both a School Director for the Butler Area School District ("School District") and a Member of the Butler County Area Vocational Technical School ("Vocational Technical School") Joint Operating Committee; (2) since July 2014, you have served as a Member of the Board of Midwestern Intermediate Unit IV Intermediate Unit IV"); (3� in a private capacity, you are the founder and Chief xecutive Officer of a 55 1(c)(3 corporation named "Grace Youth and Family Foundation" (the "Corporation"); �4) the Corporation provides programs that serve children from multiple school districts; (5) the School District and Intermediate Unit IV each own buildings that might be placed for public or private sale; and (6) the School District and Intermediate Unit IV might also seek to donate their buildings to a public non-profit entity for the purpose of operating programming that would directly benefit their students, you are advised as follows. In each of your capacities as a School Director for the School District, a Member of the Vocational Technical School Joint Operating Committee, and a Member of the Board of Intermediate Unit IV, you are a public official subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1102. The Corporation is a business with which you are associated in your private capacity. As long as the restrictions and requirements of the Ethics Act would be observed, the Ethics Act would not prohibit the Corporation from: (1) entering into cooperative programming agreement(s) with the School District or other school districts, the Vocational Technical School, or Intermediate Unit IV; or (2) purchasing or accepting as a donation building(s) owned by the School District or Intermediate Unit IV. However, in each of your public positions as a School Director for the School District, a Member of the Vocational Technical School Joint Operating Committee, and a Member Halle, 19-552 member 18, 2019 Page 6 of the Board of Intermediate Unit IV, you generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matter(s) pertaining to cooperative programming agreement(s) with the Corporation or the sale or donation of building(s) to the Corporation. You would also be prohibited from using the authority of any of your three aforesaid public positions, or confidential information accessed or received as a result of being in any of your public positions, to effectuate a private pecuniary benefit to the Corporation through a detriment to a competitor of the Corporation, such as in matter(s) involving cooperative programming agreement(s) or the sale or donation of building(s). In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed as to any contract(s) between the Corporation and: (1 the School District;A500 the Vocational Technical School; or (3) Intermediate Unit IV, tat would be valued or more. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Specifically not addressed herein is the applicability of the Public School Code, and in particular, Section 3-324 of the Public School Code, 24 P.S. § 3-324. Pursuant to Section 1107(11) of the Ethics Act, an 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, provided the requester 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 appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writingg and must be actually received at the Commission within thirty(30) days of the date of this Advice pursuant to 51 Pa. Code § f3.2(h). The , appeal may be received at the Commission by hand. delivery, United States mail, delivery service, or by FAX transmission (717-787-0806). Failure to Me such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, VV M - lr/�' - Robin M. Hittie Chief Counsel