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HomeMy WebLinkAbout860 CaljeanSTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 171E0 In re: Robert J. Caljean : File Docket: 89 -036 -C Date Decided: September 15, 199;? Date Mailed: Octolper 1, 199; Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Roy W. Wilt Austin M. Lee Allan M. Kluger The State Ethics Commission received a complaint regarding a possible violation of the State Ethics Act, No. 170 of 1978, P.L. 883. Written notice, of the specific allegation(s) was served at the commencement of the investigation. .. A Findings Report was issued and served, upon completion of the investigation, which constituted the Complaint by the Investigation Division. An Answer was not filed and a hearing was waived. A Consent Order was submitted by the parties to the Commission for consideration which was subsequently approved. This adjudication of the Commission is hereby issued which sets forth the individual Allegations, Findings of Fact, Discussion, Conclusions of Law and Order. This adjudication is final and will be made available as a public document fifteen days after issuance. However, reconsideration may be requested which will defer public release of this adjudication pending action on the request by the Commission. A request for reconsideration, however, does not affect the finality of this adjudication. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §2.38. The files in this case will remain confidential in accordance with Section 8(a) of Act 170 of 1978 during the fifteen day period and no one unless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, confidentiality does not preclude discussing this case with an attorney at law. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year, 65 P.S. S409(e). Caliean 89 -036 -C Page 2 I. ALLEGATION: That Robert J. Caljean, a member of the Valley View School District, Lackawanna County, violated the following provisions of the State Ethics Act (Act 170 of 1978), when he participated in decisions to award roofing contracts to a firm with which he is associated; and when he failed to list his association with the firm on Statements of Financial Interests filed in 1985, 1986, 1987, 1988 and 1989: Section 3. Restricted Activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. (c) No public official or public employee or a member of his immediate family or any business in which the person or a member of the person's immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business shall enter into any contract valued at $500 or more with a governmental body unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. Any contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract. Section 5. Statement of financial interests. (b) The statement shall include the following information for the prior calendar year with regard to the person required to file the statement and the members of his immediate family: (8) Any office, directorship, or employment of any nature whatsoever in any business entity. (9) Any financial interest in any legal Caliean, 89 -036 -C Page 3 entity engaged in business for profit. 65 P.S. S5403(a), 403(c), 405(b)(8), (b)(9). II. FINDINGS: 1. Robert J. Caljean served as a member of the Valley View School Board from 1975 to December of 1989. 2. Francis Reno was the owner of Renco Roofing Company/Renco Specialists which he started in the late 1970's. a . b. c . d. e . Renco did business from Reno's residence at 184 Spruce Street, Archbald, PA 18403. Renco's telephone number was 717 - 876 -1331. Renco's primary business involved the sale of roofing materials to residential customers and occasionally installing the material when requested by the homeowners. Renco Roofing was not an incorporated entity. Neither Renco Roofing or Renco Specialists filed tax returns under said names. 3. In 1982 Francis Reno entered into business, in a roofing company, with Bernard Stafursky and David Stafursky. a. The company traded under the names Stafursky /Reno Roofing Company and Tri- County Roofing Company. b. The new roofing company was the successor to the prior roofing business in which Reno was involved, Renco Roofing /Renco Specialists. c. Although the company used the name of Tri- County Roofing, it was primarily known as Stafursky /Reno Roofing. 4. When it was first initiated, Stafursky /Reno Roofing was employed by the Valley View School District to perform repair work on some of the district buildings. a. This work was minimal. (See Finding No. 7(a)(b); 38). 5. In February 1984 Robert Caljean in partnership with Francis Reno, purchased Stafursky Reno Roofing Company /Tri- County Roofing Company. a. The business was moved to a building owned by Caljean at 446 Main Street, Archbald, PA 18403. C$liean, 89 -036 -C Page 4 b. The company's telephone number is 717- 876 -5535. c. Caljean assisted in securing start up capital for this acquisition. d. The funds ($50,000) were obtained from the National Bank of Jermyn as a loan in the names of Robert J. and E. Caljean, Francis and Eileen Reno. e. This loan was paid off by Tri- County Roofing on October 16, 1986. f. This business was the successor to the prior roofing businesses. 6. Under the name of Renco Roofing /Renco Specialists, services were rendered to the Valley View School District during the years 1982 -1988. 7. The Valley View School District made payments to Renco Roofing during the years 1982 -1988 for services ostensibly performed by an entity using that name. The total amount of payments were as follows: a. Renco was paid $2,462.00 for its work for the District in 1982. This was the work done by Stafursky /Reno and was prior to Robert Caljean's interest in the company. Payment was made as follows: Date Amount Check No. 09/21/82 $2,360.00 1732 12/21/82 102.00 2316 b. Renco was paid $2,438.00 for its work for the District in 1983. This was the work done by Stafursky /Reno and was prior to Robert Caljean's interest in the company. Payment was made as follows: Date Amount Check No. 03/12/83 $ 484.50 2563 06/09/83 2,810.00 2810 11/22/83 1,400.00 3462* 12/20/83 372.00 3576* c. Renco was paid $23,029.50 for its work for the District in 1984. This work was performed by the company that succeeded Stafursky /Reno and in which Robert Caljean had a financial interest. Payment was made as follows: Ca1iean, 89 -036 -C Page 5 Date A:gount Cheek flo . 05/22/84 $ 1,085.00 4125* 09/18/84 20,947.00 4590* 11/07/84 997.50 4726* d. Renco was paid $10,385.00 for its work for the District in 1985. This work was performed by the Company that succeeded Stafursky /Reno and in which Robert Caljean had a financial interest. Payment was made as follows: e. Renco was paid $46,300.00 for its work for the District in 1986. This work was performed by the company that succeeded Stafursky /Reno and in which Robert Caljean had a financial interest. Payment was made as follows: Date Amount Check No. 06/20/86 $19,300.00 7121 06/14/86 940.00 7207 06/25/86 13,500.00 7240 06/14/86 10,400.00 7262 06/24/86 2,160.00 7278 f. Renco was paid $27,125.00 for its work performed for the District in 1987. This work was performed by the Company that succeeded Stafursky /Reno and in which Robert Caljean had a financial interest. Payment was made as follows: Date Amount Check No. 05/19/87 $1,320.00 8597 07/23/87 3,500.00 44 08/25/87 11,700.00 137 10/21/87 8,800.00 521 12/15/87 1,805.00 824 Renco was paid $2,250.00 for its work for the District in 1988. This work was performed by the company that succeeded Stafursky /Reno and in which Robert Caljean had a financial interest. Payment was made as follows: g. Date Amount Check No. 10/22/85 $10,385.00 6183* *NOTE: Robert Caljean signed these checks as President or Member of the Valley View School District Board of Directors. Caljean, 89 -036 -C Page 6 Date Amount Check No. 01/19/88 $2,250.00 938 8. Although after 1982 Renco Roofing no longer existed as a separate entity, the contacts for the Valley View School District projects were bid under that name. 9. Although the proposals to do work for the Valley View School District were submitted under the name of Renco Roofing, the actual entity that did the work and received payment therefor was Tri- County Roofing. a. Robert Caljean was a principal owner of this business. b. Robert Caljean has signature authority for Tri - County Roofing Bank accounts. 10. Telephone number 876 -5535 was listed on the proposals submitted to the Valley View School District by Renco Roofing Company in 1984'and 1986. a. This was the number for Tri- County Roofing. 11. Records of Tri County Roofing include sketches of the roof layouts for three Valley View School District projects: The Lincoln School, the Junior - Senior High School and the high school. All three sketches were completed on a form titled "Tri- County Roof Survey," "Tri- County Roofing, Archbald, PA." 12. The General Liability Insurance Policy, Erie Insurance Company number 291600384, submitted by Renco as a required on its bids was actually a policy covering Tri- County Roofing Company. 13. The list of ten (10) references listed on the bids submitted by Renco to the Valley View School District were former customers of Tri- County Roofing Company. 14. Renco Roofing was never incorporated in the State of Pennsylvania and was never registered as a fictitious name. 15. The employees that worked on the Valley View School District jobs were actually employees of Tri- County Roofing Company and were paid through Tri-County's payroll with taxes withheld through that company. a. The salaries for the employees who worked on the Valley View School District Projects were paid from a bank account in the name of Tri- County Roofing. 16. The trucks and equipment used by Renco on the Valley View Caliean, 89 -036 -C Page 7 School District jobs belonged to Tri- County Roofing Company. a. There are no vehicles titled to Renco Roofing. 17. Records of Tri - County Roofing, the Valley View School District, and the First National Bank of Jermyn, indicate that the funds that were used to provide bid -bonds on proposals that were submitted by Frank Reno to perform work for the school district came from the bank account of Tri - County Roofing. a. In July 1984 Frank Reno submitted a proposal to conduct work on the Valley View School District Elementary Center. (3) Accompanying the proposal was a bid bond in the amount of $472.50. This bid bond was in the form of a money order, (No. 059160) dated July 23, 1984 and had been purchased from the First National Bank of Jermyn. Records of the First National Bank of Jermyn for the Tri- County Roofing bank account that was maintained at that institution indicated that the bank paid $472.50 from the account on July 25, 1984. (4) These funds were used to purchase the money order that was submitted to the school district. b. In August 1984 Frank Reno submitted a proposal to conduct work on the Valley View School District Junior- Senior High School. (1) Accompanying this proposal was a bid bond in the amount of $525.00. (2) This bid bond was in the form of a money order dated August 20, 1984. Records of the First National Bank of Jermyn for the Tri- County Roofing bank account that was maintained at that institution indicate that the bank paid $525 on August 22, 1984 from the account. (4) These funds were used to purchase the money order that was submitted to the school district. c. In April 1986 Frank Reno submitted a proposal to conduct work on the Valley View School District Elementary Center. Caliean, 89 -036 -C Page 8 (1) Accompanying this proposal was a bid -bond in the amount of $2,160. (2) This bid bond was in the form of a money order (N. 060797) dated April 21, 1986 and had been purchased from the First National Bank of Jermyn. (3) Records of Tri - County Roofing and the First National Bank of Jermyn indicate that on April 21, 1986 a check (No. 2181) in the amount of $2,160 was made payable to F. Reno from the Tri- County Roofing account at the bank. (4) These funds were then used to purchase the money order that was used for the bid -bond. (5) On September 18, 1986 a deposit of $6,160 was made into the Tri- County Roofing account. (6) Records of Tri- County Roofing in relation to this deposit indicate that $2,160 of this deposit was a return of the Renco Bid Bond. d. In August 1985 Frank Reno submitted a proposal to perform work on the Valley View School District Elementary Center. (1) Accompanying this proposal was a bid -bond in the amount of $450. (2) This bid -bond was in the form of a money order (No. 060230) dated August 19, 1985, and had been purchased from the First National Bank of Jermyn. (3) Records of the bank account for Tri- County Roofing at the First National Bank of Jermyn indicate that a check (No. 1821) in the amount of $451.00 was written to the Valley View School District. The notation in the Tri- County records for this check indicates "For Bid Bond." (4) On September 4, 1986 the bid -bond was returned and deposited into the Tri- County Roofing account at the bank. 18. There was never a listing for Renco Roofing company in the telephone directories. 19. Better Business records prepared by Francis Reno in 1985 list Renco Roofing Company as another name for Tri - County Roofing Company. caliean, 89 - 036 - Page 9 20. Minutes of the Valley View School District Board of Directors meetings indicate the following in relation to actions taken by Robert Caljean regarding the awarding of roofing contracts to the entity using the name Renco Roofing and the payment of bills for said services: a. Regular School Board Meeting - May 21, 1984 Robert Caljean, President, called the meeting to order. The list of Accounts Payable contained a payment (Check No. 4125) to Renco in the amount of $1,085.00. The minutes indicate that Caljean .. was one of the Board members who voted to approve the Accounts Payable list. b. Special Board Meeting - July 30, 1984 Robert Caljean, President, called the meeting to order. The minutes indicate that Board Member Vitiello made the motion, seconded by Board Member Klach, to award the bid for the repair of the Elementary Center roof to Renco of 184 Spruce' Street, Archbald, PA, for $9,450.00. The minutes also indicate that Caljean was one of the Board Members who voted in favor of the motion. c. Regular School Board Meeting - August 20, 1984 Robert Caljean, President, called the meeting to order. The minutes indicate that Board Member Vitiello made the motion, seconded by Board Member Kolcharno, to award the bid for the repair of the Junior Senior High School roof to Renco Flat Roof Specialists, for $10,500.00. The minutes also indicate Caljean was one of the Board Members who voted in favor of the motion. d. Regular School Board Meeting - September 17, 1984 Robert Caljean, President, called the meeting to order. The Treasurer's Report contained an expenditure (Check No. 4590) of $20,947.00 payable to Renco. The minutes indicate that Board Member Buckshon made the motion, seconded by Board Member Kostage, to approve the Treasurer's Report. The minutes also indicate that Caljean was one of the Board Members who voted in favor of the motion. (Note: See Finding No. 37) regarding the disposition of these funds.) e. Regular School Board Meeting - August 20, 1985 Robert Caljean, President, called the meeting to order. The minutes indicate Board Member Kalowsky made a motion, seconded by Board Member Kolcharno, to award the bid for C.1,ie4n, 89 -036 -C Page 10 the repair of elementary roof to Renco Roofing in the amount of $9,000. The minutes also indicate Caljean was one of the Board Members who voted in favor of the motion. f. Regular School Board Meeting - November 18, 1985 Robert Caljean, President, called the meeting to order. The Treasurer's Report contained an expenditure (Check No. 6183) of $10,385.00 payable to Renco. The minutes indicate Board Member Kolcharno made the motion, seconded by Board Member Kostage, to approve the Treasurer's Report. The minutes also indicate that Caljean was one of the Board Members who voted in favor of the motion. g - Regular School Board Meeting - April 21, 1986 The minutes contained a motion by Board Member Dougher, seconded by Board Member Kostage, to award the bid for the repair of the Elementary Center roof to Renco Roofing in the amount of $43,200.00. The minutes also indicate that Caljean was one of the Board Members who voted in favor of the motion. h. Regular School Board Meeting - June 23, 1986 The Treasurer's Report contained an expenditure of $19,300.00 (Check No. 7121) payable to Renco. The minutes indicate Board Member Vitiello made a motion, seconded by Board Member Dougher, to approve the Treasurer's Report. The minutes also indicate that Caljean was one of the Board Members who voted in favor of the motion. (Note: See Finding No. 29 regarding the disposition of Check No. 7121.) i. Regular School Board Meeting - August 18, 1986 The Expenditures Report shows payments (Check No. 7240) and $10,400.00 (Check Renco. The minutes indicate Board Member motion, seconded by Board Member Kostage, Treasurer's Report. The minutes also Caljean was one of the Board Members who of the motion. (Note: See Finding 24 disposition of Check No. 7262.) of $13,500.00 No. 7262) to Dougher made a to approve the indicate that voted in favor regarding the j. Regular School Board Meeting - June 22, 1987 The minutes indicate Board Member Dougher made a motion, seconded by Board Member Kostage, to authorize the Maintenance Director and the Superintendent to review a Caljtun, 89 -036 -C Page 11 bid from Renco Roofing for the repair of the Elementary Center roof and approve up to $20,500.00 in work. The minutes also indicate Caljean was one of the Board Members who voted in favor of the motion. k. Regular School Board Meeting - September 21, 1987 The Treasurer's Report shows an expenditure of $11,700.00 (Check No. 137) payable to Renco. The minutes indicate Board Member Vitiello made a motion, seconded by Board Member Buckshon, to approve the Treasurer's Report. The minutes also indicate Caljean was one of the Board Members who voted in favor of the motion. (Note: See Finding 30 regarding the disposition of Check No. 137.) 1. Regular School Board Meeting - November 23, 1987 The Treasurer's Report shows an expenditure of $8,800.00 (Check No. 521) payable to Renco. The minutes indicate Board Member Vitiello made a motion, seconded by Board Member Buckshon, to approve the Treasurer's Report. The minutes also indicate Caljean was one of the Board Members who voted in favor of the motion. (Note: See Finding No. 31 regarding the disposition of Check No. 521.) m. Regular School Board Meeting - February 22, 1988 The Treasurer's Report shows an expenditure of $2,250.00 payable to Renco. The minutes indicate Board Member Dougher made a motion, seconded by. Board Member Cholish, to approve the Treasurer's Report. The minutes also indicate Caljean was one of the Board Members who voted in favor of the motion. 21. Tri- County Roofing Company, 446 Main Street, Archbald, PA, purchased roofing supplies from and maintained a line of credit with ABC Roofing Supply Company, 157 Welles Street, Forty Fort, PA. 22. ABC's records indicate Tri- County Roofing made a payment of $5,245.14 on May 28, 1986, which brought its balance owed to 0. 23. ABC's invoices indicate the following purchases were then made by Tri- County Roofing Company: a. Invoice #23639 dated 6 -3 -86 totalling $2,307.62, showing the material was sold to and shipped to Tri- County Roofing Company, 446 Main Street, Archbald, PA. The invoice contains customer's signature "Frank Reno." Caliean, 89 -036 -C Page 12 g. b. Invoice #23704 dated 6 -4 -86, totalling $155.61, showing the material was .sold to and shipped to Tri- County Roofing Company. c. Invoice #23528 dated 6-5-86, totalling $1,082.31, showing the material was sold to Tri - County Roofing Company with a customer's signature "Frank Reno." d. Invoice #23760 dated 6 -5 -86, totalling $3,179.36, showing the material was sold to Tri - County Roofing Company with a customer's signature "Bernie Zipay." e. Invoice #23839 dated 6 -9 -86, totalling $148.40, showing the material was sold to and shipped to Tri - County Roofing company. f. Invoice #23951 dated 6- 12 -86, totalling $2,990.89, showing the material was sold to Tri - County Roofing Company and shipped to Harrington and Sons, 421 Poplar Street, Scranton, PA. Invoice #24130 dated 6- 10 -86, totalling $1,450.93, showing the material was sold to Tri- County Roofing Company with a customer's signature "Bernie Zipay." h. Invoice #24249 dated 6- 23 -86, totalling $683.70, showing the material was sold to Tri- County Roofing Company. i. Invoice #24297 dated 6- 24 -86, totalling $1,242.47, showing the material was sold to Tri - County Roofing Company and shipped to the Valley View Elem. School, Peckville, PA. - Invoice #24569 dated 7 -3 -86, totalling $262.73, showing the material was sold to Tri- County Roofing Company and shipped to the corner of Ash and Prescott Streets, Hill Section, Dunmore, PA. k. Invoice 931, dated 6 -9 -86; invoice 935, dated 6- 12 -86; and invoice 24130, dated 6- 10 -86, contained credits totalling $598.75. Tri- County's purchases during this period totalled $12,905.22. 24. On July 20, 1986 ABC received a payment from Tri- County Roofing. a. The payment was made in the form of a Valley View School District check #7262 dated July 14, 1986 in the amount of $10,400.00 payable to Renco and endorsed "Renco." C4j.iean, 89 -036 -C Page 13 b. The account had a $222.51 credit deducted from the bill. c. The payment totalled $10,622.51 which was applied to the $12,905.22 bill, leaving a balance of $2,282.71. d. All of the materials paid for with the Valley View School district check were purchased in the name of Tri- County Roofing. 25. The materials listed on invoices 23639, 23760, 23839, 24130 and 24297 contain material that could have been used on the same job site. a. Invoices 23528, 23951 and 24569 list different types of materials which don't appear to be similar to the materials listed on invoices for the Valley View Elementary School. b. Invoice #24249 lists materials that could be used on any job site. 26. Tri- County Roofing Company in Archbald, PA also purchases materials from Allied Supply Company, Blandon, PA. 27. Renco Roofing Company, Archbald, PA, was never a customer of Allied Supply company. 28. Allied Supply company's invoices indicate the following purchases were made by Tri - County Roofing Company: a. Invoice #31 dated 5 -8 -86, totalling $1,939.80, showing the material was sold to and shipped to Tri - County Roofing, 446 Main Street, Archbald, PA. b. Invoice 314994. dated 5- 21 -86, totalling $2,705.54, showing the material was sold to Tri - County Roofing and shipped to Valley View School District, Betty Street, Eynon, PA. c. Invoice #315007 dated 5- 22 -86, totalling $5,992.07, showing the material was sold to Tri - County Roofing and shipped to Elk View County Club, Crystal Lake, Dundaff, PA. d. Invoice #315008 dated 5- 22 -86, totalling $11,299.60, showing the material was sold to and shipped to Tri - County Roofing Company. e. Invoice #319068 dated 5- 18 -87, totalling $10,684.60, showing the material was sold to Tri- County Roofing and shipped to Crystal Soda, Poplar Street, Scranton, PA. Cal.iean, 89 -036 -C Page 14 f. Invoice #319334 dated 6 -5 -87, totalling $10,748.40, showing the material was sold to Tri- County Roofing and shipped to Peter -Paul Church, Valley View. g. Invoice #319640 dated 6- 23 -87, totalling $2,567.85, showing the material was sold to Tri- County Roofing and shipped to Peter and Paul Church, Washburn and Fillmore, West Scranton, PA. h. Invoice #319850 dated 7 -6 -87, totalling $890.00, showing the material was sold to Tri- County Roofing and shipped to St. Peter and Paul Church, Washburn and Fillmore, Scranton, PA. i. Invoice #320029 dated 7- 15 -87, totalling $1,868.67, showing the material was sold to and shipped to Tri - County Roofing. Invoice #320149 dated 7- 23 -87, totalling $7,142.28, showing the material was sold to Tri- County Roofing and shipped to Valley View School District, Main Street, Peckville, PA. j 29. On June 23, 1986 Allied Supply Company received a payment from Tri - County Roofing Company. a. The payment was made in the form of a check from the Valley View School District, #7121, dated June 20, 1986, in the amount of $19,300.00 made payable to Renco and endorsed "Renco." b. The check was applied as total payment for invoices 314805, 314994, 315007 and a partial payment of $8,662.59 from the total of $11,299.60 due on invoice 315008. 30. On August 31, 1987 Allied Supply Company received a payment from Tri- County Roofing Company. a. The payment was made in the form of a check from the Valley View School District #137 dated August 25, 1987 in the amount of $11,700.00 made payable to Renco and endorsed "Renco." b. The check was applied as a partial payment of $1,842.62 towards the total of $10,684.80 owed on invoice 319068; as a partial payment of $9,857.38 towards the total of $10,748.40 owed on invoice 319334. 31. On October 26, 1987 Allied Supply Company received a payment from Tri- County Roofing Company. Caliean, 89 -036 -C Page 15 a. The payment was made in the form of a check from the Valley View School District #581 dated October 21, 1987 in the amount of $8,800.00 made payable to Renco and endorsed "Renco." b. The check was applied as a partial payment of $2,325.26 towards the total of $2,567.85 owed on invoice 319640; as partial payment of $3,715.67 towards the total of $7,142.28 owed on invoice 320149; and as full payment of invoices 319850 and 320029. 32. Records on file in Allied Supply Company's Credit Department indicate Tri- County Roofing Company, 502 Main Street, Archbald, PA, first applied for credit on May 12, 1982 listing the owners as Francis Reno and David Stafursky. a. A change of address card signed by Francis Reno on February 13, 1984 lists a new address for Tri- County Roofing Company as 446 Main Street. b. A credit application dated March 9, 1984 lists the company's officers as Francis Reno, President, and Robert Caljean, Secretary /Treasurer. 33. A portion of the funds that were paid by the Valley View School District for services ostensibly performed by Renco Roofing were used to pay the debts of Tri- County Roofing, Inc. a. These debts included amounts owed for material that had been purchased for Valley View School District projects as well as amounts owed for materials that had been purchased for other customers of Tri - County. 34. Valley View School District funds were used to pay for material purchased by Tri- county Roofing for customers of the company that were not part of the services performed for the school district as follows: a. Purchases from ABC Supply Company: 1. Invoice #23951, dated 6/21/86, totaling $2,990.89 for work performed for Harrington and Sons. 2. Invoice #24569, dated 7/3/86, totaling $262.73 for materials shipped to the corner of Ash and Prescott Streets. b. After the payment was made with the Valley View School District check, the account had an unpaid balance of $2,282.71. Caj.i9an, 89 -036 -C Page 16 c. d. The financial benefit to Tri County Roofing Company as the result of these payments was $149.65. Purchases from Allied Roofing Supply Company: 1. Invoice #315007, dated 5/8/86, totaling $5,992.07 for materials shipped to the Elk View Country Club. 2. Invoice #319068, dated 5/18/87, totaling $1,842.62 for materials shipped to the Crystal City Soda Company. 3. Invoice #319334, dated 6/5/87, totaling $10,748.40 for materials shipped to the Peter -Paul Church, for which $9,857.38 was paid with the Valley View School District check. 4. Invoice #319640, dated 6/23/87, totaling $2,567.85 for materials shipped to the Peter -Paul church, for which $2,325.26 was paid with •the Valley View School District check. 5. Invoice #319850, dated 7/6/87, totaling $890.00 for materials shipped to the Peter -Paul Church. e. The financial benefit to Tri County Roofing Company as the result of these payments was $20,907.33. 35. As a result of Tri- County's use of funds from the Valley View School District to pay for supplies and materials used on other customers' property, the payment received from those customers was total profit to Tri - County. 36. The total amount of funds received from the Valley View School District that were utilized to pay off debts of Tri - County Roofing not related to Valley View projects was $21,056.98 ($149.65 + 20,907.33). (See Findings 34c and 34e) 37. Records of the Tri- County Roofing indicate that a deposit of $18,897 was made by F. Reno into the Tri- County bank account at the First National Bank of Jermyn on 9/19/84. a. Francis Reno had received $20,947 from the Valley View School District on 9/17/84. b. The funds that were deposited into the Tri- County account were the funds received from Valley View. c. $2,050 of the funds was not deposited into the account. 38. Prior to Robert Caljean becoming part -owner of -.Tri- County Cal&ean, 89 -036 -C Page 17 Roofing, Frank Reno (Renco Roofing /Reno Stafursky) did $4,900 in business with Valley View School District. 39. After Robert Caljean obtained his ownership interest in Tri - County Roofing; Tri- County as Renco Roofing did $109,089.50 in business with the school district. 40. The amount of business that the Valley View School District gave to Renco Roofing or the entity using that name increased substantially after Robert Caljean acquired his interest therein. 41. Records of Tri- County Roofing indicate payments from that company to Robert Caljean as follows: a . Check No. Date Amount 1460 1599 2070 2091 2672 2726 2805 Total 12/14/84 $ 525 04/12/85 750 01/03/86 700 01/30/86 94.06 12/19/86 2,000 01/21/87 1,000 04/19/87 1,000 Comment 2853 05/1/87 1,000 2885 05/15/87 1,000 2922 06/5/87 1,000 2988 07/2/87 1,000 3117 09/10/87 1,000 3193 10/9/87 1,500 3261 11/23/87 500 3271 12/2/87 1,000 3309 12/23/87 1,500 3357 01/28/88 1,000 3391 03/4/88 1,000 Rent 3585 06/23/88 1,007.22 3630 07/8/88 1,007.82 - 3763 09/16/88 1,500 Rent 3778 09/30/88 2,743.05 - 4481 10/8/89 2,000 Loan 4689 02/2/90 500 4765 03/20/90 500 - Rent Rent Rent Caljean Vending Stock Return Repayment Loan to Officers ONO Loan to Officers $26,827.15 42. None of the above payments to Robert Caljean were paybacks of the initial investment made by Caljean. That investment was satisfied by Tri County on October 16, 1986. (see Finding No. 5e). Caljean, 89 -036 -C Page 18 43. None of the members of the Valley View School District Board of Directors were aware of the fact that "Renco" Roofing and Tri- County were commingled businesses. a. All of the members thought that "Renco" Roofing Tri - County was a business completely and absolutely separate from the business in which Robert Caljean had an interest, Tri- County Roofing. 44. Robert Caljean attempted to conceal his interest in the roofing company that was performing the work for the Valley View School District. 45. On August 3, 1984 Valley View School District Superintendent Daniel Corazzi received an anonymous letter alleging collusion in awarding a roofing repair contract to Renco Roofing Company. a. The writer alleged the contract was not put out for bids and that Renco Roofing Company was owned by School Board Member Caljean and Francis Reno. 46. On August 7, 1984 School Board Member Caljean responded to the allegation in a letter to Superintendent Corazzi, stating Renco Roofing Company was owned solely by Reno and that he was a partner with Reno in a separate company, Tri- County Roofing Company. a. Caljean stated that " Specialists" was a completely separate entity from Tri - County. b. Caljean also stated he had no financial interest - in Renco and would not receive any financial gain from the work done by the company. 47. In fact, Renco Specialists was not an incorporated entity and the business of Renco was completely commingled with Tri - County. 48. On Statements of Financial Interest filed by Caljean for the calendar years of 1986 and 1987, Renco Roofing Company was not listed as a direct or indirect source of income. 49. From 1984 to 1988 Renco Roofing Company was paid $109,089.50 by the Valley View School District for roof repair work. (see Finding 39). a. $14,749.99 was the amount spent for materials that were billed to Tri County Roofing Company's accounts at ABC Roofing Supply Company and Allied Roofing Supply Company and used on Valley View School District buildings. Caljean, 89 -036 -C Page 19 b. $14,392.68 was the amount spent for materials that were billed to Tri County Roofing Company's accounts at ABC Roofing Supply Company and Allied Roofing Supply Company and shipped directly to Tri County Roofing at 446 Main Street, Archbald, PA. The final disposition of these materials cannot be ascertained. c. $21,056.98 was the amount spent for materials that were billed to Tri County Roofing Company's accounts at ABC Roofing Supply Company and Allied Roofing Supply Company and shipped directly to job sites of Tri County Roofing Company costumers other than the Valley View School District. d. $18,897.00 was deposited into the Tri County Roofing Company bank account at the First National Bank of Jermyn. e. $39,393.09 is the total amount of the checks cashed by Frank Reno for which there are no Tri County Roofing Company or Renco Roofing Company records indicating their dispersal. 50. Statements of Financial Interests on file with the Valley View School district for Robert J. Caljean indicate the following: 3/20/89 1988 source of income: Caljean Vending Machine Services Office, Directorship employment: Caljean Vending Machine Services Reno /Stafursky Inc. All Seasons Window, Inc. Financial Interest in any business: Same as above. All . other categories of interests: None a. Statement Date For Calendar Year Direct or indirect b. Statement Date 4/12/88 For Calendar Year 1987 Direct or Indirect sources of income: c. Financial interest in any business: All other categories of interests: Statement Date 3/17/87 Calendar Year 1986 Caljean Vending Machine Ser. Reno /Stafursky Inc . A l Seasons Window Inc. Same as above. None Caliean,, 89 -036 -C Page 20 Direct or Indirect Sources of Income: Office, directorship, employment: Financial interests in any business: All other categories of interests: d. Statement Date 4/16/86 Calendar Year 1985 Director or indirect sources of income: Office, Directorship, employment: Financial interest in any business: Office, directorship, employment: e. Statement Date 5/16/85 Calendar Year 1984 Director indirect sources of income: Office, directorship, employment: All other categories of interest: f. Statement Date 4/17/84 Calendar Year 1983 Direct or indirect sources of income: Office, directorship, employment: Financial Interests in any legal entity Caljean Vending Machine Ser. Reno /Stafursky Inc. All Seasons Window Inc. Caljean Vending Machine Reno /Stafursky Caljean Vending Machine Ser. Reno /Stafursky Inc. None Caljean Vending Machine Ser. Caljean Vending Machine Ser. Reno /Stafursky, Inc. Same as above. None Caljean Vending Machine Caljean Vending Machine Reno Stafursky Whalers Inc. None Caljean Vending Machine Footes Pharmacy Caljean Vending Machine : Footes Pharmacy Caljean Vending Machine g. Statement Date 4/12/83 Calendar Year 1982 Director or indirect sources of income: Caljean Vending Machine Calieas, 89 -036 -C Page 21 Financial Interests in any legal entity: h. Statement Date 4/13/82 Calendar Year 1981 Direct or indirect sources of income: III. DISCUSSION: Office, Directorship in any business: Office, directorship, employment: Financial interest in any business: i. Statement Date 11/2/81 Calendar Year 1980 Direct or indirect source of income: Office, Directorship in any business: Choppy's Inc. F o o t e ' : Pharmacy Caljean Vending Same as above. Caljean Vending Machine Caljean Vending Machine Ser. Reno /Stafursky Inc. Choppy's Inc Footes Pharmacy Caljean Vending Choppy's Inc. Motts Caljean Gildea - Office Building As a Member of the Valley View School District in Lackawanna County, Robert J. Caljean, hereinafter Caljean, is a public official as that term is defined in the Ethics Act, 65 P.S. S402; 51 Pa. Code S1.1. As such, his conduct is subject to the provisions of the Ethics Act and the restrictions therein are applicable to him. Initially, it is noted that Section 9 of Act 9 of June 26, 1989, P.L. 26, provides, in part, as follows: "This amendatory act shall not apply to violations committed prior to the effective date of this act, and causes of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto." Since the occurrences in this case transpired prior to the effective date of Act 9 (June 26, 1989), we must apply the Ca_ligan, 89 -036 -C Page 22 provisions of Act 170 of 1978, P.L. 883, to determine whether the Ethics Act was violated. Under Section 3(a), quoted above, this Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law transgresses the above provision of law. Thus, use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak(McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet v. State Ethics Commission, 109 Pa. Commw. Ct. 432 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own financial interests; Koslow-v. State Ethics Commission, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988). In addition, Section 3(c) of Act 170 of 1978 specifically provides in part that no public official or member of his immediate family or business with which he or a member of his immediate family is a director, officer, owner or holder of stock exceeding five percent of the equity at fair market value may enter into a contract with his governmental body valued at five hundred dollars or more unless the contract is awarded through an open and public process. Lastly, Section 5(b) of Act 170 of 1978 requires that a public official /employee list in his Statement of Financial Interests any office, directorship or employment in any business entity and also any financial interest in any legal entity engaged in business for profit. We have three allegations before us as to the conduct of Caljean: that he violated Section 3(a) of Act 170 of 1978 by participating in decisions to award roofing contracts to a firm with which he was associated; second, that he violated Section 3(c) of Act 170 of 1978 in that contracts in excess of $500 were awarded to a business with which he was associated without an open and public process; and third, that he violated Section 5(b)(8) and 5(b)(9) of Act 170 of 1978 when he failed to list on his Statement of Financial Interests for the calendar years 1984 through 1988 his interests in the firm which was awarded roofing contracts with his governmental body. Caljean served as a member of the Valley View School Board from 1975 through December 1989. In February, 1984, Caljean entered into a partnership with Francis Reno to purchase the Stafursky /Reno Roofing Company and Tri- County Roofing Company. The foregoing business entity was originally owned by Francis Reno and operated under the name of Renco Roofing Company /Renco Specialists Caliean, 89 -036 -C Page 23 which business started in the late 1970's and continued until 1982 when Francis Reno entered into a business arrangement with Bernard and David Stafursky, trading under the name of Stafursky /Reno Roofing Company and Tri- County Roofing Company as successor to Renco Roofing /Renco Specialists. Although the successor company used the name Tri- County Roofing, it was primarily known as Stafursky /Reno Roofing. Stafursky /Reno Roofing did work for Valley View School District but such work was minimal prior to the time that Caljean became a member of the School Board. (Fact Finding 4). Renco Roofing /Renco Specialists did not operate as a business after 1982, due to the operation of the successor business, Stafursky /Reno Roofing and Tri- County Roofing Company. In 1984, after Caljean formed a partnership with Francis Reno to purchase Stafursky /Reno Roofing Company /Tri - County Roofing, services were ostensibly rendered under the name of Renco Roofing /Renco Specialists to the Valley View School District during the years 1982 through 1988. (Fact Findings 5, 6). Valley View School District made payments to Renco Roofing for services which were purportedly done by that company for the years 1982 through 1988. (Fact Finding 7) . In fact, the actual work was done and payment was received by Tri - County Roofing, even though the contracting was under the name of Renco Roofing. (Fact Finding 9). Further, the volume of business which Tri- County Roofing did for Valley View School District before Caljean became a part owner was only $4,900.00. (Fact Finding 38). However, after Caljean became a partner in Tri- County Roofing, that firm did $109,089.50 in business with the school district. (Fact Finding 39). The amounts and dates of payments made to Tri - County through the name of Renco Roofing are set forth in Fact Finding 7. Thus, the contracts for the Valley View School District were bid under the name of Renco Roofing even though it did not exist at that point in time. (Fact Finding 8). The telephone number listed on the proposals to the school district by Renco Roofing in 1984 and 1986 was the telephone number for Tri- County Roofing. (Fact Finding 10). When Caljean became a partner in Stafursky /Reno Roofing Company and Tri - County Roofing Company, the business was moved to a building owned by Caljean who assisted in securing start up capital for the acquisition and who co- signed for a loan for the business which loan was subsequently paid off by Tri- County Roofing Company. (Fact Finding 5). As to the Valley View School District projects which were bid by Tri- County under the name of Renco Roofing, the insurance company and policy number which were submitted on the bids submitted by Renco was the policy covering Tri- County Roofing Company. (Fact Finding 12). Likewise, the references submitted by "Renco" to Valley View School District were former customers of Caljean, 89 -036 -C Page 24 Tri- County Roofing Company. (Fact Finding 13). As to the actual worked performed under the contracts, the record reflects that it was the employees of Tri- County Roofing Company who worked on the Valley View School District jobs and whose salaries were paid from a bank account in the name of Tri - County Roofing. (Fact Finding 15). Likewise, the trucks and equipment used for the Valley View School District jobs belonged to Tri- County Roofing Company. (Fact Finding 16). In addition, the bid bonds that were submitted for proposals by Frank Reno came from a bank account of Tri- County Roofing. (Fact Finding 17). During this time there was no listing for Renco Roofing Company in the telephone directories and the Better Business Bureau records listed Renco Roofing Company as another name for Tri - County Roofing Company. (Fact Findings 18, 19). As to the contracts which were awarded by the Valley View School District Board to Tri - County Roofing under the name of Renco Roofing, the minutes of the Valley View School District Board reflect official action by Caljean in voting to approve lists of accounts payable which would include payments to Renco and in voting to award contracts for the repair of certain schools to "Renco ". (Fact Finding 20). The record also reflects a commingling of activity by Tri - County as to its purchases and payments to suppliers for Valley View School District and other contracts. (Fact Findings 21 through 37). In particular, invoices from ABC Roofing Supply Company, a wholesaler, reflect shipments to Tri- County Roofing, or its various customers including Valley View School District. In turn, some of the payments received by Tri- County Roofing from the Valley View School District were paid to ABC after they were endorsed by "Renco ". (Fact Finding 24). Tri- County Roofing also purchased materials from the Allied Supply Company which supplier never had Renco Roofing as a customer. (Fact Finding 27). Similarly, the invoices from Allied Supply reflect purchases by Tri - County Roofing with materials shipped to Tri - County Roofing or some of its customer including Valley View School District. (Fact Finding 28). Allied Supply Company was paid on several occasions by a check which was issued by the Valley View School District to "Renco" which was endorsed as a payment on the account of Tri- County Roofing. (Fact Findings 29 through 31). As to Allied Supply Company, the records of their credit department reflect that an original credit application in 1982 listed the owners of Tri- County Roofing Company as Francis Reno and David Stafursky but a credit application in March of 1984 listed the company's officers as Francis Reno and Robert Caljean. (Fact Finding 32). The record also establishes that Valley View School District funds were utilized in part to pay for the purchase of C4liean, 89 -036 -C Page 25 materials by Tri- County for other customers as set forth in Fact Finding 34. The result of the foregoing utilization of Valley View School District funds to pay for the supplies for other contracts resulted in total profit to Tri- County Roofing as to those projects. (Fact Finding 35). In addition, some of the funds received from Valley View School District were utilized to pay off debts of Tri- County Roofing that were not related to Valley View projects. (Fact Finding 36). In August, 1984, the Valley View. School District Superin- tendent received an anonymous letter alleging collusion in awarding roofing repair contracts to Renco Roofing Company owned by School Board member Caljean and Francis Reno. (Fact Finding 45). When confronted with the allegation, Caljean responded that Renco Roofing was solely owned by Reno and that he was a partner with Reno in a separate company Tri- County Roofing Company which was a separate entity from Renco Specialists as to which Caijean had no financial interest therein. (Fact Finding 46). Renco Specialists was not a separate entity but was commingled with Tri- County. (Fact Finding 47). None of the other members of the Valley View School District Board of Directors were aware that Renco Roofing was commingled with Tri- County Roofing. (Fact Finding 43). Caijean did not list his interest under either the category of office, directorship or employment in any business or financial interest in any legal entity engaged in business for profit on his calendar year 1984 through 1988 Statements of Financial Interests. (Fact Finding 50). Finally, Fact Finding 49 reflects a partial breakdown of the payments to "Renco" from Valley View School District wherein subfinding 49a reflects payments for materials used at the school district, subfinding 49b reflects billing amounts that cannot be ascertained, subfinding 49c reflects billing amounts of $21,056.98 that went to job sites of Tri - County Roofing Company other than the school district. Since Caljean had a 50% interest in Tri - County Roofing and since the foregoing sum reflects payments for materials that went to job sites of Tri - County Roofing customers other than Valley View School District, the private pecuniary benefit to Caijean amounts to $10,528.49. In applying the provisions of Section 3(a) of Act 170 of 1978 to the above facts, we find a violation of Section 3(a) in that there was a use of office by Caijean in voting to award contracts to Tri- County Roofing under the name of Renco as well as his voting to authorize payments on such contracts. The use of public, office on the part of Caljean did result in a discernible financial gain of $10,528.49 which is the extent as determined by a financial trace. The financial gain is to Caljean individually or to Tri - County Roofing Company, the business -with which he is associated. The term "business with which associated" is defined under the Act Caljean, 89 -036 -C Page 26 as follows: Section 2. Definitions. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or holder of stock. 65 P.S. 5402. Finally, the financial gain is compensation other than provided for by law since there is no provision in the Public School which would allow for such conduct. In fact, the Public School Code would in fact appear to prohibit such activity. See, 24 P.S. $3 -324. We likewise find a violation of Section 3(c) of Act 170 of 1978 in that although there appeared to be a bidding procedure for Valley View School District contracts, the bids in this case were not as to the real party in interest, Tri- County Roofing, but through the paper name of Renco Roofing. Thus, since the contracts were in excess of $500 and were not awarded through an open and public process to Tri- County Roofing but to the name of "Renco ", provisions of Section 3(c) were transgressed. Thus, Section 3(c) of Act 170 of 1978 was violated when contracts of the Valley View School District were awarded to Tri- County Roofing. Lastly, we find a violation of Section 5(b)(8) and 5(b)(9) of Act 170 of 1978 by the failure of Caljean to list his Statements of Financial Interests for the calendar years 1984 through 1988 his office, directorship or employment as well as his financial interest; therefore, Caljean is directed within thirty days of issuance of this Order to file amended. Statements of Financial Interests for the calendar years 1984 through 1988 listing his office, directorship or employment as well as his 50% financial interest in Tri - County Roofing Company a /k /a Stafursky/ Reno Roofing or Renco Roofing /Renco Specialists. As to the actions of Caljean in this case, we are particularly dismayed by the subterfuge used to conceal that his business was the real party in interest in the several roofing contracts entered into with his governmental body, the Valley View School District. The only reason why bids and paperwork were submitted under the name of Renco was to hide the fact that Caljean had an interest in school contracts when he was precluded by law from such activity. To make the gravity of these matters worse, Caljean, when confronted with the fact of his financial involvement in the school contracts, responded in a delusive fashion as set forth in Fact Finding 46. Finally, the obvious non- disclosure on his Statements of Financial Interests of his financial interest in these matters completed Caljean's concealment. The Preamble of the Ethics Law bespeaks, ". . .that public office is a public trust and that any Caljean 89 -036 -C Page 27 efforts to realize personal financial gain through public office other than compensation provided by law is a violation of that trust.~ 65 P.S. 5401. Caljean's actions to realize personal financial gain for himself through public office violated that trust. The power of this Commission to impose restitution has been upheld by Commonwealth Court in Yacobet v. State Ethics Commission}, supra. In this case, restitution is warranted. Accordingly, we direct Caljean within thirty days of issuance of this Order to forward a check or payment to this Commission payable to the Valley View School District in the amount of $10,528.49. Failure to comply with the foregoing will result in a directive of this Commission to institute an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Robert J. Caljean as a member of the Valley View School Board was a public official under Act 170 of 1978. 2. Caljean violated Section 3(a) of Act 170 of 1978 when he participated and voted to award contracts or pay bills as to roofing contracts awarded to a business with which he was associated. 3. Caljean violated Section 3(c) of Act 170 of 1978 when Tri- County Roofing, a business with which he was associated, entered into roofing contracts in excess of $500 with his governmental body, the Valley View School District, which were not awarded through an open and public process. 4. Caljean violated Section 5(b)(8) and 5(b)(9) of Act 170 of 1978 when he failed to list on his 1984 through 1988 calendar years Statements of Financial Interests his office, directorship, or employment and his financial interest in Tri- County Roofing Company. 5. The discernible financial gain received by Caljean in violation Section 3(a) of Act 170 of 1978 is $10,528.49. re: Robert J. Caljean f .le Docket: $9..036 -C Date Decided: Sew tuber J,5, ) J9�, Date Mailed: Q! 1, 1992. ,_ oRDEll IV. 8 Q Robert J. Caljean as a member of the Valley View School Board violated Section 3(a) of Act 170 of 1978 when he participated and voted to award contracts or pay bills as to roofing contracts awarded to a business with which he was associated. 2. Caljean violated Section 3 (c) of Act 170 of 1.978 when Tri- County Roofing, a business with which he was associated, entered into roofing contracts in excess. of $500 with his governmental body, the Valley View School District, which were not awarded through an open and public process. 3. Caljean violated Section 5(b)(8) and 5(b)(9) of Act 170 of 1978 when he failed to list on his 1984 through 1988 calendar years Statements of Financial Interests his office, directorship, or employment and his financial interest in Tri- County Roofing Company. 4. The discernible financial gain received by Caljean in violation Section 3(a) of Act 170 of 1978 is $10,528.49. 5. Caljean is directed within thirty (30) days of issuance of this Order to forward a check or payment payable to the Valley View School District in the amount of $10,528.49 to this Commission as restitution of financial gain received in Paragraph 4. 6. Caljean is directed within thirty (30) days of issuance of this Order to file amended Statements of Financial Interests for the calendar years 1984 through 1988 listing his office, directorship, or employment and his financial interest in Tri- County Roofing a /k /a Stafursky /Reno Roofing or Renco Roofing /Renco Specialists. 7. Failure to comply with the provisions of Paragraphs 5 and 6 will result in a directive of this Commission to institute an order enforcement action. BY THE COMMISSION, JAMES M. HOWLEY1