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HomeMy WebLinkAbout02-569 ParzynskiCraig V. Ambrose President of Borough Council Borough of North Belle Vernon 503 Speer Street North Belle Vernon, PA 15012 -1540 Leonard J. Parzynski Member of Borough Council Borough of North Belle Vernon 503 Speer Street North Belle Vernon, PA 15012 -1540 Dear Sirs: ADVICE OF COUNSEL June 11, 2002 John E. Garber Member of Borough Council Borough of North Belle Vernon 503 Speer Street North Belle Vernon, PA 15012 -1540 Lloyd A. Sichi Member of Borough Council Borough of North Belle Vernon 503 Speer Street North Belle Vernon, PA 15012 -1540 02 -569 Re: Conflict; Public Official /Employee; Borough Council Member; Borough Council President; Volunteer Fire Department; Non - Profit Corporation; Member of Fire Department; Officer of Fire Department; Business With Which Associated; Borough's Purchase of Building /Property From Fire Department. This responds to your letters of April 29, 2002, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Ha.G.S. § 1101 et seq., presents any prohibition or restrictions upon borough council members with regard to the borough's prospective purchase of a building /property from the local volunteer fire department, when such borough council members are members or officers of the fire department. Facts: As members of the North Belle Vernon Borough Council ( "Borough Crincil "), you collectively seek an advisory from the State Ethics Commission based upon the following submitted facts. In addition to serving on Borough Council, you serve the North Belle Vernon Volunteer Fire Department 'Fire Department ") in various capacities. Requestors Lloyd A. Sichi ( "Sichi "), Craig V. Ambrose, Council President ( "Ambrose "), and John E. Garber Ambrose, Garber, Parzynski, Sichi 02 -569 June 11, 2002 Page 2 ( "Garber ") are members but not officers of the Fire Department. Requestor Leonard J. Parzynski ( "Parzynski ") is an officer (First Vice President) of the Fire Department. Borough Council is considering purchasing a building /property from the Fire Department. You ask whether a conflict of interest would exist for you with regard to the prospective purchase of the building /property, given your respective relationships with the Fire Department. You note that the Fire Department is a non - profit corporation, and that during 2001, the Fire Department received $29,184 from North Belle Vernon Borough ( "Borough "). 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 members of Borough Council, you are all public officials 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 conflicts of interest 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. Ambrose, Garber, Parzynski, Sichi 02 -569 June 11, 2002 Page 3 "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, 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. 65 Pa.C.S. § 1102. You are advised that the use of authority of office is more than the mere mechanics of voting and encompasses all of the tasks needed to perform the functions of a given position. See, Juliante, Order 809. Use of authority of office includes, for example, discussing, conferring with others, and lobbying for a particular result. 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). The term "contract" is defined in the Ethics Act as follows: § 1102. Definitions Ambrose, Garber, Parzynski, Sichi 02 -569 June 11, 2002 Page 4 "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. 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 (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 Ambrose, Garber, Parzynski, Sichi 02 -569 June 11, 2002 Page 5 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. Depending upon the circumstances in a given case, a fire company may be viewed as part of a governmental body, such as a borough, or as a private entity meeting the definition of "business" as set forth in the Ethics Act and above. If a fire company is part of the governmental body in which the public official /public employee serves, it may generally be said that a private pecuniary benefit to the fire company alone will not present a conflict of interest for the public official /public employee. Only if there are additional circumstances, such as if the public official /public employee or a member of his immediate family will also derive a private pecuniary benefit, will there be a conflict of interest. If, on the other hand, the fire company is a "business," there is the potential for a conflict of interest based upon a private pecuniary benefit to the fire company, because the fire company is then an entity separate from the governmental body. The issue becomes whether the fire company is a business with which the public official /public employee or a member of his immediate family is associated, as defined in the Ethics Act. The definition includes a business for which the public official /public employee or a member of his immediate family is a director, officer, owner, employee, or has a financial interest. Among the most significant factors in determining the status of a fire company is the degree to which the fire company is funded and controlled by the governmental body (see, 53 P.S. § 46202), or alternatively raises its own funds and governs itself. The facts which you have submitted do not fully address the relationship between the Borough and the Fire Department. Therefore, it is not possible to determine within this Advice whether the Fire Department is part of the Borough or is a business for purposes of applying the Ethics Act to your inquiry. Nevertheless, regardless of the status of the Fire Department, it is clear that Council Members Sichi, Ambrose, and Garber will not have a conflict of interest in matters involving the Fire Department when the sole private pecuniary benefit is to the Ambrose, Garber, Parzynski, Sichi 02 -569 June 11, 2002 Page 6 Fire Department itself. This conclusion is based upon the fact that even if the Fire Department is a "business," it is not a business with which these individuals, as members, are associated. Membership is insufficient to satisfy the Ethics Act's definition of the term "business with which he is associated." Therefore, absent some other private pecuniary benefit that will satisfy the elements for a conflict of interest, Council Members Sichi, Ambrose, and Garber will not have a conflict of interest in matters involving the proposed purchase by the Borough of a building /property from the Fire Department. As for Parzynski, who is an officer of the Fire Department, general advice may be given. If the Fire Department is part of the Borough, matters involving the purchase by the Borough of the building /property owned by the Fire Department will not present a conflict of interest for Parzynski because the pecuniary benefit will flow to a governmental body, and therefore, the elements for a conflict of interest will not exist. On the other hand, if the Fire Department is not part of the Borough, such that it is a "business" as defined by the Ethics Act, then the Fire Department is a business with which with which Parzynski is associated as an officer. Assuming that the Fire Department is not part of the Borough such that it is a business with which Parzynski is associated, then as a Borough Council Member, Parzynski will: (1) generally have a conflict of interest under Section 1103(a) of the Ethics Act as to matters that will result in a financial gain to the Fire Department; and (2) specifically have a conflict of interest as to matters before Borough Council involving the proposed purchase of a building /property from the Fire Department. As noted above, in each instance of a conflict of interest, Parzynski will be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Finally, the requirements of Section 1103(f) must be satisfied as to the Borough's proposed purchase of a building/property from the Fire Department to the extent: (1) the Fire Department is a business with which Parzynski is associated; and (2) the value of the contract is $500 or more. 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 Borough Code. Conclusion: As members of the North Belle Vernon Borough Council ( "Borough Council "), Lloyd A. Sichi ("Sichi"), Craig V. Ambrose, Council President ( "Ambrose , John E. Garber ( "Garber "), and Leonard J. Parzynski ( "Parzynski ") are public officials subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Based upon the facts which have been submitted, it cannot be determined whether the North Belle Vernon Volunteer Fire Department ( "Fire Department") is part of North Belle Vernon Borough ( "Borough ") or is a "business" as defined byte Ethics Act. Regardless of the status of the Fire Department, Council Members Sichi, Ambrose, and Garber, who are members but not officers of the Fire Department, will not have a conflict of interest in matters involving the Fire Department when the sole private pecuniary benefit is to the Fire Department itself. Absent some other private pecuniary benefit that will satisfy the elements for a conflict of interest, Council Members Sichi, Ambrose, and Garber will not have a conflict of interest in matters involving the proposed purchase by the Borough of a building /property from the Fire Department. Ambrose, Garber, Parzynski, Sichi 02 -569 June 11, 2002 Page 7 If the Fire Department is part of the Borough, matters involving the purchase by the Borough of the building /property owned by the Fire Department will not present a conflict of interest for Parzynski even though he is an officer of the Fire Department. If the Fire Department is not part of the Borough, such that it is a business with which Parzynski is associated, then as a Borough Council Member, Parzynski will: (1) generally have a conflict of interest under Section 1103(a) of the Ethics Act as to matters that will result in a financial gain to the Fire Department; and (2) specifically have a conflict of interest as to matters before Borough Council involving the proposed purchase of a building /property from the Fire Department. In each instance of a conflict of interest, Parzynski will be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The requirements of Section 1103(f) must be satisfied as to the Borough's proposed purchase of a building /property from the Fire Department to the extent: (1) the Fire Department is a business with which Parzynski is associated; and (2) the value of the contract is $500 or more. 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