Loading...
HomeMy WebLinkAbout98-547 RebuckE. Eugene Brosius, Esquire 490 Queen St. Northumberland, PA 17857 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 20, 1998 98-547 Re: Conflict; Public Official /Employee; City; Vice Chairman; Redevelopment Authority; First Time Homebuyers Program; Rehabilitation; Contractor; List of Approved Contractors. Dear Mr. Brosius: This responds to your letters of March 10 and March 16, 1998 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 the vice chairman of a city redevelopment authority with regard to applying with his brother to be placed on a list of contractors approved by the authority to do work on properties under the rehabilitation portion of the city's "first -time homebuyers program." Facts: As Solicitor for the Redevelopment Authority of the City of Sunbury (Authority), you request an advisory on behalf of Todd Rebuck, Vice Chairman of the Authority. The Authority is developing a list of approved contractors for the "rehabilitation portion" of the City's First Time Homebuyers Program. This list will be given to participating first -time homebuyers, who then will select four or more names from the list. Those contractors who are selected from the list by the first -time homebuyer will be invited to walk through the property to go over the work that is to be done on the home. Those contractors will then submit bids for the work. The homeowner will select the successful bidder and will enter into an agreement with that contractor. The Authority will take no part in selecting the successful bid: the Authority will merely provide the initial list of approved contractors from which the first -time homebuyer will choose. The Authority will also assist in the work "write -ups" for the homes. Mr. Rebuck and his brother are building contractors. Given that Mr. Rebuck is Vice Chairman of the Authority, you ask whether it would be a conflict of interest under the Ethics Law for Mr. Rebuck to apply with his brother to be placed on the approved contractor list. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. H407(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 Brosius, 98 -547 April 20, 1998 Page 2 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 Vice Chairman of the Redevelopment Authority of the City of Sunbury, Todd Rebuck is a public official as that term is defined in the Public Official and Employe Ethics Law ( "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. "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. Brosius, 98 -547 April 20, 1998 Page 3 "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. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. Section 3(1) 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. Section 3(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 3(1) 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; J3rosius, 98 -547 April 20, 1998 Page 4 (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. In each instance of a conflict, 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 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 Law to your inquiry, Section 3(a), which pertains to conflicts of interest, shall be considered first. The stated purpose of the Ethics Law is to strengthen the faith and confidence of the people in their government by assuring the public that the financial interests of Brosius, 98 -547 April 20, 1998 Page 5 the holders of or candidates for public office do not conflict with the public trust. 65 P.S. §401. Section 3(a) of the Ethics Law in particular prohibits a public official /public employee 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. Mr. Rebuck's brother is a member of his immediate family. The Commission recognizes that public concern and criticism may arise if a public official or public employee who serves a governmental body receives benefits under the very program which that governmental body administers. On the other hand, as a general rule, the Ethics Law was not enacted nor should it be interpreted to preclude public officials or public employees from participating in programs which might otherwise be available to them as citizens. Wolff, Opinion 89 -030; Woodrinq, Opinion 90 -001. In order to insure that a public official or public employee does not have a conflict of interest when he, as a citizen, seeks to participate in a program administered by the governmental body which he serves, he must: 1. play no role in establishing the criteria under which the program is to operate, particularly with reference to the structure or administration of the program; 2. play no role in establishing or implementing the criteria by which selections for program participation are to be made; 3. play no role in the process of selecting and reviewing applicants or in awarding participation in the program; 4. use no confidential information acquired during the holding of public office or public employment to apply for or to obtain participation in the program, and 5. abstain and satisfy the disclosure requirements of Section 3(j) above in cases where the public official /public employee is associated with administering the program. The abstention and disclosure would be required not only as to his own. application, but also as to similarly situated individuals with whom the public official /public employee might be competing for participation. See, Pepper, Opinion No. 87 -008. Certainly Mr. Rebuck would have a conflict of interest with regard to the Authority's development of the approved contractor list. However, should Mr. Rebuck and /or his brother be selected as Authority- approved contractors, Mr. Rebuck's conflict of interest would extend to the rehabilitation portion of the First Time Homebuyers Program in its entirety. This is because Mr. Rebuck /his brother would have a reasonable expectation of obtaining work from any given participant under that program. A reasonable and legitimate expectation that a business relationship will form may support a finding of a conflict of interest. Amato, Opinion No. 89 -002; Garner, Opinion No. 93 -004; Snyder, Order No. 979 -2, affirmed Snyder v. SEC, 686 A. 2d 843 (Pa. Commw. Ct. 1996), allocatur den., No. 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). The State Ethics Commission has also held that it is a conflict of interest under Section 3(a) for a public official /public employee to pursue a private business opportunity while acting in a public capacity. Metrick, Order No. 1037. Break's, 98 -547 April 20, 1998 Page 6 As for Section 3(f), it is noted that this sort of program may require participants to enter into contracts and /or subcontracts. If Mr. Rebuck or a business with which he is associated, as a participant in this Program, would enter into a contract with the Authority or would enter into a subcontract with any "person" (as defined above) who has a contract with the Authority, the restrictions of Section 3(f) of the Ethics Law as set forth above would apply if the contract or sub - contract would be valued at $500.00 or more. As long as Mr. Rebuck would observe the restrictions of Sections 3(a), 3(f) and 3(j), the Ethics Law would not preclude the application /inclusion of Mr. Rebuck /his brother for the Authority's list of approved contractors relative to the rehabilitation portion of the City's First Time Homebuyers Program. This Advice is limited to addressing the applicability of Sections 3(a), 3(f), and 30) 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 /employee 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 imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. 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 Vice Chairman of the Redevelopment Authority of the City of Sunbury, Todd Rebuck is a public official as that term is defined in the Public Official and Employe Ethics Law ( "Ethics Law "), and hence he is subject to the provisions of that law. Section 3(a) of the Ethics Law would not preclude the application /inclusion of Mr. Rebuck /his brother for the list of approved contractors relative to the rehabilitation portion of the City's First Time Homebuyers Program, but Mr. Rebuck would be required to observe the restrictions of Sections 3(a), 3(f), and 3(j) of the Ethics Law set forth above. Specifically, Mr. Rebuck must: play no role in establishing the criteria under which the program would operate; play no role in implementing the criteria for selecting applicants; play no role in selecting or reviewing applicants; use no confidential information; and finally have no involvement with the administration of the program. Mr. Rebuck would have a conflict of interest with regard to the Authority's development of the approved contractor list. Should Mr. Rebuck and /or his brother be selected as approved contractors, Mr. Rebuck's conflict of interest would extend to the rehabilitation portion of the First Time Homebuyers Program in its entirety. The requirements of Section 3(f) of the Ethics Law noted above, to the extent applicable, must be observed. 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. Brosius, 98 -547 April 20, 1998 Page 7 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. Sincerely, vvvit-val Vincent J. D�ko V Chief Counsel