HomeMy WebLinkAbout94-540 BankensteinDear Mr. Bankenstein:
April 6, 1994
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
Bruce C. Bankenstein, Esquire
Manifold & Bankenstein
42 North Duke Street
York, PA 17401 -1299 94 -540
Re: Conflict, Public Official /Employee, Township Supervisor, Use
of Authority of Office or Confidential Information, Business
with which Associated, Engineering Services, Sewage Treatment
Facilities, Cogeneration Project, Vote.
This responds to your letter of March 7, 1994 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 Township Supervisor
from voting on various matters involving a business with which he
is associated.
Facts: You are the Solicitor of North Codorus Township, York
County. Several questions have arisen regarding a Township
Supervisor who has asked you to obtain this advisory.
The Supervisor is employed by a local engineering firm, which
employs over 400 people. A separate engineering firm serves as the
engineer for North Codorus Township. This Supervisor is not a
registered professional engineer, but he does hold a Pennsylvania
Sewage Treatment Plant Operator Certification. He is the Assistant
Director of his firm's Chemistry and Earth Sciences Division. As
such, his responsibilities within the division include staff
management scheduling, proposal preparation, new business
development and sales, with selective client project management for
private sector clients. He provides no services through hi0
employment to local or other governmental agency. Those
services are provided by a separate division of the firm. He ownO
stock in the corporation which is the holding` company of the firm;
however, that amount is less than 5 %.
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 2
You present three scenarios.
First, the ga gineering firm _which employs this supervisor had
prepared the municipal sewage facilities plan for the Borough of
New Salem, whi.ch' is surrounded `By North Codorus Township. That
firm, .though, lioes not act as .the gineer of New Salem. Neither
this Superyi,spp nor 1 i.s "d�,vi,siciii had'Anything to do with preparing
that 'sewage' fa iiitie Y plan. : t'was ;prepared by another division
of the firm `over`;which this duper risor and his division have no
control: Ypp. dp not know 3ahat: .that plan provides, but this
supprvz.pr .bel.eies tkiat recommends on -lot management until a
sew8r pp tith . apa.city .to serve .New Salem is eventually built
425/' Tort ' C04p40 Township or some other township.
This Aupprvisor's firm is not involved with the preparation of
the seer ,ge; ao .1i.ties plan gorth Codorus Township. That plan
for North 'CgdQris Township "is still being developed by the
Tbwnsh?.p''s `QWn engineer. Being a new solicitor for the township,
you are noI mi-Ug. -with it, however, you are told it recommends
an on -lot tWigfOtpI system: If any sewage treatment plant were
developed gt.J Q t CQdorus Township or for or in ' part for New
Salem aptQ� , " i :s` Supervisor's firm would join with many other
engineering' 1.rms and"lpid on providing services for that project.
To ' the - that "the bid is with North Codorus Township, you
state th.t - this sug r<t.sor would have to abstain from any vote on
any 8uch14d44.r g. g6weiier, you state that you see no other matter
which wdt1d came wi the purview of the Ethics Act.
Second, Air Products, Inc., a totally independent company from
another area of the state, is proposing a cogeneration plant in
North Codorus Township. That plant is proposed to be placed
adjacent to the paper making facilities of P.H. Gladfelter Company.
There will be some sharing arrangement between the two companies by
which the electricity made by the cogeneration plant will be sold
to or used by P.H. Gladfelter Company. This cogeneration project
has received a great deal of media attention and public scrutiny.
This supervisor's firm has no relationship with Air Products,
Inc. As with many other engineering and construction firms,
however, this supervisor's firm has had discussions with Air
Products, about providing engineering services for the final design
or construction phase of the, project. It is expected that no
contract's of that nature will be issued by Air Products with any
engineering or construction company until all permits and other
governmental approvals are obtained. This particular supervisor
has no involvement in any matter regarding Air Products, and its
obgeneration project, however, if his firm receives a contract to
provide services before all permits,, plans and other approvals are
issued by North Codorus Township, you indicate that he will need to
abstain from'voting on any such municipal approval.
Bankenstein, Bruce C., 94-540
April 6, 1994
Page 3
Third, the firm that employs this supervisor does provide some
engineering services to P.H. Gladfelter Company. This supervisor
does have client contact with that company and deals directly with
the company's environmental staff. The bulk of P.H. Gladfelter
Company's facilities are located inside the Borough of Spring
Grove. To your knowledge, the environmental issues of that company
are handled by Pennsylvania Department of Environmental Resources
and the United States Environmental Protection Agency. If any
issues involving matters in which this supervisor was involved with
P.H. Gladfelter Company were to come before the North Codorus
Township Board of Supervisors, you have indicated that this
supervisor would abstain.. You also state that while any other
independent matter which P.H. Gladf elter may bring to the Board of
Supervisors may not constitute any actual conflict of interest with
this Supervisor, it may be better for him to abstain from any such
vote.
Based upon the above, you request an advisory from the State
Ethics Commission as to what- restrictions and prohibitions apply to
this supervisor in relation to the sewer project, the cogeneration
project and matters relating to P.H. Gladfelter Company.
Discussion: It is initially noted that pursuant to Sections 7(10)
and 7(11) of the Ethics Law, 65 R.S. § 5407(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. 5S407(10), (11). An
advisory only affords a defense to the extent the requestor has
truthfully disclosed all of the material facts.
As .a Supervisor for North Codorus Township, he is a public
official as that term is, defined under the 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:
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 4
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.
"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.
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 5
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.
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 �f 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.
65 P.S. S403(f).
Parenthetically, where contracting is otherwise allowed or
where there appears to be no .expressed prohibitions to such
contracting, the above. par4cuIar 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 vltt
the governmental body, in an amount of $500,00 or more This open
and public process would require that the foll_ow}.ncg be Qbserved as
to the contract with the governmental body;
aken.t , dace C., 94-54
Apra 1 , _9
P 6
(1) prrr public notice of the ; employment or . contracting
pos szbiliity;
(2), #11M4c dent time for . ,a teas 1e andjpIriAgnt competitor/
sp rl,ican*t to be able to ; prepare amd present an
4pl3cata.0 or proposal;
�( )
puip44, 4i c oa-ure of all applicat ,gas or proposals
con.siderecl alad;
(4) pwIa #Lsclosure of the :c ontract awarded and offered and
accepted.
S.e,ct ,,oz 5‘f) of the Ethics 1,aw also requires that the public
pf.f. #1/ pioyee may not have any supervisory or overall
refponfib4Lty as to the implementation or administration of the
cexcti�h the governmental body.
Partheticaliy, 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 respective code.
In the instant situation, the Second Class Township Code
provides as follows:
(f) Except as herein provided, 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 ($300) 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:
Provided, however, That in the case of a
supervisor, if he knows that he is within the
exception just mentioned, he shall so inform
the supervisors and shall refrain from voting
on the expenditures, or any ordinancg relating
thereto, and shall in no manner participate
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 7 .
therein: Provided, further, That any such
official or appointee who shall knowingly
violate this provision shall be subject to
surcharge to the extent of the damage shown to
• be thereby sustained by the township, ouster
from office, and shall be guilty of a
misdemeanor, and upon conviction thereof,
shall be sentenced to pay a fine not exceeding
five hundred dollars ($500): Provided, That
in the case of the purchase of material for
the construction, reconstruction, maintenance
and improvement of roads and bridges, the
contract, which shall be in writing, and shall
be let only on standard specifications of the
Department of Transportation, and materials so
purchased •shall only be used in accordance
with specifications of said department.
53 P.S. §65802(f).
Since such contracting may be prohibited by the above quoted
provision of the Code, but not under the Ethics Law, it is
suggested that the Supervisor be appropriately advised as to the
applicability of the Second Class Township Code.
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 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
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 8
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, Xlakar, Advice 91-523-S.
You are further advised that the use of authority of office is
more than the mere mechanics of voting and encompasses all of the
tasks needed to perform the functions of a given position. ee,
Juliante, 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 office 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.
In applying the Ethics Law to this case, it is noted that the
Ethics Law, pursuant to Section 3(a), prohibits a public official
from using the authority of public office or confidential
information received by holding a public office for the private
pecuniary benefit of the public official, any member of his
immediate family, or any business with which the public official or
a member of his immediate family, or any business with . which the
public official or a member of his .immediate family is associated.
Section 3(a) of the Ethics Law, however, does not prohibit
public officials /employees from outside business activities or
employment. Pancoe, Opinion 89 -011. A public official /employee
mint exercise caution so that his private business activities do
Flat conflict with his public duties. Crisci, Opinion 89 -013.
Similarly, Section 3(a) would expressly prohibit the use of
confidential information received by holding public office/
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 9 .
employment for .such a :prohibited private . pecuniary benefit.
In the .event that this supervisor's private employer or
business has a matter pending before his governmental body or if he
as part of such official duties must participate, review :Or pass
upon that matter, a conflict would exist. Miller, Opinion 89 -024.
In those instances, it will be necessary that he be removed from
that process. In such cases as noted above, Section 3(j) of the
Ethics Law would require not only that he abstain from
participation but also file a written memorandum to that effect
with the person recording the minutes or his supervisor.
In summary, the Ethics Law would restrict the following:
1. The use of authority of office to obtain any business in
a private capacity;
2. utilization of confidential information gained through
public position;
3. participating in discussions, reviews, or recommendations
on matters which relate to the business /private employer
which may come before the governmental body and in such
cases publicly announcing the relationship or advising
the supervisor as well as filing a written memorandum as
per the requirements of Section 3(j) of the Ethics Law.
Brooks, Opinion 89 -023,
In Katz, Order 885, the Commission, found violations of Section
3( when a County Commissioner voted to award a contract to a
company where the Commssioner's..company had previously orally
offered to perform subcontract work on the contract, which
subcontract was subsequently awarded to the Commissioner's company,
and when he voted to approve payments to the contractor. Such
actions were a use of authority of office which resulted in a
private pecuniary benefit to the contractor and in turn to the
Commissioner's company on the subcontract.
Thus, a conflict can arise in this case if it is factually
true that there is a reasonable expectation of the development of
a relationship, through contracting or subcontracting, whereby a
private pecuniary benefit would be received by the supervisor.'s
firm as a result of the use of authority of office by thp
supervisor. If such situation occurs, then the provisions o
Section 3(f) and 3(j) must be followed. See Amato, Opinion 89 -002.
In Kannebecker, Opinion 92 -010, the issue before - the
Commission" whether the Ethics Law prohibited or restricted a
Second Class Supervisor as to individuals who had matters pending
before the township when the supervisor was an attorney for these
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 10 .
individuals in unrelated matters. In determining that the
supervisor had a conflict as to such individuals, the Commission
relied upon Miller, supra. In Miller, supra, the issue was whether
a township zoning officer was restricted by the Ethics Law from
working'for a consulting firm when that firm provided services to
private clients whose plans could be brought before the township
zoning commission for approval. After determining that the firm
was a business with which the township zoning officer was
associated; the Commission concluded that the zoning officer had a
conflict to the following extent:
"For the reasons stated above, the Ethics Law would
prohibit you from using the authority of: office to
approve recommend or play any role in the approval
of permits or in relation to any township action
involving 'a client, plan or project in which [his
business] is involved."
Id. at 3, 4.
Thus, in Kannebecker, even.. though the clients of the law firm
had matters pending before the township that were unrelated to the
legal 'representation of that supervisor, the Commission stated that
there was no distinction, and the conflict would not be lessened qg
eliminated if the firm's client was provided% with servic
unrelated to the :municipal matter. Miller, supra, was indicative
of`a'conflict as to the zoning officer's participation in townsh44
action involving any client. The concern under the Ethics Law was
that a township supervisor would look favorably on a matters
submitted for township action by the supervisor's law clients. 'ffi
that case, the people could not be assured that the supervisor's
financial interests would not conflict with the public trust.
Further, in Kannebecker, supra, the Commission rejected the
assertion that a conflict only. occurs when the pecuniary benefit is
immediate or direct. The Commission held that the foregoing common
law rule had not been adopted by the General Assembly as to Vie
statutory definition of conflict contained in Section 3(a) of the
Ethics Law with that latter definition controlling. The Ethics Law
recognizes that public officials and public employees may iaye
private business interests but those private interests cattfiot
conflict with and must defer to the public interest. , Crisci;
Supra.
In responding to your specific inquiries, as to the sewer
projects, any matter relating to this Supervisor's firm which comes
e f ore the Township would create a conflict of interest and Sect!of
3 (j) `mus "be fob lowed . Such is ' true even if the upe'zvisgr�'`s - fttni
1.6 involve with Ne'w aleir ' rather titan ;$ Cbth tis ' FQr
exampi.e ", ' if New Salem deveI8ps a" sedge ° t id t:mint` plant' in which •
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 11
the Supervisor's firm is involved, and North Codorus would seek to
tie into system, if joinder would cause the Supervisor's firm to
receive a private pecuniary benefit, a conflict would exist.
In the case of Air Products, Inc., if a contract were in place
with this Supervisor's firm and Air Products, and the matter came
before the Supervisor, a conflict of interest would exist and
Section 3(j) would have to be followed. Additionally, even if no
contracts are issued by Air Products, with the Supervisor's firm,
either prior to or after Air Products obtains all permits and
approvals, if a matter regarding Air Products, Inc. comes before
this Supervisor in his official capacity, and if there is a
reasonable expectation of the •development of a financial
relationship between Air Products and the Supervisor firm, a
conflict of interest would exist. Amato, sutra-.
Finally, as in Miller and Kannebecker, supra, in addition to
those matters involving this Supervisor's firm, whether with his .
division or some other division, where the conflict of interest is
obvious, independent matters which P.H. Gladfelter brings before
the Board of Supervisors, would also create a conflict of interest
which would require compliance with 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 Second Class Township Code.
Conclusion:- As a Supervisor for North Codorus Township, he is a
public official subject to the of the Ethics Law. The
Supervisor is prohibited from using the authority of office for the
private- pecuniary benefit of the Supervisor or the business with
which he is associated. The Township Supervisor would have a
conflict of interest as tax matters before him in his capacity as
Supervisor where there is a reasonable expectation of a private
pecuniary benefit being received by the Supervisor or a business
with which he is associated. Further, the 8uerviso-r has a
conflict as to entities that have matters pending before the
township, even in unrelated matters, when the Supervisor's firm has
an ongoing relationship with such entities. The requirements Of
Sections 3(f) and 3(j) must be followed. Lastly, the propriety of
the proposed conduct has only been addressed under the Ethics Law.
Due to the possible applicability of the Second Class Township
Code, the Supervisor should be appropriately advised as to that
law.
Pursuant to Section 7(11), this Advice is a complete defense
in any enforcement proceeding initiated by the Commission, and
Bankenstein, Bruce C., 94 -540
April 6, 1994
Page 12
proceeding, providing the requestor has disclosed truthfully all
the material facts and committed the acts complained of in reliance
on the Advice given.
-such .
This letter is a public record and will be made available as
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 fifteen (15) 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).
ncerely,
Vincent 9 Dop o
Chief Counsel