HomeMy WebLinkAbout1006 HuttonIn Re: Daniel L. Hutton, Sr.
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
File Docket: 95- 064 -C2
Date Decided: 8/27/96
Date Mailed: 9/6/96
Before: Daneen E. Reese, Chair
Austin M. Lee, Vice Chair
Roy W. Wilt
Allan M. Kluger
Rev. Joseph G. Quinn
Boyd E. Wolff
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission
conducted an investigation regarding a possible violation of the Public Official and
Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 g agg,., by the above -
named Respondent. At the commencement of its investigation, the Investigative
Division served upon Respondent written notice of the specific allegation. Upon
completion of its investigation, the Investigative Division issued and served upon
Respondent a Findings Report identified as an "Investigative Complaint." An Answer
was not filed and a hearing was deemed waived. The record is complete. A consent
agreement was submitted by the parties to the Commission for consideration which
was subsequently approved.
This adjudication of the State Ethics Commission will be made available as a
public document thirty days after the mailing date noted above. However,
reconsideration may be requested. Any reconsideration request must be received at
this Commission within thirty days of the mailing date 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). A request for reconsideration will not affect the finality
of this adjudication but will defer its public release pending action on the request by
the Commission.
The files in this case will remain confidential in accordance with Act 9 of 1989,
65 P.S. §408(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. §409(e). Confidentiality does not preclude discussing this
case with an attorney at law.
Hutton, 95- 064 -C2
Page 2
I. ALLEGATION:
That Daniel L. Hutton, Sr., a public official in his capacity as a Chest Township
Supervisor, violated Section 3(a) of the State Ethics Act (Act 9 of 1989) by using the
authority of his office for a private pecuniary benefit when he participated in board
discussions and /or actions to hire the Township Solicitor to represent the Board of
Supervisors in an effort to obtain a salary increase and when he participated in the
approval of payments of Township funds to the Township Solicitor and /or his law firm,
by voting and signing checks, for the Solicitor's representation of the Supervisors in
a legal action against the Township Auditors relating to the aforementioned action.
II. FINDINGS:
1. Daniel Hutton served as a Chest Township Supervisor from at least 1987 to the
present.
a. Hutton has held the position of Roadmaster throughout this time period.
2. Chest Township Supervisors are primarily responsible for the general care and
maintenance of Township roads.
a. Part-time help is hired on an as needed basis.
b. The Township does not employ any full -time road workers.
3. During 1992, 1993, and 1994, Chest Township Supervisors serving in a
Roadmaster capacity, were compensated at a rate of $7.00 per hour.
a. This rate was approved annually by the Chest Township Auditors.
4. Minutes from the Chest Township Board of Supervisors January 3, 1995,
Reorganization meeting, reflect that Leroy Brink and Daniel Hutton were
appointed to serve as Roadmasters.
a. At the meeting, the Supervisors requested that the Auditors keep the
Supervisor's Roadmaster wages at $7.00 per hour.
5 Minutes from the Chest Township Auditor's January 4, 1995, Reorganizational
Meeting indicate that the Supervisor /Roadmaster wage was decreased fifty
cents per hour to $6.50 per hour.
a. No specific vote was recorded on this action.
b. 1995 Township Auditors were Harriet McGarvey, Pauline Straw and
Annette Stiver.
c. The wage reduction was continued in 1996.
6 Attorney James A. Naddeo served as the Chest Township Solicitor during
1995.
7. On or about March 30, 1995, Solicitor Naddeo filed an Appeal of the Auditor's
1995 Report with the Clearfield County Court of Common Pleas Civil Division.
Hutton, 95- 064 -C2
Page 3
a. The Audit Appeal was assigned Case #95- 516 -C.D.
b. Plaintiffs were identified as the Board of Supervisors of Chest Township.
c. Defendants were identified as Harriet A. McGarvey, Pauline B. Straw and
Annette M. Stiver, Auditors of Chest Township, Clearfield County.
d. On April 6, 1995, Auditors Harriet A. McGarvey, Annette Stiver and
Pauline Straw were served with documents relating to the Supervisors'
law suit against them.
8. The topic of the law suit was discussed at the Supervisor's April 22, 1995,
meeting. At that meeting, the Auditors indicated that the pay cut was due to
the financial condition of the Township, specifically, increased legal fees
associated with the landfill, increased fire protection costs and rising Township
operating costs.
9. The Supervisors held a special meeting May 22, 1995, for the sole purpose of
discussing the fifty cent an hour pay reduction the Supervisor /Roadmasters
received. Minutes of this meeting indicate the following:
a. "Leroy Brink made a motion to hire Mr. James Naddeo for the audit
appeal. Daniel (Hutton) 2nd the motion. Motion carried 2 -1. Daniel
(Hutton) + Leroy (Brink) voted yes and Mike (Kunsman) voted no."
10. The Auditors held a special meeting on May 25, 1995, to announce the
retention of Gary Knaresboro as their legal counsel.
11. On or about June 1, 1995, a hearing on motions in the Supervisor's law suit
was held.
a. Solicitor Naddeo was present as legal counsel for Supervisors Brink and
Hutton.
12. On June 13, 1995, Solicitor Naddeo submitted to Chest Township a bill in the
amount of $2,055.36, for legal services performed.
a. Naddeo's bill was paid with Township general fund check #2983, dated
July 8, 1995. This check contained the signatures of all three
Supervisors (Brink, Hutton, Kunsman), and then Secretary /Treasurer
Tanya Kunsman.
13. Chest Township bill lists are voted on in their entirety and recorded as part of
the meeting minutes.
a. All three Supervisors sign the checks.
14. Minutes from the Chest Township Board of Supervisor's July 8, 1995, meeting,
reflect that the $2,055.36 invoice submitted by Solicitor Naddeo was approved
by a 3 -0 vote as part of the following motion:
a. "A motion to pay all outstanding bills was made by Leroy Brink and
second by Daniel Hutton. Leroy abstained from voting on $15.00 car
Hutton, 95- 064 -C2
Page 4
rental and Mike abstained from voting on secretary) wages due to
conflict of interest. Motion carried 3 -0 all in favor."
Present: Brink, Hutton, Kunsman
b. There was no recorded discussion at this meeting over the payment of
Solicitor Naddeo's bill.
15. Naddeo's June 13, 1995, billing also included charges for legal services not
associated with the Supervisors' law suit against the Auditors. The Supervisors
received the following invoice:
Three office conferences; Preparation and filing - Appeal of
Audit Report of Chest Township; Attendance at hearing -
June 1, 1995; Review of Motion to Dismiss; Preparation
and filing Brief in Opposition of Motion to Dismiss; Legal
Research; General correspondence - 3 letters; Various
telephone conferences - Chest Township Supervisors;
Review of Ordinance; Review of Agreement - Eagle
Environmental and The Township of Chest; Review of
Supplemental Agreement - Eagle Environmental and Chest
Township
James A. Naddeo - 11 hours at $ 100 per hr.
Mark A. Falvo, Associate 17 hrs at $50 per hr.
Advanced Costs:
William Shaw, Prothonotary (filing appeal)--- -
Sheriff Hawkins (service of appeal)
Advanced Costs:
William Shaw, Prothonotary (filing appeal)
Sheriff Hawkins (service of appeal)
$1,100.00
850.00
55.00
50.36
TOTAL AMOUNT DUE JAMES A. NADDEO -- $2,055.36
16. As a follow -up to the invoice detailed in Finding #15, Naddeo was requested by
the Township to provide an itemized list of legal services directly associated
with the Supervisors' law suit against the Auditors.
17. On July 24, 1995, Naddeo submitted the following itemized bill for legal
services attributed to the Supervisor's law suit against the Auditors:
a. Office conference; Preparation and filing Appeal of Audit Report of Chest
Township; Attendance at hearing - June 1, 1995; Review of Motion to
Dismiss; Preparation and filing Brief in Opposition of Motion to Dismiss;
Legal Research; General Correspondence - 3 letters; Various telephone
Conferences - Chest Township Supervisors
James A. Naddeo -7.25 hrs at 100 per hr.-
Mark A. Falvo, Associate -1 1 hrs at 50 per hr
$ 725.00
550.00
$1,275.00
55.00
50.36
Hutton, 95- 064 -C2
Page 5
TOTAL AMOUNT DUE JAMES A. NADDEO -- $1,380.36
b. Payment of this $1,380.36 was included as part of Township General
Fund check #2983, dated July 8, 1995, in the amount of $2,055.36.
18. Additional hearings were held on the Audit Appeal on or about September 6 and
September 20, 1995, in the Clearfield County Court of Common Pleas.
a. Naddeo represented Supervisors Brink and Hutton.
19. Naddeo submitted a bill to Chest Township dated December 6, 1995, in the
amount of $1,185.00 for the following legal services rendered from 07/24/95
to 12/06/95.
Correspondence (8) letters; office conferences (3);
Attendance at audit appeal hearing on 09/02/95; Telephone
conferences; Preparation of Brief In Support of Appeal
James A. Naddeo, Esq. (6.85 hrs. @ $100 /hr.) -- $ 685.00
Mark A. Falvo, Esq. (10 hrs. @ $50.00 /hr.) - - -- $ 500.00
TOTAL AMOUNT DUE JAMES A. NADDEO, ESQUIRE - - -- $1,185.00
20. Of the $1,185.00 charged by Naddeo on December 6, 1995, $755.00 is
attributable to Supervisors Brink and Hutton's law suit against the Auditors.
21. Naddeo's December 6, 1995, invoice was paid by Chest Township General fund
check #3023, in the amount of $1,185.00, issued on December 9, 1995.
a. Supervisors Brink and Hutton both signed the front side of the check.
22. Minutes from the Chest Township Board of Supervisor's December 9, 1995,
meeting, included the following discussion and action on the $1,185.00 invoice
submitted by Naddeo:
Michael Kunsman questioned the bill for James A. Naddeo.
He and Daniel Hutton looked over the bill. Daniel Hutton
asked for a motion to pay all the bills. Leroy Brink
questioned the $66.41 to himself. The secretary stated
that it was for meeting pay. Leroy Brink made a motion to
pay all the bills, Michael Kunsman seconded all bills except
the one for James Naddeo. Daniel Hutton seconded the
motion to pay James Naddeo. Motion carried 3 -0"
Present: Brink, Hutton, Kunsman.
23. Chest Township incurred a total cost of $2,135.36 (see Findings #17 and #20),
as a result of the law suit filed by Supervisors Brink and Hutton against the
Auditors.
24. Supervisor Hutton participated in the following Township actions facilitating
payments to Solicitor James Naddeo for legal expenses associated with the law
suit against the Auditors:
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Page 6
Meeting Date Action Vote Invoice Amount
07/08/95 2nd /vote 3 -0 $2,055.36
12/09/95 2nd /vote 2 -0 -1 $1,185.00
25. On January 4, 1996, Judge Frederic Ammerman of the Clearfield County Court
of Common Pleas issued the following Order on the case:
And now, this fourth day of January, 1996, it is the Order
of this Court that the Appeal of Audit Report filed on behalf
of the Board of Supervisors of Chest Township be and is
hereby dismissed. The decision by the Auditors of Chest
Township setting the hourly rate of compensation at Six
Dollars and Fifty Cents ($6.50) for the Supervisors when
acting as Roadmasters is hereby approved."
26. Supervisors Brink and Hutton received a private pecuniary benefit of $2,135.36,
the cost of their Township paid legal fees for their suit against the Auditors.
a. Hutton's financial gain was $1,067.68, 1/2 of $2,135.36.
111. DISCUSSION:
At all times relevant to this matter, the Respondent, Daniel L. Hutton, Sr.,
hereinafter Hutton, has been a public official subject to the provisions of the Public
Official and Employee Ethics Law ( "Ethics Law "), Act 9 of 1989, Pamphlet Law 26,
65 P.S. §401, at sea.
The issue before us is whether Hutton violated Section 3(a) of the State Ethics
Act (Act 9 of 1989) by using the authority of his office for a private pecuniary benefit
when he participated in board discussions and /or actions to hire the Township Solicitor
to represent the Board of Supervisors in an effort to obtain a salary increase and when
he participated in the approval of payments of Township funds to the Township
Solicitor and /or his law firm, by voting and signing checks, for the Solicitor's
representation of the Supervisors in a legal action against the Township Auditors
relating to the aforementioned action.
Section 3. Restricted Activities
(a) No public official or public employee shall
engage in conduct that constitutes a conflict of interest.
65 P.S. §403(a).
Pursuant to Section 3(a) of the Ethics Law quoted above, a public official /public
employee is prohibited from engaging 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
Hutton, 95- 064 -C2
Page 7
65 P.S. §402.
facts.
employment or any confidential information received
through his holding public office or employment for the
private pecuniary benefit of himself, a member of his
immediate family or a business with which he or a member
of his immediate family is associated. "Conflict" or
"conflict of interest" does not include an action having a de
minimis economic impact or which affects to the same
degree a class consisting of the general public or a subclass
consisting of an industry, occupation or other group which
includes the public official or public employee, a member or
his immediate family or a business with which he or a
member of his immediate family is associated.
Having noted the issues and applicable law, we shall now summarize the salient
Hutton has served as a Chest Township Supervisor from 1987 to the present
during which time he has held the position of Roadmaster. For the years 1992
through 1994, the Roadmasters were compensated at the rate of $7 per hour.
However, at the January 1995 reorganizational meeting of the Chest Township
Auditors, Roadmaster wages were decreased 50 an hour to $6.50 because of
Township financial constraints.
At a special Supervisor Board meeting, Brink made a motion, second by Hutton,
to file an appeal from the action of the Auditors which motion passed 2 -1 with
Supervisors Brink and Hutton voting yes and Kunsman voting no. Attorney Naddeo,
who serves as the Chest Township Solicitor, filed an appeal in the Court of Common
Pleas of Clearfield County, Civil Division, with the Board of Supervisors listed as the
Plaintiff and the Auditors as Defendants.
A hearing was held on the lawsuit on June 1, 1995 with Solicitor Naddeo as
legal counsel for Supervisors Brink and Hutton. On January 4, 1996, Judge
Ammerman issued an Order which approved the $6.50 an hour rate set by the
Auditors and dismissed the appeal.
As to the legal bills submitted by Attorney Naddeo for representing the
Supervisors against the Auditors, a bill in the amount of $2,055.36 was submitted
which was approved unanimously by the Township Board on July 8, 1995 based upon
a motion by Brink and second by Hutton. However, since that bill included certain
charges for legal services not associated with the lawsuit against the Auditors, Naddeo
was requested to provide an itemized list of services that related only to that lawsuit.
Thereafter, Naddeo submitted a bill for services relative to the lawsuit in the amount
of $1,380.36 which bill was paid from the Township general fund for bills approved
as of July 8, 1995.
Naddeo submitted another bill for additional legal services relative to the lawsuit
in the amount of $1,185 which was paid from the Township general fund on
December 9, 1995. Both Brink and Hutton signed the front side of the check made
payable to Naddeo. The latter payment was part of a group of bills which were
unanimously approved through a motion by Brink. Chest Township incurred a total
cost $2,135.36 in legal fees as to the Brink /Hutton lawsuit against the Auditors.
Hutton 95- 064 -C2
Page 8
Having summarized the above relevant facts, we must now determine whether
the actions of Hutton violated Section 3(a) of Act 9 of 1989.
In order to establish a violation, Section 3(a) requires a use of the authority of
office or confidential information by a public official /employee for the private pecuniary
benefit of himself, a member of his immediate family, or business with which he or a
member of his immediate family is associated. In this case, we find a violation of
Section 3(a) of Act 9 of 1989. In particular, there was a use of authority of office by
Hutton in that he took action as a Supervisor to institute the lawsuit against the
Auditors for their action in reducing the wages of a Roadmaster from $7 to $6.50 an
hour. There was also a use of authority of office as to the process of approving the
payment of the legal bills with Township funds and signing the check in payment. The
use of authority of office resulted in a pecuniary benefit in that there were no out of
pocket expenses by Hutton in that the Township paid for such legal representation.
Lastly, the pecuniary benefit was private because it was not authorized in law. In this
regard, it is well settled that Township Supervisors cannot obtain Township -paid legal
representation as to matters involving themselves as Township employees. See,
Hessinger, Order 931, Wasiela, Order 932, affirmed in part in R.H. and T.W. v. SEC,
Opinion filed on March 18, 1996 in Commonwealth Court at Docket 1732, 1733 C.D.
1994. In addressing this very issue, the Commonwealth Court in affirming the -
Commission's finding of a violation noted:
The SEC concluded that Petitioners violated Section 3(a) of the 1978 Act
by using the Township Solicitor, at Township expense, to challenge the
Auditors' 1989 decision to decrease the annual laborer wage for
Supervisors working as laborers.
*
*
Section 516 of the Code, 53 P.S. §65516, which provides that
supervisors' duties include hiring such persons as may be necessary for
the general conduct of the business of the township, allows supervisors
to retain the township solicitor to represent the township. However, we
must agree with the SEC that the benefits Petitioners sought through the
suit against the Township Auditors were personal to the Petitioners and
not necessary for the general conduct of business of the Township.
Therefore, the value of the legal representation Petitioners received from
the Township Solicitor was financial gain other than compensation
provided by law, in violation of the 1978 Act.
Slip Opinion at 14, 16.
Turning to the mat of restitution, Section 7(13) of Act 9 of 1989, 65 P.S.
§407(13), specifically empowers this Commission to impose restitution in those
instances where a public official /employee has obtained a financial gain in violation of
the Ethics Law. Regarding the legal representation by the Township Solicitor, the
financial gain which Hutton received amounted to approximately $1,067.68 (Y2 of
$2,135.36). We will impose restitution as to that amount. Therefore, Hutton is
directed to pay restitution of $1,067.68 through this Commission to Chest Township
within thirty days of the mailing date of this Order. Compliance with the foregoing will
Hutton, 95- 064 -C2
Page 9
result in the closing of this case with no further action by the Commission. Non-
compliance will result in the institution of an order enforcement action.
Lastly, we note that the parties have filed a consent agreement which sets forth
a proposed resolution of the allegations. We believe that the consent agreement is the
proper disposition for this case based upon our review as reflected in the above
analysis and the totality of the facts and circumstances.
IV. CONCLUSIONS OF LAW:
1. Daniel L. Hutton, Sr., as a Supervisor in Chest Township, is a public official
subject to the provisions of Act 9 of 1989.
2. Hutton violated Section 3(a) of Act 9 of 1989 when he used the authority of
office to hire the Township Solicitor, pay the legal bills and sign a check as to
the legal expenses for the lawsuit by the Supervisor /Roadmasters to challenge
the wages set by the Auditors for the Supervisors as Township employees.
3. The private pecuniary benefit received by Hutton was $ 1,067.68.
In Re: Daniel L. Hutton, Sr.
ORDER NO, 1006
File Docket: 95- 064 -C2
Date Decided: 8/27/96
Date Mailed: 9/6/96
1. Daniel L. Hutton, Sr., as a Supervisor in Chest Township, violated Section 3(a)
of Act 9 of 1989 when he used the authority of office to hire the Township
Solicitor, pay the legal bills and sign a check as to the legal expenses for the
lawsuit by the Supervisor /Roadmasters to challenge the wages set by the
Auditors for the Supervisors as Township employees.
2. Hutton is directed to make restitution to Chest Township through this
Commission in the amount of $1,067.68 within thirty days of the date of
mailing of this Order. Compliance with the foregoing will result in the closing
of this case with no further action. Failure to comply will result in the
institution of an order enforcement action.
BY THE COMMISSION,
aug
DANEEN E. REESE, CHAIR