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HomeMy WebLinkAbout95-615 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL November 7, 1995 95 -615 Re: Conflict, Public Official /Employee, Contracting with Governmental Body, School Director, Sale of Land to School District. This responds to your letters of September 14, September 22, and October 3, 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 a school director with regard to his prospective sale of real estate to the school board. Facts: As Solicitor for School District A, you request a confidential advisory on behalf of Mr. B, who is a Member of the School Board. Mr. B owns property adjacent to the school property, which property the Board is interested in purchasing. Mr. B is interested in selling the property, and he has the property listed for sale with a local realtor. The value of the property exceeds $500.00. You state that Mr. B and the Board wish to proceed properly. Mr. B would refrain from all discussions with any other Board Member and his real estate agent would conduct all negotiations with the Board. You also state that Mr. B would abstain from voting should an agreement be reached. On behalf of Mr. B, you ask what other precautions should be taken to effectuate the proposed sale. Discussion: It is initially noted that pursuant to Sections 7(10) CONFIDENTIAL LEGAL ADVICE 95 -615 November 7, 1995 Page 2 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 School Director for School District A, Mr. B is a public official as that term is defined under the Ethics Law, and hence he is 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. 65 P.S. §403(a). 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. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of CONFIDENTIAL LEGAL ADVICE 95 -615 November 7, 1995 Page 3 duties and responsibilities unique to a particular public office or position of public employment. "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. 65 P.S. §402 (Emphasis added). Sections 3(b) and 3(c) of the Ethics Law, 65 P.S. §§ 403(b), (c), 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. 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 CONFIDENTIAL LEGAL ADVICE 95 -615 November 7, 1995 Page 4 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. 65 P.S. §403(f). Section 403(j) of the Ethics Law provides: 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. 65 P.S. §403(j). Under Section 3(a) of the Ethics Law quoted above, a public official may not use the authority of office or confidential information to obtain a private pecuniary benefit for himself, a CONFIDENTIAL LEGAL ADVICE 95 -615 November 7, 1995 Page 5 member of his immediate family or a business with which he is or a member of his immediate family is associated. Generally, the Ethics Law places no per se prohibition upon a public official or business with which he is associated from contracting with his governmental body. Pancoe, Opinion 89 -011. However, under Section 3(a) of the Ethics Law, the public official may not participate or vote on matters involving the contract, and he must satisfy the requirements of Section 3(j) of the Ethics Law, such that the reasons for the abstention must be publicly announced as well as be set forth in a written memorandum to that effect filed with the secretary recording the minutes. Therefore, under Section 3(a) of the Ethics Law itself, Mr. B would not be precluded from contracting with the School District which is his governmental body but he could not participate or vote as to the matter of the contract and he would have to comply with the disclosure requirements of Section 3(j) of the Ethics Law. As for Section 3(f) of the Ethics Law, the State Ethics Commission has generally determined that its requirements for an open and public process must be observed in all situations where a public official is otherwise appropriately contracting with his own governmental body in an amount of $500 or more. This open and public process would require: (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. Further, Section 3(f) requires that the public official could not have supervisory or overall responsibility as to the implementation or administration of the contract. 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 Public School Code which provides as follows: No school director shall, during the term [f]or which he was elected or appointed, as a CONFIDENTIAL LEGAL ADVICE 95 -615 November 7, 1995 Page 6 24 P.S. §3 -324. such. private person engage in any business transaction with the school district in which he is elected or appointed . . . . Since such contracting may be prohibited by the above quoted provision of the Public School Code, it is suggested that Mr. B obtain legal advice in that regard. Lastly, 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 in this advice is the applicability of the Public School Code, although it is recommended that Mr. B obtain legal advice as to its applicability. Conclusion: As a School Director for School District A, Mr. B is a public official subject to the provisions of the Ethics Law. Under Section 3(a) of the Ethics Law, a public official /employee or a "business with which - -- associated" may contract with the governmental body but may not vote or participate in the matter of the contract and must observe the disclosure requirements of Section 3(j) outlined above. Furthermore, if the contract is $500 or more, the open and public process as outlined above must be accomplished. The public official /employee may not have any supervisory or overall responsibilities as to the contract. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Due to the possible application of the Public School Code in this matter, it is suggested that Mr. B obtain legal advice in that regard. 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. 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. CONFIDENTIAL LEGAL ADVICE 95 -615 November 7, 1995 Page 7 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 §13.2(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 wi thin thirty (30) days may result in the dismissal of the appeal. cerely, Vincent J. Dopko Chief Counsel