HomeMy WebLinkAbout93-544 ConfidentialSTATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 1 71 08 - 1 470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
April 7, 1993
93 -544
Re: Conflict, Public Official /Employee, School Director, Use of
Authority of Office, Vote, Business with which Associated,
Private Business Dealings with Intermediate Unit, Intermediate
Unit Budget.
This responds to your letters of March 2, 1993, March 10,
1993, and March 17, 1993, in which you requested confidential
advice from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Law
presents any prohibition or restrictions upon a school director,
where a corporation wholly owned by the school director performs
work for an intermediate unit of which the school district is a
constituent member, and where the school district votes on the
Intermediate Unit's budgets.
'Pacts: As Solicitor for School District A, a Pennsylvania third
class school district, you request a confidential advisory on
behalf of School Director B.
You have submitted the following facts:
1. School Director B, a duly elected School Board Member of
School District A (the "School District "), is the sole
shareholder of Company C.
2. The School District is a constituent member and part of
Intermediate Unit D (the "Intermediate Unit ") and has
another Board Member who is a voting representative on
the Intermediate Unit Board of Directors.
3. The School District is required annually to vote on the
four (4) budgets submitted by the Intermediate Unit.
4. The Intermediate Unit has requested that Company C do
Confidential Advice No. 93 -544
April 7, 1993
Page 2
certain repair and /or installation work on a satellite
system or systems for the Intermediate Unit at a cost of
under $1,000.00, which you state is below the threshold
bidding limits for the Intermediate Unit.
You specifically pose the following questions:
1. Whether the Ethics Law is violated as a result of School
Director B continuing to be a School Board Member at the
School District while Company C performs certain work for
the Intermediate Unit.
2. Whether School Director B would be required to abstain
from voting on the Intermediate Unit's four budgets as
the result of performing services for the Intermediate
Unit.
3. What levels of disclosure would be necessary, if any,
pursuant to the Ethics Law.
4. Whether the Intermediate Unit is a governmental body with
which School Director B is or has been associated.
Based upon the above, you request an advisory from the State
Ethics Commission.
Discussion: As. a School Director for School District A (the
"School District "), School Director B is a public official as that
term is defined under the Ethics Law, and hence School Director B
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 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 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
Confidential Advice No. 93 -544
April 7, 1993
Page 3
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.
"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.
"Financial interest." Any financial
interest in a legal entity engaged in business
for profit which comprises more than 5% of the
equity of the business or more than 5% of the
assets of the economic interest in
indebtedness.
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 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
Confidential Advice No. 93 -544
April 7, 1993
Page 4
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.
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
Confidential Advice No. 93 -544
April 7, 1993
Page 5
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 disclose 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. Y _
In applying the above provisions of the Ethics Law to the four
specific inquiries which you have posed, it is initially noted that
advisories are only issued as to the questions presented and
therefore this advisory shall be limited to addressing the four
inquiries which you have posed.
As to your first specific inquiry, you are advised that the
Ethics Law would not be transgressed as a result of School Director
B continuing to be a School Board Member at the School District
while Company C, a corporation for „which School Director B is the
sole shareholder, performs certain work for Intermediate Unit D
(the "Intermediate Unit "). It is noted that the School District
and the Intermediate Unit are two distinct governmental bodies.
In response to your second specific inquiry, you are advised
that conditioned upon the assumption that there would be no
"understandings" which would transgress Sections 3(b) and /or 3(c)
set forth above, the Ethics Law would not restrict School Director
B with regard to voting on the Intermediate Unit's four budgets
merely as a result of performing services for the Intermediate
Unit. However, in the event the School Board should consider as a
line item the work performed by Company C, Section 3(a) of the
Ethics Law would apply to restrict School Director B from
participation as to such matters. In any instance of a conflict of
interest, full abstention would be required as well as satisfaction
of the disclosure requirements of Section 3(j) as set forth above.
In response to your third specific inquiry, you are advised
that the disclosure requirements of Section 3(j) only apply where
a conflict of interest exists under Section 3(a). The corporation
must be disclosed as a source of income on the School Director's
Statement of Financial Interests if the $1000 threshold reporting
requirement is met. Additionally, the School Director's office,
directorship or employment in the corporation, and financial
interest in same, must be disclosed on the Statement of Financial
Interests.
Confidential Advice No. 93 -544
April 7, 1993
Page 6
In response to your fourth and final specific inquiry, you are
advised that the Intermediate Unit is not a governmental body with
which School Director B is associated. As to whether School
Director B has ever been associated with that governmental body,
the facts which you have submitted do not reveal any public service
by this individual for the Intermediate Unit. Conditioned upon the
assumption that there has been no such prior public service, the
Intermediate Unit would not be a governmental body with which
School Director B has been associated.
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 School Code.
Conclusion: As a School Director for School District A (the
"School District "), School Director B is a public official subject
to the provisions of the Ethics Law. School Director B would not
be prohibited by the Ethics Law with regard to service as a School
Director at the School District while a corporation wholly owned by
this individual performs certain work for Intermediate. Unit D (the
"Intermediate Unit "). Conditioned upon the assumption that there
would be no "understandings" contrary to Sections 3(b) and /or 3(c)
of the Ethics Law, this School Director would not be required to
abstain from voting on the four budgets of the Intermediate Unit as
a result of performing services for the Intermediate Unit. Should
the private business services be considered as a line item by the
School Board, however, a conflict of interest would exist under
Section 3(a) requiring full abstention by the School Director, as
well as satisfaction of the disclosure requirements of Section
3(j). The disclosure provisions of Section 3(j) only arise as to
conflicts under Section 3(a). As noted above, certain information
as to the corporation must be disclosed on the School Director's
Statement of Financial Interests. The Intermediate Unit is not a
governmental body with which the School Director is or has been
associated, based upon the facts which you have submitted. 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
Confidential Advice No. 93 -544
April 7, 1993
Page 7
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 S2.12.
ncerely,
Vincent J1 Dopko
Chief Counsel