Loading...
HomeMy WebLinkAbout03-613 ZimmermanRichard A. Zimmerman 1211 Georgetown Road Middletown, PA 17057 ADVICE OF COUNSEL December 30, 2003 03 -613 Re: Conflict; Public Official /Public Employee; Construction Inspector Manager; Department of General Services; Private Employment or Business. Dear Mr. Zimmerman: This responds to your letter of November 21, 2003, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Ha.G.S. §1101 et seq., would impose prohibitions or restrictions upon a Construction Inspector Manager tor the Department of General Services with regard to involvement in a joint venture in a roofing contracting business when the business's clients may include general contractors that conduct business with the Commonwealth. Facts: As a Construction Inspector Manager for the Department of General Vices ( "DGS "), Bureau of Construction, you seek an advisory from the State Ethics Commission. You have submitted facts that may be fairly summarized as follows. In your Commonwealth position, you assist in the management of Commonwealth building construction projects throughout Central Pennsylvania. You state that these construction projects are competitively bid and are awarded to the lowest responsible bidder. You have no direct involvement with the award process. However, you do participate in certain aspects of financial negotiations with contractors, specifically, in the areas of additions and deductions to the contracts and related costs. Although you are directly involved with these negotiations, the negotiations are completed in concert with others including project architects, engineers, the Bureau of Construction and the Change Order Division, such that the final negotiations are not solely the result of your decisions. You have submitted copies of your job description and organizational chart, which documents are incorporated herein by reference. In your private capacity, you and your brother are considering a joint venture in a roofing contracting business within the Central Pennsylvania area. You would have both a financial and a working interest in the roofing business. Initially, the business would focus on local residential work, but you expect that it would later expand to include commercial construction projects. Zimmerman, 03 -613 December 30, 2003 Page 2 You make assurances that at no time would your private business bid on or complete any work directly or indirectly related to the Commonwealth. However, you are concerned about a possible conflict of interest because your business's client list could eventually include general contractors that conduct business with the Commonwealth. Based upon the foregoing facts, you ask the following four questions: (1) Whether you may engage in a private business in the construction industry and work on projects that do not involve the Commonwealth of Pennsylvania; (2) Whether it is permissible, without the perception of conflict, for you to engage in business with general contractors that conduct business with the Commonwealth as long as you do not bid on or complete Commonwealth related projects; (3) Whether you would have any conflicts of interest under any Commonwealth policies that would prevent you from conducting business with the aforesaid contractors on projects that do not involve the Commonwealth; and (4) If a conflict would exist, which rule or regulation would prohibit your involvement in the proposed roofing business. Discussion: It is initially noted that pursuant to Sections 1107(10) and (11) of the Ethics Act, 65 Pa.C.S. §1107(10), (11), advisories are issued tote requestor based upon the facts that the requestor has submitted. In issuing the advisory based upon the facts that the requestor 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 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. In your Commonwealth position as a Construction Inspector Manager for DGS, you would be considered a public employee" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. This conclusion is based upon the job e cT - sc ription, which when reviewed on an objective basis, indicates clearly that the power exists to take or recommend official action of a non - ministerial nature with respect to one or more of the following: contracting; procurement; planning; inspecting; administering or monitoring grants; leasing; regulating; auditing; or other activities where the economic impact is greater than de minimis on the interests of another person. 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 Zimmerman, 03 -613 December 30, 2003 Page 3 "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, 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(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 Zimmerman, 03 -613 December 30, 2003 Page 4 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 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. If the private employer or business with which the public official /public employee is associated or a private client would have a matter pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter. Miller, supra; Kannebecker, supra. A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official/ public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 11030) set forth above. The abstention requirement would not be limited merely to voting, but would extend 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. Based upon the submitted facts, the proposed roofing contracting business would be considered a business with which you and your brother, an immediate family member, would be associated. Therefore, pursuant to Section 1103(a) of the Ethics Act, in your capacity as a Construction Inspector Manager for DGS, you would have a conflict of interest as to matters that would financially impact yourself, an immediate family member such as your brother, the roofing contracting business, or business client(s) such as contractors that do business with the Commonwealth. As noted above, in each instance of a conflict of interest, you would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. Having set forth the above general principles, your specific questions shall now be addressed. In response to your first question, based upon the facts that you have submitted, you are advised that Section 1103(a) of the Ethics Act would not preclude you from engaging in a private business in the construction industry and working on projects that do not involve the Commonwealth of Pennsylvania, conditioned upon your conformity with Section 1103(a) and specifically the following requirements: (1) your private business activities could not be conducted on Commonwealth time; (2) no governmental facilities, equipment, staff, or resources could be used to conduct your private business activities; and (3) there could be no use of the authority of your Commonwealth position Zimmerman, 03 -613 December 30, 2003 Page 5 or confidential information received by being in that position for the solicitation of private clients or the advancement of your private business interests. In response to your second and third questions, you are advised as follows. The Ethics Act does not address the "perception" of conflict, but rather, actual conflict(s). The Ethics Act would not prohibit you in your private capacity from engaging in business with general contractors that conduct business with the Commonwealth. However, because a business relationship would exist between you /your business and such general contractors, then in your capacity as a Construction Inspector Manager for DGS, you would have a conflict of interest under Section 1103(a) of the Ethics Act as to matters involving such general contractors. See, Miller, supra; Kannebecker, supra. See, also, Snyder v. State Ethics Commission, 686 A.2d 843 (Pa. Commw. 1996), alloc. 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). As for any other Taws, restrictions, policies or requirements that may apply to you, such would be beyond the jurisdiction of the State Ethics Commission to address. In this regard, it is strongly recommended that you contact an attorney and your human resource office for further guidance. Your fourth question has been fully addressed above. This Advice is limited to addressing the applicability of Section 1103(a) of the Ethics Act. It is expressly assumed that there has been no use of authority of office for a private pecuniary benefit as prohibited by Section 1103(a) of the Ethics Act. Further, you are advised that Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /public employee and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public 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. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation, policy 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 Governor's Code of Conduct or the State Adverse Interest Act. Conclusion: As a Construction Inspector Manager for the Department of General Services ("DGS"), Bureau of Construction, you are a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq. A proposed roofing contracting business that would be a joint venture involving you and your brother, and in which you would have both a financial and working interest, would be considered a business with which you and your brother, an immediate family member, would be associated. Section 1103(a) of the Ethics Act would not preclude you from such outside employment /business activity subject to the restrictions and qualifications as noted herein. In your capacity as a Construction Inspector Manager for DGS, you would have a conflict of interest as to matters that would financially impact yourself, an immediate family member such as your brother, your roofing contracting business, or business client(s) such as contractors that do business with the Commonwealth. In each instance of a conflict of interest, you would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. It has been recommended that you contact an attorney and your human resource office for further guidance. Zimmerman, 03 -613 December 30, 2003 Page 6 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(hl. 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