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HomeMy WebLinkAbout1016 Bruno-NelsonIn Re: Diane Bruno - Nelson STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: 94- 055 -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 lea., 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 filed and a hearing was 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. Bruno - Nelson, 94- 055 -C2 Page 2 I. ALLEGATION: That Diane Bruno - Nelson, as Counciiperson for Throop Borough, Lackawanna County, violated Section 3(a) of the Ethics Law (Act 9 of 1989) when she used the authority of her elected office for the private pecuniary benefit of herself and /or a business with which a member of her immediate family is associated by participating in Council discussions and /or decisions in relation to payments and reimbursements of various expenses, including but not limited to legal fees to the Throop Property Owners Association, an association where her mother and husband serve as members and which legal expenses were incurred on her behalf as a named plaintiff and for which she was responsible. II. FINDINGS: 1. Diane Bruno - Nelson served as a council member for Throop Borough, Lackawanna County from January, 1992, through December 31, 1995. a. Bruno - Nelson held the position of Council Representative to the Environmental Trust Fund in 1992 and was reappointed to a three year term in 1993. b. The appointments were made during the Reorganizational Meetings of January 6, 1992, and reappointment was made on January 25, 1993. 2. In 1987, Keystone Landfill, Incorporated, was proposing to expand a landfill so that it would be partially located in Throop Borough. 3. Keystone Landfill, Incorporated, is a corporation registered in Pennsylvania for the purpose of operating a municipal waste landfill under the terms and provisions of the Pennsylvania Solid Waste Management Act and related applicable statutes, state and federal. a. Louis DeNaples is President and CEO of Keystone Landfill, Incorporated. 4. The Throop Property Owners Association (TPOA) was formed in 1944 by a group of borough residents seeking to foster good government. a. The TPOA has not always been an active association. 5. The TPOA became more active in 1987, at the time a landfill expansion was being proposed by Keystone Landfill, Incorporated. a. The TPOA approved by -laws in 1989 which stated, in part: Membership shall consist of three categories: charter, regular, and honorary. Membership is open to all individuals who desire honesty from elected officials and who are willing to work through the Association to protect the rights of the citizens of Throop. Fees shall be established as $5.00 per year for an individual or family membership. Bruno - Nelson, 94- 055 -C2 Page 3 Provided for a President, Vice - President, Secretary, Treasurer and Board of Directors. The President shall preside at all meetings of the Association. He /she shall see that the Constitution, By- laws and order in general are enforced. The President shall call all special meetings and appoint all committee members subject to approval of the membership. He /she shall sign all orders and checks ordered by the Association. The President shall also serve as chairman of the Board of Directors. The President shall also sit on the Environmental Trust Fund committee. The Board of Directors shall consist of five (5) members of the Association who are in good standing. No more than two (2) officers can serve on the Board at any time. they shall supervise and protect all interests of the Association. They shall keep a vigilant watch as to the execution of the constitution and By -laws of the Association. The senior member of the Board of Directors, other than the President or Vice President, or a member proposed by the President, shall sit on the Environmental Trust Fund Committee. Any member who seeks elected public office must resign any office they may hold in the Association as well as membership in the Association during the term of elected public office. Reinstatement with all previous privileges will be automatic at the conclusion o the term, excepting for any office or seat on the Board of Directors which is vacated. 6. Ann Bruno is the mother of Diane Bruno Nelson. a. Ann Bruno is a member of the TPOA but at all relevant times hereto was not an officer and had no decision making duties and /or authority. 7. Robert Nelson is the husband of Diane Bruno Nelson. a. Robert Nelson is a member of the TPOA but at all relevant times hereto was not an officer and had no decision making duties and /or authority. 8. In April, 1987, the TPOA filed a complaint with the Pennsylvania Environmental Hearing Board in opposition to a permit being granted for Keystone Landfill, Incorporated's landfill expansion. 9. Throop Borough Council approved Keystone's landfill expansion on August 10, 1987. 10. Council's approved of the landfill expansion by a 3 to 2 vote to amend the zoning map from CN to 1 -2 of 174 acres to allow construction of a landfill by Keystone Landfill, Incorporated. Bruno - Nelson, 94- 055 -C2 Page 4 a. Diane Bruno - Nelson was not a member of council when this vote occurred. 11. In January, 1988, a change in the composition of borough council occurred as a result of the November, 1987, General Election. a. The new council joined in the TPOA's opposition of Keystone's expansion of the landfill. 12. In 1989, the Borough, TPOA and Keystone Landfill, Incorporated, entered into a three way agreement to end the complaint filed in 1987. 13. On July 17, 1989, TPOA and the Borough of Throop entered into a three -way agreement with Keystone Landfill. The Agreement provides, in part: a. In Article 2, Section 2.1, KEYSTONE agreed to maintain and operate the landfill in a manner that will protect the public's safety, health and welfare, and comply with all rules, regulations and provisions of the Solid Waste Act. b. Article 2, 2.6, provided that all leachate produced will be collected immediately, pretreated, and sent to the Scranton Sewage Plant; if not the landfill will not operate without an approved and acceptable alternative means of disposal of leachate. None of the leachate shall be disposed of through the Borough of Throop, nor through sewer pipes located in Throop. c. In Article 3.1, KEYSTONE agreed to pay to the BOROUGH and the ASSOCIATION a supplemental fee for each ton of Solid Waste received at its landfill or facility. d. Section 3.3 provided that the parties agreed that a supplemental fee of One Dollar (1.00) per ton of weight of Solid Waste shall be paid to the BOROUGH and the ASSOCIATION for all solid waste received and deposited at the Keystone Landfill facility. e. Section 3.4 stated that it is specifically understood by all parties hereto that the one dollar (1.00) per ton fee provided for by this Agreement shall be in addition to any monies that the Borough of Throop is entitled to pursuant to Pennsylvania Act 101 (Host Municipality Fee). f. Section 3.6 provided for an advance payment of fifty thousand dollars $50,000.00 to be made by Keystone at the time of the signing of the agreement. In Section 4.1, KEYSTONE shall make payment to the BOROUGH of all fees which may accrue under Article 3 on the same basis as payments under §1301(b) of Act 101. For this purpose the BOROUGH shall be acting as the agent of the ASSOCIATION. h. In Article 10.2, the BOROUGH and the ASSOCIATION intend and agree by the terms of this Agreement to immediately, upon the execution of g. Bruno - Nelson, 94- 055 -C2 Page 5 docketed at 87 -185 -W (April, 1987 C.O.A.); 88 -028 -W (December, 1987 Suspension Orders) and 88 -114 -W (February, 1988 C.O.A.), consolidated with 87- 185 -W; and 88 -320 -W (July, 1988 permit issuance). Section 10.3 provides that the BOROUGH intends and agrees by the terms of this Agreement to immediately upon execution of this Agreement, discontinue and withdraw with prejudice its Lackawanna County Equity Action docketed at 88 -EQ -66 (Zoning Matter) including any claim regarding that use of the area (shown on the map attached as Exhibit "B ") as described in the permits issued to Keystone in July of 1988 conflicts in any way with the BOROUGH'S zoning. Article 13.1 of the agreement provides that the payment of the fees contemplated to the BOROUGH, are made by KEYSTONE and received by the BOROUGH for the sole and exclusive benefit of the BOROUGH OF THROOP and the Association as described herein and not for any benefit, - use, interest or payment to any other municipality , person, individual or other entity, including without limitation, any local, county, state or federal government, or subdivision thereof. 14. The three -way agreement was signed by Louis DeNapies, President, Keystone Landfill, Fred Soltis, President TPOA, and Mark Mazak, President of Borough Council. 1• this Agreement, withdraw with prejudice their appeals with the Environmental Hearing Board, 15. On July 17, 1989, in a separate two -way agreement, TPOA and the Borough of Throop entered into an agreement which provided in part as follows regarding the division and use of funds from the supplemental fee paid by Keystone Landfill. §201 "Division" The funds received from supplemental fee paid by Keystone shall be divided equally between the BOROUGH and an interest bearing trust fund to be controlled jointly by the ASSOCIATION and the BOROUGH until the trust fund has received $500,000.00 in payments from Keystone. The trust fund shall be held by a bank or other secured trust agent. § 202 "Advance Payment" The trust fun described above will be set up initially with the receipt of the advance payment of fifty thousand dollars ($50,000) by Keystone due at the time of the signing of this agreement; §203 "Purpose and use" The trust fund shall be for the purpose of payment of the costs of, among other things, the duly authorized representatives and for engineering fees to review operational and other data, for attorney and other fees and costs associated with past, present, or future monitoring or environmental protection activities or enforcement actions regarding Keystone Landfill; the trust fund is separate from the closure trust fund which Act 101 requires to be established. The trust fund may also be used for the enhancement and maintenance of a clean, sound, safe environment to be Bruno - Nelson, 94- 055 -C2 Page 6 initiated by written directions from the President of the Association, or one whom the President designates in writing. § 204 "Enforcement of Keystone Agreement" Either the BOROUGH or the ASSOCIATION may initiate an action to enforce the Keystone agreement, or any environmental laws related to Keystone Landfill. §205 "Trust Cap" After the trust fund has reached $500,000.00 in total payments received from Keystone, the 100% of the payments shall be used fully at the discretion of the Borough. §301 "Outstanding Bills" The trust fund will pay any bills associated with investigation, monitoring or litigation regarding Keystone Landfill which are outstanding at the time of this agreement, whether incurred by the Association or its members. §302 "Prior Expenses" The trust fund will reimburse the Association for all legal fees, expert fees, and associated costs, associated with its appeals and maintenance of those appeals related to Keystone Landfill from April 20, 1987, to the time of this agreement. §401 In the event of any disagreement between the BOROUGH and the ASSOCIATION on anything related to, among other things, the use of funds in the trust fund, the selection of the Duly Authorized Representatives, its duties, etc., or other aspects of the implementation of this agreement, the parties agree to submit same to binding arbitration under the auspices of the American Arbitration Association. The method of arbitration shall be a selection of the best of the two alternatives, not compromise between alternatives. 16. The Two -way Agreement was signed by Fred Soltis, President, TPOA, and Mark Mazak, President, Borough Council. 17. At the time Diane Bruno - Nelson became a councilperson, it was practice that the Borough and TPOA would appoint two trustees each to oversee the expenditure of the funds of the Environmental Trust Fund. a. Diane Bruno - Nelson was appointed as one of the Borough Trustees in 1992 and again in 1993. 18. On May 5, 1990, Keystone Landfill submitted a proposal to the borough and the TPOA concerning construction of a sewer line through the Borough of Throop for disposal of leachate from the landfill. 19. TPOA rejected Keystone's proposal. 20. Throop Borough Council considered Keystone's proposal and at the November 26, 1990, meeting passed a motion which approved an agreement between the borough , the Lackawanna Basin Sewer Authority and Keystone Landfill for the construction and maintenance of a dedicated sewer line. a. The motion carried by a 5 to 2 vote. Bruno - Nelson, 94- 055 -C2 Page 7 b. Diane Bruno - Nelson was not on council at the time this motion was approved. 21. Keystone Landfill agreed to pay the Borough $750,000 for the privilege of running the line through the borough. 22. Borough Council members who approved the line contend that the leachate from the landfill would be treated prior to entering the sewer system and would not be considered leachate under the terms of the July 17, 1989, Agreement. 23. Council members felt that the TPOA was not properly handling the money it had so far received as the TPOA refused to provide receipts for prior expenses paid by the fund and were billing the fund for lawyers fees that were forgiven by the attorney who represented them. 24. Borough Secretary /Treasurer Mary Ann Paulic and Borough Council President Ken Mazak arranged for the payments from Keystone, that were to be directed to the TPOA, be placed into a Borough controlled account named " Throop Borough Environmental Trust Fund." a. This account could only be accessed by Ken Mazak and Mary Ann Paulic. b. Mazak and Paulic took this action as they had concerns as to how the TPOA was accounting for the money in the trust fund. c. As a result of this action, no payments were made to the "Throop Property Owner's Environmental Fund." 25. On January 28, 1991, Throop Borough Council voted to authorize depositing the Environmental Fund share of the supplemental fee from Keystone Landfill into an interest bearing account until such time the monies are turned over to the Throop Property Owner's Environmental Fund. a. b. The motion was approved by a unanimous vote. Bruno - Nelson was not on council when this motion was approved. 26. On February 11, 1991, Attorney Benjamin Lipman filed suit in Unites States District Court to Case No. 91 -0213 against Throop Borough, Keystone Landfill, Inc., Borough Secretary Mary Ann Paulic, Borough Treasurer Adam Nosak, Council members Peter Kucharski, Christopher Mazzuca and Mark Mazak. a. The suit was filed on behalf of the TPOA, Diane Bruno - Nelson, Ann Bruno and Conrad Griletto. b. Diane Bruno - Nelson, Ann Bruno and Conrad Griletto were described as members of the Association. 27. The suit filed by Lipman, Case No. 91 -0213, sought a temporary and permanent injunction prohibiting the borough from taking any action which would facilitate and /or permit the disposal of leachate from Keystone Landfill through Throop Borough or through sewer lines located in the borough. Bruno- Nelson, 94- 055 -C2 Page 8 a. The suit further sought compensatory and punitive damages, interest, costs and reasonable counsel fees and other such legal and equitable relief. b. The suit also sought an injunction against the borough compelling the borough to abide by the trust agreement and award compensatory and punitive damages, as well as reasonable counsel fees in favor of the TPOA. 28. In a letter dated February 13, 1991, Lipman thanked Bruno, Bruno - Nelson and Griletto for agreeing to serve as individually named plaintiffs. a. Lipman assured each that he was authorized by Fred Soltis to say that the litigation would not involve any significant costs to them. b. Lipman had entered into a fee agreement with TPOA and would seek his compensation from them. c. Lipman advised that the losing party in a lawsuit could be held liable for the other sides' costs. d. Lipman described the costs to include filing fees, witness fees, depositions, and transcripts. 29. In a memorandum dated February 26, 1991, Federal Court Judge Edward M. Kosik directed that the attorneys submit briefs addressing issues as to whether TPOA had standing to bring such an action; whether there was a liberty of protecting interest to which there was an alternative state remedy; and whether the agreements underlying the action were a product of a settlement of litigation in State Court necessitating enforcement of the settlement more appropriately in the hands of the State Court. a. Kosik warned that he cautioned counsel about these matters before and they have elected to pursue the requested remedies in this case and in the event the beliefs about the issues prove correct he would seriously consider imposing Rule 11 Sanctions for pursuing litigation which was not well grounded in fact and is not warranted by existing law. 30. On March 15, 1991, a hearing on the Plaintiff's Motion for a Preliminary Injunction and the Defendant's Motion to Dismiss was held before Judge Kosik. a. James Michaels identified himself as a member of the TPOA and testified of his concerns should Keystone be permitted to run leachate through the Borough of Throop sewer system. b. Michaels was later elected to Throop Borough in November, 1991. 31. On March 29, 1991, Judge Kosik issued a ruling stating the Plaintiffs (TPOA) did not meet the requirements to warrant injunctive relief. a. Judge Kosik stated the Plaintiffs (TPOA) were free to pursue these claims in state court where jurisdiction appropriately exists. Bruno - Nelson, 94- 055 -C2 Page 9 32. Judge Kosik did not impose Rule 11 Sanctions against the Plaintiffs (TPOA) in this matter. a. Further, there is no indication from the record that the Defendant Borough Officials moved to have such sanctions imposed. 33. The TPOA appealed Judge Kosik's decision to the United States Court of Appeals for the Third Circuit. a. The Court of Appeals affirmed Judge Kosik's decision and assessed costs against the appellants (TPOA). b. The Assessment of Costs refers to statutory costs and not attorney's fees. 34. On December 23, 1991, Keystone Landfill notified the Borough of Throop that they would not be installing the sewer line through the borough and that the agreement of November 26, 1990, was nullified. a. The Plaintiffs (TPOA) did not further pursue the matter in state court or . federal court. 35. The TPOA expended $27,361.15 to his point on the litigation. 36. At the January 6, 1992, meeting of Throop Borough, Diane Bruno - Nelson took office. a. Bruno - Nelson was appointed Council Representative to the Environmental Trust Fund upon a motion by Sharon Soltis Sparano. 37. On April 3, 1992, Christopher Cullen, Borough Solicitor, issued an opinion to Borough Council concerning the transfer of funds held in the Throop Environmental Trust Fund Escrow Account to the Throop Property Owners Environmental fund which contained the following statements: a. The funds contained in the Escrow are not the revenues of the Borough; b. The Borough does not possess a legal right to continue these funds in Escrow; c. A legal basis for the creation of the Escrow and the withholding of said funds from the Trust Fund did not exist at the time the Escrow was created by the Borough; d. The funds presently held in the Escrow properly belong to the Trust Fund as provided for in Article II of the Trust Fund Agreement; e. The Borough, by and through the President of Borough Council, may immediately move to authorize the transfer of said funds from the Escrow to the Trust Fund; Bruno - Nelson, 94- 055 -C2 Page 10 f. The control, administration, purpose and use of the Trust Fund rests solely with the President of the Association and the Trustees of the Trust Fund as provided for in Article II of the Trust Fund Agreement and Article 12 of the Agreement. The Association may seek to recover damages and costs, if any, caused by the negligence, or malfeasance or misfeasance which may have been committed on the part of past or present Borough officials; h. The Borough and Association acting together may designate a "Collector" other than the original collector as designated in the Agreement and Trust Fund Agreement and may notify Keystone of the new joint designation. i. The trustees of the Trust Fund may accept and review bills and invoices submitted for payment, and may authorize the same for payment and cause checks to be issued for this purpose. Section 203 of the Trust Fund Agreement authorizes the President of the Association to determine what other worthwhile things, i.e., those things which enhance and maintain a clean, sound, safe environment for the Borough of Throop, in the Borough may be appropriate to investigate and expend monies from the Trust Fund on; places the power and responsibility for making such a determination upon the President of the Association, and authorizes the President of the Association to direct the Trustees in writing to make such an expenditure from the monies contained in the Trust Fund; k. The Borough acts only in the capacity as the Agent for the Association /Trust Fund in the receipt of quarterly Supplemental Fee payments from Keystone and as such, the Borough may not act contrary to the Association /Trust Fund's interest, nor may the Borough act in contravention of the terms and provisions of the Agreement and the Trust Fund Agreement; and I. When members of Borough Council, appointed to serve as Trustees for the Trust Fund, act in the capacity as a Trustee, such Council members act in the capacity of private citizens and their actions are in support of the operation and administration of private funds held in a Trust Fund, as created pursuant to the terms and provisions of the Agreement and Trust Fund Agreements. 38. At a special meeting on April 8, 1992, Throop Borough Council approved a motion authorizing the withdrawal of funds from the Throop Environmental Trust Fund Escrow Account, No. 04- 0166 -9 to be disbursed to the TPOA pursuant to the agreement dated July 17, 1989, between the TPOA, Throop Borough and Keystone Landfill. g. j• a. The motion was approved unanimously upon a motion by Diane Bruno - Nelson and Sharon Soltis. b. Sharon Soltis provided background information concerning the settlement of the suit and challenged anyone to sue them over the matter. Bruno - Nelson, 94- 055 -C2 Page 11 c. Diane Bruno - Nelson also spoke out in favor of the settlement. 39. Throop Borough transferred funds from Environmental Trust Escrow Account No. 04- 0166 -9 to the TPOA as follows: a. $377,674.50 on April 9, 1992. b. $ 75,886.92 on April 27, 1992. 40. By letter dated April 23, 1992, TPOA Secretary Mary Ann Solensky advised Throop Council President Michaels to send future drafts (payments) to the TPOA Environmental Fund c/o Fred Soltis, 411 George Street, Throop, Pennsylvania. 41. In June, 1992, Solicitor Christopher Cullen agreed to represent the TPOA Environmental Fund. a. On June 4, 1992, Cullen was paid a $5,000.00 retainer. b. Cullen was hired after he gave an opinion to Throop Council that funds should be transferred by the borough to the TPOA. 42. In a letter dated December 17, 1992, the TPOA requested Throop Borough Council take action so that it may recover funds which had been lost due to the failure of prior council's timely turnover to TPOA of Environmental Trust Fund monies and also to initiate any surcharge action that may be able to be taken. 43. On January 25, 1993, council approved a motion to authorize Solicitor Cullen to prepare an opinion in response to the TPOA letter of December 17, 1992. a. The motion passed unanimously (7 -0) with Sparano and Bruno - Nelson voting in favor. 44. In a memo dated March 29, 1993, Solicitor Cullen prepared an opinion in response to Borough Council's January 25, 1993, motions: a. Cullen opined that Borough officials, both elected and appointed failed to honor the terms of the Environmental Trust Fund Agreement and deliberately sought to deprive the Association of monies due to it pursuant to the applicable provisions Landfill Agreement and Environmental Trust Fund Agreement. b. Cullen further opined that as to surcharges, borough officials, elected or appointed, whose actions, or failure to act, have either exceeded or failed to meet legal authorizations or legal requirements are subject to a financial penalty if the action or failure to act resulted in a financial penalty to the Borough of those whom the Borough was contractually obligated. c. Cullen recommended that Borough Council direct and authorize its solicitor to pursue the matter complained of by the Association in its December 17, 1992, letter and the matter referred to above. Bruno - Nelson, 94- 055 -C2 Page 12 45. On April 26, 1993, Throop Borough council approved a motion directing the solicitor to review and, if appropriate, initiate surcharge actions against any former council members responsible for withholding payments due to the TPOA pursuant to the terms of the July 17, 1989, agreement. a. Any surcharge action was to include losses sustained by the Association, costs incurred by the Association and damages occurring to the Association. b. The motion was approved by a 4 to 0 vote with 1 abstention upon a motion Soltis and a second by Kerecman. c. Bruno - Nelson participated in the vote. d. No surcharge action was ever filed against Throop Borough Council. 46. At about the same time that the TPOA was seeking a surcharge of former council members, the TPOA also sought to have the Borough of Throop reimburse the Association legal fees in the amount of $27,361.16 incurred as the result of the 1991 court federal court case (91 -0213) (See Findings Nos. 26 -33) a. The TPOA case was dismissed by the federal court. 47. On May 24, 1993, Throop Borough Council took action to reimburse the TPOA for costs incurred in the litigation involving the proposed leachate line by Keystone. a. Council voted to reimburse costs totaling $27,361.16. b. Diane Bruno - Nelson was one of the Plaintiffs in the suit. (See Findings Nos. 26, 28) 48. The motion to approve the payment was made upon motion by Michaels second by Bruno - Nelson and was approved by a 4 to 3 vote. a. Bruno - Nelson voted with the majority on this issue. 49. Also approved at May 24, 1993, Throop Borough Council meeting was a motion to sever the ties between the Borough and the TPOA on the Environmental Trust Fund. a. The motion carried by a 4 to 3 vote upon a motion by Michaels second by Bruno - Nelson. b. This action terminated the July 17, 1989, agreement between the Borough and the TPOA. c. Bruno - Nelson voted with the majority on this issue. 50. The TPOA severing ties with the Borough resulted in the ending of the monitoring of the spending from the Environmental Trust Fund and enabled the TPOA to spend without trustee approval. Bruno - Nelson, 94- 055 -C2 Page 13 a. In June, 1993, following termination of the agreement, the TPOA hired Christopher Cullen to file a lawsuit to overturn the 1993 Throop Borough election results which affected Sharon Soltis- Sparano. 1. Cullen was paid $15,000.00 on June 8, 1993. b. In August, 1993, the TPOA retained Cullen to oppose a liquor license application of former Councilman Ken Mazak, a TPOA opponent. 1. Cullen was paid $20,000.00 on August 8, 1993. 51. Records in the possession of Fred Soltis, President of the TPOA assert the following costs associated with payment approved by council: a. Retainer Attorney Lipman: $ 2,000.00 Attorney Lipman Invoice: $17,857.29 Estate of Attorney Brubaker: $ 7.504.04 TOTAL $27,361.33 b. Attorney Lipman represented the TPOA in the federal lawsuit field to 91- 0213 regarding the TPOA's opposition to a proposed leachate line. c. Attorney Brubaker represented the TPOA in the original 1987 lawsuit filed against Keystone and was not associated with the 1991 case at its inception. d. Lipman and Brubaker had been paid by checks drawn on Throop Property Owners Environmental Fund on May 6, 1992. 52. Throop Borough check number 7962 dated June 19, 1993, drawn from the General Fund in the amount of $27,361.16 was made payable to the Throop Property Owners Association. a. The check was deposited in the TPOA Environmental Fund Account at the national Bank of Olyphant, Account No. 04- 0058 -0 on June 24, 1993. b. These funds were not part of the $500,000 Environmental Trust Fund. c. The borough was neither required nor prohibited by any agreement to pay these funds to the TPOA. 53. Diane Bruno - Nelson participated in actions and /or discussions of Throop Borough Council which benefitted the TPOA, an association with which her mother and husband are members. a. Bruno - Nelson's mother and husband had no decision making authority within the TPOA, nor are they now or have they ever been officers of said association. Bruno - Nelson, 94- 055 -C2 Page 14 III. DISCUSSION: At all times relevant to this matter, the Respondent, Diane Bruno - Nelson, hereinafter Bruno - Nelson, 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, el seq. The issues are whether Diane Bruno - Nelson, as a Throop Borough Councilmember, Lackawanna County, violated Section 3(a) of Act 9 of 1989 (conflict provision) by participating in Council decisions to make payments, including legal fees, to the Throop Property Owners Association (TPOA), an association in which her mother and husband serve as members, and to pay the legal expenses incurred on her behalf as a named plaintiff in a TPOA lawsuit. Pursuant to Section 3(a) of the Ethics Law, 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 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. 65 P.S. §402. facts. Having noted the issues and applicable law, we shall now summarize the salient In 1987, which was prior to Bruno - Nelson's service on Throop Borough Council, Keystone Landfill, Inc. proposed to expand its landfill which is partially located in Throop Borough. The Throop Property Owners Association (TPOA), which was formed by a group of Borough residents to foster good government, actively opposed Keystone's proposal. In April, 1987, TPOA filed a complaint with the Pennsylvania Environmental Hearing Board to block Keystone's proposed expansion. Ann Bruno, Bruno - Nelson's mother, and Robert Nelson, Bruno - Nelson's husband, are members but not officers of TPOA. Throop Borough Council approved Keystone's landfill expansion on August 10, 1987. However, in January, 1988, when the composition of Borough Council changed due to the November, 1987 election, Council joined TPOA in opposition to Bruno - Nelson, 94- 055 -C2 Page 15 Keystone's proposal. In 1989, the Borough, TPOA, and Keystone Landfill entered into a three -way agreement to resolve the dispute including the complaint filed by TPOA with the Pennsylvania Environmental Hearing Board. The three -way agreement provided in part for a supplementary payment of $1.00 per ton of solid waste deposited at the Keystone landfill to the Borough and TPOA. In a separate agreement, TPOA and the Borough agreed to have the payment from Keystone placed into a trust which would be jointly controlled by the Borough and TPOA with each having an equal interest. The trust funds were earmarked for the payment of fees associated with environmental protection activities and enforcement actions. Once the trust fund reached $500,000.00, any additional payments would be made to the Borough for its discretionary use. When Bruno - Nelson became a Councilmember in January, 1992, it was the existing practice for the Borough and TPOA to appoint two trustees to oversee the expenditure of funds into the "Environmental Trust Fund." Bruno - Nelson was appointed as one of the Borough Trustees in 1992 and 1993. Keystone Landfill in May, 1990 submitted a proposal to the Borough for the construction of a sewer line through the Borough for the disposal of leachate from the landfill. Although TPOA rejected Keystone's proposal, the Borough Council passed a motion for the approval of an agreement between the Borough, the Lackawanna Basin Sewer Authority, and Keystone for the construction and maintenance of a dedicated sewer line. Bruno - Nelson was not on Council at the time this motion was approved. On February 11, 1991, TPOA filed an action in federal court seeking to enjoin the Borough from taking any action which would allow the disposal of leachate from Keystone Landfill through sewer lines located in the Borough. Bruno - Nelson agreed to be one of the named plaintiffs in the lawsuit but was assured by the attorney representing TPOA that the litigation would not involve any significant cost to the plaintiffs and that his fee agreement was with TPOA which would pay his legal fees. A hearing was held in federal court which ruled on March 29, 1991 that the plaintiffs did not meet the requirements for injunctive relief. Although TPOA appealed the decision to the Circuit Court of Appeals, the lower court's decision was affirmed. Thereafter, on December 23, 1991, Keystone Landfill notified the Borough that it would be installing the sewer lines and that TPOA did not pursue the matter in state or federal court. Following the issuance of a memo by Borough Solicitor wherein he opined that the funds held by the Borough in the Throop Environmental Trust Fund Escrow Account legally belonged in the Trust Fund, a motion was unanimously approved at a special meeting of Council on April 8, 1992 authorizing the withdrawal of funds from the Throop Environmental Trust Fund Escrow Account and the disbursement to the Trust Fund. Not only did Bruno - Nelson make the successful motion, but she also spoke out in favor of the action. After the funds were transferred, TPOA, in a letter to the Throop Borough, requested that action be taken to recover lost funds resulting from the prior council's failure to timely transfer trust funds. Following a review by the Borough Solicitor, Throop Council approved a motion, with Bruno - Nelson participating, to direct the Solicitor to review and take appropriate action as to a surcharge of former council members. TPOA also sought to have Throop Borough reimburse the association for its legal fees in the federal action. Council took action to approve the payment of legal Bruno - Nelson, 94- 055 -C2 Page 16 fees on a 4 -3 vote with Bruno - Nelson voting with the majority. A Borough check in the amount of $27,361.16 was issued to TPOA in payment of its legal expenses. Lastly, although Bruno - Nelson participated in actions which benefitted TPOA, the association is not a business with which her mother and husband are associated in that they are only members but not officers. Having summarized the above relevant facts, we must now determine whether the actions of Bruno - Nelson violated Section 3(a) of Act 9 of 1989. In applying Section 3(a) of the Ethics Law to the instant matter, we find no violation of that provision. 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. If one of the requisite elements of Section 3(a) is absent, there can be no violation. In this case, Bruno - Nelson, as a public official, in voting to pay the legal expenses of the lawsuit used the authority of office but such action did not result in a private pecuniary benefit because she was not held liable for any of the expenses. Since Bruno - Nelson received no financial gain, there was no private pecuniary benefit. On that basis, we find no violation of Section 3(a) of Act 9 of 1989. Our decision in this matter is consistent with prior Commission precedent. See, Deeds, Order 988. As to the actions of Bruno - Nelson which benefitted TPOA, we find no violation of Section 3(a). Although Bruno - Nelson's mother and husband were members of TPOA, it was not a business with which associated as that term is defined under the Ethics Law because her mother and husband were not TPOA officers. 65 P.S. §402. Accordingly, there was no Section 3(a) violation. Lastly, we note that the parties have filed a Stipulation of Findings and 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. Diane Bruno - Nelson, as a Councilperson for Throop Borough, Lackawanna County, is a public official subject to the provisions of Act 9 of 1989. 2. Bruno - Nelson did not violate Section 3(a) of Act 9 of 1989 as to her participation in Council actions to transfer Borough funds to the Throop Property Owners Association in that the association is not a business with which her mother and husband are associated in that they are members but not officers. 3. Bruno - Nelson did not violate Section 3(a) of Act 9 of 1989 as to the reimbursement of legal expenses incurred in a lawsuit wherein she was a named plaintiff in that she was not held liable for any expenses. In Re: Diane Bruno - Nelson File Docket: 94- 055 -C2 Date Decided: 8/27/96 Date Mailed: 9/6/96 ORDER NO. 1016 1. Diane Bruno - Nelson, as a Councilperson for Throop Borough, Lackawanna County, did not violate Section 3(a) of Act 9 of 1989 as to her participation in Council actions to transfer Borough funds to the Throop Property Owners Association in that the association is not a business with which her mother and husband are associated in that they are members but not officers. 2. Bruno - Nelson did not violate Section 3(a) of Act 9 of 1989 as to the reimbursement of legal expenses incurred in a lawsuit wherein she was a named plaintiff in that she was not held liable for any expenses. BY THE COMMISSION, eamt, DANEEN E. REESE, CHAIR