HomeMy WebLinkAbout02-576 RhodesDavid J. Rhodes, Esquire
McClure & Miller, LLP
717 State Street, Suite 701
Erie, PA 16501
Dear Mr. Rhodes:
ADVICE OF COUNSEL
July 22, 2002
02 -576
Re: Conflict; Public Official /Employee; Municipal Authority Authority Manager;
Immediate Family Member; Spouse; Business With Which Associated; Bid;
Contract.
This responds to your letter of May 31, 2002, by which you requested advice
from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65
1a. =S. § 1101 et seq., presents any prohibition or restrictions upon an authority
manager whose spouse is an officer in a corporation that contracts with the authority,
particularly with respect to certain duties of the authority manager which include
overseeing the preparation of plans and specifications, bidding, competency of
contractors /vendors, and the selection criteria for authority contracts.
Facts: As Solicitor for the Municipal Authority of the Borough of Union City
u ority "), located in Erie County, Pennsylvania, you seek an advisory from the State
thics Commission. You have submitted facts which may be fairly summarized as
follows.
The Authority is governed by a five member board ( "Board" ). The day -to -day
operations of the Authority are handled by the Authority Manager. You have submitted
copies of the Authority's bylaws and the Position Description for the Authority Manager,
which documents are incorporated herein by reference.
The current Authority Manager will be retiring at the end of this calendar year.
The Board is reviewing potential candidates to fill the position. One of the potential
candidates is Marsha Tomcho ( "Tomcho "), the current Office Manager of the Authority.
You seek an advisory as to whether Tomcho would be prohibited from serving as
the Authority Manager due to a business relationship that exists between the Authority
and a business with which Tomcho's spouse is associated. Specifically, Tomcho's
spouse is an officer and partial owner of a corporation, "Tomcho & Sons, Inc."
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July 22, 2002
Page 2
( "Corporation "), which performs excavation and heavy equipment work for the Authority
on an as needed basis. You state that each year, the Authority bids this work through
its standard open bidding procedure. For the last several years, the Corporation has
been awarded the contract. The amount of compensation paid to the Corporation has
varied from year to year, depending upon the amount of work needed by the Authority.
In 2001, the amount paid by the Authority to the Corporation was approximately $3,000.
You state that while the Authority Manager has no authority to award contracts,
per the Position Description of the Authority Manager, he /she "[c]oordinates activities
with the Authority Engineer, and oversees the preparation of engineering plans and
specifications, bidding, competency of contractors and vendors, and the selection
criteria for Authority contracts." Position Description of Authority Manager, p. 2.
It is further noted that per the Position Description of the Authority Manager,
he /she "[o]versees project management for the construction of Authority capital
projects" and "oversees projects to ensure contractor compliance with time and budget
parameters." Id.
Based upon the submitted facts and documents, you pose two questions:
1. Given the Authority's business relationship with the
Corporation, whether Tomcho would have a conflict of
interest that would disqualify her from serving as Authority
Manager; and
2. If a conflict would exist, whether actions could be taken to
avoid the conflict, such that Tomcho would be permitted to
serve as Authority Manager.
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.
It is further initially noted that, pursuant to the same aforesaid Sections of the
Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If
the activity in question has already occurred, the Commission may not issue an
opinion /advice but any person may then submit a signed and sworn complaint which will
be investigated by the Commission if there are allegations of Ethics Act violations by a
person who is subject to the Ethics Act. To the extent you have inquired as to future
conduct, your inquiry may, and shall be addressed.
As Authority Manager, Tomcho would be a public employee subject to the Ethics
Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. §1102; 51
Pa. Code §11.1. This conclusion is based upon the job description, which when
reviewed on an objective basis, indicates clearly that the power exists to take or
recommend official action of a non - ministerial nature with respect to one or more of the
following: contracting; procurement; planning; inspecting; administering or monitoring
grants; leasing; regulating; auditing; or other activities where the economic impact is
greater than de minimis on the interests of another person.
Section 1103(a) of the Ethics Act provides:
§ 1103. Restricted activities
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July 22, 2002
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 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.
"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.
65 Pa.C.S. § 1102.
The use of authority of office 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. Id.; see also, Confidential Opinion, 02 -004.
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
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July 22, 2002
Page 4
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
"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;
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July 22, 2002
Page 5
(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
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. It is clear that Tomcho's
spouse is a member of her immediate family, and that the Corporation is a business
with which Tomcho's spouse as an officer is associated.
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July 22, 2002
Page 6
Having established the above, your specific questions shall now be addressed.
Your first question is whether Tomcho would have a conflict of interest that would
disqualify her from serving as Authority Manager, given the Authority's business
relationship with the Corporation. You are advised that although it would be expected
that conflicts of interest would arise for Tomcho, the Ethics Act would not preclude
Tomcho from accepting the position of Authority Manager. However, Tomcho would be
prohibited from using the authority of her position as Authority Manager, or confidential
information received by being in her public position, for the private pecuniary benefit of
herself, her spouse, or the Corporation. In each instance of a conflict of interest,
Tomcho would be required to abstain from participation and to satisfy the disclosure
requirements of Section 1103(j). See, Snyder v. State Ethics Commission, 686 A.2d
843 (Pa. Cmwlth. 1996), alloc. den., 0029 M.D. Allocatur Docket 1997 (Pa. December
22, 1997).
For example, although the duties of the Authority Manager would ordinarily
include coordinating activities with the Authority Engineer, and overseeing the
preparation of engineering plans and specifications, bidding, competency of contractors
and vendors, and the selection criteria for Authority contracts, Tomcho would be
prohibited from performing such duties insofar as the Corporation would be involved.
Additionally Tomcho would have a conflict and would therefore be prohibited from
performing the project oversight duties of the Authority Manager to the extent the
Corporation would be involved in a project.
Your second question is whether actions could be taken to avoid the conflict,
such that Tomcho would be permitted to serve as Authority Manager. As noted above,
Tomcho would not be precluded from serving as Authority Manager, but in each
instance of a conflict, she would be required to abstain and make disclosures in
conformity with Section 1103(j).
You are further advised that the existence of a conflict would preclude Tomcho
from delegating her authority to a subordinate. See, Confidential Opinion, 02 -004. The
submitted facts do not indicate whether there is a pre - existing mechanism in place for
delegation of the Authority Manager's authority in the event of a conflict. You are
advised that pursuant to Section 1103(a), where there is no pre - existing mechanism in
place specifying how and by whom a public official's or public employees authority is to
be exercised in the event of a conflict, the public official's or public employee's
delegation of such authority to a subordinate is itself a use of authority of office.
Confidential Opinion, 02 -004.
Finally, with regard to Section 1103(f) of the Ethics Act, you are advised that for
each contract valued at $500 or more between the Authority and the Corporation, the
requirements of Section 1103(f) of the Ethics Act set forth above would have to be
strictly observed. In addition to the requirements for an open and public contracting
process, Section 1103(f) would require that Tomcho not have any supervisory or overall
responsibility as to the implementation or administration of the contract between the
Authority and the Corporation.
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 Municipality Authorities Act.
Conclusion: As Authority Manager for the Municipal Authority of the Borough of
Union City ( Authority "), Marsha Tomcho ( "Tomcho ") would be a public employee
subject to the provisions of the Public Official and Employee Ethics Act 'Ethics Act "), 65
Pa.C.S. § 1101 et se q. Tomcho's spouse is a member of her immediate family, and
Tomcho & Sons,7nc. 'Corporation ") is a business with which Tomcho's spouse as an
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July 22, 2002
Page 7
officer is associated. Although it would be expected that conflicts of interest would arise
for Tomcho due to the business relationship between the Authority and the Corporation,
the Ethics Act would not preclude Tomcho from accepting the position of Authority
Manager. In each instance of a conflict of interest, Tomcho would be required to
abstain from participation and to satisfy the disclosure requirements of Section 1103(j).
As Authority Manager, Tomcho would be prohibited from coordinating activities with the
Authority Engineer, and overseeing the preparation of engineering plans and
specifications, bidding, competency of contractors and vendors, and the selection
criteria for Authority contracts, insofar as the Corporation would be involved.
Additionally Tomcho would have a conflict and would be prohibited from performing the
project oversight duties of the Authority Manager to the extent the Corporation would be
involved in a project.
Pursuant to Section 1103(a), where there is no pre- existing mechanism in place
specifying how and by whom a public official's or public employee's authority is to be
exercised in the event of a conflict, the public official's or public employee's delegation
of such authority to a subordinate is itself a use of authority of office. The existence of a
conflict would preclude Tomcho from delegating her authority to a subordinate.
For each contract valued at $500 or more between the Authority and the
Corporation, the requirements of Section 1103(f) of the Ethics Act set forth above would
have to be strictly observed. In addition to the requirements for an open and public
contracting process, Section 1103(f) would require that Tomcho not have any
supervisory or overall responsibility as to the implementation or administration of the
contract between the Authority and the Corporation.
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