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HomeMy WebLinkAbout94-628 VillellaSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL November 18, 1994 Gerald J. Villella, Esquire Deputy Solicitor Office of the City Solicitor, Room 505 626 State Street Erie, PA 16501 94 -628 Re: Conflict, Public Official /Employee, Municipal Authority, Board Member, Erie Civic Center Authority, Contract, Sports. Dear Mr. Villella: This responds to your letter of October 18, 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 municipal authority member, who in a private capacity is a sports promoter, from seeking to arrange a for profit sporting event at the municipal authority civic center. Facts: You seek advice on behalf of Mr. Michael Acri (Acri), a newly appointed Member of the Erie Civic Center Authority (ECCA) as of September 15, 1994, who in a private capacity is a professional boxing promoter and operates Michael Acri Boxing Promotions, Inc. The ECCA is an Authority formed by the City of Erie under the Municipality Authorities Act with the Board composed of eleven noncompensated members who set policy and activities which are carried out by tie Executive Director, John Wells, and other employees. Acri has arranged numerous boxing events in the area and elsewhere and City Councilman James Thompson nominated Acri to the ECCA because of his nationwide network of sports and entertainment associates. Recently Acri negotiated an agreement with Wells whereby his corporation would stage a nationally televised boxing match at the ECCA Civic Center on November 15, 1994 with Michael Acri Boxing Promotions, Inc. (MABP) paying at least a minimum rental for the Civic Center plus a portion of the gate receipts. The By -Laws of the ECCA allow the Executive Director to negotiate Villella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 2 and execute agreements for promotions and events without a Board vote; however, upon the solicitor's advice, the Board acted upon this particular agreement in an open meeting on October 20, 1994 with Acri abstaining. After quoting in part Section 12(d) of the Municipality Authorities Act, you raise the issue of whether Acri's agreement is within the definition of contracts /subcontract under Section 3(f) of the Ethics Law. After noting language in the Municipality Authorities Act regarding contracts /agreements which create liabilities or indebtedness of the Authority, you assert that the Authority's Act as well as the Ethics Law recognize that although the purchase of a ticket to a concert /sporting event technically creates a contract between the ECCA and the patron and the potential liability for the ECCA for a range of possible situations from refunds of ticket prices of a cancelled event to personal injury for a spectator injury, Authority members are not precluded from attending ECCA events in that such arrangements are not barred by either the Municipality Authorities Act or the Ethics Law. You further argue that no ECCA Member may sell goods or services to the ECCA as all such transactions would be barred by the Municipality Authorities Act which is asserted to supersede the open and public process provision of Section 3(f) of the Ethics Law. You hypothesize as to whether Acri's agreement would be akin to a ticket buying patron who is licensing the Civic Center from the ECCA for an event which will provide the ECCA with funds or whether Acri is akin to a vendor of goods or services to the ECCA. After referencing your understanding of the implications of Section 3(a) of the Ethics Law, you state that you are relying upon Wells' assurance that Acri is not displacing any other event on November 15, 1994, stating that there has been no interest expressed by any other promoter for that date. Welts has indicated that he has no reluctance to book the event which will be the first professional boxing event at the Civic Center. In addition, there is no indication from Acri that he is being treated any differently as an Authority Member than he would be treated as a private citizen seeking to stage an event. Acri will be required to cover at a minimum the Civic Center's operational costs for the evening as well as provide the usual liability insurance and indemnity to the ECCA. After noting that Acri is willing to resign from the ECCA if his membership would bar him from such promotional activities, you seek advice so that Acri may understand his obligations as a public official which advice may also provide the ECCA with proper guidance for all of its members and employees. Discussion: It is initially noted that pursuant to Sections 7(10) Villella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 3 and 7(11) of the Ethics Law, 65 P.S. 51407(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. 55407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As a Board Member of the ECCA, Acri 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 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 Viliella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 4 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. "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 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. 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 Villella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 5 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 contractor 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. Villella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 6 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 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. Section 12. Conflict of law If the provisions of this act conflict with any other statute, ordinance, regulation or rule, the provisions of this act shall control. 65 P.S. 5412. Villella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 7 In applying the above provisions of the Ethics Law to the instant matter, it is noted that Section 3(a) of the Ethics Law does not prohibit public officials /employees from outside business activities or employment; however, the public official /employee may not use the authority of office for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. A public official /employee must exercise caution so that his private business activities do not conflict with his public duties. Crisci, Opinion 89 -013. Thus, a public official /employee could not perform private business using governmental facilities or personnel. In particular, the governmental telephones, postage, staff, equipment, research materials, personnel or any other property could not be used as a means, in whole or part, to carry out private business activities. In addition, the public official /employee could not during government working hours, solicit or promote such business activity. Pancoe, supra. Similarly, Section 3(a) would expressly prohibit the use of confidential information received by holding public office/ employment for such a prohibited private pecuniary benefit. In the event that the public official /employee's business has a matter pending before his governmental body or if the public official /employee as part of such official duties must participate, review or pass upon that matter, a conflict would exist. Miller, Opinion 89 -024. In those instances, it will be necessary that the public official /employee be removed from that process. In such cases as noted above, Section 3(j) of the Ethics Law would require not only that Acri 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 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. In applying the above principles to the instant matter, Villella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 8 although Section 3(a) of the Ethics Law does not require Acri to resign from his position on the ECCA, Acri would have a conflict as to matters involving his business as well as the boxing event or any other promotional events promoted by his company which would be held in the Authority Civic Arena. Given the subordinate employment position of Wells as Executive Director of the ECCA, Acri must insure in his actions that he is not using the authority (status) of his office in terms of his dealings with Wells or any other ECCA employee. See Bassi., Opinion 86 -007; Woodrina, Opinion 90 -001. In addition, Acri would have a conflict and could not participate upon personnel matters involving Wells such as his employment status, salary increases, etc. Acri must also insure that the ECCA offices, personnel and facilities are not used for his private business or any other nonofficial activities as noted above. As to the contracting, this would be a contract between Acri as a public official and his governmental body, the ECCA, and hence the open and public process requirements of Section 3(f) noted above are applicable. The very intendment of the contracting provision is to require an open and public process whenever a public official is contracting with his governmental body. Parenthetically as per Section 12 of the Ethics Law quoted above, the Municipality Authorities Act does not supersede Section 3 (f) or any other provision of the Ethics Law. 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. Conclusion: As an ECCA Member, Michael Acri is a public official subject to the provisions of the Ethics Law. Although Section 3(a) of the Ethics Law does not require Acri to resign from the ECCA when his private business seeks to promote a sports event at the ECCA Civic Arena, Acri would have a conflict regarding any matters concerning his business or events that he seeks to promote at the ECCA Civic Arena as well as with personnel matters involving the Executive Director with whom he negotiated the event (s) . Acri must observe the disclosure requirements of Section 3(j) of the Ethics law noted above. The provisions of Section 3(f) noted above regarding contracting must be satisfied. 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 Villella, Gerald J., Esquire, 94 -628 November 18, 1994 Page 9 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 513.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by PAS 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. Vincent J. Dopko Chief Counsel