HomeMy WebLinkAbout00-629 ConfidentialADVICE OF COUNSEL
December 12, 2000
00 -629
Re: Conflict; Public Official /Employee; Member; General Assembly; Business With
Which Associated; Contract; Authority.
This responds to your letter of November 6, 2000 by which you requested a
confidential 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 Legislator with
regard to an A Authority, where the member sits on a legislative committee /subcommittee
that is involved with issues affecting the A Authority, and it is anticipated that the A
Authority will enter into a contract with a business with which the Legislator is associated.
Facts: As a Member of the Pennsylvania General Assembly, specifically the B, you
seek a confidential advisory from the State Ethics Commission. You have submitted
facts which may be fairly summarized as follows.
As of the submission of your inquiry, your various legislative committee
assignments include the C, D, E, and F committees of the B. In addition, you serve as
the Chairman of Subcommittee G. Your other assignments include H and I.
You are a founder of Firm J, a K firm ( "Firm "). The Firm was formed in 1989. The
Firm is licensed by Pennsylvania and is a Pennsylvania S corporation. You have been,
in one capacity or another, an employee, officer or director of the Firm since its inception.
You state that you hold a minority financial interest in the Firm, which financial interest
has been routinely reported on your Statements of Financial Interests. You acknowledge
that the Firm is a 'business with which you are associated."
You state that the Firm has responded to a Request for Proposals ( "RFP ") issued
by an A Authority, specifically Authority L ( "Authority "). The Authority is a public authority
created pursuant to Pennsylvania law. It is governed by board members who are
appointed by County M. As one of the largest N entities in Pennsylvania, the Authority is
the recipient of substantial state and federal funding.
The RFP seeks a K firm to conduct 0 for the Authority. You have submitted pages
18 -19 of the RFP, which pages are incorporated herein by reference.
Confidential Advice, 00 -629
December 12, 2000
Page 2
You have also submitted a copy of a letter dated October 27, 2000, addressed to
you from the Chief Financial Officer of the Authority, which letter is also incorporated
herein by reference. The letter notes, inter alia, that the Firm has submitted a response
to the Authority's RFP; that you are both a principal in the Firm and a Member of the
Pennsylvania B; and that you serve on Committee C and as Chairman of Subcommittee
G. Given that Committee C has major involvement with P issues that affect the Authority,
the letter asks that you seek an advisory opinion as to whether an award of a contract by
the Authority to the Firm may create a possible "conflict of interest" or the appearance of
a "conflict of interest" under the Ethics Act. The letter states that the Authority has not
given and will not give any advantage to the Firm when rating proposals because of your
position on Committee C. The letter states that the fact that you are a member of
Committee C has not influenced and will not influence the selection process used by the
Authority to determine the most qualified firm to perform the requested services.
You state that in seeking a K firm to provide professional services, the Authority
has utilized an open and public competitive process, including prior public notice. You
further state that all proposals that may be considered and contracts that may be
awarded will be subject to subsequent public access as a matter of public record. You
state that the contract will be in excess of $500. Finally, you state that you would not
have any supervisory or other responsibility for any services that the Firm would render to
the Authority.
Based upon the above submitted facts, you ask whether a contract between the
Firm and the Authority would present a conflict of interest for you under the Ethics Act.
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), (11). An advisory only affords a
defense to the extent the requestor has truthfully disclosed all of the material facts.
As a Member of the Pennsylvania General Assembly, specifically the B, you are a
public official 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 as follows:
§ 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 pertaining to Section 1103(a) are defined in the Ethics Act as
follows:
§ 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
Confidential Advice, 00 -629
December 12, 2000
Page 3
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.
"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.
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:
(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 implementation or administration of the
contract. Any contract or subcontract made in violation of
this subsection shall be voidable by a court of competent
Confidential Advice, 00 -629
December 12, 2000
Page 4
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 1102 of the Ethics Act, the term "governmental body with
which a public official or public employee is or has been associated" is defined as follows:
§1102. Definitions
"Governmental body with which a public official or
public employee is or has been associated." The
governmental body within State government or a political
subdivision by which the public official or employee is or has
been employed or to which the public official or employee is or
has been appointed or elected and subdivisions and offices
within that governmental body.
65 Pa.C.S. §1102.
When Section 1103(f) applies, the "open and public process" which it requires
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:
§ 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
Confidential Advice, 00 -629
December 12, 2000
Page 5
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.
65 Pa.C.S. §1103(j).
The above provisions of the Ethics Act shall now be applied to your inquiry. You
ask whether the Ethics Act would present any prohibition or restrictions upon you with
regard to the Authority if the Authority would enter into a contract with the Firm, a
business with which you are associated.
You are advised that Section 1103(a) of the Ethics Act does not prohibit public
officials /public employees from having outside business activities or employment.
However, subject to certain exceptions delineated in the definition of "conflict" or "conflict
of interest" above, Section 1103(a) of the Ethics Act ordinarily applies to prohibit the
public official /public employee from using the authority of his public position —or
confidential information obtained by being in that position —for the advancement of his
own private pecuniary benefit or that of a business with which he is associated.
Ordinarily, a public official /public employee with a conflict under the Ethics Act is required
to abstain fully and to fully satisfy the disclosure requirements of Section 1103(j) of the
Ethics Act.
Members of the Pennsylvania General Assembly have the following privileges
under the Constitution of Pennsylvania:
Privileges of Members
Section 15. The members of the General Assembly shall in
all cases, except treason, felony, violation of their oath of
office, and breach of surety of the peace, be privileged from
arrest during their attendance at the sessions of their
respective Houses and in going to and returning from the
same; and for any speech or debate in either House they
shall not be questioned in any other place.
Constitution of Pennsylvania, Article 11, Section 15.
The Constitution of Pennsylvania further provides:
Vote Denied Members with Personal Interest
Section 13. A member who has a personal or private
interest in any measure or bill proposed or pending before
the General Assembly shall disclose the fact to the House of
which he is a member, and shall not vote thereon.
Constitution of Pennsylvania, Article 111, Section 13.
Confidential Advice, 00 -629
December 12, 2000
Page 6
In reviewing the above constitutional provisions and pertinent case law, the State
Ethics Commission has held that:
The activities of a member of the General Assembly insofar as such
relate to legislative actions, defined as the introduction, consideration,
debating, voting, enactment, adoption or approval of legislation, are
constitutionally controlled. Such legislative actions are therefore exempt
from the purview of the State Ethics Act and the State Ethics Commission.
. the application of the State Ethics Act to non - legislative activities are in
no way affected by this opinion.
Corrigan, Opinion 87 -001 at 4 (Emphasis added); see also, Confidential Advice, 00 -621.
Thus, Legislators are subject to the provisions of the Ethics Act and the jurisdiction of the
State Ethics Commission to the extent their activities do not constitute "legislative
actions," that is, the introduction, consideration, debating, voting, enactment, adoption or
approval of legislation. Id. See, e.g., Friend, Order 800.
Under the facts which you have submitted, you are advised that Section 1103(a) of
the Ethics Act would not apply to restrict you as to the Authority conditioned upon the
assumptions that: (1) there would be no use of confidential information received by being
in your public office for a prohibited private pecuniary benefit; and (2) any uses of
authority of office as to the Authority would fall within the above definition of 'legislative
actions' and would therefore be exempt from the purview of the Ethics Act and the State
Ethics Commission.
As for Section 1103(f) involving contracting, the restrictions of Section 1103(f)
would not apply to contracting between the Firm and the Authority because the Authority
is not part of the governmental body with which you are associated. As a Member of the
B, the governmental body with which you are associated is the B, together with Boards,
Commissions, Committees and the like upon which you serve in an official capacity.
See, e.g., Sharp, Opinions 90 -009 and 90- 009 -R, Lloyd, Advice 99 -566, Young, Advice
99 -527, and Krebs, Advice 99 -501 (defining the "former governmental body" of former
Members and staff of the House and Senate of Pennsylvania).
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 Legislative Code of Conduct.
Conclusion: As a Member of the Pennsylvania General Assembly, specifically the
B, you are a public official subject to the p rovisions of the Public Official and Employee
Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq. Legislators are subject to the
provisions of the Ethics Act and the jurisdiction of the State Ethics Commission to the
extent their activities do not constitute "legislative actions," defined as the introduction,
consideration, debating, voting, enactment, adoption or approval of legislation.
Under the submitted facts that: (1) Firm J, a K firm ("Firm"), is a business with
which you are associated; (2) the Firm has responded to a Request for Proposals ( "RFP ")
issued by Authority L ("Authority"), which is one of the largest N entities in Pennsylvania
and the recipient of substantial state and federal funding; (3) as a Member of the B, you
serve on Committee C and as Chairman of Subcommittee G; and (4) Committee C has
major involvement with P issues that affect the Authority, you are advised that Section
1103(a) of the Ethics Act would not apply to restrict you as to the Authority conditioned
upon the assumptions that: (1) there would be no use of confidential information
received by being in your public office for a prohibited p rivate pecuniary benefit; and (2)
any uses of authority of office as to the Authority would fall within the above definition of
Confidential Advice, 00 -629
December 12, 2000
Page 7
"legislative actions" and would therefore be exempt from the purview of the Ethics Act
and the State Ethics Commission.
The restrictions of Section 1103(f) would not apply to contracting between the Firm
and the Authority because the Authority is not part of the governmental body with which
you are associated. As a Member of the B, the governmental body with which you are
associated is the B, together with Boards, Commissions, Committees and the like upon
which you serve in an official capacity.
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 §13.20. 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