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HomeMy WebLinkAbout05-551 MeadAnthony P. Litwin, III, Esquire 24 East Tioga Street Tunkhannock, PA 18657 Dear Mr. Litwin: ADVICE OF COUNSEL June 10, 2005 05 -551 Re: Conflict; Public Official; Executive Board Member; Regional Planning and Development Commission; County Commissioner; Business With Which Associated; Contract. This responds to your letter of May 6, 2005, 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 member of the executive board of a regional planning and development commission who is also a county commissioner with regard to participating in a vote by the executive board to award a contract to a business with which she is associated, and having any involvement as to overseeing that contract. Facts: As the Solicitor for the Northern Tier Regional Planning and Development Commission ( "Commission "), you seek an advisory on behalf of Judy Mead ( "Mead "), a member of the Commission's Executive Board. You have submitted facts that may be fairly summarized as follows. The Commission is organized as a multi - county planning agency under the Pennsylvania Municipalities Planning Code and a Local Development District under the Local Development District Act. You state your belief that the Commission is a political subdivision as defined by the regulations. The Commission's Executive Board is comprised of two county commissioners from each member county. Mead is a commissioner of Wyoming County. In a private capacity, Mead serves on the Board of Directors of Trehab, Inc. ( "Trehab "), a Pennsylvania non - profit corporation that, inter alia, administers the Litwin /Mead, 05 -551 June 10, 2005 Page 2 Workforce Investment Act regionally, which involves awarding job training subcontracts under the Federal Workforce Investment Act of 1998. Mead serves on Trehabs's Board without compensation other than mileage reimbursement for attendance at meetings. You state that the Commission awarded a subcontract to Trehab through an open and public process. You further state that Mead did not participate to any extent in the award of the subcontract or attend meetings where discussions of Trehab took place. You state that there has been much discussion by the Executive Board of the Trehab subcontract. Based upon the foregoing facts, you pose the following specific inquires: 1. Whether Mead, as an Executive Board Member of the Commission, would have a conflict of interest under the Ethics Act in participating in the award of a contract to Trehab; and 2. Whether Mead, as an Executive Board Member of the Commission, may have any oversight of a contract awarded by the Commission to Trehab. 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. It is further initially noted that pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, the Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint, which will be investigated by the Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may, and shall be addressed. As a Wyoming County Commissioner, Judy Mead ( "Mead ") is a public official as that term is defined in the Ethics Act, and hence she is subject to the provisions of that Act. As to Mead's position as a member of the Executive Board of the Northern Tier Regional Planning and Development Commission ( "Commission "), the facts that you have submitted merely indicate that the Commission is a political subdivision, but do not indicate whether the Commission is a purely advisory body. Under the Ethics Act, the definition of "public official" excludes "members of advisory boards that have no authority to expend public funds other than reimbursement for personal expense, or to otherwise exercise the power of the State or any political subdivision thereof." 65 Pa.C.S. § 1102. Therefore, it is assumed for purposes of this advisory that as a member of the Executive Board of the Commission, Mead is also a public official subject to the Ethics Act. Section 1103(a) of the Ethics Act provides: § 1103. Restricted activities Litwin /Mead, 05 -551 June 10, 2005 Page 3 (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. "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 Litwin /Mead, 05 -551 June 10, 2005 Page 4 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: (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 Litwin /Mead, 05 -551 June 10, 2005 Page 5 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 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, 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- 10). If the private employer or business with which the public official /public employee is associated or a private customer /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 Litwin /Mead, 05 -551 June 10, 2005 Page 6 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. Having established the above general principles, your specific inquiries shall now be addressed. In response to your first question, given Mead's position as a member of the Board of Directors of Trehab, Trehab would be considered a business with which Mead is associated regardless of the fact that Mead does not receive compensation in such capacity. Pursuant to Section 1103(a) of the Ethics Act, Mead would generally have a conflict of interest as both an Executive Board Member of the Commission and a County Commissioner in matters that would financially impact herself, Trehab or Trehab's client(s). Mead would specifically have a conflict of interest in participating in the review or selection of bids or proposals, and voting to award a contract to Trehab. A conflict would exist even as to action to eliminate competitor(s), where such action would assure or increase the possibility that the governing body, whether it be the Executive Board of the Commission or the Wyoming County Board of Commissioners, would award the contract to Trehab. See, Pepper, Opinion 87 -008. In each instance of a conflict, Mead would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act as set forth above. In response to your second question, where Section 1103(f) applies, its requirements must be strictly observed. Under the facts that you have submitted, the governmental bodies with which Mead would be associated would be the Commission and Wyoming County. Accordingly, any contract between Trehab and the Commission or Wyoming County, if over $500, would be subject to the restrictions of Section 1103(f). The restriction under Section 1103(f) that a public official may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body would only apply to Mead in her public capacities as an Executive Board Member of the Commission, and as a Wyoming County Commissioner. Thus, Mead, as a public official, would be prohibited from having any supervisory or overall responsibility as to the implementation or administration of a contract between Trehab and the Commission or Wyoming County. Parenthetically, although 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 may exist as to such contracting under other applicable laws including the Municipalities Planning Code, the Local Development District Act and the County Code. Therefore, it is suggested that Mead seek legal advice in that regard. 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 municipal code. Conclusion: As a Wyoming County Commissioner, Judy Mead ( "Mead ") 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. It is assumed for purposes of this advisory that as a member of the Executive Board of the Northern Tier Regional Planning and Development Commission ( "Commission "), Mead is also a public official subject to the Ethics Act. Given Mead's position as a member of the Board of Directors of Trehab Inc. "Trehab "), Trehab would be considered a business with which Mead is associated. Pursuant to Section 1103(a) of the Ethics Act, Mead would generally have a conflict of interest as both an Executive Board Member of the Commission and a County Litwin /Mead, 05 -551 June 10, 2005 Page 7 Commissioner in matters that would financially impact herself, Trehab or Trehab's client(s). Mead would specifically have a conflict of interest in participating in the review or selection of bids or proposals, and voting to award a contract to Trehab. A conflict would exist even as to action to eliminate competitor(s), where such action would assure or increase the possibility that the governing body, whether it be the Executive Board of the Commission or the Wyoming County Board of Commissioners, would award the contract to Trehab. In each instance of a conflict, Mead would be required to abstain and to fully satisfy the disclosure requirements of Section 1103(j) of the Ethics Act as set forth above. Any contract between Trehab and the Commission or Wyoming County, if over $500, would be subject to the restrictions of Section 1103(f). The restriction under Section 1103(f) that a public official may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body would only apply to Mead in her public capacities as an Executive Board Member of the Commission, and as a Wyoming County Commissioner. Thus, Mead, as a public official, would be prohibited from having any supervisory or overall responsibility as to the implementation or administration of a contract between Trehab and the Commission or Wyoming County. Although 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 may exist as to such contracting under other applicable laws including the Municipalities Planning Code, the Local Development District Act and the County Code. Therefore, it is suggested that Mead seek legal advice in that regard. 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 requester 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