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HomeMy WebLinkAbout95-548 TaptichDear Mr. Taptich: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 18, 1995 Daniel P. Taptich P.O. Box 5726 Belleville, PA 17004 95 -548 Re: Conflict, Public Official /Employee, Member, Municipal Authority, Sale, Real Estate, Land. This responds to your letter of March 15, 1995, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions on an authority member regarding the private purchase of land from the authority in which he is a member. Facts: You are a member and an officer of the Municipal Authority of Union Township (MAUT), Mifflin County. MAUT consists of financially independent water and sewer authorities. Members of MAUT are appointed by the Union Township supervisors, are not paid for their services, and are members in both the water and sewer authorities. MAUT participated in the construction of a water transmission main that will supply MAUT water customers with water from the source and facilities of the Municipal Authority of the Borough of Lewistown (MABL)_, which sanctioned the project. MABL is responsible for treatment and distribution of water to MAUT's former water customers as well as for billing and collecting revenue from these customers. When the water transmission main was substantially completed, MAUT abandoned its existing water sources. While MAUT water distribution facilities are or will be dedicated to MABL, MAUT retained the woodlands associated with its watershed. The water authority of MAUT now exists only to authorize payment of debt service for the loans associated with recent construction projects. To offset its existing debt, MAUT plans to sell the land associate with the watershed. During Spring 1995, MAUT will advertise and sell the land either by sealed bid or by a public auction run by an independent auctioneer registered in Pennsylvania. You wish to privately purchase the land that MAUT Taptich, Daniel P., 95 -548 April 18, 1995 Page 2 plans to sell and seek advice from the Commission under the Ethics Law concerning the propriety of buying the land while you are an officer and member of MAUI. 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 member /officer for MAUT, you are a public official as that term is defined under the Ethics Law, and hence you are 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. Taptich, Daniel P., 95 -548 April 18, 1995 Page 3 "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. "Immediate family." A parent, spouse, child, brother or sister. "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. Taptich, Daniel P., 95 -548 April 18, 1995 Page 4 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 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; Taptich, Daniel P., 95 -548 April 18, 1995 Page 5 (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 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. Taptich, Daniel P., 95 -548 w -_ April 18, 1995 Page 6 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 -5. Turning now to your specific question, it is initially noted that an advice of counsel is issued only as to future conduct contemplated by the public official /employee who asks for such advice. As a potential private purchaser of the MAUT watershed land, you would clearly have a conflict of interest and would have to observe the voting restrictions and disclosure requirements as outlined above. Additionally, the Ethics Law would require the land sale contract to be awarded in an "open and public process," also as outlined above. Furthermore, the Commission Opinions indicate that if the members of MAUT are involved in selecting the purchaser of the land, as a potential purchaser you must abstain from all MAUT discussions and recommendations concerning your offer. Additionally, you should also abstain from discussions and recommendations concerning other potential purchasers of the MAUT land wherein your negative recommendation on another person's offer would work to your benefit. Essentially, the Commission seeks to prevent a public official /employee from being in a position to ensure his or her own benefit. Pepper, Opinion, 87 -008.; Wolff, Opinion 89 -030. Parenthetically, although the contracting in question would not be prohibited under the Ethics Law provided the requirements of Sections 3(a), (f) and (j) are satisfied, a problem may exist as to such contracting under the respective code. In the instant situation, the Municipality Authorities Act 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 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. 53 P.S. §312 (D) . Since such contracting may be prohibited by the above quoted provision of the Code, but not under the Ethics Law, it is Taptich, Daniel P., 95 -548 April 18, 1995 Page 7 suggested that advice in that regard be sought from the municipal solicitor or from private counsel. 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 a member /officer for MAUT, you are a public official subject to the provisions of the Ethics Law. As a potential purchaser of MAUT land, you would have a conflict of interest under the Ethics Law and would have to observe the requirements of Sections 3(a), (f) and (j). Although the proposed land purchase would not be prohibited under the Ethics Law, it may be prohibited by the Municipality Authorities Act. As such, it is suggested that you seek advice from the municipal solicitor or from private counsel. 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 813.2(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. fere cent 7 Dopko Chief Counsel