HomeMy WebLinkAbout95-511 ConfidentialSTATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
February 3, 1995
95 -511
Re: Conflict, Public Official /Employee, Municipal Authority, Board
Member, Engineer, Businesses with which Associated.
This responds to your letter of January 5, 1995 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 the appointment of a
engineer to the board of a municipal authority when the engineer is
employed by an engineering firm that performs services to private
persons and public entities and when the engineer is a shareholder
in a business that does testing for authority projects.
Facts: A is considering appointing B to a board vacancy on the C.
B is a public engineer who is an employee and a shareholder of D,
a private engineering firm which provides professional engineering
services to both private and public entities on a fee basis. The
Authority was formed in 1991 under the Municipalities Authorities
Act and is composed of nine unpaid members who set policy which is
carried out by an administrative staff. The Authority administers
to the delivery of water services which includes the processing and
delivery of water to residential and industrial users. B in his
capacity as a public engineer is under a contract with E Townships
on a consulting basis to administer to the public works in those
Townships. Part of B's duties are to consult with the townships
and advise on road and storm sewer work. B has a similar
arrangement with F Township. In such capacities, B interacts with
the Authority from time to time for purposes of arranging the
placement of the water lines through various township's property.
B is also minority shareholder in G, a company which provides soil
and concrete testing for Authority projects with the testing
performed as an accommodation for a nominal sum of $100.00 or less.
Inquiry is made whether B's membership on the Authority Board is a
conflict under the Ethics Law.
Discussion: It is initially noted that pursuant to Sections 7(10)
Confidential Advice, 95 -511
February 3, 1995
Page 2
and 7(11) of the Ethics Law, 65 P.S. § 5407(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 Board Member for the Authority, B will be a public official
as that term is defined under the Ethics Law, and hence he will be
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.
"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
fl
Confidential Advice, 95 -511
February 3, 1995
Page 3
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.
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
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
Confidential Advice, 95 -511
February 3, 1995
Page 4
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
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
Confidential Advice, 95 -511
February 3, 1995
Page 5
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.
Although the Ethics Law would not prohibit B's appointment to
the Authority, B would have a number of conflicts if he served on
the Authority Board. Since B is associated with the businesses, as
defined under the Ethics Law, of D and G, B would have a conflict
as to matters before the Authority concerning both of those
businesses. In addition, the conflict would not only extend to the
businesses but also their clients. See Miller, Opinion 89 -024;
Kannebecker, Opinion 92 -010. In addition, since B also contracts
on a consulting basis with other townships, he would have a
conflict as an Authority Board Member involving those municipal
clients. In addition, B would also have a conflict as to any of
his other private clients that would have matters pending before
the Authority. In each instance of a conflict, B would have to
recuse himself and observe the disclosure requirements of Section
3(j) of the Ethics Law noted above. Lastly, as to the businesses
with which B is associated, the contracting provisions of Section
3(f) of the Ethics Law must be satisfied as to all contracting of
$500.00 or more between those businesses and the Authority.
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 respective municipal code.
Conclusion: As an Authority Board Member, B will be a public
official subject to the provisions of the Ethics Law. B would have
a conflict under Section 3(a) of the Ethics Law as to all
businesses with which he is associated, clients of those businesses
and private engineering clients, whether municipal or private. In
Confidential Advice, 95 -511
February 3, 1995
Page 6
such instances of conflict, B must recuse himself and observe the
disclosure requirements of Section 3(j) of the Ethics Law noted
above. To the extent applicable, Section 3(f) of the Ethics Law
noted above 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
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,
Vincen J. Dopko
Chief Counsel