HomeMy WebLinkAbout23-523 Findlay
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
April 28, 2023
To the Requester:
Chad Findlay
23-523
Dear Mr. Findlay:
This responds to your letter dated April 5, 2023, by which you requested an advisory from
the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to theissue
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 who provides
transportation services to a school district as a contractor with regard to becoming a school
director for the school district.
Brief Answer: The Ethics Act would not prohibit the individual from becoming a school
director for the school district. However, as a school director, the individual generally
would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to
matters pertaining to any contract involving the individual’s provision of transportation
services to the school district.
Facts:
You request an advisory from the Commission based upon submitted facts, the material
portion of which may be fairly summarized as follows.
You were formerly a School Director for Cranberry Area School District (“School
District”), located in Venango County, Pennsylvania. You currently provide transportation
services to the School District as a contractor.
Findlay, 23-523
April 28, 2023
Page 2
Several seats on the School District School Board will be vacant by the end of 2023, and
there might not be enough individuals interested in seeking election as a School Director to fill
those seats. The School District Superintendent asked you if you would consider seeking another
term as a School Director for the School District.
You seek guidance as to whether the Ethics Act would impose any prohibitions or
restrictions upon you with regard to serving as a School Director for the School District.
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
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
Findlay, 23-523
April 28, 2023
Page 3
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.
“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.
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 employee is 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
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April 28, 2023
Page 4
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).
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.
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April 28, 2023
Page 5
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.
It is administratively noted that the Public School Code provides in part:
§ 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 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 tothe district except as provided in
this act…
….
(c) It shall not be a violation of this section for a school district to
contract for the purchase of goods or services from a business with
which a school director is associated to the extent permitted by and
in compliance with 65 Pa.C.S. Ch. 11 (relating to ethics standards
and financial disclosure).
24 P.S. § 3-324(a), (c). On its face, Section 3-324(c) of the Public School Code permits contracting
between school districts and businesses with which school directors are associated as long as the
requirements of the Ethics Act are observed.
Conclusion:
In applying the above provisions of the Ethics Act to the instant matter, you are advised as
follows.
The Ethics Act would not prohibit you from serving as a School Director for the School
District. Upon assuming office as a School Director for the School District, you would become a
public official subject to the provisions of the Ethics Act.
Findlay, 23-523
April 28, 2023
Page 6
The submitted facts do not clearly indicate whether you provide transportation services to
the School District as a self-employed individual (i.e., an independent contractor) or by way of
some type of legal entity which you may have formed (i.e., a busing company). Any business as
to which you are a director, officer, owner, or employee or in which you hold a financial interest
would be considered a business with which you are associated. A self-employed individual is
included within the definition of the term “business” as set forth in the Ethics Act.
As a School Director, you generally would have a conflict of interest under Section 1103(a)
of the Ethics Act in matters pertaining to a contract between you/a business with which you are
associated and the School District that would involve the provision of transportation services to
the School District. Matters in which you generally would have a conflict of interest as a School
Director would include overseeing work performed by you/a business with which you are
associated pursuant to a contract with the School District, participating in matters involving the
extension/renewal of a contract or the execution of a new contract with the School District, and
voting to approve payments to you/a business with which you are associated.
In each instance of a conflict of interest, you 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.
The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be
observed whenever applicable. Section 1103(f) of the Ethics Act would not be applicable to a
contract between you/a business with which you are associated and the School District that was
entered into at a time when you were not a School Director. However, at such times as you would
be a School Director, any extension/renewal of a contract between you/a business with which you
are associated and the School District or any new contract between you/a business with which you
are associated and the School District would be subject to the restrictions and requirements of
Section 1103(f) of the Ethics Act.
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
Findlay,23-523
April 28, 2023
Page 7
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