Loading...
HomeMy WebLinkAbout96-567 KesterRobert W. Kester Councilman Borough of Clark's Summit 304 South State Street Clark's Summit, PA 18411 Dear Mr. Kester: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 11, 1996 96 -567 Re: Conflict, Public Official /Employee, Borough, Council Member, Business With Which Associated, Printing Services. This responds to your letter of May 8, 1996 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 who has an ownership interest in a printing business with regard to providing printing services to the borough. Facts: As a newly elected Borough Council Member in the Borough of Clark's Summit, Lackawanna County, Pennsylvania, you request an advisory from the State Ethics Commission. You and your brother each own 50% of a small printing business known as J &B Printing in Clark's Summit. For 20 years, your company has produced business cards, borough forms, letterhead, and police reports /forms for the Borough. You state that you have no contract with the Borough, but rather, provide printing services on an "as- needed" basis. You have been paid a little over $750 for such services to date this year. You request an advisory as to whether such would be in violation of the Ethics Law, Borough Code or any other law or act. You also ask that this Commission provide to you and the entire Borough Council a policy or procedure for adoption that would clarify such transactions. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(1 1) 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. An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. It is also noted that an opinion /advice issued pursuant to Sections 7(10) and (1 1) of the Ethics Act may be given only as to prospective (future) conduct. It is noted that the State Ethics Commission does not have the statutory jurisdiction to interpret laws other than the Ethics Law. Kester, 96 -567 June 11, 1996 Page 2 Finally, it is noted that the Commission does not have, among its statutory powers and duties, the power to issue policies or procedures for adoption by municipalities. The Commission does, however, have the power to issue an advisory to you which interprets the Ethics Law under the facts which you have submitted. As a Member of the Clark's Summit Borough Council, 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. 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 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. Kester, 96 -567 June 11, 1996 Page 3 "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. Section 3(f) of the Ethics Law provides as follows: Section 3. Restricted actjvities (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 express 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. Kester, 96 -567 June 11, 1996 Page 4 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. 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. Having set forth the above provisions, you are advised that generally, the Ethics Law does not per se prohibit a public official or a business with which he or a member of his immediate family is associated from contracting with his governmental body. Pancoe, Opinion 89 -01 1. However, pursuant to Section 3(a), you could not participate or vote on matters involving work by J &B Printing for the Borough. J &B Printing is a business with which you and a member of your immediate family (brother) are associated. Such matters involving a financial benefit to J &B Printing would constitute a conflict of interest for you. In each instance of a conflict of interest, you would be Kester, 96 -567 June 11, 1996 Page 5 required to abstain fully and to fully satisfy the disclosure requirements of Section 3(j) of the Ethics Law as set forth above. As for Section 3(f), based upon the facts which you have submitted, a conclusive determination cannot be made as to whether Section 3(f) would apply in your case. Therefore, this advice is necessarily limited to advising you generally that the definition of "contract" as set forth in the Ethics Law is not limited to written contracts, and the fact that the services are provided "as needed" would not preclude a determination that there is a contract as defined in the Ethics Law. Furthermore, what you may consider to be separate purchases may actually be deemed to be part of the same contract. If Section 3(f) is in fact applicable, the restrictions for an open and public process must be observed. 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, it is suggested that you obtain legal advice regarding the applicability of the Borough Code. In the instant situation, the Borough Code provides as follows: §46404. Penalty for personal interest in contracts or purchases Except as otherwise provided in this act, no borough official either elected or appointed, who knows or who by the exercise of reasonable diligence could know, shall be interested to any appreciable degree either directly or indirectly in any purchase made or contract entered into or expenditure of money made by the borough or relating to the business of the borough, involving the expenditure by the borough of more than one thousand dollars ($ 1000) in any calendar year, but this limitation shall not apply to cases where such officer or appointee of the borough is an employe of the person, firm or corporation to which the money is to be paid in a capacity with no possible influence on the transaction, and in which he cannot be possibly benefited thereby either financially or otherwise. But in the case of a councilman or mayor, if he knows that he is within the exception just mentioned he shall so inform council and shall refrain from voting on the expenditure or any ordinance relating thereto, and shall in no manner participate therein. Any official or appointee who shall knowingly violate the provisions of this section shall be subject to surcharge to the extent of the damage shown to be thereby sustained by the borough and to ouster from office, and shall be guilty of a misdemeanor, and upon conviction thereof shall be sentenced to pay a fine not exceeding one thousand dollars ($ 1000), or not exceeding one hundred eighty days' imprisonment, or both. 1966, Feb. 1, P.L. (1965) _, No. 581, §1404. 53 P.S. §46404. )(ester, 96 -567 June 11, 1996 Page 6 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 Borough Code, although it has been suggested that you obtain legal advice as to its applicability. Conclusion: As a Member of the Clark's Summit Borough Council, you are a public official subject to the provisions of the Ethics Law. Under Section 3(a) of the Ethics Law, a public official /public employee or a business with which he or a member of his immediate family is associated may contract with the governmental body, but the public official /public employee may not vote or participate in such matters. In each instance of a conflict, the disclosure requirements of Section 3(j) outlined above must be observed. Finally, if the contract is $500 or more, the open and public process as outlined above must be accomplished. The public official /public 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 Borough Code in this matter, it is suggested that legal advice be obtained in that regard. 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. This letter is a public record and will be made available as such. 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 forma/ 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 §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 within thirty (30) days may result in the dismissal of the appeal.