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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