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HomeMy WebLinkAbout98-566 PotashCharles Potash, Esquire Wisler, Pearlstine, Talone et al 484 Norristown Rd., Ste. 100 Blue Bell, PA 19422 -2326 Dear Mr. Potash: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL June 10, 1998 98 -566 Re: Conflict; Public Official /Employee; School District; Director; Employment; Youth and Family Services; Funding; Contract. This responds to your letter of May 11, 1998 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 school board member who is employed part-time by Youth and Family Services, which receives funding from the school district and has a contract with the school district for certain programs. Facts: As the Solicitor for Upper Perkiomen School District (District), you have been authorized by Susan B. Miller (Miller) to seek an advisory from the State Ethics Commission on her behalf. Miller is a member of the District Board of School Directors and is employed part- time, up to 15 hours per week, as a program presenter and counselor for Youth and Family Services (YFS). She does not counsel individuals, nor is she in a policy- making position with YFS. The District contracts with and pays YFS for certain programs in its schools. In addition, Miller in her letter of authorization advises that YFS has received funding from the District. You ask for an Advice of Counsel as to whether conflicts of interest exist for Miller as a school board member while she is employed by YFS. 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 Board of School Directors for Upper Perkiomen School District (District), Miller is a public official as that term is defined in the Public Official and Potash, 98 -065 June 10, 1998 Page 2 Employee Ethics Law ( "Ethics Law "), and hence she 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. "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. 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 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. Potash, 98 -065 June 10, 1998 Page 3 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. 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, Potash, 98 -065 June 10, 1998 Page 4 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 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. As to Section 3(f) of the Ethics Law, it is unclear from the submitted facts as to the exact nature of YFS. If YFS is a governmental body, Section 3(f) would not apply as to the contract between the District and YFS. However, if YFS is not a governmental body but is a business as that term is defined in the Ethics Law, then Section 3(f) of the Ethics Law would apply and the requirements of Section 3(f) noted above must be followed. Regarding Section 3(a) of the Ethics Law, if YFS is business with which Miller is associated, she would have a conflict. In any event, Miller would have a conflict because of a pecuniary benefit to herself through such participation. The conflict exists because Miller is a member of the District Board which funds or contracts with YFS wherein Miller is employed. Were Miller to participate on such matters concerning YFS, such action could impact upon Miller's continued employment status and her ability to obtain a pecuniary benefit consisting of the salary she receives from YFS. Moreover, Miller would have a conflict of interest as to YFS based upon the Commission's rulings in Bassi, Opinion No. 86- 007 -R, and Woodrinq, Opinion No. 90- 001. In Bassi, Opinion No. 86- 007 -R, the State Ethics Commission held, inter alia, that a County Commissioner (Edward Paluso) could not enter into a lease with a municipal authority, where one of the members of the authority (Norman Carson) was a county employee directly responsible to the commissioners of the county, unless the execution of the lease was accomplished after an open and public process, with the authority member abstaining from participating in the review and award of said lease, and the county commissioner abstaining from participating in any matter relating to the authority member in his position as a county employee. The Commission stated, inter alia: ... we cannot ignore the fact that Mr. Carson is an authority member and has influence and control over authority decisions. In this respect, Mr. Carson, by voting on the final adoption of a lease, would be voting on a matter directly related to his employer. Even though that employer is another governmental body, we have held, in the past, that a public official Potash, 98 -065 June 10, 1998 Page 5 See, Bassi, 86 -007 at 3. The Commission further stated: Ld,.at4. may not vote or participate in a matter if it somehow relates to a financial interest which he may have. See, Welz, 86 -001. In the instant situation, Mr. Carson would be called upon to determine the advisability of renting property for the authority. The property which they are seeking to rent is owned by the individual or one of the individuals who currently supervises him and controls his public employment with the county. As a result of this, Mr. Carson, as an authority member, should abstain from participating in any matter relating to this particular lease. Mr. Paluso as a county commissioner, is, in part, responsible for the general supervision of Mr. Carson. Mr. Carson, on the other hand, is an authority member in a position to grant Mr. Paluso a lease which results in Mr. Paluso receiving a financial gain. It may be difficult for the public to perceive how Mr. Paluso's actions as a county official, would not somehow be influenced by this potential leasing arrangement. It may be argued that Mr. Paluso, in dealing with Mr. Carson, to date, has done so in order to effect the favorable outcome of this lease. Additionally, it could be argued that Mr. Carson voted in favor of the lease in order to advance his position as a full -time county employee. The above factual scenarios, while hypothetical in nature, nonetheless create the types of conflicts of interest that are to be addressed by this Commission. In Woodrinq, Opinion No. 90 -001, the State Ethics Commission reviewed a similar situation. Jesse Woodring, Chairman of the Sunbury Redevelopment Authority, had applied to the City for a rehabilitation grant through the Federal Rental Rehabilitation Program (hereinafter, the "Program "). Kenneth Pick, who was employed as the Executive Director of the Redevelopment Authority (chaired by Woodring) also served as the Community Development Coordinator for Sunbury. In the latter capacity, Pick was administrator in charge of the Program for the City. Pick's functions included administering the Program, reviewing all applications, and determining eligibility. The Commission stated: . . . we are concerned that Mr. Pick, who is an employee of the Redevelopment Authority of which you are Chairman, has the duty of reviewing all applications and determining eligibility in his capacity as Community Development Coordinator for the city. In particular, the potential exists, given the employer - employee relationship between the Redevelopment Authority and Mr. Pick, that your application might be reviewed in a more favorable light than other applications. To forestall such a situation, you must not participate or take any action as to Mr. Pick if your application is approved and you receive benefits. Bassi, Opinion 86- 007. In addition, Section 3(j) of the Ethics Law would require you to publicly note that you would have a conflict as to any matter involving Mr. Pick. In addition, you must file a written memorandum to that effect with the person responsible for recording the minutes. Woodring, Opinion No. 90 -001 at 6. As was the case in the Bassi and Woodrinq rulings discussed above, the facts which you have submitted reflect that in her public position, Miller exercises authority Potash, 98 -065 June 10, 1998 Page 6 over YFS. In her private capacity, Miller is in an employment position with YFS. Therefore, for the reasons enunciated in Bassi and Woodring, supra, Miller would have a conflict of interest pursuant to Section 3(a) of the Ethics Law in matters pertaining to YFS. In each instance of a conflict of interest, Miller would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above Finally, a question exists as to the propriety of such contracting between the District and YFS under the Public School Code. However, since we do not have the power to administer and interpret the Public School Code, it is suggested that Miller seek the advice of her solicitor or private counsel on such matters. 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 Public School Code. Conclusion: As a member of the Board of School Directors for Upper Perkiomen School District (District), Miller is a public official subject to the provisions of the Ethics Law. Miller, who is employed part-time by Youth and Family Services, which receives funding from the school district and has a contract with the school district for certain programs, has a conflict in such matters relating to Youth and Family Services. The disclosure requirements of Section 3(j) of the Ethics Law must be satisfied in all cases of conflict. Lastly, since a question exists as to the propriety of such action under the Public School Code, private counsel or the solicitor should be contacted in that regard. 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 I. 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, incent Dopko Chief Counsel