HomeMy WebLinkAbout01-519 ConfidentialADVICE OF COUNSEL
February 28, 2001
01 -519
Re: Conflict; Public Official /Public Employee; Manager, Unit B; Department C; Officer
L; City A; Private Employment or Business; Business With Which Associated.
This responds to your letter of January 22, 2001, by which you requested a
confidential advisory 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 public
employee /public official serving in multiple capacities with a city with regard to: (1)
offering State - required courses through his /her private business to employees of
establishments he /she regulates for the city; or (2) hiring city employees which he /she
supervises to work as instructors for such private business.
Facts: As an acknowledged public employee /public official serving in multiple
capacities with City A, you seek a confidential advisory from the State Ethics
Commission. You have submitted a copy of an organizational chart, which chart is
incorporated herein by reference. You have submitted facts which may be fairly
summarized as follows.
You are employed by City A ( "City ") as Manager of Unit B ( "Unit ") within
Department C. The Unit is responsible for conducting semi - annual inspections of all D
service establishments within the City limits and administering the related licensing
program. The Unit is also responsible for fulfilling general E responsibilities concerning F
and the City G, H programs, and I.
As Manager of the Unit, you supervise two full -time J inspectors as well as a K
who is qualified to inspect D service establishments. You also inspect D service
establishments from time to time.
You additionally serve as the City's Officer L, having been appointed to that
position by the City's independent five - member M.
You state that by [date], pursuant to Pennsylvania law, all D service
establishments in the Commonwealth will be required to have at least one employee
certified by State Department N in D service safety. D service establishments in the City
will be required to comply with this State requirement in order to receive and maintain a
Confidential Advice, 01 -519
February 28, 2001
Page 2
license from the City. You state that there are slightly less than [number] City
establishments that will be required to have at least one State - certified employee.
To obtain the required certification, an individual must first successfully complete a
course and test that have been approved in advance by State Department N.
In your private capacity, you are the sole shareholder of Corporation 0
( "Company "). Your Company offers D safety training for D service workers in
Pennsylvania using a curriculum that you developed prior to accepting employment with
the City. Your curriculum has already been approved by State Department N, and is
currently one of only [number] in the State that can be used by persons wishing to
conduct D service safety training courses. You have enclosed a brochure that describes
your Company and its services.
At the present time, your Company employs one part -time administrator. The
administrator works out of the Company's office facility, which is rented from another
business. You state that because the D safety certification requirement is more than
[number] years away, to date your Company has had very little business. You anticipate
that beginning in late 2002 or early 2003, your business will increase and you will need to
hire a full -time administrator /marketer. Assuming the certification deadline does not
change, you further anticipate that you will possibly need twenty or thirty more part -time
instructors by Spring 2003.
Although you are not interested in acting as an administrator /marketer for your
Company, you are interested in "teaching the teachers" on occasional weekends. In
addition, several of the City's P inspectors are interested in teaching weekend classes
and receiving compensation on the same basis as all of the other instructors employed
by your Company. You state that the majority of the part -time instructors employed by
your Company would not be City employees.
You state that because your Company will initially offer most of its courses in
leased facilities outside of but close to City limits, it is likely that D service workers
employed by establishments located within the City will sign up for its courses. However,
you anticipate that because less than [number] percent of the D service establishments
within the State are located within the City, most of the students will be employed by
establishments located outside of the City.
At the present time, courses are occasionally offered by several educational
institutions, generally at a cost of [amount] or more per student. You state that your
Company will likely offer each course for approximately [lesser amount] with each student
paying the same fee.
City.
You further state that there will be no contracts between your Company and the
Based upon the above, you ask whether the Ethics Act would present any
prohibitions or restrictions upon you /your Company with regard to: (1) offering D service
courses to D service workers employed by establishments located within the City, on the
same basis as all other D service workers; or (2) hiring City employees which you
supervise in your public capacity to work as instructors for your private Company.
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
Confidential Advice, 01 -519
February 28, 2001
Page 3
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 Manager of Unit B ( "Unit ") within Department C of City A ( "City "), and as the
City's appointed Officer L, you are a public employee /public official subject to the
provisions of the Ethics Act.
Section 1103(a) of the Ethics Act provides:
§ 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:
65 Pa.C.S. §1102.
§ 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.
"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.
Confidential Advice, 01 -519
February 28, 2001
Page 4
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(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
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).
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 applying the above provisions of the Ethics Act to your inquiry, 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, the ublic official /public
employee may not use 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. Pancoe, Opinion 89 -011.
Examples of conduct that would be prohibited under Section 1103(a) would include: (1)
the pursuit of a private business opportunity in the course of public action, Metrick, Order
No. 1037; (2) the use of governmental facilities, such as governmental telephones,
postage, staff, equipment, research materials, or other property, or the use of
governmental personnel, to conduct private business activities, Freind, Order No. 800;
Pancoe, supra; and (3) the participation in an official capacity as to matters involving the
business with which the public official /public employee is associated in his private
Confidential Advice, 01 -519
February 28, 2001
Page 5
capacity, such as the review /selection of its bids or proposals, Gorman, Order No. 1041.
If the private employer or business with which the public official /public employee is
associated would have a matter pending before the governmental body, the public
official /public employee would have a conflict of interest as to such matter. Miller, Opinion
No. 89 -024. In each instance of a conflict of interest, the public official /public employee
would be required to abstain from participation and to satisfy the disclosure requirements
of Section 1103(j).
Your Company is clearly a business with which you, its sole shareholder, are
associated. Pursuant to Section 1103(a) of the Ethics Act, it would be a conflict of
interest for you to use the authority of your public position(s) or confidential information
received by being in such position(s) for the private pecuniary benefit of you or your
Company. Metrick, supra.
In each instance of a conflict of interest, you would be required to abstain and to
satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. You are advised
that the use of authority of office includes more than voting and encompasses all of the
tasks needed to perform the functions of a given position. See, Juliante, Order 809.
Thus, in instances of a conflict of interest, the abstention requirement would prohibit you
from discussing, conferring with others, lobbying for a particular result, or engaging in
other uses of authority of office.
The specific questions which you have posed shall now be addressed.
You are advised that Section 1103(a) of the Ethics Act applies to restrict public
officials and public employees. Therefore, Section 1103(a) would apply to restrict you but
not your Company. Moreover, Section 1103(a) would apply to restrict you in your public
capacity rather than your private capacity.
Assuming that there would be no improper understandings contrary to Sections
1103(b) or 1103(c) of the Ethics Act, the Ethics Act would not per se prohibit you /your
Company from offering D service courses to D service workers employed by
establishments located within the City, or from hiring City employees which you supervise
to work for your private Company. However, to the extent you /your Company would do
so, you would have a conflict of interest in your public capacity and would be required to
abstain and make disclosures pursuant to Section 1103(j) in matters pertaining to: (1)
the regulation of D service establishments located within the City; and (2) the supervision
of City employees asked to work for your Company.
The above conclusion as to a conflict of interest pursuant to Section 1103(a) of the
Ethics Act follows the decision of Commonwealth Court in Snyder v. State Ethics
Commission, 686 A.2d 843 (Pa. Cmwlth. 1996). In the cited case, Commonwealth Court
affirmed a decision of the Commission, finding a violation by a township supervisor who
participated in matters involving a business with which he was associated that had
matters pending before the township. Commonwealth Court held that a public official
should not participate in matters in which he has a personal interest:
We are likewise unconvinced by the fact that Snyder's vote was
never controlling or necessary for a quorum. Snyder violated the Ethics
Law by discussing and voting on issues in which he had a private pecuniary
interest, not by affecting the outcome of those votes. Similarly, it is
irrelevant whether Snyder improperly used his influence as a Supervisor to
gain the Colonial Commons and Blue Meadow contracts; Snyder may have
been able to obtain the jobs even if he were not a Supervisor, but as a
Supervisor, he should not have considered and voted on issues involving
his personal business dealings.
Id. at 849 (Emphasis added).
Confidential Advice, 01 -519
February 28, 2001
Page 6
Likewise, to the extent you /your Company would offer D service courses to D
service workers employed by establishments located within the City, or would seek to
hire City employees which you supervise to work for your private Company, such would
inherently present conflicts of interest for you in your public capacity. As to the former,
you would, in your public capacity, be taking action as to D service establishments
located within the City which would either choose to use —or not use — individuals trained
by your Company. As to the latter, you would, in your public capacity, be taking action as
to City employees who would either choose to work —or not work —for your Company.
Either way, a conflict would exist.
You would also be required to avoid access to confidential information or
information more readily available to someone in your public position(s), where such
information would enhance your private business pursuits. See, Riley, Opinion 00 -008.
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 Manager of Unit B ( "Unit ") within Department C of City A ( "City ")
and as the City's appointed Officer L, you are a public employee /public official subject to
the provisions of the Public Official and Employee Ethics Act ("Ethics Act "), 65 Pa.C.S.
§1101 et seq. Corporation 0 ( "Company "), of which you are the sole shareholder, is a
business with which you are associated.
Section 1103(a) of the Ethics Act applies to restrict public officials and ublic
employees, and therefore would not apply to restrict your Company. Section 1103(a)
would apply to restrict you in your public capacity rather than your private capacity.
Assuming that there would be no improper understandings contrary to Sections
1103(b) or 1103(c) of the Ethics Act, the Ethics Act would not per se prohibit you /your
Company from offering D service courses to D service workers employed by
establishments located within the City, or from hiring City employees which you supervise
to work for your private Company. However, to the extent you /your Company would do
so, you would have a conflict of interest in your public capacity and would be required to
abstain and make disclosures pursuant to Section 1103(j) in matters pertaining to: (1)
the regulation of D service establishments located within the City; and (2) the supervision
of City employees asked to work for your Company.
You would also be required to avoid access to confidential information or
information more readily available to someone in your public position(s), where such
information would enhance your private business pursuits.
In each instance of a conflict of interest, you would be required to abstain and to
satisfy the disclosure requirements of Section 1103(j) 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.
Confidential Advice, 01 -519
February 28, 2001
Page 7
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(). 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