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In Re: Norwood A. Calhoun, : File Docket: 09-025
Respondent : X-ref: Order No. 1562
: Date Decided: 8/16/10
: Date Mailed: 8/17/10
Before: John J. Bolger, Vice Chair
Donald M. McCurdy
Raquel K. Bergen
Nicholas A. Colafella
Mark Volk
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted
an investigation regarding possible violation(s) 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 allegation(s). Upon completion of its investigation, the
Investigative Division issued and served upon Respondent a Findings Report identified as
an “Investigative Complaint.” An Answer was not timely filed and a hearing was deemed
waived. The averments in the Investigative Complaint are deemed admitted and are set
forth as the following Findings. The record is complete.
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.
Calhoun, 09-025
Page 2
I.ALLEGATIONS:
That Norwood Anthony Calhoun, a public official/public employee in his capacity as
Executive Deputy Treasurer for the Commonwealth of Pennsylvania, violated the following
provisions of the State Ethics Act (Act 93 of 1998) when he used the authority of his public
position for the private pecuniary benefit of himself and/or a member of his immediate
family when: he accepted tickets to a sporting event from PFM, a vendor for the
Department of Treasury, with whom he had negotiated a contract, which tickets were
obtained only as a result of his public position; he arranged to obtain tickets to the World
Series for himself and/or his brother from Harmelin Company, a vendor for the Department
of Treasury, with whom he had authorized a contract for advertising services, which tickets
were obtained only as a result of his public position; and when he failed to report the
source and value of the above referenced tickets on Statements of Financial Interests for
the required years.
§ 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).
§ 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.
65 Pa.C.S. § 1102.
§ 1105. Statement of financial interests
(b) Required information.--
The statement shall
include the following information for the prior calendar year
with regard to the person required to file the statement:
(6) The name and address of the source and
the amount of any gift or gifts valued in the aggregate at
$250 or more and the circumstances of each gift. This
paragraph shall not apply to a gift or gifts received from
a spouse, parent, parent by marriage, sibling, child,
grandchild, other family member or friend when the
circumstances make it clear that the motivation for the
action was a personal or family relationship. However,
for the purposes of this paragraph, the term "friend"
shall not include a registered lobbyist or an employee of
Calhoun, 09-025
Page 3
a registered lobbyist.
(7) The name and address of the source and
the amount of any payment for or reimbursement of
actual expenses for transportation and lodging or
hospitality received in connection with public office or
employment where such actual expenses for
transportation and lodging or hospitality exceed $650 in
an aggregate amount per year. This paragraph shall not
apply to expenses reimbursed by a governmental body
or to expenses reimbursed by an organization or
association of public officials or employees of political
subdivisions which the public official or employee
serves in an official capacity.
65 Pa.C.S. § 1105(b)(6), (7).
II.FINDINGS:
1. The Investigative Division of the State Ethics Commission received information
alleging that Norwood A. Calhoun violated provisions of the State Ethics Act. (Act
93 of 1998).
2. Upon review of the information, the Investigative Division initiated a preliminary
inquiry on May 4, 2009.
3. The preliminary inquiry was completed within sixty days.
4. On July 1, 2009, a letter was forwarded to Norwood A. Calhoun by the Investigative
Division of the State Ethics Commission informing himthat a complaint against him
was received by the Investigative Division and that a full investigation was being
commenced.
a. Said letter was forwarded by certified mail, no. 7006 2150 0002 5372 5409.
b. The domestic return receipt bore the signature of Grace Fuh, with a delivery
date of July 8, 2009.
5. On November 19, 2009, the Investigative Division of the State Ethics Commission
filed an application for a ninety day extension of time to complete the investigation.
6. The Commission issued an order on December 15, 2009, granting the ninety day
extension.
7. On March 8, 2010, the Investigative Division of the State Ethics Commission filed
an application for a second ninety day extension of time to complete the
Investigation.
8. The Commission issued an order on March 25, 2010, granting the ninety day
extension.
9. On June 9, 2010, an amended Notice of Investigation was forwarded to Norwood A.
Calhoun by the Investigative Division of the State Ethics Commission informing him
that the allegations contained in the July 1, 2009, Notice of Investigation were being
amended.
a. Said letter was forwarded by certified mail, no. 7009 2250 0000 3822 1214.
Calhoun, 09-025
Page 4
b. The domestic return receipt bore the signature of “Patience,” with a delivery
date of June 12, 2010.
10. On June 10, 2010, an amended Notice of Investigation was forwarded to Norwood
A. Calhoun by the Investigative Division of the State Ethics Commission informing
him that the allegations contained in the July 1, 2009, and June 9, 2010, Notice of
Investigation were being amended.
a. Said letter was forwarded by certified mail, no. 7009 2250 0000 3822 1207.
b. The domestic return receipt bore the signature of P.N.A Calhoun, with a
delivery date of June 17, 2010.
11. Periodic notice letters were forwarded to Norwood A. Calhoun in accordance with
the provisions of the Ethics Act advising him of the general status of the
investigation.
12. The Investigative Complaint/Findings Report was mailed to the Respondent on
June 23, 2010.
13. Norwood Anthony Calhoun was employed by the Commonwealth of Pennsylvania,
Department of the Treasury, as the Executive Deputy Treasurer from approximately
June 5, 2007, through March 27, 2009.
14. The position of Executive Deputy Treasurer reported directly to the Treasurer of the
Commonwealth of Pennsylvania.
a. No formal job description existed for Calhoun as Executive Deputy
Treasurer.
b. Calhoun’s work assignments were given by Treasurer Robin Wiessmann.
15. Robin Wiessmann served as Treasurer of the Commonwealth of Pennsylvania from
April 30, 2007, to December 2008.
a. Calhoun was appointed Executive Deputy Secretary by Wiessmann.
b. The position of Executive Deputy Treasurer created by Wiessmann did not
exist prior to Wiessmann taking office.
16. Calhoun’s general job duties included, but were not limited to, the following:
a. Act as Treasurer in the absence of the Treasurer.
b. All Deputy Treasurers reported to Calhoun.
c. Oversee the day-to-day operations of Treasury and its investments.
d. Approve/authorize contracts on behalf of the Department of Treasury.
17. One of Treasurer Wiessmann’s initiatives during her tenure was to increase the
involvement of women and minority owned businesses in investing Treasury assets.
18. Beginning early in 2008, one of Calhoun’s responsibilities with the Department of
Treasury was to participate in the implementation of a program whereby Treasury
would utilize the services of women owned and minority owned firms for investment
Calhoun, 09-025
Page 5
purposes of general assets of the Treasury.
a. Calhoun was assigned the task by Treasurer Wiessmann.
19. Calhoun participated in discussions with Treasury officials to select a company to
serve as the Manager of Managers for the program.
a. The Manager of Managers was responsible for the hiring and firing of
underlying managers based on performance.
20. One of the firms being considered was Public Financial Management Advisors
(PFM).
a. Wiessmann initiated discussions with representatives of PFM as early as
July 2007.
1. Wiessmann’s initial discussions were with John Spagnola, one [of]
PFM’s Managing Directors.
2. Spagnola works from PFM’s Philadelphia Office.
21. Public Financial Management Advisors (PFM) is a provider of independent financial
and investment advisory services to state and local governments and private sector
clients.
a. PFM has over 400 employees, in approximately thirty-one (31) offices, in
twenty-six (26) states.
b. PFM offers professional services to its clients in four (4) main areas
consisting of:
1. Advice on transactions related to tax exempt bond issuance for
municipalities, authorities and taxable bond issues.
2. Provide strategic consulting to government entities related to
budgetary matters, hiring and firing and labor agreements.
3. Management of assets, and short term fixed income assets, operating
funds and bond proceeds.
4. Provide investment consulting services to pension funds, endowment
funds, some hospital funds and ERISA funds (Employee Retirement
Income Security Act of 1974).
22. On or about July 25, 2007, John Spagnola, on behalf of PFM Asset Management,
had an initial meeting with State Treasurer Robin Wiessmann to discuss possible
services available to Treasury from PFM Asset Management.
a. Spagnola and Wiessmann were professionally familiar with one another prior
to her being appointed State Treasurer.
b. PFM Asset Management had not provided any services to Treasury prior to
Wiessmann’s appointment as Treasurer.
23. On or about February 5, 2008, Spagnola had a follow up meeting with Treasurer
Wiessmann in Harrisburg, Pennsylvania, to further discuss potential investment
services PFM Advisors could provide Treasury.
Calhoun, 09-025
Page 6
a. During this meeting, Spagnola was introduced to Norwood A. Calhoun.
b. On or about February 8, 2008, Wiessmann delegated the implementation
and day-to-day supervision of this program to Calhoun.
1. Calhoun was the highest ranking Treasury official involved with the
project.
24. Calhoun met with representatives of PFM on at least two occasions subsequent to
February 5, 2008.
a. Calhoun is recorded as meeting with PFM officials on May 28, 2008, and on
August 1, 2008.
25. Travel expense reimbursement records for Calhoun reflect he was reimbursed for
additional meetings held with PFM Advisors representatives on May 28, 2008, and
August 1, 2008.
a. Expenses incurred as part of both of these trips were approved by Treasurer
Robin Wiessmann.
b. Calhoun’s justification for the May 28, 2008, travel was “travel to
Philadelphia to meet with PFM Advisors with the Treasurer.”
c. Calhoun’s justification for the August 1, 2008, travel was “travel to
Philadelphia to meet with money manager and a broker RE: Our
Opportunity Fund.”
1. Services provided by PFM to Treasury were related to the
Opportunity Fund.
26. As a result of the February 5, 2008, and May 28, 2008, meetings, PFM Advisors
obtained proposals from women and minority owned investment businesses to
provide investment services to Treasury under PFM’s supervision.
a. In or around July 2008, PFM Advisors submitted an undated, twenty-three
(23) page brochure titled “PFM Advisors Emerging/Minority Manager
Program” along with a single page document detailing managers broken
down by dollar categories: $200 million portfolio, $300 million portfolio and
$400 million portfolio.
b. The twenty-three (23) page brochure includes information on the
emerging/minority program, including the names of companies and their
performance over the past several years.
27. Between February 5, 2008, and July 2008, Spagnola on behalf of PFM had contact
with the following Treasury Department employees in addition to Calhoun in
preparation of a July 8, 2008 Manager of Managers Investment Advisory Agreement
between PFM and Treasury:
a. Robin Wiessmann (Treasurer), Andrea Etter, Brian LaForme, Craig
Schwartz, Diane McCloskey, John Lisko, Kevin Leitenberger, Leo
Panduladis, Nancy Shatto, Susan Schulze and Todd Donton.
1. All of the above employees, with the exception of Treasurer
Wiessmann, would have reported to Calhoun.
Calhoun, 09-025
Page 7
28. Calhoun was responsible for implementation and supervision of the program.
a. Calhoun would provide periodic progress reports to Wiessmann.
b. Calhoun worked with other Treasury employees to implement the program.
29. Between February and July 2008, draft and final memos were submitted by
Spagnola to Treasury.
a. These memos related to the progress on the Pennsylvania Treasury
Opportunity Fund covering topic areas including:
1. Process leading to the selection of the Submanagers.
2. Contract update.
3. Investment policy update.
4. Final Steps.
b. Calhoun was responsible for reviewing and approving these documents in
his official capacity as Executive Deputy Treasurer.
30. On July 8, 2008, Calhoun, in his official capacity as Executive Deputy Treasurer,
approved the contract with PFM Asset Management, LLC for PFM Asset
Management, LLC to serve as the Manager of Managers for Treasury’s “opportunity
fund.”
a. “Opportunity Fund” was the designated title for Treasury’s investment
management opportunities program for minority, women-owned and
emerging Pennsylvania firms.
b. John Spagnola signed the agreement as Managing Director of PFM Asset
Management, LLC on June 26, 2008.
31. The July 8, 2008, contract with PFM Advisors to serve as the Manager of Managers
for Treasury identified authorized personnel and staff to provide services on behalf
of PFM Advisors as John S. Spagnola and Valentine J. Link, Jr., Managing
Directors.
a. Included with the agreement as exhibit 1 are the names of authorized
personnel to conduct business on behalf of the Pennsylvania Treasury
Department.
b. Authorized Treasury personnel included Keith Welks, Deputy Treasurer
Fiscal Operations, Brian LaForme, Director of Investments and Banking
Operations and N. A. Calhoun, Executive Deputy Treasurer.
c. This authorization gave Calhoun authority to act on behalf of Treasury on
matters relating to the Treasury Opportunity Fund.
d. Wiessmann delegated this responsibility to Calhoun.
e. Robin Wiessmann, the Treasurer at the time, is not listed on this contract.
f. Calhoun is the highest ranking Treasury Official in the chain of command
Calhoun, 09-025
Page 8
authorized to act on behalf of Treasury.
g. Schedule B of the agreement establishes the fees to be paid to PFM
Advisors as Manager of Managers. Annual fees are established for the
duration of the agreement beginning July 1, 2008, paid in twelve monthly
payments based on the account net assts [sic] for the month. Compensation
is based on the following fee schedule:
Assets Under Management:
First $200 Million 20 Basis Points
Next $100 Million 15 Basis Points
Thereafter 10 Basis Points
h. This agreement gave PFM Advisors the authority to hire money managers to
invest Commonwealth Funds on behalf of Treasury’s Opportunity Fund
program. Pursuant to contract terms, Bank of New York-Mellon was to serve
as the custodian of plan funds until distributed for investment.
i. The term of the agreement “ends on the last day of the calendar
quarter…This agreement automatically renews for an additional calendar
quarter service period unless a termination notice has been filed by client
(Treasury) within thirty days of the termination date.”
32. Calhoun participated in the ongoing review of the progress of PFM’s implementation
of the Treasury Opportunity Funds.
a. On or about July 18, 2008, a draft memo progress report on stationery of the
th
PFM Group, Two Logan Square, Suite 1600, 18 & Arch Streets,
Philadelphia, PA 19103 from John Spagnola, PFM Advisors was submitted
to Robin Wiessmann, Treasurer, with cc: to Anthony Calhoun, Assistant
State Treasurer and Brian LaForme, Director of Investments and Banking
Operations.
b. On July 21, 2008, a final memo from PFM Advisors was sent to Calhoun
which included specific information on the number of investment advisors
contacted and the contract status.
1. Included were paragraphs titled “contracts update” and “Final Steps”
which noted:
Contracts Update:
?
State Treasury Agreement - has been reviewed by counsel at PA
Treasury and PFM and executed by both parties. The contract is
now with the Attorney General’s Office for final review.
?
Submanager agreements – Contracts between the Submanagers and
PFM Asset Management have been negotiated, review [sic], and
executed.
Final Steps:
?
The fund will be ready to be funded as soon as the AG’s Office
approves the contract. Submanager accounts will be set up at BoNY
Mellon and the program should be available for funding by the end of
July.
?
We plan to maintain an open architecture environment that will allow
for new managers to be added to the program. We believe that there
will continue to be opportunities for inclusion in this program as we
continue to screen and visit managers. We also think that the
mandate can be expanded to include new asset classes.
Calhoun, 09-025
Page 9
33. In or about September 2008 a contract amendment was signed by N. Anthony
Calhoun, Executive Deputy Treasurer and John Spagnola, Managing Director on
behalf of PFM Advisors.
a. The amended agreement provided for the Submanagers to be paid directly
by the Manager of Managers (PFM Advisors).
b. Compensation for the Manager of Managers remained the same as stated in
the initial agreement.
c. The amendment was forward to Spagnola on or about September 26, 2008,
by Craig Schwartz, Treasury Deputy Chief Counsel.
34. Fee payments were made by Treasury to PFM consistent with terms contained in
the July 8, 2008, contract and September 26, 2008, contract signed by Calhoun in
his official capacity as Executive Deputy Treasurer.
35. Between August 15, 2008, and March 29, 2009, PFM received fees of $385,247.92
as a result of serving as the Manager of Managers for Treasury’s opportunity fund
program.
a. During this same timeframe, fees totaling $710,532.63 were paid to the
program’s submanagers.
b. Total fees paid during this timeframe were $1,095,780.55 ($385,247.92 to
PFM plus $710,532.63 to submanagers).
36. The following chart details total monthly fees paid to PFM Advisors along with the
amounts then paid by PFM Advisors to the submanagers. There were
approximately twelve submanagers during any given month.
Time Frame Invoice# Total Fees PFM’s Share Submanagers’
Share
08/15/08-08/31/08 52037 $ 86,961.78 $29,845.17 $57,116.61
09/01/08-09/30/08 52135 $147,900.27 $53,275.01 $94,625.26
10/01/08-10/31/08 52233 $147,932.99 $51,260.49 $96,672.50
11/01/08-11/30/08 52384 $146,368.18 $51,228.15 $95,140.03
12/01/08-12/31/08 52443 $151,386.71 $52,360.13 $99,026.58
01/01/09-01/31/09 98883 $143,161.93 $50,427.74 $92,734.19
02/01/09-02/28/09 99610 $139,410.96 $49,799.32 $89,611.64
03/01/09-03/29/09 52805 $132,657.73 $47,051.91 $85,605.82
$1,095,780.55 $385,247.92 $710,532.63
37. PFM’s services as Manager of Managers were terminated at the end of the first
quarter of 2009 (billing through March 29, 2009).
a. Calhoun’s employment with the Commonwealth ended March 27, 2009.
b. PFM’s services to Treasury were terminated by the new administration at
Treasury.
38. John Spagnola did not know Norwood A. Calhoun prior to being introduced to him
by then Treasurer Robin Wiessmann on February 5, 2008.
a. PFM’s Asset Management Division did not have any investment dealings
with the Pennsylvania Department of Treasury prior to the 2008 Opportunity
Calhoun, 09-025
Page 10
Fund investment initiative.
39. The PFM Group in Philadelphia obtains tickets to Philadelphia professional sports
teams including the Flyers (Hockey), the 76ers (Basketball), the Phillies (Baseball)
and the Eagles (Football).
a. Tickets are distributed by PFM Group employees in an effort to generate
new business and/or foster on-going business relationships.
b. Within the PFM Group Philadelphia office, approximately six (6) employees,
including Spagnola, have access to these tickets for promotional purposes.
40. PFM has control over the use of six tickets in a luxury box suite in the field box
area, with a seating capacity of twenty, at Lincoln Financial Field.
a. This luxury box suite is known as the PFM Box for seating purposes.
b. Lincoln Financial Field is used by the Philadelphia Eagles NFL team for
home games.
41. During 2008 PFM had approximately eighty (80) clients including the Pennsylvania
Department of Treasury under Spagnola’s supervision.
a. Approximately fifty-five percent (55%) of PFM’s clientele were governmental
agencies.
b. The PA Department of Treasury was one of Spagnola’s largest clients with
assets in excess of 400 million dollars.
42. Spagnola distributes sporting event tickets to clients in order to foster relationships
and generate new business.
a. Spagnola previously was a professional football player with the Philadelphia
Eagles.
43. During the summer or early fall months of 2008, Spagnola had a conversation(s)
with Calhoun regarding the unavailability of PFM tickets to Philadelphia Eagles
home football games.
a. At the time of the discussion, the PA Department of Treasury was a client of
PFM and [PFM] either was negotiating a contract or had recently obtained
the contract to manage the Treasury Opportunity Fund.
b. Norwood A. Calhoun was Spagnola’s primary point of contact at Treasury for
the PFM contract.
1. Calhoun had been delegated this responsibility by Treasurer
Wiessmann.
c. Calhoun was aware that Spagnola previously played professional football for
the Eagles as a result of conversations they had.
44. During one of Spagnola’s conversations with Calhoun, Spagnola offered Calhoun
the opportunity to attend a Philadelphia Eagles home game in PFM’s suite at
Lincoln Financial Field.
a. Spagnola had control of six (6) tickets per home game in the PFM luxury box
Calhoun, 09-025
Page 11
suite which held approximately twenty (20) seats.
45. PFM’s internal policy was to have at least one (1) representative in attendance at
an event tickets were provided to, for promotional purposes.
a. The remaining five (5) tickets per game were then available for promotional
purposes.
46. As a result of Spagnola’s conversations with Calhoun regarding attending an
Eagles game in PFM’s shared box, Calhoun expressed an interest in attending the
November 9, 2008, New York Giants vs. Philadelphia Eagles football game.
a. PFM had a total of six (6) tickets available in its shared suite for the game.
1. One of these tickets was reserved for a PFM employee (Spagnola).
47. In preparation for Calhoun’s attendance at the November 9, 2008, Giants/Eagles
game, several e-mails were exchanged between Spagnola and Calhoun between
November 3, 2008, and November 5, 2008.
a. These e-mails were sent by Spagnola and responded to by Calhoun using
Calhoun’s Commonwealth e-mail address acalhoun@patreasury.org.
b. These e-mails did not relate to Treasury business.
48. Between November 3, 2008, and November 5, 2008, the following e-mail
exchanges occurred between Spagnola and Calhoun regarding the tickets:
November 3, 2008:
a.
1. 12:03 p.m. Spagnola to Calhoun
“Tony, I have a couple of tickets to the Giants-Eagles game this week.
They are in our suite and food and beverage will be provided along
with cozy environs. Let me know if you have an interest in attending.
The game is at 815 in the evening. Hope you can make it. John.”
2. 1:50 p.m. Calhoun to Spagnola
“Sorry I sent the first response by accident. Thanks for the invite let
me get back to you by tomorrow morning. I assume this is a Sunday
nite game vs Monday nite.”
November 5, 2008:
b.
1. 1:32 p.m. Spagnola to Calhoun
“Hi Tony, Just checking in one more time before I look elsewhere. I
can do 2, 3, or 4 tickets if you are interested for Sunday’s game. If
you could let me know soon, I’d appreciate it, otherwise I have to get
moving elsewhere. Keep in mind the game is at 815 on Sunday.
Thanks, John.”
2. 2:01 p.m. Calhoun to Spagnola
“Sorry for the delay between working out family logistics and
excitement of the election I am slow in responding. My oldest son
and I are definite and I can ask my youngest (the Drexel student).
How do I get the tickets.”
3. 2:22 p.m. Spagnola to Calhoun
Calhoun, 09-025
Page 12
“Tony, That is great news! I can overnight you tickets and a parking
pass. Should I just assume that you want 3 or 4 tickets? I’m looking
forward to seeing you. John.”
4. 2:48 p.m. Calhoun to Spagnola
“3 is fine thank you.”
5. 2:54 p.m. Calhoun to Spagnola
“I am not in the office the rest of the week so listen to your voice mail.”
49. Calhoun utilized three (3) tickets he received from Spagnola for the November 9,
2008, Giants/Eagles game for himself and his two (2) sons.
a. No other representatives from the PA Department of Treasury were invited
by Spagnola to attend the game.
b. Calhoun had not previously attended any sporting events at PFM’s expense.
50. Calhoun did not seek permission from Treasurer Wiessmann prior to accepting the
tickets.
a. Wiessmann was not informed of the ticket offer prior to the game.
51. PFM estimates the fair market value of a single game ticket including hospitality
and parking to attend a regular season Eagles game in its suite at $500.00.
a. PFM does not provide the ticket recipient with any documentation of the
ticket’s value unless specifically requested.
b. PFM did not provide Calhoun with any written documentation of the tickets’
value.
52. The approximate fair market value of the three (3) game tickets, hospitality and
parking Calhoun received from Spagnola to attend the November 9, 2008,
Giants/Eagles game at Lincoln Financial Field was $1,500.00.
a. Approximate value of $1,500.00 was based on three (3) tickets at a value of
$500.00 each.
b. Calhoun did not contribute any of his own funds towards the cost of the
tickets.
53. Calhoun, in his official capacity as Executive Deputy Treasurer, was annually
required to file a Statement of Financial Interests form by May 1 containing
information for the prior calendar year.
54. Calhoun, in his official capacity as Executive Deputy Treasurer filed the following
Statement of Financial Interests forms:
a. Calendar year: 2007
Dated: March 23, 2008 form SEC-1 REV. 01/08
Position: Executive Deputy State Treasurer
Creditors: None
Direct/indirect income: PA Treasury Dept., New York State Senate,
Vantagepoint Funds
Office, Directorship or employment in any business: Vantagepoint Funds,
Director
Calhoun, 09-025
Page 13
All other financial interests: None
b. Calendar year: 2008
Dated: March 27, 2009 form SEC-1 REV. 01/09
Position: Executive Deputy State Treasurer
Creditors: None
Direct/indirect income: Federal pension, Vantagepoint Mutual Funds
Office, Directorship or employment in any business: Vantagepoint Funds,
Director
All other financial interests: None
Amended
c. Calendar year: 2008
Dated: July 21, 2009
Filed: July 23, 2009 at 11:59 a.m.
Position: Executive Deputy State Treasurer
Creditors: None
Direct/Indirect Income: Vantagepoint Mutual Funds
Gifts: Harmelin Media, 525 Rights Ferry Road, Bala Cynwyd, PA 19004
value $300.00, circumstances two World Series Tickets that were received
from the Phillies due to PA Treasury College Savings Plan advertising with
them;
th
PFM Financial Advisors, 18 & Arch Street, #1600, Philadelphia, PA 19103,
value $1,155.00, 3 tickets to Philadelphia Eagles game in Company Sky
Suite, Hospitality.
Office, Directorship or employment in any business: Vantagepoint Mutual
Funds, Director
All other financial interests: None
d. Calendar year: 2009
Dated: 04/21/10 on form SEC 1 REV 1/10
Position: Former Executive Deputy Treasurer
Occupation: Independent Consultant
Creditors: None
Direct/Indirect income: Federal pension; Vantagepoint Mutual Funds
Office, Directorship or employment in any business: Vantagepoint Mutual
Funds, Director
All other financial interests: None
55. Section 1105(b)(7) of the State Ethics Act, as amended in 2006, requires the
disclosure of: “The name and address of the source and the amount of any
payment for or reimbursement of actual expenses for transportation and lodging or
hospitality received in connection with public office or employment where such
actual expenses for transportation and lodging or hospitality exceed $650 in an
aggregate amount per year. This paragraph shall not apply to expenses reimbursed
by a governmental body or to expenses reimbursed by an organization or
association of public officials or employees of political subdivisions which the public
official or employee serves in an official capacity.”
56. Calhoun’s original Statement of Financial Interests for the 2008 calendar year dated
March 27, 2009, did not disclose the receipt of any hospitality in excess of $650.
a. The ticket package received by Calhoun from Spagnola exceeded $500.00
in value.
b. John Spagnola had no family relationship with Norwood Calhoun during
2008 or 2009.
Calhoun, 09-025
Page 14
c. Spagnola did not know Calhoun prior to February 5, 2008.
d. Calhoun only knew Spagnola as a result of Calhoun’s employment with the
Commonwealth.
e. Calhoun only received the football tickets as a result of and in connection
with his public position.
f. Calhoun would not have received the tickets if the Department of Treasury
was not a client of PFM.
57. Calhoun failed to list the Pennsylvania Treasury as a source of income in excess of
$1,300.00 on Statement of Financial Interests forms filed for the 2008 and 2009
calendar years.
a. Calhoun also failed to list his Federal pension as a source of income on his
amended filing for calendar year 2008.
1. Calhoun listed his pension as a source of income on his 2008 and
2009 calendar year filings.
58. The Pennsylvania Department of Treasury did not have a specific policy regarding
the receipt of gifts by its employees during Wiessmann’s tenure as Treasurer.
a. The Pennsylvania Department of Treasury followed guidelines set forth in
the State Ethics Act (Act 93 of 1998) regarding the receipt of gifts.
59. Sometime between July 8, 2009, and July 21, 2009, Calhoun contacted Spagnola
regarding the value of the tickets Calhoun received to the November 9, 2008,
Giants/Eagles game.
a. Calhoun initiated this contact after receiving the Notice of Investigation from
the State Ethics Commission dated July 1, 2009.
b. Calhoun informed Spagnola that he was required to list the value of any gift
he received in excess of $250.00.
c. Spagnola estimated the value to be approximately $375.00 [for] each ticket
when asked by Calhoun.
60. Calhoun did not receive any additional tickets from PFM after leaving Treasury’s
employment effective March 27, 2009.
a. Calhoun did not receive any tickets or gifts from Spagnola/PFM prior to his
employment with the Department of Treasury.
61. Calhoun filed an amended Statement of Financial Interests form for the 2008
calendar year as a result of learning of the value of tickets received from Spagnola
exceed[ing] the $250.00 reporting threshold for gifts.
THE FOLLOWING FINDINGS RELATE TO CALHOUN’S ACCEPTANCE OF TICKETS
FROM HARMELIN COMPANY AT A TIME WHEN HE WAS PARTICIPATING IN
APPROVING CONTRACTS TO THAT COMPANY.
62. Harmelin Media is an advertising company that had a statewide contract to make
media and advertising purchases for all Commonwealth agencies pursuant to State
Contract #9980-05.
Calhoun, 09-025
Page 15
a. Harmelin Media arranges for the media and advertising services through
local radio, television, newspaper and other print media in the targeted
market.
b. Harmelin Media is compensated by the hiring agency as part of the total
contract price.
c. Harmelin Media would negotiate the terms of a media purchase with the
providing company on behalf of the hiring agency.
d. The Pennsylvania Department of Treasury was one of the Commonwealth
agencies which utilized the services of Harmelin Media during 2008.
63. In an October 20, 2008, e-mail, Matt Schaeffer of Harmelin Media advised Dario
Bernardini, a Treasury official, of advertising opportunities during the 2008 World
Series.
a. Matt Schaeffer was the Harmelin Media employee responsible for Harmelin
Media’s contract with the Commonwealth.
b. Dario Bernardini was the Director of Marketing for Treasury in 2008.
c. Norwood A. Calhoun was Bernardini’s immediate supervisor at Treasury at
that time.
d. Bernardini was responsible for overseeing Treasury’s NowU Pennsylvania
529 College Savings Program at the time.
64. Schaeffer’s October 20, 2008, e-mail sent at 4:02 p.m. to Bernardini advised him of
advertising opportunities available during the upcoming World [Series].
a. The initial email included a brief description of the radio and television
advertising opportunities available during the upcoming World Series
broadcasts.
b. Specifically included in the e-mail was a statement that “All packages include
World Series tickets.”
c. Twenty-seven minutes later, at approximately 4:29 p.m. on October 20,
2008, Bernardini replie[d] to the Schaeffer e-mail with a question about the
type of promotional spots on a radio package. Schaeffer replied to
Bernardini’s question at 5:18 p.m. with more information regarding the ads.
65. Schaeffer and Bernardini continued exchanging the following e-mails on October
21, 2008, arranging for the contract and World Series tickets:
a. At 8:55 a.m. on October 21, 2008, Bernardini inquire[d], “Can you also find
out how good the seats are that come with the package…the Treasurer will
want to know.”
b. At 2:21 p.m. Schaeffer replied to the ticket inquiry advising:
“Dario, just left you a message. The original package 4 sold out, but they
have put together a similar package with 2 tickets. The tickets will be either
Sat or Sun (most likely Sunday) and would be in Section 234. Here’s a link
to see the ballpark seat diagram. Just click on section 234 and you’ll see
Calhoun, 09-025
Page 16
what the view from the section would be
http://philadelphia.phillies.mlb.com/phi/ballpark/seating_pricing.jsp. The
package cost would be $12,500 and you would receive 109 total spots
rotated on WIP and WPHT promoting tune in to the game broadcast brought
to you by NowU etc. etc. The spots would rotate throughout the six
scheduled game days. Here is a simple breakdown of the spots and
when/where they would run. Please let me know if you would like to proceed
with the package/tickets.”
66. After receiving Schaeffer’s October 21, 2008, 2:21 p.m. e-mail advising of the ticket
package and ticket location, Bernardini forwarded an e-mail to Calhoun at 2:30 p.m.
on October 21, 2008, forwarding ticket location and seeking direction as how to
proceed.
a. October 21, 2008
1. 2:30 p.m. Bernardini to Calhoun
“The package cost is $12,500.00 and we would receive 109 ten-
second spots rotated on WIP and WPHT, urging listeners to “tune in
to the game broadcast brought to you by NowU,” etc. Spots would
rotate throughout the six scheduled game days. Tickets will be either
Saturday or Sunday (most likely Sunday) and would be in Section
234. Here’s a link to see the ballpark seat diagram. Just click on
Section 234 and you’ll see what the view from the Section would be.
http://philadelphia.phillies.mlb.com/phi/ballpark/seating_pricing.jsp.
Please let me know if you would like to proceed with the
package/tickets.”
2. 2:46 p.m. Calhoun to Bernardini
“Let’s do it.”
3. 6:46 p.m. Calhoun to Bernardini
“Do the commercials have a mention of Treasurer Wiessmann if not
can we add it.”
67. After receiving Calhoun’s authorization to proceed, Bernardini direct[ed] Schaeffer
to proceed by e-mail as follows:
a. October 21, 2008, 2:49 p.m. Bernardini replie[d] to Schaeffer indicating, “let’s
proceed…send me the paperwork.”
b. At 3:22 p.m. Schaeffer inform[ed] Bernardini that he was able to negotiate
the package down to $10,500 including commission.
c. At 3:55 p.m. Bernardini faxe[d] to Schaeffer a signed purchase order.
d. At 4:01 p.m. Schaeffer replie[d], “great, once I receive the fax authorizing me
to purchase, I’ll confirm it with the station and get the ticket details.”
68. On October 22, 2008, Bernardini advised Calhoun of the specific game tickets that
would be provided and ask[ed] when Calhoun wanted the tickets sent:
a. 11:19 a.m. Bernardini to Calhoun
Subject: Phils Promo
“Harmelin says they can get Game 3 tix for Saturday night. They can
overnight them tomorrow for Friday delivery. Where do you want them
sent?”
Calhoun, 09-025
Page 17
69. After receiving Bernadini’s October 22, 2005, e-mail Calhoun sen[t] an e-mail to his
brother, Jason Calhoun, advising of the tickets and inquiring where he wanted the
tickets sent:
a. 11:36 a.m. Norwood Calhoun to Jason H. Calhoun
Subject: WS Tickets
“Are u interested in two tickets for Sat you may get wet? Send me your
address and I can have them overnited.”
b. 1:23 p.m. Jason H. Calhoun to Norwood Calhoun
Subject: Re: WS Tickets
“My address is [address redacted]. I can’t believe you were able to get
them! Thanks. You’re the best brother any ever had. :-) of course you know
that. Talk to you soon. Jason.”
70. After receiving confirmation that his brother wanted the tickets and the address
where the tickets were to be sent, Calhoun and Bernardini exchange[d] the
following e-mails:
a. 1:35 p.m. Calhoun to Bernardini
Subject: Re: Phils Prom(o)
“Nothing for Sunday? It is going to rain Sat. Just Kidding. Please send to
Jason Calhoun, [address redacted] thanks.”
b. 1:47 p.m. Bernardini to Calhoun
“Can you give me his phone #? FedEx will need it. And tell your brother to
bring an extra pair of clothes just in case…if Saturday is rained out, they’ll
play Game 3 on Sunday night.”
c. 2:16 p.m. Calhoun to Bernardini
“The phone number is [telephone number redacted] yes I already told him
about the weather.”
71. The October 22, 2008, email exchange between Bernardini and Schaeffer reflects
the following dialog regarding the tickets:
a. 2:21 p.m. Bernardini to Schaeffer:
“Send tix overnight with no signature required to: Jason Calhoun [address
redacted] [telephone number redacted]. Were we able to make the change
to the copy?”
1. Jason Calhoun is the brother of Norwood Calhoun.
b. 2:31 p.m. Schaeffer to Bernardini:
“Thanks, so far, so good with the copy. Are the tickets for the Treasurer?
The stations were asking if she will be attending.”
c. 3:10 p.m. Bernardini to Schaeffer:
“Not sure she’ll be able to attend. These are going to Tony Calhoun, who is
the Executive Deputy State Treasurer…second in command at Treasury.”
72. The following is a chronological listing of all of the e-mails between Schaeffer,
Bernardini, Norwood A. Calhoun and his brother Jason Calhoun, detailing the
award of [the] contract to [Harmelin] and Calhoun’s receipt of World Series tickets
which he then provided to his brother:
Calhoun, 09-025
Page 18
a. October 20, 2008
1. 4:02 p.m. Schaeffer to Bernardini advised him of advertising
opportunities available during the upcoming World Series.
aa. The initial email included a brief description of the radio and
television advertising opportunities available during the
upcoming World Series broadcasts.
bb. Of specific relevance was language stating that “All packages
include World Series tickets.”
2. 4:29 p.m. Bernardini to Schaeffer Bernardini replie[d] back with a
question about the type of promotional spots on a radio package.
3. 5:18 p.m. Schaeffer to Bernardini Schaeffer replied back to
Bernardini’s question.
b. October 21, 2008
1. At 8:55 a.m. on October 21, 2008, Bernardini replied back inquiring
“Can you also find out how good the seats are that come with the
package…the Treasurer will want to know.”
2. At 2:21 p.m. Schaeffer replied to the ticket inquiry advising:
“Dario, just left you a message. The original package 4 sold out, but
they have put together a similar package with 2 tickets. The tickets
will be either Sat or Sun (most likely Sunday) and would be in Section
234. Here’s a link to see the ballpark seat diagram. Just click on
section 234 and you’ll see what the view from the section would be
http://philadelphia.phillies.mlb.com/phi/ballpark/seating_pricing.jsp.
The package cost would be $12,500 and you would receive 109 total
spots rotated on WIP and WPHT promoting tune in to the game
broadcast brought to you by NowU etc. etc. The spots would rotate
throughout the six scheduled game days. Here is a simple
breakdown of the spots and when/where they would run. Please let
me know if you would like to proceed with the package/tickets.”
3. 2:30 p.m. Bernardini to Calhoun
“The package cost is $12,500.00 and we would receive 109 ten-
second spots rotated on WIP and WPHT, urging listeners to “tune in
to the game broadcast brought to you by NowU,” etc. Spots would
rotate throughout the six scheduled game days. Tickets will be either
Saturday or Sunday (most likely Sunday) and would be in Section
234. Here’s a link to see the ballpark seat diagram. Just click on
Section 234 and you’ll see what the view from the Section would be.
http://philadelphia.phillies.mlb.com/phi/ballpark/seating_pricing.jsp.
Please let me know if you would like to proceed with the
package/tickets.”
4. 2:46 p.m. Calhoun to Bernardini
“Let’s do it.”
5. At 2:49 p.m. to Schaeffer
“let’s proceed…send me the paperwork.”
Calhoun, 09-025
Page 19
6. At 3:22 p.m. Schaeffer inform[ed] Bernardini that he was able to
negotiate the package down to $10,500 including commission.
7. At 3:55 p.m. Bernardini faxe[d] over a signed purchase order.
8. At 4:01 p.m. Schaeffer replie[d] to Bernardini “great, once I receive
the fax authorizing me to purchase, I’ll confirm it with the station and
get the ticket details.”
9. 6:46 p.m. Calhoun to Bernardini
“Do the commercials have a mention of Treasurer Wiessmann if not
can we add it.”
c. October 22, 2008
1. 9:26 a.m. Bernardini to Calhoun
“Working on it.”
2. 11:19 a.m. Bernardini to Calhoun
Subject: Phils Promo
“Harmelin says they can get Game 3 tix for Saturday night. They can
overnight them tomorrow for Friday delivery. Where do you want
them sent?”
3. 11:36 a.m. Norwood Calhoun to Jason H. Calhoun
Subject: WS Tickets
“Are u interested in two tickets for Sat you may get wet? Send me
your address and I can have them overnited.”
4. 1:23 p.m. Jason H. Calhoun to Norwood Calhoun
Subject: Re: WS Tickets
“My address is [address redacted]. I can’t believe you were able to
get them! Thanks. You’re the best brother any ever had. :-) of course
you know that. Talk to you soon. Jason.”
5. 1:35 p.m. Calhoun to Bernardini
Subject: Re: Phils Prom(o)
“Nothing for Sunday? It is going to rain Sat. Just Kidding. Please
send to Jason Calhoun, [address redacted] thanks.”
6. 1:47 p.m. Bernardini to Calhoun
“Can you give me his phone #? FedEx will need it. And tell your
brother to bring an extra pair of clothes just in case…if Saturday is
rained out, they’ll play Game 3 on Sunday night.”
7. 2:16 p.m. Calhoun to Bernardini
“The phone number is [telephone number redacted] yes I already told
him about the weather.”
8. 2:21 p.m. Bernardini to Schaeffer:
“Send tix overnight with no signature required to: Jason Calhoun
[address redacted] [telephone number redacted]. Were we able to
make the change to the copy?”
9. 2:31 p.m. Schaeffer to Bernardini:
“Thanks, so far, so good with the copy. Are the tickets for the
Treasurer? The stations were asking if she will be attending.”
Calhoun, 09-025
Page 20
10. 3:10 p.m. Bernardini to Schaeffer:
“Not sure she’ll be able to attend. These are going to Tony Calhoun,
who is the Executive Deputy State Treasurer…second in command at
Treasury.”
73. On October 21, 2008, Dario Bernardini signed a media authorization form with
Harmelin Media after receiving authorization to do so from Calhoun.
a. Purchased were 109 total radio spots on WPHT (58) and WIP (51).
b. The total stated cost of $10,500.00 was determined as $10,000.00 budget ad
buy with $500.00 commission.
c. The authorization forms contain reference to the World Series tickets
provided as part of the package.
74. Bernardini signed an agency purchase request, Treasury form APR-1, request
number 08 0373 dated October 21, 2008, with a requested delivery date of October
23, 2008, between Treasury and Harmelin Media.
a. Bernardini signed the form authorizing Bureau approval.
b. Under “Article and Description” was placement of advertising on Philadelphia
radio stations promoting the 2008 World Series broadcasts.
c. Other signatures were for comptroller approval and Department approval.
d. The stated purchase amount was $10,500.00.
e. No reference is made to World Series Tickets being provided as [a] result of
purchasing air time.
75. Bernardini also signed the Treasury Purchase Order for the Media buy [on] October
21, 2008, and an invoice for the services provided on December 17, 2008.
a. The radio spots ran between October 23, 2008, and October 31, 2008.
76. Calhoun converted the two World Series tickets provided as part of this contract for
the personal use of himself and/or a member of his immediate family, his brother
Jason Calhoun.
a. Calhoun did not inform or receive permission from Treasurer Wiessmann to
do this.
1. Treasurer Wiessmann was not aware World Series tickets were
provided as part of the contract.
b. Calhoun did not offer the tickets to any other Treasury employee before
converting them to the personal use of his brother.
c. Calhoun did not inform Wiessmann of the availability of tickets or seek
permission to convert them to his own personal use.
77. The face value of World Series Game 3 tickets in Section 234 for season ticket
holders was $150.00 per ticket.
Calhoun, 09-025
Page 21
a. Neither Norwood A. Calhoun or his brother Jason Calhoun were 2008
Philadelphia Phillies season ticket holders.
b. Calhoun would not have been able to purchase the tickets to the World
Series at face value.
78. The average selling price for a Game 3 ticket to the 2008 World Series held at
Citizens Bank Park, Philadelphia, Pennsylvania, on October 25, 2008, for a non-
season ticket holder was $868.00.
a. The marketplace value of two (2) tickets to this game was $1,736.00.
b. Source of ticket value was StubHub, “the official fan to fan ticket marketplace
of the Philadelphia Phillies.”
c. In order for Calhoun to obtain the tickets on his own and at his own expense,
he would have had to pay at least $1,736.00.
79. Treasurer Robin Wiessmann was not copied into any of the e-mails relating to the
media purchase and related World Series tickets.
a. Calhoun was the highest ranking Treasury official who was involved in the
approval of the contract.
b. Calhoun authorized the contract which included the tickets.
80. Calhoun only had access to these World Series tickets as a result of authorizing the
$10,500.00 media purchase through Harmelin Media.
81. Calhoun did not disclose the receipt or value of World Series tickets on his
Statement of Financial Interests form dated March 27, 2009, for the 2008 calendar
year.
a. These tickets had an approximate fair market value of $1,736.00.
82. After receiving a Notice of Investigation dated July 1, 2009, from the Investigative
Division of the State Ethics Commission, Calhoun filed an amended Statement of
Financial Interests for the 2008 calendar year. (Finding 54)
a. The form, dated July 21, 2009, and received by the State Ethics Commission
on July 23, 2009, disclosed the following regarding Calhoun’s receipt of
World Series tickets:
Gifts: Harmelin Media, 525 Rights Ferry Road, Bala Cynwyd, PA 19004
value $300.00, circumstances two World Series Tickets that were
received from the Phillies due to Pennsylvania Treasury College
Savings Plan advertising with them.
83. Norwood A. Calhoun failed to disclose the receipt of Philadelphia Eagles football
tickets and Philadelphia Phillies World Series tickets received in October and
November of 2008 by himself and/or members of his immediate family through him
on his Statement of Financial Interests form filed for the 2008 calendar year.
a. Calhoun received tickets with a fair market value of approximately
$3,236.00:
1. Three (3) Giants/Eagles NFL tickets, $500.00 each, $1,500.00 total;
Calhoun, 09-025
Page 22
and
2. Two (2) 2008 World Series Game 3 tickets, $868.00 each, $1,736.00.
b. Calhoun disclosed the receipt of these tickets as a gift on his amended
Statement of Financial Interests form received by the State Ethics
Commission on July 23, 2009 (see, Finding 54).
84. Calhoun received the tickets to sporting events from vendors of Treasury only as a
result of his position as the Executive Deputy Treasurer of the Commonwealth of
PA.
a. Tickets were provided to Calhoun and/or members of his immediate family
from vendors Calhoun entered into and/or authorized contracts with in his
official capacity as the Executive Deputy Treasurer.
b. Total private pecuniary gain to Calhoun and/or members of his immediate
family is $3,236.00.
Calhoun, 09-025
Page 23
III.DISCUSSION:
As the Executive Deputy Treasurer for the Pennsylvania Department of the
Treasury (“Treasury”) from approximately June 5, 2007, through March 27, 2009,
Respondent Norwood Anthony Calhoun (hereinafter also referred to as “Respondent,”
“Respondent Calhoun,” and “Calhoun”) was a public official/public employee 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 Respondent Calhoun violated Sections 1103(a) and
1105(b)(6) and (7) of the Ethics Act when he used the authority of his public position for
the private pecuniary benefit of himself and/or a member of his immediate family when: (1)
he accepted tickets to a sporting event from “Public Financial Management Advisors”
(“PFM”), a vendor for Treasury with which he had negotiated a contract, which tickets were
obtained only as a result of his public position; (2) he arranged to obtain tickets to the
World Series for himself and/or his brother from Harmelin Media, a vendor for Treasury
with which he had authorized a contract for advertising services, which tickets were
obtained only as a result of his public position; and (3) he failed to report the source and
value of the above referenced tickets on Statements of Financial Interests (“SFIs”) for the
required years.
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 term "conflict of interest" is 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.
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.
Calhoun, 09-025
Page 24
Section 1105(b) of the Ethics Act and its subsections detail the financial disclosure
that a person required to file the SFI form must provide.
Subject to certain statutory exceptions, Section 1105(b)(6) of the Ethics Act requires
the filer to disclose on the SFI the name and address of the source and the amount of any
gift or gifts valued in the aggregate at $250 or more and the circumstances of each gift.
Subject to certain statutory exceptions, Section 1105(b)(7) of the Ethics Act requires
the filer to disclose on the SFI the name and address of the source and the amount of any
payment for or reimbursement of actual expenses for transportation and lodging or
hospitality received in connection with public office or employment where such actual
expenses exceed $650 in an aggregate amount per year. Section 1105(b)(7) of the Ethics
Act does not apply as to expenses reimbursed by a governmental body. 65 Pa.C.S. §
1105(b)(7).
We shall now summarize the material facts pertaining to this case. Given
Respondent’s failure to file a timely Answer to the Investigative Complaint, the facts as
averred by the Investigative Complaint are deemed admitted by Respondent. 65 Pa.C.S. §
1108(e); 51 Pa. Code § 21.5(k)(1).
Background:
Respondent Calhoun was employed by Treasury as the Executive Deputy Treasurer
from approximately June 5, 2007, through March 27, 2009. The position of Executive
Deputy Treasurer reported directly to the Treasurer of the Commonwealth of Pennsylvania.
From April 30, 2007, to December 2008, the Treasurer of the Commonwealth of
Pennsylvania was Robin Wiessmann (“Treasurer Wiessmann”). Calhoun was appointed
Executive Deputy Secretary by Treasurer Wiessmann.
As Executive Deputy Treasurer, Calhoun’s job duties included acting as Treasurer
in the absence of the Treasurer, overseeing the day-to-day operations of Treasury and its
investments, and approving/authorizing contracts on behalf of Treasury. All Deputy
Treasurers reported to Calhoun.
Calhoun’s receipt of Philadelphia Eagles Football Tickets from a Treasury vendor:
On or about February 8, 2008, Treasurer Wiessmann delegated to Calhoun the
implementation and day-to-day supervision of a Treasury program designated “Opportunity
Fund.” The Opportunity Fund program involved using the services of women owned and
minority owned firms for investing general assets of the Treasury. Calhoun was the
highest ranking Treasury official involved with the Opportunity Fund program.
Calhoun participated in discussions with Treasury officials to select a company to
serve as the “Manager of Managers” for the Opportunity Fund program. The Manager of
Managers was responsible for hiring and firing underlying managers to invest the Treasury
assets. One of the firms considered for the Manger of Managers was PFM.
John Spagnola (“Spagnola”) is a Managing Director for PFM.Calhoun was first
introduced to Spagnola on February 5, 2008, at a meeting with Treasurer Wiessmann.
Between February and July 2008, Calhoun met with PFM representatives and
reviewed and approved memos submitted by Spagnola to Treasury relating to progress on
the Opportunity Fund. Calhoun took these actions in his official capacity as Executive
Deputy Treasurer.
Calhoun, 09-025
Page 25
On July 8, 2008, Calhoun, in his official capacity as Executive Deputy Treasurer,
approved a contract between Treasury and PFM Asset Management, LLC. The contract
provided for PFM Asset Management, LLC to serve as the Manager of Managers for
Treasury’s Opportunity Fund. Spagnola signed the contract as Managing Director of PFM
Asset Management, LLC.
Per the aforesaid contract, Spagnola was one of two Managing Directors authorized
to provide services on behalf of PFM, and Calhoun was the highest ranking Treasury
official authorized to act on behalf of Treasury as to the Opportunity Fund.
Following execution of the aforesaid contract, Calhoun participated in the ongoing
review of the progress of PFM’s implementation of the Treasury Opportunity Fund.
In or about September 2008, a contract amendment was signed by Calhoun as
Executive Deputy Treasurer and by Spagnola on behalf of PFM to provide for the
Submanagers to be paid directly by PFM. Compensation for the Manager of Managers
remained as stated in the initial contract.
The PFM Group in Philadelphia obtains tickets to Philadelphia professional sports
teams including the Eagles. During the summer or early fall months of 2008, Spagnola
had conversation(s) with Calhoun regarding the unavailability of PFM tickets to
Philadelphia Eagles home football games. At the time of the discussion, Treasury was a
client of PFM, and PFM either was negotiating a contract or had recently obtained the
contract to manage the Treasury Opportunity Fund. Calhoun was Spagnola’s primary
point of contact at Treasury for the contract.
During one of Spagnola’s conversations with Calhoun, Spagnola offered Calhoun
the opportunity to attend a Philadelphia Eagles home game in PFM’s shared luxury box
suite at Lincoln Financial Field. As a result of Spagnola’s conversations with Calhoun
regarding attending an Eagles game in PFM’s shared box, Calhoun expressed an interest
in attending the November 9, 2008, New York Giants vs. Philadelphia Eagles football
game.
In preparation for Calhoun’s attendance at the November 9, 2008, Giants/Eagles
game, several e-mails were exchanged between Spagnola and Calhoun between
November 3, 2008, and November 5, 2008, as detailed at Fact Findings 48a-b. These e-
mails were sent by Spagnola and responded to by Calhoun using Calhoun’s
Commonwealth e-mail address.
Calhoun utilized three (3) tickets he received from Spagnola for the November 9,
2008, Giants/Eagles game for himself and his two (2) sons. No other representatives from
Treasury were invited by Spagnola to attend the game. Calhoun did not seek permission
from Treasurer Wiessmann prior to accepting the tickets. Treasurer Wiessmann was not
informed of the ticket offer prior to the game.
The approximate fair market value of the three (3) game tickets, hospitality and
parking Calhoun received from Spagnola to attend the November 9, 2008, Giants/Eagles
game at Lincoln Financial Field was $1,500.00. PFM did not provide Calhoun with any
written documentation of the value of the tickets he received.
Calhoun did not disclose his receipt of the Philadelphia Eagles football tickets on
his SFI form filed for the 2008 calendar year. After receiving a Notice of Investigation
dated July 1, 2009, from the Investigative Division of the State Ethics Commission,
Calhoun contacted Spagnola, who estimated the value of the tickets to be $375.00 each.
Calhoun then filed an amended SFI for the 2008 calendar year, which was dated July 21,
2009, and received by the State Ethics Commission on July 23, 2009. On his amended
SFI for calendar year 2008, Calhoun disclosed the receipt of the aforesaid tickets as a gift
Calhoun, 09-025
Page 26
from PFM and listed the value of the tickets/hospitality as $1,155.00.
Per the Fact Findings deemed admitted by Calhoun, Calhoun only knew Spagnola
as a result of Calhoun’s employment with the Commonwealth. Calhoun received the
football tickets only as a result of and in connection with his public position. Calhoun
would not have received the tickets if Treasury was not a client of PFM.
Between August 15, 2008, and March 29, 2009, PFM received fees totaling
$385,247.92 as the “Manager of Managers” for the Opportunity Fund program. PFM’s
services as Manager of Managers were terminated at the end of the first quarter of 2009
by the new administration at Treasury.
Calhoun’s receipt of World Series Tickets through a Treasury contract:
During 2008, Treasury utilized the services of an advertising company named
“Harmelin Media.” Matt Schaeffer (“Schaeffer”) was the Harmelin Media employee
responsible for Harmelin Media’s contract with the Commonwealth. Dario Bernardini
(“Bernardini”) was the Director of Marketing for Treasury. Calhoun was Bernardini’s
immediate supervisor.
On October 20, 2008, Schaeffer sent an e-mail to Bernardini advising Bernardini of
advertising opportunities available during the 2008 World Series. The e-mail specifically
stated that “All packages include World Series tickets.” Later that same day, Bernardini
replied to the Schaeffer e-mail with a question about the type of promotional spots on a
radio package, and Schaeffer replied to Bernardini’s question with more information
regarding the ads.
On October 21, 2008, Bernardini and Schaeffer exchanged e-mails regarding the
quality of the seats that would be available for the World Series tickets. Bernardini then
forwarded that information to Calhoun, who instructed Bernardini to proceed with
purchasing the package/tickets. Bernardini and Schaeffer subsequently exchanged further
e-mails arranging for the contract.
On October 21, 2008, Bernardini signed media authorization form(s) with Harmelin
Media after receiving authorization to do so from Calhoun. Per the contract, Treasury
purchased 109 radio spots at a total cost of $10,500.00. The authorization form(s) contain
reference to the World Series tickets provided as part of the package.
Bernardini also signed a Treasury purchase request form (Treasury form APR-1) to
process the purchase. The Treasury purchase request form did not contain any reference
to World Series Tickets being provided as a result of purchasing air time.
On October 22, 2008, Bernardini sent an e-mail to Calhoun advising Calhoun of the
specific game tickets that would be provided and asking where Calhoun wanted the tickets
to be sent. Calhoun then sent an e-mail to his brother, Jason Calhoun, advising of the
tickets and inquiring where he wanted the tickets sent. After receiving confirmation that his
brother wanted the tickets and the address where the tickets were to be sent, Calhoun and
Bernardini exchanged e-mails in which Calhoun instructed Bernardini to send the tickets to
Jason Calhoun. Subsequently, Bernardini and Schaeffer exchanged e-mails in which
Bernardini instructed Schaeffer to send the tickets by overnight delivery to Jason Calhoun.
Calhoun authorized the contract which included the tickets. Calhoun was the
highest ranking Treasury official who was involved in the approval of the contract.
Per the Fact Findings deemed admitted by Calhoun, Calhoun converted the two
World Series tickets provided as part of the aforesaid Treasury contract for the personal
use of himself and/or a member of his immediate family, his brother Jason Calhoun.
Calhoun, 09-025
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Calhoun did not receive permission from Treasurer Wiessmann to do so. Treasurer
Wiessmann was not aware that World Series tickets were provided as part of the contract.
Calhoun did not offer the tickets to any other Treasury employee before converting them
to the personal use of his brother. Calhoun did not inform Treasurer Wiessmann of the
availability of tickets or seek permission to convert them to personal use.
For season ticket holders, the face value of World Series Game 3 tickets in the
Section where these seats were located was $150.00 per ticket. However, Calhoun would
not have been able to purchase the aforesaid tickets to the World Series at face value.
Calhoun only had access to the aforesaid World Series tickets as a result of authorizing
the $10,500.00 media purchase through Harmelin Media.
Per Fact Finding 78a, deemed admitted by Respondent Calhoun, the marketplace
value of two (2) tickets to this particular game was $1,736.00 (2 tickets at $868.00 each).
In order for Calhoun to obtain the tickets on his own and at his own expense, he would
have had to pay at least $1,736.00. The Fact Findings indicate that the ticket value was
obtained from StubHub, “the official fan to fan ticket marketplace of the Philadelphia
Phillies.” Fact Finding 78b.
Calhoun did not disclose his receipt of the aforesaid Philadelphia Phillies World
Series tickets on his SFI form filed for the 2008 calendar year. After receiving a Notice of
Investigation dated July 1, 2009, from the Investigative Division of the State Ethics
Commission, Calhoun filed an amended SFI for the 2008 calendar year, which was dated
July 21, 2009, and received by the State Ethics Commission on July 23, 2009. On his
amended SFI for calendar year 2008, Calhoun disclosed the receipt of the aforesaid
tickets as a gift from Harmelin Media. Calhoun listed the value of the World Series tickets
as $300.00.
Private pecuniary benefit:
Per Fact Findings 84-84b, deemed admitted by Respondent Calhoun, Calhoun
received the aforesaid tickets to sporting events from vendors of Treasury only as a result
of his position as the Executive Deputy Treasurer of the Commonwealth. The tickets were
provided to Calhoun and/or members of his immediate family from vendors Calhoun
entered into and/or authorized contracts with in his official capacity as the Executive
Deputy Treasurer. The total private pecuniary gain to Calhoun and/or members of his
immediate family is $3,236.00.
With regard to Calhoun’s SFIs, we note that in addition to the facts pertaining to
non-disclosure of the aforesaid tickets, the Findings reference certain undisclosed sources
of income. Per Fact Finding 57, Calhoun failed to list Treasury as a source of income in
excess of $1,300.00 on SFI forms filed for the 2008 and 2009 calendar years. However,
the allegations before us do not encompass undisclosed sources of income.
We must now determine, based upon the record, whether the actions of
Respondent violated the Ethics Act. As we apply the facts to the allegations, due process
requires that we not depart from the allegations. Pennsy v. Department of State, 594 A.2d
845 (Pa. Commw. Ct. 1991). A violation of the Ethics Act must be based upon clear and
convincing proof. 65 Pa.C.S. § 1108(g). Clear and convincing proof is “so ‘clear, direct,
weighty, and convincing as to enable the trier of fact to come to a clear conviction, without
hesitance, of the truth of the precise facts in issue.’” In Re: Charles E.D.M., 550 Pa. 595,
601, 708 A.2d 88, 91 (1998) (Citation omitted).
We note that both parties have filed Position Statements, setting forth their
respective views as to how this Commission should decide this case.
The first allegation is that Calhoun violated Section 1103(a) of the Ethics Act when
Calhoun, 09-025
Page 28
he used the authority of his public position for the private pecuniary benefit of himself
and/or a member of his immediate family when he accepted tickets to a sporting event from
PFM, a vendor for Treasury with whom he had negotiated a contract, which tickets were
obtained only as a result of his public position.
Gifts, transportation, lodging or hospitality received from a vendor may form the
basis for a violation of Section 1103(a) of the Ethics Act when the public official/public
employee uses the authority of his public position as to the vendor. See, e.g., Haldeman,
Order 1443; Munford, Order 1390; Espenshade, Order 1387; Helsel, Order 801. The
element of use of authority of office may only be established if the public official/public
employee takes action (see, McGuire v. State Ethics Commission, 657 A.2d 1346 (Pa.
Cmwlth. 1995); Shimek, Opinion 01-002).
In the instant matter, Calhoun used the authority of his public position as Executive
Deputy Treasurer in matters involving PFM: (1) to the extent he exercised authority as to
the implementation and day-to-day supervision of the Treasury Opportunity Fund program;
(2) when he participated in meetings and other actions leading up to the selection of PFM
to serve as the Manager of Managers for the Opportunity Fund; (3) when he provided
approval on July 8, 2008, of the contract between Treasury and PFM Asset Management,
LLC for such work; (4) when he participated in the ongoing review of the progress of PFM’s
implementation of the Opportunity Fund; and (5) when he signed the September 2008
amendment to the contract with PFM.
Per the Fact Findings, Spagnola’s conversation(s) with Calhoun regarding PFM
tickets to Philadelphia Eagles games commenced during the “summer or early fall months
of 2008,” when PFM “either was negotiating a contract or had recently obtained the
contract to manage the Treasury Opportunity Fund.” Fact Findings 43-43a. The
necessary implication is that such conversations may have commenced as early as June
2008 or as late as October 2008.
Because the Fact Findings indicate that such conversations may have commenced
as late as October 2008, we find no violation of Section 1103(a) of the Ethics Act as to the
first allegation. There is no indication in the Fact Findings that Calhoun used the authority
of his public position as to PFM after September 2008.
Accordingly, we find that Calhoun did not violate Section 1103(a) of the Ethics Act
as to his acceptance of tickets to a sporting event from Treasury vendor PFM based upon
an insufficiency of evidence.
The second allegation is that Calhoun violated Section 1103(a) of the Ethics Act
when he used the authority of his public position for the private pecuniary benefit of himself
and/or a member of his immediate family when he arranged to obtain tickets to the World
Series for himself and/or his brother from Harmelin Media, a vendor for Treasury with
which he had authorized a contract for advertising services, which tickets were obtained
only as a result of his public position. Each element of the alleged violation has been
established.
As Executive Deputy Treasurer, Calhoun had the authority to approve/authorize
contracts on behalf of Treasury. Fact Finding 16d. Calhoun used the authority of his
public position as Executive Deputy Treasurer when he authorized the contract with
Harmelin Media, which included tickets to the 2008 World Series, and directed that the
World Series tickets be forwarded to his brother. Calhoun was the highest ranking
Treasury official who was involved in the approval of the contract. Per the Fact Findings,
which are deemed admitted, Calhoun converted the two World Series tickets provided as
part of the aforesaid Treasury contract for the personal use of himself and/or a member of
his immediate family, his brother Jason Calhoun. Fact Finding 76. Calhoun did not
receive permission from Treasurer Wiessmann to do so. Fact Finding 76a. Treasurer
Calhoun, 09-025
Page 29
Wiessmann was not aware that World Series tickets were provided as part of the contract.
Fact Finding 76a(1). Calhoun did not offer the tickets to any other Treasury employee
before converting them for the personal use of his brother. Fact Finding 76b.
Based upon the Fact Findings, deemed admitted by Respondent Calhoun, the
resulting private pecuniary benefit was $1,736.00, representing the value of the tickets.
Fact Findings 78a, 78c, 81a, 83a-84b.
Given the procedural posture and Respondent’s aforesaid deemed admissions in
this case, we reject the arguments raised in Respondent’s Position Statement that no one
else in the office wanted the tickets, and that the value of the tickets should be the face
value. Position Statement of Respondent, at 1-2.
We hold that Calhoun violated Section 1103(a) of the Ethics Act when he
authorized a contract between Treasury and Harmelin Media that included 2008 World
Series tickets, which tickets Calhoun obtained only as a result of his public position and
converted for the personal use of his brother.
The third allegation is that Calhoun violated Sections 1105(b)(6) and (7) of the
Ethics Act when he failed to report the sources and values of the above referenced tickets
on SFIs for the required years.
The Investigative Division acknowledges that because the tickets that Respondent
Calhoun received for sporting events would not fall within the statutory definition of the
term “gift,” there was no violation of Section 1105(b)(6) of the Ethics Act by Respondent.
Position Statement of Investigative Division, at 6-7 (Citing Haldeman, supra). We hold that
no violation of Section 1105(b)(6) of the Ethics occurred in this case as tickets received by
Respondent were not “gifts” as that term is defined by the Ethics Act.
We hold that Calhoun violated Section 1105(b)(7) of the Ethics Act when he failed
to provide an accurate and timely SFI for calendar year 2008 disclosing the source and
value of Philadelphia Eagles football game tickets that he received from PFM in 2008. The
tickets were hospitality that Calhoun received from PFM in connection with Calhoun’s
public position.
As for the aforesaid 2008 World Series tickets, based upon the Fact Findings, such
tickets were purchased by Treasury as part of an advertising package. The tickets
became the property of Treasury and were converted by Calhoun for the personal use of
his brother. As converted property of Treasury, a governmental body, the tickets were not
required to be disclosed as “hospitality” on Calhoun’s SFI form. See, 65 Pa.C.S. §
1105(b)(7).
We recognize the concern that the 2008 World Series tickets constituted a clear
benefit gained by Calhoun, who did not even disclose Treasury as a source of income on
his SFI form for calendar year 2008. Were it not for the statutory language, we would have
found a violation as to non-disclosure of these tickets.
We hold that no violation of Section 1105(b)(7) of the Ethics Act occurred with
respect to Calhoun’s non-disclosure on his SFI form of 2008 World Series tickets that
Calhoun obtained as a result of a contract between Treasury and Harmelin Media, as such
tickets were the property of Treasury, a governmental body, and were converted by
Calhoun for the personal use of his brother.
We shall now consider the imposition of a monetary penalty.
Calhoun, 09-025
Page 30
Section 1107(13) of the Ethics Act empowers this Commission to direct payment of
restitution in instances where a public official/public employee has obtained a financial
gain in violation of the Ethics Act.
We determine that restitution in the amount of $1,736.00 is warranted in this case.
Accordingly, Respondent Calhoun is directed to make payment of restitution in the amount
of $1,736.00 payable to the Commonwealth of Pennsylvania and forwarded to this
th
Commission by no later than the thirtieth (30) day after the mailing date of this
adjudication and Order, for processing.
To the extent he has not already done so, Calhoun is directed to file a complete and
accurate SFI for calendar year 2008 with this Commission by no later than the thirtieth
th
(30) day after the mailing date of this adjudication and Order.
Noncompliance will result in the institution of an order enforcement action.
IV.CONCLUSIONS OF LAW:
1. As the Executive Deputy Treasurer for the Pennsylvania Department of the
Treasury (“Treasury”) from approximately June 5, 2007, through March 27, 2009,
Respondent Norwood Anthony Calhoun (“Calhoun”) was a public official/public
employee subject to the provisions of the Public Official and Employee Ethics Act
(“Ethics Act”), 65 Pa.C.S. § 1101 et seq.
2. Calhoun did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), as
to his acceptance of tickets to a sporting event from Treasury vendor “Public
Financial Management Advisors” (“PFM”) based upon an insufficiency of evidence.
3. Calhoun violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he
authorized a contract between Treasury and Harmelin Media that included 2008
World Series tickets, which tickets Calhoun obtained only as a result of his public
position and converted for the personal use of his brother.
4. No violation of Section 1105(b)(6) of the Ethics Act, 65 Pa.C.S. § 1105(b)(6),
occurred in this case as tickets received by Respondent were not “gifts” as that term
is defined by the Ethics Act.
5. Calhoun violated Section 1105(b)(7) of the Ethics Act, 65 Pa.C.S. § 1105(b)(7),
when he failed to provide an accurate and timely Statement of Financial Interests
(“SFI”) for calendar year 2008 disclosing the source and value of Philadelphia
Eagles football game tickets that he received from PFM in 2008.
6. No violation of Section 1105(b)(7) of the Ethics Act, 65 Pa.C.S. § 1105(b)(7),
occurred with respect to Calhoun’s non-disclosure on his SFI form of 2008 World
Series tickets that Calhoun obtained as a result of a contract between Treasury and
Harmelin Media, as such tickets were the property of Treasury, a governmental
body, and were converted by Calhoun for the personal use of his brother.
7. Restitution is warranted in this case.
In Re: Norwood A. Calhoun, : File Docket: 09-025
Respondent : Date Decided: 8/16/10
: Date Mailed: 8/17/10
ORDER NO. 1562
1. Norwood Anthony Calhoun (“Calhoun”), a public official/public employee in his
capacity as the Executive Deputy Treasurer for the Pennsylvania Department of the
Treasury (“Treasury”) from approximately June 5, 2007, through March 27, 2009,
did not violate Section 1103(a) of the Public Official and Employee Ethics Act
(“Ethics Act”), 65 Pa.C.S. § 1103(a), as to his acceptance of tickets to a sporting
event from Treasury vendor “Public Financial Management Advisors” (“PFM”)
based upon an insufficiency of evidence.
2. Calhoun violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he
authorized a contract between Treasury and Harmelin Media that included 2008
World Series tickets, which tickets Calhoun obtained only as a result of his public
position and converted for the personal use of his brother.
3. No violation of Section 1105(b)(6) of the Ethics Act, 65 Pa.C.S. § 1105(b)(6),
occurred in this case as tickets received by Respondent were not “gifts” as that term
is defined by the Ethics Act.
4. Calhoun violated Section 1105(b)(7) of the Ethics Act, 65 Pa.C.S. § 1105(b)(7),
when he failed to provide an accurate and timely Statement of Financial Interests
(“SFI”) for calendar year 2008 disclosing the source and value of Philadelphia
Eagles football game tickets that he received from PFM in 2008.
5. No violation of Section 1105(b)(7) of the Ethics Act, 65 Pa.C.S. § 1105(b)(7),
occurred with respect to Calhoun’s non-disclosure on his SFI form of 2008 World
Series tickets that Calhoun obtained as a result of a contract between Treasury and
Harmelin Media, as such tickets were the property of Treasury, a governmental
body, and were converted by Calhoun for the personal use of his brother.
6. Calhoun is directed to make payment of restitution in the amount of $1,736.00
payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania
th
State Ethics Commission by no later than the thirtieth (30) day after the mailing
date of this Order for processing.
7. To the extent he has not already done so, Calhoun is directed to file a complete and
accurate SFI for calendar year 2008 with the Pennsylvania State Ethics
th
Commission by no later than the thirtieth (30) day after the mailing date of this
Order.
8. Non-compliance with Paragraph 6 or Paragraph 7 of this Order will result in the
institution of an order enforcement action.
BY THE COMMISSION,
___________________________
John J. Bolger, Vice Chair
Calhoun, 09-025
Page 32
Chair Louis W. Fryman did not participate in this matter.