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HomeMy WebLinkAbout929 FloydSTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In Re: Ralph T. Floyd File Docket: 93- 052 -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. §409(e). Fl,.,ovd, 93- 052 -C2 Page 2 I. ALLEGATION: That, Ralph T. Floyd, a Councilman for the Borough of Honesdale, Wayne County, violated the following provisions of the State Ethics Act (Act 9 of 1989) when he participated in council decisions to approve payments to Werner Electric, a company owned by his daughter and son -in law. Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that co0s nstitutes 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. 5402. Section 3. Restricted activities employee or public spouse 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 associated, unless the contract has been awarded through an open and public process, Floyd, 93- 052 -C2 Page 3 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. 5403(f) . II. FINDINGS: 1. Ralph Floyd served as a Honesdale Borough Councilman from April 13, 1992 until March 14, 1994. 2. At the March 9, 1992 council meeting, Floyd was appointed, on the motion of Councilman H. Richard Osborne, seconded by Councilman William Rogers, to fill a vacancy on the Honesdale Borough Council. a. Floyd was sworn in at the April 13, 1992, council meeting. 3. Floyd served until March 14, 1994 when he resigned. 4. In January of 1993 Floyd was appointed Chairman of the Sanitation Committee and served in that capacity until he resigned from council. 5. As chairman of the Sanitation Committee Floyd oversaw the operations at the sewer plant. a. The sewer plant superintendent oversaw the day to day operations and purchase materials and services. 6. Floyd has owned Walter Electric Company from 1978 to the present. a. Walter Electric Company is a general electric contractor. 7. Terry J. Werner worked at Walter Electric Company, intermittently, from 1983 to 1990. a. Terry Werner is the son -in -law of Ralph Floyd. 8. In 1990 Werner started Werner Electric Company which continues in business to the present time. F1�, 93- 052 -C2 Page 4 a. Werner Electric Company-is a 9. Terry J. Werner married Bonnie S. T. Floyd in 1984. 10. In November or December of 1991 Dan Guinther, Superintendent of the Honesdale Borough Sewer Plant, contacted Werner and inquired if he would be interested in performing electrical repair work at the plant. a. No other electrical contractors were contacted. b. Historically, this is the manner in which electrical repair work was performed. c. The electrician who had done the majority of work at the plant passed away in 1991. 11. Borough Councilman William Rogers, Chairman of the Sanitation Committee and in charge of overseeing the sewer plant operations, subsequently informed Werner of what work the Borough required at the plant. 12. Werner agreed to perform the work on a time ($18.00 an hour) and materials basis. a. Werner was given the authority to proceed by the end of February, 1992. 13. The minutes of the Borough Council meetings for the period November 1991 to the present contain no action by council regarding Werner's hiring. 14. Honesdale Borough records indicate the following Werner Electric Company invoices were presented to the Borough for payment for work performed at the Sewer Plant. Invoice Date 3/30/92 4/8/92 5/6/92 6/3/92 general electric contractor. Floyd, the daughter of Ralph Date of Work Amount 3/10/92, 3/11/92 3/18/92, 3/27/92 4/3/92, 4/7/92 4/8/92, 4/9/92 4/10/92, 4/13/92 4/16/92, 4/18/92 4/28/92 $1473.89 $ 249.19 $1969.65 5/6/92, 5/7/92 $1008.99 5/8/92, 5/13/92 Floyd, 93- 052 -C2 Page 5 92 8/2/92 9/4/92 10/5/92 11/4/92 12/3/92 1/6/93 2/3/93 2/3/93 3/2/93 4/5/93 6/8/93 7/8/93 7/8/93 Date of Amount Payment Paid 4 -14 -92 5 -12 -92 6 -9 -92 8 -11 -92 9 -16 -92 10 -14 -92 11 -10 -92 $1,723.08 $1,969.65 $1,008.99 $ 155.90 $ 54.00 $ 80.55 $ 222.15 5/14/92, 5/26/92 5/28/92, 5/29/92 8/11/92, 9/4/92 9/25/92 10/28/92 11/20/92 12/9/92, 12/10/92 12/15/92, 12/22/92 1/5/93 1/26/93, 1/27/93 1/29/92, 2/2/93 2/19/93, 3/1/93 3/2/93 $ 155.90 $ 54.00 $ 80.55 $ 222.15 $ 156.15 $ 313.50 $ 27.62 $1532.00 $ 359.42 $ 82.83 5/28/93, 6/2/93 $ 248.40 6/4/93, 6/8/93 6/10/93 $ 42.00 6/17/93, 6/18/93 $ 252.90 15. The minutes of the Honesdale Borough Council meetings indicate Councilman Floyd took the following action in reference to payments to Werner Electric Company: Borough Action By Doe of Check # Floyd On Acid= Payment To Werner Elect. 4386 Voted to Approve 4435 Voted to Approve 4468 Voted to Approve 4553 Voted to Approve 4601 Voted to Approve 4640 Voted to Approve 4-13-92 5 -11-92 6-8-92 8-10-92 9-14-92 10 -12- 4678 Voted to Approve 11 -9-92 F o d, 93- 052 -C2 Page 6 92 12 -15 -92 $ 156.15 1 -12 -93 2 -11 -93 2 -11 -93 3 -9 -93 4 -13 -93 6 -15 -93 7 -14 -93 7 -14 -93 Check Number 4386 4435 4468 4553 4601 4640 4678 4717 4750 5752 4783 4824 5878 4929 4965 2220 $ 313.50 $ 27.62 $1,532.00 $ 359.42 $ 82.83 $ 248.40 $ 42.00 $ 252.90 Totals 1992 1993 1992 & 1993 Endorsed 4 717 Voted to Approve 12 -14- 4750 Absent 5752 Voted to Approve 4783 Voted to Approve 4824 Voted to Approve 5878 Voted to Approve 4929 Voted to Approve 4965 Abstained 2220 Abstained $5,370.47 $2,858.67 $8,229.14 a. The bills listed above were part of a "package" of bills submitted to council for approval. 16. The checks payable to Werner Electric contain the following endorsements on the back: Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Werner Electric Bonnie S. Werner Bonnie Werner Bonnie S. Werner Bonnie S. Werner Bonnie Werner Bonnie S. Werner Bonnie S. Werner Terry J. Werner Bonnie S. Werner Terry J. Werner Terry J. Werner Bonnie Werner Bonnie S. Werner Terry J. Werner Terry J. Werner Terry J. Werner 1 -11 -93 2-8 -93 2-8 -93 3-8 -93 4 -12-93 6 -14-93 7 -12-93 7 -12 -93 17. The checks were deposited into the joint checking account of Terry J. and Bonnie S. Werner at the Honesdale National Bank. 18. On July 13, 1992 Councilman William Rogers made a motion, seconded by Councilman Jerome Theobald, to appoint T. J. Werner as Assistant Borough Electrician at a retainer fee of $50.00 per month and an hourly rate of $6.25. 19. Councilman Floyd was present at the July 13, 1992 meeting and Floyd, 93- 052 -C Page 7 participated in a unanimous vote 20. The payments listed in Finding relation to Werner's employment payments which resulted from the sewer plant. III. DISCUSSION As a councilman for the Borough of Honesdale, W ayn C Ralph T. Floyd, hereinafter Floyd, is a public term is defined under Act 9 of 1989. 65 P.S. 5402. As such, his conduct is subject to the provisions of the Ethics Law and the restrictions therein are applicable to him. Initially, it is noted that Section 9 of Act 9 of June 26, 1989 provides, in part, as follows: This amendatory act shall not apply to violations committed prior to the effective date of this act, and causes of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto. Since the occurrences in this case transpired after the effective date of Act 9 (June 26, 1989), we must apply 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 to approve hiring Werner. No. 13 were not made in with the Borough but were contract to do work at the "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 F1- 2Yd, 93- 052 -C2 Page 8 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 g includes the public official orup which employee, a member or his immediate family a business with which he or a member of his immediate family is associated. 65 P.S. S402. 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 Floyd, 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 a pments to Werner Electric, a company owned by his daughter andoson -in -law. Floyd served as Honesdale Borough Councilman from the date of his appointment, April 13, 1992 until March 14, 1994 when he resigned. In January, 1993 Floyd was appointed Chairman of the Sanitation Committee wherein he oversaw the operations of the sewer plant. In a private capacity Floyd is the owner of Walter Electric company which is a general electric contracting business. Terry Werner, the son -in -law of Floyd, started Werner Electric Company in 1990 which also performs general electric contract work. In the superintendent l of attthe Honesdale Borou hDan Guinther, the sewer to perform certain electrical repair work. Consistent with Borough practice, no other electrical contractors were contacted by Guinther. Borough Councilman William Rogers who was the Chairman of the Sanitation Committee informed Werner of the work which the Borough required at the plant. Werner agreed to do the work at the hourly rate of $18.00 plus materials. Although the minutes of Council do not reflect any action to hire Werner, the records do reflect invoices from Werner Electric Company which were presented to Borough for payment. The minutes of Honesdale Borough Council reflect those instances where Floyd took action to approve payments to Werner Electric Company which Floyd 93- 052 -C2 Page 9 bills were part of a package of bills submitted to Council. 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), Floyd, as a Councilman, did use the authority of office in voting to approve payment of bills by Werner Electric. 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 payments received at the hourly rate of $18.00 for the work performed. Lastly, a private pecuniary benefit inured to a business with which a member of Floyd's immediate family is associated. The terms business with which associated and immediate family are 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. "Immediate family." A parent, spouse, child, brother or sister. 65 P.S. 5402. Thus, since Werner Electric is owned by the son -in -law and daughter of Floyd, it is clearly a business with which a member of his immediate family is associated. Hence, in this case, there was a us fit ar bus ness office with which resulted a member of Floyd's P immedia e be efi family was 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 Werner performed could not be characterized as routine or of a preset amount. We note that Werner was contacted and agreed to perform the services at a point in time before Floyd was appointed to Council. Thus, the action of Floyd as to the contracting work by Werner was limited to voting to approve the Werner Electric Company invoices for payment. Accordingly, we find a technical violation of Section 3(a) of Act 9 of 1989. Bartorill Order 889. As to the matter of Section 3(f) of Act 9 of 1989, Werner Electric Company is a business with which Floyd's daughter is associated. Werner Electric Company entered into a contract with the Borough in excess of $500 for certain repair work which F o d, 93- 052 -C2 Page 10 contract was not awarded through an open and public process. Therefore, as to the contracts in the amount of $1,969.65, $1,008.99 and $1,532.00 which occurred during the time that Floyd was on Council, we find a technical'violation of Section 3(f) of Act 9 of 1989. Chermak, Order 887. As to such contractin we note that it was the historical practice of the Borough for�the superintendent to contact only one electrical contractor without advertising for bids. Further, the initial contact in this case was made at a point in time before Floyd 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. Ralph T. Floyd, 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 Floyd voted in favor of motions to approve a list of bills which included invoices for services performed by a business with which a member of his immediate family was 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 a child of Floyd was associated regarding repairs as to the Honesdale Borough Sewer Plant. In Re: Ralph T. Floyd File Docket: 93- 052 -C2 Date Decided: 06/23/94 Date Mailed: 06/30/94 ORDER NO. 929 1. A technical violation of Section 3(a) of Act 9 of 1989 occurred when Ralph T. Floyd, as a Honesdale Borough Councilman, voted in favor of motions to approve a list of bills which included invoices for services performed by a business with which a member of his immediate family was 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 a child of Floyd was associated regarding repairs as to the Honesdale Borough Sewer Plant. 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