Loading...
HomeMy WebLinkAbout04-599 ClarkPaul D. Clark, CPE Secretary P & J Consulting, Inc. P.O. Box 656 Hershey, PA 17033 -0656 Dear Mr. Clark: ADVICE OF COUNSEL November 5, 2004 04 -599 Re: Conflict; Public Official; Township; Supervisor; Former School Director; Member; Municipal Authority; Planning Commission; Private Business; Business Relationship; Township Engineer; Contract/Subcontract With Engineering Firms. This responds to your letter of October 6, 2004, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., presents any prohibition or restrictions upon a township supervisor with regard to entering into contracts /subcontracts with engineering firms throughout Central Pennsylvania through a private business formed by the township supervisor and his daughter to perform engineering work on projects outside of the county in which the township is located. Facts: You currently serve on the Board of Supervisors of Derry Township, having been elected to your third six -year term and having served for more than twelve years. In July 2003, after over 20 years of service, you retired from Milton Hershey School as the Director, Office of Project Management. Prior to your tenure with Milton Hershey School, you were employed as a Project Manager with Gannett Fleming Engineers in Harrisburg. You hold a degree in civil engineering and have a certified plant engineer's certificate with the Association for Facilities Engineering. You and your daughter have developed an "S" Corporation. You are considering returning to work in an effort to develop this enterprise with and for your daughter. You ask what limitations the Ethics Act would impose upon your efforts to solicit work from any of the engineering firms throughout Central Pennsylvania. You state that you have had contact with most, if not all, of these firms either directly or indirectly since entering public service. Clark, 04 -599 November 5, 2004 Page 2 In a telephone conversation with Commission staff on November 3, 2004, you provided the additional factual statements. You currently serve on the Derry Township Municipal Authority, the Derry Township General Authority, the Dauphin County Industrial Development Authority, the Dauphin County Planning Commission, and the Tri- County Regional Planning Commission. You state that the Dauphin County Planning Commission and the Tri- County Regional Planning Commission are both purely advisory bodies. Through the "S" Corporation, you wish to contract /subcontract with engineering firms throughout the Central Pennsylvania area to perform work on projects outside of Derry Township and Dauphin County. Given the foregoing facts, you pose the following specific inquiries: 1. Whether you may, through the "S" Corporation, enter into a subcontract with the firm that happens to be the Township Engineer to perform engineering work on projects outside of Dauphin County; 2. Whether you may, through the "S" Corporation, enter into a contract with a firm that works as a sub - consultant to a firm currently doing business with one or more of the authorities or commissions on which you serve; 3. If dealing with such firms is impermissible while you are in public office, whether you must be separated from public office for a certain period of time before you may seek and /or accept employment either as a contractor or an employee. 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 Township Supervisor, you are a public official as that term is defined in the Ethics Act, and hence you are 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. 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 Clark, 04 -599 November 5, 2004 Page 3 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. "Immediate family." A parent, spouse, child, brother or sister. "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. 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(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 Clark, 04 -599 November 5, 2004 Page 4 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 the instant matter, pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary 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. 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 loeing 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 1103(j) 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. In the instant matter, the "S" Corporation that you have formed with your daughter would be considered a business with which you and your daughter, an immediate family member, are associated. Pursuant to Section 1103(a) of the Ethics Act, as a Township Supervisor, you would generally have a conflict of interest in matters Clark, 04 -599 November 5, 2004 Page 5 that would financially impact yourself, your daughter, the "S" Corporation or private client(s). In each instance of a conflict, you would be required to abstain from participating and to satisfy the disclosure requirements under Section 1103(j) of the Ethics Act. Having established the above general principles, your specific inquiries shall now be addressed. In response to your first question which asks whether you may, through the "S" Corporation, enter into a subcontract with the firm that happens to be the Township Engineer to perform engineering work on projects outside of Dauphin County, you are advised that the Ethics Act would not preclude such an arrangement, absent the element of a prohibited private pecuniary benefit or an improper understanding under Section 1103(b) or Section 1103(c) of the Ethics Act. Thus, as a Township Supervisor, you would be prohibited under Section 1103(a) of the Ethics Act from using the authority of office or confidential information to promote business dealings between the Township Engineer and the "S" Corporation or to eliminate any competitors. See, Pepper, Opinion 87 -008. In addition, where such a business relationship would exist, you would have a conflict of interest under Section 1103(a) of the Ethics Act in any matter involving the Township Engineer, including the reappointment and compensation of the Township Engineer, and any projects or plans prepared by the Township engineer submitted to the Township for approval. In response to your second question which asks whether you may, through the "S" Corporation, enter into a contract with a firm that works as a sub - consultant to a firm currently doing business with one or more of the authorities or commissions on which you serve, you are advised that Section 1103(a) of the Ethics Act would not prohibit such an arrangement absent the element of a prohibited private pecuniary benefit or an improper understanding under Section 1103(b) or Section 1103(c) of the Ethics Act. However, because a business relationship would exist between the `S" Corporation and the sub - consultant firm, as a public official, you would have a conflict of interest in any matter involving the sub - consultant firm, including any projects or plans prepared by the sub - consultant firm. It is parenthetically noted that as a member of the Dauphin County Planning Commission and the Tri- County Regional Planning Commission, you would not be considered a "public official" as that term is defined under the Ethics Act based upon your factual representation that they are both purely advisory bodies. Your third question need not be addressed in that the Ethics Act would not prohibit you from entering into contracts /subcontracts with engineering firms in the Central Pennsylvania area while you are in public office conditioned upon the restrictions and qualifications noted above. It is parenthetically noted that the one year restriction under Section 1103(g) of the Ethics Act which applies to former public officials /public employees expired as to the Milton Hershey School in July 2004. See, 65 Pa.C.S. § 1103(g). 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 Second Class Township Code and the Municipality Authorities Act. Conclusion: As a Supervisor for Derry Township, you are a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The "S" Corporation that you have formed with your daughter would be considered a business with which you and your daughter, an immediate family member, are associated. Pursuant to Section 1103(a) of the Ethics Act, as a Township Supervisor, you would generally have a conflict of interest in matters that would financially impact yourself, your daughter, the "S" Corporation or private client(s). In each instance of a conflict, you would be required to abstain from participating and to satisfy Clark, 04 -599 November 5, 2004 Page 6 the disclosure requirements under Section 1103(j) of the Ethics Act. You may, through the "S" Corporation, enter into a subcontract with the firm that happens to be the Township Engineer to perform engineering work on projects outside of Dauphin County, absent the element of a prohibited private pecuniary benefit or an improper understanding under Section 1103(b) or Section 1103(c) of the Ethics Act. However, where such a business relationship would exist, you would have a conflict of interest under Section 1103(a) of the Ethics Act in any matter involving the Township Engineer, including the reappointment and compensation of the Township Engineer, and any projects or plans prepared by the Township engineer submitted to the Township for approval. In addition, you may, through the `S" Corporation, enter into a contract with a firm that works as a sub - consultant to a firm currently doing business with one or more of the authorities or commissions on which you serve, absent the element of a prohibited private pecuniary benefit or an improper understanding under Section 1103(b) or Section 1103(c) of the Ethics Act. However, because a business relationship would exist between the "S" Corporation and the sub - consultant firm, as a public official, you would have a conflict of interest in any matter involving the sub - consultant firm, including any projects or plans prepared by that firm. As a member of the Dauphin County Planning Commission and the Tri- County Regional Planning Commission, you would not be considered a "public official" as that term is defined under the Ethics Act based upon your factual representation that they are both purely advisory bodies. The one year restriction under Section 1103(g) of the Ethics Act which applies to former public officials /public employees expired as to the Milton Hershey School in July 2004. 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