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HomeMy WebLinkAbout842 VandervekenSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 In Re: Sanford F. Vanderveken : File Docket : 91- 055 -C2 : Date Decided: April 23, 1992 : Date Mailed : April 27, 1992 Before: Dennis C. Harrington, Chair James M. Howley, Vice Chair Daneen E. Reese 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, Act 9 of 1989, 65 P.S. 401 et. seq. 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 S2.38. The files in this case will remain confidential in accordance with Act 9 of 1989, 65 P.S. 408(h) 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. 409(e). Sanford F. Vanderveken April 27, 1992 Page 2 I. ALLEGATION: That Sanford F. Vanderveken, a member of the Lake Winola Municipal Authority, violated the following provisions of the State Ethics Act (Act 9 of 1989), when he contracted with the Authority to repair pumps, at a total cost of over $500.00, without an open and public process, including prior public notice and subsequent public disclosure of all proposals and contracts awarded. Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. Section 3. Restricted Activities,. (f) No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, 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. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. Section 4. Statements of Financial Interests required to be filed. (a) Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the Commission no later than May 1 Sanford F. Vanderveken April 27, 1992 Page 3 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year he holds such a position and of the year after he leaves such a position. Persons who are full -time or part - time solicitors for political subdivisions are required to file under this section. 65 P.S. SS403(a),(f); 5404(a) II. FINDINGS: 1. Sanford F. Vanderveken, Sr. is a member of the Lake Winola Municipal Authority. a. He has been an Authority Member for approximately 15 years, serving while the Authority was in the planning and financing stages. b. The Authority has been in operation for approximately 3 years. 2. Authority members are appointed to five (5) year terms by the Overfield Township Board of Supervisors and are not paid for their services. 3. The Authority Board is comprised of 5 members who oversee the operation of the sewer system, for the Lake Winola community, by hiring and supervising employees or contracting work out to private firms. 4. The Authority has approximately 490 houses connected to the sewer system with each home having a pump that cuts the waste and sends it through a closed system to the sewerage treatment plant. Sanford F. Vanderveken April 27, 1992 Page 4 5. The pumps require maintenance which calls for their removal from the system so that they can be rebuilt. 6. James Rowland, an electrical contractor, contracts with the Authority, at an hourly rate, to remove the pumps when they require maintenance. 7. The Authority had a policy where they shipped the pumps to APS Services in Connecticut or to Sani Services in Hamlin, Pennsylvania, for repairs. 8. The Authority members felt the cost of the repairs, usually $600 to $700 a pump, was too high. 9. Board Member Sanford F. Vanderveken Sr. offered to repair the pumps at a cost of $350 per pump, but the offer was rejected by other board members. 10. Vanderveken then proposed that Rowland remove the pumps from the system and take them apart. Vanderveken added he would ship the cores to a company where they would be rewound at a cost of $175 per pump, plus $10.00 for the freight charge. Rowland would reassemble the pumps when the rewinding was complete. 11. During a meeting of the Lake Winola Municipal Authority Board of Directors on May 8, 1991 the issue of repairing the pumps was discussed. a. Mr. Vanderveken reported that the cost to rewind the pump cores was $175 plus $10 freight. b. Mr. Vanderveken recommended that the board spend no more than $350 per pump repair. c. Mr. Vanderveken suggested repairing ten (10) pumps to keep in inventory. d. Other board members suggested repairing 15 and by a vote of 2 -1 the board decided to send 15 pumps for repair at a cost not to exceed $350.00. Mr. Vanderveken abstained. 12. One pump was repaired using the above procedure and Vanderveken submitted a bill to the Authority, dated June 12, 1991, for the amount of $190.30. 13. The invoice contained the heading "Sanford Vanderveken, Plant Engineering Consultant, R.D. 1, Box 1223, Factoryville, Pennsylvania 18419" and indicates it was for rewinding the pump with the total coast for the work, parts and freight. Sanford F. Vanderveken April 27, 1992 Page 5 14. Lake Winola check #1765, in the amount of $190.30, payable to Sanford Vanderveken, dated June 12, 1991, signed by Board members William Miller and Robert Barber contains the endorsement on the back, of Sanford Vanderveken. 15. The minutes of the Lake Winola Municipal Authority meeting held on June 12, 1991 indicate the payment to Vanderveken was approved by a 2 -1 vote with Vanderveken abstaining. 16. By way of letter dated July 1, 1991 to Sanford Vanderveken from Authority Solicitor James C. Davis, Mr. Davis offered his opinion as to Vanderveken's transactions with the Authority. a. The letter notes that it is unclear as to what price Vanderveken would pay for the repairs and what the total costs would be. b. He opined that such was prohibited under the Municipalities Authority Act. c . d. He also opined that bids may be required. Mr. Davis also noted that Mr. Vanderveken could not be involved even indirectly in Authority transactions. 17. Five more pumps were repaired using the same procedure and Vanderveken submitted a bill to the Authority, dated July 8, 1991, for the amount of $1,074.80. 18. The invoice contained heading "Sanford Vanderveken, Plant Engineering Consultant, R.D. 1, Box 1223 Factoryville, Pennsylvania 18419" and indicates it was for rewinding (5) pumps with the total cost for the work and parts. 19. Lake Winola check #114, in the amount of $1,074.80, payable to Sanford Vanderveken, dated July 10, 1991, signed by Board Members Robert Barber and Sanford Vanderveken does not contain an endorsement on the back and was not cashed. 20. During a meeting of the Lake Winola Municipal Authority Board of Directors on July 10, 1991 the issue of contracting for the repair of the pumps was discussed. a. The Authority Solicitor advised of the $10,000 bid requirement. b. Authority Member Pilchesky questioned whether Mr. Vanderveken could submit a bid. The solicitor responded that he could not as such would be a conflict of interest. Sanford F. Vanderveken April 27, 1992 Page 6 c. Mr. Vanderveken questioned whether Mr. Rowland could submit a bid and whether he (Vanderveken) could then work through Mr. Rowland. The solicitor advised that he was not sure. d. During this meeting a bill for pump repairs was submitted for approval. That bill was from Mr. Vanderveken. The board approved payment of bills except Mr. Vanderveken's because it was not accompanied by an invoice from the company that he sends the pumps to. e. The vote to pay Mr. Vanderveken was 2 -2. Mr. Vanderveken did not vote. 21. The check for $1,094.80 was returned to the Authority by Vanderveken. 22. By way of letter dated July 25, 1991 from the Auditor for the Authority, it was advised that all invoices for services and merchandise supplied to the Authority must contain documents in support thereof. 23. By way of letter to Sanford Vanderveken from Authority Chair William Miller dated July 25, 1991, Mr. Vanderveken is advised that the Authority requires that all invoices submitted by Vanderveken contain the amount paid for services and identification of the service provider. 24. Vanderveken has refused to reveal the name of the company that rewound the cores and also refuses to reveal the name of the company that supplied the 0- rings, seals and bearings. 25. Lake Winola Municipal Authority Solicitor James E. Davis did not know about Vanderveken repairing the pumps until after the first bill was submitted at which time he notified the Authority that he felt it was a conflict of interest for Vanderveken to do the repairs. 26. Vanderveken intends to charge the Authority $160 per pump for the remaining four (4) cores as that is the cost other companies have stated they would charge for the work. He is holding the cores until a decision is made concerning payment of his bills. 27. Vanderveken denied making a profit on the rewinding of the cores. 28. Vanderveken has not received payment for the rewinding of the (9) cores. Sanford F. Vanderveken April 27, 1992 Page 7 29. Vanderveken denied that the cores were rewound by him, or a member of his family, stating the work was done by a person whom he has known for over forty (40) years. He added that he has developed the relationship and shouldn't have to divulge the person's name. a. Vanderveken's son is employed by a tool and dye company. 30. Vanderveken did not timely file statements of financial interests for the years 1987, 1988, 1989 and 1990 but submitted the required statements on 12/31/91. III. DISCUSSION: As a Member of the Lake Winola Municipal Authority, Sanford F. Vanderveken, hereinafter Vanderveken, is a public official as that term is defined under Act 9 of 1989. 65 P.S. 5402. As such, his conduct is subject to the provisions of the Ethics Law and the restrictions therein are applicable to him. Initially, it is noted that Section 9 of Act 9 of June 26, 1989 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 after the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 9 to determine whether the Ethics Act was violated. Under Section 3(a) of Act 9 of 1989 quoted above, a public official /employee shall not engage in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under Act 9 of 1989 as follows: Section 2. Definitions "Conflict" or "conflict of interest." Sanford F. Vanderveken April 27, 1992 Page 8 65 P.S. §402. Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" 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 or his immediate family or a business with which he or a member of his immediate family is associated. The issue before us is whether Vanderveken violated Sections 3(a), 3(f) and 4(a) of Act 9 of 1989 regarding: contracting with the Authority to repair pumps at a cost exceeding $500.00 which was not awarded through an open and public process, participating in the process as to the award of that contract and failing to file Financial Interest Statements (FIS's). Section 3(a) of Act 9 of 1989 prohibits the use of authority of office or confidential information by a public official /public employee 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. Section 3(f) of Act 9 of 1989 provides that no public official /public employee, spouse or child, or a business with which the public official /public employee, spouse or child is associated shall contract with the governmental body as to any contract valued at $500.00 or more unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure. In addition, Section 3(f) prohibits the public official /public employee from having any supervisory or administrative responsibility over the contract. Section 4(a) of both Act 9 of 1989 and Act 170 of 1978 requires that each public official and public employee shall file FIS's for the preceding calendar year that they hold such position as well as the year after they leave such position. Vanderveken is one of the five Members of the Lake Winola Municipal Authority which oversees the operation of a sewer system Sanford F. Vanderveken April 27, 1992 Page 9 for the Lake Winola community servicing approximately 490 homes connected to the sewer system. Each home has its own pump that sends waste through a closed system to the sewage treatment plant. When any given pump required maintenance, the Authority contracted with a James Rowland, an electrical contractor, to remove the pump for servicing. The Authority then shipped the pump to one of two companies for repairs which averaged between $600 to $700 per pump. Since it was the consensus of the Authority Members that the repair costs were too high, Vanderveken offered to repair the pumps at a cost of $350 per pump but his offer was rejected by the other Board Members. Thereafter, Vanderveken suggested that Rowland remove and dissembly the pumps for shipment for core rewiring which would cost approximately $175 per pump plus $10 freight charge. At the May 8, 1991 meeting of the Authority, the matter of pump repairs was considered wherein Vanderveken made his proposal to repair pumps and further suggested that ten repaired pumps be kept in inventory. After other Board. Members suggesting that fifteen pumps be held in inventory, a vote was taken to proceed to repair pumps according to Vanderveken's suggestion at a cost not to exceed $350 per pump. The vote passed by 2 -1 vote with Vanderveken abstaining. After one pump was repaired under the above procedure, Vanderveken submitted an invoice dated June 12, 1991, in the amount of $190.30, captioned Sanford Vanderveken, Plant Engineering Consultant, R.D. 1, Box 1223, Factoryville, Pennsylvania 18419. Lake Winola Municipal Authority check number 1765 in the amount of $190.30 payable to Vanderveken dated June 12, 1991, was duly issued and endorsed by Vanderveken. The record does reflect that Vanderveken abstained when the Authority voted to pay the above bill. The Solicitor for the Authority, James C. Davis, in a letter dated July 1, 1991, expressed his opinion concerning the Vanderveken transactions. The Solicitor was of the view that the repair transaction was unclear regarding how much Vanderveken would pay for the repairs as compared to the total cost and that, in any event, such activity was prohibited by the Municipalities Authority Act which would preclude Vanderveken from even being indirectly involved in the transaction. Lastly, the Solicitor was of the view that any such repair transactions would have to be put out on bid. Subsequently, five more pumps were repaired through the existing process followed by an invoice to the Authority dated July 8, 1991, in the amount of $1074.80 under the same caption. Although Lake Winola check number 114 in the amount of $1074.80 payable to Vanderveken was issued on July 10, 1991, there was no endorsement (cashing) of the check. At a July 10, 1991 Authority Sanford F. Vanderveken April 27, 1992 Page 10 Meeting, concerns about the transaction for repairing pumps were raised by the Solicitor and an Authority Member. Thereafter, Vanderveken returned the check for $1074.80 to the Authority. The Auditor of the Authority in a letter dated July 25, 1991, advised that all invoices for services would require support documentation. The Chair of the Authority in a letter dated July 25, 1991, to Vanderveken reiterated the requirement that invoices must be detailed as to services and provider identification. Vanderveken responded that he intended to charge the Authority $160 per pump for the remaining four cores which is the cost other companies would charge. However, Vanderveken did refuse to reveal the name of the company that supplied the o -ring seals and bearings and the name of the company that did the rewinding. Vanderveken further denied making a profit on the rewinding and stated that he did not receive payment for the nine cores. Lastly, Vanderveken did not file FIS's for the 1987 through 1990 years but subsequently submitted the required Statements on December 31, 1991. As to Section 3(a) of Act 9 of 1989, the question before us is whether Vanderveken's participation or advocacy for a change in the procedure for repairing pumps constituted a use of authority of office. We applied the definition of use of authority of office in Juliante, Order No. 809, as follows: A review of the term 'authority of office' quoted above indicates the term extends to all of the tasks needed to perform the functions of a given position. The words, 'authority of office or employment' mean the actual power provided by law which must be exercised, and the term 'unique' applies to the duties and responsibilities of that position. Thus, the 'authority of office or employment' is the actual power provided by law which must be exercised to perform the unique duties and responsibilities of any given position. The 'actual power provided by law' encompasses every facet of that position. Juliante, at 16. In the instant matter, although Vanderveken did abstain on votes, we believe that his participation and advocacy for the change in procedure of repairing pumps was a use of authority of office. &el Esposito, Order No. 832. Likewise, there was a private pecuniary benefit to Vanderveken individually in terms of the profit made on the repair of the first pump ($190.30). Sanford F. Vanderveken April 27, 1992 Page 11 Accordingly, we find a violation of Section 3(a) of Act 9 of 1989. In addition, we find a violation of Section 3(f) of Act 9 of 1989 in that Vanderveken engaged in transaction for the repair of five pumps which exceeded the $500 threshold amount of Section 3(f). However, the repair for those five pumps was not put out on bid. Thus, since Vanderveken entered into a contract with his governmental body which was over $500 and which was not awarded through an open and public process, we find a violation of Section 3(f) of Act 9 of 1989 regarding the contract for the repair of the five pumps. Lastly, as to the FIS allegation, we note that the record reflects that Vanderveken did not file FIS's for the years 1987 through 1990 on or before May 1 as required by Section 4(a) of Act 170 of 1978 and Act 9 of 1989, and accordingly we find a violation for the failure to timely file those Statements. However, we do note that Vanderveken subsequently filed the FIS's on December 31, 1991. The Ethics Law empowers this Commission to order a public official /public employee who has obtained a financial gain in violation of this Act to make restitution to his governmental body. 65 P.S. 8407(13). In this case, Vanderveken has received $190.30. Accordingly, we direct Vanderveken, within thirty days of the issuance of this Order, to forward a check or payment to this Commission payable to the order of the Lake Winola Municipal Authority in the amount of $190.30. In the event that Vanderveken complies with this Order as to restitution, he will have removed himself from the conflict and no further action will be taken. Failure to comply with this Order will result in a directive of this Commission to institute an order enforcement action. Vanderveken, however, is reminded that as to his future conduct, he must insure that his actions as a public official do not create a conflict. 65 P.S. 8401. In addition, Vanderveken is reminded to timely file FIS's for each year that he serves on the Authority as well for the year after he leaves that position. IV. CONCLUSIONS OF LAW: 1. Sanford F. Vanderveken, Sr., as a Member of the Lake Winola Municipal Authority is a public official subject to the provisions of Act 9 of 1989. 2. Vanderveken violated Section 3(a) of Act 9 of 1989 when he used the authority of office to obtain a private pecuniary benefit for himself through participating and advocating, as a Member of the Authority, to modify pump repair procedures Sanford F. Vanderveken April 27, 1992 Page 12 whereby Vanderveken would contract with the Authority for the pump rewinding. 3. Vanderveken violated Section 3(f) of Act 9 of 1989 when he entered into a contract exceeding $500 with the Authority for the repair of five pumps which contract was not awarded through an open and public process. 4. Vanderveken violated Section 4(a) of Act 170 of 1978 and Act 9 of 1989 when he failed to timely file Statements of Financial Interests for the years 1987 through 1990. In Re: Sanford F. Vanderveken : File Docket : 91- 055 -C2 Date Decided: April 23, 1992 : Date Mailed : April 27, 1992 ORDER NO. 842 1. Sanford F. Vanderveken, Sr., as a Member of the Lake Winola Municipal Authority, violated Section 3(a) of Act 9 of 1989 when he used the authority of office to obtain a private pecuniary benefit for himself through participating and advocating, as a Member of the Authority, to modify pump repair procedures whereby Vanderveken would contract with the Authority for the pump rewinding. 2. Vanderveken violated Section 3(f) of Act 9 of 1989 when he entered into a contract exceeding $500 with the Authority for the repair of five pumps which contract was not awarded through an open and public process. 3. Vanderveken violated Section 4(a) of Act 170 of 1978 and Act 9 of 1989 when he failed to timely file Statements of Financial Interests for the years 1987 through 1990. 4. The financial gain received by Vanderveken as to the violation referenced in Paragraph 1 is $190.30. 5. Vanderveken is directed within thirty (30) days of issuance of this Order to forward a check or payment to this Commission payable to the order of the Lake Winola Municipal Authority in the amount of $190.30, and return the pumps to the Authority. 6. If Vanderveken fails to comply with the terms of Paragraph 5, this Commission will direct that an order enforcement action be instituted. BY THE COMMISSION, 10 40~ - 4- DENNIS C. HARRINGTON, CHAIR Commissioner James M. Howley, Vice Chair, did not participate in the decision of this matter.