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HomeMy WebLinkAbout1461 GoldIn Re: Fred Gold, Respondent File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Raquel K. Bergen Nicholas A. Colafella 06 -058 Order No. 1461 4/28/08 5/15/08 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." A Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were subsequently submitted by the parties to the Commission for consideration. The Stipulation of Findings is set forth as the Findings in this Order. The Consent Agreement has been approved. This adjudication of the State Ethics Commission is issued under the Ethics Act and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with the Ethics Act. Any person who violates such confidentiality commits a misdemeanor and, upon conviction, may be subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Gold, 06 -058 Page 2 I. ALLEGATION: That Fred Gold, a public official /public employee in his capacity as Supervisor and Treasurer of Warminster Township, Bucks County, violated Sections 1103(a) and 1103(f) of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. §§ 1103(a) and 1103(f), when he used the authority of his public position for a private pecuniary gain for a member of his immediate family and /or a business with which a member of his immediate family is associated by directing /recommending the use of his son's company to subordinates; by participating in actions of the board of supervisors, including but not limited to participating in discussions to award contracts in excess of $500.00 to businesses [with] which a member of his immediate family is associated; and when he participated in bid solicitations and votes to award contracts and issue payments to companies in which [his] son is co- owner and an owner. II. FINDINGS: 1. Fred Gold has served as a Supervisor for Warminster Township, Bucks County from January 4, 2004, through the present. a. Gold served as the Secretary /Treasurer of the Board of Supervisors from 2004 through 2006. b. Gold served as the Vice - Chairman of the Board of Supervisors from January 2007 to October 2007. 2. Warminster Township is a second class township governed by a five - member board of supervisors. a. Two regular meetings are normally held per month. b. Special meetings are held occasionally as needed. 3. Voting at Warminster Township meetings occurs via a group yes /no vote after a motion is made and seconded. a. Warminster Township has a policy of recording abstentions that occur. 4. All five supervisors maintain signature authority over the township accounts. a. Signatures on the checks from the General Fund require the signature of at least one supervisor for a payment of under $2,500. 1. Two supervisor signatures are required for payments above $2,500, and three are needed for payments above $100,000. b. While any Supervisor is authorized to signature checks, the Township Supervisor serving as Township Treasurer often signs the checks, along with the Chairman of the Board of Supervisors. c. Signatures on the checks are normally live signatures. 1. Stamped signatures of the township treasurer and chairman were used from 2004 through 2006 for the pre - payment of bills. aa. Pre - payment of bills was done when the due dates of the bills occurred prior to the next township meeting. Gold, 06 -058 Page 3 5. The monthly bills of the township were generally not read aloud during the regular monthly supervisor's meeting. a. Fred Gold along with the other supervisors [was] provided with a monthly bill list prior to the vote to approve the monthly bills. 6. Fred Gold as the township treasurer would sign the township checks a few days before a vote would be taken at a township meeting to approve the payment of bills. 7 Neil Gold is the son of Fred Gold. a. b. Neil Gold was affiliated with a business known as Mid - Atlantic Wholesale from April 2004 until or about August 2006. Neil Gold is also affiliated with Mid - Atlantic Sales Group. 8. Mid - Atlantic Wholesale, Inc. was established on April 7, 2004, and registered with the New Jersey Department of Treasury, Division of Revenue Corporation. a. The directors of the business were Neil Gold and Joseph Smith. b. The nature of Mid - Atlantic Wholesale, Inc.'s business was wholesale sales of maintenance supplies. 1. This included restaurant and janitorial supplies. 9. Neil Gold changed the name of his business from Mid - Atlantic Wholesale, Inc. to Mid - Atlantic Sales Group, Inc. because of various criminal charges that were filed against his partner, Joseph Smith. a. The criminal charges were administratively dismissed by the New Jersey Camden County Prosecutor's Office on August 15, 2006. 10. New Jersey Department of Treasury, Division of Revenue Corporation records for Mid - Atlantic Sales Group, Inc. listed Fred Gold as the Registered Agent. a. The corporation's mailing address was listed as: 1. 1045 Thomas Busch Memorial Highway Pennsauken, NJ 08110 b. The business was established on February 3, 2006. 11. The nature of Mid - Atlantic Sales Group, Inc.'s business was wholesale sales of janitorial supplies. a. This included restaurant supplies. b. Neil Gold and Jamie Gold, Neil Gold's wife, are listed on bank account documents as the President and Secretary respectively of Mid - Atlantic Sales Group, Inc. 12. Warminster Township Municipal Government operates with separate Departments as follows: Gold, 06 -058 Page 4 a. Administration Finance Five Ponds Golf Course Licenses & Inspection Parks & Recreation Police Department Public Works b. Each township department is managed by a Department Head who is responsible for the daily operations. c. Each township supervisor serves as a liaison for one or more of the different departments. 13. From 2000 through 2004, Warminster Township primarily purchased [its] janitorial supplies from Hillyard, Inc. a. Hillyard, Inc., was used because of [its] convenience to the township offices and the quality of service [it] provided. b. The supplies were not advertised or publicly bid. c. Hillyard, Inc. was used less after 2004 because the township began making [its] purchases from Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. 14. In 2005 and 2006, Fred Gold has [sic] served as a liaison on the Township's Golf Committee for the Five Ponds Golf Course, a golf course owned by the township. a. The township's golf committee is made up of township residents and at least one supervisor, who meet and discuss the best interests of the township golf course. b. As a result of serving as liaison, Gold would interact with township employees working at the golf course. 15. In or around June and July 2004, Gold had discussions with Golf Course Manager James McKevitt and his replacement, James Kealey, regarding Gold's son supplying paper products purchased by the golf course. a. Fred Gold told Kealey, after taking the position, that his son, Neil Gold, could provide paper products to the golf course at a discounted rate. 16. The Five Ponds Golf Course began to make purchases at Mid - Atlantic Wholesale, Inc. in October 2004. a. The purchases were initiated after Gold advised [that] his son's company was cheaper. b. The prices Mid - Atlantic Wholesale, Inc. charged the golf course were approximately $.25 cheaper per item. 17. In 2005, Fred Gold approached Five Ponds Golf Course Restaurant Manager Debra Caucci about getting prices for her restaurant supplies. 18. In August 2005, Joseph Alvare was named Acting General Manager of the Five Gold, 06 -058 Page 5 Ponds Golf Course. a. Gold provided Alvare with Neil Gold's contact information for Mid - Atlantic Wholesale, Inc. b. Alvare made purchases from Mid - Atlantic Wholesale, Inc. for the Five Ponds Golf Course starting in September 2005. 19. Neither the golf course nor the restaurant made any purchases from Mid - Atlantic Wholesale, Inc. prior to having [sic] Fred Gold becoming a Township Supervisor. 20. In or around December 2004, Fred Gold reviewed the bill lists including bills for janitorial supplies with the Warminster Township Manager's Office. a. Fred Gold made recommendations to purchase janitorial supplies from Neil Gold of Mid - Atlantic Wholesale, Inc. and Gold provided contact information for his son and Mid - Atlantic Wholesale, Inc. 21. Matthew Lynch was employed as a Janitor /Laborer for Warminster Township from 2005 until 2007. a. Lynch's duties consisted of providing janitorial supplies to the township offices and advising the Township's Department Heads when to order new supplies when their inventory was low. b. In 2005, Fred Gold provided business cards of Neil Gold for Mid - Atlantic Wholesale, Inc. to Matthew Lynch. 22. The township administration purchased janitorial -type supplies from Neil Gold - controlled companies beginning in the spring of 2005. a. The first invoice from Neil Gold was [sic] March 24, 2005. 23. None of the janitorial and restaurant supplies sold to Warminster Township between 2004 and 2006 by Mid - Atlantic Wholesale, Inc. or Mid - Atlantic Sales Group, Inc. were advertised or publicly bid by the township. a. Purchases were made from Neil Gold's companies on an as- needed basis and were not made in bulk. b. The orders were placed by the township's department heads. c. The type[s] of supplies included cleaning supplies, paper cups, paper plates, paper towels, soap, and toilet paper. d. All purchases that were made by the township were done with purchase orders. 24. Neil Gold, through Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc., submitted invoices to the township for the purchase of janitorial and restaurant supplies to the attention of each township department. a. Neil Gold utilized invoices with letterheads from Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. 1. The invoices listed the invoice number, date, description of purchase Gold, 06 -058 Page 6 and amount. 25. Beginning in or about March 2006, Neil Gold began selling supplies to the township under the name Mid - Atlantic Sales Group, Inc. 26. From September 2004 through February 2007, Neil Gold, under the name[s] of Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. billed each Township Department for janitorial and restaurant supplies and was issued payments totaling $37,069.15* by Warminster Township as shown below: a. Payments made to Mid - Atlantic Wholesale, Inc. Invoice Check Check Number Date Number 1173 10/28/04 4133 1535 11/30/04 4469 2206 03/24/05 1250 2463 05/12/05 1716 2659 06/23/05 2053 2628, 2760 06/23/05 2163 2761, 2762 2825, 2967 07/28/05 2435 2918, 2871 3018 07/26/05 2473 3074 08/11/05 2611 3147 08/25/05 2758 3280 09/08/05 2900 3374, 3423 09/22/05 3015 3510 09/29/05 3214 3548 10/11/05 3357 3582, 3612 10/27/05 3503 3666 11/10/05 3639 3726 11/17/05 3736 3746, 3748 12/08/05 3885 3749 3813, 3812 12/15/05 3975 3679 12/19/05 4068 3931 12/31/05 4369 b. Payments made to Mid - Atlantic Sales Group, Invoice Check Check Number Date Number 4049 03/09/06 4824 4084, 4092 03/23/06 4946 4164 04/06/06 5077 4159 04/27/06 5264 4277, 4303 06/08/06 5863 4325 4340, 4350 06/20/06 6055 4271, 4371 07/13/06 6193 4376, 4382 4404, 4405 4416, 4420 07/17/06 6270 Check Amount $ 203.04 $ 346.95 $ 262.84 $ 760.85 $ 385.15 $1,686.64 $2,251.06 $ 153.50 $ 868.35 $ 645.06 $ 664.00 $1,592.29 $ 758.00 $ 474.94 $1,182.99 $ 155.80 $ 508.06 $ 737.66 $ 624.80 $ 977.55 $ 660.65 Total $15,899.78* Check Amount $1,114.39 $1,191.73 $ 41.90 $ 210.83 $1,663.92 $ 945.38 $2,345.98 Township Department Five Ponds Golf Club Five Ponds Golf Club Administration Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Administration Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Inc. Township Department Five Ponds Golf Club Five Ponds Golf Club Police Department Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club Five Ponds Golf Club $2,644.80 Five Ponds Golf Club Gold, 06 -058 Page 7 4424 4442, 4444 4480, 4481 4507, 4508 4512 4526, 4535 4541, 4569 4603, 4614 4574, 4613 4629, 4645 4644, 4663 4313, 4444 4544, 4646 4670, 4705 4706 08/10/06 6482 08/14/06 6575 09/28/06 6935 10/12/06 7090 10/26/06 7248 11/03/06 7432 02/09/07 8303 a. Mid - Atlantic Wholesale, Inc. 1. 2004: $ 549.99 2. 2005: $15,349.79* 3. Total: $15,899.78* b. Mid - Atlantic Sales Group, Inc. 1. 2006: $18,839.32* 2. 2007: $ 2,330.05 3. Total: $21,169.37* $2,005.47 $ 365.98 $2,602.15 $ 767.41 $2,171.33 $ 750.05 $2,330.05 Police Department Parks & Recreation Public Works Five Ponds Golf Club Five Ponds Golf Club Police Department Public Works Administration Five Ponds Golf Club Parks & Recreation Parks & Recreation Administration Five Ponds Golf Club Total $21,169.37* 27. Twenty -six of the 36 checks issued to Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales group, Inc. exceeded $500.00 a. Of the twenty -six checks issued to Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. in excess of $500.00, none of the purchases were publicly advertised or bid by the township. 28. Fred Gold participated in voting to approve monthly bills that included payments issued to Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. and signed as township signatory on checks issued to Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. between October 28, 2004, and October 26, 2006. 29. Fred Gold occasionally made pre - payments to Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. in his capacity as the township treasurer. 30. Gold began abstaining on approving payments to Neil Gold /Mid - Atlantic Sales Group, Inc. sometime in 2006. 31. From October 2004 through February 2007, Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. were issued payments by Warminster Township by year as follows: Gold, 06 -058 Page 8 c. Grand Total: $37,069.15* 32. Mid - Atlantic Wholesale, Inc., and Mid - Atlantic Sales Group Sales [sic] total sales of janitorial supplies to Warminster Township from September 2004 through February 2007 was 35% [sic] more than the sales of Hillyard, Inc. a. Hillyard, Inc. $24, 052.93 b. Mid - Atlantic Wholesale, Inc. & Mid - Atlantic Sales Group, Inc. $37,069.15* c. Difference in Township Business: 35% [sic] 33. Sometime in 2005, Warminster Township Solicitor Stephen Harris verbally advised Fred Gold that, provided the janitorial supplies his son was charging [to] the township were cheaper in comparison to other vendors, there was no conflict. a. At the township supervisors meetings on September 14, 2006, and September 28, 2006, Fred Gold assured the Board that his voting to approve payments to Mid - Atlantic was ethical according to the ethics law. b. Harris subsequently reviewed the Pennsylvania State Ethics Act and prior to the next meeting informally advised Fred Gold that he should abstain on township payments made to his son's business. 34. Warminster Township did not publicly advertise, bid or solicit phone quotes for institutional supplies until February 23, 2006. a. The change was made because the cumulative costs for institutional supplies exceeded $10,000 in 2005. 35. Regular meetings of the Warminster Township Supervisors confirm the discussion by the supervisors on the bidding of institutional supplies. a. February 23, 2006 — Authorization to advertise Bid # 2006 -01 — Institutional Supplies. Mr. Luce explained that cleaning, janitorial, and paper supplies for all departments are included in this bid. Mr. Johnson made a motion to authorize the advertisement of Bid # 2006 -01, for institutional supplies, and was seconded by Mr. Quinn. Motion carries unanimously, 5 -0. b. August 10, 2006 — Awarding of Bid 2006 -01 to Mid Atlantic Supplies for municipal and industrial supplies. A discussion ensued regarding this bid, this was the only bid received. Karen Whitney spent an extreme amount of time putting the bid together for a two year contract. Questions were raised regarding the owner of the business and the relation of the owner to a Township Board member. Mr. Gold reviewed the State Ethics law and the use of Mid Atlantic is not illegal or unethical. 20 companies were invited to bid on this contract and Mid Atlantic was the only bidder. Mr. Johnson did agree that they did go through the proper bidding process. Mr. Luce would like to table this item, Mr. Quinn agreed. This item is tabled at this time. c. September 14, 2006 — Mr. Gold expressed that he is tired of hearing meeting after meeting complaints over the bill list primarily Mid - Atlantic supply. He feels that it was a fair bid and they are saving the township money. He will be voting for the entire bill list. Gold, 06 -058 Page 9 d. September 28, 2006 - The award of the janitorial supply bid with Mid - Atlantic was discussed. There were only two bidders and Mid - Atlantic was the low bid. Mr. Johnson made a motion to reject all bids at this time, seconded by Mr. Quinn. Motion passed 4 -0 -1 (Mr. Gold). A motion was made to re -bid changing the terms from 2 years to a 1 year by Mr. Johnson, seconded by Mr. Quinn. Motion passed. e. October 12, 2006 — The authorization to re -bid for the township janitorial supplies was presented. It was discussed and decided to re -bid and change the terms from 2 years to 1 year. A motion was made by Mr. Johnson to re- bid, seconded by Mr. Quinn. Motion passed 5 -0 -0. f. January 11, 2007 — The award for the Institutional Supply Bid 06 -08 was reviewed and recommended by Mrs. Sultzbach. She explained that the township received 4 bids and carefully reviewed them since last November up to this week. All of the vendors were asked to deliver some samples for review by the Township. Mr. Luce made a motion to accept the bid list that was provided, seconded by Mr. Johnson. Mr. Quinn asked how are we going to manage this list and bid? Mrs. Sultzbach explained that any department that needs supplies will refer to the list and place a purchase order to the Township by Department. Motion passed 5 -0 -0. 36. Pursuant to Bid # 06 -08, the Warminster Township Board of Supervisors approved the following five vendors to provide different items of institutional supplies: a. A & A Paper Supply Philip Rosenau Corporation, Inc. Albright Janitorial Supply Paragon Maintenance and Supply Company Hillyard, Inc. b. Mid - Atlantic Sales Group, Inc. did not submit a bid and was not considered as one of the vendors. 37. Neil Gold realized profit percentages of approximately 20% for Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. for the years 2004 through 2007. 38. Based on the percent of profit, Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc.'s profit on the income received from Warminster Township totaled $18,904.85 [sic] as follows: a. Mid - Atlantic Wholesale, Inc. 1. 2004: Income from Township Percent of Profit Profit from Township 2. 2005: Income from Township Percent of Profit Profit from Township 3. Total Profit from Township b. Mid - Atlantic Sales Group, Inc. $ 549.99 20% $ 110.00 $15,349.79* 20% $ 3,069.96 $ 3,179.96 Gold, 06 -058 Page 10 1 2006: Income from Township Percent of Profit Profit from Township 2. 2007: Income from Township Percent of Profit Profit from Township 3. Total Profit from Township c. Total Profit from Township for Mid - Atlantic Wholesale, Inc. and Mid - Atlantic Sales Group, Inc. *[sic] [The indicated amount(s) reflect minor calculation outcome of this case.] $18,839.32* 20% $ 3,767.86 $ 2,330.05 20% $ 466.01 $ 4,233.87 $ 7,413.83* errors that do not affect the III. DISCUSSION: As a Supervisor for Warminster Township ( "Township ") from January 4, 2004, to the present, Respondent Fred Gold (also referred to herein as "Respondent," "Respondent Gold," or "Gold ") has at all times relevant to these proceedings been a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The allegations are that Gold violated Sections 1103(a) and 1103(f) of the Ethics Act when he used the authority of his public position for a private pecuniary gain for a member of his immediate family and /or a business with which a member of his immediate family is associated by directing /recommending the use of his son's company to subordinates; by participating in actions of the Township Board of Supervisors ( "Board "), including but not limited to participating in discussions to award contracts in excess of $500 to businesses with which a member of his immediate family is associated; and when he participated in bid solicitations and votes to award contracts and issue payments to companies of which his son is co- owner /owner. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 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 related to Section 1103(a) 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 Gold, 06 -058 Page 11 65 Pa.C.S. § 1102. Section 1103(a) of the Ethics Act 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. Section 1103(f) of the Ethics Act imposes certain restrictions as to contracting: § 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). 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. "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. Gold, 06 -058 Page 12 Section 1103(f) of the Ethics Act provides in part that no public official /public employee or his spouse or child or business with which the public official /public employee or his spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are set forth above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Respondent Gold has served as a Supervisor for the Township from January 4, 2004, to the present. Gold served as the Secretary /Treasurer of the Board from 2004 through 2006 and as Vice - Chairman of the Board from January 2007 to October 2007. The Board consists of five members. At Board meetings, the Supervisors vote via a group aye or nay vote after a motion is made and seconded. The Township has a policy of recording abstentions from voting. Prior to the Board's monthly meeting, the Supervisors are provided with a monthly bill list. The Supervisors then vote to approve the monthly bills. All five Supervisors have signature authority over the Township accounts. Checks from the Township's General Fund require the signature of at least one and up to three Supervisors, depending upon the amount of the payment. The Supervisor serving as Treasurer often signs the checks along with the Chairman of the Board. Although live signatures are normally used, from 2004 through 2006, stamped signatures of the Township Treasurer and Chairman of the Board were used to pay bills due prior to the next Board meeting. Neil Gold is the son of Respondent Gold. Since April 2004, Neil Gold has been affiliated with a business that operated at different times under the names of "Mid- Atlantic Wholesale, Inc." and "Mid- Atlantic Sales Group, Inc." (hereinafter referred to as "Mid - Atlantic"). Mid - Atlantic is a wholesale supplier of restaurant and janitorial supplies. Mid - Atlantic was registered as a corporation in New Jersey on April 7, 2004, under the name of "Mid- Atlantic Wholesale, Inc.," with Neil Gold and his partner, Joseph Smith ( "Smith "), as its Directors. In 2006, Neil Gold changed the name of his business to "Mid- Atlantic Sales Group, Inc.," because of criminal charges that had been filed against Smith. Currently, Neil Gold and his spouse, Jamie Gold, are respectively listed on bank account documents as President and Secretary of Mid - Atlantic, and Respondent Gold is listed as the Registered Agent for Mid - Atlantic in records of the New Jersey Department of Treasury. The Township's municipal government has seven separate Departments: Administration; Finance; Five Ponds Golf Course; Licenses & Inspection; Parks & Recreation; Police Department; and Public Works. Each Department is managed by a Department Head who is responsible for daily operations. Each Township Supervisor serves as a liaison for one or more of the Departments. From 2000 through 2004, the Township purchased its janitorial supplies primarily from Hillyard, Inc. ( "Hillyard "), because of the quality of service and convenience to the Township offices provided by Hillyard. These purchases were neither advertised nor Gold, 06 -058 Page 13 publicly bid. After 2004, the Township's use of Hillyard declined because the Township starting purchasing supplies from Mid - Atlantic. The Township owns the Five Ponds Golf Course ( "Golf Course "). In or around June 2004 and July 2004, Respondent Gold engaged in discussions with Golf Course Manager James McKevitt (`McKevitt ") and McKevitt's successor, James Kealey ( "Kealey "), regarding the sale of paper products to the Golf Course by Neil Gold. Respondent Gold told Kealey that Neil Gold could supply paper products to the Golf Course at a discounted rate. In October 2004, the Golf Course began to purchase supplies from Mid - Atlantic at a rate that was approximately twenty -five cents less per item. In or around December 2004, Respondent Gold reviewed the Township bill lists, including bills for janitorial supplies, with the Township Manager's Office. Gold recommended purchasing janitorial supplies from Neil Gold of Mid - Atlantic and provided contact information for Neil Gold and Mid - Atlantic. Gold specifically provided business cards for Neil Gold /Mid - Atlantic to Matthew Lynch ( "Lynch "), who was employed as a janitor /laborer for the Township. Lynch's duties consisted of providing janitorial supplies to the Township offices and advising the Township's Department Heads when to order new supplies to replenish inventory. The Township administration began purchasing janitorial supplies from companies controlled by Neil Gold in the spring of 2005. The first invoice from Neil Gold for such purchases was dated March 24, 2005. In 2005 and 2006, Respondent Gold served as a liaison on the Township Golf Committee ( "Golf Committee "), which meets to discuss the best interests of the Golf Course. The Golf Committee is comprised of Township residents and at least one Supervisor. As a Golf Committee liaison, Gold would interact with Township employees working at the Golf Course. In 2005, Respondent Gold approached Debra Caucci ( "Caucci "), the Manager of the Golf Course Restaurant ( "Restaurant "), about getting prices for her restaurant supplies. Gold also provided contact information for Neil Gold at Mid - Atlantic to Joseph Alvare ( "Alvare "), who became Acting General Manager of the Golf Course in August 2005. Beginning in September 2005, Alvare made purchases for the Golf Course from Mid - Atlantic. Neither the Golf Course nor the Restaurant had made any purchases from Mid - Atlantic prior to Respondent Gold becoming a Supervisor. None of the Township's purchases of janitorial and restaurant supplies from Mid - Atlantic between 2004 and 2006 were advertised or publicly bid. Rather, all purchases were made on an as- needed basis by Township Department Heads through purchase orders. The types of supplies purchased included cleaning supplies, toilet paper, soap, and paper products. Neil Gold, through Mid - Atlantic, submitted bills to the Township, to the attention of the particular Township Department that made the purchase from Mid - Atlantic. The invoices were on Mid - Atlantic letterhead and listed the invoice number and date, and the description and amount of the purchase. Respondent Gold voted to approve monthly bills lists that included payments issued to Mid - Atlantic and signed as Township signatory on checks issued to Mid - Atlantic between October 28, 2004, and October 26, 2006. Gold, in his capacity as Township Treasurer, occasionally made pre - payments to Mid - Atlantic. In 2005, the Township Solicitor had verbally advised Gold that no conflict of interest existed provided that the prices charged for janitorial supplies purchased from Mid - Atlantic were cheaper in comparison to those of other vendors. However, in 2006, the Township Solicitor informally advised Gold that Gold should abstain from voting on Township payments made to Mid - Atlantic. Gold began abstaining from approving payments to Mid - Atlantic in 2006. Gold, 06 -058 Page 14 The parties have stipulated that from September 2004 through February 2007, Mid - Atlantic billed the Township Departments a total of $ 37,069.15 for janitorial and restaurant supplies, as detailed in Fact Findings 26a and 26b. Between October 2004 and February 2007, the Township issued thirty -six checks to Mid - Atlantic for Township purchases. Of the thirty -six checks that were issued to Mid - Atlantic for Township purchases, twenty -six exceeded $500. None of the purchases encompassed by those twenty -six checks were publicly advertised or bid by the Township. As set forth in Fact Findings 34 and 35, the Township did not begin publicly advertising or bidding its purchases of institutional supplies until February 23, 2006. The parties have stipulated that Mid - Atlantic realized a total profit of $7,413.83 on the income received from the Township between 2004 and 2007. See, Fact Findings 37, 38. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations as follows: 3. The Investigative Division will recommend the following in relation to the above allegations: a. That a violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred in relation to Gold directing and /or recommending the use of his son's company to subordinates; and b. That a violation of Section 1103(f) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(f) occurred in relation to Gold's participation in actions of the board of supervisors to award contracts in excess of $500.00 to businesses in which his son, a member of his immediate family, is associated; and c. That a violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred when Gold participated in bid solicitations and votes to award contracts and issue payments to companies in which his son is co -owner and an owner. 4. Gold agrees to make payment in the amount of $7,500 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. 5. The Investigative Division will recommend that the State Ethics Commission take no further action in this matter; and make no specific recommendations to any law enforcement or other authority to take action in this matter. Such, however, does not prohibit the Commission from initiating appropriate enforcement actions in the event of Respondent's failure to comply with this agreement or the Commission's order or cooperating with any other authority who may Gold, 06 -058 Page 15 so choose to review this matter further. Consent Agreement, at 2. Per the Consent Agreement, Gold has accepted the Consent Agreement solely for purposes of resolving this matter. Id. In considering the Consent Agreement, we agree with the parties that a violation of Section 1103(a) of the Ethics Act occurred when Gold directed and /or recommended the use of his son's company to subordinates. But for the fact that Gold is a Supervisor, he would not have been in a position to discuss with or recommend to Township employees, including McKevitt, Kealey, Lynch, Caucci, and Alvare, the purchase of janitorial and restaurant supplies from Mid - Atlantic. The aforesaid actions constituted uses of authority of office. See, Juliante, Order 809. Such uses of authority of office resulted in private pecuniary benefits to Mid - Atlantic consisting of the profits that were realized from providing supplies to the Township. The parties have stipulated that Mid - Atlantic realized a total profit of $7,413.83 on the income received from the Township between 2004 and 2007. Respondent Gold's son, Neil Gold, is President of Mid - Atlantic. There was no authorization in law permitting Gold to direct or recommend that Township employees purchase supplies from his son's company. Accordingly, we hold that a violation of Section 1103(a) of the Ethics Act occurred when Gold, as a Township Supervisor, directed and /or recommended the use of his son's company to subordinates. We shall next consider the recommendation of the parties that a violation of Section 1103(f) occurred in relation to Gold's participation in actions of the board of supervisors to award contracts in excess of $500 to businesses with which his son, a member of his immediate family, is associated. During the time frame of September 2004 through February 2007, contracting occurred between the Township and Mid - Atlantic, a business with which Respondent Gold's son is associated. Although the Board did not act in advance to formally award contracts to Mid - Atlantic, Gold, in his capacity as a Township Supervisor, recommended the use of Mid - Atlantic to Township employees who then ordered supplies from Mid - Atlantic, and the Board voted to pay the invoices submitted by Mid - Atlantic. Some of the individual contracts were in excess of $500. No contracts were awarded through an open and public process. It would appear that the parties are considering the Board votes to pay the Mid - Atlantic invoices as the Board's action to award the contracts. We note that in Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004), the Commonwealth Court of Pennsylvania held that a township supervisor did not violate Section 1103(f) of the Ethics Act when a business that employed him entered into a contract in excess of $500 with his township without an open and public process, but the supervisor himself was neither a party to the contract nor a principal of the contracting business. Id. The Court determined that Section 1103(f) of the Ethics Act prohibited the conduct of entering into the contract under such circumstances. The Court concluded that although a violation of Section 1103(f) of the Ethics Act would be established under such circumstances, it would not be the public official who would be in violation of the law. Id. See also, Means, Opinion 04 -007. In the instant matter, Neil Gold is President of Mid - Atlantic. There is no indication in the Stipulated Findings that Respondent Gold is a principal of Mid - Atlantic. Had the parties not decided to enter into a Consent Agreement, factual and legal issues might have arisen as to the application of Section 1103(f) in this case. However, Gold, 06 -058 Page 16 the parties have entered into a comprehensive Consent Agreement with the benefit of legal counsel to assist them in weighing all relevant factual and legal considerations, and the parties are in agreement that a violation of Section 1103(f) would be appropriate as part of an overall settlement of this case. We shall accept the parties' proposed disposition. We hold that a violation of Section 1103(f) of the Ethics Act occurred in relation to Gold's participation in actions of the Board to award contracts in excess of $500 to business(es) with which his son, a member of his immediate family, is associated. The finding of this violation should not be considered as precedent for other cases, which would be decided based upon their facts and circumstances. Turning to the third recommended violation submitted by the parties, given that the parties are considering the Board votes to pay the Mid - Atlantic invoices as the Board's action to award the contracts, the stipulated Fact Findings support the parties' recommendation that a violation of Section 1103(a) of the Ethics Act occurred when Gold participated in votes to award contracts and issue payments to companies of which his son is co- owner /owner. Respondent Gold voted to approve monthly bills lists that included payments issued to Mid - Atlantic and, as Township signatory, signed checks issued to Mid - Atlantic between October 28, 2004, and October 26, 2006. In addition, Gold, in his capacity as Township Treasurer, occasionally made pre - payments to Mid - Atlantic. The aforesaid uses of the authority of Gold's public office resulted in a private pecuniary benefit to Mid - Atlantic, a business of which Respondent's son, Neil Gold, is co- owner /owner. As for the portions of the allegations and recommendations of the parties involving Gold's participation in bid solicitations, the Stipulated Findings do not indicate that any such participation by Gold occurred as to Mid - Atlantic. Accordingly, we do not find a violation as to Gold's alleged participation in bid solicitations. Rather, we hold that a violation of Section 1103(a) of the Ethics Act occurred when Gold participated in votes to award contracts and issue payments to companies of which his son is co- owner /owner. Although the exclusion from the violation of the language pertaining to participation in bid solicitations does not follow the Consent Agreement, such exclusion is to the benefit of Respondent Gold and is not actionable. As part of the Consent Agreement, Gold has agreed to make payment in the amount of $7,500 payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. We determine that the Consent Agreement submitted by the parties sets forth the proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, per the Consent Agreement, Gold is directed to make payment in the amount of $7,500 payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of this adjudication and Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. As a Supervisor for Warminster Township ( "Township ") from January 4, 2004, to the present, Respondent Fred Gold ( "Gold ") has at all times relevant to these proceedings been a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Gold, 06 -058 Page 17 2. Gold violated Section 1103(a) of the Ethics Act when, as a Township Supervisor, he directed and /or recommended the use of his son's company to subordinates. 3. A violation of Section 1103(f) of the Ethics Act occurred when Gold participated in actions of the Township Board of Supervisors to award contracts in excess of $500 to business(es) with which his son, a member of his immediate family, is associated. 4. Gold violated Section 1103(a) of the Ethics Act when he participated in votes to award contracts and issue payments to companies of which his son is co- owner /owner. In Re: Fred Gold, Respondent ORDER NO. 1461 File Docket: 06 -058 Date Decided: 4/28/08 Date Mailed: 5/15/08 1 Fred Gold ( "Gold "), a public official in his capacity as a Supervisor for Warminster Township ( "Township ") from January 4, 2004, to the present, violated Section 1103(a) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1103(a), when, as a Township Supervisor, he directed and /or recommended the use of his son's company to subordinates. 2. A violation of Section 1103(f) of the Ethics Act occurred when Gold participated in actions of the Township Board of Supervisors to award contracts in excess of $500 to business(es) with which his son, a member of his immediate family, is associated. 3. Gold violated Section 1103(a) of the Ethics Act when he participated in votes to award contracts and issue payments to companies of which his son is co- owner /owner. 4. Per the Consent Agreement of the parties, Gold is directed to make payment in the amount of $7,500 payable to the Commonwealth of Pennsylvania and forwarded to this Commission by no later than the thirtieth (30 ") day after the mailing date of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair