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HomeMy WebLinkAbout96-587 CaramanicoLouis R. Martin, Esquire 214 State Street Harrisburg, PA 17101 Dear Mr. Martin: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL August 30, 1996 96 -587 Re: Conflict, Public Official /Employee, Member, PRIME Council, Consulting Engineer, Business With Which Associated, Client, Agency. This responds to your letter dated July 22, 1996 (received August 6, 1996) in which you requested advice from the State Ethics Commission. Whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon the President and sole equity owner of a consulting engineering company which contracts with various state agencies . of the Commonwealth of Pennsylvania as to his appointment by the Governor to serve on the PRIME Council. Facts: You have been retained by Thomas A. Caramanico (Caramanico) to request an advisory from the State Ethics Commission on his behalf. Caramanico is the President and sole equity owner of McCormick Taylor & Associates, Inc. ( "McCormick Taylor "), a consulting engineering company which provides multiple engineering and planning services to the Commonwealth of Pennsylvania through various contracts. Currently, McCormick Taylor is providing contracted services to the Department of Transportation and the Turnpike Commission. In the past, McCormick Taylor has provided services to the Department of General Services. You state that it is the intention of Caramanico and McCormick Taylor to continue to seek work with the Commonwealth and to provide services to the above agencies as well as others. On July 10, 1996, Governor Ridge appointed Caramanico to the Privatize Retain Innovate Modify and Eliminate (PRIME) Council. The PRIME Council consists of the Lieutenant Governor who serves as Chairperson and other individuals appointed by the Governor. You have submitted copies of the appointing letter from the Governor and the organizational chart of the PRIME Council, which documents are incorporated herein by reference. Martin /Caramanico 96 -587 August 30, 1996 Page 2 As a member of the PRIME Council, Caramanico will not be compensated by the Commonwealth. Members of the PRIME Council are required to take the Commonwealth Constitutional Oath of Office, a copy of which you have provided and which is incorporated herein by reference. You have also provided a copy of Executive Order 1996 -2 which created the PRIME Council, and a July 2, 1996 letter from Lieutenant Governor Schweiker, which documents are incorporated herein by reference and which provide, inter alia, the following information as to the function of the PRIME Council. The PRIME Council was established to coordinate the implementation of recommendations contained in the IMPACCT (Improve Management and Cost Control Task Force) Commission's final report and to review other areas of state government which were not included in that report. 4 Pa.Code, Chapter 5, Executive Order 1996- 2. The stated purpose of the PRIME Council is "to coordinate the reengineering of State government in order to make State government more efficient and less costly." id The PRIME Council's specific duties include the following: (1) Offering advice and assistance in prioritizing the recommendations of the IMPACCT Commission's report and recommendations. !L (2) Providing advice and assistance in the review of agency action plans and in the implementation of specific Commonwealth reengineering initiatives. (3) Assisting in the further review of areas of State government which were not reviewed by the IMPACCT Commission. All agencies under the Governor's jurisdiction have been directed to cooperate fully with the PRIME Council and to provide staff assistance and information as needed. The specific question which you pose is whether Caramanico may serve on the PRIME Council and continue to conduct business with the Commonwealth through McCormick Taylor & Associates, as he currently does and intends to do in the foreseeable future. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(1 1) of the Ethics Law, 65 P.S. 55407(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 cjoes 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. 55407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. Martin /Caramanico 96 -587 August 30, 1996 Page 3 As a Member of the PRIME Council, Thomas A. Caramanico (Caramanico) would be a public official as that term is defined under the Ethics Law, and hence he would be 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. "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 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. 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. Martin /Caramanico 96 -587 August 30, 1996 Page 4 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, JVllakar Advice 91- 523 -S. In applying the above provisions of the Ethics Law to the instant matter, it is noted that Section 3(a) of the Ethics Law does not prohibit public officials /employees from outside business activities or employment. However, the public official /employee may not use the authority of office for the advancement of his own private pecuniary benefit or that of a business with which he is associated, Pancoe, Opinion 89 -011, nor may he use confidential information received by holding public office/ employment for such a prohibited private pecuniary benefit. A public official /employee must exercise caution so that his private business activities do not conflict with his public duties. Crisci., Opinion 89 -013. Thus, the Commission has held that in the event the private employer or business has a matter pending before the public official's /public employee's Martin /Caramanico 96 -587 August 30, 1996 Page 5 governmental body, or if he as part of such official duties must participate, review or pass upon such a matter, a conflict exists. Miller, Opinion 89 -024. Furthermore, matters before the governmental body involving clients of such a business with which the public official /public employee is associated present a conflict of interest for the public official /public employee. Miller, supra; Kannebecker, Opinion 92 -010. Finally, a reasonable or legitimate anticipation that a financial relationship will develop may itself form the basis for a conflict of interest. Garner Opinion 93 -004; Amato, Opinion 89 -002. Thus, while Section 3(a) would not prohibit Caramanico's membership on the PRIME Council, Caramanico would probably encounter with some frequency situations that would constitute a conflict of interest for him, and which would require that he abstain from participation and satisfy the disclosure requirements of Section 3(j). The consulting engineering company, McCormick Taylor & Associates, Inc., of which Caramanico is President and sole equity owner, is a business with which he is associated as that term is defined in the Ethics Law. In this case, the clients of Caramanico's business include the very governmental agencies which the PRIME Council will be reviewing. The decisions of the PRIME Council will have an unquestionably significant impact upon such agencies. In some cases, the Council may be considering eliminating the very existence of an agency with which Caramanico's firm has a contract or has a reasonable expectation of securing a contract. Caramanico would have a conflict of interest as to matters before the PRIME Council involving any agency: which is a client of his company; with which his company has a contract; or with which he reasonably expects his company to develop a business relationship. In each instance of a conflict of interest, Caramanico would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j). 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 Governor's Code of Conduct. Conclusion: As a member of the PRIME Council, Thomas A. Caramanico (Caramanico) would be a public official subject to the provisions of the Ethics Law. The consulting engineering company, McCormick Taylor & Associates, Inc., of which Caramanico is President and sole equity owner, is a business with which he is associated as that term is defined in the Ethics Law. Although Section 3(a) would not prohibit Caramanico's membership on the PRIME Council, Caramanico would have a conflict of interest as to matters before the PRIME Council involving any agency: which is a client of his company; with which his company has a contract; or with which he reasonably expects his company to develop a business relationship. In each instance of a conflict of interest, Caramanico would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j). 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 Martin /Caramanirn 96 -597 August 30, 1996 Page 6 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). 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 ii ncerely, Vi ncent J Bop o rlio Chief Counsel