Loading...
HomeMy WebLinkAbout249 BrownMs. Linda L. Brown c/o Edward G. Shoemaker, Esq. Adams, Shoemaker & McSorley 718 Frick Building Pittsburgh, PA 15219 Re: 83 -102 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION November 1, 1983 Order No. 249 Dear Ms. Brown: The State Ethics Commission has received a complaint regarding you and a possible violation of Act 170 of 1978. The Commission has now completed its investigation. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That as a member of the North and South Shenango Joint Municipal Authority you violated Section 3(a) or (b) of the Ethics Act, 65 P.S. 403(a) or ((b), in that your official action was influenced or you used your office /vote to secure appointment as General Administrator of the Authority by the Receiver thereof or by securing appointment as General Manager of the Authority. A. Findings: 1. a. You serve on the North and South Shenango Joint Municipal Authority, hereinafter the Authority, having been appointed to same by the South Shenango Township Supervisors on April 29, 1981. b. You were appointed as Secretary for the Authority on May 5, 1981. 2. You serve without compensation except for reimbursement for actual expenses in both capacities. Ms. Linda Brown Page 2 November 1, 1983 3. The Authority was formed in 1974 to provide sewage facilities for North and South Shenango Townships and applied for the necessary permits, grants and loans to construct a sewer system and treatment plant. a. After completion of the design and construction work in 1979, however, the integrity of the system was questioned because of problems experienced both during and after construction. b. Several engineering reports were made and a Court suit was instituted by a citizens' group alleging among other things, negligent construction of the system. c. The United States Environmental Protection Agency (EPA), in a "Construction Grants and Audit Task Force Report" issued in October, 1982 reviewed the Authority, its operation and the system. d. In addition to reviewing and responding to questions relating to the system's design, construction deficiencies, effectiveness, cost, etc., the EPA reviewed the overall management of the project and recommended that proper management of the Authority's financial management system, procedures, accounts, etc. was needed and that a Manager to oversee complete operations was also needed. 4. The Authority also entered into litigation against those it felt were responsible for the problems which have arisen in connection with the design and construction of the sewer system, against a Bank for problems associated with rates, loans, instruments and documents between the Authority and the Bank. a. The Authority sought the protection of the Bankruptcy Court under the federal bankruptcy laws. b. The Bank instituted legal action designed to obtain involuntary appointment of a Receiver for the Authority. c. In relation to these legal actions a Settlement Agreement and Consent Decree was filed in April, 1982 and approved by Order of Court (signed) April 15, 1982. ' d. On April 4, 1982, the Authority approved this Consent Decree and you voted for this Decree. e. This Consent Decree included the agreement of the Authority to the appointment of a Receiver who, among other duties, was required to give his "prior approval to the hiring of any new employees." Ms. Linda Brown Page 3 b. The Receiver, as set forth above, No. 4(e) approved of your appointment as required by the Consent Decree. November 1, 1983 5. As recommended by EPA (see No. 3 above), the Authority decided to appoint a Manager and on May 11, 1982 pursuant to Resolution No. 82 -2, you were appointed to this post. a. The Minutes of the Authority reflect the fact that you abstained on the vote to appoint a Manager. c. As Manager you were, by Resolution No. 82 -2, to be paid $220 per week effective May 1, 1982. B. Discussion: We must initially address the question of whether you are a "public official" or "public employee" as those terms are defined in the Ethics Act. In this analysis we turn to the conclusions reached in Advice of Counsel No. 83 -537 issued to you dated April 12, 1983, which is incorporated herein by reference. In that Advice it was correctly concluded tht as General Manager you are a "public employee" subject to the restrictions of the Ethics Act. However, the Allegation at issue here concerns your conduct as a member of the Board of the Authority and thus we must ask whether, as a member of the Authority, you are subject to the jurisdiction of the Ethics Act. Addressing this question, Advice No. 83 -537 correctly concluded that as an uncompensated (except for expense reimbursement) member of the Authority Board, you are not a "public official" subject to the Ethics Act or the restrictions contained in Section 3(a) or (b) thereof which apply to "public officials." There is no evidence to suggest or support a conclusion that in your role as Secretary to the Authority you otherwise fall within the definition of "public employee" under the Ethics Act. Thus, your actions as an Authority Board member and even when serving as Secretary for the Authority are not technically subject to our scrutiny. Even if they were, we feel compelled to state, however, that the fact that you voted to approve the Consent Decree (No. 4 above) in April, 1982 and were approved by the Receiver as Manager in May, 1982 are insufficient, standing alone to warrant a finding that you were influenced in your vote by the possibility of employment as Manager so as to violate Section 3(b) of the Ethics Act. Likewise, given that you abstained on the question of appointment of the Manager we would, even if the Ethics Act were applicable, be hard - pressed to find that you used your public office for personal gain. Ms. Linda Brown Page 4 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 notice and subsequent public diclosure 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). November 1, 1983 C. Conclusion: As an uncompensated, appointed member of the Authority, you are not a "public official" or "public employee" whose conduct as such is subject to the Ethics Act. Therefore, it cannot be said that your conduct as a "public official" or "public employee" violated the provisions of Section 3(a) or (b) of the Ethics Act. II. Allegation: That your appointment as and contract to serve as General Administrator or Manager for the Authority violated Section 3(c) of the Ethics Act, 65 P. S. 403(c), in that no open and public process was undertaken. A. Findings: In addition to Findings 1 -5 set forth above, which are incorporated here as if fully set forth, we also find: 6. There did not appear to be any opportunity for others to apply for the appointment to the post as Manager (No. 5, above) or publicly announced opportunity for competitors for this post to apply for same. B. Discussion: With respect to this Allegation, we again refer to Advice No. 83 -537 wherein it was concluded that there is no per se or inherent conflict in serving as uncompensated member - Secretary for the Authority and General Manager for the Authority. This is a correct statement. The question here, however, is whether the contract of employment between the Authority and you as manager violates Section 3(c) of the Ethics Act. Section 3(c) of the Ethics Act states: Ms. Linda Brown Page 5 November 1, 1983 Clearly, if you were as an Authority member, a "public official" or "public employee" who sought to contract with the Authority, Section 3(c) would have application. However, having concluded above that as an uncompensated, appointed member of the Authority Board and Secretary to the Authority, you are not a "public official" or "public employee," Section 3(c) would be inapplicable and in this hiring, you would not be required to enter into the "open and public" process set forth in Section 3(c) of the Ethics Act. As set forth above, upon your appointment as Manager, you became a "public employee." However, any restrictions upon your ability as a "public employee" to contract with the Authority relate only to activities undertaken after you became a "public employee" upon your appointment as Manager. We wish, finally, to reiterate, however, the directions in the Advice referenced above which indicate that as a "public employee," ie. General Manager, you may not take or recommend actions favorable to yourself and /or then act upon those same actions or recommendations as a member of the Board. We would expand upon this Advice only slightly to indicate that in the alternative it would be acceptable if you, a General Manager, were to refrain from undertaking to make recommendations to the Board (or Receiver) or to take actions as General Manager on matters which affect you personally. C. Conclusion: Section 3(c) of the Ethics Act is inapplicable under these facts and does not bar or place restrictions upon this contract or process of your appointment as Manager. Our files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final and will be made available as a public document 15 days after service (defined as mailing) unless you file documentation with the Commission which justifies reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code 2.38. During this 15 -day period, no one, including the Respondent unless he waives his right to challenge this Order, may violate this confidentiality by releasing, discussing or circulating this Order. Any person who violates the confidentiality of a Commission proceeding is guilty of a misdemeanor and shall be fined not more than $1,000 or imprisoned for not m"re than one year or both, see 65 P.S. 409(e). PJS /jc By the Commission, Paul J./5 Chairma