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HomeMy WebLinkAbout00-599 BackenstoeDavid M. Backenstoe, Esquire Haber, Corriere & Backenstoe 433 East Broad Street P.O. Box 1217 Bethlehem, PA 18016 -1217 ADVICE OF COUNSEL August 11, 2000 00 -599 Re: Conflict; Public Official /Employee; Supervisor; Township; Second Class; Police Department; Vehicles; Auto Repair; Business With Which Associated; Member; Immediate Family; Contract; Vote. Dear Mr. Backenstoe: This responds to your letter of July 13, 2000 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. §1101 et seq., presents any prohibition or restrictions upon a supervisor where: 1) the supervisor is employed by a business that is owned by his father; and 2) the business has been engaged in repairing and maintaining vehicles for the township. Facts: As Solicitor to the Board of Supervisors of Lehigh Township ( "Township "), a municipal entity organized and existing under the Second Class Township Code, you request an advice on behalf of Paul Leibenguth ( "Leibenguth "), a Township Supervisor. Leibenguth was elected to the Board in November 1999 and officially was sworn into office as a Supervisor on January 4, 2000. The Board consists of five members. For many years, the Township has engaged the services of Leibenguth Auto Body, Inc. to repair Township vehicles such as police cars that are damaged in accidents or otherwise are in need of body work. Leibenguth is an employee of Leibenguth Auto Body, Inc., which is owned by his father, Richard Leibenguth. You state that the Articles of Incorporation list Leibenguth as Vice President of Leibenguth Auto Body, Inc.; however, Leibenguth maintains that he has no proprietary interest in that corporation and works only as a salaried employee. You have enclosed a copy of an unsigned, unnotarized affidavit prepared by Leibenguth's personal attorney attesting to Leibenguth's association and involvement with Leibenguth Auto Body, Inc., which is incorporated herein by reference. You have reviewed the Ethics Act, in particular, Sections 1102 and 1103(a), (f), and (), as well as Title 53, Section 68102(i) of the Second Township Code with the Board. However, Leibenguth and the Board have unanimously requested that the Township receive an advisory opinion on the issue before allowing Leibenguth Auto Leibenguth, 00 -599 August 11, 2000 Page 2 Body, Inc. to repair any other Township vehicles pursuant to public notice, advertisement, or otherwise. Based upon the foregoing facts, you ask under what circumstances may the Township continue to contract with Leibenguth Auto Body, Inc. for the repair and maintenance of Township vehicles if such contracting is permitted at all. Assuming the Board may contract with Leibenguth Auto Body, Inc. by following the appropriate procedural safeguards, you ask whether Leibenguth would have to abstain from voting on any issues involving the Lehigh Township Police Department because a majority of the work that is performed on Township vehicles is on Township Police vehicles. 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 request 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), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As a Supervisro for Lehigh Township, Paul Leibenguth ("Leibenguth ") is a public official as that term is defined in the Ethics Act, and hence Leibenguth is 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 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. Leibenquth, 00 -599 August 11, 2000 Page 3 sister. "Immediate family." A parent, spouse, child, brother or "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 than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. "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. In addition, Sections 1103(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 1103(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 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 Leibenquth, 00 -599 August 11, 2000 Page 4 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. 65 Pa. C. S. §1103(f). Section 1103(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 1103(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 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 1103(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. Leibenguth, 00 -599 August 11, 2000 Page 5 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. Initially, it is noted that the issue of whether the Township may contract with Leibenguth Auto Body, Inc. will not be addressed in that the jurisdiction of the Commission is limited to reviewing the conduct of public officials /public employees but not governmental bodies. In applying the above provisions of the Ethics Act to the instant matter, pursuant to Section 11 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. The term "immediate family" is defined to include a parent, spouse, child, brother, or sister. Because Leibenguth's father is in one of the familial relationships delineated above, he is a member of Leibenguth's immediate family. Further, based upon your specific factual representation that Leibenguth is an employee of Leibenguth Auto Body, Inc., which is owned by his father, that is a business with which he and his father are associated. Pursuant to Section 1103(a) of the Ethics Act, Leibenguth would be prohibited from using the authority of his office as a Township Supervisor, or confidential information for the private pecuniary benefit of himself, his father, or Leibenguth Auto Body, Inc. Furthermore, if a matter would come before the Board that would result in a financial gain to Leibenguth, his father, or Leibenguth Auto Body, Inc., Leibenguth would have a conflict and would be required to abstain and observe the disclosure requirements of Section 1103(j) of the Ethics Act as set forth above. Having established the above principles, your specific inquiries shall now be addressed. As for your specific inquiry regarding whether the Township may continue to contract with Leibenguth Auto Body, Inc. for the repair and maintenance of Township vehicles, you are advised that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. To the extent you have inquired as to conduct which has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall be addressed. The Ethics Act would not prohibit the Township or the Board of Supervisors from contracting with Leibenguth Auto Body, Inc. when Leibenguth, a Township Supervisor, is also an employee of that business. However, the requirements imposed by Section 1103(f) of the Ethics Act as to contracts /subcontracts must be observed. Those requirements as to an open and public process and Leibenguth's inability to have any supervisory or overall responsibility for the implementation or administration of such contract(s) are set forth above. Leibenguth, 00 -599 August 11, 2000 Page 6 Parenthetically, although the contracting in question would not be prohibited under the Ethics Act provided the requirements of Sections 1103(a), 1103(f), and 1103(j) are satisfied, a problem may exist as to such contracting under the respective code. In the instant situation, the Second Class Township Code provides as follows: §68102. Letting contracts (i) No township official, either elected or appointed, or township employe who knows, or who by the exercise of reasonable diligence could know, shall be interested to any appreciable degree, either directly or indirectly, in any contract for the sale or furnishing of any supplies or materials for the use of the township or for any work to be done for the township involving the p ayment by the township of more than five hundred dollars ($500) in any year unless the contract is awarded through the p ublic bid process. This limitation does not apply if the officer or appointee of the township is an employe of the person, firm or corporation to which the money is to be paid in a capacity with no possible influence on the transaction and the officer cannot possibly be benefited thereby, either financially or otherwise. If a supervisor is within this exception, the supervisor shall so inform the board of supervisors and refrain from voting on the payments and shall in no manner participate in the contract. Any official or appointee who knowingly violates this provision is subject to surcharge to the extent of the damage shown to be sustained by the township, is ousted from office or employment and commits a misdemeanor of the third degree. 53 P.S. §68102(I). Since such contracting may be prohibited by the above quoted provision, it is suggested that Leibenguth might consider obtaining legal advice on the application of the Second Class Township Code. As for your second question regarding whether Leibenguth would have to abstain from voting on any issues involving the Lehigh Townshi p Police Department assuming the Township could contract with Leibenguth Auto Body, Inc., a business with which Leibenguth is associated, you are advised that Leibenguth would not have a conflict as to Police Department issues provided that there would be no improper understandings as set forth in Sections 1103(b) and 1103(c) of the Ethics Act as discussed above. Again, it is not suggested that Leibenguth would engage in such conduct and the above is provided in order to be complete in our response. 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 respective municipal code. Conclusion: As a Supervisor for Lehigh Township, Leibenguth is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq. Leibenguth's father is a member of Leibenguth's immediate family. Leibenguth, 00 -599 August 11, 2000 Page 7 Based upon your specific factual representation that Leibenguth is an employee of Leibenguth Auto Body, Inc., which is owned by his father, that is a business with which he and his father are associated. Pursuant to Section 1103(a) of the Ethics Act, Leibenguth would be prohibited from using the authority of his office as a Township Supervisor, or confidential information for the private pecuniary benefit of himself, his father, or Leibenguth Auto Body, Inc. Furthermore, if a matter would come before the Board that would result in a financial gain to Leibenguth, his father, or Leibenguth Auto Body, Inc., Leibenguth would have a conflict and would be required to abstain and observe the disclosure requirements of Section 1103( of the Ethics Act as set forth above. The Ethics Act would not prohibit the Board of Supervisors from contracting with Leibenguth Auto Repair, Inc. when Leibenguth, a Township Supervisor, is also an employee of that business. However, the requirements imposed by Section 1103(f) of the Ethics Act as to contracts /subcontracts must be observed. Although the contracting in question would not be prohibited under the Ethics Act provided the requirements of Sections 1103(a), 1103(f), and 1103(j) are satisfied, a problem may exist as to such contracting under the respective code. In this regard, it is suggested that Liebenguth might consider obtaining legal advice on the application of the Second Class Township Code. Leibenguth would not have a conflict as to issues involving the Lehigh Township Police Department provided that there would be no improper understandings as set forth in Sections 1103(b) and 1103(c) of the Ethics Act. 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 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 formal 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. Sincerely, Vincent J. Dopko Chief Counsel