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HomeMy WebLinkAbout874 PodluckySTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In Re: Bernard Podlucky File Docket: 92- 034 -C2 Date Decided: January 29, 1993 Date Mailed: February 1, 1993 Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Dennis C. Harrington Roy W. Wilt Austin - M. Lee Allan M. Kluger Joseph W. Marshall, III The State Ethics Commission received a complaint regarding a possible violation of the State Ethics Act, Act 9 of 1989, 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 not filed and a hearing was` deemed waived. The record is complete. This adjudication of the Commission is hereby issued which sets forth the individual Allegations, Findings of Fact, Discussion, Conclusions of Law and Order. This adjudication is final and will be made available as a public document fifteen days after issuance. However, reconsideration may be requested which will defer public release of this adjudication pending action on the request by the Commission. A request for reconsideration, however, does not affect the finality of this adjudication. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §2.38. The files in this case will remain confidential in accordance with Act 9 of 1989, 65 P.S. §408(h) during the fifteen day period and no one unless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, confidentiality does not preclude discussing this case with an attorney at law. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year, 65 P.S. 5409(e). Podlucky, 92- 034 -C2 Page 2 I. ALLEGATION: That Bernard Podlucky, Supervisor for Conemaugh Township, Cambria County, violated the following section of the Public Officials and Employee Ethics Law (Act 9 of 1989), when a firm with which he is associated, NAPA Auto Parts, sold auto parts to the township without an open and public process, and when he participated in the payment of their bills: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes conflict of interest. II. FINDINGS: 1. Bernard Podlucky served as a Conemaugh Township Supervisor. a. He has served in this position from 1988 to the present. b. He was appointed Police Commissioner in 1988, and still serves in that capacity. c. Bernard Podlucky also served as an appointed roadmaster. 2. Bernard Podlucky was employed by Fullwell Motor Products, as a Sales Representative prior 1989. a. Fullwell specializes in nuts and bolts. b. Fullwell is based in Cleveland, Ohio. 3. Conemaugh Township purchased from Fullwell Motor Products after Podlucky became a supervisor. a. Podlucky was the sales representative for the area which included the township. 4. Fullwell Motor Products Company invoices on file with the township reflect the following purchases: Invoice Date 1/25/88 10/6/88 2/17/89 11/30/89 Check Amount Check # Date $ 284.37 .1027 48.59 1407 88.83 1635 69.90 2048 2/1/88 11/7/88 2/28/89 12/11/89 Salesman B. Podlucky B. Podlucky B. Podlucky 016 -AJO1 a. Bernard Podlucky's salesman identification number is Podluckv, 92- 034 -C2 Page 3 reflected on invoices as 016/545. This would indicate that the last invoice, dated 11/30/89, was not sold by Podlucky. 5. Total township purchases from Fullwell Motor Products while Bernard Podlucky was sales representative are as follows: 1988 - $332.96 1989 - $ 88.83 6. Subsequent to his employment at Fullwell Motor Products, Bernard Podlucky was employed as Manager of the two NAPA Auto Parts stores owned by Gabriel F. Podlucky, his brother. a. He was employed there from approximately June, 1989, through June, 1990. b. He was paid on a salary basis. c. The two stores were located in Johnstown and Seward. 7. In August, 1990, Bernard Podlucky purchased the NAPA store in Seward from his brother. 8. Conemaugh Township purchased parts from both NAPA Auto Parts stores. 9. Records of Conemaugh Township indicate the following payments made by the township to the NAPA Auto Parts store located in Seward, during the years 1990 through 1992, for parts . purchased from that company. a. 1990: Check Date Check # Amount 8/15/90 2403 $ 25.50 9/4/90 2424 104.56 9/4/90 2425 196.74 10/1/90 2437 142.42 10/1/90 2455 109.30 10/1/90 2478 177.58 10/10/90 2494 123.36 10/31/90 2537 23460 11/25/90 2581 11.49 12/11/90 2613 24.24 1990 total: $938.79 b. 1991: Podlucky, 92- 034 -C2 Page 4 1991 total: $2;222.63 c. 1992: 1/16/92 2/5/92 2/26/92 1992 total: d. Bernard Podlucky managed this store from June, 1989, to June, 1990, and was the owner thereof from August, 1990, forward. 10. Records of Conemaugh Township indicate the following payments made by the township to NAPA Auto Parts store, Johnstown, during the years 1988 through 1992, for parts purchased from that company. a. 1988: b. 1989: 1/16/91 3025 $ 42.66 2/4/91 3067 178.66 2/4/91 3090 73.70 3/4/91 3112 83.32 3/4/91 3136 72.59 3/4/91 3171 77.37 4/1/92 3206 245.63 4/1/91 3226 238.44 5/6/91 3249 16.25 5/6/91 3285 60.71 6/3/91 3311 88.79 6/3/91 3324 77.78 8/1/91 3433 20.18 8/31/91 3461 181.67 10/7/91 3512 25.75 11/4/91 3549 (140.02)78.93 11/4/91 3555 48.48 11/18/91 3592 325.63 12/16/91 3646 32.89 1/6/92 3670 192.17 3723 3750 3796 2/4/92 3/2/92 4/6/92 Check Date Check # Amount 10/3/88 1382 $ 576.03 12/5/88 1493 63.93 2/6/89 1605 59.49 1988 total: $ 699 $ 42.06 31.00 2.75 $ 75.75 Podlucky, 92- 034 -C2 Page 5 c. 1990: d. 1991: 5/1/89 1728 $ 37.05 6/12/89 1785 8.64 8/3/89 1887 33.94 6/16/89 1803 10.68 10/2/89 1947 201.79 10/30/89 1981 74.26 11/6/89 1996 86.84 11/28/89 2029 232.04 11/30/89 2036 $ 317.86 12/21/89 2059 17.68 1/5/90 2083 80.10 1989 total: $1,100.88 2/5/90 2119 $ 60.73 2/5/90 2121 12.16 3/5/90 2136 196.22 3/5/90 2159 5.94 4/2/90 2194 13.35 4/2/90 2212 58.37 5/7/90 2241 59.36 5/7/90 2247 76.56 5/7/90 2269 32.74 6/4/90 2300 12.14 6/6/90 2322 146.50 1990 total: $ 674.07 4/15/91 3238 $ 67.70 5/6/91 3279 35.73 1991 total: e. 1992: 1/10/92 3699 $ 33.32 1992 total: $ 103.43 $ 33.32 f. Bernard Podlucky was the manager of this store (which was owned by his brother from June, 1989, to'June, 1990. 11. The township purchases from the NAPA store in Johnstown decreased significantly when Bernard Podlucky purchased the store in Seward. a. In comparing the 1991 sales to the 1989 sales, the Podlucky, 92- 034 -C2 Page 6 decrease is approximately 27 %. 12 Bernard Podlucky delivered parts to the township. a. His name appears on the invoice when he delivered parts. b. At various times, other individuals picked up or delivered parts for the township. 13. Minutes of the Cambria County, Conemaugh Township Supervisors meetings show that Bernard Podlucky regularly voted to pay the bills between January, 1988, and April, 1992. a. The Conemaugh Township Supervisors meetings were held on a monthly basis. b. Bernard Podlucky was not absent from any meetings during this time. c. The votes to pay the bills were unanimous. d. Bills were voted on in their entirety. 14. Conemaugh Township records show that Bernard Podlucky's signature appears on all checks made payable to NAPA Auto Parts with the exception of the following two: #3555, dated 11/4/91, $48.48; and #3549, dated 11/4/91, $78.93. 15. Since April 1, 1992, there have been no purchases from the NAPA Auto Parts stores in Johnstown or Seward. 16. Records of the Conemaugh Township, Cambria County, Auditor's meetings reflect recommendations made by the auditors to the supervisors in regard to the relationship between the township and the NAPA Auto Parts Store owned by Bernard Podlucky. a. February 9, 1992: A meeting was held between the auditors and the supervisors. Purpose of the meeting was to gather information and discuss some issues raised by the auditors. The focal point of the meeting was to discuss a possible infraction of the Second Class Township Code and the Ethics Act. The point in question dealt with Mr. Podlucky's ownership of a NAPA Auto Parts store which sold parts to the township through 1991, that total $2,037.06. It was pointed out by the auditors to the supervisors that the Township Code limits a business owned by a supervisor to not more than $300.00 worth of business in a single year. Podluckv, 92- 034 -C2 Page 7 A second meeting was set up for February 11, 1992, at which time these issues would be discussed with the township solicitor. Present: Harold Kaseler, John Jacoby, Vince McGowan. Supervisors present: Rudy Galayda, Jr., Robert Nies, Bernard Podlucky. b. February 11, 1992: A meeting was held between the supervisors and the auditors along with the Township Solicitor, Attorney William Barbin. Additional discussion with Mr. Miller of the Department of Community Affairs, resulted in the following determinations: (1) (3) The excess of business over $300.00 done by Mr. Podlucky's business with the township was a violation of the Second Class Township Code and the Ethics Act. (2) That no surcharge should be levied because the township did not sustain any financial loss. After comparing prices at other auto parts store, it was determined that NAPA charges were not excessive, and in some instances were actually lower. That the auditors should recommend that the township supervisors stay within the guidelines as set down in the Second Class Township Code and the Ethics Act. (4) Mr. Miller, DCA, stated that if the supervisors agreed to follow the recommendation, this was all that needed to be done by the auditors. Present: Harold Kaseler, John Jacoby, Vincent McGowan. Supervisors Present: Rudy Galayda, Jr., Robert Nies, Bernard Podlucky. c. February 26, 1992: The following recommendations were included in those made by the auditors. (1) That the supervisors adhere to the Second Class Township Code and the State Ethics Act. Podluckv, 92- 034 -C2 Page 8 (2) That monthly bills be included as,a part of the official minutes. 17. The price comparison used in the February 11, 1992, meeting showed that the NAPA prices were slightly to significantly less than those charged by the other two suppliers. a. The price comparison total of each supplier is reflected as follows: NAPA $1,255.45 Dicks Automotive $1,584.78 (2 items not priced) Harvey's Auto Parts $2,002.13 18. Records of Conemaugh Township, Cambria County, included the following Statements of Financial Interest on file with the township Secretary /Treasurer for Bernard Podlucky which show that he did disclose his employment at NAPA Auto Parts and subsequent ownership of the Seward Store: a. Filing date: March 15, 1986 For the Year: 1986 Source of Income: Fuliwell Motor Products, Cleveland, Ohio Occupation: Salesman Public Position Held: Zoning Officer, Conemaugh Township All other Financial Interest Categories: None b. Filing date: April 1, 1988 For the Year: 1987 Source of Income: Fuliwell Motor Products, Cleveland, Ohio Occupation: Salesman Public Office: Supervisor All other Financial Interest Categories: None c. Filing date: January 5, 1989 For the Year: 1988 Source of Income: Fuliwell Motor Products, Cleveland, Ohio; Conemaugh Township, Johnstown, PA; Ribblett Corporation, Johnstown, PA. Occupation: Salesman Public Office: Supervisor All other Financial Interest Categories:' None d. Filing date: January ?, 1990 For the Year: 1989 Source of Income: Fuliwell Motor Products, Cleveland, Ohio; NAPA Auto Parts, Cherry Podlucky, 92- 034 -C2 Page 9 Street, Johnstown, PA. Occupation: Salesman Public Office: Supervisor All other Financial Interest Categories: None e. Filing date: February 4, 1991 For the Year: 1990 Source of Income: NAPA Auto Parts, Seward, PA. Occupation: Part store owner Public Office: Supervisor Office /Directorship or Employment in any business: NAPA Auto Parts, Route 56, Seward, PA -owner All other Financial Interest Categories: None f. No Statement of Financial Interest was filed by Bernard Podlucky in 1992, for the year 1991, as of May 7, 1992. 19. Records of Conemaugh Township show that Bernard Podlucky did not file a Statement of Financial Interests in 1992 for the 1991 year. 20. Thomas Morder was employed as the Road Foreman for Conemaugh Township from 1988 through December, 1991. a. As foreman he was responsible for the road crew; maintenance of equipment; and purchasing. b. He was told to purchase where he could get the best price. c. He would call several parts suppliers to get the best price. d. Bernard Podlucky, Supervisor, approached him and asked him to give Podlucky's brother a chance to supply parts to the township through the NAPA stores. (1) He had not done business with NAPA before. e. Initially he did not get good prices from NAPA and subsequently purchased only small price items from them. f . Bernard Podlucky asked him why he was not purchasing much from NAPA. (1) He told Podlucky that he could get better prices elsewhere. (2) Podlucky did not have a problem with his efforts to get good prices for the township. Podlucky, 92- 034 -C2 Page 10 g- NAPA started giving more discount to the township after Bernard Podlucky started running the NAPA stores for his brother. h. Podlucky offered the township cheaper prices after purchasing the NAPA store in Seward. i. Podlucky never directed him to buy from the NAPA store that Podlucky owned. The NAPA store in Seward is approximately 30 minutes from the township, and is .farther away than several other parts suppliers. (1) Most of the time the parts were delivered to the township by Podlucky. k. Morder purchased parts from Fullwell Motor Products when Podlucky was employed there as a salesman. (1) Podlucky approached him after being elected supervisor and told him he could give the township good prices on nuts and bolts. (a) Fullwell specializes in nuts and bolts. (b) Fullwell sells to most parts stores and hardwares. (c) At the time a local auto parts store carried Fullwell products. 21. After Bernard Podlucky had been working for his brother for awhile, he approached the township road foreman and asked for some of the township business, if NAPA was competitive with the other suppliers. a. The foreman purchased a few things from NAPA and then advised him that the prices were not in line with other suppliers. b. The foreman continued to purchase some items from NAPA that were the same price or cheaper than the other suppliers. c. The foreman was familiar with auto parts prices and purchased the item wherever the best price could be obtained. d. His brother did not take advantage of the NAPA rebate program and as a result the prices were higher than other Podluckv, 92- 034 -C2 Page 11 suppliers. 22. After purchasing the NAPA store in Seward, Bernard Podlucky approached the foreman and asked for some of the township business. a. He advised the foreman that he could offer better prices. b. His could offer better prices because he bought the NAPA computer system which allowed him to participate in the rebate program. (1) The rebates were to the dealership, not the customer. (2) The rebates took three to six months to receive. c. The township did not buy many rebatable items. 23. His total sales for 1991 were $200,416.00 a. Conemaugh Township purchases totaled $2,229.00. b. This represents 1.12% of his business. c. His cost of the township purchases totaled $1,704.00, or $525.00 profit. d. This shows his gross profit percentage as 23.54 %. 24. Podlucky indicated his gross profit percentage was more like 14.79 %. a. He deducted the cost of an advertisement in the Conemaugh Township 1991 Information Guide from his profit. b. He admitted that it was his choice to place the ad and that the township business was not contingent upon doing so. 25. The township never bid the parts business. 26. Bernard Podlucky has always voted to approve payment of the bills, which included the bills from the NAPA stores owned by his brother, and subsequently the NAPA store owned by him. a. He has never missed a township meeting since he became supervisor in 1968. b. He has never abstained on the vote to pay the bills or on any one bill. Podlucky, 92- 034 -C2 Page 12 c. He regularly signed the checks made payable to NAPA Auto Parts. III. DISCUSSION: As a Supervisor for Conemaugh Township in Cambria County, Bernard Podlucky, hereinafter Podlucky, is a public official as that term is defined under Act 9 of 1989. 65 P.S. 5402. As such, his conduct is subject to the provisions of the Ethics Law and the restrictions therein are applicable to him. Initially, it is noted that Section 9 of Act 9 of June 26, 1989 provides, in part, as follows: "This amendatory act shall not apply to violations committed prior to the effective date of this act, and causes of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto." Since the occurrences in this case transpired after the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 9 to determine whether the Ethics Act was violated. Under Section 3(a) of Act 9, of 1989 quoted above, a public official /employee shall not engage in conduct that constitutes a conflict of interest. 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 Podlucky, 92- 034 -C2 Page 13 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. 5402. The issue before us is whether Podlucky violated Section 3(a) of Act 9 of 1989 regarding the sale of auto parts by NAPA Auto Parts, a business with which Podlucky was associated to the Township. Factually, Podlucky has been a Conemaugh Township Supervisor since 1988. When Podlucky was privately employed by Fullwell Motor Products as a sales representative prior to 1989, that firm made various sales to the Township. Thereafter, when Podlucky became employed as a manager of two NAPA Auto Parts stores owned by his brother, Gabriel, the Township purchased parts from both NAPA Auto Parts stores. As to one of the NAPA Auto Parts stores, Podlucky became the owner in August, 1990, after which time the Township purchases from the other NAPA store significantly decreased. The Township parts delivered from Podlucky's NAPA Auto Parts contained the name of Podlucky on the invoices and were either delivered by Podlucky himself or other individuals. The minutes of the Township reflect that the vote to approve bills were voted on as a list, that the votes to pay were unanimous, and lastly that Podlucky did vote on the approval of the bill lists which included bills from his NAPA Auto Parts store. The Township records reflect that Podlucky's signature appears on checks payable to NAPA Auto Parts for all invoices except two. Such practice continued until April 1, 1992, at which time no further purchases were made by the Township from the NAPA Auto Parts stores. At the February 9, 1992 meeting of the Conemaugh Township Auditors, a discussion ensued concerning the possible violation of the Second Class Township Code by Podlucky relative to the sale of parts to the Township in 1991 exceeding $2,000 from his NAPA Auto Parts store. The Township Code limits a business owned by a supervisor to no more than $300 worth of business in any single year. In the February 11, 1992 meeting held among the Supervisors, the Auditors and the Township Solicitor, it was determined that Podlucky did violate the Second Class Township Code by the amount of business done but that no surcharge would be levied since the Township did not incur any financial loss. The foregoing action was taken in part due to the fact that the NAPA charges were not excessive and in some instances actually lower. Finally, at a February 26, 1992 meeting of the Auditors, recommendations were made that the Supervisors adhere to the Second Class Township Code and State Ethics Act and that monthly bills be included as part of Podlucky, 92- 034 -C2 Page 14 the official minutes. The record reflects that Thomas Morder, who was the Road Foreman of Conemaugh Township between 1988 and 1991, had the responsibility for purchasing and maintaining Township equipment. At one point, Podlucky approached Morder and inquired as to why Podlucky's brother was not given an opportunity to supply parts to the Township. When Morder subsequently advised Podlucky that he was not purchasing from NAPA because he could get better prices elsewhere, Podlucky did not have a problem with Morder's efforts to get the best prices for the Township. Podlucky never directed Morder to buy from the NAPA:store owned. Thereafter, NAPA did start giving discounts to the Township for purchases. The statements of Morder are corroborated by Podlucky. Although not part of the allegation in this case, the investigation in this case reflects as to the Financial Interests Statements (FIS's) of Podlucky certain potential deficient filings and non - filings. In particular, Podlucky did not file an FIS for the 1991 calendar year. In addition, for the FIS's as to calendar years 1988 forward, Podlucky did not list Conemaugh Township as a source of income, assuming that he received reportable income from the Township. In applying the above quoted provisions of Section 3(a) of Act 9 of 1989 to the instant matter, there was a use of authority of office on the part of Podlucky regarding his contact with the Road Foreman relative to the solicitation for the purchase of parts from NAPA Auto Parts stores. In addition, Podlucky used the authority of office in voting to approve .bill lists which included the invoices from NAPA Auto Parts store. Finally, it was use of authority of office on the part of Podlucky when he signed checks in payment to NAPA Auto Parts stores from the invoices from the sales. Juliante, Order 809. The use of office resulted in a private pecuniary benefit consisting of the profit that was made as to the sale of the parts. Lastly, the private pecuniary benefit went to either Podlucky individually or to NAPA Auto Parts which was owned by him. The term business with which associated is defined under Act 9 of 1989 as follows: 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 has a financial interest. 65 P.S. §402. In light of the above, it is clear that NAPA Auto Podluckv, 92- 034 -C2 Page 15 Parts store is a business with which Podlucky is associated. Accordingly, we find a violation of that provision of law by Podlucky. Our decision in this matter is in accord with Long, Order 853 and Jelliff, Order 855. Considering the facts and circumstances of the case in totality and in particular that Podlucky did not direct the Foreman to purchase from NAPA and that NAPA provided competitive or cheaper prices for the parts and that Podlucky has desisted in such sales since April, 1992, we will take no further action. As to the FIS deficiencies /non- filing, since this is not part of the allegation, we can make_no.determination of a violation. However, Podlucky is directed within thirty (30) days of the date of issuance of this Order to file an FIS for the 1991 calendar year as well as file amended FIS's for the calendar years 1988 forward listing Conemaugh Township as a source of income, assuming that Podlucky did derive reportable income from the Township. Failure to comply with the foregoing will result in a directive of this Commission to issue an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Bernard Podlucky as a Conemaugh Township Supervisor is a public official subject to the provisions of Act 9 of 1989. 2. Podlucky violated Section 3(a) of Act 9 of 1989 when he used the authority of office to obtain a private pecuniary benefit for NAPA Auto Parts, a business with which he is associated relative to the sale of parts to the Township. In Re: Bernard Podlucky File Docket: 92- 034 -C2 . Date Decided: January 29, 1993 : Date Mailed: February 1, 1993 ORDER NO. 874 1. Bernard Podlucky as a Conemaugh Township Supervisor violated Section 3(a) of Act 9 of 1989 when he used the authority of office to obtain a private pecuniary benefit for NAPA Auto Parts, a business with which he is associated relative to the sale of parts to the Township. 2. Podlucky is directed within thirty (30) days of the date of issuance of this Order to file a Financial Interests Statement for the 1991 calendar year. 3. Podlucky is directed within thirty (30) days of the date of issuance of this Order to file amended Financial Interests Statements listing Conemaugh Township as a source of income if he did in fact receive reportable income from the Township. 4. Failure of Podlucky to comply with the provisions of Paragraphs 2 and 3 shall result in a directive of this Commission to issue an order enforcement action. BY THE COMMISSION,