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HomeMy WebLinkAbout07-513 GehmanJohn L. Gehman 3243 Gehman Road Barto, PA 19504 Dear Mr. Gehman: ADVICE OF COUNSEL March 2, 2007 07 -513 This responds to your letter of January 20, 2007, by which you requested an advisory from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., would present any prohibitions or restrictions upon a school director, who is also an athletic official for the Pennsylvania Interscholastic Athletic Association, with regard to receiving payment(s) from his school district for officiating athletic contests held on the school district's home field. Facts: You are a School Director for the Upper Perkiomen School District (" chool District "). You are also an athletic official for the Pennsylvania Interscholastic Athletic Association "PIAA "). You state that you might be assigned by the PIAA's central assignor to referee athletic contests held on the School District's home field. As with all contests that you officiate outside of the School District, you would request fees from the School District for your services, consistent with the pre - established league - wide fee structure. Per the submitted facts, to the extent you would be assigned by PIAA to officiate athletic contest(s) held on the School District's home field, your business transaction(s) would be directly with the School District, such that you would request and receive compensation directly from the School District. You ask whether you would transgress the Ethics Act by receiving payment from the School District for services that you would render as an athletic official assigned by the PIAA to an athletic contest held on the School District's home field. You specifically ask whether, pursuant to the Ethics Act, your receipt of such payment(s) would be considered: (1) accepting improper influence; (2) a prohibited honorarium; or (3) a prohibited contract. 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 Gehman, 07 -513 March 2, 2007 Page 2 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 that your inquiries relate to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent that your inquiries relate to future conduct, your inquiries may and shall be addressed As a School Director, you are a public official subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act 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 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 Gehman, 07 -513 March 2, 2007 Page 3 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. 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. The statutory definition of "conflict" or "conflict of interest" includes two exclusions, hereinafter referred to as the "de minimis" exclusion and the "class /subclass exclusion." The de minimis exclusion 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. In order for the class /subclass exclusion to apply, two criteria must be met: (1) the affected public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be affected "to the same degree" in no way differently) than the other members of the class /subclass. 65 Pa.C.S. 1102; see, Kablack, Opinion 02 -003; Graham, Opinion 95 -002 (citing Van Rensler, pinion 90 -017); Rubenstein, Opinion 01 -007. In each instance of a conflict of interest, Section 1103(] of the Ethics Act requires the public official /public 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. The abstention requirement is not limited merely to voting, but extends 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. 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. Sections 1103(b) and 1103(c) of the Ethics Act, pertaining to improper influence, provide as follows: § 1103. Restricted activities (b) Seeking improper influence. —No person shall offer or give to a public official, public employee or nominee or candidate for public office or a member of his immediate Gehman, 07 -513 March 2, 2007 Page 4 family or a business with which he is associated, anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment based on the offeror's or donor's understanding that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. (c) Accepting improper influence. —No public official, public employee or nominee or candidate for public office shall solicit or accept anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment, based on any understanding of that public official, public employee or nominee that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. 65 Pa.C.S. §§ 1103(b), (c). The term "person" is defined in the Ethics Act as follows: § 1102. Definitions "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. Section 1103(d) of the Ethics Act provides: §1103. Restricted activities (d) Honorarium. —No public official or public employee shall accept an honorarium. 65 Pa.C.S. §1103(d). The term "honorarium" is defined in the Ethics Act as follows: §1102. Definitions "Honorarium." Payment made in recognition of published works, appearances, speeches and presentations and which is not intended as consideration for the value of such services which are nonpublic occupational or professional in nature. The term does not include tokens presented or provided which are of de minimis economic impact. 65 Pa.C.S. §1102 (Emphasis added). Section 1103(f) of the Ethics Act provides as follows: § 1103. Restricted activities Gehman, 07 -513 March 2, 2007 Page 5 (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 pertaining to Section 1103(f) are defined in the Ethics Act 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. "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. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. 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 Gehman, 07 -513 March 2, 2007 Page 6 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) (2) (3) (4) prior public notice of the employment or contracting possibility; sufficient time for a reasonable and prudent competitor /applicant to be able to prepare and present an application or proposal; public disclosure of all applications or proposals considered; and public disclosure of the contract awarded and offered and accepted. Section 1103(f) of the Ethics Act also requires that the public official /public employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. Having set forth the above provisions of the Ethics Act about which you have inquired, it is noted that the State Ethics Commission, in the exercise of its jurisdiction, is limited to making determinations under the Ethics Act. However, in issuing advisories under the Ethics Act, it is necessary at times to review other laws to determine whether a particular benefit would be unauthorized, so that it may be determined whether a public official /public employee would be receiving a private pecuniary benefit contrary to the Ethics Act. It is noted that because school directors are not compensated, you do not receive compensation for holding public office. Therefore, the only financial benefit at issue as to your inquiry would be the compensation you would receive from the School District in your private capacity as a PIAA athletic official. In the instant matter, it is administratively noted that Section 3- 324(a) of the Public School Code of 1949, as amended ( "Public School Code "), provides 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 engaged in any business transaction with the school district in which he is elected or appointed, be employed in any capacity by the school district in which he is elected or appointed, or receive from such school district any pay for services rendered to the district except as provided in this act: Provided, That one who has served as a school director for two consecutive terms, of six years each, may be elected to the position of attorney or solicitor for the board of which he was a member by the unanimous vote of all the other members of the board, and, after resigning his office as school director, shall be entitled to receive such pay for his services as solicitor as the board of school directors may determine: Provided, however, That a school director may be appointed to the position of secretary to the board of a school district of the second class, of which he was a member during the term for which he was elected or appointed upon the unanimous consent of all the other members of the board after resigning his office as school director, and he shall be entitled to receive such pay for his services as secretary as the board Gehman, 07 -513 March 2, 2007 Page 7 of school directors shall determine: And provided further, That one who has served as a school director may, after resigning from office as a school director, be elected to the position of teacher by the board of which he was a member by a vote of at least two - thirds of all other members of the board and shall be entitled to receive such pay for his services as a teacher as the board of school directors may lawfully determine. 24 P.S. § 3- 324(a). On its face, Section 3- 324(a) of the Public School Code specifically prohibits a school director, during the term for which he was elected or appointed, from receiving from the school district in which he is elected or appointed any pay for services rendered to the school district. You are advised that if during your term as School Director ou would use the authority of your public office with relation to receiving payment(s) from the School District for rendering services as an athletic official for contests held on the School District's home field, you would be using the authority of your public office for a prohibited private pecuniary benefit. Cf., Paucke, Opinion 02 -002. You are advised that subject to the statutory exclusions to the definition of "conflict" or "conflict of interest," you would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act in using the authority of your public office as School Director with relation to payment(s) from the School District for your services as a PIAA athletic official. Turning to your other specific inquiries, you ask whether your receipt of payment(s) from the School District for rendering services as an athletic official would be considered: (1) accepting improper influence; (2) a prohibited honorarium; or (3) a prohibited contract. You are advised that absent an improper understanding that your vote, official action, or judgment as a School Director would be influenced thereby, your receipt of fees as an athletic official would not transgress Sections 1103(b) and 1103(c) of the Ethics Act. Based upon the submitted fact that your fees as an athletic official for contests at the School District's home field would be consistent with the pre - established league wide fee structure, and the obvious fact that such services would be nonpublic occupational or professional in nature, you are advised that your acceptance of such fees would not transgress Section 1103(d) of the Ethics Act because such payments would not constitute honoraria. See, Fiorello, Order 1363; Confidential Opinion, 01 -001. As for whether your provision of such services for a fee would constitute a prohibited contract under Section 1103(f) of the Ethics Act, as noted above, Section 1103(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. However, the restrictions of Section 1103(f) address contracting procedures and the conduct of public officials /public employees in their public capacities where contracting /subcontracting occurs as otherwise permitted. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. 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. Gehman, 07 -513 March 2, 2007 Page 8 Conclusion: As a School Director for the Upper Perkiomen School District ( "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. On its face, Section 3- 324(a) of the Public School Code of 1949, 24 P.S. § 3- 324(a), prohibits a school director, during the term for which he was elected or appointed, from receiving from the school district in which he is elected or appointed any pay for services rendered to the school district. Subject to the statutory exclusions to the definition of "conflict" or "conflict of interest," you would have a conflict of interest pursuant to Section 1103(a) of the Ethics Act in using the authority of your public office as School Director with relation to payment(s) from the School District for your services as a PIAA athletic official. Absent an improper understanding that your vote, official action, or judgment as a School Director would be influenced thereby, your receipt of fees as an athletic official would not transgress Sections 1103(b) and 1103(c) of the Ethics Act. Based upon the submitted fact that your fees as an athletic official for contests at the School District's home field would be consistent with the pre - established league wide fee structure, and the obvious fact that such services would be nonpublic occupational or professional in nature, you are advised that your acceptance of such fees would not transgress Section 1103(d) of the Ethics Act because such payments would not constitute honoraria. Section 1103(f) of the Ethics Act does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. The restrictions of Section 1103(f) address contracting procedures and the conduct of public officials /public employees in their public capacities where contracting /sub - contracting occurs as otherwise permitted. The requirements of Section 1103(f) of the Ethics Act would have to be observed whenever applicable. 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, Robin M. Hittie Chief Counsel