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HomeMy WebLinkAbout94-637 WassCarl G. Wass, Esquire Caldwell & Kearns Attorneys at Law 3631 North Front Street Harrisburg, PA 17110 -1533 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 6, 1994 94 -637 Re: Conflict, Public Official /Employee, School Director, Discount Program, Computers. Dear Mr. Wass: This responds to your letter of November 3, 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 school director with regard to taking advantage of an educator's discount and purchasing a computer under an existing discount program between a computer company and the school district. Facts: As Solicitor for the Halifax Area School District, you request an advisory on behalf of a Member of the Board of Directors. The Apple Computer Company has, for several years, offered a program to school districts whereby the school district may, on behalf of its professional employees, purchase, at a substantial discount, computers from the Apple Company and then resell those same computers to school district employees. You state that the advantage to the Apple Computer Company is obvious. The advantage to the participating school district is that its educators will have full -time access to computers, programs, etc. so that they will be better equipped to educate and instruct the children in their care. The mechanics of the program are that the school district first determines how many of its employees wish to purchase a computer. The numbers, model numbers, etc. are then calculated, and a purchase order is placed with the Apple Company. The Apple Wass, Carl G., Esquire, 94 -637 December 6, 1994 Page 2 Company delivers the computers and invoices the school district. The school district pays the invoice. Then, the school district resells the computers to the individual employees who wish to take advantage of the educators' discount. Normally, the full purchase price is not immediately paid. Instead, a down - payment is made by the employee, a promissory note is signed by the employee in favor of the school district, and a written authorization for a payroll deduction by the school district from the employees' compensation is secured until the full purchase has been paid. You further add that the purchase of the computers by the school district, acting as agent for its employees, is not subject to the normal bidding requirements (It is assumed that you are referring to such requirements under the Public School Code). The School Board Member on whose behalf you have inquired has expressed an interest in taking advantage of this educators' discount in purchasing a computer under this program. Other members of the School Board may also follow suit if the process is not prohibited by the provisions of the Ethics Law. You ask whether the School Director's purchase of a computer through the School District under the "educators' discount" program would violate the Ethics Law. Your concerns are: that the value of the discounted purchase by the public official is not generally available to residents of the school district; that the discount program is available to the School Director only because he sits as a public official on the School Board; and that the proposed conduct of the School Director could be violative of Section 3 of the Ethics Law or of the language set forth in the purpose clause in Section 1. Based upon all of the above, you request an advisory from the State Ethics Commission. 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 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. As a School Director for the Halifax Area School District, the School Director 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. Wass, Carl G., Esquire, 94 -637 December 6, 1994 Page 3 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 particular public office or position of public employment. 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: Wass, Carl G., Esquire, 94 -637 December 6, 1994 Page 4 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. 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 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 Wass, Carl G., Esquire, 94 -637 December 6, 1994 Page 5 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 Trotta, Opinion 85 -002, the State Ethics Commission considered computer discount programs under Act 170 of 1978. The guiding principles set forth by the Commission in that decision are equally applicable under Act 9 of 1989. Such a "discount" would be considered a thing of monetary value within the meaning of Sections 3(b) and 3(c) of Act 9 of 1989 and therefore would form the basis for a violation of those Sections if provided to a public official or public employee with the understanding that his vote, official action or judgment would be influenced by same. The Commission further noted that any use or offer of such a discount program would have to comply with the public notice requirements of former Section 3(c) of the Ethics Law, the counterpart of which is Section 3(f) of Act 9 of 1989. Finally, although the Commission was not faced with such a situation in Trotta, the Commission advised that an individual who was responsible for awarding a purchase contract should not participate in the benefit of such a discount program offered by the vendor. See also, Cancelli, Advice 91 -585. Under the facts which you have submitted, it is not clear whether this particular Board Member has previously had any involvement with decisions for purchases from Apple Computer Company, either for the school district itself or for its professional employees under this discount program. Nevertheless, there are concerns in this case which would clearly indicate a conflict of interest under Section 3(a) of the Ethics Law for this School Board Member. An obvious concern is that the School Board must authorize paying the invoices for purchases under the discount program. Thus, there is ongoing Board action as to purchases under the discount program. Furthermore, even if this Board Member were to abstain from such Board action and even if there were no reciprocal arrangement between this Board Member and other Board Members also wishing to take part in the discount program, it is clear that "but for" his official position, the School Board Member on whose behalf you have inquired would not be able to take part in the discount program. The discount would constitute a private pecuniary benefit because it would enable the School Director to purchase the computer for substantially less than the fair market price which could be charged to him as a private citizen. Therefore, Section 3(a) would prohibit the School Director from participating in the discount program. The propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, Wass, Carl G., Esquire, 94 -637 December 6, 1994 Page 6 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 Public School Code. Conclusion: A school director is a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would prohibit the School Director on whose behalf you have inquired from participating in a discount program by which School District employees purchase computers from a computer company through the School District at a discount. 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 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 FAS 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. ncerely, (A, Vincent Si Dopko Chief Counsel