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HomeMy WebLinkAbout94-643 KurtzRegina J. Kurtz, President Bolich and Burke, Inc. 1 -3 South Main Street Shenandoah, PA 17976 Dear Ms. Kurtz: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 9, 1994 94 -643 Re: Conflict; Public Official /Employee; Township Supervisor; Insurance Agent /Broker; Use of Authority of Office or Confidential Information; Private Employment or Business; Business with which Associated. This responds to your letter of November 23, 1994, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law imposes any prohibitions or restrictions upon a township supervisor who is employed as an insurance agent and brokers the township's account through another agent. Facts: Although you are not presently an elected official, you intend to announce your candidacy for Township Supervisor for West Mahanoy Township in the primary election. You ask whether you would violate "any ethics" by winning and serving as Supervisor since you are also an insurance agent. You state that you broker the Township's account through another agent. 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. Upon being elected Township Supervisor for West Mahanoy Township, you would become a public official as that term is Kurtz, Regina J., 94 -643 December 9, 1994 Page 2 defined under the Ethics Law, and hence you would be subject to the provisions of that law. The pertinent provisions of the Ethics Law are set forth below. 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. "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 Kurtz, Regina J., 94 -643 December 9, 1994 Page 3 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 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 Kurtz, Regina J., 94 -643 December 9, 1994 Page 4 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 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 Kurtz, Regina J., 94 -643 December 9, 1994 Page 5 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. Having set forth the pertinent provisions of the Ethics Law, your inquiry will now be addressed. You specifically ask whether the Ethics Law would preclude your serving as a Township Supervisor given that you are also an insurance agent and that you broker the Township's account through another agent. You are advised that Section 3(a) of the Ethics Law would not preclude your holding office as a West Mahanoy Township Supervisor under these circumstances. However, in your capacity as a public official, you would be subject to the Ethics Law and certain restrictions would be placed upon you as to your official conduct. 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 Kurtz, Regina J., 94 -643 December 9, 1994 Page 6 office or confidential information received by being in that position for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Your insurance agency would be a business with which you are associated. You would have a conflict of interest as to matters involving your insurance agency and specifically as to matters involving the Township's account which you broker through another agent. It is additionally noted that pursuant to Section 3(a) of the Ethics Law, a public official may not use the authority of public office or confidential information received by being in that position to the detriment of business competitors. See, Pepper, Opinion 87 -008. In each instance of a conflict of interest, you would be required to abstain from any participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. A public official /employee must exercise caution so that his private business activities do not conflict with his public cou not Crisci, Opinion 89 -013. Thus, a public official/employee perform private business using governmental facilities or personnel. In particular, the governmental telephones, any t staff, equipment, research materials, personnel 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. You are further advised that Section 3(f) must be observed as y o ctracts body business West Mahanoy Township), and where the value of your governor Y the contract would be $500.00 or more. 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 address herein is the applicability of the Second Class Township Code, Insurance Department Act of 1921 or other insurance laws, and /or any code of ethics pertaining to your profession, and it is recommended that you seek the advice of legal counsel as to the applicability of same to your proposed service as a Township Supervisor under the circumstances that you have presented. West Conclusion: Upon being elected Township official Supervisor f t r to the Mahanoy Township, you would become a public Kurtz, Regina J., 94 -643 December 9, 1994 Page 7 provisions of the Ethics Law. Section 3(a) of the Ethics Law would not preclude your service as a Township Supervisor merely because you are also an insurance agent or because you broker the Township's account through another agent. However, the restrictions of Sections 3(a), (b) , (c) , (f) , and (j) as set forth above must be observed. Pursuant to Section 3(a) of the Ethics Law, you would have a conflict of interest as to matters pertaining to your insurance agency and specifically pertaining to the Township's account. Section 3(a) would prohibit any use of authority of office or confidential information received by being in that position for the private pecuniary benefit of a business with which you are associated or for the detriment of a business competitor. In each instance of a conflict of interest, you would be required to abstain from any participation and to fully satisfy the disclosure requirements of Section 3(j) set forth above. The restrictions of Section 3(f) must be observed as to contracts valued at $500.00 or more between a business with which you are associated and your governmental body. 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 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, Vincent Dopko Chief Counsel