HomeMy WebLinkAbout1641 Schwenk
In Re: Matthew Schwenk, : File Docket: 13-008
Respondent : X-ref: Order No. 1641
: Date Decided: 6/16/14
: Date Mailed: 7/10/14
Before: John J. Bolger, Chair
Nicholas A. Colafella, Vice Chair
Raquel K. Bergen
Mark R. Corrigan
Roger Nick
Kathryn Streeter Lewis
Maria Feeley
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 Matthew Schwenk, a public official/public employee in his capacity as Director
of Product Selection for the Pennsylvania Liquor Control Board (“PLCB”) violated Sections
1103(a) and 1105(b) of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. §§ 1103(a) and
1105(b), when he used the authority of his public position for \[the\] private pecuniary
benefit of himself by soliciting and/or accepting items of value from vendors of the PLCB at
a time when he was responsible for, and participated in, PLCB decisions to place vendor
products in PLCB liquor stores; when he solicited and/or accepted
travel/hospitality/lodging from Commonwealth vendors; and when he failed to disclose on
Statements of Financial Interests his receipt of gifts, transportation, lodging and hospitality
for calendar years 2010 through 2012.
II.FINDINGS:
1. Matthew Schwenk served as the Director of Product Selection for the PLCB from
approximately July 2010 until January 2013.
a. Schwenk began employment with the PLCB in 2004, as a full-time clerk
typist.
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1. Schwenk began employment with the Commonwealth with the
Department of Labor & Industry as a temporary clerical pool
employee.
b. Schwenk held multiple positions during his tenure with the PLCB including
Clerk, Management Analyst, Merchandising and Pricing Coordinator, and
Chief of Category Management.
1. Schwenk received multiple promotions throughout his tenure with the
PLCB.
2. Schwenk’s job description for the position of Director of Product Selection for the
PLCB included the following responsibilities and duties:
a. Planning, developing, directing, and coordinating the PLCB’s comprehensive
statewide marketing and merchandising programs/functions;
1. In this capacity, Schwenk reported directly to James Short, PLCB
Director of Marketing and Merchandising.
b. Development, implementation, and evaluation of policies and operational
procedures to ensure the efficient marketing of regularly listed and luxury
wine and spirits products made available in Wine and Spirits stores;
c. Direction of a centralized marketing and merchandising program to satisfy
customer and licensee demand, promote product selection while enhancing
profit, and ensure competitive pricing;
d. Advising on proposed polic\[y\] changes needed for improved customer
service and agency profitability; and
e. Performance of work with considerable independence within the framework
of applicable laws, regulations, and policies with considerable direction
exercised in making administrative and program decisions under the general
direction of an executive supervisor with work reviewed through
conferences, reports, and evaluation of results obtained.
f. Direction of the supervision of the luxury and category management staff in
the establishment of marketing programs;
g. Oversight of special pricing and display programs and coordinates with
luxury and category management staff in the implementation of marketing
and merchandising plans;
h. Direction and approval of the development of standards for promotional
campaign displays and oversight of the preparation of documentation for
distribution to, and training of, field personnel;
i. Direction of the planning and implementation of space prioritization and
layout of varied products and brands for display and promotion;
j. Direction and evaluation of profitability and margin analysis with appropriate
recommendations;
k. Presents analysis of supplier proposals to add products and makes
recommendations to the Director of Marketing for prospective new product
introduction or trial, or recommendations for discontinuation of currently
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offered products;
l. Leads negotiations with vendors on product promotion proposals involving
discounts, rebates, incentives, luxury items, or one-time buys; and
m. Directs luxury wine and category management staff in the review and
analysis of special product promotions, including the pricing, floor
positioning, advertising, and marketing of these items.
3. 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.
4. 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.
5. 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.
6. 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.
7. On April 12, 1951, the Pennsylvania General Assembly combined existing beer and
liquor laws into one statute, entitled the “Liquor Code.”
8. 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.
9. 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.
10. The PLCB is a high volume purchaser of wine and spirits in the United States.
a. The PLCB currently operates approximately 608 stores, which are leased
from private landlords.
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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.
11. 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.
12. 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
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.
13. In 2006, the Director of Administration had no supervisory authority over employees
in the Purchasing Division.
a. Requests were made to James Short, PLCB Director of Marketing, to
implement the policy in the Purchasing Department.
b. Short never implemented the policy.
14. As a Control State, 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.
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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.
15. In order to have a product sold by the PLCB, a manufacturer/supplier of alcoholic
beverage products may employ several different methods to have its product
represented within the Commonwealth of Pennsylvania.
a. A manufacturer/supplier may market its product directly to the PLCB for the
listing/delisting process as well as for sales and distribution.
b. A manufacturer/supplier may market its product through a vendor.
1. For all sales/distribution, a vendor of record must be identified with
the PLCB.
2. A manufacturer/supplier may also be a vendor/vendor of record.
c. A manufacturer/supplier may enlist the services of a broker, who then in turn
represents the manufacturer/supplier and its products before the PLCB.
1. Any broker may represent multiple manufacturers/suppliers and/or
multiple products before the PLCB.
2. A broker may also serve as a vendor/vendor of record.
16. 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, when for each product
listed, one product is delisted, due to the limited amount of shelf space
available at each PLCB retail store.
17. The process to present a new product for listing is regulated through the PLCB.
a. Once the appropriate application has been submitted, a specific date/time
will be scheduled for a vendor/broker to present new products to Members of
the PLCB.
b. Generally two (2) bottles of a product are provided for sampling.
1. One (1) bottle for tasting and another for label review are submitted.
c. PLCB \[staff\] members usually responsible for evaluating new product are:
Director of Marketing and Merchandising
Chief Product Management and Pricing Division
Merchandising Pricing Coordinator(s)
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d. 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. A report of products to be listed is forwarded to the Commissioners
for approval.
2. The Commissioners do not participate in the new product review
process.
3. Commissioners vote on the entire recommended new product list,
without any independent review of the product/support data.
4. The Director of Marketing and Merchandising along with the Chief of
the Product Management and Pricing Division make the final
recommendation to the Commission as to what product(s) should be
listed for sale.
5. Luxury wines and one-time buys, including the Chairman’s Selection
Program, are not subject to the listing/delisting process.
18. Delisting occurs simultaneously with the listing process.
a. The delisting process is formally termed “category management,” but is
commonly described as “bucketing” or “filtration” process.
b. If a product is to be delisted, the vendor is notified and provided an
opportunity to avoid a delisting.
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 Chief of the Product
Management and Pricing Division make the final recommendation to the
Commission as to what product(s) should be delisted.
19. The PLCB relies primarily on recommendations made by James Short, the Director
of Marketing and Merchandising, and his subordinates, including Schwenk as the
Director of Product Selection, when making listing/delisting decisions.
a. The Board conducts no independent review of products and relies on staff
recommendations.
b. It is estimated that 5% of the recommendations to list/delist are not accepted
by the Board.
20. 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.
21. Southern Wine and Spirits of America, Inc. (“Southern”) \[claims\] to be the nation’s
largest wine and spirits distributor.
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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.
22. 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.
23. 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 (“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.
24. Southern is a broker and vendor/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.
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b. Products for which Southern serves as broker and/or vendor/vendor of
record account for between approximately 6.43% to 6.85% of PLCB total
Cost of Goods Sold during the last five (5) years (2007-2012).
1. Sales to PLCB for years 2007 through 2012 totaled between
$62,051,980.00 and $77,641,059.78.
25. 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.
26. 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. Sales to the PLCB for years 2007 through 2012 totaled between
$198,712,993.38 and $221,606,618.99.
27. 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”).
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.
28. 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.
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29. Capital Wine and Spirits/Alliance Brands representatives interacting most often with
PLCB officials include the following:
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)
30. 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.”
31. As a broker and vendor/vendor of record for products sold to the PLCB, Allied
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.
a. Sales to PLCB for years 2007 through 2012 totaled between $15,267,768.10
and $25,000,032.79.
32. 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.
33. Executives and marketing representatives from vendors supplying products to the
PLCB met with PLCB employees to market products.
a. The market strategies of these representatives included offering gifts,
transportation, lodging, and hospitality to PLCB employees.
b. These items including golf events, meals, alcoholic beverages, and gift cards
were offered year round including when listing/delisting of products was
occurring.
c. Items of value were routinely provided to PLCB officials who were in decision
making positions regarding product selection and placement.
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34. Representatives of the numerous PLCB vendors frequently contacted Schwenk and
various other PLCB representatives 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.
c. Schwenk’s job duties, at times, included making determinations where
products would be located in state liquor stores.
THE FOLLOWING FINDINGS RELATE TO SCHWENK’S RECEIPT OF GIFTS AND
HOSPITALITY THAT HE WOULD NOT HAVE BEEN IN A POSITION TO RECEIVE
ABSENT HIS EMPLOYMENT WITH THE PLCB.
35. 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.
36. 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.
37. 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.
38. 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.
39. 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
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items of value by PLCB employees from PLCB vendors.
b. The decision to cancel the event was made jointly among Littles, Desmond,
and Sirota.
40. 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
and/or the Alliance suppliers at the events.
d. The event was primarily social in nature with no specific business agenda.
41. 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.
42. 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. In addition to Schwenk, PLCB attendees were Short and CEO Joe Conti.
b. Schwenk reported directly to James Short.
1. Short is a subordinate to PLCB CEO Joe Conti.
c. Although the event was social in nature, Schwenk did not utilize leave of any
kind (annual or personal) in association with his participation at the 2009
Alliance Open.
1. Schwenk attended this event at the direction of his Supervisor, James
Short.
2. Schwenk believed the event was “work related” as he was advised to
attend by Short and therefore did not utilize leave or vacation time,
nor was he instructed to do so by Short or any other PLCB official.
d. 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.
43. 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
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$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).
44. 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.
45. 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.
46. The 2010 Alliance Golf Open was held at the River Crest Golf Club, 100 Golf Club
Drive, Phoenixville, PA 19460 on July 15, 2010.
a. The event was more inclusive than the 2009 event by providing lunch,
cocktails and dinner.
1. Fifteen (15) individuals participated in the 2010 Alliance Open,
including three (3) PLCB officials/employees.
b. PLCB attendees at the event included Schwenk, Short, and P.J. Stapleton
(PLCB Chairman at that time.)
1 Neither Schwenk nor Short utilized leave of any kind (annual or
personal) in association with their respective attendance at the 2010
Alliance Open.
2. Schwenk was directed to attend this event by his Supervisor, James
Short.
3. Schwenk believed the event was “work related” as he was directed to
attend by Short, and therefore did not utilize leave or vacation time,
nor was he instructed to do so by Short or any other PLCB official.
4. 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.
47. Schwenk submitted Commonwealth Travel Expense Voucher (TEV) MS07152010
dated July 26, 2010, in the amount of $195.24 for travel and overnight expenses
from Harrisburg to Skippack, Pennsylvania, and New Hope, Pennsylvania, on July
15, 2010, and from Skippack, Pennsylvania, to Harrisburg, Pennsylvania, on July
16, 2010.
a. Schwenk submitted the TEV at the direction of Short.
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48. 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).
49. The value of the golf outing based on a maximum of fifteen (15) individuals in
attendance totaled approximately $490.87 per individual.
50. The 2011 Alliance Golf Open was held at the Philadelphia Country Club, 1601
Spring Mill Road, Gladwyne, PA 19035 on July 14, 2011.
a. PLCB attendees at the event included Schwenk, Short, Conti, Stapleton, and
Doug Hitz, PLCB Bureau Director for Planning and Procurement.
b. Although the event was social in nature, neither Schwenk nor any other
PLCB employees utilized leave of any kind (annual or personal) in
association with their respective attendance at the 2011 Alliance Open.
c. Schwenk was authorized to attend this event by his Supervisor, James Short.
d. Schwenk believed the event was “work related” and therefore did not utilize
leave or vacation time, nor was he instructed to do so by Short or any other
PLCB official.
e. 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.
51. Schwenk submitted Commonwealth Travel Expense Voucher (TEV) MS071511
dated July 20, 2011, in the amount of $130.20 for travel and overnight expenses to
Philadelphia, Pennsylvania, on July 14, 2011, returning to Harrisburg,
Pennsylvania, on July 15, 2011.
a. TEV No. MS071511 was submitted and completed as directed by Short on
July 20, 2011.
52. 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.
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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).
d. The value of the golf outing based on a maximum of twenty (20) individuals
in attendance totaled approximately $474.40 per individual.
THE FOLLOWING FINDINGS RELATE TO SCHWENK’S RECEIPT OF GOLF TRIPS
THAT HE WOULD NOT HAVE BEEN IN A POSITION TO RECEIVE ABSENT HIS
EMPLOYMENT WITH THE PLCB.
53. Christopher Papariello is currently employed as the Executive Vice-President of
Majestic Wine and Spirits (“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.
54. 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.
55. In or about August 2010 Clark and Papariello organized a golf trip to Pebble Beach,
California.
a. Clark and Pappariello discussed PLCB employee James Short
accompanying them on the golf trip.
b. W.J. Deutsch was to cover the expenses associated with the trip.
c. Short received his invitation for the trip directly from Papariello.
d. Schwenk was informed by Short that he was to attend.
56. At no time did Papariello provide any information as to the cost of the trip or
whether any payment was required regarding expenses associated with the trip.
a. Both Schwenk and Short were informed that W.J. Deutsch had budgeted
funds to cover the costs associated with the trip.
Schwenk, 13-008
Page 15
b. Costs associated with the trip included airfare, lodging, greens fees,
subsistence, and entertainment.
57. The dates established for the golf trip to Pebble Beach called for Schwenk and
Short 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. Schwenk 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.
58. Lodging accommodations as well as golf reservations for the trip were made by
Clark.
a. Schwenk, Short, 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. Schwenk, Short, 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 submitted as a business expense by Clark and Papariello and
was considered a marketing event.
59. Neither Schwenk nor Short 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.
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.
60. 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).
62. Current airfare for one round-trip ticket from Philadelphia International Airport to
San Jose International Airport with one stop is approximately $347.50.
Schwenk, 13-008
Page 16
a. Neither Papariello nor his employer provided records of airfare expenses
incurred for Schwenk.
63. Both Short and Schwenk accepted the travel, lodging, and hospitality associated
with the golf trip to Pebble Beach, California, from entities conducting business with
the PLCB at the time of the trip.
64. Schwenk realized a private pecuniary gain of no less than $1,971.87 in association
with his acceptance of an all-expense paid three (3) day golf trip to Pebble Beach
provided by Majestic Wine and Spirits/W. J. Deutsch and Sons at a time when
Majestic Wine and Spirits and W. J. Deutsch and Sons had ongoing business
dealings with the PLCB.
a. 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 SCHWENK
ARRANGED BY WHITE ROCK DISTILLERIES REPRESENTATIVES.
65. 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.
66. 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
Schwenk.
67. 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.
68. During or about February 2010, Coulombe invited James Short, 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. No marketing or business purpose existed for the trip.
1. All expenses incurred by Brungo and other White Rock officials were
reimbursed by White Rock.
Schwenk, 13-008
Page 17
b. The purpose of the trip was not related to any official PLCB purpose.
c. Short directed Schwenk to accompany him on the trip.
d. Lodging for Schwenk and Short was provided by Coulombe at his personal
residence near Naples, Florida.
69. The dates established for the golf trip to Bonita Bay called for Schwenk, Short, 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.
70. Schwenk and Short 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.
71. All of Schwenk’s and Short’s expenses associated with the trip (i.e. airfare, greens
fees, meals, entertainment, etc.) were paid for by Coulombe and/or White Rock
representatives.
72. 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 Schwenk and
Short.
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 Schwenk and Short.
73. 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. Air travel was arranged by Coulombe.
74. Schwenk did not 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. Schwenk was informed by Short not to utilize leave.
b. Schwenk went on the trip at the direction of his immediate supervisor.
75. During or about November 2011, Coulombe again invited Short (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.
Schwenk, 13-008
Page 18
a. No PLCB business purpose existed for the trip.
1. All expenses related to the trip were paid by White Rock.
b. Short informed Schwenk that he was to accompany him.
76. The dates established for the golf trip to Bonita Bay called for Schwenk, Short, 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.
b. Schwenk 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.
77. Lodging accommodations were made on behalf of Schwenk and Short 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 Schwenk’s two nights of lodging at the Hyatt
Coconut Point Resort and Spa totaled approximately $708.62.
78. Schwenk and Short 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.
79. All of Schwenk’s and Short’s expenses associated with the trip (e.g., airfare, greens
fees, meals, entertainment, etc.) were paid for by Coulombe and/or White Rock
representatives.
80. Total expenses for the golf trip sponsored by Coulombe/White Rock could not be
fully determined, particularly airfare, greens fees and meals and entertainment.
Schwenk, 13-008
Page 19
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.
2. Brungo’s expense report for the week ending December 2, 2011,
document lodging fees totaling $3,543.12 in regard to lodging in
Bonita Springs, Florida.
aa. Brungo paid for individual rooms for Schwenk, Short,
Desmond, Doran, and herself for two nights ($354.31 x 5 x 2 =
$3,543.10).
81. 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. White Rock representatives confirmed, in sworn statements to Commission
Investigators, paying for Schwenk’s airfare but did not provide records
confirming the expenses.
82. Schwenk and Short accepted the travel, lodging, and hospitality associated with the
golf trip to Bonita Bay, Florida, from Coulombe at a time when White Rock and
Capital Wine and Spirits were then conducting business with the PLCB.
83. The total cost of Schwenk’s attendance at the golf trips is at least as follows:
2010: 2011:
Drinks: $ 34.51 Room: $ 708.62
Airfare: $ 330.20 Drinks: $ 95.11
Wages: $ 409.80 Airfare: $ 330.20
________ ________
Total: $ 774.51 Total: $1,133.93
a. These amounts do not include all meals, greens fees, and other
transportation.
b. All expenses associated with the event, including airfare, lodging, greens
fees, subsistence, and entertainment, were paid for by White Rock
Distilleries representatives.
84. In addition to the golf trips to Bonita Bay, Schwenk was provided with
meals/hospitality from Brungo and/or Doran while Schwenk was employed as
Director of Product Selection.
a. Most of these offers were made in conjunction to similar offers made to
James Short.
b. Absent Schwenk’s employment with the PLCB, Schwenk would not have
been in a position to receive the meals/hospitality from Brungo and/or Doran,
White Rock Distilleries representatives.
Schwenk, 13-008
Page 20
1. The total specific value of all the meals/hospitality received by
Schwenk from Brungo and/or Doran could not be determined.
THE FOLLOWING FINDINGS RELATE TO SCHWENK’S GENERAL RECEIPT OF GIFTS
AND HOSPITALITY THAT HE WOULD NOT HAVE BEEN IN A POSITION TO RECEIVE
ABSENT HIS EMPLOYMENT WITH THE PLCB.
85. 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 Schwenk 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.
1. Specific representatives Schwenk 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
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.
86. As part of the marketing process, vendor representatives routinely offered and
provided PLCB employees 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
Schwenk, 13-008
Page 21
a. Schwenk accepted gifts, hospitality, and/or other items of economic value on
a regular basis from multiple vendor representatives, including but not
limited to, Littles, Desmond, Waxman, Brungo, Doran, and Schiller.
b. Schwenk was offered meals and gifts by vendors due to his position(s) with
the PLCB.
c. Schwenk was provided items by vendors in his official capacity as part of the
marketing of products by vendors.
87. Schwenk received direction from James Short to accept items, including alcohol,
gifts cards, golf trips, etc.
a. Schwenk was aware that employees who did not accept items of value
provided by vendors were subject to retaliation and threats of dismissal.
88. Schwenk, Short, 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.
c. Following a day of testing, vendor representatives would provide dinner for
Schwenk, Short, and Pollack.
1. The primary vendor representatives providing dinner were from
Capital and Majestic.
d. Schwenk accepted dinners and drinks annually between 2010 and 2012
from these vendors who were attempting to get products selected for the
Chairman’s Select Program.
1. Schwenk was advised by Short the dinners were part of PLCB
business.
89. While serving in the position of PLCB Chief of Category Management and later as
the Director of Product Selection, Schwenk received and accepted meals/hospitality
and/or gifts during Chairman Select buying trips from Littles and/or Desmond,
representatives of Capital Wine and Spirits.
a. Littles’ expense summaries identify Schwenk as being present when
meals/hospitality were offered to PLCB employees.
1. Specific expenses could not be directly attributed to Schwenk.
90. Desmond’s expense summaries document meals/hospitality and/or gifts provided to
Schwenk, as a PLCB employee, as detailed below:
Activity Net Description Additional Text
Date Amount
Schwenk, 13-008
Page 22
Activity Net Description Additional Text
Date Amount
11/03/2010 $75.00 Nordstrom gift for buyer None
11/28/2011 $325.00 Bumble Bee Hollow: gift for None
buyer
02/15/2012 $200.00 Nordstrom: gift for buyer None
a. Schwenk does not recall receipt of the Nordstrom gifts and denies receipt of
same.
91. Schwenk accepted the meals/hospitality and/or gifts from Littles and/or Desmond at
a time when Schwenk was responsible for making recommendations to the PLCB
Board regarding product purchasing, as well as listing and delisting, of products
from suppliers represented by Capital Wine and Spirits.
a. Absent Schwenk’s employment with the PLCB, Schwenk would not have
been in a position to receive the meals/hospitality and/or gifts from Littles
and/or Desmond, PLCB vendor representatives.
THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT SCHWENK FAILED
TO DISCLOSE HIS RECEIPT OF GIFTS, TRANSPORTATION, LODGING, AND/OR
HOSPITALITY ON STATEMENTS OF FINANCIAL INTERESTS FILED FOR THE 2010
THROUGH 2011 CALENDAR YEARS.
92. 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
93. Schwenk was required to file Statements of Financial Interests by May 1 annually
in his position as a PLCB Merchandising and Pricing Coordinator, PLCB Chief of
Category Management, and PLCB Director of Marketing and Merchandising.
94. 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.”
Schwenk, 13-008
Page 23
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.”
95. Schwenk filed Statements of Financial Interests for calendar years 2008 through
2012 in compliance with Section 1104 of the State Ethics Act as follows:
Date Filed Calendar Year
03/04/2009 2008
04/01/2010 2009
03/01/2011 2010
03/05/2012 2011
03/31/2013 2012
a. Schwenk 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. Schwenk’s calendar year 2008 through 2012 Statements of Financial
Interests all documented “none” in relation to gifts received.
b. Schwenk disclosed transportation, lodging, and hospitality received from the
Italian Wine & Food Institute (value of $2,781.00) and the St. Croix Rum
Council (valued at $4,000.00) on his 2009 and 2011 calendar year SFIs
respectively.
1. No additional receipt of transportation, lodging, and hospitality was
disclosed on Schwenk’s 2009 and 2011 calendar year SFIs.
2. Schwenk’s 2008, 2010, and 2012 calendar year Statements of
Financial Interests documented “none” in relation to transportation,
lodging, and hospitality received.
c. Schwenk’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).
96. Schwenk 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 year 2011.
a. Schwenk failed to disclose gifts received from Christine Desmond, Capital
Wine & Spirits representative, in the total amount of $325.00 in 2011.
97. Schwenk failed to disclose the name and address of \[sic\] any payment for or
Schwenk, 13-008
Page 24
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 2010 and 2011 as documented below:
Year Source Description Minimum
Value
2010 Paul Coulombe, White Rock Three day golf trip to Bonita Bay, $650.00+
Florida/Naples, Florida area plus round
trip airfare
2010 Beau Clark, W.J. Duetsch Three day golf trip to Pebble Beach, CA, $1,971.87
all expenses paid
2011 Paul Coulombe, White Rock Three day golf trip to Bonita Bay, $1,133.93
Florida/Naples, Florida area, all expenses
paid
a. No specific expense documents were provided by the vendor for the 2010
golf trip to the Bonita Bay/Naples area.
1. 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.
Schwenk, 13-008
Page 25
III.DISCUSSION:
As the Director of Product Selection for the Pennsylvania Liquor Control Board
(“PLCB”) from approximately July 2010 until January 2013, Respondent Matthew Schwenk,
hereinafter also referred to as “Respondent,” “Respondent Schwenk,” and “Schwenk,” 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 Schwenk violated Sections 1103(a) and 1105(b) of the
Ethics Act, 65 Pa.C.S. §§ 1103(a) and 1105(b): (1) when he used the authority of his
public position for the private pecuniary benefit of himself by soliciting and/or accepting
items of value from vendors of the PLCB at a time when he was responsible for, and
participated in, PLCB decisions to place vendor products in PLCB liquor stores; (2) when
he solicited and/or accepted travel/hospitality/lodging from Commonwealth vendors; and
(3) when he failed to disclose on Statements of Financial Interests (“SFIs”) his receipt of
gifts, transportation, lodging and hospitality for calendar years 2010 through 2012.
Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is
prohibited from engaging in conduct that constitutes a conflict of interest:
§ 1103. Restricted activities
(a)Conflict of interest.—
No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
65 Pa.C.S. § 1103(a).
The term "conflict of interest" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Conflict" or "conflict of interest."
Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family
or a business with which he or a member of his immediate
family is associated. The term does not include an action
having a de minimis economic impact or which affects to the
same degree a class consisting of the general public or a
subclass consisting of an industry, occupation or other group
which includes the public official or public employee, a
member of his immediate family or a business with which he or
a member of his immediate family is associated.
65 Pa.C.S. § 1102.
Section 1103(a) of the Ethics Act prohibits a public official/public employee from
using the authority of public office/employment or confidential information received by
holding such a public position for the private pecuniary benefit of the public official/public
employee himself, any member of his immediate family, or a business with which he or a
member of his immediate family is associated.
Section 1105(a) of the Ethics Act provides that the Statement of Financial Interests
shall be filed on the form prescribed by this Commission; that all information requested on
Schwenk, 13-008
Page 26
the form shall be provided to the best of the knowledge, information and belief of the filer;
and that the form shall be signed under oath or equivalent affirmation.
Section 1105(b) of the Ethics Act and its subsections detail the financial disclosure
that a person required to file the Statement of Financial Interests 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 Statement of Financial
Interests 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 Statement of Financial
Interests 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 Schwenk held multiple positions during his tenure with the PLCB
including Clerk, Management Analyst, Merchandising and Pricing Coordinator, and Chief
of Category Management. Schwenk served as the Director of Product Selection for the
PLCB from approximately July 2010 until January 2013. In this capacity, Schwenk
reported directly to James Short (“Short”), PLCB Director of Marketing and Merchandising.
Schwenk’s job description for the position of Director of Product Selection for the
PLCB included, inter alia, the following responsibilities and duties: (1) planning,
developing, directing, and coordinating the PLCB’s comprehensive statewide marketing
and merchandising programs/functions; (2) developing, implementing, and evaluating
policies and operational procedures to ensure the efficient marketing of regularly listed and
luxury wine and spirits products; (3) directing a centralized marketing and merchandising
program; (4) advising on proposed policy changes for improved agency profitability; (5)
presenting analysis of supplier proposals to add products and making recommendations to
the Director of Marketing for prospective new product introduction or trial, or
recommendations for discontinuation of currently offered products; and (6) leading
negotiations with vendors on product promotion proposals involving discounts, rebates,
incentives, luxury items, or one-time buys.
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.
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 PLCB Director of
Marketing and Merchandising, Chief of the Product Management and Pricing Division, and
Merchandising Pricing Coordinator(s) are usually responsible for evaluating new products.
The Director of Marketing and Merchandising and the Chief of the Product Management
and Pricing Division make the final recommendation to the PLCB Board Members as to
what product(s) should be listed or delisted. The PLCB relied primarily on
recommendations made by Short, the Director of Marketing and Merchandising, and his
subordinates, including Schwenk as the Director of Product Selection, when making
Schwenk, 13-008
Page 27
listing/delisting decisions. The Board conducted no independent review of products and
relied on staff recommendations.
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 are: (1) Southern Wine and Spirits (“Southern”); (2) Capital Wine and Spirits
(“Capital”); and (3) Allied Beverage Group, LLC (“Allied”), which has a subsidiary named
“Majestic Wine & Spirits, USA, LLC” (“Majestic”).
Products for which Southern serves as broker and/or vendor/vendor of record
account for approximately 6.43% to 6.85% of the PLCB total Cost of Goods Sold during the
last five (5) years.
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 (5) years. 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 previously
represented White Rock Distilleries, a former supplier of alcohol/spirits to the
Commonwealth of Pennsylvania.
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 (5) years.
Executives and marketing representatives from vendors supplying products to the
PLCB would meet with PLCB employees to market products. Those representatives
offered gifts and hospitality to PLCB representatives. These items were offered when
listing/delisting of products was occurring. Items of value were routinely provided to PLCB
officials in decision making positions regarding product selection and placement.
Representatives of the numerous PLCB vendors frequently contacted Schwenk and
various other PLCB representatives to market new and existing products. Some of these
products were subject to the listing/delisting process. Other products were luxury products
which are not subject to listing/delisting procedures.
Primary vendors and/or suppliers who marketed products to the PLCB with whom
Schwenk interacted on a regular basis included Capital, Southern, Majestic, White Rock
Distilleries (“White Rock”); Beam Global Spirits and Wine (“Beam”); and Diageo. Specific
representatives with whom Schwenk dealt included the following: Mark Littles (“Littles”),
President of Capital; Cristina Desmond (“Desmond”), Director of Marketing and Business
Analytics for Capital; Brad M. Waxman (“Waxman”), Executive Vice President, General
Manager of Southern Wine and Spirits of PA; Christopher Papariello (“Papariello”),
Executive Vice-President of Majestic; Tricia Brungo (“Brungo”), Control States Manager of
White Rock; Paul Doran (“Doran”), Regional Sales Manager of White Rock; and Erin (a/k/a
“Red”) Schiller, Pennsylvania State Account Manager of Beam.
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
primarily social in nature. No specific business presentations were made by Capital and/or
Schwenk, 13-008
Page 28
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. Schwenk 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. PLCB attendees at the event included PLCB CEO Joe
Conti (“Conti”), Short, and Schwenk. Schwenk attended this event at the direction of
Short. Schwenk believed the event was “work related” as he was advised to attend by
Short and therefore did not utilize leave or vacation time, nor was he instructed to do so by
Short or any other PLCB official. The value of the golf outing totaled approximately
$105.09 per individual.
The 2010 Alliance Golf Open was held at the River Crest Golf Club in Phoenixville,
Pennsylvania, on July 15, 2010. PLCB attendees at the event included Short, Schwenk
and PLCB Chairman P.J. Stapleton. Schwenk attended this event at the direction of Short.
Schwenk believed the event was “work related” as he was directed to attend by Short and
therefore did not utilize leave or vacation time, nor was he instructed to do so by Short or
any other PLCB official. The value of the golf outing totaled approximately $490.87 per
individual. Additionally, at Short’s direction, Schwenk submitted a Commonwealth Travel
Expense Voucher (“TEV”) claiming reimbursement from the Commonwealth for purported
business expenses totaling $195.24 for this trip.
The 2011 Alliance Golf Open was held at the Philadelphia Country Club in
Gladwyne, Pennsylvania, on July 14, 2011. PLCB attendees at the event included Short,
Conti, Schwenk, Stapleton, and Doug Hitz, PLCB Bureau Director for Planning and
Procurement. Schwenk was authorized to attend this event by Short. Schwenk believed
the event was “work related” and therefore did not utilize leave or vacation time, nor was
he instructed to do so by Short or any other PLCB official. The expenses of the golf outing
totaled approximately $474.40 per attendee. Additionally, at Short’s direction, Schwenk
submitted a TEV claiming reimbursement from the Commonwealth for purported business
expenses totaling $130.20 for this trip.
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. Schwenk was informed by Short that he was to attend. Short,
Schwenk, Papariello, and Beau Clark (“Clark”), the Pennsylvania District Manager for W.
J. Deutsch, participated in the event. The trip 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 Schwenk realized a
private pecuniary gain of 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 at a
time when Majestic/W.J. Deutsch and Sons had ongoing business dealings with the PLCB.
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. Short directed or informed Schwenk that Schwenk was to
accompany Short on these trips. No PLCB business purpose existed for these trips, and
no PLCB business meetings were held as part of either of these trips. Schwenk was
informed by Short not to utilize leave for the 2010 trip. Schwenk utilized a total of fifteen
(15) hours of annual leave to account for his absence from work during the 2011 trip. 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. The parties have stipulated that the cost of Schwenk’s attendance at the
aforesaid two all-expense paid, three day golf trips to Bonita Bay was at least $774.51 for
the 2010 trip and at least $1,133.93 for the 2011 trip.
Schwenk, 13-008
Page 29
In addition to the golf trips to Bonita Bay, Schwenk was provided with
meals/hospitality from then White Rock representatives Brungo and/or Doran while
Schwenk was employed as Director of Product Selection. Most of these offers were made
in conjunction to similar offers made to Short. Absent Schwenk’s employment with the
PLCB, Schwenk would not have been in a position to receive the meals/hospitality from
Brungo and/or Doran, White Rock representatives. The total specific value of all the
meals/hospitality received by Schwenk from Brungo and/or Doran could not be determined.
Vendor representatives make regular appearances at the PLCB offices located in
the Northwest Office Building, Harrisburg, Pennsylvania. As part of the marketing process,
vendor representatives routinely offered and provided PLCB employees with items of
value, including but not limited to alcohol, meals, golf outings, out of state golf trips and gift
cards/certificates. Schwenk accepted gifts, hospitality, and/or other items of economic
value on a regular basis from multiple vendor representatives, including but not limited to,
Littles, Desmond, Waxman, Brungo, Doran, and Schiller. Schwenk was offered meals and
gifts by vendors due to his position(s) with the PLCB. Schwenk was provided items by
vendors in his official capacity as part of the marketing of products by vendors.
Schwenk received direction from Short to accept items, including alcohol, gifts
cards, golf trips, and the like. Schwenk was aware that employees who did not accept
items of value provided by vendors were subject to retaliation and threats of dismissal.
Schwenk, Short, and Steve Pollack, Chief of the PLCB Chairman Select Program,
made regular trips to California to purchase wine for the Chairman Select Program.
Between 2010 and 2012, Schwenk accepted dinners and drinks from vendors
during trips to California to purchase wine for the PLCB’s Chairman Select Program.
These vendors were attempting to get products selected for the Chairman’s Select
Program. Schwenk was advised by Short the dinners were part of PLCB business.
Littles’ expense summaries identify Schwenk as being present when
meals/hospitality were offered to PLCB employees. Specific expenses could not be
directly attributed to Schwenk.
Desmond’s expense summaries document the following items provided to Schwenk,
as a PLCB employee:
Activity Net Description
Date Amount
11/03/2010 $75.00 Nordstrom gift for buyer
11/28/2011 $325.00 Bumble Bee Hollow: gift for
buyer
02/15/2012 $200.00 Nordstrom: gift for buyer
Schwenk does not recall receipt of the Nordstrom gifts and denies receipt of same.
Schwenk accepted the meals/hospitality and/or gifts from Littles and/or Desmond at
a time when Schwenk was responsible for making recommendations to the PLCB Board
regarding product purchasing, as well as listing and delisting of products from suppliers
represented by Capital.
Absent Schwenk’s employment with the PLCB, Schwenk would not have been in a
position to receive the meals/hospitality and/or gifts from Littles and/or Desmond, PLCB
vendor representatives.
Schwenk, 13-008
Page 30
During the relevant time period, Schwenk was required to annually file an SFI by
st
May 1. Schwenk filed SFIs for calendar years 2008 through 2012. Schwenk 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.
Schwenk 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 year 2011. Schwenk failed to disclose gifts received from Desmond in the total
amount of $325.00 in 2011.
Schwenk failed to disclose on his SFIs filed for calendar years 2010 and 2011
required information as to reportable transportation and lodging or hospitality he received
from PLCB vendors as detailed below:
Year Source Description Minimum
Value
2010 Paul Coulombe, White Rock Three day golf trip to Bonita Bay, $650.00+
Florida/Naples, Florida area plus round
trip airfare
2010 Beau Clark, W.J. Duetsch Three day golf trip to Pebble Beach, CA, $1,971.87
all expenses paid
2011 Paul Coulombe, White Rock Three day golf trip to Bonita Bay, $1,133.93
Florida/Naples, Florida area, all expenses
paid
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, as part of a negotiated settlement agreement, no
violation of Section 1103(a) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. § 1103(a), occurred in
relation to Schwenk’s receipt of gifts, transportation,
lodging, and/or hospitality from vendors of the PLCB;
and
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 Schwenk’s neglect to report receipt of gifts,
transportation, lodging, and/or hospitality from vendor(s) of
the PLCB, upon Statements of Financial Interests filed for
the 2010 through 2011 calendar years.
1. No reporting violation occurred for calendar year
2012, as insufficient evidence exists to support a
finding of a violation of Section 1105(b).
4. Schwenk agrees to make payment in the amount of $500.00 in
settlement of this matter payable to the Commonwealth of
Pennsylvania and forwarded to the Pennsylvania State Ethics
Schwenk, 13-008
Page 31
Commission within thirty (30) days of the issuance of the final
adjudication in this matter.
5. Schwenk agrees to file complete and accurate amended
Statements of Financial Interests with the Pennsylvania Liquor
Control Board through the Pennsylvania State Ethics
Commission, for 2010 and 2011 calendar years within thirty
(30) days of the issuance of the final adjudication in this
matter.
6. Schwenk agrees to not accept any reimbursement,
compensation or other payment from the Commonwealth of
Pennsylvania 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
specific recommendations to any law enforcement or other
authority to take action in this matter. Such, however, does
not prohibit the Commission from initiating appropriate
enforcement actions in the event of Respondent's failure to
comply with this agreement or the Commission's order or
cooperating with any other authority who may so choose to
review this matter further.
Consent Agreement, at 1-2.
As part of a negotiated settlement agreement, the parties have recommended that
this Commission find that no violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. §
1103(a), occurred in relation to Schwenk’s receipt of gifts, transportation, lodging, and/or
hospitality from vendors of the PLCB. It is clear that Schwenk’s receipt of such items
occurred at the direction or with the authorization of his immediate supervisor, Short.
Schwenk attended the 2009, 2010 and 2011 Alliance Golf Open, the August 2010 golf trip
to Pebble Beach, California, and the 2010 and 2011 golf trips to Bonita Bay East, Florida,
at the direction or with the authorization of Short. Schwenk accepted gifts, hospitality,
and/or other items of economic value on a regular basis from multiple vendor
representatives. The parties have stipulated that Schwenk received direction from Short to
accept items, including alcohol, gifts cards, golf trips, and the like, and that Schwenk was
aware that employees who did not accept items of value provided by vendors were subject
to retaliation and threats of dismissal.
One of the elements for establishing a violation of Section 1103(a) of the Ethics Act
is use of the authority of the public position. In this case, Schwenk’s acceptance of gifts,
hospitality, and/or other items of economic value from PLCB vendors occurred at the
direction and with the authorization of his immediate supervisor, Short.
Based upon the Stipulated Findings and Consent Agreement, we accept the
recommendation of the parties, and we hold that per the negotiated settlement agreement
of the parties, no violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a),
occurred in relation to Schwenk’s receipt of gifts, transportation, lodging, and/or hospitality
from vendors of the PLCB.
The parties have agreed, and we hold, t
hat a violation of Section 1105(b) of the Ethics
Act, 65 Pa.C.S. § 1105(b), occurred in relation to Schwenk’s neglect to report receipt of gifts,
transportation, lodging, and/or hospitality from vendor(s) of the PLCB, upon SFIs filed for the
2010 through 2011 calendar years.
Schwenk, 13-008
Page 32
We accept the parties’ recommendation and we hold that no reporting violation occurred
for calendar year 2012, as insufficient evidence exists to support a finding of a violation of Section
1105(b), 65 Pa.C.S. § 1105(b).
As part of the Consent Agreement, Schwenk has agreed to make payment in the
amount of $500.00 in settlement of this matter 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.
Schwenk has agreed to not accept any reimbursement, compensation or other
payment from the Commonwealth of Pennsylvania representing a full or partial
reimbursement of the amount paid in settlement of this matter.
Schwenk has agreed to file complete and accurate amended SFIs with the PLCB
through this Commission for the 2010 and 2011 calendar years 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, Schwenk is directed to
make payment in the amount of $500.00 payable to the Commonwealth of Pennsylvania
th
and 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, Schwenk is directed to not accept any
reimbursement, compensation or other payment from the Commonwealth of Pennsylvania
representing a full or partial reimbursement of the amount paid in settlement of this matter.
To the extent he has not already done so, Schwenk is directed to file complete and
accurate amended SFIs for the 2010 and 2011 calendar years 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 Product Selection for the Pennsylvania Liquor Control Board
(“PLCB”) from approximately July 2010 until January 2013, Respondent Matthew
Schwenk (“Schwenk”) 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. Per the negotiated settlement agreement of the parties, no violation of Section
1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to Schwenk’s
receipt of gifts, transportation, lodging, and/or hospitality from vendors of the PLCB.
A
3. violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred in relation
to Schwenk’s neglect to report receipt of gifts, transportation, lodging, and/or hospitality
from vendor(s) of the PLCB, upon Statements of Financial Interests filed for the 2010
through 2011 calendar years.
Schwenk, 13-008
Page 33
4. No reporting violation occurred for calendar year 2012, as insufficient evidence exists to
support a finding of a violation of Section 1105(b), 65 Pa.C.S. § 1105(b).
In Re: Matthew Schwenk, : File Docket: 13-008
Respondent : Date Decided: 6/16/14
: Date Mailed: 7/10/14
ORDER NO. 1641
1. Per the negotiated settlement agreement of the parties, Matthew Schwenk
(“Schwenk”)--a public official/public employee in his capacity as the Director of
Product Selection for the Pennsylvania Liquor Control Board (“PLCB”) from
approximately July 2010 until January 2013--did not violate Section 1103(a) of the
Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), in
relation to his receipt of gifts, transportation, lodging, and/or hospitality from
vendors of the PLCB.
A
2. violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. § 1105(b), occurred in relation
to Schwenk’s neglect to report receipt of gifts, transportation, lodging, and/or hospitality
from vendor(s) of the PLCB, upon Statements of Financial Interests filed for the 2010
through 2011 calendar years.
3. No reporting violation occurred for calendar year 2012, as insufficient evidence exists to
support a finding of a violation of Section 1105(b), 65 Pa.C.S. § 1105(b).
Per the Consent Agreement of the parties, Schwenk is directed to make payment in
4.
the amount of $500.00 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.
Per the Consent Agreement of the parties, Schwenk is directed to not accept any
5.
reimbursement, compensation or other payment from the Commonwealth of
Pennsylvania representing a full or partial reimbursement of the amount paid in
settlement of this matter.
To the extent he has not already done so, Schwenk is directed to file complete and
6.
accurate amended Statements of Financial Interests for the 2010 and 2011
calendar years 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.
Compliance with paragraphs 4, 5, and 6 of this Order will result in the closing of this
7.
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