HomeMy WebLinkAbout07-531 AndresDavid M. Andres, D.O.
Andres -Bush Internal Medicine Associates
3742 State Route 257
Seneca, PA 16346
Dear Dr. Andres:
ADVICE OF COUNSEL
May 7, 2007
07 -531
This responds to your letter dated March 27, 2007, by which you requested
advice 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 in a private capacity as a physician is a member of a limited liability
corporation, with regard to participating in matters relating to the selection of a school
physician for the school district, where a bid has been submitted by another physician
who is also a member of the school director's limited liability corporation.
Facts: As a School Director for the Franklin Area School District (hereinafter the
School District "), you request an advisory from the State Ethics Commission based
upon submitted facts that may be fairly summarized as follows.
You are a local physician and a member of Andres -Bush Internal Medicine
Associates, a limited liability corporation (hereinafter also referred to as the
Corporation "). You recently found out that the School District advertised a request for
bids for a school physician. You state that the business manager for the School District
placed a notice in the local newspaper and mailed invitations for bids to local
physicians. Your office did not receive an invitation to bid on the job due to the fact that
you are a School Director for the School District.
Todd A. Bush, M.D., who is a member of the Corporation, saw the public notice
for bids placed in the local newspaper, and he subsequently submitted a bid for the
position of school physician for the School District. You state that you and Dr. Bush, as
private business owners, discussed your current arrangement as school physician with
another school district as compared to Dr. Bush's bid submitted to the School District.
At a closed session of the School Board, it was brought to your attention by the
School District's Solicitor that there might be a violation of the Ethics Act as a result of
the bid submitted by Dr. Bush. You further state that the Solicitor was unable to advise
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May 7, 2007
Page 2
you as to whether you could avoid transgressing the Ethics Act if you would abstain
from any votes with respect to the selection of a school physician and would have no
personal income generated from Dr. Bush's arrangement with the School District.
Based upon the above submitted facts, you seek guidance as to whether the
Ethics Act would impose any prohibitions or restrictions upon you with respect to
participating in matters before the School District that would involve the selection of a
school physician, including but not limited to the bid submitted by Dr. Bush.
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 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 inquiry relates 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 inquiry relates to future
conduct, your inquiry may and shall be addressed.
As a School Director for the Franklin Area School District, 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
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May 7, 2007
Page 3
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
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.
"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.
The use of authority of office 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 each instance of a voting conflict, Section 1103(j) 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. In the event that the required abstention results in the
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May 7, 2007
Page 4
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.
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 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 term "contract" is 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.
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;
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May 7, 2007
Page 5
(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 /public
employee may not have any supervisory or overall responsibility as to the
implementation or administration of the contract with the governmental body.
It is administratively noted that the Public School Code of 1949 as amended
( "Public School Code ") provides in pertinent part:
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
[sic] 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 ...
(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). On its face, Section 3- 324(c) of the Public School Code permits
contracting to occur between a school district and a business with which a school director
is associated as long as the restrictions and requirements of the Ethics Act are fully
observed and satisfied.
In applying the above provisions of the Ethics Act to the instant matter, it is noted
that Section 1103(a) of the Ethics Act pertaining to conflicts of interests 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 or private clients(s). Miller, Opinion 89-
024; Kannebecker, Opinion 92 -010.
In the instant matter, given that you are a member of the Corporation, the
Corporation would be a business with which you are associated. As a general rule,
pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest in
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May 7, 2007
Page 6
matters before the School District that would financially impact you, the Corporation, or
the Corporation's clients. See, Miller, supra; Kannebecker, supra.
In considering your specific inquiry, the submitted facts do not indicate whether
the Corporation would be financially impacted if Dr. Bush would be selected to serve as
the School District's school physician. Therefore, this Advice must necessarily be
limited to providing general guidance as to Section 1103(a) of the Ethics Act.
You are advised that as a School Director, you would have a conflict of interest
under Section 1103(a) of the Ethics Act in matters pertaining to the School District's
selection of a school physician to the extent you or the Corporation would be financially
impacted if Dr. Bush, a member of the Corporation, would be selected as the School
District's school physician. Pursuant to Section 1103(a) of the Ethics Act, you would be
prohibited from using the authority of your public position, or confidential information
accessed or received as a result of being a School Director, to effectuate a private
pecuniary benefit to yourself or the Corporation through action favorable to Dr. Bush or
through a detriment to a competitor for the school physician work. See, DiBerardinis,
Opinion 07 -010; McGinty, Opinion 07 -009; Pepper, Opinion 87 -008.
In addition, you would generally have a conflict of interest with regard to voting to
approve the payment of invoices that would be submitted by the Corporation to the
School District.
In each instance of a conflict of interest, you would be required to abstain fully
from participation and to satisfy the disclosure requirements of Section 1103(j) of the
Ethics Act. The abstention requirement would extend beyond voting to include any use
of authority of office. For example, as a School Director, you could not participate in
matters involving the qualifications for the school physician position, the terms of the
contract, or the review or selection of bids or proposals.
Finally, the requirements of Section 1103(f) of the Ethics Act would have to be
observed whenever applicable. To the extent the Corporation would contract with the
School District, or would subcontract with a person awarded a contract with the School
District, and the value of the Corporation's contract /subcontract would be $500 or more,
the restrictions of Section 1103(f) would be 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.
Conclusion: As a School Director for the Franklin Area 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. Andres -Bush Internal
Medicine Associates ( "the Corporation "), a limited liability corporation of which you are a
member in a private capacity as a physician, would be considered a business with
which you are associated. Pursuant to Section 1103(a) of the Ethics Act, you would
generally have a conflict of interest in matters that would financially impact you, the
Corporation, or the Corporation's clients. As a School Director, you would have a
conflict of interest under Section 1103(a) of the Ethics Act in matters pertaining to the
School District's selection of a school physician to the extent you or the Corporation
would be financially impacted if Dr. Bush, a member of the Corporation, would be
selected as the School District's school physician. Pursuant to Section 1103(a) of the
Ethics Act, you would be prohibited from using the authority of your public position, or
confidential information accessed or received as a result of being a School Director, to
effectuate a private pecuniary benefit to yourself or the Corporation through action
favorable to Dr. Bush or through a detriment to a competitor for the school physician
work. In addition, you would generally have a conflict of interest with regard to voting to
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May 7, 2007
Page 7
approve the payment of invoices that would be submitted by the Corporation to the
School District. In each instance of a conflict of interest, you would be required to
abstain fully from participation and to satisfy the disclosure requirements of Section
1103(j) of the Ethics Act. The abstention requirement would extend beyond voting to
include any use of authority of office. The requirements of Section 1103(f) of the Ethics
Act would have to be observed whenever applicable. To the extent the Corporation
would contract with the School District, or would subcontract with a person awarded a
contract with the School District, and the value of the Corporation's contract /subcontract
would be $500 or more, the restrictions of Section 1103(f) of the Ethics Act would be
applicable.
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