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HomeMy WebLinkAbout05-585 ToothmanFarley Toothman, Esquire 183 South Morris Street Waynesburg, PA 15370 ADVICE OF COUNSEL October 24, 2005 05 -585 Re: Public Official /Employee; County; Solicitor; President of Board of Directors of Private Non - Profit Entity; Business With Which Associated. Dear Mr. Toothman: This responds to your letter of September 26, 2005, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., imposes any prohibition or restrictions upon a county solicitor with regard to continuing to serve on the board of directors of a non - profit private organization that serves as the administrative agent of the county's recycling program. Facts: You have served as Solicitor for the County of Greene ( "County ") for the past two years. As Solicitor, you are a salaried employee who receives a benefit package comparable to that of a full -time County employee. You work for the Board of Commissioners and their various departments practicing primarily in the areas of administrative law and contracts. You state that the County maintains a contract with another local attorney with whom you are not affiliated, who performs highly specialized legal work for the County's Human Service Department. As a volunteer, you were recently re- elected to your second year as the President of the Board of Directors of the Greene Association of Retarded Citizens, ( "GreeneARC "), having served on the Board for approximately five years. GreeneARC is a well established local private non - profit agency that provides program services for about 65 mentally retarded clients and functions as the administrative agent of the County's recycling program. GreeneARC clients work at the recycling facility on GreeneARC property. Eighty -five percent of GreeneARC funding comes from service contracts provided by Greene County's Office of Human Services, while the other 15% comes from clients GreeneARC serves from Washington County. You state that as an administrative matter, you as the County Solicitor are not involved in the awarding of contracts to GreeneARC as such function is vested in the County Human Services Advisory Board, which authorizes agencies like GreeneARC to be a "provider." Contracts between the County and agencies Toothman, 05 -585 October 24, 2005 Page 2 like GreeneARC are considered on a client by client basis. You state that you do not serve as a member of the County Human Services Advisory Board and do not appear before that Board. You further state that you have no involvement in the awarding of contracts as either County Solicitor or President of the Board of Directors of GreeneARC. Based upon the foregoing facts, you ask whether you as County Solicitor may continue to serve as President of GreeneARC. 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 facts that you have submitted indicate that as Solicitor of the County of Greene ( "County "), you are an employee of the County who receives a benefit package comparable to that of a full -time County employee. Based upon these facts, you would be considered a "public official" or "public employee" subject to the provisions of the Ethics Act. See, PJS v. State Ethics Commission, 555 Pa. 149, 723 A.2d 174 (1999). Compare, CPC v. State Ethics Commission, 698 A.2d 155 (Pa. Cmwlth. 1997), alloc. den., 550 Pa. 686, 704 A.2d 640 (1997) (Retained - -as opposed to employed -- solicitors are not public officials /public employees under 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 Toothman, 05 -585 October 24, 2005 Page 3 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. "Financial interest." Any financial interest in a legal entity engaged in business for profit which comprises more than 5% of the equity of the business or more than 5% of the assets of the economic interest in indebtedness. "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 Toothman, 05 -585 October 24, 2005 Page 4 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 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 Toothman, 05 -585 October 24, 2005 Page 5 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 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 client(s) 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. 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, GreeneARC would be considered a business with which you as President of the Board of Directors are associated. Pursuant to Section 1103(a) of the Ethics Act, you would generally have a conflict of interest in your public capacity as County Solicitor in matters that would financially impact yourself, GreeneARC, or private customer(s) /client(s). You would specifically have a conflict of interest in matters relating to any contract(s) between GreeneARC and the County. In each instance of a conflict of interest, you would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. 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. Toothman, 05 -585 October 24, 2005 Page 6 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 $400 to be de minimis. Therefore, you are advised that you would not have a conflict of interest as to a client from which GreeneARC 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. With respect to Section 1103(f) of the Ethics Act, the submitted facts indicate that GreeneARC may currently be under contract with the County as the administrative agent of the County's recycling program. Under Section 1103(f), you as the County Solicitor would be prohibited from having any supervisory or overall responsibility for the implementation or administration of the contract. 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 the County Code. In this regard, you are advised that the State Ethics Commission does not have the statutory jurisdiction to interpret the County Code. 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. Conclusion: As Solicitor of the County of Greene ( "County "), 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 Greene Association of Retarded Citizens ( "GreeneARC ") would be considered a business with which you as President of the Board of Directors are associated. Pursuant to Section 1103(a) of the Ethics Act, you would generally have a conflict of interest in your public capacity in matters that would financially impact yourself, GreeneARC, or private client(s). You would specifically have a conflict of interest in matters relating to any contract(s) between GreeneARC and the County. In each instance of a conflict of interest, you would be required to abstain from participating and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. You would not have a conflict of interest as to a client from which GreeneARC 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. With respect to Section 1103(f) of the Ethics Act, the submitted facts indicate that GreeneARC may currently be under contract with the County as the administrative agent of the County's recycling program. Under Section 1103(f), you as the County Solicitor would be prohibited from having any supervisory or overall responsibility for the implementation or administration of the contract. 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 the County Code. 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 Toothman, 05 -585 October 24, 2005 Page 7 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