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HomeMy WebLinkAbout94-619 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 4, 1994 94 -619 Re: Conflict, Public Official /Employee, Authority Board Member, Subcontracting with Contractor for Authority Construction Project. This responds to your letter of September 21, 1994 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 an authority board member with regard to subcontracting with a contractor to supply concrete for an authority construction project. Facts: You are Counsel to Authority A which is a waste water treatment facility located in City B, Pennsylvania. By and through an open and public bid, the Authority's Board awarded a contract for the construction of a chemical feed building on premises owned by the Authority. The construction for this project has not begun, and you have been asked by one of the Board Members to provide him with an opinion regarding his ability to lawfully supply the contractor with concrete, within the parameters of the Ethics Law. You have related to the Board Member that you would seek an opinion from this Commission regarding this matter. You note that this Board Member is regularly and customarily in the business of supplying concrete for residential and commercial jobs. Based upon all of the above, you request an advisory from the State Ethics Commission as to the restrictions and prohibitions of the Ethics Law which would be applicable in this matter. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. § §407(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the Confidential Advice, 94 -619 October 4, 1994 Page 2 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. § §407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. It is further initially 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. Specifically not addressed herein would be the propriety of any official action already taken by this Board Member in awarding the contract, particularly if the successful contractor is an established customer. As a Board Member of Authority A, the Authority Board Member on whose behalf you have inquired is a public official as that term is defined under the Ethics Law, and hence he 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 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 Confidential Advice, 94 -619 October 4, 1994 Page 3 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. 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 as follows: 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 Confidential Advice, 94 -619 October 4, 1994 Page 4 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 the 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: (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 Confidential Advice, 94 -619 October 4, 1994 Page 5 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 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. Having set forth the above provisions of the Ethics Law and general principles pertaining to them, your specific inquiry shall now be addressed. 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. The Board Member's concrete supply business would be a business with which he is associated. Section 3(a) would not restrict the Board Member from acting in his private capacity to subcontract to supply concrete to the contractor for the Authority construction project. However, the Board Member could not use the authority of office or confidential Confidential Advice, 94 -619 October 4, 1994 Page 6 information received by being in his position for the advancement of his own private pecuniary benefit or that of his concrete supply business or its customer(s). In the event that the Board Member's concrete supply business or its customer(s), including but not limited to this particular contractor, would have a matter pending before the Authority or if the Board Member as part of such official duties would participate, review or pass upon the matter, a conflict would exist. Miller, Opinion 89 -024. In those instances, it would be necessary that the Board Member be removed from that process. In such cases as noted above, Section 3(j) of the Ethics Law would require not only that the Board Member abstain from participation but also file a written memorandum to that effect with the person recording the minutes. In summary, the Ethics Law would restrict the following: 1. The use of authority of office to obtain any business in a private capacity; 2. utilization of confidential information gained through public position; 3. participating in discussions, reviews, or recommendations on matters which relate to the business /private employer or its customers which may come before the governmental body and in such cases publicly announcing the relationship or advising the supervisor as well as filing a written memorandum as per the requirements of Section 3(j) of the Ethics Law. Brooks, Opinion 89 -023. As for Section 3(f), assuming that the value of the subcontract for supplying concrete would be $500.00 or more, Section 3(f) would be applicable and its restrictions would have had to have been observed as to the Authority's contract with the contractor in order for this Board Member to lawfully subcontract to supply such concrete. Although the State Ethics Commission does not have the express statutory authority to interpret the Municipality Authorities Act, concern is expressed as to whether the Board Member would be permitted by the Municipality Authorities Act to supply concrete to the contractor. It is noted that the Municipality Authorities Act of 1945 provides as follows: D. No member of the Authority or officer or employee thereof shall either directly or indirectly be a party to or be in any manner Confidential Advice, 94 -619 October 4, 1994 Page 7 53 P.S. §312 (D) . interested in any contract or agreement with the Authority for any matter, cause or thing whatsoever by reason whereof any liability or indebtedness shall in any way be created against such Authority. If any contract or agreement shall be made in violation of the provisions of this section the same shall be null and void and no action shall be maintained thereon against such Authority. It is recommended that the Board Member obtain legal counsel as to the restrictions of the Municipality Authorities Act in this matter. 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 Municipality Authorities Act, although a concern has been noted as to its applicability. Conclusion: As a Board Member for Authority A, the Authority Board Member on whose behalf you have inquired is a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would not preclude the Board Member from subcontracting in his private capacity to supply concrete to a contractor for an authority construction project, subject to the restrictions and qualifications as noted above. In the event that the Board Member's concrete supply business or any of its customers, including but not limited to that particular contractor, would have a matter pending before the Authority, this Board Member could not participate in that matter and the disclosure requirements of Section 3(j) of the Ethics Law as outlined above would have to be satisfied. Should the Board Member subcontract with the contractor for this project, assuming that the value of the subcontract would be $500.00 or more, the restrictions of Section 3(f) would have had to have been observed as to the contract between the Authority and the contractor in order for such subcontracting to be lawful under the Ethics Law. This advisory has only addressed prospective conduct. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Specifically not addressed herein is the applicability of the Municipality Authorities Act of 1945, although a concern has been noted as to its applicability and it has been recommended that the Board Member obtain legal counsel as to whether the proposed subcontracting would be permissible within the restrictions of that Act. Confidential Advice, 94 -619 October 4, 1994 Page 8 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 523.2(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 file such an appeal at the Commission within fifteen (15) days may result in the dismissal of the appeal. cerely, ltvt(.) lo Vincent J. Dop Chief Counsel