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HomeMy WebLinkAbout94-621 SawtelleBarry W. Sawtelle, Esquire Kozloff, Diener, Payne & Fegley 2640 Westview Drive P.O. Box 6286 Wyomissing, PA 19610 Dear Mr. Sawtelle: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL October 5, 1994 94 -621 Re: Conflict, Public Official /Employee, Private Employment or Business, Contractual Relationship Between Public Official's Business and Company Submitting Bid to the Township, Supervisor, Second Class Township. This responds to your letter of September 16, 1994, in which you requested advice from the State Ethics Commission. Issue: Whether a Second Class Township supervisor is prohibited or restricted by the Public Official and Employee Ethics Law from working with, being employed by or associated with a business /person in a private capacity which may submit a bid to the township. Facts: You represent James Mandolos; a duly elected Supervisor of a Second Class Township, Bern Township, Berks County. Mandolos maintains a place of business with a designated address and telephone number. Bern Township is contemplating new construction and an upgrade of its sewage treatment facilities with concomitant anticipated borrowing in excess of two million dollars. The Bern Township Board of Supervisors presently has considered securing the necessary financing through a single investment banking firm operating out of Philadelphia. Mandolos has suggested that consideration be given to soliciting bids for the financing from a variety of sources in order to secure the best available terms for the Township. In particular, Mandolos has suggested that the solicitation include Meridian Bank which maintains a significant presence in the Berks County financial and business communities. Mandolos is the principal shareholder, director and president of Bright Signs, Inc., a Pennsylvania corporation which maintains and erects electrified and other types of signs for business and Sawtelle, Barry W., Esquire, 94 -621 October 5, 1994 Page 2 other institutions. Meridian Bank is one of Bright Signs, Inc.'s customers with a contract for the maintenance of all Meridian Bank Signs in Berko County. In 1993, the business provided to Bright Signs, Inc. as per the Meridian Bank contract constituted approximately 10% of the gross revenue of Bright Signs, Inc. A conflict has been alleged as to Mandolos' advocacy of a solicitation for bids for the sewage treatment financing that would include but not be limited to Meridian Bank. The basis for the conflict charge is in part Mandolos' association with Bright Signs, Inc. and the business relationship between that corporation and Meridian Bank. In light of the foregoing, Mandolos has requested an advisory from the Commission as to these circumstances. Specifically, under the above facts, Mandolos seeks advice as to whether his advocacy of a solicitation for bids from a broad range of financial institutions doing business in Berko County would constitute a violation of the Ethics Law. Second, in the event that the solicitation for bids is undertaken by the Township and Meridian Bank would be the most favorable bidder for financing, Mandolos inquires as to whether there would be any violation of the Ethics Law if Mandolos were to vote in favor of accepting the bid of Meridian Bank. Discussion: As a Supervisor for Bern Township, Mandolos 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: Sggtj.on 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. $ef }pitions. "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 minims economic impact or which affects to the same degree a class consisting of the Sawtelle, Barry W., Esquire, 94 -621 October 5, 1994 Page 3 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. 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. 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. 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 patter Sawtelle, Barry W., Esquire, 94 -621 October 5, 1994 Page 4 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 fining a written memorandum to that effect with the person recording the minutes or supervisor. In applying the above provisions of the Ethics Law to the instant matter, it is noted that Section 3 (a) of the Ethics Law does not prohibit public officials /employees from outside business activities or employment, however, the public official /employee may not use the authority of office for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. A public official /employee must exercise caution so that his private business activities do not conflict with his public duties. Crisci, Opinion 89 -013. Thus, a public official /employee could not perform private business using governmental facilities or personnel. In particular, the governmental telephones, postage, staff, equipment, research materials, personnel or any other property could not be used as a means, in whole or part, to carry out private business activities. In addition, the public official /employee could not during government working hours, solicit or promote such business activity. Pancoe, supra. Similarly, Section 3(a) would expressly prohibit the use of confidential information received by holding public office/ employment for such a prohibited private pecuniary benefit. Having set forth the above the general principles, the specific inquires which you have posed will now be addressed under the Ethics Law. As to whether the solicitation of bids from a broad range of financial institutions doing business in Berks County would constitute_ a violation of the Ethics Law, you are advised that any past action cannot be addressed in an advice format in that an advisory opinion can only address future Sawtelle, Barry W., Esquire, 94 -621 October 5, 1994 Page 5 prospective conduct. However, if the question posed relaty to future conduct as to solicitation from a broad range of institutions, you are advised that such action would not constitute a conflict by Mandolos in that under the submitted facts, there would not be any use of authority of office to obtain a private pecuniary benefit for Mandolos, a member of his immediate family or business with which he or a member of his immediate family is associated. As to the second question posed, it is noted that the question clearly relates to future /prospective conduct, which may be addressed under the Ethics Law. In the event that there is a solicitation of bids and Meridian is the most favorable bidder, you are advised that Mandolos would have a conflict so that he could not vote or participate as to the award to Meridian Bank and must observe the disclosure requirements of Section 3(j) of the Ethics Act noted above. In Miller, Opinion 89 -024, the Commission held that a public official had a conflict as to any matters involving the business with which he was associated, clients of that business as well as plans or projects of the business in which the public official was involved. Similarly, in Kannebecker, Opinion 92 -010, the Commission held that a Township Supervisor who was an attorney had a conflict as to any of his firm's clients that had matters pending before the Township even though the legal representation was on other /non - Township matters. In the instant matter, it is clear that Mandolos' business has Meridian as a client and there is an ongoing business relationship between Bright Signs, Inc. and Meridian Bank. Therefore, based upon the above prior precedent of the Commission, Mandolos would have a conflict as to Meridian Bank, could not vote or participate on matters pertaining to Meridian Bank (as well as Bright Signs, Inc.) and must observe the disclosure requirements of Section 3(j) of the Ethics Law as noted above. 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 Supervisor for Bern Township, Mandolos is a public offi subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Act would not prohibit future conduct of Mandolos from advocating for the solicitation of bids from a broad range of financial institutions doing business in Berks County. However, Section 3(aYQf tie Ethics Law would prohibit the participation or vote - by landplos as to the award of a bid to a company that has an ongoing coi relationship with a business with which Mandolos is associated. The disclosure requirements of Section Sawtelle, Barry W., Esquire, 94 -621 October 5, 1994 Page 6 3(j) of the. Ethics Law as outlined above must be satisfied. 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. 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 d sled and a formal Opinion will be issued toy the Commission. Any such appeal must be in writing and must be actuallv re at the Commission within fifteen (15) days of thec,1ate of this Advice pursuant to 51 Pa. Code 513.2(h). The appeal May be received at the Commission by hand delivery, Waited States mail, delivery-service, or by FA% transmission (717- 787 -0800. Failure to file such an appeal at the Commission within fifteen (15) days may result in the dismissal of the appeal. T 'ncerely, incent J. ¶ropko Chief Counsel