HomeMy WebLinkAbout95-591 KaplanAlan W. Kaplan
27 E. Spring Street
Frackville, PA 17931
Dear Mr. Kaplan:
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
August 1, 1995
Your situation involves the following facts:
95 -591
Re: Conflict, Public Official /Employee, Borough, Council Member,
Real Estate Broker, Blighted Area, Revitalization, Grants
Program.
This responds to your letter of July 11, 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 upon a borough council
member in participation as to matters involving the revitalization
of a blighted area in the borough wherein he and members of his
immediate family have property interests.
Facts: You seek an advisory on your situation including any
ethical consideration or conflicts of interest issues. You have
been a Frackville Borough Council Member since January, 1994 and
serve on the Property Committee. Many downtown properties in your
area have not fared well. Downtown Frackville was designated a
blighted area before you were on council. A downtown study with
several recommendations was completed before you were elected to
council. One of your duties is to help revive downtown Frackville.
1. You are a real estate broker and appraiser with your
office located at 25 S. Lehigh Ave, Frackville which is
in the blighted area.
2. Your parents own the building at 25 S. Lehigh Ave.,
Frackville which is located in the blighted area (this is
where your office is located). It was purchased in 1970
having been previously owned by your grandparents for
several decades.
Kaplan, Alan W., 95 -591
August 1, 1995
Page 2
3. Your parent's residence was at 14 S. Lehigh Ave.,
Frackville until April, 1995. This is also in the
blighted area. The residential part of this property is
currently vacant. The property was purchased in 1950.
4. You are in a partnership with your brother and father who
own property at 24 -30 S. Lehigh. Ave, Frackville. This is
in the blighted area. The property was purchased in
1984.
5. You are in partnership with your brother who owns a
property at 101 N. Lehigh Ave., Frackville which was
purchased in 1984.
6. No fictitious name is used for property ownership.
Public records show your interest in the properties.
7. You own other properties in Frackville which are not in
the blighted area.
You have enclosed a map for the Commission to better visualize
the location of the blighted area and the location of properties as
to which you or members of your immediate family have interests.
This map is incorporated herein by reference.
You need clarification on the following and any other ethical
issues that the Commission thinks should be brought to your
attention.
1. May you as a councilman promote revitalization of the
blighted area?
2. May you make motions and /or vote on issues of
revitalization such as applying for grants, using your
real estate expertise to help, or be involved in such
other issues as hiring contractors?
3. If you may take actions, is there any special disclosure
required?
4. Is participation in revitalization simply a matter of no
special treatment for yourself and immediate family or
are there requirements that must be met?
5. Does your involvement with council completely eliminate
any revitalization until your term is up?
You have used your real estate expertise for the borough in
several real estate related issues and have not charged for your
services. As an example, you closed a transaction to purchase
Kaplan, Alan W., 95 -591
August 1, 1995
Page 3
property for a cul -de -sac on Wall St. that had been pending in
stalled negotiations for 8 years. You have not charged the borough
for your real estate services and you have no plans to do so. You
inquire as to whether it is allowable for a councilman to charge
the borough for normal services?
Discussion: As a Council Member for Frackville Borough, you are a
"public official" as that term is defined in the Ethics Law and
hence you are subject to the provisions of that Law. 65 P.S. §402;
51 Pa. Code §11.1.
Sections 3(a), 3 (f) , and 3(j) of the Ethics Law provide:
Section 3. Restricted Activities.
(a) No public official or public
employee shall engage in conduct that
constitutes a conflict of interest.
(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.
(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
Kaplan, Alan W., 95 -591
August 1, 1995
Page 4
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.
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 or no public official /employee shall
solicit or accept any thing 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.
The following terms are defined in the Ethics Law:
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
Kaplan, Alan W., 95 -591
August 1, 1995
Page 5
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.
"Immediate family." A parent, spouse,
child, brother or sister.
Under the Ethics Law, we must observe the stated purpose of
that Act which is to strengthen the faith and confidence of people
in their government by assuring the public that the financial
interests of the holders of or candidates for public office do not
present a conflict with the public trust.
In applying the above quoted provisions of the Ethics Law to
the instant matter, we will first consider the provisions of
Section 3(f) of the Ethics Law. Since Frackville Borough is the
governmental body with which you are associated, Section 3 (f) would
apply in this case. ,
Assuming that a contract or sub- contract would be made between
you, your spouse or child and Frackville Borough pursuant to the
provisions of this Program, Section 3(f) of the Ethics Law would
impose the following requirements if the contract or sub- contract
is $500.00 or more were to be made between you, your spouse and
child and the governmental body:
1. prior public notice of the contract possibility;
2. public disclosure of applications and contracts
considered;
3. public disclosure of the award of the contracts; and
4. no supervisory or overall responsibility for the
implementation or administration of the contract or sub-
contract by the public official /employee.
We will now address the propriety of the proposed conduct
Kaplan, Alan W., 95 -591
August 1, 1995
Page 6
under Section 3(a) of the Ethics Law. In this review, we note and
recognize the concern that arises where a public program, funded
with public monies and administered through a public agency,
political subdivision, or governmental body is also available to
public officials or employees of that agency or governmental body.
We recognize the public concern and criticism that may arise if a
public official or public employee who serves a governmental body
receives benefits under a program of this nature.
It is clear that the Ethics Law, and in particular Section
3(a), was primarily designed to restrict the activity of a public
official or employee from using the authority of office for private
pecuniary benefit. However, we believe that as a general rule the
Ethics Law was not enacted nor should it be interpreted to preclude
public officials or employees from participating in programs which
might otherwise be available to them as citizens. Wolff, Opinion
89 -030; Woodrinq, Opinion 90 -001.
In order to insure that a public official or employee is not
in a conflict when he seeks to participate in a rehabilitation or
grant program, he must observe the following:
1. play no role in establishing the criteria under which the
program is to operate, particularly with reference to the
structure or administration of the program;
2. play no role in establishing or implementing the criteria
by which selections for program participation are to be
made;
3. play no role in the process of selecting and reviewing
applicants or in awarding grants or funds;
4. use no confidential information acquired during the
holding of public office or public employment to apply
for or to obtain such funds, grants, etc., and
5. abstain, publicly disclose and file a memorandum with the
person responsible for recording the minutes under
Section 3(j) of the Ethics Law in cases where the public
official/ employee is associated with administering the
grant or rehabilitation program not only as to his own
application but as to similarly situated individuals with
whom the public official /employee might be competing for
available funds. In cases where Section 3(f) is
applicable, the public official /employee would be
prohibited from any supervisory or overall responsibility
as to the contract or program.
Through application of the above criteria, we seek to
Kaplan, Alan W., 95 -591
August 1, 1995
Page 7
eliminate the possibility that a public official /employee who is
seeking such funds or seeking to participate in these programs
would be in a position to insure that the grant funds or the
program benefits would be available for his own benefit. Thus, a
public official or public employee in such a situation should
refrain from participating in making decisions or recommendations
about the program and regarding distribution of the limited funds
which might be available as a result of such a program.
Expressly conditioned upon the assumption that you act in
conformance with the above criteria, you, your spouse or child may
apply for and participate in the benefits associated with the
Program.
The questions which you have posed will now be addressed
seriatim. As to the first two questions concerning your
participation in promoting revitalization or in mailing matters and
voting on grant application or the hiring of contractors,
participation within the limitations noted above is not prohibited;
however, such participation may not be used to positively
facilitate advantages to the public official or his immediate
family nor negatively to eliminate any potential competitors.
Pepper, Opinion 87 -008. The third inquiry concerning disclosure is
addressed in Section 3(j) which is detailed above. The fourth and
fifth inquiries concerning participation or involvement in the
revitalization process has been outlined above.
Lastly, regarding your inquiry about charging the borough for
normal real estate services, Section 3 (a) , 3(f) and 3(j) of the
Ethics Law would have application. As to Section 3(a) of the
Ethics Law, you would have a conflict as to any matters involving
the award of real estate services, could not participate and would
have to comply with the disclosure requirement of Section 3(j). In
addition to the extent that such services exceeded $500.00, the
open and public contracting requirement of Section 3(f) must be
satisfied.
Lastly, questions exist as to whether such private real estate
services by a council member is permissible under the Borough Code.
It is suggested that you obtain the advice of the Borough Solicitor
or private counsel as to an interpretation of the Borough Code.
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 Code of Federal Regulations or
the respective municipal code.
Kaplan, Alan W., 95 -591
August 1, 1995
Page 8
Conclusion: As Council Member for Frackville Borough, you are a
public official subject to the provisions of the Ethics Law.
Subject to the qualifications noted above, Section 3(a) of the
Ethics Law would not preclude you, your spouse or child from
applying for a Program grant provided you played no role in
establishing the criteria under which the program would operate,
played no role in implementing the criteria for selecting
applicants, played no role in selecting or reviewing applicants,
used no confidential information and finally had no involvement
with the administration of the program. The requirements of
Section 3(f) and 3(j) of the Ethics Law noted above, to the extent
applicable, must be observed. 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 thirty (30) 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 thirty
(30) days may result in the dismissal of the appeal.
Vincent J. Dopko
Chief Counsel