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HomeMy WebLinkAbout99-563 ConfidentialSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL June 30, 1999 Re: Conflict; Public Official /Employee; Director of A; Caucus B. 99 -563 This responds to your letters of May 13 and May 28, 1999 by which you requested a confidential advisory from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 seq., presents any prohibition or restrictions upon the Director of A for Caucus B with regard to his ownership and control of a small business which sells C products to state and federal D in Pennsylvania pursuant to contracts that are awarded through a competitive bidding process. Facts: As the Director of A for Caucus B ( "Caucus "), you seek an advisory from the State Ethics Commission. Your position with the Caucus is an E position. You have submitted a brief description of your job functions, which is incorporated herein by reference. In your private capacity, you are assuming ownership and control of your mother's small business. The business is a sole proprietorship which sells C products to state and federal D in Pennsylvania pursuant to contracts that are awarded through a competitive bidding process. You state that the bidding process consists of the F mailing bids to prospective vendors and those vendors submitting prices for the various G items. The bids are awarded based upon price, and all vendors are able to learn of the winning bids via mail and telephone calls. Based upon the above, you seek an advisory as to any applicable restrictions /prohibitions under the Ethics Act. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§1107(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 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. FAX: (717) 787 -0806 • Web Site: www.ethics.state.pa.us • e -mail: ethics@state.pa.us Confidential Advice, 99 -563 June 30, 1999 Page 2 As the Director of A for Caucus B, you are a public employee as that term is defined in the Ethics Act, and hence you are subject to the provisions of that Act. Section 1 103(a) of the Ethics Act provides: Section 1 103. 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. "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. "Immediate family." A parent, spouse, child, brother or sister. "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 Confidential Advice, 99 -563 June 30, 1999 Page 3 "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. The term 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. 65 Pa.C.S. §1102. Section 1 103(f) of the Ethics Act provides as follows: Section 1 103. Restricted activities. 65 Pa.C.S. §1103(f). (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. Section 1 103(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 1 103(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 Confidential Advice, 99 -563 June 30, 1999 Page 4 (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 1 103(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 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). In each instance of a conflict, Section 1103(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 Act to the instant matter, pursuant to Section 1 103(a) of the Ethics Act, 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. Your mother is a member of your "immediate family" as that term is defined in the Ethics Act. Thus, during her ownership of the C business, it has been a business with which a member of your "immediate family" has been associated. When you assume the ownership of the business, it will be a business with which you are associated. Confidential Advice, 99 -563 June 30, 1999 Page 5 You are advised that Section 1103(a) of the Ethics Act 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 (or a member of his immediate family) is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1 103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, 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 1103(j). Under the facts which you have submitted, Section 1 103(a) of the Ethics Act would not preclude you from the proposed outside employment /business activity subject to the restrictions and qualifications as noted above. As for Section 1103(f), the restrictions of that Section have applicability to contracting /subcontracting involving the public official's /public employee's governmental body. Since your governmental body is a Chamber of the General Assembly, specifically the H, Section 1 103(f) would appear to have no applicability under the facts which you have submitted because the contracting in question would presumably not involve the H. 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 Legislative Code of Conduct. Conclusion: As the Director of A for Caucus B, you are a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 Lt seq. Section 1103(a) of the Ethics Act would not preclude you from engaging in the proposed outside employment /business activity subject to the restrictions and qualifications as noted above. In the event that your business would have matter(s) pending before your governmental body, specifically the H, then you would be required to abstain and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act set forth above. As for Section 1103(f), the restrictions of that Section would appear to have no applicability under the facts which you have submitted because the contracting in question would presumably not involve your governmental body, the H. 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 Confidential Advice 99 -563 June 30, 1999 Page 6 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 forma/ 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, Vincent J. Dopko Chief Counsel //,