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HomeMy WebLinkAbout03-007 ConfidentialOPINION OF THE COMMISSION Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Frank M. Brown Donald M. McCurdy Michael J. Healey DATE DECIDED: 6/23/03 DATE MAILED: 7/8/03 03 -007 Re: Public Official /Public Employee; Executive -Level State Employee; A of Department B; Member /Chair, Commission C; Grant Program D; Grant Program E; Participation by Public Official /Public Employee. This Opinion is issued in response to your request dated May 23, 2003, for a confidential advisory. I. ISSUE: Whether, pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., the A of Department B may, in his private capacity, apply for a grant under Act G, [cite], for the Enterprise F that he owns and operates, when in his public capacity: (1) he serves as a Member and sometimes the Chair of Commission C, which developed and administers the grant program; and (2) he designates an office and staff to coordinate and assist in the development, implementation and enforcement of programs of Commission C. II. FACTUAL BASIS FOR DETERMINATION: As [title] for Department B, you have been authorized by the A of Department B to request a confidential advisory from this Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Commission C administers grants under two programs that are relevant to your request, specifically, Grant Program D, hereinafter referred to as the "First -Stage Grant Program," and Grant Program E, hereinafter referred to as the "Second -Stage Grant Program." In his private capacity, the A of Department B is the owner and operator of Enterprise F. Prior to being nominated for his current public position, the A of Department B received Confidential Opinion 03 -007 July 8, 2003 Page 2 approval for a grant under the First -Stage Grant Program. He subsequently developed an H for his Enterprise F, and Commission C approved it. The H subjects the A of Department B to the jurisdiction of Commission C and its authority to enforce compliance with the provisions of Act G and certain provisions in the H. In addition, the H sets forth specific I which must now be installed and implemented within time frames set forth in the statute and related regulations. You note that the powers and duties of Commission C are set forth in Law J, [cite], and Act K, [cite]. Commission C is an entity within and under the authority of the Commonwealth of Pennsylvania, Department L. Per [cite], the A of Department B at times serves as Chair of Commission C, M with the N of Department L. In addition, the Commission C offices for its Executive Secretary and staff were moved to and are housed at Department B. The A of Department B designates an office and staff within the Department to coordinate and assist in the development, implementation and enforcement of programs of Commission C that affect O. That office and staff, among other functions, develop programs to assist those engaged in 0 to comply with Act G. They also oversee and administer those programs and make suggestions to the Executive Secretary of Commission C with regard to approval and denial of program participants and enforcement actions to be taken regarding program participants. Related legal advice is provided to Commission C by Office of General Counsel attorneys assigned to Department B. The Executive Secretary of Commission C remains independent of both agencies. Commission C administers the Second -Stage Grant Program in accordance with regulations contained in [cites]. The Second -Stage Grant Program is competitive and grant funds are limited, such that not all applicants with acceptable applications will succeed in obtaining a grant. You state that the Executive Secretary of Commission C has been delegated the authority to make the decision regarding an application. However, the office staff provided by Department B provides assistance in the areas of eligibility, ranking and prioritization. The same staff also monitors compliance by the grant recipient with the provisions of the grant agreement. For informational purposes, you have submitted a copy of the Second -Stage Grant Program grant agreement, which includes the application and applicable guidelines and regulations. The question that you have presented for review by this Commission is whether, pursuant to the Ethics Act, the A of Department B may, in his private capacity, apply for a grant under the Second -Stage Grant Program as to his Enterprise F, when in his public capacity: (1) he serves as a Member and sometimes the Chair of Commission C, which developed and administers the grant program; and (2) he designates an office and staff to coordinate and assist in the development, implementation and enforcement of programs of Commission C. Noting that there are grant application deadlines and that as the owner and operator of his Enterprise F, the A of Department B is responsible for financing the implementation costs of his H, you request an expedited review of your advisory request. By letter dated May 28, 2003, you were notified of the date, time and location of the executive meeting at which your request would be considered. At the executive meeting on June 23, 2003, you appeared for the purpose of answering any questions of this Commission. III. DISCUSSION: It is initially noted that pursuant to Sections 1107(10) and 1107 (11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requestor based upon the facts Confidential Opinion 03 -007 July 8, 2003 Page 3 that the requestor has submitted. In issuing the advisory based upon the facts that the requestor has submitted, this 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 requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may and shall be addressed. The A of Department B is a public official /public employee and an "executive -level State employee" as those terms are defined in the Ethics Act and hence he is subject to the provisions of the Ethics Act. 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. Sections 1103(a) and 1103(j) of the Ethics Act provide as follows: § 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 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), (j). The following terms pertaining to conflicts of interest under the Ethics Act are defined as follows: § 1102. Definitions Confidential Opinion 03 -007 July 8, 2003 Page 4 "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 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(f) of the Ethics Act, which pertains 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). The following terms that pertain to Section 1103(f) are 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 Confidential Opinion 03 -007 July 8, 2003 Page 5 65 Pa.C.S. § 1102. In applying the above provisions of the Ethics Act to your inquiry, Sections 1103(a) and 1103(j) pertaining to conflicts of interest shall be considered first. The stated purpose of the Ethics Act is to strengthen the faith and confidence of the people in their government by assuring the public that the financial interests of the holders of or candidates for public office do not conflict with the public trust. 65 Pa.C.S. § 1101.1. Section 1103(a) of the Ethics Act in particular prohibits a public official /public employee 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. This Commission recognizes that public concern and criticism may arise if a public official or public employee who serves a governmental body receives benefits under the very program that that governmental body administers. On the other hand, the Ethics Act was not enacted nor should it be interpreted to preclude public officials or public employees from participating in programs that might otherwise be available to them as citizens, as long as the restrictions of the Ethics Act are observed. Wolff, Opinion 89 -030; Woodrinq, Opinion 90- 001. In order to ensure that a public official or public employee does not have a conflict of interest when he, as a citizen, seeks to participate in a loan or grant program administered by the governmental body that he serves, this Commission has held that he must: (1) play no role in establishing the criteria under which the program is to operate, particularly with reference to the structure or administration of the program; (2) play no role in establishing or implementing the criteria by which selections for program participation are to be made; play no role in the process of selecting and reviewing applicants or in awarding grants or funds; (4) use no confidential information acquired during the holding of public office or public employment to apply for or to obtain such funds, grants, etc.; and (3) 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. "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. Confidential Opinion 03 -007 July 8, 2003 Page 6 (5) abstain and satisfy the disclosure requirements of Section 1103(j) above in cases where the public official /public employee is associated in any way with administering the loan or grant program. The abstention and disclosure would be required not only as to his own application, but also as to similarly situated individuals with whom the public official /public employee might be competing for available funds. Additionally, in cases where Section 1103(f) is applicable, the public official /public employee would be prohibited from any supervisory or overall responsibility as to the contract or program. See, e.q., Woodrinq, supra. In considering the above, you are advised that the ability of the A of Department B to participate in the Second -Stage Grant Program would be contingent upon his strict conformance with the above criteria. These criteria would require that he: (1) play no role as to the Second -Stage Grant Program or any person(s) involved in administering it; and (2) make the requisite disclosures to satisfy the requirements of Section 1103(j). We recognize that it may be difficult for someone serving in the position held by the A of Department B to achieve compliance with the above criteria. For example, if the A of Department B would use the authority of his office to participate in selecting the Executive Director of Commission C or to designate his own Department's office staff involved in administering the Second -Stage Grant Program, he would have a conflict of interest as to participating in the Second -Stage Grant Program. The obvious reason is that by selecting or designating the very individuals who would: (1) review his application and the applications of his competitors as to eligibility, ranking and prioritization; (2) possibly take action to award a grant to him On the case of the Executive Director); and (3) subsequently monitor compliance by the successful grant recipients with the provisions of their grant agreements, he would designate the individuals who would affect the success of his application and, if successful, who would subsequently regulate him. If, on the other hand, the A of Department B would abstain from selecting, designating or otherwise using the authority of his public position as to such individuals, he could avoid a conflict of interest. However, you are cautioned that in the absence of a pre- existing conflict mechanism in place specifying how and by whom his authority is to be exercised in the event of a conflict, his delegation of such authority to a subordinate would itself constitute a use of authority of office in contravention of Section 1103(a) of the Ethics Act. Confidential Opinion, 02 -004. Additionally, if and to the extent contracting (as the term "contract" is defined above) valued at $500 or more would occur between the A of Department B and the governmental body with which he is associated, the requirements of Section 1103(f) of the Ethics Act would have to be satisfied. (Because the A of Department B serves as a Member, [cite], and sometimes the Chair, [cite], of Commission C, it is part of the governmental body with which he is associated, see, 65 Pa.C.S. § 1102). This Advice is limited to addressing the applicability of Sections 1103(a), 1103(f) and 1103(j) 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 /employee 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. 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 Confidential Opinion 03 -007 July 8, 2003 Page 7 than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of Code P. IV. CONCLUSION: The A of Department B is a public official /public employee and an "executive -level State employee" subject to the provisions of the Public Official and Employee Ethics Act, ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Section 1103(a) of the Ethics Act would not preclude the A of Department B from applying with Commission C for a grant under Grant Program E provided that he played no role in establishing the criteria under which the program would operate, played no role in implementing the criteria for selecting applicants, played no role in selecting or reviewing grant applicants, used no confidential information acquired during the holding of his public position to apply for or obtain such a grant, and finally had no involvement with the administration of the program. If the A of Department B would apply for such a grant, the requirements of Section 1103(j) of the Ethics Act noted above would have to be observed, and the requirements of Section 1103(f) of the Ethics Act noted above, to the extent applicable, would also have to be observed. The propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(10), the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair