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HomeMy WebLinkAbout1636-2 Street In Re: John Street, : File Docket: 11-010 Respondent : X-ref: Order No. 1636-2 : Date Decided: 6/17/14 : Date Mailed: 7/15/14 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 allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an “Investigative Complaint.” An Answer was filed and a hearing was held. On April 24, 2014, this Commission initially decided this matter. On May 8, 2014, Order No. 1636 was issued to the parties. The Investigative Division requested reconsideration, and this Commission granted reconsideration to retain jurisdiction in order to consider arguments as to whether there had been a material error of law or fact. Oral argument was held. The record is complete. I. ALLEGATIONS: That John Street, a public official/public employee in his capacity as a Commissioner and Chairman of the Philadelphia Housing Authority violated Sections * 1103(a), 1103(f), and 1104(a) of the State Ethics Act (Act 93 of 1998) when he used the authority of his public position for the private pecuniary benefit of a member of his immediate family and/or a business with which a member of his immediate family is associated by participating in discussions and actions of the Housing Authority Board of Commissioners resulting in resolutions being adopted to award contracts to Wolf Block Schorr & Solis-Cohen, LLP (“Wolf Block”), a law firm that employed his son for services to be provided by his son; when he participated in the decisions of the Board to adopt resolutions awarding contracts to a business with which a member of his immediate family * is associated in excess of $500 without an open and public process; and when he failed to file a Statement of Financial Interests for the calendar years 2006 and 2010. *\[The Investigative Division has exercised its prosecutorial discretion to nol pros the allegation under Section 1103(f) of the Ethics Act (see, Discussion, infra).\] II. FINDINGS: A. Stipulations and/or Pleadings Street, 11-010 Page 2 1. The Investigative Division of the State Ethics Commission received a signed, sworn complaint alleging that John Street violated provisions of the State Ethics Act (Act 93 of 1998). 2. Upon review of the complaint the Investigative Division initiated a preliminary inquiry on May 18, 2011. 3. The preliminary inquiry was completed within sixty days. 4. On July 15, 2011, a letter was forwarded to John Street by the Investigative Division of the State Ethics Commission informing him that a complaint against him was received by the Investigative Division and that a full investigation was being commenced. a. Said letter was forwarded by certified mail, no. 7009 2250 0000 3821 8696. b. The domestic return receipt bore the signature of John Street, with a delivery date of July 18, 2011. 5. On August 31, 2011, the Investigative Division of the State Ethics Commission filed an application for a ninety day extension of time to complete the investigation. 6. The Commission issued an Order on September 27, 2011, granting the ninety day extension. 7. On January 10, 2012, the Investigative Division of the State Ethics Commission filed an application for a second ninety day extension of time to complete the investigation. 8. The Commission issued an Order on January 30, 2012, granting the ninety day extension. 9. Periodic notice letters were forwarded to John Street in accordance with the provisions of the Ethics Act advising him of the general status of the investigation. 10. The Investigative Complaint/Findings Report was mailed to the Respondent on June 28, 2012. 11. John Street served as a Commissioner with the Philadelphia Housing Authority (“PHA”) from on or around April 19, 2004, until on or around March 4, 2011. a. Street served as the Chairman of the PHA during his tenure on the PHA. b. Street previously served as a Commissioner with the PHA from 1993 until 1998. 1. Street resigned from the PHA Board to seek the office of Mayor. 12. Street held elected office with the City of Philadelphia serving as a Member of Council and later as Mayor. a. Street served as Mayor of Philadelphia from January 2000 until January 2008. b. Street served on City Council for the City of Philadelphia from January 1980 until December 1998. Street, 11-010 Page 3 13. The PHA was established by Resolution by the Philadelphia City Council and approved by the Mayor of Philadelphia on August 26, 1937, in accordance with the Housing Authorities Act, \[Act\] No. 265 approved by the Pennsylvania General Assembly on May 28, 1937. 14. The PHA was established to provide for the erection of dwellings for families of low income that will provide work opportunities for many persons now unemployed and will further stimulate general business activities. 15. Funding for the PHA is provided primarily by the U.S. Department of Housing and Urban Development (“HUD”). 16. The By-Laws of the PHA (HUD) first adopted on March 11, 1939, identified the Authority as the PHA. a. Article II includes officer positions of Chairman, Vice-Chairman, Secretary, Assistant Secretary, Treasurer and Assistant Treasurer. 1. Section 2 of Article II defined the Chairman as the Executive Head of the Authority. 17. A five-Member Board of Commissioners (“Board”) governs the PHA. a. Appointments to the PHA Board are made pursuant to Section 5 of the Housing Authorities Act. b. Section 5 of the Housing Authorities Act provides that for Cities of the First Class (Philadelphia), the Mayor shall appoint two members, the City Controller shall appoint two members, and the four members, thus appointed, shall select a fifth member of such Authority. c. The Commissioners serve staggered terms. 18. The order of business at the Regular Meetings of the PHA Board of Commissioners includes the approval of minutes of the previous meeting and the approval of Resolutions identified in agendas given to the Commissioners. a. Votes were recorded as “Ayes” and “Nays.” 1. All abstentions during a vote are recorded and specifically noted in the minutes. 19. Meeting agendas describing meeting topics to be discussed are provided to the PHA Commissioners a few days before each Regular Board meeting. a. The agendas identify Resolutions the PHA Board of Commissioners would be voting on. 20. Street was generally provided with an agenda when he attended Pre-Board Meetings with PHA Resident Leaders. a. The Pre-Board Meetings were usually held a few days before the Regular Board Meetings. b. Street was normally the only PHA Commissioner who attended the Pre- Board Meetings. Street, 11-010 Page 4 c. At the Pre-Board Meetings PHA Resident Leaders would identify their concerns and issues. 21. Street as the Chairman of the PHA would preside over the PHA Board of Commissioner Meetings. a. Street would identify every Resolution the PHA Commissioners would be voting on at the meetings. b. Street would call meetings to order and would declare when Resolutions were adopted after votes were taken by the PHA Commissioners. 22. Since at least 1994, the PHA Executive Director has been authorized to execute contracts without Board approval. a. From 1994 to 1998, amendments to the PHA By-Laws have been made by the PHA Board regarding the issuance of contracts without Board approval. b. Street was a Member of the Board and voted to approve the amendments. 23. On July 21, 1994, the PHA Board of Commissioners approved Resolution No. 9201 authorizing delegation of authority of the Board of Commissioners to the Executive Director to conclude and execute contracts in amount not to exceed Fifty Thousand dollars ($50,000.00) without the prior approval of the Board of Commissioners. a. Under this Resolution, the Executive Director did not have the authority to execute contracts and applications for funding submitted to federal, state, local and private agencies in amount not to exceed Fifty Thousand Dollars ($50,000.00) without prior Board approval. b. The Resolution was approved by the PHA Board of Commissioners by a 5-0 vote. 1. John Street was a PHA Commissioner and voted in favor of this Resolution. 24. On June 23, 1998, the PHA Board of Commissioners approved Resolution No. 10246 authorizing delegation of the authority of the Board of Commissioners to the Executive Director to conclude and execute contracts in amount not to exceed One Hundred Thousand Dollars ($100,000.00) without prior approval of the Board of Commissioners. a. This Resolution modified and superseded Resolution No. 9201 dated July 21, 1994. b. The Resolution was approved by the PHA Board of Commissioners by a 5-0 vote. 1. John Street was a PHA Commissioner and voted in favor of this Resolution. 25. On May 21, 1998, a Resolution was approved by the PHA Board of Commissioners authorizing the Executive Director and the Contracting officer to negotiate and conclude contract modifications up to and including $150,000.00. a. No contract was permitted to be modified in an amount greater than $150,000.00 without the approval of the PHA Board of Commissioners. Street, 11-010 Page 5 26. As a result of the Resolutions approved by the Board in 1994 and 1998, the PHA revised \[its\] Procurement Policy on April 16, 2002. 27. The revised Procurement Policy included under General Provisions the Purpose as follows: The purpose of this Statement of procurement Policy is to: provide for the fair and equitable treatment of all persons or firms involved in purchasing by PHA; assure that supplies, services, and construction are procured efficiently, effectively, and at the most favorable prices available to PHA; promote competition in contracting; provide safeguards for maintaining a procurement system of quality and integrity; and assure that PHA purchasing \[sic\] are in full compliance with applicable Federal standards, HUD regulations, and State and local laws. Exhibit ID 8-1. 28. The Revised PHA Procurement Policy provided for Board of Commissioners’ approval of contract actions of $100,000 or more. a. All contracts where the base contract amount or any amount or any option exceeds One Hundred Thousand Dollars ($100,000) are required to be pre- approved by the Board of Commissioners. In addition, all contract modifications in excess of One Hundred Fifty Thousand Dollars ($150,000) require pre-approval by the Board of Commissioners. 29. As a result of the 2002 revisions, no contract over $100,000 or contract modifications in excess of $150,000 was to be entered into by the PHA without the approval of the PHA Commissioners. 30. The PHA Procurement Policy in Article IX includes a code of conduct provision, Ethics in Public Contracting-PHA Conduct. a. The code of conduct included a Conflict of Interest provision which provided that no employee, officer or agent of PHA shall participate directly or indirectly in the selection or in the award or administration of any contract if a conflict, real or apparent, would be involved. Such conflict would arise when a financial or other interest in a firm selected for award is held by: 1. An employee, officer or agent involved in making the award; 2. His/her relative including father, mother, spouse, brother, sister or child including “half” or “step”; 3. His/her partner; or 4. An organization which employs, is negotiating to employ, or has arrangement concerning prospective employment of any of the above. b. While Respondent stipulates to Fact Findings 30 - 30a above, Respondent does not stipulate that he was bound by such Policy. (Tr. at 12). 31. The Procurement Policy of the PHA included Competitive Proposals which were used when entering into contracts with law firms. Street, 11-010 Page 6 a. Solicitations issued by the PHA would require Request for Proposals (“RFP”) that would clearly identify the relative importance of price and other evaluation factors, including the weight given to each technical factor and subfactor. b. Negotiations would be conducted with offerors who submit proposals determined to have a reasonable chance of being selected for award, based on evaluation against the technical and price factors as specified in the RFP. c. Offerors shall not be directed to reduce their proposal prices to a specific amount in order to be considered for award. A common deadline (Best and Final Offer or BAFO) shall be established for receipt of proposal revisions based on negotiations. 32. As the Mayor of Philadelphia, John Street was familiar with the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., and the restrictions placed upon the Mayor on the hiring of family members. a. Street was cognizant of the Ethics Act and conflict of interest issues since serving as a public official in Pennsylvania since 1980 in various capacities that included serving as PHA Commissioner from 1993 until 1998. b. \[Redacted due to the confidentiality requirements of the Ethics Act.\] 33. Sharif Street is the son of John Street. a. Sharif T. Street is an attorney having graduated from the University of Pennsylvania Law School in 1999. 1. Sharif Street was admitted to the Pennsylvania Bar in July 2000. 34. Sharif Street was employed by the law firm Wolf Block beginning in or about January 2000. a. Sharif Street was employed by Wolf Block as an Associate Attorney until on or around March 4, 2008. 35. The law firm of Wolf Block had been doing legal work for the PHA since the 1990’s and predated Sharif Street’s employment with the firm. 36. As an Associate Attorney for Wolf Block, Sharif Street was paid an annual salary. a. Sharif Street did not receive any bonuses for the work he performed for Wolf Block. 37. The Contracting Office of the PHA advertised Solicitations for RFP for various types of legal services. a. Wolf Block submitted responses to at least one of the PHA RFPs. b. Alan Kessler, a Partner at Wolf Block had primary responsibility for responding to the RFPs. 38. Wolf Block’s RFPs were sent to the attention of the PHA Contracting Officer. a. Shuri Hamilton served as the Contracting Officer for the PHA from 2005 through 2008. Street, 11-010 Page 7 39. After the RFPs were submitted for legal services, PHA Senior Staff would establish Review Committees for the purpose of rating and scoring RFPs submitted by the various law firms. a. Following completion of the reviews, the Review Committee would submit evaluations and recommendations to the PHA Commissioners and the Contracting Officer. b. RFPs submitted by law firms would not be reviewed by the PHA Board of Commissioners. 40. One week prior to each PHA Board meeting, Commissioners, including John Street, would be provided with an agenda of what was to be discussed at the meeting. a. The agenda would identify every Resolution the PHA Commissioners would be voting at that particular meeting. b. The Resolutions would identify every law firm that was being recommended to receive a legal contract. 41. Resolutions relating to legal contracts submitted to the PHA Board for approval would identify the law firms to be selected. 42. Wolf Block received payments from the PHA for services rendered under Contract No. 003598 (003598B) as outlined below. Contract Invoice Invoice Payment Payment of Total No. No. Date Date Services Overall that were Payments Performed made to by Sharif Wolf Block Street 003598B 843731 2/29/2008 8/25/2008 $305.50 $1,715.50 003598B 843735 2/29/2008 8/25/2008 $1,103.50 $22,199.62 $1,409.00 $23,915.12 43. The Philadelphia Housing Authority paid $30.5 million for outside legal services provided by 15 law firms during the period of April 2007 through August 2010. 44. Sharif T. Street, Esq. was assigned to the Real Estate Practice Group and the Government Relations Practice Group of Wolf Block. 45. The PHA Board of Commissioners made the final decision as to what law firms were going to receive contracts by voting on Resolutions at the Regular Board ** Meetings. a. This was in accordance with PHA Procurement Policy that all contracts over ** $100,000 had to be approved by the PHA Commission. b. The approvals would be based on recommendations and evaluations of the ** Review Committee. 46. Board Members were not aware of Street’s need to abstain on matters involving Wolf Block. Street, 11-010 Page 8 47. Street’s hourly rate as an Associate and Contract Attorney ranged from $185.00 to $265.00 per hour. 48. John Street, as a public official in his official capacity as the Chairman and Commissioner of the PHA, was annually required to file a Statement of Financial st Interests (“SFI”) form by May 1 containing information for the prior calendar year. 49. Street was required to file \[the\] SFI for calendar years 2006, 2007, 2008, 2009, 2010 and 2011 as a Member of the PHA. 50. Street did not file SFIs for calendar years 2006 and 2010 with the PHA. a. Street did file \[an\] SFI with the City of Philadelphia for the 2006 calendar year in his capacity as Mayor. 51. Street filed \[SFIs\] with the PHA for calendar years 2007, 2008, 2009 and 2011, as follows: a. Calendar Year: 2007 Filed: No date on SEC-1 REV. 01/08 b. Calendar Year: (2008)-Nothing Listed Filed: 9/23/10 on SEC-1 REV. 01/10 c. Calendar Year: 2009 Filed: 9/23/10 on SEC-1 REV. 01/10 d. Calendar Year: 2011 Filed: 4/26/12 on SEC-1 REV. 01/12 **\[Fact Findings 45-45b above consist of the admitted averments of Paragraphs 51-51b of the Investigative Complaint. Respondent admitted these averments in his Answer to the Investigative Complaint. At the hearing, Respondent made a motion to amend his Answer to deny the averments. (Tr. at 13). The Investigative Division did not object to the motion being made, but stated that it was this Commission’s ultimate decision whether or not that would be feasible under law. (Tr. at 13-14). Respondent’s motion is denied because Respondent’s admissions in his Answer are binding “judicial admissions.” See, Bartholomew v. State Ethics Commission, 795 A.2d 1073 (Pa. Cmwlth. 2002). However, our decision in this case does not hinge upon Fact Findings 45-45b.\] B. Testimony 52. Heather McCreary (“McCreary”) is employed as the Executive Vice President of Supply Chain Management for the PHA, having been employed by the PHA since December 16, 2012. a. McCreary did not work for the PHA in 2007. b. McCreary’s job duties include responsibility for the procurement and contracts department(s) of PHA. c. PHA contracting procedures include the following steps for services or products in excess of $100,000.00: (1) The identification of a need by a unit within the PHA; (2) Preparation by the user department of a Statement of Work, independent cost estimate, and request for services ensuring that funding is available for the project; Street, 11-010 Page 9 (3) Confirmation by the PHA’s finance organization that funding is available; (4) Preparation by McCreary’s department of a “solicitation package” followed by advertisement for the solicitation; (5) Selection of a bid review committee based upon subject matter expertise; (6) Review of proposals by McCreary’s department for satisfaction of minimum requirements; (7) Distribution of proposals to review committee; (8) Independent review of proposals by review committee, which weighs/scores the proposals and recommends proposal(s) to the PHA Board; (9) Approval of a Resolution by the PHA Board to proceed with contracting; and (10) Execution of contract(s) with the approved supplier(s). d. Contracts for greater than $100,000.00 must go before the PHA Board for approval. e. A contract that is in excess of $100,000.00 cannot be entered into by the PHA without a Resolution. f. HUD regulations require PHA Board approval for a contract of $100,000.00 or more, and that particular requirement would have been in effect in 2007. g. PHA Commissioners do not execute contracts for services. h. ID 28-1 – ID 28-2 consists of PHA Resolution No. 11154 (“Resolution No. 11154”). (See, Fact Finding 70). i. ID 29-1 – ID-29-19 consists of PHA Contract No. 003598B with attachments, which corresponds to Resolution No. 11154. (See, Fact Findings 73 – 73a). 53. Leigh Ann Poltrock (“Poltrock”) is an attorney with the law firm of Pepper Hamilton in Pittsburgh, Pennsylvania. a. Poltrock served as PHA’s General Counsel for litigation from the beginning of October 2003 through December 23, 2005. b. Prior to her departure from PHA, Poltrock attended a PHA Board meeting at which a Resolution for legal service contracts came up for a vote by the PHA Board, which Resolution included Wolf Block. 1. At this meeting, Poltrock was sitting next to Carl Greene (“Greene”) and John Street was sitting to Greene’s right, such that all three were sitting together within a three-foot area. 2. At this meeting, Poltrock leaned over to Greene and stated that Wolf Block was in “this one,” meaning the Resolution, and “He can’t vote on this,” whereupon Greene nodded his head and leaned over to John Street and said, “You can’t vote on this one. Wolf Block is in here.” (Tr. at 72, 78-79). 3. When Greene made the above statement to him, John Street was doing something with his Blackberry but nodded his head. Street, 11-010 Page 10 4. John Street called for the vote on this Resolution and also voted in favor of this Resolution. C. Documents 54. ID 3-1 - ID 3-14 consists of the PHA By-laws (“By-laws”) adopted March 11, 1939. a. Article II, Section 1 of the By-laws provides: Section 1. General. The officers of the Authority shall be a Chairman, Vice-Chairman, Secretary, Assistant Secretary, Treasurer and Assistant Treasurer, all of whom shall be Members of the Authority. ID 3-2. b. Article II, Section 2 of the By-laws provides, in part: Section 2. Chairman. The Chairman shall be the executive head of the Authority. He shall preside at all meetings of the Authority. Except as otherwise authorized by resolution of the Authority, the Chairman shall sign all contracts, deeds and other instruments made by the Authority. … ID 3-2 – ID 3-3. c. Article VIII of the By-laws provides, in part: …. Section 2. Additional Requirements. In addition to the statutory requirements for the making and letting of contracts, the Authority may, by Resolution, prescribe the manner in which contracts shall be made and let: Provided, however, That no such Resolution shall conflict with any governing statute. ID 3-13 – ID 3-14. 55. ID 5-1 - ID 5-2 consists of a PHA Resolution approved by the PHA Board on April 28, 1998, which provides, in part: The Board of Commissioners hereby delegates to the Executive Director authority to conclude and execute contracts in an amount not to exceed One Hundred Thousand Dollars ($100,000.00) for Professional Services without the prior approval of the Board of Commissioners; subject to compliance with any applicable competitive procurement requirements approved by the Board, and/or competitive procurements of the U.S. Department of Housing and Urban Development, and, if applicable, state law. ID 5-1. 56. ID 6-1 consists of a PHA Resolution approved by the PHA Board on May 21, 1998, which provides, in part: Street, 11-010 Page 11 1. The Contracting Officer shall be charged with the negotiations and implementation of all Contract Modifications according to PHA’s procedure (CPP-534), up to and including the amount of $150,000.00 without gaining Board of Commissioner approval. 2. The Contracting Officer shall be charged with the negotiations of all contract modifications that are greater than $150,000.00 in value according to PHA’s procedure (CPP- 534), but prior to implementation, the Contracting Officer, through the Executive Director, shall gain Board of Commissioner approval via the Recommendation of Award Process. No contract shall be modified in an amount greater than $150,000.00 without said approval. ID 6-1. 57. ID 7-1 - ID 7-2 consists of PHA Resolution No. 10246 adopted by the PHA Board on June 23, 1998, which provides, in part: The Board of Commissioners hereby delegates to the Executive Director authority to conclude and execute contracts in an amount not to exceed One Hundred Thousand Dollars ($100,000.00) without the prior approval of the Board of Commissioners; subject to compliance with any applicable competitive procurement requirements approved by the Board, and/or competitive procurement of the U.S. Department of Housing and Urban Development, and, if applicable, state law. ID 7-1. 58. ID 8-1 – 8-12 consists of the Procurement Policy that is referenced in Fact Findings 30 – 30b. a. The Procurement Policy was approved by the PHA Board of Commissioners on September 25, 1991, and revised on April 28, 1998. b. The Procurement Policy provides that pre-approval of the PHA Board of Commissioners is required for all contracts where the base contract amount or any option exceeds $100,000.00 and for all contract modifications in excess of $150,000.00. ID 8-2. c. The Procurement Policy provides, in part: IX. ETHICS IN PUBLIC CONTRACTING – PHA CONDUCT A. GENERAL PHA shall adhere to the following code of conduct, consistent with applicable State or local law. B. CONFLICT OF INTEREST No employee, officer or agent of PHA shall participate directly or indirectly in the selection or in the award or administration of any contract if a conflict, real or apparent, would be involved. Street, 11-010 Page 12 Such conflict would arise when a financial or other interest in a firm selected for award is held by: 1. An employee, officer or agent involved in making the award; 2. His/her relative including father, mother, spouse, brother, sister or child including “half” or “step”; 3. His/her partner; or, 4. An organization which employs, is negotiating to employ, or has an arrangement concerning prospective employment of any of the above. …. ID 8-11 – ID 8-12. 59. ID 10-1 – ID 10-2 consists of PHA Resolution No. 11017 (“Resolution No. 11017”), which was adopted unanimously by the PHA Board on December 16, 2004. a. Commissioner/Mayor John F. Street, Chairman of the PHA, voted to approve Resolution No. 11017. b. Resolution No. 11017 authorized the PHA Executive Director to conclude and execute contracts with five law firms, including Wolf Block, to provide real estate legal counsel services for the PHA Real Estate Development Department. c. Resolution No. 11017 stated that the maximum amount recommended to be paid by the PHA to Wolf Block, under a contract providing for a two-year base period and three potential one-year option periods, was $5,000,000.00. ID 10-1. 1. Per Resolution No. 11017, the maximum amount recommended to be paid by the PHA to each of the four other law firms was less, with the next highest amount being a maximum of $3,750,000.00. ID 10-1 - 10-2. 60. ID 11-1 – ID-11-14 consists of Contract No. P-003281-B with attachment(s), between the PHA and Wolf Block for real estate development legal counsel services. a. Contract No. P-003281-B was authorized by Resolution No. 11017. b. Contract No. P-003281-B is dated January 11, 2005. c. Contract No. P-003281-B became effective no later than January 11, 2005, and was for an initial contract term of two years, with PHA having the option to renew the contract for additional terms of three one-year periods, not to exceed a total of five years. d. The total contract value of Contract No. P-003281-B was not to exceed $5,000,000.00. ID 11-3. Street, 11-010 Page 13 61. ID 14-1 – ID 14-2 consists of PHA Resolution No. 11042 (“Resolution No. 11042”) adopted unanimously by the PHA Board on March 29, 2005. a. Commissioner/Mayor John F. Street, Chairman of the PHA, voted to approve Resolution No. 11042. b. Resolution No. 11042 authorized the PHA Executive Director to conclude and execute contracts with three law firms, including Wolf Block, to provide real estate title review work. c. Resolution No. 11042 stated that the maximum amount recommended to be paid by the PHA to each firm, including Wolf Block, under contracts providing for a two-year base period and two potential one-year option periods, was $400,000.00. ID 14-1. 62. ID 15-1 – ID-15-4 consists of Contract No. 3423C with attachment(s), between the PHA and Wolf Block for real estate title review work. a. Contract No. 3423C is dated April 22, 2005. b. Contract No. 3423C was for an initial contract term of two years, with PHA having the option to renew the contract for additional terms of two one-year periods. c. The total contract value of Contract No. 3423C was not to exceed $400,000.00. ID 15-1. 63. ID 18-1 – ID 18-2 consists of PHA Resolution No. 11060 (“Resolution No. 11060”) adopted unanimously by the PHA Board on June 16, 2005. a. Commissioner/Mayor John F. Street, Chairman of the PHA, voted to approve Resolution No. 11060. b. Resolution No. 11060 authorized the PHA Executive Director to conclude and execute contracts with seven law firms, including Wolf Block, to provide labor and employment law legal services. c. Resolution No. 11060 stated that the maximum amount recommended to be paid by the PHA to Wolf Block and three other law firms, under contracts providing for a two-year base period and three potential option periods, was $4,500,000.00 each. ID 18-1 - 18-2. 1. Per Resolution No. 11060, the maximum amount recommended to be paid by the PHA to each of the remaining three law firms was $550,000.00. ID 18-1 - 18-2. 64. ID 19-1 – ID-19-19 consists of Contract No. 003459-D with attachment(s), between the PHA and Wolf Block for labor and employment law legal services. a. Contract No. 003459-D was authorized by Resolution No. 11060. b. Contract No. 003459-D is dated July 1, 2005. c. Contract No. 003459-D became effective no later than July 1, 2005, and was for an initial contract term of two years, with PHA having the option to renew the contract for additional terms of three one-year periods. Street, 11-010 Page 14 d. The total contract amount of Contract No. 003459-D was not to exceed $4,500,000.00. ID 19-2, ID 19-4. 1. PHA could determine to provide additional funding to this contract. ID 19-2. 65. ID 22-1 – ID 22-2 consists of PHA Resolution No. 11073 (“Resolution No. 11073”) adopted unanimously by the PHA Board on September 15, 2005. a. Commissioner/Mayor John F. Street, Chairman of the PHA, voted to approve Resolution No. 11073. b. Resolution No. 11073 authorized the PHA Executive Director to conclude and execute contracts with three law firms, including Wolf Block, to provide general legal services. c. Resolution No. 11073 stated that the maximum amount recommended to be paid by the PHA to Wolf Block, under a contract providing for a two-year base period and three potential option periods, was $7,500,000.00. ID 22-2. 1. Per Resolution No. 11073, the maximum amount recommended to be paid by the PHA to the two other law firms was less, with the next highest amount being a maximum of $5,000,000.00. ID 22-2. 66. ID 23-1 – ID-23-17 consists of Contract No. 003486A with attachment(s), between the PHA and Wolf Block for general legal services. a. Contract No. 003486A was authorized by Resolution No. 11073. b. Contract No. 003486A is dated October 14, 2005. c. Contract No. 003486A became effective no later than October 14, 2005, and was for an initial contract term of two years, with PHA having the option to renew the contract for additional terms of three one-year periods. d. The total contract amount of Contract No.003486A was not to exceed $7,500,000.00. ID 23-2, ID 23-4. 1. PHA could determine to provide additional funding to this contract. ID 23-2. 67. ID 22-3 – ID 22-5 consists of PHA Resolution No. 11084 (“Resolution No. 11084”) adopted unanimously by the PHA Board on October 24, 2005. a. Commissioner/Mayor John F. Street, Chairman of the PHA, voted to approve Resolution No. 11084. b. Resolution No. 11084 authorized the PHA Executive Director to conclude and execute contracts with nine law firms, including Wolf Block, to provide regulatory and administrative legal services. c. Resolution No. 11084 stated that the maximum amount recommended to be paid by the PHA to Wolf Block and five other law firms, under contracts providing for a two-year base period and three potential option periods, was $5,000,000.00 each. ID 22-4. Street, 11-010 Page 15 1. Per Resolution No. 11084, the maximum amount recommended to be paid by the PHA to each of the three remaining law firms was $2,500,000.00. ID 22-4. 68. ID 24-1 – ID-24-19 consists of Contract No. 003486H with attachment(s), between the PHA and Wolf Block for regulatory and administrative legal services. a. Contract No. 003486H was authorized by Resolution No. 11084. b. Contract No. 003486H is dated December 29, 2005. c. Contract No. 003486H became effective no later than December 29, 2005, and was for an initial contract term of two years, with PHA having the option to renew the contract for additional terms of three one-year periods. d. The total contract amount of Contract No.003486H was not to exceed $5,000,000.00. ID 24-2, ID 24-4. 1. PHA could determine to provide additional funding to this contract. ID 24-2. 69. ID 25-1 consists of PHA Resolution No. 11065 (“Resolution No. 11065”) adopted unanimously by the PHA Board on September 15, 2005. a. Commissioner/Mayor John F. Street, Chairman of the PHA, voted to approve Resolution No. 11065. b. Resolution No. 11065 authorized the PHA Executive Director to conclude and execute Contract Modification No. 3 to Contract No. P-003000 between the PHA and Wolf Block, to allow for additional compensation to Wolf Block in the amount of $1,100,000.00. c. Resolution No. 11065 stated that there were two prior contract modifications to Contract No. P-003000, which had added an additional $300,000.00 for a contract total of $4,425,000.00. 1. With the third modification authorized by Resolution No. 11065, the contract total of Contract No. P-003000 was increased to $5,525,000.00. 70. ID 28-1 – ID 28-2 consists of PHA Resolution No. 11154 (“Resolution No. 11154”) adopted unanimously by the PHA Board on January 31, 2007. ID 28-1 – ID 28-2; ID 29-1). a. Commissioner/Mayor John F. Street, Chairman of the PHA, voted to approve Resolution No. 11154. b. Resolution No. 11154 authorized the PHA Executive Director to conclude and execute contracts with thirteen law firms, including Wolf Block, to provide general legal services. c. Resolution No. 11154 stated that the maximum amount recommended to be paid by the PHA to Wolf Block and four other law firms, under contracts providing for a two-year base period and three potential option periods, was $7,500,000.00 each. ID 28-2. Street, 11-010 Page 16 1. Per Resolution No. 11154, the maximum amount recommended to be paid by the PHA to each of the remaining law firms was less, with the next highest amount being a maximum of $5,000,000.00. ID 28-2. d. Resolution No. 11154 states, in part: BE IT RESOLVED , by and for The Philadelphia Housing Authority, that the Executive Director is hereby authorized to conclude and to execute contracts with Wolf Block Schorr and Solis-Cohen, LLP, Ballard Spahr Andrews & Ingersoll, LLP, Duane Morris, LLP, Schnader Harris Segal & Lewis, Hangley Aronchick Segal & Pudlin, Flaster Greenberg, P.C., Fox Rothschild, LLP, Cozen O’Connor, Law Office of Denise Smyler, Cohen & Grigsby, P.C., Kelly, Monaco and Naples, Kolber, Freeman & Randazzo and Booth & Tucker LLP for the provision of general legal services. BE IT FURTHER RESOLVED , that (1) the recommended contractor(s) comply with all terms required by the solicitation: (2) the contract is subject to approval by PHA’s funding source before a contract shall exist; (3) no contract shall exist until signed by the Executive Director; and (4) if PHA and the offeror have not mutually agreed on the terms of a contract within forty-five (45) days of the next regularly scheduled Board meeting, then this resolution shall be void and the authority of the Executive Director shall cease. ID 28-2. 71. Commissioner/Mayor John F. Street, Chairman of the PHA, presided over the PHA Regular Meeting on January 31, 2007. ID 28-3. 72. January 31, 2007, falls within the time period that this Commission may review in this matter pursuant to Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m). (See, Fact Finding 76). 73. ID 29-1 – ID-29-19 consists of Contract No. 003598B with attachment(s), between the PHA and Wolf Block for general legal services. a. Contract No. 003598B was authorized by Resolution No. 11154. b. Contract No. 003598B is dated April 10, 2007. c. Contract No. 003598B became effective no later than April 10, 2007, and was for an initial contract term of two years, with PHA having the option to renew the contract for additional terms of three one-year periods. d. The total contract amount of Contract No. 003598B was not to exceed $7,500,000.00. ID 29-2, ID 29-4. 1. PHA could determine to provide additional funding to this contract. ID 29-2. Street, 11-010 Page 17 e. The attachments to Contract No. 003598B set forth the hourly rates to be charged by Wolf Block for the work performed by various categories of attorneys as well as paralegals. 1. For the initial contract term of two years, the hourly rates to be charged by Wolf Block under Contract No. 003598B were as follows: Senior partner, $320; Partner, $285; Associate, $235; Partner for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $275; Associate for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $225; and Paralegal, $130. 2. For the first one-year option period available under Contract No. 003598B, the hourly rates to be charged by Wolf Block were as follows: Senior partner, $330; Partner, $295; Associate, $245; Partner for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $285; Associate for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $230; and Paralegal, $135. 3. For the second one-year option period available under Contract No. 003598B, the hourly rates to be charged by Wolf Block were as follows: Senior partner, $335; Partner, $300; Associate, $255; Partner for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $285; Associate for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $235; and Paralegal, $140. Street, 11-010 Page 18 4. For the third one-year option period available under Contract No. 003598B, the hourly rates to be charged by Wolf Block were as follows: Senior partner, $340; Partner, $305; Associate, $260; Partner for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $290; Associate for services at administrative hearings, municipal court and arbitrations ($50,000 and under), $240; and Paralegal, $145. 74. ID 30-1 – ID 30-3 consists of billing information for invoices submitted to the PHA by Wolf Block under various contracts. 75. During the time period that this Commission may review in this matter pursuant to Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m), Respondent John Street had knowledge of the restrictions and requirements of Sections 1103(a) and 1103(j) of the Ethics Act, 65 Pa.C.S. §§ 1103(a), 1103(j). (ID 31; Fact Finding 76). a. During the time period that this Commission may review in this matter pursuant to Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m), and specifically on January 31, 2007, when he voted to approve Resolution No. 11154, Respondent Street had knowledge that, pursuant to Section 1103(a) of the Ethics Act, he would be prohibited from using the authority of public office for the private pecuniary benefit of his son or his son’s employer. 65 Pa.C.S. §§ 1103(a), 1102. (ID 31; Fact Findings 75, 76). D. Other Findings 76. The time period that this Commission may review in this matter, pursuant to Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m), is from July 15, 2006 forward. (See, 65 Pa.C.S. §§ 1108(c), (m); 51 Pa. Code §§ 11.3; 21.3(c), 21.5(b); Fact Finding 4; Cagno, Order 1204; Cook, Order 1203). 77. The evidence of record in this case does not include contracts between the PHA and law firms other than Wolf Block that were entered into under the authorization of Resolution No. 11154, or the hourly rates or total amounts ultimately charged/received by other law firms under such contracts. III. DISCUSSION: As a Commissioner of the Philadelphia Housing Authority (“PHA”) from on or around April 19, 2004, until on or around March 4, 2011, Respondent John Street (hereinafter also referred to as “Respondent,” “Respondent Street,” and “Street”) was a public official subject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. The allegations as set forth in the Investigative Complaint/Findings Report are that Respondent Street violated Sections 1103(a), 1103(f), and 1104(a) of the Ethics Act when he, as a Commissioner and Chairman of the PHA: (1) used the authority of his public Street, 11-010 Page 19 position for the private pecuniary benefit of a member of his immediate family and/or a business with which a member of his immediate family is associated by participating in discussions and actions of the PHA Board of Commissioners (“Board”) resulting in resolutions being adopted to award contracts to Wolf Block Schorr & Solis-Cohen, LLP (“Wolf Block”), a law firm that employed his son for services to be provided by his son; (2) when he participated in the decisions of the Board to adopt resolutions awarding contracts to a business with which a member of his immediate family is associated in excess of $500 without an open and public process; and (3) when he failed to file a Statement of Financial Interests (“SFI”) for the calendar years 2006 and 2010. The Investigative Division has exercised its prosecutorial discretion to nol pros the allegation under Section 1103(f) of the Ethics Act. (Tr. at 10). Based upon the nol pros, we need not address the Section 1103(f) allegation that is no longer before us. 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. Per the Pennsylvania Supreme Court’s decision in Kistler v. State Ethics Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a) of the Ethics Act, a public official/public employee: … must act in such a way as to put his \[office/public position\] to the purpose of obtaining for himself a private pecuniary Street, 11-010 Page 20 benefit. Such directed action implies awareness on the part of the \[public official/public employee\] of the potential pecuniary benefit as well as the motivation to obtain that benefit for himself. Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics Act, a public official/public employee “must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit.” Id., 610 Pa. at 528, 22 A.3d at 231. The above statutory definition of the term "conflict" or "conflict of interest" contains two exclusions, referred to herein as the "de minimis exclusion" and the "class/subclass exclusion." The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact, a conflict would not exist and Section 1103(a) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburg, Order 900. In order for the class/subclass exclusion to apply, two criteria must be met: (1) the affected public official/public employee, immediate family member, or business with which the public official/public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official/public employee, immediate family member, or business with which the public official/public employee or immediate family member is associated must be affected "to the same degree" (in no way differently) than the other members of the class/subclass. 65 Pa.C.S. § 1102; see, Kablack, Opinion 02-003; Rubenstein, Opinion 01-007. The first criterion of the exclusion is satisfied where the members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual/business in question and the other members of the class/subclass are reasonably affected to the same degree by the proposed action. Kablack, supra. Section 1104(a) of the Ethics Act provides that each public official/public employee must file an SFI for the preceding calendar year, each year that he holds the position and the year after he leaves it: § 1104. Statement of financial interests required to be filed (a) Public official or public employee.-- Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the commission no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Persons who are full-time or part-time solicitors for Street, 11-010 Page 21 political subdivisions are required to file under this section. 65 Pa.C.S. § 1104(a). We shall now summarize the relevant facts. Respondent Street served as a PHA Commissioner from on or around April 19, 2004, until on or around March 4, 2011. Respondent previously served as a Commissioner with the PHA from 1993 until 1998. Respondent also served as Mayor of Philadelphia from January 2000 until January 2008. Respondent served on the Philadelphia City Council from January 1980 until December 1998. The PHA is governed by a five-Member Board of Commissioners (“Board”). Respondent served as the Chairman of the PHA during his tenure on the PHA. As Chairman of the PHA, Respondent was an officer of the PHA. Since at least 2002, all PHA legal service contracts have required pre-approval of the PHA Board when the base contract amount or any option exceeded $100,000.00. Pre- approval of the PHA Board has also been required for all contract modifications in excess of $150,000.00. The PHA legal service contracts have been awarded through a competitive proposal process, which included a solicitation and a bid review process by an internal committee which did not include the Respondent, and resulted in the submission to the PHA Board of the evaluations and recommendations of the bid review committee and a proposed Resolution for Board approval. Such Resolutions have authorized the PHA Executive Director to conclude and execute contracts with the recommended law firm(s). As Chairman of the PHA, Respondent presided over PHA Board meetings. Respondent knew in advance of the PHA Board meetings what Resolutions the Board would be voting on. The Resolutions identified every law firm that was being recommended to receive a legal contract. At the PHA Board meetings, Respondent would identify every Resolution the PHA Commissioners would be voting on and would declare when Resolutions were adopted after votes were taken by the PHA Commissioners. From in or about January 2000 until on or around March 4, 2008, Respondent’s son, Sharif Street, was employed by the law firm of Wolf Block. During the time period under review in this case, Sharif Street was an Associate Attorney with Wolf Block and was paid an annual salary. Sharif Street did not receive any bonuses for the work he performed for Wolf Block. Wolf Block did legal work for the PHA since the 1990’s. The evidence before this Commission includes numerous Resolutions approved by the PHA Board, including Respondent, which authorized contracting to occur between the PHA and Wolf Block. However, only one such Resolution, PHA Resolution No. 11154 (“Resolution No. 11154”), was approved by the PHA Board during the time period that this Commission may review in this matter pursuant to the five-year statute of limitations provision at Section 1108(m) of the Ethics Act, 65 Pa.C.S. § 1108(m). Resolution No. 11154 (ID 28-1 – ID 28-2) was adopted unanimously by the PHA Board on January 31, 2007. Respondent voted to approve Resolution No. 11154. Resolution No. 11154 authorized the PHA Executive Director to conclude and execute contracts with thirteen law firms, including Wolf Block, to provide general legal services. Resolution No. 11154 stated that the maximum amount recommended to be paid by the PHA to Wolf Block and four other law firms, under contracts providing for a two-year base period and three potential option periods, was $7,500,000.00 each. ID 28-2. Per Resolution No. 11154, the maximum amount recommended to be paid by the PHA to each Street, 11-010 Page 22 of the remaining law firms was less, with the next highest amount being a maximum of $5,000,000.00. ID 28-2. Resolution No. 11154 states, in part: BE IT RESOLVED , by and for The Philadelphia Housing Authority, that the Executive Director is hereby authorized to conclude and to execute contracts with Wolf Block Schorr and Solis-Cohen, LLP, Ballard Spahr Andrews & Ingersoll, LLP, Duane Morris, LLP, Schnader Harris Segal & Lewis, Hangley Aronchick Segal & Pudlin, Flaster Greenberg, P.C., Fox Rothschild, LLP, Cozen O’Connor, Law Office of Denise Smyler, Cohen & Grigsby, P.C., Kelly, Monaco and Naples, Kolber, Freeman & Randazzo and Booth & Tucker LLP for the provision of general legal services. BE IT FURTHER RESOLVED , that (1) the recommended contractor(s) comply with all terms required by the solicitation: (2) the contract is subject to approval by PHA’s funding source before a contract shall exist; (3) no contract shall exist until signed by the Executive Director; and (4) if PHA and the offeror have not mutually agreed on the terms of a contract within forty-five (45) days of the next regularly scheduled Board meeting, then this resolution shall be void and the authority of the Executive Director shall cease. ID 28-2. Pursuant to Resolution No. 11154, the PHA and Wolf Block entered into Contract No. 003598B for general legal services (ID 29-1 – ID-29-19). Contract No. 003598B is dated April 10, 2007. Contract No. 003598B became effective no later than April 10, 2007, and was for an initial contract term of two years, with PHA having the option to renew the contract for additional terms of three one-year periods. The total contract amount of Contract No. 003598B was not to exceed $7,500,000.00, although PHA could determine to provide additional funding to this contract. The attachments to Contract No. 003598B set forth the hourly rates to be charged by Wolf Block for the work performed by various categories of attorneys as well as paralegals, which hourly rates are detailed at Fact Findings 73 e(1)-(4). Wolf Block received from the PHA payments totaling $23,915.12 for services rendered under Contract No. 003598B. Of that amount, $1,409.00 was for services performed by Sharif Street. On January 31, 2007, when he voted to approve Resolution No. 11154, Respondent Street knew that, pursuant to Section 1103(a) of the Ethics Act, he was prohibited from using the authority of his public office for the private pecuniary benefit of his son or his son’s employer. 65 Pa.C.S. §§ 1103(a), 1102. (ID 31; Fact Findings 75-75a, 76). Additionally, at least as early as 2005, Respondent was specifically told that he could not vote to approve a Resolution authorizing contracting between the PHA and Wolf Block, whereupon Respondent nodded his head and voted anyway. (Fact Findings 53-53 b(4)). During the period of April 2007 through August 2010, the PHA paid $30.5 million for outside legal services provided by 15 law firms. With regard to Respondent’s SFIs, in his capacity as a Commissioner of the PHA, Respondent was required to file the SFI form for calendar years 2006, 2007, 2008, 2009, Street, 11-010 Page 23 2010 and 2011. Respondent did not file SFIs for calendar years 2006 and 2010 with the PHA. Respondent did file an SFI with the City of Philadelphia for the 2006 calendar year in his capacity as Mayor. Having summarized the above relevant facts, we must now determine whether the actions of Respondent violated Section 1103(a) of the Ethics Act. As we apply the facts to the allegations, due process requires that we not depart from the allegations. Pennsy v. Department of State, 594 A.2d 845 (Pa. Cmwlth. 1991). A violation of the Ethics Act must be based upon clear and convincing proof. 65 Pa.C.S. § 1108(g). Clear and convincing proof is “so ‘clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear conviction, without hesitance, of the truth of the precise facts in issue.’” In Re: Charles E.D.M., 550 Pa. 595, 601, 708 A.2d 88, 91 (1998) (Citation omitted). In considering the evidence, it is clear that Respondent used the authority of his public office as a PHA Commissioner when he voted on January 31, 2007, to approve Resolution No. 11154. At the time Respondent cast this vote, he knew that, pursuant to Section 1103(a) of the Ethics Act, he was prohibited from using the authority of his public office for the private pecuniary benefit of his son or his son’s employer. 65 Pa.C.S. §§ 1103(a), 1102. (ID 31; Fact Findings 75-75a, 76). Respondent knew that Wolf Block was among the law firms listed in Resolution No. 11154 to potentially receive a contract for legal services with the PHA. There is little if any doubt that Respondent knew that Wolf Block was his son’s employer. Looking at these facts from a non-legal perspective, one could easily conclude that it was improper for Respondent to have voted to approve Resolution No. 11154. We recognize the public concern that may arise when a public official’s conduct appears to constitute a conflict of interest, but a conflict of interest is not found due to the applicability of one or more of the aforesaid statutory exclusions. However, we are duty- bound to apply the Ethics Act as promulgated, and we may only find a violation based upon clear and convincing proof. While this Commission does not condone Respondent’s conduct, Respondent argues—and we are constrained to agree—that the class/subclass exclusion is applicable in this case, and therefore we are precluded from finding a violation of Section 1103(a) of the Ethics Act. The first criterion of the class/subclass exclusion is established in this case because, based upon the evidence, Wolf Block was a member of a subclass of five law firms (hereinafter also referred to as “the Five Law Firms”) that: (1) were seeking to contract with the PHA to provide general legal services; and (2) were recommended by PHA bid review committees/staff for PHA contracts to provide such services for a two-year base period and three potential option periods at a maximum contract cost of $7,500,000.00 per firm. The second criterion of the class/subclass exclusion is established because the Five Law Firms were affected to the same degree by Resolution No. 11154. Specifically, Resolution No. 11154 authorized the PHA Executive Director to conclude and execute contracts with the Five Law Firms for a two-year base period and three potential option periods at a maximum contract cost of $7,500,000.00 per firm. At the time Respondent voted to approve Resolution No. 11154, the proposed contracts had not been finalized. Resolution No. 11154 advanced all five of the Five Law Firms to the next step in the contracting process. As to each of the Five Law Firms, a contract would not exist unless it was approved by PHA’s funding source, contract terms were agreed upon within a defined time frame, and the contract was signed by the PHA Executive Director. Because Wolf Block was a member of a subclass consisting of the Five Law Firms and was affected by Resolution No. 11154 to the same degree as the other members of the subclass, we are constrained to find that the class/subclass exclusion is applicable in this case. Street, 11-010 Page 24 We hold that Respondent Street did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he, as a Commissioner and Chairman of the PHA, participated in actions of the PHA Board to approve PHA Resolution No. 11154, authorizing the PHA to engage in a contractual relationship with Wolf Block, a law firm that employed his son, because his actions affected to the same degree a subclass of five law firms including Wolf Block that were seeking to provide legal services to the PHA. Based upon our above holding, there is no need to address Respondent’s 1 remaining arguments as to the Section 1103(a) allegation. As for Respondent’s SFIs, we hold that Respondent Street violated Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), when he, as a Commissioner and Chairman of the PHA, failed to file SFIs with the PHA for calendar years 2006 and 2010. To the extent he has not already done so, Respondent Street is directed to file complete and accurate SFIs for calendar years 2006 and 2010 with the PHA, through this Commission, by no later than th the thirtieth (30) day after the mailing date of this adjudication and Order. Non- compliance will result in the institution of an order enforcement action. IV.CONCLUSIONS OF LAW: 1. As a Commissioner of the Philadelphia Housing Authority (“PHA”) from on or around April 19, 2004, until on or around March 4, 2011, Respondent John Street (“Street”) was a public official subject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. 2. Street did not violate Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he, as a Commissioner and Chairman of the PHA, participated in actions of the PHA Board to approve PHA Resolution No. 11154, authorizing the PHA to engage in a contractual relationship with Wolf Block Schorr & Solis-Cohen, LLP (“Wolf Block”), a law firm that employed his son, because his actions affected to the same degree a subclass of five law firms including Wolf Block that were seeking to provide legal services to the PHA. 3. Street violated Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), when he, as a Commissioner and Chairman of the PHA, failed to file Statements of Financial Interests with the PHA for calendar years 2006 and 2010. 1 Respondent also argues that: (1) the evidence does not meet the Kistler standard for knowledge and motivation on the part of Respondent such that he put his office at a purpose of obtaining a private pecuniary benefit for his son or Wolf Block; (2) there is no evidence as to what Respondent’s knowledge was, and in particular, no evidence Respondent knew his son worked at Wolf Block; (3) there is no evidence that Wolf Block did not do the work or was not entitled to payment; (4) the evidence does not show whether a profit was made by Wolf Block; (5) the de minimis exclusion is applicable because: (a) Contract No. 003598B had a de minimis economic impact on PHA, Wolf Block, and Sharif Street; (b) the $23,915.12 paid by PHA to Wolf Block under Contract No. 003598B was eight one hundredths of one percent (.08%) of the amount (in excess of $30 million) spent by PHA on outside legal services from 2007-2010 and was miniscule in proportion to PHA’s total annual budget; (c) there was no adverse impact on the PHA from Respondent’s action; and (d) Sharif Street billed $1,409.00 under Contract No. 003598B and did not receive individual bonuses as a result of his work at Wolf Block during the contract period; (6) Resolution No. 11154 merely authorized the PHA Executive Director to negotiate and conclude contracts; and (7) Respondent did not cast the deciding vote to approve Resolution No. 11154. In Re: John Street, : File Docket: 11-010 Respondent : Date Decided: 6/17/14 : Date Mailed: 7/15/14 ORDER NO. 1636-2 1. While this Commission does not condone the conduct at issue in this case, given the applicability of a statutory exclusion, this Commission is constrained to hold that as a Commissioner and Chairman of the Philadelphia Housing Authority (“PHA”), John Street (“Street”) did not violate Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), when he, as a Commissioner and Chairman of the PHA, participated in actions of the PHA Board to approve PHA Resolution No. 11154, authorizing the PHA to engage in a contractual relationship with Wolf Block Schorr & Solis-Cohen, LLP (“Wolf Block”), a law firm that employed his son, because his actions affected to the same degree a subclass of five law firms including Wolf Block that were seeking to provide legal services to the PHA. 2. Street violated Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), when he, as a Commissioner and Chairman of the PHA, failed to file Statements of Financial Interests with the PHA for calendar years 2006 and 2010. 3. To the extent he has not already done so, Street is directed to file complete and accurate Statements of Financial Interests for calendar years 2006 and 2010 with th the PHA, through this Commission, by no later than the thirtieth (30) day after the mailing date of this Order. 4. Non-compliance with this Order will result in the institution of an Order enforcement action. BY THE COMMISSION, ___________________________ Nicholas A. Colafella, Vice Chair Chair John J. Bolger and Commissioner Roger Nick dissent. Commissioner Maria Feeley did not participate in this matter. In re: Street, No. 1636-2 Date: July 15, 2014 DISSENTING OPINION I dissent from the Majority Opinion in this matter. The ban on use of public office for a private pecuniary gain for the public official himself or immediate family is at the heart of the Ethics Act. To allow a class/subclass to be created that does not currently exist creates the opportunity to circumvent this essential provision. John J. Bolger, Chair In re: Street, No. 1636-2 Date: July 15, 2014 DISSENTING OPINION I dissent from the Majority Opinion in this matter. The Investigative Division argues that for the class/subclass exclusion to be applicable, the class/subclass must exist prior to the action in question. I agree. Otherwise, a public official could vote to award a contract to his own company if a similar contract is awarded to another company, thereby creating a “class/subclass.” The Investigative Division cites legislative debate, indicating legislative intent, that the class/subclass is intended to provide an exclusion for a public official who votes on a matter which involves an existing class of individuals or entities. The Investigative Division also argues that case law, in particular the Commonwealth Court decision in Russell v. State Ethics Commission, concluded that “…for the class/subclass exception to apply, the underlying action that the public official or public employee desires to take must be a legal action. This exception does not make an otherwise illegal action legal.” Id., 987 A.2d 835, 841 (Pa. Cmwlth. 2009), allocatur denied, 607 Pa. 708, 4 A.3d 1056 (2010). The ban on use of public office for a private pecuniary gain for the public official himself or immediate family is at the heart of the Ethics Act. To allow a class/subclass to be created that does not currently exist creates the opportunity to circumvent this essential provision. For these reasons I dissent from the Majority Opinion in this matter. Commissioner Roger Nick