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HomeMy WebLinkAbout23-506 Lamay PHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE: 717-787-0806 TOLL FREE: 1-800-932-0936 FINANCE BUILDING WEBSITE: www.ethics.pa.gov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL January 30, 2023 To the Requester: Gregory E. Lamay 23-506 Dear Mr. Lamay: This responds to your letter dated January 5, 2023, and received January 10, 2023, by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to the issue presented below: Issue: Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would impose prohibitions or restrictions upon an individual serving as a School Director for the Camp Hill School District and as Chairperson of the Cumberland Perry Area Career and Technical Center’s (“CTC’s”) Joint Operating Committee (“JOC”), who in his private capacity, is employed by Eastern PCM, LLC as a Vice-President, with regard to participating in matters pertaining to the award of a construction management contract for Cumberland Perry Area CTC, when the individual’s employer intends to submit a bid for the contract. Brief Answer: YES. In the individual’s public capacity as School Director for the Camp Hill School District and as Chairperson of the Cumberland Perry AreaCTC’s JOC, he would have a conflict of interest in matters pertaining to the bidding and awarding of the construction management contract when the individual’s employer intends to submit a bid for the contract. Facts: You request an advisory from the Commission based upon submitted facts, the material portion of which may be fairly summarized as follows. Lamay, 23-506 January 30, 2023 Page 2 You are a School Director in the Camp Hill School District. The Cumberland Perry Area Career and Technical Center’s (“CTC’s”) Joint Board (“Joint Board”) consists of all school directors of the participating school districts, including the Camp Hill School District. The Joint Board has delegated the responsibility for operating, administering, and managing the Cumberland Perry Area CTC to the Joint Operating Committee (“JOC”). You are chairperson of the JOC. Cumberland Perry Area CTC has an upcoming construction project for which it will be issuing an open and public Request for Proposal for a construction manager who will provide professional construction consulting, guidance, and management services specificto the upcoming construction project. The construction manager will report to the CTC administration. Construction manager services are independent from the project’s architect and contractors. In your private capacity, you are a Vice-President at Eastern PCM, LLC, a project and construction management firm located in Camp Hill, PA. Eastern PCM intends to submit a proposal in response to the Request for Proposal issued by the Cumberland Perry Area CTC. If Eastern PCM is awarded the construction management contract, you would delegate the work to a project manager. You further indicate that Eastern PCM’s compensation would be a set monthly fee, and that in your capacity as School Director for the Camp Hill School District and Chairperson of the Cumberland Perry Area CTC’s JOC, you would not have the authority to unilaterally approve or change the terms of any contract. Based upon the above submitted facts, you ask whether the Ethics Act would impose any restrictions upon you if Eastern PCM submits a bid for the construction management contract in response to the Request for Proposal of Cumberland Perry Area CTC. 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. In issuing the advisory based upon the facts that the requester has submitted, 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). An advisory only affords a defense to the extent the requester has truthfully disclosed all material facts. Sections 1103(a) and 1103(j) 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. (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 Lamay, 23-506 January 30, 2023 Page 3 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), 1103(j). 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 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. Lamay, 23-506 January 30, 2023 Page 4 “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. 65 Pa.C.S. § 1102. Section 1103(a) of the Ethics Act, pertaining to conflict of interest, restricts public officials and public employees in their public capacities, not their private capacities. Subject to the statutory exclusions to the Ethics Act’s definition of the term “conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, a public official/public employeeis prohibited from using the authority of public office or confidential information received by holding such a public position for the private pecuniary (financial) 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 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 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. Section 1103(f) of the Ethics Act, pertaining to contracting, 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). Lamay, 23-506 January 30, 2023 Page 5 The term “contract” is defined in the Ethics Act as follows: “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 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. 65 Pa.C.S. § 1101. 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. Please note that Section 1103(a) of the Ethics Act pertaining to conflicts of interest does not prohibit public officials/public employees from having outside business interests 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) 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, Friend, 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 or private clients(s). Miller, Opinion 89-024; Kannebecker, Opinion 92-010. If a private employer or business with which the public official/public employee is associated or a client of the private employer or business 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 Lamay, 23-506 January 30, 2023 Page 6 abstain from participation and in the instance of a voting conflict, to abstain and fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a School Director of the Camp Hill School District and Chairperson of the Cumberland Perry Area CTC’s JOC, you are a public official/public employee as that term is defined in the Ethics Act, and therefore you are subject to the provisions of the Ethics Act. Eastern PCM, LLC is a business with which you are associated in your capacity as a Vice-President. Pursuant to Section 1103(a) of the Ethics Act, in your public capacity as a School Director of the Camp Hill School District and Chairperson of the Cumberland Perry Area CTC’s JOC, you would have a conflict of interest as to discussion(s), vote(s), and/or other actions of the School District and the Cumberland Perry Area CTC’s JOC pertaining to Eastern PCM’s actual or anticipated bid submission in response to the Request for Proposal for a construction manager issued by Cumberland Perry Area CTC. As noted above, in each instance of a conflict of interest, you would be required to fully abstain from participation. The abstention requirement would not be limited to voting, but rather would extend to any use of the authority of office. At any such time as there would be a reasonable expectation of a business relationship forming between the Camp Hill School District or the Cumberland Perry Area CTC and Eastern PCM, you would have a conflict of interest and could not participate in related matters, such as for example, drawing up contract specifications for such project. Where Eastern PCM would bid on the construction management contract or any other work for the Camp Hill School District or the Cumberland Perry Area CTC, you would have a conflict of interest and could not participate in reviewing or selecting bids or proposals or awarding the contract(s). You also would be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being a School Board Director or Chairperson of the Cumberland Perry Area CTC’s JOC, to effectuate a private pecuniary benefit to Eastern PCM through a detriment to a business competitor. See, Pepper, Opinion 87-008. In addition, you generally would have a conflict of interest with respect to voting to approve the payment of any bills or invoices that would be submitted by Eastern PCM to the Camp Hill School District or the Cumberland Perry Area CTC. As noted above, in each instance ofa conflict of interest, you would be required to abstain fully from participation and in the instance of a voting conflict, to abstain fully and satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. To the extent Eastern PCM would contract with the Camp Hill School District or the Cumberland Perry Area CTC, or would subcontract with a person awarded a contract with the Camp Hill School District or the Cumberland Perry Area CTC, and the value of Eastern PCM’s Lamay, 23-506 January 30, 2023 Page 7 contract/subcontract would be $500.00 or more, the restrictions of Section 1103(f) would be applicable. In such instance, the contract would have to be awarded through an open and public process, and if awarded to Eastern PCM, you would be precluded from having any supervisory or overall responsibility for the implementation of any contract between Eastern PCM and the Camp Hill School District or the Cumberland Perry Area CTC. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, 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 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 receivedat 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