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HomeMy WebLinkAbout02-616 PastonMichael J. Paston 720 Eastwind Circle Dresher, PA 19025 ADVICE OF COUNSEL November 8, 2002 02 -616 Re: Conflict; Public Official /Public Employee; School Director; Private Employment or Business; Business With Which Associated; Contract; Vote. Dear Mr. Paston: This responds to your letter of October 8, 2002, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 1ra.GS. §1101 et seq., presents any prohibition or restrictions upon a school director where the schooTdirector owns and operates a private business that provides services to the school district Facts: You are contemplating running for the position of School Director for the 1 p r Dublin School District ( "School District "). The School District currently does business with the Minuteman Press, which you own and operate. The Minuteman Press, located in Fort Washington, Pennsylvania, has obtained some, though not all, of its work through the bidding process. You state that in the first nine months of this year, your business has completed 33 different jobs ranging in price from $6.25 to $2,315.84. You further state that most jobs have ranged between $100 and $300, and that only one job has been in excess of $500. You state your understanding that you would be required to abstain on votes related to your business and state the reason(s) for your abstention. You ask whether under the Ethics Act, ou would be permitted to do business with the School District, individual schools, and /PTA organizations if you would be elected School Director. Discussion: It is initially noted that pursuant to Sections 1107(10) and (11) of the Ethics Act, 65 Pa.C.S. § §1107(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 Pa.C.S. 107(10), (11). An advisory only affords a defense to the extent the requestor has truth fully disclosed all of the material facts. If you would be elected to the position of School Director for the Upper Dublin School District ( "School District "), you would subsequently become a public official as that Paston, 02 -616 November 8, 2002 Page 2 term is defined under the Ethics Act, and hence you would be subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: §1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The following terms are defined in the Ethics Act as follows: §1102. 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. The term 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." 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. "Contract." An agreement or arrangement for the acquisition, use or disposal loy the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term 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. Paston, 02 -616 November 8, 2002 Page 3 65 Pa.C.S. §1102. In addition, Sections 1103(b) and 1103(c) of the Ethics Act 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 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. Section 1103(f) of the Ethics Act provides as follows: § 1103. Restricted activities (f) Contract. - -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. 65 Pa.C.S. § 1103(f). Section 1103(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 1103(f) requires that an "open and public process" be observed as to the contract with the governmental body. Pursuant to Section 1103(f), an "open and public process" includes: (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. Section 1103(f) of the Ethics Act 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 1103(j) of the Ethics Act provides as follows: Paston, 02 -616 November 8, 2002 Page 4 §1103. Restricted activities (j) Voting conflict. - -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. 65 Pa.C.S. §1103(j). In applying the above provisions of the Ethics Act to your inquiry, it is noted that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position - -or confidential information obtained by being in that position - -for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 1103(a) would include: (1) the pursuit of a private business opportunity in the course of public action, Metrick, Order 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official/ public employee is associated in his private capacity, Gorman, Order 1041, or private clients). Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010. If the private employer or business with which the public official /public employee is associated or a private client would have a matter pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter. Miller, supra; Kannebecker, supra. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official /public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. The abstention requirement would not be limited merely to voting, but would extend to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In considering the above, it is clear that Minuteman Press would be considered a business with which you, as its owner, are associated. As a general rule, pursuant to Section 1103(a) of the Ethics Act, if elected as a School Director, ou would be prohibited from using the authority of your office or confidential information for the private pecuniary Paston, 02 -616 November 8, 2002 Page 5 benefit of yourself, a member of your immediate family, Minuteman Press, or client(s) of Minuteman Press. In each instance of a conflict, you would be required to abstain and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. Having established the above general principles, your specific inquiry shall now be addressed. As to the specific question you have posed, the Ethics Act would not p rohibit you from doing business with the School District, individual schools, and PTO /PTA organizations through Minuteman Press if you would be elected School Director. However, any contract that Minuteman Press would have with the School District, if over $500, would be subject to the restrictions of Section 1103(f) of the Ethics Act. Under Section 1103(f) you in your capacity as a public official would be prohibited from having any supervisory or overall responsibility for the implementation or administration of the contract. In addition, pursuant to Section 1103(a) of the Ethics Act, you, as a School Director, would have a conflict as to matters before the School Board that would financially impact yourself or Minuteman Press, such as any contract between Minuteman Press and the School District, could not participate, and would be required to observe the disclosure requirements of Section 1103) of the Ethics Act. Parenthetically, although the contracting in question would not be prohibited under the Ethics Act provided the requirements of Sections 1103(a), 1103(f), and 1103(j) are satisfied, a problem may exist as to such contracting under the Public School Code of 1949 as amended ( "Public School Code "). The Public School Code provides in pertinent part as follows: 3 -324. Not to be employed by or do business with district; exceptions (a) No school director shall, during the term for which he was elected or appointed, as a private person engaged [sic] in any business transaction with the school district in which he is elected or appointed, be employed in any capacity by the school district in which he is elected or appointed, or receive from such school district any pay for services rendered to the district except as provided in this act.... 24 P.S. § 3 -324. Since the State Ethics Commission does not administer or enforce the Public School Code, it is suggested that you seek legal advice in that regard. This Advice is limited to addressing the applicability of Section 1103(a) of the Ethics Act. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 1103(b) and 1103((c) of the Ethics Act provide in part that no person shall offer to a public official public employee and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public 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 Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Paston, 02 -616 November 8, 2002 Page 6 Conclusion: If you would be elected to the position of School Director for the Upper 'Dublin School District ( "School District "), you would subsequently become a public official subject to the provisions of the Ethics Act. Minuteman Press would be considered a business with which you, as its owner, are associated. As a general rule, pursuant to Section 1103(a) of the Ethics Act, if elected as a School Director, ou would be prohibited from using the authority of your office or confidential information for the private pecuniary benefit of yourself, a member of your immediate family, Minuteman Press, or client(s) of Minuteman Press. In each instance of a conflict, you would be required to abstain and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. The Ethics Act would not prohibit you from doing business with the School District, individual schools, and PTO /PTA organizations through Minuteman Press if you would be elected School Director. However, any contract that Minuteman Press would have with the School District, if over $500, would be subject to the restrictions of Section 1103(f) of the Ethics Act. Under Section 1103(f) you in your capacity as a public official would be prohibited from having any supervisory or overall responsibility for the implementation or administration of the contract. In addition, pursuant to Section 1103(a) of the Ethics Act, you, as a School Director, would have a conflict as to matters before the School Board that would financially impact yourself or Minuteman Press, such as any contract between Minuteman Press and the School District, could not participate, and would be required to observe the disclosure requirements of Section 1103(j) of the Ethics Act. Although the contracting in question would not be prohibited under the Ethics Act provided the requirements of Sections 1103(a), 1103(f), and 1103(j) are satisfied, a problem may exist as to such contracting under the Public School Code of 1949 as amended, and therefore, it is suggested that you seek legal advice in that regard. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), an 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, provided 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 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 thirt (30 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, nited 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, Vincent J. Dopko Chief Counsel