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HomeMy WebLinkAbout94-539 LoftusThomas P. Loftus 803 Tyndall Avenue Erie, PA 16511 Dear Mr. Loftus: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783.1610 ADVICE OF COUNSEL April 1, 1994 94 -539 Re: Conflict of Interest, Public Official, Contracting with Governmental Body, Township Commissioner, Private Employment, Business with which Associated, Bid on Contract with Department within Governmental Body Not Supervised by Commissioner. This responds to your letter of letters of February 18 and February 25, 1994, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any . prohibition upon a Township Commissioner or a "business with which he is associated" from contracting with the Township when the contract would be with a department that is not supervised by the Commissioner. Facts: You are a Commissioner for Lawrence Park Township, a First Class Township. There are five elected members on the Board of Commissioners. Once elected, each Commissioner chooses one particular department within the Township to supervise. You are the Commissioner in charge of the Sanitation Department. You request an advisory from the State Ethics Coz nissimn as to whether you may open a business and participate in a public Open bidding process if the bid is not involved in yout . particular department. You state that the bid will not be over $10,000. Discussion: It is initially noted that pursuant to Sections 1(10) and 7(11) of the Ethics Law, 85 P.S. 85407(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 C6suaission does not engage in an independent investigation of the facts, nor does At speculate as to facts which have not been Submitted: it is tho Loftica, Thd!as P. , 94 -539 April 1, 1194 Page 2 biirdan Of the requester to truthfully disclose all of the materials fadta relevant to the inquiry. 65 P.S. S5407(10), (11). An adviSOry only affords a defense to the extent the requestor has truthfly disclosed all of the material facts. AA COMMIASiOner for Lawrence Park Township, you are a "public official" as that term is defined in the Ethics Law. 65 P.S. 5402; 51 Pa, Cede 511.1. As such, you are subject to the provisions of the Sthies Law and the restrictions therein are applicable to you. Section 3(a) of the Ethics Law provides: Restricted Activities No public official or public employee shall engage in conduct that constitutes a donflict of interest. The following terms are defined under the Ethics Law: "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 or his immediate family or a business with which he or a member of his i 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 Loftus, Thomas P., 94 -939 April 1, 1994 Page 3 financial interest. Under Section 3(a) of the Ethics Law quoted above, a public official may not use the authority of office or confidential information to Obtain a private pecuniary benefit for himself, a member of his immediate family or a business with which he is or a member of his immediate family is associated. Generally, the Ethics Law places no per se prohibition upon a public official or business with which he is associated from contracting with his governmental body. Pancoe; Opinion 89 -011. As owner of a business, it is clear that the foregoing entity a "business with which you are associated" as that test is defined under the'Ethic`s Law. Under Sections 3(a), you could not participate or vote on matters involving the contract between the "business" or the "business with which you are associated" and your government body, in its entirety, regardless of whether the contract is with your department or another department . In addition,, the requirements of Section 30), infra; of the Ethics Law Must be followed whereby; the reasons for the abstention must be publicly noted as well as a written memorandum to that effect must be filed with the secretary recording the minutes. Therefore, under Section 3(a), the "business with which you are associated" • is not precluded from contracting with your governmental body, whether the contract is with your department or another department, but you could not participate or vote as to the matter of the contract and must. comply- with the disclosure requirements of Section 3(j), infra, of the Ethics Law. Section 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 any thing of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Section 3(f) of the Ethics Law provides as follows: Section. 3'. Restrited 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 Loftus, Thomas P., 94 -539 April 1, 1994 Page 4 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. In relation to the above provision of law, the State Ethics Commission has generally determined that this provision is a procedure to be used when a public official or employee contracts with his own governmental body in an amount of $500 �r more. The process must be open and public •- with prior public notice and subsequent public disclosure. In addition, the public official/ employee may not have any supervisory or overall responsibility for the implementation or administration of the contract. Thus, the open and public process, must be used in all situations where a public official is otherwise appropriately contracting with his own governmental body in an amount of $500 or more. This open and public process would require: (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. Further, Section 3(f) requires that the public official could not have supervisory or overall responsibility as to the implementation or administration of the contract. Loftus, Thomas P., 94 -539 April 1, 1994 Page 5 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 requuired 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, Mlakar, Advice 91- 523 -S. You are furthers advised that the use of authority of office is Loftus, Thomas P., 94 -539 April 1, 1994 Page 6 more than the mere mechanics of voting and encompasses all of the tasks needed to perform the functions of a given .position. In, Ju Order No. 809. Use of authority of office includes discussing, conferring with others, lobbying for a particular result and /or any other use of the authority of offioe in which the result would be a private pecuniary benefit to a business with which a public official or a member of his immediate family is associated. Parenthetically, although the contracting in question would not be prohibited under the Ethics Law provided the requirements of Sections 3(a), (f) and (j) are satisfied, a problem may exist as to such contracting under the First Class Township Code. In the instant situation, the First Class Township Code provides as follows: : 156811. Penalty for personal interest in contracts Except as otherwise provided in this act, no township official, either elected or appointed, who knows or who by the ;exercise of reasonable diligence could know, shall be. interested to any appreciable degree, either' directly or indirectly, in any contract for the sale or furnishing of any' supplies or materials for the use of the township or for any work to be done for such. township involving the expenditure by -the township of more than three hundred dollars in any year, but this limitation shall not apply to cases where such officer or appointee of the township is an employee of the person, firm or corporation to which the money is to be paid in a capacity with no possible influence on the transaction and in which he cannot be possibly benefited thereby, either financially or otherwise. But in. the case of a commissioner, if he knows that he is within the exception just mentioned, he shall so inform the commissioners and shall refrain . from voting on the expenditure or any ordinance relating thereto and shall in no manner participate therein. Any official or appointee who shall knowingly violate the provisions of this section shall be subject to surcharge to the extent of the damage shown to be thereby sustained by the township, to ouster from office, and shall be guilty of a Loftus, Thomas P., 94 -539 April 1, 1994 Page 7 such. . Misdemeanor, and; upon conviction shall be sentenced to pay a f ine not° five hundred 1931, June 1206, art. XVIi1; 51811, added 1949 P.L., 1955, §39. 53 P.S. 556811 thereof) :exceeding L .. '.:24; P.L. may 27, Since such Contracting may prohibited by the above quoted provision of Code, but not under the Ethics Law, it is suggested that advice in that regard be sought from the municipal solicitor ot from private counsel. 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. Specifically not addressed in this advice is the applicability of the First Class Township Code. Conclusion: As Commissioner for Lawrence Township Park, you are a public official subject to the provisions of- the-Ethics Law. Under Section 3(a) of the Ethics Law, a public official /employee or a "business with which you are associated" may contract with your governmental body, in its entirety, but could. not vote or participate in the matter of the contract. The disclosure requirements of S ection 3(j) outlined above must. be observed. Finally, if the contract it $500 or more, the open and public process as outlined` above must be accomplished: The public official /employee could not have any supervisory or overall responsibilities as to the contract. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Due to the possible application of the above referenced code in this matter, it is suggested that advice be obtained from the municipal solicitor or private counsel in that regard. Pursuant,to Section 7(11), this Advice -is.a complete defense in any enforcement proceeding initiated -iby the Comiaission, and evidence of good faith conduct in any other �ivi1 or criminal proceeding, providing the requester 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 ava,ilabld as Finally, if you disagree with this Advice br 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. L01 Ifldetts Y., l4 -539,, Pit 1, 1f94 Palle # Any such appeal must be in' writing and must be actually, 2. at the Commission within fifteen (15) days of the date of this Advice pursuant to 51 Pa.Code §13.2(h). The appeal. may be received a t the Commission by hand delivery, United States mail, delivery service►, or by FAX transmission (717- 787 - 0806). cerely, Vincent Dop o Chief Counsel