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HomeMy WebLinkAbout97-554 WrightGregory A. Karle, Esquire City Solicitor City of Erie Office of the City Solicitor Room 505 626 State Street Erie, PA 16501 Dear Mr. Karle: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 14, 1997 97 -554 Re: Conflict, Public Official /Employee, Member, City Council, Vote, General Obligation Bond Issue, Spouse, Attorney, Law Firm Serving as Bond Counsel. This responds to your letter of March 14, 1997 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 Council Member with regard to participating in matters involving a proposed general obligation bond issue where her spouse is an attorney with the firm that will be serving as bond counsel if the bond issue is approved. Facts: You request an advisory from the State Ethics Commission on behalf of Gayle Wright (Wright), who is one of seven Members of City Council for the City of Erie. City Council will be voting in the near future on final approval of an Ordinance for a General Obligation Bond Issue which is to be used for general capital improvements throughout the City. You state that the enactment of such debt is a relatively common occurrence throughout the Commonwealth. Wright is married to an attorney who is a member of the law firm which will be acting as Bond Counsel for the Bond Issue if and when it is finally adopted. Wright's spouse does not have any involvement in the legal work for the Bond Issue. You state that neither Wright nor the City Council acted to retain Bond Counsel or the Bond Underwriter which is a function of the Mayor under the Third Class City Code. Wright has publicly disclosed that her husband is a member of the law firm which is acting as Bond Counsel but that he is not a direct beneficiary of any fee resulting from the legal representation. Wright is requesting an advisory from this J<arle /Wright, 97 -554 April 14, 1997 Page 2 Commission as to whether her participation in the vote on the Bond Issue Ordinance, after public disclosure of her relationship, would constitute a conflict of interest under the Ethics Law. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) 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 a Member of City Council for the City of Erie, Wright is a public official as that term is defined under the Ethics Law, and hence she 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. "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. Karle/Wriaht, 97 -554 April 14, 1997 Page 3 "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. "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. "Contract" 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. 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. Karle /Wright, 97 -554 April 14, 1997 Page 4 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 S500.00 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. 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. Karle /Wright, 97 -554 April 14, 1997 Page 5 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 voting is permissible provided the disclosure requirements noted above are followed. See, Jyllakar, Advice 91- 523 -S. In applying the above provisions of the Ethics Law to the circumstances which you have submitted, pursuant to Section 3(a) of the Ethics Law, 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. Wright's spouse is a member of her immediate family, and the law firm of which he is a member is a business with which he is associated, as those terms are defined in the Ethics Law. Thus, Wright would have a conflict of interest in matters pertaining to the general obligation bond issue. This conclusion is based upon the fact that if the bond issue would be approved, a private pecuniary benefit would flow to a business with which Wright's spouse is associated — specifically, the law firm that would be acting as bond counsel. The private pecuniary benefit to the law firm would be sufficient to establish a conflict of interest; the submitted fact that Wright's husband would not be a direct beneficiary of any fee resulting from that legal representation is irrelevant. In each instance of a conflict of interest, Wright would be required to abstain fully from participation and to satisfy the disclosure requirements of Section 3(j) as set forth above. As for Section 3(f), the restrictions of that Section would have to be observed in this and any other instance where the law firm would be contracting with the City of Erie or would be subcontracting with a contractor who was awarded a contract with the City of Erie, where the value of the contract /subcontract would be $500 or more. 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 a Member of City Council for the City of Erie, Gayle Wright (Wright) is a public official subject to the provisions of the Ethics Law. Wright would have a conflict of interest in matters pertaining to the general obligation bond issue based upon the fact that if the bond issue would be approved, a private pecuniary benefit would flow to a business with which Wright's spouse is associated — specifically, the law firm that would be acting as bond counsel. In each instance of a conflict of interest, Wright would be required to abstain fully from participation and to satisfy the disclosure requirements of Section 3(j) as set forth above. The restrictions Karle /Wright, 97 -554 April 14, 1997 Page 6 of Section 3(0 would have to be observed in this and any other instance where the law firm would be contracting with the City of Erie or would be subcontracting with a contractor who was awarded a contract with the City of Erie, where the value of the contract /subcontract would be $500 or more. 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 forma/ 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