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HomeMy WebLinkAbout946 ZangrilliSTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In Re: Armand Zangrilli File Docket: 92- 036 -C2 Date Decided: 09/12/94 Date Mailed: 09/21/94 Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Dennis C. Harrington Austin M. Lee Allan M. Rluger The Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the State Ethics Law, Act 9 of 1989, P.L. 26, 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. 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 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. 5408(h). Any person who violates confidentiality of the Ethics Law 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. 5409(e). Confidentiality does not preclude discussing this case with an attorney at law. Zangrilli, 92- 036 -C2 Page 2 I. ALLEGATIONS: That Armand Zangrilli, a Plumber Foreman for the Pittsburgh School District, violated the following provisions of the State Ethics Act (Act 9 of 1989), when he used the authority of his position to direct school district business to A & D Mechanical, Incorporated and ADAM Specialty, Incorporated, businesses with which he and a member of his immediate family are associated; when he utilized school district equipment and materials for his private business purposes; when he failed to file Statements of Financial Interests for the 1989, 1990 and 1991 calendar years; when A & D Mechanical and ADAM Specialty contracted with the school district without an open and public process; and when he used his public position to order, purchase or requisition various supplies and materials for the school district from a member of his immediate family or a business with which he is associated, which materials and supplies were paid for by the district but never received. 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). (f) No public official or public employee or his spouse or child or any 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, 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). Zanarilli, 92- 036 -C2 Page 3 II. FINDINGS: Section 4. Statement of financial interests required to be filed (a) Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the commission no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Persons who are full -time or part -time solicitors for political subdivisions are required to file under this section. 65 P.S. 5404(a). 1. David Donahoe is the Executive Director for Business Affairs for the School District of Pittsburgh ( "PSD "), having served in this capacity since July 1, 1991. a. Donahoe commenced employment with PSD in January, 1991 as an Assistant Director. b. Donahoe is also Assistant Secretary to the Pittsburgh Board of Public Education ( "PBOPE "). (1) Investigative Division Exhibit 1 is the job description dated June 30, 1989 for Armand Zangrilli's former position with the PBOPE as Plumber Foreman. (a) Zangrilli's general job responsibilities were as follows: "Under the general direction of the Chief of Maintenance is responsible for the Zangrilli, 92- 036 -C2 Page 4 direct supervision of the Plumbing Shop in the maintenance and repair of all buildings owned and /or occupied (subject to lease) by the School District, as they pertain to plumbing." (b) Zangrilli's typical job duties were as follows: "Reviews all work requests assigned to the plumbers. Assists in establishing priorities, planning and scheduling jobs. Directs work requests to Shop and /or journeymen, as appropriate. Oversees and assists in the requisitioning and /or ordering of all equipment, materials and tools needed, while working in close harmony with the materials expeditor, purchasing supervisor, stockroom supervisor and toolroom attendant. Keeps accurate records of time and materials for each work request. Provides technical support and backup to workmen as needed. Provides an accurate account of the workmen's time for the payroll account clerk, including overtime, sick days, vacation time, personal days, accident reports etc. in a timely manner. Acts as a liaison between the workman and school administrators as necessary. Make frequent visits to School District buildings to review progress and quality of work. Keeps the Chief of Maintenance fully informed to any emergency situation of problems." (c) Specific job duties for Zangrilli's position as Plumber Foreman included: (1) Assist in establishing priorities, planning and scheduling. (2) Provide accurate account of payroll for payroll clerk, sick days, vacation, personal days, accident reports, etc. (3) Act as liaison between the tradesmen and school administrators. (4) Review progress and quality of work performed by tradesmen. Zanarilli, 92- 036 -C2 Page 5 (2) Investigative Division Exhibits 2 -A through 2 -E are cancelled checks from the PBOPE payable to A&D dated from August 21, 1989 through March 9, 1992. (3) Investigative Division Exhibits 3 -A through 3 -D are cancelled checks from the PBOPE payable to ADAM dated from October 24, 1990 through March 9, 1992. (4) Investigative Division Exhibit 4 consists of cancelled payroll checks of the PBOPE payable to Armand Zangrilli dated for 1989 through 1992. (5) Investigative Division Exhibits 5 -A through 5 -F are attendance reports for the PSD's plumbing shop for 1987 -1992. c. The Director of PSD's Unit of Purchasing, Dan McConachie, reports to Donahoe. (1) Between approximately 1989 and the end of 1992, McConachie's job duties included responsibility for: (a) operating PSD's central purchasing system, which includes the advertising, receipt, and opening of bids; (b) making recommendations to Donahoe, the Superintendent, and School Board on the awards for such bids; (c) personnel who assisted various other units with procurement; (d) the issuance of written procedures governing the purchase and acquisition of supplies and goods. (2) The Purchasing Support Manager, Billie Kruse, is McConachie's Assistant. (3) The expediters, Neely Earl and Herb Hatfield, are below Billie Kruse in the chain of command. (a) Between approximately 1989 and the end of 1992, the duties of the expediters were generally to work with and to support various departments in obtaining materials. (4) Ernie Miller is below the expediters. Zanarilli, 92- 036 -C2 Page 6 d. The Director of the Facilities Department, which is a separate department from the Unit of Purchasing, Edward Preskar, also reports to Donahoe. e. The Maintenance Division has various trade shops, among which are the carpentry shop, the electrical shop, the paint shop, the metal shop, the plumbing shop, and the steamfitter shop. g. (1) The Maintenance Division is headquartered at the "Service Center." (2) An inventory of routinely -used items is maintained for the trades at the Service Center. (3) Items which are not maintained in inventory are purchased in the marketplace. f. It is Donahoe's understanding that between approximately 1989 and the end of 1992, trades foremen had latitude in purchasing non -bid items under a certain threshold amount. (1) The trades foremen were authorized to find the goods, select a vendor, and to make the order without anybody else's approval. (2) Donahoe was not aware of any limit to the total or aggregate amount of such purchases. In 1991, after becoming the Executive Director for Business Affairs for PSD, Donahoe expressed concern to McConachie as to who could make purchases and under what rules. h. PBOPE maintains lists of vendors who ask to receive bid documents. i. PBOPE has "Minority /Women Business Participation Guidelines" for contracts that are bid. (R -3A). (1) Donahoe states that when Pittsburgh School District people place an order that is not bid, they are asked to do whatever they can to meet minority guidelines. j PBOPE does not prohibit tradesmen from working on outside jobs as long as they do not do it during the course of their working hours at the Board. (1) There is a School District policy against Zangrilli, 92- 036 -C2 Page 7 b. Investigative Division Exhibit 28, pages 1 through 615, is comprised of checks from the PBOPE to ADAM, together with all supporting documentation for those checks. (1) Armand Zangrilli's name appears on three of these Maintenance Materials Requisition Forms on the line designated, "Requested by." (I.D. 28 -365, 28 -369, and 28 -434). 2. Daniel Robert McConachie is the Director of Purchasing for the PSD, having served in this capacity since 1977. a. McConachie's job responsibilities and duties include overseeing the purchase of all materials used by the PSD and coordinating the functions of the warehouse. c. Pittsburgh School District employees selling goods to the School District, even if done on the employee's own time. (a) Each of these three forms bears Miller's name on the line designated "Required approval." (2) The Maintenance Materials Requisition Forms labelled I.D. 28 -160 and 28 -162 do not bear the name "Armand Zangrilli," but do bear the name "Zang" on the line designated, "Requested by." (a) Each of these forms has the name "Don" at the far right of the line designated "Required approval." (b) I.D. 28 -162 is also signed by Miller. Investigative Division Exhibit 29, pages 1 through 1,112, is comprised of checks from the PBOPE to A&D, together with all supporting documentation for those checks. (1) The following Maintenance Materials Requisition Forms do not bear the name "Armand Zangrilli," but do bear the name "Zang" on. the line designated, "Requested by ": I.D. 29 -42, 29 -48, 29 -49, 29 -52, 29 -53, 29 -56, 29 -57, 29 -60, 29 -61, 29 -64, 29 -65, 29 -229, 29-310, 29 -571, 29 -901, and 29 -905. (a) Of these, I.D. 29 -42 and 29 -310 bear the names "Charles B. McShane" and "Don" on the "Required Approval" line. (b) I.D. 29 -48, 29 -49, 29 -52, 29 -53, 29 -56, 29 -57, 29 -60, 29 -61, 29 -64, 29 -65, 29 -571, 29 -901, Zanarilli, 92- 036 -C2 Page 8 and 29 -905 all bear the name "Don" at the far right of the "Required Approval" line. (1) Of these, I.D. 29 -49, 29 -53, 29 -57, 29- 61, 29 -65, and 29 -57 also bear the name of "E.B. Miller." (2) Of these, all but I.D. 29 -49 also bear the initials of Neely Earl on the far right of the "Requested By" line. (c) I.D. 29 -229 does not bear any name on the "Required Approval" line, but does bear the name "E.B. Miller" elsewhere on the form. d. During the relevant period from August, 1989 to January, 1992, ADAM and A&D repeatedly contracted with the PBOPE for sales of $500 or more, which sales were processed without prior or subsequent public notification and with no more than two (2) quotations from other companies. (See Findings 2f -g). (1) For many of these sales, no quotations were obtained. e. As the Director of the Unit of Purchasing, McConachie had the authority to issue procedures governing purchasing by the PBOPE (See Finding 1 (c) (1) (d) ) . f. From August of 1989 through January of 1992, procedures for purchasing for the trades of the PSD were specified in a memorandum dated August 30, 1989 from McConachie to Charles McShane (I.D. 39). (1) In all cases except sealed bids, materials were to be purchased from suppliers located within the City of Pittsburgh limits. (2) Individual purchases over $4,000 had to be purchased through formal competitive sealed bids advertised in the newspapers. (a) For these items, the only role of the tradesman or trades foreman was to specify what items were needed. (3) Purchases from $2,500 up to $4,000 required at least three written price quotations, to be obtained by the buyers. (a) Purchases over $2,500 required the approval of Zanarilli, 92- 036 -C2 Page 9 g• I Billie Kruse (formerly Billie Talak) or McConachie. (4) Purchases from $1,000 up to $2,500 required one written price quotation. (a) A tradesman could get the price quotation. (b) It was within Zangrilli's authority to get a price quote. (5) Purchases under $1,000 did not require any written price quotation. (6) Purchases under $1,000 did require the signature of the trades foreman or Chief of Maintenance authorizing the "direct purchase" of the items specified. (I.D. 39 -4). (7) McConachie does not know if McShane distributed copies of the memorandum of August 30, 1989 to tradesforemen and tradesmen. From August of 1989 through January of 1992, the procedures for requisitioning materials also depended upon the dollar amount of the purchases. (1) For items over $1,000 in price, a separate requisition and purchase order was to be initiated. (2) For items under $1,000 in price, purchases for tradesmen were applied against "open purchase orders" which had been established for each of the trade categories. (a) An "open purchase order" is a document by which a significant amount of money is encumbered within PSD's financial system to be used for purchasing unspecified supplies for tradesmen over a designated period of time. Items below the $1,000 threshold could be purchased in one of the following two ways: (1) The item could be requisitioned in advance, with the tradesman contacting an individual in the Facilities Office to prepare a Maintenance Materials Requisition Form and submit it to a buyer in the Purchasing Office. (a) The tradesman could recommend a vendor which Zanarilli, 92- 036 -C2 Page 10 would be indicated on this form. (b) The buyer would not be required to use any recommended vendor. (2) A tradesman could pick up the needed item from the vendor himself and either simultaneously contact the Purchasing Office to get a release number, or submit a packing slip after the purchase was made to either the Facilities Office or the Purchasing Office to get a Maintenance Materials Requisition Form prepared to support the purchase. (a) The tradesman had total latitude to select vendors for purchases in the field below the $1,000 threshold. (b) There was no limit upon the aggregate number of purchases below the $1,000 threshold that a tradesman could make in the field. (c) There was no aggregate limit upon the total dollar amount expended by a tradesman for purchases below the $1,000 threshold. i. The middle section of the Maintenance Materials Requisition Form is used to request items kept in warehouse stock, while the lower portion labelled "description- direct purchase" is used to purchase items that are not maintained in warehouse stock from vendor companies, if the items are less than $1,000. Each Maintenance Materials Requisition Form is assigned a number known as a "purchase order number." (1) The first part of a "purchase order number" is the number of the purchase order that was used to encumber the bulk amount of money being accessed, while the second part (appearing after the letters "RR ") is the "release" number. (2) A purchase being charged against an open purchase order is not paid for unless a release number is issued. (3) The release number is a three -digit number, and indicates the numerical sequence of the particular purchase against the open purchase order during the calendar year. (4) Release numbers are assigned sequentially beginning Zanarilli, 92- 036 -C2 Page 11 with 001 and increasing in increments of one. (5) When the number of the purchase order is combined with the release number, the result is a number which should never be duplicated. (6) The release number is to be given to the vendor so that it appears on the invoice. (7) The release number should also be put on the packing slip. (a) A packing slip is a document which indicates that goods have been received from a vendor. (8) A log is maintained which assigns the release numbers. k. Nealy Earl and Herb Hatfield are the expediters who operate at the Service Center. (1) Although Nealy Earl and Herb Hatfield did assign release numbers in the log books, the books are accessible to other people who might need to identify a release number, such as Ernie Miller, Don Rase, Billie Kruse, and McConachie. (2) McConachie would ordinarily not play any role in purchases under $1,000 during the relevant period. (3) Kruse coordinates the clerical staff at the Service Center and performs some buying responsibilities, but has nothing to do with any of the tradesmen or trade shops. 1. Don Rase is a Materials Expediter in the Facilities Office. (1) Rase's main responsibility is to prepare Maintenance Material Requisition Forms. (2) Rase can issue releases against open purchase orders. (3) Rase cannot issue a purchase order for the School District, although Earl and Hatfield can do so. m. During the relevant period from August of 1989 to January of 1992, the Maintenance Materials Requisition Form was required to be signed by either the trades foreman or the Chief of Maintenance. Zanarilli, 92- 036 -C2 Page 12 n. Respondent's Exhibit 7 is McConachie's memorandum recounting the investigation of Zangrilli's relationship to A&D and ADAM. q. (1) As the plumber foreman, Armand Zangrilli had the authority to sign Maintenance Materials Requisition Forms to authorize purchases. (1) The PBOPE stopped all business dealings with A&D and ADAM on or about December 27, 1991, while the matter was investigated. (2) On or about January 3, 1992, McConachie and Billie Kruse reviewed PBOPE files to determine whether the signatures of trades foremen were on Maintenance Materials Requisition Forms in the files. (a) In many cases, the appropriate signatures were on the forms, but for the majority of requisitions for materials from A&D and ADAM, the signatures were not on either packing slips or requisitions. (R -7). (b) For those items with which Ernie Miller and Mr. Baxter were dealing, it was their responsibility to make sure that the signatures were on the requisitions. o. The Purchasing Division operates a warehouse of supplies for the maintenance trades which is coordinated by Ernie Miller. (1) Ernie Miller initiates requests to replenish warehouse stock. (2) Warehouse stores are purchased by requisition under McConachie's signature under a revolving fund. (3) McConachie signed requisitions for several purchases from A&D and/or ADAM. A purchased item that is not a part of warehouse stores never goes into the warehouse stores. (1) If the item is delivered to the warehouse it is forwarded to the shop where the tradesmen work. Invoices for purchases go directly to finance for payment. (1) A payment by the Finance Office is initiated by the Zangrilli, 92- 036 -C2 Page 13 matching of an invoice with the signed packing slip as verification of receipt. (2) The Finance Office creates its own log of release numbers from the invoices which that office pays. (3) McConachie does not control the Finance Office. r. The Purchasing Department is audited by the Controller's Office for the City of Pittsburgh and to some extent external auditors. (1) Items outside of the warehouse stock, such as in the trade cages, are neither controlled by purchasing nor audited. (2) For the most part, the auditors look only at a very small portion of what is in the warehouse stock. s. Investigative Division Exhibit 29 -43 is a proposal from A&D to the PBOPE for a Raypack W2824 Modulating Water Heater in the amount of $3,250.00. (1) The proposal indicates that the individual who obtained the quote on behalf of the School District was "A. Zangrilli" at telephone number 488 -5109. (a) There is no "A. Zangrilli" working for the PSD other than Armand Zangrilli. t. PBOPE does not preapprove vendors. (1) A vendor is assigned a vendor number when the vendor first sells an item to PBOPE or asks to be added to a vendor list. u. For materials under $1,000, A&D and ADAM were not entitled to preferential treatment under the School District's policy for minorities. (1) The School District's policy refers to sealed bid documents and specifically relates to items over $4,000.00. v. The PSD has an informal policy regarding purchasing from Pittsburgh Area suppliers. (1) The policy is set forth in the memo of August 30, 1989 from McConachie to McShane. (See Finding 2f). (2) The minority /women policy adopted by the Board Zangrilli, 92- 036 -C2 Page 14 which applies to bids does not require that the business be located in the City. w. In addition to plumbing supplies, steamfitter's supplies were purchased by the PBOPE from A&D and ADAM (R -6). 3. Bradley A. Graham is employed by Service Master as Director of Building Grounds and Transportation for Service Master's Conneaut Lake, Pennsylvania location. a. Service Master has a contract with the Conneaut School District to run the School District's maintenance, custodial and transportation departments. b. From approximately 1989 through 1991, Service Master did business with A&D. c. Graham's contacts with A&D were with Armand Zangrilli. (1) Graham recognizes Armand Zangrilli. (2) Graham's dealings with Armand Zangrilli in relation to A&D were in making purchases, requests for materials, and discussing projects on which Graham wanted Zangrilli to quote. (a) On one occasion when Graham needed a certain part, Zangrilli stated that "they" had used that at the Pittsburgh City School District. (3) In the course of Graham's dealings with A&D, Graham did not deal with any representative of A&D other than Armand Zangrilli, on a personal, face -to -face basis. d. When Graham needed materials from A&D, he would contact A&D either by leaving a message on A&D's answering machine or by direct contact with Armand Zangrilli. (1) Armand Zangrilli would meet with Graham in response to Graham's telephone calls to A&D. (2) Graham does not know Donna Luke. (3) Graham never met Donna Luke. (4) When Graham contacted A&D by telephone, it was at a local telephone number within the Conneaut Lake area. (5) The answering machine recording was a female voice. Zangrilli, 92- 036 -C2 Page 15 e. Investigative Division Exhibit 14 consists of the invoices from A&D that Graham reviewed as a representative of Service Master. f. Investigative Division Exhibit 14A consists of the Conneaut Lake School District's payments to A&D and a related deposit slip for A&D's account at Marine Bank. (1) The payments are dated from 11/08/89 through 03/13/91. (2) The payments total $2112.25. 4. John Patrick Dyer is employed by the PEOPE as the Chief of Maintenance, having served in that capacity since July 1, 1991. a. As Chief of Maintenance, Dyer's job duties and responsibilities include working directly with the trades foremen in applying work requests to the appropriate tradesmen, and in directing and guiding the tradesmen on various projects. b. As Chief of Maintenance, Dyer was Armand Zangrilli's supervisor. c. (1) Dyer's predecessor was Charles McShane. Dyer is not familiar with the purchasing procedures which existed before Dyer became Chief of Maintenance in 1991, as to materials for tradesmen under $1,000. d. Dyer states that Miller and Rase approved requisition forms to expedite getting materials to the job site. e. Dyer states that Donna Luke was sales representative for A&D. (1) Dyer states that he did not observe Zangrilli marketing or representing A&D or making deliveries for A&D or ADAM. (2) Dyer states that Zangrilli did not ask Dyer to direct a particular purchase to A&D. f. Dyer did not know that Armand Zangrilli and Donna Luke were husband and wife until after Zangrilli had retired from the PBOPE. (1) Dyer was informed of the marriage by a Special Investigator for the State Ethics Commission in Zanarilli, 92- 036 -C2 Page 16 g- December, 1992. When allegations surfaced regarding whether items the School District ordered from A&D and ADAM had ever been delivered and installed, Dyer's inquiry was limited to checking on three or four parts, which he found. 5. Donald Boyd is a resident of Meadville, Pennsylvania. a. Boyd contacted A&D to install a new furnace and air conditioner in his home. (1) Armand Zangrilli came to Boyd's house to give Boyd an estimate for the work. b. Boyd received a written proposal from A&D for the work. (I.D. 9 -1) . (1) The written proposal indicates that it was submitted to Boyd by A&D "Per A. Zangrilli & D. Luke." (2) There are two signatures which appear in the "Acceptance of Proposal" block, Boyd's and Zangrilli's (See Finding 41 mm(3) (c)) . c. Armand Zangrilli installed the furnace. d. Armand Zangrilli signed at least one of the two invoices Boyd received from A&D (I.D. 9 -2, 9 -3). (1) The invoice dated February 18, 1992 bears Armand Zangrilli's signature, as well as a signature of the name "Donna Luke" followed by the word "owner" (See Finding 41 mm(3) (d)) . (2) The invoice dated March 30, 1992 bears the handwritten notation "Paid in full" followed by the signature of the name, "Armand Zangrilli." (a) Luke's name does not appear on this invoice. e. Boyd paid for the work with checks payable to A&D (I.D. 10) . (1) These payments were deposited into A&D's account at Marine Bank. (I.D. 10). 6. Donald J. Rase is employed by the PBOPE as a materials expeditor, having served in that capacity since January, 1982. Zangrilli, 92- 036 -C2 Page 17 b. Rase's job duties include preparing paperwork to requisition materials from the stockroom, and preparing Maintenance Materials Requisition Forms for the acquisition of materials and supplies by tradesmen. (1) Rase was not specifically authorized to issue release numbers, but he did so for expediency. c. A tradesman may acquire materials under $1,000 by calling Rase and ordering materials in advance, in which case Rase completes the paperwork and submits it to the Purchasing Department for acquisition. (1) Tradesmen have the authority to recommend a particular vendor for a purchase. (2) It was a frequent practice for tradesmen to make such recommendations of vendors. (3) Rase states that Earl or Hatfield could use any vendor that provided the best price. d. The past practice has also been for tradesmen to purchase materials under $1,000 on their own, with the Maintenance Materials Requisition Form being subsequently completed. e. Maintenance Materials Requisition Forms often indicate the name of a company in the description column of the Form. g• a. Rase reports to the Chief of Maintenance. (1) That company would be the suggested vendor. (2) The recommendation as to which vendor should be used for a purchase could be made by the tradesman or by Rase. f. As a Plumber Foreman, Armand Zangrilli approached Rase to obtain materials and supplies. Armand Zangrilli recommended to Rase that A&D be used to obtain materials and supplies for the PHOPE. h. Rase used the word "Zang" on the Maintenance Materials Requisition Forms to refer to Armand Zangrilli. i. For Maintenance Materials Requisition Form number 329674 (I.D. 28- 160/162), on which Rase indicated "Zang" as Zangrilli having requested the materials which were ordered from ADAM, Rase stated, "It is a very good Zangrilli, 92- 036 -C2 Page 18 j possibility I might have gotten (ARAM's] name from Mr. Zangrilli." Rase prepared Maintenance Materials Requisition Form No. 320859 (I.D. 29 -42), dated 08/17/89, ordering a "Ray Pak W2824 Modulating Water Heater" priced at $3,250.00. (1) Rase indicated on the Form that Zangrilli requested that this water heater be purchased. (I.D. 29 -42). (2) The recommended vendor was A&D. (3) Rase obtained the vendor's name from a proposal which A&D had submitted (I.D. 29 -43). (a) Zangrilli is indicated as having requested each of these orders. (b) A&D Mechanical Supplies, Inc. submitted the Proposal (I.D. 29 -43) dated 08/17/89 to the PBOPE for one Ray Pak W2 -824 Modulating Water Heater for the price of $3,250.00. (4) A&D's proposal indicates that Zangrilli received the proposal on behalf of the School District. (a) The telephone number next to Zangrilli's name, 488 -5109, is the telephone number of Zangrilli's office at the PBOPE. (b) Rase did not instruct Luke to submit the proposal in this format. (1) Rase never had occasion to ask vendors to submit proposals in a particular way. k. Zangrilli recommended to Rase that the PBOPE purchase Model S25 Armstrong pumps from A&D. (1) Zangrilli stated that he wanted to switch to Armstrong pumps. (2) Zangrilli stated that A&D could get Armstrong pumps "cheaper and quicker ". (3) Rase prepared five (5) Maintenance Materials Requisition Forms dated September 1, 1989 which purchased from A &D the exact make and model of Armstrong pumps for which Zangrilli had recommended A &D. (I.D. 29- 48/49, 52/53, 56/57, 60/61, 64/65). Zangrilli, 92- 036 -C2 Page 19 (a) Zangrilli is indicated as having requested each of these orders. (a) These five (5) particular pumps cost the PBOPE $1,130.00. 1. Rase prepared a Maintenance Materials Requisition Form dated June 18, 1990 for the purchase of a trailer by the School District. (I.D. 29 -571). (1) This purchase was requested by Zangrilli. (2) Rase states that the purchase order number, price, and Nealy Earl's initials are not in Rase's handwriting. (3) The recommended vendor, A&D, is in Rase's handwriting. (a) Rase got this information for this Requisition from Zangrilli. (b) Zangrilli told Rase that this was the trailer he wanted and that A&D could get it quickly and cheaply. (4) This trailer was purchased from A&D at the price of $985.00 (I.D. 29 -569, 29 -571). (a) A vendor invoice by which A&D acquired this trailer has not been identified. m. Rase was not aware that Zangrilli was married to Donna Luke, the owner of A&D. (1) Rase thought that Zangrilli and Luke were close friends. n. Rase signed his name on Maintenance Materials Requisition Forms for the purpose of recording the fact that he had prepared them. (1) Rase signed Maintenance Materials Requisition Forms on the right of the "Required Approval" line with the name "Don." (2) After Rase signed the form, it went to Nealy Earl for ordering. (3) Neither Rase nor the Facilities Department approves purchases or payments. Zangrilli, 92- 036 -C2 Page 20 P q. (4) Rase states that the Purchasing Department approves payments of bills. o. Rase testified that in order for a part to be procured, the Maintenance Materials Requisition Form must be signed by someone from the Facilities Office and someone in the Purchasing Department. (1) A purchase could be made without the appropriate signatures if the Purchasing Department issued the purchase order number to the tradesman. (2) Rase states that no payment would be obtained without the packing slip or some proof being given to the Purchasing Department indicating delivery of the goods. Rase states that Donna Luke was at the Service Center frequently. (1) Luke told Rase what products could be supplied. Dyer did not tell Rase to utilize A&D and ADAM. r. Rase states that McShane told Rase to utilize A&D and ADAM. (1) Rase states that he was instructed by McShane, before even the first purchase, that he was to use A&D as much as possible, because "she" was a female, minority, and had a family to raise. (2) Rase states that the School Board's policy to encourage the use of minority /female businesses to fill orders applied to bids and to purchases under a thousand dollars. s. Rase stated that whether Zangrilli was involved with A&D or not, he would have handled things in the same manner. t. Rase states - that prior to early 19 92, it was Board_ policy that any tradesman could sign the request line on the Maintenance Materials Requisition Form. (1) Rase states that after early 1992, the foremen's signature was required. u. Rase states that on occasion, he determined that supplies from A&D and ADAM were cheaper than from other vendors. (1) Rase was happy with the service received from A&D. Zangrilli, 92- 036 -C2 Page 21 (2) Rase states that A&D delivered orders quickly. 7. Thomas A. Motley is employed as the Director of Plant Operations for PBOPE. a. Motley knows Armand Zangrilli from the PBOPE. b. In 1992, A&D performed air conditioning and furnace work for Motley at various residential properties. (1) Motley contacted Zangrilli about the work to be done. (2) Zangrilli looked at the job and gave Motley estimates for the work. (3) A&D billed Motley for the work (I.D. 7). (a) The address indicated for A&D was in Conneaut Lake. (4) When a problem developed with the furnace that had been installed, Motley dealt with Zangrilli. (a) Motley's contact with Zangrilli resulted in corrective work being performed. (5) In dealing with A &D, Motley primarily dealt with Armand Zangrilli. (6) Motley paid for the work by checks payable to A&D. (I.D. 8) . (a) The checks were deposited to A&D's account at Marine Bank, account number 1011 -0058 (I.D. 8) . (b) Armand Zangrilli's name does not appear on the checks. (7) Zangrilli gave Motley receipts for his payments. 8. Michael Luke is the son of Donna Luke. a. Michael Luke has a brother named Anthony. b. Armand Zangrilli was Michael Luke's stepfather. c. For seven to eight years, Michael Luke resided with Armand Zangrilli, together with Donna Luke and Anthony Luke. Zangrilli, 92- 036 -C2 Page 22 g- d. From 1985 to approximately 1989 the Lukes and Armand Zangrilli resided in one part of a duplex in Pittsburgh. (1) The duplex was owned by Theresa Zangrilli, who is Armand Zangrilli's mother. (I.D. 27). (2) Theresa Zangrilli resided in the other part of the same duplex. (3) The duplex was at the corner of two intersecting avenues, namely Knowlson and Dorchester. (4) The address of Theresa Zangrilli's part of the duplex was 2899 Knowlson Avenue. (5) The address of the other part of the duplex was 537 Dorchester Avenue. e. Subsequently, the Lukes and Armand Zangrilli resided in Conneaut Lake, Pennsylvania. (1) Conneaut Lake was the residence at the time Zangrilli married Donna Luke. (2) Zangrilli was at the Conneaut Lake residence on a regular, daily basis. (3) Zangrilli slept and ate at the Conneaut Lake residence. (4) The street address for the Conneaut Lake residence was R.D. #1, Oakmont Drive, Conneaut Lake, Pennsylvania. (a) No mail came to the street address. (b) The mailing address was a post office box in Conneaut Lake, Pennsylvania. f. Michael Luke was told that the initials in A&D's name stand for "Armand and Donna ". The main location for A&D was Conneaut Lake. (1) Sometimes, but not all of the time, A&D operated out of the duplex on the corner of Dorchester Avenue and Knowlson Avenue in Pittsburgh. h. ADAM was operated out of Conneaut Lake. i. The initials in the company name "ADAM" stand for the Zangrilli, 92- 036 -C2 Page 23 j first initials of the members of the Zangrilli /Luke family, specifically "Armand ", "Donna ", "Anthony ", and "Michael ". (1) The use of these initials for the company name was Michael Luke's idea. Michael Luke helped in performing plumbing services for A&D. (1) When Michael Luke worked for A&D, he worked with Armand Zangrilli. (a) Armand Zangrilli was in charge of the jobs. (2) Other employees were used irregularly, on bigger jobs. k. Armand Zangrilli accepted payments for A&D. (1) Michael Luke observed A&D's customers giving payments directly to Armand Zangrilli. 1. Michael Luke was present when Armand Zangrilli picked up materials from vendors for A&D. m. Zangrilli had a plumbing company when he met Donna Luke. (1) Some plumbing parts for Zangrilli's plumbing business were sometimes stored at the Dorchester Avenue property. 9. Catherine Murlis resides at 1530 Green Tree Road, Pittsburgh, Pennsylvania. a. Murlis owns a cottage in Conneaut Lake, Pennsylvania. b. Murlis received a circular in the mail from A&D regarding services available for cottage owners (I.D. 12A). c. In the spring of 1990, Murlis telephoned A&D at the telephone number on the circular ftom A&D. (1) A female individual who identified herself as "Donna" spoke to Murlis. (a) The female individual seemed to Murlis to know what Murlis was talking about when Murlis explained the cottage's problems. (2) As a result of Murlis' telephone calls to A &D, Zangrilli, 92- 036 -C2 Page 24 Armand Zangrilli met with Murlis and looked at the damage. d. Armand Zangrilli told Murlis that he was able to repair the damage at Murlis' cottage. (1) Zangrilli gave Murlis a price quote for doing the work. (2) Zangrilli was to do the work on weekends or whenever he could, by fitting it into his schedule. (3) Murlis was not physically present when the work was done. e. A&D billed Murlis for the work (I.D. 11). f. Murlis paid for the work with checks payable to A&D (I.D. 12) . (1) These payments were deposited into A&D's account at Marine Bank, account number 1011 -0058 (I.D. 12). (2) Zangrilli's name does not appear on these checks. 10. David Imhoff is a foreman custodian for the PBOPE. a. Imhoff asked Armand Zangrilli to install a furnace in his home. (1) At that time, Imhoff was not aware of A &D. b. Zangrilli looked at the job and gave Imhoff a verbal estimate for the work. c. Zangrilli told Imhoff to pay Zangrilli $875 for the furnace. (1) Imhoff gave Zangrilli a check for $875 for the furnace. (2) The furnace was delivered to Imhoff by the furnace company. d. Zangrilli installed the furnace, assisted by a woman named "Donna ". e. After the furnace was installed, Imhoff gave Zangrilli $300 in cash for the installation. f. Subsequently, Imhoff asked Zangrilli for a receipt. Zanarilli, 92- 036 -C2 Page 25 (1) The receipt (I.D. 13) is from A&D and bears the notation, "Paid in full" signed "Donna G. Luke." 11. Neely Earl is employed as an expediter by the PBOPE, having served in that capacity for approximately 20 years. a. Earl's job duties include purchasing material for the carpenters, plumbers and steamfitters. (1) Herb Hatfield is primarily responsible for purchasing for the other trades, although Earl at times purchases for the other trades also. (2) Earl states that Don Rase purchases at times, but it is not his primary responsibility. (3) Earl's immediate supervisor is Billie Kruse. b. Purchases of materials under $1,000 for the trades do not require formal bidding. (1) Such a purchase may be initiated by Don Rase filling out a Maintenance Materials Requisition For for materials requested by the tradesmen. (a) No one else but Don Rase is responsible for filling out these Forms. (1) Earl states that three or four years ago, Ernie Miller also played a role in filling out these forms. (b) Under this procedure, tradesmen are authorized to recommend a vendor for a purchase, but can not force the use of that vendor. (2) A trades foreman or a tradesmen may directly make purchases from vendors, before any paperwork is actually completed. c. Earl states that prior to January, 1992, the tradesmen could sign the Maintenance Materials Requisition Form on the "Requested By" line. (1) Earl states that after January, 1992, the foremen had to sign the "Requested By" line. d. Under normal procedures, Earl would receive a Maintenance Materials Requisition Form after Don Rase had completed it. Zanarilli, 92- 036 -C2 Page 26 (1) The form would come to Earl for Earl to get a price or to put a purchase order number on the form. (2) If an item had already been picked up, Earl would telephone the vendor to confirm the price. e. Each trade has its own fund from which purchases are paid, which is indicated by a "purchase order number." (1) These numbers are changed once a year. f. Earl is primarily responsible for giving the "RR" number out in relation to the plumbers, carpenters and steam fitters. (5) Earl did not have the authority to question how another individual assigned release numbers. (6) Tradesmen cannot give out "RR" numbers. (7) Earl never saw Zangrilli assign release numbers. Earl states that Rase asked Earl to use A&D and /or ADAM. (1) Earl states that Rase asked Earl to put A&D and /or ADAM on the vendor list. (2) Vendors could be added to the vendor list without any authorization. (3) ADAM and A &D were on Earl's vendor list. h. Armand Zangrilli recommended A &D and /or ADAM to Earl for purchases. (1) If these companies had not been recommended to g• (1) Each trade has its own logbook to record "RR" numbers. (2) These logbooks are kept in an office occupied by Earl and Hatfield. (3) Respondent's Exhibit 5 is a sample of pages from a logbook for release numbers. (4) "RR" numbers can be given out by Billie Kruse, Herb Hatfield, Ernie Miller, Don Rase and Earl. (a) Hatfield's duties require him to be out of the building frequently. Zangrilli, 92- 036 -C2 Page 27 (2) Earl did not discuss pricing with Zangrilli. i. Earl states that Rase and Zangrilli introduced him to Luke. Earl, Earl would not have sought them out on his own. (1) Earl did not know that Zangrilli and Donna Luke were husband and wife. Donna Luke was represented to Earl to be the owner of A&D and ADAM. (1) Earl's dealings with A&D and ADAM were with Luke. k. Maintenance Materials Requisition Forms numbered 334678 (I.D. 28 -609), 321112 (I.D. 29 -53), 321111 (I.D. 29 -57), 321110 (I.D. 29 -61), 321113 (I.D. 29 -65), 328971 (I.D. 29 -571) , and 330367 (I.D. 29 -901) bear Earl's initials in the lower right -hand corner. (1) Earl placed his initials on these forms for the purpose of giving the "RR" number, except for Form number 330367 (I.D. 29 -901). (a) This Maintenance Materials Requisition Form bears the name "Don" on the right of the "Required approval" line; the name "Zang" on the "Requested by" line; and the initials of Nealy Earl. (b) Earl stated that he could not give an "RR" number to Form number 330367 (I.D. 29 -901) until it was approved by Billie Kruse, because of the amount of money involved, specifically $2,528.00. (1) This Maintenance Materials Requisition Form does not bear Kruse's initials to approve it. (c) A&D's proposal for this item indicates that it was submitted to the Board at telephone numbers "488 -5109 488- 5100." (1) 488 -5109 is the number for Zangrilli's office at the PBOPE. (2) On all of these forms, except for I.D. 28 -609 and I.D. 29 -901, the only handwriting which is Earl's Zangrilli, 92- 036 -C2 Page 28 is the "RR" number and his initials. (3) Earl did not play any role in pricing any of these orders from A&D and ADAM, except for the Forms numbered 330367 (I.D. 29 -901) and 334678 (I.D. 28- 609) . (a) On I.D. 29 -901, the price is in Earl's handwriting. (b) On I.D. 28 -609, the delivery date, price, and address are in Earl's handwriting. 1. Investigative Division Exhibit 28 -A is a listing of one hundred twenty -three (123) Maintenance Materials Requisition Forms for purchases from ADAM, and one (1) invoice /packing slip from ADAM to the PBOPE. (1) None of these documents contain Earl's signature, name or handwriting. (2) Earl did not play any role in the purchase or acquisition of the materials represented on the documents enumerated on I.D. 28 -A. (3) Under the purchasing procedures that existed from 1989 to January of 1992, Earl would normally have played a role in processing these purchases. (4) Only seven (7) of these forms bear any signature or name on the lines at the bottom of the Form designated, "Requested By" and "Required Approval ": 331912 (I.D. 28 -434, I.D. 28 -369); 331941 (I.D. 28- 365); 331911 (I.D. 28 -361); 331903 (I.D. 28 -353); 331878 (I.D. 28 -332); 329674 (I.D. 28 -160); and 327874 (I.D. 28 -117). (a) Earl states that it is extraordinary that many of these forms did not indicate that someone requested them and only bore Miller's signature. (b) The name Armand Zangrilli appears on the "Requested By" line on three of these Forms, the Requisitions numbered 331912 (I.D. 28 -369, I.D. 28 -434) and 331941 (I.D. 28 -365). (c) The name "Zang" appears on the "Requested By" line on one form, the Requisition numbered 329674 (I.D. 28 -160). Zangrilli, 92- 036 -C2 Page 29 (1) Around the Service Center, Armand Zangrilli was called "Armand" and "Zang ". (d) The other three forms do not bear the name "Armand Zangrilli" or "Zang ". (e) Earl states that on the forma numbered 331911 (I.D. 28 -361) and 331941 (I.D. 28 -365), the vendor's name (ADAM), is in Ernie Miller's handwriting. (5) The other document listed on I.D. 28 -A is I.D. 28- 613 which is an invoice or packing slip. (a) I.D. 28 -613 bears various signatures, including a signature of the name Armand Zangrilli. m. Investigative Division Exhibit 29 -A is a listing of 218 Maintenance Materials Requisition Forms for purchases from A&D. (1) None of these documents contains Earl's signature, name or handwriting. (2) Earl did not play any role in the purchases represented by the documents enumerated on I.D. 29- A . (3) Only one of these forms bears any signature or name on the lines designated "Requested By" and "Required Approval ". (a) This one form (I.D. 29 -229) has the name "Zang" on the "Requested By" line. (b) On one other Requisition, number 331490 (I.D. 29 -947), Miller's name appears twice. (c) Earl states that it is extraordinary that many of these forms did not indicate that someone requested them and only bore Miller's - signature. n. Earl had the authority to question irregularities in Maintenance Materials Requisition Forms. (1) Earl had the authority to question Forms which did not meet pricing or quoting requirements. (2) The submission of multiple Maintenance Materials Zanarilli, 92- 036 -C2 Page 30 q. Requisition Forms for the same item from the same vendor on the same date totalling over $1,000 would be a procedural deviation that would authorize Earl to stop processing the forms and to question them, even if different trade groups were indicated. (3) If the same items are purchased for different schools, a separate form must be used for each school. o. Earl is not aware of Armand Zangrilli delivering materials on behalf of A&D or ADAM. p. Earl was aware that the PBOPE had a policy to encourage purchasing from female and minority vendors. Earl occasionally compared the prices of A&D to other vendors, and sometimes found them to be lower. (1) A&D and ADAM had good delivery time. 12. Lyle David Schaef is the owner and publisher of a weekly newspaper publication known as "The Community News," which is circulated in the western third of Crawford County, Pennsylvania. a. The front page of the September 5, 1989 edition of the Community News featured a picture of Armand Zangrilli and Donna Luke with two columns under the caption, "A&D Mechanical Opens. (I.D. 15). (1) Armand Zangrilli telephoned Schaef and asked him to do a story on the opening of A&D. (2) Schaef met with Armand Zangrilli and Donna Luke at the Conneaut Lake residence on Oakmont. (3) Schaef photographed Zangrilli and Luke, and Schaef wrote the article with the information given to him by Zangrilli and Luke. (4) The article regarding A&D's oi5ening contains the following information about Armand Zangrilli: "Zangrilli has worked in the plumbing business in the Pittsburgh area for over 25 years and is knowledgeable in plumbing systems of all types including installation of new systems and repairs to existing systems, domestic water systems, and control work as well as in estimating, ordering, and layout work." Zangrilli, 92- 036 -C2 Page 31 (5) The article refers to the individuals in the photograph as "owner Donna Luke and Armand Zangrilli." (6) The article states, "A&D is located off Oakmont Drive, Conneaut Lake. They may be reached at 814- 382- 4141 -24 hours a day ". b. A&D has placed paid advertisements in The Community News. (1) At the time Schaef met with Zangrilli and Luke to photograph them for the September 5, 1989 article, Zangrilli and Luke jointly discussed with Schaef a paid advertisement for A&D which appeared in that same edition. (2) For other advertisements that were placed by A&D, a salesman, not Schaef, made the calls. (3) A&D pays for the advertisements by checks signed by Donna Luke. c. Schaef is a director on the Conneaut School Board, having served in that capacity since 1984. (1) Schaef is President of the Board and has served in that capacity several terms. (2) Armand Zangrilli telephoned Schaef and asked Schaef how A&D could start doing business with the School District. (a) Schaef referred Zangrilli to Graham (See Finding 3). (3) Schaef has seen A&D on the list of bills for the School District. a. For orders that did not have a purchase order number, F &L would designate on the invoice the name of the person who ordered the item. 13. Cathy Fabian was formerly affiliated" in an ownership and working capacity with an entity known as F &L Pump Service Inc. (F &L), having typed invoices and taken orders for that company • for eighteen years until it went out of business on June-25, 1993. b. A&D was a customer of F &L. c. Investigative Division Exhibit 16 consists of the records Zangrilli, 92- 036 -C2 Page 32 d. of the business dealings between F &L and A&D (I.D. 16). (1) Armand Zangrilli is indicated as having placed each of A&D's orders to F &L. (2) One of the invoices (I.D. -16 page 4) indicates that the ordered item, a submersible pump, was picked up by John Nee, who was a plumber laborer for the PBOPE. (3) The invoices include orders for new supplies, including submersible pumps (I.D. -16 pages 1,4) and parts (I.D. -16 pages 5,8), and for the pick -up and repair of other pumps (I.D. -16 pages 2,3,6,7). Fabian could not recall whether she personally took orders from Armand Zangrilli. e. The Pittsburgh School District was a customer of F &L. (1) The Pittsburgh School District used purchase order numbers on its orders. 14. Dan Vaughn is employed by Trumbull Industries as a Branch Manager for the company's Meadville, Pennsylvania branch, having served in this capacity since July, 1985. a. Trumbull Industries ( "Trumbull ") is in the wholesale supply business. b. A&D is a customer of Trumbull Industries. c. Trumbull's business records. indicate that Armand Zangrilli picked up numerous orders for A&D. (1) The names of other individuals also appear as having picked up supplies for A&D, including the names Donna Luke and Michael Luke. d. On several occasions, Vaughn personally had dealings with Armand Zangrilli for A&D. • (1) Zangrilli personally came in to Trumbull supplies for A &D. business to order (2) Vaughn talked with Zangrilli about Trumbull's products. (3) Vaughn answered Zangrilli's questions pertaining to A &D's account. Zangrilli, 92- 036 -C2 Page 33 (4) Vaughn stated, "To me [Armand] was A&D Mechanical." e. Vaughn does not recall ever talking to Donna Luke. f. Trumbull's forms also had a box which was for the customer's record - keeping purposes, and the customer controlled the information put in it. (1) The name "Armand" appears in this box for numerous purchases by A&D. (2) The name "Donna" also appears in this box on numerous forms. 15. Mark Trew is President of Trew Company, Inc. ( "Trew Company ") having served in this capacity for eight (8) years. a. Trew Company, Inc. is distributor of pumps b. Trew Company, Inc. accounts receivable. a manufacturers' representative and and related products. maintains ledger cards to track (1) Each time an invoice is sent to a customer, it is posted on the ledger card for that respective account. (2) Accounts are in the name of the customer, and are not assigned a number. c. From 08/01/89 to 10/13/89, Armand Zangrilli had an account in his own name with Trew Company, Inc. (1) Trew Company has a ledger card under the name Armand Zangrilli (I.D. 23, page 1). (a) The ledger begins 08/01/89 with the first entry being a "balance forward" of $0.00 (I.D. 23, page 1). (b) The final entry under Armand Zangrilli's name is dated October 13, 1989 and indicates a balance of $93.00 and total "Sales -to -date" of $3,773.00 (I.D. 23, page 1). (c) The entries are on a sheet numbered "1" (I.D. 23, page 1). d. As of October 13, 1989, Zangrilli's account at Trew Company became the account of A &D. (1) Trew Company has a ledger card under the name A &D Zanarilli, 92- 036 -C2 Page 34 Mechanical, Inc. (I.D. 23, pages 2 -5). (a) The entries under A&D's name begin on a sheet which Trew Co. has numbered "2" (I.D. 23, page 2) . (b) The entries under A&D's name begin on October 13, 1989 by forwarding Zangrilli's balance of $93.00 and total "Sales -to- date" of $3,773.00 (I.D. 23, page 2). e. When A&D got a tax - exempt certificate, Zangrilli' s ledger card was credited by Trew Company for sales tax which had been paid for items ordered under the name Armand Zangrilli. (1) The second entry on the ledger card under Armand Zangrilli's name is an entry dated 08/23/89 for the amount of $2,713.60 (I.D. 23, page 1). (2) This is the only entry for that date and it is the only entry for that amount (I.D. 23, page 1). (3) The invoice dated 08/23/89 shows the items were shipped on 08/22/89 (I.D. 23A, page 1). (4) The price was $2,560 plus 6% sales tax in the amount of $153.60, for a total of $2,713.60 (I.D. 23A, page 1). (5) Trew Company issued a credit memo dated 09/18/89 to A&D in the amount of $153.60, for sales tax which had been paid on items shipped 08/22/89 (I.D. 23A, page 2) . (6) A&D did not order any items shipped 08/22/89 because A&D did not have an account until 10/13/89. (Finding 15d). (7) The following notation appears on the credit memo issued to A&D: "This credit is issued for the 6% PA Sales Tax charged on Trew Co. Inv. #8908 -6097 (certificate on way)" (I.D. 23A, page 2). (8) The credit memo number is 8909 -6292 (I.D. 23A, page 2) . (9) The credit memo appears as the eighth entry on Armand Zangrilli's ledger card (I.D. 23, page 1). (10) After Trew Company, Inc. received a copy of the tax Zanarilli, 92- 036 -C2 Page 35 exempt certificate for A&D, no sales tax was charged for A&D's purchases. f. A&D was billed for purchases made on the account under Armand Zangrilli's name. (1) Invoice No. 8909 -6187 indicates that the items were sold to A&D with the notation: "Attn: Armond Zangrille (sic)" (I.D. 23A, page 3). (a) The invoice date is 09/06/89 and the shipping date is 09/05/89. (b) A&D's name was not on the account until 10/13/89. (Finding 15d). (c) The invoice appears as the third entry on Armand Zangrilli's ledger card (I.D. 23, page 1) . (d) A credit memo dated 10/13/89 was issued for invoice No. 8909 -6187 (I.D. 23A, page 7). (1) The credit was for $33.60 (I.D. 23A, page 7) . (2) The credit was for the 6% sales tax which had been charged on the invoice and bears the notation "(certificate on file) ". (I.D. 23A, page 7). (3) The credit memo lists both A&D and Zangrilli as the customer (I.D. 23A, page 7) . (4) The credit memo is number 8910 -6525 (I.D. 23A, page 7). (5) The credit memo appears as the final entry on Armand Zangrilli's ledger card (I.D. 23, page 1). (2) Invoice No. 8909 -6239 indicates that the items were sold to A&D (I.D. 23A, page 4). (a) The invoice date is 09/14/89 and the shipping date is 09/12/89 (I.D. 23A, page 4). (b) A &D's name was not on the account until 10/13/89. (Finding 15d). Zangrilli, 92- 036 -C2 Page 36 g- (c) The invoice indicates that the order was placed by "Armond" (I.D. 23A, page 4). (d) The invoice appears as the fourth entry on Armand Zangrilli's ledger card (I.D. 23, page 1) . (3) Invoice No. 8910 -6463 indicates that the items were sold to A&D (I.D. 23A, page 5). (a) The invoice date and the shipping date are 10/06/89 (I.D. 23A, page 5). (b) A&D's name was not on the account until 10/13/89. (Finding 43(b) (4) (b)) . (c) The invoice indicates that the order was placed by Armand Zangrilli (I.D. 23A, page 5). (d) The invoice appears as the tenth entry on Armand Zangrilli's ledger card (I.D. 23, page 1). (e) A credit memo dated 10/13/89 was issued for invoice 8910 -6463 (I.D. 23 -A, page 6) (1) The credit was for 47.00, for incorrect pricing (I.D. 23 -A, pages 5, 6). (2) The credit memo indicates the customer as A&D. (3) The credit memo number is 8910 -6494. (4) The credit memo appears as the twelfth entry on Armand Zangrilli's ledger card. There are 46 orders documented by the invoices under A&D's name (I.D. 23 -A) . (1) Armand Zangrilli is indicated as having placed 32 of these orders, which are documented on the original and carbon copies of Trew Invoices in evidence as: I.D. 23A- 4/23B -1; 23A- 5/23B -4; 23A- 15/23B -10; 23A- 16/23B -11; 23A- 17/23B -12; 23A- 18/23B -13; 23A- 19/23B -14; 23A- 20/23B -15; 23A- 21/23B -16; 23A- 22/23B -17; 23A- 23/23B -18; 23A- 24/23B -19; 23A- 26/23B -21; 23A- 27/23B -22; 23A- 28/23B -23; 23A- 29,23A- 30/23B -24; 23A- 31/23B -25; Zangrilli, 92- 036 -C2 Page 37 h. (1) 23A- 32/23B -26; 23A- 36/23B -29; 23A- 42/23B -35; 23A- 48/23B -41; 23A- 51/23B -44; 23A- 33/23B -27; 23A- 39/23B -32; 23A- 44/23B -37; 23A- 49/23B -42; 23A- 52/23B -45; 23A- 34/23B -28; 23A- 41/23B -34; 23A- 46/23B -39; 23A- 50/23B -43; 23A- 53/23B -46. Trew Company, Inc. keeps the amber carbon copy of its invoice as the record that the materials were received by the customer. The words, "WILL CALL" which appear on the invoice means that the order is going to be picked up, rather than delivered. (2) The carbon copy of the invoice is signed by the recipient at the time the merchandise is picked up. (3) Most of A&D's orders were picked up, rather than delivered. i. Of the forty -six (46) orders under A&D's name, Armand Zangrilli is indicated as having picked up at least seventeen (17) orders (I.D. 23 -B, pages 1, 2, 4, 5, 6, 7, 9, 10, 11, 12, 13, 14, 17, 27, 28, 35, 36) . (1) John Nee, who was a plumber laborer for the PROPS, is indicated as having picked up at least thirteen (13) of these orders (Finding 31(f)), (I.D. 23 -B). (2) Donna Luke is indicated as having picked up one order for A&D (I.D. 23B -46). (3) Four orders bear the names of various other individuals. For at least 11 of A&D's orders from Trew Company, Armand Zangrilli is indicated as having both placed the order and picked it up. (Findings 15(g) and (i)). k. Trew personally dealt with Armand Zangrilli and Donna Luke in dealing with the A &D account. 1. Some of the items ordered by A &D were commercial items and some were residential. 16. Donald Fink is the President and co -owner of Action Supply Products, Inc. ( "Action Supply ") having served in this capacity for approximately ten and one -half years. a. Action Supply is primarily a supplier of oil absorbent products, wiping materials and maintenance supplies. Zanarilli, 92- 036 -C2 Page 38 b. Shortly before April, 1990, Action Supply was verbally informed that A&D was the successful awardee of the business for wiping rags for the PBOPE. (1) Action Supply was informed that A&D would be placing orders with Action Supply for the wiping rags. (2) Action Supply was informed that the orders would be released by someone from the PBOPE. (3) Action Supply was asked to ship the wiping rags directly to the PBOPE, which it agreed to do. c. The orders from A&D for the wiping rags were placed by telephone. (1) John Black, a sales representative Supply, handled these orders. (2) Fink did not personally deal representatives of A&D, and does not Zangrilli. for Action with any know Armand d. A&D placed six (6) orders with Action Supply for wiping rags to be shipped by Action Supply directly to the PBOPE (I.D. 17 -1, 17 -3, 17 -5, 17 -7, 17 -9, and 17 -11). (1) Each of the six orders was for 1,000 pounds of wiping cloths at $1.49 per pound for a total of $1,490.00 per invoice. (a) Invoice number 022536 (I.D. 17 -3) had a shipped quantity of only 425 pounds, and therefore was for $633.25. e. Action Supply had previously done business directly with the PBOPE primarily on wiping rags. (1) Action Supply solicited wiping rag business from the PBOPE through sale persons and bids. (a) Action Supply solicited this business from Billie Talak (Kruse) and Ernie Miller. f. Action Supply charged A &D the same price for the wiping rags that Action Supply charged the Pittsburgh School District for wiping rags, which was $1.49 per pound, or $1,490 for 1,000 pounds. Zangrilli, 92- 036 -C2 Page 39 (1) A&D sold wiping rags to the PBOPE for $1,700 per 1,000 pounds (See Finding 25j). Armand Zangrilli's name does not appear on the invoices (I.D. 17 -1, 17 -3, 17 -5, 17 -7, 17 -9, and 17 -11). h. Armand Zangrilli's name does not appear on the bills of lading for these goods (I.D. 17 -2, 17 -4, 17 -6, 17 -8, 17- 10, 17 -12) . g• (1) The bill of lading is the shipping document that is signed by the recipient of the goods upon delivery. (2) Ernie Miller's name appears on some of the bills of lading (I.D. 17 -4, 17 -6, 17 -8). (3) The name "B. Baxter" appears on some of the bills of lading (I.D. 17 -2, 17 -10, 17 -12). i. After Action Supply was advised by A&D that A&D had been given the wiping rag business for the PBOPE, John Black contacted Ernie Miller to find out why A&D got the business. 17. Joseph R. Starr is Corporate Secretary and a sales person for Conroy Starr and Associates, Inc., having been so employed for 6% years. a. Conroy Starr and Associates, Inc. ( "Conroy Starr ") is a manufacturer's representative, primarily for plumbing supplies. b. A&D is a customer of Conroy Starr. (1) The staff of Conroy Starr take notes of its customers' telephone calls pertaining to parts or prices, which notes are kept as business records for a period of time. c. Starr was present when Armand Zangrilli picked up material for A &D. (1) Starr recognizes Armand Zangrilli to see him. d. Investigative Division Exhibit 18 is a copy of the invoices from Conroy Starr to A &D for products purchased. (1) The invoices pertain to purchases from July 18, 1991 through October 1, 1991. (2) The invoice dated January 3, 1991 (I.D. -18, page 5) Zangrilli, 92- 036 -C2 Page 40 bears instructions to call Armand Zangrilli to pick up the materials, and lists the telephone number for Armand Zangrilli's office at the PBOPE: 488- 5109. (3) John Nee, a plumber laborer for the PBOPE, is indicated as having picked up one order (I.D. -18, page 6) . (4) Donna Luke is indicated as having placed three orders (I.D. -18, pages 1, 4, 6), and as having received materials twice (I.D. -18, pages 7, 8). f. A&D's tax exemption certificate dated March 25, 1991 indicates Donna Luke's name as President of A&D. g• Conroy Starr's records include a check from A&D signed by Luke. 18. Donald Smith is the Controller for Morris Paper Company, which is an industrial packaging distributor. a. A&D placed four orders with Morris Paper Company between 01/03/91 and 08/30/91 (I.D. 19). (1) One of the orders is indicated as having been placed by Donna Luke (I.D. 19, pages 7 -9). (2) Armand Zangrilli is indicated as having picked up three of the four orders for A&D (I.D. 19, pages 2, 8, 11) . (3) Donna Luke is indicated as having picked up one order (I.D. 19, page 5). b. Donna Luke signed a check from A&D to Morris Paper Company. c. Smith is not involved in the company's sales, and so has never dealt personally with A&D. 19. Patricia A. Ryan is employed_ as the Administrative. Manager for Construction Tool Service, Incorporated ( "Construction Tool Service "), which is a wholesale retailer for the construction industry for small to mid - weight equipment. a. A&D placed eleven (11) orders with Construction Tool Service between 04/19/90 and 08/20/91 (I.D. 20). (1) Four of these orders indicate "Verbal: Armand," and /or "Contact: Armand." (I.D. 20, pages 8 -9, 16- Zangrilli, 92- 036 -C2 Page 41 17, 18 -19, 22 -23). (2) The name "Lukas" or "Luke" appears as the contact on two orders (I.D. 20, pages 12 -13, 14 -15). (3) The names of other individuals appear as the contact on two other orders (I.D. 20, pages 6 -7, 10 -11) . (4) Armand Zangrilli is indicated as having picked up six of the eleven orders for A&D. (I.D. 20, pages 5, 7, 9, 17, 19, 23) . (5) Donna Luke is indicated as having picked up three orders (I.D. 20, pages 3, 13, 21). (6) John Nee, who was a plumber laborer for the PBOPE, is indicated as having picked up one order (I.D. 20, page 11). (7) Another individual is indicated as having picked up one order (I.D. 20, page 15). b. Ryan is not personally involved in the company's sales. 20. Judith Pacileo is the former manager of the Meadville branch of R.E. Michel Company, having served in that capacity for approximately 46 years until June, 1993. a. R.E. Michel is a wholesale distributor of heating, air conditioning, and refrigeration parts, equipment, and supplies. (1) The goods sold by R.E. Michel were geared more toward residential than commercial usage. (2) R.E. Michel Company's Meadville store has business hours from 8:00 a.m. to 4:30 p.m., Monday through Friday and Saturdays from 8:00 a.m. to 12:00 p.m. b. As Manager of the Meadville branch, Pacileo managed the branch, worked the counter, and did ordering. c. Pacileo became acquainted with Armand Zangrilli through Zangrilli's patronage of the Meadville branch of R.E. Michel Company. d. To purchase from R.E. Michel Company, Zangrilli had to be affiliated with a company. (1) R.E. Michel Company will not sell to individuals. Zangrilli, 92- 036 -C2 Page 42 (2) Zangrilli had an account in his name with the Pittsburgh branch, but the Meadville branch only had an inactive or old account in Zangrilli's name and it could not be accessed by the computer. e. Zangrilli indicated that he was affiliated with A&D. (1) Zangrilli told Pacileo that he was the owner of A&D. (2) In a conversation with Pacileo, Zangrilli referenced "A&D" as "Armand and Donna ". (3) Zangrilli had conversations with Pacileo regarding A&D's jobs. (4) Pacileo also had dealings with Donna Luke, who Pacileo understood to be Zangrilli's wife. f. The first purchase made by Zangrilli which Pacileo recalls was in late 1990 or early 1991, for shop towels. (1) This was a product that R.E. Michel did not ordinarily sell in large quantities, and Zangrilli bought an unusually large number of boxes of them. (2) Zangrilli stated that this purchase was for his trucks in Pittsburgh. g. Approximately at the end of 1992 A&D had a charge account, for which A &D used a Conneaut Lake address. (1) Armand Zangrilli was still making the purchases for A&D at this time. (2) Armand Zangrilli brought checks in A&D's name to Pacileo to make payments for A&D. h. Zangrilli's purchases for A&D from R.E. Michel Company included furnaces and related sheet metal products for furnace installation, air conditioning equipment, and residential water heaters. (1) Most of these units were residential as opposed to commercial. (2) Occasionally, the Tempstar furnaces would be delivered to the job, but most often Armand Zangrilli would pick them up. (3) Sometimes Donna Luke would pick things up. Zangrilli, 92- 036 -C2 Page 43 i. A&D provided a certificate of tax exemption to R.E. Michel Company. 21. Michael Reilly is the former majority stockholder of Safety Warehouse, Inc. trading as Safety First Supply, which until 1993 was a distributor of safety equipment products such as safety glasses, hard hats, respirators, and gloves. a. A&D placed five orders with Safety First between 08/23/89 and 10/08/91 (I.D. 21). (1) Armand Zangrilli is indicated as having placed two of the five Orders for A&D (I.D. 21, pages 8 -9 and 10 -12) . (2) The other orders are indicated as having been placed by Donna Luke (I.D. 21, pages 1 -3, 4 -5, 6- 7) . (3) Donna Luke is indicated as having picked up two of these orders (I.D. 21, pages 6, 8). (4) Armand Zangrilli is indicated as having picked up part of Order No. 103478 (I.D. 21, page 2), the remainder of which was later cancelled by Donna Luke (I.D. 21, page 1). b. Reilly has not met and does not know Zangrilli or Luke. 22. Brian William Swager is President of B.M. Kramer and Company, Inc. ( "B.M. Kramer "), which is a distributor of industrial pipe valves and pipe fittings. a. A&D placed four (4) orders with B.M. Kramer between September, 1989 and July, 1991 (I.D. 22). (1) One of the orders is indicated as having been placed by Armand Zangrilli (I.D. 22, pages 7 -8, 12) . (2) Two of the orders are indicated as having been placed by Donna Luke (I.D. 22, pages 3 -4, 10, 5 -6, 11) . (3) Donna Luke is indicated as having picked up the four orders (I.D. 22, pages 9, 10, 11, 12). (4) All of the orders are for commercial items. c. Kramer personally had dealings with Armand Zangrilli on several occasions. Zangrilli, 92- 036 -C2 Page 44 23. David Oliver is a collection coordinator for the BP Oil Company, having served in that capacity for eleven (11) years. a. Armand Zangrilli has a charge account with BP Oil Company for the purchase of gasoline and other products produced by BP Oil Company. (1) Some of the purchase tickets on Zangrilli's account are signed by the name "Donna Luke," and some of the purchase tickets are signed with Zangrilli's name. 24. Edward W. Preskar is employed by the Pittsburgh School District as the Director of Facilities, having fulfilled the duties of this position since approximately 1989. a. From 1989 to early 1992, the PBOPE owned approximately 125 buildings. (1) Preskar estimates that there are approximately 12,000 requests for repairs or maintenance which come through his office each year. (a) Approximately one -third of these requests are of an emergency nature and two- thirds are routine requests. (2) Repairs required by the Allegheny County Health Department would be made quickly, because the Health Department has the authority to close a school for uncorrected violations. (a) There have been occasions where Preskar received Health Department reports on more than one school on the same day. b. The trade personnel are within Preskar's chain of command and Preskar indirectly supervises them. (1) The front line supervisor for the trade personnel is the Chief of Maintenance, who presently is John Dyer, and formerly was Charles McShane. (2) During the relevant period from late 1989 through early 1992, Preskar relied upon the Chief of Maintenance to run the South Side operation, with Preskar personally going to the Service Center approximately once per month, usually to confer with the Chief of Maintenance. c. The Trades Foreman is responsible for scheduling the work Zangrilli, 92- 036 -C2 Page 45 of the group of tradesmen under his direction, organizing the work orders, providing technical help and backup to those workers, and expediting and ordering material necessary to complete the repair orders given to those respective foremen. d. A Trades Foreman has the authority to select vendors and to order and obtain products. (1) The Plumber Foreman is given this authority because of his expertise. (2) From 1989 to January of 1992, Trades Foremen could use their knowledge and discretion in placing orders for materials under one thousand dollars. e. On January 6, 1992, Preskar met with Armand Zangrilli, who was accompanied by his Attorney Albert Zangrilli, Jr. (1) The purpose of the meeting was to hear Armand Zangrilli's response to allegations pertaining to purchases of materials from ADAM and A&D, with which companies it was rumored that Armand Zangrilli had some relationship (I.D. 42). (2) Armand Zangrilli indicated that A&D and ADAM were being used for the purchase of materials used by the plumber tradesmen. (3) Preskar asked Zangrilli what his relationship was to the person or persons who owned these companies. (a) Armand Zangrilli's response to the question was "She is a friend of mine." (I.D. 42). (b) Preskar did not specifically ask Armand Zangrilli if he was married to Donna Luke. (4) Preskar asked Armand Zangrilli, "What is your relationship to these companies, and what is your interest ?" (a) Armand Zangrilli's response was that he did not have an interest in these companies. (5) Armand Zangrilli had a large sheaf of work orders with him, and stated that he could demonstrate where all of the material ordered for these work orders had been placed in the schools. (6) Preskar made notes of the meeting immediately Zangrilli,, 92- 036 -C2 Page 46 following the meeting, and subsequently issued a formal memo dated 1/16/92 of what had taken place at the meeting (I.D. 42). f. Preskar has not seen any documentation that Zangrilli requested or ordered particular supplies to be purchased from A&D or ADAM. 25. Ernest B. Miller is employed as a "Storekeeper I" by the PBOPE, having served in that capacity since 1969. a. Miller reports to Kruse within the chain of command under McConachie, Director of Purchasing. b. Miller's duties are to ship, receive, and fill in orders for materials. (1) Miller works with all of the trades and the custodians. c. Miller orders and maintains the warehouse stock for the trade groups. (1) Stock items are ordered through a different process than non -stock items. (a) Stock items are ordered on a "Purchase Order" form, which is different from a Maintenance Materials Requisition Form. (b) Miller personally prepares the purchase orders for stock items. (c) A purchase order number is assigned by an individual other than Miller. (d) Miller receives his copies by mail. (2) "Wipe rags" are stock items. (a) Industrial wipes, as opposed to "wipe are not stock items. rags" (3) Pumps are not maintained in warehouse stock for the plumbers or steamfitters. (4) Prior to January, 1994, Miller was assisted in the storeroom by Mr. Willard Baxter. (a) Baxter's duties included unloading trucks, filling orders, and putting away materials. Zancrilli, 92- 036 -C2 Page 47 (5) Miller did not personally check to see that materials from A&D and ADAM were delivered. (a) Initially Miller testified that Baxter unloaded materials and that Miller was not allowed to pick up anything due to heart surgery. (b) Miller subsequently testified that everything purchased from A&D or ADAM was delivered and received by the PBOPE. (c) Miller subsequently acknowledged that he did not personally check all of the materials received at the Service Center. d. When a tradesman needs an item which is not maintained in warehouse stock, the purchase is documented by a Maintenance Materials Requisition Form also known as the "DBA 121 ". (1) Each purchase is assigned a purchase order number with a release number. (a) Miller states that his responsibilities included issuing these numbers. (b) Miller issued many of these numbers for all trade groups. (c) Kruse told Miller to stop giving out "RR" numbers. (d) Miller states that trades people were not permitted to assign release numbers or fill out suppliers. (1) Miller testified that a tradesman who requested an item did not request a particular supplier. (2) Miller states that frequently a purchase would be completed before a purchase order number was assigned to it. (3) A tradesmen could purchase an item directly and bring the packing slip to Miller for preparation of the Maintenance Materials Requisition Form after the materials had already been obtained. Zangrilli, 92- 036 -C2 Page 48 (a) For these purchases, Miller states that he got the information for the Maintenance Materials Requisition Forms from the tradesmen. (b) Miller states that this procedure was followed frequently and by all trade groups between 1989 and 1992. (c) This procedure was not limited to emergencies. e. All of the 123 Maintenance Materials Requisition Forms enumerated on Investigative Division Exhibit 28 -A are for purchases from ADAM, between 10 -18 -90 and 12 -16 -91 (I.D. 28 -A) . (1) Of the 123 Maintenance Materials Requisition Forms enumerated on Investigative Division Exhibit 28 -A, all but two are in Miller's handwriting, specifically I.D. 28 -117 and I.D. 28 -160. (2) Miller stated that at the time he prepared these documents, he was not familiar with ADAM and was not aware of whose company it was. (3) Miller testified that McShane specifically directed Miller to give out each of the 121 orders to A&D enumerated on I.D. 28 -A which are in Miller's handwriting. (a) Of the .121 Maintenance Materials Requisition Forms enumerated on I.D. 28 -A which bear Miller's handwriting, 117 forms were prepared after McShane's last day on the job, and 65 of those were prepared after McShane's death. (b) Upon further questioning as to whether McShane was not already dead when some of these forms were prepared, Miller stated that he could not remember whether McShane gave him specific directions on these forms. (c) Miler testified that if McShane was dead when these documents were prepared, Miller could not recall another person who would have given him directions to prepare these forms. (d) Miller stated that he could not recall any of these orders being brought to him by tradespeople. f. Armand Zangrilli brought packing slips to Miller for Zanarilli, 92- 036 -C2 Page 49 g• preparation of Maintenance Materials Requisition Forms. (1) Miller initially testified that Armand Zangrilli brought him packing slips for Miller to prepare Maintenance Materials Requisition Forms. (2) After being questioned about the forms enumerated on Investigative Division Exhibit 28 -A, Miller subsequently stated that he had no specific recollection of whether Armand Zangrilli had brought packing slips to Miller for materials that had already been obtained to obtain a purchase order number. (3) Miller stated that Armand Zangrilli never brought him packing slips from ADAM. Miller acknowledged that Donna Luke would bring him packing slips. (1) When asked if he actually saw the materials for these packing slips, Miller stated that Baxter unloaded materials, and that Miller was not allowed to pick up anything because of his heart surgery. h. Miller stated that when a tradesman would purchase materials directly, Miller would not receive the packing slip for two or three days or as much as a week later. i. All of the approximately 218 Maintenance Materials Requisition Forms enumerated on Investigative Division Exhibit 29 -A are for purchases from A&D, between 8/89 and 12/91 (I.D. 29 -A). (1) Of the 218 Maintenance Materials Requisition Forms enumerated on Investigative Division Exhibit 29 -a, all but one, I.D. 29 -229, were prepared by Miller. (2) Miller stated that at the time these documents were filled out, he did not know who owned A&D. (3) Miller testified that he guessed McShane picked the vendor on these purchases. (a) Of the approximately 217 Maintenance Materials Requisition Forms enumerated on I.D. 29 -A which bear Miller's handwriting, 77 were prepared after McShane's last day on the job, and 43 of those were prepared after McShane's death. Zanarilli, 92- 036 -C2 Page 50 j• Miller repeatedly changed his testimony regarding instructions from McShane to purchase from A&D /ADAM. (1) Miller initially testified that he did not remember whether McShane gave him a general direction to purchase from Donna Luke or whether this was done for each purchase. (2) Miller then testified that he did recall being told by McShane several hundred times to make purchases from A&D. (3) When questioned further as to whether this happened for the forms dated 1991, Miller testified that he didn't remember the dates but that McShane would bring Donna Luke over and Miller would give her the order. (a) Miller stated that he could not remember whether this was done on each and every occasion or just some occasions. (4) Miller then stated that McShane gave him direction on specific purchases on a "pretty regular basis ". (5) When asked whether McShane would have given such directions to Miller in 1990 and 1991, when these forms are dated, Miller responded affirmatively for as long as McShane was there until he died. k. Miller stated that he could not recall whether the Maintenance Materials Requisition Forms enumerated in Exhibits 28 -A and 29 -A were completed after the materials had been purchased. 1. Miller stated that he learned that A&D and ADAM were owned by Donna Luke at some point after the Maintenance Materials Requisition Forms in Exhibits 28 -A and 29 -A were filled out. m. Miller did not know Donna Luke and Armand Zangrilli were married until he was so informed By the investigators of the SEC. n. The Pittsburgh School District at one time purchased wipe rags, a stock item, directly from Action Supply Company. (1) Subsequently, the School District purchased these wipe rags from A &D. Zanarilli, 92- 036 -C2 Page 51 (2) Miller states that he had to stop buying from Action Supply because it moved outside the City and he was directed to buy from within the City. o. When the wipe rags were purchased through A&D, Action Supply continued to supply the rags and shipped them directly to the School District (I.D. 17). (1) On 04/03/90, the PBOPE placed purchase order no. 140074 with A&D for 1,000 pounds of wiping rags at the price of $1,700 (I.D. 29- 397/398; R -9, page 9). (a) The purchase order indicates the price was quoted "per Donna ". (b) One copy of the purchase order bears the name of Kruse, Miller's superior (R -9, page 9). (c) On 04/09/90, Action Supply shipped 1,000 pounds of wiping rags directly to the PBOPE, and billed A&D for these rags in the amount of $1,490.00 (I.D. 17 -7). (1) There is no name or number indicated in the box labelled "Purchase Order # ". (d) A&D's invoice to the PBOPE for these wiping rags is dated 4/10/90 and is in the amount of $1,700.00 (I.D. 29- 396/399). (1) A&D's profit from this sale was $210.00. (2) On 06/15/90 Action Supply shipped 1,000 pounds of wiping rags directly to the PBOPE, and billed A&D for these cloths in the amount of $1,490.00 (I.D. 17 -9) . (a) "Ernie" is indicated as having placed this order. (b) Purchase order no. twelve days later, with A&D for 1,000 $1,700.00 (I.D. 29- The purchase order quoted "per Donna ". 146701 of the PBOPE dated 06/27/90, placed an order pounds of wiping rags for 557/559; R -9, page 12). indicates the price was One copy of the purchase order bears the name of Kruse, Miller's superior (R -9, page 12). Zanarilli, 92- 036 -C2 Page 52 (e) A&D's invoice to the PBOPE for these wiping rags is dated 7/05/90 and is in the amount of $1,700.00 (I.D. 29- 556/558). (1) A&D's profit from this sale was $210.00. (3) On 10/02/90, the PBOPE placed purchase order no. 154606 with A&D for 1,000 pounds of wiping rags at the price of $1,700. (I.D. 29- 675/677; R -9, page 13) . (a) The purchase order indicates the price was quoted "per Donna ". (b) One copy of the purchase order bears the name of Kruse, Miller's superior (R -9, page 13). (1) Miller stated that he is familiar with Kruse's handwriting and that the signature of Kruse's name on this form is not Kruse's handwriting. (a) Miller stated the name was signed by office staff (See Finding 25p). (b) The initials "B.T." next to Kruse's name stand for Kruse's maiden name "Billie Talak." (c) On 10/04/90, Action Supply shipped 1,000 pounds of wiping cloths directly to the PBOPE, and billed A&D for these cloths in the amount of $1,490.00 (I.D. 17 -11). (1) "Ernie" is indicated as having placed this order. (d) A&D's invoice to the PBOPE for these wiping rags is dated 10/03/90 and is in the amount of $1,700.00 (I.D. 29- 674/676). (1) A&D's profit from this sale was $210.00. (4) On 01/25/91, Action Supply shipped 1,000 pounds of wiping rags directly to the PBOPE, and billed A&D for these rags in the amount of $1,490.00. (I.D. 17 -1) . (a) "Ernie" is indicated as having placed this order. Zanarill &, 92- 036 -C2 Page 53 (b) Purchase Order No. 165027 of the PBOPE dated seven days later, 02/01/91, placed an order with A&D for $1,000 pounds of wiping cloths for $1,700. (I.D. 29 -789; R -10, page 1). (c) The purchase order indicates the price was quoted "per Donna ". (R -10, page 1) (d) One copy of the purchase order bears the name of Kruse, Miller's superior (R -10, page 1). (1) The initials next to Kruse's name, "B.K." stand for "Billie Kruse." (e) A&D's invoice to the PBOPE for these wiping rags is dated 2/05/91 and is in the amount of $1,700.00 (I.D. 29 -788). (1) A&D's profit from this sale was $210.00. (5) On 04/22/91, Action Supply shipped 425 pounds of wiping rags directly to the PBOPE and back - ordered 525 more pounds for the PBOPE, and billed A&D in the amount of $633.25 (I.D. 17 -3, 4). (a) The "Customer P.O. Number" is "Ernie 0418." (b) Purchase order No. 170887 of the PBOPE dated four days later, 04/26/91, placed an order with A&D for 1,000 pounds of wiping cloths for $1,700 (I.D. 29- 928/932; R -10, page 7). (c) The purchase order indicates the price was quoted "per Donna ". (d) One copy of the purchase order bears the name of Kruse, Miller's superior (R -10, page 7). (e) A&D's invoice to the PBOPE for these wiping rags was dated 4/29/91 (I.D. 29 -931). (1) A &D charged the PBOPE $1,700 for these wiping rags. (a) A &D's profit from this sale was $210.00. (6) On 10/14/91, Action Supply shipped 1,000 pounds of wiping cloths directly to the PBOPE, and billed A &D for these cloths in the amount of $1,490.00 (I.D. 17 -5) . Zanarilli, 92- 036 -C2 Page 54 (a) "Ernie" is indicated as having placed this order. (b) Purchase Order No. 184853 of the PBOPE dated four days later, 10/18/91, placed an order with A&D for 1,000 pounds of wiping cloths for $1,700 (I.D. 29- 1079/1081; R -10, page 13). (c) The purchase order indicates the price was quoted "per Donna ". (R -10, page 13). (d) One copy of the purchase order bears the name of Kruse, Miller's superior (R -10, page 13). (e) A&D's invoice to the PBOPE for these wiping rags is dated 10/22/91 and is in the amount of $1,700.00 (I.D. 29- 1078/1080). (1) A&D's profit from this sale was $210.00. (7) From 4/03/90 through 10/18/91, there were no invoices from A&D to the PBOPE for wiping rags other than those set forth in subparagraphs 1 -6 immediately above. (8) Miller states that he probably ordered the rags from A&D, but that he did not order them from Action Supply. (a) Miller states that he did not order the rags from Action Supply for A&D. (b) Miller states that A &D called Action Supply and Action Supply sent the rags to Miller. (c) Miller states that everything was shipped from Action Supply with his name on it. (d) Miller states that Action Supply put his name down as the receiver. (9) Miller knew John Black to be a salesman employed by Action Supply Company. (10) Miller states that he does not recall a conversation among John Black, Armand Zangrilli, and Miller regarding A &D's orders from Action Supply Company. (See Finding 28d). p. Miller stated that when Billie Kruse was not in the office, office staff members would sign the purchase Zangrilli, 92- 036 -C2 Page 55 orders with Kruse's name. (1) Miller states that Kruse knew of and authorized this procedure. (2) Miller states that McConachie also signed the original copy of purchase orders. (a) None of the copies of the purchase orders referenced in Finding 25 o above bear McConachie's name. Miller states that he was told by Kruse to use minority and female vendors if he could. (1) Miller stated that at the time he was told to bring minority and female companies into the sales process, he knew that A&D was owned by Donna Luke. (a) Miller had previously testified twice that at the time he was preparing the Maintenance Materials Requisition Forms enumerated on Z.D. 29 -A, he did not know who owned A&D. (See Findings 25i(2), 2 5 (1)) . r. A&D's delivery time was comparable to the rest of the vendors. s. Miller states that in the past, he could place an order without comparing prices. (1) During the relevant time period from August of 1989 through January of 1992, orders over $1,000 had to be approved by Miller's superiors. t. Miller states that Donna Luke was frequently at the Service Center soliciting orders. u. Miller's testimony was contradictory and not credible. (1) Miller testified that all items ordered from A&D and ADAM were received by the PHOPN,_ but acknowledged that he did not personally check all of the materials received at the Service Center. (See Findings 25c and 25g). (2) Miller gave conflicting testimony regarding alleged directions by McShane to order from A&D. (See Finding 25j). (3) Miller testified that McShane directed purchases to Zangrilli, 92- 036 -C2 Page 56 A&D and ADAM which purchases occurred after McShane was dead. (See Findings 25e and 25i). (4) Miller gave contradictory testimony regarding whether he knew who owned A&D at the time he prepared Maintenance Materials Requisition Forms for purchases from A&D. (See Findings 25i(2), 25(1), 25q) . 26. Willard Baxter is employed by the PBOPE as a "Store Clerk III," having served in that capacity since 1973. a. Baxter's duties are to receive, distribute, and ship material, fill orders, and run a high lift and power jacks. b. Baxter plays no role in ordering materials for the School District. (1) Baxter never played any role in filling out or processing Maintenance Materials Requisition Forms. c. Baxter and Miller are the individuals at the Service Center who are primarily responsible for receiving materials. (1) Baxter and Miller unload and move materials, with Baxter doing most of the heavy work due to Miller's health condition. (2) Stock items are placed in stock. (3) The non -stock materials are forwarded by Baxter and Miller. d. Miller handles the paperwork for materials received. e. Baxter is familiar with A&D, but not ADAM. (1) Baxter helped Donna Luke unload deliveries. ' (2) Deliveries from A&D came in a car. (a) Baxter did not observe any markings on the car. (3) Baxter states that Zangrilli did not make deliveries to the PBOPE. f. Zangrilli introduced Baxter to Donna Luke. Zangrilli, 92- 036 -C2 Page 57 (1) Baxter did not know Donna Luke was Zangrilli's wife. 27. Mitchell J. Hovanec is employed by the PBOPE as a plumber, having served in that capacity for nine and one half years. a. From August of 1989 until January of 1992, Zangrilli as plumber foreman was Hovanec's immediate supervisor. b. From August of 1989 until January of 1992 while Zangrilli was the tradesforeman, Hovanec did not personally make any purchase from A&D or ADAM. c. Hovanec first became familiar with these companies when Rase showed Hovanec a document with A&D or ADAM on it. (1) Hovanec testified that when he first became familiar with these companies he thought the owner was Donna Luke. (2) At this time, Hovanec thought Donna Luke was Zangrilli's girlfriend. (3) Hovanec did not know Zangrilli and Luke were married. d. Hovanec purchased a gas valve and burner assembly for his own personal use from Benjamin Trew Company through A&D. (I.D. 23C). (1) Hovanec used A&D's account at Trew Company at the suggestion of Armand Zangrilli. (a) Hovanec says that Zangrilli told Hovanec that Hovanec could talk to Donna and order it. e. Hovanec purchased an air conditioning unit through A&D. (1) Hovanec told Investigator Bender that he dealt with Zangrilli on this unit. (2) Hovanec told Investigator Bender that he .went through Zangrilli because Zangrilli could get a better price than Hovanec could have gotten himself. (3) Zangrilli told Hovanec what kind of unit to get to meet his needs. (4) Hovanec tendered payment for the unit to Zangrilli. Zangrilli, 92- 036 -C2 Page 58 (a) The payment was a check payable to A&D. (b) Hovanec states he gave the check to Zangrilli to give to Donna Luke. 28. John Black is employed as a salesman for Action Supply Products, Inc. ( "Action Supply "), having served in that capacity for ten years. a. From approximately 1986 through the beginning of 1990, Action Supply sold wiping rags directly to the PBOPE. (1) Wiping rags are a bid item. (2) Black was Action Supply's salesman who handled these sales to the PBOPE. b. In early 1990, while making a routine sales call, Black was informed that the PBOPE had a new policy preferring companies within the City of Pittsburgh. (1) Ernie Miller told Black that A&D was going to supply these rags to the School District. (2) Miller told Black that Armand Zangrilli owned A&D. (a) Miller initially told this to Black in a telephone conversation in which Miller told Black that "A&D" stood. for Armand and Donna. (b) Miller also told this to Black in Zangrilli's presence. c. Black attempted to contact A&D for the purpose of supplying A&D with the rags that A&D would sell to the School District. (1) On numerous occasions, Black attempted to telephone A&D at its Pittsburgh telephone number and reached an answering machine. (2) On one occasion, a man answered at A&D's telephone number. (3) Approximately one month after learning that A&D would be supplying wiping rags to the PBOPE, Black got a verbal release from someone at A&D to ship the first shipment of rags to the PBOPE. (a) A verbal release is the verbal authorization for a purchase using the name of the person Zangrilli, 92- 036 -C2 Page 59 g• placing the order, rather than a purchase order number. (b) Black recalls that the person who gave the verbal release for the first shipment was a woman. (c) Action Supply shipped the first order directly to the PBOPE's Service Center. (d) Action Supply ships within five (5) days of getting a release. d. Black went to the Service Center to talk to Miller about the delay and the difficulty he had experienced in reaching someone at A&D. (1) While Black met with Miller, Miller introduced Black to Zangrilli. (a) Zangrilli authorized Black to ship A&D's future orders for wiping rags on Ernie Miller's verbal release. (1) Black was to call Miller periodically to determine whether A&D was the successful bidder on the wipe rag business as rags were needed. e. The invoices from Action Supply to A&D for the PBOPE's wipe rags indicate the rags were shipped directly to the PBOPE on the verbal release of Ernie Miller. (I.D. 17). f. Action Supply charged A&D the same price for the rags that Action Supply had charged the PBOPE when it had dealt with the School District directly, which was $1,490 per 1,000 pounds. (See Findings 16d, 16f). (1) A&D charged the PBOPE $1,700 per 1000 pounds for these wiping rags that Action Supply delivered to the PBOPE, making a profit of $210.00 for every 1,000 pounds. (See Finding 25j). • Black's testimony is credible. (1) Action Supply made the same profit whether it sold wiping rags directly to the PBOPE or through A&D. 29. Suzanne Sadowski is employed as a secretary for Conroy -Starr and Associates. Zangrilli, 92- 036 -C2 Page 60 a. Sadowski took orders from A&D. (1) The orders were placed by telephone. (2) All of the orders placed with Sadowski by a an identifying himself as Armand b. Sadowski's notes for certain order(s) for Zangrilli's telephone number at the instructions as to when to contact him (I.D c . were placed Zangrilli. A&D include PBOPE and . 18 -A). Sadowski was present when Zangrilli picked up orders for A&D. (1) Zangrilli paid by check or cash when he picked the materials up for A&D. (2) Donna Luke also picked up orders for A&D, and tendered checks as payments. d. A&D provided Conroy -Starr with a sales tax exemption certificate signed with the name Donna Luke as president. 30. Investigative Division Exhibit No. 47, is a listing of the plumbers (other than Zangrilli) who worked at the PBOPE during the period from 1989 to 1992, namely Bigley, Brumfield, Gillenberger, Hovenac, Jackson, Johns, Mansmann, McGee, McMahon, Seljak, Stonehouse, and Conley. a. During the relevant period, Conley only worked sporadically, for a few months at a time, between the following dates: 08/89 - 10/19/89; 10/30/89 - 04/26/90 (I.D. 47) . b. The other ten (10) plumbers had no business dealings with A&D or ADAM. (1) These individuals did not personally make any purchases from either A&D or ADAM. (2) These individuals, to the best of their recollection, never picked up any materials supplies or goods from either A&D or ADAM. (3) One of the plumbers, Seljak, did sign one invoice from Trew Company, Inc., as the recipient of materials sold to A &D (I.D. 23B -20). (a) Seljak was a temporary plumber from approximately 1987 through 1990 and became a permanent plumber in 1991. Zangrilli, 92- 036 -C2 Page 61 (b) Seljak does not recall picking these materials up. (c) Seljak does not recall Trew Company. (d) Seljak did on various occasions, pick up orders at supply companies at the direction of Armand Zangrilli. d. During the time Zangrilli was the plumber foreman, the procedure was to use materials in stock before going to purchase an item directly from a vendor. (1) The plumber would use materials maintained in his van, and then replace those materials. (2) The plumber would get other in -stock materials by going to Rase for the necessary paperwork. (3) Materials that weren't in stock were obtained from a vendor using the purchase order number. (4) Seljak testified that the paperwork would not necessarily name a vendor. (a) The plumber foreman (Zangrilli) gave the plumber the authority to go to a particular store. e. Dudley Brumfield has been employed as a plumber for the PBOPE since approximately June of 1979. (1) When asked if he had business dealings with A&D or ADAM, Brumfield testified that the foreman usually took care of "business dealings." 31. John Nee was employed by the PBOPE as a plumber laborer for twenty -four years, until 1992. a. As the plumber foreman, Zangrilli was Nee's immediate supervisor. b. Nee did not have the power to purchase materials for the plumbers or to order materials from any vendor. c. In the course of his employment as part of his job duties, Nee frequently picked up materials from vendors. (1) Nee had no knowledge as to how the orders were placed for the materials he picked up. Zangrilli 92- 036 -C2 Page 62 (2) Usually it was Armand Zangrilli who directed Nee to pick up materials. (3) Some of the items which Zangrilli directed Nee to pick up for A&D were under emergency service. d. At Zangrilli's direction, Nee picked up supplies for A&D from F &L Pump Service Inc. (1) F &L's Invoice No. 10405 (I.D. 16 -4) indicates that John Nee picked up two (2) pumps for A&D. (2) Zangrilli is indicated as having placed this order for A&D (Finding 41(e)). (3) Nee was directed by Zangrilli to pick up these materials for A&D in the course of Nee's employment as part of Nee's job duties. e. At Zangrilli's direction, Nee picked up materials for A&D from Construction Tool Service. (I.D. 20, page 11). (1) Nee was directed by Zangrilli to pick up these materials for A&D in the course of Nee's employment as part of Nee's job duties. f. At Zangrilli's direction, Nee frequently picked up materials for A &D from Trew Company, Inc. (1) At Zangrilli's direction, Nee picked up at least 13 orders for A&D from Trew Company, Inc. (I.D. 23B, pages 16, 23, 25, 26, 30, 31, 32, 33, 34, 37, 39, 40, 43) . (a) Nee was directed by Zangrilli to pick up these materials for A&D in the course of Nee's employment as part of Nee's job duties. (b) For at least 9 of these orders, Zangrilli is indicated as having placed the order for A&D. (I.D. 23B, pages 16, 23, 25, 26, 32, 34, 37, 39, 43) . (Finding 15(g)). • g• All of the materials which Zangrilli directed Nee to pick up for A &D were taken by Nee to the Service Center. (1) Nee left these materials in the plumbers' section with the packing slips attached. (2) Nee also picked up materials for some of the other PBOPE shop foremen. Zangrilli, 92- 036 -C2 Page 63 32. Robert P. Caruso is the Deputy Executive Director for the State Ethics Commission (SEC), having served in that capacity since August, 1990. a. Caruso has been employed by the SEC since August, 1982. (1) From 1985 to August 1990, Caruso served as Director of Investigations of the SEC. (2) From 1982 to 1985 Caruso was a special investigator for the SEC. b. Prior to being employed by the SEC, Caruso was employed by Clearfield County for approximately two years as county detective and for approximately six (6) years as a parole agent. c. Caruso has a Bachelor of Science degree degree in criminology. d. Caruso has additional training in techniques and practices, including the Course on tracing funds and calculating worth. (1) (2) and a Master's investigative Link Analysis individual net e. Caruso had general oversight responsibility for the investigation of Armand Zangrilli, as well as specific duties. f. In the course of the investigation of Armand Zangrilli, Caruso reviewed documents from the PBOPE consisting of payment records and cancelled checks which were paid to A&D and ADAM. The payments to A &D were dated from 08/21/89 through March 9, 1992 (I.D. -2A, 2B, 2C, 2D, 2E, 48) . (a) The total amount paid to A&D was $160,472.08. (I.D. 48) (b) On. a yearly basis, these payments by the PBOPE to A&D totalled: $16,428.32 in 1989; $79,600.16 in 1990; $63,818.20 in 1991; and $625.40 in 1992. The payments to ADAM were dated from October 24, 1990 through March 9, 1992 (I.D. -3A, 3B, 3C, 3D, 48) . (a) The total amount paid to ADAM was $70,473.90. Zauarilli, 92- 036 -C2 Page 64 g• (b) On a yearly basis, these payments by the PBOPE to ADAM totalled: $12,312.20 in 1990; $57,608.70 in 1991; and $553.00 in 1992. (3) The combined total of payments to A&D and ADAM by the PBOPE from 08/21/89 through March 9, 1992 was $230,945.98. A&D Mechanical maintains a checking account at Marine Bank, Erie, PA. (1) Luke is the sole signatory for this account. (2) Caruso reviewed this account (I.D. 46) for the period of August, 1989 through October, 1992. (I.D. 49). (3) The total major deposits made into the account were $338,667.70. (I.D. 49). (a) At least $223,784.30 of these deposits were PBOPE funds. (1) The one hundred twenty (120) checks from the PBOPE constituting I.D. 2A -2E were deposited directly into this account in the total amount of $160,472.08. (2) Forty -six (46) checks from ADAM's account (I.D. 44) were deposited into this account in the total amount of $68,154.00 (I.D. 49), of which at least $63,312 came from the PBOPE. (Finding 32(h) (3) (a) (1)) . (b) Two hundred twelve (212) checks from private individuals, as opposed to business entities, were deposited into this account in the total amount of $68,114.69. (I.D. 49). (c) Thirty -three (33) checks from Donna Luke's personal account (I.D. 45) were deposited in this account, in the total amount of $23,605.00 (I.D. 49). (d) Two (2) of Armand Zangrilli's payroll checks from the PBOPE were deposited in this account, in the total amount of $1,159.93. (I.D. 49). (4) Payments totalling $127,774.89 were issued to the following thirteen (13) vendors: Trew Company; R.E. Michel Co; Trumbull; Action Supply Products; Meyers Zanarilli, 92- 036 -C2 Page 65 Plumbing and Heating; Construction Tool Services; Conroy- Starr; F &L Pump Service; B.M. Kramer Company; Noftz Sheet Metal; Safety First; Morris Paper, and Wilson Building Supply. (a) Payments totalling approximately $7,700 were made to eleven (11) other vendors. h. Caruso's review of Account No. 4155 -2960 in the name of Donna G. Luke d /b /a ADAM Specialty Supplies, Inc. (I.D. 44) covered the period of November, 1990 through October, 1992. (1) The signature authority was Donna Luke. (2) Total deposits were $75,315.68. (a) $70,473.90 of these deposits were the checks from the PBOPE in evidence as Exhibit I.D. 3A, 3B, 3C, and 3D. (3) Disbursements totalled $74,487.89. (I.D. 50). (a) Forty -six (46) checks were issued to A&D in the total amount of $68,154.00. (I.D. 50). (1) At least $63,312.22 of these funds emanated from the PBOPE. (a) Only $4,841.78 of the total deposits to this account were from sources other than the PBOPE ($68,154.00 less $4,841.78= $63,312.22). (b) There were no identifiable disbursements to vendors. i. Caruso's review of Marine Bank Account No. 4136 -6114 in the name of Donna G. Luke (I.D. 45) covered the period of January 1, 1989 through October 15, 1992. (I.D. 51). (1) The signature authority is Donna Luke. (2) Total major deposits were $230,655.21. (a) One hundred twenty -four (124) checks from A&D payable to Donna Luke in the total amount of $93,590.16 were deposited in this account. (I.D. 51). (b) Four (4) checks from ADAM payable to Donna Zangrilli, 92- 036 -C2 Page 66 j Luke in the total amount of $1,703.10 were deposited in this account. (I.D. 51). (c) Sixty - six (66) checks payable to cash and endorsed by Donna Luke in the total amount of $24,855.99 were deposited in this account. (I.D. 51) . (d) Eighty -two (82) of Armand Zangrilli's payroll checks from the PBOPE in the total amount of $48,029.74 were deposited and commingled with the other funds in this account. (I.D. 51). (e) Three tax refund checks payable jointly to Armand Zangrilli and Donna Luke in the total amount of $15,849.00 were deposited in this account. (I.D. 51). (f) Fifteen (15) checks from private individuals payable to Armand Zangrilli in the total amount of $4,790.25 were deposited in this account. (I.D. 51). (g) Fourteen (14) checks from the Pittsburgh Teacher's Credit Union payable to Armand Zangrilli in the total amount of $7,130.00 were deposited in this account. (I.D. 51). (3) Funds from Luke's account were used to pay obligations and expenses of Armand Zangrilli. (a) Deposits of Zangrilli's funds into this account exceeded the traceable funds disbursed on behalf of Zangrilli from this account. Caruso reviewed the A&D and ADAM checking accounts through October, 1992. (1) The last checks to A&D and ADAM from the PBOPE were issued March 9, 1992 (I.D. 48). (a) Without the PBOPE,funds, there was virtually no activity in ADAM's account. (b) Without the PBOPE funds, the amounts for the A&D account dropped off significantly. k. Zangrilli did not endorse checks from the PBOPE to A&D or to ADAM. 33. Robert Haffner is employed by the PBOPE as the painter Zangrilli, 92- 036 -C2 Page 67 foreman, having served in that 1993. a. Prior to September 7, 1993, Haffner PBOPE as the painter subforeman for years. b. The foreman and subforeman had the materials for the painters. (1) Haffner did most of the ordering. (2) The painters did not order anything (1) Haffner did not prepare these forms. capacity since September 7, was employed by the approximately seven authority to order e. Six Maintenance Materials Requisition Forms industrial wipes and dust masks from A&D and ADAM painters trade group from 1990 -1991 (I.D. 28 -195, 29 -334, 29 -450, 29 -468, and 29 -541). on their own. (a) All of the painters' requests for materials went through Haffner. c. For items not in stock, Haffner prepared Maintenance Materials Requisition Forms, took them to the Purchasing Department and gave them to Herb Hatfield or Neely Earl, who would contact the vendor. (1) Haffner would always sign the Maintenance Materials Requisition Forms which he prepared. d. From 1989 through 1992, Haffner was not familiar with A&D or ADAM. (1) Haffner did not direct any other person to make purchases from A&D or ADAM. ordered for the 28 -426, (2) Industrial wipes were available in the tool room or the storeroom at all times. (a) Ernie Miller was in charge of stock items. (b) Industrial wipes are not a stock item (Finding 25(b)(2)), but any painter could obtain wipes from the warehouse stock without any paper work or Haffner's involvement. f. Haffner does not recall Zangrilli ever ordering any items for the paint shop or the painters. Zangrilli, 92- 036 -C2 Page 68 34. Joseph Mitchell is employed as the electrical foreman for the PHOPE, having served in that capacity for approximately five years. a. Miller states that Miller gives Mitchell and the electricians whatever they need from stock. b. For items not in stock, Rase prepares the paperwork for the electricians. (1) Mitchell states that for the past couple of years, foremen have been required to sign the Maintenance Materials Requisition Form on the line designated, "Required Approval." (a) Mitchell states that prior to that time, the foremen did not have to sign these Forms. c. Mitchell has heard of ADAM and A&D but did not personally make any purchases from either of them. d. The following Maintenance Materials Requisition Forms ordered materials from ADAM and A&D designating the electricians group: Numbers 327144 (I.D. 28 -10), 327645 (I.D. 28 -67) , 329073 (I.D. 28 -108) , 330057 (I.D. 28 -231) , 330709 (I.D. 28 -281), 320848 (I.D. 29 -22), 322789 (I.D. 29 -157), 323576 (I.D. 29 -185), 324186 (I.D. 29 -256), 324737 (I.D. 29 -339), 324884 (I.D. 29 -411), 328209 (I.D. 29 -419), 328349 (I.D. 29 -447), 328922 (I.D. 29 -512), 325241 (I.D. 29 -550), 325340 (I.D. 29 -564), 325771 (I.D. 29 -600), 325804 (I.D. 29 -615), 326213 (I.D. 29 -638), 329912 (I.D. 29 -808), and 331175 (I.D. 29 -936). (1) Mitchell did not make these particular purchases. (2) Ernie Miller's name appears on all of these Forms except for I.D. 29 -447, which does not bear any signature. e. The electricians group obtained industrial wipes from Ernie Miller. (1) The electricians group never purchased industrial wipes directly from a vendor. (2) The industrial wipes were in the warehouse. (3) Mitchell stated that industrial wipes were used by the different trade groups without regard to which group had ordered them. Zangrilli, 92- 036 -C2 Page 69 f. To Mitchell's knowledge Zangrilli did not order items for the electricians trade group. Mitchell met Donna Luke and saw her at the Service Center. g. (1) Mitchell did not advise Luke if he needed industrial wipes. 35. William H. Taylor is employed as the carpenter foreman for the PBOPE, having served in that capacity for approximately ten (10) years. a. Taylor's assistant, John Banaszewski, prepares the paperwork to acquire materials needed by the carpenters. b. Items which are not in stock are obtained by completing a Maintenance Materials Requisition Form and giving it to one of the buyers. (1) All of the carpenters would have to come to Taylor or Banaszewski under this procedure. (2) The foreman could recommend a vendor to the buyer, but could not dictate to the buyer. c. Taylor states that a recent change in the procedure requires that the Maintenance Materials Requisition Form be signed by the foreman or assistant foreman. d. Taylor has never personally made any purchases from ADAM or A&D. (1) To Taylor's knowledge, the carpenters trade group has never purchased from ADAM or A &D. e. The following Maintenance Materials Requisition Forms ordered materials from ADAM and A&D, designating the carpenters' group: Numbers 327647 (I.D. 28 -63), 329920 (I.D. 28 -207), 332761 (I.D. 28 -449), 324740 (I.D. 29- 331), 324767 (I.D. 29- 370), 325176 (I.D. 29 -537), 329325 (I.D. 29 -706), 330711 (I.D. 29 -895), and 331491 (I.D. 29- 950) . (1) Taylor was not aware of and did not initiate these Requisition Forms. (2) These forms bear Miller's name. (3) Some of these forms ordered quantities of industrial wipes which the carpenters group would Zangrilli, 92- 036 -C2 Page 70 g• not use. (4) Taylor testified that everyone used the industrial wipes and that they were not specifically for the carpenters group to use. f. To Taylor's knowledge, Zangrilli did not order items for the carpenters. Taylor states that he did not receive reports as to how much his department was budgeted or the status of its purchases against the budget. 36. John Banaszewski is employed by the PBOPE as the subforeman for the carpenters group, having served in that capacity for approximately ten (10) years. a. Banaszewski does the ordering for the carpenters group. (1) All of the carpenters' requests for materials go through Banaszewski, who prepares the paperwork. (2) This same procedure applied from 1989 -1992. (3) To Banaszeweki's knowledge, Zangrilli did not do ordering for the carpenters group. b. To obtain materials which are not in stock, Banaszewski prepares the Maintenance Materials Requisition Form and turns it over to Neely Earl in the Purchasing Department (1) In preparing the Maintenance Materials Requisition Form, Banaszewski would indicate the item needed and, if he knew of the vendor which carried it, the name of the vendor. (2) Earl was not required to use the vendor recommended by Banaszewski. (3) Earl does all of the purchasing for the carpenters group. c. The Maintenance Materials Requisition Forms identified in Finding 35e were not prepared by Banaszewski. (1) At the time these Forms were filled out, Banaszewski was not familiar with ADAM or A &D. (2) Banaszewski did not authorize the purchase of any of the materials exhibited on these orders from A &D and ADAM. Zanarilli, 92- 036 -C2 Page 71 (3) To Banaszewski's knowledge, none of the people under him requested purchases of these items from A&D or ADAM. (4) Banaszewski is not aware of how these particular Forms were processed or these purchases made for his trade group. (5) Banaszewski states that the signatures on these forms look like Miller's handwriting. (6) Some of these purchases were for industrial wipes. (a) Banaszewski has never asked Miller to order industrial wipes. (7) The carpenters group has obtained wipes from the stockroom from Miller. (a) Miller always had industrial wipes in stock. (b) From August, 1989 through January, 1992 a carpenter could get those wipes from Miller without a requisition. 37. Richard Dillon is employed as the steamfitter foreman for the PBOPE, having served in that capacity for thirteen (13) years. a. When the steamfitters group needs materials from warehouse stock, the paperwork is prepared by Rase. (1) When Miller gave stock items to the steamfitters upon request, the order would subsequently come to Dillon for Dillon's approval. b. The pumps used by the steamfitters are not kept in stock. c. For materials which are not in warehouse stock, Dillon prepares the order form and gives it to Rase or Miller. (1) The steamfitters underneath Dillon report to Dillon when they need materials. (2) All requests for materials go through Dillon. d. Dillon is not familiar with A&D or ADAM and never personally made any purchases from them. (1) Dillon never directed or authorized any purchases to be made from A &D or ADAM. Zanarilli, 92- 036 -C2 Page 72 (2) Dillon has no knowledge or information as to purchases made from A&D or ADAM. e. During the relevant period from August, 1989, through January, 1992, the following supplies were ordered from A&D and ADAM, designated to be for the steamfitters group, without Dillon's authorization: (1) Nine (9) Armstrong pumps which cost the PBOPE $2,239.10 (I.D. 29 -161, 181, 584, 780, 947, 1093; 28 -171) . (a) Dillon is not familiar with the Model S25 Armstrong pump and has never ordered it. (b) Eight of these nine pumps were Model S25 Armstrong pumps. (2) Three (3) Gorman Rupp pumps which cost the PBOPE $1,602.82 (I.D. 29 -590, 642). (a) The steamfitters group never uses any Gorman - Rupp pumps. (3) Four (4) sump pumps which cost the PBOPE $864.00 (I.D. 29 -672). (4) Two (2) heavy duty submersible pumps which cost the PBOPE $417.06 (I.D. 29 -457). (5) Various types of gloves which cost the PBOPE $2,007.50 (I.D. 29 -414, 826; 28 -314). (6) Two (2) cases of drain waste cleaner and one (1) case of silicone gasket maker, which cost the PBOPE $335.00 (I.D. 28 -32). (7) Eighty -one (81) quantities of vis -queen which cost the PBOPE $3,928.50 (I.D. 29 -305, 349, 423, 505, 554, 576, 1090; 28 -18, 131). (a) Dillon ordered vis - queen, but not in the quantities reflected on these orders. (8) Eighty -four (84) boxes /cases of black liner rubbish bags which cost the PHOPE $3,444.00 (I.D. 29 -477, 528, 629, 722; 28 -276, 353, 454). (a) Dillon did not order these bags in the quantities reflected on these orders. Zanarilli, 92- 036 -C2 Page 73 (9) Twelve (12) boxes of heavy duty liners which cost the PBOPE $492.00 (I.D. 28 -58). (10) Twenty -one (21) cases of industrial wipes which cost the PBOPE $1,410.00 (I.D. 29 -318, 345, 804, 939; 28 -71, 413). f. Black plastic bags, vis- queen, and masks were used for asbestos removal. (1) There was not much asbestos removed during the relevant time period of August of 1989 through January, 1992. (2) Most of the asbestos removal occurred from 1983- 1985. (3) Miller had these items on hand approximately half the time and when he did not, would usually get them the same day. g. Each foreman was responsible for ordering materials for his own trade shop. h. The carpenters group has a departmental budget. (1) Materials ordered for the carpenters group are charged against the budget of the carpenters group. (2) Dillon does not check the budget for his department unless he is told that it is low. (3) Dillon is not aware of the charges that are made against his department's budget. (4) Charges could have been made against the carpenters group for items used by other trades. 38. Daniel Bender is employed by the SEC as a Special Investigator II. a. As a Special Investigator. for the State Ethics Commission, Bender was assigned to the investigation of Armand Zangrilli. b. Bender reviewed documents and records, including: Armand Zangrilli's payroll checks from the PBOPE; the checks from the PBOPE to A &D and ADAM; leave records for Armand Zangrilli as the plumber foreman of the PBOPE; documents relating to purchasing procedures of the PBOPE; all known invoices and requisitions for business transacted between Zanarilli, 92- 036 -C2 Page 74 the Pittsburgh School District and A&D and ADAM; and records of vendors who supplied A&D and /or ADAM. c. For Investigative Division Exhibits 30 through 35 Bender correlated vendor invoices for materials and supplies acquired by A&D with a subsequent sale to the PBOPE by either A&D or ADAM, to determine the resulting "profit" to A&D and ADAM. (1) Purchases from vendors were correlated to sales by A&D and ADAM to the PBOPE through the approximate dates and the product descriptions on the invoices and PBOPE requisitions. (2) In a given transaction, the materials ordered from a vendor may not have been the very materials sold to the PBOPE. (3) "Profit" to A&D and ADAM was calculated as the difference between the price paid to the vendor by A&D /ADAM and the price charged to the PBOPE for materials and supplies sold to the PBOPE by A&D and ADAM. (4) Investigative Division Exhibit 36 is a summary of these exhibits and Bender's calculation of total "profit" to A&D and ADAM. d. Investigative Division Exhibits 30 and 31 only include transactions where Bender determined there was a corresponding vendor invoice for the supplies sold by A&D and ADAM to the School District. e. Investigative Division Exhibit 30 enumerates one hundred fourteen (114) instances where Armand Zangrilli's name appeared on the vendor invoices as having either placed the orders or picked up the materials for A &D. (1) I.D. 30 does not include orders picked up by Zangrilli which were indicated as having been placed by another person. (2) Bender calculated the "profit" to A&D /ADAM (the difference between the price paid to the vendor by A&D and the price charged to the PBOPE) for the materials and supplies sold to the PBOPE by A &D and ADAM for the sales enumerated on I.D. -30 to be $16,895.05. (3) Zangrilli testified that a vendor invoice for "824 Raypak Boilers" (I.D. 23A, page 1) was not Zanarilli, 92- 036 -C2 Page 75 accurately matched to I.D. 29 -42, which is a Maintenance Materials Requisition Form for a "Ray Pak W2824 Modulating Water Heater." (See Finding 41w(2)) . f. Investigative Division Exhibit 31 enumerates seventy -five (75) instances where either Luke's name or no name appeared on the vendor invoice. g- (1) This exhibit does not overlap I.D. -30. (a) This exhibit does not include any instances where Zangrilli's name appeared on the vendor invoice. (2) I.D. 31 proffers that the "profit" to A&D /ADAM (the difference between the price paid to the vendor by A&D and the price charged to the PBOPE) for the sales enumerated on I.D. -31 was $7,483.51. Investigative Division Exhibits 32, 33, 34, and 35 identified sales by A&D /ADAM to the PBOPE of various types of supplies for which Bender could not find a corresponding vendor invoice. (1) Bender calculated the "profit" from these sales as the full amount paid by the PBOPE. (2) Bender acknowledged that: (a) it would be possible for an invoice to be missing or for A&D to have had a supply in inventory, such that a supplier invoice would not be found; (b) items could be purchased for cash without a supplier invoice; and (c) it would be possible for there to be a vendor patronized by A&D /ADAM whose records were not subpoenaed by the Investigative Division. h. Investigative Division Exhibit 32 identified sales of Model 525 Armstrong pumps to the PBOPE by A &D and ADAM. (1) Between 09/01/89 and 11/19/91 A &D and ADAM invoiced the PBOPE for seventy -two (72) model S25 Armstrong Pumps. (2) For forty (40) of these pumps, Bender identified a Zangrilli, 92- 036 -C2 Page 76 corresponding vendor invoice from Trew Company. (a) There were thirty -two (32) pumps for which Bender could not find corresponding vendor invoices. (3) Rase prepared five of the Maintenance Materials Requisition Forms which ordered these pumps, specifically: I.D. 29- 48/49, 52/53, 56/57, 60/61, and 64/65. (a) Bender found a corresponding vendor invoice (I.D. 23A -3) from Trew Company for four of these pumps (I.D. 32 -1). (1) These four pumps cost A&D $140.00 each. (2) The profit to A&D for these pumps was $86.00 per pump, for a total of $344.00. (b) Bender could not find a corresponding vendor invoice for the fifth pump. (1) Luke testified that her sources for Armstrong Pumps were Trew Company and cash sales (See Finding 42u). (2) The pumps which Luke purchased as cash sales cost A&D much less than pumps purchased from Trew Company. (See Finding 42u(4)) . (3) The profit to A&D from the sale of the fifth pump was at least $86.00. (c) Total profit to A&D for these five pumps was $430.00. i. A&D Mechanicals, Inc. and ADAM Specialty have made various sales of drain and sewer cleaner to the PBOPE. (1) Sales have been by either in quart or % gallon containers. (2) Bender identified twenty -three (23) vendor invoices for sewer and drain cleaner. (a) Armand Zangrilli is indicated as having made twelve (12) of these purchases for A &D /ADAM. (b) Luke is indicated as having made nine (9) of Zanarilli, 92- 036 -C2 Page 77 j these purchases for A&D /ADAM. Investigative Division Exhibit Number 37 lists fifteen (15) incidents where the PBOPE had multiple purchases of items on the same dates from A&D or ADAM. (1) For some of these fifteen (15) instances, the multiple requisitions were for different trade groups, building locations, and /or repair orders. (2) In at least four (4) instances, these conditions did not exist. (a) There were two contracts dated 02/04/91 in the amount of $1,200 each, divided among four (4) requisitions at $600 each (I.D. 29 -762, 29- 765, 29 -769, 29 -772). (b) There was one contract dated 03/12/91 in the amount of $1,290, divided among (2) requisitions at $645 each (I.D. 28 -236, I.D. 28 -240). (c) There was one contract dated 06/28/91 in the amount of $1,440.00 divided among two requisitions at $720 each (I.D. 28 -340, I.D. 28 -344) . (d) There was one contract dated 07/11/91 in the amount of $1,410.00 divided among three requisitions (I.D. 28 -361, 28 -365, 28 -369). (1) Two requisitions were for $564.00 each and one was for a lesser quantity at $282.00, for a combined total of $1,410.00. k. From 1989 -1991, A&D and ADAM acquired an increasing percentage of PBOPE's plumbing supply purchases. (1) A &D's sales to the PBOPE commenced approximately 8/21/89 (I.D. 48). (a) In 1989, with only four months of sales, A&D placed eighth out of twelve plumbing supply vendors, getting 4% of the total of that business. (b) ADAM's sales to the PBOPE commenced approximately 10 /24/90 (I.D. 48). Zangrilli, 92- 036 -C2 Page 78 (2) In 1990, A&D and ADAM had combined sales constituting 24.8% of the total of that business. (a) A&D was in second place out of thirteen plumbing supply vendors with 21.5% of the total of that business. (b) ADAM's sales to the PBOPE commenced approximately 10/24/90 (I.D. 48). (1) With only two months of sales, ADAM placed ninth out of thirteen plumbing supply vendors, with 3.3% of the total of that business. (3) In 1991, A&D and ADAM placed second and third respectively out of fourteen plumbing supply vendors, with combined sales equalling 35.3% of the total of that business. (a) The combined sales of A&D and ADAM greatly exceeded the plumbing supply sales of any other vendor. 1. For Investigative Division Exhibit 43, Bender corresponded, by dates, vendor invoices which indicated that Armand Zangrilli placed the order to PBOPE with requisitions for those supplies. (1) Many of the vendor invoices also indicated that Armand Zangrilli received the supplies from the vendor. (2) Bender acknowledged that for a given match, the materials ordered from a vendor may not have been the very same materials sold to PBOPE. (3) In one instance, it was not clear whether the documents referenced the same supply (I.D. 43 -2, line 7 pertaining to I.D. 23A -33 and I.D. 29 -686). m. Investigative Division Exhibit 53 is a compilation_ of , A&D's payments for Armand Zangrilli's charge account with BP Oil. (1) The total amount of payments by A&D to BP Oil for the charge account in Armand Zangrilli's name was $11,767.33. (2) The total amount of payments by A &D to BP Oil on Zangrilli's account for charges where the charge Zangrilli, 92- 036 -C2 Page 79 slip bore Zangrilli's name as the purchaser was $777.81. n. On October 8, 1993, in the course of an attempt by Bender to serve a subpoena in relation to the hearing of this case regarding Armand Zangrilli, Armand Zangrilli stated to Bender, "You tried to ruin my business by contacting my suppliers and people I do business for." (1) The only suppliers and vendors which Bender had contacted were suppliers and vendors of A&D /ADAM. 39. McShane died in service on March 29, 1991 (I.D. 60). a. The last day that McShane was actually on the job was October 19, 1990. b. McShane was on sick leave from October 22, 1990 to March 29, 1991. 40. Veleter Mazyck is employed by the PBOPE as Assistant Solicitor. a. For the "relevant period" of August of 1989 through January of 1992, Mazyck is not aware of a Board policy to inform employees and officials of duties under the Ethics Law. b. During the relevant period, Statements of Financial Interests were not disseminated to the trades foremen by the PBOPE. 41. Armand Zangrilli served as a Plumber Foreman for the Pittsburgh Board of Public Education (PBOPE) from March 30, 1987 until September 15, 1992. a. He was employed as a Plumber Tradesman from June 10, 1974, until his appointment as foreman b. Zangrilli's immediate supervisor as foreman from 1987 through June (sic), 1991 was Charles McShane. Thereafter it was John Dyer. [McShane died in March, 1991 (See Finding 39)]. c. Armand Zangrilli has not filed Statements of Financial Interests with the PHOPE since his appointment as plumber foreman. d. Armand Zangrilli and Donna Grace Luke were married on October 30, 1989, in Vernon Township, Meadville, Crawford County, PA by Hubert Vogan, Justice of the Peace. Zangrilli, 92- 036 -C2 Page 80 (1) Marriage license application no. 62411 was filed with the Crawford County Clerk of Courts on October 11, 1989. (2) License no. 62411 was issued on October 17, 1989. e. Zangrilli and Luke maintain a residence at R.D. #1, Oakmont Drive, Conneaut Lake, PA with a mailing address of P.O. Box 490, Conneaut Lake, PA. (1) The home was purchased on May 13, 1988, from Gordon and Helen Barett. (2) Donna G. Luke was the sole purchaser. (3) Zangrilli moved to Conneaut Lake in 1988. (4) Zangrilli also has a mailing address at P.O. Box 5060 Conneaut Lake, Pa. f. Commencing in the early 1960's, Zangrilli conducted business in his own name, specifically "Armand A. Zangrilli Plumbing, Heating and Air Conditioning." (1) This business was in operation during the years 1989 through 1992. (2) This business was previously "Armand Plumbing" when Zangrilli worked with his father who was also named "Armand Zangrilli." (a) Zangrilli's father died twenty -five (25) years ago. (3) This business is not a corporation or a fictitious name. (4) Zangrilli states that the business in his name operated out of wherever he lived. (a) Zangrilli states that when he lived in the top portion_ of the double duplex owned by his mother, he operated out of that unit's address. (1) 2899 Knowison Avenue is the address of Theresa Zangrilli, Armand Zangrilli's mother. (2) 537 Dorchester Avenue, Pittsburgh, PA 15226 is located in the same building as Zangrilli, 92- 036 -C2 Page 81 g. 2899 Knowlson Avenue. (3) The building is a corner property located at the intersection of Knowlson and Dorchester. (a) 537 Dorchester Avenue is the address used by Armand Zangrilli from March, 1987, through December, 1988. (b) Zangrilli states that for the years 1989 through 1992, he was operating this business from the Conneaut Lake residence which was on Oakmont Drive. Zangrilli testified regarding a van and tools which he uses in his business. (1) Zangrilli testified that during 1989 -1991, "Armand A. Zangrilli Plumbing, Heating and Air Conditioning" had a 1978 van used for the business which was titled solely in Zangrilli's name. (a) Zangrilli testified that he used a car to "go back and forth," but "wherever the job was is where the truck would end up." (b) Zangrilli stated, "I don't have any office. My truck is my office." (2) Zangrilli testified that in the course of his career he amassed the tools of his profession which he needed to do his work. (a) Zangrilli testified that he has pipe wrenches, some power equipment including a saw, an angle driller, and a snake container. (b) Zangrilli testified that he has some sewer cleaning equipment. (3) When questioned as to the value of his tools Zangrilli stated, "I'll say the truck with my air conditioning equipment is three or four thousand bucks." (a) Zangrilli testified that $3,000- $4,000 would be the consistent value for the tools that he maintained in 1989, 1990, 1991 and 1992. h. Zangrilli made prior declarations under penalty of Zangrilli, 92- 036 -C2 Page 82 perjury in a bankruptcy proceeding which are contradicted by his testimony. (1) On May 24, 1990, Armand A. Zangrilli petitioned the United States Bankruptcy Court for the Western District of Pennsylvania for relief under Chapter 7 of the Bankruptcy Code (I . D . 61) . (2) The documents filed in the bankruptcy proceeding included a Statement of Financial Affairs for Debtor not Engaged in Business, with attached schedules. (a) The Statement of Financial Affairs was signed by Zangrilli under his declaration under penalty of perjury that he read the answers in the Statement and that they are true and correct to the best of his knowledge, information and belief. (b) There is no mention within Zangrilli's Statement of Financial Affairs of "Armand A. Zangrilli Plumbing, Heating and Air Conditioning." (c) Zangrilli specifically denied having a business. (1) Question 2(c) of the form, pertaining to "occupation and income," and Zangrilli's answer are as follows: Have you been in a partner- ship with anyone, or engaged in any business during the 6 years immediately preceding the filing of the original petition herein? (If so, give particulars, including names, dates and places.) No. (d) Zangrilli signed a declaration under penalty of perjury that he had read Schedules A &B of this document and that they were true and correct to the best of his knowledge, information and belief. (1) Zangrilli testified that he did not read these schedules. Zangrilli, 92- 036 -C2 Page 83 (2) On the schedule designated "Current Income and Current Expenditures for Individual Debtor," Zangrilli indicated "N /A" where he was to disclose his self - employment. (3) On Zangrilli's "Summary of Debts and Property" there was no figure listed for "Machinery, equipment, and supplies used in business." (a) When questioned as to this particular contradiction with his testimony, Zangrilli stated that although he had testified that he had tools, he did not own the tools. (1) Zangrilli stated that his mother, who is not a plumber, owns the tools. (2) Zangrilli stated that when his father died (25 years earlier) , his father left the tools to his mother. i. Zangrilli became the plumber foreman for the PBOPE on March 30, 1987. Zangrilli states that he requested but never received a written outline of the duties of the plumber foreman (1) Zangrilli authored a typewritten letter /memo dated June 15, 1989 (Respondent's Exhibit 15) to McShane, Colautti and Preskar officially asking for a job description. (a) Zangrilli states that he did not receive any verbal or written response to this letter. (b) Zangrilli states that he did not receive a job description. (2) Zangrilli acknowledges that a job description was written for his position but states that it was written by McShane without Zangrilli's participation. (a) The job description (I.D. -1) is dated fifteen (15) days after Zangrilli's official request. Zangrilli, 92- 036 -C2 Page 84 (b) Zangrilli states that he never saw his job description because he takes the month of July off. (3) Respondent's Exhibit 17 is a memorandum from Joy Bieltz who is the secretary for McShane and Dyer, regarding: "MEMO 6/30/89. JOB DESCRIPTION FOR PLUMBER FOREMAN MR. ARMAND ZANGRILLI." (a) McShane directed Bieltz to contact the Personnel Office for a job description for the Plumber Foreman (1) Bieltz was informed that there were no job descriptions on file for any of the building trades. (b) McShane wrote Zangrilli's job description for Zangrilli's position as Plumber Foreman with Zangrilli's aid and participation. (c) McShane directed Bieltz to type the job description, to sign his name to it since he planned to be absent and to give the original to Zangrilli. (1) It was common for McShane to direct Bieltz to sign his memos or letters in his absence. (2) Bieltz knew that the job description had been requested by Zangrilli, but she was not aware of the reason it was needed. (d) This memorandum does not specifically address whether Bieltz gave the job description to Zangrilli. k. Zangrilli states that the work which was directed to the PBOPK's plumbing department was initiated through a school principal, custodian, or a District coordinator. (1) Zangrilli states that the request for work would go from the District coordinator to Preskar to Dyer to Zangrilli. 1. Zangrilli assigned the work to the plumbers. (1) Zangrilli also assigned work to John Nee, a plumber laborer. Zanvrilli, 92- 036 -C2 Page 85 (2) At Armand Zangrilli's direction, Nee frequently picked up materials from vendors in a School District vehicle on School District time. (a) Zangrilli stated that Nee picked up materials for the PHOPE. (b) Nee picked up materials for A&D (See Finding 31) . m. The PHOPE maintains a list of vendors from which purchases of materials for use by the maintenance department, including the plumber tradesmen are made. (1) A&D Mechanicals Inc. and ADAM Specialty Supply appear on this list. (2) In August, 1989, A&D Mechanical was placed on the list by the late Charles McShane, former Chief of Maintenance. n. Materials used by tradesmen of the PHOPE in the performance of their duties have been classified as warehouse stock and non- warehouse stock. (1) Warehouse stock are items that are normally part of the school district's inventory of supplies maintained in the storeroom. (2) Non - warehouse stock or direct purchase materials are items that are needed for the completion of either emergency repair requests or scheduled maintenance. (3) The procedures utilized by the PHOPE for the purchase of warehouse stock are as follows: (a) The storeroom clerk (Ernie Miller) is responsible for re- stocking warehouse stock items. (b) Contacts are made with companies which have - previously supplied price quotes, and stock items are replenished. o. For the Board's plumbing shop, non- warehouse stock items are to be purchased by materials expediters in the Division of Purchasing. (1) The purchase of these items are made through open purchase orders known as buy -outs. Zanarilli, 92- 036 -C2 Page 86 p. Zangrilli was instructed by his superiors to purchase only from suppliers located within the City of Pittsburgh limits. Zangrilli stated that the procedure for ordering supplies for the PBOPE during the relevant period from August of 1989 through January of 1992 differed "according to the way the foreman wanted to run his shop." r. Zangrilli stated that in his shop, the journeymen ordered all materials. (1) Zangrilli stated that the plumbers would take the Maintenance Repair Request to the work site, look at the work, determine what was needed, and order the materials needed. (2) Zangrilli stated that until 1992, he never filled out Maintenance Material Requisition Forms or saw what the journeymen ordered. (3) Zangrilli stated that he chose to run his shop by never filling out the Maintenance Materials Requisition Forms or seeing what his plumbers ordered, because he did not have enough time. (a) Zangrilli stated that he did not have a subforeman working under him. (b) Zangrilli stated that since he was running his shop, he chose to have Rase or Purchasing take care of preparing the Maintenance Materials Requisition Forms. (4) Zangrilli stated that when the plumbers needed materials they would go to Rase, Earl, or Miller. (5) Zangrilli stated that if the plumbers needed a buy- out, they would get an order number from Miller. (a) Zangrilli stated that Miller would designate the vendor. (6) Zangrilli stated that after the job was done, the plumbers would return the journeyman sheet to him. s. Zangrilli stated that he wrote a typewritten letter in August, 1987 (R -16) to the PBOPE plumbers who worked under him, in which he stated, "Please order all materials and tools in advance so that your time is wisely used." Zangrilli, 92- 036 -C2 Page 87 t. u. v . w. Zangrilli stated that the only thing he filled out was the back of the foreman's sheet of the Maintenance Repair Request pertaining to "Labor." (1) Zangrilli stated that the "Materials" portion of the maintenance repair request was not completed but the Maintenance Materials Requisition Form was attached. Zangrilli states that he never assigned a release number or wrote in the release log. Zangrilli states that he never signed a requisition form, whether it was a Maintenance Materials Requisition Form or any other kind. Zangrilli's name does not appear anywhere on any exhibit in the Investigative Division Exhibit 29 series, whether written by him or by third parties, with the exception of following exhibits: I.D. 29 -42, 43, 48/49, 52/53, 56/57, 60/61, 64/65, 229, 310, 571, 901, 905, 1006 and 1107. (1) I.D. 29 -42, 48/49, 52/53, 56/57, 60/61, 64/65, 229, 310, 571, 901, and 905 are Maintenance Materials Requisition Forms which bear the word "Zang" at the bottom right hand side of the forms, on the line designated "Requested by ". (a) Zangrilli stated that this word is in Rase's handwriting. (b) Rase prepared at least seven (7) of these eleven (11) Maintenance Materials Requisition Forms (See findings 6 j, 6 k, 6 1). (c) Rase used the word "Zang" on the Maintenance ;Materials Requisition Forms to refer to Armand Zangrilli (See Finding 6 i). (d) All of these forms except for I.D. 29 -229 bear the name "Don" on the "Required Approval" line. (e) (1) This was how Rase marked the forms he prepared (See Finding 6 n(1). Some of these forms also bear the names of Miller or McShane, and the initials of Neely Earl. (f) I.D. 29 -229 does not bear any signature on the Zangrilli, 92- 036 -C2 Page 88 "Required Approval" line but does bear Miller's name elsewhere on the form. (g) Zangrilli states that he wrote a letter asking that this practice of others writing his name be stopped. (h) Zangrilli states that whenever he wrote his name on any paper pertaining to any School Board matters, he wrote it, "Armand Zangrilli". (i) Zangrilli states that he did not suggest or recommend the acquisition of these particular parts. (2) I.D. 29 -43 is a typewritten proposal dated August 17, 1989 from A&D for one Raypak W2 -824 modulating water heater. (a) The proposal indicates that it was submitted to the following: Name Street City State Telephone (b) 488 -5109 number at Board of Education 13th & Muriel Pittsburgh Pa Number 488 -5109 A. Zangrilli is Armand Zangrilli's telephone PBOPE. (c) Zangrilli states that he did not solicit, receive or have anything to do with this proposal. (d) Zangrilli states that a Raypak W2 -824 Modulating water heater is different from an 824T Raypak boiler. (3) I.D. 29 -902 is a typewritten proposal from A&D to the PBOPE. (a) The proposal indicates that it was submitted to the PBOPE at telephone numbers 488 -5109 and 488 -5100. (4) I.D. 29 -1006 is a Maintenance Materials Requisition Form dated July 19, 1991 which bears the typewritten name, "Armand Zangrilli" at the bottom right -hand corner of the for on the line Zangrilli, 92- 036 -C2 -Page 89 designated "Requested by ". (a) Zangrilli states that he did not type his name, does not know how to type, and does not have a typewriter. (1) Zangrilli has testified that he authored other typewritten documents in evidence as Respondent's Exhibits 14, 15 and 16. (See Findings 41j, 41s and 41 ee). (b) Below the typewritten name of Armand Zangrilli (c) Above the typewritten name of Armand Zangrilli is the handwritten name, "Greg Mansmann". are the handwritten initials, "A.Z. ". (1) Mansmann is a plumber for the PBOPE. (d) The handwritten name, "John Dyer" appears on the "Required approval" line. (e) There are numerous handwritten and typed notations on this form. (5) I.D. 29 -1107 is an invoice to the PBOPE. (a) The invoice bears a "Armand Zangrilli". dated 01/24/92 from A&D signature of the name (1) Zangrilli states that he cannot identify his handwriting on this Exhibit. (6) Zangrilli specifically reviewed and stated that on the following exhibits, any handwritten notation of "A&D Mechanical" was in Miller's handwriting: I.D. 29 -1 through 29 -60, 29 -64, I.D. 29 -110 through 29- 134. x. Zangrilli's name does not appear anywhere on any exhibit in the Investigative Division Exhibit 28 series, with the exception of the following exhibits: 28- 160/162,•28 -365, 28 -434, and 28 -613. (1) I.D. 28- 160/162 is a Maintenance Materials Requisition Form which bears the word "Zang" at the bottom right hand side of the forms, on the line designated "Requested by ". (a) This word is in Rase's handwriting (See Zangrilli, 92- 036 -C2 Page 90 Finding 6i). (2) I.D. 28 -365 and I.D. 28 -434 are Maintenance Materials Requisition Forms which bear signatures of the name "Armand Zangrilli" at the bottom right hand side of the forms, on the line designated "Requested by ". (a) Zangrilli states that these signatures of his name are in Miller's handwriting. (b) Miller prepared these forms (See Finding 25e) . (3) I.D. 28 -613 is an invoice dated 01/24/91 from ADAM to the PBOPE. (a) At the bottom right -hand side of the invoice is a signature of the name "Armand Zangrilli". (b) Zangrilli states, "This isn't my signature, but they did a nice job on it ". (c) Zangrilli states that there would be no reason for him to sign this document because he didn't get the material, didn't do the job, and "It wouldn't even need to be signed because Ernie already signed it ". (1) Miller's signature is dated 03/03/92, which is more than one month after the date of the invoice. (d) Zangrilli states that John Dyer also signed this invoice. y. Zangrilli states that he never requested anything that is on any of the Maintenance Materials Requisition Forms. (1) Zangrilli states that for all of the Exhibits in the Investigative Division Exhibits 28 and 29 which bear his name, he did not order the materials. (a) Zangrilli states that he did not give anyone at the PBOPE permission to sign his name, but that they did so. (b) When asked if he knew who signed his name, Zangrilli stated, "Mitch signed my name many times." z. Zangrilli states that during the relevant period from Zangrilli, 92- 036 -C2 Page 91 August of 1989 through January, 1992, he never chose A&D or ADAM as vendors to supply parts, materials, supplies or the like to the PBOPE. (1) Zangrilli states that Miller and Rase chose A&D and ADAM. (2) Zangrilli states, "My name is on none of that." aa. Zangrilli states that during the relevant period from August of 1989 through January, 1992, he never recommended to anyone employed by the PBOPE that they use any particular vendor. (1) Zangrilli states that during the relevant period from August of 1989 through January, 1992, he never recommended to anyone employed by the PBOPE that they purchase materials from A&D or ADAM. (a) When asked if he knew whether A&D and ADAM were doing business with the School District, Zangrilli stated, "I knew Donna was selling to the Board of Education." bb. Zangrilli states that he never recommended to Rase that he purchase Armstrong pumps from A&D. (1) Zangrilli states that he did not recommend an Armstrong pump to any person in the purchasing operation of the PBOPE. (2) Zangrilli states that he was trying to standardize the pumps at the PBOPE. (3) Zangrilli states that McShane wanted the School District's pumps standardized for availability of servicing. (4) Zangrilli states that in 1987 McShane made the decision to go with Armstrong pumps. (a) Zangrilli states that he,did not tell anyone, including McShane, where to buy the pumps. cc. Zangrilli states that he did not monitor whether items were properly charged against his budget. dd. Zangrilli states that prior to 01/09/92, he received no memoranda from anyone at the School District regarding acquisition, purchasing, or items which had to receive quotes. Zanarilli, 92- 036 -C2 Page 92 ee. Zangrilli states that in early 1992 the buy -out procedure changed per a direction by Dyer, by requiring Zangrilli's signature on the plumbing shop's Maintenance Materials Requisition Forms to approve them. (1) Zangrilli states that up until that day, he never signed or approved any of these Forms. (2) Zangrilli states that this procedural change was communicated to him in a meeting with Dyer. (a) Zangrilli states he never received any written memorandum on the change. (3) Zangrilli states that after the change in procedure in January, 1992, he started signing the Maintenance Materials Requisition Forms but that other people still signed where the foreman was to sign. (4) Respondent's Exhibit 14 is a typed memorandum with attachments from Armand Zangrilli to Dyer dated 02/11/92. (a) The memorandum regards a Maintenance Materials Requisition Form dated 02/05/92 which failed to comply with the procedures set forth in McConachie's memorandum of 01/09/92. (b) Rase had signed the form which was supposed to be approved by the trades foreman or by Dyer. (c) Zangrilli's memorandum bears the handwritten initials "A.Z." (d) Zangrilli attached a copy of McConachie's memorandum of 01/09/92 to his memorandum. (1) McConachie's memorandum reiterated the existing requirement that Maintenance Materials Requisition Forms required proper authorization by being signed by the trades foreman or the Chief of Maintenance. (2) The changes in procedure were that: upon receipt of the materials ordered, the trades foreman or his authorized representative would be required to sign the packing slip; the tradesmen's signatures would be used to authorize Zangrilli, 92- 036 -C2 Page 93 payment through the Division of Finance; and the signature of the storeroom staff would no longer be acceptable for authorizing these payments. ff. Zangrilli stated that he never delivered an item to the PBOPE for A&D or ADAM. gg. (1) Zangrilli subsequently acknowledged that he rode to work in a truck which was carrying materials to the PBOPE from A&D and /or ADAM and that he unloaded some of those materials at the PBOPE dock. During cross examination, Zangrilli stated that the signature of his name "Armand Zangrilli" on I.D. 28 -613, which is an invoice from A&D to the PBOPE, is not his "because there's no A in it." (1) Zangrilli stated that every time he signs his name at the PBOPE he tries to sign it with his middle initial. hh. A&D was officially created as of September 28, 1989 (R- 20) . (1) Approximately one month later, Zangrilli and Luke were married (See Finding 41d). (a) Zangrilli stated that he did not know when A&D was started. (2) Zangrilli stated that Luke started A&D at the request of McShane and Dyer. (3) Zangrilli stated that he does not know what "A&D" stands for. ii. A&D Mechanical transacted business with residential customers. (1) Services provided included plumbing, heating and air conditioning in and maintenance. (a) Services also included maintenance of summer cottages located at Conneaut Lake. (2) Residential customers included past and present employees of the PBOPE and their relatives. (3) One other commercial customer was the Conneaut Lake School District through a contract with Service Zangrilli, 92- 036 -C2 Page 94 Master. (a) A&D performed the services in relation to this contract. (b) Zangrilli worked on the project for A&D. jj. ADAM was officially created in April, 1991. (R -21). (1) Zangrilli stated that he does not know what "ADAM" stands for. kk. A&D and Zangrilli have the same telephone number, street address and mailing address. (1) The March 1993 - February 1994 Meadville and vicinity telephone book distributed by Alltel has listings for A&D and Zangrilli, but not Donna Luke. (2) Zangrilli states that there was a listing for "Scrub -a -Dub" at the same number. (a) According to Luke, Scrub -a -Dub is a division of A&D. (See Finding 42(aa)). 11. Zangrilli states that he has no ownership interest in A&D or ADAM. (1) Zangrilli states that he owns no shares of A&D or ADAM. (2) Zangrilli states that he never told anyone that he was owner of A&D or ADAM. mm. Zangrilli denies acting on behalf of A&D. (1) Zangrilli states that the testimony of Graham that the representative of A&D which Graham dealt with was Zangrilli, was inaccurate. (See Finding 3). (2) Zangrilli acknowledged that he contacted the Conneaut Lake School Board President David Schaef, but states that he did not do so as the representative of A&D. (a) Zangrilli states that he contacted Schaef to put his own advertisement in the newspaper. (b) Zangrilli states that he never called Schaef in an attempt to get business from the Conneaut Lake School District. Zangrilli, 92- 036 -C2 Page 95 (3) Zangrilli acknowledged that he presented a proposal from A&D (I.D. 9, page 1) to Boyd (See Finding 5b), but states that he presented the proposal to Boyd on his own behalf. (a) Zangrilli states that he bought this job from Luke. (b) Zangrilli was not able to state how much he paid for this job. (1) When asked how much he paid Luke for the job, Zangrilli stated, "Whatever she wanted." (2) In response to the next question, "Do you know what that was," Zangrilli stated, "I don't have any idea at this moment." (c) Zangrilli signed the acceptance of this proposal. (1) Despite the fact that the proposal indicates that it is a proposal from A&D to Boyd, Zangrilli states he accepted this as a proposal from Boyd. (d) The invoices for the work (I.D. 9, pages 2, 3) are from A&D. (1) The first invoice, dated February 18, 1992, indicates the receipt of $2,100 from Boyd and bears the notation "Received Donna G. Luke, owner" with Zangrilli's signature below. (a) Zangrilli acknowledges that Luke received this money. (b) Zangrilli acknowledges that the signature of his name is his signature. (1) Zangrilli states that he signed this document because Boyd wanted Zangrilli to sign because Zangrilli was doing the work. (2) The second invoice, dated April 13, 1992, bears the notation, "4/13/92 Paid in Zangrilli, 92- 036 -C2 Page 96 full" followed by a signature of the name "Armand Zangrilli." (a) Zangrilli states that this notation is not his handwriting but is the handwriting of Tom Timlin. nn. Zangrilli acknowledged installing furnaces and air conditioners for A&D and ADAM, but stated that he never worked for A&D and ADAM. (1) Zangrilli's testimony was evasive on this issue (See Finding 41 eee (3)) . (2) Zangrilli's Answer to the Investigative Complaint acknowledged that Zangrilli worked on the Conneaut Lake School District job "for A&D." oo. Zangrilli testified that he never ordered materials for A&D and ADAM. (1) On behalf of A&D, Armand Zangrilli placed orders with R.E. Michel Company. (a) Orders were placed telephonically by Zangrilli on behalf of A&D to R.E. Michel's Meadville facility. (b) Zangrilli admitted to placing orders for A&D with R.E. Michel and Trew Company in his Answer to the Investigative Complaint. (1) Zangrilli averred that these orders were placed at A&D's request. (2) Zangrilli states that he never placed orders for ADAM or A&D with Susan Sadowski from Conroy -Starr (See Finding 29). (a) Zangrilli states that he never met or talked to Susan Sadowski before she testified in this case. (b) Zangrilli acknowledged that his name and the telephone number of his office at the PBOPE appear on Sadowski's notes from order(s). (1) Zangrilli stated that someone from the PBOPE could have ordered the material and given Zangrilli's name and telephone number. Zangrilli, 92- 036 -C2 Page 97 (2) These order(s) were sold to A&D. (See Finding 29) (See I.D. 18a, I.D. 18, page 5) . (3) Zangrilli placed orders by telephone to the Trew Company for A&D. (a) In his Answer to the Investigative Complaint, Zangrilli admitted to placing orders for A&D with Trew by telephone. (1) Zangrilli stated that he did so at the request of A&D. (b) At the hearing in this matter, Zangrilli gave contradictory /evasive testimony as to whether he placed various orders with Trew Company (See Finding 41 eee(4)). (1) Zangrilli eventually denied ever ordering a part from Trew Company using the A&D account. (a) Zangrilli stated, "I don't call and order under (A&D's) account. I bought under my name." (b) Zangrilli's account at Trew Company, Inc. became A&D's account on october 13, 1989. (Finding 15d). (c) The only vendor invoice in evidence in Armand Zangrilli's name is I.D. 23A -1, which is a Trew Co. invoice. (1) When A&D got a tax exempt certificate, Zangrilli received credit for sales tax he had paid on this invoice. (See Finding 15e). (,4) Zangrilli stated that he never ordered a part from F &L Pump on the A &D account. (See Finding 13). (a) Zangrilli stated that he had his own account at F &L. (5) Zangrilli stated that he dealt with Construction Tool Services but never used the A&D account. (6) Zangrilli stated that he did not need A &D's account Zangrilli, 92- 036 -C2 Page 98 PP- q4. to buy at R.E. Michel because he had his own account there. (a) Zangrilli stated that he had an account with the prior owner and with R.E. Michel who bought the business as a private owner. (b) Zangrilli states that Pacileo's testimony (See Finding 20d) that R.E. Michel Company does not sell to individuals but only to companies is not true. (c) Zangrilli stated that wipes were not the first thing he bought from Pacileo, but that he bought furnaces. (7) Zangrilli subsequently stated that his bankruptcy proceedings did not affect his ability to purchase from vendors because he pays and never uses credit. Zangrilli stated that he never arranged billing procedures for A&D with John Black from Action Supply (See Finding 28) . Zangrilli picked up supplies and materials ordered by A&D. (1) Zangrilli reviewed signatures of his name on various vendor invoices to A&D. (a) I.D. 6A -45 and I.D. 6B -11 are vendor invoices from Trumbull Industries to A&D which Armand Zangrilli acknowledges he signed. (1) Zangrilli testified as the purpose of his signature on I.D. 6A -45 as follows: "The purpose for my signature on this document is I bought P.V. stuff for somebody's house. That's all stuff for a home." (2) Zangrilli picked these materials up. (b) Zangrilli testified as to the signature of his name on the following vendor invoices to A&D, that he did not know whether the signature was his: I.D. 6B -3, 6B -7. (1) Zangrilli stated that I.D. 6B -3 was for items that were not used at the PBOPE. (2) Zangrilli stated that he did not know if Zangrilli, 92- 036 -C2 Page 99 I.D. 6B -7 was for items used at the PBOPE. (c) Zangrilli testified that the signature of his name on the following vendor invoices to A&D were not his: I.D. 6B -9, 613-17, 6B -19. (1) Of these, Zangrilli stated that I.D. 6B -9 was for items that were not used at the PBOPE. (2) Zangrilli stated that I.D. 6B -17 was for items that are or could be used at the PBOPE. (d) Zangrilli testified that the signature of his name on the vendor invoice to A&D which is I.D. 6B -11 could be his. (1) Zangrilli stated that I.D. 6B -11 was for items that were not used at the PBOPE. (2) Zangrilli states that he gave permission to Michael Luke and Tom Timlin to sign his name. (a) Zangrilli states that Timlin did work for Donna. (b) Zangrilli states that Timlin used Zangrilli's name because Timlin was going through a divorce and was receiving workmen's compensation, and did not want to be caught. rr. Zangrilli also directed at least one PBOPE employee, John Nee, to pick up supplies from vendors for A&D on School District time in a School District vehicle (See Findings 31 and 41(1)) . ss. Zangrilli stated that he has no control over the A&D account at Marine Bank. tt. Zangrilli states that on McShane's vacation days, he would come in to the plumbing shop. uu. Zangrilli states that when McShane was on sick leave, Zangrilli would speak with McShane by telephone every other day. (1) Zangrilli states that McShane came in to the plumbing shop even after October 19, 1990. Zangrilli 92- 036 -C2 Page 100 (2) Zangrilli states that McShane was bedridden February and March of 1991. vv. Zangrilli states that he saw McShane in other trade shops at the PBOPE when McShane was on vacation or sick leave. ww. Zangrilli reviewed I.D. 24 which consists of documents pertaining to his charge account with BP Oil, and stated that none of the signatures of his name were his with one possible exception (I.D. 24 -17). (1) Zangrilli stated that he loaned the card to Donna Luke. (2) Zangrilli stated that he never used it from 1989- 1991. xx. Zangrilli stated that none of the signatures of his name on his payroll checks were his. yy. Zangrilli gave his payroll checks and checks made payable to him from private individuals to Luke, and Luke handled the finances. (1) Zangrilli states that he made no payments out of Luke's account. (a) Zangrilli states that he uses cash and money orders. (2) Zangrilli acknowledged that Luke made payments from her personal account on Zangrilli's account at Saks Fifth Avenue. (a) As to other various expenses, Zangrilli stated that he guessed Luke paid them. (3) Between August, 1989, and June, 1992, monthly payments totaling $11,667.55 were made from the A&D Mechanical account 1011 -0058 to Boron Oil Company. (a) The checks were payments to Boron Oil Company to be applied to account number 047- 122 - 855 -1. (b) The account is owned by Armand Zangrilli. (1) Charges to the account were made by Armand Zangrilli and Donna Luke. (4) Expenditures from account no. 4136 -6114 at Marine Bank included expenses for vacations to Atlantic Zangrilli, 92- 036 -C2 Page 101 City and Seven Springs. zz. Zangrilli and Donna Luke were married on October 30, 1989. (1) Zangrilli testified that he did not tell anyone at the Service Center except McShane that he and Donna Luke were married. aaa. During an internal school district review of the business dealings of A&D Mechanicals, Inc. and ADAM Specialty, Armand Zangrilli made statements to officials of the PBOPE. bbb. During a meeting on January 2, 1992, with Billie Kruse, school district Purchasing Support Manager, Zangrilli denied having any interest in either A&D or ADAM. ccc. Zangrilli and his attorney met with Edward Preskar, Director of Facilities for the PBOPE on January 6, 1992. (1) Zangrilli was evasive when answering Preskar's questions about Donna Luke. (2) Zangrilli stated that when he met with Preskar (See Finding 24), the specific questions and answers were as follows: Preskar: Zangrilli: Preskar: Zangrilli: (3) Zangrilli stated: "Do you know Donna ?" "Yes. "What is she to you ?" "She's my very best friend." "It - he (Preskar) never asked me what relationship. He just asked me who she is, and he never asked me if I was married." (4) Zangrilli stated that he never indicated to Preskar that there is no family connection between Zangrilli and Luke. (5) When asked if he thought his answer was evasive at all, Zangrilli responded as follows: A. No. If he wanted to know if I was married all he had to do was ask, correct? Q. And you would only answer a direct question or Zangrilli, 92- 036 -C2 Page 102 a specific question? A. That's all I have to answer with Mr. Preskar. Q. Would you consider your answer shading the truth to some extent? A. I never shade the truth. If he would have asked me, I would have been glad to tell him. I'm not hiding nothing from Mr. Preskar. ddd. Zangrilli stated that he was not aware of the existence of the Ethics Law until he was notified that he was being investigated by the State Ethics Commission. (1) Zangrilli stated that he was never informed about the Ethics Law by anyone at the PBOPE. (2) Zangrilli stated that no one at the PBOPE ever gave him a Statement of Financial Interests Form or told him to fill one out. eee. Zangrilli's testimony was evasive and contradictory. (1) When asked whether it was mere coincidence that A&D Mechanical was incorporated one month before Zangrilli and Luke were married, Zangrilli stated, "You have to ask Ms. Luke." (2) When asked what "A&D" stands for, Zangrilli stated, "Advanced dynamic maybe." (3) Zangrilli testified that he installed furnaces and air conditioners for A&D and ADAM, but subsequently testified that he never worked for A&D and ADAM. • (a) Upon further questioning, Zangrilli stated, "I have to know what work means." (b) Zangrilli's Answer to the Investigative Compliant states that Zangrilli worked for A&D" on the Conneaut Lake School District job. (4) Zangrilli testified that he never ordered materials for A&D and ADAM. (a) This testimony is contradicted by Zangrilli's admissions in his Answer to the Investigative Complaint where he admitted that he placed orders for A &D with R.E. Michel Company and Trew Company. Zangrilli, 92- 036 -C2 Page 103 (b) Zangrilli reviewed invoices from Trew Company to A&D which indicated that the orders were placed by "Armand" or "Armond" (I.D. 23A -4, 5, 15, 16, 17, 18, 19, 20, 21, 22) . (1) Zangrilli testified as to certain of these invoices that he did not recall placing the orders. (a) As to one of these Zangrilli specifically testified that it was possible he could have placed the order. (I.D. 23A -5). (2) When asked if he therefore had access to use A&D's account at Trew, Zangrilli stated he might have picked the part up "for Donna ". (3) Zangrilli subsequently testified that he did not order items from Trew using A&D's account. (4) Zangrilli subsequently stated he did not recall whether he placed certain orders. (a) When asked if it was possible that he placed these orders, Zangrilli stated "No, it isn't possible that I ordered for A&D Mechanical." (5) In his Answer to the Investigative Complaint, Zangrilli admitted to placing orders for A&D with Trew Company by telephone. (a) Zangrilli stated that he did so at the request of A &D. (5) Zangrilli testified that he did not use A&D's account to order from Trew Company, Inc., F &L Pump, Construction Tool Service, and R.E. Michel because he had his own accounts with each of these companies. (See Finding 41 oo (3) - (6)) . (a) Zangrilli subsequently testified that he never uses credit, but pays cash. (Finding 41 00(7)). (b) When asked, "You never had any kind of account at any of these vendors ?" Zangrilli replied, Zangrilli, 92- 036 -C2 Page 104 "I wouldn't need it because I get my money up front." (6) When asked whether he picked up materials for A&D and ADAM Zangrilli stated: "I picked up materials for Donna. I did not pick up materials for A&D and ADAM." (a) When asked whether the materials he picked up for Donna were for A&D, Zangrilli stated, "I have no idea." (b) Zangrilli was asked what was the purpose of his signature on a vendor invoice from Trumbull Industries to A&D. (1) Zangrilli replied, "The purpose for my signature on this document is I bought PV stuff for somebody's house. That's all stuff for a home." (2) Upon further questioning as to his purchasing materials under the A&D account, Zangrilli testified that he just picked up the materials. (7) Zangrilli testified that whenever he wrote his name on any paper pertaining to any School Board matter he wrote it, "Armand Zangrilli." (See Finding 41w) . (a) Zangrilli subsequently testified that every time he signs his name at the PBOPE he tries to sign it with his middle initial (See Finding 41gg). (b) Zangrilli signed Respondent's Exhibit 16 "Armand Zangrilli" without any middle initial, and initialled Respondent's Exhibit 14 "A.Z." (1) These are documents which Zangrilli testified he authored. (See Findings_ 41s, 41w, 4lee). (8) Zangrilli was asked to review I.D. 29 -43 (See Finding 41w(2), a proposal from A&D which indicates that it was submitted to the PBOPE listing the name "A. Zangrilli" together with the telephone number of Zangrilli's office at the PBOPE. (a) When asked if his name is A. Zangrilli, Zanarilli, 92- 036 -C2 Page 105 Zangrilli stated, "My name isn't A. Zangrilli, it's Armand Zangrilli." (1) When asked if his first initial is A, Zangrilli stated, "You could call it that, yes." (b) When asked if he had any idea how his name and telephone number got on this proposal, Zangrilli stated, "You have to ask the person that did it." (9) When asked whether I.D. -4 consists of copies of his payroll checks from the PBOPE, Zangrilli stated, "They could be payroll checks or they could be travel checks. I don't know." (10) Zangrilli positively identified his signatures on the following exhibits: I.D. 9 (See Finding 41mm(3)); I.D. 6A -45 (See Finding 11(1)(a)). (a) Zangrilli testified as to the precise circumstances under which he signed each of these signatures. (b) When these same signatures were subsequently presented to Zangrilli for the expressed purpose of comparing them to other signatures, Zangrilli testified that they "looked like" and "could be" his signatures. (c) Zangrilli stated, "I'm not going to commit and tell you it is." (11) Zangrilli testified as to many signatures of his name that he did not know if they were his. (a) When asked to review I.D. 6B -11, Zangrilli stated, "This one here is mine. I know my handwriting." (12) Zangrilli contradicted himself an testimony regarding whether he had a subforeman and regarding the telephone number of his office at the PBOPE. (a) Zangrilli testified on direct examination that he did not have a subforeman working under him. (See Finding 41r(3)). (b) Zangrilli testified that the telephone number 488 -5109 which appeared in the "submitted to" Zangrilli, 92- 036 -C2 Page 106 block on various proposals submitted by A&D to the PBOPE (I.D. 29 -43, I.D. 29 -202), was the telephone number in his office at the PBOPE. (1) When subsequently asked, "So that's your office," Zangrilli stated, "No, it's an office that I go to. I share that office with all the plumbers and my subforeman, and I'm off 45 days a year." (a) When questioned about the contra- diction in his testimony as to whether he had a subforeman, Zangrilli stated that he had a fill - in foreman. (13) A&D's street and mailing address as indicated on its Articles of Incorporation and Registry Statement (R -20) are the same as Zangrilli's. (a) Zangrilli testified that the address at which he lives in Conneaut Lake is not the same address used by A&D. (b) Zangrilli subsequently testified that A&D is partially run out of the Conneaut Lake house and partially from Knowlson Avenue in Pittsburgh. (14) Zangrilli testified that he did not know if there are any supplies and equipment at the Conneaut Lake address for A&D. (a) Zangrilli had previously testified that an inventory of plumbing, heating, and air conditioning supplies is stored in the shed and attic above the carport at this Conneaut Lake home, and that these supplies are not his. (15) Zangrilli testified that he never received any written memoranda on changes- in the purchasing procedures instituted in January, 1992. (See Finding 4lee) . (a) Zangrilli subsequently testified regarding his own memorandum (R -14) to which he had attached a copy of McConachie's memorandum which instituted the changes in the purchasing procedures. (See Finding 4lee). Zangrilli, 92- 036 -C2 Page 107 fff. Zangrilli is not credible. (1) Zangrilli's testimony regarding his business, "Armand A. Zangrilli Plumbing Heating and Air Conditioning" can not be reconciled with contradictory declarations which he made under penalty of perjury in his bankruptcy proceedings (See Finding 41h). (a) At a minimum, Zangrilli lied in the bankruptcy proceedings or in this Commission's proceedings. (2) Zangrilli gave contradictory and evasive testimony on numerous matters within the proceedings before this Commission (See Finding 4leee). 42. Donna Grace Luke is the wife of Armand Zangrilli. a. Luke's address is P.O. Box 5061, Conneaut Lake, Pa. 16316. b. Prior to meeting Armand Zangrilli, Luke had no background, education, or experience in plumbing, heating, air conditioning, electrical or carpentry work or in the procurement or sales of plumbing, heating, air conditioning, electrical or carpentry supplies. (1) Luke received a high school G.E.D. in 1977. (2) Until approximately 1982, Luke was a full -time mother caring for her children at home. (3) In 1982, Luke attended a business school where she received a certificate in computer programming. (4) From 1982 -1988 Luke was an administrative specialist for the Pennsylvania Air National Guard. (a) From 1982 until 1986, Luke's service was part - time, consisting of one weekend a month and an additional two weeks each year. (b) From 1986 -1988, Luke worked full -time at this position. (c) Luke's duties were filing, typing, and ordering office supplies and supplements to military regulations. (1) This ordering was from an in -house stock Zanarilli, 92- 036 -C2 Page 108 warehouse that the Air National Guard maintained. c. Luke states that at the end of 1985, she met Armand Zangrilli. (1) Luke states that from 1986 on, she did plumbing, heating and air - conditioning work with Armand Zangrilli. (a) Luke states that she learned about installation, repair, and the techniques of these trades, and the related supplies and equipment. (b) Luke states that she also audited a plumbing course at a community college. d. Luke states that she formed A&D and subsequently ADAM and began to sell supplies and materials to the PBOPE as a result of a conversation which Luke had with Dyer and McShane. (1) Luke states that this conversation took place in July or August of 1989. (2) Luke states that she had known Dyer and McShane since 1986. (3) A&D's first sale to the PBOPE occurred in August of 1989, before A&D was officially incorporated. e. Luke states that she caused A&D to be formed. (1) Luke states that Armand Zangrilli was not present when Luke met with Albert Zangrilli to establish A&D. (2) A&D Mechanicals, Inc. ( "A&D ") was incorporated in the Commonwealth of Pennsylvania on September 28, 1989, by Albert J. Zangrilli, Jr. Esquire as a close corporation. (a) The address for the corporation is listed as R.D. #1, Oakmont Drive, Conneaut Lake, PA 16316. (3) A &D's Corporate Registry Information for Departments of State and Revenue ( "Registry Statement ") lists two principal officers for A&D. Zangrilli, 92- 036 -C2 Page 109 (a) Armand A. Zangrilli is listed as "President" on the Registry Statement. (b) The Registry Statement provides that Donna Luke is Secretary- Treasurer. (c) (1) Donna Luke was elected President of A&D at the corporation's organizational meeting. The Registry Statement sets forth the following mailing address: P.O. Box 490, Conneaut Lake, PA 16316. Business is indicated as having started July 28, 1989 as a sole proprietorship. A&D's principal business activity is designated to be "Plumbing, heating and air - conditioning contracting; general contracting." (f) The registry certification Zangrilli, as being, to the correct. statement is signed under the of the incorporator, Albert J. having been examined by him and best of his knowledge, true and (4) Luke states that she did not see the registry statement before it was filed. (a) Luke states that after the registry statement was filed, she saw it and told Albert Zangrilli that it was erroneous. (1) Luke states that Armand Zangrilli never held any office or position with A&D. (2) Luke states that Armand Zangrilli never held any stock in A&D. (b) Luke states that she asked Albert Zangrilli to fix the "error" which had indicated that Armand Zangrilli was the President of A&D and Luke was Secretary /Treasurer. (c) Included in the corporation's Minute Book is a copy of a letter dated October 6, 1989, from Albert Zangrilli to Donna Luke, which states that Albert Zangrilli talked with the Pennsylvania Corporation Bureau about amending Zangrilli, 92- 036 -C2 Page 110 f. Luke was elected President, Secretary and Treasurer of A&D at A&D's organizational meeting on October 4, 1989. (R -20) . g. the Registry Statement to change the name of a corporate officer and the fiscal year. A11 shares of A&D are in Luke's name. h. Luke states that she also formed ADAM. j- (1) Luke states that Armand Zangrilli was not present when Luke met with Albert Zangrilli to establish ADAM. (2) ADAM's Articles of Incorporation were filed with the Department of State on or about April 29, 1991. (R -21) . (a) ADAM was incorporated in Pennsylvania under the name, "ADAM Specialty Supply, Inc.," as a close corporation. (b) The address of ADAM's registered office in Pennsylvania is R.D. #1, Oakmont Drive, Conneaut Lake, Pa. 16316. (1) The mailing address of P.O. Box 5061, Conneaut Lake, Pa. is also listed. (2) These addresses were also the addresses of Armand Zangrilli, Donna Luke, and A&D. (c) Albert J. Zangrilli, Jr., was the incorporator. (d) The Registry Statement lists Donna Luke as President, Secretary and Treasurer. i. All shares of ADAM are in Luke's name. Luke was elected President, Secretary and Treasurer of ADAM at its organizational meeting on April 30, 1991. k. Luke states that she thought of the corporate names. (1) Luke states that for A &D, she used the initial "A" to be alphabetically first in the telephone book and other listings, while the letter "D" stands for her name, "Donna." Zangrilli, 92- 036 -C2 Page 111 (2) Luke states that for "ADAM ", she took the "A" and "D" from A&D's name, and added an "A" and an "M ". (3) Luke states that the testimony of her son, Michael Luke (See Finding 8i), that it was his idea to use "ADAM" to stand for the names, "Armand," "Donna," "Anthony," and Michael is inaccurate. (a) Luke states that it is mere coincidence that the initials in the names "A&D" and "ADAM" are the same initials of Armand and Donna (husband and wife) and Anthony and Michael (Donna's sons) who all lived together in the Conneaut Lake residence during the relevant period, except that Luke acknowledges the "D" stands for her name. (4) Luke testified that she wanted to be first in the telephone book and other listings because she wanted people to call her to obtain plumbing services. (a) A&D's listing in the Alltel telephone directory for Meadville, Conneaut Lake, and vicinity does not identify the company as a plumbing business. 1. Alitel Telephone Directory for the Conneaut Lake, Meadville area for the period March, 1993, through February, 1994, contains listings for Armand Zangrilli and A&D Mechanical, Inc. (1) Armand Zangrilli is listed at Oakmont Drive, telephone number (814) 382 -4141. (2) A&D Mechanicals, Inc. is listed at Oakmont Drive, telephone number (814) 382 -4141. (3) Luke states that there are two telephone numbers assigned to the Conneaut residence: (814) 382 -4141 and (814) 382 -4838. (a) Luke states that these two telephone numbers were assigned to the Conneaut residence during the relevant period. (b) Luke states that the first number, (814) 382- 4141 was the number for A&D, Donna and Anthony Luke, and Scrub -a -Dub. (c) Luke states that the second number, (814) 382- Zangrilli, 92- 036 -C2 Page 112 4838, was Armand Zangrilli's number. (1) Zangrilli acknowledged that his telephone number is 382 -4141. (See Finding 41kk). (4) When asked how people would contact her during the relevant period to purchase items from A&D and ADAM, Luke testified as follows: A. I was always down at the Service Center. Q. That was the method? A. I was there all the time. m. Luke sent a letter dated November 6, 1989 (R -22) to Dr. Curtis Walker, asking to be registered as a minority, woman -owned supplier for bidding purposes. (1) The date of this letter is one week after Luke and Zangrilli were married. (2) Luke did not inform Walker that she had just married the PBOPE's plumber foreman. (3) Luke's letter states that she is President and owner of A&D. (4) Luke's letter indicates A&D's address and telephone number as: 2899 Knowlson Avenue, Pittsburgh, Pa. 15226 (412) 341 -9927. n. Investigative Division Exhibit 29 -43, dated 8/17/89, was one of the first proposals A&D submitted to the PBOPE. (1) Luke states that she prepared this proposal, with Rase's help. (2) Luke states that she asked Rase what telephone number should be put in the "submitted to" block and that she was given "488 -5109, A. Zangrilli." (a) Luke states that Armand Zangrilli did not tell her to put his name there. o. Luke states that during the relevant period from August of 1989 through January of 1992, which was the period during which A &D and ADAM sold supplies to the PBOPE, she made sales calls at the Service Center four or five times a week, every week. Zanarilli, 92- 036 -C2 Page 113 P• q. (1) Luke states that she called upon Rase, Miller, Dyer and Earl, and that they also called her. Luke acknowledges that at least $228,626.08 of the total $338,667.70 deposited into A&D's account consisted of PBOPE funds. (I.D. 49). (1) The largest source of deposits into ADAM's account (I.D. -50) was the PBOPE. (2) The PBOPE accounted for a substantial portion of the income received by A&D and ADAM. (3) The PBOPE accounted for a substantial portion of sales by A&D. (4) Most of the other clients were individuals. (5) During the years that A&D and ADAM were doing business with the PBOPE, they had no other clients that were school districts other than the Conneaut Lake School District. (a) From 11/08/89 through 03/13/91, the payments by the Conneaut Lake School District to A&D totalled $2,112.25. Luke testified that when she dealt with the PBOPE, she dealt primarily with Rase, Earl, and Miller. (1) Luke states that of these three, she dealt with Miller the most. (2) Luke states that she would get PBOPE order numbers in three ways. (a) Luke states that for bids through Ernie Miller which had to be approved by Kruse, Miller would advise Luke if she got the bid, but Luke had to wait for the order number to come through the mail. (1) Luke states that the document she received in the mail was a purchase order such as is exemplified by Respondent's Exhibit 9. (b) Luke states that for other items Miller would hand to Luke a slip of paper with the Purchase Order Number on it. Zangrilli, 92- 036 -C2 Page 114 (1) Luke states that Respondent's Exhibit 23 consists of some of these slips. (2) Luke states that there were more of these slips given to her by Miller, but that these are all that remain. (c) Luke states that Neely Earl or Don Rase would give her order numbers over the telephone. (1) Luke states that these telephone calls were for bigger items, and Earl and Rase would be soliciting a written quote from her. (d) Luke states that she never received any Maintenance Materials Requisition Forms. (e) Luke states that she never received a purchase order, either in writing or verbally, from Armand Zangrilli. (1) Luke states that she never asked Armand Zangrilli to get a purchase order for her. r. Luke stated that she was the only person who made deliveries for A &D and ADAM. s. Luke subsequently acknowledged that some items which A&D sold to the PBOPE were picked up directly from the vendors by School District employee John Nee. (1) Luke states that this was because Luke could not pick them up right away. (2) Luke states that on these occasions, she would call Neely Earl, Don Rase or Ernie Miller to tell them she could not get the items to the PBOPE that day, but that "they" could pick up the items from the vendor if it were an emergency. (3) Luke states that she never called Nee to tell him to go. (4) Luke states that she never called Armand Zangrilli to tell him to send Nee. t. Luke testified that she never dealt with the foremen of the trades groups on behalf of A &D, as a vendor. Zangrilli, 92- 036 -C2 Page 115 (1) Luke was asked to explain the contradiction between her testimony and a letter which she wrote to Donahoe dated 1/21/92 (I.D. -64) in which she stated that as a vendor, she contacted by telephone calls and visits, various people including the trades foremen to sell them products. (a) When asked to explain this contradiction, Luke stated that the foremen would come up to her in the hall and ask her for industrial wipes. (b) Luke subsequently testified that she never dealt with the foremen as a vendor, but also stated that her letter to Donahoe was accurate because if the foremen told her they needed something she would so inform Miller and ask if he needed the item. (2) Luke stated that she never dealt with Armand Zangrilli as a foreman. u. Luke states that some of the inventory of A&D or ADAM consisted of cash purchases. (1) Luke states that she made cash purchases from a company called "Santaire ". (a) On cross - examination, Luke acknowledged that the only product which A&D /ADAM bought from Santaire was a toilet paper product. (2) Luke states that she made cash purchases at the "Andover Auction" in Andover, Ohio. (a) On cross - examination, Luke acknowledged that the "Andover Auction" is a flea market which operates in the summertime. (1) Luke acknowledged that she went to this flea market six times per year, and that two of those times,there were no plumbing supplies at the flea market. (b) Luke states that the method of payment at the auction is cash and that she did not get any receipts. (c) Luke states that she bought Modess boxes, anti- freeze, sewer and drain cleaner, pumps, visqueen, and root destroyer at this auction. Zanarilli, 92- 036 -C2 Page 116 (1) Luke stated that she could not recall if she bought any pumps at this flea market in 1989, but that she bought 17 -18 pumps there during 1990 and 1991. (2) Luke could not recall how much root destroyer she bought there. (3) Luke guessed that she bought 30 -40 cases of sewer and drain cleaner there on behalf of A&D. (d) Luke states that she bought products at this auction which she in turn sold to the PHOPL at her usual prices with no discount. (3) Luke states that she made cash purchases from companies or plumbers that were going out of business. (a) On cross- examination, Luke acknowledged that any such sources were at. the Andover Auction and were not additional sources. (4) Luke states that she could buy products for less money in a cash sale than she could from an ordinary transaction with a vendor. (a) Luke states that she would pay approximately $140 for an Armstrong S -25 pump from Trew Company, but that in a cash sale she would pay from $88 -$94 for this pump. (b) Luke states that in an ordinary transaction with a vendor, she would pay $25.00 for a Modess box, but that at the auction she paid from $15 -$17 for a Modess box. (c) Luke states that she would pay Trumbull Industries $4.46 per quart for sewer and drain cleaner, but that at the auction she could buy sewer and drain cleaner for between $1.50- $2.00 a quart. (d) Luke states that she could buy root destroyer for less money at the auction than from Trumbull Industries, especially if she bought in quantities. v. Luke testified that A &D purchased: work gloves from Safety First Warehouse; Gorman Rupp pumps from Meyers and Zanarilli, 92- 036 -C2 Page 117 Trew Company; industrial wipes from R.E. Michel; and visqueen from Construction Tool Services. (1) Luke states that she does not have all of the statements that were non -cash purchases. (a) Luke stated that her checks would show that she bought material from Trew Company for which Trew Company does not have an invoice. w. Luke states that she kept a product inventory at Conneaut Lake Storage and in a garage in Pittsburgh which she leased from Theresa Zangrilli (Armand Zangrilli' s mother) at the 537 Dorchester Avenue /2899 Knowlson Avenue property. (1) Luke stated that she started storing at Conneaut Lake storage around 1991. (2) Luke states that she paid Theresa Zangrilli a monthly rental of $75.00 for the Pittsburgh garage. (3) Respondent's Exhibit 24 includes two (2) leases with Theresa Zangrilli as lessor: one lease is to A&D for a garage at 2899 Knowlson Avenue, Pittsburgh, Pa. for a one -year term from July 1, 1989 through June 30, 1990; and the other is to ADAM for a garage at 537% Dorchester Avenue, Pittsburgh, Pa. for a one -year term from August 1, 1990 through July 31, 1991. (4) Luke states that she used the garage to work out of and to store supplies. (5) Luke states that there was another room that she used that had a telephone. x. A&D and ADAM had Mercantile licenses for the City of Pittsburgh and /or School District of Pittsburgh and paid mercantile taxes to the City of Pittsburgh (R -24). y. Luke states that she did A&D's service and installation work with "helpers." (1) Luke states that she did not have any employees. (2) Luke states that Zangrilli and Tom Timlin did not know anything about A &D, but helped her. (a) Zangrilli stated that he worked for A &D in Zangrilli, 92- 036 -C2 Page 118 performing services for the Conneaut Lake School District. (b) When asked to explain the distinction of how Timlin worked on A&D's jobs but worked for Luke and not A&D, Luke stated: "Well, Tom was going through a divorce, and he was on workman's comp, and I loaned Tom some money, and Tom helped me -- he paid me back by helping me, so it wasn't through the company." (3) Luke acknowledges that the jobs Zangrilli and Timlin did were jobs that had been obtained by A&D. (4) Luke states that A&D has never paid any compensation to Armand Zangrilli. aa. Luke states that she is still actively doing business with A&D. (1) Luke states that the Conneaut. Lake School District and Sousa Real Estate account for 60 -65% of A&D's business which is related to plumbing, heating and air conditioning. (2) Luke states that "Scrub -a -Dub" is a cleaning service which is a division of A&D. bb. ADAM is no longer an active corporation in terms of doing business. (1) ADAM ceased actively selling when the PBOPE stopped doing business with A&D and ADAM. cc. Luke states that she signed Armand Zangrilli's name on his payroll checks and on Boron slips. dd. Luke states that Zangrilli gave her a Boron card to use. (1) Luke states that she used Zangrilli's Boron oil charge account because she could not get credit for A&D. (2) Luke states that A &D used the gas and paid the bills. ee. Armand Zangrilli's funds were commingled with funds from A &D /ADAM in Luke's personal checking account. Zangrilli, 92- 036 -C2 Page 119 (1) Some of Zangrilli's expenses were paid from Luke's account. ff. Luke stated that there were three vehicles used by A&D. (1) One of these vehicles, Luke stated, was a 1978 Chevy van. g g• (a) Luke testified that this was the only Chevy van that A&D owned or had during the relevant period. (b) Luke testified that she still has this van. (2) Luke stated that A&D also used a station wagon titled in Luke's name, and a car, which Luke sold. (3) Luke stated that these three vehicles were all used by A&D at the same time. A&D had a stock of tools and equipment. (1) Luke testified that these were not the same tools that Armand Zangrilli used in his plumbing business, "Armand Zangrilli Plumbing, Heating and Air Conditioning." (2) luke stated that the tools and equipment included: (a) one sewer machine that was available for rental and had cost Luke $375; (b) power tools, such as an electric saw, electric drill, and electric snake; (c) hand tools including assorted wrenches, screwdrivers, and pliers; and (d) a pipecutter and different sizes of threads. (3) Luke testified that: (a) she personally purchased all of the A&D owned over the course of a before A &D was formed in 1989. (b) Armand Zangrilli told Luke what equipment she needed to buy. (c) When A &D was formed, the tools and equipment became the property of A &D. tools that few years tools and Zanarilli, 92- 036 -C2 Page 120 (4) (5) (6) (3) Luke testified that the value of A&D's tools and equipment, excluding vehicles, was approximately $20,000.00. Luke (a) (b) stated that A&D owns office Luke states that A&D owns with disk drives which cost equipment. a typing station $4,500. Luke states that A&D owns two large bookcases, three desks, one computer desk, chairs, telephones, bulletin boards, rugs, and floor mats which cost $3,000- $4,000. A&D's Federal and State Income Tax return for the year ending June 30, 1990 includes Form 4562 which is an election to expense depreciable assets. (a) A&D's tools and equipment are listed as having a cost basis of $80,037. (b) Luke indicated that her accountant prepared the form, and she could not explain what the $80,037 was for. testified that the checks made payable to her by A&D hh. Luke were for money owed to her by A&D. (1) Luke testified that this money was owed money and material she put into A&D as start -up expenses. (2) Luke testified that she believed A&D had capital of $3,800. for the capital start -up A&D's 1990 tax return lists loans from stockholders of $61,951. (a) Luke did not know how this figure was calculated. (b) Luke testified that there was no actual' cash infusion of $61,951 into A &D. (c) Luke states that she did not take any other compensation from A&D. ii. Donna Luke met with Daniel McConachie, Director Division of Purchasing for the PBOPE on January 14, 1992, during the school district's internal review of A&D Mechanical and ADAM Specialty. Zangrilli, 92- 036 -C2 Page 121 jj. Luke to A kk. 11. mm. testified that Armand Zangrilli did not have access &D's account at Trew Company. (1) Luke stated that Zangrilli had his own account at Trew Company. (2) Luke stated that she did not know why Zangrilli's name appears on Trew Company invoices to A&D, in the area designated "customer order number." Luke stated that she wore her engagement ring and wedding ring while at the Service Center. (1) Luke stated that Kruse knew she was married. (2) Luke stated that she does not know whether Miller, Rase, or Earl knew that she was married to Armand Zangrilli. Luke states that she was running A&D to make money. Luke is not credible. (1) Luke participated in structuring Timlin's work so as to assist him in avoiding adverse consequences in his workmen's compensation and divorce matters (See Finding 42y). (2) Luke made contradictory statements regarding whether she dealt with the trades foremen on behalf of A &D as a vendor. (See Finding 42t). (3) Luke testified that Zangrilli knew nothing about A&D, yet he taught her the plumbing, heating and air conditioning business, was her consultant as she gathered tools and equipment for the business, and worked on A&D's jobs. (4) The evidence that Zangrilli's account at Trew Company became A&D's account on October 13, 1989, and that Zangrilli placed and picked up orders for A&D on this account and personally dealt with Mark Trew on behalf of A&D is clear, convincing, and cannot reasonably be disputed (See Finding 15), yet Luke stated that Zangrilli did not have access to A &D's account at Trew Company and had his own account there. (See Finding 42jj). 43. Joyce Bieltz was employed by the PBOPE as an Account Clerk. a. Bieltz' duties included secretarial duties. Zangrilli, 92- 036 -C2 Page 122 b. In June of 1989 Bieltz worked as a secretary to McShane, who was Chief of Maintenance at that time. (1) Bieltz was McShane's secretary at the time of McShane's death on March 29, 1991. c. The trades foremen were under McShane's supervision. d. As part of his duties, McShane prepared job descriptions for trades foremen, or for anyone in the trades, with the participation of the trades foremen. (1) The preparation of these job descriptions would be prompted by contract negotiations or by grievances from the foremen or the trades people. (a) Bieltz stated that any time there was a grievance and a copy of the job description was requested, the PBOPE did not have one so it was typical for the Chief of Maintenance, along with the trades foremen, to write one. (2) Bieltz would type job descriptions from time to time. (a) Bieltz does not recall whether in June of 1989 in particular, she typed job descriptions for other trades foremen. e. The procedure which McShane followed to prepare a job description for a trades foreman was as follows: (1) McShane would ask the foreman to write down his duties and responsibilities as he saw them; (2) The foreman would do this and would give his writing to McShane; (3) McShane would write the job description using his own ideas and incorporating those of the foreman; (4) Bieltz would type the job description according to McShane's instructions. f. Bieltz recalls the preparation of Armand Zangrilli's job description in June, 1989. g. Armand Zangrilli participated in drafting this job description, working in conjunction with McShane. (1) Zangrilli came into McShane's office with a paper Zangrilli, 92- 036 -C2 Page 123 that Zangrilli had written up. (2) McShane called Bieltz into his office. (3) McShane told Bieltz that Zangrilli had a job description which McShane wanted Bieltz to type, but that McShane was first going to write something which was to be incorporated with it. (a) McShane told Bieltz that Armand Zangrilli wanted to have a copy of this. (4) Subsequently, Bieltz got McShane's writing and the paper which Zangrilli had brought in. (a) Bieltz is able to recognize Armand Zangrilli's handwriting. (b) Bieltz recognized the handwriting on the paper which Zangrilli had brought in as Zangrilli's handwriting. (5) Bieltz typed up the job description for Armand Zangrilli in accordance with McShane's instructions to Bieltz. (a) I.D. -1 is the job description for Armand Zangrilli which Bieltz typed per McShane's instructions. (b) Bieltz personally typed the document which is I.D. -1. (6) At McShane's direction Bieltz signed and placed her initials on Zangrilli's job description. (a) Bieltz prepared the memorandum in evidence as R -17 which explains that she signed Zangrilli's job description for McShane in accordance with his instructions since McShane was planning to be absent. (7) Bieltz does not recall which portions of Zangrilli's job description were from which paper. h. McShane communicated with the office when he was able. (1) Approximately eight weeks before his death on March 29, 1991, McShane was not in a position to communicate. Zangrilli, 92- 036 -C2 Page 124 7 g- (2) In December of 1990, McShane came to the office Christmas party. (a) McShane was not working at that time. (b) To Bieltz' knowledge, McShane did not perform any service at that time. 44. Allegations of violations of the Ethics Law by Armand Zangrilli first came to the attention of the Investigative Division in a letter received on or about February 26, 1992. a. The investigation of Armand Zangrilli was initiated by the Executive Director pursuant to the Executive Director's authority to initiate a preliminary inquiry without involvement by the Commission. b. No member of the Commission played any role in drafting the notice letters sent to Zangrilli (I.D. -B and I.D. -D). c. Subpoenas were issued which is a ministerial function. d. Neither Chief Counsel nor any member of the State Ethics Commission accessed any investigative materials or files while this case was being processed. e. The Investigative Division sought any legal advice on this case from the Executive Director, who is a lawyer. f. Other than the hearing in this matter, no presented to any member of the Commission. Chief Counsel withdrew from this matter as testifying at the hearing regarding the issue. k. Each Division has its own staff. evidence was a result of commingling h. The Harrisburg Offices of the Investigative Division and the Legal Division of the State Ethics Commission are located on the third floor of the Finance Building. (1) Each Division is reached through the main telephone numbers for the State Ethics Commission. i. The Executive Director, John Contino, heads the Investigative Division and functions independently of Dopko. Chief Counsel Vincent Dopko heads the Legal Division and functions independently of Contino. (R -B). Zanarilli, 92- 036 -C2 Page 125 III. DISCUSSION: 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. 65 P.S. §403(a). Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 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 Zanarilli, 92- 036 -C2 Page 126 65 P.S. §403(f). 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. Section 3. Restricted activities (f) No public official or public employee or his spouse or child or any 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, 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. Section 4. Statement of financial interests required to be filed Zangrilli, 92- 036 -C2 Page 127 65 P.S. 5404(a). (a) Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the commission no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Persons who are full -time or part -time solicitors for political subdivisions are required to file under this section. Section 4(a) of the Ethics Law quoted above requires that every public official /public employee must file a Statement of Financial Interests each year that he holds the position and the year after he leaves the position. The Statement of. Financial Interests requires the public official/ public employee to disclose specific information for the preceding calendar year. We shall first address the legal issues which Respondent has raised. Respondent initially sought to raise three Affirmative Defenses in his Answer to the Investigative Complaint: first, that the Ethics Law does not apply to Zangrilli; second, that the Complaint fails to state a claim upon which relief can be granted; and third, that this case would be barred by the statute of limitations or by the effective date of the Ethics Law and its amendments. The Respondent was advised that the rules and regulations of the State Ethics Commission do not provide for the raising of affirmative defenses and that the matters that he had raised would be treated as notice to the Investigative Division of new issues which Respondent wished to raise in the case. Thereafter, Respondent properly raised only the first Zangrilli, 92- 036 -C2 Page 128 argument, as to whether the Ethics Law applied to Zangrilli. This issue is discussed below as a substantive issue. Although the other two issues were waived by Respondent, it is noted that no basis was at any time proffered for these arguments and none is apparent to this Commission. We would merely add that the Investigative Complaint in this matter was issued well within the timeframe provided by Act 9 of 1989. (See 65 P.S. 5408(m)). There is no statute of limitations which would bar this proceeding. In a prehearing teleconference on October 13, 1993, the presiding officer directed the mechanism for raising legal issues, which required the submission of a brief. Respondent first raised a "commingling" issue, arguing that this proceeding improperly permits the prosecution and adjudication of this case to be made by the same agency. A separate hearing was held on this issue, and briefs were submitted by Respondent and the Investigative Division. The evidence from that hearing establishes that allegations of violations of the Ethics Law by Zangrilli came to the attention of the Investigative Division by a letter received on or about February 26, 1992. The investigation of Armand Zangrilli was initiated by the Executive Director's own motion without any involvement by this Commission. No member of the Commission played any role in drafting the notice letter sent to Zangrilli. Subpoenas were issued as a ministerial function. Neither Chief Counsel nor any member of the State Ethics Commission accessed any investigative materials or files while the case was being processed. The Investigative Division sought any legal advice from its Executive Director, who is a lawyer - not from Chief Counsel. No evidence was presented to any member of this Commission other than the hearing in this matter. Respondent acknowledges that under Lyness v. State Board of Medicine, 529 Pa. 535, 605 A.2d 1204 (1992), it is sufficient for the adjudicatorial and prosecutorial functions to be "parceled out and divided" among individuals or entities who are distinct from the board rendering the ultimate decision. See, Brief of Respondent at 4 (Citing Lyness, supra). In this case, the prosecutorial function has been executed solely by the Investigative Division. Neither the members of this Commission nor Chief Counsel have played any prosecutorial role. Furthermore, the Chief Counsel withdrew from this case as a result of testifying at the hearing on commingling. Thus, there is no basis for Respondent to allege commingling with regard to Chief Counsel. Indeed, Respondent could ask no more than the removal of Chief Counsel, which has already occurred. The remaining arguments advanced by Respondent on this issue Zangrilli, 92- 036 -C2 Page 129 are equally baseless. The roles of the Chief Counsel and the Executive Director as prescribed by statute and as executed are distinct and segregated. 65 P.S. 406(i). Each of these individuals reports directly to the Commission. Finally, Respondent's argument based upon the physical facilities and telephone number of the Commission offices fails to proffer any facts which would run afoul of Lvness, supra, which recognizes such conditions as practical and permissible realities. Based upon all of the above, we reject Respondent's commingling argument as without merit. Respondent did not brief -- and therefore has waived -- a second argument that his right to be free from self incrimination would be infringed upon for the proffered reason that in order to defend himself in these proceedings, he would have no alternative but to testify. We would parenthetically note the spurious nature of this argument. The privilege against self incrimination is invoked by individuals who are being forced to testify. There is no compulsion upon the Respondent to testify in these proceedings. The Fifth Amendment does not preclude bringing proceedings against a Respondent simply because he believes his defense will be enhanced if he chooses to testify. The crux of the next issue raised by Respondent is that the First Amendment protection afforded to commercial free speech would permit him to use his public position for illegal self dealing in violation of the Ethics Law. The very case cited by the Respondent, ostensibly to support his position, in actuality holds that there is no First Amendment protection for commercial speech related to illegal activity. Central Hudson Gas v. Public Service Comm'n, 447 U.S. 557, 100 S.Ct. 2343, 65 L. Ed. 2d. 341 (1980); see also, Pittsburgh Press Co. v. Human Relations Comm., 413 U.S. 376, 93 S.Ct. 2553, 37 L. Ed. 2d. 669 (1973). Respondent's argument is rejected. Respondent has failed to brief and has therefore waived his fourth argument, that Act 9 of 1989 is unconstitutionally vague. We need only note that similar arguments were raised as to Act 170 of 1978, and were rejected. Snider v. Shape, 45 Pa. Cornrow. 337, 405 A.2d 602 (1979). Respondent's fifth argument, which regarded ex post facto application of Commission regulations has also not been briefed and has therefore been waived. We parenthetically note that under either set of regulations, we would conclude -- as we do below -- that as Plumber Foreman for the Pittsburgh School District Armand Zangrilli was a "public employee" subject to the Ethics Law. We will now address the substantive allegations before us, Zangrilli, 92- 036 -C2 Page 130 which are whether under Act 9 of 1989, Zangrilli violated Section 3(a) (conflict provision) , Section 3(f) (contracting provision) , and Section 4(a) (Financial Interest Statement filing requirement provision) by using the authority of his position to direct school district business to A&D Mechanicals, Inc. (A&D) and ADAM Specialty Supply, Inc. (ADAM), businesses with which it has been alleged that Zangrilli and a member of his immediate family are associated; by utilizing school district equipment and materials for such private business purposes; by using his public position to order, purchase, or requisition various supplies and materials for the school district from a member of his immediate family or a business with which he is associated, which materials and supplies were paid for by the district but allegedly were never received; by the lack of an open and public process as to contracts between the school district and A&D and ADAM; and by failing to file Statements of Financial Interests for the 1989, 1990, and 1991 calendar years. The evidence in this case has uncovered an elaborate scheme by which Armand Zangrilli, the Plumber Foreman for the Pittsburgh School District, contrived to sell supplies to the Pittsburgh School District through two corporations owned on paper by his wife whose name is "Donna Luke." Zangrilli used the authority of his position at the School District to direct purchases to these corporations and to direct the use of School District man hours, facilities and equipment for these corporations. Factually, Zangrilli was employed by the Pittsburgh Board of Education (PBOPE) as the plumber foreman for the Pittsburgh School District (PSD) from March 30, 1987 until September 15, 1992. Various testimony and exhibits have been offered to establish the authority and duties that Zangrilli had as the plumber foreman. Zangrilli denies that he was subject to the Ethics Law. Since the early 1960's, Zangrilli operated a business of his own, namely "Armand A. Zangrilli Plumbing, Heating and Air Conditioning." This business continued to operate during what has been termed "the relevant period" of August, 1989 to January, 1992. However, Pittsburgh School District employees like Zangrilli were prohibited from selling products to the School District. On September 28, 1989 -- one month before Zangrilli married Donna Luke -- a corporation named A &D Mechanicals, Inc. (A&D) was officially created, with Attorney Albert Zangrilli, Jr. as the incorporator. The corporation's Registry Statement indicates that Armand A. Zangrilli is its President and Donna Luke is its Secretary - Treasurer. Luke has stated that the corporate Registry Statement is erroneous in this regard. In any event, at the corporation's organizational meeting, Luke was elected president, secretary and treasurer of A &D. All of the corporate stock is indicated as being owned by Luke. Zangrilli, 92- 036 -C2 Page 131 A&D's sales to the Pittsburgh School District began in August of 1989, about one month before A&D was incorporated. In 1989, with only four months of sales to the PBOPE, A&D placed eighth out of the twelve vendors who sold plumbing supplies to the PBOPE that year, getting 4% of the total of that business. The next year, 1990, A&D rose to second place out of thirteen plumbing supply vendors with 21.5% of the total of that business. Also, in October of 1990, ADAM Specialty Supplies, Inc. (ADAM) began to do business with the PBOPE. ADAM was not incorporated until approximately five months later, on April 29, 1991, and once again, the corporation was owned on paper by Donna Luke. In 1990, with only two months of sales, ADAM placed ninth out of the thirteen vendors who sold plumbing supplies to the PBOPE that year, getting 3.3% of the total of that business. Combined, A&D and ADAM had 24.8% of the total of that business. In 1991, A &D and ADAM placed second and third respectively out of fourteen vendors who sold plumbing supplies to the PBOPE, with combined sales equaling 35.3% of the total of that business. The combined sales of A&D and ADAM greatly exceeded that of any other plumbing supplier doing business with the PBOPE. From August 21, 1989 through March 9, 1992, the total amount paid by the PBOPE to A&D and ADAM was $230,945.98. The Maintenance Division of the Pittsburgh School District has numerous "trade shops," including the plumbing shop. During the relevant period from August, 1989 through January, 1992, the procedures for purchases for the trades area of the PSD including the plumbing shop run by Armand Zangrilli were issued by Daniel McConachie, the Director of PSD's Unit of Purchasing. The procedures varied depending upon the dollar amount of a purchase. Purchases over $4,000 had to be through formal competitive sealed bids advertised in the newspapers. Purchases between $2,500 and $4,000 required at least three written price quotations which were to be obtained by persons other than trades personnel. These purchases had to be approved by McConachie or his Assistant, Billie Talak, later known as Billie Kruse. Purchases from $1,000 up to $2,500 required one written price quotation. A tradesman could get that quotation and it was within Zangrilli's authority as plumber foreman to get such a price quotation. Finally, purchases under $1,000 did not require any written price quotation, but they were required to be authorized by either the Chief of Maintenance or by the trades foreman for the trade making the purchase. Purchases under $1,000 could be accomplished in one of two ways. The items could be requisitioned in advance, through the preparation of a Maintenance Materials Requisition Form, which would then be submitted to a buyer in the purchasing office. The tradesman could recommend a vendor, but could not force the buyer to use that vendor. Alternatively, the tradesman could purchase the needed items himself from the vendor and have the paperwork prepared later. Under this procedure, the Purchasing Department had no say in selecting the vendor. Zangrilli, 92- 036 -C2 Page 132 The documents evidencing a particular purchase under $1,000 bear a unique identification number called a "purchase order number" which is assigned to that purchase. The first part of the number references the money being accessed for the purchase. The second part of the number indicates the numerical sequence of this purchase among other purchases against that money. Armand Zangrilli testified that he ran "his shop," the plumbing shop, and that he chose to do so by never filling out Maintenance Materials Requisition Forms or seeing what his plumbers ordered, but by allowing Rase or Purchasing to take care of preparing these forms. Zangrilli stated that he never signed a requisition for of any kind prior to January, 1992. Zangrilli's name or nickname ( "Zang ") appears on fifteen Maintenance Materials Requisition Forms, one proposal from A&D, and one invoice from ADAM, from all of the documents evidencing the sales by A&D and ADAM to the PBOPE. Zangrilli denied signing or having anything to do with these documents. There is some evidence that others wrote Zangrilli's name on at least some of these documents. Zangrilli denied requesting any materials or recommending any vendors, including A&D and ADAM. Rase and Earl, individuals who were involved in processing purchases, testified that Zangrilli did request materials and did recommend A&D and ADAM for purchases by the PBOPE. Evidence was also offered to show that Zangrilli used the man hours, facilities and equipment of the School District for A&D's private business purposes. Zangrilli and Luke denied that Zangrilli has any ownership interest in A&D or ADAM, or that Zangrilli acted on behalf of these corporations. Various vendors and private individuals testified that Zangrilli was involved in every phase of A&D's operations, including placing orders with vendors and picking up those orders, tendering payments on A &D's accounts, meeting with A&D customers, giving estimates, doing jobs for A&D, and receiving payments for A&D. Finally, the Investigative Division has offered testimony and various charts regarding its analysis of the voluminous and complex documents in this case. We begin our analysis of the specific issues and evidence in this case by stating without reservation, that Armand Zangrilli is not credible. The numerous examples evidencing Zangrilli's complete lack of credibility are set forth at length in Finding 41 above and will not be repeated at length here. However, it will suffice for purposes of this discussion to note that Zangrilli either lied to this Commission in his testimony about his business, Armand Zangrilli Plumbing, Heating and Air Conditioning, or he lied Zanarilli, 92- 036 -C2 Page 133 in his declarations under penalty of perjury in bankruptcy proceedings wherein he failed to disclose facts concerning that business. Zangrilli's contradictory declarations simply cannot be reconciled. Furthermore, Zangrilli's testimony before this Commission within these proceedings is so riddled with contradictions and attempts to evade straightforward questions as to render him completely incredible. We are convinced that this Respondent will avoid the truth, twist the truth, and deliberately lie to further his own interests. The threshold substantive issue which must be addressed is whether Armand Zanarilli as the Plumber Foreman for the Pittsburgh School District, was a "public employee" subject to Act 9 of 1989. The statutory definition of the term, "public employee" is as follows: 65__ P.$. 5402. Section 2. Definitions "Public employee." Any individual employed by the Commonwealth or a political subdivision who is responsible for taking or recommending official action of a nonministerial nature with regard to: (1) contracting or procurement; (2) administering or monitoring grants or subsidies; (3) planning or zoning; (4) inspecting, licensing, regulating or auditing any person; or (5) any other activity where the official action has an economic impact of greater than a de minimis nature on the interests of any person. "Public employee" shall not include individ- uals who are employed by the State or any political subdivision thereof in teaching as distinguished from administrative duties. The Commission regulations at 51 Pa. Code list various factors for determining status as a public employee, including inter alia: whether the person makes final decisions; the degree to which the person has the authority to forward or stop recommendations to the person or body who makes final decisions; and whether the person normally performs his responsibilities in the field without on -site supervision. We conclude that as Plumber Foreman for the Pittsburgh School Zangrilli, 92- 036 -C2 Page 134 District, Armand Zangrilli was a "public employee" subject to the Ethics Law. This conclusion is based upon Zangrilli's job description and the testimony of Donahoe, McConachie, Preskar, trades personnel and Zangrilli himself. Coverage under the Ethics Law is to be construed broadly, and it is the authority that a public employee has, rather than his actual performance of duties, which is the objective test used to determine whether the individual is subject to the Ethics Law. Phillips v. State Ethics Com'n., 79 Pa. Commw. 491, 470 A.2d 659 (1984). Objectively, Zangrilli's job description sets forth duties which fall squarely within the statutory definition of "public employee" as well as the regulations of this Commission. Zangrilli was responsible for taking or recommending official action of a nonministerial nature with regard to activities in which his official action had a greater than de minimis economic impact. Zangrilli normally performed his responsibility in the field without on -site supervision. He was to "make frequent visits to school district buildings to review progress and quality of work." Zangrilli gave final approval for most if not all of the work of the plumbing shop. Zangrilli was also responsible for taking or recommending official action of a nonministerial nature with regard to contracting or procurement. His job description included the following: "oversees and assists in the requisitioning and /or ordering of all equipment, materials and tools needed, while working in close harmony with the materials expediter, purchasing supervisor, stock room supervisor and tool room attendant." See Finding lb). We reject Zangrilli's argument that the Purchasing Department had all of the control in this process. Zangrilli's authority and responsibility was significant because the Plumber Foreman -- not Rase, Nealy Earl, or the Purchasing Department -- would know what materials would be needed for the PSD's approximately 12,000 plumbing jobs each year. As for the tradesmen, Zangrilli had the final say and approval as to the plumbing jobs. Under the procedures for purchasing, only two people could authorize purchases under $1,000 for the plumbing shop -- the Chief of Maintenance and Zangrilli. Zangrilli had the authority and the duty to review Maintenance Materials Requisition Forms and approve or disapprove them. The fact that Zangrilli did not sign the forms does not alter the authority that Zangrilli had. (We parenthetically note here that none of the plumbers signed forms for purchases from A &D or ADAM). Zangrilli was given the authority to select vendors and to order and obtain products, because of his expertise as Plumber Foreman. For advance requisitions Zangrilli had the authority to recommend vendors to the buyer who made the final decision. Zangrilli also had the Zangrilli, 92- 036 -C2 Page 135 authority to direct "in the field" purchases under $1,000 to particular vendors. (See Findings if, 24(d), 30d(4),e) Based upon all of the above, we conclude that Armand Zangrilli as the Plumber Foreman for the Pittsburgh School District was a "public employee" subject to the Ethics Law. Respondent's arguments to the contrary are without merit. Zangrilli has asserted that he did not participate in preparing his job description and that he never received a copy of it. Even if we believed this assertion, which we do not, Zangrilli admitted that he ran "his shop" as he saw fit and that he "chose" not to complete Maintenance Materials Requisition Forms or to see what his plumbers ordered. Zangrilli clearly knew of his authority -- with or without a job description. Zangrilli claims that prior to January 9, 1992, trades foremen were not required to sign Maintenance Materials Requisition Forms. Zangrilli misreads McConachie's August 30, 1989 memorandum pertaining to the purchase of supplies for use by the Maintenance tradesmen, as providing purchasing guidelines for use by the tradesmen. Closing Statement of the Respondent at 10. Respondent cites this memorandum as requiring that the name of the tradesman requesting the material be indicated. (I.D. 39 -3). The particular reference Respondent cites, however, applies to warehouse stock requests, not direct purchases, while the very next page of the document clearly states that the signature of the trades foreman or Chief of Maintenance is required to authorize direct purchases. (See Finding 2 (f) (6)) . Finally, Zangrilli engages in semantics, citing McConachie's memorandum of January 9, 1992, which instituted changes in procedures for open purchase orders (See Finding 41 ee(4)(a)(1)), as establishing that the system was being "changed" to require the signatures of the Chief of Maintenance or the trades foremen on Maintenance Materials Requisition Forms. Although there were changes effectuated by this later memorandum, the authority and duty of the trades foremen to approve or disapprove Maintenance Materials Requisition Forms was not one of these "changes" but had existed throughout the relevant period (See Findings 2f, 2m). The "change" effective January, 1992 was that Maintenance Materials Requisition Forms which did not comply with that existing procedure would no longer be processed. Respondent's argument that the Board would not have instituted these changes had it suspected him of wrongdoing is ludicrous. The PBOPE had put a stop to doing business with A &D and ADAM at the time these changes were instituted, and it was investigating allegations involving Zangrilli's relationship to A &D and ADAM. (See Finding 2n(1)). It would appear that these changes in Zangrilli, 92- 036 -C2 Page 136 procedures may have been the direct result of suspected wrongdoing by Zangrilli. We must next determine whether Armand Zangrilli violated the Ethics Law. Act 9 of 1989 requires "clear and convincing" proof for finding a violation. 65 P.S. §408(g). We shall first consider whether Armand Zangrilli used the authority of his position as the Plumber Foreman for the Pittsburgh School District in violation of Section 3(a) of the Ethics Law. The elements for a Section 3(a) violation are the use of the authority of the public position or confidential information received in that position, for the private pecuniary benefit of the public official /public employee himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated. As for Zangrilli's authority as Plumber Foreman, it is important to keep in mind that the Plumber Foreman "oversees and assists in the requisitioning and /or ordering of all equipment, materials and tools needed, while working in close harmony with the materials expediter, purchasing supervisor, stock room supervisor and. tool room attendant. As for the third element for a Section 3 (a) violation, A&D and ADAM are businesses with which -- at the very least -- Zangrilli's spouse, Donna Luke, is associated in her official capacities as President, Secretary, Treasurer, and sole stock holder. See 65 P.S. §402. This element is fully satisfied -by Donna Luke's association with A&D and ADAM. Any private pecuniary benefit to Luke personally, or to Zangrilli, is merely the proverbial "icing on the cake." To the extent that Zangrilli has strenuously denied his own involvement with these corporations in the face of overwhelming testimony by customers and suppliers of A&D that Zangrilli was involved in every phase of A &D's operations -- placing orders, picking up supplies, and paying vendors for A&D; giving estimates for A &D; performing installation and repair work for A&D; and accepting payments for A &D -- all such testimony merely serves to strengthen our conviction that Armand Zangrilli is not credible, and that he recognized that the success of his scheme to do business with the ,School District depended upon_ his involvement being kept secret. In reviewing the evidence, the mere presence of Zangrilli's name on a Maintenance Materials Requisition Form, without more, is not sufficient to establish that Zangrilli recommended the vendor for the purchase. This is true in light of the evidence that other individuals wrote Zangrilli's name or nickname on these forms and also recommended vendors. In a similar vein, we reject the Investigative Division's Zangrilli, 92- 036 -C2 Page 137 suggestion that we find a violation of Section 3(a) merely because Zangrilli ordered supplies for A&D which were subsequently sold to the PBOPE. Such was not a use of authority of Zangrilli's public position. Violations of Section 3(a) have been established in several instances, however. Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his position as plumber foreman to recommend to Neely Earl, an expediter in the PSD's Unit of Purchasing, that he use A&D or ADAM for purchases for the PBOPE (See Finding llh). Zangrilli's recommendation to Earl was particularly significant because Earl testified that if these companies had not been recommended to him, he would not have sought them out on his own. Therefore, as to Zangrilli's recommendation to Earl, it is clear that Zangrilli's use of the authority of his office directly resulted in a financial benefit to these businesses. Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his position as Plumber Foreman for the PSD to recommend to Don Rase, a materials expediter in the PSD's Facilities Office, that A&D be used for purchases for the PBOPE (See Finding 6g) . Zangrilli violated Section 3(a) of the Ethics Law when he specifically recommended to Rase that the PBOPE purchase Model S25 Armstrong Pumps from A &D. Zangrilli stated that he wanted to switch to Armstrong Pumps, and in recommending A&D as the vendor to use, Zangrilli stated that A &D could get these pumps "cheaper and quicker ". (See Finding 6k). Rase prepared Maintenance Materials Requisition Forms dated September 1, 1989 for five of these pumps as a result of Zangrilli's aforesaid use of authority of office. The profit to A&D from these sales was $430.00. (See Findings 6k, 38h, and 42u(4)) . Zangrilli violated Section 3(a) of the Ethics Law when he specifically recommended to Rase that he purchase a trailer for the PBOPE from A&D. Rase prepared a Maintenance Materials Requisition Form dated June 18, 1990 for the purchase of the trailer by the school district, at the request of Armand Zangrilli (See Finding 6 1). Rase got the information for this Maintenance Materials Requisition Form directly from Armand Zangrilli. Armand Zangrilli told Rase that this particular trailer was the trailer that he wanted and that A &D could get it quickly and cheaply. This trailer cost the PBOPE $985.00. (See Finding 6 1). We conclude that a prohibited private pecuniary benefit resulted from each of Zangrilli's aforesaid recommendations to Rase. Although Rase stated that he would have "handled things" in the same manner whether Zangrilli was involved with A &D or not, Zangrilli, 92- 036 -C2 Page 138 this at most establishes that Rase felt no special loyalty for Zangrilli. It in no way undermines the fact that Zangrilli's recommendations of A&D and ADAM to Rase, particularly with regard to the Armstrong Pumps and the trailer referenced above, directly resulted in the use of these companies as the vendors from whom these products were purchased. The third witness who was directly involved in the purchasing process was Ernest Miller (See Finding 25). Miller is not a credible witness, particularly on the issue of why A&D and ADAM were the designated vendors on hundreds of forms which he prepared (See Findings 25 e, 25 i). Miller specifically reviewed 121 Maintenance Materials Requisition Forms which he prepared for purchases from ADAM. Miller testified that the former Chief of Maintenance, Charles McShane, specifically directed Miller to give each of these purchases to ADAM. Of these 121 Maintenance Materials Requisition Forms, 117 were dated after McShane's last day on the job, with 65 of these forms bearing dates after McShane's death. Miller similarly testified that McShane picked A&D as the vendor for 217 Maintenance Materials Requisition Forms which Miller prepared. Of these 217 Maintenance Materials Requisition Forms, 77 were dated after McShane's last day on the job, and 43 of these were dated after McShane's death. On further questioning, Miller's testimony was that he had difficulty recalling each of these purchases and that McShane gave him directions on specific purchases on a "pretty regular basis." Obviously, we do not believe that McShane directed Miller to give each of these orders to A &D and ADAM, particularly those orders which occurred after McShane was deceased. However, it is possible that McShane made some such directions during his lifetime. Rase also testified that McShane told him to utilize A&D and ADAM. We reject any assertion by Zangrilli that the plumbers who worked below him recommended A&D or ADAM. The evidence clearly establishes that the plumbers were not familiar with A&D or ADAM and never made purchases from these companies. By process of elimination, given that McShane was dead when many of these purchases occurred, the evidence suggests that Zangrilli may have used the authority of his office to recommend A &D and ADAM for these purchases. However, it is also possible that Miller gave some of these orders to A &D and ADAM on his own. We cannot conclude on the evidence before us that Armand Zangrilli used the authority of his office to recommend A &D and ADAM for every one of these purchases. With regard to the sale by A &D of wiping rags to the PBOPE, however, the evidence establishes that a violation of Section 3(a) of the Ethics Law did occur. Wiping rags are a stock item at the Zangrilli, 92- 036 -C2 Page 139 PSD. (Finding 25c(2)). Miller was personally responsible for maintaining wiping rags in stock. (Finding 25c). Wiping rags were not ordered on a Maintenance Materials Requisition Form but rather were ordered on a document known as a "Purchase Order." (Finding 25c). Miller was personally responsible for preparing these purchase orders (Finding 25c(1)). Although Billie Kruse was supposed to approve these purchase orders, Miller stated that certain members of office staff signed Kruse's name to the forms when Kruse was out of the office. (Finding 25p). Action Supply used to sell these wiping rags directly to the Pittsburgh School District. John Black was Action supply's representative who handled these sales. (Finding 28). Black testified that in early 1990, while making a routine sales call to the PBOPE, he was told that the Board had a new policy preferring companies within the City of Pittsburgh. Miller told Black that A&D was going to supply these rags to the School District, and that Armand Zangrilli owned A&D. (See Finding 28b). We believe the testimony of John Black that Armand Zangrilli, Black, and Miller agreed upon an arrangement whereby A&D would purchase wiping rags from Action Supply on the verbal release of Ernie Miller, with the wiping rags being shipped by Action Supply directly to the PBOPE but invoiced to A&D. Our belief of Black's testimony does not hinge upon the fact that Miller and Zangrilli are not credible (See Findings 25 u and 41 eee). Black had no reason to lie. Action Supply made the same profit whether it sold the wiping rags directly to the PBOPE or through A&D (Finding 28 g). The only conceivable motivation that Black would have had to lie would be to deny any involvement with Zangrilli in the hopes that Action Supply's business with the PBOPE would not be adversely affected. The documents evidencing these sales are most enlightening. There are six documented transactions for sales of wiping rags by A &D to the PBOPE where Action Supply shipped the rags directly to the PBOPE and billed A &D (See Finding 25 o). These transactions occurred between 4/03/90 and 10/18/91. There is no doubt that the Findings set forth at Finding 25 o accurately match A &D's orders from Action Supply to A &D' s corresponding sale to the PBOPE because during this time period, there were no other sales of wiping rags to the PBOPE by A &D. (Finding 25 0(7)). Five of the six shipments occurred after the Zangrilli- Miller- Black meeting. Each of these shipments was authorized by "Ernie." Of course, Miller has denied ordering the rags from Action Supply (Finding 25 o (8)) . Zangrilli, 92- 036 -C2 Page 140 The very purchase orders that Miller prepared for these wiping rags show that Miller did in fact contrive with Zangrilli to circumvent the bidding process and direct these sales to A&D. After the Zangrilli - Miller -Black arrangement had been struck, with only one exception, each order of wiping rags was shipped to the PBOPE before any purchase order was prepared, let alone "approved." (See Finding 25 o). Miller testified that for purchase orders, the number is assigned by an individual other than Miller, and Miller receives his copies by mail. (Finding 25c). Luke also testified that for bids which had to be approved by Kruse, Luke had to wait for a copy of the purchase order to come in the mail (Finding 42q(2)). If these procedures were followed to any degree for these six orders of wiping rags -- which is doubtful -- they merely "rubber stamped" what Zangrilli and Miller had already done. Any such "approval" would in no way undermine our conclusion that a Section 3(a) violation occurred as to these six transactions. The Plumber Foreman "oversees and assists in the requisitioning and /or ordering of all equipment, materials and tools needed, while working in close harmony with the ... stockroom supervisor ...." Zangrilli used the authority of his position as plumber foreman to contrive a scheme with Miller to direct these particular orders to A&D. But for his position as plumber foreman, Zangrilli would not have been in a position to do so. The resulting private pecuniary benefit to A&D was $1,260.00 (See Finding 25 o). We shall now consider two proposals submitted by A&D to the PBOPE, one of which indicated that it had been submitted to "A. Zangrilli" followed by Zangrilli's telephone number at the PBOPE, and the other of which did not indicate a name but listed two telephone numbers, including the aforesaid number of Armand Zangrilli (See Findings 41w(2), 41w(3)). The Exhibits documenting the former of these transactions are identified as I.D. 29- 41 -44. The Exhibits documenting the latter transaction are identified as I.D. 29- 901 -902 and R10, page 6. We find that there is insufficient evidence to establish a violation of Section 3(a) of the Ethics Law as to either of these purchases. As for the first transaction, we do not believe Luke's testimony that Rase told Luke to put Zangrilli's name on the proposal. Luke is not credible (Finding 42mm), and Rase testified that he did not so instruct Luke and that he never had occasion to instruct vendors in drafting their proposals (See Finding 6j). It seems likely that Zangrilli, who is heavily involved with A &D, was aware of this proposal which was the first, or one of the first, submitted by A &D to the PBOPE. However, Luke may well have Zangrilli, 92- 036 -C2 Page 141 put Zangrilli's name on the proposal of her own volition. The second proposal, which merely lists Zangrilli's telephone number at the PBOPE as one of two numbers, is clearly insufficient to establish a violation. We shall next consider a Maintenance Materials Requisition Form for a purchase from A&D which bears the typewritten name "Armand Zangrilli" on the "Requested by" line, and the handwritten initials "A.Z." (See Finding 41 w(4) regarding I.D. 29- 1006). It is quite possible that Zangrilli personally initialled this form. Despite Zangrilli's conflicting testimony as to how he signed his name on PBOPE related documents (See Finding 41 eee(7)), by his own admission Zangrilli initialled rather than signed at least one other document (See Finding 41 ee). However, the vendor may have been recommended by someone else. We note that this particular document bears typewritten and handwritten notations, and various signatures, such that it is impossible to conclude as to this form, who did what. We turn now to the allegation that Zangrilli used the authority of his position as plumber foreman to use school district equipment and materials for private business purposes. Based upon the evidence which is before us, we conclude that Armand Zangrilli did violate Section 3(a) of the Ethics Law when he used the authority of his office to direct John Nee to pick up supplies for A &D from various vendors on school district time in a school district vehicle. Our conclusion is supported by the testimony of John Nee. (See Finding 31). Nee identified his signature on numerous vendor invoices /packing slips as the person who picked up orders for A&D. Nee testified that Armand Zangrilli, as Nee's supervisor, directed him to pick up these supplies in the course of Nee's employment. Luke acknowledged that Nee picked up items for A&D and ADAM. Her explanation was that there were times that she could not pick up the orders and told PBOPE staff that if there was an emergency, "they" were free to pick up the orders (See Finding 42s) . This explanation is unbelievable and it does not alter the fact that PSD man hours and equipment were used for the private pecuniary benefit of A &D, at Zangrilli's discretion. Zangrilli acknowledged that John Nee picked up supplies from vendors in a school district vehicle, but stated that these supplies were for the PBOPE. (See Finding 41 1). Perhaps Zangrilli was engaging in semantics yet again, since the supplies were ultimately destined for the PBOPE. In any event we need merely reiterate that Zangrilli is not credible and we do not believe him. Zangrilli, 92- 036 -C2 Page 142 Similarly, Armand Zangrilli used the authority of his position to use School District man hours and facilities in violation of Section 3(a) of the Ethics Law by arranging for Ernest Miller to handle telephone calls from Black -- on School District time using School District telephones -- so that Miller could give verbal releases on behalf of A&D to Action Supply, and so that wiping rags would be shipped directly to the PBOPE without any effort by A&D. A&D did nothing but reap the profit from these sales. As for the allegation that Zangrilli used the authority of his position to order, purchase, or requisition supplies and material for the PSD from a member of his immediate family or a business with which he was associated, which materials and supplies it is alleged were paid for by the PBOPE but never received, we do not so find. The Investigative Division's case on this issue hinged upon the implication that if a corresponding vendor invoice could not be located to establish that A&D or ADAM actually had such a supply -- that it actually existed -- then the supply did not exist. Thus, the PBOPE would have paid for a supply which it did not receive. Problems with this theory, as Bender acknowledged, are that there may have been cash purchases for which there would be no vendor invoice; there may have been vendors who were not identified by the Investigative Division; or a vendor's records could be incomplete such that vendor invoices could be missing. Donna Luke testified that she did in fact make cash purchases. Specifically with regard to Armstrong Pumps, Luke testified that she bought seventeen or eighteen pumps at the Andover auction in 1990 and 1991. (See Finding 42 u(2)(c)). Luke is not a credible witness. Without reiterating the many reasons that Luke is not credible (See Finding 42mm), we reference Luke's contrived arrangement with Tom Timlin, whereby Timlin would work for A&D without being an A &D employee on paper, so that Timlin's divorce proceeding and workmen's compensation would not be adversely affected. Given Luke's willingness to contrive such an arrangement with a third party, there is little doubt that she would be equally creative where her own interests are at stake. Nevertheless, even after rejecting Luke's testimony as not credible, there is insufficient evidence to support a violation for supplies not received by the PBOPE. There was one particular pertinent sale to the PBOPE of a Model S25 Armstrong Pump for which a corresponding vendor invoice could not be located. The profit from that sale has therefore been calculated by giving the benefit of the doubt to the Respondent. (See Finding 38h). The next issue is whether Section 3(f) of the Ethics Law was violated when A &D and ADAM contracted with the school district Zangrilli, 92- 036 -C2 Page 143 without an open and public process. We find that Section 3(f) of the Ethics Law was violated repeatedly, when ADD and ADAM repeatedly contracted with the PBOPE for amounts of $500 or more without an open and public process. (See Finding 2d). These purchases were made without any prior or subsequent public notification, often with no quotations, or with two or fewer other quotations. Only purchases in excess of $4,000 were processed with prior public notice. (See Findings 2f -g). For purposes of this discussion, it is not necessary to specifically enumerate each such violation. However, we would highlight the purchases set forth in Finding 38j which clearly evidence contract fragmentation. In each of these instances, there were multiple requisitions submitted on the same date for the same item from the same vendor. In each of these instances, the only conceivable reason for these multiple requisitions would be to circumvent PBOPE procedures which applied to purchases of $1,000 or more. In fragmenting these contracts, the lower threshold of $500 set forth in Section 3(f) of the Ethics Law was not taken into account. With only one exception, each of the individual requisitions exceeded the $500 threshold such that each requisition, even individually, was required to go through an open and public process under the Ethics Law. Finally, we address Zangrilli's failure to file Statements of Financial Interests for the 1989, 1990 and 1991 calendar years. Zangrilli has admitted that he did not file these Statements of Financial Interests, but has contended that he was not required to file them. We conclude to the contrary, based upon our decision that Zangrilli, as a Plumber Foreman for the Pittsburgh School District, was a "public employee" subject to the Ethics Law. Therefore we conclude that Armand Zangrilli violated Section 4(a) of the Ethics Law when he failed to file Statements of Financial Interests for calendar years 1989, 1990 and 1991. As for Zangrilli's alleged ignorance of the Ethics Law,such does not preclude our finding him to be in violation of that law. Furthermore, in this case, we have no doubt that Zangrilli acted deliberately and in bad faith. We also reject Zangrilli's argument that he should not be found in violation of the Ethics Law just because the private pecuniary benefit received was a smaller profit than another vendor would have made on the sales. A public official /public employee may not engage in illegal self dealing simply because he gives the governmental body a "good deal" in the process. See, Harper, Opinion 94 -001. A "good" illegal deal is still an illegal deal. We will now consider the issue of restitution. Section 7(13) of the Ethics Law, 65 P.S. §407(13), provides that an Order of this Commission may include recommendations to law enforcement Zangrilli, 92- 036 -C2 Page 144 officials, and that, "Any Order resulting from a finding that a public official or public employee has obtained a financial gain in violation of this act may require the restitution plus interest of that gain to the appropriate governmental body." We conclude that restitution by Zangrilli to the PBOPE is appropriate and warranted under the facts and circumstances of this case, which evidence a reprehensible violation of the public trust by Zangrilli. Zangrilli is ordered to make timely restitution through this Commission payable to the Pittsburgh Board of Public Education in the amount of $1,690. This figure is the profit realized by A&D for the five Model S25 Armstrong Pumps discussed in Finding 38h and the six sales of wiping rags discussed in Finding 25 0. To the extent Zangrilli is concerned that any "damages" account for A&D's and ADAM's operating costs in these illegal transactions (See, Closing Statement of Respondent at 22), the offsetting of an operating cost can itself constitute a private pecuniary benefit. See, Freind, Order 800; Harper, Opinion 94 -001. In any event, we note that there were no operating costs for the sales of the wiping rags -- Action Supply and Miller did all of the work for A&D -- and any costs incurred for picking up the five Armstrong pumps would be minimal. Section 9(c) of the Ethics Law provides: 65 P.S. §409 (c) . Section 9. Penalties. (c) Any person who obtains financial gain from violating any provision of this act, in addition to any other penalty provided by law, shall pay into the State Treasury a sum of money equal to three times the financial gain resulting from such violation. In the instant matter, a treble penalty is also warranted. As noted above, the financial gain that we can discern with certainty amounts to $1,690.00. We will impose a treble penalty in the amount of $5,070.00, which penalty is in addition to the award of restitution. This Commission will only impose a treble penalty under Section 9(c) where there is clear and convincing evidence of a discernable financial gain; a use of office to obtain said gain and intentional, blatant, extraordinary and /or exceptional circumstances whereby the conduct, based on all relevant factors, Zangrilli, 92- 036 -C2 Page 145 warrants such action. See Helsel, Order 801. We believe that such circumstances are present. The egregious nature of Zangrilli's conduct, including his deliberate and scheming attempts to conceal what he was doing, demands a treble penalty. Zangrilli is ordered to pay a treble penalty through this Commission payable to the order of the Commonwealth of Pennsylvania in the amount of $5,070.00, for deposit in the State Treasury. If there is any injustice to our decision, it is that we are unable to order restitution and a treble penalty in sufficient amounts to reflect the appalling self - dealing of this public employee. Based upon a review of the entire record, we will also refer this matter to the appropriate law enforcement authority with our recommendation that a criminal prosecution be instituted. Section 9(e) of the Ethics Law provides in part that any person who willfully affirms or swears falsely in regard to any material matter before a Commission proceeding pursuant to Section 8 is guilty of a felony and shall be fined not more than $5,000 or imprisoned for not more than five years or be both fined and imprisoned. During the course of this proceeding, certain statements were taken under oath including that of Mr. Zangrilli, which statements are contradicted by the facts as previously outlined. Therefore, we are also referring this matter for review as to whether there have been any violations of Section 9(e) of the Ethics Law or of the perjury or false swearing provisions of the Crimes Code. Additionally, we are also referring this matter for review as to whether any other laws have been implicated in relation to Zangrilli or other individuals involved in this matter. IV. CONCLUSIONS OF LAW: 1. Armand A. Zangrilli as Plumber Foreman for the Pittsburgh School District (PSD) was a public employee subject to the Ethics Law. 2. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A &D Mechanicals, Inc. ( " &D ") and ADAM Specialty Supply, Inc. ( " ADAM "), businesses with which Zangrilli's spouse is associated, by recommending to Nealy Earl, an expediter in the PSD's Unit of Zangrilli, 92- 036 -C2 Page 146 Purchasing, that he use A&D and ADAM for purchases for the Pittsburgh Board of Public Education ( "PBOPE "). 3. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by recommending to Don Rase, a materials expediter in the PSD's Facilities Office, that A&D be used for purchases for the PBOPE. 4. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by recommending to Don Rase, a materials expediter in the PSD's Facilities Office, that A&D be used for purchases of five Model S25 Armstrong Pumps ordered September 1, 1989 for the PBOPE. a. The private pecuniary benefit received by A&D for these pumps was $430.00. 5. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by recommending to Don Rase, a materials expediter in the PSD's Facilities Office, that A&D be used for the purchase of a trailer ordered June 18, 1990 for the PBOPE. a. The private pecuniary benefit received by A&D for this trailer cannot be determined. 6. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by directing six purchases to A&D for wiping rags ordered by the PBOPE on April 30, 1990, June 27, 1990, October 2, 1990, February 1, 1991, April 26, 1991, and October 18, 1991. a. The private pecuniary benefit received by A&D from these sales was $1,260.00. 7. Armand Zangrilli did not violate Section 3(a) of the Ethics Law by the mere appearance of his name and /or telephone number on two A &D proposals dated August 17, 1989 and March 21, 1991, as having received the proposal for the Board. 8. Armand Zangrilli did not violate Section 3(a) of the Ethics Law as to a particular purchase by the mere appearance of his typewritten name and handwritten initials on a Maintenance Zangrilli, 92- 036 -C2 Page 147 Materials Requisition Form dated July 19, 1991, along with other names and notations. 9. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by directing John Nee, a plumber laborer for the PBOPE, to pick up supplies for A&D from various vendors on School District time in a School District vehicle. 10. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by arranging for Ernest Miller, a "Storekeeper I" employed by the PSD, to act on behalf of A&D to authorize five of six shipments from Action Supply, A&D's supplier of wiping rags, directly to the PBOPE. 11. Armand Zangrilli did not violate Section 3(a) of the Ethics Law by using the authority of his public position as Plumber Foreman for the PSD to order, purchase or requisition supplies and materials for the PSD which were paid for but not received, based upon an insufficiency of evidence. 12. Armand Zangrilli did not violate Section 3(a) of the Ethics Law by ordering supplies for A&D, a business with which Zangrilli's spouse is associated, which supplies were subsequently sold to the PBOPE. 13. Armand Zangrilli violated Section 3(f) of the Ethics Law when A&D and ADAM, businesses with which Zangrilli's spouse is associated, repeatedly entered into contracts with the PBOPE valued at $500 or more without an open and public process. 14. Armand Zangrilli violated Section 4(a) of the Ethics Law when he failed to file Statements of Financial Interests for the 1989, 1990 and 1991 calendar years. _15. An order directing Armand Zangrilli to pay both restitution and a treble penalty is warranted under the facts and circumstances of this case. In Re: Armand Zangrilli File Docket: 92- 036 -C2 Date Decided: 09/12/94 Date Mailed: 09/21/94 ORDER NO. 946 1. Armand A. Zangrilli as Plumber Foreman for the Pittsburgh School District (PSD) violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D Mechanicals, Inc. ( "A&D ") and ADAM Specialty Supply, Inc. ( "ADAM "), businesses with which Zangrilli's spouse is associated, by recommending to Neely Earl, an expediter in the PSD's Unit of Purchasing, that he use A&D and ADAM for purchases for the Pittsburgh Board of Public Education ( "PBOPE "). 2. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by recommending to Don Rase, a materials expediter in the PSD's Facilities Office, that A&D be used for purchases for the PBOPE. 3. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by recommending to Don Rase, a materials expediter in the PSD's Facilities Office, that A&D be used for purchases of five Model S25 Armstrong Pumps ordered September 1, 1989 for the PBOPE. a. The private pecuniary benefit received by A&D for these pumps was $430.00. 4. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by recommending to Don Rase, a materials expediter in the PSD's Facilities Office, that A&D be used for the purchase of a trailer orde ;ed June 18, 1990 for the PBOPE. a. The private pecuniary benefit received by A &D for this trailer cannot be determined. 5. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A &D, a business with which Zangrilli's spouse is associated, by directing six purchases to A&D for wiping rags ordered by the PBOPE on April 30, 1990, June 27, 1990, October 2, 1990, February 1, 1991, April 26, 1991, and October 18, 1991. a. The private pecuniary benefit received by A&D from these sales was $1,260.00. 6. Armand Zangrilli did not violate Section 3(a) of the Ethics Law by the mere appearance of his name and /or telephone number on two A&D proposals dated August 17, 1989 and March 21, 1991, as having received the proposal for the Board. 7. Armand Zangrilli did not violate Section 3 Law as to a particular purchase by the mere typewritten name and handwritten initials Materials Requisition Form dated July 19, other names and notations. (a) of the Ethics appearance of his on a Maintenance 1991, along with 8. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by directing John Nee, a plumber laborer for the PBOPE, to pick up supplies for A&D from various vendors on School District time in a School District vehicle. 9. Armand Zangrilli violated Section 3(a) of the Ethics Law when he used the authority of his public position as Plumber Foreman for the private pecuniary benefit of A&D, a business with which Zangrilli's spouse is associated, by arranging for Ernest Miller, a "Storekeeper I" employed by the PSD, to act on behalf of A&D to authorize five of six shipments from Action Supply, A&D's supplier of wiping rags, directly to the PBOPE. ,10. Armand Zangrilli did not violate Section 3(a) of the Ethics Law by using the authority of his public position as Plumber Foreman for the PSD to order, purchase or requisition supplies and materials for the PSD which were paid for but not received, based upon an insufficiency of evidence. 11. Armand Zangrilli did not violate Section 3(a) of the Ethics Law by ordering supplies for A &D, a business with which Zangrilli's spouse is associated, which supplies were subsequently sold to the PBOPE. 12. Armand Zangrilli violated Section 3(f) of the Ethics Law when A &D and ADAM, businesses with which Zangrilli's spouse is associated, repeatedly entered into contracts with the PBOPE valued at $500 or more without an open and public process. 13. Armand Zangrilli violated Section 4(a) of the Ethics Law when he failed to file Statements of Financial Interests for the 1989, 1990 and 1991 calendar years. 14. An order directing Armand Zangrilli to pay both restitution and a treble penalty is warranted under the facts and circumstances of this case. 15. Armand Zangrilli is directed within thirty (30) days of the date of issuance of this Order to submit restitution in the amount of $1,690.00 to this Commission payable to the order of the Pittsburgh Board of Public Education. 16. Armand Zangrilli is directed within thirty (30) days of the date of issuance of this Order to submit payment of a treble penalty in the amount of $5,070.00 to this Commission payable to the order of the Commonwealth of Pennsylvania for deposit in the State Treasury. 17. Armand Zangrilli is directed within thirty (30) days of the date of issuance of this Order to file Statements of Financial Interests for calendar years 1989, 1990 and 1991 with the Pittsburgh School District, and to forward copies of same to this Commission evidencing compliance to the following address: Commonwealth of Pennsylvania State Ethics Commission P.O. Box 11470 Room 309, Finance Building Harrisburg, PA 17108 -1470 18. Failure to comply with Paragraph 14, 15, 16 or 17 will result in the institution of an order enforcement proceeding. 19. This matter will also be referred to the appropriate law enforcement authority for review as to whether any individual may have violated other sections of the Ethics Law, the Crimes Code or other laws. BY THE COMMISSION, Commissioner Dennis C. Harrington abstained as to the decision of this matter.