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HomeMy WebLinkAbout03-576 MeansCharles M. Means, Esquire Campbell, Durrant & Beatty, P.C. 555 Grant Street, Suite 120 Pittsburgh, PA 15219 Dear Mr. Means: ADVICE OF COUNSEL July 30, 2003 03 -576 Re: Conflict; Public Official /Employee; Commissioner; First Class Township; Garage; Vehicle Repair; Contract: First Class Township Code; Supersede. This responds to your letter of July 9, 2003, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., presents any prohibition or restrictions upon a township commissioner as to repair services on township vehicles by a garage that he owns. Facts: As the Solicitor for Collier Township, a First Class township and on behalf ow Township Commissioner, William Scalise (Scalise), who was appointed to fill a vacancy on April 22, 2003, you seek an advisory as to his conduct. Scalise has owned and operated a vehicle repair garage for many years which ownership predated his service as a Township Commissioner. Although the township has a majority of the its repair work done elsewhere, some township vehicles have been inspected at Scalise's garage. After providing your interpretation of Section 1103(f) of the Ethics Act, you state that the "First Class Township Code, 53 P.S. §56811 provides that no Township official may be interested to any appreciable degree in any contract for work to be done for the Township involving the expenditure by the Township of more that $300 in any year (with certain exceptions not applicable here)." July 9, 2003 letter of Means at 1. On behalf of Scalise as a Township Commissioner, you pose the following two questions on which you seek an advisory: Whether Section 3(f) of the Ethics Act supersedes the above quoted section of the First class Townshi p Code. I note that Section 12 of the Ethics Act provides that if the provisions of" the Ethics Act conflict with any other statute, ordinance, Means, 03 -576 July 30, 2003 Page 2 regulation or rule, the provisions of the ethics Act shall control. Section 3(f) of the Ethics Act directly conflicts with the above quoted section of the First Class Township Code, since Section 3(f) expressly permits entry into contracts that would not be permitted under the First Class Township Code. 2. Whether in computing the applicable limitation amount ($500 under the Ethics Act or $300 under the First Class Township Code) the amount of any work done in 2003 by Mr. Scalise prior to his appointment as a Township Commissioner may be excluded." Id. at 2. 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 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. §§ 1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As a Commissioner for Collier Township, Scalise is a public official as that term is defined in the Ethics Act, and hence he is 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. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, Means, 03 -576 July 30, 2003 Page 3 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 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. § 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 Means, 03 -576 July 30, 2003 Page 4 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: § 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 each instance of a conflict, Section 1103(j) requires the public official /employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In the event that the required abstention results in the inability of the governmental body to take action because a majority is unattainable due to the Means, 03 -576 July 30, 2003 Page 5 abstention(s) from conflict under the Ethics Act, then voting is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. 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 client(s). Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010. As a First Class Township Commissioner, Scalise would generally have a conflict of interest under Section 1103(a) of the Ethics Act as to matters that would financially benefit himself, a member of his immediate family, a business with which he or a member of his immediate family is associated, or business client(s). Since Scalise is the owner of the vehicle repair garage, it is a business with which he is associated as defined under the Ethics Act. See, 65 Pa.C.S. 1102. Scalise would specifically have a conflict of interest as to matters pertaining to any contract between his repair garage and the township, such as the payment of invoices involving services, or the issuance of any checks payable to himself /his business. In each instance of a conflict, Scalise would be required to abstain and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. With respect to Section 1103(f) of the Ethics Act, if any contract between Scalise's vehicle repair garage and the township would be $500 or more, the requirements of Section 1103(f) would have to be satisfied. Hence, such contracting would not be prohibited under the Ethics Act provided the requirements of Section 1103(a), 1103(f), and 1103(j) would be satisfied. It is administratively noted that the First Class Township Code (Code) provides in pertinent part: § 56811. Penalty for personal interest in contracts. Except as otherwise provided in this act, no township official, either elected or appointed, who knows or who by the exercise of reasonable diligence could know, shall be interested to any appreciable degree, either directly or indirectly, in any contract for the sale or furnishing of any supplies or materials for the use of the township or for any work to be done for such township involving the expenditure by the township of more than three hundred dollars in any year, but this limitation shall not apply to cases where such officer or appointee of the township is an employe of the person, firm or corporation to which the money is to be paid in a capacity with no possible influence on the transaction and in which he cannot be possible benefited thereby, either financially or otherwise. But in the case of a commissioner, if he knows that he is within the exception just mentioned, he shall so inform the commissioners and shall refrain from Means, 03 -576 July 30, 2003 Page 6 53 P.S. §56811 voting on the expenditure or any ordinance relating thereto and shall in no manner participate therein. Any official or appointee who shall knowingly violate the provisions of this section shall be subject to surcharge to the extent of the damage shown to be thereby sustained by the township, to ouster from office, and shall be guilty of a misdemeanor, and, upon conviction thereof, shall be sentenced to pay a fine not exceeding five hundred dollars. Although such contracting would not be prohibited under the Ethics Act provided the requirements of Section 1103(a), 1103(f), and 1103(j) would be satisfied, a problem could exist under the Code. In that the Code may impose restrictions upon Scalise's ability to provide such services to the Township, it is suggested that you seek legal advice in this regard. As to the two questions you pose, Section 1112 does not apply in this context. The Commission has held that Section 1103(f) is in the nature of a procedural requirement so that a public official /public employee may contract with his governmental body, but if the contract is $500 or more, then an open and public process including disclosure is required. See, Miller, Opinion 89 -024. Since Section 56811 of the Code and Section 1103(f) of the Ethics Act are not in conflict, Section 1112 of the Ethics Act is not applicable. As to your second inquiry, Section 1103(f) of the Ethics Act would not have application to any contractin done by Scalise prior to his public service. However, as noted above, Section 1103( would have application to any contract of $500 or more after Scalise became a First lass Township Commissioner. 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. Conclusion: Scalise as a First Class Township Commissioner is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Scalise would generally have a conflict of interest under Section 1103(a) of the Ethics Act as to matters that would financially benefit himself, a member of his immediate family, a business with which he or a member of his immediate family is associated, or business client(s). Since Scalise is the owner of the vehicle repair garage, it is a business with which he is associated as defined under the Ethics Act. Scalise would specifically have a conflict of interest as to matters pertaining to vehicle repair contracts with the township, such as the payment of invoices involving your contracted services or the issuance of any checks payable to himself /his business. 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. Any contract, if over, $500, would be subject to the restrictions of Section 1103(f). Although such contracting would not be prohibited under the Ethics Act provided the requirements of Section 1103(a), 1103(f) and 1103(j) would be satisfied, a problem could exist under the First Class Township Code, and therefore, it is suggested that Scalise seek legal advice in that regard. Means, 03 -576 July 30, 2003 Page 7 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 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. Sincerely, Vincent J. Dopko Chief Counsel