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HomeMy WebLinkAbout94-515 PalloneFrank J. Pallone, Jr. City Treasurer 301 Eleventh Street New Kensington, PA 15068 Dear Mr. Pallone: 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 18, 1994 94 -515 Re: Conflict, Public Official /Employee, City Treasurer, Use of Authority of Office or Confidential Information, Use of Computer Service Company owned by Immediate Family of City Council Member. - This responds to your letter of January 7, 1994 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 City Treasurer from contracting for computer services from a company owned by the wife and brother -in -law of a City Council Member. Facts: You are the elected City Treasurer for New Kensington, Westmoreland County. You have been using the services of a computer consulting company by the name of Productivity Consulting Services (PCS). The owners of PCS are Charles Choltco and Dara Kubiak. Mrs. Kubiak is the wife of and Mr. Choltco is the brother - in -law of Bernie Kubiak, a New Kensington City Council Member. Mr. Choltco is the consultant for PCS and meets with you to write the software for the computer to perform record keeping and produce tax reports. The budget for the Treasurer is under the New Kensington Department of Accounts and Finance. Mr. Kubiak was the Director of Accounts and Finance from January, 1992, after the relationship between the City Treasurer and PCS was established, until January, 1994. You state that neither Councilman Kubiak, as Director of Accounts and Finance or otherwise, nor any other council members vote on any contracts which you have with PCS. You have a separate line item for office expenses from which you deduct all your office expenses, including the expenses for software consulting services Pallone,'Frank J., 94 -515 February 18, 1994 Page 2 performed by PCS, without council approval. To date, you have expended the following amounts for work by PCS: 1990 1991 1992 1993 $ 2000.00 1152.50 692.50 610.00 You indicate that these amounts comply with the advertised bidding requirements of the Third Class City Code and with the requirements set forth in a city resolution. A subsequent telephone conference revealed that the Council member who is now the Director of Accounts and Finance is questioning the ethical appropriateness of the PCS contract. Based upon the above, you request an advisory as to whether a conflict of interest exists in relation to your contract with PCS. 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 material facts relevant to the inquiry. 65 P.S. S §407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of_the material facts. As City Treasurer for New Kensington, Westmoreland County, you are a public official as that term is defined under the Ethics Law, and hence you are 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 Pallone, Frank J., 94 -515 February 18, 1994 Page 3 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 of his immediate family or a business with which he or a member of his immediate family is associated. "Authori 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. "Immediate family." A parent, spouse, child, brother or sister. "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. "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 Palione, Frank J., 94 -515 February 18, 1994 Page 4 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. 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, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more. This open and public process would require that the following be observed as to the contract with the governmental body: Pal]one, Frank J., 94 -515 February 18, 1994 Page 5 (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. 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 with the governmental body. 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 from voting as a result of a conflict of interest, and the remaining two members of the governing body have cast opposing votes, the Pailone, Frank J., 94 -515 February 18, 1994 Page 6 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 the event that the required abstention results in the inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under the Ethics Law, then in that event participation is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. In applying the Ethics Law to this case, it is noted that the Ethics Law, pursuant to Section 3(a), prohibits a public official from using the authority of public office or confidential information received by holding a public office for the private pecuniary benefit of the public official, any member of his immediate family, or any business with which the public official or a member of his immediate family, or any business with which the public official or a member of his immediate family is associated. Here, there does not appear to be any real possibility of an inherent conflict or a private pecuniary benefit inuring to you, a member of your immediate family or a business with which you or a member of your immediate family is associated merely because of your relationship, as City Treasurer, with PCS. Thus, you would not have a conflict of interest in connection with the contract between PCS and the City Treasurer. The foregoing is based upon the factual assumption that PCS is not a business with which you or a member of your immediate family is associated and that the Kubiaks are not members of your immediate family. 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 City Code or the applicability of the Ethics Law as to Council Member Kubiak. Conclusion: As City Treasurer for New Kensington, Westmoreland County, you are a public official subject to the provisions of the Ethics Law. Under the Ethics Law, you would not have a conflict in your relationship with PCS, subject to the qualifications and limitations noted above. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pallone, Frank J., 94 -515 February 18, 1994 Page 7 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 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 writing and must be actually received at the Commission within fifteen (15) days of the date of this Advice pursuant to 51 Pa.Code §13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717- 787 - 0806). Sincerely, Vincent J. Dopko Chief Counsel