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HomeMy WebLinkAbout06-518 DixonPatrice B. Dixon 215 Holly Lane Lancaster, PA 17602 ADVICE OF COUNSEL February 22, 2006 06 -518 Re: Conflict; Public Official /Employee; School Director; Director of Family Center of Community Action Program; Business; Business With Which Associated; Governmental Body; Political Subdivision; Services to School District; Grant; Cash Match. Dear Ms. Dixon: This responds to your letter of January 20, 2006, 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., would impose any prohibition or restrictions upon a School Director who, in a separate capacity, is employed as Director of the Family Center of a Community Action Program that provides services to the School District and receives funding from the School District in connection with a state grant supported by the School District. Facts: As a School Director for the School District of Lancaster ( "School District "), you seek an advisory from the State Ethics Commission. You have submitted facts, the material portion of which may be fairly summarized as follows. In addition to serving as a School Director, you are employed as Director of the Lancaster Family Center ( "Family Center ") of the Community Action Program ( "CAP ") of Lancaster County. In 1990 —prior to your service either as a School Director or as Director of the Family Center — Lancaster County ( "County "), the School District, and CAP collaborated to apply for a state grant from the Department of Public Welfare to implement Family Center services in Lancaster City ( "City ") and the County. In order to be eligible for the grant, the County and School District agreed to provide the requisite 10% "local cash match" and a signature supporting the Family Center. You state that both the County and School District have fulfilled these obligations since the grant was initially awarded in 1990. The County was the grant recipient, and CAP was provided a subcontract to implement the family care services throughout the City and County. In 2002, you were hired by CAP as the Director of the Family Center. You state that Dixon, 06 -518 February 22, 2006 Page 2 the sole purpose of the Family Center is to implement programs and services throughout the City and County, including the School District. CAP /Family Center provides services to the School District in several schools, and as noted above, the School District provides a portion of the aforesaid "local cash match." The local cash match is presently in the total amount of $52,162 with the School District contributing $25,000. You state that the School District's $25,000 contribution represents approximately 4% of the total budget for the Family Center and supports the salary of a CAP employee providing services at two of the schools in the School District. You state that although the Position Description for your position as Director of the Family Center designates you as the contact for the School District, that particular responsibility has been delegated to the Assistant Director of the Family Center for as long as you are a School Director. You state that the Assistant Director of the Family Center also provides all supervision and support to staff working in schools. The CAP fiscal department is responsible for handling all matters related to any fiscal transactions between the School District, the County, and any other entity that contracts with CAP. The CAP Executive Director is the only individual authorized to bind CAP in any contractual agreement. You state that you do not vote or participate in any conversations with other School Directors of the School District regarding CAP or the Family Center. However, recently your roles have come under scrutiny, which has led to the instant request for an advisory from the State Ethics Commission. You have submitted a copy of a December 16, 2003, letter from George T. Brubaker, Esq., to Mrs. Patricia A. Sweigert, School Board Secretary, which you characterize as an opinion by the School District Solicitor regarding your employment at CAP. You have also submitted copies of the following documents, which are incorporated herein by reference: Position Description for the Director of the Family Center; Position Description for the Assistant Director of the Family Center; and Organizational Chart of the Family Center. Based upon the submitted facts, you specifically request a ruling as to the appropriateness of your remaining a School Director. You further ask whether, as a School Director for the School District, you would have conflict(s) of interest under the Ethics Act as a result of your employment as Director of the Family Center. 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 Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), 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 Dixon, 06 -518 February 22, 2006 Page 3 as to future conduct, your inquiry may and shall be addressed. As a School Director for the School District, you are a "public official" subject to the provisions of the Ethics Act. 65 Pa.C.S. § 1102; 51 Pa. Code § 11.1. In order to provide a complete response to your inquiry, numerous provisions of the Ethics Act must be considered. Sections 1103(a) and 1103(j) of the Ethics Act pertaining to conflicts provide: § 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. 65 Pa.C.S. §§ 1103(a), (j). The following terms pertaining to conflicts are defined by 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 Dixon, 06 -518 February 22, 2006 Page 4 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. 65 Pa. C. S. § 1102. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited 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. Subject to certain voting conflict exceptions, Section 1103(j) of the Ethics Act requires a public official /public employee with a conflict of interest 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. 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 pertaining 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 Dixon, 06 -518 February 22, 2006 Page 5 65 Pa.C.S. § 1103(f). 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. The Ethics Act defines the term "contract" as follows: § 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. 65 Pa.C.S. § 1102. 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. In addition to the above provisions of the Ethics Act, administrative notice is taken as to Sections 3- 324(a) and (c) of the Public School Code of 1949, which provide, in pertinent part, as follows: § 3 -324. Not to be Employed by or do Business with District; Exceptions (a) No school director shall, during the term for which he was elected or appointed, as a private person engage in any Dixon, 06 -518 February 22, 2006 Page 6 business transaction with the school district in which he is elected or appointed .. . (c) It shall not be a violation of this section for a school district to contract for the purchase of goods or services from a business with which a school director is associated to the extent permitted by and in compliance with 65 Pa.C.S. Ch. 11 (relating to ethics standards and financial disclosure). 24 P.S. §§ 3- 324(a), (c) (Emphasis added). On its face, Section 3- 324(c) would appear to allow contracting to occur between school districts and businesses with which their school directors are associated as long as the requirements of the Ethics Act are observed. Having set forth the relevant provisions of law, your questions shall now be addressed. You specifically request a ruling as to the appropriateness of your remaining a School Director. You are advised that the Ethics Act would not prohibit you from remaining a School Director while being employed as Director of the Family Center. This conclusion is based upon the fact that there is no statutorily declared incompatibility as to simultaneous service in these two positions, nor would there be an inherent conflict under Section 1103(a) of the Ethics Act, that is, a conflict that would be so pervasive that as a practical matter, you could not function in both positions without running afoul of the Ethics Act. Rather, it would appear that at most, you could have conflicts of interest as to matters involving or impacting CAP /the Family Center. The further question of whether conflicts of interest would in fact arise for you as a School Director as a result of your employment as Director of the Family Center hinges upon the nature of CAP, which cannot be conclusively determined under the limited facts that you have submitted. However, the various possibilities shall be discussed. Depending upon how and by whom /what it was created, CAP could be a "business" or a "governmental body" or "political subdivision" as defined by the Ethics Act: § 1102. Definitions "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. "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. "Political subdivision." Any county, city, borough, incorporated town, township, school district, vocational school, county institution district, and any authority, entity or body organized by the aforementioned. 65 Pa.C.S. § 1102 (Emphasis added). Dixon, 06 -518 February 22, 2006 Page 7 The status of CAP is significant to your inquiry, because if CAP is a "business," it is a business with which you as a CAP employee are associated, such that: (1) you would have conflicts of interest as a School Director in matters that would financially benefit CAP /the Family Center and the restrictions and requirements of Sections 1103(a) and 1103(j) would have to be observed; and (2) Section 1103(f) would have to be observed to the extent it would be applicable. However, if CAP would be a "governmental body" or "political subdivision" and not a "business," the use of the authority of your public position as a School Director for a pecuniary benefit to such "governmental body" or "political subdivision" would not in and of itself constitute a conflict of interest under the Ethics Act. The elements of a conflict of interest do not encompass a pecuniary benefit that flows solely to a governmental body or political subdivision rather than a business. See, Confidential Opinion, 01 -005. You are further advised that if CAP is a non - profit corporation, that fact alone will not be dispositive of its status. Although non - profit corporations certainly may fall within the Ethics Act's definition of "business" (Soltis - Sparano, Order No. 1045 at 31; see, also, Confidential Opinion, 89 -007; McConahy, Opinion 96 -006), depending upon the circumstances, a non - profit corporation may qualify as a governmental body as an "agency performing a governmental function" or as a "political subdivision" as having been formed by other political subdivisions. 65 Pa.C.S. § 1102 (definitions of "governmental body" and "political subdivision." See, Area Loan Organizations Under Capital Loan Fund Act, Opinion 95 -006 at 12 and 95 -006 -R at 5 -7; Cf., Sphere Drake Ins. Co. v. Philadelphia Gas Works, 566 Pa. 541, 782 A.2d 510 (2001) (The Philadelphia Facilities Management Corporation, a non - profit corporation created by a political subdivision to provide management services for the City -owned Philadelphia Gas Works, was held to be a "local agency" entitled to governmental immunity under the Pennsylvania Tort Claims Act, 42 Pa.C.S. § 8541 et seq.). Of course, no one with standing has inquired as to CAP's status, and based upon the limited submitted facts, this Advice must necessarily be limited to providing to you the above general guidance under each of the two possible scenarios. 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 a School Director for the School District of Lancaster ( "School District "), 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 your request for a ruling regarding the appropriateness of your remaining a School Director and possible conflict(s) of interest based upon your employment as Director of the Lancaster Family Center ( "Family Center ") of the Community Action Program ( "CAP ") of Lancaster County — which provides services to the School District and receives funding from the School District in connection with a state grant supported by the School District —you are advised as follows. The Ethics Act would not prohibit you from remaining a School Director while being employed as Director of the Family Center. This conclusion is based upon the fact that there is no statutorily declared incompatibility or inherent conflict under Section 1103(a) of the Ethics Act as to simultaneous service in these two positions. The question of whether conflicts of interest would arise for you as a School Director as a result of your employment as Director of the Family Center hinges upon the nature of CAP, which cannot be conclusively determined under the limited submitted facts. If CAP is a "business," it is a business with which you as a CAP employee are associated, such that: (1) you would have conflicts of interest as a School Director in matters that would financially benefit CAP /the Family Center and the restrictions and requirements of Sections 1103(a) and 1103(j) would have to be observed; and (2) Section 1103(f) would have to be observed to the extent it would be applicable. If CAP would be a "governmental body" or "political Dixon, 06 -518 February 22, 2006 Page 8 subdivision" and not a "business," the use of the authority of your public position as a School Director for a pecuniary benefit to such "governmental body" or "political subdivision" would not in and of itself constitute a conflict of interest under the Ethics Act. Lastly, the propriety of the proposed course of conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), this 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