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HomeMy WebLinkAbout1575 Wilson In Re: Paul Wilson, : File Docket: 09-027 Respondent : X-ref: Order No. 1575 : Date Decided: 12/15/10 : Date Mailed: 12/20/10 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.” 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. Wilson, 09-027 Page 2 I.ALLEGATIONS: That Paul Wilson, a public official/public employee in his capacity as a Supervisor of East Finley Township, Washington County, violated Sections 1103(a), 1103(f), 1104(a), and 1105(b) of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. §§ 1103(a), 1103(f), 1104(a), and 1105(b), when he participated in discussions and actions of the Board of Supervisors to award contracts to a business owned by his son, Wilson Outdoor Services; when the projects valued at in excess of $500.00 were awarded without an open and public process; when he participated in actions of the Board of Supervisors to authorize payments to his son’s company; and when he failed to file a Statement of Financial Interests for the 2006 calendar year by May 1, 2007; and when he failed to disclose all direct/indirect sources of income on Statements of Financial Interests filed for the 2004, 2005, 2007 and 2008 calendar years. II.FINDINGS: 1. Paul Wilson served as a Supervisor for East Finley Township (hereafter Township), Washington County, from March 22, 2004, to July 17, 2009. a. Wilson served as Roadmaster from January 2, 2001, to June 15, 2009. 1. Wilson served as a Road Laborer from June 1984 to January 2, 2001. b. Wilson served as Vice-Chairman of the Board of Supervisors in 2007, 2008 and 2009. c. Wilson submitted a letter of resignation on July 17, 2009, stating that his resignation was due to “a potential conflict of interest” that could occur now due to his employment with a company that does business with the Township. 2. East Finley Township is a Second Class Township governed by a three-Member Board of Supervisors (Board). a. The Board holds regular monthly meetings on the second Tuesday of each month. b. Special meetings are held as necessary. 3. East Finley Township Supervisors are compensated $1,875.00 a year for their services. 4. Board voting procedures occur in an aye/nay group vote after a motion is made and seconded. a. All objections and abstentions are noted in the minutes. 1. The minutes of each meeting are approved for accuracy at each subsequent meeting. 5. Actual bill lists were not generated for review at the monthly meetings until approximately June 2009. a. Prior to June 2009, bills were considered approved when the Township checks issued to pay the bills were signed by the Supervisors. 1. Some checks were signed after the Supervisors reviewed the bills Wilson, 09-027 Page 3 provided at the Township meetings. 2. There was no vote of the Board to approve checks which were signed on the day of Township meetings. 6. The Supervisors also reviewed bills and signed checks prior to Township meetings. a. Bills were reviewed and checks were signed prior to Township meetings in order to: 1. Avoid late fees. 2. To appease those Supervisors that requested that bills be paid in advance of meeting dates. b. Bills paid in advance were not reviewed at subsequent meetings or made available for public review. 7. On two separate occasions (April 10, 2007, and April 8, 2008) the Township elected Auditors recommended to the Supervisors that bills for the Township be presented, reviewed, and approved at monthly meetings by the Supervisors. a. The Township elected Auditors recommended that bills be paid at Township meetings so that all the Township officials (not just those signing checks) were notified of what bills were being paid. b. The Township elected Auditors also made the recommendation so that the public had the opportunity to review the bills presented at the meetings. 8. As of June 2009, bill lists have been generated and provided at monthly meetings for review and approval. a. Bill lists approved for payment represent all those bills received at the Township in the period of time from the previous monthly meeting to the subsequent monthly meeting. 9. All three Supervisors and the Secretary/Treasurer maintain signature authority over the financial accounts associated with the Township. a. Three signatures are required on all checks issued by the Township. 1. Facsimile stamps are not utilized. 2. Checks have to be signed by the Secretary/Treasurer and any combination of two Supervisor signatures. 10. Wilson, as Roadmaster, was responsible for performing the duties described in the Second Class Township Code. a. Article XXIII, Section 2302 of the Second Class Township Code details the duties of a Roadmaster as follows: 1. Report to the Board of Supervisors any information that may be required by the Board of Supervisors and by the Department of Transportation. 2. Inspect all roads and bridges as directed by the Board of Supervisors. Wilson, 09-027 Page 4 3. Do or direct to be done all work necessary to carry out the responsibilities imposed by the Board of Supervisors with respect to the maintenance, repair, and construction of Township roads. 11. Wilson was responsible for performing the duties detailed in the Second Class Township Code, as well as other responsibilities, including soliciting quotes/bids related to road projects, since becoming Roadmaster in 2001. a. The Roadmaster was typically the individual responsible for reviewing the quotes/bids related to road projects and recommending a responsible contractor to the Supervisors for utilization. 12. Article XXIII, Section 3102 of the Second Class Township Code outlines parameters that must be followed when selecting a contractor, as detailed, in part, below: a. Written or telephonic price quotations from at least three qualified and responsible contractors shall be requested for all contracts that exceed $4,000.00 but are less than $10,000.00. b. All contracts in excess of the required public advertising amount of $10,000.00 shall not be made except with and from the lowest responsible bidder due to notice published for circulation. 13. Article XXIII, Section 3102, Subsection (i) of the Second Class Township Code further stipulates that the following condition must be met when selecting a contractor: a. No township official, either elected or appointed, or township employee who knows, or who by the exercise of reasonable diligence could know, shall be interested to any appreciable degree, either directly or indirectly, in any contract for the sale or furnishing of supplies or materials for the use of the township or for any work to be done for the township involving the payment by the township of more than five hundred dollars ($500) in any year unless the contract is awarded through the public bid process. 14. Wilson did not always formally solicit quotes/bids from contractors for Township road related projects during his tenure as Roadmaster. a. The selection of contractors resulted from Supervisors’ discussions that did not include obtaining or reviewing quotes/bids. 1. Most of these discussions did not occur during meetings of the Supervisors. 15. On occasion, the Supervisors (including Wilson) formally discussed and selected the utilization of contractors for road related projects at Township meetings. 16. James Wilson is the owner and operator of Wilson’s Outdoor Services (hereafter WOS), located at [residence address redacted]. a. James Wilson is Paul Wilson’s son. 1. WOS operates out of James Wilson’s residence. b. WOS specializes in ditching of roadways, excavating, mowing grass, and seeding lawns. Wilson, 09-027 Page 5 c. WOS is not incorporated in the Commonwealth of Pennsylvania. 17. James Wilson established WOS as a business in approximately 2000-2001 and is the sole owner. a. Initially, James Wilson was the only full-time employee of WOS. 1. James Wilson occasionally hired sub-contractors to assist with projects prior to hiring seven full-time employees in 2009. b. Paul Wilson is currently a part-time employee of his son’s business. 18. East Finley Township contracted with WOS from June 2004 through March 2009. a. East Finley Township’s contract with WOS for ditching/road related projects occurred approximately three months after Wilson became Supervisor. 1. The first WOS invoice submitted to the Township for these projects was paid on June 14, 2004. 2. Paul Wilson became a Supervisor on March 22, 2004. b. The Township continued to award contracts to WOS during Wilson’s tenure as Supervisor/Roadmaster. 1. The contracts awarded to WOS were done without public bidding or by vote of the Board. c. The Township ended its relationship with WOS after Wilson’s [July 2009] resignation as Supervisor/Roadmaster. * 19. From 1984 until 2004, when Wilson was appointed Roadmaster, the Township Road Crew completed most, if not all, road related projects without the assistance of a contractor. a. Since Wilson’s resignation in July 2009, Township road related projects were completed by Township employees. b. WOS was utilized by the Township as a result of Wilson’s actions as Supervisor and Roadmaster to select his son’s company. * [Cf., Fact Finding 1 a.] 20. Wilson introduced his son’s business to the other Supervisors shortly after becoming Supervisor in March 2004. a. Wilson organized an equipment demonstration for the Board with his son’s business so that the other Supervisors could witness the capabilities of his son’s skid-loader/high-lift which included a custom bucket attached. 1. Wilson wanted to demonstrate that the custom bucket made it easier to ditch road berms without removing gravel that the Township would have to pay to have replaced. 2. Wilson participated in making modifications to the bucket by adding "wings" to it so that when the bucket was used for Township work, Wilson, 09-027 Page 6 leaves would not get scooped into the bucket. b. No other contractors provided an equipment demonstration for the Supervisors. 21. At the conclusion of the equipment demonstration, the Supervisors (including Wilson) agreed that Wilson’s son’s business would be utilized by the Township for ditching/road related projects. a. The Supervisors did not receive or review any quotes/bids from WOS or any other contractor prior to selecting WOS to be utilized by the Township. b. There was no vote of the Board at a public meeting authorizing contracts with WOS. c. The informal meeting arranged by Wilson resulted in the Township utilizing WOS for road projects as recommended by Wilson. 22. Minutes of Board meetings reflect that work performed for the Township by WOS was not publicly discussed until April 2006 when the Board discussed work performed by WOS. a. Minutes of the April 11, 2006, Board meeting reflect the following: “Supervisors discussed Jim Wilson of Wilson Outdoor Services being hired as a [sic] contractor by the Township. All seems to be working well.” 23. WOS was subsequently approved as a contractor for the Township by Board votes beginning in May 2006. a. The votes of the Board after May 2006 authorized WOS as an approved contractor, but not for any specific contract. 1. WOS was approved as an emergency contractor during meetings of the Board when other emergency contractors were appointed. b. The contractor appointments occurred after the auditor report on April 10, 2007. 24. Board meetings reflect the following actions resulting in the selection of WOS as a contractor: Meeting Board Action Wilson’s Official Action(s) Date May 24, “Supervisor Rudy Barbisch motioned to Voted to approve WOS 2006 accept Wilson Outdoor Services to work on Township roads doing ditch work. Chairman Ernie [sic] Moorehead seconded.” Wilson was present at the meeting when the vote occurred. No abstention or no vote is recorded for Wilson. May 8, 2007 “Supervisors discussed using Wilson Wilson participated in the Outdoor Services as a subcontractor for discussion leading up to the ditching our Township roads at a rate of vote. Wilson informed the $60.00 per hour and we supply the fuel for Board of his son’s intentions the machine. Supervisor Barbisch made the to serve as a contractor and motion to approve this hire, Chairman provided the Board with Wilson, 09-027 Page 7 Meeting Board Action Wilson’s Official Action(s) Date Moorehead seconded the motion, and Vice-WOS’s rates. Chairman Wilson abstained from the vote. Abstained from the vote Motion passed.” Supervisor Ernie Moorehead motioned for Wilson abstained from the January 7, WOS to be the Township’s excavating vote. Wilson participated in 2008 contactor; Moorehead’s motion was discussion and provide[d] seconded by Supervisor Ralph “Rudy” rates for WOS. Barbisch. The Supervisors via a 3-0 vote appointed Wilson participated in the January 5, WOS as a designated Township contractor. vote to appoint his son's 2009 company to be utilized by the Township. 25. Between 2004 and 2009, the Board did not solicit bids or quotes from any other contractors prior to selecting WOS as the Township excavating contractor. a. The only company considered was WOS. b. Wilson, as Supervisor and Roadmaster, recommended WOS every year from 2006 through 2009 and provided the Board with WOS rates. c. Wilson voted to approve his son’s business as a Township contractor in 2006 and 2009. d. WOS’s appointment in 2008 and 2009 was to serve as an emergency contractor. e. There were no votes in either 2004 or 2005 to utilize WOS. 26. As Roadmaster, Wilson made the decision when to utilize WOS and the specific projects for which WOS would be utilized. a. Wilson would fragment these projects so that the $10,000.00 bidding threshold of the Second Class Township Code would not be exceeded. b. Wilson would authorize WOS for ditching on Township roads and label each road as a separate contract keeping the cost of each road under $10,000. 1. Keeping contracts under $10,000.00 eliminated the requirement for public bidding. 27. The Road Crew assisted WOS during the time period that WOS completed road related projects for the Township (2004 through 2009). a. Wilson, as Roadmaster, directed the Road Crew to provide assistance to WOS to complete road related projects by providing Township equipment and personnel. b. On occasion, a member of the Township Road Crew operated WOS equipment if the WOS operator did not report to the Township work site. 1. Wilson directed the Road Crew members to operate WOS equipment if WOS operators did not report to the Township work site. Wilson, 09-027 Page 8 aa. WOS equipment was hauled to designated work sites based on directives Wilson provided to his son via telephone. 28. Secretary/Treasurer Melissa Metz advised Wilson as early as September 19, 2006, at a Township meeting that the Second Class Township Code bidding procedures must be followed when awarding contracts, including those awarded to his son’s company. a. Wilson was also informed of the Second Class [Township Code] bidding procedures within months of becoming a Supervisor in 2004. b. Wilson ignored Metz’s advice and continued to participate in the award of contracts to his son’s business without public advertisement or soliciting bids/quotes. 29. Following the audit of 2006 Township accounts, the elected Auditors determined that the Supervisors failed to perform the following actions in 2006 that resulted in contracts being awarded through methods considered non-public in nature: a. Solicit quotes/bids from contractors. b. Vote to award contracts at public meetings. c. Vote to approve the payment of bills at Township meetings. 30. In an attempt to rectify the situation and make the Township more transparent to the public, the elected Auditors made the following recommendations to the Supervisors at the April 10, 2007, meeting: a. Approve a list of contractors at the beginning of each year for emergency use. 1. The Auditors recommended that an emergency list of contractors be approved so that at a minimum the public was aware as to whom the Supervisors would contact in case of an emergency. b. Obtain rates from the approved emergency contractors in case the Supervisors would want to utilize them for non-emergency projects. 1. The Auditors recommended that rates be obtained so that the Supervisors would have an idea as to how much a project might cost. aa. By determining the approximate price of the project based on the rates, it would be easier for the Supervisors to determine if the project would have to be put out for public bid. 31. Auditors recommended a stronger stipulation than the Second Class Township Code by recommending that all contracts should be on a bid basis. 32. On April 8, 2008, the Township elected Auditors again provided recommendations to the Supervisors, which included the following: a. That bills for the Township be presented, reviewed, and approved at the monthly meetings by the Supervisors. b. The Supervisors review and consult with the Township Solicitor regarding Wilson, 09-027 Page 9 procedures outlined within the Second Class Township Code that address conflicts of interest/contracts valued at $500.00 or more. 1. This written recommendation was made in light of the no bid contracts awarded to WOS and other no-bid contracts awarded to another Supervisor. 33. Wilson ignored the advice of the elected Auditors [and] continued to authorize contracts for his son’s business in 2008 and 2009 without adhering to the public bidding process. 34. Wilson would hand-deliver his son’s invoices to Township Secretary Metz prior to Township meetings. a. At Wilson’s direction, payments to WOS were made immediately upon Metz’s receipt of the invoices. b. Payments were made without the review of the full Board of Supervisors or public inspection. c. Wilson would then sign the checks as one of the three Township signatories. 35. From 2004 through early 2009, Wilson authorized WOS to complete various Township projects for the total amount of $69,043.00. 36. Between June 14, 2004, and April 10, 2009, Wilson submitted thirty-five (35) WOS invoices to the Township for payment totaling $69,043.00. a. Only five of WOS’s thirty-five WOS invoices were available for Supervisor and public inspection at a Township meeting. b. None of the (35) invoices were approved by a vote of the Board of Supervisors. 37. Of the thirty-five invoices submitted, thirty-three included charges in excess of $500.00. a. Of the thirty-three invoices charging $500.00 or more, none of the work completed by WOS related to those invoices was put out for public bid by the Supervisors. 38. Wilson signed thirty of the thirty-three Township checks issued to WOS. a. Payments issued to WOS from 2004 through 2009 totaled $69,043.00. 1. Township checks signed by Wilson total $65,378.00. 39. WOS maintained a bank account at National City Bank from 2004 through 2007. a. James Wilson and his wife, Michelle Wilson, had signature authority over the account. 40. Payments issued to WOS by the Township from 2004 through 2007 were deposited in Wilson’s son’s business bank account at National City Bank. 41. In 2008, WOS opened a bank account at First Federal Savings and Loan Association of Greene County (FFSL). Wilson, 09-027 Page 10 a. James Wilson and his wife, Michelle Wilson, had signature authority over the account. 42. Payments issued to WOS by the Township from 2008 through 2009 were deposited in Wilson’s son’s business bank account at FFSL. 43. In addition to checks deposited into the WOS accounts, six checks issued by the Township to WOS totaling $11,159.00 were cashed. 44. The percentage of WOS’s gross income as a result of no bid contracts with the Township is as follows: 2004 – 3.7% 2005 – 5.7% 2006 – 28.9% 2007 – 16.8% 2008 – 27.7% a. Approximate income percentages for 2009 could not be determined due to the 2009 Federal Income Tax Returns for WOS not yet being finalized. 45. WOS filed Federal Income Tax Returns for calendar years 2004, 2005, 2006, 2007, 2008, and 2009. a. Included in WOS’s income tax returns were Schedule C (Form 1040), Profit or Loss From Business reports regarding WOS for each respective year. 46. WOS realized profit percentages from gross profit reported for years 2004-2008 as shown below: Year Gross Net Income/Profit Profit Percentage From Income/Profit Gross Income/Profit 2004 $71,574.00 $25,276.00 35.3% 2005 $44,499.00 $3,242.00 7.3% 2006 $79,529.00 $23,549.00 29.6% 2007 $119,285.00 $72,569.00 60.8% 2008 $218,643.00 $144,071.00 65.9% a. WOS net profit was calculated by including all expenses detailed on WOS Schedule C forms including costs of goods, insurance, mortgage, other repairs and maintenance, rent or lease of equipment, insurance, fuel, small tools, other truck expenses, telephone and miscellaneous expenses. 47. WOS business realized approximate profits totaling $29,801.68 from 2004 through 2008 as a result of doing business with East Finley Township, as shown below: Year Gross Payment Profit Percentage Profit Realized from Township From Gross Income/Profit 2004 $3,200.00 35.3% $1,129.60 2005 $3,150.00 7.3% $229.95 2006 $25,965.00 29.6% $7,685.64 2007 $24,319.00 60.8% $14,785.95 2008 $9,060.00 65.9% $5,970.54 Total: 29,801.68 Wilson, 09-027 Page 11 48. The issue of the Board of Supervisors awarding contracts without public bidding, including contracts awarded to Wilson’s son, became a point of discussion during the May 12, 2009, Board of Supervisors meeting. a. Citizens became aware of the practice of no bid contracts partially as a result of Auditor comments and recommendations to the Board. b. Following the discussion on May 12, 2009, the Board took the following action: “Motion by Chairman Moorehead that the Finley Township Supervisors will follow all bidding rules to the PA Second Class Township Code from now on. Motion seconded by Barbisch, Vice- Chairman Wilson agreed.” 49. Wilson provided State Ethics Commission investigators with sworn testimony on July 14, 2010, during which he confirmed the following: a. As Roadmaster/Supervisor, he was responsible for soliciting quotes and/or bids related to Township road projects. b. He was aware that if a road related project was going to exceed $10,000.00, the project would have to be publicly bid. 1. If the project was less than $10,000.00 he solicited phone quotes. c. Certain road related projects did not require him to obtain quotes or bids because the projects were awarded to contractors approved at the January re-organizational meeting in which the Supervisors were aware of the approved contractors' rates. d. Contractor selection did not always occur at a Township meeting via a vote. 1. On occasion, the Supervisors decided to utilize a contractor during informal telephone conversations or in passing outside of Township meetings. e. All three Supervisors were aware of and approved of those contractors working for the Township unless specifically noted in the minutes otherwise. f. After witnessing what his son's equipment could do, Wilson organized an equipment demonstration in which the potential of WOS was introduced to the other Supervisors. 1. He introduced the utilization of his son's company shortly after becoming Supervisor. g. He kept in constant contact with his son in order to arrange where his son had to deliver WOS equipment for Township projects, determine whether or not his son was going to operate WOS equipment, etc. 1. As Roadmaster, he dispatched Township Road Laborers to assist WOS. 2. He directed Township Road Laborers to operate WOS equipment if Wilson, 09-027 Page 12 his son would not be available to do so. 3. He approved the use of Township equipment in assisting WOS with Township road related projects. h. Wilson admitted to fragmenting projects WOS worked on in order to keep the projects from exceeding the $10,000.00 bidding threshold. i. He did not publicly bid any projects WOS completed for the Township. j. At the January re-organizational meetings, he informed the Supervisors as to what his son's rates/terms would be if selected as an approved contractor. k. He delivered his son's invoices to the Township Secretary/Treasurer for payment. l. He signed checks to his son's business. m. Wilson acknowledged that he was not following the Second Class Township Code when he voted at the May 12, 2009, meeting to “from now on” follow the Code. THE FOLLOWING FINDINGS RELATE TO THE ALLEGATIONS THAT WILSON FAILED TO FILE A STATEMENT OF FINANCIAL INTERESTS FOR THE 2006 CALENDAR YEAR BY MAY 1, 2007; AND WHEN HE FAILED TO DISCLOSE ALL DIRECT/INDIRECT SOURCES OF INCOME ON STATEMENTS OF FINANCIAL INTERESTS FILED FOR THE 2004, 2005, 2007, AND 2008 CALENDAR YEARS. 50. Wilson in his official capacity as Township Supervisor/Roadmaster of East Finley Township was required to file a Statement of Financial Interests (SFI) form by May 1 annually containing information for the prior calendar year. a. Township Supervisors/Roadmasters are annually provided with blank Statements of Financial Interests forms for completion. 51. Wilson’s W-2 forms covering the time period of 2004 through 2009 confirm the receipt of compensation from the Township for serving as Supervisor/Roadmaster: Calendar Year Compensation Received For Serving As from the Township 2004 $32,285.75 Supervisor/Roadmaster 2005 $34,158.00 Supervisor/Roadmaster 2006 $34,777.15 Supervisor/Roadmaster 2007 $36,533.00 Supervisor/Roadmaster 2008 $37,888.25 Supervisor/Roadmaster 2009 $20,317.50 Supervisor/Roadmaster a. Wilson’s total compensation as Supervisor and Roadmaster is determined as follows: Roadmaster Compensation Supervisor Compensation 2004: $31,000.75 $1,875.00 2005: $32,283.00 $1,875.00 2006: $32,902.15 $1,875.00 2007: $34,658.00 $1,875.00 2008: $36,013.25 $1,875.00 Wilson, 09-027 Page 13 2009: $19,223.75 $1,093.75 52. On July 30, 2009, an SFI compliance review was conducted for East Finley Township by the Investigative Division of the State Ethics Commission. a. The compliance review confirmed that Wilson annually filed SFIs for calendar years 2004, 2005, 2006, 2007 and 2008. b. Wilson’s SFIs for calendar years 2004, 2005, 2007, and 2008 did not disclose East Finley Township as a direct/indirect source of income. 53. Wilson’s SFI for the 2006 calendar year was [an] undated form and not filed until after May 1, 2007. a. Lines 8 through 14, which require disclosure of financial information, were not completed by Wilson. b. Wilson’s non-disclosure included direct/indirect sources of income. 54. Wilson used his position as Supervisor/Roadmaster to recommend the use of his son's business as a Township contractor, when contracts for road projects were awarded to his son’s business without an open and public process, when he voted to designate his son's business as a selected contractor for Township use, and when he authorized Township checks to be issued to his son's business, all of which resulted in a private pecuniary gain to WOS, a business with which his son is associated. III.DISCUSSION: As a Supervisor of East Finley Township (“Township”), Washington County, from March 22, 2004, to July 17, 2009, Respondent Paul Wilson (hereinafter also referred to as “Respondent,” “Respondent Wilson,” and “Wilson”) 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 Wilson violated Sections 1103(a), 1103(f), 1104(a), and 1105(b) of the Ethics Act: (1) when he participated in discussions and actions of the Township Board of Supervisors (“Board”) to award contracts to a business owned by his son, “Wilson’s Outdoor Services” (“WOS”); (2) when the projects valued at in excess of $500.00 were awarded without an open and public process; (3) when he participated in actions of the Board to authorize payments to his son’s company; (4) when he failed to file a Statement of Financial Interests (“SFI”) for the 2006 calendar year by May 1, 2007; and (5) when he failed to disclose all direct/indirect sources of income on SFIs filed for the 2004, 2005, 2007 and 2008 calendar 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: Wilson, 09-027 Page 14 § 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 1103(f) of the Ethics Act imposes certain restrictions as to contracting: § 1103. Restricted activities (f)Contract.— No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. § 1103(f). Section 1103(f) of the Ethics Act provides in part that no public official/public employee or his spouse or child or business with which the public official/public employee or his spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official/public employee is associated unless the contract is awarded Wilson, 09-027 Page 15 through an open and public process including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. 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(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 not applicable to this matter, Section 1105(b)(5) of the Ethics Act requires the filer to disclose on the SFI the name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. 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. The Board consists of three Supervisors. All three Supervisors and the Township Secretary/Treasurer have signature authority over Township accounts. Township checks require the signatures of the Secretary/Treasurer and any combination of two Supervisors. Prior to June 2009, bill lists were not generated for review by the Board, and Township bills were considered approved when the Supervisors signed the Township checks issued to pay the bills. Respondent Wilson served as a Township Supervisor from March 22, 2004, to July 17, 2009. Wilson served as Vice-Chairman of the Board in 2007, 2008 and 2009. Wilson served as Township Roadmaster from January 2, 2001, to June 15, 2009. As Township Roadmaster, Wilson was responsible for soliciting quotes/bids related to road projects. Wilson’s son, James Wilson, is the sole owner of WOS. WOS specializes in ditching roadways, excavating, mowing grass, and seeding lawns. After Wilson became a Township Supervisor, the Township contracted with WOS from June 2004 through March 2009. WOS was utilized by the Township as a result of Wilson’s actions as Supervisor and Roadmaster to select his son’s company. The contracts awarded to WOS were done without public bidding or vote of the Board. Wilson introduced his son’s business to the other Supervisors through a demonstration of WOS equipment, which Wilson organized shortly after becoming Supervisor in March 2004. No other contractors provided an equipment demonstration for the Supervisors. At the conclusion of the equipment demonstration, the Supervisors (including Wilson) agreed that Wilson’s son’s business would be utilized by the Township for ditching/road related projects. The Supervisors did not receive or review any quotes/bids from WOS or any other contractor prior to selecting WOS to be utilized by the Township. There was no vote of the Board at a public meeting authorizing contracts with WOS. The informal meeting arranged by Wilson resulted in the Township utilizing WOS for road projects as recommended by Wilson. Per the meeting minutes of the Board, the work performed for the Township by WOS was not publicly discussed at Township Board meetings until April 2006. WOS was subsequently approved as a contractor for the Township by Board votes beginning in May 2006. The votes of the Board after May 2006 authorized WOS as an approved contractor, but not for any specific contract. On May 24, 2006, the Board including Wilson voted to accept WOS to work on Wilson, 09-027 Page 16 Township roads doing ditch work. On May 8, 2007, Wilson abstained from a Board vote to use WOS as a subcontractor for ditching Township roads but participated in the Board’s discussion, informed the Board of his son’s intentions to serve as a contractor, and provided the Board with WOS rates. On January 7, 2008, Wilson abstained from a Board vote to use WOS as the Township’s excavating contractor but participated in the Board’s discussion and provided rates for WOS. On January 5, 2009, Wilson participated in a 3-0 vote of the Board to appoint WOS as a designated Township contractor. Between 2004 and 2009, the Board did not solicit bids or quotes from any other contractors prior to selecting WOS as the Township excavating contractor. The only company considered was WOS. Wilson, as Supervisor and Roadmaster, recommended WOS every year from 2006 through 2009 and provided the Board with WOS rates. Wilson voted to approve his son’s business as a Township contractor in 2006 and 2009. As Roadmaster, Wilson made the decision when to utilize WOS and the specific projects for which WOS would be utilized. Wilson fragmented projects so that the $10,000.00 bidding threshold of the Second Class Township Code would not be exceeded. As Roadmaster, Wilson also directed the Township Road Crew to provide assistance to WOS to complete road related projects by providing Township equipment and personnel. Wilson directed the Township Road Crew members to operate WOS equipment if WOS operators did not report to the Township work site. Wilson would hand-deliver his son’s invoices to Township Secretary/Treasurer Melissa Metz (“Metz”) prior to Township meetings. At Wilson’s direction, payments to WOS were made immediately upon Metz’s receipt of the invoices. Payments were made without the review of the full Board or public inspection. Wilson would sign Township checks issued to WOS as one of the three Township signatories. From 2004 through early 2009, Wilson authorized WOS to complete various Township projects for the total amount of $69,043.00. Wilson has confirmed that he did not publicly bid any projects WOS completed for the Township. Between June 14, 2004, and April 10, 2009, Wilson submitted 35 WOS invoices to the Township for payment totaling $69,043.00. Only five of WOS’s 35 invoices were available for Supervisor and public inspection at a Township meeting. None of the 35 invoices were approved by a vote of the Board. Of the 35 WOS invoices submitted to the Township, 33 included charges in excess of $500.00. None of the work completed by WOS related to those 33 invoices was put out for public bid by the Supervisors. Township payments issued to WOS from 2004 through 2009 totaled $69,043.00. Wilson signed 30 of the 33 Township checks issued to WOS. Township checks signed by Wilson totaled $65,378.00. As calculated in Fact Finding 47, from 2004 through 2008, WOS realized approximate profits totaling $29,801.68 as a result of doing business with the Township. The issue of the Board awarding contracts without public bidding became the subject of discussion at the May 12, 2009, Board meeting, with the Board including Wilson voting unanimously to follow all bidding rules of the Second Class Township Code from then on. In July 2009 Wilson resigned as Supervisor/Roadmaster, stating that his resignation was due to “a potential conflict of interest” that could occur due to his employment with a company that does business with the Township. The Township ended its relationship with WOS after Wilson’s resignation. Wilson, 09-027 Page 17 The parties have stipulated that Wilson used his position as Township Supervisor/Roadmaster to recommend the use of his son's business as a Township contractor and that Township contracts for road projects were awarded to Wilson’s son’s business without an open and public process. The parties have further stipulated that Wilson voted to designate his son's business as a selected contractor for Township use and authorized Township checks to be issued to his son's business. The parties have stipulated that Wilson’s aforesaid actions resulted in a private pecuniary gain to WOS, a business with which his son is associated. We shall now review the material facts pertaining to Wilson’s SFIs. Wilson’s SFIs filed with the Township for calendar years 2004, 2005, 2007, and 2008 did not disclose the Township as a direct/indirect source of income despite the fact that Wilson had received compensation from the Township in excess of $30,000.00 in each of those years. Wilson’s SFI for the 2006 calendar year was undated and was not filed until after May 1, 2007. Lines 8 through 14 of the form, which require disclosure of financial information, were not completed by Wilson. Such non-disclosure included direct/indirect sources of income. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations as follows: 3. The Investigative Division will recommend the following in relation to the above allegations: a. That a violation of Section 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1103(a), occurred when Wilson, as a Member of the Board of Supervisors, participated in discussions and actions of the Board of Supervisors to award contracts to a business owned by his son, Wilson Outdoor Services. b. That a violation of Section 1103(f) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1103(f), occurred when projects valued at in excess of $500.00 were awarded to a business owned by Wilson’s son, Wilson Outdoor Services, without an open and public process. c. That a violation of Section 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1103(a), occurred when Wilson participated in actions of the Board of Supervisor[s] to authorize payments to Wilson’s son’s company. d. That a violation of Section 1104(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1104(a), occurred when Wilson failed to file a Statement of Financial Interests for the 2006 calendar year by May 1, 2007. Wilson, 09-027 Page 18 e. That a violation of Section 1105(b) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1105(b), occurred when Wilson failed to disclose all direct/indirect sources of income on Statements of Financial Interests filed for the 2004, 2005, 2007 and 2008 calendar years. 4. Wilson agrees to make payment in the amount of $8,000.00 in settlement of this matter payable to East Finley Township and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. 5. If Wilson has not already [done] so, Wilson agrees to file amended Statements of Financial Interests for the 2004, 2005, 2007 and 2008 calendar years disclosing all required information as appropriate. Wilson also agrees to file a Statement of Financial Interests for the 2006 calendar year. All Statements of Financial Interests shall be filed with East Finley Township within thirty (30) days of the issuance of the final adjudication in this matter. Copies of said forms shall be forwarded to the State Ethics Commission for compliance verification purposes. 6. Wilson agrees that he will neither seek nor hold any position of public office or of public employment in the Commonwealth of Pennsylvania at any time. Consent Agreement, at 1-2. In considering the Consent Agreement, we agree with the parties that a violation of Section 1103(a) of the Ethics Act occurred when Wilson, as a Member of the Board, participated in discussions and actions of the Board to award contracts to a business owned by his son, specifically, WOS. Wilson used the authority of his public office when he introduced WOS to the other Supervisors through the equipment demonstration that he organized shortly after becoming Supervisor in March 2004. Wilson further used the authority of his public office when, at the conclusion of the equipment demonstration, he and the other Supervisors agreed that WOS would be utilized by the Township for ditching/road related projects. The equipment demonstration/informal meeting arranged by Wilson resulted in the Township utilizing WOS for road projects as recommended by Wilson. Wilson, as Supervisor and Roadmaster, recommended WOS every year from 2006 through 2009 and provided the Board with WOS rates. Wilson voted to approve WOS as a Township contractor in 2006 and 2009. In 2007 and 2008, Wilson abstained from Board votes to use WOS for Township work but participated in the Board’s discussions leading up to the votes and provided the Board with WOS rates. From 2004 through early 2009, Wilson authorized WOS to complete various Township projects for the total amount of $69,043.00. Wilson’s aforesaid actions resulted in a private pecuniary gain to WOS, a business with which his son is associated. As calculated in Fact Finding 47, from 2004 through 2008, WOS realized approximate profits totaling $29,801.68 as a result of doing business with the Township. Wilson, 09-027 Page 19 With each element of a violation of Section 1103(a) established, we hold that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Wilson, as a Member of the Board, participated in discussions and actions of the Board to award contracts to WOS, a business owned by Wilson’s son. Cf., Vaughn, Order 1450. We accept the recommendation of the parties for a finding that a violation of Section 1103(f) of the Ethics Act occurred when Township projects valued at in excess of $500.00 were awarded to WOS without an open and public process. In 2004 when Wilson and the other Township Supervisors agreed that WOS would be utilized by the Township for ditching/road related projects, the Supervisors did not receive or review any quotes/bids from WOS or any other contractor prior to selecting WOS to be utilized by the Township. There was no vote of the Board at a public meeting authorizing contracts with WOS. The equipment demonstration/informal meeting arranged by Wilson resulted in the Township utilizing WOS for road projects as recommended by Wilson. Between 2004 and 2009, the Board did not solicit bids or quotes from any other contractors prior to selecting WOS as the Township excavating contractor. The only company considered was WOS. The fact that work was being performed for the Township by WOS was not publicly discussed at Township Board meetings until April 2006. The votes of the Board after May 2006 authorized WOS as an approved contractor, but not for any specific contract. The contracts awarded to WOS were done without public bidding or vote of the Board. Between June 14, 2004, and April 10, 2009, Wilson submitted 35 WOS invoices to the Township for payment totaling $69,043.00. Only five of the 35 WOS invoices were available for Supervisor and public inspection at a Township meeting. None of the 35 invoices were approved by a vote of the Board. Of the 35 WOS invoices submitted to the Township, 33 included charges in excess of $500.00. None of the work completed by WOS related to those 33 invoices was put out for public bid by the Supervisors. We are mindful of the ruling in Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004). In Bixler, supra, the Commonwealth Court of Pennsylvania held that a township supervisor did not violate Section 1103(f) of the Ethics Act when a business that employed him entered into a contract in excess of $500 with his township without an open and public process, but the supervisor himself was neither a party to the contract nor a principal of the contracting business. Id. The Court determined that Section 1103(f) of the Ethics Act prohibited the conduct of entering into the contract under such circumstances. The Court concluded that although a violation of Section 1103(f) of the Ethics Act would be established under such circumstances, it would not be the public official who would be in violation of the law. Id. See also, Means, Opinion 04-007. In the instant matter, if the parties had not determined to enter into a Consent Agreement, we might have been presented with factual and legal issues as to whether, under the circumstances of this case, Bixler would apply. See, Hauser, Order 1518. However, given: (1) that the parties have entered into a comprehensive Consent Agreement; and (2) the parties are in agreement that the finding of a violation of Section 1103(f) would be appropriate as part of an overall settlement of this case, we shall accept the parties’ proposed disposition as to Section 1103(f). We hold that per the Consent Agreement of the parties, a violation of Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), occurred when Township projects valued at in excess of $500.00 were awarded to WOS, a business owned by Wilson’s son, without Wilson, 09-027 Page 20 an open and public process. We note that the Section 1103(f) determination in this case based upon the agreement of the parties should not be considered as precedent for other cases, which would be determined based upon their facts and circumstances. We agree with the parties that a violation of Section 1103(a) of the Ethics Act occurred when Wilson participated in actions of the Board to authorize payments to his son’s company, WOS. Between June 14, 2004, and April 10, 2009, Wilson submitted 35 WOS invoices to the Township for payment totaling $69,043.00. At Wilson’s direction, payments to WOS were made immediately upon Metz’s receipt of the invoices. Wilson signed 30 of the 33 Township checks issued to WOS as one of the three Township signatories. Township checks signed by Wilson totaled $65,378.00. The signing of such checks constituted formal approval of the payments. None of the invoices were approved by a vote of the Board. We hold that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Wilson participated in actions of the Board to authorize payments to Wilson’s son’s company, WOS. Cf., Gold, Order 1461; Vaughn, supra. As for the allegations involving Wilson’s SFIs, we hold that a violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), occurred when Wilson failed to file an SFI for the 2006 calendar year by May 1, 2007. We further hold that a violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred when Wilson failed to disclose all direct/indirect sources of income on SFIs filed for the 2004, 2005, 2007 and 2008 calendar years. As part of the Consent Agreement, Wilson has agreed to make payment in the amount of $8,000.00 payable to East Finley Township 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, Wilson has agreed to file with the Township, within thirty (30) days of the issuance of the final adjudication in this matter, amended SFIs for the 2004, 2005, 2007 and 2008 calendar years, disclosing all required information as appropriate, and an SFI for the 2006 calendar year, and to forward copies of all such forms to this Commission for compliance verification purposes. Finally, Wilson has agreed that he will neither seek nor hold any position of public office or of public employment in the Commonwealth of Pennsylvania at any time. 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, Wilson is directed to make payment in the amount of $8,000.00 payable to East Finley Township and forwarded to th this Commission by no later than the thirtieth (30) day after the mailing date of this adjudication and Order. To the extent he has not already done so, Wilson is directed to file with the th Township, by no later than the thirtieth (30) day after the mailing date of this adjudication and Order, amended SFIs for the 2004, 2005, 2007 and 2008 calendar years, appropriately disclosing all required information, and an SFI for the 2006 calendar year, and to forward copies of all such forms to this Commission for compliance verification purposes. Wilson, 09-027 Page 21 Per the Consent Agreement of the parties, Wilson is directed that he is to neither seek nor hold any position of public office or of public employment in the Commonwealth of Pennsylvania at any time. Compliance with the Consent Agreement and this Order 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 of East Finley Township (“Township”), Washington County, from March 22, 2004, to July 17, 2009, Respondent Paul Wilson (“Wilson”) 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. Wilson violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when, as a Member of the Township Board of Supervisors, he participated in discussions and actions of the Township Board of Supervisors to award contracts to “Wilson’s Outdoor Services,” a business owned by his son. 3. Per the Consent Agreement of the parties, a violation of Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), occurred when Township projects valued at in excess of $500.00 were awarded to Wilson’s Outdoor Services, a business owned by Wilson’s son, without an open and public process. 4. A violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Wilson participated in actions of the Township Board of Supervisors to authorize payments to Wilson’s son’s company, Wilson’s Outdoor Services. 5. A violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), occurred when Wilson failed to file a Statement of Financial Interests (“SFI”) for the 2006 calendar year by May 1, 2007. 6. A violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred when Wilson failed to disclose all direct/indirect sources of income on SFIs filed for the 2004, 2005, 2007 and 2008 calendar years. In Re: Paul Wilson, : File Docket: 09-027 Respondent : Date Decided: 12/15/10 : Date Mailed: 12/20/10 ORDER NO. 1575 1. As a Supervisor of East Finley Township (“Township”), Washington County, Paul Wilson (“Wilson”) violated Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), when, as a Member of the Township Board of Supervisors, he participated in discussions and actions of the Township Board of Supervisors to award contracts to “Wilson’s Outdoor Services,” a business owned by his son. 2. Per the Consent Agreement of the parties, a violation of Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), occurred when Township projects valued at in excess of $500.00 were awarded to Wilson’s Outdoor Services, a business owned by Wilson’s son, without an open and public process. 3. A violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Wilson participated in actions of the Township Board of Supervisors to authorize payments to Wilson’s son’s company, Wilson’s Outdoor Services. 4. A violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), occurred when Wilson failed to file a Statement of Financial Interests (“SFI”) for the 2006 calendar year by May 1, 2007. 5. A violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred when Wilson failed to disclose all direct/indirect sources of income on SFIs filed for the 2004, 2005, 2007 and 2008 calendar years. 6. Per the Consent Agreement of the parties, Wilson is directed to make payment in the amount of $8,000.00 payable to East Finley Township and forwarded to the th Pennsylvania State Ethics Commission by no later than the thirtieth (30) day after the mailing date of this Order. 7. To the extent he has not already done so, Wilson is directed to file with the th Township, by no later than the thirtieth (30) day after the mailing date of this Order, amended SFIs for the 2004, 2005, 2007 and 2008 calendar years, appropriately disclosing all required information, and an SFI for the 2006 calendar year, and to forward copies of all such forms to the Pennsylvania State Ethics Commission for compliance verification purposes. 8. Per the Consent Agreement of the parties, Wilson is directed that he is to neither seek nor hold any position of public office or of public employment in the Commonwealth of Pennsylvania at any time. 9. Compliance with the Consent Agreement and 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, ___________________________ Wilson, 09-027 Page 23 Louis W. Fryman, Chair