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HomeMy WebLinkAbout23-537 Foster 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 15, 2023 To the Requester: Jonathan P. Foster, Sr., Esquire 23-537 Dear Mr. Foster: This responds to your letter dated June 5, 2023, by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to the issue presented below: Issue: 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 member of a borough council would have a conflict of interest with regard to participating in matters pertaining to a culvert project or a street and stormwater improvement project where there is a reasonable expectation that the individual’s employer, a construction company, will submit bids for the projects. Brief Answer: YES. Because the construction company is a business with which the individual is associated in his capacity as an employee, the individual 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 pertaining to the projects. As to each project for which the construction company would submit a bid, the individual would have a conflict of interest with respect to participating in discussions or votes of the borough council pertaining to the award of a bid for that project. As to each project for which the construction company would be the successful bidder, the individual would have a conflict of interest as a borough council member with regard to participating in matters pertaining to that project. Foster, 23-537 June 15, 2023 Page 2 Facts: You have been authorized by Christopher Wood (“Mr. Wood”) to request an advisory from the Commission on his behalf. You have submitted facts that may be fairly summarized as follows. Mr. Wood, who has an engineering background, is a Member of Council for South Waverly Borough (“Borough”). As a Borough Council Member, Mr. Wood serves on the streets committee and the grants-applying committee, and he works with the Borough’s public works employee to coordinate work on road and stormwater issues. Borough Council has relied on Mr. Wood to recommend the annual road improvement projects as well as stormwater projects. Mr. Wood utilized his engineering background to work with the Pennsylvania Department of Community and Economic Development (“DCED”) to obtain grant funding for a $575,875 culvert project and a $576,000 grant for a street and stormwater improvement project. The culvert project will be handled by Larsen Design Group of Williamsport, Pennsylvania. The street and stormwater improvement project will be handled by the Pennsylvania Department of Transportation (“PennDOT”). Mr. Wood would normally assist with project-related matters pertaining to the roads, including determining the width and depth of the surface of the roads and whether the roads would be resurfaced or reconstructed. This information would then be provided to PennDOT, which would determine how to proceed with the roadwork. In a private capacity, Mr. Wood is employed as the Operations Manager for a construction company (“the Construction Company”). Mr. Wood is responsible for submitting bids for construction projects, including Borough paving and construction projects. The Construction Company is interested in submitting bids for the culvert project and the street and stormwater improvement project. Based upon the above submitted facts, you seek guidance as to whether the Ethics Act would impose prohibitions or restrictions upon Mr. Wood, in his capacity as a Borough Council Member, with regard to participating in matters pertaining to the culvert project and the street and stormwater improvement project. In particular, you ask whether Mr. Wood would be permitted to: (1) participate in discussions of the projects at any stage during the pre-bidding award process; (2) answer questions from the Borough’s public works employee after the projects are bid; or (3) work with DCED with respect to project grant funding after the projects are bid. 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. An advisory opinion only affords a defense to the extent the requester has truthfully disclosed all material facts. In issuing an advisory opinion, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to acts that have not been submitted. It is the burden of the requester totruthfully disclose allmaterial facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). Sections 1103(a) and 1103(j) of the Ethics Act provide: Foster, 23-537 June 15, 2023 Page 3 § 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), 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. Foster, 23-537 June 15, 2023 Page 4 “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. 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” (i.e., the “de minimis exclusion” or the “class/subclass exclusion”), 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: (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 openand 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 Foster, 23-537 June 15, 2023 Page 5 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: § 1102. Definitions "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. 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 Borough Council Member, Mr. Wood is a public official subject to the provisions of the Ethics Act. The Construction Company is a business with which Mr. Wood is associated in hiscapacity as an employee (Operations Manager). In hiscapacity as a Borough Council Member, Mr. Wood generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters that would financiallyimpact him or the Construction Company. Foster, 23-537 June 15, 2023 Page 6 Given that there is a reasonable expectation that the Construction Company will submit bids for the culvert project and the street and stormwater improvement project, Mr. Wood 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 discussing or otherwise having involvement in matters pertaining to the projects during all stages of the pre-bidding award process. As to each project for which the Construction Company would submit a bid, Mr. Wood would have a conflict of interest with respect to participating in discussions or votes of Borough Council pertaining to the award of a bid for that project. As to each project for which the Construction Company would be the successful bidder, Mr. Wood would have a conflict of interest as a Borough Council Member with regard to participating in matters pertaining to that project, including but not limited to working with DCED with respect to grant funding for the project. Mr. Wood would further have a conflict of interest with respect to answering questions from the Borough’s public works employee about the project to the extent that the questions would relate to matters that would financially impact the Construction Company. In each instance of a conflict of interest, Mr. Wood 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 as to any contract entered into by the Construction Company and the Borough in relation to the culvert project or the street and stormwater improvement project. (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 Mr. Wood, in his public capacity as a Member of Borough Council, from having any supervisory or overall responsibility for the implementation of acontract awarded to the Construction Company by the Borough in relation to either of the projects. 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. Pursuant to Section 1107(11) of the Ethics Act, an Adviceof Counsel 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 Foster, 23-537 June 15, 2023 Page 7 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