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HomeMy WebLinkAbout05-525 StuartADVICE OF COUNSEL March 23, 2005 Brian I. Stuart, Chairman Lackawaxen Township Board of Supervisors P.O. Box 205 Lackawaxen, PA 18435 Dear Mr. Stuart: 05 -525 Re: Conflict; Public Official /Public Employee; Township; Apprentice Building Inspector; Private Employment or Business; General Construction Contractor. This responds to your letter of February 17, 2005, by which you requested advice from the State Ethics Commission. Issue: Whether an apprentice building inspector for a second class township is prohibited or restricted by the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq., from working with, being employed by or associated with a business /person in a private capacity in addition to public service. Facts: As members of the Lackawaxen Township ( "Township ") Board of Supervisors ( "Board "), the appointing authority and employer of the Township's Apprentice Building Inspector, you seek an advisory from the State Ethics Commission. You have submitted facts, which may be fairly summarized as follows. The Board recently appointed an Apprentice Building Inspector for the Township to succeed the current Building Inspector, who will retire in the distant future. In an effort to provide the best services to the Township residents through adequate staffing, the Township is actively pursuing the Township Zoning Officer to also become certified as a building inspector. Thus, at the present time, the Township has one certified building inspector and two individuals who are in the process of seeking certification. In a private capacity, the Apprentice Building Inspector is currently employed and will remain employed as a general construction contractor within and outside the Township. You state your understanding that once the Apprentice Building Inspector is certified, he may not inspect or certify his own work in whole or in part, and that any such inspections and certifications must be done by one of the Township's alternate inspectors or an independent inspector. You state your further understanding that the position cannot and would not create an environment that would be a detriment to other contractors. You maintain that you have controls in place to avoid a conflict of interest with the position of Building Inspector and the individual's construction business. Based upon the foregoing facts, you seek guidance as to how to prevent conflicts of interest before they occur. Stuart, 05 -525 March 23, 2005 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 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. The Apprentice Building Inspector for the Township is a public official /public employee as those terms are defined under the Ethics Act, and hence the Apprentice Building Inspector 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. 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. "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. Stuart, 05 -525 March 23, 2005 Page 3 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 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 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 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; Rembold, Order 1303; Wilcox, Order 1306), or private customer(s)/client(s) (Miller, Opinion 89 -024; Kannebecker, Opinion 92 -010). In Kannebecker, supra, the State Ethics Commission determined that a township supervisor, who in his private capacity was an attorney, would have a conflict of interest as to matters before the township involving ongoing clients or client(s) for whom he was on retainer, even if he would not represent such client(s) as to the matter pending before the township. The Commission determined that as a general rule, a conflict would not exist as to former client(s), but that under certain circumstances, a conflict could exist as to former client(s) depending upon factors such as the number of prior representations of the given client and the period of time over which such occurred. Stuart, 05 -525 March 23, 2005 Page 4 The Commission has also held that a reasonable and legitimate expectation that a business relationship will form may support a finding of a conflict of interest. Amato, Opinion 89 -002. In the instant matter, the construction business that employs the Apprentice Building Inspector would be considered a business with which he is associated. The Ethics Act would not prohibit the Apprentice Building Inspector in his private capacity from continuing to do business with clients who would have matters before the Township. However, pursuant to Section 1103(a) of the Ethics Act, the Apprentice Building Inspector would generally have a conflict of interest in a public capacity in matters that would financially impact himself, the construction business, or a private client. Thus, if a matter would come before the Apprentice Building Inspector in his public capacity involving a private client, he would generally be required to abstain from participating and to satisfy the disclosure requirements of Section 1103 (j) of the Ethics Act. In this regard, it is noted that the Township will have several individuals who will be certified building inspectors; thus those individuals may serve as alternate building inspectors on jobs involving the construction business that employs the Apprentice Building Inspector. Having established the above, you are advised that as a general rule, a conflict would not exist as to former client(s), but under certain circumstances, a conflict could exist as to former client(s) depending upon factors such as the number of prior business transactions involving the given client and the period of time over which such occurred. You are further advised that the de minimis exclusion to the definition of "conflict" or "conflict of interest" precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. See, Kolb, Order 1322; Schweinsburq, Order 900. The Commission has determined the applicability of the de minimis exclusion on a case -by -case basis, considering all relevant circumstances. In the past, the Commission has found amounts ranging from $2 to approximately $300 to be de minimis. Therefore, the Apprentice Building Inspector would not have a conflict of interest as to a client from which he would receive only a de minimis (insignificant) financial benefit. 65 Pa.C.S. § 1102. See, Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004). For a client involved in multiple transactions, the aggregate financial benefit received from such transactions should be considered in order to determine whether the de minimis exclusion would be applicable. 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. Conclusion: The Apprentice Building Inspector for Lackawaxen Township "Township ") is a public official /public employee as those terms are defined under the Ethics Act, and hence the Apprentice Building Inspector is subject to the provisions of that Act. The construction business that employs the Apprentice Building Inspector would be considered a business with which he is associated. The Ethics Act would not prohibit the Apprentice Building Inspector in his private capacity from continuing to do business with clients who would have matters before the Township. However, pursuant to Section 1103(a ) of the Ethics Act, the Apprentice Building Inspector would generally have a conflict of interest in a public capacity in matters that would financially impact himself, the construction business, or a private client. Thus, if a matter would come before Stuart, 05 -525 March 23, 2005 Page 5 the Apprentice Building Inspector in his public capacity involving a private client, he would generally be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. In this regard, it is noted that the Township will have several individuals who will be certified building inspectors; thus those individuals may serve as alternate building inspectors on jobs involving the construction business that employs the Apprentice Building Inspector. As a general rule, a conflict would not exist as to former client(s), but under certain circumstances, a conflict could exist as to former client(s) depending upon factors such as the number of prior business transactions involving the given client and the period of time over which such occurred. The Apprentice Building Inspector would not have a conflict of interest as to a client from which he would receive only a de minimis (insignificant) financial benefit. For a client involved in multiple transactions, the aggregate financial benefit received from such transactions should be considered in order to determine whether the de minimis exclusion would be applicable. 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