HomeMy WebLinkAbout832 EspositoIn Re: Fidel R. Esposito
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG. PENNSYLVANIA 17120
: File Docket:
: Date Decided:
: Date Mailed:
Before: Dennis C. Harrington,
James M. Howley, Vice
Daneen E. Reese
Roy W. Wilt
Austin M. Lee
James P. Gallagher
Allan M. Kluger
91- 028 -C2
Febr »ry 20 , 199;
Feb Luary 27. 1992
Chair
Chair
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 filed and a hearing was held. 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 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).
I. ALLEGATION:
That Fidel R. Esposito violated the following section of the
Public Officials and Employees Ethics Law (Act 9 of 1988), when
he, as Bristol Borough Business Manager, negotiated a labor
contract which benefited his brother and then recommended to
Borough Council that they approve the agreement.
Section 3. Restricted Activities
(a) No public official or public employee shall
engage in conduct that constitutes a conflict of interest.
65 P.S. 5403(a).
II. Findings:
Section 2. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office
or employment or any confidential information received
through his holding public office or employment for the
private pecuniary benefit of himself, a member of his
immediate family or a business with which he or a member of
his immediate family is associated. "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 included the
public official or public employee, a member of his
immediate family or a business with which he or a member of
his immediate family is associated. 65 P.S. S402.
1. Fidel Esposito has served as Business Manager for Bristol
Borough, Bucks county, for approximately 20 years.
2. Esposito's duties as Business Manager include negotiating
labor contracts with the borough's various employee unions.
a. Esposito has been performing this function for at least
ten years.
b. He is given general guidelines by Council when
negotiating a contract.
c. Esposito presents results of negotiations to Council.
1) Contracts are voted upon by Council at a
public meeting.
Page 3
3. Bristol Borough has three employee unions: The First Line
Supervisors Union, Borough Employees Union and the Police
Benevolent Association.
4. The First Line Supervisors' Union represents the Sewer Plant
Superintendent, Water Plant Superintendent, Streets and Highway
Superintendent, Assistant Code Enforcement Officer, Assistant
Treasurer, Administrative Assistant, Bookkeeper and Police
Secretary.
5. Anthony Esposito has been employed as the Sewer Plant
Superintendent for approximately the past 15 years.
a. He is a member of the First Line Supervisors' Union.
b. He is the brother of Borough Business Manager,
Fidel Esposito.
c. He retired as Sewer Plant Supervisor on December 15,
1991, effective December 31, 1991.
6. In 1991 Fidel Esposito negotiated contracts with the First
Line Supervisors' Union, Borough Employees Union and the Police
Benevolent Association.
7. The contract negotiated in 1991 with the First Line
Supervisors' Union was for a three -year period.
a. The contract called for five (5) percent wage increases
for each year of the contract.
b. The Borough Manager's secretary was to receive an
additional $40.00 for attendance at regular Borough Council
meetings.
c. In addition to the five percent increase the following
employees were to receive an additional flat, yearly
increase effective January 1, 1991:
Bookkeeper, Assistant Treasurer $1,000.00
Administrative Assistant $2,000.00
Water Plant Superintendent $2,000.00
Sewer Plant Superintendent $2,000.00
Street and Highway Superintendent $2,000.00
d. All employees were to receive an additional annual
payroll increment of $300.00 per year, payable on or before
January 30 of 1991, 1992 and 1993, with the exception of the
Police Secretary who was to receive a $500.00 increment in
1991 and a $300.00 increment in 1992 and 1993.
Page 4
8. The total increase in the Sewer Plant Superintendent's salary
over the three years of the contract, amounted to a twenty (20)
percent raise in pay.
9. The contract negotiated with the Borough employees union was
for a three -year period.
a. The contract called for a five - and - one -half (5 1/2)
percent increase in 1991; a five - and - one -half (5 1/2)
increase in 1992; and a five percent (5) increase in 1993.
b. The total increase in Borough employees salaries, over
the three years of the contract, amounted to a sixteen (16)
percent increase in pay.
10. The contract negotiated with the Polio Benevolent
Association was for a three -year period.
a. The contract called for a six (6) percent increase in
each year of the contract.
b. The contract also called for a one (1) percent decrease
in employee pension contributions in 1991 and 1992 and a two
(2) percent decrease in employee pension contributions in
1993.
c. The total increase in police salaries over the three
years of this contract amounted to a twenty -two (22) percent
increase in pay.
11. Bristol Borough Council reviewed the proposed contracts at
the April 8, 1991 meeting of council.
a. Eight council members were present.
b. Borough Business Manager Esposito, Solicitor Snyder,
Engineer Wright and the Chief of Police were also present.
c. A motion was made by Councilman Piraino, seconded by
Squillace to approve the three Borough employees and First
Line Supervisors' contracts as negotiated by the borough
manager. The motion carried unanimously.
d. A motion was also approved for the three -year police
contract as negotiated by the borougitmanager. The motion
carried unanimously.
12. On April 25, 1991 the Bristol Borough Benevolent Association
4
Page 5
filed an unfair labor practice charge against
Bristol Borough in relation to the 1991, 1992 and 1993 contracts.
a. The Association argued that the B engaged in bad
faith bargaining when it disclosed its interests in
regionalization and because agreements with the other
bargaining units allows for a larger pay increase than what
the Association received.
b. A hearing was scheduled for May 10, 1991 before the
Pennsylvania Labor Relations Board.
c. As findings of fact, the board found in part,:
1) That during the course of negotiations, the
Borough informed the Association that it was
financially burdened and was consequently exploring the
possibility of regionalizing its police force.
2) That during the course of negotiations, the
Borough informed the Association that its millage
rate was at the maximum rate allowable by law.
3) That the salaries for the police department come
out of the general fund. The revenues for the general
fund budget are raised predominantly through taxes.
4) That the salaries for the
department employees come out
sewer department budget. The
are produced by the Borough's
5
water and sewer
of a separate water and
revenues for that budget
water and sewer plants.
5) That two - thirds of the first line supervisors'
salaries come out of the water and sewer department
budget.
6) That the agreement entered into with the Borough by
the first line supervisors includes a total percentage
increase for first line supervisors of 20% over a
three -year period.
7) The agreement between the Association and the
Borough includes a 6% increase per year for the three
years of the agreement. In addition, the Borough
agreed to reduce the percentage rate of
the employees' contribution to their pension plan. In
the first and second year of the agreement the employe
contribution rate is reduced by i %, for
the third year of the agreement the rate will be
reduced by 2 %. The total percentage increase covering
Page 6
the three -year agreement with the Association is 22 %.
8) That the agreement between the Borough and the
non - uniformed employees includes'a total percentage
increase for non - uniformed employees of approximately
16% over a three -year period.
9) That all of the bargaining units that the Borough
negotiated with received the same limitations in their
Blue - Cross /Blue Shield.
10) That the police department raises are 1% or 2%
higher than the first line supervisor rates which, in
turn, are 4% or 5% higher than the non - uniformed
employe raises.
11) The majority of funds necessary to support the pay
increases of the other two units come from the water
and sewer budget, which is funded by
proceeds from the water and sewer plants.
12) These funds are separate from the general fund and
cannot be used to supplement funds to pay the police
force.
d. On August 7, 1991 the Pennsylvania Labor Relations
Board dismissed the charge of an unfair labor practice.
13. The members of Bristol Borough Council were aware that Fidel
Esposito was negotiating contracts in 1991 with the various
unions.
III. DISCUSSION:
a. Council members were aware of the increases for the
First Line Supervisors' Union.
1.) Esposito routinely informed council members of
negotiations.
b. Council members agreed that the salary increases were
needed for the first line supervisors to keep the salaries
competitive.
c. Council members agreed that contracts, overall, were
good packages.
d. Esposito did not pressure council to approve the
contracts.
6
Page 7
As the Business Manager for Bristol Borough, Bucks County, Fidel
R. Esposito, hereinafter Esposito, is a public employee as that term
is defined under Act 9 of 1989. 65 P.S. 402. 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." 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
7
Page 8
business with which he or a member of his
immediate family is associated. 65 P.S. §402.
The issue in this case is whether Esposito as the Bristol Borough
Business manager violated Section 3(a) of Act 9 of 1989, quoted above,
when he negotiated labor contracts with the three Borough Unions when
his brother was a member of one of those Unions.
Factually, Esposito has served as Business Manager for Bristol
Borough for approximately 20 years, with his duties including the
responsibility of negotiating labor contracts with the Borough's
employee Unions. Esposito has performed this function for the last
ten years and negotiates under general guidelines given by Borough
Council. After negotiations are completed, Esposito presents the
results to Borough council, which votes on the contracts at a public
meeting. Bristol Borough has three employee Unions consisting of the
Borough Employee's Union, the Police Benevolent Association Union and
the Firstline Supervisors Union. The Sewer Plant Superintendent,
Water Plant Superintendent, Streets and Highways Superintendent,
Assistant Code Enforcement Officer, Assistant Treasurer,
Administrative Assistant, Bookkeeper and Police Secretary comprise the
Firstline Supervisor's Union. Within the Firstline Supervisor's
Union, the Sewer Plant Superintendent is Anthony Esposito who has been
employed in that position for the last fifteen years. Anthony
Esposito is the brother of Esposito, and retired on December 15, 1991,
effective December 31, 1991 as Sewer Plant Supervisor.
In 1991, Esposito negotiated contracts with the three Borough
Unions. As to the contract for the Firstline Supervisor's Union, the
contract was for a three year period wherein a five percent wage
increase was provided in each year; the Borough Manager's secretary
was to receive an additional $40.00 for attendance at each regular
Borough Council meeting; the Administrative Assistant, Water Plant
Superintendent, Sewer Plant Superintendent and Street and Highway
Superintendent were to receive $2,000.00 in addition to the five
percent increase and the Bookkeeper and Assistant Treasurer were to
receive $'1,000.00 in addition to the five percent increase; and all
employees were to receive an additional annual payroll increment of
$300.00 per year payable on or before January 30 of each of three
contract years, with the exception of the Police Secretary who was to
receive a $500.00 increment in the first year and a $300.00 increment
in each of the two following years. The total increase which the
Sewer Plant Superintendent would receive for the three year contract
amounted to a twenty percent raise in pay.
As to the Borough Employee's Union contract, the contract was for
a three year period with a five and one -half percent raise in the
first and second years and a five percent raise in the third year
which amounted to a total increase of sixteen percent in the three
8
Page 9
year period.
As to the contract for the Police Benevolent Association, the
contract was for a three year period whereby a six percent increase
was given in each year coupled with a one percent decrease in employee
pension contributions in the first two years and a two percent
decrease in the third year which resulted in a total salary increase
for the three year period of twenty -two percent.
The three proposed contracts were reviewed by Bristol Borough
Council on April 8, 1991 wherein all three contracts were unanimously
approved by Council. However, on April 25, 1991 the Bristol Borough
Benevolent Association filed an unfair labor practice against Bristol
Borough regarding their particular contract. The unfair labor
practice claim was based upon allegations that there was bad -faith
bargaining by the Borough regarding consideration of regionalization
of police services and secondly regarding the receipt of larger pay
increases by the other two bargaining units. The hearing was
scheduled before the Pennsylvania Labor Relations Board which
subsequently issued the following findings of fact relative to the
negotiation process:
1) That the Borough informed the Association that it was
financially burdened and was considering regionalization of the
police force;
2) That the Borough informed the Association that its millage
rate was at the maximum rate allowed by law;
3) That the salaries of the Police Department came out of the
general fund, the revenues of which are raised predominately
through taxes;
4) That the salaries for the Water and Sewer Department employees
came out of a separate Water and Sewer Department budget;
5) That two - thirds of the Firstline Supervisor's salaries came
out of the Water and Sewer Department budget;
6) That the agreement entered into with the Firstline Supervisors
amounted to a twenty percent raise over a three year period;
7) That the agreement as to the Association included a six
percent increase per year over a period of three years coupled
with a reduction of the percentage rate of employee contribution
to the pension fund with a total salary increase over the three
year agreement of twenty -two percent;
8) That the agreement between the Borough and the non - uniformed
9
Page 10
employees amounted to a sixteen percent increase over a three year
period;
9) That all bargaining units received the same limitations as to
Blue Cross /Blue Shield coverage;
10) That the Police Department raises are one to two percent
higher than the Firstline Supervisors and also four to five
percent higher than the non - uniformed employee raises;
11) That the majority of funds necessary to support the pay
increase of the other two bargaining units came from Water and
Sewer Budget and that the funds are separate from the general fund
and cannot be used to supplement funds to pay the police force.
The Pennsylvania Labor Relations Board on August 7, 1991 dismissed the
charges of an unfair labor practice.
The facts reflect that the members of Council were aware that
Esposito was negotiating the contracts for 1991 with the various
Borough Unions; that they were aware of the increases for the
Firstline Supervisor's Union as to which Esposito routinely informed
them as to the negotiations; that the salary increases were needed for
Firstline Supervisors to keep the salaries competitive; that the
contracts overall were good packages and lastly that Esposito did not
pressure Council to approve the contracts.
In determining whether Esposito violated Section 3 {a) of Act 9 of
1989, quoted above, we first must determine whether a conflict exists,
and if so whether the exclusionary language contained in the
definition of conflict has application. Preliminarily, we note that
Anthony Esposito is a member of the immediate family of Esposito. The
term immediate family is defined under the Ethics Law as follows:
Section 2. Definitions
"Immediate family." A parent, spouse,
child, brother or sister. 65 P.S. §402.
We must now determine whether the negotiations conducted by
Esposito constitute a use of authority of office to obtain a private
pecuniary benefit for a member of his immediate family. Since
Esposito's brother is a member of his immediate family and since his
brother received a private pecuniary benefit consisting of the
negotiated raises in the contract, it follows that there is a private
pecuniary benefit to a member of Esposito's immediate family.
The issue in this case reduces to whether there has been a use of
authority of office on the part of Esposito. Although it is true that
10
Page 11
Esposito as the Borough Manager did not vote to approve the contract,
it is equally true that he negotiated the contracts as part of his
duties as Business Manager. We believe that the negotiations by
Esposito as part of his duties and responsibilities as Borough Manager
is clearly a use of authority of office as that term is defined under
the Ethics Law.
Section 2. Defin$tions
"Authority of office or employment." The
actual power provided by law, the exercise of
which is necessary to the performance of duties
and responsibilities unique to a particular public
office or position of public employment. 65 P.S.
5402.
We have had occasion to interpret and apply the above definition in
Juliante, Order 809 wherein we opined:
"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.
We therefore find in this case that there has been a use of
authority of office on the part of Esposito to obtain a private
pecuniary benefit for a member of his immediate family.
The only issue remaining is whether the exclusionary language
contained in the above definition of conflict has application to the
instant matter. We must determine therefore whether the action by
Esposito affects to the same degree a sub - class consisting of an
industry, occupation or other group which included a member of the
immediate family.
In this case, the Borough had to negotiate with three different
Unions. The Union in which Esposito's brother was a member was the
Firstline Supervisor's Union which has a membership comprised of the
Sewer Plant Superintendent, Water Plant Superintendent, Streets and
Highway Superintendent, Assistant Code Enforcement Officer, Assistant
Treasurer, Administrative Assistant, Bookkeeper and Police Secretary.
11
Page 12
In reviewing the negotiated contract as to that particular Borough
Union, it is readily apparent that All Superintendents received the
same salary package except for the Manager's Secretary and Police
Secretary and Bookkeeper and Assistant Treasurer who received a
slightly different structured package in the contract. Therefore, as
to the grouping of the Superintendents, Esposito's brother was
affected to the same degree as all the other Superintendents and
therefore we find that the exclusion within the definition of conflict
is applicable. Accordingly, we find that Esposito did not violate
Section 3(a) of Act 9 of 1989 in that his action in negotiating the
contract with the Firstline Supervisor's Union constituted - an action -
which affected to the same degree a sub -class consisting of an
occupation or a group which included a member of his immediate family.
IV. CONCLUSIONS OF LAW:
1. Fidel R. Esposito as the Business Manager for Bristol Borough,
Bucks County is a public employee subject to the provisions of Act
9 of 1989.
2. Esposito did not violate Section 3(a) of Act 9 of 1989
regarding negotiating a contract with the Bristol Borough Union,
of which his brother was a member, since the action taken affected
to the same degree a sub -class consisting of an occupation or
other group which included a member of his immediate family.
12
In Re: Fidel R. Esposito
: File Docket: 91- 028 -C2
: Date Decided: February 20, 1992
. Date Mailed: February 27. 1992
ORDER No. 832
1. Fidel R. Esposito as the Business Manager for Bristol Borough,
Bucks County did not violate Section 3(a) of A:.t 9 of 1989 regarding
negotiating a contract with the Bristol Borough Union, of which his
brother was a member, since the action taken affected to the same
degree a sub -class consisting of an occupation or other group which
included a member of his immediate family.
BY THE COMMISSION,
DENNIS C. HARRINGTON,`' CHAIR
Commissioner Austin M. Lee did not participate in this matter because
he acted as single hearing officer and recused himself pursuant to 51
Pa. Code §2.34(d).
13