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HomeMy WebLinkAbout04-603 EvankoRonald Evanko 31 East Chestnut Street Blairsville, PA 15717 Dear Mr. Evanko: ADVICE OF COUNSEL November 30, 2004 04 -603 Re: Conflict; Public Official /Employee; Borough; Council Member; Immediate Family; Daughter; Son -in -Law; Business With Which Associated; Transfer of Borough Police Pension to Bank That Employs Daughter and Son -in -Law; Contract. This responds to your letter of October 14, 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., would present any prohibition or restrictions upon a borough council member whose daughter and son -in -law are employed by a bank, in matters pertaining to the proposed transfer of the borough police pension from the current holder /advisor to another financial institution, and particularly, to the bank that employs his daughter and son -in -law. Facts: As a Borough Council Member for the Borough of Blairsville ( "Borough "), you seek an advisory from the State Ethics Commission. You have submitted facts that may be fairly summarized as follows. The Borough is currently considering transferring the Borough Police Pension from the current holder /advisor to another financial institution. One of the financial institutions that the Borough will be interviewing and considering is a bank that employs your daughter and son -in -law. You state that neither your daughter nor son -in -law has any involvement with the bank's pension department. You further state that neither your daughter nor son -in -law will be entitled to any bonuses or commissions if the Borough decides to transfer the Borough Police Pension to the bank that employs them. Based upon the foregoing facts, you ask whether the Ethics Act would present any prohibition or restrictions upon you as a Borough Council Member in matters pertaining to the proposed transfer of the Borough Police Pension from the current holder /advisor to another financial institution, and particularly, to the bank that employs your daughter and son -in -law. Evanko, 04 -603 November 30, 2004 Page 2 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 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. As a Borough Council Member, you are 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. "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 Evanko, 04 -603 November 30, 2004 Page 3 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 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: Evanko, 04 -603 November 30, 2004 Page 4 (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). In each instance of a conflict, Section 1103(j) requires the public official/ employee to abstain fully 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 Evanko, 04 -603 November 30, 2004 Page 5 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. Because the Ethics Act's definition of "immediate family" is limited to a parent, spouse, child, brother or sister, your son -in -law would not be considered a member of your "immediate family." See, Pulice v. State Ethics Cmmission, 713 A.2d 161 (Pa. Cmwlth. 1998), appeal denied, 557 Pa. 642, 732 A.2d 1211 (1998). However, your daughter is clearly a member of your "immediate family" as that term is defined in the Ethics Act. Furthermore, the bank that employs your daughter is a business with which she as a member of your immediate family is associated. Based upon the submitted facts that Borough Council may transfer the Borough Police Pension from the current holder /advisor to another financial institution, and that one of the financial institutions Borough Council will interview and consider to handle the Borough Police Pension is the bank that employs your daughter, you are advised that you would generally have a conflict of interest in your capacity as a Borough Council Member in matters pertaining to the transfer of the Borough Police Pension. You would specifically have a conflict of interest in matters pertaining to a transfer of the Borough Police Pension to the bank that employs your daughter. Pursuant to Section 1103(a) of the Ethics Act, you would also be prohibited from using the authority of your office or confidential information received by being a Borough Council Member to effectuate a detriment to business competitor(s) of the bank that employs your daughter. See, Pepper, Opinion 87 -008. In each instance of a conflict, you would be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act set forth above. You are further advised that to the extent the proposed transfer of the Borough's Police Pension would result in a contract between the bank that employs your daughter and the Borough, the restrictions and requirements of Section 1103(f) of the Ethics Act set forth above would have to be strictly observed. 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 Borough Code. Conclusion: As a Borough Council Member for the Borough of Blairsville ( "Borough "), 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. Your daughter is a member of your immediate family. The bank that employs your daughter is a business with which she as a member of your immediate family is associated. Based upon the submitted facts that Borough Council may transfer the Borough Police Pension from the current holder /advisor to another financial institution, and that one of the financial institutions Borough Council will interview and consider to handle the Borough Police Pension is the bank that employs your daughter, you would generally have a conflict of interest in your capacity as a Borough Council Member in matters pertaining to the transfer of the Borough Police Pension. You would specifically have a conflict of interest in matters pertaining to a transfer of the Borough Police Pension to the bank that employs your daughter. You would also be prohibited by Section 1103(a) of the Ethics Act from using the authority of your office or confidential information received by being a Borough Council Member to effectuate a detriment to business competitor(s) of the bank that employs your daughter. In each instance of a conflict, you would be required to abstain fully and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. To the extent the proposed transfer of the Borough's Police Pension would result in a Evanko, 04 -603 November 30, 2004 Page 6 contract between the bank that employs your daughter and the Borough, the restrictions and requirements of Section 1103(f) of the Ethics Act would have to be strictly observed. 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