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HomeMy WebLinkAbout03-609 LundbladCarl D. Lundblad, Esquire Rh & Sinon, LLP 12 Floor, One South Market Square P. O. Box 1146 Harrisburg, PA 17108 -1146 Re: Conflict; Public Official /Employee; County Commissioner; Lease With The County; Contract; Renewal. Dear Mr. Lundblad: ADVICE OF COUNSEL December 17, 2003 03 -609 This responds to your letter of November 13, 2003, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 1: § 1101 et seq., presents any prohibition or restrictions upon a county commissioner witF respect to a current lease agreement between the county commissioner and the county, which lease agreement was entered into prior to his assuming office, and which lease agreement contains an option to renew for an additional five -year term. Facts: On behalf of Bruce K. Barclay ( "Barclay "), a recently elected �missioner for Cumberland County ( "County "), you seek an advisory from the State Ethics Commission. You have submitted facts, which may be fairly summarized as follows. Barclay's term as County Commissioner commences in January 2004. The County Code, 16 P.S. § 101 et sect, establishes Barclay's responsibilities as a County Commissioner. As per the County Code, the Board of Commissioners has the authority to exercise the corporate power of the County, adopt resolutions and ordinances prescribing the manner in which the powers of the County shall be carried out, and generally regulate the County affairs. On January 1, 2000, rior to winning the election as County Commissioner, Barclay, as landlord, executed p a lease agreement with the County to lease office space to the County for use as offices for a district justice. The five -year lease term expires on Lundblad/Barclay, 03 -609 December 17, 2003 Page 2 December 31, 2004, which term may be renewed at the option of the County for an additional five -year term through December 31, 2009. You state that when the Board of Commissioners considers renewing the lease, Barclay intends to abstain from voting, and prior to any vote being taken, to publicly disclose the abstention and the nature of his interest both orally and in a written memorandum to be included in the minutes of the Board of Commissioners in accordance with Section 1103(j) of the Ethics Act. In addition to Section 11030 of the Ethics Act, you opine that Section 1103(f) would also apply to the submitted - acts. You seek confirmation from the State Ethics Commission that continuation and renewal of the lease will not be prohibited by Section 1103(f) of the Ethics Act provided Barclay abstains from participating in any matter relating to the renewal or administration of the lease. 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. Upon assuming office as a County Commissioner, Barclay will be a public official subject to the provisions of the Ethics 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. Lundblad /Barclay, 03 -609 December 17, 2003 Page 3 "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, 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 Lundblad /Barclay, 03 -609 December 17, 2003 Page 4 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 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). Lundblad/Barclay, 03 -609 December 17, 2003 Page 5 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 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. Upon assuming office as a County Commissioner, Barclay 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 Barclay or a member of his immediate family is associated, or business client(s). Barclay would specifically have a conflict of interest as to matters pertaining to his lease agreement with the County, such as rental payments made to Barclay by the County, a renewal of the lease between Barclay and the County, or a new lease between Barclay and the County. In each instance of a conflict, Barclay 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, you state that the lease agreement was entered into prior to Barclay's election to the office of County Commissioner. You further state that the lease agreement contains an option to renew for an additional five -year term. As to the pre- existing lease agreement between Barclay and the County, Section 1103(f) of the Ethics Act would have no application. As to a possible renewal by the County, you are advised as follows. Where a renewal of the lease would result in a continuation of the original lease, Section 1103(f) also would not apply. See, Spodek v. USA, 26 F. Supp. 2d 750 (E.D. Pa. 1998), (wherein the United States District Court for the Eastern District of Pennsylvania found that the exercise by a lessee of a renewal option contained in the original lease is merely a continuation of the original lease). However, where Barclay would enter into a new lease with the County while serving as a County Commissioner, whether such new lease be in nature of a lease extension with changes in material terms and conditions, or an entirely new lease, such new lease agreement, if over, $500, would be subject to the restrictions of Section 1103(f). 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. Specifically not addressed herein is the applicability of the County Code. Lundblad/Barclay, 03 -609 December 17, 2003 Page 6 Conclusion: Upon assuming office as a Commissioner for Cumberland County ("County"), Bruce K. Barclay ( "Barclay ") will be a ublic official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. As a County Commissioner, Barclay 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 Barclay or a member of his immediate family is associated, or business client(s). Barclay would specifically have a conflict of interest as to matters pertaining to his lease agreement with the County, such as rental payments made to Barclay by the County, a renewal of the lease between Barclay and the County, or a new lease between Barclay and the County. In each instance of a conflict, Barclay would be required to abstain and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. In that Barclay entered into the lease agreement with the County prior to his election to the office of County Commissioner, Section 1103(f) of the Ethics Act would have no application. Where the County would exercise its option to renew the lease, and such renewal would result in a continuation of the original lease, Section 1103(f) also would not apply. However, where Barclay would enter into a new lease with the County while serving as a County Commissioner, whether such new lease be in nature of a lease extension with changes in material terms and conditions, or an entirely new lease, such new lease agreement, if over, $500, would be subject to the restrictions of Section 1103(f). 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