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HomeMy WebLinkAbout06-549 RobertsL. James Roberts, Vice President Borough of Quakertown 35 Nor- h Third Street P.O. Box 727 Quakertown, PA 18951 Dear Mr. Roberts: ADVICE OF COUNSEL April 14, 2006 06 -549 This responds to your letter of March 23, 2006, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 1 =S. § 1101 et seq., presents any prohibition or restrictions upon a borough councilman as to purchases from a business which he is associated by borough personnel. Facts: As a Councilman for Quakertown Borough (Borough), you seek an acvf lsory from the State Ethics Commission. You have submitted - the following facts which may be fairly summarized as follows. You and your wife hold a 30% interest in your family owned stationery store. The Borough Manager and other employees of the Borough would like to purchase miscellaneous office supplies from the store. All individual purchases would not exceed $500 and would only be purchased on an as needed basis. The Manager and other authorized employees of the Borough would not consult with you prior to making any purchases. Lastly, any payments That would appear on monthly voucher reports would not be voted upon by you at Council meetings. You ask whether such urchases by Borough personnel from your store would be permitted under the Ethics Act. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the ttnics 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 he 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 thaf 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. As Councilman for the Borough of Quakertown, you are a public official as that term is defined in the Ethics Act, and you are subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: Roberts, 06 -549 April 14, 2006 Page 2 § 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. "Immediate family." A parent, spouse, child, brother or sister. "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 the business or more than 5% of the assets of the economic interest in indebtedness. 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 Roberts, 06 -549 April 14, 2006 Page 3 (f) Contract. - -No public or ppublic 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 Ns employee, s 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 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 if 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 Roberts, 06 -549 April 14, 2006 Page 4 the remaining wo 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 oT a business with which he is associated. Pancoe, Opinion 89 -011. Examples of conduct that would be prohibited under Section 11 U3(a) would include: J1) 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 telep i� postage, staff, equipment, research materials, or other property, or the use of overnmental personnel, to conduct private business activ Freind, Order 800; Pancoe, supra; and (3) the participation in an official capacity a 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 client(s) (Miller, Opinion 89 -024; Kannebecker, Opinion 92 -U10). 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 torm may also support a finding of a conflict of interest. Amato, Opinion 89 -002. In each instance of a conflict of interest, the public official/public fq oyee 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 ot and lobbying for a particular result. Juliante, Order 809. Under the facts which you have submitted, the store is a business with which you are associated as that term is defined under the Ethics Act. Section 1103(a) of the Ethics Act would not preclude purchases from your store, the business with which you are associated, by Borough personnel. You could not use your position to direct such Boroug personnel to make purchases from your store. Further, as to any matters involving the store that would come before Borough Council, you would have a conflict could not participate and must observe the disclosure requirements of Section 1103(j) of the Ethics Act. The proprietyy 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 Borough Code. Conclusion: As Councilman for the Borough of Quakertown you are a public otticial subject to the provisions of the Public Official and Employee 'Ethics Act ( "Ethics Act"), 65 Pa.C.S. 1101 et seq. Your store is a business with which you are associated as that term is de under the Ethics Act. Section 1103(a) of the Ethics Act would not preclude purchases from your store by Borough personnel. You could not use your position to direct such Borough personnel to make the purchases from your store. Roberts, 06 -549 April 14, 2006 Page 5 Further, as to any matters involving the store that would come before Borough Council, you would have a conflict, could not participate and must observe the disclosure requirements of Section 1103(j) of the Ethics Act. 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 (3U) da of the date of tins 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 (71T -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