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HomeMy WebLinkAbout06-509 BrazilJohn J. Brazil, Jr., Esquire 310 -312 Adams Avenue, Suite 200 Scranton, PA 18503 Re: Conflict; Loan /Grant Program; Participation by Public Official; Borough; Council Member; Zoning Hearing Board; 2005 Home Program; Department of Community and Economic Development. Dear Mr. Brazil: ADVICE OF COUNSEL January 26, 2006 06 -509 This responds to your letter of December 23, 2005, by which you requested advice from the State Ethics Commission. Issue: Whether, pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S.. § 1101 et seq., a borough council member or a zoning hearing board member may participate in a grant program administered by an independent contractor for the borough. Facts: As Solicitor for the Borough of Moosic ( "Borough "), you have been authorized to seek an advisory on behalf of a newly elected Borough Council Member. You have submitted facts, the material portions of which may be fairly summarized as follows. On March 2, 2005, the Borough received a grant through the Department of Community and Economic Development ( "DCED ") under DCED's 2005 Home Program to be used by low income individuals for property rehabilitation. In order to qualify for the Program, applicants had to establish that they resided in the Borough and met Section 8 guidelines. The Administrator for the Program, an independent contractor for the Borough, advertised for potential applicants who were selected on a "first come, first serve" [sic] basis. On or about May 23, 2005, prior to being elected, the Borough Council Member submitted an application to participate in the Program. At the time the application was submitted, the Council Member -elect was serving as a Zoning Hearing Board Member. The application was preliminarily approved subject to income verifications. In November 2005, the Borough Council Member won the election. You state that a question has now arisen as to whether a member of the Borough Council or Zoning Hearing Board would be eligible to receive a grant under the Program. You note that the Council Member, while serving as a Zoning Hearing Board Member, did not vote on any matters relating to the disbursement of funds or participate in legislative actions of Council. You further note that none of the funds are in the Borough's possession at the present time. Based upon past discussions with the Administrator overseeing the Brazil, 06 -509 January 26, 2006 Page 2 Program, you state your understanding that those funds probably will not be disbursed until after the first of the year when they will be drawn down, placed into the Borough's account, and distributed by the Borough. Based upon the foregoing facts, you pose the following two specific inquiries: 1. Whether a Borough Council Member would have a conflict of interest in receiving a grant under the Program if funds would not be disbursed until he would take office as a Borough Council Member; and 2. Whether a Zoning Hearing Board Member who was a Council Member -elect would have a conflict of interest in receiving a grant under the Program if funds would be disbursed prior to taking office as a Borough Council Member. 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. A Borough Council Member and a Zoning Hearing Board Member would be considered public officials subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act provide as follows: § 1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. (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. Brazil, 06 -509 January 26, 2006 Page 3 65 Pa.C.S. §§ 1103(a), (j). The following terms that pertain to conflicts of interest under the Ethics Act are defined 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. 65 Pa.C.S. § 1102. Section 1103(f) of the Ethics Act, which pertains to contracting, 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). The following terms that pertain to Section 1103(f) are defined in the Ethics Act as follows: Brazil, 06 -509 January 26, 2006 Page 4 § 1102. Definitions "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. "Governmental body." Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. 65 Pa.C.S. § 1102. In applying the above provisions of the Ethics Act to your inquiry, Section 1103(a), which pertains to conflicts of interest, shall be considered first. The stated purpose of the Ethics Act is to strengthen the faith and confidence of the people in their government by assuring the public that the financial interests of the holders of or candidates for public office do not conflict with the public trust. 65 Pa.C.S. § 1101.1. Section 1103(a) of the Ethics Act in particular prohibits a public official /public employee from using the authority of public office /employment or confidential information received by 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. The Commission recognizes that public concern and criticism may arise if a public official or public employee who serves a governmental body receives benefits under the very program which that governmental body administers. On the other hand, the Ethics Act was not enacted nor should it be interpreted to preclude public officials or public employees from participating in programs which might otherwise be available to them as citizens, as long as the restrictions of the Ethics Act are observed. Wolff, Opinion 89 -030; Woodrinq, Opinion 90 -001. In order to ensure that a public official or public employee does not have a conflict of interest when he, as a citizen, seeks to participate in a loan or grant program administered by the governmental body which he serves, he must: 1. play no role in establishing the criteria under which the program is to operate, particularly with reference to the structure or administration of the program; 2. play no role in establishing or implementing the criteria by which selections for program participation are to be made; Brazil, 06 -509 January 26, 2006 Page 5 3. play no role in the process of selecting and reviewing applicants or in awarding grants or funds; 4. use no confidential information acquired during the holding of public office or public employment to apply for or to obtain such funds, grants, etc., and 5. abstain and satisfy the disclosure requirements of Section 1103(j) above in cases where the public official /public employee is associated with administering the loan or grant program. The abstention and disclosure would be required not only as to his own application, but also as to similarly situated individuals with whom the public official /public employee might be competing for available funds. As for Section 1103(f), it is noted that this sort of program may require participants to enter into contracts and /or subcontracts. If a Borough Council Member or a Zoning Hearing Board Member, as a participant in this Program, would enter into a contract with the Borough, the governmental body with which the he is associated, or would enter into a subcontract with any "person" (as defined above) who has a contract with the said governmental body, Section 1103(f) of the Ethics Act would impose the following requirements if the contract or sub - contract would be valued at $500.00 or more: 1. prior public notice of the contract possibility; 2. public disclosure of applications and contracts considered; 3. public disclosure of the award of the contracts; and 4. no supervisory or overall responsibility for the implementation or administration of the contract or sub - contract by the public official /employee. Thus, as long as a Borough Council Member or a Zoning Hearing Board Member observes the restrictions of Sections 1103(a), 1103(f) and 1103(j) of the Ethics Act as detailed above, he may apply for and participate in the benefits associated with the Borough's 2005 Home Program. The timing of the disbursement of grant monies is of no legal consequence. This Advice is limited to addressing the applicability of Sections 1103(a), 1103(f) and 1103(j) 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 /employee 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. 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 Code of Federal Regulations or the Borough Code. Conclusion: A Moosic Borough ( "Borough ") Council Member and a Borough Zoning Hearing Board Member would be considered public officials subject to the provisions of the Public Official and Employee Ethics Act, ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Section 1103(a) of the Ethics Act would not preclude such public officials from applying to participate in the Borough's 2005 Home Program provided they played no role in Brazil, 06 -509 January 26, 2006 Page 6 establishing the criteria under which the program would operate, played no role in implementing the criteria for selecting applicants, played no role in selecting or reviewing applicants, used no confidential information and finally had no involvement with the administration of the program. The requirements of Section 1103(j) of the Ethics Act noted above must be observed. The requirements of Secion1103(f) of the Ethics Act noted above, to the extent applicable, must be 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 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