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HomeMy WebLinkAbout96-613 RoosKenneth A. Roos, Esquire Wisler, Pearlstine, Talone, Craig, Garrity & Potash, LLP Office Court at Walton Point 484 Norristown Road Suite 100 Blue Bell, PA 19422 -2326 Dear Mr. Roos: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL December 4, 1996 96 -613 Re: Conflict, Grant Program, Participation by Public Official/ Employee, Housing Authority, Participation of Employees in 5(h) Homeownership Program, First - time Homebuyers. This responds to your letters of October 23, 1996 and October 31, 1996 in which you requested advice from the State Ethics Commission. Issue: Whether employees of a County Housing Authority under the Public Official and Employee Ethics Law may participate in a grant program administered by the Housing Authority. Facts: As the Solicitor for the Montgomery County Housing Authority (MCHA) and as per a Resolution ( #96 -649) of the Board authorizing such inquiry, you are requesting an advisory from the State Ethics Commission as to the participation of MCHA's employees in a program administered by the MCHA for first -time homebuyers. On or about June 1, 1995, the United States Department of Housing and Urban Development (HUD) approved a plan for subsidies for first -time homebuyers as part of a Homeownership Plan to be administered by the MCHA pursuant to 24 CFR Part 906, Section 5(h) (HUD's regulations dealing with such plans). You have provided a copy of the approved plan which is incorporated herein by reference. The plan generally provides for sales of residential properties owned by the MCHA at substantially reduced prices to first -time homebuyers who meet certain income standards. A question has arisen as to whether employees of the MCHA may participate as homebuyers under the 5(h) Homeownership Program. You state that many MCHA Roos /MCHA, 96 -613 December 4, 1996 Page 2 employees meet the income standards of the program and are eager to participate if permitted. You have submitted a copy of a letter from Robert A. Dinney, Associate Field Counsel for HUD (which letter is incorporated herein by reference) which states that "if an employee meets all program criteria and does not formulate policy, influence decisions or exercise any responsibility or functions with respect to the Homeownership Program, there would not be any HUD prohibition against the participation of the employee in the Authority's Program." You state that MCHA's concern arises out of the conflict of interest section of the Pennsylvania Housing Authorities Law, 35 P.S. § 1548, which states: No member or employe of an Authority shall acquire any interest, direct or indirect, in any housing project or in any property included or planned to be included in any project .. . You state that 35 P.S. §1548 defines "project" to include "[a]ny work or undertaking to provide safe and sanitary dwelling accommodations by means of the new construction, or the reconstruction, restoration, reconditioning, remodeling, or repair of existing structures for person of low income ... The term "Housing Project" or "Project" may be applied to the planning of the buildings and improvements, the acquisition of property, the demolition of existing structures, the construction, reconstruction, alteration, and repair of existing improvements, and all other work in connection therewith." You have attached copies of these Sections which are incorporated herein by reference. The MCHA is requesting an advisory from the State Ethics Commission regarding the participation of MCHA employees who do not formulate policy, influence decisions or exercise responsibilities or functions with respect to the Homeownership Program as to their ability to participate in the 5(h) Homeownership Program. Discussion: Those employees of MCHA who meet the definition of public employee in the Ethics Law and Regulations are "public employees" subject to the provisions of that Law. 65 P.S. §402; 51 Pa. Code § 1 1.1. Sections 3(a), 3(f), and 3(j) of the Ethics Law provide: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. (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 Roos /MCHA, 96 -613 December 4, 1996 Page 3 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. (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. 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 or no public official /employee shall solicit or accept any thing 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. The following terms are defined in the Ethics Law: 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 Roos /MCHA, 96 -613 December 4, 1996 Page 4 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. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. Under the Ethics Law, we must observe the stated purpose of that Act which is to strengthen the faith and confidence of people in their government by assuring the public that the financial interests of the holders of or candidates for public office do not present a conflict with the public trust. In applying the above quoted provisions of the Ethics Law to the instant matter, we will first consider the provisions of Section 3(f) of the Ethics Law. Since Montgomery County Housing Authority is the governmental body with which MCHA employees are associated, Section 3(f) would apply in this case. Assuming that a contract or sub - contract would be made between MCHA employees and MCHA pursuant to the provisions of this Program, Section 3(f) of the Ethics Law would impose the following requirements if the contract or sub - contract is $500.00 or more were to be made between MCHA employees and the governmental body: 1. prior public notice of the contract possibility; 2. public disclosure of applications and contracts considered; 3. public disclosure of the award of the contracts; and 4. no supervisory or overall responsibility for the implementation or administration of the contract or sub - contract by the public official /employee. We will now address the propriety of the proposed conduct under Section 3(a) of the Ethics Law. In this review, we note and recognize the concern that arises Roos /MCHA, 96 -613 December 4, 1996 Page 5 where a public program, funded with public monies and administered through a public agency, political subdivision, or governmental body is also available to public officials or employees of that agency or governmental body. We recognize the public concern and criticism that may arise if a public official or public employee who serves a governmental body receives benefits under a program of this nature. It is clear that the Ethics Law, and in particular Section 3(a), was primarily designed to restrict the activity of a public official or employee from using the authority of office for private pecuniary benefit. However, we believe that as a general rule the Ethics Law was not enacted nor should it be interpreted to preclude public officials or employees from participating in programs which might otherwise be available to them as citizens. Wolff, Opinion 89 -030; Woodrinq, Opinion 90 -001. In order to insure that a public official or employee is not in a conflict when he seeks to participate in a rehabilitation or grant program, he must observe the following: 1. play no role in establishing the criteria under which the program is to operate, particularly with reference to the structure or administration of the program; 2. play no role in establishing or implementing the criteria by which selections for program participation are to be made; 3. play no role in the process of selecting and reviewing applicants or in awarding grants or funds; 4. use no confidential information acquired during the holding of public office or public employment to apply for or to obtain such funds, grants, etc., and 5. abstain, publicly disclose and file a memorandum with the person responsible for recording the minutes under Section 3(j) of the Ethics Law in cases where the public official/ employee is associated with administering the grant or rehabilitation program not only as to his own application but as to similarly situated individuals with whom the public official /employee might be competing for available funds. In cases where Section 3(f) is applicable, the public official /employee would be prohibited from any supervisory or overall responsibility as to the contract or program. Through application of the above criteria, we seek to eliminate the possibility that a public official /employee who is seeking such funds or seeking to participate in these programs would be in a position to insure that the grant funds or the program benefits would be available for his own benefit. Thus, a public official or public employee in such a situation should refrain from participating in making decisions or recommendations about the program and regarding distribution of the limited funds which might be available as a result of such a program. Expressly conditioned upon the assumption that MCHA employees are in conformance with the above criteria, they may apply for and participate in the benefits associated with the Program. 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 Roos /MCHA, 96 -613 December 4, 1996 Page 6 involve an interpretation of the Ethics Law. Specifically not addressed herein is the applicability of the Code of Federal Regulations or the Pennsylvania Housing Authorities Law. Conclusion: Those employees of MCHA who meet the definition of public employee in the Ethics Law and Regulations are "public employees" subject to the provisions of that Law. Section 3(a) of the Ethics Law would not preclude MCHA employees from applying for a Program grant provided they played no role in establishing the criteria under which the program would operate, played no role in implementing the criteria for selecting applicants, played no role in selecting or reviewing applicants, used no confidential information and finally had no involvement with the administration of the program. The requirements of Section 3(f) of the Ethics Law noted above, to the extent applicable, must be observed. 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). 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. cerely, Vincent J. P opk. Chief Counsel