HomeMy WebLinkAbout01-544 RubensteinHerbert F. Rubenstein, Esquire
Suite 107
26 West Skippack Pike
Broad Axe, PA 19002 -5152
Dear Mr. Rubenstein:
ADVICE OF COUNSEL
April 25, 2001
01 -544
Re: Conflict; Public Official /Employee; Member; Governing Body; Member of
Immediate Family; Spouse; Employee; University; Contract; Vote.
This responds to your letter of March 22, 2001, 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 member of a
governing body as to participating in actions of the governing body with regard to a
contract between a university and the governing body for the construction by the
university of a baseball field on governing body /municipal property, where the member's
spouse is a university employee.
Facts: You request an advisory on behalf of a member of a governing body of a
municipality. The member's spouse is employed by a university (a nonprofit corporation)
as one of a large number of secretaries in a "secretarial pool." You state that there are
2,253 university employees and 162 secretaries, including the member's spouse. You
further state that the spouse /secretary has no supervisory or advisory responsibilities and
holds no position as an officer, director, trustee, or shareholder of the university.
The governing body is contemplating entering into a contract with the university.
Pursuant to the contract, the university, at its own expense, will construct a baseball field
together with backstops, bleachers, dugouts, fences, and parking areas on property
owned by the municipality in whole or in part. In exchange, the university will be
permitted to use the field for its baseball practice and games on a nonexclusive basis.
The contract will be the subject of public input through an open and public process. The
municipality will require an ordinance to authorize the contract, but the work to be
performed by the university will not be competitively bid since such will not involve the
expenditure of municipal funds.
Rubenstein, 01 -544
April 25, 2001
Page 2
You state that the member's spouse does not work for and is not employed by the
department of the university that will be involved in negotiating the above - described
contract. You further state that the contract between the university and the municipality
will have no impact, economic or otherwise, upon the employment responsibilities,
compensation, or continued employment of the member's spouse.
You believe that the above - described arrangement is a "contract" as defined under
the Ethics Act, as it involves an agreement for the acquisition, use or disposal by a
political subdivision of services, supplies, material, equipment, land, etc. You also
believe the university is a business with which the member's spouse, an immediate family
member, is associated. You state that the member would normally participate in the
consideration and discussion of such a contract and would vote to approve or disapprove
the same. However, given the above facts, you request guidance as to the following
inquiries.
1. Whether the member, as a public official in his capacity as a member of a
governing body, would violate §1103(a) of the Ethics Act or any other provision of
the Act, if he would participate in discussions, deliberations, negotiations and /or
decisions of the governing body regarding the contract by and between the
university and the municipality under the circumstances described above;
2. Whether the de minimis economic impact exclusion under §1103(a) of the Ethics
Act would apply, where there would be no economic impact whatsoever upon the
member or the member's spouse, which would in any way [be] dependent on the
finalization of the contract by and between the municipality and the [ u]niversity;"
3. Whether the subclass exclusion under §1103(a) of the Ethics Act would apply,
where the member's spouse is one of 2,252 employees of the university and 161
secretaries employed by the university, is not in a supervisory or advisory position,
is not an officer, director, trustee or shareholder of the university, and is not an
employee in and of the department of the university involved in the contract; and
4. Whether the municipality and the university may enter into the contract described
above under §1103(f) of the Ethics Act, where the contract is valued at more than
$500 and awarded through an open and public process, and where the member
will not have any supervisory or overall responsibility for the implementation or
administration of the contract. As to the open and public process, you note that
the municipality will adopt an ordinance requiring prior public notice and
subsequent public disclosure of all proposals considered and contracts awarded.
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.
The member of a governing body is a public official as that term is defined in the
Ethics Act, and hence the member is subject to the provisions of that Act.
Section 1103(a) of the Ethics Act provides:
$1103. Restricted activities.
Rubenstein, 01 -544
April 25, 2001
Page 3
(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:
$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.
"Immediate family." A parent, spouse, child, brother
or sister.
"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.
"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.
Rubenstein, 01 -544
April 25, 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(f) of the Ethics Act provides as follows:
$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
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:
$1103. Restricted activities.
Rubenstein, 01 -544
April 25, 2001
Page 5
(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 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.
In applying the above provisions of the Ethics Act to the instant matter, pursuant to
Section 1103(a) 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 member's spouse is an immediate family member. Further, the university that
employs the member's spouse is a "business" with which the spouse, as an employee, is
associated. First, the definition of the term "business" as set forth in the Ethics Act is very
broad. See, Novak, Opinion No. 91 -009, where the Commission determined that Penn
State was a business under the Ethics Act. As a corporation, the university is clearly
within that definition. Moreover, the fact that the university is a non - profit corporation
would not disqualify it as a "business." The word "or" toward the end of the definition of
"business" is disjunctive, and the repeated use of the word "any" precludes any
interpretation that the final phrase "legal entity organized for profit" modifies the initial
word "corporation ": Any corporation, ... or any legal entity organized for profit." The clear
and unambiguous statutory language is that any corporation, including a non - profit
corporation, is a "business.' Soltis-Sparano, Order No. 1045 at 31 (Citing, Confidential
Opinion, No. 89 -007; McConahy, Opinion No. 96 -006). Since the university is a
Rubenstein, 01 -544
April 25, 2001
Page 6
"business" as that term is defined in the Ethics Act, it is clearly a business with which the
member's spouse is associated in the capacity as a university employee.
Pursuant to Section 1103(a) of the Ethics Act, the member would have a conflict
as to matters coming before the governing body that would result in a financial gain to the
member, the member's spouse, or the university. In each instance of a conflict, the
member would be required to abstain and observe the disclosure requirements of Section
1103(j) of the Ethics Act.
Having established the above principles, your inquiries shall now be addressed.
With regard to your first question, the member would be prohibited from
participating in discussions, deliberations, negotiations and /or decisions of the governing
body regarding the contract by and between the university and the municipality. The
member would have a conflict because if the university would be permitted to construct a
baseball field for practice and games, it would receive a financial benefit as a result of
such action. Because the member would have a conflict of interest, he /she could not
vote, discuss, deliberate, confer with others, lobby for a particular result, or engage in
other uses of authority of office. This is true because the use of authority of office
encompasses all of the tasks needed to perform the functions of a given position. See,
Juliante, Order 809. Further, as noted above, the member would be required to observe
the disclosure requirements of Section 1103(j) of the Ethics Act.
With regard to your second and third questions, because the member's conflict of
interest would be based upon a pecuniary benefit to the university rather than the
member's spouse, the de minimis and class /subclass exclusions would not apply under
the facts as presented.
With regard to your fourth question, given that the contract would be valued at
more than $500 and awarded through an open and public process, and the member
would not have any supervisory or overall responsibility for the implementation or
administration of the contract, the contracting in question would not be prohibited under
the Ethics Act. The above only addresses the contract between the governing
body /municipality and the business with which the member's spouse is employed.
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 municipal
code. In this regard, it is suggested that you seek legal advice as to the applicability of
that code.
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: The member of a governing body, 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. The member's spouse is a member of his /her immediate family. The university
that employs the spouse is a business with which the member's spouse is associated.
Pursuant to Section 1103(a) of the Ethics Act, the member would have a conflict as to
matters coming before the governing body that would result in a financial gain to the
member, the member's spouse, or the university. In each instance of a conflict, the
member would be required to abstain and observe the disclosure requirements of Section
1103(j) of the Ethics Act.
Rubenstein, 01 -544
April 25, 2001
Page 7
The member would be prohibited from participating in discussions, deliberations,
negotiations and /or decisions of the governing body regarding the contract by and
between the university and the municipality. The member would have a conflict because
if the university would be permitted to construct a baseball field for practice and games, it
would receive a financial benefit as a result of such action. Because the member would
have a conflict of interest, he /she could not vote, discuss, deliberate, confer with others,
lobby for a particular result, or engage in other uses of authority of office.
Because the member's conflict of interest would be based upon a pecuniary
benefit to the university rather than the member's spouse, the de minimis and
class /subclass exclusions would not apply under the facts as presented.
Given that the contract would be valued at more than $500 and awarded through
an open and public process, and the member would not have any supervisory or overall
responsibility for the implementation or administration of the contract, the contracting in
question would not be prohibited under the Ethics Act. The above only addresses the
contract between the governing body /municipality and the business with which the
member's spouse is employed.
A problem may exist as to contracting under the respective municipal code.
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