HomeMy WebLinkAbout93-546 DufallaSTATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
April 14, 1993
Michael H. Dufalla
Engelhardt -Power & Associates, Inc.
125 South College Street
Washington, PA 15301
91: ....
93 -546
Re: Conflict, Public Official /Employee, District Engineer,
PennDOT, Business with which Associated, Financial Interest,
Consulting Engineer Firm.
Dear Mr. Dufalla:
This responds to your letter of March 17, 1993, 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 District Engineer
for the Commonwealth of Pennsylvania, Department of Transportation
(PennDOT) with regard to matters before PennDOT involving a
consulting engineering firm which he sold while financing the
unpaid portion of the purchase.
Facts: As an interviewee for a District Engineering position with
the Commonwealth of Pennsylvania, Department of Transportation
(PennDOT), you seek an advisory from the State Ethics Commission.
You presently are the sole owner of a consulting engineering firm,
Engelhardt -Power & Associates, Inc., located in the City of
Washington, Washington County, Pennsylvania. A question arose
during the interview process with PennDOT concerning the proper
ethical disposition of your engineering firm should you be selected
for the appointment.
You state that if you are selected for the District Engineer
position, you plan to sell your ownership in Engelhardt - Power. You
state that the large sum needed to purchase your ownership may
cause you to finance the unpaid portion of the purchase.
Your firm does not perform consulting engineering services for
PennDOT. However, the purchaser could be a firm that either does
or does not perform consulting services for PennDOT. If the
Michael. H. Dufalla
April 14, 1993
Page 2
purchaser does not perform services for PennDOT, you do not feel
there would be a conflict problem. However, if the purchaser does
perform consulting services for PennDOT, you plan to recuse
yourself from the decision - making process within PennDOT that will
involve the firm in question. By not participating in a decision
process within PennDOT involving the purchaser, you believe that a
conflict of interest will not occur.
You state that during your meeting with PennDOT Secretary
Howard Yerusalim on March 12, 1993, he suggested that you contact
this Commission to discuss the ethical perspective of selling your
ownership in Engelhardt- Power. You contacted the Commission on
March 16, 1993, and after discussing this matter with the Executive
Director, you have written for this advisory.
You specifically ask whether your willingness to recuse
yourself and not participate in a PennDOT based decision - making
process involving the purchaser of your business would be
sufficient to eliminate any conflict of interest.
Discussion: If you would be employed as a District Engineer for
PennDOT, you would in that capacity be a public employee as that
term is defined under the Ethics Law, and hence you would be
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 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
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
Michael H. Dufalla
April 14, 1993
Page 3
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(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
Michael H. Dufalla
April 14, 1993
Page 4
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 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.
In applying the above provisions of the Ethics Law to the
circumstances which you have submitted, pursuant to Section 3(a) of
the Ethics Law, 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 official /public
employee himself, any member of his immediate family, or a business
with which he or a member of his immediate family is associated.
In this case, following the sale of your firm, the firm would
nevertheless continue to be a business with which you are
associated should you continue to have a "financial interest" in
the firm as the term "financial interest" is defined above. Such
could occur through your financing the unpaid portion of the
purchase.
In that event, as a District Engineer for PennDOT, you would
have a conflict of interest in matters pertaining to the firm. In
each instance of a conflict of interest, the Ethics Law requires
that the public official /public employee abstain from participation
and fully satisfy the disclosure requirements of Section 3(j) as
set forth above.
Michael H. Dufalla
April 14, 1993
Page 5
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 Governor's Code of Conduct.
Conclusion: If you would be employed as District Engineer for
PennDOT, you would in that capacity be a public employee subject to
the provisions of the Ethics Law. - Following the sale of your
consulting engineering firm, Engelhardt -Power and Associates, Inc.,
the said firm would nevertheless continue to be a business with
which you are associated if you retain a "financial interest" in
the firm, as the term "financial interest" is defined in the Ethics
Law and set forth above, in which case you would have a conflict of
interest in matters before PennDOT pertaining to said firm. In
each instance of conflict of interest, you would be required to
abstain from participation and to fully satisfy the disclosure
requirements of Section 3(j) as set forth above. 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 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.
cerely,
Vincent ". Dop o
Chief Counsel