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HomeMy WebLinkAbout1629 Short In Re: James H. Short, Jr., : File Docket: 12-029 Respondent : X-ref: Order No. 1629 : Date Decided: 2/6/14 : Date Mailed: 2/12/14 Before: John J. Bolger, Chair Nicholas A. Colafella, Vice Chair Raquel K. Bergen Mark R. Corrigan Roger Nick Kathryn Streeter Lewis This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding possible violation(s) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., by the above-named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an “Investigative Complaint.” A Stipulation of Findings and a Consent Agreement were subsequently submitted by the parties to the Commission for consideration. The Stipulated Findings are set forth as the Findings in this Order. The Consent Agreement has been approved. I.ALLEGATIONS: That James Short, a public official/public employee in his capacity as Director of Marketing of the Pennsylvania Liquor Control Board (“PLCB”), violated Sections 1103(a) and 1105(b) of the State Ethics Act (Act 93 of 1998) when he used the authority of his public position to obtain a private pecuniary benefit for himself, members of his immediate family, and/or a business with which he and/or members of his immediate family are associated, by soliciting and/or accepting gifts, transportation, lodging, and/or hospitality from vendors of the PLCB at a time when he was participating in and/or making final recommendations/decisions regarding the PLCB’s purchase of wine and spirits from those vendors; and when he failed to disclose on Statements of Financial Interests his receipt of gifts, transportation, lodging, and/or hospitality, on Statements of Financial Interests filed for the 2008 through 2011 calendar years. II.FINDINGS: 1. James Short has served as the Director of Marketing and Merchandising for the PLCB from approximately 2003 to the present. a. Short began employment with the PLCB in 1984, as a part-time seasonal clerk. b. Short held multiple positions during his tenure with the PLCB including Clerk, Assistant Store Manager, Store Manager, etc. Short, 12-029 Page 2 1. Short received multiple promotions throughout his tenure with the PLCB. 2. As the PLCB Director of Marketing and Merchandising, Short had direct supervisory responsibility over multiple PLCB employees including but not limited to the following: a. Matthew Schwenk, Director of Product Selection; b. Anthony Jones, Division Chief of Luxury Wines; c. Timothy Frigner, Category Management Director; d. Christine Gerberich/Gail Chiavetta, Director of Marketing Programs; and e. Stephen Pollack, Director of the Chairman’s Select Program. f. All of these subordinate employees, as well as Short, have interacted with PLCB vendors. 3. Short’s job description in the position of Director of Marketing and Merchandising for the PLCB sets forth the position definition, examples of work, and required knowledge, skills and abilities. a. The definition for the position sets forth duties and responsibilities for the individual in the position which include, in part, the following: 1. Strategic planning, policy development, and administration of the statewide program for liquor and alcohol purchasing, product marketing, and branding and design of the state store within the PLCB; 2. Serving as the principal advisor to the Chief Executive Officer (“CEO”) and Board on all matters pertaining to the purchase and marketing of liquor and alcohol through the state store system; aa. Short reported directly to Walter Joseph Conti, PLCB CEO, in his position as Director of Marketing and Merchandising. 3. Development, implementation, and administration of marketing plans and strategies; communication and promotion of new products to consumers; and the coordination and administration of all liquor and alcohol purchasing conducted by the PLCB; and 4. Working with considerable independence within the framework of Board policies under the general direction of the CEO who reviews work through conferences, reports, and effectiveness of results. b. Examples of work to be performed by the individual in the position include, in part, the following: 1. Direction, through subordinate bureau directors, of all liquor and alcohol marketing, merchandising, and purchasing operations; 2. Advising the CEO and Board on matters of purchasing and marketing of alcohol; and Short, 12-029 Page 3 3. Direction of the development and preparation of policies/procedures relating to the purchase of liquor and alcohol by the PLCB. c. Required knowledge, skills, and abilities for the individual in the position which include, in part, the following: 1. Knowledge of the principles and practices of product marketing; 2. Knowledge of behavioral psychology; 3. Ability to analyze and interpret policies and procedures; and 4. Ability to establish and maintain effective working relationships. 4. The PLCB was created by state law on November 29, 1933, following the end of prohibition. a. Prohibition was repealed on December 5, 1933, with the ratification of the st 21 Amendment to the U.S. Constitution. b. Pennsylvania is one of eighteen (18) states and two (2) Maryland counties that actively participate in the distribution process to control the sale of alcohol. 5. The PLCB is governed by a three (3) Member Board, appointed by the Governor and confirmed by two-thirds of the State Senate. a. The Board appoints a Chief Executive Officer. 6. The PLCB is responsible for regulating the sale of alcohol, educating consumers on the responsible use of alcohol, and working to prevent underage use of alcoholic beverages. 7. The PLCB accomplishes its responsibilities through marketing and merchandising a retail operation of approximately 608 stores with sales of approximately $2.1 billion in 2011-2012. a. The PLCB also oversees: 1. Regulation of 17,000 licenses. 2. Administration of alcohol education and awareness programs. b. The current employment complement of the PLCB is approximately 4,500 people with four (4) labor associations. 8. Between December 6, 1933, and April 1934, the PLCB commenced operation by initiating the following: a. More than 600 licenses were approved, giving the new license holders, such as bars and restaurants, the right to legally sell alcohol for on-premises consumption in Pennsylvania. b. The PLCB opened sixty-three (63) state stores and five (5) warehouses in the Commonwealth. Short, 12-029 Page 4 c. The PLCB established four (4) district offices in Philadelphia, Harrisburg, Pittsburgh, and Wilkes-Barre. 1. Since 1939, the PLCB has maintained its headquarters at the Northwest Office Building. 9. On April 12, 1951, the Pennsylvania General Assembly combined existing beer and liquor laws into one statute, entitled the “Liquor Code.” 10. On July 1, 1987, the Pennsylvania General Assembly reenacted the Liquor Code and created the Bureau of Liquor Control Enforcement (“BLCE”), within the Pennsylvania State Police, which is responsible for enforcing the Liquor Code and the Board’s regulations; and the Office of Administrative Law Judge, an autonomous office within the PLCB, which is responsible for presiding over citation and enforcement hearings. 11. The PLCB provides products and services through seven (7) dedicated departments designed to meet the specific needs of PLCB customers and licensees. a. Each of the seven (7) dedicated offices has specific deputies who have oversight responsibility. b. Dedicated offices are: Finance, Supply Chain, Marketing & Merchandising, Retail Operations, Administration, Regulator Affairs, and External Affairs. 12. The PLCB is the largest purchaser of wine and spirits in the United States. a. The PLCB currently operates approximately 608 stores, which are leased from private landlords. b. The PLCB outsources warehousing services for three (3) distribution centers in Pennsylvania. c. There currently are approximately 25,595 beverage alcohol licenses and permits throughout Pennsylvania and 5,391 registered malt and brewed beverage brands granted by the PLCB. 13. Products that are sold by the PLCB are categorized as either regular items, luxury items, or special order items. a. Regular items are products that are routinely stocked in the distribution centers. b. Luxury items are products that are purchased intermittently or as one-time purchases. c. Special order products are items that are not stocked in the PLCB distribution centers but may be special ordered by either licensees or by consumers. d. On or about February 4, 2004, the PLCB began the Chairman’s Selection Program, which offers wine at premium collection stores. 14. In or about 2006, a policy was developed by the PLCB known as the “bright line.” a. The policy was developed during the time when Joseph Martz was serving Short, 12-029 Page 5 as PLCB Director of Administration. 1. In 2006, Martz simultaneously served as Secretary of the Commonwealth and PLCB Director of Administration. b. The bright line was a policy that advised employees they were to accept nothing from PLCB vendors. c. When initially implemented, the policy was applicable to employees of the Administrative Division of the PLCB. 1. Employees signed the policy agreeing not to accept anything from PLCB vendors. d. Jonathan Newman was PLCB Chairman at the time the policy was implemented for administrative staff. 15. In 2006, the Director of Administration had no supervisory authority over employees in the Purchasing Division. a. As a result, the “bright line” policy was never enacted for employees in the Marketing/Purchasing Division. 1. PLCB Chairman Newman was opposed to the policy. 2. Newman hoped to enact a policy which permitted employees to accept items of value similar to the provisions of the Ethics Act. 3. The policy advocated by Newman reiterated the restrictions in the Liquor Code and the PLCB Code of Conduct. 16. The PLCB is the only retail seller of wine/spirits in the Commonwealth. a. The PLCB may grant licenses to entities/establishments for the sale of alcoholic beverages for on-site consumption as well as for vendors who sell products for off-site consumption. b. In order for an alcoholic beverage to be sold in Pennsylvania, it must be authorized for sale by the PLCB. 1. If a product is “listed” it is authorized for sale and stocked as a product in PLCB retail stores. 17. Manufacturers and suppliers of alcoholic beverage products lawfully employ several different methods to sell their products within the Commonwealth of Pennsylvania. a. Manufacturers/suppliers may market their product directly to the PLCB through the listing/delisting process for sales and distribution. b. Manufacturers/suppliers may market their product through a vendor. 1. Vendors must register with the PLCB. 2. A manufacturer/supplier may serve as its own vendor of record. c. Manufacturers/suppliers may enlist the services of a broker, who in turn represents the manufacturer/supplier and its products before the PLCB. Short, 12-029 Page 6 1. Brokers may represent multiple manufacturers/suppliers and/or multiple products before the PLCB. 2. A broker may also serve as a vendor of record. 18. Once a product is manufactured, if a manufacturer/supplier is utilizing a vendor of record, product is then shipped to the custody of the vendor of record. a. The vendor takes physical custody of the product for delivery to the PLCB. b. Payment for the product is made between the PLCB and the vendor of record. c. If a manufacturer/supplier is serving as its own vendor of record, product is shipped directly from the manufacturer/supplier to the PLCB. 19. If a manufacturer/supplier uses a broker, product is still distributed from the vendor of record to the PLCB. a. Where a broker is used, payment is made from the PLCB to the broker. b. A broker may also serve as a vendor of record. 20. The PLCB periodically reviews all products currently sold in PLCB retail stores to evaluate their profitability, and at or about the same time considers new products for placement in PLCB retail stores through a process known as “listing” and “delisting.” a. Listing/delisting occurs twice a year, usually in the fall and spring of each year. b. The goal of listing/delisting is to achieve a 1:1 ratio or a “zero sum.” For each product listed, one is delisted due to the limited shelf space at each PLCB retail store. 21. The process to present a new product for listing is regulated through the PLCB. a. Only individuals/entities with a Pennsylvania Vendor Permit may present items for listing. b. A fee of $150.00 (per item/per size) for proposed new products is required. c. Appropriate paperwork as well as two (2) product samples for wine and one (1) product sample for spirits is also required. d. Once the appropriate application and sample(s) have been submitted, a date/time is scheduled for the vendor/broker to present its new products to [staff] members of the PLCB. e. Generally two (2) bottles of a product are provided for sampling. 1. One (1) bottle for tasting and another for label review are submitted. f. The Director of Marketing and Merchandising does not regularly sit in on new product presentations or evaluations. PLCB [staff] members usually responsible for evaluating new product are: Short, 12-029 Page 7  Director of Product Selection  Chief of Product Management and Pricing Division  Merchandising Pricing Coordinator(s). g. Presentation time is limited to forty-five to ninety (45-90) minutes per vendor/broker regardless of the number of items presented. 1. Sampling is to occur at PLCB headquarters in a room called the Retail Education Center or REC Room. h. Once a new product presentation has been made, a recommendation will be made as to whether the new product should be listed (sold in PLCB retail stores). 1. The Commissioners do not participate in the new product review process. 2. The Director of Marketing and Merchandising along with the Director of Product Selection make the final recommendation to the Commission as to what product(s) should be listed for sale. 3. A report of products to be listed is forwarded to the Commissioners for approval. 4. The Commissioners vote on the entire recommended new product list without an independent assessment. 5. Luxury wines and one-time buys, including the Chairman’s Selection Program, are not subject to the listing/delisting process. 22. Delisting occurs simultaneously with the listing process. a. The delisting process is formally termed “category management,” but is commonly described as a “bucketing” or “filtration” process. 1. Products of like type are placed into categories; i.e. wines of a similar vintage, type, style, price, etc., are grouped together. 2. Items are categorized by length of time listed: items listed for less than one year are not eligible for delisting; items listed for between eighteen to twenty-four (18-24) months are reviewed separately from those items listed twenty-four (24) months or more. 3. After each item is reviewed, it is placed into a “bucket” if it passes the “filtering” criteria. For example, if a product meets the threshold criteria, it is “bucketed” to the next area of review. 4. Items are reviewed for their profitability with special attention being placed on: how much profit [was] generated; how many stores stocked the item; percentage of profit growth (20% growth is viewed by PLCB as a “good product.”) b. If a product is to be delisted, the vendor is notified and provided an opportunity to avoid a delisting. Short, 12-029 Page 8 1. Actions such as an advertising campaign, discounts, and product sampling are used to promote sales and possibly avoid a delisting. c. Recommendations for delisting are similar to listings, where the Director of Marketing and Merchandising along with the Director of Product Selection make the final recommendation to the Commission as to what product(s) should be delisted. 23. The PLCB relies primarily on recommendations made by Short and his direct reports when making listing/delisting decisions. a. In an interview with Commission Investigators, Short estimated that 5% of the staff’s recommendations to list/delist are not accepted by the Board. 24. Prior to sometime in 2012, the PLCB purchased all product and warehoused it in a PLCB facility until distribution to PLCB retail stores. a. PLCB was responsible for payment of the product once it was within its possession. b. PLCB assumed responsibility for loss of the product due to theft, spoilage, damage, etc., once in the physical custody of PLCB. 25. During calendar year 2012, the PLCB initiated a purchasing/inventory system of bailment. a. Through the PLCB’s bailment system, product is shipped to PLCB warehouses from the vendor, as occurred pre-2012. b. PLCB does not transfer payment of funds or ownership of the product until it is to be shipped to the PLCB retail stores. c. The PLCB system of bailment allows for greater control over inventory and also limits the risk/exposure the PLCB may have regarding product loss. 1. Through the bailment process, PLCB maintains no more than three (3) to five (5) weeks’ worth of inventory within its warehouses. 2. Currently twenty-seven (27) vendors are under bailment with the PLCB, which represents approximately 80% of the cash value of PLCB products sold. d. Prior to initiating a bailment process, PLCB staff were responsible for predicting the market for a particular product; if sales were not as expected, the PLCB would suffer a financial loss through spoilage of product if an excessive amount of product remained unsold. 26. The primary vendors providing products to the PLCB are:  Southern Wine and Spirits  Capital Wine and Spirits (Alliance Brands, White Rock Distilleries)  Allied Beverage (Majestic). These vendors represent at least 31% of total PLCB sales/inventory. 27. Southern Wine and Spirits of America, Inc. (“Southern”) [claims] to be the nation’s largest wine and spirits distributor. Short, 12-029 Page 9 a. Since its creation/formation in 1968, Southern has maintained its corporate office in Miami, Florida. b. Currently, Southern represents clients in no less than thirty-five (35) states including “Control States” and “Open States.” 1. An “Open State” refers to a state/jurisdiction where wine, spirits, and beer sales are conducted through an independent beverage distributor/retailer. 2. A “Control State” is where a state or county “controls” or regulates the distribution and/or the sale of wine, spirits, and/or beer. 3. Pennsylvania is the largest Control State operation in the United States. 28. Southern Wine & Spirits of Pennsylvania operates as a licensed wine and spirits broker/marketer. a. Southern expanded its operations into Pennsylvania in 1995. b. Southern employs approximately two-hundred twenty-five (225) sales and support staff statewide in Pennsylvania. c. Southern maintains two (2) offices within Pennsylvania, one in the King of Prussia area, and the other in the Greater Pittsburgh geographic area. 1. These employees are responsible for marketing and merchandising alcoholic beverages to the more than six-hundred (600) PLCB state stores, as well as Pennsylvania’s 14,500 on-premise accounts. 2. The PLCB is Southern’s only off-premise customer. 29. Brad M. Waxman (“Waxman”) is the Executive Vice President, General Manager of Southern Wine & Spirits of Pennsylvania. a. In January 1999, Waxman initiated his employment with Southern. 1. In 2002, Waxman was named Executive Vice President/General Sales Manager of Southern’s Pennsylvania operations. b. Mark Sweeney is the Vice President and General Manager of North American Wine and Spirits, a division of Southern Wine and Spirits. 1. Sweeney also makes sales calls to PLCB officials and employees. 2. In 2008, Waxman was promoted to the position of Executive Vice President/General Manager of Southern’s Pennsylvania operations. 30. Southern is a broker and vendor of record for a number of wines and/or spirits sold to the PLCB. a. Waxman serves as a broker for a number of the products before the PLCB. Short, 12-029 Page 10 b. Products for which Southern serves as broker and/or vendor of record account for between approximately 6.43% to 6.85% of PLCB total Cost of Goods Sold (“COGS”) during the last five (5) years. c. A list of Southern’s business with the PLCB is detailed below: Fiscal Year Supplier Name Fiscal Year Percent of COGS Payment SOUTHERN WINE & SPIRITS OF PA 2007-2008 $ 62,051,980.00 6.60% SOUTHERN WINE & SPIRITS OF PA 2008-2009 $ 67,340,276.96 6.64% SOUTHERN WINE & SPIRITS OF PA 2009-2010 $ 72,529,178.51 6.85% SOUTHERN WINE & SPIRITS OF PA 2010-2011 $ 69,482,807.78 6.43% SOUTHERN WINE & SPIRITS OF PA 2011-2012 $ 77,641,059.78 6.78% * The spreadsheet above is only able to detail approximately 86% of PLCB inventory, as the remaining percentage is made up of small purchases. 31. Capital Wine & Spirits, LLC (“Capital”) claims to be one of the largest wholesalers/brokers of wine and spirits in Pennsylvania. a. Capital is a member of the Charmer Sunbelt Group, a nationwide distributor of wine, spirits, beer, and other beverages. b. The Charmer Sunbelt Group is a collection of privately held companies and operates distributor/brokerage houses in no less than fifteen (15) states, including Pennsylvania. c. Capital employs more than two-hundred (200) employees and reports to sell in excess of four million cases of wine and spirits throughout the Commonwealth. d. The reported four million cases of wine/spirit sales include sales to the PLCB. 32. Capital is a broker and vendor/vendor of record for a number of wines and/or spirits sold to the PLCB. a. Products brokered by Capital account for a total of between approximately 19.11% to 22.03% of PLCB total Cost of Goods Sold during the last five (5) years. b. A list of Capital’s business with the PLCB is detailed below: Fiscal Year Supplier Name Fiscal Year Percent of COGS Payment 1 BACARDI USA INC. 2007-2008 $ 65,399,563.92 6.96% 1 BROWN FORMAN 2007-2008 $ 50,057,434.25 5.33% REMY COINTREAU USA INC. 1 2007-2008 $ 8,306,486.83 0.88% CAPITAL WINE & SPIRITS 2007-2008 $ 40,178,158.61 4.28% Short, 12-029 Page 11 2 WHITE ROCK DISTILLERIES 2007-2008 $ 18,931,222.63 2.01% BANFI PRODUCTS CORPORATION 2 2007-2008 $ 12,874,577.00 1.37% SUTTER HOME WINERY 2 2007-2008 $ 11,305,649.31 1.20% Fiscal Year Supplier Name Fiscal Year Percent of COGS Payment BACARDI USA INC. 2008-2009 $ 62,721,532.75 6.19% BROWN FORMAN 2008-2009 $ 46,707,019.90 4.61% REMY COINTREAU USA INC. 2008-2009 $ 7,032,821.38 0.69% CAPITAL WINE & SPIRITS 2008-2009 $ 37,819,784.20 3.73% WHITE ROCK DISTILLERIES 2008-2009 $ 15,925,879.32 1.57% BANFI PRODUCTS CORPORATION 2008-2009 $ 14,124,707.82 1.39% SUTTER HOME WINERY 2008-2009 $ 14,381,248.01 1.42% Fiscal Year Supplier Name Fiscal Year Percent of COGS Payment BACARDI USA INC. 2009-2010 $ 67,263,103.22 6.35% BROWN FORMAN 2009-2010 $ 50,613,490.40 4.78% REMY COINTREAU USA INC. 2009-2010 $ 7,911,959.34 0.75% CAPITAL WINE & SPIRITS 2009-2010 $ 38,317,957.26 3.62% WHITE ROCK DISTILLERIES 2009-2010 $ 21,435,297.82 2.02% BANFI PRODUCTS CORPORATION 2009-2010 $ 16,606,904.35 1.57% SUTTER HOME WINERY 2009-2010 $ 15,255,869.66 1.44% Fiscal Year Supplier Name Fiscal Year Percent of COGS Payment Short, 12-029 Page 12 BACARDI USA INC. 2010-2011 $ 61,685,074.98 5.71% BROWN FORMAN 2010-2011 $ 47,563,997.04 4.40% REMY COINTREAU USA INC. 2010-2011 $ 7,305,972.37 0.68% CAPITAL WINE & SPIRITS 2010-2011 $ 39,033,604.40 3.61% WHITE ROCK DISTILLERIES 2010-2011 $ 19,421,875.69 1.80% BANFI PRODUCTS CORPORATION 2010-2011 $ 16,521,319.81 1.53% SUTTER HOME WINERY 2010-2011 $ 14,909,694.70 1.38% Fiscal Year Supplier Name Fiscal Year Percent of COGS Payment BACARDI USA INC. 2011-2012 $ 60,866,013.23 5.31% BROWN FORMAN 2011-2012 $ 48,337,155.48 4.22% REMY COINTREAU USA INC. 2011-2012 $ 9,765,846.17 0.85% CAPITAL WINE & SPIRITS 2011-2012 $ 42,274,675.76 3.69% WHITE ROCK DISTILLERIES 2011-2012 $ 25,582,535.77 2.23% BANFI PRODUCTS CORPORATION 2011-2012 $ 16,385,912.23 1.43% SUTTER HOME WINERY 2011-2012 $ 18,394,480.35 1.61% 1. Members of TheAlliance 2 Manufacturers represented by Capital in Pennsylvania * The spreadsheet above is only able to detail approximately 86% of PLCB inventory, as the remaining percentage is made up of small purchases. 33. In an effort to condense marketing efforts and maximize sales and product exposure, several manufacturers/producers of wines, spirits and malt/brewed beverages have formed partnerships for marketing purposes; one such partnership is “The Alliance.” a. The Alliance is comprised of wine/spirit suppliers: Bacardi USA (“Bacardi”); Brown Forman; and Remy Cointreau (“Remy”). Short, 12-029 Page 13 b. The Alliance was established by Bacardi, Brown Forman, and Remy to “re- shape” their route to market in order to provide greater service and access to the consumer. c. The goal of The Alliance was/is to create a way for Bacardi, Brown Forman, and Remy to leverage their scale and profitability in order to secure dedicated resources. 34. The Alliance is a United States program and is focused on distribution and a combined portfolio in an effort to compete with other suppliers. a. The Alliance covers twenty-six (26) markets, which include the state of Pennsylvania. b. Within Pennsylvania, The Alliance is represented by Capital Wine & Spirits/Charmer Sunbelt Group. 35. Bacardi was founded in 1862, with Bacardi USA being established in New York City in 1944. Bacardi USA relocated to Miami in 1964. a. Bacardi reports worldwide sales of $5.5 billion; Bacardi fiscal year recap for Pennsylvania included a PLCB Rolling 12 Market Profit of $113,127,361. b. The total Bacardi portfolio cases sold in Pennsylvania was reported at 642,870. c. Bacardi’s total Pennsylvania marketing budget was $5.4 million. 36. Brown Forman was founded in 1870 and is one of the largest American owned wine and spirit companies in the world, and is among the top ten largest global spirits companies. a. Brown Forman reported $3.2 billion annual net spirit and wine sales for Fiscal Year 2009. b. Brown Forman reported PLCB Rolling 12 Market Profit of $77,066,137. c. The total Brown Forman portfolio cases sold in Pennsylvania was 390,415. d. Brown Forman’s total Pennsylvania marketing budget was $2,582,120. 37. Remy is a two-hundred eighty-eight (288) year old company based in Paris, France with global sales reported of over $1 Billion. a. Remy USA is headquartered in New York, and it was established in 1981. b. Remy USA reports to have spent approximately $983,500.00 in SPA support for sales programs during the 2011-2012 fiscal year; and an additional $400,000.00 in marketing support for the Pennsylvania marketplace annually. c. Total estimated expenditures for marketing in Pennsylvania total $1,383,500.00 or approximately $23.00 on every case of beverage sold in the State of Pennsylvania. 38. Capital Wine and Spirits/Alliance Brands representatives interacting most often with PLCB officials include the following: Short, 12-029 Page 14  Mark Littles, President, Capital Wine and Spirits  Christina Desmond, Director of Marketing and Business Analytics  Rob Sirota, General Manager, Alliance Division of Capital Wine and Spirits  Kevin McCarty, Vice-President of Compliance and Administration of Capital Wine and Spirits  Tim Kilcullen, Vice-President of Wine and Education, Capital Wine and Spirits  David Franke (Brown-Forman). 39. Allied Beverage Group, LLC (“Allied”) was created by the mergers of The Baxter Group, Inc., F&A Distributing Company and The Jaydor Corporation. a. Allied reports to be New Jersey’s largest and most comprehensive wine and spirits distributor and ranks among the ten largest distributors in the United States. b. Allied also operates subsidiary Majestic Wine & Spirits, USA, LLC (“Majestic”), which is a Pennsylvania brokerage and vendor/vendor of record for products sold to the PLCB. 1. As a broker/vendor, Majestic provides merchandising and promotional services for several major suppliers of alcoholic beverages. 2. Majestic reports to be the PLCB’s highest volume distributor of “special liquor orders.” c. Majestic is the vendor which provides the PLCB’s private label wines. 1. By March 2011, the PLCB private label wines, TableLeaf, were being sold in state stores. 2. Short was primarily responsible for negotiating with vendors and ultimately recommended Papariello’s company, Majestic, be awarded the contract. 3. Bronco Wine Company, a Majestic supplier, bottled the TableLeaf brand. 40. As a broker and vendor/vendor of record for products sold to the PLCB, Allied’s and/or Majestic’s sales account for between approximately 1.51% to 2.18% of PLCB total Cost of Goods Sold during the last five (5) years. b. A list of Majestic’s business with the PLCB is detailed below: Fiscal Year Supplier Name Fiscal Year Percent of COGS Payment MAJESTIC WINE AND SPIRITS 2007-2008 $15,623,508.91 1.66% MAJESTIC WINE AND SPIRITS 2008-2009 $15,267,768.10 1.51% 2009-2010 $16,454,785.45 1.55% MAJESTIC WINE AND SPIRITS 2010-2011 $16,973,020.65 1.57% MAJESTIC WINE AND SPIRITS 2011-2012 $25,000,032.79 2.18% MAJESTIC WINE AND SPIRITS Short, 12-029 Page 15 41. Majestic’s primary contacts with PLCB officials and employees are Chris Papariello and Edward Murray. a. Papariello is Executive Vice-President of Majestic. b. Murray serves as Majestic’s Eastern Regional Manager. 42. Executives and marketing representatives from vendors supplying products to the PLCB would meet with PLCB employees to market products. a. The market strategies of these representatives included offering gifts, transportation, lodging, and hospitality to PLCB employees, including Short. b. These items included golf events, meals, alcoholic beverages, and gift cards. c. None of the items could be directly tied to product listing/delistings. d. Items of value were provided to PLCB officials who were in decision making positions regarding product selection and placement. 43. Representatives of the numerous PLCB vendors frequently contacted Short and his subordinates (Schwenk, Pollack and Fringer) to market new and existing products. a. Some of these products were subject to the listing/delisting process. b. Other products were luxury products which are not subject to listing/delisting procedures. 44. As part of the marketing process, vendor representatives offered and provided Short with items of value, including but not limited to the following:  Alcohol  Meals, including lunches and dinners  Golf outings  Out of state golf trips  Gift cards/certificates  Tickets to entertainment/sporting events  Sports memorabilia 45. The vendors and representatives who most frequently provided Short with items of value included:  Cristina Desmond  Mark Littles  Chris Papariello  Edward Murray  Brad Waxman  Tricia Brungo  Paul Coulombe  Paul Doran THE FOLLOWING FINDINGS RELATE TO SHORT’S RECEIPT OF GIFTS AND HOSPITALITY THAT HE WOULD NOT HAVE BEEN IN A POSITION TO RECEIVE ABSENT HIS EMPLOYMENT WITH THE PLCB. Short, 12-029 Page 16 46. Robert Sirota is employed as the General Manager, Alliance Division, for Capital Wine and Spirits. a. In his position, Sirota serves as the direct liaison between the Alliance suppliers and Capital Wine and Spirits. b. Sirota reports directly to Mark Littles, President, Capital Wine and Spirits. 47. In or about 2009, the concept for an Alliance Golf Open was conceived as a collaborative effort between Sirota and members of the Alliance. a. The golf outing was organized as a means by which Capital Wine and Spirits and the Alliance suppliers could strengthen their relationship with the PLCB and to allow various Alliance senior management officials to have “face time” with PLCB officials. 48. Sirota served as the Capital Wine and Spirits lead/point of contact in relation to organization of the event. a. Although Sirota served as the event lead, PLCB individuals to be invited to the event were determined as a result of collaboration between Sirota, Littles, Christine Desmond (Director of Marketing and Business Analytics, Capital Wine and Spirits), and/or the Alliance suppliers. b. Actual invitations to PLCB officials for the event were made by Littles and/or Desmond. 49. Alliance Golf Open events were held in 2009, 2010, and 2011. a. Sirota served as the Capital Wine and Spirits lead for the event organization each year. b. Invitees to the event were determined in the same manner for each year. c. Actual invitations for the events were presented by the same individuals for each year. 50. An Alliance Golf Open was initially planned for the 2012 calendar year but ultimately was not held. a. The 2012 Alliance Golf Open was cancelled as a result of the Commission investigation in this matter and published media accounts of the receipt of items of value by PLCB employees from PLCB vendors. b. The decision to cancel the event was made jointly among Littles, Desmond, and Sirota. 51. The 2009, 2010, and 2011 Alliance Opens were one-day events consisting of morning travel (if necessary), a warm up session, lunch, a round of golf (eighteen holes), and dinner in the evening. a. Sirota developed the itinerary for each respective Alliance Open. b. No specific time slot was designated for any specific business presentation by Capital Wine and Spirits and/or the Alliance suppliers. c. No specific business presentations were made by Capital Wine and Spirits Short, 12-029 Page 17 and/or the Alliance suppliers at the events. d. The event was social in nature. 52. The costs associated with the 2009, 2010, and 2011 Alliance Golf Open were borne by the Alliance suppliers and Capital Wine and Spirits. a. The total costs of the events were divided into four equal amounts to be paid by Capital Wine and Spirits, Bacardi, Brown Forman, and Remy. 53. The 2009 Alliance Golf Open was held at the West Shore County Club, 100 Brentwater Road, Camp Hill, PA 17011, on Wednesday, August 19, 2009. a. The roster for the 2009 Alliance Open identified the individuals participating as shown below: Group No. Player Affiliation #1 Joe Conti PLCB, Chief Executive Officer Mike Remitz Remy Cointreau USA, VP/Division Manager Bart Pio Capital Wines & Spirits, Chairman WS Member* - *WS=West Shore member to play as host member not identified Group No. Player Affiliation #2 Matt Symanski Scott Pickford Bacardi USA Kevin McCarty Capital Wine & Spirits: The Charmer Sunbelt Group, VP Compliance & Administration WS Member* - *WS=West Shore member to play as host member not identified Group No. Player Affiliation #3 Jim Short PLCB, Director of Marketing and Merchandising Dave Franke Brown-Forman, State Manager PA/DE Al Bruni Bacardi USA Mark Littles Capital Wine & Spirits: The Charmer Sunbelt Group, President Group No. Player Affiliation #4 Matt Schwenk PLCB, Director of Product Selection Brad Moser Remy Cointreau USA, Regional Sales Manager Rob Sirota Capital Wine & Spirits: The Charmer Sunbelt Group, General Manager of the Alliance Division Christina Godfrey Capital Wine & Spirits: The Charmer Sunbelt (Desmond) Group, Director of Marketing and Business Analytics b. The roster identified the start time of the event as 10:30 a.m. 1. An actual event itinerary was not provided by Capital. 54. In addition to Short, PLCB attendees were CEO Joe Conti and Matthew Schwenk. a. Matthew Schwenk is a subordinate employee to Short. 1. Schwenk’s position in 2009 was PLCB Chief of Category Management. b. August 19, 2009, was a regularly scheduled workday for Commonwealth of Pennsylvania employees. c. Although the event was social in nature, no PLCB employee utilized leave of Short, 12-029 Page 18 any kind (annual or personal) in association with his participation at the 2009 Alliance Open. d. Neither Short’s immediate supervisor, CEO Joe Conti, nor any Board Member required Short to use annual or personal leave for participating in the event. e. Short’s salary in August 2009 equated to approximately $55.29 per hour based on a thirty-seven and one-half hour work week (7.5 hours per day). 55. Sirota received a banquet invoice from the West Shore Country Club for the August 19, 2009, Alliance Golf Open in the amount of $1,324.06. a. The invoice did not document a date or invoice number. b. The invoice documented the client/organization as Capital Wine and Spirits. c. The invoice documented a breakdown of golf charges in the amount of $1,136.80 and Food and Beverage charges in the amount of $187.26 ($1,324.06 total). d. The cost of the event to Capital Wine and Spirits and each Alliance supplier was approximately $331.00 ($1,324.00 ÷ 4). 56. Additional purchases totaling approximately $147.17 were made by Sirota and Desmond for refreshments in association with the 2009 Alliance Open. a. Sirota’s expense report documented a purchase in the amount of $67.17 for the golf outing. b. Desmond’s expense report documented a purchase of $80.00 for the golf outing. 57. Expenses associated with the 2009 Alliance Golf Open totaled at least $1,471.23. a. The value of the golf outing based on a maximum of sixteen individuals in attendance totaled approximately $105.09 per individual. 1. Greens fees costs for the two (2) WSCC members are not included as they were not assessed fees. 58. Short realized a private pecuniary gain of $519.77 in association with his participation at the 2009 Alliance Open based on his pro rata share of the hospitality expenses incurred by Capital Wine and Spirits and the Alliance and his failure to utilize leave from employment to attend the event. a. Neither Short nor any of the other PLCB representatives in attendance offered to reimburse either Capital Wine and Spirits or any of the Alliance suppliers for the hospitality they provided. 1. All expenses associated with the event including cocktails and dinner after the event were paid for by Capital Wine and Spirits and/or members of the Alliance. 59. The 2010 Alliance Golf Open was held at the River Crest Golf Club, 100 Golf Club Drive, Phoenixville, PA 19460 on July 15, 2010. Short, 12-029 Page 19 a. The event was more inclusive than the 2009 event by providing lunch, cocktails and dinner. b. The roster/itinerary for the 2010 Alliance Open identified the individuals participating as shown below: Group No. Player Affiliation #1 PJ Stapleton PLCB, Board Member/Chairman Joe Davolio Capital Wine & Spirits: The Charmer Sunbelt Group, Executive VP Capability Development Mark Littles Capital Wine & Spirits: The Charmer Sunbelt Group, President Al Bruni Bacardi USA Group No. Player Affiliation #2 Joe Conti PLCB Chief Executive Officer Kevin McCarty Capital Wine & Spirits: The Charmer Sunbelt Group, VP Compliance & Administration Matt Symanski Brown-Forman, Territory Sales Manager Rob Sirota Capital Wine & Spirits: The Charmer Sunbelt Group, Director of Alliance Brands Group No. Player Affiliation #3 Jim Short PLCB, Director of Marketing Mike Remitz Remy Cointreau USA, VP/Division Manager Bart Pio Capital Wines & Spirits, Chairman Scott Pickford Bacardi USA Group No. Player Affiliation #4 Matt Schwenk PLCB, Director of Product Selection Dave Franke Brown-Forman, State Manager PA/DE Brad Moser Remy Cointreau USA, Regional Sales Manager Cristina Capital Wine & Spirits: The Charmer Sunbelt Group, Director of Desmond Marketing and Business Analytics 1. Although documented on the 2010 Alliance Open roster, Conti did not participate in the event. 2. Fifteen (15) individuals participated in the 2010 Alliance Open, including three (3) PLCB officials/employees. c. The itinerary for the event documented the following activities: 11:00 a.m. Warm up / Range-River Crest Golf Club 12:00 p.m. Lunch-Greenside Grille 1:00 p.m. First Group Tee Time 1:10 p.m. Second Group Tee Time 1:20 p.m. Third Group Tee Time 1:30 p.m. Fourth Group Tee Time th 5:00 p.m. 19 Hole-Cocktails at the Club House Bar 6:00 p.m. Hotel Check In-Hotel Fiesole Skippack, PA 7:00 p.m. Cocktails at Basta Pasta in Skippack 7:45 p.m. Dinner at Parc Bistro in Skippack d. The itinerary for the event documented hotel accommodations available at Hotel Fiesole, 4046 Skippack Pike, Skippack Village, PA 19474. 60. PLCB attendees at the event included Short, Schwenk, and P.J. Stapleton (PLCB Chairman at that time.) a. July 15, 2010, was a regularly scheduled workday for Commonwealth of Pennsylvania employees. Short, 12-029 Page 20 b. Although the event was social in nature, no PLCB employee utilized leave of any kind (annual or personal) in association with his participation at the 2010 Alliance Open. c. Neither Short’s immediate supervisor, CEO Joe Conti, nor any Board Member required Short to use annual or personal leave for participating in the event. d. Short’s salary in July 2010 equated to approximately $55.29 per hour based on a thirty-seven and one-half hour work week (7.5 hours per day). 61. Short submitted Commonwealth Travel Expense Voucher (TEV) JS071610 dated July 20, 2010, in the amount of $330.50 for travel and overnight expenses to Philadelphia, Pennsylvania, on July 15, 2010, and Harrisburg on July 16, 2010. a. TEV No. JS071610 listed Short departing from Harrisburg, Pennsylvania, on July 15, 2010, at 8:30 a.m. and returning from Philadelphia, Pennsylvania, on July 16, 2010, at 5:00 p.m. b. Documentation submitted with TEV No. JS071610 documented Short incurring lodging fees at the Hotel Fiesole in Skippack, Pennsylvania, for the night of July 15, 2010, in the amount of $119.00. 1. Short’s receipt for the Hotel Fiesole documented a check in time of approximately 6:43 p.m. c. Short claimed subsistence expenses during travel on July 15, 2010, in the amount of $61.00 and July 16, 2010, in the amount of $8.00 for a total of $69.00 on TEV No. JS071610. d. Short claimed $142.50 in mileage reimbursement expenses on TEV No. JS071610 for use of his personal vehicle for travel from Harrisburg, Pennsylvania, to Philadelphia, Pennsylvania, and back on July 15, 2010, and July 16, 2010, respectively. 1. Short claimed a total of two hundred eighty-five business miles traveled (285 x $0.50/mile = $142.50). e. The purpose of travel documented on TEV No. JS071610 [was] stated: 1. July 15, 2010: “Traveled to Philadelphia for store visits and discuss merchandising strategies for prototype store in New Hope.” 2. July 16, 2010: “Holiday sales presentations and yearly reviews with Capital Wine and Spirits and Jim Beam Global.” 3. “Joe Conti gave permission for per. Vehicle.” f. TEV No. JS071610 was approved by Conti on July 21, 2010. 1. Conti was aware that Short had traveled to, attended, and participated in the 2010 Alliance Open at the time that he approved Short’s TEV. 62. The TEV submitted by Short resulted in Short’s receipt of $330.50 in Commonwealth funds for non-business expenses incurred on July 15, 2010, and July 16, 2010. Short, 12-029 Page 21 a. The majority of Short’s regularly scheduled work day for July 15, 2010, was spent traveling to, attending, and participating in the 2010 Alliance Open. th b. Short claimed meal expenses of $61.00 on July 15 even though lunch and dinner were provided by Capital/Alliance. c. The 2010 Alliance Open was a social event arranged by Capital Wine and Spirits and the Alliance. 1. Activities taking place at the 2010 Alliance Open included lunch, eighteen holes of golf, cocktails at two separate locations, and dinner. d. No evidence is available of any holiday presentations made by any Capital representatives as asserted by Short on his TEV. 63. Records of Capital Wine and Spirits in reference to the July 15, 2010, Alliance Golf Open documented expenses incurred in the approximate amount of $7,363.00. a. The document memorializing the cost of the event was updated on July 16, 2010. b. The invoice documented the expense breakdown as: Description Costs Food & Beverage $4,263.00 Golf $1,280.00 Golf Swag Bags $1,600.00 Forecaddies $220.00 Total $7,363.00 c. The cost of the event to Capital Wine and Spirits and each Alliance supplier was approximately $1,840.75 ($7,363.00 ÷ 4). 64. Documented expenses associated with the 2010 Alliance Golf Open totaled a minimum of approximately $7,363.00. a. The value of the golf outing based on a maximum of fifteen (15) individuals in attendance totaled approximately $490.87 per individual. 65. Short realized a private pecuniary gain of $1,236.05 from his participation at the 2010 Alliance Open based on his pro rata share of the hospitality expenses incurred by Capital Wine and Spirits and the Alliance, when he claimed and received reimbursement for business expenses of $330.50 based on an incorrect description of the event he attended, and when he failed to utilize leave from employment to attend the event. a. Neither Short nor any of the remaining PLCB representatives in attendance at the event offered to pay either Capital Wine and Spirits or any of the Alliance suppliers for any gifts and/or hospitality provided in association with the 2010 Alliance Open. 1. All expenses associated with the event including cocktails and dinner after the event were paid for by Capital Wine and Spirits and/or members of the Alliance. b. Expenses incurred by Short were not business related in that: Short, 12-029 Page 22 1. Short claimed $61.00 in subsistence expenses for July 15, 2010, although Short was provided subsistence in the form of lunch and dinner on July 15, 2010, via attendance at the 2010 Alliance Open; 2. Short incurred lodging expenses on July 15, 2010, in the amount of $119.00 and subsistence expenses on July 16, 2010, in the amount of $8.00 as a result of his attendance at the 2010 Alliance Open, which was a social function. 3. Short claimed and received mileage reimbursement in the amount of $142.50 for business use of his personal vehicle for travel to and from the 2010 Alliance Open, which was a social function. 66. The 2011 Alliance Golf Open was held at the Philadelphia Country Club, 1601 Spring Mill Road, Gladwyne, PA 19035 on July 14, 2011. a. The roster/itinerary for the 2011 Alliance Open identified the individuals participating as shown below: Group No. Player Affiliation #1 PJ Stapleton PLCB, Board Member/Chairman Mike Leibick Mark Brown-Forman, Vice President/Director Central States & Satterthwaite Canada Mark Littles Capital Wine & Spirits: The Charmer Sunbelt Group, President Group No. Player Affiliation #2 Joe Conti PLCB, Chief Executive Officer Mike Remitz Remy Cointreau USA, VP/Division Manager Todd Pemble Bacardi USA, Regional Director Matt Symanski Brown-Forman, Territory Sales Manager Group No. Player Affiliation #3 Jim Short PLCB, Director of Marketing Guillermo Bacardi, V.P./Managing Director - East Commercial Business Rodriguez Unit John Higgins Wirtz Beverage Nevada, Sales Manager Rob Sirota Capital Wine & Spirits: The Charmer Sunbelt Group, Director of Alliance Brands Group No. Player Affiliation #4 Matt Schwenk PLCB, Director of Product Selection Scott Pickford Bacardi USA Cristina Capital Wine & Spirits: The Charmer Sunbelt Group, Director Desmond of Marketing and Business Analytics Brad Moser Remy Cointreau USA, Regional Sales Manager Group No. Player Affiliation #5 Doug Hitz PLCB, Bureau Director Kevin McCarty Capital Wine & Spirits: The Charmer Sunbelt Group, VP Compliance & Administration Dave Franke Brown-Forman, State Manager PA/DE Rich Byrne Remy Cointreau, Field Marketing Director 1. Twenty (20) individuals participated in the 2011 Alliance Open, including five (5) PLCB representatives. b. The itinerary for the event documented the following activities: 11:00 a.m. Warm up/Range-PCC 11:30 a.m. Lunch-The Terrace 12:40 p.m. First Group Tee Time 12:50 p.m. Second Group Tee Time Short, 12-029 Page 23 1:00 p.m. Third Group Tee Time 1:10 p.m. Fourth Group Tee Time 1:20 p.m. Fifth Group Tee Time 5:00 p.m.-6:30 p.m. Cocktails on the Terrace 5:00 p.m.-6:30 p.m. Hotel Check In-Conshohocken Marriot 7:00 p.m. Dinner at Philadelphia Country Club on the Terrace c. The itinerary for the event documented hotel accommodations available at the Marriott, 111 Crawford Ave, West Conshohocken, PA 19428. 67. PLCB attendees at the event included Stapleton, Conti, Short, Schwenk, and Doug Hitz, PLCB Bureau Director for Planning and Procurement. a. July 14, 2011, was a regularly scheduled workday for Commonwealth of Pennsylvania employees. b. Although the event was social in nature, no PLCB employee utilized leave of any kind (annual or personal) in association with his participation at the 2011 Alliance Open. c. Neither Short’s immediate supervisor, CEO Joe Conti, nor any Board Member required Short to use annual or personal leave for participating in the event. d. Short’s salary in July 2011 equated to approximately $55.84 per hour based on a thirty-seven and one-half hour work week (7.5 hours per day). 68. Short submitted Commonwealth Travel Expense Voucher (TEV) JS071511 dated July 18, 2011, in the amount of $185.20 for travel and overnight expenses to Philadelphia, Pennsylvania, on July 14, 2011, returning to Harrisburg, Pennsylvania, on July 15, 2011. a. TEV No. JS071511 listed Short departing from Harrisburg, Pennsylvania, on July 14, 2011, at 8:30 a.m. and returning from Philadelphia, Pennsylvania, on July 15, 2011, at 11:00 a.m. b. Documentation submitted with TEV No. JS071511 documented Short incurring lodging fees at the Marriott in West Conshohocken, Pennsylvania, for the night of July 14, 2011, in the amount of $124.20. 1. Short’s hotel folio for the Marriott documented a check in time of approximately 10:15 a.m. c. Short claimed subsistence expenses during travel on July 14, 2011, in the amount of $61.00 TEV No. JS071511. d. Short claimed and/or received no mileage reimbursement related to his travel on July 14, 2011, and July 15, 2011. 1. Short did not utilize his personal vehicle for travel on July 14, 2011, and July 15, 2011. 2. Short rode with Hitz in Hitz’s personal vehicle in relation to travel on July 14, 2011, and July 15, 2011. e. The purpose of travel documented on TEV No. JS071511 [was] stated: Short, 12-029 Page 24 1. July 14, 2011: “James Short, Director of marketing and Merchandising traveled in a vehicle with Doug Hicks [sic] to Philadelphia for an Alliance business review, fiscal year planning and holiday promotions meeting.” 2. July 15, 2011: “James provided his Commonwealth Tax Exempt form to the Marriott staff and it was not accepted (they would not remove the tax from his bill). He informed them of the protocol and they still would not remove the tax from his bill. James did receive a state rate for his room.” f. TEV No. JS071511 was approved by Conti on July 18, 2011. 1. Conti was aware that Short had traveled to, attended, and participated in the 2011 Alliance Open at the time that he approved Short’s TEV. 69. The TEV submitted by Short resulted in Short’s receipt of $185.20 in Commonwealth funds for expenses incurred on July 14, 2011. a. Short’s regularly scheduled work day for July 14, 2011, was spent traveling to, attending, and participating in the 2011 Alliance Open. b. The 2011 Alliance Open was a social event arranged by Capital Wine and Spirits and the Alliance. 1. Activities taking place at the 2011 Alliance Open included lunch, eighteen holes of golf, cocktails, and dinner. 70. Capital Wine and Spirits records in reference to the July 14, 2011, Alliance Golf Open documented expenses incurred at the Philadelphia Country Club in the approximate amount of $9,487.96. a. The banquet invoice generated by the Philadelphia Country Club (Booking No. 017299) documented a billing date of July 14, 2011. b. The invoice documented the expense breakdown as: Recap & Total Costs Services $2,691.55 Resources $6,037.00 Service Chg $592.14 Sales Tax $167.27 Total $9,487.96 1. Included within the event cost were golf hats, shirts, and golf gift bags with miscellaneous items for the participants. c. The cost of the event to Capital Wine and Spirits and each Alliance supplier was approximately $2,371.99 ($9,487.96 ÷ 4). 71. Expenses associated with the 2011 Alliance Golf Open totaled a minimum of approximately $9,487.96. a. The value of the golf outing based on a maximum of twenty (20) individuals in attendance totaled approximately $474.40 per individual. 72. Short realized a private pecuniary gain of $1,078.40 in association with his Short, 12-029 Page 25 participation at the 2011 Alliance Open based on his pro rata share of the hospitality expenses incurred by Capital Wine and Spirits and the Alliance, and reimbursement for expenses in the amount of $185.20, and when he failed to utilize leave from employment to attend the event. a. Neither Short nor any of the remaining PLCB representatives in attendance at the event offered to pay either Capital Wine and Spirits or any of the Alliance suppliers for any gifts and/or hospitality provided in association with the 2011 Alliance Open. 1. All expenses associated with the event including cocktails and dinner after the event as well as golf shirts, hats, and gift bags were paid for by Capital Wine and Spirits and/or members of the Alliance. b. Expenses incurred by Short were not related to PLCB business in that: 1. Short claimed $61.00 in subsistence expenses for July 14, 2011, although Short was provided subsistence in the form of lunch and dinner on July 14, 2011, via attendance at the 2011 Alliance Open; 2. Short incurred lodging expenses on July 14, 2011, in the amount of $124.20 as a result of his attendance at the 2011 Alliance Open which was a social function. THE FOLLOWING FINDINGS RELATE TO SHORT’S RECEIPT OF GOLF TRIPS THAT HE WOULD NOT HAVE BEEN IN A POSITION TO RECEIVE ABSENT HIS EMPLOYMENT WITH THE PLCB. 73. Christopher Papariello is currently employed as the Executive Vice-President of Majestic. a. Majestic is owned by Allied Beverage Group. b. Majestic provides merchandising and promotional services as the broker representative of several major suppliers including W.J. Deutsch and Sons (“W.J. Deutsch”). 1. W.J. Deutsch was founded in 1981 to market wine and spirits produced from major wine and spirits regions of the world. 74. Beau Clark is employed with W. J. Deutsch as a Pennsylvania District Manager. a. As the Pennsylvania District Manager for W. J. Deutsch, Clark was responsible for development of the Pennsylvania market for both on and off premise sales. 75. In 2010, W.J. Deutsch organized a national trip to Pebble Beach, California, for various company representatives, company brokers, etc. a. W.J. Deutsch routinely schedules such trips on an annual basis. b. Papariello was scheduled to participate in the trip as a representative of Majestic. 76. Prior to departure for California, Clark contacted Papariello via telephone and inquired as to Papariello’s interest in traveling to Pebble Beach to golf prior to Papariello’s scheduled departure date. Short, 12-029 Page 26 a. Clark suggested that PLCB employees James Short and Matthew Schwenk could accompany him and Papariello on the golf trip. 1. Schwenk is a subordinate employee of Short and is the PLCB’s Director of Product Placement. b. Clark informed Papariello that W.J. Deutsch would cover the expenses associated with the trip. 77. Papariello subsequently contacted Short via telephone and invited Short on the trip to Pebble Beach with him and Clark. a. Schwenk received his invitation for the trip directly from Clark. b. Papariello had conversations with Schwenk regarding the trip after Schwenk was initially invited by Clark. 78. At no time during conversations regarding the trip with Short and/or Schwenk did either Short and/or Schwenk question Papariello as to the cost of the trip or whom they needed to submit payment to regarding expenses associated with the trip. a. Both Short and Schwenk were informed that W.J. Deutsch had budgeted funds to cover the costs associated with the trip. b. Costs associated with the trip included airfare, lodging, greens fees, subsistence, and entertainment. 79. The dates established for the golf trip to Pebble Beach called for Short and Schwenk to arrive in California on August 26, 2010, and depart California on August 28, 2010. a. August 26, 2010 (a Thursday) and August 27, 2010 (a Friday) were regularly scheduled work days for Commonwealth employees. b. Short utilized a total of fifteen (15) hours of annual leave to account for his absence from work on August 26, 2010, and August 27, 2010. 80. Lodging accommodations as well as golf reservations for the trip were made by Clark. a. Short, Schwenk, Papariello, and Clark stayed at The Lodge at Pebble Beach located at 1700 17-Mile Drive, Pebble Beach, California on the nights of August 26, 2010, and August 27, 2010. b. Short, Schwenk, Papariello, and Clark played two (2) rounds of golf at Pebble Beach Golf Links and one round of golf at Spy Glass Golf Course during the three day trip. c. The trip was primarily a social event. 1. The trip was submitted as a business expense by Clark and Papariello and was considered a marketing event. 81. Neither Short nor Schwenk made any payment to either Papariello or Clark for expenses associated with the three day golf trip to Pebble Beach, California, either prior to, during, or after the trip. Short, 12-029 Page 27 a. The initial minimum cost for the trip of at least $6,497.46 posted to and was paid via Papariello’s corporate American Express Credit Card. 1. Expenses incurred by Majestic representatives via use of corporate credit cards are paid directly by the company. b. Approximately $6,000.00 of the minimum $6,497.46 expense for the golf trip was ultimately expensed back to W.J. Deutsch by Majestic. 1. W.J. Deutsch ultimately provided Document Number 76845 dated August 31, 2011, to Majestic documenting the issuance of a credit to Majestic in the amount of $6,000.00 for expenses associated with the trip. 82. Expenses for the golf trip totaling a minimum of approximately $6,497.46 posted to Papariello’s corporate American Express Credit Card on August 28, 2010, and August 29, 2010, regarding all accommodations/activities organized through The Lodge at Pebble Beach. a. The value of the trip per individual was approximately $1,624.37 not including airfare (6,497.46 ÷ 4). 83. Current airfare for one round-trip ticket from Philadelphia International Airport to San Jose International Airport with one stop is approximately $347.50. a. The cost of round-trip airfare from Philadelphia International Airport to San Jose International Airport in August 2010 could not be determined. b. Neither Papariello nor his employer provided records of airfare expenses for Short. 84. Short realized a private pecuniary gain of at least $1,971.87 in association with his acceptance of an all-expense paid three (3) day golf trip to Pebble Beach provided by Majestic/W. J. Deutsch, a vendor doing business with the PLCB. a. Neither Short nor any other PLCB representative participating in the trip offered to pay either Majestic Wine and Spirits or W.J. Deutsch for the travel, lodging, and/or hospitality as related to the three (3) day golf trip to Pebble Beach, California. b. All expenses associated with the event including airfare, lodging, greens fees, subsistence, and entertainment were paid for by Majestic Wine and Spirits and/or W.J. Deutsch. THE FOLLOWING FINDINGS RELATE TO GOLF OUTINGS FOR SHORT ARRANGED BY WHITE ROCK DISTILLERIES REPRESENTATIVES. 85. Tricia Brungo and Paul Doran are currently employed by Western Spirits Beverage Company (“Western Spirits”) in the positions of Controlled States Manager and Regional Sales Manager respectively. a. Capital Wine and Spirits serves as the distributor/vendor for Western Spirits in the Commonwealth of Pennsylvania. Short, 12-029 Page 28 86. Prior to their employment with Western Spirits, Brungo and Doran were employed by White Rock Distilleries (“White Rock”) in the positions of Control State Manager and Regional Sales Manager respectively. a. Capital Wine and Spirits served as the distributor/vendor for White Rock in the Commonwealth of Pennsylvania. b. In 2010, White Rock was marketing products to the PLCB including Three Olives vodka. 1. Brungo and Doran marketed products to PLCB officials including Short. 87. White Rock is not currently operational. a. White Rock sold the rights to all of its brands and ceased operations as of June 1, 2012. b. Paul Coulombe was/served as the owner/Chief Executive Officer of White Rock prior to its closing. 88. During or about February 2010, Coulombe invited Short and Schwenk (PLCB representatives), Brungo and Doran (White Rock representatives), and Desmond (Capital Wine and Spirits representative) to his residence near Naples, Florida for a weekend golf outing to occur at Bonita Bay East. a. Coulombe entertained his guests as a marketing effort on behalf of White Rock. 1. All expenses incurred by Brungo, Doran, and other White Rock officials were reimbursed by White Rock. b. Short was invited due to his position as Director of Marketing and Merchandising with the PLCB. c. Lodging for Short and Schwenk was provided by Coulombe at his personal residence near Naples, Florida. 89. The dates established for the golf trip to Bonita Bay called for Short, Schwenk, and the remaining invitees to arrive in Florida on Thursday, February 11, 2010, and depart on Saturday, February 13, 2010. a. Thursday, February 11, 2010, and Friday, February 12, 2010, were regularly scheduled work days for Commonwealth employees. 90. Short and Schwenk traveled to Florida on February 11, 2010, and played at least one round of golf (eighteen holes) with Coulombe, Brungo, Doran, and Desmond at Bonita Bay during the three (3) day trip. a. No specific business meetings were held during the three day time frame. 91. Neither Short nor Schwenk paid Coulombe, White Rock, Capital Wine and Spirits, or the remaining individuals present for expenses associated with the golf trip. a. All of Short’s and Schwenk’s expenses associated with the trip (i.e. airfare, greens fees, meals, entertainment, etc.) were paid for by Coulombe and/or White Rock representatives. Short, 12-029 Page 29 92. Total expenses for the golf trip sponsored by Coulombe/White Rock could not be specifically determined due to the lack of records provided by White Rock regarding airfares, meals, greens fees and entertainment paid for on behalf of Short and Schwenk. a. No specific records could be located detailing the costs associated with the trip with the exception of two entries on Brungo’s expense summary report for February 13, 2010. 1. Brungo’s expense report for February 13, 2010, documented cocktails purchased at Trulucks and Verginas for $84.26 and $88.30 respectively for entertainment regarding Short and Schwenk. 93. Current airfare for one round-trip ticket from Philadelphia International Airport to Southwest Florida International Airport (a/k/a Fort Meyers Airport) with one stop is approximately $330.20. a. The cost of round-trip airfare from Philadelphia International Airport to Southwest Florida International Airport in February 2010 could not be determined. 94. Short failed to utilize Commonwealth leave of any type (annual or personal) to account for the fifteen (15) hour absence from his normal working hours on February 11, 2010, and February 12, 2010. a. Short did not inform his superiors that he would be taking the golf trip paid for by a vendor. 95. Short received approximately $829.35 in wages from the Commonwealth for fifteen (15) work hours on February 11, 2010, and February 12, 2010, for which Short was absent and did not submit leave of any type to offset Commonwealth time spent in Florida. a. Short’s salary based on a thirty-seven and one-half (37.5) hour work week equated to $55.29 per hour in February 2010. 96. During or about November 2011, Coulombe again invited Short and Schwenk (PLCB representatives), Brungo and Doran (White Rock representatives), and Desmond (Capital Wine and Spirits representative) to his residence near Naples, Florida for a weekend golf outing to occur at Bonita Bay East. a. Coulombe entertained Short, Schwenk and the others as part of a White Rock marketing effort. 1. All expenses related to the trip were paid by White Rock. 2. PLCB employees were invited to attend due to their respective position in the Marketing and Merchandising division of the PLCB. 97. The dates established for the golf trip to Bonita Bay called for Short, Schwenk, and the remaining invitees to arrive in Florida on Thursday, December 1, 2011, and depart on Saturday, December 3, 2011. a. Thursday, December 1, 2011, and Friday, December 2, 2011, were regularly scheduled work days for Commonwealth employees. Short, 12-029 Page 30 b. Short utilized a total of fifteen (15) hours of annual leave to account for his absence from work on December 1, 2011, and December 2, 2011. 98. Lodging accommodations were made on behalf of Short and Schwenk at the Hyatt Coconut Point Resort and Spa located at 5001 Coconut Road, Bonita Springs, Florida, for the nights of December 1, 2011, and December 2, 2011. a. The cost associated with one night of lodging at the Hyatt Coconut Point Resort and Spa totaled approximately $354.31 including taxes and fees. b. Expenses associated with Short’s two nights of lodging at the Hyatt Coconut Point Resort and Spa totaled approximately $708.62. 99. Short and Schwenk traveled to Florida on December 1, 2011, and followed the scheduled itinerary as detailed below: a. December 1, 2011: 1. Arrival at Fort Meyers on Delta Airlines: 11:36 a.m. 2. Free time to relax at the pool or enjoy spa service: 12:00-4:00 p.m. 3. Meet in lobby for transfer to Coulombe’s house for cocktails: 5:00 p.m. 4. Dinner at Capital Grill: 7:00 p.m. b. December 2, 2011: 1. Meet in lobby to depart for lunch at Bonita Bay East: 10:15 a.m. 2. Golf at Bonita Bay East: 12:30 p.m. 3. Meet in lobby for transfer to dinner: 6:30 p.m. 4. Dinner at Handsome Harry’s: 7:00 p.m. c. December 3, 2011: 1. Depart airport on Delta Airlines: 11:06 a.m. d. No PLCB business meetings were held during the three day time frame. 100. Neither Short nor Schwenk paid Coulombe, White Rock, Capital Wine and Spirits, or the remaining individuals present for expenses associated with the golf trip. a. All of Short’s and Schwenk’s expenses associated with the trip (i.e. airfare, greens fees, meals, entertainment, etc.) were paid for by Coulombe and/or White Rock representatives. 101. Total expenses for the golf trip sponsored by Coulombe/White Rock could not be fully determined, particularly airfare, greens fees and meals and entertainment. a. No specific records were provided by White Rock detailing the costs associated with the trip, with the exception of three entries on Brungo’s expense summary report for December 2, 2011. 1. Brungo’s expense report for December 2, 2011, documented meals purchased at the Hyatt in the amount of $405.73 and drinks purchased at Handsome Harry’s in the amount of $69.80 respectively for entertainment regarding Short, Schwenk, Doran, and Desmond. aa. The approximate cost was $95.10 per person. Short, 12-029 Page 31 2. Brungo’s expense report for the week ending December 2, 2011, documented lodging fees totaling $3,543.12 in regard to lodging in Bonita Springs, Florida. aa. Brungo paid for individual rooms for Short, Schwenk, Desmond, Doran, and herself for two nights ($354.31 x 5 x 2 = $3,543.10). 102. Current airfare for one round-trip ticket from Philadelphia International Airport to Southwest Florida International Airport (a/k/a Fort Meyers Airport) with one stop is approximately $330.20. a. The cost of round-trip airfare from Philadelphia International Airport to Southwest Florida International Airport in February 2010 [sic] could not be determined. b. Although White Rock representatives confirm paying for Short’s airfare, no records were provided. 103. Short did not inform his superiors at the PLCB that he was accepting an all-expense paid golf trip from a PLCB vendor. 104. Short realized a private pecuniary gain of at least $2,327.98 in association with his acceptance of two all-expense paid, three day golf trips to Bonita Bay provided by White Rock Distilleries, a vendor doing business with the PLCB. a. The gain is determined by year as follows: 2010: 2011: Drinks: $34.51 Room: $708.62 Airfare: $330.20 Drinks: $95.10 Wages: $829.35 Airfare: $330.20 _______ _______ Total: $1,194.06 Total: $1,133.92 b. These amounts do not include all meals, greens fees, and other transportation. c. Neither Short nor any other PLCB representative participating in the trips paid White Rock Distilleries or Capital Wine and Spirits for the travel, lodging, and/or hospitality. d All expenses associated with the event including airfare, lodging, greens fees, subsistence, and entertainment were paid for by White Rock Distilleries representatives. THE FOLLOWING FINDINGS RELATE TO SHORT’S GENERAL RECEIPT OF GIFTS AND HOSPITALITY THAT HE WOULD NOT HAVE BEEN IN A POSITION TO RECEIVE ABSENT HIS EMPLOYMENT WITH THE PLCB. 105. Vendor representatives make regular appearances at the PLCB offices located in the Northwest Office Building, Harrisburg, Pennsylvania. a. Primary vendors and/or suppliers who marketed products to the PLCB with whom Short interacted on a regular basis included Capital Wine and Spirits; Southern Wine and Spirits; Majestic Wine and Spirits; White Rock Distilleries; Beam Global Spirits and Wine; and Diageo, among others. Short, 12-029 Page 32 1. Specific representatives Short dealt with from the primary vendors included, in part, the following: aa. Capital Wine and Spirits: 1. Mark Littles, President 2. Christina Desmond, Director of Marketing and Business Analytics bb. Southern Wine and Spirits: 1. Brad Waxman, Executive Vice President, General Manager, Southern Wine and Spirits of PA cc. Majestic Wine and Spirits: 1. Christopher Papariello, Executive Vice President 2. Edward Murray, Eastern Regional Manager dd. White Rock Distilleries: 1. Tricia Brungo, Control States Manager 2. Paul Doran, Regional Sales Manager ee. Beam Global Spirits and Wine: 1. Erin (a/k/a Red) Schiller, Pennsylvania State Account Manager. ff. Diageo: 1. Mark Sweeney, Vice President of Sales 106. Short accepted meals, tickets for entertainment functions, and gifts from PLCB vendors in his position as the PLCB Director of Marketing and Merchandising. a. Short accepted gifts, hospitality, and/or other items of economic value from multiple vendor representatives, including but not limited to, Littles, Desmond, Waxman, Papariello, Murray, Brungo, Doran, Schiller, and Sweeney. 1. Short maintained a close relationship with Desmond and Papariello specifically. b. The two primary vendors from which Short received gifts were Capital Wine and Spirits and Majestic Wine and Spirits. 1. Desmond is employed by Capital Wine and Spirits. 2. Papariello is employed by Majestic Wine and Spirits. Short, 12-029 Page 33 c. But for Short’s employment with the PLCB, Short would not have been in a position to come to know specific PLCB vendor representatives and receive anything of value from them. d. Short was provided items by vendors in his official capacity as part of the marketing of products by vendors. 107. Some of the meals, entertainment and rounds of golf were provided as part of Short’s attendance at annual National Alcohol Beverage Control Association (“NABCA”) conferences. a. NABCA is the national association representing the Control State Systems, those jurisdictions that directly control the distribution and sale of beverage alcohol within their borders. 1. D.C. Area: NABCA serves as an information clearinghouse and as liaison to federal, state and local governments, research and advocacy groups, and other organizations impacting alcohol policy. 2. Management of NABCA is vested in its Board of Directors with one director from each of the voting member control jurisdictions and a Chairman elected by the Board annually. b. NABCA hosts annual conferences at resorts on a rotating basis between Arizona and Florida. c. NABCA is primarily funded by the liquor industry. d. Short is a State Representative to NABCA. 108. Vendors would contact either Short or PLCB Chairman P.J. Stapleton via e-mail prior to the start of a conference to solicit their interest in playing golf and going to dinner. a. All costs associated with golf and dinner are incurred by vendors. b. Short regularly was a guest of a vendor when attending NABCA conferences in 2009, 2010, 2011 and 2012. c. Vendors paying expenses for Short were representatives of Capital Wine and Spirits and Majestic. 109. Short, Matt Schwenk and Steve Pollack, Chief of the PLCB Chairman Select Program, made regular trips to California to purchase wine for the Chairman Select Program. a. Prior to 2010, the trips would include tasting at various wineries in the region. 1. The PLCB employees would be accompanied by PLCB vendor marketing representatives from Capital, Majestic and Southern. b. In or about 2010, the tastings were scheduled for a hotel conference room. 1. Vendors would arrange wineries to make presentations over the course of three (3) days. Short, 12-029 Page 34 c. Following a day of testing, vendor representatives would provide dinner for Short, Schwenk and Pollack. 1. The primary vendor representatives providing dinner were from Capital and Majestic. d. Short accepted dinners and drinks annually between 2010 and 2012 from these vendors during Chairman Select buying excursions. 110. While serving in the position of PLCB Director of Marketing and Merchandising, Short received and accepted meals/hospitality and/or gifts, including during NABCA events and Chairman Select buying trips from Littles and/or Desmond, representatives of Capital Wine and Spirits. a. Littles’ expense summaries document meals/hospitality received and accepted by Short as detailed in the chart below: Activity Date Net Amount Description Additional Text 04/29/2009 $717.25 Grey Goose Tables MAG Restaurant Group Pitts J Short, T Jones, CWS J Short PLCB, T Jones PLCB 05/14/2009 $841.95 NABCA Dinner Capital Grill Phoenix PLCB Jim Short, K McCarty, B Pio, D Pio, C Godfrey 08/13/2009 $1,144.27 Dinner, Drinks with PLCB, Noble Philadelphia CWS PLCB J Short, K Pain [sic], M Schwenk CWS Managers 11/12/2009 $1,335.90 Dinner/Drinks PLCB Union Trust Whiskey Fest Event J Short, K Payne, M Schwenk, A Schwenk, T Fringer, 2 PLCB Event Specialists, 4 CWS Managers 01/10/2010 $143.98 Lunch Embassy Suites Napa PLCB Chairmans Buying Trip PLCB Buying Team J Short, T Jones, S Pollack 01/11/2010 $1,833.04 Dinner Aqua SF PLCB Chairmans Buying Trip PLCB Buying Team CWS Selling Team 01/11/2010 $145.11 Food and Drinks Westin Napa PLCB Buying Trip T Kilcullen, D Mich, J Short 03/23/2010 $148.46 Drinks Pre Dinner Baltimore Fosters Winemaker Event Fosters Winemaker Event PLCB Buyers, PA Rest Buyers, Fosters and CWS Personnel 04/13/2010 $177.92 Hershey Hotel Hershey Hotel PLCB, BUSA Meeting B Pio, J Short 05/16/2010 $474.46 Dinner Kurrents, Marco Island PLCB, CWS Dinner PLCB, CWS 05/17/2010 $295.74 Dinner PLCB, CWS Sale’s Pepe NABCA Meeting PLCB, CWS 05/17/2010 $379.31 Drinks Before & After Dinner Marriot, Marco Island PLCB and CWS PLCB, CWS Short, 12-029 Page 35 Activity Date Net Amount Description Additional Text 11/24/2010 $249.07 Food Delivered to Jim Short’s Michaels, Harrisburg House-Dad’s Funeral Jim Short’s Dad’s Funeral 02/23/2011 $87.14 Lunch Meeting with Jim Short Mangia Qui, Harrisburg PLCB, B Pio, D Dahme PLCB Lunch Meeting 03/18/2011 $149.73 Catered Lunch Sophia’s on Market, Harrisburg, PA Jim Short, PLCB, Family Funeral Catered Lunch, Jim Short and Family 04/19/2011 $31.34 Lunch Meeting, PLCB Harrisburg Sammy’s Harrisburg PLCB Modernization Jim Short, PLCB Ron Raymond Lobbyist 04/28/2011 $64.06 PLCB Lunch Mangia Qui, Harrisburg SLO Vintage Discussion w Jim Short Jim Short, PLCB, C Desmond, K McCarty 05/13/2011 $888.49 Dinner Mastro’s City Hall, Scottsdale, AZ NACBA, PLCB Members NABCA Meetings J Short, PJ Stapleton, CWS Managers 05/15/2011 $540.82 Breakfast and Drinks w PLCB Arizona Biltmore At NABCA 05/10--05/15 PLCB Board Members, Buyer J Short, CWS Managers / NABCA Meeting 05/25/2011 $2,974.39 PLCB Holiday Presentation Dinner Davios & Parc, Philadelphia, PA Bacardi/B-F 50% e PLCB Holiday Presentation Dinner Bill Back 50% to Bacardi and 50% to Brown Forman 10/14/2011 $102.86 Lunch PLCB/CWS Managers Meeting Mangia Qui, Harrisburg Lunch Meeting PLCB, CWS Managers 10/20/2011 $291.91 PWSA/PLCB Breakfast/Lunch North Wales, Catered Meeting at CWS Breakfast/Lunch for PWSA, PLCB Meeting 03/13/2012 $46.28 Lunch Meeting Mangia Qui, Harrisburg Jim Short, PLCB J Short, PLCB Issues 05/21/2012 $461.92 NABCA Dinner Verdis, San Marco, FL Meeting w CWS Managers and PLCB 1. Littles issued payment for the expenses incurred via use of his personal credit card. aa. Although Capital Wine and Spirits issues corporate credit cards to applicable representatives for business expenses incurred, Littles utilizes his personal credit card regarding payment for business expenses. 1. Capital Wine and Spirits employees are permitted to receive reimbursement from the company for legitimate business expenses incurred. 2. Capital Wine and Spirits employees may not receive reimbursement for personal expenses incurred. 2. Littles documented the expenses on his employee expense reports for reimbursement and received reimbursement for said expenses. Short, 12-029 Page 36 3. The percentage of expenses which could directly be attributed to Short based on the identified number of attendees on each item includes: 05/14/09 1/6 of $841.95 $140.33 11/12/09 1/12 of $1,335.90 $111.33 01/10/10 1/4 of $143.98 $36.00 01/11/10 1/4 of $145.11 $36.28 04/13/10 1/3 of $177.92 $59.30 02/25/11 1/4 of $87.14 $21.79 04/19/11 1/3 of $31.34 $10.45 04/28/11 1/4 of $64.06 $16.02 03/13/12 1/2 of $46.28 $23.14 ______ Total: $454.64 111. Desmond’s expense summaries document meals/hospitality and/or gifts received and accepted by Short as detailed in the chart below: Activity Date Net Amount Description Additional Text 09/14/2009 $172.25 Resoration Hardware: Frames for None key buyers 12/14/2009 $106.69 Primo’s: NABCA Supplier and PLCB None lunch at NW Office 06/09/2010 $300.00 Neiman Marcus-Gift for buyer None 12/06/2010 $418.70 Neiman Marcus: Gift for buyer None 12/08/2010 $41.62 Glass Lounge: Lunch with Buyer None 12/22/2010 $74.81 Alfred Victorian-lunch with buyers None 04/26/2011 $268.00 Phillies-Tickets for buyer None 05/13/2011 $316.69 AZ Biltmore: Dinner with buyer None 05/15/2011 $97.73 AZ Biltmore: Lunch and drinks with None buyer 06/03/2011 $200.00 Nordstrom: Gift for buyer None 11/24/2011 $500.00 Ferragamo: Gift for buyer None 08/30/2012 $39.98 Five Guys: Lunch and Store Survey Lunch with buyers a. In a sworn statement given to State Ethics Commission officials, Desmond confirmed Short’s receipt/acceptance of the above listed items. b. Desmond issued payment for the expenses incurred via use of her corporate issued credit card. 1. Capital Wine and Spirits employees are permitted to receive reimbursement from the company for business expenses incurred. 2. Capital Wine and Spirits employees may not receive reimbursement for personal expenses incurred. c. Desmond documented the expenses on her employee expense reports for reimbursement and received reimbursement for said expenses. Short, 12-029 Page 37 d. The 05/13/2011 and 05/15/2011 expenses are related to the 2011 NABCA conferences. e. Short and Desmond communicated by e-mail on 05/11/11 prior to the start of the conference as follows: May 11, 2011, 4:42 p.m. Short to Desmond: Do you know what I just realized? I have the entire delist with me by supplier, but I can’t let you see it. May 11, 2011, 7:45 p.m. Desmond to Short: Yippy! You are here. Oh yes you can. May 11, 2011, 8:12 p.m. Short to Desmond: I can’t wait to check in a[nd] lay down for a few. No dice on the delist! 1. There is no evidence that Short ever disclosed the list/delist document. f. Expenses from Desmond directly attributed to Short are as follows: 06/09/10 $300.00 12/06/10 $418.70 12/08/10 $41.62 04/26/11 $268.00 06/03/11 $200.00 11/24/11 $500.00 _______ Total: $1,728.32 112. Desmond arranged for alcoholic beverages (wine and spirits) to be provided to Short while he was vacationing in Hilton Head Island in June 2011. a. In an e-mail exchange between Desmond and Short on June 9, 2011, Desmond confirmed the location where Short would be staying and the arrival date: June 9, 2011, 10:14 a.m., Desmond to Short: Where are you staying in OBX. June 9, 2011, 10:22 a.m., Short to Desmond: I don’t go to OBX, I go to Hilton Head. June 9, 2011, 10:28 p.m., Desmond to Short: Oh ok. Where in Hilton Head? Do you have the address? June 9, 2011, 3:27 p.m., Short to Desmond: 402 Ocean One 11 South Forest Beach, Hilton Head, South Carolina 29928 June 9, 2011, 3:28 p.m. Desmond to Short: And when will you be arriving? June 9, 2011, 4:07 p.m., Short to Desmond: th June 25. Short, 12-029 Page 38 b. Desmond subsequently contacted Kevin Karcher of Ben Arnold Beverage and arranged a delivery of wine and spirits to the property rented by Short. 1. Karcher was previously the President of Capital Wine and Spirits before being employed by Ben Arnold Beverage. 2. Karcher delivered and/or arranged for the delivery of six (6) bottles of wine and a bottle of Woodford Reserve Bourbon on June 25, 2011. c. On June 25, 2011, the following e-mail exchange occurred: June 25, 2011, 4:19 p.m., Short to Desmond: You are the best! June 25, 2011, 9:58 p.m., Short to Karcher: Kevin, I trust this note finds you and your family well. I saw Steve this afternoon and I wanted to drop you a quick note of thanks. Thank you very much for the prime selection. Be well … Jim 06/25/2011, 10:01 p.m., Karcher to Short: Have a great vacation! Let me know if you need anything else. 113. Although not listed on any vendor expense report, Short also admitted to State Ethics Commission Investigators [that he received] a round of golf at Hilton Head’s Harbour Town Golf Course while vacationing in Hilton Head. a. Short was not certain of the year. b. Short believed the costs were paid by either Capital or Southern. 114. Short accepted the meals/hospitality and/or gifts from Littles and/or Desmond, representatives of Capital Wine and Spirits. a. Absent Short’s employment with the PLCB, vendor representatives Littles and/or Desmond would not have given meals/hospitality and/or gifts to Short. 1. The total specific value of all the meals/hospitality received by Short from Littles could not be determined. aa. Amounts directly related to Short from Littles totaled $454.64. 2. The specific value of the gifts/gift cards and meals received and accepted between 2009 and 2011 by Short from Desmond, a PLCB vendor representative, totaled at least $1,728.32. 3. Short made no personal payment for any meals/hospitality and/or gifts provided to him from Littles/Desmond. THE FOLLOWING FINDINGS RELATE TO ITEMS PROVIDED TO SHORT BY BRAD WAXMAN. 115. While serving in the position of PLCB Director of Marketing and Merchandising, Short received and accepted meals/hospitality and/or gifts from Waxman, a representative of Southern Wine and Spirits. Short, 12-029 Page 39 a. Expenses documented on monthly statements associated with Waxman’s corporate issued credit card relating to Short as identified by Waxman are detailed in the chart below: Purchase Description of Expense Expense Provided Date Amount To 05/18/2008 Dinner with J. Short, J. Martin to discuss listings $429.11 Short 08/06/2008 Dinner with PLCB to discuss holiday priorities – J. $987.96 Short, Jones Short, T. Jones-Table 31 08/09/2008 Dinner – Jim Short – Dec priorities $182.30 Short 12/11/2008 Drinks with J. Short to discuss Sanza $30.25 Short 12/12/2008 Coffee – Jim Short – to discuss (Illegible) $9.37 Short 12/15/2008 Lunch – Jim Short – Marley Crane to discuss $39.21 Short Absolute 12/19/2008 Tickets for J. Short for wrestling at Giant Center – $83.50 Short Hershey 12/09/2009 Constellation - Dinner with PLCB – Jim Short, Matt $308.66 Short, Schwenk– John Clemmons, Brandon (illegible) Schwenk 12/11/2009 Dinner - Chops – Jim Short/Matt Schwenk $421.39 Short, Schwenk 05/15/2011 Tickets to 76ers game for Jim Short – PLCB $110.00 Short 05/26/2011 Four tickets to Wicked at Gershwin Theatre, New $1,000.00 Short York, New York: Will Call Pick Up Jim Short 06/01/2011 Golf with PLCB – Hershey CC $750.01 Short, Schwenk 06/01/2011 Lunch - John Clemmons, Jim Short, Matt $65.97 Short, Schwenk, Brad Waxman - Hershey CC to discuss Schwenk business a. Portions of the above expenses distributed to Short total $2,118.02. b. Waxman issued payment for the expenses incurred via use of his corporate issued credit card. 1. Southern Wine and Spirits employees are permitted to receive reimbursement from the company for legitimate business expenses incurred. 2. Southern Wine and Spirits employees may not receive reimbursement for personal expenses incurred. c. Waxman documented the expenses on his employee expense reports for reimbursement and received reimbursement for said expenses. d. Short asserts that he did not attend the December 11, 2009 event/dinner. 116. Between 2008 and 2011, Short accepted meals/hospitality and gifts from Waxman, a representative of Southern Wine and Spirits. Short, 12-029 Page 40 a. Absent Short’s employment with the PLCB, Short would not have been in a position to receive the meals/hospitality and gifts from Waxman, a PLCB vendor representative. b. The specific value of the gifts and meals received and accepted by Short from Waxman, a PLCB vendor representative, totaled at least $2,118.02. c. The total specific value of the meals/hospitality received and accepted by Short from Waxman, a PLCB vendor representative, could not be determined. d. Short did not pay for the meals/hospitality and/or gifts. 117. Short’s acceptance on June 1, 2011, of lunch and a round of golf from Waxman at the Hershey Country Club resulted in Short receiving his Commonwealth wages at his regular employee rate for approximately four hours (1 p.m. to 5 p.m.) during which time Short was not working. a. Wednesday, June 1, 2011, was a regularly scheduled working day for Commonwealth employees. 118. Short’s normal working hours are 8:30 a.m. to 5 p.m. with a one hour lunch period. a. Waxman’s receipt for the lunch expense documented the time of payment as 1:17 p.m. b. Waxman’s receipt for the cost of the round of golf documented the time of payment as 1:29 p.m. 119. Short failed to utilize Commonwealth leave of any type (annual or personal) to account for the approximate four hour absence from his normal working hours on June 1, 2011. a. Short’s salary based on a thirty-seven and one-half hour work week equated to $55.84 per hour as of June 1, 2011. 120. Short received approximately $223.36 in wages from the Commonwealth for four (4) hours work on June 1, 2011, for which Short was absent and did not submit leave of any type to offset Commonwealth time spent playing golf with Waxman. a. Short was absent from work and/or played golf at the Hershey Country Club with Waxman for approximately the last four hours of his regularly scheduled workday on June 1, 2011. THE FOLLOWING FINDINGS RELATE TO SHORT’S RECEIPT OF ITEMS OF VALUE FROM MAJESTIC REPRESENTATIVES. 121. While serving in the position of PLCB Director of Marketing and Merchandising, Short received and accepted meals/hospitality and/or gifts from Papariello and/or Murray, representatives of Majestic Wine and Spirits. a. Expenses documented on monthly statements associated with Papariello’s corporate issued credit card relating to Short as identified by Papariello are detailed in the chart below: Purchase Description of Expense Expense Provided Date Amount To Short, 12-029 Page 41 Purchase Description of Expense Expense Provided Date Amount To 12/18/2010 Dinner at Amis in Philadelphia; Short and spouse, $350.51 Short Papariello and spouse 12/18/2010 Drinks and/or appetizers at the Four Seasons $238.48 Short Hotel Philadelphia; Short and spouse, Papariello and spouse 05/13/2011 Dinner at Cowboy Ciao in Scottsdale, Az; Short, $704.33 Short Papariello and spouse 1. Papariello issued payment for the expenses incurred via use of his corporate issued credit card. 2. The expenses were ultimately paid for by Majestic Wine and Spirits. aa. Majestic Wine and Spirits makes direct payments to the credit card company for the applicable employee regarding business expenses incurred. 3. Expenses directly attributed to Short claimed by Papariello totaled $529.28. b. Expenses documented on monthly statements associated with Murray’s corporate issued credit card relating to Short, as identified by Murray, are detailed in the chart below: Purchase Description of Expense Expense Provided Date Amount To 01/09/2008 Butterfly the Embarade in California, Dinner after $375.47 Short/PLCB 2008 Chairman’s meeting; PLCB representatives present including Short 06/08/2008 Hurley’s Restaurant located in Yountville, CA, $453.09 Short/PLCB Dinner after 2008 Chairman’s meeting; PLCB representatives present including Short 01/11/2009 Angele, located in Napa, CA, Dinner after 2009 $1,087.82 Short/PLCB Chairman’s meeting; PLCB representatives present including Short 1. Murray issued payment for the expenses incurred via use of his corporate issued credit card. 2. The expenses were ultimately paid for by Majestic Wine and Spirits. aa. Majestic Wine and Spirits makes direct payments to the credit card company for the applicable employee regarding business expenses incurred. 122. Short confirmed to State Ethics Commission Investigators that he accepted gifts of alcohol from Papariello over the past five years. a. Short specially admitted to receiving a case (12 bottles) of a Marceau valued at $40 to $50 per bottle from Papariello within the past three (3) years. 123. Short accepted the meals/hospitality and gifts from Papariello and/or Murray, representatives of Majestic Wine and Spirits. Short, 12-029 Page 42 a. Absent Short’s employment with the PLCB, Short would not have been in a position to receive the meals/hospitality and gifts from Papariello and/or Murray, PLCB vendor representatives. 1. The specific value of the meals/hospitality received and accepted by Short from Papariello and/or Murray, PLCB vendor representatives, could not be determined. 2. Short made no personal payment for the meals/hospitality and/or gifts. b. Short accepted donations for fundraising events held by his church from vendors of the PLCB. THE FOLLOWING FINDINGS RELATE TO SHORT’S RECEIPT OF ITEMS OF VALUE FROM WHITE ROCK DISTILLERIES REPRESENTATIVES. 124. While serving in the position of PLCB Director of Marketing and Merchandising, Short received and accepted meals/hospitality from Brungo and/or Doran, representatives of White Rock Distilleries, a supplier of alcohol/spirits to the Commonwealth. a. Brungo’s expense summaries document meals/hospitality received and accepted by Short as detailed in the chart below: Date Description of Expense Expense Individuals Amount Present Lunch-Meeting/Sales call at Mang/Bar Jim Short-Mark/Cristina- 04/24/2009 $163.26 Louie (Harrisburg) Capital/Consumers Jim Short, Matt Schwenk, 08/18/2009 Lunch Meetings at Manga Qui (Harrisburg) $93.14 Cristina, Becc Jim Short, Matt-PLCB, Cris, 09/29/2009 Lunch at Manga Qui (Harrisburg) $98.44 Red-Capital 05/06/2010 Cocktails at Habitat (Pittsburgh) $42.82 Jim Short, Joe Conti-PLCB 05/06/2010 Golf at Treesdale (Pittsburgh) $169.96 Jim Short, Joe Conti-PLCB 05/06/2010 Dinner at Habitat (Pittsburgh) $297.01 Jim Short, Joe Conti-PLCB Lunch-Meetings at Manga Qui J Short, M Schwenk,-PLCB, 08/24/2010 $127.82 (Harrisburg) Cris-Paul D Jim S, Matt S,-PLCB, Cris- 02/18/2011 Lunch-Meeting at Manga Qui (Harrisburg) $118.05 Capital, Doran 1. The portion of Brungo’s expenses directly attributed to Short totaled $298.23. 2. Brungo issued payment for the expenses incurred via use of her corporate issued credit card. 3. The expenses were ultimately paid for by White Rock Distilleries. aa. White Rock Distilleries expense summary reports provide a section for the signature of the employee incurring the expense which serves to certify that all expenses reported were incurred on company business. Short, 12-029 Page 43 b. Doran’s expense summaries document meals/hospitality received and accepted by Short as detailed in the chart below: Purchase Description of Expense Expense Individuals Date Amount Present 09/21/2011 Entertainment-Golf at Colonial Golf Club $400.00 Jim Short (Harrisburg) PLCB, M Schwenk PLCB, K McCarty CWS, C Desmond CWS, T Brungo WRD 09/21/2011 Post Golf-Drinks/Food at Colonial Golf Club $75.00 Jim Short (Harrisburg) PLCB, M Schwenk PLCB, K McCarty CWS, C Desmond CWS, T Brungo WRD 1. Doran issued payment for the expenses incurred via use of his corporate issued credit card. 2. The expenses were ultimately paid for by White Rock Distilleries. aa. White Rock Distilleries expense summary reports provide a section for the signature of the employee incurring the expense which serves to certify that all expenses reported were incurred on company business. 3. Short was one of six (6), including Doran, participating in the golf outing. 4. Costs per participant were at least $79.17. 125. Short accepted meals/hospitality from Brungo and/or Doran, representatives of White Rock Distilleries, a PLCB vendor. a. Absent Short’s employment with the PLCB, Short would not have been in a position to receive the meals/hospitality from Brungo and/or Doran, White Rock Distilleries representatives. 1. The total value of the meals/hospitality received and accepted by Short from Brungo, and/or Doran, PLCB vendor representatives, could not be determined. 2. Short made no personal payment for the meals/hospitality and/or gifts. b. There is no record of Short utilizing personal or annual leave while golfing with PLCB vendors on September 21, 2011. THE FOLLOWING FINDINGS RELATE TO SHORT’S ACCEPTANCE OF ITEMS OF VALUE FROM A JIM BEAM MARKETING REPRESENTATIVE. 126. While serving in the position of PLCB Director of Marketing and Merchandising, Short received and accepted meals/hospitality and gifts from Erin Schiller, a Short, 12-029 Page 44 representative of Beam Global Wine and Spirits as identified by Schiller on business expense reports detailed in the chart below: Date Description of Expense Expense Individuals Amount Present 06/13/2011 Bourbon Drinks w/ PLCB at the Marriott $54.30 Jim Short PLCB, M Schwenk (Pittsburgh) PLCB, D Tierney Beam Global 06/14/2011 Red Stag Sampling at Casey’s Draft $168.24 Jim Short, Matt Schwenk, Larz House (Pittsburgh) Kegerries PLCB, D Tierney Beam Global 06/14/2011 Effen Vodka Promotion for PLCB at $263.60 Jim Short, Matt Schwenk, Larz MAG Restaurant Group (Pittsburgh), Kegerries, D Tierney meals and cocktails 06/14/2011 Effen Vodka Promotion for PLCB at $905.00 Jim Short, Matt Schwenk Larz MAG Restaurant Group (Pittsburgh) Kegerries, D Tierney 01/26/2012 Unique Limousine for PLCB Dinner $475.00 Jim Short, Matt Schwenk, D Meeting; stops at McGrath’s Pub Tierney, Paul G Beam Global, (Harrisburg) and Tavern on the Hill Steve B Beam Global (Enola) 04/04/2012 PLCB Market Dinner at Capital Grille $1,090.24 Jim Short, Matt Schwenk (Pittsburgh) a. Schiller issued payment for the expenses incurred via use of his corporate issued credit card. b. The expenses were ultimately paid for by Beam Global Wine and Spirits. 127. Hospitality expenses for Short incurred by Schiller have been determined as follows: 2011: 6/13/2011 ¼ of $54.30 $13.58 6/14/2011 1/5 of $168.24 $33.65 6/14/2011 1/5 of $263.60 $52.72 6/14/2011 1/5 of $905.00 $181 Total $280.95 2012: 01/26/2012 1/6 of $475.00 $79.17 04/04/2012 1/6 of $1,090.24 $181.71 Total $260.88 2011-2012 Total: $541.83 128. In addition to providing meals/hospitality to Short, Schiller provided Short with an Ipad2 valued at approximately $499.00 sometime in 2011. a. Schiller had the Ipad2 delivered to Short’s residence. b. Schiller did not pay for the Ipad personally or via use of his corporate credit card. 1. The Ipad2 had been given to Schiller by Beam Global Wine and Spirits as a marketing tool. Short, 12-029 Page 45 129. Short accepted the meals/hospitality and gifts from Schiller, a representative of Beam Global Wine and Spirits, a supplier of alcohol/spirits to the Commonwealth of Pennsylvania. a. Absent Short’s employment with the PLCB, Short would not have been in a position to receive the meals/hospitality from Schiller, a Beam Global Wine and Spirits representative. 1. The specific value of the Ipad2 gifted to Short was approximately $499.00. 2. Short made no personal payment for the meals/hospitality and/or gifts. THE FOLLOWING FINDINGS RELATE TO SHORT’S RECEIPT OF ITEMS OF VALUE FROM MARKETING REPRESENTATIVES OF DIAGEO. 130. While serving in the position of PLCB Director of Marketing and Merchandising, Short received and accepted gifts from Sweeney, a representative of Diageo, as detailed in the chart below: Date Description of Expense Expense Provided Amount To 05/21/2009 VIP Package consisting of flowers, fruit, one bottle $133.00 Short of Moet et Chandon Brut Imperial Champagne provided to Short and spouse on vacation 06/17/2009 Ketel One Golf Flag autographed by Arnold unknown Short Palmer a. Sweeney issued payment for the VIP package incurred via use of his corporate issued credit card. b. The expense for the purchase of the VIP package was ultimately borne by Diageo. c. The VIP package was sent by Sweeney to a hotel where Short and his wife were vacationing. 1. Sweeney knew of Short’s vacation location based on information given to him by Short. 131. Short accepted the gifts from Sweeney, a representative of Diageo, a PLCB vendor. a. Absent Short’s employment with the PLCB, Short would not have been in a position to receive the gifts from Sweeney, a PLCB vendor representative. b. The specific value of the Arnold Palmer autographed Ketel One golf flag received and accepted by Short from Sweeney, a PLCB vendor representative, could not be determined. c. Short made no personal payment for the gifts. 132. In 2011, Short received two (2) Callaway golf putters from David Franke, Brown- Forman, State Manager Pennsylvania-Delaware. Short, 12-029 Page 46 a. Franke provided the putters pursuant to a request from Short to make a donation for a church fund raiser. 1. The clubs were a promotional tool that contained the Gentleman Jack (a Jack Daniels Bourbon marketed by Brown-Forman) logo on the grip. 2. The clubs were re-gripped given the fact they advertised alcohol at a church fundraising event. b. Short did not receive a private pecuniary benefit from the donation, and the church was not a “business with which he is associated,” as defined under the Ethics Act. c. Franke also provided Short with 2 to 5 bottles of a Pinot Grigio valued at $25.99 per bottle. 133. In addition to accepting meals/hospitality and gifts paid for by PLCB vendor representatives and or Commonwealth suppliers specifically identified in this document, Short was offered and accepted wine and/or spirit products from multiple PLCB vendors and suppliers at no cost. a. Wine and/or spirits were regularly provided to Short and other PLCB employees involved in the marketing side of the agency. 1. Wine/spirits are provided under the guise of sampling; however, marketing employees, executive and board members are frequently provided with multiple bottles of wine/spirits for personal consumption. b. Over the years Short has received multiple bottles and/or cases of wine from various vendor representatives during his tenure as the PLCB Director of Marketing and Merchandising. 1. Short specifically received wine and/or spirits from Papariello (Majestic Wine and Spirits), Desmond (Capital Wine and Spirits), Franke (Brown Forman) among other vendor representatives. 2. In or about 2010, Short received twelve (12) bottles of Marceau Wine from Papariello valued at $40.00 to $50.00 a bottle. 3. The wine was delivered to Short’s home. 4. Desmond arranged for alcohol to be delivered to Short’s vacation location. 5. David Franke provided Short with bottles of Pinot Grigio. c. The majority of the gifts of alcohol provided to Short from the various vendors were delivered to Short’s office at the PLCB in the Northwest Office Building. 1. Cases of wine have been delivered to Short’s home on occasion. d. The specific value of all wine and/or spirits received by Short could not be positively determined. 1. No vendor records were available which documented the number or Short, 12-029 Page 47 value of bottles and/or cases of wine and/or spirits provided to Short. 2. The value of the Marceau wine received from Papariello was between $480.00 and $600.00. THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT SHORT FAILED TO DISCLOSE HIS RECEIPT OF GIFTS, TRANSPORTATION, LODGING, AND/OR HOSPITALITY ON STATEMENTS OF FINANCIAL INTERESTS FILED FOR THE 2008 THROUGH 2011 CALENDAR YEARS. 134. Statement of Financial Interests (“SFI”) filing requirements for public officials and public employees are mandated by Section 1104 of the State Ethics Act, which st requires a public official/employee to file an SFI no later than May 1 of each year that he/she holds such a position and the year after leaving such a position. st 135. Short is required to file Statements of Financial Interests by May 1 annually in his position as the PLCB Director of Marketing and Merchandising. 136. Information to be disclosed on Statements of Financial Interests filed by public officials and public employees is mandated by Section 1105 of the State Ethics Act. a. Section 1105(b), Subsections 1-10 identify specific information to be disclosed, as well as exceptions to disclosure requirements, when applicable. 1. Section 1105(b)(6) mandates disclosure of the following on Statements of Financial interests filed: “The name and address of the source and the amount of any gift or gifts valued in the aggregate at $250 or more and the circumstances of each gift. This paragraph shall not apply to a gift or gifts received from a spouse, parent, parent by marriage, sibling, child, grandchild, other family member, or friend when the circumstances make it clear that the motivation for the action was a personal or family relationship. However, for the purposes of this paragraph, the term “friend” shall not include a registered lobbyist or an employee of a registered lobbyist.” 2. Section 1105(b)(7) mandates disclosure of the following on Statements of Financial interests filed: “The name and address of the source and the amount of any payment for or reimbursement of actual expenses for transportation and lodging or hospitality received in connection with public office or employment where such actual expenses for transportation and lodging or hospitality exceed $650 in an aggregate amount per year. This paragraph shall not apply to expenses reimbursed by a governmental body, or to expenses reimbursed by an organization or association of public officials or employees of political subdivisions which the public official or employee serves in an official capacity.” 137. Short filed Statements of Financial Interests for calendar years 2008 through 2012 in compliance with Section 1104 of the Ethics Act as follows: Date Filed Calendar Year 05/01/2009 2008 04/27/2010 2009 04/08/2011 2010 Short, 12-029 Page 48 03/09/2012 2011 04/02/2013 2012 a. Short claimed to have received no gifts valued at over $250.00 in the aggregate for Calendar Years 2008 through 2012 in his position as the PLCB Director of Marketing and Merchandising. 1. Short’s Calendar Year 2008 through 2012 Statements of Financial Interests all documented “none” in relation to gifts received. b. Short disclosed transportation, lodging, and hospitality received from NABCA on his Statements of Financial Interests filed for Calendar Years 2008, 2010, 2011, and 2012. 1. Short’s 2009 Calendar Year Statement of Financial Interest documented “none” in relation to transportation, lodging, and hospitality received. 2. NABCA pays for expenses incurred by members attending annual NABCA conferences. c. Short’s signature is present on each Statement of Financial Interests filed signifying that the information provided on the form is true and correct to the best of his knowledge, information, and belief subject to penalties prescribed by 18 Pa.C.S. §4904 (unsworn falsification to authorities) and the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1109(b). 138. Short failed to disclose the name and address of the source and the amount of gifts received valued in the aggregate at $250 or more from vendors doing business with the PLCB and the circumstances of each gift on his Statements of Financial Interests filed for calendar years 2008, 2010, 2011, and 2012 as documented below: Year Source Description Value 2010 Cristina Desmond, Neiman Marcus Gift card $300.00 Capital Wine and Spirits David Yurman Cufflinks, shirt-Neiman Marcus $418.70 Total $718.70 2011 Cristina Desmond, Nordstrom Gift Card $200.00 Capital Wine and Spirits Ferragamo Gift Card $500.00 Total $700.00 Erin “Red” Schiller, IPad2 $499.00 Beam Global Wine and Spirits Total $499.00 a. Short never disclosed on any SFI filed between 2008 and 2012 the receipt of wine from Papariello with a value of at least $480.00. 139. Short failed to disclose transportation, lodging, and hospitality received from NABCA in excess of $650.00 regarding his travel and attendance at the 2009 annual NABCA Conference held in Phoenix, Arizona. a. As a State Representative for NABCA, Short is reimbursed by NABCA for Short, 12-029 Page 49 conference related expenses. b. Short’s average NABCA conference expenses total approximately $1,272.65. c. Short consistently disclosed transportation, lodging, and hospitality received from NABCA on his 2008, 2010, 2011, and 2012 calendar year Statements of Financial Interests. 140. Short failed to disclose the name and address of any payment for or reimbursement of actual expenses for transportation and lodging or hospitality received in excess of $650.00 in the aggregate per year from vendors doing business with the PLCB on his Statements of Financial Interests filed for calendar years 2008, 2010 and 2011 as documented below: Year Source Description Minimum Value 2008 Southern Wine and Spirits Aggregate dinners, drinks, tickets $746.71 2010 Paul Coulombe, White Rock Three day golf trip to Bonita Bay, Florida/Naples, $650.00+ Florida area plus round trip airfare 2010 Beau Clark, W.J. Duetsch Three day golf trip to Pebble Beach, CA, all expenses $1,971.87 paid 2010 Alliance/Capital Golf Event $490.87 NABCA-Drinks $295.74 NABCA $379.31 2011 Cristina Desmond, Philadelphia Phillies Tickets $268.00 Capital Wine and Spirits 2011 Alliance/Brown Forman Golf-NABCA $128.00 Alliance/Capital 2011 Alliance $474.40 Capital NABCA-Dinner $888.49 Breakfast $540.82 2011 Brad Waxman, Philadelphia 76ers Tickets $110.00 Southern Wine and Spirits Brad Waxman, Wicked Tickets, Gershwin Theater, New York, NY $1,000.00 Southern Wine and Spirits 2011 Paul Coulombe, Three day golf trip to Bonita Bay, Florida /Naples, $1,038.82 White Rock Florida area 2012 Paul Coulombe, NABCA-Dinner $461.92 White Rock a. No specific expense documents were provided by the vendor for the 2010 golf trip to the Bonita Bay/Naples area. 1. Round trip airfare from Philadelphia, Pennsylvania, to Southern Florida International Airport is currently valued at approximately $330.20. 2. Additional transportation, lodging, hospitality associated with the trip included lodging at Coulombe’s home for three days and two nights, all meals, greens fees for eighteen holes of golf, and entertainment expenses. 141. Short, in his position as the PLCB Director of Marketing and Merchandising, realized a minimum private pecuniary gain of at least $13,586.92 when he used the authority of his office to obtain a private pecuniary benefit [for] himself and Short, 12-029 Page 50 members of his immediate family when he accepted gifts, transportation, lodging, and/or hospitality from vendors of the PLCB. Description Value Alliance Golf Trips, 2009-2011 $2,834.22 2010 Pebble Beach Golf Trip $1,971.87 Bonita Bay Golf Trips, 2010-2011 $2,327.98 Meals/Gifts, CWS 2009-2012-Desmond-Littles $2,182.96 Meals/Gifts SWS, Waxman 2008-2011 $2,118.02 2011 Wages Golf with Waxman $223.36 Gifts/Meals, Majestic-Papariello $529.28 Wine-Papariello (2009-2010) $480.00 Meals, 2009-2011, White Rock-Brungo $298.23 Meals/Entertainment, White Rock-Doran $79.17 Meals/Entertainment, Jim Bean-Schiller $541.83 Minimum Total $13,586.92 III.DISCUSSION: As the Director of Marketing and Merchandising for the Pennsylvania Liquor Control Board (“PLCB”) from approximately 2003 to the present, Respondent James H. Short, Jr., hereinafter also referred to as “Respondent,” “Respondent Short,” and “Short,” has been a public official/public employeesubject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. The allegations are that Short violated Sections 1103(a) and 1105(b)of the Ethics Act when he used the authority of his public position to obtain a private pecuniary benefit for himself, members of his immediate family, and/or a business with which he and/or members of his immediate family are associated, by soliciting and/or accepting gifts, transportation, lodging, and/or hospitality from vendors of the PLCB at a time when he was participating in and/or making final recommendations/decisions regarding the PLCB’s purchase of wine and spirits from those vendors; and when he failed to disclose his receipt of gifts, transportation, lodging, and/or hospitality on Statements of Financial Interests (“SFIs”) filed for the 2008 through 2011 calendar years. Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted activities (a)Conflict of interest.— No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The term "conflict of interest" is defined in the Ethics Act as follows: § 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 Short, 12-029 Page 51 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 1105(b) of the Ethics Act and its subsections detail the financial disclosure that a person required to file the SFI form must provide. Subject to certain statutory exceptions not applicable to this matter, Section 1105(b)(6) of the Ethics Act requires the filer to disclose on the SFI the name and address of the source and the amount of any gift or gifts valued in the aggregate at $250 or more and the circumstances of each gift. Subject to certain statutory exceptions not applicable to this matter, Section 1105(b)(7) of the Ethics Act requires the filer to disclose on the SFI the name and address of the source and the amount of any payment for or reimbursement of actual expenses for transportation and lodging or hospitality received in connection with public office or employment where such actual expenses exceed $650 in an aggregate amount per year. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are set forth above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Respondent Short has served as the Director of Marketing and Merchandising for the PLCB from approximately 2003 to the present. Short’s duties and responsibilities as PLCB Director of Marketing and Merchandising include, inter alia: (1) strategic planning, policy development, and administration of the statewide program for liquor and alcohol purchasing and product marketing; (2) serving as the principal advisor to the PLCB Chief Executive Officer (“CEO”) and Board on all matters pertaining to the purchase and marketing of liquor and alcohol through the state store system; (3) directing, through subordinate bureau directors, of all liquor and alcohol marketing, merchandising, and purchasing operations; and (4) coordinating and administering all liquor and alcohol purchasing conducted by the PLCB. As the PLCB Director of Marketing and Merchandising, Short had direct supervisory responsibility over multiple PLCB employees including but not limited to: Matthew Schwenk (“Schwenk”), Director of Product Selection; Anthony Jones, Division Chief of Luxury Wines; and Stephen Pollack (“Pollack”), Director of the Chairman’s Select Program. The PLCB is governed by a three-Member Board. The PLCB regulates the sale of alcohol in Pennsylvania. In order for an alcoholic beverage to be sold in Pennsylvania, it must be authorized for sale by the PLCB. The PLCB is the only retail seller of wine/spirits in the Commonwealth. Short, 12-029 Page 52 The PLCB adds and removes products sold in PLCB retail stores through a process known as “listing” and “delisting.” The parties have stipulated that the Director of Product Selection, Chief of the Product Management and Pricing Division, and Merchandising Pricing Coordinator(s) are usually responsible for evaluating new products, and that the PLCB Director of Marketing and Merchandising does not regularly sit in on new product presentations or evaluations. The Director of Marketing and Merchandising and the Director of Product Selection make the final recommendation to the PLCB Board Members as to what product(s) should be listed or delisted. PLCB Board Members vote on the entire recommended new product list without an independent assessment. The PLCB relies primarily on recommendations made by Short and his direct reports when making listing/delisting decisions. A manufacturer/supplier of alcoholic beverage products may market its products to the PLCB directly or through a vendor or broker. The primary vendors providing products to the PLCB include: (1) Southern Wine and Spirits (“Southern”); (2) Capital Wine and Spirits (“Capital”), which represents Alliance Brands and White Rock Distilleries (“White Rock”); and (3) Allied Beverage Group, LLC (“Allied”), which has a subsidiary named “Majestic Wine & Spirits, USA, LLC” (“Majestic”). These vendors represent at least 31% of total PLCB sales/inventory. Products for which Southern serves as broker and/or vendor of record account for approximately 6.43% to 6.85% of the PLCB total Cost of Goods Sold during the last five years. A list of Southern’s business with the PLCB is detailed in Fact Finding 30 c. Capital is a member of the “Charmer Sunbelt Group,” a nationwide distributor of wine, spirits, beer, and other beverages. Products brokered by Capital account for a total of approximately 19.11% to 22.03% of the PLCB total Cost of Goods Sold during the last five years. A list of Capital’s business with the PLCB is detailed in Fact Finding 32 b. In Pennsylvania, Capital/Charmer Sunbelt Group represents a marketing partnership named “the Alliance,” which is comprised of wine/spirit suppliers Bacardi USA (“Bacardi”), Brown Forman, and Remy Cointreau (“Remy”). Capital also served as the distributor/vendor for White Rock in Pennsylvania before White Rock ceased operations in 2012. Allied was created by the mergers of The Baxter Group, Inc., F&A Distributing Company and The Jaydor Corporation. Allied ranks among the ten largest wine and spirits distributors in the United States. Allied subsidiary Majestic is a Pennsylvania brokerage and vendor/vendor of record for products sold to the PLCB. Allied’s and/or Majestic’s sales account for approximately 1.51% to 2.18% of PLCB total Cost of Goods Sold during the last five years. A list of Majestic’s business with the PLCB is detailed in Fact Finding 40 b. The vendor/supplier representatives Short dealt with included: (1) from Capital, Mark Littles (“Littles”), President, and Christina Desmond (“Desmond”), Director of Marketing and Business Analytics; (2) from Southern, Brad Waxman (“Waxman”), Executive Vice President, General Manager, Southern Wine and Spirits of PA; (3) from Majestic, Christopher Papariello (“Papariello”), Executive Vice President, and Edward Murray (“Murray”), Eastern Regional Manager; (4) from White Rock, Tricia Brungo (“Brungo”), Control States Manager, and Paul Doran (“Doran”), Regional Sales Manager; (5) from Beam Global Spirits and Wine, Erin Schiller (“Schiller”), Pennsylvania State Account Manager; and (6) from Diageo, Mark Sweeney (“Sweeney”), Vice President of Sales. Vendor representatives offered gifts, transportation, lodging, and hospitality to PLCB employees, including Short. None of the items could be directly tied to product listing/delistings. Vendor representatives provided Short with alcohol, meals, golf outings, out of state golf trips, gift cards/certificates, tickets to entertainment/sporting events, and sports memorabilia. But for Short’s employment with the PLCB, Short would not have been Short, 12-029 Page 53 in a position to come to know specific PLCB vendor representatives and receive anything of value from them. In 2009, 2010, and 2011, Capital/Alliance held golf outings referred to as the “Alliance Golf Open,” which included officials and management employees of the PLCB. The Alliance Golf Open was organized as a means by which Capital and the Alliance suppliers could strengthen their relationship with the PLCB and to allow various Alliance senior management officials to have “face time” with PLCB officials. These events were social in nature. No specific business presentations were made by Capital and/or the Alliance suppliers at the events. The costs associated with the 2009, 2010, and 2011 Alliance Golf Open were divided into four equal amounts paid by Capital, Bacardi, Brown Forman, and Remy. Short attended all three events. The 2009 Alliance Golf Open was held at the West Shore County Club in Camp Hill, Pennsylvania, on August 19, 2009, a Commonwealth workday. PLCB attendees at the event included Short, Conti and Schwenk. The value of the golf outing totaled approximately $105.09 per individual. The parties have stipulated that Short realized a private pecuniary gain of $519.77 in association with his participation at the 2009 Alliance Open based upon his pro rata share of the hospitality expenses incurred by Capital and the Alliance and his failure to utilize leave from employment to attend the event. The 2010 Alliance Golf Open was held at the River Crest Golf Club in Phoenixville, Pennsylvania, on July 15, 2010, a Commonwealth workday. PLCB attendees at the event included Short, Schwenk and PLCB Chairman P.J. Stapleton. The value of the golf outing totaled approximately $490.87 per individual. Short submitted a Commonwealth Travel Expense Voucher (“TEV”) claiming reimbursement from the Commonwealth for purported business expenses totaling $330.50 for this trip; however, the parties have stipulated that Short’s expenses were not business related. The TEV was approved by Conti, who was aware that Short had participated in the 2010 Alliance Open. The parties have stipulated that Short realized a private pecuniary gain of $1,236.05 from his participation at the 2010 Alliance Open based upon his pro rata share of the hospitality expenses incurred by Capital and the Alliance, his claim and receipt of reimbursement from the Commonwealth for expenses of $330.50, and his failure to utilize leave from employment to attend the event. The 2011 Alliance Golf Open was held at the Philadelphia Country Club in Gladwyne, Pennsylvania, on July 14, 2011, a Commonwealth workday. PLCB attendees at the event included Short, Conti, Schwenk, Stapleton, and Doug Hitz, PLCB Bureau Director for Planning and Procurement. The expenses of the golf outing totaled approximately $474.40 per attendee. Short submitted a TEV claiming reimbursement from the Commonwealth for purported business expenses totaling $185.20 for this trip; however, the parties have stipulated that Short’s expenses were not business related. The TEV was approved by Conti, who was aware that Short had participated in the 2011 Alliance Open. The parties have stipulated that Short realized a private pecuniary gain of $1,078.40 in association with his participation at the 2011 Alliance Open based upon his pro rata share of the hospitality expenses incurred by Capital and the Alliance, his claim and receipt of reimbursement from the Commonwealth for expenses of $185.20, and his failure to utilize leave from employment to attend the event. Majestic is the broker representative of supplier W.J. Deutsch and Sons (“W.J. Deutsch”). In August 2010, Short and Schwenk attended an all-expense paid three day golf trip to Pebble Beach, California, provided by Majestic/W. J. Deutsch, a vendor doing business with the PLCB. Short, Schwenk, Papariello, and Beau Clark (“Clark”), the Pennsylvania District Manager for W. J. Deutsch, participated in the event. The trip was primarily a social event and was submitted as a business expense by Clark and Papariello. Costs associated with the trip included airfare, lodging, greens fees, subsistence, and entertainment. The parties have stipulated that Short realized a private pecuniary gain of Short, 12-029 Page 54 at least $1,971.87 in association with his acceptance of the all-expense paid three day golf trip to Pebble Beach provided by Majestic/W. J. Deutsch. In 2010 and 2011, Short and Schwenk attended two all-expense paid three day golf trips to Bonita Bay East, Florida, at the invitation of Paul Coulombe (“Coulombe”), then the owner/CEO of White Rock. The events were a marketing effort on behalf of White Rock. Short was invited on these trips due to his position as PLCB Director of Marketing and Merchandising. No PLCB business meetings were held as part of either of these trips. All of Short’s and Schwenk’s expenses associated with these trips (airfare, greens fees, meals, entertainment, and the like) were paid for by Coulombe, White Rock, and/or White Rock representatives. Two of the three days included in the 2010 trip were Commonwealth work days for which Short failed to utilize Commonwealth leave. The parties have stipulated that Short realized a private pecuniary gain of at least $2,327.98 in association with his acceptance of two all-expense paid, three day golf trips to Bonita Bay provided by White Rock, a vendor doing business with the PLCB. Between 2010 and 2012, Short accepted dinners and drinks from Capital and Majestic during trips to California to purchase wine for the PLCB’s Chairman Select Program. Capital/Majestic also provided hospitality to Short at National Alcohol Beverage Control Association (“NABCA”) conferences attended by Short in 2009, 2010, 2011, and 2012. Short is a State Representative to NABCA, an organization which is primarily funded by the liquor industry. Littles’ expense summaries document meals/hospitality received and accepted by Short as detailed in Fact Findings 110 a, 110 a(3). Desmond’s expense summaries document meals/hospitality and/or gifts received and accepted by Short as detailed in Fact Findings 111, 111 f. In June 2011 Desmond arranged for alcoholic beverages (six bottles of wine and a bottle of Woodford Reserve Bourbon) to be provided to Short at a property Short was renting while vacationing in Hilton Head Island. Absent Short’s employment with the PLCB, vendor representatives Littles and/or Desmond would not have given hospitality and/or gifts to Short. The total specific value of all the hospitality received by Short from Littles could not be determined. Amounts directly related to Short from Littles totaled $454.64. The specific value of the gifts/gift cards and meals received and accepted between 2009 and 2011 by Short from Desmond, a PLCB vendor representative, totaled at least $1,728.32. Between 2008 and 2011, while serving as PLCB Director of Marketing and Merchandising, Short accepted hospitality and/or gifts from Waxman, a representative of Southern. Absent Short’s employment with the PLCB, Short would not have been in a position to receive the hospitality and gifts from Waxman, a PLCB vendor representative. The specific value of the gifts and meals received and accepted by Short from Waxman, a PLCB vendor representative, totaled at least $2,118.02. On June 1, 2011, Short accepted lunch and a round of golf from Waxman at the Hershey Country Club and failed to utilize Commonwealth leave for approximately four Commonwealth work hours. Short received approximately $223.36 in wages from the Commonwealth for the aforesaid four hours he used for his lunch/golf outing with Waxman. While serving as PLCB Director of Marketing and Merchandising, Short accepted hospitality and/or gifts from representatives of Majestic. The specific value of the hospitality received by Short from Papariello and/or Murray could not be determined. Expenses directly attributed to Short claimed by Papariello totaled $529.28. Expenses documented on monthly statements associated with Murray’s corporate issued credit card relating to Short, as identified by Murray, are detailed in the chart at Fact Finding 121 b. Short, 12-029 Page 55 In or about 2010 Short received a case (12 bottles) of a Marceau valued at $40 to $50 per bottle from Papariello. The wine was delivered to Short’s home. Absent Short’s employment with the PLCB, Short would not have been in a position to receive hospitality and gifts from Papariello and/or Murray, PLCB vendor representatives. While serving as PLCB Director of Marketing and Merchandising, Short received and accepted hospitality from Brungo and/or Doran, representatives of White Rock, a PLCB vendor. The portion of Brungo’s expenses directly attributed to Short totaled $298.23. Doran’s expense summaries document hospitality received and accepted by Short as detailed in the chart at Fact Finding 124 b. The expenses were ultimately paid for by White Rock. Absent Short’s employment with the PLCB, Short would not have been in a position to receive hospitality from Brungo and/or Doran, White Rock representatives. In 2011 and 2012, while serving as PLCB Director of Marketing and Merchandising, Short received and accepted hospitality from Schiller, a representative of Beam Global Wine and Spirits, in the total amount of $541.83. Absent Short’s employment with the PLCB, Short would not have been in a position to receive hospitality from Schiller. Additionally, in 2011, Schiller provided Short with an Ipad2 valued at approximately $499.00. While serving as PLCB Director of Marketing and Merchandising, Short received and accepted from Sweeney, a representative of Diageo, a Ketel One Golf Flag autographed by Arnold Palmer and a VIP package provided to Short and Short’s spouse while on vacation. The VIP package was valued at $133.00. The specific value of the Arnold Palmer autographed Ketel One golf flag could not be determined. Absent Short’s employment with the PLCB, Short would not have been in a position to receive the aforesaid items from Sweeney, a PLCB vendor representative. David Franke (“Franke”), Brown-Forman, State Manager Pennsylvania-Delaware, provided Short with 2 to 5 bottles of a Pinot Grigio valued at $25.99 per bottle. Wine and/or spirits were regularly provided to Short and other PLCB employees involved in the marketing side of the agency. The specific value of all wine and/or spirits received by Short could not be positively determined. The parties have stipulated that Short, in his position as the PLCB Director of Marketing and Merchandising, realized a private pecuniary gain of at least $13,586.92, calculated as the sum of the items listed below, when he used the authority of his public position to obtain a private pecuniary benefit for himself and members of his immediate family when he accepted gifts, transportation, lodging, and/or hospitality from vendors of the PLCB: Description Value Alliance Golf Trips, 2009-2011 $2,834.22 2010 Pebble Beach Golf Trip $1,971.87 Bonita Bay Golf Trips, 2010-2011 $2,327.98 Meals/Gifts, CWS 2009-2012-Desmond-Littles $2,182.96 Meals/Gifts SWS, Waxman 2008-2011 $2,118.02 2011 Wages Golf with Waxman $223.36 Gifts/Meals, Majestic-Papariello $529.28 Wine-Papariello (2009-2010) $480.00 Meals, 2009-2011, White Rock-Brungo $298.23 Meals/Entertainment, White Rock-Doran $79.17 Meals/Entertainment, Jim Bean-Schiller $541.83 Minimum Total $13,586.92 Short, 12-029 Page 56 On his SFIs, Short claimed to have received no gifts valued at over $250 in the aggregate for calendar years 2008 through 2012 in his position as the PLCB Director of Marketing and Merchandising. Short failed to disclose the name and address of the source and the amount of gifts received valued in the aggregate at $250 or more from vendors doing business with the PLCB and the circumstances of each gift on his SFIs filed for calendar years 2010 and 2011 as documented at Fact Finding 138. As detailed at Fact Finding 140, Short failed to disclose on his SFIs filed for calendar years 2008, 2010 and 2011 required information as to reportable transportation and lodging or hospitality he received from PLCB vendors. Short never disclosed on any SFI filed between 2008 and 2012 his receipt of wine from Papariello with a value of at least $480.00. Short failed to disclose transportation, lodging, and hospitality in excess of $650 received from NABCA regarding his travel and attendance at the 2009 annual NABCA Conference held in Phoenix, Arizona. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations as follows: 3. The Investigative Division will recommend the following in relation to the above allegations: a. That a violation of Section 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1103(a) occurred when Short, by virtue of his employment with the PLCB, accepted gifts, transportation, lodging, and/or hospitality for the benefit of himself from vendors of the PLCB; b. That a violation of Section 1105(b) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1105(b), occurred in relation to Short’s failure to report receipt of gifts, transportation, lodging, and/or hospitality, as enumerated in paragraph “a” above, from vendor(s) of the PLCB, upon Statements of Financial Interests filed for the 2008 through 2011 calendar years. c. That no violation of Section 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1103(a) occurred in relation to Short’s solicitation and/or acceptance of gifts from vendors of the PLCB for the benefit of any business with which he and/or members of his immediate family are associated. 4. Short agrees to make payment in the amount of $13,586.92 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. Short, 12-029 Page 57 5. Short agrees to file complete and accurate amended Statements of Financial Interests with the Pennsylvania Liquor Control Board through the Pennsylvania State Ethics Commission, for the 2008 through 2011 calendar years within thirty (30) days of the issuance of the final adjudication in this matter. 6. Short agrees to not accept any reimbursement, compensation or other payment from the Pennsylvania Liquor Control Board representing a full or partial reimbursement of the amount paid in settlement of this matter. 7. The Investigative Division will recommend that the State Ethics Commission take no further action in this matter; and make no recommendations to any law enforcement or other authority to take action in this matter. Such, however, does not prohibit the Commission from initiating appropriate enforcement actions in the event of Respondent’s failure to comply with this agreement or the Commission’s order or cooperating with any other authority who may so choose to review this matter further. Consent Agreement, at 1-2. In considering the Consent Agreement, we accept the recommendation of the parties for a finding that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Short, by virtue of his employment with the PLCB, accepted gifts, transportation, lodging, and/or hospitality for the benefit of himself from vendors of the PLCB. The acceptance of gifts, transportation, lodging or hospitality from donor(s) with which a public official/public employee has involvement in his public capacity can form the basis for a conflict of interest under Section 1103(a) of the Ethics Act. See, Cohen, Opinion 03-006 (regarding a PLCB Hearing Examiner’s prospective acceptance of item(s) from licensees); see, e.g., Haldeman, Order 1443; Munford, Order 1390; Espenshade, Order 1387. As PLCB Director of Marketing and Merchandising, Short administers all liquor and alcohol purchasing conducted by the PLCB. Additionally, the PLCB relies primarily on Short’s recommendations and reports when making listing/delisting decisions. In this case, Short performed his duties as PLCB Director of Marketing and Merchandising while receiving gifts, transportation, lodging, and hospitality from various vendors that sell liquor and alcohol to the PLCB. The parties have stipulated that Short, in his position as the PLCB Director of Marketing and Merchandising, realized a private pecuniary gain of at least $13,586.92 when he used the authority of his public position to obtain a private pecuniary benefit for himself and members of his immediate family when he accepted gifts, transportation, lodging, and/or hospitality from vendors of the PLCB. Based upon the Stipulated Findings and Consent Agreement of the parties, we hold that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Short, by virtue of his employment with the PLCB, accepted gifts, transportation, lodging, and/or hospitality for the benefit of himself from vendors of the PLCB. We agree with the parties and we hold that a violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred in relation to Short’s failure to report receipt of gifts, transportation, lodging, and/or hospitality from vendor(s) of the PLCB on his SFIs filed for the 2008 through 2011 calendar years. Short, 12-029 Page 58 We further hold that no violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to the allegation that Short solicited and/or accepted gifts from vendors of the PLCB for the benefit of a business with which he and/or members of his immediate family are associated, as the Stipulated Findings do not support such allegation. As part of the Consent Agreement, Short has agreed to make payment in the amount of $13,586.92 payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. Short has agreed to not accept any reimbursement, compensation or other payment from the PLCB representing a full or partial reimbursement of the amount paid in settlement of this matter. Short has further agreed to file complete and accurate amended SFIs for calendar years 2008 through 2011 with the PLCB, through this Commission, within thirty (30) days of the issuance of the final adjudication in this matter. We determine that the Consent Agreement submitted by the parties sets forth a proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, per the Consent Agreement of the parties, Short is directed to make payment in the amount of $13,586.92 payable to the Commonwealth of Pennsylvania and th forwarded to this Commission by no later than the thirtieth (30) day after the mailing date of this adjudication and Order. Per the Consent Agreement of the parties, Short is further directed to not accept any reimbursement, compensation or other payment from the PLCB representing a full or partial reimbursement of the amount paid in settlement of this matter. To the extent he has not already done so, Short is directed to file complete and accurate amended SFIs for calendar years 2008 through 2011 with the PLCB, through this th Commission, by no later than the thirtieth (30) day after the mailing date of this adjudication and Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV.CONCLUSIONS OF LAW: 1. As the Director of Marketing and Merchandising for the Pennsylvania Liquor Control Board (“PLCB”) from approximately 2003 to the present, Respondent James H. Short, Jr. (“Short”) has been a public official/public employeesubject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. 2. Short violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he, by virtue of his employment with the PLCB, accepted gifts, transportation, lodging, and/or hospitality for the benefit of himself from vendors of the PLCB. 3. A violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred in relation to Short’s failure to report receipt of gifts, transportation, lodging, and/or hospitality from vendor(s) of the PLCB on his Statements of Financial Interests filed for the 2008 through 2011 calendar years. 4. No violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to the allegation that Short solicited and/or accepted gifts from vendors of Short, 12-029 Page 59 the PLCB for the benefit of a business with which he and/or members of his immediate family are associated, as the Stipulated Findings do not support such allegation. In Re: James H. Short, Jr., : File Docket: 12-029 Respondent : Date Decided: 2/6/14 : Date Mailed: 2/12/14 ORDER NO. 1629 1. As the Director of Marketing and Merchandising for the Pennsylvania Liquor Control Board (“PLCB”), James H. Short, Jr. (“Short”) violated Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), when he, by virtue of his employment with the PLCB, accepted gifts, transportation, lodging, and/or hospitality for the benefit of himself from vendors of the PLCB. 2. A violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred in relation to Short’s failure to report receipt of gifts, transportation, lodging, and/or hospitality from vendor(s) of the PLCB on his Statements of Financial Interests filed for the 2008 through 2011 calendar years. 3. No violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to the allegation that Short solicited and/or accepted gifts from vendors of the PLCB for the benefit of a business with which he and/or members of his immediate family are associated, as the Stipulated Findings do not support such allegation. 4. Per the Consent Agreement of the parties, Short is directed to make payment in the amount of $13,586.92 payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission by no later than the th thirtieth (30) day after the mailing date of this Order. 5. Per the Consent Agreement of the parties, Short is further directed to not accept any reimbursement, compensation or other payment from the PLCB representing a full or partial reimbursement of the amount paid in settlement of this matter. 6. To the extent he has not already done so, Short is directed to file complete and accurate amended Statements of Financial Interests for calendar years 2008 through 2011 with the PLCB, through the Pennsylvania State Ethics Commission, th by no later than the thirtieth (30) day after the mailing date of this Order. 7. Compliance with Paragraphs 4, 5 and 6 of this Order will result in the closing of this case with no further action by this Commission. a. Non-compliance will result in the institution of an order enforcement action. BY THE COMMISSION, ___________________________ John J. Bolger, Chair