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HomeMy WebLinkAbout94-559 WallaceRobert S. Wallace 20 W. Luzerne Avenue Larksville, PA 18704 Dear This requested Issue: presents "business Borough. Mr. Wallace: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 114 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 20, 1994 94 -559 Re: Conflict of Interest, Public Official, Borough Council Member, Contracting with Governmental Body, Use of Authority of Office, Manager of Auto Service, Repairs for Borough Equipment and Vehicles, Business with which Associated, Immediate Family, Wife, Employee of Borough Sewer Authority. responds to your letter of April 5, 1994, in which you advice from the State Ethics Commission. Whether the Public Official and Employee Ethics Law any prohibition upon a Borough Council Member or a with which he is associated" from contracting with his Facts: You are requesting an advisory from the State Ethics Commission. You were sworn in as a Councilman for Larksville Borough on January 3, 1994. You are employed as Manager of Petriga's Auto Service. Your wife and your two brothers -in -law are the owners of the business. The auto shop does minor repairs to the Borough equipment and vehicles. All of the bills to the Borough from the business have been under five- hundred dollars ($500.00) . You abstain from voting on any bills concerning payment to the business. Your questions are: 1. Should the bills submitted for payment to Petriga's Auto Service be separate from all the other bills? 2. The business does not have any type of contract with Larksville Borough. The maintenance and repair work is brought into the business without any solicitation from you. Is this a violation of the Ethics,AOt? Wallace, Robert S., 94 - 559 AFL 20 , 1994 Pale 2 • T,P'1� . d� • >./...s 1. 3. Tour wife is employed. by Larksville Borough Sewer Authority, which is separate from the Borough. Since she is part owner of the business, is there any violation of any Discussion: As Member of Council for Larksville Borough, you are a "public official" as that term is defined in the Ethics Law. 65 P.S. 5402. 51 Pa. Code S11.1. As such, you are subject to the provisions of the Ethics 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 conflict 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 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 Wallace, Robert S., 94 -559 April 20, 1994 Page 3 director, officer, owner, employee or has a financial interest. "Immediate family." A parent, spouse, child, brother or sister. 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 Manager of Petriga's Auto Service, it is clear that the foregoing entity is a "business with which you are associated" as that term is defined under the Ethics Law. Under Sections 3(a), you could not participate or vote on matters involving the contract: between the government body and Petriga's Auto Service or the "business with which you are associated." In addition, the requirements of Section 3(j) 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), you or the "business with which you are associated" is not .precluded from contracting with Larksville Borough 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) 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. Restricted activities. (f) No public official or public employee or his spouse or. gild 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 As associated or Wallace, Robert S., 94 -559 April 20, 1994 Page 4 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 b 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 employee contracts with his own governmental body in an amount of $500 or 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. Section 3(j) of the Ethics Law provides as follows: Wallace, Robert S., 94 -559 April 20, 1994 Page 5 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. 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. Your specific inquiries will now be addressed. As to your first inquiry, it is not within the jurisdiction of Wallace, Robert S., 94 -559 April 20, 1994 Page 6 the State Ethics Commission to instruct,you as to how certain bills should be submitted for payment. The caution that must be expressed, of course, is that you would have a conflict as to any matter before you relating to the business with which you and your wife are associated. in such cases, you must abstain from participation and observe the provisions of Section _3(j) must be followed as set forth above. Your second specific question has been addressed above. Again, the business with which you are associated is not precluded from contracting with the Borough. The restriction is that if the contract is in excess of $500.00, Section 3(f) of the Ethics Law must be followed and with a of any amount, Section 3(j) must be followed. Finally, the Commission has indicated that contracts nevertheless be included within the statutory requirements of Section 3(f) if it is determined that .fragmentation has occurred. Parenthetically, fragmentation is an action where contracts are broken down into several contracts of lesser amounts so as to avoid contracting limitations or bidding requirements. As to your third inquiry, you would not have a conflict in your positiori as Borough Council Member merely because your wife is an employee of the Borough Sewer Authority. However, if in your position as Borough Council Member, you are required to review any matter involving your wife, you would have a conflict of interest. You must abstain from participation of any nature and comply with the disclosure requirements of Section 3(j) of the Ethics Law set forth above. Any conflict as to the ownership of the business has been discussed above. Finally,•since advisories can only address the Ethics Law as to the individual requestor, any question as to conflicts regarding your wife in her position as Sewer Authority employee and as owner of the business, if any such conflicts exists, cannot be discussed here. 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 Borough Code. In the instant situation, the Borough Code provides as follows: S46404. Penalty for personal interest in contracts or purchases Except as otherwise provided in this act, no borough 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 Wallace, Robert S., 94 -559 April 20, 1994 Page 7 indirectly in any purchase made or contract entered into or expenditure of money made by the borough of relating to the business of the borough, invoIvtng the expenditure by the borough of more than one thousand dollars ($1000) in any calendar year, but this limitation shall not apply to cases where such officer or appointee of the borough 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 councilman or mayor, if he knows that he is within the exception just mentioned he shall so inform council and shall refrain from voting on the expenditure or any 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 borough and to ouster from office, and shall be guilty of a misdemeanor, and upon conviction thereof shall be sentenced to pay a fine not exceeding one thousand dollars ($1000), or not exceeding'one hundred eighty days' imprisonment, or both. 1966, Feb. 1, P.L. (1965) , No. 581, §1404. 53 P.S. S46404. Since such contracting may be prohibited by the above quoted provision of the Code, but not under the Ethics Law, it is suggested that advice in that regard be sought from the Borough Solicitor or 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 riot addressed in this advice is the applicability of the Borough Code: Conclusion: As a Member of Larksville Borough Council, 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 the governmental body but could not vote or participate in the matter of the contract. The disclosure requirements of Section 3(j) Wallace, Robert S. 94 -55 ' April 20, 1994 Page 8 outlined above must be observed. Finally,' if the contract is $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. nue to the possible application of the above referenced code in this matter, it is suggested that advice be obtained from the Borough Solicitor or private counsel in that regard. 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 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 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 actual ly received at the Commission within fifteen (15) days of the date of this 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, Vincen '' J. ' opko Chief Counsel