Loading...
HomeMy WebLinkAbout833 RohrerIn re: Clyde N. Rohrer STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 1712,0 . 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. Rluger 88 -076 -C February 20, 199,2 Fcbruary 27. 1992 Chair Chair 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 deemed waived. The record is complete. 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). Rohrer, 88 -076 -C Page 2 1. ALLEGATION: That Clyde N. Rohrer, an employee of the Potter County Community Development Block Grant Program violated the following provisions of the State Ethics Act, when he participated in the awarding of CDBG funds to firms with which he is associated: 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). 1. Clyde Rohrer was employed as a Housing Rehabilitation Inspector with the Potter County Office of Planning and Development in Coudersport, Pennsylvania. a. He served in this position from January 4, 1984 until April 4, 1986. 2. The Potter County Office of Planning and Development was closed in 1986. The functions then became part of the Potter County Housing and Redevelopment Authority in 1986. 3. The duties of a Housing Rehabilitation Inspector were as follows: a. To inspect and prepare work write -ups on housing rehabilitation projects. b. The inspections were for the purpose of bringing the properties up to acceptable standards of living. 4. Robert Perry was the Director of the Potter County Office of Planning and Development. a. As Director, Perry handled all of the administrative matters of the office and had supervision over the Housing Rehabilitation Inspectors. b. Perry had the final approval for the awarding of the grants and loans and based his decisions on the preliminary inspections conducted by the Housing Rehabilitation Inspectors. Rohrer, 88 -076 -C Page 3 5. In 1984 the Potter County Office of Planning and Development sponsored a Housing Rehabilitation Loan and Grant Program for the citizens of Roulette Township. a. Funding was provided through the Pennsylvania Department of Community Affairs, Small Communities Program. 6. Housing Assistance was available to renters and homeowners in the form of grants and low interest loans. a. The eligible applicants must have met the following income requirements: Family Number 1 $10,900 2 12,500 3 14,050 4 15,600 5 16,550 6 17,550 7 18,500 7. The Potter County Office of Planning and Development's Grant and Loan Program application procedure was as follows: a. Owner submits application to the Office of Planning and Development. b. Preliminary screening and review of proposal. c. Inspection Stage: (1) Rehabilitation Inspector conducts inspection to determine work needed to renovate. (2) Program administrator approves rehabilitation inspector's report. d. Review of contractor proposal. (1) Program administrator reviews proposal with rehabilitation inspector, if approved, informs owner of decision. (2) Owner notifies contractor. e. Construction Process. (1) The owner shall issue a written Proceed Order within the ten (10) days from the date of the contract. Rohrer, 88 -076 -C Page 4 (2) The contractor must commence work within ten (10) days after issuance of the Proceed Order. (3) The contractor must satisfactorily complete the work within thirty (30) days after issuance of the Proceed Order. (4) The rehabilitation inspector would be inspecting all work related to the contract. 8. Community Development Block Grant (CDBG) Programs administered by the United States Department of Housing and Urban Development (HUD) prohibits conflicts of interest under Federal Regulation 570.611. a. The conflict of interest provision applies to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the recipient, or of any designated public agencies or subrecipients which are reviewing funds. b. It prohibits obtaining personal or financial interest or benefits including money, favors, gratuities, entertainment or anything of value that might be interpreted as a conflict of interest. c. It prohibits obtaining a direct or indirect interest in any contract, subcontract or agreement for any CDBG activity. This prohibition extends to contracts in which a spouse, minor child, dependent or business associate may have a personal or financial interest. This prohibition extends for a period of one year after leaving a position with a CDBG activity or program. d. HUD may grant an exception to this caaflict of interest provision if it determines that such an exception will enhance the effectiveness of the CDBG project. Requests for such exceptions must be made in writing to the local HUD office. 9. Community Development Block Grant (CDBG) Programs administered by the Pennsylvania Department of Community Affairs (DCA) follows the same regulations as the federal government in prohibiting conflicts of interest. a. The CDBG regulations of CFR Part 570.611 state that except for the use of CDBG funds to pay salaries and other related administrative or personnel costs, the general rule is that no person who is an employee, agent, .onsultant, officer, or Rohrer, 88 -076 -C Page 5 elected official or appointed official of the subrecipient, or of any designated public agencies, or subrecipients which are receiving CDBG funds who exercise or have exercised any functions or responsibilities with respect to CDBG activities assisted under this part or who are in a position to participate in a decision'' making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from a CDBG assisted activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder either for themselves or those with whom they have family or business ties, during their tenure or for one year thereafter. 10. DCA may grant, upon written request of the grantee, an exception to the federal conflict of interest provisions on a case -by -case basis when it determines that such exception will serve to further the purposes of the CDBG program and the effective and efficient administration of the grantee's program. An exception may be considered only after the following steps have been taken: a. A disclosure of the nature of the conflict, accompanied by an assurance that there has been public disclosure of the conflict and a description of how the public disclosure was made. b. The grantee's solicitor reviews the circumstances involved and renders an opinion based on the applicable municipal code as to whether the particular situation constitutes, or if implemented would constitute a conflict of interest. c. The information is then forwarded to DCA and then they determine if an exception to the federal conflict of interest may be granted. However, it may still be necessary to request a determination from the State Ethics Commission. 11. A Home Improvement Grant /Loan File Preliminary Information Worksheet was filed by Leon and Karen Green with the Potter County Office of Planning and Development on June 27, 1985 . a. The Greens listed their address as P.O. Box 159, Roulette, Pennsylvania. b. The Greens listed their total income as $7,248.00 for the year. c. The Greens listed themselves as being the owners of the property and had eight people living in the household. Rohrer, 88 -076 -C Page 6 12. Clyde N. Rohrer performed the preliminary inspection of Green's property on June 27, 1985 and recommended that it did not meet HUD Section 8 Housing Quality Standards and made a recommendation that the property be approved for a grant. a. This report was submitted to Robert Perry, Rohrer's supervisor. b. Perry approved Rohrer's inspection of the Green property. 13. D & K Construction was awarded the contract to repair the home of Leon Green for the amount of $4,040.00. a. Additional repairs were needed for Green's property as a Change Order Form was written up and the final cost to repair the property came to $5,500.00. b. A change Order Form is completed whenever a deviation occurs in the work write -up for the original contract. c. The Change Order Form was completed cn September 3, 1985 and it was approved by Clyde N. Rohrer. d. The Certification of Final Inspection on Leon Green's property was conducted by Clyde N. Rohrer on September 16, 1985. 14. An Agreement of Sale was made on October 23, 1984 between Bruce C. Burr and his wife as the seller, and Clyde N. Rohrer and Karen M. Rohrer as the buyer of a property located at Box 159, Roulette, Pennsylvania. a. The Rohrers purchased the property from the Burrs under a land contract for the sum of $13,000.00. b. The Rohrers were to make monthly payments in the amount of $156.03 and a balloon payment was to to made in three years. 15. An Agreement of Sale was made for the property at Box 159, Roulette, Pennsylvania, on June 13, 1985 between Clyde N. Rohrer as the seller and Leon and Karen Green as the buyer. a. The agreement was for the Greens to pay Rohrer the sum of $2,000,00 as a down payment against the purchase price of $16,500.00. The balance was due on or before October 30, 1987. b. The Greens agreed to lease the property from Rohrer for $156.03 a month. Rohrer, 88 -076 -C Page 7 c. On December 1, 1985 this was changed to $250.00 a month when the Greens applied for housing assistance under a Section 8 program with the United States Department of Housing and Urban Redevelopment and they were accepted. 16. Robert Perry, Clyde N. Rohrer's supervisor, approved Rohrer's inspection of Green's property. a. Perry was aware that Rohrer owned the property. b. He approved the report because he believed there was an agreement of sale between Rohrer and Green. 17. The Greens were unable to pay the balance of $14,500 to the Rohrers for the property at Box 159, Roulette, Pennsylvania in October of 1987. a. The Greens were forced to leave the property. b. When the Greens left the premises, extensive property damage was done. 18. A subsequent Agreement of Sale was made for the property at Box 159, Roulette, Pennsylvania on July 22, 1988 between Clyde N. Rohrer and Karen Rohrer as the seller and Lester and Dorothy Saylers as the buyer. a. The Salyers paid the Rohrers the sum of $19,000 for the property. b. This agreement was contingent upon the Rohrer's renovating certain areas of the house. 19. A Quit -Claim Deed was made for the property at Box 159 in Roulette, Pennsylvania on September 29, 1988 where the Rohrer's transferred the property back to the Burr's for the sum of $1.00. a. The Burr's then transferred this same property to the Salyers through a Quit -Claim Deed on September 30, 1988 for the sum of $1.00. b. Two transactions were made on this property to avoid paying additional real estate transfer taxes. 20. When the deeds were completed, Lester Salyers then signed mortgage documents on September 30, 1988 with Albert Winkelvoss of Coudersport and a second mortgage with Clyde L. Rohrer of Coudersport. Rohrer, 88 -076 -C Page 8 a. The Salyers were to pay Albert Winkelvoss $14,500.00 at a 12% interest rate for a term of 15 years having a monthly payment of $174.03. A balloon payment was to be made at the end of five years for the balance owed on the principal and interest. b. The Salyers were to pay Clyde L. Rohrer a sum of $4,500.00 at a rate of 12% for a term of 15 years having a monthly payment of $54.02. A balloon payment was to be made at the end, of five years for the balance owed on the principal and interest. 21. Clyde N. Rohrer never filed for an exception of the conflict of interest provisions of the grant application with DCA. 22. Clyde N. Rohrer conducted inspections of properties owned by his father, Clyde L. Rohrer, during the Roulette Redevelopment Project where block grants were awarded. a. The borough of Roulette participated in the Potter County Housing and Rehabilitation Loan and Grant Program. 23. Records of the Potter County Housing and Redevelopment Authority confirm that Clyde L. Rohrer received grants for housing rehabilitation as follows: a. Case Number: R -95 Owner: Clyde L. Rohrer Tenant: Kristine Landes Location: Box 21, Roulette, PA 16746 Grant: $1,788.75 Contractor: Greely & Rio Inspector: Clyde N. Rohrer Date of Final Inspection: 11/20/84 b. Case Number: RB -35 Owner: Clyde L. Rohrer Tenant: Gerald P. and Susan Quii!n Location: Trailer Lot No. 23, Roulette, PA 16746 Contractor: Steve Smith Inspector: Clyde N. Rohrer Date of Final Inspection: 1/24/85 c. Case Number: RB -P -38 Owner: Clyde L. Rohrer Tenant: Sharon L. Kaple Location: Trailer Lot No 17 Contractor: Steve Smith Rohrer, 88 -076 -C Page 9 Inspector: Clyde N. Rohrer Date of Final Inspection: 1/24/85 d. Case Number: RBTP -39 Owner: Clyde L. Rohrer Tenant: Calee Sherwood Location: Trailer Lot #23, Roulette, PA 16746 Contractor: Steve Smith Inspector: Clyde N. Rohrer e. Total Grant amount for 23 b,c,d, $1,551.34. f. Change order was submitted for RBTP -38 and RBTP -39. g. III. DISCUSSION: 1) An additional $654.31 was approved for those properties. Clyde N. Rohrer conducted all of the estimates of rehabilitation and inspections for the properties outlined in 23 a,b,c,d. As a Housing Rehabilitation Inspector, Clyde N. Rohrer, hereinafter Rohrer, is a public employee 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 data of this act if any elements of the violation occs:xed 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 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 obaain a financial gain for Rohrer, 88 -076 -C Page 10 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. Stake Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yocabet 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. The allegation before us in this case is whether Rohrer while employed as a Housing Rehabilitation Inspector violated Section 3(a) of Act 170 of 1978 quoted above regarding his participation in awarding Community Development Block Grants (CDBG) funds to entities with which he was associated. Factually, Rohrer was employed as a Housing Rehabilitation Inspector with the Potter County Office of Planning and Development from January 4, 1984 until April 4, 1986 when that office was closed and its functions were incorporated into the. Potter County Housing and Redevelopment Authority. Rohrer's duties as a Housing Rehabilitation Inspector were to inspect and prepare write -ups on housing rehabilitation projects, the goal of which is to raise properties to an acceptable standard of living. The Director of the Potter County Planning and Development handled all administrative matters of the office and had supervision over the inspectors. In addition, the director had final approval for awarding grants and loans, which decisions were based upon the preliminary inspections conducted by the inspectors. One program sponsored in 1984 by the Potter County Office of Planning and Development was for a rehabilitation loan and grant program for the citizens of Roulette Township with the funding being provided by the Pennsylvania Department of Community Affairs (DCA). The particular housing assistance program was available to renters as well as homeowners in the form of grants and low interest loans. Participation in the Housing Assistance Program occurred according to the following procedures: an owner would submit an application to the Office of Planning and Development followed by a preliminary screening and review of the proposal; a rehabilitation inspector would conduct an inspection to determine the renovation work needed followed by a review of the inspector's report by the Program Administrator; the submission of a proposal by a contractor which would be reviewed by the Program Administrator and the Rehabilitation Inspector followed by a notification, if approved, to Rohrer, 88 -076 -C Page 11 the owner who would then notify the contractor; and finally construction would begin whereby the owner would issue a written proceed order within ten days from that date to the contractor who would have to commence work within ten days after issuance of the proceed order followed by a satisfactory completion within thirty days subject to a final review of the contract work by the inspector. The CDBG program is administrated by the United States Department of Housing and Urban Development (HUD) which has promulgated certain conflict of interest provisions that apply to any person who is an employee of a designated public agency which reviews funding requests. One provision prohibits obtaining any personal or financial interest or obtaining any direct or indirect interest ir,:any contract, subcontract, or agreement. Likewise, DCA in administering the CDBG program applies federal conflict of interest regulations so that any person who is an official or employee of an agency receiving CDBG funds may not obtain a personal or financial interest or benefit from a CDBG assisted program. Procedures do exist whereby a person may request an exception with respect to a conflict of interest provision. Rohrer was involved in an official capacity as a Housing Rehabilitation Inspector as to a property located at P.O. Box 159 Roulette, Pennsylvania. A home improvement grant /loan application was filed by Leon and Karen Green with the Potter County Office of Planning and Development on June 27, 1985 as to that property. The Potter County Office and Planning Development file reflects that the Greens listed themselves as the owners of the property and that Rohrer performed a preliminary inspection of the property on June 27, 1985 followed by his recommendation that the property did not meet HUD Section 8 Housing Quality Standards so as to satisfy one of the qualifications for a CDBG grant. The report was submitted to the Planning and Development Director who approved Rohrer's inspection of the Green property. A contract for the repair of the Green property in the amount of $4,040.00 was approved with D &K Construction performing the services. A subsequent change order was written to modify the amount of the repairs to $5,500.00. The work was completed and a certification of final inspection of the Green property was conducted by Rohrer on September 16, 1985. As to the property in question, an agreement of sale had been entered into on October 23, 1984 between Rohrer and his wife as buyer and Bruce C. Burr and his wife as sellers for a consideration of $13,000. A subsequent agreement of sale was entered into on June 13, 1985 with Rohrer as seller and Leon and Karen Green as buyers with a down payment of $2,000.00 applied against the purchase price of $16,500.00 with the balance due on or before October 30, 1987. The Greens agreed to lease the property from Rohrer for $156.03 per month which was changed on December 1, 1985 to a payment of $250.00 a month when the Greens applied for the housing assistance. Parenthetically, Rohrer's supervisor, the Director of the Planning and Development Rohrer, 88 -076 -C Page 12 Office, was aware that Rohrer owned the property in question but was under the belief that there was an agreement of'jsale between Rohrer and Green. After the Greens were unable to pay the balance of $14,500.00 to the Rohrers for the property in question, the Greens were forced to leave the property and extensive property damage occurred. Thereafter, another agreement of sale was entered between the Rohrers as sellers and Lester and Dorothy Salyers as buyers for a consideration of $19,000.00, contingent upon Rohrer making certain renovations to the house. Title was transferred through the mechanism of two Quit Claim Deeds whereby the Rohrers transferred the property back to the Burrs who in turn executed a Quit Claim Deed to the Saylers for the purpose of avoiding Pennsylvania realty transfer taxes. Contemporaneous with the title transfer, the Saylers signed mortgage documents with Albert Winkelvoss of Coudersport as the first mortgagee and Rohrer as the second mortgagee. Rohrer never filed an exception for a conflict of interest with DCA as to the property. Finally, the record reflects that Rohrer conducted inspections of properties owned by his father during the period when block grants were awarded as to the Roulette Development Project. Rohrer's father received grants as to four different properties totalling $1,551.34 with an additional $654.31 being approved as to a change order for one property. Rohrer conducted all of the rehabilitation estimates and inspections as to those properties. In applying the provisions of Section 3(a) of Act 170 of 1978 quoted above to the facts of this case, we find a violation of Section 3(a) as to Rohrer's use of office concerning the realty located at Box 159 in Roulette, Pennsylvania. In particular, Rohrer used public office in his position as a Housing Rehabilitation Inspector to perform his duties as to a property that he owned and contemplated selling. Given Rohrer's financial interest in:that property, his inspection activities ultimately generated an approval for a CDBG participation which enhanced the value of the property. The $5500 received for the improvements to the property was $5500 that Rohrer did not have to expend from his own personal funds. Further, these funds markedly increased the value of the property as is evidenced by the fact that Rohrer purchased the property for in October, 1984, but sold the property to the Greens in June, 1985, for $16,500. The foregoing latter sales price clearly reflected the improvements which were to be made in the property. Such action was clearly a use of office to obtain a financial gain. Such financial gain is other than compensation provided for by law because there is no provision in law which authorizes such use of public office. In fact, the conflict of interest provisions contained in HUD regulations prohibit such activities. Therefore, Rohrer did violate Section 3(a) of Act 170 of 1978 by performing his inspection duties as to a property in which he had a financial interest when he received a financial gain through the enhanced value of that property that resulted from participation in the program. Rohrer, 88 -076 -C Page 13 Turning to the question of Rohrer conducting rehabilitation and inspection activities as to various properties owned by his father, we find no violation in those instances. Under Act 170 of 1978, "immediate family" is defined as follows: "a spouse residing in the person's household and minor dependent children." Although we find both a use of office on the part of Rohrer and a financial gain to his father, we are constrained to find no violation because his father is not included within the statutory definition of immediate family under Act 170 of 1978. The authority of this Commission to impose restitution of a financial gain has been judicially upheld. See, Yocabet v. State Ethics Commission, supra. Given the nature of Rohrer's conduct in this case, we find that restitution is appropriate. Accordingly, we direct Rohrer to make restitution in the amount of $5500 to DCA within thirty days of issuance of this Order by forwarding a check to the Commission payable to DCA in the amount above. Failure to comply with the restitution order will result in a directive of this Commission to institute an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Clyde N. Rohrer as a Housing Rehabilitation Inspector for the Potter County Office of Planning and Development was a public employee subject to the provisions of Act 170 of 1978. 2. Rohrer violated Section 3(a) of Act 170 of 1978 when he performed inspection activities on a property in which he had an interest, that resulted in the award of a rehabilitation grant to that property which was a financial gain other tran compensation provided for by law. 3. Rohrer did not violate Section 3(a) of Act 170 of 1978 regarding performing inspections as to various properties owned by his father in that his father is not a member of Rohrer's "immediate family" as that term is statutorily defined in Act 170 of 1978. In re: Clyde N. Rohrer : File Docket: 88 -076 -C : Date Decided: February 20, 1992 : Date Mailed: February 27. 1997 ORDER No. 833 1. Clyde N. Rohrer as the Housing Rehabilitation Inspector for the Potter County Office of Planning and Development in Coudersport violated Section 3(a) of Act 170 of 1978 when he performed inspection activities on a property in which he had a financial interest which resulted in the award for a rehabilitation grant to that property which was a financial gain other than compensation provided for by law. 2. Rohrer did not violate Section 3(a) of Act 170 of 1978 regarding performing inspections as to various properties owned by his father in that his father is not a member of Rohrer's "immediate family" as that term is statutorily defined under Act 170 of 1978. 3. The financial gain received by Rohrer in Paragraph 1 amounted to $5500. 4. Rohrer is ordered to make restitution of the financial gain referenced in Paragraph 3 by forwarding a check to this Commission within thirty days of the date of issuance of this Order payable to the order of the Pennsylvania Department of Community Affairs in the amount of $5500. 5. Failure by Rohrer to comply with the provisions of Paragraph 4 will cause this Commission to issue a directive to institute an order enforcement action. BY THE COMMISSION, DENNIS C. HARRINGTON;'CHAIR