HomeMy WebLinkAbout1034 BeattyIn Re: John Beatty
STATE ET; -TICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
File Docket:
Date Decided:
Date Mailed:
Before: Daneen E. Reese, Chair
Austin M. Lee, Vice Chair
Roy W. Wilt
Allan M. Kluger
Rev. Joseph G. Quinn
Boyd E. Wolff
96- 018 -C2
12/31/96
1/3/97
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 et seq., by the above -
named Respondent. At the commencement of its investigation, the Investigative
Division served upon Respondent written notice of the specific allegations. 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.
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.
Beatty, 96- 018 -C2
Page 2
I. ALLEGATION:
That John Beatty, a public official /public employee, in his capacity as a
Supervisor for Oakland Township, Butler County, violated the following provisions of
the State Ethics Act (Act 9 of 1989) when he participated in township discussions,
decisions and /or actions regarding the awarding of a contract to an individual employed
by his company, and subsequently received funds from said individual; and when a
business with which he was associated entered into a contract with the governmental
body with which he was associated in excess of $500.00 without an open and public
process.
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).
Section 3. Restricted activities
(c) No public official, public employee or nominee or
candidate for public office shall solicit or accept, anything
of monetary value, including a gift, loan, political
contribution, reward, or promise of future employment
based on any understanding of that public official, public
employee or nominee that the vote, official action, cr
judgment of the public official or public employee or
nominee or candidate for public office would be influenced
thereby. 65 P.S. §403(c).
Section 3. Restricted activities
(f) No public official or public employee or his
spouse or child or any business in which the person or his
spouse or child is associated shall enter into any contract
valued at $ 500 or more with the governmental body with
which the public official or public employee is associated or
any subcontract valued at $500 or more with any person
who has been awarded a contract with the governmental
body with which the public official or public employee is
associated, unless the contract has been awarded through
an open and public process, including prior public notice and
subsequent public disclosure of all proposals considered and
contracts awarded. In such a case, the public official or
public employee shall not have any supervisory or overall
responsibility for the implementation or administration of the
contract. Any contract or subcontract made in violation of
this subsection shall be voidable by a court of competent
jurisdiction if the suit is commenced within 90 days of the
making of the contract or subcontract. 65 P.S. §403(f).
Beatty, 96- 013 -C2
Page 3
II. FINDINGS:
1. The Investigative Division of the State Ethics Commission received a sicced,
sworn complaint alleging that John Beatty violated provisions of the State
Ethics Act (Act 9 of 1 989).
2. Upon review of the complaint by the Director of Investiaations a
recommendation was made to the Executive Director to commence a preliminary
inquiry.
3. At the direction of the Executive Director, the Investigative Division initiated a
preliminary inquiry on March 18, 1996.
4. The preliminary inquiry was completed within sixty days.
5. On May 17, 1996, a letter was forwarded to John Beatty, by the Executive
Director of the State Ethics Commission informing him that a complaint against
him was received by the Investigative Division and that a full investigation was
being commenced.
a. Said letter was forwarded by certified mail, No. Z 129 438 602.
b. The domestic return receipt bore the signature of Gwen Beatty, with a
delivery date of May 20, 1996.
6. The full investigation was commenced at the direction of the Executive Director
of the State Ethics Commission.
7. Periodic notice letters were forwarded to John Beatty in accordance with the
provisions of the Ethics Law advising him of the general status of the
investigation.
8. The Investigative Complaint was mailed to the Respondent on November 13,
1996.
9 John Beatty has served as an Oakland Township, Butler County Supervisor
since approximately 1983.
10 John Beatty has owned and operated Beatty Refrigeration & Heating since
approximately 1981.
a. Beatty Refrigeration & Heating is operated from John Beatty's residence,
316 Hoon Road, Butler, PA.
b. Beatty Refrigeration & Heating also goes by it's incorporated name GJB.
11. Beatty Refrigeration & Heating employs John Beatty; his wife Gwen Beatty; his
son Jason Beatty; and Edward Desmond.
a. Edward Desmond has been employed by Beatty Refrigeration & Heating
for the past six years.
Beatty, 96- 013 -C2
Page 4
b. Edward Desmond's brother Dana Desmond, also was employed by Beatty
Refrigeration & Heating for approximately nine years until 1996.
12. Beatty disclosed his ownership interests in Beatty Refrigeration & Heating on
Statements of Financial Interests forms on file with Oakland Township for
calendar years 1993, 1994, and 1995.
a. Calendar year: 1995
Position: Supervisor
Creditors: Citizens National Bank 7.75%
Direct /Indirect Income: GJB Enterprises, Oakland Twp.
Office /Directorship /Employment in any Business: GJB Enterprises,
President
All other Financial Interests: None
b. Calendar year: 1994
Filed: 03/06/95 on SEC Form 1/95
Position: Supervisor Candidate
Creditors: Citizen National Bank, 10.5%
Direct /Indirect Income: GJB Ent, Inc.- Beatty Refrigeration & Heating,
Oakland Township
Office Directorship or Employment in any Business: GJB Enterprises,
Inc., President
All other Financial Interests: None
c. Calendar year: 1993
Filed: 06/30/94
Position: Supervisor
Creditors: None
Direct /Indirect Income: Beatty Refrigeration & Heating, Oakland
Township
Office Directorship or Employment in any Business: Beatty Refrigeration
& Heating, owner
All other Financial Interests: None
13. On October 6, 1994, Oakland Township purchased a property and existing
structure on Chicora Road, from Jay J. Waltman and Hazel Arlene Waltman, for
the sum of $90,400.00.
a. This property transaction was recorded in Butler County Deed Book
#2474, pages 800 -803.
b. Beatty was instrumental in negotiating the transaction on behalf of the
township.
c. The township purchased the building with the intent of converting it into
the township's municipal building.
d. The property formerly housed a bar.
14. The building needed extensive renovations so that it could be utilized as the
township's municipal building.
Beattv, 96- 018 -C2
Page 5
a. Township rcadworkers were utilized to clean out the building to prepare
it for renovation.
15. The Board of Supervisors discussed obtaining funding for the renovations by
way of a $30,000.00 loan from Integra Bank.
a. This was later increased to a line of credit up to $100,000.
16. Minutes from the Oakland Township Board of Supervisors July 3, 1995,
meeting, include the following official action on obtaining a $30,000.00 loan.
"Tammy Abel stated that she was informed by Charlie Flach of
Murrin, Taylor, Flach & Horan, that the Butler Branch of Integra
Bank is willing to provide a $30,000.00 unsecured loan for a five
year period with a fixed interest rate of 5.38 %. It would be
permissible for early pay -off on the loan if the township so desires.
John Beatty made the motion to do whatever is necessary on the
part of the township to secure the loan with Integra Bank for
renovations to the new buildings, second by Ken Hartle. Motion
carried."
Present: Roper, Beatty, Hartle.
17. The renovation loan frcm Integra Bank was modified at the Oakland Township
Supervisors' Meetings of August 7, 1995, and September 11, 1995, meetings:
a. August 7, 1 995:
"John Beatty made the motion to adopt Resolution No 95 -1, to enter into
a loan agreement with Integra Bank, Butler Branch, 106 South Main
Street, Butler, PA., the terms of which are as fellows: $30,000.00 at a
rate of 6.30% for a period of twelve (12) months. Interest payments
would be due in twelve (12) months at maturity with no points, as per
option #1 on faxed document from lntecra Bank, dated August 7, 1995,
second by Ken Hartle. Motion carried."
Present: Roper, Beatty, Hartle.
b. September 11, 1995
"At this time, all paperwork received from Integra Bank regarding the loan
for renovations to the new building was reviewed. John Beatty made a
motion to adopt Resolution No. 95 -3, for the borrowing of $100,000.00,
or less, second by Ken Hartle. Motion carried. John Beatty made the
motion to adopt Resolution No. 95 -4, for increasing the non - electoral
indebtedness of Oakland Township, by the issuance of a General
Obligation Note in the amount of $30,000.00, second by Ken Hartle.
Motion carried. The board decided to begin the determination of how
much and what types of materials will be needed for this project."
Present: Roper, Beatty, Hartle.
Beatty, 96- 018 -C2
Page 6
18. Supervisor Dennis Roper, was designated by the board of supervisors to hire
contractors and schedule renovation work on the building.
a. Roper had the most amount of available time to donate to the project.
19. Roper utilized the following criteria for selecting vendors and hiring contractors
for the project.
a. He would utilize local business' as much as possible.
b. The following bidding guidelines would be utilized:
$1 -4,000
$4,000- 10,000
$10,000 -up
20. Township Solicitor James Taylor was not asked to and did not provide the
supervisors with any written legal advice on the hiring of contractors for the
building renovation project.
21. The supervisor's intent was to get the renovations completed prior to the
November, 1995, general election.
a. The building was scheduled to serve as the township's polling place.
b. The supervisors had approximately six(6) weeks to complete the work
from the time funding was finally approved (September 11, 1995) and
election day, November 7, 1 995.
22. Supervisor Roper provided the following report on the building renovations at
the Supervisor's October 2, 1995, meeting:
"Denny Roper stated that the studding, insulation, drywall, and electrical work
will be done within the next four to six weeks. Denny also stated that he will
obtain three price quotes for the installation of a heating and cooling system for
the building."
Present: Roper, Beatty, Hartle.
23. Roper utilized the following ten(10) contractors and nine(9) suppliers for the
project:
a.
Contractors
Paul R. Benniger
Classic Sign & Graphics
Edward Desmond
Etzel Masonry
Robert Hartle
John Tomsey
Frank McCall Plumbing
Total discretion of Roper
Phone quotes
Competitive bids
Service Cost
Electrical
Paint Sign
HVAC /General labor
Masonry labor
Flooring
Construction labor
Plumbing labor
$ 5,967.00
162.00
10,045.00
1,512.92
3,540.60
1,800.00
1,030.92
Beatty, 96- 018 -C2
Page 7
Suburban Insulation Inc. Building insulation
Superior Drywall Drywall labor
Zippys Painting & Repair Painting
b.
Material Suopliers
Central Tractor Farm & Country
Countryside Carpet & Furniture
E.F. Hays' & Sons
Keith & McCrea Co.
Key Septic Tank Co.
Lezzer Lumber
Robertson Heating Supply Co.
Shamrock Office Products
Zenella Automotive
Cost
$ 121.99
966.72
276.89
30.00
26.19
4,122.56
1,410.43
6,010.95
17.34
$12,983.07
2,26 4.00
4,950.00
3.4^- -8.78
$34,721.22
24. John Tomsey, the contractor who initially agreed to install new ceiling joists in
the building for $1,200.00 labor decided he could not perform the work within
Roper's schedule as he got involved with a new house construction.
a. Ceiling joists needed to be replaced immediately to enable the
electricians, dry - wailers and insulators to continue with their work on
schedule.
b. Roper discussed this problem with Beatty and requested that he help out.
25. Beatty discussed the possibility of installing the ceiling joists with his employee
Edward Desmond.
26. John Beatty, Edward Desmond, and Dennis Roper met at the township building
to determine what would be involved with the installation of the ceiling joists.
a. Desmond and Beatty agreed to do the work for the $1,200.00 labor
quoted Roper by Tomsey.
27. All paperwork associated with the installation was submitted by Edward
Desmond.
a. Edward Desmond is a full -time employee of John Beatty Refrigeration &
Heating.
b. Edward Desmond does not regularly take on side jobs separate and apart
from John Beatty Refrigeration & Heating.
c. On those occasions that Desmond does take on a side job, he utilizes
Beatty's tools and equipment.
d. Materials for the side jobs are generally purchased through Beatty's
business to utilize his trade discount.
Beatty, 96- 018 -C2
Page 8
e. Desmond will pay Beatty for the use of his tools and equipment based on
the length of time he uses them.
f. Beatty had Desmond submit the paperwork so as to distance himself
with the project.
28. Edward Desmond, John Beatty, Jason Beatty, and Ben Rath, spent
approximately three (3) evenings installing new ceiling joists in the township
building.
a. Jason Beatty is John Beatty's son and a part -time employee of Beatty
Refrigeration & Heating.
b. Ben Rath is a friend of Jason Beatty and occasional employee of Beatty
Refrigeration & Heating.
c. John Beatty's tools and equipment were used on this project.
29. Edward Desmond received $1,200.00 for the installation of ceiling joists by way
of Oakland Township check #1 1617, dated 10/17/95.
a. Materials for this project were purchased from Lezzer Lumber, Butler,
PA., and billed directly to the township.
b. The front side of check #11617, was signed by Secretary /Treasurer
Tamara Abel and Supervisor William D. Roper.
c. The backside of the check was endorsed by Edward Desmond, followed
by Gwen Beatty.
d. Gwen Beatty is John Beatty's wife.
30. Gwen Beatty cashed the $1,200.00 check for Desmond and gave him the
money.
a. Gwen Beatty has frequently cashed checks for Desmond when his work
schedule prohibited him from getting to the bank during normal business
hours.
31. Desmond received the $1,200.00 payment as a result of his computer
generated invoice #001 1, dated October 14, 1995.
a. Desmond's invoice #001 1 was for the "replacement of ceiling joists in
new building as quote."
b. Desmond's invoice #001 1 was prepared by Jason Beatty on Beatty's
personal computer at Desmond's direction.
32. Desmond split the $1,200.00 he received from Oakland Township four(4) ways.
a. Ben Rath received $100.00.
Beat *v, 96- 018 -C2
Page 9
b. The remaining $1,100.00 was split equally between Edward Desmond,
John Beatty, and Jason Beatty.
c. Each received a before tax payment of $366.66.
d. Desmond received a 1099 Miscellaneous Income form from the township
and was responsible for the taxes on the entire $1,200.00.
33. The renovation project also called for the installation of a heating and air -
conditioning (HVAC) system in the new township building.
34. The heating and air - conditioning system was the only portion of the project for
which written bids were received.
a. Bid specifications for the HVAC system were prepared by John Beatty for
the Supervisor's October 2, 1995, meeting.
b. These specifications were provided to Dennis Roper, who was designated
by the board of supervisors to hire contractors and schedule renovation
work on the building.
35. Roper sought and received three (3) phone quotes for the heating and air -
conditioning system.
a. Roper personally contacted Edward Desmond, Schneider Heating, Inc.,
and Agway Energy Products, requesting quotes and written bids.
(1) All three (3) were from the Butler area.
b. Roper did not advertise for competitive bids.
(1) No other vendors /contractors were contacted by Roper.
c. The following written bids for the heating and air conditioning system
were submitted.
Business Bid Date Bid Quote
Edward Desmond
Schneider Heating, Inc.
Schneider Heating, Inc.
Agway Energy Products
10/03/95
10/11/95
10/11/95
10/10/95
$ 8,845.00
$ 9,100.00
$ 9,777.00
$13,500.00
36. Supervisor Dennis Roper determined Edward Desmond to be the low bidder
based upon the written bids submitted (See Finding 35(c)).
a. The Board of Supervisors collectively did not take action to hire the
HVAC contractor.
b. Roper based his decision, at least in part, on his satisfaction with the
installation of ceiling joists previously performed by Desmond and Beatty.
c. Desmond was highly recommended to Roper by Beatty.
Beattv, 96- 018 -C2
Page 10
37. Desmond submitted a bid of $8,845.00 to Oakland Township with the
assistance of John Beatty and Jason Beatty.
a. Beatty and Desmond inspected the building to determine what would be
involved.
b. John Beatty determined what the job would cost to do.
c. John Beatty told Desmond to bid $8,845.00.
d. Desmond is not a HVAC estimator and relied on John Beatty's direction.
e. Jason Beatty prepared Desmond's bid on Beatty's personal computer at
the direction of John Beatty and Edward Desmond.
f. John Beatty was the individual who prepared the specifications for the
heating and air conditioning system.
38. The HVAC system was installed in the township building by Edward Desmond,
his brother Dana Desmond, John Beatty, and his son Jason Beatty.
a. The installation took approximately two (2) days to complete.
b. Edward Desmond and Jason Beatty made duct work for the project in
John Beatty's shop prior to the beginning of the installation.
c. Edward Desmond and Jason Beatty spent approximately two (2) days
making the duct work for the project.
d. Materials for the installation were purchased by Edward Desmond from
Beatty Refrigeration & Heating at or near cost.
39. Desmond invoiced Oakland Township in the amount of $8,845.00, by way of
invoice #0012, dated November 3, 1995.
a. Desmond's invoice #0012, identified work as "install complete system
as per quote dated October 3, 1995."
b. Desmond's invoice was prepared by Jason Beatty on Beatty's computer.
40. Desmond was issued township Pennsylvania Local Government Investment
Trust (PLIGIT) check #1017, in the amount of $8,845.00, on November 14,
1995, for invoice #0012.
a. The front side of the check is signed by Secretary /Treasurer Tamara S.
Abel and Supervisor William D. Roper.
b. The backside of the check is signed by Ed Desmond.
c. This amount was included on the 1099 Form issued to Desmond by the
township for 1995.
Bear 96 -018 -C2
Page 11
41. Desmond issued the following personal checks disbursing all but $1,000.00 of
the $8,845.00 he received from Oakland Township on November 17, 1995:
a.
Check # Source
Amount Reason
1370 Dana Desmond $ 285.00 Labor
1371 Jason Beatty 1,000.00 Labor
1372 John Beatty Refrig. 6,560.00 Materials
b. Edward Desmond retained $ 1,000.00, for his labor on the installation.
42. John Beatty spent two (2), ten (10) hour days assisting on the installation at no
cost.
a. Beatty's normal billable rate is $45.00 per hour.
b. Beatty donated $900.00 ($45 /hr x 20 hours) in labor on the installation
to Oakland Township.
43. The $6,560.00 check issued by Desmond to John Beatty Refrigeration &
Heating, for Beatty invoice #3301, in the amount of $6,560.00, and dated
November 15, 1995, contained the following:
Materials
90+ Gas Furnace 93% 45,000 Btu /hr
90+ Gas Furnace 93% 90,000 Btu /hr.
10.0 SEER Scroll Cond. Unit 1.5 ton
10.0 SEER Scroll Cond. Unit 4.0 ton
2 Ton Coil & Casing 17.5"
4.0 Ton Coil & Casing 21"
Chronotherm 111 Thermostat
Hi Eff. Electronic Air Cleaner 20" x 25"
Hi Eff. Electronic Air Cleaner 16" x 25"
Condensate Pump
Ductwork and fittings
Flue Pipe and fittings
Tubing, disconnects, fittings, slab, etc.
Registers and grilles
Gas pipe, fittings
Cost
963.85
1069.45
552.58
99 9.94
159.10
269.14
255.86
375.87
345.02
42.54
988.75
36.08
259.24
197.33
45.25
$6,560.00
44. Beatty Refrigeration & Heating maintained records which itemized the materials
used on the installation and Beatty's cost.
a. Cost figures were obtained from Robertson Heating Supply Company
price catalog.
b. Robertson Heating Supply Company is John Beatty's primary supplier.
45. Beatty's itemized accounting ledger details parts costing him $6,51 3.58.
Beatty, 96- 018 -C2
Page 12
a. Not included on the list were miscellaneous hardware items for which
Beatty normally does not charge.
b. Beatty received a financial gain of $46.42 from the sale of parts and
materials sold to Desmond.
c. Financial gain calculation based on $6,560.00, received from Desmond,
Tess $6,513.58, in material costs, for a financial gain of $46.42.
46. Edward Desmond could not have purchased the materials directly from
Robertson Heating Supply for the same price as Beatty.
a. Beatty received a volume discount from Robertson Heating Supply.
b. Robertson Heating Supply is a contractor wholesaler and does not sell
goods to the general public.
c. Edward Desmond does not have his own plumbing and heating business.
47. Desmond would not have gotten the work had it not been for Beatty.
48. John Beatty and his son Jason were compensated for approximately fifteen (15)
hours each doing plumbing rough -in work on the building's two (2) main
restrooms.
a. Beatty's billable rate was $45.00 per hour at the time for himself and (1)
laborer.
b. If Beatty was billing the township, he could have charged $675.00
($45 /hour x 15 hours).
49. Beatty, in his official capacity as a Oakland Township Supervisor, participated
in official actions taken by the Board of Supervisors to approve bill lists which
included the payments made to Edward Desmond and Robertsons Heating
Supply Company detailed in this report. These payments were ratified as
follows:
Meeting Date Payment Action Vote
11/06/95 Ed Desmond $1,200.00 2nd - 3 -0
12/04/95 Ed Desmond $8,845.00 2nd 3 -0
01/02/96 Robertson $1,410.43 2nd 3 -0
50. John Beatty received a financial gain of $413.08 for renovation work performed
on the Oakland Township Building through Edward Desmond. Financial gain
calculation based on:
a. $366.66 for the installation of ceiling joists. (See Finding #32).
b. $46.42 for materials sold to Edward Desmond for the HVAC installation.
(See Finding #45).
Beatty, 96- 018 -C2
Page 13
51. Beatty's son Jason Beatty, received a financial gain of $ 1,366.66, as a result
of work performed on the Oakland Township Building through Edward
Desmond. Financial gain calculation based on:
a. $366.66 for the installation of ceiling joists. (See Finding #32).
b. $1,000.00 for labor on the installation of the HVAC system. (See
Finding #41a).
52. Edward Desmond, who performed work as a full -time employee of Beatty
Refrigeration & Heating, received a financial gain of $1,366.66, as a result of
work performed on the Oakland Township Building. Financial gain calculation
based on:
a. $366.66 for the installation of ceiling joists. (See Finding #32).
b. $1,000.00 for labor on the installation of the HVAC System. (See
Finding #41b).
53. Dana Desmond, in 1995, a full -time employee of Beatty Refrigeration & Heating
received a financial gain of $285.00 for the installation of the HVAC system.
(See Finding #41a).
54. John Beatty, members of his immediate family and employees of Beatty
Refrigeration, received a total financial gain of $3,431.40, as detailed in
Findings #50 -53.
a. Calculation based on total financial gain of John Beatty, Jason Beatty,
Edward Desmond and Dana Desmond.
b. Financial gain John Beatty $ 413.08
c. Financial gain Jason Beatty $1.366.66
d. Financial gain Edward Desmond $1.366.66
e. Financial gain Dana Desmond $ 285.00
III. DISCUSSION:
At all times relevant to this matter, the Respondent, John Beatty, hereinafter
Beatty, 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,
et sea.
The issues before us are whether Beatty, in his capacity as a Supervisor for
Oakland Township, Butler County, violated Sections 3(a), 3(c), and 3(f) of the State
Ethics Act (Act 9 of 1989) as to the allegation that he participated in township
actions regarding a contract to an individual employed by his company from whom he
subsequently received funds; and when a business with which he is associated
entered into a contract with the township in excess of $500.00 without an open and
public process.
Beatty, 96- 018 -C2
Page 14
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
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 of
his immediate family or a business with which he or a
member of his immediate family is associated.
65 P.S. §402.
Section 3(c) of Act 9 of 1989 quoted above provides in part that a public
official /public employee shall not solicit or accept anything of monetary value based
upon any understanding that his vote, official action or judgment would be influenced
thereby.
Section 3(f) of Act 9 of 1989 quoted above specifically provides in part that no
public official /public employee or spouse or child or business with which he or the
spouse or child is associated may enter into a contract with his governmental body
valued at five hundred dollars or more or any subcontract valued at five hundred dollars
or more with any person who has been awarded a contract with the governmental
body with which the public official /public employee is associated unless the contract
is awarded through an open and public process including prior public notice and
subsequent public disclosure.
facts.
Having noted the issues and applicable law, we shall now summarize the salient
Beatty is the owner of Beatty Refrigerating and Heating (BRH) which is
incorporated under the name of GJB. BRH employs Beatty, his spouse Gwen, his son
Jason, and Edward Desmond (Desmond). Desmond's brother Dana was also employed
by BRH until 1996. Beatty, as an Oakland Township Supervisor, has disclosed his
financial interest in BRH on his Financial Interests Statements for the calendar years
1993 through 1995.
In October, 1994, Oakland Township purchased a tavern for the purpose of
renovating and converting it into the Township municipal building. The Board of
Supervisors obtained a loan of $30,000 which was increased to a line of credit up to
$1 00,000 for the municipal building project.
Beatty, 96- 018 -C2
Page 15
The Township Board assigned Supervisor Dennis Roper the task of scheduling
the building renovation work and hiring the contractors. In selecting vendors and
contractors, Roper utilized local businesses as much as possible and established certain
bidding guidelines: for contracts between $1 and $4,000, Roper gave himself total
discretion; for contracts between $4,000 and $10,000, Roper used phone quotes; and
for contracts of $10,000 or more, Roper used competitive bids.
The Supervisors wanted to have the renovations completed prior to the
November, 1995 election because the building was scheduled to serve as the
Township's polling place. The above time constraints allowed approximately six
weeks for the completion of work on the building.
Roper planned to utilize 10 contractors and 9 suppliers for the renovation
project; neither Beatty nor BRH was selected for the renovation work. An immediate
problem arose with the project because John Tomsey, who received the contract to
install new ceiling joists for $1,200, declined to perform the contract. The ceiling
joists had to be replaced first so that the other contractors, the electricians, drywallers,
insulators, and others, could do their work. Roper discussed the problem with Beatty
and then asked Beatty to help out. After Beatty discussed the possibility of installing
the ceiling joists with his employee Desmond, the two met with Roper at the Township
building to determine what the project entailed. Desmond and Beatty agreed to do the
work for the $1,200 price quoted by Tomsey.
Although Desmond did not regularly take side jobs, he took the ceiling joist
installation contract. Desmond utilized Beatty's tools and equipment to do the job and
then submitted the paperwork under his own name. The new ceiling joists were
installed in the Township building in three evenings with Beatty, his son Jason,
Desmond, and Ben Rath doing the work. After Desmond submitted his invoice, he
received a check signed by Secretary /Treasurer Abel and Supervisor Roper in the
amount of $1,200 as payment from the Township. After Desmond paid $100 to Ben
Rath, the remaining $1,100 was split equally among Desmond, Beatty, and his son
Jason, each receiving $366.66.
The proposal for the Township building heating and air conditioning system
(HVAC) was done by Beatty who prepared the system specifications. Beatty then
gave the specifications to Roper who did not advertise for competitive bids but
received three telephone quotes. Roper chose Desmond who submitted the low bid.
The selection of Desmond was based upon Roper's satisfaction with the installation
of the ceiling joists and Beatty's recommendation. Desmond's bid of $8,845 was
calculated by Beatty and relied upon by Desmond who is not a bid estimator. Since
Desmond does not have his own plumbing and heating business, Desmond would have
not obtained the work at the Township building but for Beatty.
The HVAC system was installed in two days by Desmond, his brother Dana,
Beatty, and Beatty's son Jason. The Township then issued a check in the amount of
$8,845 as per Desmond's invoice which was prepared on Beatty's computer. The
Township check was signed by Secretary /Treasurer Abel and Supervisor Roper.
Desmond then issued three personal checks: $285 to Dana Desmond for labor; $1,000
to Jason Beatty for labor; and $6,560 to BRH for materials. As to the $6,560
payment received by BRH, the parts cost Beatty $6513.58 thereby leaving him with
a profit of $46.42. Desmond retained $1,000 for his labor on the project. Beatty did
not charge the Township for his labor. Based upon Beatty's normal billable rate of $45
Beatty, 96- 018 -C2
Page 16
an hour for the 20 hours of labor, he donated $900 as to the HVAC system
installation.
As a Township Supervisor, Beatty participated in the official action of the Board
to approve bill lists which included the payments made to Desmond as well as
Robertson Heating Supply Company which is the company that supplied the parts to
Beatty for the Township HVAC system project. The payment to Robertson however
appears to be based upon a separate unrelated contract with the Township.
As to the financial gain, Beatty received $413.08 consisting of the $366.66 for
labor as to the ceiling joist work and $46.42 in profit as to parts for the HVAC system
in the Township building. Beatty's son Jason and Desmond each received $1,366.66
on the Township building project consisting of $366.66 in labor for installing the
ceiling joists and $1,000 for labor as to the HVAC system. Dana Desmond received
$285 as to the labor services he performed as to the installation of the HVAC system
and Ben Rath received $100 for the ceiling joist installation work.
Having summarized the above relevant facts, we must now determine whether
the actions of Beatty violated Sections 3(a), 3(c), and 3(f) of Act 9 of 1989.
Section 3(a) of the Ethics Law prohibits a public official /public employee frorn
using the authority of public office /employment or confidential information received by
holding such a public position for the private pecuniary benefit of the public
official /public employee himself, a member of his immediate family, or a business with
which he or a member of his immediate family is associated.
In applying the provisions of Section 3(a) of Act 9 of 1989 to the instant
matter, we find a technical violation when Beatty participated in an action of the Board
of Supervisors to approve bill lists which included a payment to Desmond in the
amount of $1,200 for the installation of ceiling joists in the Township. The voting by
Beatty was a use of authority of office. Juliante, Order 809. The use of authority of
office resulted in a financial gain consisting of $1,200 that was paid for the labor as
to the ceiling joists installation. A private pecuniary benefit of $366.66 enured to
Beatty, who along with Desmond, had contracted with Supervisor Roper to perform
the ceiling joist installation. Further, Beatty's son Jason also received a private
pecuniary benefit of $366.66 for performing labor as to that project. Jason, being
Beatty's son, is a member of his immediate family as that term is defined under the
Ethics Law. 65 P.S. §402.
In finding a technical violation as to the above action, we note that Supervisor
Roper had contracted with Beatty and Desmond only after Tomsey, the original
contractor, withdrew from the project which caused Roper to contact Beatty for his
help on the project. Further, Beatty and Desmond agreed to do the work for the
$1,200 which was the accepted bid submitted by Tomsey. Lastly, Beatty's only use
of office as to that project was voting on the submitted bill lists.
As to the Township HVAC system, we find a violation of Section 3(a) when
Beatty voted with the Board to approve bill lists which included one bill to Desmond
in the amount of $8,845 for the installation of that system. The use of authority of
office by Beatty was not limited to voting but also involved the preparation of the
specifications for the HVAC system. The use of office resulted in a private pecuniary
benefit consisting of the $1,000 payment which Beatty's son Jason received for
working on the project.
Beam, 96- 018 -C2
Page 17
We find no violation of Section 3(a) as to the financial gain of $46.42 which
represented profit for the business with which Beatty is associated in that such
amount is de minimis. Schweinsbera, Order 940; Green, Order 1022.
We do not find any violation of Section 3(a) of Act 9 of 1989 regarding Beatty's
action to approve an invoice to Robertson Heating Supply Company in the amount of
$1,410.43 in that such contract appears to have been awarded separate and apart
from either the joist installation or the HVAC installation contracts with no involvement
by Beatty. Further, Beatty is not in the type of business client relationship with
Robertson as in Miller, Opinion 89 -024 or Kannebecker, Opinion 92 -010. Robertson
is nothing more than a vendor to Beatty, and not a business with which he is
associated.
Turning to Section 3(c) of Act 9 of 1989, Section 3(c) provides in part that no
public official /employee shall solicit or accept anything of value based on any
understanding that his official action or judgment would be influenced thereby. In this
case we find no 3(c) violation because the record before us does not establish any
solicitation or acceptance of anything of value based upon an understanding by Beatty.
Kasaback, Order 993.
Finally, as to Section 3(f) of Act 9 of 1989, the contract between Beatty and
Desmond and the Township as to the ceiling joist installation project was in excess of
$500 but was not awarded through an open and public process. The record reflects
that there was not any prior public notice nor subsequent public disclosure of the
contract which was awarded by Supervisor Roper to Beatty and Desmond after the
original contractor Tomsey withdrew from the project. Since all the requisite elements
of Section 3(f) are met, Beatty violated Section 3(f) of Act 9 of 1989 when he, along
with Desmond, entered into a contract in excess of $500 as to the ceiling joist
installation with the Township which was not awarded through an open and public
process.
As to the contract for the installation of the HVAC system, we are constrained
to find no violation of Section 3(f) of Act 9 of 1989. The contract in question was in
excess of $500 and was not awarded through an open and public process. However,
the issue is whether the contract was between Beatty or a business with which he is
associated and the Township. It is true that Beatty, as a Supervisor, prepared the
specifications for the HVAC system. In a private capacity Beatty prepared the bid for
Desmond. The actual bid proposal was prepared on Beatty's personal computer and
if it were not for Beatty, the bid would not have been awarded to Desmond. However,
the record lists the actual award of the contract to Desmond and not to Beatty or BRH.
The invoice submitted for the work was on a Desmond invoice. Similarly, the payment
of the invoice was made by a check payable to Desmond. Although it is clear to us
that Beatty was instrumental as to the award of the Township contract as to the
HVAC system, we are guided under the facts of this case by the actual contract itself
which is between the Township and Desmond. Therefore, we find no violation of
Section 3(f) of Act 9 of 1989 regarding the award of the HVAC system contract in the
Township building in that said contract was not between the Township and Beatty or
a business with which he is associated.
Our decision in this case should not be misconstrued. We view with suspicion
any arrangement involving a contract between a public official's governmental body
and his private employee. In applying and enforcing the Ethics Law, we are not
compelled to accept, as if they were legitimate, transacticns that are mere subterfuges
Beatty, 96- 018 -C2
Page 18
involving straw parties. However in this case, the contract between Oakland Township
and Beatty's employee legitimately arose from the peculiar circumstances set forth
above, and consequently, no violation of Section 3(f) was found. Respondent would
do well to ensure that such conduct be avoided in the future.
IV. CONCLUSIONS OF LAW:
1. John Beatty, as a Supervisor in Oakland Township, Butler County, is a public
official subject to the provisions of Act 9 of 1989.
2. A technical violation of Section 3(a) of Act 9 of 1989 occurred when John
Beatty used the authority of office to obtain a private pecuniary benefit for
himself and his son as to labor services performed in installing ceiling joists in
the Township Building.
3. Beatty violated Section 3(a) of Act 9 of 1989 when he used the authority of
office to obtain a private pecuniary benefit for his son, a member of his
immediate family, as to the installation of a HVAC system in the Township.
4. Beatty did not violate Section 3(a) of Act 9 of 1989 as to the installation of a
HVAC system in the Township building which resulted in the receipt of a profit
in the amount of $46.42 to a business with which Beatty is associated in that
such amount is de minimis.
5. Beatty did not violate Section 3(a) of Act 9 of 1989 as to the vote to approve
a bill from Robertson Heating Supply Co: which is not a business with which
Beatty is associated.
6. Beatty did not violate Section 3(c) of Act 9 of 1989 as to actions involving the
Township building renovation project in that there is no evidence as to any
solicitation or acceptance of anything of value based upon an understanding by
Beatty.
7. Beatty violated Section 3(f) of Act 9 of 1989 when he and another individual
entered into a contract with the Township to install ceiling joists which contract
was in excess of $500 and was not awarded through an open and public
process.
8. Beatty did not violate Section 3(f) of Act 9 of 1989 regarding a contract to
install a HVAC system in the Township in that such contract was not awarded
to Beatty or a business with which he is associated.
In Re: John Beatty
File Docket:
Date Decided:
Date Mailed:
ORDER NO. 1034
96- 018 -C2
12131/96
1/3/97
1. A technical violation of Section 3(a) of Act 9 of 1989 occurred when John
Beatty, as a Supervisor in Oakland Township, Butler County, used the authority
of office to obtain a private pecuniary benefit for himself and his son as to labor
services performed in installing ceiling joists in the Township Building.
2. Beatty violated Section 3(a) of Act 9 of 1989 when he used the authority of
office to obtain a private pecuniary benefit for his son, a member of his
immediate family, as to the installation of a HVAC system in the Township.
3. Beatty did not violate Section 3(a) of Act 9 of 1989 as to the installation of a
HVAC system in the Township building which resulted in the receipt of a profit
in the amount of $46.42 to a business with which Beatty is associated in that
such amount is de minimis.
4. Beatty did not violate Section 3(a) of Act 9 of 1989 as to the vote to approve
a bill from Robertson Heating Supply Co. which is not a business with which
Beatty is associated.
5. Beatty did not violate Section 3(c) of Act 9 of 1989 as to actions involving the
Township building renovation project in that there is no evidence as to any
solicitation or acceptance of anything of value based upon an understanding by
Beatty.
6. Beatty violated Section 3(f) of Act 9 of 1989 when he and another individual
entered into a contract with the Township to install ceiling joists which contract
was in excess of $500 and was not awarded through an open and public
process.
7. Beatty did not violate Section 3(f) of Act 9 of 1989 regarding a contract to
install a HVAC system in the Township in that such contract was not awarded
to Beatty or a business with which he is associated.
BY THE COMMISSION,
4 LLatAJ8 PLWJ
DANEEN E. REESE, CHAIR