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HomeMy WebLinkAbout98-543 BurkeWilliam R. Burke, Mayor Borough of Auburn P.O. Box 89 Auburn, PA 17922 Dear Mr. Burke: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 17, 1998 98 -543 Re: Conflict; Public Official /Employee; Borough; Mayor; Business With Which Associated; Contracting; Permits; Use of Authority of Office. This responds to your letter of March 5, 1998 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employe Ethics Law presents any prohibition or restrictions upon the mayor of a borough who, in his private capacity, operates a contracting business that regularly contracts with the borough and with private citizens within the borough, with regard to the issuance of borough permits for such work and with regard to contracting with the borough. Facts: You are currently serving as the Mayor of the Borough of Auburn (Borough) in Schuylkill County, which has a population of 911. You also operate a contracting business which regularly does work for both private citizens and the Borough. Such work includes putting in sidewalks, connecting sewer systems, doing snow removal, and loading trucks with ashes for the Borough. Under various Borough Ordinances, the Mayor issues the permits for much of the above - described work. You state that these permits are issued when the applicant complies with the requirements for such work set out in the Borough Ordinances, and that there is very little discretion involved in awarding the permits. The Borough does not currently have a Code Enforcement Office. Additionally, in the past when the Mayor has not been available to issue permits they have been issued by the President of Council. You state that it has been your belief that the Borough could contract with you for jobs that amount to less than $500 per contract, as to which belief you reference the Ethics Law. You note that the Borough Code states that no borough official of a borough with a population of more than 3,000 may serve as an employee of the borough, and that a borough may contract with a borough official for no more than $1,000 per year. You state that you are having trouble reconciling these provisions. Burke, 98 -543 April 17, 1998 Page 2 You ask for an advisory from the State Ethics Commission as to the following specific questions: 1) Whether there are any ethical concerns as to the Borough contracting with your business to do work for the Borough; 2) Whether you may issue permits to your business, or whether the President of Council must do so; and 3) Whether you may issue permits to other contractors. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) 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. It is further initially noted that pursuant to the same aforesaid provisions of the Ethics Law, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint which will be investigated by the Commission if there are allegations of Ethics Law violations by a person who is subject to the Ethics Law. As Mayor for the Borough of Auburn you are a public official as that term is defined in the Public Official and Employe Ethics Law ( "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 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 Burke, 98 -543 April 17, 1998 Page 3 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. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "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. 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 Burke, 98 -543 April 17, 1998 Page 4 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. Section 3(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. Rather, where a public official /public employee, his spouse or child, or a business with which he, his spouse or child is associated, is otherwise appropriately contracting with the 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, Section 3(f) requires that an "open and public process" be observed as to the contract with the governmental body. Pursuant to Section 3(f), an "open and public process" includes: (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. Burke, 98 -543 April 17, 1998 Page 5 In each instance of a conflict, 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 voting is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. Having set forth the above provisions and restrictions of the Ethics Law, your specific inquiries shall be addressed seriatim. Your first specific inquiry is whether there are any ethical concerns as to the Borough contracting with your business to do work for the Borough. You are advised that Section 3(a) of the Ethics Law does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position — or confidential information obtained by being in that position — for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 3(a) would include: (1) the pursuit of a private business opportunity while acting in a public capacity, Metrick, Order No. 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order No. 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity, such as the review /selection of its bids or proposals, Gorman, Order No. 1041. If the private employer or business with which the public official /public employee is associated would have a matter pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter. Miller, Opinion No. 89 -024. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 3(j). Under the facts which you have submitted, your contracting business would be considered a "business with which you are associated." Therefore, you could not use the authority of your public position as Mayor of the Borough of Auburn, or confidential information obtained by being in that position, to solicit or promote business activity between the Borough and your business. Furthermore, to the extent you would, in your public capacity, have involvement as to your business, a conflict of interest would exist. In each instance of a conflict of interest, you would be required to abstain and to satisfy the disclosure requirements of Section 3(j) set forth - above. With regard to Section 3(f), as noted above, that Section of the Ethics Law would not operate to make contracting with the Borough permissible where it would otherwise be prohibited, such as by the Borough Code. Rather, Section 3(f) would operate to impose the additional restrictions set forth above where you or your business would otherwise be appropriately contracting with the Borough, or subcontracting with any person who has been awarded a contract with the Borough, in an amount of $500.00 or more. In such cases, Section 3(f) would require that an Burke, 98 -543 April 17, 1998 Page 6 "open and public process" be observed as to the contract with the Borough. Section 3(f) would also require that you as Mayor not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. Parenthetically, although the contracting in question would not be prohibited under the Ethics Law provided the requirements of Sections 3(a), 3(f), and 3(j) would be satisfied, a problem might exist as to such contracting under the Borough Code which 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. 53 P.S. §46404 (Emphasis added). Since such contracting may be prohibited or restricted by the above quoted provision, it is suggested that you seek legal advice in that regard. As for your stated difficulty in reconciling the Ethics Law with the provisions of the Borough Code, the State Ethics Commission does not have the express statutory jurisdiction to interpret the Borough Code. However, with regard to the provision involving serving as an employee of the Borough, it would appear from the facts which you have submitted that you are not serving as an employee of the Borough, but rather are an independent contractor. With regard to the second provision that you reference and which is quoted above, involving certain limitations upon contracts between Borough officials and the Borough, it would appear that such provision operates to establish whether and to what extent contracting is permissible, in contrast to Section Burke, 98 -543 April 17, 1998 Page 7 3(f) of the Ethics Law which simply imposes additional restrictions where such contracting is permissible and is in excess of $500. Your second specific inquiry is whether you may issue permits to your business, or whether the President of Council must do so. As noted above, you would have a conflict of interest as Mayor with regard to work performed by you and /or your business. You would therefore be required to abstain from any use of authority of office in that regard, which abstention would include but would not be limited to the issuance of permits. Your third specific inquiry is whether you may issue permits to other contractors. Generally speaking, you would be able to do so as long as there would be no other basis for a conflict of interest under the Ethics Law, such as an immediate family relationship with the other contractor. However, you could not use your authority over the issuance of permits to indirectly benefit your own business by effectuating a detriment to your business competitors. See, Pepper, Opinion No. 87- 008. Subject to these restrictions, you would be able to issue permits to other contractors. 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. Conclusion: As Mayor for the Borough of Auburn (Borough) in Schuylkill County, you are a public official subject to the provisions of the Ethics Law. Although Section 3(a) of the Ethics Law would not preclude you, or a business with which you are associated, from contracting with the Borough, you could not use the authority of office or confidential information obtained by being in the public position to obtain such business, and any private business activity could not be conducted using governmental facilities or personnel. Pursuant to Section 3(a) of the Ethics Law, you could not, as Mayor of the Borough, issue permits to yourself and /or your business. Section 3(a) of the Ethics Law would prohibit the use of the authority of office or confidential information to the detriment of business competitors. The restrictions of Sections 3(a) and 3(j) of the Ethics Law as set forth above must be observed. Where applicable, the restrictions of Section 3(f) of the Ethics Law as set forth above must be observed. Such restrictions would specifically apply to contract(s) valued at $500 or more between the Borough of Auburn and you and /or your business. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. It is suggested that legal advice be obtained with regard to the possible applicability of the Borough Code. 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. Burke, 98 -543 April 17, 1998 Page 8 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. s rely, Vincent '41. •o• o Chief Counsel