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HomeMy WebLinkAbout99-564 HarveySTATE 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 David G. Harvey, Associate Director Forest /Warren Dept. of Human Services Forest County Branch Office PO Box 523, Highland Street Tionesta, PA 16353 FAX: (717) 787 - 0806 • Web Site: www.ethics.state.pa.us • e - mail: ethics @state.pa.us 99 -564 Re: Conflict; Public Official /Employee; Associate Director; Bi- County Department of Human Services; Immediate Family; Spouse; Program Director; Big Brothers /Big Sisters; Contracting. Dear Mr. Harvey: This responds to your letter of May 21, 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 et seg., presents any prohibition or restrictions upon an associate director of a bi- county department of human services with regard to contracting between one of the county's children and youth services and a private, non - profit agency for services from its Big Brothers /Big Sisters program for which the associate director's wife serves as program director. Facts: As the Associate Director of the Forest /Warren Department of Human Services, you seek an advisory from the State Ethics Commission regarding a potential conflict of interest involving a fee for service contract between "Forest County Children and Youth Services" and "Family Services and Children's Aid Society of Venango County." Forest County Children and Youth Services has been, and currently is, contracting with Family Services and Children's Aid Society of Venango County on a fee for service basis for services from their Venango /Forest Big Brothers /Big Sisters Program. This contractual relationship has existed for five years, and you state that it has been beneficial to Children and Youth Services clients, as well as the Children and Youth Services Agency in meeting State and Agency goals. This history of contractual agreements predates your very recent marriage to the Program Director of the Venango /Forest Big Brothers /Big Sisters. This contractual agreement also predates your wife's appointment to the position of Program Director of the Venango /Forest Big Brothers /Big Sisters Program in December of 1996. This fee for service contract is based upon a unit of service cost. You state that as the Family Services and Children's Aid society is a private, nonprofit Agency, the rate is simply its cost of providing service. This rate is determined by the Family Harvey, 99 -564 June 30, 1999 Page 2 Service accounting staff, approved by the Executive Director of Family Services, Mr. Bob Carone, and presented to you as the Associate Director for Forest County Children and Youth Services. While you monitor the contract and approve the invoices, the contract is signed by the Forest /Warren Department of Human Services Director, currently Ms. Grace Zerbe. You further state that your wife does not set the contract amount or unit of service cost. Invoices are generated based upon hours of services rendered to children in Forest County in the Big Brothers /Big Sisters Program. You state that the Big Brothers /Big Sisters program has been instrumental in the prevention of the placement of children in foster care as well as improved school performance, truancy prevention and prevention of drug and alcohol abuse. You are very interested in maintaining this service in Forest County and do not want the service to be at risk due to a perceived conflict of interest. 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. As the Associate Director for the Forest /Warren Department of Human Services, 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 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 Harvey, 99 -564 June 30, 1999 Page 3 65 Pa.C.S. §1102. 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. "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. In addition, Sections 1 103(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. Section 1 103(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 Harvey, 99 -564 June 30, 1999 Page 4 65 Pa.C.S. §1103(f). 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 1 103(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 (4) public disclosure of the contract awarded and offered and accepted. Section 1 103(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 Harvey, 99 -564 June 30, 1999 Page 5 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 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 Act, then voting is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. In applying the above provisions of the Ethics Act to the instant matter, pursuant to Section 1103(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. Based upon the facts which you have submitted, the Family Services and Children Aid Society of Venango County would be considered a business with which a member of your immediate family, specifically your spouse, is associated. First, the definition of the term "business" as set forth in the Ethics Act is very broad. Novak, Opinion No. 91 -009. The Family Services and Children's Aid Society of Venango County would at least be an "organization" within that definition. Second, the fact that the Family Services and Children's Aid Society of Venango County is a non - profit organization would not disqualify it as a "business." The word "or" toward the end of the definition of "business" is disjunctive, and the repeated use of the word "any" precludes any interpretation that the final phrase "legal entity organized for profit" modifies the preceding forms of entities in the list. See, Soltis - Sparano, Order No. 1045 at 31 (Citing, Confidential Opinion, No. 89 -007; McConahy, Opinion No. 96 006). Since the Family Services and Children's Aid Society of Venango County is a "business" as that term is defined in the Ethics Act, it is clearly a business with which your spouse is associated in her capacity as its Program Director for the Venango /Forest Big Brother /Big Sisters Program. Regardless of the submitted fact that the rate charged by the Family Services and Children's Aid Society of Venango County is simply its cost of providing this service, you are advised that the payment for the services provided would constitute a pecuniary benefit to that entity as a business with which your spouse is associated. Even if a "profit" would not exist, the payments by your governmental body would Harvey, 99 -564 June 30, 1999 Page 6 offset operating costs for your wife's employer, and that would constitute a pecuniary benefit. Based upon all of the above, it is clear that under Section 1103(a) of the Ethics Act, you would have a conflict of interest in your capacity as the Associate Director of the Forest /Warren Department of Human Services in matters involving contract(s) with the Family Services and Children's Aid Society of Venango County. In each instance of a conflict of interest, you would be required to abstain from participation (such as monitoring the contract(s) or approving the invoices), and you would further be required to fully satisfy the disclosure requirements of Section 1 103(j) as set forth above. So that there is no misunderstanding, let it be clear that the fact that you are married to the Program Director of the Venango - Forest Big Brother /Big Sisters Program would not preclude the continuation of the provision of such services in Forest County. Rather, Section 1103(a) of the Ethics Act would merely prohibit your involvement as to such matters. As for Section 1103(f), the requirements imposed by that Section as to contracting /subcontracting involving your governmental body and your wife's employer must be observed. Those requirements which pertain to an open and public process and your inability to have any supervisory or overall . responsibility for the implementation or administration of such contract(s) are as set forth above. 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. Conclusion: As the Associate Director of the Forest /Warren Department of Human Services, you are a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 sea. The "Family Services and Children Aid Society of Venango County" would be considered a business with which a member of your immediate family, specifically your spouse, is associated. Under Section 1 103(a) of the Ethics Act, you would have a conflict of interest in your capacity as the Associate Director of the Forest /Warren Department of Human Services in matters involving contract(s) with the Family Services and Children's Aid Society of Venango County. In each instance of a conflict of interest, you would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 1 103(j) as set forth above. The fact that you are married to the Program Director of the Venango- Forest Big Brother /Big Sisters Program would not preclude the continuation of the provision of such services in Forest County. Rather, Section 1103(a) of the Ethics Act would merely prohibit your involvement in such matters. As for Section 1103(f), the requirements imposed by that Section as to contracting /subcontracting involving your governmental body and your wife's employer must be observed. Those requirements which pertain to an open and public process and your inability to have any supervisory or overall responsibility for the implementation or administration of such contract(s) are as set forth above. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1 107(1 1), 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 Harvey, 99 -564 June 30, 1999 Page 7 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, incentVJ Dopko Chief Counsel