HomeMy WebLinkAbout870 DavittSTATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG. PENNSYLVANIA 17120
In re: Stephen V. Davitt File Docket: 89 -024 -C
Date Decided: December 10, 1992
Date Mailed: December 15, 1992
Before: James M. Howley, Chair
Daneen E. Reese, Vice Chair
Roy W. Wilt
Austin M. Lee
Allan M. Kluger
The State Ethics Commission received a complaint regarding a
possible violation of the State Ethics Act, No. 170 of 1978, P.L.
883. Written notice, of the specific allegation(s) was served at
the commencement of the investigation. A Findings Report was
issued and served, upon completion of the investigation, which
constituted the Complaint by the Investigation Division. An Answer
was filed and a hearing was waived. A Consent Order was submitted
by the parties to the Commission for consideration which was
subsequently approved. This adjudication of the Commission is
hereby issued which sets forth the individual Allegations, Findings
of Fact, Discussion, Conclusions of Law and Order.
This adjudication is final and will be made available as a
public document fifteen days after issuance. However,
reconsideration may be requested which will defer public release of
this adjudication pending action on the request by the Commission.
A request for reconsideration, however, does not affect the
finality of this adjudication. A reconsideration request must be
received at this Commission within fifteen days of issuance and
must include a detailed explanation of the reasons as to why
reconsideration should be granted in conformity with 51 Pa. Code
52.38.
The files in this case will remain confidential in accordance
with Section 8(a) of Act 170 of 1978 during the fifteen day period
and no one unless the right to challenge this Order is waived, may
violate confidentiality by releasing, discussing or circulating
this Order. However, confidentiality does not preclude discussing
this case with an attorney at law.
Any person who violates confidentiality of the Ethics Act is
guilty of a misdemeanor subject to a fine of not more than $1,000
or imprisonment for not more than one year, 65 P.S. 5409(e).
Davitt, 89 -024 -C
Page 2
I. ALLEGATION:
That Stephen V. Davitt, a Councilman for Dickson City Borough,
Lackawanna County, violated the following provisions of the State
Ethics Act (Act 170 of 1978), when the Borough contracted with
Vance Engineering, a business with which he is associated, to erect
fencing at the Borough garage and ball field without an open and
public process, including prior public notice and subsequent public
disclosure of all proposals considered and contracts awarded; when
he failed to list his association with Vance Engineering on
Statements of Financial Interest filed in 1986, 1987, 1988 and
1989; and when he failed to list direct or indirect sources of
income on those same statements:
Section 3. Restricted Activities
(a) No public official or public
employee shall use his public office or any
confidential information received through his
holding public office to obtain financial gain
other than compensation provided by law for
himself, a member of his immediate family, or
a business with which he is associated.
(c) No public official or public
employee or a member of his immediate family
or any business in which the person or a
member of the .person's immediate family is a
director, officer, owner or holder of stock
exceeding 5% of the equity at fair market
value of the business, shall enter into any
contract valued at $500 or more with a
governmental body 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. Any contract made in
violation of this subsection shall be voidable
by a court of competent jurisdiction if the
suit is commenced within 90 days of making of
the contract.
65 P.S. §S403(a),(c).
Section 5. Statement of Financial Interests.
(b) The statement shall include the
following information for the prior calendar
year with regard to the person required to
file the statement and members of his
immediate family:
Davin, 89 -024 -C
Page 3
65 P.S. §405(b).
(5) The name and address of any person
who is the direct or indirect source of income
totalling in the aggregate $500 or more.
However, this provision shall not be construed
to require the divulgence of confidential
information protected by statute or existing
professional codes of ethics.
(8) Any office, directorship, or
employment of any nature whatsoever in any
business entity.
(9) Any financial interest in any legal
entity engaged in business for profit.
II. FINDINGS:
1. Steven Davitt served as a Councilman for Dickson City Borough,
Lackawanna County from 1980 until the end of 1991.
2. In 1988 Vance Engineering and Vance Hodovanec installed fence
at the Dickson City Borough baseball field and the borough
garage.
a. The projects were not approved at a public meeting or
through a bid process.
1) The bills for• the projects were approved for
payment after completion of each project.
b. The projects awarded to Vance Engineering and Vance
Hodovanec were arranged by Council President John
Maholick following a recommendation by Councilman
Stephen Davitt.
c. Previous borough fence work was installed by a
borough police officer.
3. The office of Borough Administrator normally arranged projects
of this nature after council approval.
a. The borough administrator did not approve or discuss
these projects with 'either the Hodovanec's or borough
council.
b. The borough administrator approved payment of the fence
invoices because the bills appeared to be in order.
1) His was one of four signatures required to pay
Davitt, 89 -024 -C
Page 4
bills. Other signatures needed were the
Comptroller, Treasurer and President of Council.
4. Vance Engineering is owned by George Hodovanec, father -
in -law of Steven Davitt.
a. Vance Hodovanec is employed by Vance Engineering. He is
the son of Hodovanec and brother -in -law of Steven Davitt.
5. Vance Engineering was incorporated on June 1, 1965 with the
Pennsylvania Department of State, Corporation Bureau.
a. Incorporators were listed as:
George Hodovanec, 408 Main St., Dickson City, PA 98 shares
Nan Hodovanec, 408 Main St:, Dickson City, PA 1 share
Henry Zarnoski, 330 Third St., Blakely, PA 1 share
b. The purpose(s) of the corporation are:
To buy and sell at wholesale and retail, to import and
export piping, fittings, expansion joints, ferrous and
nonferrous metals and supplies used in connection with
piping and machinery; to manufacture piping products and
expansion joints; to carry on the business of
fabricating, consulting, designing, installing, repairing
and any work in connection with all types of piping,
metals, electrical or mechanical machinery.
6. In May 1988 Vance Hodovanec submitted invoice !Jr 6564 to
Dickson City Borough for the materials and installation of
fence at the borough baseball field.
a. Invoice Number 6564 listed the installation of 212 feet
of galvanized fencing, 9 gauge thickness, with 1 5/8 inch
toprail, with 2 inch line post (all SS 20 galv. pipe) at
the borough ball field. The invoice also lists repairs
to 50 feet of 48 inch. galv.
b. The invoice indicates the Customer Order Number was
"verbal."
c. The material and labor cost are listed as $2,148.00.
7. On May 10, 1988 borough council voted to pay bills including
the Vance Hodovanec invoice.
a. Steven Davitt made the motion to pay all bills and the
borough payroll. The motion was approved by a 5 to 1
vote.
Davitt, 89 -024 -C
Page 5
8. Dickson City check number 3734 was made payable to Vance
Hodovanec in the amount of $2148.00, endorsed by Vance and Nan
Hodovanec and cashed at the First National Bank of Carbondale.
a. Nan Hodovanec is the wife of George Hodovanec.
9. In October 1988 Vance.Engineering submitted invoice No. H -125
to Dickson City. Borough for materials and installation of
fencing at the borough garage.
a. Vance Engineering invoice number H -125 indicates the
order number was verbal; the date was October of 1988;
with Vance Sales Order Number D -229 and sold to Dickson
City Borough.
b. The invoice indicates Vance was to supply and install 250
feet of 6 foot, 9 gauge galvanized fence with 3 inch
corners and 2 inch line post, 1 5/8 toprail, all SS 20
pipe. 1 set of 12 foot by 6 foot drive gates.
c. The net price of materials and labor was listed as
$3385.00.
10. On November 3, 1988 borough council approved for payment all
bills including the Vance Engineering invoice No. H -125.
a. Steven Davitt made the motion to approve paying the bills
which was passed by a 6 to 1 vote.
b. Councilman Zlotucha questioned the Vance Engineering
bill.
11. Dickson City Check #4122 dated November 4, 1988 to Vance
Engineering in an amount of $3,385.00.
12. Councilman Steven Davitt, his son and his brother, Phillip,
assisted with the installation of fencing at the Borough ball
field in May, 1988.
a. Stephen Davitt provided some assistance and supervision
during the construction of these projects.
b. Vance Engineering is not an active installer of fencing.
1) Vance Engineering had not installed any fences
prior to fences being installed for the borough.
c. Steven Davitt is knowledgeable of fencing projects and
has been in business since at least 1991.
1) His son has assisted him in this business.
Davitt, 89 -024 -C
Page 6
13. Borough road workers assisted Davitt in installing the fence
around the borough garage.
The road workers used a borough jack hammer to dig holes
in the driveway so that Davitt could install fence posts.
14. Fencing material for the two borough fence jobs was purchased
at Quality Fence Company, Olyphant, PA.
a. The purchases were made by Steven Davitt.
1) Davitt made the purchase in order
discount for the borough contractor.
b. Davitt regularly purchased fencing material
in 1988.
a.
c .
to obtain a
from Quality
Vance Engineering made no purchases from Quality Fencing
in 1988.
15. Davitt made fencing purchases from Quality Fencing in 1988 as
follows. These fencing purchases were used for the Dickson
City Borough jobs.
a. Quality Fence Company's Invoice #1275 dated May 6, 1988
indicates various fencing material valued at $609.95 was
sold to Steve Davitt, 1114 Main Street, Dickson City, PA,
and contains the signature of S. Davitt. Payment was
made with cash.
b. Quality Fence Company's Invoice #1369 dated August 3,
1988 indicates various fencing material valued at $750.14
was sold to Steve Davitt. Payment was made with cash.
c. Quality Fence Company's Invoice #1304 dated June 10, 1988
indicates various fencing material valued at $275.10 was
sold to Steve Davitt and contains the signature of S.
Davitt. Payment was made with cash.
d. Quality Fence Company's Invoice #1440 dated October 28,
1988 indicates various fencing material valued at
$1077.79 was sold to Steve Davitt, Vance Engineering, and
contains the signature of S. Davitt. Payment was made
with Vance Engineering check number 1161.
16. Stephen Davitt was not compensated by Vance Engineering for
services he performed in relation to the borough fencing
projects.
17. Stephen Davitt filed statements of financial interests with
Dickson City Borough from 1986 through 1991. These forms
avitt, 89 -024 -C
Page 7
disclosed the following:
a. Statement of Financial eI = ere signed dated St April en Davitt. , 186,
for the 1985 calendar y , g
1) Direct or indirect source of income: None
2) Office or directorship in any business: None
3) Financial interest in any legal entity in business
for profit: None
b. Statement of financial interest dated March 5, 1987 for
the 1986 calendar year, signed by Steven Davitt.
1) Direct or indirect source of income: None
or employment in any
2) Office or directorship
business: None
3) Financial interest in any legal entity in
for profit: None
c. Statement of financial interest dated April 14,
1987 calendar year, signed by Steven Davitt.
1) Direct or indirect source of income: None
2) Office of directorship or employment in
business: None
3) Financial interest in any legal entity in business
for profit: None
d. Statement of financial interest dated April 26, 1989 for
the 1989 calendar year, signed by Steven Davitt.
1) Direct or indirect source of income: None
2) Office or directorship or employment in
business: None
business
1988 for
any
any
Financial interest in any legal entity in business
for profit: None
e. Statement of financial interest dated May 15, 1990 for
the 1990 calendar year, signed by Stephen Davitt.
1) The statement was filed on SEC -1 Rev 1/91 Form
which was not printed until January, 1991.
Davitt, 89 -024 -C
Page 8
As
Stephen
term is
As such,
and the
3
Handwritten at the top of the form was "Received 5-
29-91, Mary Goralski, Sec."
The form contained the following:
Direct or indirect sources of income: Trane Co.
Office or directorship or employment in any
business: None
Councilman Davitt asserts that it was his intent to
date the form May 15, 1991, with the information
being provided for /990.
f. Statement' of financial interest dated January 2, 1992 for
the 1 calendar year, signed by Stephen V. Davitt.
1) Handwritten at the top of the form was "rec. 12 -30-
91, Mary Goralski, Sec."
2) The form contained the following:
Direct or indirect sources of income: Trane Co.,
Self- employed part -time contractor.
18. On statements of financial interests filed by Stephen Davitt
for the 1985, 1986, 1987 and 1989 calendar years, Trane
Company, his employer, was not disclosed as a direct or
indirect source of income.
a. Davitt did report on those forms, under occupation, that
he was an Assembler for Trane Company.
III. DISCUSSION:
a Councilman for Dickson City Borough, Lackawanna County,
V. Davit, hereinafter Davitt, is a public official as that
defined in the Ethics Act,.65 P.S. §402; 51 Pa. Code 5101.
his conduct is subject to the provisions of the Ethics Act
restrictions therein are applicable to him.
Initially, it is noted that Section 9 of Act 9 of June 26,
1989, P.L. 26, provides, in part as follows:
"This amendatory act shall not apply to
violations committed prior to the effective'
date of this act, and causes of action
initiated for such violations shall be
governed by the prior law, which is continued
in effect for that purpose as if this act were
not in force. For the purposes of this
Davitt, 89 -024 -C
Page 9
Since
effective
provisions
Ethics Act
section, a violation was
the effective date of this
of the violation occurred
the occurrences in this
date of Act 9 (June 26
of Act 170 of 1978, P.L.
was violated.
committed prior to
act if any elements
prior thereto."
case transpired prior to the
1989), we must apply the
883, to determine whether the
Under Section 3(a), quoted above, this Commission has
determined that use of office by a public official to obtain a
financial gain for himself or a member of his immediate family or
a business with which he is associated which is not provided for in
law transgresses the above provision of law. Thus, use of office
by a public official to obtain a financial gain which is not
authorized as part of his compensation is prohibited by Section
3(a): Hoak /McCutcheon v. State Ethics Commission, 77 Pa. Commw.
Ct. 529, 466 A.2d 283 (1983); Yacobet v. State Ethics Commission
109 Pa. Commw. Ct. 432 531 A.2d 536 (1987). Similarly, Section
3(a) of the Ethics Act would prohibit a public official /employee
from using public office to advance his own financial interests;
Koslow v. State Ethics Commission, 116 Pa. Commw. Ct. 19, 540 A.2d
1374 (1988).
In addition, Section 3(c) of Act 170 of 1978 specifically
provides in part that no public official or member of his immediate
family or business with which he or a member of his immediate
family is a director, officer, owner or holder of stock exceeding
five percent of the equity at fair market value may enter into a
contract with his governmental body valued at five hundred dollars
or more unless the contract is awarded through an open and public
process.
Lastly, Section 5(b)(5), (8), and (9) of Act 170 of 1978
requires that a public official /employee list in his
n who nt of
Financial Interests the name and address of any person
direct /indirect source of. income of $500 or more in aggregate; any
office, directorship or employment in any business entity and also
any financial interest in any legal entity engaged in business for
profit.
In the instant matter, we must determine whether Davitt
violated either Section 3(a) or 3(c) of Act 170 of 1978 regarding
contracting between Dickson City Borough and Vance Engineering as
to the erection of fencing at both the Borough garage and at the
ball field when the contracting was done without an open and public
process. In addition, wa must determine whether Davitt violated
Section 5(b)(5), (8) or (9) of Act 170 of 1978 regarding the
failure to list his association with Vance Engineering as to
Statement of Financial Interests (FIS's) filings in the years 1986
through 1989, and lastly, whether he violated Section 5(b)(5) as to
Davitt, 89 -024 -C
Page 10
the failure to list direct or indirect sources of income on those
Statements.
Factually, Davitt served as a Dickson City Borough Councilman
from 1980 through 1991. In 1988, Vance Engineering installed
fencing at the Dickson City Borough baseball field and at the
Borough garage which contracts were not awarded through an open and
public process. Vance Engineering was awarded the project after
arrangements were made by Council President John Maholick based
upon a recommendation by Davitt. Vance Engineering is owned by
George Hodovanec who is the father -in -law of Davitt; Vance
Hodovanec who is an employee of Vance Engineering is the brother -
in -law of Davitt. = It was the normal practice for the Borough
administrator to arrange for, such projects after. Council approval.
The Borough administrator did apprpve the payment of these project
invoices because the bills appeared to be in order. In May, 1988,
Vance Hodovanec submitted an invoice to Dickson City Borough in the
amount of $2,148 for the material and labor costs as to the
installation of the fence at the Borough baseball field. On May
10, 1988, Borough Council voted to pay a series of bills which
included the Vance Hodovanec invoice following passage of a motion
made by Davitt. Dickson City Borough check number 3734 in the
amount of $2,148 was issued and endorsed by Vance and Nan
Hodovanec. In October, 1988, Vance Engineering submitted invoice
number H -125 in the amount of $3,385 as to installation of fencing
at the Borough garage. On November 3, 1988, Borough Council
approved the payment of all bills including Vance Engineering
invoice number H -125 based upon a motion of Davitt to pay all
bills. Thereafter, Dickson City Borough check number 4122 was
issued to Vance Engineering in the amount of $3,385.
The record reflects that Davitt, his son, and brother assisted
with the installation of the fencing at the Borough baseball field.
Although Vance Engineering was not active in installing fencing,
Davitt was knowledgeable of fencing projects and provided
assistance and supervision during the Borough fencing installation.
The materials used for the two Borough fencing projects were
purchased at Quality Fence Company by Davitt in order to obtain a
discount for the Borough contractor. Davitt was not compensated by
Vance Engineering for the services he performed as to the Borough
fencing projects. Lastly, as to the Financial Interests Statements
(FIS) which Davitt filed (Fact Finding 17), Trane Company was not
listed as a source of income for, the FIS filing years 1986 through
1989. Finally, the FIS for the 1990 filing was prepared on a SEC -1
Rev. 1/91 form which was not printed until January, 1991. As to
Trane Company, Davitt was an employee of that firm for the 1985
through 1989 calendar years.
In applying the provisions of Section 3(a) and 3(c) of Act 170
of 1978 to the instant matter, we find no violation of those
sections. One of the requisite elements for a violation is that
Davitt, 89 -024 -C
Page 11
Vance Engineering would have to be a business with which Davitt was
associated. The te of business
as follows:
Section which he is associated is
defined under Act
Section 2. Definitions.
"Business with which he is associated." Any
business in which the person or a member of
the person's immediate family is a director,
officer, owner, employee or holder of stock.
65 P.S. §402. Since the facts reflect that Vance Engineering is
not a business with which Davitt is associated, we find no
violation as to either Section 3(a) or 3(c). Further, since
Vance Engineering is not a business with which Davitt is
associated, Davitt would not be required to list that on his FIS
form and accordingly we find no violation of Section 5(b)(5) of
Act 170 of 1978.
However, as to Trane Company, it is clear that Davitt was
employed by that firm and consequently was required to list his
income from that employment on his 1986 through 1989 FIS's filing
years. Accordingly, a technical violation of Section 5(b)(5) of
Act 170 of 1978 occurred when Davitt failed to list Trane Company
as a source of income on his calendar years 1985, 1986, 1987 and
1989 FIS's. Davitt is directed within thirty (30) days of
issuance of this Order to file amended FIS's for the calendar
years 1985, 1986, 1987, and 1989 listing Trane Company as a
source of income. In addition, Davitt is directed to file a new
FIS for the calendar year 1990 using a current filing date rather
than a filing date which preceded the date of printing of the
form. (Fact Finding 17e).
Compliance by Davitt as to our directive to file amended
FIS's as noted above will conclude this matter with no further
action being taken by the Commission. However, in the event that
Davitt fails to file amended FIS filings within thirty days, a
directive will be issued to institute an order enforcement
against Davitt.
IV. CONCLUSIONS OF LAW:
1. Stephen V. Davitt as a Councilman for Dickson City Borough
was a public official subject to the provisions of Act 170
of 1978.
2. Davitt did not violate either Section 3(a) or 3(c) of Act
170 of 1978 as to the award of Borough contracts to Vance
Engineering for the installation of fencing at the Borough
garage and baseball field in that Vance Engineering was not
a business with which Davitt was associated.
Davitt, 89 -024 -C
Page 12
3. Davitt did not violate Section 5(b)(5), (8) or (9) as to the
failure to list Vance Engineering on his Financial Interests
Statements since Vance Engineering is not a business with
which Davitt is associated.
4. A technical violation of Section 5(b)(5) of Act 170 of 1978
occurred when Davitt failed to list Trane Company, a
business with which he was associated, on his Financial
Interests Statements for the calendar years 1985, 1986,
1987, and 1989. .
In re: Stephen V. Davitt : File Docket: 89 -024 -C
Date Decided: December 10, 1992
: Date Mailed: December 15, 1992
ORDER NO. 870
1. Stephen V. Davitt as a Councilman for Dickson City Borough
did not violate either Section 3(a) or 3(c) of Act 170 of
1978 as to the award of Borough contracts to Vance
Engineering for the installation of fencing at the Borough
garage and baseball field in that Vance Engineering was not
a business with which Davitt was associated.
2. Davitt did not violate Section 5(b)(5), (8) or (9) as to the
failure to list Vance Engineering on his Financial Interests
Statements since Vance Engineering is not a business with
which Davitt is associated.
3. A technical violation of Section 5(b)(5) of Act 170 of 1978
occurred when Davitt failed to list Trane Company, a
business with which he was associated, on his Financial
Interests Statements for the calendar years 1985, 1986,
1987, and 1989.
4. Davitt is directed within thirty (30) days of issuance of
this Order to file amended Financial Interests Statements
listing Trane Company as a source of income for the calendar
years 1985, 1986, 1987, and 1989.
5. Davitt is directed within thirty (30) days of issuance of
this Order to file another Financial Interests Statement for
calendar year 1990 using a current filing date.
6. Failure to comply with the provisions of Paragraphs 4 and 5
will result in a directive of this Commission to institute
an order enforcement action.
BY THE COMMISSION,
JAMES M. HOWLE