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HomeMy WebLinkAbout22-544 HaakPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: Christopher Haak Dear Mr. Haak: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov ADVICE OF COUNSEL October 19, 2022 22-544 This responds to your submission received October 14, 2022, by which you requested an advisory opinion from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the issue presented below: Issue: Would the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et SeMc ., prohibit an individual serving as a Member and Chairman of the Board of the Nittany Valley Joint Recreation Authority ("Authority") from loaning the Authority funds with no interest due in order to assist the Authority with paying for design/engineering services while it awaits the receipt of grants funds which have been awarded to it by the Commonwealth? Brief Answer: NO. The Ethics Act would not prohibit the individual, in his private capacity, from making a no -interest loan to the Authority for the aforesaid purpose. Facts: You are a Member and Chairman of the Authority Board. The question that you pose is whether the Ethics Act would permit you to loan the Authority funds with no interest due in order to assist the Authority with paying for design/engineering services while it awaits the receipt of grants funds which have been awarded to it by the Commonwealth. Discussion: Pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. Haak, 22-544 October 19, 2022 Page 2 An advisory opinion only affords a defense to the extent the requester has truthfully disclosed all material facts. In issuing an advisory opinion, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). Sections 1103(a) and 11030) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. -- No public official or public employee shall engage in conduct that constitutes a conflict of interest. 0) 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(a), 11030). The following terms related to Section 1103(a) 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 Haak, 22-544 October 19, 2022 Page 3 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. 65 Pa.C.S. § 1102. Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, apublic official/public employee is prohibited from using the authority of public office/employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official/public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting but extends to any use of authority of office/employment including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows: (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. Haak, 22-544 October 19, 2022 Page 4 65 Pa.C.S. § 1103(f). The term "contract" is defined in the Ethics Act as follows: § 1102. Definitions "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. The term shall not mean an agreement or arrangement between the State or political subdivision as one parry and a public official or public employee as the other parry, 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. 65 Pa.C.S. § 1102. 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. Section 1103(f) of the Ethics Act also provides that the public official/public employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member and Chairman of the Authority Board, you are a public official subject to the provisions of the Ethics Act. Section 1103(a) of the Ethics Act (pertaining to conflict of interest) imposes restrictions upon you in your capacity as a Member and Chairman of the Authority Board, rather than upon you in your private capacity. Therefore, Section 1103(a) of the Ethics Act would not prohibit you, in your private capacity, from making a no -interest loan to the Authority in order to assist it with paying for design/engineering services while it awaits the receipt of grants funds which have been awarded to it by the Commonwealth. The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed as to any contract between you and the Authority that would be valued at $500 or more. It is noted that a problem could exist under the Municipality Authorities Act as to contracting between you and the Authority. Haak, 22-544 October 19, 2022 Page 5 The Municipality Authorities Act provides, in pertinent part: § 5614. Competition in award of contracts (e) Conflict of interest. No member of the authority or officer or employee of the authority may directly or indirectly be a parry to or be interested in any contract or agreement with the authority if the contract or agreement establishes liability against or indebtedness of the authority. Any contract or agreement made in violation of this subsection is void, and no action may be maintained on the agreement against the authority. 53 Pa.C.S. § 5614(e). Because this Advice may not interpret the above quoted provision of the Municipality Authorities Act, it is suggested that you seek legal advice in that regard. 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. Pursuant to Section 1107(11) of the Ethics Act, an Advice of Counsel 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 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 actually received at the Commission within thirty (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, United 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. Respectfully, Bridget K. Guilfoyle Chief Counsel