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HomeMy WebLinkAbout95-594 SuhoskyRobert J. Suhosky RR #2, Box 360 Honesdale, PA 18431 Dear Mr. Suhosky: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL August 15, 1995 95 -594 Re: Conflict, Public Official /Employee, Member, Municipal Authority, Use of Authority of Office or Confidential Information, Sale of Shale to Company Awarded Authority Contract. This responds to your undated letter received July 27, 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 member and chair of a sewer authority with regard to his prospective sale of shale to a corporation awarded a construction contract by the authority. Facts: As Chairman of the newly formed Sewer Authority in Cherry Ridge Township, Wayne County, you request an advisory from the State Ethics Commission. The Sewer Authority has recently completed Pennvest financing and has awarded a construction contract for approximately $1,700,000.00 to Linde Construction, Inc. ( "Linde ") of Honesdale, Pa. Linde's bid was significantly under the next lowest of the bids. The decision to award was unanimous. Reilly & Co. P.E., the design and project engineers, will oversee all aspects of the construction project. You own a farm which is very close to -- but not served by -- the sewer system. On the farm is a red shale bank. You have sold shale at $1.00 per ton from this location since 1989. Linde Construction, Inc.. has approached you about buying shale /rock for use in various projects, including the Cherry Ridge Sewer construction. You note that the agreed upon price of $0.50 per ton is substantially less than your previous sales price. You state that you never met and never had any conversation or interaction with any official of Linde until after it was awarded the construction contract. You further state that the estimated annual sales of the rock would constitute less than 2.5% of your Suhosky, Robert J., 95 -594 August 15, 1995 Page 2 annual income. You seek an advisory from the State Ethics Commission so that you may avoid any potential conflict of interest. Discussion: It is initially noted that pursuant to Sections 7(10) 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. § 5407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. A reading of Sections 7(10) and (11) of the Ethics Act makes it clear that an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Law violations by a person who is subject to the Ethics Law. Thus, to the extent you may have participated as to the award of the construction contract to Linde Construction, Inc., such would constitute past conduct which may not be addressed in this advisory. However, as to your prospective conduct, your inquiry shall be addressed. As a Member and Chair of the newly formed Sewer Authority. in Cherry Ridge Township, Wayne County, Pennsylvania, 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 Suhosky, Robert J., 95 -594 August 15, 1995 Page 3 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. 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, Suhosky, Robert J., 95 -594 August 15, 1995 Page 4 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; (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 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 Suhosky, Robert J., 95 -594 August 15, 1995 Page 5 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. 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. In applying the above provisions of the Ethics Law to the circumstances which you have submitted, pursuant to Section 3(a) of the Ethics Law, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As to your prospective conduct in your capacity as a public official, you would have a conflict of interest in future matters pertaining to the Cherry Ridge sewer construction and /or Linde Suhosky, Robert J., 95 -594 August 15, 1995 Page 6 Construction, Inc., if you do in fact supply that corporation with the red shale as proposed. This Commission has previously held that a public official has a conflict of interest and must abstain from matters involving business clients. See, Miller, Opinion 89- 024, Kannebecker, Opinion 92 -010, and since the shale would actually be used in the sewer construction itself your participation in such matters could have a direct effect in the nature of a private pecuniary benefit to you. In each instance of a conflict of interest, you would be required to abstain from any participation of any nature whatsoever, and to publicly announce the abstention and the reasons for same, both orally and in a written memorandum to be filed with the Secretary recording the minutes. With regard to Section 3(f), it is noted that your proposed sale of shale would constitute a subcontract which would invoke the restrictions of Section 3 (f) . Therefore, in order for you to be in compliance with Section 3 (f) , the above restrictions as to an "open and public process" would have had to have been observed as to the contract between the authority and Linde Construction, Inc. Finally, although the State Ethics Commission does not have the statutory jurisdiction to interpret the Municipality Authorities Act, you are advised that the Municipality Authorities Act provides, inter alia, 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). It is recommended that you seek the advice of legal counsel as to the application of the Municipality Authorities Act in this matter. 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, although you are advised to seek legal advice as to the application Suhosky, Robert J., 95 -594 August 15, 1995 Page 7 of the Municipality Authorities Act in this matter. Conclusion: As a Member and Chair of the Sewer Authority in Cherry Ridge Township, Wayne County, Pennsylvania, you are a public official subject to the provisions of the Ethics Law. If you would supply shale as proposed to Linde Construction, Inc. ( "Linde "), the company which has been awarded the contract for construction of the Cherry Ridge Sewer, you would have a conflict of interest as to future matters pertaining to the sewer construction and /or Linde. In each instance of a conflict of interest, you would be required to abstain fully and to publicly disclose the abstention and the reasons for same, both orally and in a written memorandum to be filed with the secretary recording the minutes. The restrictions of Section 3 (f) of the Ethics Law would apply. In order for you to be in compliance with Section 3 (f) , the above restrictions as to an "open and public process" would have had to have been observed as to the contract between the Sewer Authority and Linde Construction, Inc. 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 FAX 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. erely, Vincent . Dopko Chief Counsel