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HomeMy WebLinkAbout86-001 WelzStephen G. Welz, Esquire Attorney at Law 226 North 6th Street Reading, PA 19601 Dear Mr. Welz: I. Issue: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 May 1, 1986 OPINION OF THE COMMISSION 86 -001 Re: Conflict of Interest; Township Supervisor Participation in Matter involving County, Contract with County This responds to your request for the opinion of the State Ethics Commission. Whether a supervisor in a township of the second class may participate in a matter involving the county wherein the township is located when the supervisor's private business enterprise has a contract with the county. II. Factual Basis for Determination: As Solicitor for Bern Township, Berks County, Pennsylvania, you have requested the opinion of the State Ethics Commission regarding a matter that is currently pending in the township. You have requested this opinion on behalf of the township board of supervisors. All of the pertinent details in the instant matter have been set forth in your original letter of request. We do note that while we have received subsequent correspondence from both you and another member of the towship hoard of supervisors, we do not believe that this correspondence sets forth any pertinent or relevant factual information which should be considered at this time. You advise that one of the township supervisors is a stockholder in a closely held corporation which provides physical therapy services to hospitals, nursing homes and other health care facilities. Said services are provided by this company on a contract basis. In 1985, the Berks County commissioners, after receiving sealed bids, awarded a contract to this corporation. Pursuant to this contract, the closely held corporation is to Stephen G. Welz, Esquire May 1, 1986 Page 2 provide physical therapy services at Berks Heim, the county home for the aged and infirmed. The contract became effective January 1, 1986. Bern Township general ly deals with the county regardi ng a variety of issues ranging from community development funds, Klock grant applications and other normally encountered township- county issues. The township also deals with the county on a number of specialized issues concerning county historical sites and recreational facilities that are located within the township. Approximately five months ago, the county announced that it was considering the construction of a trash -to -steam generating plant which would be located on county -owned property in Bern Township. Other alternative sites i n the county were also heing considered for this facility. You have further advised that the county forwarded a letter of intent, which in effect solicited a statement from the local governing bodies within the county, that all trash and refuse collected within the borders of said municipality would be disposed of at the county operated facility. You have also indicated that this letter of intent is not bi ndi ng. In this respect, the letter of intent appears to operate more as a survey of the municipalities located within Berks County. When the letter of intent was brought before the board during a recent meeting of the township board of supervisors, objections were set forth alleging that the aforementioned township supervisor should not participate i n this matter in light of his ongoing contractual relationship with Berks County. As a result of this objection, you have requested the opinion of this Commission as to whether any restrictions are placed upon this township supervisor in light of the foregoing factual circumstances. Specifically, you have questioned whether there is a conflict of interest on the part of the subject supervisor if he votes on any issue involving the county. You have also requested to know the extent, nature, and scope of any restrictions that are applicable by virtue of the State Ethics Act. III. Discussion: As a township supervisor, in a township of the second class, the individual involved in this particular matter is clearly a public official within the purview of the State Ethics Act. 65 P.S. §402. As such, this individual's conduct must conform to the requi rements of that Act. Sowers, 80 -050; King, 85 -025. The State Ethics Act provides as follows: 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, a member of his immediate family, or a business with which he is associated. 65 P.S. 403(a). Stephen G. We lz. Esquire May 1, 1986 Page 3 Within this provision of law, no public official, including a township supervisor may use his public position in order to obtain any financial gain for himself or for a business with which he is associated. The Act defines business with which one is associated as follows: Section 2. Definitions. "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 holder of stock. 65 P.S. 402. In the instant situation, there is no doubt that the subject township supervisor is associated with the business that has contracted with Berks County. It is also clear, however, that it is not this business that will be presenting matters to the township for a decision but rather it is the county that employs this business. Thus, in the most technical construction of the above provision of law, any action that the township supervisor takes in relation to the county would not directly benefit the business with which he i s associated. We must consider i n the instant situation, however, whether there is even a benefit of an indirect nature that inures to the township supervisor's business by virture of his participation in a matter related to the county. In this respect, we have previously held that certain benefits fl owi ng to a publi c official , even i f somewhat i ndi rect, could not result from that offici al's action. See King, 85 -025. In addition to Section 403(a) of the Act, cited above, we must also consider the instant situation in light of Section 403(d) of the State Ethics Act, which allows this Commission to address other areas of possible conflict. Such a conflict would arise in situations where a public official attempts to represent interests that are adverse to the interest represented in his official capacity. See Allen, 79 -024, Fritzinger, 80 -008; Domalakes, 85 -010. Based upon this provision of law, this Commission has specifically ruled, in the past, that while the Ethics Act would not prohibit a public official from engaging in private business enterprises, such an official must abstain from participating in a matter that involves an entity by which he is employed. For example, in Sowers, 80 -050, we determined that a township supervisor may not participate in a township's decision to approve a developers proposal when that township supervisor is employed by or can reasonably expect to be employed by that developer. Similarly, in Knox, 81 -009, we ruled that township commissioners, who are employed by a company that is party to a dispute before the township, must abtain from voting on a settlement agreement between his employer and the township. Throughout the history of this Commission, this general rule, that a township supervisor could not participate in a matter that involves his employer has been set forth on numerous occasions. See Hahalis, 83 -009; McCullough, 82 -589 (Township Commissioner who also served as school district business administrator could not participate in the decision by the township to purchase property from the Stephen G. Welz, Esquire May 1, 1986 Page 4 district). in the instant situation, the subject township supervisor is employed by Berks County on a contractual basis to provide certain services at a county facility. In this respect, the county has indeed employed the services of this township supervisor and is compensating said supervisor therefor. This contract was awarded to this supervisor by the county commissioners. There can be no doubt that if the county commissioners now present a proposal to this particular township that requires action by the township board of supervisors, the supervisor here in question would be required to vote upon a proposal that has been presented to him by the same individuals who have recently awarded a contract to his company. This supervisor, of course as a public official , i s obliged to serve the interest of the public. However, in this situation, he is also called upon to review the proposals that are being submitted by the county commissioners, i.e., the entity that has employed him. There can be no doubt that in this situation the interests involved could be adverse. On the one hand, this supervisor . must decide whether the proposals set forth by the county is in the best interest of the citizens of the township who have elected him. On the other hand, there will always be in his mind the thought, that the particular group of individuals whose proposal he must review have awarded a financial benefit to him. As such, we believe that in the instant situation a conflict of interest, the type prohibited and authorized to be address in Section 403(d) above, is present. As such, we do not believe that this township supervisor should participate in any matter presented to the township board of supervisors by the county commissioners. We note, in relation to this situation, that the fact that the proposal is being submitted by another governmental body is of no consequence. We have recently ruled that when a public official has financial dealings with a governmental body, and that governmental body or certai n representatives from that governmental body appear before the public official 's body, said offical must abstain from participation in the matter. See Conner, 85 -026. It should be also noted that this restriction would not flow to all county issues and to all governmental officials of the county. Pursuant to our decision in Conner, supra, the restriction placed upon this township supervisor would extend to matters presented to the township by the county commissioners or by any of the individuals or representatives of the county who were involved in the award or monitoring of the contract to his private entity. In light of the foregoing, we beli eve that the township supervisor i n question, may not participate in any non- routine matter presented to the township that emanates from the county board of commissioners. Said restriction would require that this individual abstain from all participation in said matter. This would include participating i n negotiations, discussions, comments and the final voting on any non - routine matter presented by the county board of commissioners, including the trash -to -steam plant matter. The above restriction would not prohibit this township supervisor from voting on all county matters but only those matters that involve individuals who were parties to the contract award as set forth above or that involve non - routine matters. In addition to this individual 's abstention from these matters, such Stephen G. Welz, Esquire May 1, 1986 Page 5 abstention should be publicly recorded in the appropriate township minutes. Additionally, we believe that the supervisor should publicly disclose, at the township level, the terms of your ongoing contractual relationship with the county. Of course, the supervisor must also abstain from participating in any matter relating directly to his business. IV. Conclusion: A township supervi sor may not participate in non - routine matters presented by the county board of commissioners to the township when that township supervisor has an ongoing contractual relationship that has been awarded to hi:; business by the county board of commissioners. This would include abstention in the trash -to -steam plant matter. The supervisor may participate in routine, daily township /county matters. His abstention, when required, should be publicly noted and recorded and the terms of his contract with the county should be disclosed at the township level. Pursuant to Section 7(9)(i), this opinion is a complete defense in any enforcement pi oceeding initiated by the Commission, and evidence of good faith conduct i n 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 be made available as such, Finally, any person may request within 15 days of service of th^ opinion that the Commission reconsider its opinion. The person requesting reconside- ration should present a detailed explanation setting forth the reasons why the opinion requires reconsideration. By the Commission, sltriAltirciv,(?Cvveucarr G. Sieber Pancoast Chairman