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HomeMy WebLinkAbout96-548 TracyJames P. Coulter, Esquire Dillon, McCandless, King, Coulter & Graham, L.L.P. 128 West Cunningham Street Butler, PA 16001 Dear Mr. Coulter: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 30, 1996 96 -548 Re: Conflict, Public Official /Employee, City Treasurer, Business With Which Associated, Purchases. This responds to your letters of March 29, 1996 and April 5, 1996 in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a City Treasurer as to the sale of office products to the City by a business with which he is associated. Facts: As the Solicitor for the City of Butler, Butler County, Pennsylvania, and with the authorization of Emil Tracy (Tracy), you are requesting an advisory as to Tracy who is the duly appointed Treasurer for the City of Butler, having taken office on or about February 2, 1996. Tracy owns and operates an office products business in Butler known as Butler Office Products which for many years has sold office supplies and equipment to the City of Butler. At the time Tracy was appointed as Treasurer and as of March 29, 1996, Tracy retains a 15% interest in Butler Office Products, Inc. The majority of the shareholders in Butler Office Products, Inc. do not reside with Tracy nor does he support them in any manner. You state that Tracy takes no part in the day -to -day operation of the company, receives no salary, and does not submit quotes or bids to the City for office products or related materials. The amount of purchases made by the City varies from year to year but you approximate yearly purchases of $2,500 Your specific question is whether Mr. Tracy, as City Treasurer, can continue to provide office supplies to the City through his business based on the following assumptions: that the City makes full disclosure of the business relationship by listing each invoice on the list for payment at a public meeting; that the supplies, equipment Coulter/Tracv, 96 -548 April 30, 1996 Page 2 and service is performed by Butler Office Products employees and not Tracy; and that the charges to the City are commensurate with or less than other companies. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(1 1) of the Ethics Law, 65 P.S. § §407(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 P.S. §§407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As Treasurer for the City of Butler, Tracy is a public official as that term is defined under the Ethics Law, and hence he is subject to the provisions of that law. Section 3(a) of the Ethics Law provides: Section 3 Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined in the Ethics Law as follows: Section 2. 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. "Conflict" or "conflict of interest" 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. "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. Coulter /Tracv, 96 -548 April 30, 1996 Page 3 In addition, Sections 3(b) and 3(c) of the Ethics Law 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 judgement 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 3(f) of the Ethics Law provides as follows: Section 3. Restricted activities (f) 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. Parenthetically, where contracting is otherwise allowed or where there appears to be no express prohibitions to such contracting, the above particular provision of the law would require that an open and public process must be used in all situations where a public official /employee is otherwise appropriately contracting with his own 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. This open and public process would require that the following be observed as to the contract with the governmental body: (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. Coulter /Tracy, 96 -548 April 30, 1996 Page 4 Section 3(f) of the Ethics Law 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 3(j) of the Ethics Law provides as follows: Section 3. Restricted activities (j) 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. If a conflict exists, Section 3(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 Law, then in that event participation is permissible provided the disclosure requirements noted above are followed. See, fvllakar, Advice 91- 523 -S. In applying the provisions of Section 3(a) of Act 9 of 1989 to the instant matter, Tracy would have a conflict as to all matters involving Butler Office Products which is a business with which he is associated as that term is defined under the Ethics Law. Some examples of conflicts would be decisions to purchase from Butler Office Products, directions to subordinates to purchase from Butler Office Products; however, participation as to the payment of non - contested routine bills would not be a conflict. See, Krushinski, Order 168. Consequently, Tracy could not participate as to any matters involving Butler Office Products and must satisfy the disclosure Coulter /Tracy, 96 -548 April 30, 1996 Page 5 requirements of Section 3(j). In addition, to the extent that any purchases are valued at $500 or more, the contracting requirements of Section 3(f) of the Ethics Law must be satisfied. The propriety of the proposed conduct has only been addressed under the Ethics Law; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Law has not been considered in that they do not involve an interpretation of the Ethics Law. Specifically not addressed herein is the applicability of the respective municipal code. Conclusion: As Treasurer for the City of Butler, Tracy is a public official subject to the provisions of the Ethics Law. Tracy would have a conflict as to matters involving Butler Office Products, a business with which he is associated, regarding sales of office products to the City. To the extent applicable, the provisions of Section 3(f) and 3(j) of the Ethics Law must be satisfied. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Pursuant to Section 7(11), this 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, providing 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 1. 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. cerely, incent J- -Dopko Chief Counsel