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HomeMy WebLinkAbout04-534 ProciusEugene F. Hickey, II, Esquire Cipriani & Werner Suite 210, Oppenheim Building 409 Lackawanna Avenue Scranton, PA 18503 -2059 Dear Mr. Hickey: ADVICE OF COUNSEL April 28, 2004 04 -534 Re: Conflict; Public Official /Employee; City; Council Member; Business With Which Associated; Professional Services Contract; Vote. This responds to your letter of March 29, 2004, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., presents any prohibition or restrictions upon a city council member as to participating on matters involving a contract between the council member's employer and the city. Facts: You represent the City of Scranton ( "City ") and John Pocius ( "Pocius "), a City Council Member. You seek an advisory as to the propriety of the City entering into a professional services contract with Pocius' employer, and Pocius voting on that professional services contract. You have submitted facts, the relevant portions of which may be fairly summarized as follows. In a private capacity, Pocius is employed as a salaried engineer with CECO Associates, Inc. ( "CECO "), a professional civil engineering firm located within the City. In addition, Pocius is an officer, but not an owner or a shareholder, of CECO. The City recently proposed to hire CECO to perform engineering services with respect to the construction of a new facility for the City's Police Department. The total contract amount was approximately $22,000. The contract was forwarded by the Mayor through a resolution to City Council. You state that Pocius clearly indicated his conflict of interest and advised that he would be abstaining from any vote on the contract and would not be discussing the contract with City Council. Hickey /Pocius 04 -534 April 28, 2004 Page 2 By way of background, you provide the following information. The City is a home rule municipality with a strong Mayor -City Council form of government. As required by the City's Administrative Code, the Mayor negotiates all contracts for professional services and submits them to City Council via a resolution. City Council places the resolution with the contract on its agenda for consideration. All City Council meetings are open to the public and advertised in compliance with the Sunshine Act. City Council then entertains a motion to place the resolution into committee for discussion and further consideration. The vote to place an item into committee also takes place at an open and public meeting which provides an opportunity for citizens to comment. When an item is placed into committee, City Council discusses that issue and places the resolution back on a future Council agenda for a final vote. Citizens have an additional opportunity to comment prior to the final vote. The final vote is conducted at an open and public meeting duly advertised according to the Sunshine Act. You state that the City's Administrative Code does not require the City to seek public bids or public proposals through advertising in the paper. You further state that there is no State law that requires publicly advertised bids or proposals for professional service contracts. Various members of City Council have questioned whether Pocius would have a conflict of interest with regard to voting on a professional services contract and resolution between the City and CECO. You state that Pocius has always refrained and will continue to refrain from voting on any contract involving his employer. City Council members have likewise questioned with CECO for professional engineering services while Member. The Council members have suggested that prohibits the City from contracting with his employer. provided Pocius with an opinion that although he may issues concerning his employer, the City would not be professional engineering services contract with CECO. whether the City may contract Pocius serves as City Council Pocius' tenure on City Council You state that you previously have a conflict as to voting on prohibited from entering into a As to Pocius and the City, you seek an advisory as to the legality of the City contracting for professional engineering services with CECO Associates. 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. As a City Council Member, Pocius is a public official as that term is defined in the Ethics Act, and hence he is subject to the provisions of that 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. Hickey /Pocius 04 -534 April 28, 2004 Page 3 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 loenefit 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. "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. Hickey /Pocius 04 -534 April 28, 2004 Page 4 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 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 Hickey /Pocius 04 -534 April 28, 2004 Page 5 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). 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, Pavlovic, Opinion 02 -005. 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. Hickey /Pocius 04 -534 April 28, 2004 Page 6 In considering the above, CECO, of which Pocius is an officer and employee, would be considered a business with which he is associated. See, Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102. Pursuant to Sections 1103(a) and 1103(j) of the Ethics Act, as a City Council Member, Pocius would have a conflict of interest and could not participate as to matters that would financially impact himself, CECO, or business client(s). Having established the above general principles, your specific inquiries shall now be addressed. As to the propriety of the City entering into a professional services contract with Pocius' employer, you are advised that your inquiry as it relates to the City cannot be addressed within the statutory parameters of the Ethics Act, § 1107(10), (11), because the inquiry relates to the conduct of a governmental body, over which the Commission has no jurisdiction. The Ethics Act regulates the conduct of public officials /public employees. Where Section 1103(f) applies, its requirements must be strictly observed. See, Bixler v. State Ethics Commission, No. 2371 C.D. 2003 (Pa. Commw. Ct. April 26, 2004). Under Section 1103(f), Pocius, in his capacity as a public official, would be prohibited from having any supervisory or overall responsibility for the implementation or administration of the contract. Parenthetically, even where the contracting in question would not be prohibited under the Ethics Act provided the requirements of Sections 1103(a), 1103(fl and 1103(j) are satisfied, a problem could exist as to such contracting under the 1103(f), of Scranton Administrative Code ( "Administrative Code "). It is administratively noted that the Administrative Code provides in pertinent part: ARTICLE VII CODE OF ETHICS Section 702. Conflict of Interest. No officer, member or employee of the municipal government or any municipal authority or agency to whom this code of ethics applies shall: a. Engage in or have a financial or other personal interest, in any business or transaction direct or contrived, which is incompatible with the proper discharge of his official duties. f. Vote on or participate in the selecting, award, the negotiation or the administration of any contract in which he, any member of his immediate family, his or her partner, or an organization which employs or is about to employ any of the above has a financial or other interest, real or apparent in the firm selected for the award of the Contract. Section 703. Disclosure. Any officer, member or employee to whom this code of ethics, applies who shall have any private financial interest direct or contrived in any business or transaction pending before any municipal authority or agency shall disclose such private interest to city council and the board of the authority or agency and it shall be made a matter of permanent record. The said officer, member, or Hickey /Pocius 04 -534 April 28, 2004 Page 7 employee shall disqualify himself form [sic] participating in any decision or vote relating to such business or transaction. Section 707. Contracts Voidable and Rescindable. Any contract between the municipal government, municipal authority or agency to which this code of ethics applies and another party shall be voidable or rescindable at the option of the governmental body at any time within a period of thirty (30) days from the date of execution of such contract if any member, officer or employee there of has any financial or personal interest in such contract and does not disclose such interest in accordance with the section of this code of ethics which applies to disclosure. City of Scranton Administrative Code, Art. VII, § 702(a), (f); § 703; § 707 (Emphasis in the original). The State Ethics Commission does not have the statutory jurisdiction to interpret the Administrative Code. Therefore, it is suggested that Pocius seek legal advice as to its applicability. 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. Conclusion: As a Council Member for the City of Scranton ( "City "), John Pocius ( "Pocius ") is a public official subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act "), 65 Pa.C.S. § 1101 et seq. CECO Associates, Inc. ( "CECO "), of which Pocius is an officer and employee, is a business with which he is associated. Pursuant to Sections 1103(a) and 11030) of the Ethics Act, as a City Council Member, Pocius would have a conflict of interest and could not participate as to matters that would financially impact himself, CECO, or business client(s). Where Section 1103(f) applies, its requirements must be strictly observed. Under Section 1103(f), Pocius, in his capacity as a ublic official, would be prohibited from having any supervisory or overall responsibility f the implementation or administration of the contract. Even where the contracting in question would not be prohibited under the Ethics Act provided the requirements of Sections 1103(a), 1103(f), and 1103(j) are satisfied, a problem could exist as to such contracting under the City of Scranton Administrative Code, and therefore, it is suggested that Pocius seek legal advice as to its applicability. 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 Hickey /Pocius 04 -534 April 28, 2004 Page 8 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