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HomeMy WebLinkAbout97-558 WinderAndrew L. Winder, Esquire Bomgardner & Winder 10 -12 South Main Street Box 166 Mifflintown, PA 17059 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 21, 1997 97 -558 Re: Conflict, Public Official /Employee, Industrial Development Corporation, Purchase of Land Owned by State Representative, Federal and State Grants and Loans. Dear Mr. Winder: This responds to your inquiry consisting of your letter of March 18, 1997 and Representative Daniel F. Clark's letter of March 20, 1997, by 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 the Pennsylvania House of Representatives as to his sale of real estate to an industrial development corporation of a County within his district, where the transaction will involve federal and state grants and loans. Facts: Your office is counsel to Juniata Business and Industry, Inc. (JBI), a non- profit corporation which the Pennsylvania Industrial Development Authority (PIDA) recognizes as the industrial development corporation for Juniata County. With the authorization of Representative Daniel F. Clark (Representative Clark), a Member of the Pennsylvania House of Representatives from the district which includes Juniata County, you request an advisory from the State Ethics Commission as to the following facts and circumstances. JBI has signed an agreement to purchase undeveloped real estate containing approximately 57 acres from Representative Clark for the sum of $684,000. In order to fund the purchase of the land and subsequent construction of municipal water and sewer lines, road and street lights, JBI has applied for and obtained grants from the United States Economic Development Agency, the United States Appalachian Regional Commission, and the Pennsylvania Department of Community and Economic Development (through the Juniata County Commissioners), and loans from PIDA and the Pennsylvania Power and Light Company. JBI intends to use all of the loan proceeds from PP &L and part of the loan proceeds from PIDA to purchase the land Winder /Clark, 97 -558 April 21, 1997 Page 2 from Representative Clark. The grant money will be used for construction of the infrastructure and the design and administrative costs associated with the project. The ultimate purpose of the entire project is to develop suitable industrial sites in Juniata County. You state that Representative Clark will have no involvement in the project after the land is purchased from him. A concern has been raised as to whether the proposed transaction would implicate the contracting restrictions contained in Section 3(f) of the Ethics Law, since JBI will be contracting with PIDA to borrow an amount of up to $602,000 to partially fund the purchase of Representative Clark's land. The application submitted by JBI for the PIDA loan contained a copy of the real estate sales agreement identifying Representative Clark as the seller. The fact that Representative Clark is a Member of the House was not expressly stated in the application. A subsequent exchange of correspondence occurred between your office and PIDA's counsel, copies of which you have enclosed and which are incorporated herein by reference. You note that PIDA's counsel did not answer your question regarding PIDA's knowledge of Clark's status as a State Representative. Finally, Representative Clark has indicated that he is not fully aware of all of the funding sources and the purposes of the funds which JBI will be using to develop this industrial park. 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. As a Member of the Pennsylvania House of Representatives, Daniel F. Clark (Representative Clark) 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 Winder /Clark, 97 -558 April 21, 1997 Page 3 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. "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 Winder /Clark, 97 -558 April 21, 1997 Page 4 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 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 Winder /Clark, 97 -558 April 21, 1997 Page 5 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 applying the above provisions of the Ethics Law to the circumstances which you have submitted, 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. In this case, the facts which have been submitted do not reveal any potential use of the authority of office by Representative Clark or any use of confidential information that the Representative has access to by being in his public position. Rather, it would appear from the facts which have been submitted that Representative Clark's sole involvement with this transaction is in his private capacity as a private citizen selling a piece of real estate. Conditioned upon the assumption that such is correct, and that Representative Clark would not in any way be using the authority of his office or confidential information that he has access to by being a Representative to advance the sale of his real estate, Section 3(a) would not restrict Representative Clark as to this transaction. As for Section 3(f), in order for that provision's restrictions to become applicable, there would have to be some contract to which the governmental body — the Pennsylvania House of Representatives — would be a party. The facts as they have been submitted do not reveal any contracting by the Pennsylvania House of Representatives related to this transaction. Conditioned upon the assumption that the House of Representatives would not be a party to any contract related to the proposed sale of Representative Clark's real estate, Section 3(f) would not impose restrictions as to this transaction. 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 Legislative Code of Conduct or the PIDA Code of Ethics. Conclusion: As a Member of the Pennsylvania House of Representatives, Daniel F. Clark (Representative Clark) is a public official subject to the provisions of the Ethics Law. Neither Section 3(a) nor Section 3(f) of the Ethics Law would impose restrictions as to the proposed sale of real estate by Representative Clark to the industrial development corporation of a County within his district, conditioned upon the assumptions that Representative Clark would not in any way be using the authority of his office or confidential information that he has access to by being a Representative to advance the sale of his real estate and the House of Representatives would not be Winder /Clark, 97 -558 April 21, 1997 Page 6 a party to any contract related to the transaction. 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. Si ely, Vincent J. • pko Chief Counsel