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HomeMy WebLinkAbout96-582 SnelbakerRichard C. Snelbaker, Esquire Snelbaker & Brenneman 44 West Main Street Mechanicsburg, PA 17055 Dear Mr. Snelbaker: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL August 15, 1996 96 -582 Re: Conflict, Public Official /Employee, Township, Supervisor, Contractor, Immediate Family, Brother, Business with which Associated, Contract, Use of Authority of Office, Bid Specification, Inspection. This responds to your letter of July 17, 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 Township Supervisor regarding his participation in preparing bid specifications for Township projects that might be bid by his brothers' firms, in hiring his brothers' firms as to projects involving planned or emergency work, in inspecting work done by his brothers' firms, and in authorizing payment for work performed by his brothers' businesses at meetings attended by only 2 of the 3 supervisors. Facts: On behalf of Keith Thebes (Thebes), an elected Township Supervisor for Centre Township, Perry County, Pennsylvania, you request an advisory from the State Ethics Commission. Thebes was elected to the office of Supervisor for a six year term beginning in January, 1994. Thebes is one of three Township Supervisors for Centre Township. Thebes was also elected Chairman of the Board of Supervisors and Roadmaster at the January, 1994 organization meeting with his full -time working day devoted to duties as Supervisor and Roadmaster. Centre Township is a rural community with a population of approximately 2,000. Since the Township owns very little equipment and has limited manpower with which to maintain its roads, bridges, and other facilities, it is therefore dependent upon independent contractors to perform construction and maintenance of roads and bridges and other public improvements. Thebes has two brothers who are the principals of independent corporations (Fred S. Thebes & Sons, Inc. and Perry County Construction) which own equipment Snelbaker /Thebes, 96 -582 August 15, 1996 Page 2 and hire employees to perform construction and maintenance of roads, bridges and other improvements of the type under the jurisdiction of the Township. Both of these businesses are located in Centre Township. You state that Thebes does not reside with his brothers, has no financial or proprietary interest in either of the corporations and receives no benefits from them. As Roadmaster, Thebes inspects public improvements, recommends projects to the Board of Supervisors, prepares specifications for approved projects and inspects the work performed by the contractors. Where the projected work will cost less than $4,000, Thebes engages contractors to perform such work. Where the projected work will cost more than $4,000 but less than $10,000, Thebes, as Roadmaster, receives and processes quotes from contractors pursuant to Section 802 of the Township Code. When emergency conditions such as snowfall or road washouts occur, Thebes is required to locate contractors with sufficient equipment and /or manpower to relieve the conditions. You state that under such emergency circumstances, the cost will usually be undeterminable and the receipt of quotes impractical. Thebes is an authorized signatory on Centre Township bank accounts from which payments are made to vendors. Because of the absence of other contractors in close proximity to Centre Township, it is reasonable to expect that the equipment and services of Thebes' brothers' contracting companies will be needed in the future. You indicate that there appears to be no complaints as to the quality or cost of the work provided by said contractors and that the future use of those contractors would be in the best interest of the Township. You state that many Centre Township roads are unpaved and it is anticipated that future improvements will be made to such roads including the clearing of additional width, constructing stormwater drainage facilities, grading and paving. Additionally, many of the Township public improvements will require maintenance. Such public improvements and maintenance are typical of the kind of work which would be performed by the contractor. Your specific inquiry involves any restrictions upon Thebes' performance of his duties as to the following: a. Engagement of contractors in which his brothers are interested, to perform both planned and emergency work. b. Preparing bid specifications for projects in which his brothers' firms may be interested. c. Inspecting work performed by his brothers' firms. d. Authorizing payment for work performed by his brothers' firms when only two supervisors are in attendance at a meeting at which such action is required. 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 Snelbaker/Thebes, 96 -582 August 15, 1996 Page 3 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. Further, advisories only address future, prospective conduct. You are therefore advised that this advisory does not address any past conduct by Thebes. Further, although an advisory affords defenses as to activities involving future conduct where all the material facts have been submitted truthfully, an advisory affords no defense as to past conduct. Lastly, this Advice is expressly limited to addressing only the specific questions which you have raised. As a Supervisor for Centre Township, Thebes 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 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. Snelbaker /Thebes, 96 -582 August 15, 1996 Page 4 "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. "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 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. Snelbaker/Thebes, 96 -582 August 15, 1996 Page 5 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 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. Snelbaker /Thebes, 96 -582 August 15, 1996 Page 6 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 of the Ethics Law and principles as interpreted by the Commission, the four questions you pose will be considered separately under Sections 3(a), 3(f) and 3(j) of the Ethics Law. Regarding Section 3(a), Thebes would have a conflict in engaging, as contractors, the businesses with which his brothers are associated. Whether the contract would be for planned or emergency work would make no difference. Thebes would not per se be prohibited from preparing bid specifications provided he did not have a reasonable or legitimate expectation that his brothers' businesses would obtain the contracts. Amato, Opinion 89 -002. Further, Thebes could not tailor such specifications to favor, insure, or enhance the ability of his brothers' businesses to obtain such contracts. Conversely, the specifications could not be written so as to disfavor, eliminate or lessen the ability of competitors of his brothers' businesses from obtaining such contracts. Pepper, Opinion 87 -008. Thebes could not perform inspections of the work performed by his brothers' businesses because the Ethics Law seeks to eliminate the concern that a public official /employee would not have objectivity in inspecting work performed by a member of his immediate family. Any lack of objectivity could result in approving something which should not pass inspection thereby resulting in a pecuniary benefit to a member of the immediate family. Lastly, Thebes could not participate in the process of authorizing payment of work performed by his brothers' businesses at meetings attended by two supervisors because Section 3(j) requires abstention in such circumstances. In the case of three member boards, a supervisor with a conflict may only vote if the other two members are deadlocked whereupon the supervisor with the conflict can vote to break the tie after the necessary disclosures are made. Thus, when only two members of a three member board are present, the supervisor with the conflict may not vote. The above exception is narrow and has been strictly construed. As to Section 3(f) of the Ethics Law, that provision would not have application because it does not apply to businesses with which a brother is associated. The foregoing is expressly conditioned upon the factual assumption that neither Thebes, nor his spouse, nor any child has any financial interest in the brothers' businesses. Finally, as to Section 3(j), that provision of the Ethics Law would require abstention and disclosure by Thebes as to the conflicts delineated above. 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. Snelbaker /Thebes, 96 -582 August 15, 1996 Page 7 Conclusion: As a Supervisor for Centre Township, Thebes is a public official subject to the provisions of the Ethics Law. As detailed above, Thebes would have a conflict as to awarding contracts, inspecting the work performed as to such contracts, and possibly preparing the bid specifications for such contracts that would be awarded to businesses with which his brothers are associated. Section 3(f) of the Ethics Law would not apply to such contracts provided Thebes, his spouse or any children would have no financial interest in the businesses of his brothers. Lastly, the requirements of Section 3(j) would apply in those instances where Thebes would have a conflict. 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 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 §13.2(h 1. 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. incent J. opko Chief Counsel