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HomeMy WebLinkAbout819 GeorginoIn re: Patsy Georgino, Jr. STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 . File Docket: : Date Decided: : Date Mailed: 91 -009 -C December 4.19 91 December 11.1991 Chair Before: Dennis C. Harrington, James M. Howley Daneen E. Reese Roy W. Wilt Austin M. Lee James P. Gallagher 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 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 52.38. 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. 409(e). I. ALLEGATION: That you, a Township Supervisor in Huston Township, Clearfield County, violated the below cited provisions of the Public Official and Employee Ethics Law (Act 170 of 1978), 65 P.S. 5401 et. seq., when the township purchased various commodities from Patsy Georgino & Sons, Inc., a business in which you are an officer and in which you have a financial interest without an open and public process; and when you approved payment of bills from said company; and when you signed checks in relation to the payment of such bills: II. FINDINGS: 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. 65 P.S. §403(a). Section 3(c) of the Ethics Act provides: (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. 65 P.S. 5403(c). 1. Patsy Georgino, Jr. serves as a member of the Huston Township Board of Supervisors, Clearfield County, Pennsylvania. a. He has served in this position since October 28, 1988 at which time he was seated and sworn. b. He was appointed to fill the unexpired term of a former supervisor. 2. Patsy Georgino, Jr. is part owner and an officer in Patsy Georgino & Sons, Inc. a. He holds 12.5% of the stock in this entity. b. He serves as Vice - President for marketing. 3. Patsy Georgino & Sons, Inc. was incorporated in 1965. a. The firm is engaged in the wholesale and retail sale of goods, wares and merchandise including gasoline, industrial supplies, propane gas, mining supplies and explosives. b. Patsy Georgino, Jr. was an original director and incorporator of the entity. 4. Huston Township purchased various supplies and materials from Patsy Georgino & Sons, Inc. during Patsy Georgino, Jr.'s term of office as a township supervisor. 5. Huston Township also purchased supplies and materials from Patsy Georgino & Sons, Inc. prior to Patsy Georgino, Jr's appointment to the Board of Supervisors. 6. Records of Huston Township indicate the following invoices from Patsy Georgino & Sons, Inc. to the township for the purchase of supplies subsequent to Mr. Georgino's appointment to the township Board of Supervisors: DATE NUMBER AMOUNT ITEM 10/30/88 A7313 $ 30.69 Grease 10/31/88 A7346 192.76 Blend Fuel 10/31/88 A7347 121.00 Oil 11/18/88 A8I86 13.86 Fuel 11/18/88 A8212 3.31 Wix Filter 11/23/88 A8393 14.05 Fuel 11/30/88 A8761 17.23 Fuel Subtotal $ 392.90 01/17/89 A10831 121.00 01/17/89 A10832 121.00 Arco Fleet 01/17/89 A10833 48.40 Grease, Gas, Tape, Saw Blade, Special Blend, Dry Gas, Trap Strap 05/03/89 A16289 552.52 Drain Line, Grease, Couplers 05/10/89 A16665 200.75 Dexron 06/03/89 8540 90.78 06/16/89 B1217 180.41 Fuel 06/28/89 81801 28.48 Brush 07/19/89 82791 90.44 Various Supplies 08/08/89 83683 39.25 Various Supplies 08/31/89 84963 7.00 Nuts, Flats 11/03/89 88242 32.85 Filters 10/03/89 86602 31.11 Paint, Brush 10/03/89 86601 125.40 Bulk 5 -3 -30 89449 15.42 TOTAL $ 2,298.81 7. Minutes of the Huston Township Board of Supervisors' meeting show the following actions were taken by the supervisors relative to the approval for the payment of bills from Patsy Georgino & Sons, Inc. from November 1988 through January 1990: 11/1/88 - Present: Llewellyn, Georgino "Bills were approved ". 12/7/88 - Present: Llewellyn, Georgino, Kalgren "Bills were approved for payment ". 1/3/89 - Present: Kalgren, Georgino, Llewellyn No motion. 2/7/89 - Present: Georgino. Llewellyn "Bills were approved ". 3/7/89 - Present: Llewellyn, Kalgren "Bills were approved and meeting adjourned". 4/4/89 - Present: Georgino, Kalgren, Llewellyn "Bills were approved for payment ". state fund account at the Deposit Bank in the amount of $32.53. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. e. Check Number 1882 written on the Huston Township state fund account at the Deposit Bank in the amount of $844.05. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. f. Check Number 1889 written on the Huston Township state fund account at the Deposit Bank in the amount of $208.89. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. Check Number 1896 written on the Huston Township state fund account at the Deposit Bank in the amount of $90..44. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. h. Check Number 1905 written on the Huston Township state fund account at the Deposit Bank in the amount of $75.05. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. i. Check Number 1924 written on the Huston Township state fund account at the Deposit Bank in the amount of $189.36. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. Check Number 5688 written'on the Huston Township Road District General Fund Account at the Deposit Bank in the amount of $15.42. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. g• j 9. The total amount of the payments from Huston Township to Patsy Georgino & Sons, Inc. as noted in the above records totaled $2,327.59. a. The above total includes: $ 392.90 (1988 Purchases) $1,919.27 (1989 Purchases) $ 15.42 (Account Balance Payment) 10. On November 24, 1989, the Pennsylvania Department of Transportation Bureau of Municipal Services issued an "Audit 5/2/89 - Present: Georgino, Llewellyn, Kalgren Motion by Llewellyn to pay the bills, seconded by Georgino. All voted yes. Motion carried. 6/6/89 - Present: Georgino, Llewellyn, Kalgren No motion. 7/11/89 - Present: Kalgren, Georgino, Llewellyn "Bills were approved ". 8/1/89 - Present: Georgino, Llewellyn, Kalgren "Bills were approved ". 9/5/89 - Present: Georgino, Llewellyn, Kalgren No motion. 10/3/89 - Present: Georgino, Llewellyn, Kalgren "Bills were approved ". 11/7/89 - Present: Llewellyn, Georgino, Kalgren "Bills were approved ". 12/5/89 - Present: Llewellyn, Georgino, Kalgren "Bills were approved ". 1/2/90 - Present: Llewellyn, Georgino, Kalgren No motion. 8. Records of Huston Township indicate the following payments by the township to Patsy Georgino & Sons, Inc. for the purchase of various supplies and materials subsequent to Mr. Georgino's appointment to the township Board of Supervisors. a. Check Number 1851 written on the Huston Township state fund account at the Deposit Bank in the amount of $392.90. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. b. Check Number 1862 written on the Huston Township state fund account at the Deposit Bank in the amount of $290.40. Patsy Georgino is one of three signatories. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. c. Check Number 1872 written on the Huston Township state fund account at the Deposit Bank in the amount of $188.55. The check is marked for Deposit to the Account of Patsy Georgino & Sons, Inc. Patsy Georgino did not sign this check. d. Check Number 1875 written on the Huston Township Report of the Liquid Fuels Tax Fund" for Huston Township for the year January 1, 1988 to December 31, 1988: a. The report notes that township expenditures from this fund included $392.90 for supplies purchased from Patsy Georgino & Sons, Inc. b. The report further notes that, "Patsy Georgino was appointed supervisor on October 28, 1988 and is part -owner of Patsy Georgino & Sons, Inc. Under Act 655, the township would not be allowed to purchase items from a business when the part -owner is a supervisor ". c. The report recommended that the township reimburse the Liquid Fuels Tax Account in the above -noted amount. 11. The purchases amounting to $392.90 noted in the PennDOT Audit Report were made during the period October 30, 1988 through November 30, 1988 [See Findings No. 6; 8(a)]. 12. A deposit in the amount of $392.90 into the township Liquid Fuels Tax Account was made on January 13, 1990 as reimbursement in accordance with the PennDOT Report. a. This payment was made by the township from its general fund. 13. Township checks require the signature of three individuals; two supervisors and the secretary /treasurer. 14. Patsy Georgino, Jr. did not direct the township employees to purchase materials and supplies from Patsy Georgino & Sons, Inc. a. Mr. Georgino did advise a township employee that the township could purchase from Patsy Georgino & Sons as long as he did not become involved in the sale. 15. When questioned about the propriety of the township purchasing items from his company, Mr. Georgino advised the other supervisors that his attorney had advised him that the township could continue to do business with said entity as long as he didn't participate in the matter. a. This advice was not provided by the township solicitor. 16. Records of Huston Township indicate a Statements of Financial Interests on file for Patsy Georgino as follows: a. Statement Date: April 25, 1990 For Calendar Year: 1989 Creditors: Keystone Bank, 11.E Source of Income: Patsy Georgino & Sons, Inc. Office, Directorship, Employment: Patsy Georgino & Sons, Inc. - V.P. b. Statement Date: April 16, 1991 For Calendar Year: 1990 Sources of Income: Patsy Georgino & Sons, Inc.; BITCO Office of Directorship, Employment: Patsy Georgino & Sons, Inc.; BITCO, Inc. Financial Interest in Any Business Entity: Patsy Georgino & Sons, Inc.; BITCO, Inc. 17. There are no other Statements of Financial Interests on file for Patsy Georgino. 18. BITCO, Inc. was incorporated in February 1984. a. Patsy F. Georgino was an incorporation and also signed the articles of incorporation as secretary /treasurer. III. DISCUSSION: As a Township Supervisor, Patsy Georgino, Jr., hereinafter Georgino, is a public official as that term is defined in the Ethics Act, 65 P.S. 402; 51 Pa. Code 1.1. 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 signing checks from the Huston Township account for payment of the submitted and approved bills for Patsy Georgino & Sons, Inc. Parenthetically, on November 24, 1989, PennDOT issued an audit report as to Liquid Fuels Tax Fund, which reflected for Huston Township for the calendar year 1988, that there were township expenditures from the fund in the amount of $392.90 for supplies purchased from Patsy Georgino & Sons, Inc., which was contrary to Act 655, given that Georgino was an appointed supervisor. Act 655 prohibits the purchase of items from a business if a part -owner is a supervisor. Said report recommended that the township reimburse the Liquid Fuels Tax Fund in the amount of $392.90, which was done on January 13, 1990. Although the record reflects that Georgino did not direct township employees to purchase materials or supplies from Patsy Georgino & Sons, Inc., he did advise township employees that they could purchase from the company as long as he personally was not involved in the sale. The record further reflects that when Georgino was questioned about the propriety of the township purchasing such items from Patsy Georgino & Sons, Inc., Georgino informed the other supervisors that his attorney had advised him that the township could do business with Patsy Georgino & Sons, Inc., as long as Georgino did not participate in the matter. Lastly, although not part of the allegation, it is noted that the records of Huston Township indicate that Georgino only filed Financial Interests Statements (FIS's) for the calendar years 1989 and 1990 and did not list Huston Township as source of income. In applying the provisions of Sections 3(a) and 3(c) of the Ethics Act to the above facts, we find violations of both provisions of law. As to Section 3(a) of the Ethics Act, there was a use of office on the part of Georgino in that he voted to approve bills and co- signed checks regarding payments to Patsy Georgino & Sons, Inc., a business with which he is associated as that term is defined under the Ethics Act: 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. In addition, the use of office resulted in a financial gain as to the sales by Patsy Georgina & Sons, Inc. Lastly, the financial gain is other than compensation provided for by law because there is no provision in the Second -Class Township Code which would authorize a second -class township supervisor to use office to obtain a financial gain for a business with which he is associated. However, as stated above, we note that Georgino did not direct the township employees to purchase from Patsy Georgino and Sons, Inc. In addition, the purchases in this case did not involve services but commodities. Accordingly, we find a technical violation of Section 3(a) of Act 170 of 1978. 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 provisions of Act 170 of 1978, P.L. 883, to determine whet ?er the Ethics Act was violated. Under Section 3(a), quoted above, this Commission has determined that use of office by a public official to amain 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): Ioa.k /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 interests; Koslow v. State Ethics Commission, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. Section 3(c) of Act 170 of 1978 quoted above, provides that a public official /employee, member of his immediate family or business with which he or a member or his immediate family is a director, officer, owner or holder of stock exceeding 5i cf equity at the fair market value of the business may contract with his governmental body, but if such contract is $500.00 or more it must be through an open and public process including prior public notice and subsequent public disclosure. In the instant matter, we must determine wh.ther Georgino violated Sections 3(a)sand -3(c) of Act 170 of 1978 quotes above, regarding sales by Patsy Georgino & Sons, Inc., a businesa with which Georgino was associated, to the township when Georgino avproved and voted in favor of bills and signed checks in relation no a payment of bills for such sales. Factually, Georgino has been a member of the Huston Township Board of Supervisors, Clearfield County, since October 28, 1988, when he was appointed to fill the unexpired term of a former supervisor. Georgino is part owner and an officer in Patsy Georgino s Sons, Inc., a firm incorporated in 1965, which sells various goods, wholesale and retail, and household goods to the township, both prior - :o and during Georgino's term in office. From the period 10!10/88 through 10/3/89, Patsy Georgino & Sons, Inc. sold various items to the township totalling $2,298.81, all of which, except a purchase on 5/3/89, were less than the $500.00 threshold amount of Sec:icn 3(c) of Act 170 of 1978 (Fact Finding 6). Both the official minute:; and records of Huston Township (Fact Finding 7, 8) reflect nurac:ous instances of Georgino as well as the other township superviss, voting to approve payment of bills from Patsy Georgino & Sons, Inc., as well as co- In re: Patsy Georgino, Jr. File Docket: 91 -009 -C Date Decided: December 4 , 4,9 1 Date Mailed: December 11,1991 ORDER No. 819 1. A technical violation of Section 3(a) of Act 170 of 1978 occurred when Patsy Georgino, Jr., as a Huston Township Supervisor, voted to approve the payment of bills and co- signed checks in payment of said bills as to sales to the township from Patsy Georgino & Sons, Inc., a business with which he is associated. 2. Georgino violated Section 3(c) of Act 170 of 1978 regarding a sale on May 3, 1989 from Patsy Georgino & Sons, Inc. to the township in the amount of $552.52 which exceeded $500.00 and was not awarded through an open and public process as required by the Ethics Law. .3. Georgino is directed within thirty days of the issuance of this Order to file Financial Interest Statements for the calendar years 1987 and 1988, as well as file amended Financial Interests Statements for the calendar years 1989 and 1990 if he received income from Huston Township and list his position as an officer in BITCO, Inc. for the calendar years 1987 through 1990. 4. Georgino is directed within thirty days of the date of this Order to make restitution by forwarding a check to this Commission payable to Huston Township in the amount of $392.90. BY T COMMISSION, DENNIS C. HARRINGTON, CHAIR In Yacobet, supra, the Commonwealth Court upheld the right of this Commission to impose restitution. In this case, the township was required to reimburse the Liquid Fuels Fund in the amount of $392,90. Since the township lost $392.90, restitution in this amount is appropriate. Accordingly, Georgino is directed to make restitution within thirty days of the date of this Order by forwarding a check to the Commission payable to the order of Huston Township in the amount of $392.90. As to Section 3(c) allegation, we find a violation of that provision regarding the May 3, 1989 contract in the amount of $552.52 to the township from Patsy Georgino & Sons, Inc. Such contract exceeded the $500.00 threshold requirements of Section 3(c) of Act 170 of 1978, and was not awarded through an open and public process. Accordingly, we find a violation of Section 3(c) of the Ethics Act of 170 of 1978 regarding the award of the May 3, 1989 contract. See Astolos, Order 741. Turning to the matter of the FIS's of Georgino, again we note that there is no allegation before us as to any alleged FIS violations. However, since Georgino was appointed to office in 1988, Section 4 of Act 170 of 1978 requires him to file FIS's for the calendar years 1987 and 1988. Since Georgino has not filed FIS's for the 1987, 1988 calendar years, he is directed within thirty days of issuance of this Order to file FIS's with Huston Township and file a copy with this Commission for compliance verification. In addition, if Georgino has in fact received income from Huston Township for any of the years 1988 forward, and said income exceeds the threshold reporting requirements of Act 170 of 1978 or Act 9 of 1989, he must report that income on his 1987 and 1988 calendar year FIS's or file amended FIS's for the calendar years 1989 and 1990. Finally, Georgino must also list his position as an officer in BITCO, Inc. for the calendar years 1987 through 1990. IV. CONCLUSIONS OF LAW: 1. Patsy Georgino, Jr., as a Huston Township Supervisor, is a public official as the term is defined under Act 170 of 1978. 2. A technical violation of Section 3(a) of Act 170 of 1978 occurred when Georgino voted to approve the payment of bills and co- signed checks in payment of said bills as to sales to the township from Patsy Georgino & Sons, Inc., a business with which he is associated. 3. Georgino violated Section 3(c) of Act 170 of 1978 regarding a sale on May 3, 1989 from Patsy Georgino & Sons, Inc. to the township in the amount of $552.52 which exceeded $500.00 and was not awarded through an open and public process as required by the Ethics Law.