HomeMy WebLinkAbout1700 TupperSTATE ETHICS COMMISSION
309 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
In Re: Craig A. Tupper, File Docket:
Respondent X -ref:
Date Decided
Date Mailed:
15 -031
Order No. 1700
10/19/16
10/28/16
Before: Nicholas A. Colafella, Chair
Mark R. Corrigan, Vice Chair
Roger Nick
Melanie DePalma
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.
ALLEGATIONS:
That Craig A. Tupper, a public official /public employee in his capacity as a Member
and Board Chairman of the Dallas Area Municipal Authority, Luzerne Count ,
Pennsylvania, violated [Sections 1103 (a), 1104(d), 1105(b)(3), 1105(b)(5), 1105(b)(6�,
1105(b)(7), 11 Q5(b)(8), 1105(b ) (9), and 1105(b)(10)] of the State Ethics Act {Act 93 of
1998) when he utilized the authority of his public position to direct, authorize and/or
otherwise execute the transfer of public monies, namely funds under the control of the
Dallas Area Municipal Authority, from one financial institution (bank) to another which
is /was a business with which he is /was associated and/or otherwise maintained a financial
interest; and when he failed to identify for which calendar year he was making financial
disclosure upon a purported calendar year 2011 Statement of Financial Interests form, in
addition to failing to identify any direct or indirect interest in any real estate requiring
disclosure under the Ethics Act, the name and address of the source and the amount of
any gift or gifts received, the name and address of the source and the amount of any
transportation, lodging, and/or hospitality received in connection with public office or
employment, the identity of any financial interest in a business which has been transferred
to a member of the reporting person's immediate family, and any office, directorship or
employment of any nature whatsoever in any business entity; when he failed to identify his
office, directorship or employment with National Penn Bank/KNBT Bank and /or PS Bank
on [his] calendar year 2012 Statement of Financial Interests; failed to report office,
directorship or employment in Luzeme Bank on [his] calendar year 2013 Statement of
Financial Interests; and failed to disclose any direct or indirect sources of income, and any
office, directorship or employment in any business, [on his] calendar year 2014 Statement
of Financial Interests.
P.O. BOX 11470, HARRISBURG, PA 17108-1470 • 717- 783 -1610 • 1 -800- 932 -0936 • www.ethics.state.pa.us
Tupper, 15 -031
Page 2
IL FINDINGS
1. Craig Tupper has served as a Member of the Dallas Area Municipal Authority
( "DANA ") Board since approximately 2005.
a. The DAMA was initially incorporated on August 22, 1967, as the Back
Mountain Municipal Authority.
1. On June 9, 1969, the name was changed to the "Dallas Area
Municipal Authority" (DAMA).
b. The DAMA was incorporated by Kingston Township, Dallas Township and
Dallas Borough.
C. Tupper has held the position of DAMA Board Chairman since 2009.
2. The DAMA consists of six (6) Members appointed by the participating municipalities.
a. The Board consists of two (2) Members each representing Dallas Borough,
Dallas Township and Kingston Township.
b. Tupper is one (1) of two (2) representatives from Dallas Township.
C, Each Board Member holds lone of the] appointed officer positions, which
include: Chairman, Vice - Chairman, Treasurer, Assistant Treasurer, Secretary
and Assistant Secretary.
d. The day -to -day operations of the DAMA are administered by Executive
Director Larry Spaciano ( "Spaciano ").
3. The DAMA provides sewer services for Dallas Borough and Kingston, Dallas,
Lehman, and Jackson Townships and solid waste collections for Dallas Borough
and Dallas and Kingston Townships.
a. The DAMA has separate Sewer and Solid Waste Divisions.
4, Professionally, Craigg Tupper has been employed as the Branch Manager for various
banks including KNBT, PS Bank, First National, and Luzerne Bank.
a. Tupper was employed by KNBT Bank from approximately March 1, 2010,
through October 2012.
1. KNBT Bank is a subsidiary of National Penn Bank.
b. Tupper was employed by PS Bank from approximately November 12, 2012,
to August 2013.
C. Tupper was employed by First National Bank from approximately August
2013 to December 2013.
d. Tupper has been employed by Luzerne Bank since approximately December
20, 2013.
5. The DAMA has employed Spaciano as its Executive Director since approximately
March 2001.
a. Spaciano is responsible for overseeing the day -to -day operations of the
Authority and reports directly to the DAMA Board.
TTu pe , 15 -031
Page
b. Spaciano assists the Board in administering DAMA policy and serves as the
Authority's Custodian of Records.
C. Spaciano has direct supervisory responsibility over the DAMA's Sewer and
Solid Waste Divisions and administrative staff.
6. Carol Kieser ( "Kieser ") was employed by the DAMA in various
ad ministrativelfinancial positions including Office Manager from approximately 2004
through 2015.
a. Keiser reported directly to Spaciano in the DAMA's chain of command.
b. From at least 2010 through 2015, Kieser's general job duties included
handling the Authority's accounts receivable and payable, electronic
transfers of solid waste funds and overseeing the assignment of work to one
(1) full -time and one (1) part -time clerical office employee.
C. Kieser also was responsible for preparation of financial reports, which are
provided to the Board on a monthly basis, and annual financial records
needed for financial audits.
1. Kieser would generate a monthly Treasurer's Report by account
based on the date of the Board meeting.
2. These financial reports may differ in account balances from monthly
bank statements because Kieser prepares them specifically as of the
date of the Board meeting, not the most recent statement date for the
specific account.
7. Since at least 2010, the DAMA had commercial loan, investment and operating
accounts for both its Sewer and Solid Waste Divisions.
a. Since 2010, the DAMA had commercial loan, investment and /or operating�
accounts with financial institutions including Citizens Bank, PLGIT,
Wachovia[Wells Fargo, PNC and KNBT /National Penn Bank.
Wachovia accounts were obtained by Wells Fargo.
2. KNBT Bank was a division of National Penn Bank.
b. Day -to -day account activity was monitored by Kieser.
C. Decisions regarding loans, investments and which financial institutions the
DAMA would utilize were made by the DAMA Board, with input from
Executive Director Spaciano.
8. In May of 2010, the DAMA had various financial accounts with PLGIT, Citizens
Bank and Wachovia. These accounts included:
a. Two (2) savings Mwer & Solid Waste) and two (2) investment accounts
(Sewer Revenue Reserve) with PLGIT.
b. Four (4) checking (Sewer Operations, Sewer Revenue, Solid Waste
Checking & SEO Checking) with Citizens Bank.
C. One (1) Long Range Plan account with Wachovia Bank.
Tu er , 15 -031
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9. As of May 6, 2010, the DAMA maintained the following account balances and rates
of return:
a. Citizens Bank
ewer
Sewer Operating Account
$55,803.00
0.15%
Sewer Revenue Checking
$663,245.00
0.15%
Solid Waste
Solid Waste Checking
$74,313.00
0.15%
SEO
SEO Checking
$9,257.00
0.15%
b. Wachovia
on�F;Fa_n_ge Plan $1,973,723.00
0.96%
C. PLGIT
T3= Plus Sewer Reserve
$464,083.43
0.18%
PLGIT Class Sewer Reserve
$18,808.62
0.07%
PLGIT Solid Waste Savings
$214,118.77
0.07%
PLGIT SEO Savings
$8,890.04
0.07%
10. Prior to any DAMA Board action to change financial institutions, the DAMA's
Executive Director would obtain rate quotes and /or [responses to] RFP's for the
Board to consider.
a. DAMA Board action was required to move any financial accounts.
b. Neither Executive Director Spaciano nor Office Manager Kieser had the
authority to transfer any DAMA financial accounts from one financial
institution to another.
C. DAMA officials with signature authority on financial accounts included the
Board's Chairman, Vice - Chairman, Treasurer and Assistant Treasurer.
11. Around May 6, 2010, the DAMA Board, which was chaired by Tupper, directed
Executive Director Spaciano to transfer the DAMA's investment and operating
accounts with PLGIT and Citizens Bank to KNBT Bank. The transfers were in turn
then made by Spaciano and /or Office Manager Keiser.
a. Kieser was a subordinate employee to the DAMA Board and to Executive
Director Spaciano.
1. Kieser did not have the authority to transfer DAMA funds independent
of a specific Board directive.
b. Tupper was the Chairman of the DAMA Board at the time that the Board
directed Executive Director Spaciano to change banks.
12. On May 6, 2010, at the direction of the DAMA Board, which was chaired by Tupper,
the DAMA opened approximately five (5) operating and investment accounts at
KNBT Bank's Shavertown Branch location.
a. Accounts opened included three (3) checking accounts (Sewer, Solid Waste
& SEO) and two (2) CD Investment Accounts (Sewer & Solid Waste).
b. Signature cards for the newly opened accounts included authorized signers
of Craig Tupper, Thomas Doughton, Charles Steever and Joseph
Youngblood, with two (2) signatures required.
Tuppe, 15 -031
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13. Between May 6, 2010, and June 10, 2010, DAMA investment accounts were
transferred from PLGIT to KNBT Bank.
a. Appp�roximately $675,619,00 in investment funds were moved from PLGIT to
KNBT Bank closing out the Authority's accounts with PLGIT.
b. Transfers on May 6, 2010, totaling $461,874.23 in the amounts of
$452,983.50 and 8,890.73 were made by the DAMA.
Check number 132 from PLGIT account no. [account number
redacted] was the source of the $452,893.50 transfer.
2. Check number 1001 from PLGIT account no. [account number
redacted] was the source of the $8,890.73 transfer.
3. Both of these checks were signed by Board Member Charles Steever.
C. No DAMA records were available to document the remaining transfers of
$213,744.77.
d. Signature cards for the KNBT accounts were signed by Craig Tupper,
Charles Steever, Thomas Doughton and Joseph Youngblood on May 6,
2010.
e. Tupper was the Branch Manager for KNBT Bank that the funds were moved
to at the time.
14. Between May 6, 2010, and September 10, 2010, at the direction of the DAMA
Board, which was chaired by Tupper, all funds that DAMA had in accounts with
Citizens Bank were transferred to KNBT Bank's Shavertown Branch location.
a. At least $502,077.16 in DAMA operating funds were transferred to KNBT
Bank during this timeframe.
b. KNBT account no. [account number redacted ] entitled "DAMA Sewer
Operations" was opened on May 6, 2010, with a $100.00 initial deposit [from]
an unknown source. Other deposits included the following:
Date
Amount
Si natures
Source
June 11, 2010
$200,000.00
Tupper/Young oo
Citizens account number
Stam
acte
Ju y 5, 2010
200,000.00
Tupper Doug ton
zens account number
Stam
acte
August 6, 2010
5,398.50
TupperlDoug ton
account num er
(Stamp)
redacted
August 6, 2010
$20,000.00
TupperlDoug ton
Citizens account number
(Stamp)
redacte
-September 10,
2.03
Doug tonl I upper
P account number
2010
redacted
—Citizens
eptem er 10,
$59,581.41
TupperlDoug ton
account num er
2010
1
redacte
C. KNBT Solid Waste account no. (account number redacted] also opened on
May 6, 2010, had the following deposits:
Date
Amount
Signatures
Source
July 15, 2010
$10,000.00
Tupper oug ton
Citizens account num er
Stam
redacte
August 6, 20 0
$4,851.43
upper oug on
[account num er
Stam
redacted
Tuber, 15 -031
Page 6
September 10, $1,143.79 upper Doug ton account number
2010 1 redacted
d. On May 6, 2010, a $100.00 deposit from an unknown source was made for
account no. [account number redacted], Sewer SEO.
15. Tupper facilitated the transfers to KNBT Bank by facsimile or actual signature on
nine (9) checks totaling $502,077.16.
a. Tupper actually signed four (4) checks totaling $261,827.23.
b. Tupper's facsimile signature appeared on five (5) checks totaling
$240,249.93.
C. The remaining transfers could not be documented.
16. By September 9, 2010, the DAMA no longer had any active accounts with Citizens
Bank.
a. The DAMA did maintain a Long Range Plan account at Wachovia Bankwith
a balance of $1,640,491.06.
b. All other Sewer, Solid Waste, SEO and investment accounts are listed as
being at KNBT Bank.
17. At the time the DAMA Board, which was chaired by Tupper, directed the transfer of
funds from the DAMA's PLGIT and Citizens Bank accounts to KNBT Bank, Tupper
was employed as the Branch Manager of KNBT's Shavertown location.
a. Tupper had only been employed by KNBT for approximately two (2) months
at the time the DAMA Board, which was chaired by Tupper, directed the
transfer.
18. As a result of the 2010 change in financial institutions from PLGIT and Citizens
Bank to KNBT Bank, the DAMA saw an increase in its rate of investment returns
while the rate of return on operating accounts remained the same.
a. DAMA investment accounts with PLGIT earned 0.18% and 0.07 %.
These same investments earned 0.80% at KNBT Bank.
b. DAMA operating accounts with Citizens Bank earned 0.'17°/x.
These accounts earned the same 0.17% at KNBT Bank.
C. The DAMA also implemented an Automated Clearing House payment
process with KNBT Bank as part of the account changes to assist with the
collection of current and delinquent customer accounts.
d. As such, the DAMA's investment accounts earned a higher rate on their
investment returns as a result of the 2010 change in financial institutions
from PLGIT and Citizens Bank to KNBT Bank, to the DAMA's benefit, and
the DAMA's operating accounts earned the same rate of return at KNBT as
with Citizens.
19. Tupper's compensation package at KNBT Bank consisted of a base salary plus a
region -wide performance based bonus structure.
Tu erer, 15 -031
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a. That region consisted of approximately twenty -seven (27) branch locations.
b. Tupper did not receive any finder's fees, bonuses, or incentives as a result of
business generated at his branch.
C. Tupper's bonus structure was based on the overall corporate performance of
all KNBT Bank branch locations in the region.
d. Moving DAMA accounts to KNBT would help increase the overall corporate
performance of the twenty - -seven (27) KNBT branch locations.
20. Although Tupper's gross compensation while employed by KNBT Bank was not
directly affected by new business generated, as a Branch Manager, he was
expected to generate new sources of revenue for the company.
Tupper's performance review dated March 29, 2011, includes language
which affirmed that Tupper was responsible for generating new revenue for
the bank as branch manager (Shavertown Office Branch Manager),
21. The following comments from Tupper's March 29, 2011, performance review relate
to production accomplishments covering the period March 2010 through March
2011.
"In the area of deposit growth for 2010, nice increases were made in the Now
account portfolio as well as the time deposits. Overall deposits showed an
increase of $1,846,072.00 over budget... unfortunately the overall total loan
portfolio was down $274,007.00 for year end. My expectation for 2011 is that
Craig and his staff will look diligently to increase both categories this year
through strategically targeting existing customers as well as prospects with
lending needs." (Now accounts, time deposits, money market.) "...Craig
continues to develop new business relationships through his contacts with
community involvement as well as actively seeking to do joint calls with
commercial lenders and other affiliates." Under the category for
professionally representing NPB through external community business
development activities "Chairman of DAMA, Dallas Lions, Luzerne County
Fair Board, Shriners, Back Mountain Business Association, Dallas Lodge.'
Stated objectives for the next year included improved community office
profitability, increased sales productivity and accountability within the office,
maintain a culture of exceptional customer service at all times and actively
work within assigned group to develop business plans, promote KNBT in the
community and conduct regular business calls.
22. In 2011, Tupper arranged a meeting for John Strellish, KNBT's Commercial Loan
Officer, with DAMA Executive Director Spaciano to discuss refinancing options for
the Authority's Long Range Plan loan.
a. Strellish had the responsibility of handling commercial loans for three (3)
KNBT Bank Branches including the Shavertown location Tupper was
managing at the time.
23. On March 24, 2011, Tupper, Spaciano and Strellish met at the DAMA Office to
review the Authority's Long Range Plan Loan, and if warranted, to discuss
refinancing options for the Authority's Long Range Plan loan.
Upon review of the Authority's current loan structure, it was concluded that
KNBT could not offer the DAMA a better financing /refinancing option.
Thu der, 15 -031
aP ge 8
b. As such, KNBT did not realize any new business as a result of the meeting.
24. Spaciano reported the meeting he and Tupper had with Strellish to the DAMA Board
during its April 14, 2011, meeting.
a. Minutes from that meeting included the following report to the Board by
Spaciano:
La rY Spaciano advised the Board that he and Mr. Tupper had met on March
24�' with John Strelish from KNBT bank to review DAMA's Long Range Plan
Loan, which is currently with Wells Fargo bank, for refinancing options.
Based on current market conditions and future loan market speculation, Mr.
Strelish felt DAMA's Present loan represented the best value for the
Authority, and did not recommend a refinance option at this time.
Present: Craig Tupper, Chuck Steever, Tom Doughton, Tim Carroll, and
John Oliver.
25. For the years 2010 through 2012, when DAMA o erati? and some investment
accounts were maintained at KNBT/National Penn Bank, Tupper received bonuses
totaling approximately $5,094.55.
a. Bonuses received by Tupper, by year were:
1. 2010: $22.19
2. 2011: $1,138.89
3. 2013: $3,933.47
b. These bonuses were earned consistent with KNBT/National Penn Bank
policy and based on regional production goals.
C. Tupper did not receive any finder's fees or commissions as a direct result of
DAMA funds being transferred to his KNBT Branch.
26. In 2011, the DAMAwas considering obtaining financing to initiate a solid waste and
recycling division.
a. At this time, the DAMA was contracting these services with private vendors.
b. This initiative would require financing for the purchase of real estate,
equipment, vehicles and hiring of additional employees.
27. In 2011, John Oliver was appointed to the DAMA Board before any official Board
. action establishing the Solid Waste Division in house.
a. Oliver learned of Tupper's involvement in the banking industry, specifically,
Tupper's employment as the Branch Manager at KNBT Bank and the DAMA
doing business with KNBT.
b. Sometime prior to August 5, 2011, Oliver suggested that Tupper should seek
legal advice regarding the DAMA's business relationship with KNBT,
Tupper's employer.
28. During an interview with an SEC Investigator on March 2, 2016, Tupper indicated
that he attended a presentation on the Mate Ethics Act while attending a PMAA
training session in the Bethlehem, Pennsylvania, area, which he believed occurred
in the spring of 2011.
Tupper, 15 -031
Page 9
a. Tupper recalled having a brief discussion regarding potential conflicts of
interest with John Contino, Esquire, then Executive Director of the State
Ethics Commission and speaker at the training.
29. As a result of Tupper's attendance at the spring 2011 PMAA Conference and
conversation(s) with fellow DAMA Board Member John Oliver, Tupper submitted a
request for an Advice of Counsel to the State Ethics Commission's Legal Division
dated August 15, 2011.
a. This request was received by the State Ethics Commission's Legal Division
on August 16, 2011.
b. Tupper was sent an acknowledgment letter of receipt of his request on
August 22, 2011, and a status update letter dated September 15, 2011.
C. State Ethics Commission Legal Division file documents reflect Chief Counsel
Robin Hittie had a follow -up conversation on Tupper's request telephonically
on October 4, 2011.
30. Tupper's letter dated August 15. 2011, seeking an Advice, outlined the following
regarding his request for an Advice of Counsel:
a. "I am requesting your advice. I am the Chairman of the Board of the Dallas
Area Municipal Authority and employed by KNBT Bank a division of National
Penn Bank. The board dust recently voted to do self collection of solid waste
and recycling. We are now in the process of purchasing 4 trucks. The
amount would be approximately $650,000.00. We have received offers of
financing from several banks including the one that I work for. Mr. John
Strelish from the commercial lending department has put the offer in to the
Executive Director and will be up for a vote at the Sept. 8, 2011 meeting.
I am the Branch Manager of the KNBT Bank Shavertown office and the
authority does have accounts with us along with Wells Fargo and PNC.
I am a salaried employee at the bank and receive no compensation for
serving on the board of directors of the Dallas Area Municipal Authority.
want to make sure that we do not create an ethics violation and am looking
for your opinion on this matter.
Enclosed is a copy of the Authorities By-- Laws."
31. On October 4, 2011, additional information was provided to the State Ethics
Commission Legal Division as a follow -up to his Advice of Counsel request which
included the following:
a. "Mr. Tupper stated that although the matter of financing the purchase of four
trucks by the Authority was originally scheduled for an Authority Board vote
on September 8, 2011, the matter was postponed pending the issuance of
an advisory in response to Mr. Tupper's request.
Mr. Tupper stated that he did participate in Board discussions /decisions to
self - collect solid waste and recycling and to purchase trucks, but that at that
time, he did not know that his employer would be considered for financing.
He stated that the Executive Director had mentioned some other business as
a possibility for financing. He stated that it was after the aforesaid Board
decisions that the Authority's Executive Director looked for financing. Mr.
Tupper stated that he did not suggest to the Executive Director to inquire with
Tupper, 15-031
Page 10
Mr. Tuppper's employer as to financing. Mr. Tupper also stated that he had
no further involvement in the matter after he was informed that his employer
had submitted a proposal. Mr. Tupper noted that the purchase of such
trucks falls under the category of commercial lending, and that he is a branch
manager."
b. In his request, Tupper sought an Advice of Counsel regarding his
involvement in DAMA Board actions being considered relating to the
financing of four (4) trucks at an approximate cost of $650,000.00.
C. In his request, Tupper re ooted that he is "employed with KNBT Bank, a
division of National Penn Bank, as the Branch Manager of the Shavertown
Office. The Authority has accounts with the Bank, Wells Fargo and PNC
Bank."
32. Advice of Counsel No. 11 -553 was issued to Tupper by the State Ethics
Commission on October 4, 2011.
a. The Advice of Counsel informed Tupper of general conflict of interests, and
the conclusion portion in part advised him as follows:
"Pursuant to Section 'I 103(a) of the Ethics Act, in your capacity as a
Member and Chairman of the Authority Board, you generally would
have a conflict of interest in matters that would financially impact you
or the bank ... You would be prohibited from using the authority of your
ppublic position, or confidential information accessed or received as
being, a Member /Chairman of the Authority Board ... You would also be
prohibited from using the authority of your public pposition, or
confidential information accessed or received as a resuit of being a
Member /Chairman of the Authority Board, to effectuate a private
pecuniary benefit to the Bank through a detriment to a business
competitor. In each instance of a conflict of interest, you would be
required to abstain from participation, which would include voting
unless one of the statutory exceptions of Section 11030) of the Ethics
Act would be applicable.'
33. Between October 13, 2011, and November 13, 2014, the DAMA Board discussed
and took official action on the acquisition of trucks for both its Sewer and Solid
Waste Divisions.
a. Tupper was Chairman of the DAMA Board throughout this timeframe.
b. During this timeframe at least three (3) separate vehicle purchases occurred.
C. Tupper would abstain from discussions and official actions taken on
financing.
d. Executive Director Spaciano was responsible to obtain rate quotes for the
DAMA Board to consider.
34. Tupper accepted employment to become the Branch Manager at PS Bank, 802
Hunter Highway, Tunkhannock, Pennsylvania, on November 12, 2012.
a. PS Bank's Tunkhannock Branch location was a new branch opening in
December of 2012.
TT per, 15 -031
Page 11
Tupper simultaneously was employed as the Branch Manager at PS
Bank's Factoryville location, 118 College Avenue, Factoryville,
Pennsylvania T8419 during his employment with PS Bank.
b. Tupper remained employed by PS Bank for approximately nine (9) months
from November 12, 2012, to August 2013.
35. Prior to 2013, the DAMA used financial institutions which had locations within the
geographical boundaries of the Authority's service area.
a. The lone exception to this was investment accounts the DAMA had with the
PLGIT until May of 2010, when the DAMA Board, which was chaired by
Tupper, directed that they be transferred to KNBT Bank, his employer at the
time.
b. The PS Bank's Tunkhannock Branch was not located within the service area
of the DAMA.
36. As a matter of standard operating procedures, the DAMA's Executive Director
(Spaciano) was responsible for seeking quotes andlor proposals relating to
Authority investments, loans and other financial matters.
a. When Tupper was hired as a Branch Manager by PS Bank in November
2012, the DAMA had its long range plan account with Wells Fargo
(previously Wachovia) and operating and investment accounts with
KNBT/National Penn Bank.
b. Prior to 2013, the DAMA did not have any financial dealings with PS Bank.
37. Sometime between November 13, 2012, and December 31, 2012, Spaciano took
Authority checks needing to be signed to Tupper at PS Bank in Tunkhannock.
a. Tupper signed the checks and introduced Spaciano to Mark Mellas, PS Bank
Vice - President of Commercial Loans.
b. Tupper introduced Spaciano to Mellas in order to potentially generate new
business for PS Bank's Tunkhannock Branch location, if warranted.
C. Mellas worked at PS Bank's Tunkhannock Branch location but was not
supervised by Tupper.
Mellas reported to Sr. Commercial Lending personnel at PS Bank's
Main Office.
38. Spaciano memorialized the meeting with Tupper and Mellas in personal notes dated
April 5, 2013, which in part noted the following:
a. "The redistribution of DAMA funds, both operating and investment, from
KNBT Bank, Craig's former employer, to PS Bank was discussed with me by
both Mark and Craig At this time, at the request of Craig, I gave Mark a RFP
for the pending DAMA vehicle loan (Solid Waste & Sewer Divisions), and a
list of DAMA's current account balances with respective interest rates. Mark
stated that he would work on a proposal, and get it to me as soon as
possible, and would review the rates and what options are available. Craig
was present at all times and fully participated in discussing the transfer of
DAMA funds `in the best interest of DAMA. "'
T1 uppe r, 15 -031
Page 12
39. The DAMA was not considering other investment options at the time Tupper
introduced Spaciano to Mellas.
a. DAMA Board meeting minutes for November 2012 to January 2013 do not
include any recorded discussions or official actions taken directing the
Executive Director to look for other financial institutions.
40. As part of his employment duties as a PS Bank Branch Manager, Tupper was
expected to generate new deposit and loan business for the company.
a. Around January of 2013, Tupper was provided with the new deposits goal
amount for 2013 for the Tunkhannock Branch of $10,000,000.00.
b. PS Bank establishes a 6 to7 % annual deposit growth goal for its Branches.
C. A baseline goal of 10 million dollars in new deposits was established for the
Tunkhannock Branch since it was a new PS Bank location with no deposit
history.
41. In addition to the company established new deposit goals for 2013, Tupper was
required to prepare a `Retail Business Development Plan (for) Tunkhannock and
Factoryville."
a. The undated plan included a section on deposit and loan growth:
Deposit Growth and Loan Growth:
• Conduct business calls to potential business customers and existing
business customers.
• Involve entire staff into reaching out to people they know.
• Ask existing customers to refer their business partners and friends.
• Conduct calling efforts to customers with only loans to explain the
benefits of banking with PS Bank.
• Profile existing customers for cross- sales.
42. Early in 2013 PS Bank was promoting a higher -than- market interest rate to
municipalities through its Municipal Money Market investment accounts.
a. PS Bank was offering the higher interest rate accounts to municipalities in an
effort to attract other more profitable business for the bank.
b. PS Bank created the investment program for municipalities to capitalize on
increased revenues local municipalities in Northeast Pennsylvania were
receiving from gas drilling impact fees.
C. PS Bank prepared a solicitation letter promoting its Municipal Money Market
rate which was distributed to municipalities in the Wyoming County area, and
also in parts of Bradford, Luzerne and Lackawanna Counties, early in 2013.
43. For the DAMA's February 21, 2013, meeting, Tupper provided Board Treasurer
Brent Snowdon a proposal on PS Bank stationery also dated February 21, 2013, for
a Municipal Money Market account with a 1% interest rate on balances over
$25,000.00 until April 1, 2013.
a. This proposal was generated from PS Bank's Tunkhannock Branch under
the signature of Janice Mortimer, a subordinate employee to Tupper.
b. The proposal was addressed to Brent Snowdon, DAMA Treasurer.
Tue_r, 15 -031
Page 13
C. Snowdon turned the proposal over [to] Executive Director Spaciano for
Board consideration.
44. Snowdon did not initiate or request any proposals for investment rates from PS
Bank in 2013.
a. Executive Director Spaciano was responsible for handling all RFP's for the
Authority.
b. Snowdon did not have contact with anyone from PS Bank on the proposal
except Tupper.
46. The DAMA Board reviewed and took official action on the PS Bank proposal during
the February 21, 2013, meeting.
a. Tupper was present at the meeting but is recorded in official DAMA minutes
as leaving the meeting when the DAMA Treasurer discussed PS Bank's
proposal.
46. Minutes from the DAMA's February 21, 2013, meeting include the following
recorded discussion and official action taken to approve the PS Bank money market
proposal:
a. "The meeting was turned over to Mr. Steever. Mr. Tupper excused himself
and left the meeting. Mr. Snowdon Presented a proposal to transfer DAMA's
Sewer and Solid Waste CD funds into a PS Bank Money Market. A motion
was made by Mr. Snowdon and seconded by Mr. Carroll to transfer the CD
funds from KNBT Bank to PS Bank. Roll call: Mr. Steever, yes; Mr. Oliver,
yes; Mr. Snowdon, yes; Ms. Sebastian, yes; Mr. Carroll, yes. Motion carried
on majority vote ". Present: Craig Tupper, Charles Steever, Tim Carroll, Brent
Snowdon, John Oliver and Kathy Sebastian.
b. This transfer would not have occurred had Tupper not introduced Spaciano
to Mellas.
C. This transfer resulted in DAMA obtaining a higher rate of return on its sewer
and solid waste CDs at PS Bank.
47. During the DAMA's March 14, 2013, meeting, action was taken authorizing the
transfer of the Authority's Long Range Plan investment account from Wells Fargo to
PS Bank.
a. This action was a follow -up to Board action taken on February 21, 2013,
transferring DAMA Sewer and Solid Waste CD's to PS bank.
b. Tupper is recorded as abstaining from the vote.
48. Minutes from the DAMA's March 14, 2013, Board meeting include the following
recorded discussions and official actions taken authorizing the transfer of the
Authority's Long Range Plan account from Wells Fargo to PS Bank:
a. "The meeting was turned over to Mr. Steever to discuss the vehicle financing
resolution and investment accounts. A motion was made by Mr. Snowdon,
seconded by Mr. Oliver, to transfer the Long Range Plan Funds from the
Wells Fargo Bank into an account at the PS Bank. Roll call: Mr. Snowdon,
yes; Mr. Oliver, yes; Mr. Steever, yes; Ms. Sebastian, yes; Mr. Carroll, yes;
Mr. Tupper abstained. Motion was carried on a majority roll call vote ". Board
Tu rr, 15 -031
Page e 14
Members Present: Craig Tupper, Charles Steever, Tim Carroll, Brent
Snowdon, John Oliver and Kathy Sebastian.
49. The DAMA did not seek, receive, or consider proposals from any other financial
institution other than PS Bank for its investment accounts in 2013.
a. The only proposal received was generated by Tupper three (3) months after
he began employment as a Branch Bank Manager for PS Bank.
b. The interest rate PS Bank provided the DAMA was higher than those DAMA
was receiving on its investments held at Nation Penn Bank and Wells Fargo
Bank.
C. PS Bank provided the DAMA with an interest rate of 1.01 %.
d. DAMA investments with National Penn Bank were earning 0.17% at the time.
e. DAMA investments with Wells Fargo Bank were earning 0.0 1 % at the time.
f. As such, this transfer resulted in DAMA receiving a higher rate of return at
PS Bank than at National Pena Bank and Wells Fargo Bank.
50. Tupper participated as a DAMA Member in actions leading to the Board vote
transferring three (3) investment accounts to PS Bank in 2013.
a. Tupper, independent of any DAMA Board action, obtained a proposal from
his employer, PS Bank, dated February 21, 2013, for the Board to consider.
b. The proposal was generated by a subordinate employee and Tupper from
PS Rank's Tunkhannock location approximately three (3) months after
Tupper began employment as the Branch Manager.
C. Tupper, as PS Bank Manager, signed and, through Executive Director
Spaciano, obtained the signatures of DAMA Board Members Charles
Steever, Brent Snowdon and Kathleen Sebastian on signature cards opening
three (3) investment accounts with PS Bank.
1. Signature cards for the Sewer and Solid Waste investment accounts
were signed on February 26, 2013.
2. The signature card for the Long Range Plan investment account was
signed on March 21, 2013.
d. Tupper and Charles Steever, as DAMA officers, signed the front side of
DAMA Long Range Plan account check # 001052, dated March 20, 2013, in
the amount of $1,293,510.40 made payable to PS Bank, transferring that
account to PS Bank.
51. On or about February 26, 2013, Charlotte Severcool { "Severcool "), PS Bank
employee, opened the three (3) investment accounts for &AMA at the direction of
the DAMA Board, chaired by Tupper.
a. Severcool was a customer service employee reporting directly to Tupper at
PS Bank's Tunkhannock Branch location at the time.
1. Severcool replaced Tupper as the Branch Manager around August
2013.
T1u per, 15 -031
aP ge 15
b. Severcool provided Tupper with the signature cards to be signed and
received the corresponding deposits from him opening the accounts.
G. Severcool dealt with Tupper, her immediate supervisor at PS Bank, and with
Executive Director Spaciano, regarding the opening of the accounts.
52. DAMA financial records confirm three (3) transfers of funds were made to PS Bank
in conjunction with the investment accounts opened on February 26, 2013, and
March 21, 2013.
a. On February 26, 2013, PS Bank received two (2) National Penn Bank checks
used to open the Sewer and Solid Waste Municipal Money Market
investment accounts.
National Penn Bank check number 652659 in the amount of
$217,000.95 was used to open Solid Waste account # [account
number redacted].
2. National Penn Bank check number 652660 in the amount of
$467,659.99 was used to open Sewer account # [account number
redacted].
b. On March 21, 2013, PS Bank received DAMA Long Range Plan account
check # 001052 in the amount of $1,293,510.40 transferring that account to
PS Bank.
Craig Tupper and Charles Steever signed the front side of this check.
G. The three (3) transfers totaled $1,978,171.34.
53. The transfer of the Authority's Long Range Plan account funds to PS Bank was
discussed by DAMA officials via email on March 18, 2013, four (4) days after the
vote approving the transfer.
a. When discussing the transfer, Executive Director Spaciano and Treasurer
Snowdon both mentioned contacting Craig (Tupper) for assistance with the
transaction.
b. The exchange between Snowdon and Spaciano included, in park, the
following:
Snowdon:
"Larry, The sooner the better. Let me know what you need me or
Craig to do and we will get it done.
Spaciano:
"Brent, I can have the check ready to o by tomorrow. If needed, I
can run it up to Craig at PS Bank for deposit, however, I believe he
wanted to distance himself from the actual transaction because he
manages the bank. Also, you may need to open the LRP investment
account via signature as DAMA Treasurer. Do you want me to touch
base with Craig on this matter ?"
Snowdon:
"Yes, Please check with him, just so that we understand what is
needed..."
TTu per, 15 -031
Page 16
54. Tupper and Snowdon are also copied into email exchanges between Spaciano and
Severcool of PS Bank, relating to the transfer of Long Range Plan account funds
starting on March 18, 2013, and continuing March 19, 2013.
a. The email exchange states as follows:
Spaciano to Severcool; Snowdon and Tupper copied:
"We current[ y have wastewater and solid waste Municipal Money Market
accounts at PS Bank, and are now ready to transfer our Long Range Plan
(LRP) funds to the same type of account. There is approximately
$$1,2993,510.40 in the LRP account as of today's date. I can cut a check in
house for deposit at PS Bank, but need to know if a Board member that is
listed on the account signature card has to physically come up to the bank to
open this account, or can I take care of it as Executive Director? I believe
that Brent Snowdon, our Treasurer, spoke with Janice Mortimer on or about
February 21, 2013 concerning the Municipal Money Market accounts."
Severcool to Spaciano:
"I can go ahead and open up your third municipal money market checking
account for the LRP funds, with the check made payable to Dallas Area Muni
Authority. If you can send the check up with Craig, I will open up the account
with the same board members as authorized signers- Craig, Charles, Brent &
Kathleen. Craig had alerted me that these funds were planned to put in our
bank. I will be out of the office Tues and Wed. So I can open this up on
Thurs. at the earliest.
Spaciano to Severcool; Snowdon and Tupper copied:
"Thanks Charlotte, I'll have the check cut on Wednesday and drop it off to
Craig after work. Please let me know if you need anything else."
55. Tupper participated in the process which resulted in a combined total of
$1,978,171.34 in DAMA funds being transferred to PS Bank, Tupper's employer at
the time, between February 26, 2013, and March 21, 2013.
a. The transfers accounted for almost 2 million of his 10 million dollar goal for
new deposits with PS Bank in 2013.
b. Tupper left the Bank's employ prior to receiving a company -wide
performance bonus for 2013.
56. Since December of 2013, Tupper has been employed by Luzerne Bank as the
Branch Manager at its Lake Office, Route 118 & 415, Dallas, Pennsylvania.
a. The DAMA Long Range Plan, Sewer and Solid Waste investments have
remained at PS Bank.
b. During the DAMA meeting of November 13, 2014, Tupper initiated a
discussion regarding the Long Range Plan account.
Minutes from that meeting reflect Tupper advising the Board that he
would check on available investment rates for municipalities.
2. At the time, Tupper did not advise the Board he was employed by
Luzerne Bank.
Tupper, 15 -031
Page 17
3. No DAMA financial accounts were moved as a result of Tupper`s
offer.
THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT TUPPER FILED
DEFICIENT STATEMENTS OF FINANCIAL INTERESTS FOR THE 2011 THROUGH 2014
CALENDAR YEARS.
57. Tupper, in his official capacity as a Member of the Dallas Area Municipal Authority
Bard, was annually required to file a Statement of Financial Interests form by May
1 s , reporting information for the prior calendar year.
58. Tupper was annually provided with a blank Statement of Financial Interests form by
a DAMA administrator to complete.
a. Blank SFI forms include an instruction page detailing information required to
be reported on the form.
b. Blank SFI forms also include regular and toll free phone numbers for the
State Ethics Commission, to answer any reporting questions.
59. Tupper failed to report all direct/indirect sources of income on SFIs filed for calendar
years 2013 and 2014.
a. Tupper failed to report direct/indirect income in excess of $1,300.00 from
Luzerne Bank on his SFI filed for the 2014 calendar year.
b. Tupper failed to report direct/indirect income in excess of $1,300.00 from PS
Bank on his SFI filed for the 2013 calendar year.
C. Tupper failed to report direct/indirect income in excess of $1,300.00 from
First National Bank on his SFI filed for the 2013 calendar year.
60. Tupper failed to report all sources of employment on SFIs filed for calendar years
2012 through 2014.
a. Tupper failed to report his employment as a Branch Manager with Luzerne
Bank on SFIs filed for the 2013 and 2014 calendar years.
Tupper has been employed by Luzerne Bank since December 2013.
b. Tupper failed to report his employment as a Branch Manager with First
National Bank on his SFI filed for the 2013 calendar year.
1. Tupper was employed by First National Bank from approximately
August to December 2013.
C. Tupper failed to report his employment with PS Bank on SFIs filed for the
2012 and 2013 calendar years.
1. Tupper was employed by PS Bank from November 12, 2012, until
August 2013.
d. Tupper failed to report his employment with KNBT /National Penn Bank on
his SFI filed for the 2012 calendar year.
1. Tupper was employed by KNBT /National Penn Bank from March 1,
2010, until November of 2012.
Tu er, 15031
a'1agge 18
61. Tupper failed to provide a response to requests for information regarding Calendar
Year; Real Estate Interests, Gifts; Transportation, Lodging, Hospitality; Financial
Interests in any Legal Entity in Business for Profit; and Business Interests
Transferred to Immediate Family upon his SFI dated March 8, 2012, intended for
the 2011 calendar year.
62. During an interview with a State Ethics Commission Investigator on March 2, 2016,
Tupper stated that he did not fully understand the reporting requirements on
Statement of Financial Interests forms.
a. Tupper admitted that he did not seek any clarification on SFI reporting
requirements from the State.Ethics Commission.
1. Reporting deficiencies were discussed with Tupper and he then
completed amended SFI forms for calendar years 2010 through 2014.
63. Amended Statement of Financial Interests forms were completed by Craig Tupper
and submitted to the State Ethics Commission on March 2, 2016, as well as being
filed with the DAMA, correcting his deficiencies.
64. Tupper was re wired to generate new business while employed as the Branch
Manager for KN�T /National Penn Bank from March 1, 2010, through October 2012,
and for PS Bank from November 12, 2012, to August 2013.
a. Tupper used the authority of his public position as Chairman of the Dallas
Area Municipal Authority Board to participate in the process which resulted in
DAMA financial accounts being transferred to banks which employed him as
their Branch Manager at the time, as detailed [above].
III. DISCUSSION:
As a Member of the Dallas Area Municipal Authority ( "DAMA ") Board since
approximately 2005, Craig A. Tupper, hereinafter also referred to as "Respondent,"
"Respondent Tupper," and "Tupper,' has been a public official sub11'ect to the provisions of
the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pat& § 1101 et se q.
The allegations are that Respondent Tupper violated Sections 1103(a), 1104(d),
1105(b)(3), 1105(b)(5), 1105(b }(6), 1105(%7), 1105(b)(8), 1105(b)(9), and 1105(b)(10 of
the Ethics Act when he: (1) utilized the authority of his public position to direct, authorize
and/or otherwise execute the transfer of public monies, namely funds under the control of
the DAMA, from one financial institution (bank) to another which is /was a business with
which he is /was associated andlor otherwise maintained a financial interest; (2) failed to
identify for which calendar year he was making financial disclosure upon a purported
calendar year 2011 Statement of Financial Interests ( "SFI ") form, in addition to failing to
identify any direct or indirect interest in any real estate requiring disclosure under the Ethics
Act, the name and address of the source and the amount of any gift or gifts received, the
name and address of the source and the amount of any transportation, lodging, and /or
hospitality received in connection with public office or employment, the identity of any
financial interest in a business which has been transferred to a member of the reporting
person's immediate family, and any office, directorship or employment of any nature
whatsoever in any business entity; (3) failed to identify his office, directorship or
employment with National Penn Bank/KNBT Bank and/or PS Bank on his calendar year
2012 SFI; (4) failed to report his office, directorship or employment in Luzeme Bank on his
calendar year 2013 SFI; and (5) failed to disclose any direct or indirect sources of income,
and any office, directorship or employment in any business, on his calendar year 2014 SFI.
Tu rr, 15 -031
Page e 19
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 employyee of the authority of his office or
m
eployment 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 ecuniary 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 1104(d) of the Ethics Act provides that no public official shall be allowed to
take the oath of office, or enter or continue upon his duties, nor shall he receive
compensation from public funds, unless he has filed a Statement of Financial Interests as
required by the Ethics Act.
Section 1105(b)(3) of the Ethics Act requires the filer to disclose on the Statement of
Financial Interests any direct or indirect interest in any real estate which was sold or leased
to or purchased or leased from the Commonwealth, any of its agencies or political
subdivisions, or which was the subject of any condemnation proceedings by the
Commonwealth or any of its agencies or political subdivisions.
Subject to certain statutory exceptions not applicable to this matter, Section
1105(b)(5) of the Ethics Act requires the filer to disclose on the Statement of Financial
Interestts the name and address of any direct or indirect source of income totaling in the
aggregate $1,300 or more.
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.
Tu ee_r, 10 -031
Page 20
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.
Section 1105(b)(8) of the Ethics Act requires the filer to disclose on the Statement of
Financial Interests any Aice, directorship or employment in any business entity.
Section 1105(b)(9) of the Ethics Act requires the filer to disclose on the Statement of
Financial Interests any financial interest in any legal entity engaged in business for profit.
The term "financial interest" is defined in the Ethics Act as " [a]ny financial interest in a legal
entity engaged in business for profit which comprises more than 5% of the equity of the
business or more than 5% of the assets of the economic interest in indebtedness." 65
Pa.C.S. § 1102.
Section 1105(b)(10) of the Ethics Act requires the filer to disclose on the Statement
of Financial Interests any financial interest in a business with which he is or has been
associated in the preceding calendar year which has been transferred to a member of his
immediate family.
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.
Tupper has served as a Member of the DAMA Board since approximately 2005 and
as DAMA Board Chairman since 2009. Larry Spaciano ("Spaciano") been employed
as Executive Director of DAMA since approximately March 2001.
Since at least 2010, DAMA had commercial loan, investment and operating
accounts for both its Sewer and Solid Waste Divisions. Decisions regarding loans,
investments and which financial institutions DAMA would utilize were made by the DAMA
Board, with input from Spaciano. DAMA Board action was required to move any financial
accounts.
Ina private capacity, Tupper has been employed as the Branch Manager for various
banks including KNBT, PS Bank, First National, and Luzerne Bank. Tupper was employed
by KNBT Bank from approximately March 1, 2010, through October 2012. KNBT Bank is a
subsidiary of National Penn Bank. Tupper was employed by PS Bank from approximately
November 12, 2012, to August 2013. Tupper was employed by First National Bank from
approximately August 2013 to December 2013. Tupper has been employed by Luzerne
Bank since approximately December 20, 2013.
While employed as the Branch Manager for KNBT/National Penn Bank and for PS
Bank, Tupper was required to generate new business for his employer. The parties have
stipulated that Tupper used the authority of his public position as Chairman of the DAMA
Board to participate in the process which resulted in DAMA financial accounts being
transferred to banks which employed him as their Branch Manager at the time.
During the time period between May 6, 2010, and September 10, 2010, while
Tupper was Chairman of the DAMA Board and the Branch Manager for one of KNBT
Bank's branch locations, all DAMA Sewer, Solid Waste, SEO and investment accounts
were transferred to KNBT Bank except for one Long Range Plan account with a balance of
$1,640,491.06, which was maintained at Wachovia Bank. Although the Stipulated Findings
include detailed information regarding the aforesaid transfers to KNBT Bank, the
recommendation of the Consent Agreement for a violation of Section 1103(a) is limited to
more recent events, when DAMA funds were transferred to PS Bank.
TuoDer, 15 -031
Page 21
From November 12, 2012, to August 2013, Tupper was employed by PS Bank as
the Branch Manager at both its Tunkhannock, Pennsylvania, and Factoryville,
Pennsylvania locations. When Tupper was hired as a Branch Manager by PS Bank in
November 2012, DAMA had its long range plan account with Wells Fargo (previously
Wachovia) and operating and investment accounts with KNBTINational Penn Bank. Prior
to 2013, DAMA did not have any financial dealings with PS Bank.
As part of his employment duties as a PS Bank Branch Manager, Tupper was
expected to generate new deposit and loan business for PS Bank.
Sometime between November 13, 2012, and December 31, 2012, when Spaciano
took DAMA checks needing to be signed to Tupper at PS Bank in Tunkhannock, Tupper
introduced Spaciano to Mark Mellas ("Mellas"), PS Bank Vice -- President of Commercial
Loans, in order to potentially generate new business for PS Bank's Tunkhannock Branch
location, if warranted. At the time Tupper introduced Spaciano to Mellas, DAMA was not
considering other investment options. Spaciano memorialized the meeting with Tupper
and Mellas in personal notes quoted at Fact Finding 38(a).
Around January of 2013, Tupppper was provided with a $10,000,000.00 "new deposits
goal" for 2013 for the PS Bank Tunl�hannock Branch. Tupper, independent of any DAMA
Board action, obtained a proposal from his employer, PS Bank, dated February 21, 2013,
for the Board to consider. The proposal was generated by a subordinate employee and
Tupper from PS Bank's Tunkhannock location approximately three months after Tupper
began employment as the Branch Manager. Tupper provided the PS Bank proposal to
DAMA Board Treasurer Brent Snowdon. The proposal was for a Municipal Money Market
account with a 1% interest rate on balances over $25,000.00 until April 1, 2013. The
proposal was addressed to Brent Snowdon, DAMA Treasurer. Snowdon turned the
proposal over to Spaciano for Board consideration.
Snowdon did not initiate or request any proposals for investment rates from PS
Bank in 2013. Spaciano was responsible for handling all RFP's for DAMA. Snowdon did
not have contact with anyone from PS Bank on the proposal except Tupper.
At the DAMA Board's February 21, 2013, meeting, the Board voted to transfer
DAMA's Sewer and Solid Waste CD funds from KNBT Bank into a PS Bank Money Market.
The meeting minutes indicate that Tupper left the meeting when the DAMA Treasurer
discussed PS Bank's proposal. However, the parties have stipulated that this transfer
would not have occurred had Tupper not introduced Spaciano to Mellas.
During DAMA's March 14, 2013, meeting, action was taken authorizing the transfer
of DAMA's Long Range Plan investment account from Wells Fargo to PS Bank. Tupper is
recorded as abstaining from the vote.
DAMA did not seek, receive, or consider proposals from any financial institution
other than PS Bank for its investment accounts in 2013. The only proposal received was
generated by Tupper three months after he began employment as a Branch Bank Manager
for PS Bank.
The parties have stipulated that Tupper participated as a DAMA Board Member in
actions leading to the DAMA Board vote transferring three investment accounts totaling
$1,978,171.34 to PS Bank in 2013. One of these account transfers was made via DAMA
Long Range Plan account check number 001052, in the amount of $1,293,510.40, which
was signed by Tupper as one of two authorized signatories for DAMA.
The transfer of DAMA's Long Range Plan account funds to PS Bank was discussed
by DAMA officials via email on March 18, 2013, four days after the vote approving the
transfer. When discussing the transfer, Executive Director Spaciano and Treasurer
Tuber, 15 -031
Page 22
Snowdon both mentioned contacting Tupper for assistance with the transaction, as
detailed in Fact Finding 53�b�. Tupper and Snowdon are also copied into email exchanges
between Spaciano and a Bank employee relating to the transfer of Long Range Plan
account funds starting on March 18, 2013, and continuing March 19, 2013.
Tupper participated in the process which resulted in a combined total of
$1,978,171.34 in DAMA funds being transferred to his employer, PS Bank, between
February 26, 2013, and March 21, 2013. The transfers accounted for almost 2 million
dollars of Tupper's 10 million dollar goal for new deposits with PS Bank in 2013. Tupper
left PS Bank s employ prior to receiving a company -wide performance bonus for 2013.
Since December of 2013, Tupper has been employed by Luzerne Bank as a Branch
Manager. During the DAMA Board meeting of November 13, 2014, Tupper initiated a
discussion regarding the Long Range Plan account. However, the DAMA Long Range
Plan, Sewer and Solid Waste investments have remained at PS Bank.
With regard to Tupper's SFIs, Tupper failed to report Luzerne Bank as a
direct/indirect source of income totaling $1,300.00 or more on his SFI filed for the 2014
calendar year. Tupper failed to report PS Bank as a direct/indirect source of income
totaling $1,300.00 or more on his SFI filed for the 2013 calendar year. Tupper failed to
report First National Bank as a direct/indirect source of income totaling $1,300.00 or more
on his SFI filed for the 2013 calendar year.
Tupperfailed to report his employment as a Branch Managerwith Luzerne Bank on
SFIs filed for the 2013 and 2014 calendar years. Tupper failed to report his employment
as a Branch Manager with First National Bank on his SFI filed for the 2013 calendar year.
Tupper failed to report his employment with PS Bank on SFIs filed for the 2012 and 2013
calendar years. Tupper failed to report his employment with KNBTINational Penn Bank on
his SFI filed for the 2012 calendar year.
Tupper failed to provide a response to requests for information regarding Calendar
Year; Real Estate Interests; Gifts; Transportation, Lodging, Hospitality; Financial Interests
in any Legal Entity in Business for Profit; and Business Interests Transferred to Immediate
Family upon his SFI dated March 8, 2012, intended for the 2011 calendar year.
Amended SFI forms were completed by Tupper and submitted to this Commission
on March 2, 2016, as well as being filed with the DAMA, correcting his deficiencies.
Having highlighted the Stipulated Findings and issues before us, we shali 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:
The Investigative Division will recommend the following in
relation to the above allegations:
a. That a violation of Section 1103(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1103(a) occurred when Tupper, as a Member
and Board Chairman of the Dallas Area
Municipal Authority, utilized the authority of his
public position to participate in the process which
resulted in the transfer of public monies, namely
funds under the control of the Dallas Area
Municipal Authority, from various financial
institutions (banks) to PS Bank, which was at
that time the Employer of Tupper as therefore a
Tupper, 15031
Page 23
business with which Tupper was then
associated.
b. That a violation of Section 1105(b) Elt ), (0) -(10) of
the Public Official and Employee hi cs Act, 65
Pa.C.S. § 1105(b)(3), (5) -(10) occurred when
Tupper, as a Member and Board Chairman of
the Dallas Area Municipal Authority, filed
Statements of Financial Interests for the 2011,
2012, 2013, and 2014 calendar years with the
Dallas Area Municipal Authority, each containing
various and /or multiple deficiencies.
That no action will be undertaken pursuant to
Section 1104(d) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. § 1104(d), in
that Tupper, as a Member and Board Chairman
of the Dallas Area Municipal Authority, did not
receive compensation from public monies of the
Dallas Area Municipal Authority.
Tupper agrees to make payment in the amount of $2,500.00 in
settlement of this matter as follows:
$2,000.00 payable to the Commonwealth of
Pennsylvania and forwarded to the Pennsylvania
State Ethics Commission within thirty (30) days
of the issuance of the final adjudication in this
matter.
$500.00 which represents a portion of the
expenses and costs incurred by the State Ethics
Commission in the investigation and
administrative prosecution of the instant matter,
payable by certified check or money order made
payable to the Pennsylvania State Ethics
Commission within thirty (30) days of the
issuance of the final adjudication in this matter.
As part of the negotiated settlement of this matter, Tupper
hereby agrees to resign his public officelposition as a Member
and Board Chairman of the Dallas Area Municipal Authority.,
L.uzerne County, Pennsylvania; and further agrees that he will
neither seek nor hold any position of public office in the
Commonwealth of Pennsylvania for a period of five (5) years
from the date of the Final Order in this matter.
6. To the extent he has not already done so, Tupper agrees to file
complete and accurate amended Statements of Financial
Interests with Dallas Area Municipal Authority through the
Pennsylvania State Ethics Commission, for the 2011, 2012,
2013 and 2014 calendar ears within thirty (30) days of the
issuance of the final adjudication in this matter.
Tupper agrees to not accept any reimbursement,
compensation or other payment from Dallas Area Municipal
Authority representing a full or partial reimbursement of the
amount paid in settlement of this matter.
Tupper, 15 -031
Page 24
8. 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 2 -3.
In considering the Consent Agreement, we agree with the recommendation of the
Kfor the finding of a violation of Section 1103(x) of the Ethics Act with regard to
Respondent's participation as to the transfer of DAMA funds to PS Bank.
Tupper participated in the process which resulted in a combined total of
$1,978,171.34 in DAMA funds being transferred to his employer, PS Bank, between
February 26, 2013, and March 21, 2013. The transfers accounted for almost 2 million
dollars of Tupper's 10 million dollar goal for new deposits with PS Bank in 2013.
Tupper's specific actions included: (1) introducing Spaciano to Mellas, PS Bank
Vice - President of Commercial Loans, in November - December 2012 in order to potentially
generate new business for PS Bank's Tunkhannock Branch location; (2) independent of
any DAMA Board action, obtaining a proposal from PS Bank, dated February 21, 2013, for
the Board to consider and providing the proposal to DAMA Treasurer Snowdon, who
turned the proposal over to Spaciano for Board consideration; and (3) signing DAMA Long
Range Plan account check number 001052 in the amount of $1,293,510.40 as an
authorized signatory for DAMA, transferring that account to PS Bank.
Based upon the Stipulated Findings and Consent Agreement of the parties, we hold
that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when
Tupper, as a Member and Chairman of the DAMA Board, utilized the authority of his public
position to participate in the process which resulted in the transfer of public monies, namely
unds under the control of DAMA, from various financial institutions (banks) to PS Bank,
which was at that time the employer of Tupper and therefore a business with which Tupper
was then associated.
We further hold that a violation of Section 1105(b)(3), (5)� - {'10) of the Ethics Act, 65
Pa.C.S. § 1105(b)(3), �5)-(l 0 ), occurred when Tupper, as a em er and Chairman of the
DAMA Board, filled SF s for t e 2011, 2012, 2013, and 2014 calendar years with DAMA,
each containing various and/or multiple deficiencies.
No action will be undertaken pursuant to Section 1104(4) of the Ethics Act, 65
Pa.C.S. § 1104(d), in that Tupper, as a Member and Chairman of the DAMA Board, did not
receive compensation from public monies of DAMA.
As part of the Consent Agreement, Tupper has agreed to make payment in the
amount of $2,500.00 in settlement of this matter as follows:
a. $2,000.00 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; and
b. $500.00, which represents a portion of the
expenses and costs incurred by this Commission
TI uppe r, 15 -031
Page 25
in the investigation and administrative
prosecution of the instant matter, payable by
certified check or money order made payable to
the Pennsylvania State Ethics Commission
within thirty (30) days of the issuance of the final
adjudication in this matter.
Tupper has agreed to not accept any reimbursement, compensation or other
payment from DAMA representing a full or partial reimbursement of the amount paid in
settlement of this matter.
As part of the negotiated settlement of this matter, Tupper has further agreed to
resign his public office/position as a Member and Board Chairman of DAMA and to neither
seek nor hold any position of public office in the Commonwealth of Pennsylvania for a
period of five years from the date of this Commission's Final Order in this matter.
Per the Stipulated Findings, amended SF1 forms were completed by Tupper and
submitted to this Commission on March 2, 2016, as well as being filed with the DAMA,
correcting his deficiencies. Nevertheless, to the extent he has not already done so, Tupper
has agreed to file complete and accurate amended SF'Is with DAMA through this
Commission, for the 2011, 2012, 2013 and 2014 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, Respondent Tupper is
directed to make payment in the amount of $2,500.00 as follows:
a. $2,000.00 payable to the Commonwealth of
Pennsylvania and forwarded to t0is Commission
by no later than the thirtieth (30 �') day after the
mailing date of this adjudication and Order; and
b. $500.00, which represents a portion of the
expenses and costs incurred by this Commission
in the investigation and administrative
prosecution of the instant matter, payable by
certified check or mone order made payable to
the Pennsylvania State 6�oics Commission by no
later than the thirtieth (30 ) day after the mailing
date of this adjudication and Order.
Respondent Tupper is directed to not accept any reimbursement, compensation or
other payment from DAMA representing a full or partial reimbursement of the amount paid
in settlement of this matter.
Respondent Tupper is directed to fulfill his agreement to resign his public
office/position as a Member and Board Chairman of the DAMA and to neither seek nor
hold any position of public office in the Commonwealth of Pennsylvania for a period of five
years from the mailing date of this adjudication and Order.
To the extent he has not already done so, Respondent Tupper is directed to file
complete and accurate amended SFls with DAMA through this Commission, for the 2011,
2012, 2013 and 2014 calendar years by no later than the thirtieth (30) day after the
mailing date of this adjudication and Order.
Tue_r, 15 -031
Page 26
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 a Member of the Dallas Area Municipal Authority ( "DAMA ") Board since
approximately 2005, Craig A. Tupper ( "Tuppper ") has been a public official subject to
the provisions of the Public Official and Emp oyee Ethics Act ( "Ethics Act "), 65
Pa.C.S. § 1101 et sect.
2. Tupper violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he,
as a Member and Chairman of the DAMA Board, utilized the authority of his public
position to participate in the process which resulted in the transfer of public monies,
namely funds under the control of DAMA, from various financial institutions (banks)
to PS Bank, which was at that time the employer of Tupper and therefore a
business with which Tupper was then associated.
3. A violation of Section 1105(b)(3), (5) -(10) of the Ethics Act, 65 Pa.C.S. § 1105(b)(3),
(5) -(10), occurred when Tupper, as a Member and Chairman of the DAMA Board,
filed Statements of Financial Interests for the 2011, 2012, 2013, and 2014 calendar
years with DAMA, each containing various and /or multiple deficiencies.
4. No action will be undertaken pursuant to Section 1104(d) of the Ethics Act, 65
Pa.C.S. § 1104(d), in that Tupper, as a Member and Chairman of the DAMA Board,
did not receive compensation from public monies of DAMA.
In Re: Craig A. Tupper, File Docket: 15 -031
Respondent Date Decided: 10/19/16
Date Mailed: 1012$116
ORDER NO. 1700
1. As a Member and Chairman of the Dallas Area Municipal Authority ( "DAMA ") Board,
Crai A. Tupper ( "Tupper ") violated Section 1103(a) of the Public Official and
Emp�oyee Ethics Act ('Ethics Act "), 65 Pa.C.S. § 1103(a), when he utilized the
authority of his public.position to participate in the process which resulted in the
transfer of public monies, namely funds under the control of DAMA, from various
financial institutions (banks) to PS Bank, which was at that time the employer of
Tupper and therefore a business with which Tupper was then associated.
2. A violation of Section 1105(b)(3), (5) -(10) of the Ethics Act, 65 Pa.C.S. § 1105(b)(3),
OT 0), occurred when Tupper, as a Member and Chairman of the DAMA Board,
Statements of Financial Interests for the 2011, 2012, 2013, and 2014 calendar
years with DAMA, each containing various and /or multiple deficiencies.
3. No action will be undertaken pursuant to Section 1104(d) of the Ethics Act, 65
Pa.C.S. § 1104(d), in that Tupper, as a Member and Chairman of the DAMA Board,
did not receive compensation from public monies of DAMA.
Per the Consent Agreement of the parties, Tupper is directed to make payment in
the amount of $2,500.00 as follows:
$2,000.00 payable to the Commonwealth of Pennsylvania and
forwarded to tl�e Pe ns Ivania State Ethics Commission by no later
than the thirtieth (30�') day after the mailing date of this Order, and
$500.00, which represents a portion of the expenses and costs
incurred by the Pennsylvania State Ethics Commission in the
investigation and administrative prosecution of the instant matter,
ppayable by certified check or money order made payable to the
Pennsylvania State Ethics Commission by no later than the thirtieth
(3( ) day after the mailing date of this Order.
5. Tupper is directed to not accept any reimbursement, compensation or other
payment from DAMA representing a full or partial reimbursement of the amount paid
in settlement of this matter.
6. Tupper is directed to fulfill his agreement to resign his public office /position as a
Member and Board Chairman of the DAMA and to neither seek nor hold any
position of public office in the Commonwealth of Pennsylvania for a period of five
years from the mailing date of this Order.
7. To the extent he has not already done so, Tupper is directed to file complete and
accurate amended Statements of Financial Interests with DAMA through the
Pennsylvania State Ethics Commission, for �he 2011, 2012, 2013 and 2014
calendar years by no later than the thirtieth (30 ) day after the mailing date of this
Order.
Tupper -, 15 -031
Page 28
& Compliance. with paragraphs 4, 4a, 4b, 5, 6 and 7 of this Order will result in the
closing of this case with no further action by this Commission.
a. Noncompliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
4
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