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HomeMy WebLinkAbout1570 Nashtock In Re: Michael P. Nashtock, Jr., : File Docket: 09-023 Respondent : X-ref: Order No. 1570 : Date Decided: 10/19/10 : Date Mailed: 10/26/10 Before: Louis W. Fryman, Chair 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 allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an “Investigative Complaint.” An Answer was filed and a hearing was requested. A Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were subsequently submitted by the parties to the Commission for consideration. The Stipulated Findings are 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. Nashtock, 09-023 Page 2 I.ALLEGATIONS: That Michael Nashtock, Jr., a public official/public employee in his capacity as a Supervisor of South Pymatuning Township, violated Sections 1103(a), 1104(a) and 1105(a) of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. §§ 1103(a), 1104(a) and 1105(a), when he used the authority of his public position for private gain by participating in actions of the Board of Supervisors to appoint him to a compensated position on the South Pymatuning Township Municipal Authority and when he participated in actions of the Board of Supervisors to approve compensation for Authority Members; and when, as a Member of the Authority, he voted to increase compensation for Members of the Authority; when he failed to file a Statement of Financial Interests with South Pymatuning Township for the 2007 calendar year; when he failed to file a Statement of Financial Interests as an Authority Board Member for calendar year 2006; when he failed to disclose income received from the Authority on Statements of Financial Interests filed for calendar years 2004, 2005 and 2008; and when he failed to disclose income received from the Township on his Statement of Financial Interests (original and amended) filed for calendar year 2008. II.FINDINGS: 1. Michael P. Nashtock has served as a Supervisor for South Pymatuning Township, Mercer County, from January 2, 1990, through the present. a. Nashtock served as the Chairman of the Board of Supervisors from January 2, 1996, until January 2, 2007, and from January 4, 2010, to the present. b. Nashtock served as the Assistant Chairman from January 2, 2007, until January 4, 2010. 2. Nashtock has also served as a Member of the South Pymatuning Township Municipal Authority (hereafter Authority) from November 22, 2002, through the present. a. Nashtock was initially appointed by the South Pymatuning Board of Supervisors to fill a vacancy on the Authority Board and was subsequently re-appointed to a complete five year term in January 2006. b. Nashtock served as the Chairman of the Authority Board from January 4, 2005, through the present and Vice-Chairman of the Authority Board from January 7, 2003, through January 3, 2005. 3. South Pymatuning Township is a second class township governed by a three Member Board of Supervisors. a. The South Pymatuning Township Supervisors hold one legislative meeting per month on the second Tuesday of the month. 1. Workshop meetings are held approximately one hour prior to the start of the regular legislative meeting. b. Special meetings are held as necessary. 4. South Pymatuning Township Supervisors are compensated in the amount of $1,875.00 annually in their Supervisor positions. a. Supervisors receive compensation due in quarterly installments. Nashtock, 09-023 Page 3 b. Supervisors need not be present at Township meetings in order to receive compensation. 5. Voting at South Pymatuning Township meetings occurs via group aye or nay vote after a motion is made and properly seconded. a. Objections or abstentions cast during voting are specifically documented in the minutes. 1. Minutes of Township meetings are approved for accuracy at each subsequent meeting. 6. The South Pymatuning Township Supervisors created the Authority via Ordinance presented at a meeting of the Township Supervisors on September 30, 1968. a. The Township Supervisors created the Authority pursuant to the provisions of the Pennsylvania Municipality Authorities Act. 1. Per the Municipality Authorities Act, compensation provided for Authority Board Members must be established by the appointing authority, with the exception of Authority officer compensation. aa. Board Members are not permitted to receive an increase or decrease in compensation during their existing terms, unless related to officer pay. 1. Any increase or decrease in salary becomes effective only upon the beginning of a new term after the increase/decrease is enacted, except for changes in officer’s pay. b. The Authority was incorporated with the Pennsylvania Department of State, Corporation Bureau, as a municipal authority under Entity Number 336376 on October 28, 1968. 1. Department of State Corporation Bureau records document no registered office address for the Authority. 2. The Authority utilizes the address of the South Pymatuning Township municipal building (located at 3483 Tamarack Drive, Sharpsville, PA 16150) as its registered office. c. The Authority provides sewage service for only a portion of South Pymatuning Township. 1. Approximately sixty percent of the Township is tapped into the public sewage system. aa. South Pymatuning Township does not maintain its own sewage processing plant. 1. Sewage from properties tapped into the infrastructure is pumped to processing plants operated by the Sharon Municipal Authority and the Hermitage Municipal Authority respectively. 2. Remaining Township residents utilize on-lot septic systems for Nashtock, 09-023 Page 4 sewage disposal purposes. 7. The South Pymatuning Township Supervisors are responsible for appointing the Members of the Authority Board and setting Board Member compensation. a. Authority Board Members serve five year terms. 8. The original Articles of Incorporation associated with the Authority provided for a five Member Board of Directors. a. The Articles of Incorporation specifically mandated that the Authority was limited to the undertaking of only those projects which it was directed to undertake by resolution or ordinance of the Board of Supervisors. 9. The Authority is currently governed by a five Member Board of Directors. a. The Authority Board holds one regularly scheduled meeting per month on the first Tuesday of each month. 1. Special meetings are held as necessary. b. The Township Supervisors appointed a specific alternate Member to the Authority Board in March 2003, January 2007, January 2008, and January 2009. 1. The initial alternate Board Member appointed served as such from March 2003 until December 2005. 10. Voting at Authority meetings is normally conducted via group “aye/nay” vote after a motion is made and properly seconded. a. All Board Members, including the Board Chairman, vote on motions presented. b. If any Authority Member objects during the group vote, on occasion, an individual roll call vote would be taken and recorded. c. Any objections or abstentions cast are specifically noted in the minutes. 1. Minutes of Authority Board meetings are approved for accuracy at subsequent meetings. 11. No specific meeting packets are compiled for Authority Board Members to review prior to Authority Board meetings. a. Documents provided to the Authority Board Members at each meeting include an agenda developed by the Board Chairman, a report developed by the Authority engineer, and a Treasurer’s report generated by the recording secretary. b. The recording secretary also compiles a bill list which is presented to the Board for review at the regular monthly meeting. 1. The bill list represents all those bills received by the Authority since the prior legislative meeting. 12. Payment issued to Authority Board Members for meeting attendance is specifically Nashtock, 09-023 Page 5 documented on the bill list presented for review and approval. a. The Authority secretary sends an e-mail message to every Board Member on a monthly basis in order to determine the amount of compensation to issue to each respective Board Member. 1. The e-mail requests each respective Board Member to inform the secretary of the number of meetings which were attended during the prior month. b. The Authority secretary generates checks for each respective Board Member based on the response received. c. The Authority secretary transports the checks to the Authority meeting for required signatures and subsequent distribution. 13. Signature authority over Authority accounts is maintained by all five Members of the Authority Board. a. Authority checks require two live signatures. b. Facsimile stamps are not utilized by the Authority. 14. Although originally incorporated as a five Member Board, frequent lack of meeting attendance by Board Members prompted the Authority Board to consider increasing the size of the Authority Board. a. From the mid-1990s through 1999 Authority Board meetings were often cancelled due to the lack of a quorum of the total Members. b. The Authority Board petitioned the Township for an increase in the size of the Authority Board from five Members to seven Members. The rationale of the Authority was that: 1. A quorum of four out of seven Members would be easier to achieve than three out of five Members. 2. An increase in Board Members would provide residents of the Township with larger representation on the Authority. 15. At the March 7, 2000, meeting of the Authority Board, the Authority passed Resolution 1-2000 to be presented to the Township Supervisors proposing that the membership of the Authority be increased. a. Resolution 1-2000 called for the increase of Members on the Authority Board from five to seven Members. b. Resolution 1-2000 passed via unanimous 4-0 vote. 1. Board Member James Pritchard was not present for the meeting. 16. Upon submission to the Township Supervisors, the Supervisors adopted Resolution 4 of 2000 titled, “A Resolution of the Board of Supervisors of the Township of South Pymatuning, Mercer County, Pennsylvania, Adopted March 17, 2000 Approving An Amendment of the Articles of Incorporation of the South Pymatuning Township Municipal Authority to Increase the Number of Members of the Board of the Authority.” Nashtock, 09-023 Page 6 a. The Supervisors approved the amendments to the Authority’s Articles of Incorporation as documented in the resolution presented for consideration at the March 17, 2000, Supervisor’s continuation meeting. 1. The Supervisors approved the general increase in size of the Authority Board at the March 13, 2000, Supervisor’s meeting. b. Nashtock signed Resolution 4 of 2000 as the Chairman of the Board of Supervisors signifying Township approval of the addition of two seats to the Authority Board. 1. The Authority failed to provide the amendment to the Articles of Incorporation to the Pennsylvania Department of State. 17. The Municipality Authorities Act of 1945 mandates that members of boards of authorities (with the exception of school district authorities) may receive salaries as determined by the governing body of the appointing municipality. a. Members of authority boards are not permitted to establish, increase, or decrease their own compensation, with the exception of compensation of authority officers. b. Salaries of board members cannot be increased or diminished during the term for which the member was appointed. 18. Authority Board Members compensation as approved by the South Pymatuning Township is $50.00 (gross) per meeting. a. The South Pymatuning Township Supervisors approved $50.00 per meeting pay for Authority Members on December 4, 2002. b. Board Members must be present in order to receive the $50.00 payment. c. The $50.00 per meeting payment is applicable to Authority meetings as well as any meetings attended which relate to the Authority or Authority business. d. Prior to December 2002 Authority Members were not compensated. 19. The Authority Board Members’ request to receive compensation for service on the Authority was first presented to the Township Supervisors for consideration at least as early as December 17, 2001. a. Authority Board Members had historically served as unpaid volunteers in their positions through that time. b. No action was taken by the Board of Supervisors until December 4, 2002. c. Nashtock was Chairman of the Board of Supervisors at the time of this request. 20. Minutes of the December 17, 2001, Board of Supervisors Special Meeting document then Authority Board Member Mark Presley questioning the Supervisors regarding Authority Board Members receiving compensation. a. The entire Authority Board and Authority solicitor were in attendance at the meeting with the exception of Board Member David Sopko. Nashtock, 09-023 Page 7 b. The Board of Supervisors did not approve compensation for Authority Board Members at that time. 1. Nashtock participated in the decision to not set compensation as requested. 21. At the January 2, 2002, Authority meeting, the Authority Board requested its solicitor to inform the Township Supervisors of the Authority’s position on various issues under consideration. a. Issues under consideration included the size of the Board, appointment of new Board Members, and compensation for Board Members. 22. In correspondence dated January 4, 2002, to the Township Supervisors, the Authority solicitor presented the Authority’s position that: a. The Authority Board was opposed to reducing its membership to five Members and would refuse to adopt the required resolution to do so; b. The Authority recommended David Haywood be appointed to a vacant position on the Board as well as additional term amendments in order to achieve required term staggering; and c. The Authority Board was renewing its request that its Members be paid for each regular meeting attended at the rate of fifty dollars per meeting. 1. The correspondence identified extra Board Member responsibilities regarding the Authority beyond regular meeting attendance including managing finances, answering concerns of the public, attending meetings with the Borough of Clark Sewer Committee, and attending meetings of the Upper Shenango Valley Water Pollution Control Authority (USVWPCA). 2. The correspondence documented that all extra responsibilities would remain uncompensated including attending special meetings or meetings with the Township Supervisors. 23. The Township Supervisors did not approve compensation for Authority Board Members as a result of the second request. a. Nashtock was a Member and Chairman of the Board in 2001 and 2002 when the Board would take no action to set compensation for Authority Members. b. Authority Board Members continued to serve as unpaid volunteers in their positions through 2002. 24. At the November 14, 2002, Authority meeting, the Authority Board again requested its solicitor to inform the Township Supervisors of the Authority’s position on various issues under consideration by both the Authority and the Supervisors. a. Issues under consideration again included the size of the Authority Board, appointment of new Board Members, and compensation for Board Members. b. Additionally considered were the advantages and disadvantages of disbanding the Authority and creating a Sewer Committee as well as increasing Township revenues by performing services for the Authority. Nashtock, 09-023 Page 8 c. Nashtock and Township Supervisor Burt DeVries were present at and participated in the discussions held at the November 14, 2002, Authority Board meeting. 25. In correspondence to the Township Supervisors dated November 19, 2002, the Authority solicitor presented the Authority’s position on multiple issues, including: a. That the Authority Board be reduced from seven to five Members; b. That appointments/reappointments be made as follows: 1. Reappointment of Klein to the Authority Board for a five year term expiring on December 31, 2007. 2. Appointment of an interested Supervisor to complete Robert Mocker’s unexpired term of office to expire on December 31, 2005. aa. Appointment of an interested Supervisor was recommended to provide the Supervisors with a direct role in the administration of the Authority and problems encountered by the Authority. bb. The Authority Board recommended Mocker’s removal due to the fact that Mocker had attended only one meeting in 2002 to date. 3. Appointment of Vincent J. DeJulia as an alternate Member of the Authority Board. bb. Appointment of an alternate Member was recommended in order to provide a “back-up” Member for purposes of achieving a quorum when needed. c. [Approval] for establishment of a salary for Authority Members at the rate of fifty dollars per regular meeting attended. d. The Supervisors would be confronted with solving all of the problems encountered by the Authority and lose the comfort of having the Authority serve as a buffer for the Supervisors if the Authority was disbanded. 26. As of November 18, 2002, Board Members still serving on the Authority for the 2002 calendar year were Pritchard, Mocker, Klein, Chris Novak, and David Haywood. a. Mocker was removed from his position as an Authority Board Member at the November 18, 2002, continuation meeting of the Township Supervisors. 1. Nashtock motioned, seconded by DeVries, for the removal of Mocker from the Authority Board for failure to attend more than three consecutive meetings pursuant 53 Pa.C.S.§ 5610(f) which reads: Unless excused by the board, a member of a board who fails to attend three consecutive meetings of the board may be removed by the appointing municipality up to 60 days after the date of the third meeting of the board which the member failed to attend. 53 Pa.C.S. § 5610 (f). Nashtock, 09-023 Page 9 2. The motion passed via unanimous 2-0 vote. aa. Supervisor Michael Derr was not present at the meeting. b. Authority Members Francis Pavcik and Mark Presley resigned as Board Members prior to November 2002. 27. The specific size of the Authority Board was reduced from seven Members to five Members at the November 22, 2002, meeting of the Township Supervisors. a. Nashtock made the motion and voted in favor of reducing the size of the Authority Board from seven to five Members. 1. The motion passed via unanimous 2-0 vote. aa. Derr was not present at the meeting. b. The Supervisors passed no specific Resolution documenting the reduction in size of the Authority Board from seven to five Members. 28. Subsequent to the reduction in size of the Authority Board, a motion was made by DeVries at the November 22, 2002, Supervisors meeting to appoint Nashtock to the Authority Board. a. Nashtock seconded the motion and voted in favor of his appointment to the Authority Board. b. The motion passed via unanimous 2-0 vote. 1. Supervisor Derr was not present at the meeting. 29. At the December 4, 2002, meeting of the Township Supervisors, multiple motions were made and unanimously approved relating to the Authority, including setting compensation of Authority Members and appointing new Members. a. Nashtock motioned, seconded by DeVries, to accept the resignations of Pritchard, Novak, and Haywood. 1. Haywood and Pritchard were subsequently re-appointed to the Authority Board at the January 6, 2003, re-organization meeting of the Township Supervisors. b. Nashtock motioned, seconded by DeVries, to appoint DeVries to fill Novak’s position on the Authority Board. 1. DeVries cast the deciding vote to appoint himself as a Member of the Authority Board. c. Both of the motions passed via unanimous 2-0 vote. 1. Derr was not present at the meeting. 30. At the December 4, 2002, meeting an additional motion was made by Nashtock, seconded by DeVries, to set compensation of Authority Board Members from Authority accounts as designated by the Authority Board. Nashtock, 09-023 Page 10 a. The motion called for Authority Board Members to receive compensation in the amount of $50.00 per meeting. 1. The $50.00 per meeting payment was documented as being effective January 1, 2003, for Board Members starting their term on or after this date. b. The motion passed via 2-0 unanimous vote. 1. Nashtock participated in and voted to approve compensation for Authority Board Members approximately twelve days after voting to appoint himself to the Authority Board. 31. Nashtock, along with Supervisor DeVries, approved the motion to set compensation for Authority Members one meeting after voting to appoint himself to the Authority. 32. From January 1, 2003, through the present, Authority Board Members were eligible to receive $50.00 per meeting attended pursuant to the motion approved by Nashtock and DeVries at the December 4, 2002, Supervisors meeting. a. The Township Supervisors did not approve any increase in Authority Board Member compensation from January 1, 2003, through the present. 33. Between 2005 and 2008, the Authority Board increased compensation of Board Members without the approval of the South Pymatuning Board of Supervisors. a. Nashtock was a Member of the Authority at the times in 2005, 2006 and 2008 when actions were taken to increase compensation. b. Nashtock participated in actions to increase compensation absent approval by the Board of Supervisors. c. Nashtock asserts that the Authority had the power to increase compensation for officers of the Authority pursuant to 53 Pa.C.S.A. § 5607(d)(8) and 53 Pa.C.S.A. § 5610(e) without the approval of the Board of Supervisors. 1. Nashtock believed that all Members of the Authority were officers thereof. 2. Meeting minutes do not specifically delineate that the increase in compensation was limited to only Authority officer positions. 34. Nashtock participated as an Authority Board Member to routinely approve increases in Board Member compensation as illustrated in the chart below: Meeting Date Members Meeting Meeting Compensation Vote Present Compensation Approved by Authority Established by Supervisors January 5, 2005 M. Nashtock $50.00 per meeting $75.00 per meeting 4-0 B. DeVries V. DeJulia D. Haywood January 4, 2006 M. Nashtock $50.00 per meeting $100.00 per Authority meeting 5-0 B. DeVries Nashtock, 09-023 Page 11 Meeting Date Members Meeting Meeting Compensation Vote Present Compensation Approved by Authority Established by Supervisors V. DeJulia $75.00 per USVWPCA meeting E. Klein D. Haywood January 18, 2008 M. Nashtock $50.00 per meeting $150.00 per Authority meeting 5-0 B. DeVries V. DeJulia $50.00 per extra and continued E. Klein meetings J. Schenker a. None of the increases in compensation were presented to the South Pymatuning Township Supervisors for consideration or approval prior to enacting. b. Although serving as both a South Pymatuning Township Supervisor and Authority Board Member during those years, Nashtock did not advise the Township Supervisors of Authority Board actions to increase Board Member compensation in 2005, 2006 or 2008. c. Nashtock believed he could vote to increase salaries for Authority Members in their capacity as officers thereof. 35. The Authority maintained a minimum of four separate accounts at First National Bank (FNB) spanning the time period of May 2004 through August 2009 including Account Numbers XXXX406 and XXXXX526. a. Account Number XXXX406 was a preferred interest checking account. 1. Account Number XXXX406 was opened on November 21, 1979, and closed on October 18, 2006. b. Account Number XXXXX526 is a preferred interest checking account. 1. Account Number XXXXX526 was opened on September 6, 2009, and is currently active. c. Checks issued to Authority Board Members as compensation for meeting attendance originated from Account Numbers XXXX406 and XXXXX526. 36. As a result of his November 22, 2002, vote to appoint himself a Member of the Authority, and his subsequent vote on December 4, 2002, to set compensation, Nashtock received compensation of $50.00 per meeting. a. Nashtock voted to set the compensation of Authority Members less than two weeks after voting for his appointment to the Authority. 37. From May 2004 through December 2004, Nashtock received compensation as a result of his vote appointing him to the Authority and setting compensation. a. Nashtock signed check number 2119. 38. From January 2005 through August 2009, Nashtock received and negotiated a Nashtock, 09-023 Page 12 minimum of fifty-three (53) checks from Authority accounts representing payment for attendance at Authority and additional outside meetings as shown below: a. Of the fifty-three (53) checks issued to Nashtock representative of attendance at Authority and additional outside meetings, Nashtock’s signature appears as an authorized Authority signatory on at least forty checks totaling $8,675.00. b. Nashtock deposited into personal bank accounts or cashed all checks received and utilized the funds for various personal use. c. The payments include the initial rate of $50.00/meeting set by the Board of Supervisors in December 2002 and the increases set by the Authority between 2005 and 2007. 39. Nashtock, as an Authority Board Member, participated in actions to approve monthly bill lists which included payments to Nashtock for his attendance at Authority and additional outside meetings. a. Nashtock voted to approve monthly bill lists on at least fifty-two of fifty-eight occasions on which payment to Nashtock was documented. 1. A total of sixty-four regular Authority meetings were held from May 2004 through August 2009. 2. Votes cast at the December 2004 and June 2005 meetings could not be determined due to the absence of minutes in Authority records for those meetings. 3. Minutes for an additional four meetings did not record a specific motion, second, or vote to approve monthly bills. b. Nashtock was present at the January 5, 2005, January 4, 2006, and January 18, 2008, Authority meetings and voted in favor of the motion to increase Authority Board Member compensation as presented at the meetings. 1. Any increase in Authority Board Member compensation required approval of the appointing municipal body, South Pymatuning Township, unless it was to increase officer compensation. 40. Nashtock was not issued payment for his attendance at the July 7, 2009, regular Authority meeting until the August 4, 2009, meeting. a. Nashtock received payment for his attendance at both the July 7, 2009, Authority meeting and the August 4, 2009, Authority meeting at the August 4, 2009, meeting. 41. From February 2005 through August 2009, Nashtock received compensation as an Authority Board Member in excess of the amount specifically approved by the Township Supervisors. a. Nashtock was present for and participated in the Board vote at the January 5, 2005, January 4, 2006, and January 18, 2008, meetings to increase Board Member compensation as presented at the meetings. 1. Any increase in Authority Board Member compensation must be approved by the appointing municipal body (see, Findings Numbers Nashtock, 09-023 Page 13 17 and 44). 2. Nashtock asserts that the Authority had the power to increase compensation for officers of the Authority pursuant to 53 Pa.C.S.A. § 5607(d)(8) and 53 Pa.C.S.A. § 5610(e) without the approval of the Board of Supervisors. aa. Nashtock believed that all Members of the Authority were officers thereof. bb. Meeting minutes do not specifically delineate that the increase in compensation was limited to only Authority officer Positions. b. In addition to participating in Authority Board Member votes to increase Member compensation, Nashtock accepted the increases prior to the beginning of a new term. 1. Nashtock accepted an increase in compensation in 2005 but did not begin a new term until January 2006. 2. Nashtock accepted an increase in compensation in 2008 but will not begin a new term until January 2006 [sic] (if re-appointed). aa. Nashtock was not eligible for any legitimate increase in compensation as an Authority Board Member with the exception of the 2006 calendar year (see, Findings Numbers 17 and 44) and/or any properly authorized increase in compensation as an officer of the Authority. 42. Payments to Authority Board Members were suspended by the Authority Board at the October 6, 2009, Authority Board meeting. a. Noted under “New Business” was that the Board hold payment for October and future meetings until informed by the Commission of a resolution to the potential conflict of Members adjusting their own compensation. 1. Commission refers to the State Ethics Commission. b. The motion passed unanimously. 1. Nashtock was present at the meeting and participated in the unanimous vote. 43. During an interview with Commission investigators on April 1, 2010, Nashtock provided the following information: a. Nashtock did not believe that Authority Board Members received compensation for service on the Authority Board prior to January 2003; b. Nashtock believed that the Authority Board Members expressed a desire to the Township Supervisors for compensation possibly as early as the mid- 1990s; c. The Township Supervisors had not set compensation for the Authority Board Members prior to December 2002 per advice received by Nashtock at a supervisors training session; Nashtock, 09-023 Page 14 d. Nashtock recalled as a Township Supervisor approving compensation for Authority Board Members but could not specifically recall setting the compensation amount at $50.00 per meeting; e. Nashtock claimed that both he and DeVries verbally acknowledged at the applicable Supervisors meetings the possible conflict of interest in appointing themselves to the Authority Board and authorizing compensation for Authority Board Members; 1. Nashtock had no explanation as to why his and DeVries’s appointments were not postponed until Derr could be present at a Township Supervisors meeting and vote on the motions. f. Nashtock verified the Authority Board Members increasing their own compensation and receiving the increase in compensation without formal approval by the Township Supervisors as the appointing body; and g. The Authority solicitor expressed no concern over the Authority Board increasing its own compensation at the Authority meetings. 44. Nashtock realized a private pecuniary gain when he used the authority of his office as an Authority Board Member to participate in votes as an Authority Board Member to increase Board Member compensation without the approval of the Township Supervisors; when he participated in Authority votes to approve bill lists on which payment to him as an Authority Board Member was documented; and when he signed checks issued to him from Authority accounts as an authorized Authority signatory. a. Nashtock participated in actions to increase compensation absent approval by the Board of Supervisors. b. Nashtock asserts that the Authority had the power to increase compensation for officers of the Authority pursuant to 53 Pa.C.S.A. § 5607(d)(8) and 53 Pa.C.S.A. § 5610(e) without the approval of the Board of Supervisors. 1. Nashtock believed that all Members of the Authority were officers thereof. 2. Meeting minutes do not specifically delineate that the increase in compensation was limited to only Authority officer positions. THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT NASHTOCK FAILED TO FILE A STATEMENT OF FINANCIAL INTERESTS IN HIS POSITION AS A SOUTH PYMATUNING TOWNSHIP SUPERVISOR FOR CALENDAR YEAR 2007; [THAT] NASHTOCK FAILED TO FILE A STATEMENT OF FINANCIAL INTERESTS AS A MEMBER OF THE SOUTH PYMATUNING TOWNSHIP AUTHORITY BOARD FOR CALENDAR YEAR 2006; AND [THAT NASHTOCK] FAILED TO DISCLOSE INCOME FROM SOUTH PYMATUNING TOWNSHIP ON HIS STATEMENT OF FINANCIAL INTERESTS FILED FOR THE 2008 CALENDAR YEAR AND FROM [THE] AUTHORITY ON HIS STATEMENT OF FINANCIAL INTERESTS FILED FOR CALENDAR YEAR[S] 2005 AND 2008. 45. Statement of Financial Interests filing requirements for public officials and public employees are mandated by Section 1104 of the State Ethics Act. st a. Nashtock was required to file Statements of Financial Interests by May 1 annually in his position as a South Pymatuning Township Supervisor and his Nashtock, 09-023 Page 15 position as a South Pymatuning Township Municipal Authority Board Member. 46. On May 20, 2009, and August 26, 2009, a review of various records including Statements of Financial Interests was conducted at the South Pymatuning Township municipal building. a. No Statement of Financial Interests was present for Nashtock in his position as a Township Supervisor for calendar year 2007. b. No Statement of Financial Interests was present for Nashtock in his position as an Authority Board Member for calendar year 2006. c. Nashtock filed Statements of Financial Interests relating to both positions for calendar years 2004 and 2005. 47. Nashtock asserts that he properly filed Statement[s] of Financial Interests concerning his position as a Township Supervisor for calendar year 2007 and his position as an Authority Board Member for calendar year 2006. a. Nashtock asserts that said calendar year Statements of Financial Interests were misplaced, lost, or removed by an unknown individual(s). b. Files containing Nashtock’s Statement(s) of Financial Interests were poorly maintained, and there is no evidence contradicting his statements that same were properly filed. 48. Section 1104(d) of the State Ethics Act mandates that, “No public official shall be allowed to take the oath of office or enter or continue upon his duties, nor shall he receive compensation from public funds, unless he has filed a Statement of Financial Interests as required by this chapter.” 49. Section 1105(b)(5) of the State Ethics Act mandates that the name and address of any direct or indirect source of income totaling $1,300.00 or more in the aggregate be disclosed on Statements of Financial Interests filed. a. Nashtock neglected to disclose receipt of income from the Township in excess of $1,300.00 on his Statement of Financial Interests filed for calendar year 2008 and from the Authority in excess of $1,300.00 on his Statements of Financial Interests filed for calendar year[s] 2005 and 2008. 1. Nashtock received $1,875.00 (gross) in compensation from the Township in his position as a Township Supervisor in calendar year 2008. 2. Nashtock received $1,975.00 and $2,800.00 (gross) in compensation from the Authority in his position as an Authority Board Member in calendar years 2005 and 2008 respectively. III.DISCUSSION: As a Supervisor for South Pymatuning Township (“Township”), Mercer County, and as a Member of the South Pymatuning Township Municipal Authority (“Authority”), Respondent Michael P. Nashtock, Jr., hereinafter also referred to as “Respondent,” “Respondent Nashtock,” and “Nashtock,” is a public official subject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. Nashtock, 09-023 Page 16 The allegations are that Respondent Nashtock violated Sections 1103(a), 1104(a), and 1105(a) of the Ethics Act: (1) when he used the authority of his public position(s) for private gain by participating in actions of the Township Board of Supervisors to appoint him to a compensated position on the Authority and to approve compensation for Authority Members, and when, as a Member of the Authority, he voted to increase compensation for Members of the Authority; (2) when he failed to file a Statement of Financial Interests (“SFI”) with the Township for the 2007 calendar year; (3) when he failed to file an SFI as an Authority Board Member for calendar year 2006; (4) when he failed to disclose income received from the Authority on SFIs filed for calendar years 2004, 2005 and 2008; and (5) when he failed to disclose income received from the Township on his SFIs (original and amended) filed for calendar year 2008. 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. Section 1104(a) of the Ethics Act provides that each public official/public employee must file an SFI for the preceding calendar year, each year that he holds the position and the year after he leaves it. Section 1105(a) of the Ethics Act provides that the SFI shall be filed on the form prescribed by this Commission; that all information requested on the form shall be provided to the best of the knowledge, information and belief of the filer; and that the form shall be signed under oath or equivalent affirmation. Nashtock, 09-023 Page 17 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 Nashtock has served as a Township Supervisor from January 2, 1990, through the present. Nashtock served as the Chairman of the Township Board of Supervisors from January 2, 1996, until January 2, 2007, and from January 4, 2010, to the present. Nashtock served as the Assistant Chairman from January 2, 2007, until January 4, 2010. Nashtock has also served as a Member of the Authority from November 22, 2002, through the present. Nashtock was initially appointed by the Township Board of Supervisors to fill a vacancy on the Authority Board and was subsequently re-appointed to a complete five year term in January 2006. Nashtock served as the Chairman of the Authority Board from January 4, 2005, through the present and Vice-Chairman of the Authority Board from January 7, 2003, through January 3, 2005. The Township is a second class township governed by a three Member Board of Supervisors. The Authority was created in 1968 pursuant to the Municipality Authorities Act. The Members of the Authority Board are appointed by the Township Board of Supervisors. Pursuant to the Municipality Authorities Act, compensation provided for Authority Board Members other than officer pay must be established by the Township Board of Supervisors as the appointing authority. Authority Board Members are not permitted to receive an increase or decrease in their meeting pay/salaries during their existing terms. Any increase or decrease becomes effective only upon the beginning of a new term. Prior to December 2002, Authority Board Members received no meeting pay/salary. In November 2002 the Authority Board requested that an interested Supervisor be appointed to the Authority Board and that a salary be established for Authority Members at the rate of fifty dollars per regular meeting attended. At the November 22, 2002, meeting of the Township Board of Supervisors, Township Supervisor Burt DeVries (“DeVries”) made a motion to appoint Nashtock to the Authority Board. Nashtock seconded the motion and voted in favor of his appointment to the Authority Board. The motion passed via unanimous 2-0 vote. The third Supervisor, Michael Derr (“Derr”), was not present at the meeting. At the December 4, 2002, meeting of the Township Supervisors, Nashtock made a motion, seconded by DeVries, to appoint DeVries to fill a position on the Authority Board. The motion passed via unanimous 2-0 vote. Derr was not present at the meeting. At the December 4, 2002, meeting an additional motion was made by Nashtock, seconded by DeVries, to set compensation of Authority Board Members at the rate of $50.00 gross per meeting attended. The motion passed via 2-0 unanimous vote. The $50.00 per meeting payment was documented as being effective January 1, 2003, for Board Members starting their term on or after that date. The parties have stipulated that the $50.00 per meeting payment is applicable to Authority meetings as well as any meetings attended that relate to the Authority or Authority business (Fact Finding 18c). As a result of his November 22, 2002, vote to appoint himself a Member of the Authority, and his subsequent vote on December 4, 2002, to set compensation for Authority Board Members, Nashtock received compensation of $50.00 per meeting as an Authority Board Member. Nashtock, 09-023 Page 18 The Township Supervisors did not approve any increase in Authority Board Member compensation from January 1, 2003, through the present. However, at Authority Board meetings held on January 5, 2005, January 4, 2006, and January 18, 2008, Nashtock participated in Authority Board votes to increase Authority Board Member compensation as detailed in Fact Findings 33-34. None of these increases in compensation were presented to the Township Board of Supervisors for consideration or approval prior to enactment. Nashtock did not advise the Township Board of Supervisors of the increases. Nashtock accepted the increases prior to beginning new terms. Nashtock asserts that the Authority had statutory power to increase compensation for officers of the Authority without the approval of the Township Board of Supervisors. However, meeting minutes do not specifically delineate that the increase in compensation was limited to Authority officer positions. From January 2005 through August 2009, Nashtock received and negotiated a minimum of 53 checks from Authority accounts representing payment for attendance at Authority and additional outside meetings. Nashtock’s signature appears as an authorized Authority signatory on at least 40 of these checks totaling $8,675.00. The payments include the initial rate of $50.00 per meeting set by the Board of Supervisors in December 2002 and the increases set by the Authority between 2005 and 2007 without approval of the Township Board of Supervisors. Nashtock also participated as an Authority Board Member in actions to approve monthly bill lists that included payments to Nashtock for his attendance at Authority and additional outside meetings. Nashtock voted to approve monthly bill lists on at least 52 of 58 occasions on which payment to Nashtock was documented. At the October 6, 2009, Authority Board meeting, Nashtock participated in a unanimous vote of the Authority Board to suspend further meeting payments to Authority Board Members until informed by this Commission of a resolution to the potential conflict of Members adjusting their own compensation. The parties have stipulated that Nashtock realized a private pecuniary gain when he used the authority of his office as an Authority Board Member to participate in votes as an Authority Board Member to increase Board Member compensation without the approval of the Township Supervisors; when he participated in Authority votes to approve bill lists on which payment to him as an Authority Board Member was documented; and when he signed checks issued to him from Authority accounts as an authorized Authority signatory. On May 20, 2009, and August 26, 2009, a review of SFIs was conducted at the Township municipal building. No SFIs were present for Nashtock in his position as a Township Supervisor for calendar year 2007. No SFIs were present for Nashtock in his position as an Authority Board Member for calendar year 2006. Nashtock asserts that he properly filed such SFIs and that the SFIs were misplaced, lost, or removed by unknown individual(s). The parties have stipulated that files containing Nashtock’s SFIs were poorly maintained and there is no evidence contradicting his statements that the forms were properly filed. Nashtock failed to disclose the Township as a source of income on his SFI filed for calendar year 2008 despite having received $1,875.00 (gross) in compensation from the Township in his position as a Township Supervisor in calendar year 2008. Nashtock failed to disclose the Authority as a source of income on his SFIs filed for calendar years 2005 and 2008 despite having received $1,975.00 and $2,800.00 (gross) in compensation from the Authority in his position as an Authority Board Member in calendar years 2005 and 2008 respectively. Nashtock, 09-023 Page 19 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 an unintentional violation of Section 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1103(a) occurred when Nashtock participated in actions of the Board of Supervisors to appoint himself to position on the South Pymatuning Township Municipal Authority and subsequently participated in actions of the Board of Supervisors to approve compensation for Authority Members; and when, as a Member of the Authority, he voted to increase compensation for Members of the Authority, without approval of the South Pymatuning Township Board of Supervisors, the appointing Authority. b. That no violation of Section 1104(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1104(a), occurred in relation to the allegation that Nashtock failed to file Statements of Financial Interests for the 2006 and 2007 calendar years with the South Pymatuning Township Municipal Authority, due to insufficient evidence. c. That a technical violation of Section 1105(b) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1105(b), occurred when Nashtock failed to list all sources of direct or indirect income on his 2004, 2005 and 2008 Statements of Financial Interests, namely a failure to disclose income received from the Authority on Statements of Financial Interests filed for calendar years 2004, 2005 and 2008; and income received from the Township on Statement of Financial Interests (original and amended) filed for calendar year 2008. 4. Nashtock agrees to make payment in the amount of $3,000.00 in settlement of this matter payable to the South Pymatuning Township Municipal Authority and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. 5. If Nashtock has not already done so, he agrees to file amended Statements of Financial Interests for calendar years 2004, 2005, and 2008 listing all sources of income; and file Statements of Financial Interests for calendar years 2006 and 2007 with the South Pymatuning Township/South Pymatuning Nashtock, 09-023 Page 20 Township Municipal Authority, and forward copies of all filings to this Commission. 6. 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 so choose to review this matter further. Consent Agreement, at 2. In considering the Consent Agreement of the parties, we accept the recommendation of the parties for the finding of an unintentional violation of Section 1103(a) of the Ethics Act. Factually, at the November 22, 2002, meeting of the Township Board of Supervisors, Nashtock seconded the motion and voted in favor of his appointment to the Authority Board. At the December 4, 2002, meeting of the Township Board of Supervisors, Nashtock made the motion and participated in the vote to set compensation of Authority Board Members at the rate of $50.00 gross per meeting attended. Nashtock’s aforesaid actions in 2002 occurred prior to the time period that is subject to review in this case and may not form the basis for a violation (see, 65 Pa.C.S. § 1108(m)). However, the recommendation for an unintentional violation of Section 1103(a) is supported by Nashtock’s subsequent actions at Authority Board meetings held on January 5, 2005, January 4, 2006, and January 18, 2008, when Nashtock participated in Authority Board votes to increase Authority Board Member compensation as detailed in Fact Findings 33-34. None of these increases in compensation were presented to the Township Board of Supervisors for consideration or approval prior to enactment, and the resulting compensation to Nashtock constituted a private pecuniary benefit. Intent is not a requisite element for a violation of Section 1103(a) of the Ethics Act. See, e.g., Yocabet v. State Ethics Commission, 531 A.2d 536 (Pa. Cmwlth. 1987). Nevertheless, based upon the Stipulated Findings, it would appear that the aforesaid violation was unintentional. We hold that an unintentional violation of Section 1103(a) of the Ethics Act occurred when, after having voted as a Township Supervisor in 2002 to appoint himself to the Authority Board and to set the compensation of Authority Board Members, Nashtock voted as an Authority Board Member on January 5, 2005, January 4, 2006, and January 18, 2008, to increase compensation for Members of the Authority, without approval of the Township Board of Supervisors (the appointing authority). Cf., Russell v. State Ethics Commission, 987 A.2d 835 (Pa. Cmwlth. 2009), allocatur denied, No. 22 WAL 2010 (Pa. August 11, 2010). We further hold that Nashtock did not violate Section 1104(a) of the Ethics Act as alleged, based upon insufficient evidence. Although the remaining allegations pertain to Section 1105(a) of the Ethics Act, and the Stipulated Findings do not mention any substantive deficiencies in Nashtock’s SFI for calendar year 2004, the parties have agreed to a finding that a technical violation of Section 1105(b) of the Ethics Act occurred when Nashtock failed to list all direct/indirect sources of income on his 2004, 2005 and 2008 SFIs, namely the Authority on SFIs filed for Nashtock, 09-023 Page 21 calendar years 2004, 2005 and 2008, and the Township on SFIs (original and amended) filed for calendar year 2008. We accept the recommendation and hold that a technical violation of Section 1105(b) of the Ethics Act occurred when Nashtock failed to list all direct/indirect sources of income on his 2004, 2005 and 2008 SFIs, namely the Authority on SFIs filed for calendar years 2004, 2005 and 2008, and the Township on SFIs (original and amended) filed for calendar year 2008. As part of the Consent Agreement, Respondent has agreed to make payment in the amount of $3,000.00 payable to the South Pymatuning Township Municipal Authority and forwarded to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. To the extent he has not already done so, Respondent has further agreed to file with the Authority amended SFIs for calendar years 2004, 2005, and 2008 listing all sources of income, and SFIs for calendar years 2006 and 2007, and to forward copies of all such filings to this Commission. We determine that the Consent Agreement submitted by the parties sets forth a 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 of the parties, Respondent Nashtock is directed to make payment in the amount of $3,000.00 payable to the South Pymatuning Township Municipal Authority and forwarded to this Commission by no later than the th thirtieth (30) day after the mailing date of this adjudication and Order. To the extent he has not already done so, Respondent Nashtock is directed to file with the Authority amended SFIs for calendar years 2004, 2005, and 2008 listing all sources of income, and SFIs for calendar years 2006 and 2007, and to forward copies of th all such filings to this Commission by no later than the thirtieth (30) day after the mailing date 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 South Pymatuning Township (“Township”), Mercer County, and as a Member of the South Pymatuning Township Municipal Authority (“Authority”), Respondent Michael P. Nashtock, Jr., hereinafter also referred to as “Respondent,” “Respondent Nashtock,” and “Nashtock,” is a public official subject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. 2. Nashtock unintentionally violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when, after having voted as a Township Supervisor in 2002 to appoint himself to the Authority Board and to set the compensation of Authority Board Members, he voted as an Authority Board Member on January 5, 2005, January 4, 2006, and January 18, 2008, to increase compensation for Members of the Authority, without approval of the Township Board of Supervisors (the appointing authority). 3. Nashtock did not violate Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), as alleged, based upon insufficient evidence. 4. A technical violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), Nashtock, 09-023 Page 22 occurred when Nashtock failed to list all direct/indirect sources of income on his 2004, 2005 and 2008 Statements of Financial Interests (“SFIs”), namely the Authority on SFIs filed for calendar years 2004, 2005 and 2008, and the Township on SFIs (original and amended) filed for calendar year 2008. In Re: Michael P. Nashtock, Jr., : File Docket: 09-023 Respondent : Date Decided: 10/19/10 : Date Mailed: 10/26/10 ORDER NO. 1570 1. Michael P. Nashtock, Jr. (“Nashtock”), a public official in his capacities as a Supervisor for South Pymatuning Township (“Township”), Mercer County, and as a Member of the South Pymatuning Township Municipal Authority (“Authority”), unintentionally violated Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), when, after having voted as a Township Supervisor in 2002 to appoint himself to the Authority Board and to set the compensation of Authority Board Members, he voted as an Authority Board Member on January 5, 2005, January 4, 2006, and January 18, 2008, to increase compensation for Members of the Authority, without approval of the Township Board of Supervisors (the appointing authority). 2. Nashtock did not violate Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), as alleged, based upon insufficient evidence. 3. A technical violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred when Nashtock failed to list all direct/indirect sources of income on his 2004, 2005 and 2008 Statements of Financial Interests (“SFIs”), namely the Authority on SFIs filed for calendar years 2004, 2005 and 2008, and the Township on SFIs (original and amended) filed for calendar year 2008. 4. Per the Consent Agreement of the parties, Nashtock is directed to make payment in the amount of $3,000.00 payable to the South Pymatuning Township Municipal Authority and forwarded to the Pennsylvania State Ethics Commission by no later th than the thirtieth (30) day after the mailing date of this Order. 5. To the extent he has not already done so, Nashtock is directed to file with the Authority amended SFIs for calendar years 2004, 2005, and 2008 listing all sources of income, and SFIs for calendar years 2006 and 2007, and to forward copies of all such filings to the Pennsylvania State Ethics Commission by no later than the th thirtieth (30) day after the mailing date of this Order. 6. Compliance with Paragraphs 4 and 5 of this Order will result in the closing of this case with no further action by this Commission. a. Non-compliance will result in the institution of an order enforcement action. BY THE COMMISSION, ___________________________ Louis W. Fryman, Chair