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HomeMy WebLinkAbout05-515 ConfidentialADVICE OF COUNSEL March 9, 2005 05 -515 Re: Conflict; Public Official; County; Council Member; Authority A; Project; Ongoing Business Relationship. This responds to your letter of February 7, 2005, by which you requested a confidential advisory 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 county council member as to participating in the matter of the county approving financing for a project undertaken by an A authority, where a B firm for which the county council member is a contracted consultant, intends to bid on the project, and the council member stands to financially benefit should the B firm be awarded the contract. Facts: As a Council Member for County C, you seek a confidential advisory based upon facts contained in a letter originally submitted by the County Clerk to the State Ethics Commission dated [date]. You have submitted a copy of the County Clerk's letter, which letter is incorporated herein by reference. The pertinent facts relative to your inquiry may be fairly summarized as follows. Pursuant to its Home Rule Charter, County C is governed by a seven - member County Council and a County Executive. A copy of the County's Home Rule Charter, the County Government Organization Chart, and a portion of the County Administrative Code have been submitted, which documents are incorporated herein by reference. Authority A is proposing to construct a D (the "Project" ) to be financed with bonds backed by the full faith and taxing power of the County. Authority A is doing all the hiring for the Project; County Council is only being asked to approve the Project's financing. In a private capacity, you are a contracted consultant for E, a B firm in City F. E has indicated that it plans to bid on part of the Project. Given that you stand to financially gain should E be awarded the contract, you express concerns about transgressing Sections 1103(a) and 1103(j) of the Ethics Act. Confidential Advice, 05 -515 March 9, 2005 Page 2 You ask whether you may participate in votes or discussions relative to the guarantee of Authority A bonds. 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 requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester 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 requester 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 requester has truthfully disclosed all of the material facts. As a County Council Member, 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 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. 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. Confidential Advice, 05 -515 March 9, 2005 Page 3 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 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, it is noted that Section 1103(a) of the Ethics Act does not prohibit public officials /public employees from having outside business activities or employment; however, the ublic 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; Rembold, Order 1303; Wilcox, Order 1306), or private customer(s)/client(s) (Miller, Opinion 89 -024; Kannebecker pinion 92 -010). A reasonable and legitimate expectation that a business relationship will form may also support a finding of a conflict of interest. Amato, Opinion No. 89 -002; Garner, Opinion No. 93 -004; Snyder, Order No. 979 -2, Confidential Advice, 05 -515 March 9, 2005 Page 4 affirmed Snyder v. SEC, 686 A.2d 843 (Pa. Cmwlth. 1996), alloc. den., No. 0029 M.D. Allocatur Docket 1997 (Pa. December 22, 1997). 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 considering the above, you have an ongoing business relationship with E. Pursuant to Section 1103(a) of the Ethics Act, as a public official, you would generally have a conflict of interest in matters that would financially impact yourself or E. But for the fact that County Council will guarantee the bonds that will be issued, the Project could not go forward under the current financial arrangement. In that E intends to bid on the Project and you stand to financially benefit if E is awarded the contract, you would have a conflict of interest as to participating in the matter of the County approving financing for the Project. In each instance of a conflict of interest, you would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. 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 respective County Code. Conclusion: As a Council Member for County C, 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. In response to the question of whether you would have a conflict of interest as to participating in the matter of the County approving financing for a project ( "the Project ") undertaken by Authority A, where E, a B firm for which you are a contracted consultant, intends to bid on the Project, you are advised as follows. Because you have an ongoing business relationship with E, pursuant to Section 1103(a) of the Ethics Act, as a public official, you would generally have a conflict of interest in matters that would financially impact yourself or E. But for the fact that County Council will guarantee the bonds that will be issued, the Project could not go forward under the current financial arrangement. In that E intends to bid on the Project and you stand to financially benefit if E is awarded the contract, you would have a conflict of interest as to participating in the matter of the County approving financing for the Project. In each instance of a conflict of interest, you would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. 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. Confidential Advice, 05 -515 March 9, 2005 Page 5 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