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HomeMy WebLinkAbout98-500 SassamanSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. 80X 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1 610 ADVICE OF COUNSEL January 8, 199• Francis M. Mulligan, Esquire Rhoda, Stoudt & Bradley Sixth Floor The Berkshire 501 Washington Street Box 877 Reading, PA 19603 -0877 98 -500 Re: Conflict, Public Official /Employee, Municipal Authority, Member, Contracting, Operation of Sewage Treatment Plant. Dear Mr. Mulligan: This responds to your letter of December 4, 1997 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employe Ethics Law presents any prohibition or restrictions upon Members of a Municipal Authority with regard to contracting to operate a private sewage treatment plant that would be taken over by the Authority on an interim basis, until another Authority -owned plant would become operational and a sewage treatment plant operator would be hired. Facts: As Solicitor for the Centre Township Municipal Authority (CTMA), you request an advisory from the State Ethics Commission on behalf of CTMA Chairman, Michael Yerger (Yerger) and CTMA Secretary, Michael Sassaman ( Sassaman). The CTMA is currently in the process of condemning land in Centre Township to build a sewage treatment plant. You state that this has been a slow process due to a court battle with a local landowner that has ended in the CTMA's favor. The CTMA has been asked to take over a nearby private sewage treatment plant and its customers during the interim period caused by the condemnation process and the actual construction of the plant. The CTMA would like Yerger and Sassaman (who is a licensed Public Treatment Plant Operator) to run the system. That service is currently being performed by "The Vitello Group" (Vitello). Vitello charges $1,260 per month for this service. Yerger and Sassaman are proposing a lesser charge of $ 175 per week, amounting to approximately $700 per JvtuIliaan/Yarger and Sassaman, 98 -500 January 8, 1998 Page 2 month. You state that it is likely that this arrangement would continue for approximately one to two years until the CTMA -owned plant would be operational and a sewage treatment plant operator would be hired. Based upon the above, you seek an advisory from the State Ethics Commission as to the legality and propriety of this proposed course of action. 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. It is further initially noted that pursuant to Sections 7(10) and (11) of the Ethics Law, 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 Law violations by a person who is subject to the Ethics Law. As Members of the Centre Township Municipal Authority (CTMA), Michael Yerger ( Yerger) and Michael Sassaman (Sassaman) are public officials as that term is defined in the Public Official and Employe Ethics Law ( "Ethics Law "), and hence they are subject to the provisions of that law. Sections 3(a) and 3(j) of the Ethics Law provide as follows: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. (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 Mulliaan/yerger and Sassaman 98 -500 January 8, 1998 Page 3 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. The following terms that pertain to conflicts of interest under the Ethics Law are defined 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. Section 3(f) of the ° Ethics Law, which pertains to contracting /subcontracting, 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 Mulliaan/Yerger and Sassaman, 98 -500 January 8, 1998 Page 4 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. The following terms that pertain to Section 3(f) are defined in the Ethics Law as follows: Section 2. 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. 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. "Governmental body.” Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body, or other establishment in the Executive, Legislative or Judicial Branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Governmental body with which a public official or . public employee is or has been associated? The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. In applying the above provisions of the Ethics Law to your inquiry, Section 3(a) shall be addressed first. It would appear from the facts which you have submitted that Yerger and Sassaman would not be hired as emoloyees of the Authority, but rather would be entering into a contractual arrangement to provide services to the Authority as independent contractors (Compare, Swick /Aman, Opinion No. 91 -006, wherein the Commission held that Section 3(a) of the Ethics Law would not prohibit a municipal authority board member from simultaneously being employed by the authority, as long as the position was legitimate,. but that the board member could not participate or vote in favor of his appointment or in other matters concerning such employment). Section 3(a) of the Ethics Law does not prohibit public officials /public employees from having outside business activities or employment; however, the public JVlulliaan/Yerger and Sassaman 98 -500 January 8, 1998 Page 5 official /public employee may not use the authority of his public position — or confidential information obtained by being in that position — for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -01 1. Examples of conduct that would be prohibited under Section 3(a) wouldinclude: (1) the pursuit of a private business opportunity while acting in a public capacity, Metrick, Order No. 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order No. 800; Pancoe, supra. and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity, such as the review /selection of its bids or proposals, Gorman, Order No. 1041. If the private employer or business with which the public official /public employee is associated would have a matter pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter. Miller, Opinion No. 89 -024. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 3(j). In applying the above principles to your inquiry, Yerger and Sassaman could not use the authority of their public positions as CTMA Members and /or officers, or confidential information obtained by being in those positions, to solicit or promote business activity between themselves and the CTMA. .Furthermore, to the extent Yerger and Sassaman would, in their public capacities, have involvement as to the "taking over" of the private sewage treatment plant or the provision of services to operate that plant, a conflict of interest would. exist. In each instance of a conflict of interest, Yerger and Sassaman would be required to abstain and to satisfy the disclosure requirements of Section 3(j) set forth above. As for Section 3(f), you are advised that Section 3(f) of the Ethics Law 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 3(f) requires that an "open and public process" be observed as to the contract with the governmental body. Pursuant to Section 3(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 3(f) of the Ethics Law also requires that the public official /public employee may not have any, supervisory or overall responsibility as to the implementation or administration, of the contract with the governmental body. Mulliaan/Yeraer and Sassaman 98 -500 January 8, 1998 Page 6 Where Section 3(0 applies, its requirements must be strictly observed. Under the facts which you have submitted, Yerger and Sassaman would be contracting with the CTMA, which is the governmental body with which they are associated. Accordingly, the contract between Yerger and Sassaman and the CTMA would be subject to the restrictions of Section 3(f). Parenthetically, although the contracting in question would not be prohibited under the Ethics Law itself provided the requirements of Sections 3(a), 3(f), and 3(j) are satisfied, a problem may exist as to such contracting under the Municipality Authorities Act of 1945, as amended, which provides as follows: §312. Competition in award of contracts D. No member of the Authority or officer or employee thereof shall either directly or indirectly be a party to or be in any manner interested in any contract or agreement with the Authority for any matter, cause or thing whatsoever by reason whereof any liability or indebtedness shall in any way be created against such Authority. If any contract or agreement shall be made in violation of the provisions of this section the same shall be null and void and no action shall be maintained thereon against such Authority. 53 P.S. §312(D). Since such contracting may be prohibited by the above quoted provision, it is suggested that legal advice be obtained in that regard. This Advice is limited to addressing the applicability of Sections 3(a). and 3(f) of the Ethics Law. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as prohibited by Section 3(a) of the Ethics Law. Further, you are advised that Sections 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public official /public employee and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public 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. Lastly, 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. Conclusion: As Members of the Centre Township Municipal Authority (CTMA), Michael Yerger (Yerger) and Michael Sassaman (Sassaman) are public officials subject to the provisions of the Ethics Law. Although Section 3(a) of the Ethics Law itself would not preclude Yerger and Sassaman from contracting with the CTMA to operate, on an interim basis, a private sewage treatment plant that would be taken over by the Mulliaan/Yeraer and Sassaman 98 -500 January 8, 1998 Page 7 CTMA pending the construction of an Authority -owned plant and the hiring of a sewage treatment plant operator, Yerger and Sassaman could not use the authority of office or confidential information obtained by being in their public positions to obtain such business. The restrictions of Sections 3(a), 3(f), and 3(j) of the Ethics Law as set forth above must be observed. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. It is suggested that legal advice be obtained with regard to the possible applicability of the Municipality Authorities Act of 1945. 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). 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. Vincent J. Dopko Chief Counsel ‘cerely, ■