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HomeMy WebLinkAbout23-533 Smith 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 June 1, 2023 To the Requester: Chip Smith 23-533 Dear Mr. Smith: This responds to your email received May 22, 2023, by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to the issues presented below: Issues: (1) Whether, pursuant to Section 1103(a) ofthe Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), an individual serving as a borough council member would have a conflict of interest with regard to participating in matters before the borough council pertaining to a third party agency that administers and enforces the Uniform Construction Code for the borough, where in his private capacity, the individual is employed as a building inspector with the third party agency. Brief Answer: YES. Because the third party agency is a business with which the individual is associated in his capacity as an employee, the individual generally would have a conflict of interest under Section 1103(a) of the Ethics Act in his capacity as a borough council member with regard to participating in matters before the borough council pertaining to the third party agency. (2) Whether the Ethics Act would impose prohibitions or restrictions upon the individual, as a borough council member, with regard to overseeing work performed by the third party agency under a contract between the borough and the third party agency for the administration and enforcement of the Uniform Construction Code. Smith, 23-533 June 1, 2023 Page 2 Brief Answer: YES. Pursuant to Section 1103(f) of the Ethics Act (pertaining to contracting), in his public capacity as aborough council member, the individual would be prohibited from having any supervisory or overall responsibility for the implementation of a contract between the borough and the third party agency for the administration and enforcement of the Uniform Construction Code. Facts: You request an advisory from the Commission based on submitted facts that may be fairly summarized as follows: You are a Member of Council for Hallam Borough (“Borough”). In a private capacity, you are employed as a building inspector with a third party agency named “Code Administrators, Inc.” (“the Agency”) that provides Uniform Construction Code services. The Agency has a contract with the Borough to administer and enforce the Uniform Construction Code for the Borough. You have no ownership interest in the Agency. Permit applications are reviewed by staff reviewers, of which you are not one. Inspections are scheduled by the office staff based on inspector availability. The question that is posed by your advisory request is whether the Ethics Act would impose prohibitions or restrictions upon you with regard to performing the duties of your public office as a Borough Council Member in relation to the Agency’s contract to enforce the Uniform Construction Code for the Borough. 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 Smith, 23-533 June 1, 2023 Page 3 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), 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, Smith, 23-533 June 1, 2023 Page 4 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 personor 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 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. Smith, 23-533 June 1, 2023 Page 5 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. 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. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member of Borough Council, you are a public official subject to the provisions of the Ethics Act. The Agency is a business with which you are associated in your capacity as an employee. Pursuant to Section 1103(a) of the Ethics Act, you generally would have a conflict of interest as a Borough Council Member in matters that would financially impact you or the Agency. You specifically would have a conflict of interest with regard to matters pertaining to a contract between the Borough and the Agency for the provision of Uniform Construction Code administration and enforcement services to the Borough. In each instance of a conflict of interest, you would be required to abstain from participation, which would includevoting 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. Smith, 23-533 June 1, 2023 Page 6 At such times as you would be employed withthe Agency, the restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed as to any extension/renewal of a contract between the Borough and the Agency or any new contract between the Borough and the Agency for the provision of Uniform Construction Code administration and enforcement services to the Borough. (See, Kistler v. State Ethics Commission, 610 Pa. 516, 22 A.3d 223 (2011), regarding the requirements for an “open and public process.”) In pertinent part, Section 1103(f) of the Ethics Act would prohibit you, in your public capacity as a Member of Borough Council, from having any supervisory or overall responsibility for the implementation of a contract between the Borough and the Agency for the administration and enforcement of the Uniform Construction Code. 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