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HomeMy WebLinkAbout96-577 DanyiKevin Frank Danyi, Esquire Maloney, Danyi, Davis & Danyi 901 West Lehigh Street PO Box 1279 Bethlehem, PA 18016 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 2, 1996 96 -577 Re: Conflict, Public Official /Employee, Municipal Authority, Board Member, Son, Business With Which Associated, Reimbursement for Emergency and Routine Repair Work, Contracting. Dear Mr. Danyi: This responds to your letters of June 17 and June 25, 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 Member of an Authority Board as to (1) the payment for emergency and routine work performed by his son or (2) as to transactions between his employer and the Authority. Facts: As Solicitor for the Freemansburg Municipal Authority (Authority) in Northampton County, Pennsylvania, you request an advisory on behalf of an Authority Board Member as to two factual scenarios. The first scenario involves the Authority Member's adult son who performed routine and emergency work on a sanitary sewage pump station. The Authority's regular maintenance man resigned suddenly, at the same time as there were mechanical /operational problems with the pump station which necessitated emergency repairs. The Board Member's son billed the Authority $4,000 for that work, which amount included his labor at a rate of $20 per hour and reimbursement for equipment which he purchased to perform the work. You state that he is a skilled mechanic, and has performed his work to the Board's satisfaction. It is your belief that he is entitled to be reimbursed for any materials purchased on behalf of the Authority provided that he provides receipts for same and the total cost does not exceed the $ 10,000 threshold for formal public bidding. You state that the Board Member himself was also physically involved in the work, which he did for the Authority as a favor /civic obligation. Danvi, 96 -577 August 2, 1996 Page 2 You further state that the Board Member abstained from voting in this matter. Your questions as to the first scenario are: 1. Should the Board Member have any role in discussions regarding the work? 2. Should the Board Member be excluded from discussions and leave the room during any public discussion of the work performed by his son and /or the payment of any bills submitted by his son? You note that your questions as to the maintenance and repair work involve a distinction between normal maintenance and emergency repairs. The second scenario pertains to whether it is permissible for the employer of an Authority Board Member to transact business with the Authority. You state that your opinion as to this is uncertain but that you did advise the Authority that under no circumstances should any Authority Member who receives a commission on sales have his company involved in any business dealings with the Authority, as you feel that this would violate the Pennsylvania Municipality Authorities Act. You have submitted copies of two letters from you to the Chair of the Authority, dated May 14, 1996 and June 11, 1996. 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. 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. The Authority Board Member on whose behalf you have inquired 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. 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 Danvi, 96 -577 August 2, 1996 Page 3 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. "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. 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 Danvi, 96 -577 August 2, 1996 Page 4 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. 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 Danvi, 96 -577 August 2, 1996 Page 5 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, it is first noted that there does not appear to be any precedent where the Commission in applying the Ethics Law has drawn a distinction between normal maintenance and emergency repairs. 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. By definition, a public official's son is a member of his immediate family, and a public official's employer is a business with which he is associated. Furthermore, the use of authority of office is more than the mere mechanics of voting and encompasses all of the tasks needed to perform the functions of a given position. See, Juliante, Order No. 809. Use of authority of office includes, for example, discussing, conferring with others, and lobbying for a particular result. Thus, pursuant to Section 3(a), the Board Member whose son has performed routine and emergency work for the Authority would have a conflict of interest in matters pertaining to the work. The Board Member could not participate in discussions or otherwise "use the authority of office" regarding his son's work. In each instance of a conflict of interest, the Board Member would be required to abstain from any participation of any nature and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. However, the Board Member would not be required to leave the room during public meetings. Public meetings, by their very nature, do not involve Danvi, 96 -577 August 2, 1996 Page 6 "confidential information," and mere presence at a public meeting does not constitute a use of the authority of office. As for Section 3(f), the requirements of Section 3(f) would have to be observed as to contracts between the Authority and an Authority Member's son, where the value of the contract is $500 or more. As for your second inquiry, involving business transactions between the employer of an Authority Board Member and the Authority, it is noted that Section 3(a) of the Ethics Law does not prohibit public officials /employees from outside business activities or employment; however, the public official /employee may not use the authority of office for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. A public official /employee must exercise caution so that his private business activities do not conflict with his public duties. Crisci, Opinion 89 -013. In the event that the private employer or business has a matter pending before the governmental body or if the public official as part of such official duties must participate, review or pass upon that matter, a conflict would exist. Miller, Opinion 89 -024. In those instances, it will be necessary that the public official be removed from that process. In such cases as noted above, Section 3(j) of the Ethics Law would require not only that the public official abstain from participation but also file a written memorandum to that effect with the person recording the minutes. Furthermore, the requirements of Section 3(f) as set forth above would apply to any contract involving the employer of a public official and the governmental body where that contract is valued at $500 or more. As for the Municipality Authorities Act, the State Ethics Commission does not have the express statutory jurisdiction to interpret or enforce that Act. For your information, it is noted that said Act provides 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). 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. Danvi, 96 -577 August 2, 1996 Page 7 Conclusion: The Freemansburg Municipal Authority Board Member on whose behalf you have inquired is a public official subject to the provisions of the Ethics Law. Pursuant to Section 3(a) of the Ethics Law, the Authority Board Member may not use the authority of his public office for the private pecuniary benefit of his son or his employer. The Board Member would have a conflict of interest in matters regarding work performed by his son for the Authority. However, the Board Member need not leave the room during public meetings when such matters are before the Board. The requirements of Section 3(f) must be observed where applicable. 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. erely, incent Do Chief Counsel