HomeMy WebLinkAbout83-004 BalabanRestrictions
Dear Mr. Balaban:
I. Issue:
II. Factual Basis for Determination:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
March 3, 1983
OPINION OF THE COMMISSION
William Balaban, Esquire, Solicitor 83 -004
City of Harrisburg
City Government Center
Harrisburg, PA 17101
RE: Kane Request, 82 -114; Grant Program Participation, City Employee,
You request advice as to the prohibitions which might be placed upon two
City of Harrisburg employees employed in the Department of Community and
Economic Development (DCED) and the Department of Parks and Recreation (DPR)
respectively as to their participation in grant programs administered by the
City of Harrisburg (hereinafter, the City). You also, in your letter, request
that we provide "any guidelines that the City could use in anticipation of
further conflict problems."
The City of Harrisburg receives and administers Community Development
Block Grant (CDBG) programs and monies including U.S. Department of Housing
and Urban Development (HUD),funds. An overview of the administration of these
programs within the City, the programs themselves, and the two employees about
whom you raise questions follows.
First, the City is a Third Class City with a strong mayoral form of
government. The Mayor is the Chief Executive, Council is the legislative body
and the Mayor selects, with Council confirmation, heads of the Departments of:
Administration; Community and Economic Development (DCED);• Safety;
Public Works; Parks and Recreation (P &D); the Solicitor, Controller -
Treasurer, Human Relations Commission and several others. There is little, if
any, liason between these Departments except at the highest levels where joint
actions are needed. Of importance to this question is DCED which contains the
Bureaus or Divisions of: Planning; Economic Development; Codes
Administration; and Neighborhood Development.
William Balaban, Esquire, Solicitor
March 3, 1983
Page 2
The Director of DCED directs the activities of the Divisions (1) through
(4) above and is the direct supervisor of the Executive Deputy Director of the
Neighborhood Development Division (NDD). Within NDD the Executive Director is
responsible for all CDBG programs and activities and directly supervises the
Rehabilitation Unit (Rehab) Manager. The Rehab Unit Manager and staff are, as
of July, 1982, located on the fourth floor of the City Government Center and
all other DCED employees are located on the second floor.
The Rehab Unit Manager supervises five teams, each responsible for a
specific arba eligible for CDBG< grants within the City and consisting=_of a
Fiscal Coordinator, Rehabilitation (Rehab) Specialist and a Clerk- Typist. The
Fiscal Coordinator insures compliance with federal financial eligibility
standards, assures bids are taken for projects and administers the coptracts
awarded. In concert with the Rehab Specialist the Fiscal Coordinator inspects
the property /project before final payment is authorized. The Rehab
Specialist, in addition to this final joint inspection, is responsible for
inspecting eligible homes, preparing a list of repairs and a plan for bringing
a home up to HUD standards and estimating the contract price for these
repairs. The Executive Deputy Director of NDD is also the direct supervisor
of a Project Officer who oversees CDBG programs other than rehab programs and
who operates similarly to the Rehab Unit Manager in administering these other
programs.
Notably there is no direct relationship as to CDBG programs and the Codes
Division or the Parks and Recreation Department. The two employees about whom
you raise the question to be answered here are Barbara Kearney and Raymond
Burnett, hereinafter Kearney and Burnett. Kearney began work with the City as
a Vector Control Aide and Crew Leader II in DCED in 1973 and served there
until July, 1981, when she was assigned as a Crew Leader II in the Department
of Parks and Recreation. As such she is responsible for supervising and
performing snow plowing; street cleaning; salting; equipment repair and some
record keeping. The chart attached to your memo indicates "past employment"
in the Codes Division, but the "Fact Sheet" as to Kearney gives no further
details. Kearney bought the property in which she lives at 2206 North 6th
Street in the City in 1979 from her mother.
Burnett began work with the City as a summer intern in 1979 at DCED,
Codes Division and was employed by the City as a Housing Inspector, DCED,
- Codes Division. As such he was responsible for acting on complaints regarding
'iolations of City Ordinances, ie. premises not fit for human habitation. It
should be noted that due to lay -offs within the City, Rurnett "bumped" into
the Rehab Unit and is currently classified as a Rehab Specialist. Burnett
brought the property in which he lives, located at 1920 North 4th Street in
the City in September, 1982, from his parents.
William Balaban, Esquire, Solicitor
March 3, 1983
Page 3
You state that at the time the properties in which Burnett and Kearney
reside were "acquired" none of their family or relatives worked for the City.
It is not clear whether this statement refers to the original acquisition of
the properties by their parents or Burnett's and Kearney s acquisition of the
property from their parent(s). We will assume you mean the latter. We also
note that both the Kearney and Burnett families had owned these properties for
some years. Finally, we assume, although it is not stated, that both Burnett
and Kearney wish to apply for the rehab grant monies available through DCED as
described below.
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Second, the CDBG programs offeredrby the City must be described. The
program we believe you wish us to address (referred to below as the
rehab -grant program) involves DCED administration of funds for rehabf itation
of houses for the benefit of low and moderate income persons. The rehab -grant
program began with public hearings held in this case between November, 1981
and May, 1982, at which persons within the City suggested that certain areas
of the City be designated as eligible for rehabilitation purposes. After
these hearings, senior staff of DCED made recommendations to City Council to
approve a particular area as eligible for rehabilitation. City Council's
initial determination is then forwarded to HUD for final review and approval.
After an area has been approved for rehabilitation all owners within the area
are notified of the availability of rehabilitation funds. Applications for
rehab - grants are then solicited and accepted. In this case the area
designation was made on or about June, 1982, and Kearney and Burnett expressed
their desire to apply for rehab funds in the fall of 1982.
In the City one team within DCED, as discussed above, is assigned to each
of the five areas designated for rehabilitation. When an application is made
for rehabilitation funds, an income review is made by the rehabilitation team
assigned to the area to determine whether the HUD standards are met. The
Financial Coordinator within the team makes an initial review and
recommendation on the financial eligibility of the applicant and reports to
the Rehab Unit Manager who reports to the Executive Deputy Director of DCED.
If financial eligibility is established, the Rehab Specialist on the team
inspects the building, applies the HUD standards, and recommends a plan or
specifications for rehabilitation of the particular unit. These plans and
specifications which are drawn up by the Rehab Specialist are forwarded to the
Financial Coordinator and the Rehab Unit Manager for final approval. If all
items are in order, kids are secured, DCED contracts for the work specified to
be done, the work is performed and inspected and the Financial Coordinator
approves the program as complete for that particular unit. \
William Balaban, Esquire, Solicitor
March 3, 1983
Page 4
III. Applicable Law:
The law to be applied to this question is as follows:
Section 1. Purpose
The Legislature hereby declares that public office is a
public trust and that any effort to realize personal
financial gain through public office other than
cornpensatiion providedby law is a violation of that trust.
In order to strengthen the faith and confidence of the
people of the State in their government, the Legislature
further declares that the people have a right to be
assured that the financial interests of holders of or
candidates for public office present neither a conflict
the appearance of a conflict with the public trust.
Because public confidence in government can best be
sustained by assuring the people of the impartiality and
honesty of public officials, this act shall be liberally
construed to promote complete disclosure 65 P.S. 401.
Section 2. Definitions
"Public employee." Any individual employed by the
Commonwealth or a political subdivision who is responsible
for taking or recommending official action of a
nonministerial nature with regard to:
(1) contracting or procurement;
(2) administering or monitoring grants or
subsidies;
(3) planning or zoning;
(4) inspecting, licensing, regulating or auditing
any person; or
(5) any other activity where the official action
has an economic impact of greater than a de
minimus nature on the interests of any person.
"Public employee" shall not include individuals who are
employed by the State or any political subdivision thereof
in teaching as distinguished from administrative duties.
65 P.S. 402.
Section 3. Restricted Activities
(a) No public official or public employee shall use his
public office or any confidential information received
through his holding public office to obtain financial gain
other than compensation provided by law for himself,
member of his immediate family, or a business with which
he is associated. 65 P.S. 403(a).
William Balaban, Esquire, Solicitor
March 3, 1983
Page 5
IV. Discussion:
(c) No public official or public employee or a member of
his immediate family or any business in which the person
or a member of the person's immediate family is a
director, officer, owner or holder of stock exceeding 5%
of the equity at fair market value of the business shall
enter into any contract valued at $500 or more with a
governmental body unless the contract has been awarded
through an open and public process, including prior public
nptice and subsequent public disclosure of all proposals
considered and contracts awarded. Any contract made in
violation of this subsection shall be voidable by a court
of competent jurisdiction if the suit is commenced within
90 days of making of the contract. 65 P.S. 403(c).
We will respond to your specific questions concerning the two particular
employees, Kearney and Burnett. We note that Mr. Kane of the DCED had
originally requested responses to different questions (see his letter of
September 20, 1982, incorporated herein) but your letter of January 27, 1983,
requests a response to the two situtations you presented at our December 22,
1982 meeting.
The Ethics Act, as described above, regulates the conduct of "public
employees. Thus, the threshold determination is whether Kearney or Burnett
are "public employees" subject to the restrictions of Section 3(a) or (c) of
the Ethics Act. Without job descriptions for these individuals it is
difficult to definitively ascertain whether they fall within the definition of
"public employee." If not, they would be subject only to those portions of
the Ethics Act which regulate the conduct of "persons." See Section 3(b) of
the Act, for example, 65 P.S. 403(b). The facts you provide as to Kearney
tend to indicate that she is not a public employee because of the nature of
her duties. The facts you provide as to Burnett may fit the definition of
public employee or State Ethics Commission regulations on that term because of
his role in the grant administration with the Rehab Unit. See 51 Pa. Code
1.1, definition of "public employee."
Simply because Kearney once worked in the Codes Division of DCED this
does not per se disqualify her from participating in the CDBG rehab program
administered by DCED. This is particularly true where she may not, while
employed with DCED, have been nor may not now be within the definition of
"public employee." Likewise, even while employed with DCED it is difficult to
discern that she had access to any confidential information about the rehab
program or any role in setting the criteria by which the program or its
participants were to be established or how program participants are, in fact,
selected.
William Balaban, Esquire, Solicitor
March 3, 1983
Page 6
Section 3(c) of the Ethics Act must also be reviewed. Section 3(c)
states that any contract between the governmental body with which the
individual "public employee " -is associated and his or her governmental body
must be made only after an "open and public process." In the present case
any, even assuming Kearney was a "public employee ", the contract for
rehabilitation is between DCED and the contractor, with the applicant being
the beneficiary of the contract and there is no contract between the public
employee - applicant and DCED. The open and public process requirements of
Section 3(}) would be inapplicable to the DCED - contractor situation..
Moving to consideration of Burnett, we will assume, for purposes of
discussion that he is a "public employee." However, you indicate no,
connection between the Codes Division in which he served until recently and
the Neighborhood Development Division of DCED which administers the rehab
program. The facts do not indicate Burnett, while with the Codes Division,
had access to any confidential information about the rehab program, played or
plays any role in setting the criteria by which this program was established
or operates or its participants selected. Likewise, in his new position as
Rehab Specialist his jurisdiction can be limited to the one team /area in which
he serves. He cannot now influence the process of designation of the area as
eligible for grant funds in which he resides as that process was complete
prior to his "bumping" into DCED and NDD.
We recognize the serious concerns you present where a public program,
funded with public monies and administered through a public agency or entity
is also available to employees of the agency that administers that program. We
recognize the public concern and criticism that may arise if a public employee
of the City receives benefits under that program. But, the Ethics Act was
designed to restrict activities where a conflict exists and to address
situations where an appearance of a conflict with the public trust arises or
might arise. Where the public employees under the facts presented here:
1. played no role in establishing the program at issue as to the
structure or administration of the program; or
2. played no role in establishing or implementing the criteria by which
selections for program participation are made; or
3. played no role in the actual selection process;
4. would apply rehab grant funds to the homes in which they reside and
which they acquired from family members whose ownership thereof long pre -dated
their relationship with the City; we see no reason to restrict employees who
might otherwise be eligible for the program from participating in the
program.
William Balaban, Esquire, Solicitor
March 3, 1983
Page 7
Finally, you have asked for guidelines that the City could use in
anticipation of further conflict problems. We are hard - pressed to respond
effectively to this general request. Generally, public employees and
officials who are and were unconnected with the DCED Division of Neighborhood.,
Development, assuming they do not - share confidential information about the
programs administered by DCED and who play(ed) no role in establishing
criteria for administering the program, selecting its participants or in
establishing the criteria by which participants are selected and who share
characteristics similar to Bur¢ ett and Kearney are not barred from
participating in' the particular program. Employees within DCED, in general,
and the Division of Neighborhood Development (DND) in particular, at least at
the higher levels of DND would almost inevitably be involved in areas outlined
above and might have to be advised against participating in or applying for
program benefits to avoid even the appearance of a conflict with the-public
trust under Section 1 of the Ethics Act. Of course, specific requests as to
individual employees or officials may be the best avenue by which to decide
future cases.
V. Conclusion:
Employees Kearney and Burnett under the unique circumstances outlined
above, may, without violating the provisions of the Ethics Act, apply for and
participate as recipients in this rehab program. Of course, no person may
attempt to influence official conduct in relation to this program or otherwise
in violation of Section 3(b) of the Ethics Act.
Section 3(c) of the Ethics Act, does not apply to the contract between
the City (DCED) and contractors under this rehab program as described.
Other employees of the City may not per se be precluded from
participating as grantees in publicly funded programs operated by the City,
but such persons cannot assume that such participation is acceptable under the
Ethics Act on the basis of this ruling. Individual questions may be raised
and addressed as needed.
Pursuant to Section 7(9)(i), this opinion is a complete defense in any
enforcement proceeding initiated by the Commission, and evidence of good faith
conduct in any civil or criminal proceeding, providing the requestor has
. disclosed truthfully all the material facts and committed the acts complained
of in reliance of the advice given.
This letter is a public record and will he made available as such.
William Balaban, Esquire, Solicitor
March 3, 1983
Page 8
Finally, any person may request within 15 days of service of the opinion
that the Commission reconsider its opinion. The person requesting
reconsideration should present a detailed explanation setting forth the
reasons why the opinion requires reconsideration.
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By the Commission,
PAUL J. MITH
Chairman
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