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HomeMy WebLinkAbout93-608 GreenMichael J. Green 1016 Green Glen Drive DuBois, PA 15801 Dear Mr. Green: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 13, 1993 93 -608 Re: Conflict of Interest, Public Official, School Board Member, Use of Authority of Office or Confidential Information, Contracting with Governmental Body, Private Employment, Business with which Associated, Oil Company. This responds to your letter of June 23, 1993, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition upon a School Board Member or a "business with which he is associated" from contracting with the School District for petroleum business. Facts: You are a Member of the DuBois School Board. You are also Vice President of John B. Green Oil Company, a division of Jobbers Buying Group, Inc. Your company competes in sealed bidding processes for the DuBois School District petroleum business. When the bid is publicly awarded, you abstain from voting. You have requested an advisory from the State Ethics Commission as to whether a conflict exists under the Ethics Law regarding the above activity and whether the status of the company, (corporation, partnership, etc.), your position as an officer of the company or your ownership interest in the company are relevant factors. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. SS407(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the materials facts relevant to the inquiry. 65 P.S. SS407(10), (11). An advisory only affords a defense to the extent the requestor has Green, 93 -608 October 13, 1993 Page 2 truthfully disclosed all of the material facts. It is further noted that your request for advice may only be addressed with regard to prospective conduct. A reading of Sections 7(10) and 7(11) of the Ethics Law makes it clear that an opinion or 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 or 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. As a Member of the DuBois School Board, you are a "public official" as that term is defined in the Ethics Law. 65 P.S. §402; 51 Pa. Code §11.1. As such, you are subject to the provisions of the Ethics Law and the restrictions therein are applicable to you. Section 3(a) of the Ethics Law provides: Restricted Activities No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined under the Ethics Law: "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 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 or 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 Green, 93 -608 October 13, 1993 Page 3 65 P.S. S402. 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. Under Section 3(a) of the Ethics Law quoted above, a public official may not use the authority of office or confidential information to obtain a private pecuniary benefit for himself, a member of his immediate family or a business with which he is or a member of his immediate family is associated. Generally, the Ethics Law places no per se prohibition upon a public official or business with which he is associated from contracting with his governmental body. Pancoe, Opinion 89 -011. As Vice - President of John B. Green Oil Company, it is clear that the foregoing entity is a "business with which you are associated" as that term is defined under the Ethics Law. As the above definitions indicate, a business with which a public official is associated includes any business. Thus, the type of business (corporation, partnership, etc.) has no bearing on this matter. The holding of officer positions and financial interests can be relevant, but is not in this case. Therefore, it is unnecessary, and further, it is beyond the scope of this advisory, to discuss all the possible situations where such factors would affect the result. Under Section 3(a), you could not participate or vote on matters involving the contract between your governmental body and John B. Green Oil Company or the "business with which you are associated." In addition, the requirements of Section 3(j) of the Ethics Law must be followed whereby the reasons for the abstention must be publicly noted as well as a written memorandum to that effect must be filed with the secretary recording the minutes. Accordingly, under Section 3(a), you or the "business with which you are associated" are not precluded from contracting with Green, 93 -608 October 13, 1993 Page 4 your governmental body but you could not participate or vote as to the matter of the contract and must comply with the disclosure requirements of Section 3(j) of the Ethics Law. Section 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 any thing 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. 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. In relation to the above provision of law, the State Ethics Commission has generally determined that this provision is a procedure to be used when a public official or employee contracts with his own governmental body in an amount of $500 or more. The process must be open and public with prior public notice and subsequent public disclosure. In addition, the public official/ employee may not have any supervisory or overall responsibility for the implementation or administration of the contract. Thus, the open and public process, must be used in all situations where a public official is otherwise appropriately contracting with his own governmental body in an amount of $500 or Green, 93 -608 October 13, 1993 Page 5 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; (3) public disclosure of all applications or proposals considered and; (4) public disclosure of the contract awarded and offered and accepted. Further, Section 3(f) requires that the public official could not have supervisory or overall responsibility as to the implementation or administration of the contract. Parenthetically, although the contracting in question would not be prohibited under the Ethics Law provided the requirements of Sections 3(a), (f) and (j) are satisfied, a problem may exist as to such contracting under the Public School Code. In the instant situation, the Public School Code provides as follows: No school director shall, during the term of which he was elected or appointed, as a private person engage in any business transaction with the school district in which he is elected or appointed, be employed in any capacity by the school district in which he is elected or appointed, or receive from such school district any pay for services rendered to the district except as provided in this act. 24 P.S. S3 -324. Since such contracting may be prohibited by the above quoted provision of the Public School Code, but not under the Ethics Law, it is suggested that advice in that regard be sought from the municipal solicitor or from private counsel. Lastly, 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 in this advice is the applicability of the respective code. Green, 93 -608 October 13, 1993 Page 6 Conclusion: As. a Member of the DuBois School Board, you are a public official subject to the provisions of the Ethics Law. Under Section 3(a) of the Ethics Law, a public official /employee or a "business with which he is associated" may contract with the governmental body but could not vote or participate in the matter of the contract. The disclosure requirements of Section 3(j) outlined above must be observed. Further, if the contract is $500 or more, the open and public process as outlined above must be accomplished. The public official /employee could not have any supervisory or overall responsibilities as to the contract. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Due to the possible application of the Public School Code in this matter, it is suggested that advice be obtained from the municipal solicitor or private counsel in that regard. 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 513.2(h). ncerely, I �,an ,a47„ Vincent J. Dopko Chief Counsel