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HomeMy WebLinkAbout1588 Thuy In Re: Voung Thuy, : File Docket: 09-009 Respondent : X-ref: Order No. 1588 : Date Decided: 6/23/11 : Date Mailed: 7/15/11 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 allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an “Investigative Complaint.” An Answer was filed and a hearing was held. The record is complete. I. ALLEGATIONS: That Vuong Thuy, a (public official/public employee) in his capacity as Chief Administrative Officer, Treasurer, and Headmaster for the Multi-Cultural Academy Charter School (MACS) of Philadelphia violated the following provisions of the State Ethics Act (Act 93 of 1998) when he used the authority of his public position for private pecuniary gain of himself, a member of his immediate family and/or a business with which he and/or a member of his immediate family are associated by participating in actions of MACS including but not limited to: recommending the rental of property by MACS; negotiating/determining the terms and conditions of the rental agreements; authorizing payments, by MACS for the rented property; relating to the rental of said property from the Indochinese American Council (IAC), a business with which Thuy and his wife were employed, which property was owned by Thuy and his wife and leased to IAC for subsequent leasing to MACS; and when such rental contracts by MACS were not awarded through an open and public process, and when he failed to disclose on Statements of Financial Interests for the years 2004 through 2009, his ownership interests in property leased to MACS or income derived from rent.* § 1103. Restricted activities (a)Conflict of interest.— No public official or public employee shall engage in conduct that constitutes a conflict of interest. Thuy, 09-009 Page 2 65 Pa.C.S. § 1103(a). § 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). § 1105. Statement of financial interests (b) Required information.— The statement shall include the following information for the prior calendar year with regard to the person required to file the statement: (3) Any direct or indirect interest in any real estate which was sold or leased to the Commonwealth, any of its agencies or political subdivisions or purchased or leased from the Commonwealth, any of its agencies or political subdivisions or which was the subject of any condemnation proceedings by the Commonwealth, any of its agencies or political subdivisions. (5) The name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. However, this provision shall not be construed to require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges. 65 Pa.C.S. § 1105(b)(3), (5). § 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 Thuy, 09-009 Page 3 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. *The Allegations are as set forth in the Investigative Complaint/Findings Report, at 2. II. FINDINGS: A. Pleadings 1. On April 17, 2009, a letter was forwarded to Vuong Thuy, by the Investigative Division of the State Ethics Commission informing himthat a complaint against him was received by the Investigative Division and that a full investigation was being commenced. a. Said letter was forwarded by certified mail, no. 7006 2150 0002 5372 7045. b. The domestic return receipt bore an undistinguishable signature, with a delivery date of April 24, 2009. 2. On April 8, 2010, an amended Notice of Investigation was forwarded to Vuong Thuy, c/o Drew S. Dorfman, Esquire, by the Investigative Division of the State Ethics Commission informing him that the allegations contained in the April 17, 2009, Notice of Investigation were being amended. a. Said letter was forwarded by certified mail, no. 7009 0820 0000 1856 8529. 3. The Investigative Complaint/Findings Report was mailed to the Respondent on April 12, 2010. 4. Vuong Thuy has served as the Chief Administrative Officer/headmaster and treasurer of the Multi-Cultural Academy Charter School (“MACS”) since its inception on October 7, 1997, until the present time. a. Thuy was named headmaster and treasurer by unanimous vote of the MACS Board of Trustees on October 7, 2007. 5. Thuy was one of the founders of the MACS. a. In his capacity as Chief Administrative Officer (“CAO”), headmaster and treasurer, Thuy was the primary contact person for all MACS business and had primary responsibility for securing approvals and funding [in addition to performing other duties]. 6. In or around July/August 1997 the MACS received approval for a planning grant by the Pennsylvania Department of Education (“PDE”). a. Thuy, as one of the charter school’s founders, communicated to the School District of Philadelphia receipt of the grant and of MACS’ intention to apply for charter school status from the District in or about November 1997. Thuy, 09-009 Page 4 7. As the headmaster of the MACS, Thuy was provided with employment contracts by the MACS Board of Trustees. 8. W-2’s for the MACS confirm the following income received by Thuy as the CAO/headmaster from the MACS from 2004 through 2009: Year Amount a. 2004 $120,371 2005 $139,690 2006 $147,450 * 2007 $169,987 2008 $190,842 2009 $226,013 * [sic]. [Cf., ID 6-4.] 9. Funding for the MACS has been provided by Philadelphia School District, Commonwealth of Pennsylvania, the Federal Government and private donations. 10. The [Indochinese American Council (“IAC”)] is a community-based, non-profit corporation that supports and provides educational opportunities and school to work programs to multi-racial, at risk, low income youths and promotes racial harmony and understanding through education, traditional arts and personal interaction. a. Thuy was one of the founders of the IAC and has been listed on IAC federal tax filings as the IAC executive director. 1. Thuy’s wife, Maria Thuy, has been identified as a program director. 11. The IAC offices are located at 4934-36 Old York Road, Philadelphia, PA 19141 on property owned by Thuy and his wife and leased to the IAC. 12. City of Philadelphia Department of Records lists the deed for the property at 4666- th 68 North 15 Street, Philadelphia, PA 19140 as being owned by Vuong Thuy and his wife, Maria Thuy. a. The property is also listed on the deed as 1500 Belfield Avenue, Philadelphia, PA 19140. b. The property was purchased by Vuong & Maria Thuy in 1994 from Ronald Grunes in the amount of $54,000. 1. No mortgage was recorded for this property. th 13. MACS began operations for the 1998-99 school year at 4666-68 North 15 Street, Philadelphia, PA 19140. th 14. The property [at 4654 North 15 Street, Philadelphia, PA was identified as a facility to accommodate the need of MACS for expansion]. th 15. The property at 4654 North 15 Street was purchased by Thuy and his wife in or about the time the MACS Board was considering expansion. th a. City of Philadelphia Department of Records lists the deed at 4654 North 15 Street, Philadelphia, PA 19140 as being owned by Vuong & Maria Thuy. Thuy, 09-009 Page 5 b. Vuong & Maria Thuy purchased the property on April 23, 2001, in the amount of $17,500 from Anthony and Victoria Mazur. 16. Thuy then leased the property approximately two months later to the IAC in anticipation of the property being subleased to the MACS. 17. Minutes of the IAC Board of Trustees meeting for June 12, 2001, reflect that the th board members approved to lease the property at 4654 N. 15 Street, Philadelphia, PA from Vuong & Maria Thuy and sublease the property to the MACS. th a. The leasing of the property at 4654 North 15 Street and the subleasing of this property to the MACS was done as a temporary and additional facility. 18. A market rental was completed by Edward S. Snyder Real Estate Inc. on August 6, th 2001, for the property at 4654 North 15 Street, Philadelphia, PA 19140 at the request of Thuy. a. The market rental report was addressed to the IAC to the attention of Dr. Huyen Tran, President of IAC. 19. The Board authorized the President of the MACS Board of Trustees to sign a sublease for one year, September 1, 2001, to August 31, 2002, with the IAC to th sublease the property at 4654 North 15 Street, Philadelphia. a. Thuy proposed the lease to the Board. 20. Vuong Thuy was present for the meeting [of the IAC Board of Trustees held September 26, 2001]. 21. On September 28, 2001, Dr. Huyen Tran, President of the IAC authorized a letter to Bernice Warshowsky, President of the MACS regarding the sublease for the th property at 4654 North 15 Street that included the following information: At a meeting on September 26, 2001, our board unanimously and officially approved our previous offer dated June 1, 2001 to sublet the building at 4654 N. 15 Street, Philadelphia, PA 19140 to the Academy Charter School beginning September 1, 2001 as mutually agreed earlier, and for a period of one year, renewable. Now that the fair market rental appraisal and the renovations to meet the needs of the school and the city codes have been completed, the monthly rental cost is $2,420. Your school will be responsible for utilities, water and all required insurance. The IAC will be listed as co-insured in the liabilities insurance to be acquired by your school for the above property. Please sign below to indicate acceptance of the terms and conditions of our offer and this letter will serve as a lease between the MACS and the IAC. a. The letter was not authored by Tran, but he did review the contents and signed the letter. b. The letter was signed by Bernice Warshowsky as President of the Board of Trustees for MACS on 9-28-01. Thuy, 09-009 Page 6 1. The letter signed by Warshowsky was given to her by Vuong Thuy. 2. Warshowsky signed the letter after discussion with Thuy. 22. On July 4, 2003, a letter from Huyen Tran, President of the IAC was directed to Dennis Cook, President of the MACS regarding the renewal of the lease for the th property at 4654 N. 15 Street. a. The letter was authored by Thuy, but signed by Tran. b. Cook signed the letter on October 3, 2003. 23. Thuy was present at the meeting [of the MACS Board of Trustees held October 6, 2003]. 24. On July 20, 2004, Edward S. Snyder Real Estate Inc. submitted two (2) letters to Huyen Tran, President of the IAC on market rentals for the Thuy properties located thth at 4666-68 North 15 Street and 4654 North 15 Street. a. Snyder was authorized to do the analysis by Thuy and directed by Thuy to send the letters to Tran. 25. During the course of conducting the market rentals in 2004 for the properties that were leased to the IAC and subleased to the MACS, Snyder discussed the matter only with Vuong Thuy. a. All of Snyder’s communications regarding the market rentals were directed through Thuy. b. Snyder was directed by Thuy to address the market rental reports to Huyen Tran of the IAC. c. Thuy in his role as the CAO/headmaster of the MACS had been delegated by the MACS Board to secure the leases. 26. On July 20, 2004, Maria Thuy, wife of Vuong Thuy sent two (2) letters to Huyen Tran of the IAC advising him that based upon the fair market rentals performed by thth Snyder Real Estate of the 4666-68 North 15 Street and 4654 North 15 Street properties she and Thuy own, she was offering new leases with the IAC to run from August 1, 2004, through July 31, 2009. a. The [leases were] signed by Huyen Tran on July 20, 2004. b. Vuong Thuy is co-owner of the buildings to be leased to the MACS through the IAC. 27. Thuy was serving as the executive director of IAC at this time. a. Both Thuy and his wife were paid employees of IAC. 28. The sublets [by the MACS] were signed by Dennis Cook on August 27, 2004. 29. The MACS needed more space than the buildings owned by Thuy offered. 30. In 2008 Truebright Science Academy Charter School (“TSACS”) was occupying the property at 3821-33 N. Broad St. that they were leasing the facility [sic] from the School District of Philadelphia. Thuy, 09-009 Page 7 a. TSACS was vacating that facility in 2009. b. Thuy had no ownership in the property located at 3821-23 N. Broad Street. 31. Based on the request of Thuy, Robin Kay of Delaware Valley Appraisal Services th performed market rentals on September 10, 2008, at 4666-68 and 4654 North 15 Street, Philadelphia, PA, the properties owned by Thuy, which determined the following: th a. 4666-68 N. 15 Street, Philadelphia, PA 19140 – 6,000 square feet × $1.50 per square foot = $9,000. 1. The market rent was estimated at $9,000 per month. th b. 4654 N. 15 Street, Philadelphia, PA 19140 – 1,680 square feet × $1.50 per square foot = $2,520 per month triple net. 1. The market rent was estimated at $2,520 per month. c. The purpose of Thuy requesting the appraisal of his properties was to continue leasing property to the MACS through the IAC pending the MACS’ move to a new facility. th 32. Kay prepared and submitted her market rental report for 4666-68 and 4654 N. 15 Street to Linda Chandler of the IAC. 33. On October 1, 2008, a lease agreement was entered into between Thuy and the thth IAC for the properties at 4666-68 N. 15 Street and 4654 N. 15 Street. a. The lease was signed by Thuy and Huyen Tran, President of the IAC. 34. On October 1, 2008, a lease agreement was made between the IAC and the MACS thth for the properties at 4666-68 N. 15 Street and 4654 N. 15 Street, Philadelphia, PA 19140. a. The MACS desired to use the building for education and counseling services. b. The terms of the agreement would commence on October 1, 2008, and end on August 31, 2009. c. The lease payments were to be $11,520 per month. 1. The MACS agreed to pay for heating, electrical service, water, custodial services and building repairs. d. The lease was signed by Huyen Tran as President of the IAC and Tae-Ock Kauh as the President of the MACS. e. There was no vote of the MACS Board to approve the lease. (See, Paragraph 93 e of the Investigative Complaint/Findings Report, deemed admitted by Paragraph 93 of Answer of Respondent Vuong Thuy, Ph.D to Investigative Complaint/Findings Report.) 35. As treasurer and administrator for MACS, Thuy was involved in the lease process by selecting the appraiser who communicated all details of the appraisal process Thuy, 09-009 Page 8 through Thuy which resulted in monthly rents paid to him. a. Respondent’s Answer to the Investigative Complaint/Findings Report states: “Dr. Thuy did suggest that the appraisal be done.” Answer of Respondent Vuong Thuy, Ph.D to Investigative Complaint/Findings Report, Paragraph 94. 36. Between 2004 and 2009, all rental payments made by the MACS for the rental of Thuy’s property were made by Thuy in his official position with MACS. a. Payments were made by Thuy as MACS treasurer to the IAC on a school year basis. 37. Thuy had signature authority for a checking account that was opened under the name of MACS on December 3, 1997, with PNC Bank. a. The account was referred to as Checking 25. b. Thuy had signature authority along with Tao Ock Kauh, President of the MACS. 1. On January 3, 2008, Huyen Tran was also added as having signature authority. 2. Both Thuy and Tran are also affiliated with the IAC. B. Testimony 38. Daniel J. Whelan (“Mr. Whelan”) served as a Member of the School Reform Commission of the School District of Philadelphia (“School Reform Commission”) from February 2002 to February 2007. a. As a Member of the School Reform Commission, Mr. Whelan was involved in reviewing charter school applications and participating in informal hearings as to such applications. b. Mr. Whelan became acquainted with Respondent in or about 2002. c. Mr. Whelan became a supporter of the MACS, contributing to the MACS and arranging for other educational institutions to provide surplus/used equipment to the MACS. d. Mr. Whelan never served as a Board Member of the MACS or the IAC. e. Mr. Whelan testified that the MACS is a very successful school. f. During Mr. Whelan’s term on the School Reform Commission, charters for charter schools were limited to five year periods and there was no guarantee of a charter being renewed; therefore, it was difficult for a charter school to secure financing for acquiring or leasing real estate. g. During Mr. Whelan’s term on the School Reform Commission, he was not aware that Respondent owned the buildings where the MACS was originally located. h. Mr. Whelan testified that if there was an objective appraisal to support the amounts charged under the lease, he would not have been troubled by Respondent’s ownership of the buildings at which the MACS was located. Thuy, 09-009 Page 9 i. Late in Mr. Whelan’s term on the School Reform Commission, Respondent sought to acquire the St. Stephen’s School from the School District of Philadelphia. j. The IAC purchased the St. Stephen’s School. 39. Bernice Warshowsky (“Ms. Warshowsky”) is a former Member of the Boards of the IAC and the MACS. a. Ms. Warshowsky’s signature is one of the executing signatures on the sublease in evidence as ID 18-1. b. The minutes of the February 11, 1998, meeting of the MACS Board of Trustees indicate that Ms. Warshowsky was present at the meeting and that the MACS Board of Trustees authorized Respondent to represent it in the negotiation and signing of contracts and/or leases. (ID 3-195). c. Ms. Warshowsky has no recollection of engaging in any lease negotiations th as to the North 15 Street building from 1997 to 2003 while serving as a MACS Board Member. 40. Dennis Edward Cook (“Mr. Cook”) is a former Board Member of the MACS. a. Mr. Cook did not serve as a Board Member of the IAC. b. Mr. Cook testified that he was not aware of any relationship between the IAC and the MACS. c. The day-to-day operations of the MACS were delegated to Respondent as headmaster. d. Mr. Cook did not play any role in negotiating any lease arrangements or drafting any leases for the MACS. 41. Tae-Ock Kauh, Ph.D. (“Dr. Kauh”) has served as a Board Member of the MACS since 1998 with the exception of one year. a. Dr. Kauh has served as a Board Member of the IAC since 2000. b. Just after the MACS was founded in 1998, Dr. Kauh learned that the building th where the MACS was located on North 15 Street was owned by Respondent. c. Dr. Kauh recalls that Respondent asked the Board Members of one of the Boards she served on (the IAC or the MACS Board) if they wanted to buy the th “Annex” building—the building at 4654 N. 15 Street—but none of the Board Members responded. (1) Dr. Kauh testified, “The school needed more space so Dr. Thuy bought the Annex building.” (3/14/11 Tr. at 77). d. In 2008, the MACS entered into an agreement with the IAC to continue th operating at the North 15 Street address until the MACS’ new location at the St. Stephen’s School became available. Thuy, 09-009 Page 10 (1) At that time, another charter school, TSACS, was already operating at the St. Stephen’s School and had to complete its term. (2) The MACS did not consider moving into any building other than the th North 15 Street buildings for the time period prior to moving into the St. Stephen’s School. e. As President of the MACS Board, Dr. Kauh signed the October 1, 2008, License Agreement between the IAC and the MACS, which is in evidence as ID 29-1 – 29-8. (1) Dr. Kauh did not participate in negotiating the terms of this License Agreement. (2) Dr. Kauh did not draft this License Agreement. (3) This License Agreement was prepared and given to Dr. Kauh to execute. f. Dr. Kauh did not participate in the negotiation of the October 1, 2008, Lease Agreement between Respondent and the IAC, which is in evidence as ID 28- 1 – 28-7. (1) Dr. Kauh did not prepare this Lease Agreement as an IAC Board Member. 42. Linda Chandler (“Ms. Chandler”) served as a Board Member of the IAC for approximately ten years, from the late 1990’s until 2008 or 2009. a. Ms. Chandler signed the IAC checks that are in evidence as ID 31-13 through ID 31-56. (1) Ms. Chandler did not write these checks but only signed them. (2) Respondent presented these checks to Ms. Chandler to sign. 43. Andrew Wright (“Mr. Wright”) is a Board Member of the MACS, having served in that capacity for almost six years. a. Mr. Wright testified that until he saw subpoena documentation for this case, th it was his understanding that the IAC owned the building on North 15 Street when the MACS was located there. th b. The IAC leased the North 15 Street building to the MACS. c. The MACS is now located at what is referred to as “St. Stephen’s School.” d. After the St. Stephen’s School had been purchased for use by the MACS, there was a delay before the MACS could move to that location, during th which time the MACS continued to operate at the North 15 Street address. e. Mr. Wright testified that as a Board Member of the MACS, he was never involved in any kind of lease negotiations or rental negotiations between the MACS and any other group of people. f. The day-to-day operations of the MACS are performed by the headmaster and the assistant headmaster. Thuy, 09-009 Page 11 g. There was a period of approximately six to eight months during which Mr. Wright was not able to perform his duties as a MACS Board Member. 44. Cheryl Ransom-Garner (“Ms. Ransom-Garner”) is a Member of the Boards of both the MACS and the IAC, having served on both Boards since 2007. a. Ms. Ransom-Garner is the secretary of the IAC. b. Ms. Ransom-Garner is the vice president of the MACS. th c. In 2007, the MACS was physically located on North 15 Street in Philadelphia. d. The MACS is now located at what is referred to as the “St. Stephen’s School.” th e. At the time the MACS was located on North 15 Street, the IAC rented that property from Respondent and Respondent’s wife and subleased the property to the MACS. f. In 2007 and at the time of Ms. Ransom-Garner’s testimony on March 15, 2011, Respondent held the positions of part-time executive director of the IAC and CEO and headmaster of the MACS. g. Prior to moving to the St. Stephen’s School, the MACS renewed its lease with the IAC. h. Ms. Ransom-Garner testified that for leases between Respondent and his wife and the IAC where the property would be subleased to the MACS, appraisals were obtained to determine the fair market rent, the IAC Board reviewed and discussed the appraisals, and the IAC Board determined what it would present to the MACS Board for rent. (1) Ms. Ransom-Garner testified that normally, the IAC Board presented the proposed rental arrangement to the MACS Board through correspondence. (2) Ms. Ransom-Garner testified that the MACS Board then reviewed and voted as to the lease renewal. (a) Ms. Ransom-Garner testified that Respondent was present at Board meetings when the leasing arrangements were discussed. (b) Ms. Ransom-Garner testified that Respondent would sometimes recuse himself depending upon the subject matter. i. Ms. Ransom-Garner testified that to her knowledge, the appraisal was always handled through the president of the IAC. (1) Respondent could recommend an appraiser. j. As a Board Member for the IAC, other than voting and discussing the leasing arrangements, Ms. Ransom-Garner did not engage in any kind of search for property for the MACS school rental. Thuy, 09-009 Page 12 k. As a MACS Board Member, Ms. Ransom-Garner had a lead role in negotiating with the Philadelphia School District for the purchase of the St. Stephen’s School building. (1) Ms. Chandler also had a lead role in these negotiations. l. The MACS did not purchase the St. Stephen’s School because its charter was limited to five years, and there was no way to know how long the MACS would be funded. m. The IAC had sufficient cash to buy the St. Stephen’s School. n. Many issues had to be resolved prior to the sale of the St. Stephen’s School, and it was not certain that the sale would occur until the actual settlement. o. Ms. Ransom-Garner was present at the settlement at which the IAC purchased the St. Stephen’s School from the School District of Philadelphia. (1) Ms. Ransom-Garner attended the settlement as the representative of the MACS. (2) Ms. Chandler attended the settlement as the representative of the IAC. p. The MACS was delayed in moving into the St. Stephen’s School until TSACS, which was occupying the property, relocated. (1) After the lease of TSACS ended, the St. Stephen’s School had to be renovated to be suitable for the MACS. q. Ms. Ransom-Garner testified that the MACS’ lease with the IAC for the North th 15 Street properties was renewed because there was no exact date as to when the purchase of the St. Stephen’s building would be finalized. r. Prior to the MACS moving into the St. Stephen’s School, there was no search conducted for any other property for the MACS to occupy in 2008. s. Respondent does not have any ownership interest in the St. Stephen’s School. t. Ms. Ransom-Garner testified that the meetings of the MACS Board are published in a school handbook and are open to the public. 45. Huyen Tran, MD (“Dr. Tran”) is a Member of the Boards of both the MACS and the IAC. a. Dr. Tran has served as a Board Member of the MACS for more than five years. b. Dr. Tran has served as a Board Member of the IAC for more than ten years. c. As a Board Member of the IAC, Dr. Tran has voted on leases between the th IAC and the MACS for properties located on North 15 Street in Philadelphia. th d. Dr. Tran testified that the North 15 Street properties were owned by Respondent’s family. Thuy, 09-009 Page 13 th e. Dr. Tran testified that the IAC leased the North 15 Street properties from Respondent’s family at fair market value and then leased those same buildings to the MACS. f. In 2008 Dr. Tran was a Member of the Boards of both the MACS and the IAC. g. The IAC purchased the St. Stephen’s School with the intention of leasing it to the MACS. th (1) Moving the MACS from the North 15 Street properties to another location was necessary so that the MACS could serve more children. (2) Ms. Ransom-Garner and Ms. Chandler were instrumental in arranging the purchase of the St. Stephen’s School by the IAC. h. The IAC agreed to allow TSACS to complete the term of its lease at the St. Stephen’s School property before the MACS would move into the St. Stephen’s School. i. The St. Stephen’s School needed to be renovated before the MACS moved there. th j. The IAC Board did not consider using any property other than the North 15 Street properties owned by Respondent/Respondent’s family for its lease with the MACS for the temporary time it would take until the St. Stephen’s School was ready. k. Leases between the IAC and the MACS typically ran five years and would have to be renewed. l. Dr. Tran and Respondent executed the October 1, 2008, Lease Agreement th between the IAC and Respondent for the properties at 4666-68 N. 15 Street th and 4654 N. 15 Street, Philadelphia, Pennsylvania, which Lease Agreement is in evidence as ID 28-1 – 28-7. m. Dr. Tran and Dr. Kauh executed the October 1, 2008, License Agreement th between the IAC and the MACS for the properties at 4666-68 N. 15 Street th and 4654 N. 15 Street, Philadelphia, Pennsylvania, which License Agreement is in evidence as ID 29-1 – 29-8. (1) This is a lease agreement between the IAC and the MACS. n. Dr. Tran testified that the October 1, 2008, Lease Agreement in evidence as ID 28-1 – 28-7 and the October 1, 2008, License Agreement in evidence as ID 29-1 – 29-8 were presented to and approved by the respective Boards prior to being executed. (3/15/11 Tr. at 141-142). o. The October 1, 2008, Lease Agreement in evidence as ID 28-1 – 28-7 and the October 1, 2008, License Agreement in evidence as ID 29-1 – 29-8 were signed on the same day. p. Dr. Tran testified that the financial terms of the October 1, 2008, Lease Agreement between the IAC and Respondent were not negotiated, but rather, were based upon the fair market value as found by a third party (appraiser). Thuy, 09-009 Page 14 q. As a Board Member of the MACS, Dr. Tran was not involved with the negotiations of the terms of the October 1, 2008, License Agreement between the IAC and the MACS. th r. The IAC continues to occupy one of the North 15 Street properties owned by Respondent/Respondent’s family. th (1) The IAC’s lease for the other North 15 Street property was canceled by mutual agreement after the MACS moved to the St. Stephen’s School. (2) The IAC had originally intended to occupy both properties if the MACS moved, but as a result of funding cutbacks, the IAC no longer needed as much space. s. As executive director of the IAC, Respondent was in charge of running the day-to-day operations of the IAC. t. As principal (headmaster) of the MACS, Respondent took care of the day-to- day operations of the MACS. u. Dr. Tran testified that to his knowledge, Respondent does not have any ownership interest in the St. Stephen’s School. 46. Gregory Curran (“Mr. Curran”) is a Special Investigator for the State Ethics Commission. a. Mr. Curran was assigned to this case involving Respondent. b. Respondent cooperated with Mr. Curran’s requests for information. c. Respondent amended his Statements of Financial Interests for calendar years 2004 through 2008 based upon communications between Respondent’s Counsel and Mr. Curran. d. Mr. Curran testified that the total amount of the payments made by the th MACS to the IAC for rent at the North 15 Street properties under the October 1, 2008, License Agreement was $69,120. C. Stipulations 47. From 1997 till 2003, Ms. Warshowsky served in various functions on the Boards of the IAC and the MACS at the same time. (3/14/11 Tr. at 50). 48. Mr. Cook served as a MACS Board Member from approximately 1998 to 2003 or 2004. (3/14/11 Tr. at 62-63). 49. Ms. Chandler manually signed the checks that are in evidence as ID 31-13 through ID 31-56. (3/15/11 Tr. at 102). 50. Ms. Chandler manually signed all of the checks that are in evidence as ID 31-68 through 31-111. (3/15/11 Tr. at 99, 102). a. Ms. Chandler did not write these checks but only signed them. (3/15/11 Tr. at 99). Thuy, 09-009 Page 15 51. The October 1, 2008, Lease Agreement that is in evidence as ID 28-1 – 28-7 was a lease agreement between Respondent and the IAC. (3/15/11 Tr. at 139). 52. The October 1, 2008, License Agreement between the IAC and the MACS for the thth properties at 4666-68 N. 15 Street and 4654 N. 15 Street, Philadelphia, Pennsylvania, which License Agreement is in evidence as ID 29-1 – 29-8, is a lease agreement between the IAC and the MACS. (3/15/11 Tr. at 138). 53. The rent set forth in the October 1, 2008, Lease Agreement, which is in evidence as ID 28-1 – 28-7, is exactly the same as the rent set forth in the October 1, 2008, License Agreement in evidence as ID 29-1 – 29-8. 54. At all times relevant to this case, Respondent was the executive director of the IAC as well as the headmaster of the MACS. (3/15/11 Tr. at 158). D. Documents 55. On December 15, 2008, the Investigative Division of the State Ethics Commission received information as to possible violation(s) of the Ethics Act by Respondent. (ID 1). 56. The Investigative Division initiated a preliminary inquiry as to Respondent on February 18, 2009. (ID 2-1). 57. The preliminary inquiry was completed within sixty days. 58. On April 17, 2009, a letter was forwarded to Respondent by the Investigative Division of the State Ethics Commission informing Respondentthat a preliminary inquiry had been conducted by the Investigative Division as to alleged violation(s) of the Ethics Act by Respondent, and that a full investigation was being commenced. (ID 2-3 – 2-11). a. Said letter was forwarded by certified mail, no. 7006 2150 0002 5372 7045. (ID 2-7 – 2-11). b. The domestic return receipt bore an undistinguishable signature, with a delivery date in April 2009. (ID 2-10). 59. On July 1, 2009, the Investigative Division of the State Ethics Commission filed an application for a ninety day extension of time to complete the Investigation. (ID 2- 12 – 2-16). 60. The Commission issued an Order on July 22, 2009, granting the ninety day extension. (ID 2-17). 61. On November 18, 2009, the Investigative Division of the State Ethics Commission filed an application for a second ninety day extension of time to complete the Investigation. (ID 2-18 – 2-22). 62. The Commission issued an Order on December 15, 2009, granting the ninety day extension. (ID 2-23). 63. On April 8, 2010, an amended Notice of Investigation was forwarded to Respondent, c/o Drew S. Dorfman, Esquire, by the Investigative Division of the State Ethics Commission informing him that the allegations contained in the April 17, 2009, Notice of Investigation were being amended. (ID 2-24 – 2-33). Thuy, 09-009 Page 16 a. Said letter was forwarded by certified mail, no. 7009 0820 0000 1856 8529. (ID 2-29 – 2-33). 64. Notice letters were forwarded to Respondent on July 6, 2009, September 21, 2009, December 7, 2009, February 22, 2010, May 10, 2010, July 26, 2010, October 12, 2010, and December 28, 2010, advising him of the general status of the investigation, the preparation and filing of the Investigative Complaint/Findings Report, and the filing of an Answer and request for hearing. (ID 2-77 – 2-84). 65. The Investigative Complaint/Findings Report was mailed to the Respondent on April 12, 2010. (ID 2-34 - 2-76). 66. The IAC is a non-profit corporation governed by an Executive Board. (ID 7-5, 7-8 – 7-11). a. The Articles of Incorporation of the IAC were filed with the Pennsylvania Department of State on December 27, 1982. (ID 7-8). b. Respondent was one of the four incorporators of the IAC. (ID 7-9). 67. The registered office address of the IAC has been 1123 Beverly Road, Jenkintown, Pennsylvania, which property is owned by Respondent and his wife, Maria Thuy. (ID 1-14, 1-15, 7-8). 68. Respondent has served as executive director of the IAC since 1987. (ID 3-48). 69. Respondent has been an authorized signatory on the IAC bank accounts at Citizens Bank. (ID 8-1 - 8-4). 70. Per the Financial Statements of the IAC, from 2004 through June 30, 2009, the IAC’s cash/cash and equivalent assets ranged from $943,192 to $1,486,424. (ID 7). 71. The MACS was incorporated as a non-profit corporation in October1997. (ID 3-4 - 3-5). a. Respondent was one of two incorporators of the MACS. (ID 3-4). 72. The MACS operates a charter school for grades 9-12, which opened September 1998 (ID 1-96). a. The School Reform Commission has final authority for granting or denying charter school applications in Philadelphia. (Thuy-003-8). b. Pursuant to the Charter School Law, the term of a charter shall be no less than three years and no more than five years. (Thuy-003-8) (Citing Section 17-1720-A of the Charter School Law, 24 P.S. § 17-1720-A). c. The MACS received its first charter to operate a public school for the period commencing on September 1, 1998, and ending on August 31, 2002. (ID 3- 9). 73. The MACS is governed by a Board of Trustees, which includes officers and other members. (ID 3-71, 4-8). 74. At the October 8, 1997, meeting of the MACS Board of Trustees, Respondent was named headmaster and treasurer of the MACS. (ID 3-8). Thuy, 09-009 Page 17 75. Respondent has also served as the Chief Executive Officer of the MACS. 76. Respondent has been an authorized signatory for the MACS PNC Bank Account. (ID 5-1 - 5-8). 77. At its February 11, 1998, meeting, the MACS Board of Trustees unanimously approved the appointment of Respondent as the first headmaster of the MACS and authorized Respondent to represent the Board of Trustees in the negotiation and signing of contracts and/or leases. (ID 3-195). 78. There are two versions of the By-Laws of the MACS in evidence. a. The By-Laws of the MACS submitted with its original application for a school charter in November 1997 are in evidence as ID 3-69 – 3-76. b. A more recent version of the By-Laws of the MACS, which is in evidence as ID 4-6 – 4-11, provides that the headmaster serves as treasurer and does not have the right to vote. (ID 4-8). c. Both the 1997 version and the more recent version of the By-Laws of the MACS provide that the headmaster serves as treasurer. (ID 3-71, 4-8). d. The aforesaid more recent version of the By-Laws of the MACS provides, in part: As the treasurer, the headmaster shall receive all funds including local, state and federal funds and privately donated funds. He/she shall also make payments out of the same on proper orders approved by the board of trustees, signed by the president or vice-president of the board. The headmaster may pay out such funds on orders which have been properly signed without the approval of the board first having been secured for the payment of amounts owing under any contracts which shall previously have been approved by the board . . . The headmaster shall have custody of the Academy’s funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Academy and shall keep the monies of the Academy in a separate account to the credit of the Academy. The headmaster shall disburse the funds of the Academy as may be appropriately ordered by the president . . . . (ID 4-9). 79. Respondent’s W-2 Forms from the IAC for 2004 through 2005 and from 2007 through 2009 report “wages, tips, other compensation” in the following amounts: (1) for 2004, $30,685.00; (2) for 2005, $31,042.50; (3) for 2007, $50,295.00; (5) for 2008, $69,550.00; and (6) for 2009, $155,462.50. (ID 9-1, 9-2, 9-5, 9-7- 9-8). 80. Respondent’s W-2 Forms from the MACS for 2004 through 2008 report “wages, tips, other compensation” in the following amounts: (1) for 2004, $120,371.38; (2) Thuy, 09-009 Page 18 for 2005, $139,689.85; (3) for 2006, $147,450.00; (4) for 2007, $168,986.80; and (5) for 2008, $190,842.42. (ID 6-1 – 6-5). 81. Respondent’s wife, Maria Thuy, has been employed as a Program Director for the IAC since 1989. (ID 1-28, 1-36, 1-52, 1-62, 1-63, 3-48, 3-168). 82. Maria Thuy’s W-2 Forms from the IAC for 2004 through 2009 report “wages, tips, other compensation” in the following amounts: (1) for 2004, $49,198.98; (2) for 2005, $50,683.86; (3) for 2006, $54,561.86; (4) for 2007, $67,242.61;(5) for 2008, $63,026.86; and (6) for 2009, $65,074.36. (ID 9-1, 9-3 – 9-4, 9-6 -9-8). 83. On March 7, 1994, Respondent and his wife, Maria Thuy, purchased property th located at 4666-68 North 15 Street and 1500-02 Belfield Avenue, Philadelphia, Pennsylvania, for a total price of $54,000.00. (ID 20-1 – 20-8). 84. On January 13, 1995, certified appraiser Edward S. Snyder appraised the market th rental of the property located at 4666-68 North 15 Street, Philadelphia, Pennsylvania, as $30,000.00 (calculated as $5.00 per square foot x 6,000 square feet) plus utilities upon completion of renovations that were underway at that time. (ID 21-1 – 21-2). 85. At its July 14, 1997, meeting, the IAC Board of Directors unanimously approved the th subleasing of the property at 4666-68 North 15 Street, Philadelphia, Pennsylvania, to the MACS for a period of five years from July 1, 1998, to June 30, 2001. (ID 22- 1). 86. At its May 6, 1999, meeting, the MACS Board of Trustees decided that it would ask the IAC to help acquire a larger facility to accommodate the MACS’ expanded student population beginning the 2000-2001 school year. (ID 4-5). 87. On February 20, 2001, the governing boards of the IAC and the MACS both held meetings. (ID 10-1, ID 11-1). a. At its February 20, 2001, meeting, which commenced at 3:30 p.m., the MACS Board of Trustees discussed the need for additional space for its increased enrollment and the dilemma presented by the fact that the school’s charter would be up for renewal in early 2002. (ID 10-1). (1) The meeting minutes reflect that Dr. Kauh suggested that the IAC be asked to help. (ID 10-1). (2) Respondent was present at this meeting. (ID 10-1). b. At the February 20, 2001, meeting of the IAC Executive Board, which commenced at 5:30 p.m., Respondent was present and informed the Board th Members of the availability of a facility at 4654 N. 15 Street, Philadelphia, Pennsylvania. (ID 11-1). (1) The meeting minutes indicate that at that time and because of its location, the IAC was not interested in the facility as a long-term investment, but that the Board asked if any Board Member or Respondent was interested in buying the property and then renting it to the IAC on a short term basis and at a fair market value. (ID 11-1). (2) The meeting minutes note that the aforesaid facility could be used as an additional facility for the IAC or for the MACS while the MACS was waiting for renewal of its charter in 2002. (ID 11-1). Thuy, 09-009 Page 19 88. On April 23, 2001, Respondent and his wife, Maria Thuy, purchased the property at th 4654 N. 15 Street, Philadelphia, Pennsylvania, for the price of $17,500.00. (ID 12- 3 – ID 12-7). a. The Transfer Tax Certification dated April 23, 2001, listed the fair market th value of the property at 4654 N. 15 Street, Philadelphia, Pennsylvania, as $26,891.20, with a notation that the property was in poor, run-down condition in need of repairs and was located in an economically depressed area. (ID 12-7). 89. At its May 15, 2001, meeting, the MACS Board of Trustees unanimously approved th the sublease by the MACS of the property at 4654 N. 15 Street, Philadelphia, Pennsylvania, from the IAC as a temporary addition to the school facilities. (ID 13- 1). a. The meeting minutes indicate that the sublease would begin on September 1, 2001, but that all renovation and permit costs would be born by the MACS. (ID 13-1). b. Respondent was present at this meeting. (ID 13-1). 90. At its June 12, 2001, meeting, the IAC Executive Board unanimously approved the th leasing of the property at 4654 N. 15 Street and the sublease of this property to the MACS as a temporary and additional facility. (ID 14-1). a. Respondent was present at this meeting. (ID 14-1). 91. On August 6, 2001, certified appraiser Edward S. Snyder appraised the market th rental of the property located at 4654 N. 15 Street, Philadelphia, Pennsylvania, as $15,120.00 (calculated as $9.00 per square foot x 1680 square feet) plus utilities. (ID 15-1). a. The appraisal noted that the building was in the process of being rehabilitated. (ID 15-1). 92. At its August 28, 2001, meeting, the MACS Board of Trustees authorized the Board President to sign a sublease with the IAC for the MACS to sublease the property at th 4654 N. 15 Street, Philadelphia, Pennsylvania, for the period of September 1, 2001, to August 31, 2002. (ID 16-1). a. Respondent was present at this meeting. (ID 16-1). 93. At its September 26, 2001, meeting, the IAC Executive Board approved the rental th appraisal for the property at 4654 N. 15 Street, Philadelphia, Pennsylvania, the IAC lease for such property, and the sublease of such property to the MACS as a temporary and additional facility. (ID 17-1). a. Respondent was present at this meeting. (ID 17-1). 94. ID 18-1 consists of a one-page letter dated September 28, 2001, from Dr. Tran as President of the IAC to Ms. Warshowsky as President of the MACS Board of Trustees, which letter served as a sublease by the MACS from the IAC of the th property at 4654 N. 15 Street, Philadelphia, Pennsylvania. a. The sublease was for a period of one year commencing September 1, 2001. (ID 18-1). Thuy, 09-009 Page 20 b. The sublease was renewable. (ID 18-1). c. The monthly rental cost to be paid by the MACS was $2,420 plus utilities, water and all required insurance. (ID 18-1). d. The sublease was signed by Dr. Tran as President of the IAC and by Ms. Warshowsky as President of the MACS Board of Trustees. (ID 18-1). 95. During the time period under review, from April 17, 2004, to July 2009, the MACS th operated at the properties located at 4654 and 4666-68 North 15 Street, Philadelphia, PA 19140. (ID 3-9, 3-15, 7-21, 7-22, 7-33, 7-34, 7-44, 7-45, 7-55, 7- 56, 7-67, 7-68, 7-78 – 7-80). a. These properties were subleased to the MACS by the IAC. (ID 3-45, 3-58, 3-89, 7-21, 7-33, 7-44, 7-55, 7-67, 7-78). b. The IAC was reimbursed dollar for dollar under the sublease agreement. (ID 7-21, 7-33, 7-44, 7-55, 7-67, 7-78). c. The Financial Statements of the IAC for 2004 through June 30, 2009, state that the fair rental values of the aforesaid properties were determined by periodic independent property appraisals and approved by the IAC’s Board. (ID 7-22, 7-34, 7-45, 7-56, 7-68, 7-79). 96. On July 20, 2004, certified appraiser Edward S. Snyder appraised the market rental th of the property located at 4666-68 North 15 Street and 1500 Belfield Avenue, Philadelphia, Pennsylvania, as $84,000.00 (calculated as $14.00 per square foot x 6,000 square feet) plus utilities. (ID 23-1). 97. ID 27-1 consists of a one-page letter dated July 20, 2004, from Maria Thuy to Dr. Tran as President of the IAC, setting forth the terms for the lease by the IAC from th Maria Thuy of the property at 4666-68 N. 15 Street and 1500 Belfield Avenue, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. (ID 27-1). a. The monthly rental rates to be paid by the IAC were as follows: August 1, 2004 – July 31, 2005: $7,000 Triple Net August 1, 2005 – July 31, 2006: $7,210 Triple Net August 1, 2006 – July 31, 2007: $7,430 Triple Net * August 1, 2007 – July 31, 2008: $5,650 Triple Net August 1, 2008 – July 31, 2009: $7,880 Triple Net * [sic]. [The actual rental rate was $7,650 Triple Net, and that is the rate that the IAC paid as per the IAC checks in evidence as ID 31-98 - 31-109.] b. The letter states: “The IAC will have to pay for all utilities and water, and buy adequate liability insurance listing me and my husband as co-insureds.” (ID 27-1). c. The letter states: “If you agree with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” (ID 27-1). Thuy, 09-009 Page 21 d. The letter/lease was signed by Dr. Tran as President of the IAC and by Respondent’s spouse, Maria Thuy, with an execution date of July 20, 2004. (ID 27-1). 98. ID 24-1 and ID 27-3 consist of a one-page letter dated July 21, 2004, from Dr. Tran as President of the IAC to Dennis Cook as President of the MACS Board of Trustees, setting forth the terms for the sublease by the MACS from the IAC of the th properties at 4666-68 N. 15 Street and 1500 Belfield Avenue, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. (ID 24-1, 27-3). a. The monthly rental rates to be paid by the MACS were as follows: August 1, 2004 – July 31, 2005: $7,000 Triple Net August 1, 2005 – July 31, 2006: $7,210 Triple Net August 1, 2006 – July 31, 2007: $7,430 Triple Net August 1, 2007 – July 31, 2008: $7,650 Triple Net August 1, 2008 – July 31, 2009: $7,880 Triple Net b. The letter states: “The Multi-Cultural Academy Charter School will have to pay for all utilities and water, and buy adequate liability insurance listing the IAC and Mary Thuy, the owner, and her husband as co-insureds.” (ID 24-1, 27-3). c. The letter states: “If you agree with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” (ID 24-1, 27-3). d. The letter/sublease was signed by Dr. Tran as President of the IAC and by Dennis Cook as President of the MACS Board of Trustees with an execution date of August 27, 2004. (ID 24-1, 27-3). 99. ID 27-2 consists of a one-page letter dated July 20, 2004, from Maria Thuy to Dr. Tran as President of the IAC, setting forth the terms for the lease by the IAC from th Maria Thuy of the property at 4654 N. 15 Street, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. (ID 27-2). a. The monthly rental rates to be paid by the IAC were as follows: August 1, 2004 – July 31, 2005: $1,960 Triple Net August 1, 2005 – July 31, 2006: $2,019 Triple Net August 1, 2006 – July 31, 2007: $2,080 Triple Net August 1, 2007 – July 31, 2008: $2,142 Triple Net August 1, 2008 – July 31, 2009: $2,206 Triple Net b. The letter states: “The IAC will have to pay for all utilities and water, and buy adequate liability insurance listing me and my husband as co-insured.” (ID 27-2). c. The letter states: “If you agree with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” (ID 27-2). d. The letter/lease was signed by Dr. Tran as President of the IAC and by Respondent’s spouse, Maria Thuy, with an execution date of July 20, 2004. (ID 27-2). Thuy, 09-009 Page 22 100. ID 27-4 consists of a one-page letter dated August 12, 2004, from Dr. Tran as President of the IAC to Dennis Cook as President of the MACS Board of Trustees, setting forth the terms for the sublease by the MACS from the IAC of the property at th 4654 N. 15 Street, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. (ID 27-4). a. The monthly rental rates to be paid by the MACS were as follows: August 1, 2004 – July 31, 2005: $1,960 Triple Net August 1, 2005 – July 31, 2006: $2,019 Triple Net August 1, 2006 – July 31, 2007: $2,080 Triple Net August 1, 2007 – July 31, 2008: $2,142 Triple Net August 1, 2008 – July 31, 2009: $2,206 Triple Net b. The letter states: “Your school will have to pay for all utilities and water, and buy adequate liability insurance listing the IAC, and the property owner, Maria Thuy, and her husband as co-insured.” (ID 27-4). c. The letter states: “If you agree with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” (ID 27-4). d. The letter/sublease was signed by Dr. Tran as President of the IAC and by Dennis Cook as President of the MACS Board of Trustees with an execution date of August 27, 2004. (ID 27-4). 101. The minutes of the August 29, 2006, MACS Board meeting include the following: MACS’ Building Lease: There was a brief discussion and approval by the Board of a named insured inclusion in MACS’ liability insurance policies for the Indochinese American Council, from whom MACS leases its space, and Dr. Vuong Thuy and Maria L. Thuy, building owners. (ID 32-17). 102. In 2008 the Board Members of the IAC included: Linda Chandler; Dr. Tran; Cheryl Ransom-Garner; and Tae-Ock Kauh, Ph.D. (Thuy-005). 103. In 2008 the Board Members of the MACS included: Tae-Ock Kauh, Ph.D.; Andrew Wright; Dr. Tran; Cheryl Ransom-Garner; and Alan Klein. (ID 32-26 – 32-38; Thuy- 005). 104. On September 10, 2008, certified appraiser Robin A. Kay appraised the market th rental of the property located at 4666-68 North 15 Street, Philadelphia, Pennsylvania, as $9,000.00 per month Triple Net. (ID 25-1 – 25-7). 105. ID 28-1 -28-7 consists of a seven-page lease agreement between Respondent and the IAC, executed October 1, 2008, setting forth the terms for the lease by the IAC th from Respondent of the properties at 4666-68 and 4654 N. 15 Street, Philadelphia, Pennsylvania, for a period of five years from October 1, 2008, to September 30, 2013. (ID 28-1 -28-7). a. The monthly rental rates to be paid by the IAC were as follows: October 1, 2008 – September 30, 2009: $11,520 Triple Net October 1, 2009 – September 30, 2010: $11,980 Triple Net Thuy, 09-009 Page 23 October 1, 2010 – September 30, 2011: $12,459 Triple Net October 1, 2011 – September 30, 2012: $12,957 Triple Net October 1, 2012 – September 30, 2013: $13,475 Triple Net b. The IAC was required to pay all use and occupancy taxes and provide various insurance with Respondent and Maria Thuy being named as additional insureds as to some types of insurance. (ID 28-2 -28-5). c. The lease agreement was signed by Dr. Tran as President of the IAC and by Respondent. (ID 28-7). 106. ID 29-1 - 29-8 consists of an eight-page license agreement between the IAC and the MACS, executed October 1, 2008, setting forth the terms for the use by the th MACS of the buildings at 4666-68 and 4654 N. 15 Street, Philadelphia, Pennsylvania, for a period of 11 months from October 1, 2008, to August 31, 2009. (ID 29-1 -29-8). a. The license payments to be paid by the MACS to the IAC during the relevant time period of October 1, 2008, to July 2009 were in the amount of $11,520 per month. (ID 29-1). b. The MACS was required to pay all use and occupancy taxes and provide various insurance with IAC being named as an additional insured as to some types of insurance. (ID 29-3 -29-5). c. The MACS was required to pay for heating, electrical service, water, custodial services, and certain other expenses. (ID 29-1 - 29-2). d. The lease agreement was signed by Dr. Tran as President of the IAC and by Tae-Ock Kauh as President of the MACS Board of Trustees. (ID 29-8). 107. The following payments were made by the MACS to the IAC from 2004 through 2009 for rental payments on properties owned by Respondent: Date of Check Amount Memo section of check check number 9/22/2004 4882 $23,143.00 Rent from July, 04 – Sept., 04 th 4666 & 4654 N. 15 Street 9/22/2004 4883 $41,112.00 Rent from Nov. 1st, 2003 – June 2004 th 4666 & 4654 N. 15 Street 9/6/2005 5535 $71,680.00 Rent October 04 – June 05 12/14/2005 5755 $55,105.00 Rent 12/29/2006 6394 $112,153.00 Rent 7/11/2007 6734 $57,060.00 Rental Jan. – June 2007 12/27/2007 7064 $58,470.00 Rent July – Dec. 07 4/17/2008 1098 $39,168.00 Rental Fees January thru April 2008 6/30/2008 1244 $19,584.00 Rental Property May – June 2008 12/29/2008 1573 $64,524.00 Property Rental July thru December th 2008 4666 North 15 7/16/2009 2026 $69,120.00 rent from Jan 2009 – june 2009 – replace chk#1985 (ID 30-1 – 30-12; Thuy-014). Thuy, 09-009 Page 24 a. Respondent signed as an authorized signatory for the MACS all of the aforesaid checks, specifically, checks numbers 4882, 4883, 5535, 5755, 6394, 6734, 7064, 1098, 1244, 1573, and 2026. b. Respondent also signed check number 6394 on the back as the depositing agent for the IAC. (ID 30-5). 108. The following rental payments were made by the IAC payable to Maria Thuy for the property at 4654 N. 15 Street, Philadelphia, PA 19140: Check Date No. Amount 1/5/2004 8552 $1,337.00 2/4/2004 8586 $1,337.00 3/3/2004 8634 $1,377.00 3/30/2004 8678 $1,377.00 5/1/2004 8723 $1,377.00 6/1/2004 8771 $1,377.00 7/1/2004 8844 $1,337.00 8/11/2004 8942 $1,960.00 8/31/2004 8994 $1,960.00 10/1/2004 9035 $1,960.00 10/25/2004 9065 $1,960.00 11/26/2004 9104 $1,960.00 1/3/2005 9173 $1,960.00 2/4/2005 9224 $1,960.00 2/28/2005 9242 $1,960.00 4/1/2005 9281 $1,960.00 5/3/2005 9318 $1,960.00 6/3/2005 9360 $1,960.00 7/8/2005 9434 $1,960.00 8/5/2005 9486 $2,019.00 8/30/2005 9537 $2,019.00 10/3/2005 9576 $2,019.00 11/1/2005 9623 $2,019.00 12/1/2005 9678 $2,019.00 1/3/2006 9743 $2,019.00 2/1/2006 9776* $2,019.00 3/1/2006 9814 $2,019.00 4/3/2006 9859 $2,019.00 5/3/2006 9886 $2,019.00 6/1/2006 9919 $2,019.00 7/3/2006 10000 $2,019.00 7/31/2006 10040 $2,080.00 9/2/2006 10101* $2,080.00 10/2/2006 10131 $2,080.00 11/2/2006 10170 $2,080.00 12/5/2006 10215 $2,080.00 1/2/2007 10274* $2,080.00 2/1/2007 10317 $2,080.00 Thuy, 09-009 Page 25 3/25/2007 10378 $2,080.00 5/1/2007 10419 $2,080.00 6/1/2007 10454 $2,080.00 No date 10517 $2,080.00 8/1/2007 10622 $2,142.00 9/4/2007 10664 $2,142.00 10/1/2007 115 $2,142.00 11/2/2007 156 $2,142.00 12/3/2007 223 $2,142.00 1/2/2008 290 $2,142.00 2/4/2008 342 $2,142.00 3/1/2008 384 $2,142.00 4/2/2008 441 $2,142.00 4/28/2008 484 $2,142.00 6/2/2008 521 $2,142.00 7/1/2008 638 $2,142.00 8/8/2008 702 $2,206.00 9/2/2008 753 $2,206.00 Total $110,263.00 *These three checks reference “4654 Old York Road,” “4654 N. [illegible],” and thth “4666-68 North 15” respectively, but were for 4654 N. 15 based upon their amounts. (ID 31-1 – 31-56). 109. The following rental payments were made by the IAC payable to Maria Thuy for the property at 4666-68 N. 15th Street, Philadelphia, PA 19140: Check Date No. Amount 1/5/2004 8551 $3,846.00 2/4/2004 8585 $3,846.00 3/3/2004 8633 $3,846.00 3/30/2004 8677 $3,846.00 6/1/2004 8772 $3,846.00 7/1/2004 8845 $3,846.00 8/11/2004 8943 $7,000.00 8/31/2004 8995 $7,000.00 10/1/2004 9036 $7,000.00 10/29/2004 9063 $7,000.00 11/26/2004 9103 $7,000.00 1/3/2005 9172 $7,000.00 2/4/2005 9223 $7,000.00 2/28/2005 9241 $7,000.00 4/1/2005 9280 $7,000.00 5/3/2005 9317 $7,000.00 6/3/2005 9362 $7,000.00 7/8/2005 9433 $7,000.00 8/5/2005 9487 $7,210.00 Thuy, 09-009 Page 26 8/30/2005 9538 $7,210.00 10/3/2005 9577 $7,210.00 11/1/2005 9624 $7,210.00 12/1/2005 9676 $7,210.00 1/3/2006 9741 $7,210.00 2/1/2006 9774 $7,210.00 3/1/2006 9810 $7,210.00 4/3/2006 9860 $7,210.00 5/2/2006 9887 $7,210.00 6/1/2006 9920 $7,210.00 7/3/2006 10001 $7,210.00 7/31/2006 10039 $7,430.00 9/2/2006 10100 $7,430.00 10/2/2006 10133 $7,430.00 No Date 10169 $7,430.00 12/5/2006 10217 $7,430.00 1/2/2007 10272 $7,430.00 2/1/2007 10319 $7,430.00 3/29/2007 10377 $7,430.00 5/1/2007 10418 $7,430.00 6/1/2007 10453 $7,430.00 7/2/2007 10516 $7,430.00 8/1/2007 10621 $7,650.00 9/4/2007 10663 $7,650.00 10/1/2007 116 $7,650.00 11/2/2007 157 $7,650.00 12/3/2007 229 $7,650.00 1/2/2008 291 $7,650.00 2/4/2008 341 $7,650.00 3/1/2008 383 $7,650.00 4/2/2008 440 $7,650.00 4/28/2008 485 $7,650.00 6/2/2008 522 $7,650.00 7/1/2008 639 $7,650.00 8/6/2008 688 $7,880.00 9/2/2008 752 $7,880.00 Total $382,886.00 (ID 31-57 - 31-111). 110. The following payments were made by the IAC payable to Vuong G. Thuy for the combined rental payments for 4654 & 4666-68 N. 15th Street, Philadelphia, PA 19140. Check Date No. Amount 10/3/2008 820 $11,520.00 10/31/2008 869 $11,520.00 12/1/2008 913 $11,520.00 Thuy, 09-009 Page 27 1/2/2009 1002 $11,520.00 4/1/2009 1137 $11,520.00 6/2/2009 1230 $11,520.00 Total $69,120.00 (ID 31-112 - 31-117). 111. The total amount of the payments made by the MACS to the IAC--and likewise by th the IAC to Respondent--for rent at the North 15 Street properties under the October 1, 2008, License Agreement between the MACS and the IAC and the October 1, 2008, Lease Agreement between the IAC and Respondent was $69,120. (Cf., Fact Findings 53, 105, 106, 110; see, ID 28-1 -28-7; ID 29-1 - 29-8; ID 31-112 - 31-117). 112. The MACS submitted to the PDE Applications for Approval of Charter School Lease th for the property located at 4654 N. 15 Street, Philadelphia, PA 19140 for the years 2004-2005, 2005-2006, 2006-2007, 2007-2008, and 2008-2009. (Thuy-007). a. Respondent was listed on all such applications as the MACS’ Contact Person. (Thuy-007). b. These application forms required the identification of the “lessor” but not the property owner. (Thuy-007). 113. The MACS submitted to the PDE Applications for Reimbursement for Charter th School Lease for the property located at 4654 N. 15 Street, Philadelphia, PA 19140 for the years 2004-2005, 2005-2006, 2006-2007, 2007-2008, and 2008- 2009. (Thuy-008). a. Respondent was listed on all such applications as the MACS’ Contact Person. (Thuy-008). b. Respondent signed the certification on all such applications as the MACS’ CEO. (Thuy-008). c. These application forms required a certification by the “lessor” but did not require the identification of the property owner. (Thuy-008). 114. The MACS submitted to the PDE Applications for Approval of Charter School Lease th for the property(ies) located at 4666 or 4666-68 N. 15 Street, Philadelphia, PA 19140 for the years 2004-2005, 2005-2006, 2006-2007, 2007-2008, and 2008- 2009. (Thuy-009). a. Respondent was listed on all such applications as the MACS’ Contact Person. (Thuy-009). b. These application forms required the identification of the “lessor” but not the property owner. (Thuy-009). 115. The MACS submitted to the PDE Applications for Reimbursement for Charter th School Lease for the property located at 4666-68 N. 15 Street, Philadelphia, PA 19140 for the years 2004-2005, 2005-2006, 2006-2007, 2007-2008, and 2008- 2009. (Thuy-010). a. Respondent was listed on all such applications as the MACS’ Contact Thuy, 09-009 Page 28 Person. (Thuy-010). b. Respondent signed the certification on all such applications as the MACS’ CEO. (Thuy-010). c. These application forms required a certification by the “lessor” but did not require the identification of the property owner. (Thuy-010). 116. Documents provided to the Investigative Division on March 22, 2009, by Elizabeth Gutman, Esquire (“Attorney Gutman”), an attorney for the School District of Philadelphia, included a letter dated July 21, 2004, from Dr. Tran as President of the IAC to Dennis Cook as President of the Board of Trustees of the MACS, which letter indicated that Respondent or his wife owned the properties that were being leased to the MACS. (Thuy-006). a. This would appear to be the letter in evidence as ID 24-1/ID 27-3. b. There is no indication on the letter in evidence as ID 24-1/ID 27-3 that it was copied to the School District of Philadelphia. c. The record does not establish how or when the School District of Philadelphia obtained a copy of the letter in evidence as ID 24-1/ID 27-3. 117. MACS Board meeting minutes reference the active search for a new site for the MACS at least as early as 2003. (ID 32-5). 118. The revised meeting minutes of the February 14, 2008, MACS Board meeting include the following: St. Stephen’s School Building: Dr. Thuy and Commissioner Garner provided the Board with a complete report on the St. Stephen’s School facility in the vicinity of Broad and Erie Streets as a site for MACS’ new home. . . . Dr. Thuy reported that the purchase price of the building is $1,000,000 and that we would need a new appraisal before committing any funds to this transaction. . . . After the Indochinese American Council (IAC) has been approved as a purchaser of the property, Dr. Thuy will have a structural engineer go through the property carefully and provide an estimate of the cost of necessary renovations to update the property to suit MACS’ needs. . . . [T]he Indochinese American Council has agreed to purchase and take title to the St. Stephen’s School and to work with MACS in renovations of this facility. After a full consideration of the St. Stephen’s School, the Board voted unanimously to authorize Dr. Thuy and certain Board members to proceed with a further investigation of this opportunity. The School Reform Commission will be meeting on March 12 to consider IAC’s application for the purchase of St. Stephen’s School. Dr. Thuy urged all Board members to register to speak at the Commission’s hearing. (ID 32-26). 119. The meeting minutes of the March 25, 2008, MACS Board meeting include the following: The IAC is still trying to acquire the St. Stephen’s School building at Thuy, 09-009 Page 29 3821-33 N. Broad Street from the School District of Philadelphia and expected to know very soon if the school district will decide to sell it to the IAC and at what price. If the IAC agrees to buy the property at the price offered by the school district it will offer to lease it to MACS at a fair market rent. (ID 32-29). 120. By letter dated April 14, 2008, Michael A. Frattone, Esquire, as Counsel for the Board of Trustees of MACS, informed Attorney Gutman that Respondent would have no role in the negotiation or administration of the lease between the IAC and the MACS for the St. Stephen’s Building. (ID 1-18 - 1-19). 121. The revised meeting minutes of the May 15, 2008, MACS Board meeting include the following: St. Stephen’s School: Dr. Thuy reported that the Indochinese American Council (IAC) has received and is reviewing the deed to the property. Subsequently, an Agreement of Sale will be furnished by the School District to the IAC. The current tenant in the property, another charter school, is making plans to vacate the premises in August to facilitate the necessary renovations once the transaction with the IAC is completed and an appropriate lease is prepared and approved by the MACS Board of Trustees. . . . . MACS lease for St. Stephens with the IAC: Andrew Wright was appointed by the Board to oversee negotiations for the lease between the IAC and MACS for the St. Stephens School property. (ID 32-30). 122. The meeting minutes of the August 14, 2008/August 18, 2008, MACS Board meeting(s) include the following: St. Stephen’s School: Cheryl Gardner, Linda Chandler and Dr. Thuy attended the School Reform Commission meeting on August 13, 2008. The SRC deferred voting on a resolution to approve the proposed leases of Truebright Science Academy Charter School and MACS regarding the St. Stephen’s facility. The Commission’s proposed resolution provides the terms and conditions of these leases, and makes their execution a pre-condition for the issuance of an Agreement of Sale of the St. Stephen’s facilities. (ID 32-33, 32-36). 123. As of September 2010, PDE guidelines expressly provide that the PDE will not provide lease reimbursements to a charter school for a building owned by the charter school’s board member(s) or staff or relatives of such board member(s) or staff. (Thuy-013). 124. On September 18, 2008, the IAC purchased the St. Stephen’s School and then leased it to the TSACS for a short term ending July 14, 2009. (ID 7-80). 125. Respondent filed SFIs for calendar years 2004 through 2008 as a public official/public employee of the MACS, each of which forms listed: (1) the names Thuy, 09-009 Page 30 and addresses of the MACS and IAC as “direct/indirect sources of income”; and (2) “real estate interests” as “None.” (ID 34-1 - 34-5). a. Respondent did not report that he leased property to the MACS through the IAC under the section titled “real estate interests,” Block number 8. (ID 34-1 - 34-5). 126. On or about August 27, 2009, Respondent filed amended SFIs for calendar years 2004 through 2008. (ID 34-6 – 34-10). a. All of the forms were filed on forms listed as SEC-1 REV 01/09. (ID 34-6 – 34-10). b. In Block number 8 for “real estate interests,” Respondent disclosed the following for each year: “4654 & 4666-68 N. 15 St.; Philadelphia, PA.” c. Respondent signed and dated the forms 8/27/09. III. DISCUSSION: As the Chief Administrative Officer/Chief Executive Officer, headmaster and treasurer of the Multi-Cultural Academy Charter School (the “MACS”) of Philadelphia from 1997 through and including the time of the hearing in this matter in March 2011, Respondent Vuong Thuy, hereinafter also referred to as “Respondent,” “Respondent Thuy,” and “Thuy,” 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 Thuy violated Sections 1103(a), 1103(f), 1105(b)(3), and 1105(b)(5) of the Ethics Act: (1) When he used the authority of his public position for the private pecuniary gain of himself, a member of his immediate family and/or a business with which he and/or a member of his immediate family is/are associated by participating in actions of the MACS including but not limited to: (a) recommending the rental of property by the MACS; (b) negotiating/determining the terms and conditions of the rental agreements; and (c) authorizing payments by the MACS for the rented property, relating to the rental of said property from the Indochinese American Council (“IAC”), a business with which Thuy and his wife were employed, which property was owned by Thuy and his wife and leased to IAC for subsequent leasing to the MACS; and (2) When such rental contracts by the MACS were not awarded through an open and public process; and (3) When he failed to disclose on Statements of Financial Interests (“SFIs”) for the years 2004 through 2009, his ownership interests in property leased to the MACS or income derived from rent. 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 Thuy, 09-009 Page 31 (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 1102 of the Ethics Act defines the term “immediate family” to include a parent, spouse, child, brother or sister. 65 Pa.C.S. § 1102. 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. Thuy, 09-009 Page 32 65 Pa.C.S. § 1103(f). The term “contract” is defined in the Ethics Act as follows: § 1102. Definitions "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. 65 Pa.C.S. § 1102. Section 1103(f) of the Ethics Act provides in part that no public official/public employee or his spouse or child or business with which the public official/public employee or his spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official/public employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. 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. Section 1105(b)(3) of the Ethics Act requires the filer to disclose on the SFI any direct or indirect interest in any real estate which was sold or leased to or purchased or leased from the Commonwealth, any of its agencies or political subdivisions, or which was the subject of any condemnation proceedings by the Commonwealth or any of its agencies or political subdivisions. 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. We preliminarily address a procedural issue raised in Respondent’s Post-Hearing Brief. Respondent in his Brief asserts: “The parties stipulated to the authenticity of all of the exhibits. The exhibits were accepted subject to rulings on their admissibility.” Respondent’s Post-Hearing Brief, at 2. Respondent then raises in his Brief objections to the admissibility of various evidentiary exhibits, which objections are primarily based upon the five year statute of limitations at 65 Pa.C.S. § 1108(m). Respondent’s Post-Hearing Brief, at 2-10. While we are cognizant of the statute of limitations and shall apply it properly in reviewing the facts before us, the evidentiary exhibits were already admitted at the hearing in this matter with the express agreement of Respondent’s counsel. (See, 3/14/11 Tr. at 41-44; 3/15/11 Tr. at 166-167). We shall now summarize the relevant facts. Thuy, 09-009 Page 33 From 1997 through and including the time of the hearing in this matter in March 2011, Respondent served as the Chief Administrative Officer (“CAO”)/Chief Executive Officer (“CEO”) (such terms being used interchangeably herein), headmaster and treasurer of the MACS. The MACS operates a charter school for grades 9-12, which opened September 1998. Additionally, since 1987, Respondent has been employed as executive director of the IAC. Respondent’s wife, Maria Thuy, has been employed as a Program Director for the IAC since 1989. The IAC is a community-based, non-profit corporation that supports and provides educational opportunities and school to work programs to multi-racial, at risk, low income youths and promotes racial harmony and understanding through education, traditional arts and personal interaction. The MACS and the IAC are both non-profit corporations. Respondent was an incorporator of both the MACS and the IAC. The MACS is governed by a Board of Trustees. The IAC is governed by an Executive Board. The current vice president of the MACS testified that the meetings of the MACS Board are published in a school handbook and are open to the public. During the relevant time period, Respondent handled the day-to-day operations of both the IAC and the MACS. Respondent served as the primary contact person for all MACS business and was authorized to represent the MACS Board of Trustees in the negotiation and signing of contracts and/or leases. Respondent and his wife own various real estate. On March 7, 1994, Respondent th and his wife purchased property located at 4666-68 N. 15 Street and 1500-02 Belfield Avenue, Philadelphia, Pennsylvania, for a total price of $54,000.00. On April 23, 2001, th Respondent and his wife purchased property located at 4654 N. 15 Street, Philadelphia, Pennsylvania, for the price of $17,500.00. The aforesaid properties were leased to the IAC and subleased to the MACS from July 1, 1998, and September 1, 2001, respectively, to July 2009. Pursuant to the statute of limitations at Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m), we may not consider any alleged violations of the Ethics Act prior to April 17, 2004. (See, Fact Finding 58; 51 Pa. Code §§ 21.3(c), 21.5(b); cf., Cagno, Order 1204; Cook, Order 1203.) During the relevant time period, it was difficult for a charter school such as the MACS to secure financing for acquiring or leasing real estate because charters were limited to five years and there was no guarantee of a charter being renewed. However, the IAC was an established entity with significant cash assets. Per the Financial Statements of the IAC, from 2004 through June 30, 2009, the IAC’s cash/cash and equivalent assets ranged from $943,192 to $1,486,424. During the time period from April 17, 2004, to July 2009, the MACS operated at the th Thuys’ properties located at 4666-68 and 4654 N. 15 Street, Philadelphia, Pennsylvania. The aforesaid properties were leased by Respondent/Respondent’s wife to the IAC, which in turn subleased the properties to the MACS dollar for dollar for the same amount of rent. The Financial Statements of the IAC for 2004 through June 30, 2009, state that the fair rental values of the aforesaid properties were determined by periodic independent property appraisals and approved by the IAC’s Board. (Fact Finding 95c). For lease/sublease arrangements that occurred in 2004, Respondent in his role as the CAO/headmaster of the MACS was delegated by the MACS Board to “secure the leases.” (Fact Finding 25 c). Appraisals of the fair market rental of the aforesaid properties were provided by certified appraiser Edward S. Snyder (“Snyder”) of Edward S. Thuy, 09-009 Page 34 Snyder Real Estate Inc. Snyder was authorized by Respondent to perform the appraisals. Snyder discussed the matter only with Respondent. All of Snyder’s communications regarding the market rentals were directed through Respondent. Snyder was directed by Respondent to send the appraisal letters to Huyen Tran (“Dr. Tran”), President of the IAC. The record does not establish the dates in 2004 when Respondent authorized Snyder to perform the appraisals or engaged in the aforesaid communications with Snyder. On July 20, 2004, Snyder submitted two letters to Dr. Tran as President of the IAC th providing market rentals for the properties located at 4666-68 and 4654 N. 15 Street, Philadelphia, Pennsylvania. Additionally, Respondent’s wife sent two letters to Dr. Tran-- both dated July 20, 2004--advising him that based upon the fair market rentals of the properties, she was offering new leases with the IAC to run from August 1, 2004, through July 31, 2009. ID 27-1 consists of a one-page letter from Maria Thuy to Dr. Tran as President of the IAC, dated and executed as a lease on July 20, 2004, setting forth the rental rates and other terms whereby the IAC was to lease from Respondent’s wife the property at 4666-68 th N. 15 Street and 1500 Belfield Avenue, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. The letter/lease provided that the IAC would have to pay for all utilities and water and buy adequate liability insurance listing Maria Thuy and her husband as co-insureds. (ID 27-1). The letter/lease stated: “If you agree with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” Id. The letter/lease was signed by Dr. Tran as President of the IAC and by Maria Thuy. ID 24-1 and ID 27-3 consist of a one-page letter from Dr. Tran as President of the IAC to Dennis Cook as President of the MACS Board of Trustees, dated July 21, 2004, and executed as a sublease on August 27, 2004, setting forth the rental rates and other terms th whereby the MACS was to sublease from the IAC the properties at 4666-68 N. 15 Street and 1500 Belfield Avenue, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. The letter/sublease provided that the MACS would have to pay for all utilities and water and buy adequate liability insurance listing the IAC and Maria Thuy, the owner, and her husband as co-insureds. (ID 24-1, 27-3). The letter/sublease stated: “If you agree with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” Id. The letter/sublease was signed by Dr. Tran as President of the IAC and by Dennis Cook as President of the MACS Board of Trustees. ID 27-2 consists of a one-page letter from Maria Thuy to Dr. Tran as President of the IAC, dated and executed as a lease on July 20, 2004, setting forth the rental rates and other terms whereby the IAC was to lease from Respondent’s wife the property at 4654 N. th 15 Street, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. The letter/lease provided that the IAC would have to pay for all utilities and water and buy adequate liability insurance listing Maria Thuy and her husband as co- insured. (ID 27-2). The letter/lease stated: “If you agree with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” Id. The letter/lease was signed by Dr. Tran as President of the IAC and by Maria Thuy. ID 27-4 consists of a one-page letter from Dr. Tran as President of the IAC to Dennis Cook as President of the MACS Board of Trustees, dated August 12, 2004, and executed as a sublease on August 27, 2004, setting forth the rental rates and other terms th whereby the MACS was to sublease from the IAC the property at 4654 N. 15 Street, Philadelphia, Pennsylvania, for a period of five years from August 1, 2004, to July 31, 2009. The letter/sublease provided that the MACS would have to pay for all utilities and water and buy adequate liability insurance listing the IAC and the property owner, Maria Thuy, and her husband as co-insured. (ID 27-4). The letter/sublease stated: “If you agree Thuy, 09-009 Page 35 with my offer please sign and write the date on the lines at the bottom of this letter indicating your acceptance of the aforementioned terms, returning one copy to me.” Id. The letter/sublease was signed by Dr. Tran as President of the IAC and by Dennis Cook as President of the MACS Board of Trustees. The rental rates paid by the MACS to the IAC under the aforesaid August 27, 2004, subleases were dollar for dollar the same rental rates paid by the IAC to Maria Thuy under the aforesaid July 20, 2004, leases. (Cf., Fact Findings 97a, 98a, 99a, 100a.) There is no evidence in the record to establish that any negotiations occurred between the MACS and the IAC as to the aforesaid subleases. The record does not establish whether the MACS Board voted to approve the aforesaid subleases of Respondent’s properties in 2004. At least as early as 2003 the MACS was actively searching for a new site. On September 18, 2008, the IAC purchased from the School District of Philadelphia a facility referred to as the “St. Stephen’s School” with the intention of leasing it to the MACS. The IAC agreed to allow a pre-existing tenant to complete the term of its lease at the St. Stephen’s School property before the MACS would move into the facility. The pre-existing tenant leased the St. Stephen’s School through July 14, 2009. In the meantime, the MACS th continued to operate at the Thuys’ 4666-68 and 4654 N. 15 Street properties. The IAC th Board did not consider using any property other than the aforesaid North 15 Street properties for its lease with the MACS for the interim period. th Despite the fact that the 4666-68 and 4654 N. 15 Street properties had already been leased by the IAC and subleased by the MACS through July 31, 2009, new leases were executed on October 1, 2008. Dr. Tran and Respondent executed the October 1, 2008, Lease Agreement between the IAC and Respondent for the properties at 4666-68 th and 4654 N. 15 Street, Philadelphia, Pennsylvania, which Lease Agreement is in evidence as ID 28-1 – 28-7. Dr. Tran and MACS President Tae-Ock Kauh, Ph.D. executed the October 1, 2008, “License Agreement” between the IAC and the MACS for the th properties at 4666-68 and 4654 N. 15 Street, Philadelphia, Pennsylvania, which License Agreement is in evidence as ID 29-1 – 29-8. The rent set forth in the October 1, 2008, Lease Agreement in evidence as ID 28-1 – 28-7 is exactly the same as the rent set forth in the October 1, 2008, License Agreement in evidence as ID 29-1 – 29-8. While the prior leases had provided for the MACS to pay combined monthly rental rates of $10,086 Triple Net for the aforesaid properties from August 1, 2008, through July 31, 2009, the October 1, 2008, leases provided for combined monthly rent of $11,520 Triple Net during the period of October 1, 2008, through July 2009. Dr. Tran testified that the October 1, 2008, Lease Agreement in evidence as ID 28-1 – 28-7 and the October 1, 2008, License Agreement in evidence as ID 29-1 – 29-8 were presented to and approved by the respective Boards prior to being executed. (Fact Finding 45n). However, per a deemed admission of Respondent, there was no vote of the MACS Board to approve its October 1, 2008, lease (License Agreement) with the IAC. (Fact Finding 34e). Per Fact Finding 35, as treasurer and administrator for MACS, Respondent was involved in the lease process by selecting the appraiser to determine the fair market rental of the aforesaid properties. The appraiser communicated all details of the appraisal process through Respondent, which resulted in monthly rents paid to Respondent. Respondent’s Answer to the Investigative Complaint/Findings Report states: “Dr. Thuy did suggest that the appraisal be done.” Answer of Respondent Vuong Thuy, Ph.D to Thuy, 09-009 Page 36 Investigative Complaint/Findings Report, Paragraph 94. Respondent requested the appraisal for the purpose of continuing to lease his aforesaid properties to the MACS through the IAC pending the MACS’ move to the new facility. (Fact Finding 31c). Dr. Tran testified that the financial terms of the October 1, 2008, Lease Agreement between the IAC and Respondent were not negotiated, but rather, were based upon the fair market value as found by a third party appraiser. Three of the MACS Board Members including Dr. Tran testified that they were not involved in negotiating the terms of the October 1, 2008, License Agreement between the MACS and the IAC. There is no evidence in the record to establish that any negotiations occurred between the MACS and the IAC as to the License Agreement. After the MACS moved to the St. Stephen’s School facility, the IAC continued to th occupy one of the North 15 Street properties owned by the Thuys. The IAC’s lease for the th other North 15 Street property was canceled by mutual agreement after the MACS moved to the St. Stephen’s School. Dr. Tran testified that the IAC originally intended to occupy both properties if the MACS moved, but as a result of funding cutbacks, the IAC no longer needed as much space. Between 2004 and 2009, all rental payments made by the MACS to the IAC for the rental of Respondent’s property(ies) were made by Respondent in his official position as MACS treasurer. As detailed in Fact Finding 107, from 2004 through July 16, 2009, MACS checks were issued to the IAC for rental payments on properties owned by Respondent. Respondent signed as an authorized signatory for the MACS all of the aforesaid checks, specifically, checks numbers 4882, 4883, 5535, 5755, 6394, 6734, 7064, 1098, 1244, 1573, and 2026. Respondent also signed check number 6394 on the back as the depositing agent for the IAC. As detailed in Fact Findings 108 and 109, from January 5, 2004, through September 2, 2008, the IAC made rental payments to Maria Thuy totaling $382,886.00 for the property thth at 4666-68 N. 15 Street, Philadelphia, and $110,263.00 for the property at 4654 N. 15 Street, Philadelphia. The total amount of the payments made by the MACS to the IAC--and likewise by th the IAC to Respondent--for rent at 4666-68 and 4654 N. 15 Street, Philadelphia, under the October 1, 2008, License Agreement between the MACS and the IAC and the October 1, 2008, Lease Agreement between the IAC and Respondent was $69,120. (Cf., Fact Findings 53, 105, 106, 110; see, ID 28-1 -28-7; ID 29-1 - 29-8; ID 31-112 - 31-117.) A comparison of the rental payments from the MACS to the IAC and from the IAC to Respondent/Respondent’s wife indicates that, while the IAC typically made regular monthly rental payments to the Thuys, the MACS made rental payments to the IAC only once, twice, or three times per year. (Fact Findings 107-110). Additionally, the MACS payments to the IAC were made at the end or even after the time periods to which they were applied. It was not unusual for the MACS to tender to the IAC a rental payment covering the month that was ending or had just ended as well as the prior five or six months. The MACS submitted to the Pennsylvania Department of Education (“PDE”) various application forms in order to be reimbursed a portion of the MACS’ lease payments for the years 2004-2005, 2005-2006, 2006-2007, 2007-2008, and 2008-2009 for the Thuys’ th properties located at 4666-68 and 4654 N. 15 Street, Philadelphia, Pennsylvania. Respondent was listed on all such applications as the MACS’ Contact Person. These application forms required the identification of the “lessor” but not the property owner. As of September 2010, PDE guidelines expressly provide that PDE will not provide lease reimbursements to a charter school for a building owned by the charter school’s Thuy, 09-009 Page 37 board member(s), staff, or relatives of same. As for Respondent’s SFIs, Respondent filed SFIs for calendar years 2004 through 2008 as a public official/public employee of the MACS, each of which forms listed: (1) the names and addresses of the MACS and IAC as “direct/indirect sources of income”; and (2) “real estate interests” as “None.” Respondent did not report that he leased property to the MACS through the IAC under the section titled “real estate interests,” Block number 8. On or about August 27, 2009, Respondent filed amended SFIs for calendar years 2004 through 2008, listing “4654 & 4666-68 N. 15 St.; Philadelphia, PA” in Block 8 for each calendar year. Having summarized the above relevant facts, we must now determine whether the actions of Respondent violated Sections 1103(a), 1103(f), 1105(b)(3), and 1105(b)(5) of the Ethics Act. As we apply the facts to the allegations, due process requires that we not depart from the allegations. Pennsy v. Department of State, 594 A.2d 845 (Pa. Cmwlth. 1991). A violation of the Ethics Act must be based upon clear and convincing proof. 65 Pa.C.S. § 1108(g). Clear and convincing proof is “so ‘clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear conviction, without hesitance, of the truth of the precise facts in issue.’” In Re: Charles E.D.M., 550 Pa. 595, 601, 708 A.2d 88, 91 (1998) (Citation omitted). Additionally, we must observe the five year statute of limitations at Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m). As noted above, the Thuys’ properties at 4666-68 th and 4654 N. 15 Street, Philadelphia, Pennsylvania, were leased to the IAC and subleased to the MACS from July 1, 1998, and September 1, 2001, respectively, to July 2009. However, pursuant to the statute of limitations at Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m), we may not consider any alleged violations of the Ethics Act prior to April 17, 2004. (See, Fact Finding 58; 51 Pa. Code §§ 21.3(c), 21.5(b); cf., Cagno, supra; Cook, supra.) Whatever actions might have occurred prior to April 17, 2004, to put the lease/sublease arrangements in place would be beyond the scope of the statute of limitations and could not form the basis for a violation in this case. The first allegation is that Respondent Thuy violated Section 1103(a) of the Ethics Act when he used the authority of his public position for the private pecuniary gain of himself, a member of his immediate family and/or a business with which he and/or a member of his immediate family is/are associated by participating in actions of the MACS including but not limited to: (a) recommending the rental of property by the MACS; (b) negotiating/determining the terms and conditions of the rental agreements; and (c) authorizing payments by the MACS for the rented property, relating to the rental of said property from the IAC, a business with which Thuy and his wife were employed, which property was owned by Thuy and his wife and leased to IAC for subsequent leasing to the MACS. In considering the elements of a conflict of interest, we determine that t he IAC did not receive a pecuniary gain from the aforesaid lease arrangements with the MACS. Rather, the IAC was reimbursed by the MACS dollar-for-dollar for IAC payments made to Respondent/Respondent’s wife. A “wash” as to expenditures does not constitute a private pecuniary benefit. See, Moore, Opinion 04-004. However, it is clear that Respondent and/or his wife did receive pecuniary benefits through the leasing arrangements involving the IAC and the MACS that were entered into in 2004 and 2008. (Fact Findings 107-111). The remaining element to be considered is the element of “use of the authority of public office/employment.” Respondent’s authority as to his public positions with the MACS included authority to handle the day-to-day operations of the MACS, serve as the Thuy, 09-009 Page 38 primary contact person for all MACS business, represent the MACS Board of Trustees in the negotiation and signing of contracts and/or leases, and sign and issue checks in payment of MACS expenditures. For the lease renewals in 2004, Respondent in his role as the CAO/headmaster of the MACS was delegated by the MACS Board to “secure” the leases. The actions of Respondent that have been established as to the 2004 lease/sublease arrangements are as follows: (1) Respondent authorized certified appraiser Snyder of Edward S. Snyder Real Estate Inc. to perform the property appraisals; (2) Respondent engaged in communications with Snyder regarding the market rentals; (3) Respondent directed Snyder to send the appraisal letters to Dr. Tran as President of the IAC; and (4) after the subleases between the MACS and the IAC had been executed, Respondent made the rental payments from the MACS to the IAC as MACS treasurer, signing the checks as an authorized signatory. The actions of Respondent that have been established as to the 2008 lease/sublease arrangements are as follows: (1) Respondent suggested that the appraisal be done; (2) Respondent selected the appraiser to determine the fair market rental of the properties; (3) Respondent communicated with the appraiser; (4) Respondent entered into a lease with the IAC; and (5) after the License Agreement (sublease) between the MACS and the IAC had been executed, Respondent made the rental payments from the MACS to the IAC as MACS treasurer, signing the checks as an authorized signatory. There is no evidence in the record to establish that during the relevant time period, Respondent recommended the rental of the Thuys’ property(ies) by the MACS or that any negotiations occurred between the MACS and the IAC as to the aforesaid subleases. We hold that during the relevant time period from April 17, 2004, forward, Respondent did not violate Section 1103(a) of the Ethics Act by making MACS rental payments to the IAC for properties owned by Respondent and his wife because, at the time such payments were made, sublease agreements authorizing the rental payments had already been approved by the MACS President, if not the MACS Board. The MACS’ obligation to make such payments was contractually pre-fixed and uncontested. This Commission has held that the approval of pre-fixed, routine, uncontested bills does not in and of itself rise to the level of a violation of Section 1103(a) of the Ethics Act. See, Krushinski, Order 168; Yezzi, Order 825 at 58; Chermak, Order 887; Shea, Order 921; Belli, Order 923; Kupchella, Order 975; Gradizzi, Order 1379; Stewart, Opinion 79-070; Brooks, Opinion 89-023; Maholick, Opinion 90-010; Pizonka/Rieder/Rittenhouse, Opinion 09-007. With respect to the 2004 lease/sublease arrangements, the Investigative Division has acknowledged that there are statute of limitations issues. Closing Statement and Brief of the Investigative Division, at 37. As we have noted above, the evidence does not indicate whether Respondent’s actions as to the 2004 appraisal occurred before or after the April 17, 2004, statute of limitations cutoff date. Based upon our review of the record, we hold that Respondent did not violate Section 1103(a) of the Ethics Act with respect to the 2004 lease/sublease arrangements involving Respondent’s wife, Maria Thuy, the IAC, and the MACS for properties owned by Respondent and his wife, based upon an insufficiency of evidence to establish such a violation within the scope of the five year statute of limitations, 65 Pa.C.S. § 1108(m). 1 With respect to the 2008 lease/sublease arrangements, Respondent’s actions in presenting the IAC with a lease proposal and/or entering into a Lease Agreement with the 1 We parenthetically note that there does not appear to be any explanation in the record for the fact that the IAC and the MACS Boards agreed to enter into new lease/sublease arrangements for the Thuys’ properties Thuy, 09-009 Page 39 IAC were taken in his private capacity as a property owner/landlord. Although Respondent knew (or expected) that the properties would be subleased by the IAC to the MACS (see, Closing Statement and Brief of the Investigative Division, at 24-25), such does not convert Respondent’s private actions as a property owner/landlord into a use of the authority of his public positions with the MACS. Respondent’s actions in suggesting that the appraisal be done and selecting the appraiser to determine the fair market rental of the properties were significant because the appraisal formed the basis for the rental rates. However, the record is inconclusive as to whether Respondent acted in his public capacity or his private capacity with respect to these actions. The record includes acknowledgments by the parties that could support a conclusion either way as to the selection of the appraiser (see, Fact Finding 35; Closing Statement and Brief of the Investigative Division, at 38). As for Respondent’s communications with the appraiser, the record does not establish the content of such communications. We conclude that the fact that Respondent engaged in unspecified communications with the appraiser would be insufficient in and of itself to support a violation. Accordingly, we hold that Respondent did not violate Section 1103(a) of the Ethics Act with respect to the 2008 lease/sublease arrangements between Respondent and the IAC and between the IAC and the MACS for the properties owned by Respondent and his wife, based upon an insufficiency of evidence. The second allegation is that Respondent violated Section 1103(f) of the Ethics Act when the aforesaid rental contracts by the MACS were not awarded through an open and public process. Section 1103(f) of the Ethics Act provides, in pertinent part, that no public official/public employee, his spouse or child, or business with which the public official/public employee, spouse or child is associated, shall enter into: (1) any contract valued at $500 or more with the governmental body with which the public official/public employee is associated; or (2) any subcontract valued at $500 or more with any person who has been awarded a contract with such governmental body, unless the contract has been awarded through an open and public process. 65 Pa.C.S. § 1103(f). In Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Commw. Ct. 2004), the Commonwealth Court of Pennsylvania held that a township supervisor did not violate Section 1103(f) of the Ethics Act when a business that employed him entered into a contract in excess of $500.00 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. In Means, Opinion 04-007, we reviewed the Bixler decision and determined, inter alia, that Section 1103(f) would apply as to a public official/business owner if he would be a party to a contract with his governmental body or if he would be deemed to have entered into a contract between his business and his governmental body on behalf of or as a principal of his business. Means, Opinion 04-007. In the instant matter, the IAC is a business with which both Respondent and his wife are associated as employees. The IAC entered into subleases with the MACS. However, covering the time period of October 1, 2008, through July 31, 2009, when the IAC and the MACS already had existing leases/subleases for the properties for that same time period at significantly lower rental rates. Thuy, 09-009 Page 40 Respondent was not a party to the subleases between the IAC and the MACS. Additionally, Respondent would not be deemed to have entered into the subleases between the IAC and the MACS on behalf of or as a principal of the IAC. The IAC Board/Board President entered into such subleases. Therefore, in applying Section 1103(f) to the facts of this case, we may not find a violation of Section 1103(f) by Respondent unless Respondent entered into either: (1) a contract with the MACS; or (2) a subcontract with the IAC. 65 Pa.C.S. § 1103(f); see, Bixler, supra. Our first determination in applying Section 1103(f) to the facts of this case is that neither Respondent nor his wife entered into a contract with the MACS. Rather, as private landlords, Respondent and his wife entered into contracts with the IAC, which is not a governmental body. Our second determination in applying Section 1103(f) to this case is that neither Respondent nor his wife entered into any subcontract with the IAC. The leases between Respondent/Respondent’s wife and the IAC were not subcontracts. Rather, they were the main contracts. Neither Respondent nor his wife was a party to the subleases between the IAC and the MACS. In reaching the above determinations, we do not find a de facto contract between Respondent and the MACS for the following reasons. First, the Investigative Division, as the prosecutor, has stated its belief that this case does not involve any trickery. (Opening Statement of the Investigative Division, 3/14/11 Tr. at 34). Second, the evidence of record does not establish that the IAC’s involvement in the lease/sublease arrangements was as a straw party. Rather, the evidence suggests that the lease/sublease arrangements may have occurred for reasons involving financing. Fundamentally, our application of Section 1103(f) in this case is driven by Commonwealth Court’s narrow construction of Section 1103(f) in Bixler, supra. Because the evidence does not establish that Respondent entered into either a contract with the MACS or a subcontract with the IAC, we find no violation of Section 1103(f) on that basis, and we do not reach the question of whether an open and public process was observed. We hold that Respondent did not violate Section 1103(f) of the Ethics Act as to the allegation that rental contracts with the MACS were awarded without an open and public process. We note that our above holdings as to the Section 1103(a) and Section 1103(f) allegations should not be misconstrued as condoning what transpired in this case. To the contrary, it is disturbing that while Respondent served as executive director of the IAC and CAO/CEO, headmaster and treasurer of the MACS, Respondent and his wife received substantial pecuniary benefits through the aforesaid lease/sublease arrangements involving their properties, the IAC, and the MACS. However, the outcome of this case is controlled by legal considerations. This Commission is duty-bound to apply the law to the facts of record. We must observe the statute of limitations. We may not find violations of the Ethics Act based upon an appearance of impropriety. Each and every element of a violation must be established, and a violation may only be found based upon clear and convincing proof. Based upon the record, there is not enough evidence to establish a violation of Section 1103(a) or Section 1103(f) during the time period within the scope of the statute of limitations, and therefore, we are constrained to find no violations as to the Section 1103(a) and Section 1103(f) allegations for the time period under review. However, we do not condone what transpired in this case. Thuy, 09-009 Page 41 The third allegation is that Respondent violated Sections 1105(b)(3) and 1105(b)(5) of the Ethics Act when he failed to disclose on SFIs for the years 2004 through 2009 his ownership interests in property leased to the MACS or income derived from rent. The record includes Respondent’s SFIs and amended SFIs for calendar years 2004 through 2008 only. Factually, Respondent filed SFIs for calendar years 2004 through 2008 as a public official/public employee of the MACS, each of which forms listed: (1) the names and addresses of the MACS and IAC as “direct/indirect sources of income”; and (2) “real estate interests” as “None.” Respondent did not report that he leased property to the MACS through the IAC under the section titled “real estate interests,” Block number 8. On or about August 27, 2009, Respondent filed amended SFIs for calendar years 2004 through 2008, listing “4654 & 4666-68 N. 15 St.; Philadelphia, PA” in Block 8 for each calendar year. As for Respondent’s argument that his original SFIs identified the properties being leased to the MACS in Block number 10, and that his failure to “transfer the information” to Block 8 falls within the “de minimis exclusion,” Respondent’s Post-Hearing Brief at 26-27, we note that Respondent did not identify the properties being leased to the MACS in Block number 10 of his original SFIs, and there is no de minimis exclusion for SFI violations. We find that Respondent violated Section 1105(b)(3) of the Ethics Act with respect to his original SFIs. Under the express terms of Section 1105(b)(3), Respondent was required to disclose his interest in the properties that were being leased by the MACS. We hold that Respondent violated Section 1105(b)(3) of the Ethics Act when he failed to disclose on his SFIs filed for calendar years 2004 through 2008 his interest in real estate that was leased to the MACS. Since Respondent has now amended his SFI forms in that regard, we need go no further than to find the violation as to the original filings. With respect to Section 1105(b)(5) of the Ethics Act, Respondent’s original SFIs listed the names and addresses of both the MACS and the IAC as sources of income. Nothing more was required. Section 1105(b)(5) does not require the filer to identify the nature of the income, but rather, only the source. We hold that Respondent did not violate Section 1105(b)(5) of the Ethics Act as to the allegation that he failed to disclose on SFIs for the years 2004 through 2009 income derived from rent in that Respondent’s SFIs satisfied the statutory requirements for such disclosure. IV.CONCLUSIONS OF LAW: 1. As the Chief Administrative Officer/Chief Executive Officer, headmaster and treasurer of the Multi-Cultural Academy Charter School (the “MACS”) of Philadelphia from 1997 through and including the time of the hearing in this matter in March 2011, Respondent Vuong Thuy (“Thuy”) 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. During the relevant time period from April 17, 2004, forward, Thuy did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), by making MACS rental payments to the Indochinese American Council (“IAC”) for properties owned by Thuy and his wife because, at the time such payments were made, sublease agreements authorizing the rental payments had already been approved by the MACS President, if not the MACS Board. 3. Thuy did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), with respect to the 2004 lease/sublease arrangements involving his wife, Maria Thuy, the IAC, and the MACS for properties owned by Thuy and his wife, based upon an Thuy, 09-009 Page 42 insufficiency of evidence to establish such a violation within the scope of the five year statute of limitations, 65 Pa.C.S. § 1108(m). 4. Thuy did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), with respect to the 2008 lease/sublease arrangements between Thuy and the IAC and between the IAC and the MACS for the properties owned by Thuy and his wife, based upon an insufficiency of evidence. 5. Based upon a lack of evidence to establish that Thuy entered into either a contract with the MACS or a subcontract with the IAC, Thuy did not violate Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), as to the allegation that rental contracts with the MACS were awarded without an open and public process. 6. Thuy violated Section 1105(b)(3) of the Ethics Act, 65 Pa.C.S. § 1105(b)(3), when he failed to disclose on his Statements of Financial Interests filed for calendar years 2004 through 2008 his interest in real estate that was leased to the MACS. 7. Thuy did not violate Section 1105(b)(5) of the Ethics Act, 65 Pa.C.S. § 1105(b)(5), as to the allegation that he failed to disclose on Statements of Financial Interests for the years 2004 through 2009 income derived from rent in that Thuy’s Statements of Financial Interests satisfied the statutory requirements for such disclosure. In Re: Voung Thuy, : File Docket: 09-009 Respondent : Date Decided: 6/23/11 : Date Mailed: 7/15/11 ORDER NO. 1588 1. During the relevant time period from April 17, 2004, forward, Vuong Thuy (“Thuy”), a public official/public employee in his capacities as the Chief Administrative Officer/Chief Executive Officer, headmaster and treasurer of the Multi-Cultural Academy Charter School (the “MACS”) of Philadelphia, did not violate Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), by making MACS rental payments to the Indochinese American Council (“IAC”) for properties owned by Thuy and his wife because, at the time such payments were made, sublease agreements authorizing the rental payments had already been approved by the MACS President, if not the MACS Board. 2. Thuy did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), with respect to the 2004 lease/sublease arrangements involving his wife, Maria Thuy, the IAC, and the MACS for properties owned by Thuy and his wife, based upon an insufficiency of evidence to establish such a violation within the scope of the five year statute of limitations, 65 Pa.C.S. § 1108(m). 3. Thuy did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), with respect to the 2008 lease/sublease arrangements between Thuy and the IAC and between the IAC and the MACS for the properties owned by Thuy and his wife, based upon an insufficiency of evidence. 4. Based upon a lack of evidence to establish that Thuy entered into either a contract with the MACS or a subcontract with the IAC, Thuy did not violate Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), as to the allegation that rental contracts with the MACS were awarded without an open and public process. 5. Thuy violated Section 1105(b)(3) of the Ethics Act, 65 Pa.C.S. § 1105(b)(3), when he failed to disclose on his Statements of Financial Interests filed for calendar years 2004 through 2008 his interest in real estate that was leased to the MACS. 6. Thuy did not violate Section 1105(b)(5) of the Ethics Act, 65 Pa.C.S. § 1105(b)(5), as to the allegation that he failed to disclose on Statements of Financial Interests for the years 2004 through 2009 income derived from rent in that Thuy’s Statements of Financial Interests satisfied the statutory requirements for such disclosure. BY THE COMMISSION, ___________________________ Louis W. Fryman, Chair