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HomeMy WebLinkAbout928 FirmstoneIn Re: James G. Firmstone STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: 93- 054 -C2 Date Decided: 06/23/94 Date Mailed: 06/30/94 Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Roy W. Wilt Austin M. Lee Allan M. Kluger The Investigative Division of the State Ethics Commission received a complaint regarding a possible violation of the State Ethics Act, Act 9 of 1989, 65 P.S. S401 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 waived. A consent agreement 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 §21.29(b). 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. S409(e). Firmstone, 93- 054 -C2 Page 2 1. .ALLEGATION: That, James G. Firmstone, a Councilman for the Borough of Honesdale, Wayne County, violated the following provisions of the State Ethics Act (Act 9 of 1989) when his firm, Firmstone Service Station and Firmstone Fuel Oil Company, contracted with the Borough for the sale of gasoline and oil without an open and public process; and when he participated in council decisions to approve payments to that firm. Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 P.S. 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 of his immediate family or a business with which he or a member of his immediate family is associated. 65 P.S. §402. Section 3. Restricted activities employee or h ff a or child or 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 Firmstone, 93- 054 -C2 Page 3 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. 65 P.S. S403(f). II. FINDINGS: 1. James G. Firmstone has served as a Honesdale Borough Councilman from January of 1980 to the present. 2. Firmstone is co -owner of Firmstone Oil Company / Firmstone Service Station, 1210 Main Street, Honesdale, PA, with his brother. a. Each holds a 50% interest in the business 3. The Borough of Honesdale has purchased gasoline, oil, diesel fuel, tires and parts from, and had vehicle maintenance performed at Dean Fowler Service Station and Oil Company, Highhouse Oil Company, Lakewood Oil Company and Firmstone Service Station and Oil Company for approximately the past 25 years. 4. Maurice Brown, the Borough's Director of Public Works, made these purchases from the vendors outlined in Finding No. 3 on a rotating basis. a. Broom believed that better prices could be obtained by utilizing this method. 5. The purchases were not put out for bids nor were price quotes obtained. a. This procedure has been the practice for at least the past twenty -five years. 6. Borough Records indicate the following payments were made to the companies cited in Finding #3. Fowler Oil Highhouse Oil Lakewood Oil Firmstone Oil Check Number 2613 2614 2749 2815 2872 2873 2935 2936 3392 3418 3449 3258 3320 3528 3631 3581 3582 3695 3746 Firmstone, 93- 054 -C2 Page 4 1991: 1992: a . Company 7420.05 4741.84 2448.19 Date of Amount Check 4 -14 -89 4 -14 -89 6 -13 -89 7 -13 -89 8 -15 -89 8-15-89. 9 -12 -89 9 -12 -89 10 -10 -89 11 -15 -89 12 -12 -89 1989 Totals - $5382.66 2 -15 -90 3 -13 -90 6 -14 -90 6 -13 -90 7 -12 -90 7 -12 -90 9 -12 -90 10 -11 -90 $1496.49 $ 8.50 $ 81.06 $ 146.25 $ 127.60 $2008.88 $ 10.00 $1458.00 $ 7.03 $ 34.58 $ 4.27 $1582.04 $ 35.19 $ 59.90 $ 75.00 $1878.00 $1434.00 $ 18.00 $ 6.56 Company 5977.13 5698.42 196.88 1993: (6 mths) Totals $14,610.08 $11,872.43 1991, 1992, 1993 (6 mths) Bills are approved as part of a 8. Firmstone participated in actions of listings. Date and Taken By 4 -10 -89 4 -10 -89 6 -12 -89 7 -10 -89 8 -14 -89 8 -14 -89 9 -11 -89 9 -11 -89 10 -9 -89 11 -13 -89 12 -11 -89 Company 5058.68 3266.70 3561.65 $11,887.03 $15,877.79 7. Payment of the individual invoices f or all vendors are approved by Borough Council at their regular monthly meetings. listing of invoices. council to approve bill 9. The following action was taken by Borough Councilman Firmstone in relation to payments to Firmstone Oil Company or Firmstone Service Station: Action Firmstone Motion and Vote Motion and Vote Vote Vote Absent Absent Vote Vote Vote Vote Motion and Vote 2 -12 -90 Motion and Vote 3 -12 -90 Absent 6 -11 -90 Vote 6 -11 -90 Vote 7 -9 -90 Vote 7 -9 -90 Vote 9 -10 -90 Absent 10 -8 -90 Motion and Vote Company 5053.57 6500.52 4323.70 Firmstone, 93- 054 -C2 Page 5 3780 3769 3796 3946 3947 1990 Totals 3830 3859 4104 4105 3894 3952 4161 4303 3987 4533 4563 4679 4206 4751 4752 4248 4905 4986 4987 5053 4413 4533 4579 5401 4663 5511 5622 4737 4772 4804 4882 4910 5726 5786 5849 5850 5911 10 -12 -90 11 -13 -90 12 -13 -90 12 -14 -90 12 -14 -90 - $9563.49 1 -16 -91 2 -13 -91 2 -13 -91 2 -13 -91 3 -13 -91 5 -14 -91 3 -12 -91 5 -15 -91 6 -11 -91 8 -13 -91 9 -11 -91 11 -12 -91 12 -11 -91 12 -10 -91 12 -10 -91 1991 Totals - $5053.53 1 -14 -92 2 -13 -92 3 -10 -92 3 -10 -92 4 -15 -92 5 -12 -92 8 -11 -92 9 -15 -92 9 -15 -92 11 -10 -92 11 -11 -92 12 -22 -92 1992 Totals - $ 6479.02 1 -12 -93 2 -11 -93 3 -9 -93 5 -11 -93 6 -15 -93 2 -9 -93 3 -10 -93 4 -13 -93 4 -13 -93 5 -11 -93 $2123.78 $ 16.00 $ 19.00 $2314.02 $ 2.00 $ 35.86 $ 59.95 $ 35.40 $ 77.95 $ 6.00 $ 16.00 $ 66.95 $ 16.00 $ 76.75 $1635.62 $ 812.59 $ 172.94 $ 18.00 $ 71.85 $1951.67 $ 20.68 $ 8.55 $1682.08 $ 79.59 $1805.89 $ 46.40 $ 45.96 $ 3.96 $1900.41 $ 56.90 $ 809.10 $ 19.50 $ 52.95 $ 29.98 $ 5.50 $ 197.36 $ 9.00 $2416.03 $ 83.95 $ 72.36 $ 58.50 $ 9.00 10 -8 -90 Motion and Vote 11 -12 -90 Vote 12 -10 -90 Vote 12 -10 -90 Vote 12-10-90 Vote 1 -14 -91 Vote 2 -11 -91 Absent 2 -11 -91 Absent 2 -11 -91 Absent 3 -11 -91 Vote 5 -13 -91 Vote 3 -11 -91 Vote 5 -13 -91 Vote 6 -10 -91 Vote 8 -12 -91 Vote 9 -9 -91 Vote 11 -11 -91 vote 12 -9 -91 Vote 12 -9 -91 Vote 12 -9 -91 Vote 1 -13 -92 2 -10 -92 3 -9 -92 3 -9 -92 4 -13 -92 5 -11 -92 8 -10 -92 9 -14 -92 9 -14 -92 11 -9 -92 11 -9 -92 12 -14 -92 1 -11 -93 2 -8 -93 3 -8 -93 5 -10 -93 6 -14 -93 2 -8 -93 3 -8 -93 4 -12 -93 4 -12 -93 5 -10 -93 Vote Vote Motion Motion Motion Motion Vote Motion Motion Motion Motion Motion Vote Motion Motion Motion Motion Motion Motion Motion Motion Motion and and and and and and and and and and and and and and and and and and Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Vote Firmstone, 93- 054 -C2 Page 6 5979 6 -16 -93 $ 764.09 6 -14 -93 Motion and Vote 6052 7 -13 -92 $ 13.60 7 -12 -93 Abstained 1993 Totals - $3712.32 a. All of the bills listed above were approved unanimously as part of a "package" of bills at each council meeting. 10. There was no written notification or public disclosure of Firmstone's interest in Firmstone Fuel Oil or Firmstone Service Station until the July 12, 1993 meeting. a. At the meeting Firmstone began abstaining from participation in payment of bills. b. Local newspaper articles questioned his participation. 11. It was common knowledge in the borough that Firmstone owned Firmstone Service Station III. DISCUSSION: As a Councilman for the Borough of Honesdale, Wayne County, James G. Firmstone, hereinafter Firmstone, is a public official 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. Firmstone, 93- 054 -C2 Page 7 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 business with which he or a member of his immediate family is associated. 65 P.S. §402. In addition, Section 3(f) of Act 9 of 1989 specifically provides in part that no public official /employee or spouse or child or business with which he or the spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official /employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure. The issues before us are whether Firmstone, as a Honesdale Borough Councilman, violated Section 3(a) of Act 9 of 1989, the conflict provision, and Section 3(f), the contracting provision, regarding his alleged participation in Council decisions to approve payments to Firmstone Oil Company /Firmstone Service Station ( FIRCO), a company in which he holds a 50% ownership interest. Firmstone has served as Honesdale Borough Councilman from the January, 1980 to the present. For the past twenty -five years, Honesdale Borough has purchased fuel, oil, tires, parts and maintenance services from FIRCO and other companies on a rotational basis. Maurice Brown, the Publics without bid based upon utilized a belief that better prices could purchasing ould be obtained. Firmstone, 93- 054 -C2 Page 8 Although the minutes of Council do not reflect any action to utilize FIRCO, the records do reflect invoices from FIRCO which were presented to Borough for payment. The minutes of Honesdale Borough Council reflect those instances where Firmstone took action to approve payments to FIRCO which bills were part of a package of bills submitted to Council. The bills in question were approved unanimously by Council. On or about 12, 1993, Firmstone began abstaining after local newspaper articles questioned his participation. It was common knowledge that Firmstone had an ownership interest in FIRCO. In applying the provision of the Ethics Law to the instant matter we find technical violations of both Section 3(a) and 3(f) of Act 9 of 1989. Regarding Section 3(a), Firmstone, as a Councilman, did use the authority of office in voting to approve the payment of bills by FIRCO. Such action was a use of authority of office. See Juliante, Order 809. In addition, the use of authority of office resulted in a private pecuniary benefit consisting of the profits received by FIRCO. Lastly, a private pecuniary benefit inured to a business with which Firmstone is associated. The terms business with which associated is defined as follows: "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 has a financial interest 65 P.S. §402. Thus, since FIRCO is 50% owned by Firmstone, it is clearly a business with which he is associated. Hence, in this case, there was a use of authority of office which resulted in a private pecuniary benefit to a business with which Firmstone is associated. We are aware of our decision in Krushinski, Order 168, wherein we held that a public official who voted to approve invoices of a business with which he was associated did not violate the Ethics Law where the invoices were routine and related to preset cost items. Krushinski is inapposite to the instant matter since the services and sales FIRCO made could not be characterized as routine or of a preset amount. We note that FIRCO was performing services and making sales at a point in time before Firmstone came on Council. Thus, the action of Firmstone as to the FIRCO business was limited to voting to approve the FIRCO invoices for payment. Accordingly, we find a technical violation of Section 3(a) of Act 9 of 1989. Bartorillo, Order 889. As to the matter of Section 3(f) of Act 9 of 1989, FIRCO is a Firmstone, 93- 054 -C2 Page 9 business with which Firmstone is associated. FIRCO entered into contracts with the Borough in excess of $500 for certain sales and service which contracts were not awarded through an open and public process. Therefore, as to these contracts which occurred during the time that Firmstone was on Council, we find a technical violation of Section 3(f) of Act 9 of 1989. Chermak, Order 887. As to such contracting, we note .that was the historical practice of the Borough not to advertise for bids. Further, the sales and services in this case started at a point in time before Firmstone was on Council. Therefore, based upon the totality of facts and circumstances in this case, we will take no further action. IV. CONCLUSIONS OF LAW: 1. James G. Firmstone, as a Honesdale Borough Councilman, was a public official subject to the provisions of Act 9 of 1989. 2. A technical violation of Section 3(a) of Act 9 of 1989 occurred when Firmstone voted in favor of motions to approve a list of bills which included invoices for sales and services by a business with which he is associated. 3. A technical violation of Section 3(f) of Act 9 of 1989 occurred when contracts in excess of $500 were awarded without an open and public process to a business with which Firmstone is associated regarding sales and service as to Honesdale Borough. In Re: James G. Firmstone File Docket: 93- 054 -C2 Date Decided: 06/23/94 Date Mailed: 06/30/94 ORDER NO. 928 1. A technical violation of Section 3(a) of Act 9 of 1989 occurred when James G. Firmstone, as a Honesdale Borough Councilman, voted in favor of motions to approve a list of bills which included invoices for sales and services by a business with which he is associated. 2. A technical violation of Section 3(f) of Act 9 of 1989 occurred when contracts in excess of $500 were awarded without an open and public process to a business with which Firmstone is associated regarding sales and services as to Honesdale Borough. 3. Based upon the totality of facts and circumstances of this case we will take no further action. BY THE COMMISSION, JAMES M. HO , CHAIR