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HomeMy WebLinkAbout99-558 HookJ. William Hook Hook and Hook 189 W. High St., PO Box 792 Waynesburg, PA 15370 Dear Mr. Hook: Facts: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL June 8, 1999 FAX : (717) 787 - 0806 • Web Site: www.ethics.state.pa.us • e - mail: sec@state.pa.us 99 -558 Re: Conflict; Public Official /Employee; Member; Sewer Authority; Contract; Landowners. This responds to your letter of May 11, 1999 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 sgg., presents any prohibition or restrictions upon a municipal authority board member in contracting with the authority or with landowners as to lines and facilities for connection into the authority sewer system. On behalf of Ron Kurtyka (Kurtyka), a member of the Dry Tavern Sewer Authority (Authority) you request an advisory as to certain services Kurtyka intends to provide to the Authority and landowners. Although you reference three documents as attached Exhibits, no such documentation has been submitted. In 1990 a particular bid by Kurtyka was accepted by the Authority to provide services but that contract can not be located. The minutes of the September 5, 1990 Board Meeting reflect that bids were received from Kurtyka and H & H and that Kurtyka's bid was accepted. In 1995, after confusion arose as to the contract, Kurtyka and the Authority entered into a written agreement. The Authority did not advertise as to that agreement. You express your view that the agreement did not have to be advertised because it was greater than $500 but Tess than $4,000. In 1999, Jefferson Township appointed Kurtyka to be a member of the Authority. With Kurtyka as an Authority Board Member, you make the following inquiries: whether the written agreement of 1995 between Kurtyka and the Authority may continue; whether Kurtyka may enter into agreements with landowners as to line and facilities for connection into the Authority's system; and whether Kurtyka may submit bids for publicly awarded contracts by the Authority and accept the contracts, if awarded. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§1107(10), (1 1), 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 Hook, 99 -558 June 8, 1999 Page 2 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 Pa.C.S. §§1107(10), (1 1). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. It is further noted that, pursuant to Sections 1107(10) and (1 1) of the Ethics Act, 65 Pa.C.S. §1107(10), (1 1), an opinion /advice may 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 Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct which has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall be addressed. As Board Member for Dry Tavern Sewer Authority, Kurtyka is a public official as that term is defined in the Ethics Act, and hence Hook is subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The following terms are defined in the Ethics Act as follows: Section 1102. 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. The term 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. 65 Pa.C.S. §1102. In addition, Sections 1103(b) and 1103(c) of the Ethics Act 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 judgment 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. Hook, 99 -558 June 8, 1999 Page 3 Section 1103(f) of the Ethics Act provides as follows: Section 1103. Restricted activities. (f) Contract. - -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. 65 Pa.C.S. §1103(f). Section 1103(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 1103(f) requires that an "open and public process" be observed as to the contract with the governmental body. Pursuant to Section 1103(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 1103(f) of the Ethics Act 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 1103(j) of the Ethics Act provides as follows: Section 1103. Restricted activities. (j) Voting conflict. - -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 H ook, 99 -558 June 8, 1999 Page 4 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. 65 Pa.C.S. §1103(j). As to the inquiries you pose, the first inquiry will not be addressed for the reason that it is beyond the jurisdiction of the Commission to determine whether a given contract may continue. As to the second question, it is generally noted that a conflict of interest exists where a public official /public employee, in his official capacity, participates, reviews or passes upon a matter involving a business with which he is associated and /or private clients. Miller, Opinion No. 89 -024; Kannebecker, Opinion No. 92 -010. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion No. 89 -002; Garner, Opinion No. 93 -004; Snyder, Order No. 979 -2, affirmed Snyder v. SEC, 686 A.2d 843 (Pa. Commw. Ct. 1996), alloc. den., No. 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). The State Ethics Commission has also held that it is a conflict of interest under Section 1103(a) for a public official /public employee to pursue a private business opportunity in the course of public action. Metrick, Order No. 1037. In each instance of a conflict of interest, the public official /public employee must abstain from participation in his public capacity. The abstention requirement is not limited merely to voting, but extends to any use of authority of office. In Juliante, Order No. 809, the Commission recognized that the use of authority of office as defined in the Ethics Act includes, for example, discussing, conferring with others, and lobbying for a particular result. In each instance of a conflict of interest, the public official must also satisfy the disclosure requirements of Section 1103(j) set forth above. As to Kurtyka, he would not be prohibited by Section 1103(a) of the Ethics Act from entering into such contracts in a private capacity with landowners. However, Kurtyka would have a conflict in matters before the Board involving such business clients as well as matters involving the work that he performed for these individuals. In Snyder, Order 979 -2, affirmed Snyder v. SEC, 686 A.2d 843 (1996), (allocatur denied) the Commission found that a township supervisor violated Section 3(a) of Act 9 of 1989 when he participated in board decisions concerning two development projects wherein his business had contracts to do building work. Commonwealth Court, in affirming the decision of the Commission, noted: Hook, 99 -558 June 8, 1999 Page 5 We are likewise unconvinced by the fact that Snyder's vote was never controlling or necessary for a quorum. Snyder violated the Ethics Law by discussing and voting on issues in which he had a private pecuniary interest, not by affecting the outcome of those votes. Similarly, it is irrelevant whether Snyder improperly used his influence as a Supervisor to gain the Colonial Commons and Blue Meadow contracts; Snyder may have been able to obtain the jobs even if he were not a Supervisor, but as a Supervisor, he should not have considered and voted on issues involving his personal business dealings. (Emphasis added). Snyder v. SEC, at 849. As to the third inquiry, as noted above, Section 1103(f) of the Ethics Act provides for contracting by a public official with his governmental body but such process must be open and public if the contract is $500 or more. Although the contracting in question would not be prohibited under the Ethics Act provided the requirements of Section 1103(f) are satisfied, a problem may exist as to such contracting under the Municipality Authorities Act. In the instant situation, the Municipality Authorities Act of 1945, as amended, provides as follows: 53 P.S. §312(D). §312. Competition in award of contracts D. No member of the Authority or officer or employee thereof shall either directly or indirectly be a party to or be in any manner interested in any contract or agreement with the Authority for any matter, cause or thing whatsoever by reason whereof any liability or indebtedness shall in any way be created against such Authority. If any contract or agreement shall be made in violation of the provisions of this section the same shall be null and void and no action shall be maintained thereon against such Authority. It is suggested that advice be obtained from private counsel or the Authority Solicitor as to the application of the Municipality Authorities Act. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Municipality Authorities Act. Conclusion: As a Board Member for Dry Tavern Sewer Authority, Kurtyka is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 gi amt. Although Kurtyka in a private capacity may contract with landowners as to line and facilities for connection into the Authority sewer system, he would have a conflict as to such individuals and as to the work that he performed. In the event that matters involving the landowners or work that he performed would come before the Authority, he would have to abstain and satisfy the disclosure requirements of Section 1103(j) noted above. As to Kurtyka contracting with the Authority, the requirements of Section 1103(f) above must be satisfied. Since a question exists under the Municipality Authorities Act as to whether Kurtyka may Hook, 99 -558 June 8, 1999 Page 6 contract with the Authority, private counsel or the Authority Solicitor might be contacted by Kurtyka. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), an 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, provided 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. erely, incent J. Dopko Chief Counsel