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HomeMy WebLinkAbout1041 GormanIn Re: Joseph Gorman STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: 95- 026 -C2 Date Decided: 2/20/97 Date Mailed: 3/7/97 Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Roy W. Wilt 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 el seq., by the above - named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). 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. Gorman, 95- 026 -C2 Page 2 1. ALLEGATION: That Joseph Gorman, as a councilman for Lansdowne Borough, Delaware County, and the Lansdowne Borough Treasurer, violated provisions of the State Ethics Act (Act 9 of 1989) when he used the authority of his office to obtain a private pecuniary benefit for himself and /or a business with which he was associated by participating in discussions, actions, and decisions of the Borough in the Borough's efforts to award a contract to administer the Borough Police Pension Fund; when he participated in his official capacity in the administration of said contract; when, as borough treasurer, he participated in the process to obtain a tax anticipation loan; and when he used confidential information received through holding public office for the private pecuniary benefit of himself and /or a business with which he was associated. 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 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. I1. FINDINGS: 1. Joseph F. Gorman served as a Lansdowne Borough, Delaware County, council member from January 5, 1988 to December 31, 1993. 2. Gorman was appointed Chairman of the Council Finance Committee on January 5, 1988 and held that position until December 31, 1993. a. The Finance Committee reviews all financial transactions of the Borough and makes recommendations to council. b. This would include pension plans and tax anticipation loans 3. Gorman also served as a member of the Police and Fire Committee from January 6, 1992 to December 31, 1993. Gorman, 95- 026 -C2 Page 3 4. Gorman has been employed as a Vice President with PFPC, 400 Bellevue Boulevard, Wilmington, DE 19809 since April of 1991. a. Gorman is the Director of Mutual Fund Accounting Training with duties including designing and teaching mutual fund accounting based on Security Exchange Commission and Internal Revenue Service regulations. 5. PFPC is a subsidiary of PNC Bank of Delaware which is a subsidiary of PNC Bank of Pittsburgh. a. PNC Bank is the successor to Provident Bank. 6. Lansdowne Borough maintains a pension fund for the Borough police officers. a. The fund is supported through contributions from the police officers and the Commonwealth of Pennsylvania. b. The Borough is required to make contributions if funding from the officers and the State are not sufficient to make the fund solvent. 7. The Lansdowne Borough Police Pension Fund was administered by Borough Treasurer Merlyn Kirkwood from January of 1980 to December of 1993. 8. Kirkwood invested the Pension Fund monies in United States Treasury Notes. 9. The Pension Fund grew from $985,000 in 1980 to over $4,000,000 in 1993. a. The growth of the Fund was a function of the economic climate of the 1980's in which interest rates were extremely high, and the fact that there were fewer claims against the Fund in those years. 10. The Borough Treasurer, Merlyn Kirkwood, reported directly to Borough Council and the President of the Borough Council. a. Joseph Gorman gave Merlyn Kirkwood little direction until October of 1993, when Gorman directed Kirkwood to purchase Treasury Bills. Kirkwood wanted to continue to purchase Treasury Notes. Joseph Gorman reminded Kirkwood that the Police Pension Fund would be managed by a professional money manager beginning in early 1994. The Borough's portfolio of Treasury Notes was to be sold in the open market and the proceeds used to purchase stocks and bonds in accordance with the Borough's investment policy. Joseph Gorman informed Kirkwood that Treasury Notes were investments for two to five years and have the risk of being sold for less than their purchase price if economic conditions change. Interest rates were low for new Treasury Notes at this time, below 5 %. The purchase of Treasury Bills would provide safety and liquidity as they are a 90 day investment. The interest rate environment changed rapidly in 1994, and Joseph Gorman's decision saved the Borough from a loss of $15,000.00. 11. At the February 1, 1993, meeting of Lansdowne Borough Council, Kirkwood reported on the status of the Police Pension Fund for 1992. Gorman, 95- 026 -C2 Page 4 a. Kirkwood reported that as of that time the fund was earning enough to pay for pensions and other expenses. b. With additional people in the plan, it was necessary for the Borough to contribute $11,704 to the fund to make it actuarially sound. c. He did not foresee interest rates going up and expenses going down. d. He redeemed the last of the old style notes on January 15, 1993. e. Because of older investments, Kirkwood reported that the fund was still earning about 6 %. 12. Prior to or in May of 1993, several members of the police department approached the Mayor of Lansdowne Borough and /or the Solicitor of the Borough regarding the feasibility of an investment advisor making a presentation to the Borough Council regarding the Police Pension Fund. a. The decision was made to allow a specific company to make the presentation. b. After the presentation, the decision was made to institute a process whereby other investment managers could make presentations to the Borough Council. 13. The Borough Council's decision to hire a professional money manager was based on a number of factors and concerns, including: a) the Borough's need for administration of the Fund which included check disbursements and IRS filings; b) increased payouts from the Fund to future retirees; c) the low interest rate environment; and d) the Borough's need for flexibility of investment policies to take advantage of economic conditions. a. The borough wanted to see a greater return on investments. 14. Borough Council directed that joint committees consisting of members of the Finance Committee, the Police and Fire Committee and the Mayor, assisted by the Borough Solicitor Michael F.X. CoII, review the possibility of an outside company administering the Fund. a. Members of the Lansdowne Police Department were also to be included on the joint committees, and were to have input into the decision making process regarding professional administration of the Fund. b. Mayor John Rankin served as the informal chairman. 15. The Finance Committee was made up of council members: Joseph F. Gorman Chairman George Bochanski William Smith 16. The Police and Fire Committee was made up of council members: Gorman, 95- 026 -C2 Page 5 George Bochanski Chairman Joseph Gorman Charlene Hennessy 17. At the May 3, 1993, Council meeting Councilman Bochanski, Chairman of the Police and Fire Committee, reported on the Police Committee meeting on May 13, 1993, to investigate the possibility of having an outside firm manage the Police Pension Fund. a. Bochanski stated a firm will be present to make a presentation and other firms will also be asked to make presentations. 18 Various investment companies were contacted by members of the joint committee and officers from the Borough Police Department who requested that the companies submit proposals on administering the Fund. a. There were no formal advertised requests for proposals issued by the Borough. 19. In approximately June or July, 1993, Gorman directed Borough Manager R.J. Robinson to contact the managers of the PNC Bank and the First Fidelity Bank at their branch offices in the Borough of Lansdowne and inform them the Borough was seeking an outside company to handle the Fund. 20. Nine firms presented proposals to the joint committee for their consideration. 21. From May of 1993 to December of 1993, Gorman, in his capacity as Chairman of the Finance Committee gave verbal reports to Borough Council, at their monthly meetings, on the activities of the joint committee in reference to their search for an investment company and the presentations made by the nine firms. 22. Minutes of Lansdowne Borough Council meetings confirm various committee reports made by Joseph Gorman regarding the selection of an outside pension fund manager. May 19, 1993: Police and Fire Committee. Bochanski reported that the committee met on 05/13/93 to listen to a presentation regarding the Police Pension Fund. The committee will listen to several presentations. June 16, 1993: Administration and Finance Committee. Gorman reported that the Police and Administration Committees will have a joint meeting on 06/29/93 to listen to another presentation. Gorman advised that due to low interest rates the Borough is looking into ways to increase the fund. July 6, 1993: Gorman reported regarding the presentation on 06/29/93. Another presentation from professionals for the police pension fund was scheduled for 07/21/93. The Joint Committee will hear two more presentations and then make a decision. Gorman, 95- 026 -C2 Page 6 Gorman advised that all firms interviewed felt a Pension Review Board should be set up. July 21, 1993: Administration and Finance Committee. Gorman reported that the Administration and Police Committee have been meeting with money managers relative to the Police Pension Fund. The Committee met that evening with a representative of Dean Witter Reynolds. There will be other presentations. August 2, 1993: Gorman reported that the Administration and Police Committees are continuing to meet with firms interested in managing the Police Pension Fund. Gorman advised that the Committees want to hear presentations from two Lansdowne Banks and the Treasurer. August 18, 1993: Gorman reported that the Committees are continuing to hear presentations from financial consultants relative to the management of the Police Pension Fund. September 7, 1993: Gorman reported that a meeting of the Administration and Police Committees to hear wrap -up presentations #8, 9 and 10 on managing the Police Pension Fund will be held on 09/08/93. Solicitor Coll to meet with Gorman and Bochanski on 09/14/93 to shorten the list. Gorman stated he would put together a summary prior to the meeting. September 15, 1993: Gorman reported that the Committees have heard nine presentations from investment managers and a presentation from Mr. Kirkwood (Treasurer). They will begin the process of pairing down the proposals to a manageable number. Council President Alpigini appointed the following Police Pension Committee: George Bochanski Joseph Gorman John Murphy Mayor Rankin William Smith October 4, 1993: Gorman reported the Police Pension Committee met last Thursday, made up parameters and cut the number of proposals to four. The four will be asked to meet with the Committee again to assess the full costs. Gorman was to put together a new proposal form for the bidders to complete so that the Committees could make a comparison. Gorman, 95- 026 -C2 Page 7 October 20, 1993: Gorman reported regarding the reduction to four proposals and informed that two presentations will be heard on October 28, 1993 and two on November 10, 1993. All members of council were invited to attend. November 17, 1993: Gorman reported the Police Pension Committee will meet on November 23, 1993, with financial managers to discuss the handling of the Police Pension Fund. 23. Joseph Gorman participated as a member of Council and the Joint Committee in the review process leading to the selection of a Police Pension Fund Manager. 24. Because of his background in investment and banking, Gorman was given the assignment of interpreting the proposals and putting them into terminology that the other members of the joint committee could understand. 25. Gorman prepared a chart, at his borough office, listing the names, strategy, experience with municipalities, and fees of the various companies submitting proposals. a. The chart was typed up by Gorman's secretary at PFPC. b. Gorman felt that a blend of performance, experience and fees should be considered in choosing an investment company. 26. The chart prepared by Gorman'listed eight of the management firms submitting proposals. a. The chart also identified investment strategies, experience with municipal pension funds and fees based on a $4,000,000 investment of each firm. b. The following firms were identified: Spagnola - Cosack Consulting Group Rich Investments Investment Management Consulting Services (Dean Witter Reynolds) First Fidelity Bank PNC Bank Glenmede Trust Unity Management c. Specific fees to administer the police pension fund were listed for each firm. 1. PNC's fees were listed as "Mutual Fund Fees." 27. Gorman participated in the joint committee discussions of the merits of each presentation and the decision to narrow the number of applicants to four. Gorman, 95- 026 -C2 Page 8 a. Gorman recommended PNC, Glenmede Trust Company, the Consulting Group and Rich Investments. b. Rich Investments was excluded by the other members of the joint committee from the final selection process. 28. Gorman and the Mayor would have recommended First Fidelity, except for the strong opposition by representatives of the Police Department. 29. The final four companies were asked to make presentations to the joint committee answering a list of questions provided by the committee. a. The Mayor asked Gorman to prepare several questions that would help "laymen" understand the financial jargon. 30. Gorman participated in the joint committee's meetings with the final four companies and took an active role in the discussions. a. The meeting with the four companies took place on November 10, 1993, having been rescheduled from October 28, 1993. 31. Gorman prepared a handwritten summary of the companies' presentations and submitted the comparison to the other committee members for their review. 32. The handwritten summary prepared by Gorman listed the following qualifications of the final four firms: * Experience * Service charge to pay pensioners * Liquidation of securities * Investment * After fee return percent * Annual fee Dollars Expense Ratio Glenmede Trust $35,356 .88% Consulting Group $58,000 1.45% PNC $34,000 .85% Spagnola -Cosak $45,200 1.13% 33. Gorman participated in the joint committee meetings, and that [sic] the joint committee decided to recommend to the Borough Council the hiring of PNC as the Borough's investment company for the Police Pension Fund. 34. Craig Aronhalt, PNC Bank, Assistant Vice President for Marketing, was responsible for making PNC's presentation. 35. Records of Craig Aronhalt indicate that during the period from August 10, 1993, through the second presentation by PNC to the Joint Committee on November 10, 1993, Gorman and Aronhalt discussed PNC's proposal. Gorman spoke privately with representatives of each of the other presenters on various occasions. All of the presenters would call at various times seeking information. The representative from Glenmede called Gorman more than any of the other presenters. In fact, a chart similar to the chart described in Findings 25 -26 was Gorman, 95- 026 -C2 Page 9 incorporated in the Consulting Group's presentation booklet on November 10, 1993. The chart indicated that the respective fees of each of the presenters based on Four Million Dollars in assets were as follows: Spagnola -Cosak $60,000 Consulting Group $58,000 PNC $ 50,000 Glenmede Trust $62,400 Neither Spagnola - Cosak, PNC nor Glenmede Trust's presentation booklets contained such a chart. Spagnola - Cosak, PNC and Glenmede Trust listed only their respective fees. a. Gorman recommended to Aronhalt specifics to be included in the proposal. b. Gorman advised Aronhalt what to stress and when to make PNC's presentation. c. Gorman counseled the PNC representatives as to what approaches to take. +� d. The PNC representative used an outdated prospectus, and therefore used outdated fees. Even with the outdated fees, the PNC fees were the lowest of all of the presenters (the actual fees were even lower). e. None of the information transmitted by Mr. Gorman to Mr. Aronhalt was confidential in nature. 36. On or about September 30, 1993, Gorman had a telephone conversation with Aronhalt and the other presenters during which the following was discussed: a. The Committees met on September 29, 1993, and that PNC made the short list. 37. Information regarding various aspects of the proposals that were submitted was discussed by Joseph Gorman and the respective representatives of the presenters prior to their presentations. 38. Records of Aronhalt indicate the specifics of his conversation with Gorman as follows during the above discussion: a. Aronhalt was advised that fees are the big issue. b. Aronhalt was advised that Gorman has to abstain from voting. c. The Committee was down to five members. d. There would be a second presentation. 39. On or about October 15, 1993, Gorman advised the presenters of potential meeting times on November 10, 1993. Gorman, 95- 026 -C2 Page 10 a. Gorman informed that they must bring the portfolio managers. 40. PNC made their presentation on November 10, 1993, at approximately 8:30 p.m. a. PNC was advised by letter dated November 5, 1993, authored by Joseph Gorman. 41. On or about October 15, 1993, George Beck, Manager of PNC's Lansdowne Branch advised Aronhalt that it was between PNC and John Spagnola's firm to be named Lansdowne Police Pension Fund Manager. 42. On or about November 2, 1993, Aronhalt was informed by Joe Gorman that he would need to stress in PNC's presentation client service and flexibility. a. Aronhalt was to cite examples. b. The PNC presentation booklet dated November 10, 1993, contains 16 pages. There is no mention of client service or flexibility, or any examples thereof, in PNC's presentation booklet. 43. On or about November 3, 1993, Aronhalt discussed the short list of presentations with Gorman. a. The short list included PNC, Glenmede Trust, Shearson and Spagnola- Cassack. 44. Prior to the November 10, 1993, presentation made by PNC, Aronhalt and Gorman corresponded telephonically and by fax communication at Gorman's PFPC office. a. On November 10, 1993, Gorman observed that the fees stated in PNC's proposal were incorrect and that Aronhalt used an outdated prospectus. Gorman asked that Aronhalt provide the correct expense ratio as stated in the Prospectus for Institutional Shares for the PNC funds. Joseph Gorman did not see or review PNC's presentation booklet prior to PNC's presentation on the evening of November 10, 1993. Gorman became aware of the incorrect fees sometime after the presentation. On November 22, 1993, following Joseph Gorman's discovery of Aronhalt's mistake, Aronhalt provided the current expense ratios as listed in the current prospectus supplement dated September 1, 1993. b. The prospectus with the correct expense ratio would have an expense of $29,200, or .73 %, which is significantly lower than the $34,000 or .85% for PNC as listed in finding 32(a). 45. Aronhalt had proposed that Lansdowne's Police Pension Fund be considered in the Service Class of PNC Family of Mutual Funds. Aronhalt mistakenly included outdated fees taken from an outdated Institutional Class PNC prospectus in PNC's presentation booklet. Aronhalt had no ability or authority to include anything but the current institutional class fees in the presentation booklet. Gorman, 95-026-C2 Page 11 46. The joint committee met with other members of Borough Council at the December 1993 Business Meeting and discussed the merits of the various proposals. a. Gorman participated in the discussion with other members of Borough Council. 47. Borough Council met on December 15, 1993 and voted 6 -0 to approve Resolution 93 -17 which authorized the selection of PNC Bank, N.A., as Pension Fund Manager. 48. Resolution 93 -17 provided, in part, as follows: a. The appropriate Borough officials are hereby authorized to take all appropriate steps including, but not limited to, entering into a written agreement with PNC Bank, N.A., to provide investment advice and management services and to act as trustee to the Borough of Lansdowne Police Pension Fund. b. All proposals and other information collected by Borough Council in the course of its investigation shall be made available for public inspection in the office of the Borough Manager. 49. Gorman submitted a conflict of interest memorandum dated 12/15/93 which stated in substance that he was an employee of PNC Bank and would abstain from the vote on Resolution 93 -17. 50. Although Gorman did not vote on the final selection of PNC, he participated in the review and consideration of the PNC proposal. Gorman's participation in the review of the PNC proposal and the other proposals were at the request of the Mayor and Borough Council. 51. Although PNC received remuneration according to the prospectus fee schedule for its selection as the police pension fund administrator, Joseph Gorman did not personally obtain any financial benefit as a result of the placement of the police pension fund assets for investment with PNC funds. 52. Joseph Gorman's participation in the analysis of proposals for investment of police pension fund assets was done at the request of the Mayor and members of Borough Council who were all in full knowledge of the fact of Joseph Gorman's position with PNC Bank. 53. Neither the proposal of PNC Bank nor any of the other proposals to the Borough of Lansdowne were based upon confidential information conveyed by Joseph Gorman to the mutual fund officials. 54. The PNC Bank funds were determined to be the best of all investment options in the opinion of the borough committee with respect to the fees charged for investments and the performance history of the mutual funds. The investigation conducted by the Ethics Commission has found no evidence to suggest that the determination by the Borough Council was not accurate. Gorman, 95- 026 -C2 Page 12 55. The investment fees charged by PNC Bank to the Borough of Lansdowne are the same fees charged to all other institutional investors similar to the Lansdowne borough Police Pension Fund and are a matter of public record. PNC Bank did not, nor was it ever permitted to, negotiate a special fee for the Borough of Lansdowne. 56. The process of awarding the management of the police pension fund assets was open and public as delineated in the Ethics Law. Joseph Gorman timely signed and filed a conflict of interest statement which disclosed his association with PNC Bank, and which was a matter of public record. 57. At the January 3, 1994, Reorganization Meeting of Lansdowne Borough Council, Gorman was appointed Lansdowne Borough Treasurer. a. Gorman's term of office as a councilman had expired. 58. Gorman was appointed to the Police Pension Committee by Borough Council on January 31, 1994. 59. Gorman's duties as Borough Treasurer consisted of the following: a. Maintenance of the accounting system. b. Preparation of the annual budget. c. Supervision of borough funds and investments, deposits and transfers of funds from various accounts including the police pension fund. d. Advise the manager and council on all fiscal matters. 60. Minutes of the January 31, 1994 Borough Council meeting confirm that a motion was passed appointing the following to the Police Pension Committee: Mayor (Chair of the Committee) Chair of the Financial management Committee Chair of the Public Safety Committee Treasurer (Non- voting member) Representative From The Police Department (Who is a non - voting member) 61. On February 17, 1994, the Police Pension Committee met with representatives of PNC Bank. a. Gorman attended the meeting in his capacity as Borough Treasurer. 62. In a letter dated March 9, 1994 (which is after the contract was awarded to PNC), from James P. Dunigan, Senior Vice President and Chief Investment Officer for PNC Bank, addressed to Joseph F. Gorman, Vice President, PFPC, Inc., 103 Bellevue Parkway, Wilmington, DE, Dunigan refers to the Investment Strategy the Police Pension Committee discussed and asks Gorman to advise him of any other changes the Police Pension Committee wishes to make. Lansdowne Borough Ordinance 1 130 provides for this Investment Strategy. Gorman, 95- 026 -C2 Page 13 63. In May of 1994 the Police Pension Fund Agreement was signed by the Borough and PNC Bank. a. The agreement was a PNC document which was revised by Borough Solicitor Coll. b. The agreement did not list specific amounts to be charged to the borough for administering the police pension fund. 64. On June 3, 1994, Gorman, in his capacity as Borough of Lansdowne Treasurer, directed the Federal Reserve Bank Securities Division to transfer all securities in the Borough of Lansdowne Police Pension Fund Account Number 1300 -001- 8014, totaling $3,290,000 to PNC Bank, 3 -5 Trust Funds Account Number 110-262-1, Further Credit Account Number 350021028160. a. Gorman also directed the transfer of $760,000 in cash from Police Pension Fund Accounts to the account of PNC. 65. On June 15, 1994 Borough Council passed Resolution 94 -13 which, in part, provided: a. That the Borough Treasurer, Joseph F. Gorman, is hereby authorized to transfer all securities currently standing in the Treasury Direct Account Number 1300- 001 -8014 to PNC Bank Account Number 110 -262 -1 b. The Borough Treasurer is hereby authorized to sign all documents on behalf of the Borough of Lansdowne and to take any other appropriate action to effectuate said transfer of investments. 66. On July 5, 1994 Borough Council passed Ordinance Number 1 130 regarding the establishment of a Police Pension Advisory Board and its powers and duties. 67. Ordinance No. 1 130 provides, in part, as follows: Section 1. Establishing Police Pension Advisory Committee The Police Pension Advisory Committee shall consist of five (5) voting members who shall be the Mayor, serving ex officio, who shall preside at meetings, the member of the Borough Council who serves as Chairman of the Police Committee, the member of Borough Council who serves as the Chairman of the Finance Committee, the Borough Treasurer, serving ex officio, and a representative of the Lansdowne Borough Police Department duly elected by and from the membership of the police collective bargaining unit. Section 3. Powers and Duties of Advisory Committee a. The Advisory Committee shall report to Borough Council and shall meet regularly with the authorized representatives of the financial institution which manages or gives investment advice concerning the assets of the Police Pension Fund. b. The Advisory Committee shall have the authority to make investment decisions in consultation with the representatives of the financial Gorman, 95- 026 -C2 Page 14 institution which manages or gives advice concerning the investments of the Police Pension Fund; said authority shall be limited in scope to making decisions which do not increase the risk factors associated with investments of Pension Fund assets. c. Whenever the Police Pension Advisory Committee is of the opinion that the risk factors which govern the investment of assets or the investment policy guidelines should be changed to enhance the return on the investment of Pension Fund assets, or to conserve said assets, the Committee shall make such recommendations in writing to Borough Council on a timely basis. Section 5. Meetings and Reports a. The Police Pension Advisory Committee shall meet with the representatives of the financial institution which manages or gives advice on investments of the Pension Fund assets at least one time each quarter and on additional occasions as needed. All written reports received by the committee shall be forwarded to the Borough Manager along with any recommendations which the committee shall direct to Borough Council. Any reports or other documents pertaining to investments of Pension Fund assets received by the Borough Manager shall be made available to the Police Pension Fund Advisory Committee on a timely basis. A quorum for the conduct of business shall consist of three members present at a meeting. b. The Police Pension Fund Advisory Committee shall report annually, within sixty (60) days after the end of the Borough's fiscal year, to Borough Council on the performance of the investments of the Police Pension Fund assets and shall make appropriate comments and recommendations either for the continuation of the current investment policy guidelines or for specific changes in such policy guidelines giving the reasons upon which said recommendations are based. Section 6. Final Responsibility The final responsibility and authority for making all investment decisions concerning Police Pension Fund assets shall remain with the Borough Council of Lansdowne. 68. At the July 5, 1994, meeting Gorman, as Treasurer, reported that $700,000 of police pension monies had been invested with PNC Bank according to the guidelines. a. Gorman also reported that all Treasury Notes are being transferred to PNC Bank. 69. During 1994 and 1995 Gorman, in his capacity as Lansdowne Borough Treasurer, corresponded with representatives of PNC Bank directing them to make cash transfers from the PNC Fund to Fidelity Bank. Gorman, 95- 026 -C2 Page 15 a. Gorman summarized the PNC status reports for the Police Pension Committee at the request of the Mayor. The PNC status report was 18 pages in length and the Mayor asked Gorman to summarize the report on one page and to make it understandable to the Police Pension Committee. Gorman presented a sample report to the Police Pension Committee, and with several minor changes, the report form was approved. 70. PNC issues monthly reports, which were summarized by Gorman on a "cash - flow" basis. Gorman would indicate the cost of the investments and the market value thereof. 71. At the November, 1993, meeting Lansdowne Borough Council considered obtaining a Tax Anticipation Loan for 1994. a. Gorman made a motion, which was unanimously approved that the secretary read a proposed resolution for requesting bids for a Tax Anticipation Loan in the amount of $450,000. b. The resolution authorized the borough secretary to advertise for sealed bids for the purchase of public sale of the Tax Anticipation Note in the amount of $450,000. c. Bids were to be received by December 15, 1993. d. The note was to be dated January '1, 1994, and shall be due and payable on December 31, 1994. 72. Bids were received from three banks by the Borough Manager and were announced at the council meeting held on December 15, 1993. Bidder Rate a. First Fidelity 2.95% Philadelphia National Bank 2.94% PNC Bank 2.90 b. The bids were turned over to the Finance Committee for their consideration and recommendation. c. The Finance Committee was chaired by Joseph Gorman. 73. At the meeting of December 15, 1993, council, upon the recommendation of Gorman, as Finance Committee Chairman, moved to adopt Resolution 93 -16 for the Tax Anticipation Loan. 74. Gorman was the Finance Committee chairman for eight years. Gorman always made the motion to accept to the low bid of the bank that bid on the Tax Anticipation Note for each of the eight years he was Finance Committee chairman. In 1988, 1989 and 1990, Gorman was not employed by PNC Bank nor its predecessors at the time the bids for the next year were made, and the following banks were awarded the Tax Anticipation Note: December 1988 (for 1989): Provident (now PNC) Bank December 1989 (for 1990): Provident (now PNC) Bank Gorman, 95- 026 -C2 Page 16 December 1990 (for 1991): Philadelphia National (now Corestates) Bank 75. Borough Council took the following action in reference to Resolution 93 -16 on December 15, 1993: Resolutions Mr. Gorman moved that the Secretary summarize a proposed Resolution authorizing and awarding the 1994 Tax Anticipation Loan. The motion was seconded by Mr. Smith and carried unanimously. Resolution Number 93 -16 Authorizing the issuance of Tax and Revenue Anticipation Notes, Series 1994 with the terms set forth in the foregoing and attached certificate and transmittal; approving a form of note; authorizing designated officers to execute and deliver the notes; authorizing and directing the filing of proceedings with the Department of Community Affairs; providing for the payment and security of the notes; appointing a paying agent, registrar and sinking fund depository; creating a sinking fund; making certain federal income tax covenants in respect of the notes; accepting the proposal of PNC Bank, National Association, for the purchase of notes; and repealing inconsistent resolutions. Mr. Gorman moved that this Resolution be adopted as summarized. The motion was seconded by Mrs. Hennessy. On roll call Mr. Bochanski, Mrs. Hennessy, Mr. Campuzano, Mr. Smith, Mrs. Merlino, and Mr. Alpignini vote "Aye ". Mr. Gorman abstained as he is an employee of the PNC Bank. 76. Gorman filed a Conflict of Interest Memorandum advising that he was an e6 ployee of PNC Bank and that he would abstain from voting on Resolution 93- 77. At the council meeting held on January 4, 1994, Gorman, in his capacity as Borough Treasurer, gave a report on the Tax Anticipation Loan. a. Gorman reported that funds were received. b. Gorman reported that after checking with Corestates, Fidelity and PNC, the funds were placed with PNC, as they had the highest interest rate. 78. In May, 1994, tax revenues received by Lansdowne Borough were deposited into the Borough's accounts at First Fidelity Bank. a. Gorman moved $ 1,000,000 of Certificates of Deposit from First Fidelity to three mutual fund accounts with PNC Bank. b. Gorman was given authorization by Council to transfer funds at his discretion to places pre- approved by Council. 79. In November, 1994, Borough Council considered a Tax Anticipation Note for 1995. Gorman, 95- 026 -C2 Page 17 a. Gorman reported at the November 1, 1994, meeting that interest rates are predicted to continue to rise which will impact the rate of the 1995 Note. 80. On December 21, 1994, council noted that bids were received for the 1995 Tax Anticipation Note. a. Bidder Rate Corestates - Philadelphia National Corestates - Philadelphia National First Fidelity Mellon Bank PNC Bank b. The bids were turned over recommendation. 5.25% 5.09% (if mature by 06/30/95) 5.28% 5.38% 4.95% to the Finance Committee for review and 81. On December 21, 1994, council passed Resolution 94 -27 appointing the low bid of PNC Bank for the 1995 Tax Anticipation Note. a. Mrs. Hennessy moved that this Resolution be adopted as summarized. The motion was seconded by Ms. Juliano. Mr. Campuzano asked Solicitor Coll if there was any conflict of interest since Mr. Gorman was an employee of PNC Bank. Mr. Coll said there was none as Mr. Gorman has no vote on the matter. On roll call Mrs. Hennessy, Mr. DuFrayne, Ms. Juliano, Mr. Campuzano, Mr. Smith, Mrs. Merlino & President Bochanski voted "Aye." 82. Resolution 94 -27, provided as follows: Resolution 94 -27: Authorizing the issuance of Tax and Revenue Anticipation Notes Series 1995 with the terms set forth in the foregoing and attached certificate and transmittal; approving a form of note; authorizing designated officers to execute and deliver the notes; authorizing and directing the filing of proceedings with the Department of Community Affairs; providing for the payment and security of the notes; appointing a paying agent, registrar and sinking fund depository; creating a sinking fund; making certain federal income to [sic] covenants in respect of the notes; accepting the proposal of PNC Bank, National Association for the Purchase of the notes; and repealing .. . 83. Gorman, in his capacity as Borough Treasurer, had the responsibility to oversee the receipt, deposit and disbursement of the Tax Anticipation Notes. 84. PNC Bank earned approximately $11,000 to $ 14,000 in 1994 as the result of being named Police Pension Fund managers, and approximately $24,000 to $28,000 in 1995. Gorman, 95- 026 -C2 Page 18 a. PNC earned $112,000,000 (per its annual report) in mutual fund income in 1994. PNC earned approximately $154,000,000 (per its annual report) in mutual fund income in 1995. 85. PNC earned interest income as a result of the tax anticipation notes as follows: $13,000 in 1994 $22,000 in 1995 III. DISCUSSION: At all times relevant to this matter, the Respondent, Joseph Gorman, hereinafter Gorman, 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, leg.. The issue before us is whether Gorman, as a councilman for Lansdowne Borough, Delaware County, and the Lansdowne Borough Treasurer, violated Section 3(a) of Act 9 of 1989 regarding the allegation that he used the authority of his office to obtain a private pecuniary benefit for himself and /or a business with which he was associated by participating in discussions, actions,'and decisions of the Borough in the Borough's efforts to award a contract to administer the Borough Police Pension Fund; when he participated in his official capacity in the administration of said contract; when, as borough treasurer, he participated in the process to obtain a tax anticipation loan; and when he used confidential information received through holding public office for the private pecuniary benefit of himself and /or a business with which he was associated. Pursuant to Section 3(a) of the Ethics Law quoted in Section I 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 set forth in Section I above. Having noted the issues and applicable law, we shall now summarize the facts. The events which are relevant to this case occurred over a span of time during which Gorman served in various Borough positions. From January 5, 1988 to December 31, 1993, Gorman served as a Lansdowne Borough Council Member and as Chairman of the Council Finance Committee. Gorman also served as a Member of the Police and Fire Committee from January 6, 1992 until his term as a Council Member ended on December 31, 1993. On January 3, 1994 — just a few days after Gorman's term of office as a Council Member had expired — Gorman was appointed by Borough Council to be the Lansdowne Borough Treasurer. Four weeks later, on January 31,1994, Gorman was also appointed by Borough Council to the Police Pension Committee. In his private capacity, Gorman has been employed as a Vice President with "PFPC" since April of 1991. PFPC is a subsidiary of PNC Bank of Delaware. PNC Bank of Delaware is itself a subsidiary of PNC Bank of Pittsburgh. PNC Bank is the successor to Provident Bank. Gorman, 95- 026 -C2 Page 19 This case involves two separate matters: a contract awarded by the Borough to PNC Bank for the management of the Borough's multi - million dollar Police Pension Fund, and a tax anticipation loan obtained by the Borough through PNC Bank. With regard to the Borough's Police Pension Fund, during the entire time that Gorman served as a Borough Council Member, the Borough Treasurer, who at that time was Merlyn Kirkwood, administered the Fund. However, during Gorman's final year as a Council Member, at the suggestion of several members of the police department, the decision was made to allow investment managers to make presentations to the Borough Council regarding the Police Pension Fund. Borough Council directed that joint committees consisting of members of the Finance Committee, the Police and Fire Committee, members of the Police Department, and the Mayor, assisted by the Solicitor, review the possibility of having an outside company administer the fund. Gorman participated as a Member of Council and as a Member of the Joint Committee in the review process which ultimately led to the selection of PNC Bank as the Police Pension Fund Manager. There were no formal advertised requests for proposals issued by the Borough. Various investment companies were contacted by members of the joint committee and the officers from the Borough Police Department 'and were asked to submit proposals for administering the fund. Gorman directed the Borough Manager to contact the Managers of the PNC Bank and the First Fidelity Bank at their branch offices in the Borough and inform them that the Borough was seeking an outside company to handle the Fund. Nine firms presented proposals to the joint committee for consideration. From May of 1993 to December of 1993, Gorman, as Chairman of the Finance Committee, gave verbal reports to Borough Council at the Borough's monthly meetings as to the activities of the joint committee in its search for an investment company and specifically as to the presentations made by the nine firms. At the September 15, 1993 meeting, where Gorman reported that the Committees had heard nine presentations and would begin the process of paring down the proposals to a manageable number, the Council President appointed a "Police Pension Committee" consisting of five Council Members including Gorman. On October 4, 1993, Gorman reported that the Police Pension Committee had met, had made up "parameters," and had cut the number of proposals to four. Gorman indicated that the four would be asked to meet with the Committee again to assess the full costs. Gorman was to put together a new proposal form for the bidders to complete so that the Committees could make a comparison. Because of his background in investment and banking, Gorman was assigned to interpret the proposals and to put them into terminology that the other members of the Joint Committee could understand. Gorman felt that a blend of performance, experience, and fees should be considered in choosing an investment company. He prepared a chart, at his Borough office, listing the names, strategy, experience with municipalities, and fees of the various companies submitting proposals. The chart was typed by Gorman's secretary at PFPC. The chart identified eight of the nine management firms, including PNC Bank. Gorman, 95- 026 -C2 Page 20 Gorman participated in the Joint Committee's discussions of the merits of each presentation and the decision to narrow the number of the applicants down to four. Gorman recommended four companies including PNC Bank. One of the firms which Gorman recommended and another that he would have recommended were excluded from consideration based upon the views of others. The final four companies were asked to make presentations to the Joint Committee, answering a list of questions provided by the Committee. The Mayor asked Gorman to prepare several questions that would help laymen understand the financial jargon. Gorman spoke privately with representatives of each of the presenters, including PNC, on various occasions. All of the presenters would call at various times seeking information. Information regarding various aspects of the proposals that had been submitted were discussed by Gorman and the respective presenters prior to their presentations. Gorman specifically discussed PNC's proposal with its presenter, Craig Aronhalt, during the period from August 10, 1993 through the second presentation by PNC to the Joint Committee on November 10, 1993. None of the information transmitted by Gorman to Aronhalt was confidential in nature:- Aronhalt's records indicate that Gorman advised him that fees were the big issues, that Gorman had to abstain from voting, that the Committee was down to five members, and that there would be a second presentation. Gorman recommended to Aronhalt specifics to be included in PNC's proposal. Gorman advised Aronhalt what to stress and when to make PNC's presentation. Gorman counseled the PNC representatives as to what approaches to take. On or about November 2, 1993, which was shortly before the second presentation was to be made, Gorman informed Aronhalt that he would need to stress client service and flexibility in PNC's presentation and cite examples. Aronhalt discussed the short list of presentations with Gorman on or about November 3, 1993. On or about November 5, 1993, Gorman authored the letter advising PNC of its presentation date and time. The Joint Committee met with the final four companies on November 10, 1993. Gorman participated in the Joint Committee's meetings with the final four companies and he took an active role in the discussions. Gorman prepared a handwritten summary of the companies' presentations and submitted the comparison to the other Committee members for their review. The chart listed the following qualifications of the four firms: experience; service charge to pay pensioners; liquidation of securities; investment; after fee return percent; and annual fee. The chart also listed an expense ratio for each firm. Per the chart, PNC's expense ratio was the lowest of the four, and was indicated as .85 %. However, on November 10, 1993, after the PNC presentation had been made, Gorman observed that the fees used in PNC's proposal were incorrect and that Aronhalt had used an outdated prospectus. The correct expense ratio would have been .73 %, which was even lower than the .85% that had been noted for PNC. Gorman asked Aronhalt to provide the correct expense ratio and subsequently, Aronhalt did so. The Joint Committee decided to recommend to the Borough Council the hiring of PNC as the Borough's investment company for the Police Pension Fund. In December, 1993, the Joint Committee met with other Members of Borough Council at the business meeting and discussed the merits of the various proposals. Gorman participated in the discussion with other members of Borough Council. On December Gorman, 95- 026 -C2 Page 21 15, 1993, Borough Council voted 6 -0 to approve Resolution 93 -17 which authorized the selection of PNC Bank, N.A., as Pension Fund Manager. Gorman submitted a conflict of interest memorandum bearing the same date which stated that he was an employee of PNC Bank and would abstain from the vote on Resolution 93 -17. The PNC Bank funds were determined to be the best of all investment options in the opinion of the borough committee with respect to the fees charged for investments and the performance history of the mutual funds. The investigation conducted by the Ethics Commission has found no evidence to suggest that the determination by the Borough Council was not accurate. Although Gorman did not vote on the final selection of PNC as noted above, he did participate in the review and consideration of the PNC proposal. Gorman's participation in the review of the PNC proposal and the other proposals was at the request of the Mayor and Borough Council, who knew of Gorman's position with PNC Bank. Neither the proposal of PNC Bank nor any of the other proposals to the Borough were based upon confidential information conveyed by Gorman to the mutual fund officials. Furthermore, the parties have stipulated that the process of awarding the management of the Police Pension Fund assets was open and public as required by the Ethics Law. As noted above, on December 31, 1993, Gorman's term as a Council Member expired. Shortly thereafter, Gorman was appointed by Borough Council to be the new Borough Treasurer and a non - voting Member of the Police Pension Committee. As Borough Treasurer, Gorman's duties included supervising Borough funds and investments, handling deposits and transfers of funds from various accounts including the Police Pension Fund, and advising the Manager and Council on all fiscal matters. On February 17, 1994, Borough Treasurer Gorman attended a meeting of the Police Pension Committee at which the Committee met with representatives of PNC Bank. Subsequently, the Senior Vice President and Chief Investment Officer for PNC Bank wrote a letter addressed to "Joseph F. Gorman, Vice President, PFPC, Inc." asking Gorman to advise him of any other changes the Police Pension Committee wished to make to the "investment strategy." The Police Pension Fund Agreement was signed by the Borough and PNC Bank in May of 1994. The agreement did not list specific amounts to be charged to the Borough for administering the Police Pension Fund. Thereafter, in June of 1994, Gorman as Borough Treasurer directed the transfer of all securities in the prior pension fund account, totaling $3,290,000.00, to a PNC Bank account and directed the transfer of $760,000 in cash from Police Pension Fund accounts to the account of PNC. Subsequently, the Borough Council passed a resolution which authorized the transfer of the securities from the old account to the PNC account and which authorized the Treasurer (Gorman) to sign all documents on behalf of the Borough and to take any other appropriate action to effectuate the said transfer of investments. At the July 5, 1994 meeting, Gorman as Treasurer reported on the transfers of Police Pension monies and treasury notes to PNC Bank, and Borough Council passed an ordinance regarding the establishment of a Police Pension Advisory Board. The Gorman, 95- 026 -C2 Page 22 Ordinance designated the Borough Treasurer, serving ex officio, as one of the five voting members of the Police Pension Advisory Committee. During 1994 and 1995, Gorman as Borough Treasurer corresponded with representatives of PNC Bank directing them to make cash transfers from the PNC fund to Fidelity Bank. At the request of the Mayor, Gorman summarized the PNC status reports for the Police Pension Committee. PNC Bank earned approximately $11,000 to $14,000 in 1994 and approximately $24,000 to $28,000 in 1995, as the result of being named Police Pension Fund Manager for Lansdowne Borough. Gorman did not personally obtain any financial benefit as a result of the placement of the Police Pension Fund assets for investment with PNC. The following facts pertain to tax anticipation loans obtained by the Borough through PNC Bank. At the November, 1993 meeting of the Borough Council, while Gorman was still a Borough Council Member, Council considered obtaining a tax anticipation loan for 1994. Gorman made a motion, which was unanimously approved, that the Secretary read a proposed resolution for requesting bids for a tax anticipation loan in the amount of $450,000. Bids were to be received by December 15, 1993. Bids were received from three banks, including PNC Bank. PNC Bank's rate was the lowest of the three. The bids were turned over to the Finance Committee, chaired by Joseph Gorman, for its consideration and recommendation. Historically, during Gorman's 8 years as Chairman of the Finance Committee, Gorman had always made the motion to accept the low bid on the tax anticipation note for each year. On December 15, 1993, Gorman took the following actions: (1) Gorman moved that the Secretary summarize a proposed resolution authorizing and awarding the 1994 tax anticipation loan, which motion carried unanimously; and (2) Gorman moved that Resolution 93 -16 be adopted as summarized. Resolution 93 -16, inter alia, accepted the proposal of PNC Bank, N.A. for the purchase of notes. Council voted to adopt Resolution 93 -16 for the tax anticipation loan. Gorman abstained from the vote to adopt the Resolution and filed a conflict of interest memorandum advising that he was an employee of PNC Bank and that he would so abstain. As of January 3, 1994, Gorman was no longer a Borough Council Member but was the new Borough Treasurer. Gorman, in his capacity as Borough Treasurer, had the responsibility to oversee the receipt, deposit, and disbursement of the tax anticipation notes. At the Borough Council meeting on January 4, 1994, Gorman as Treasurer reported that the funds had been received and that after checking with Corestates, Fidelity, and PNC, the funds were placed with PNC as it had the highest interest rate. In May, 1994, tax revenues received by the Borough were deposited into the Borough's accounts at First Fidelity Bank. Gorman moved one million dollars of certificates of deposit from First Fidelity to three mutual fund accounts with PNC Bank. Gorman was given authorization by Council to transfer funds at his discretion to places pre- approved by Council. Gorman, 95- 026 -C2 Page 23 PNC Bank earned interest income in the amount of $13,000 as a result of the tax anticipation note in 1994. In November, 1994, Borough Council again considered a tax anticipation note for 1995. Gorman reported at the November 1, 1994 meeting that interest rates were predicted to continue to rise which would impact upon the rate of the 1995 note. On December 21, 1994, Council noted that bids had been received for the 1995 tax anticipation note. The lowest rate was from PNC Bank. The bids were turned over to the Finance Committee for review and recommendation. On December 21, 1994, Council passed Resolution 94 -27 which, inter alia, accepted the proposal of PNC Bank, N.A. for the purchase of the notes. One Council Member asked the Solicitor if there was any conflict of interest since Gorman was an employee of PNC Bank. The Solicitor stated that there was none as Gorman had no vote on the matter. PNC earned interest income in the amount of $22,000 as a result of the tax anticipation note in 1995. Having summarized the above relevant fact, we must now determine whether the actions of Gorman violated Section 3(a) of Act 9 of 1989. The elements for a Section 3(a) violation are the use of the authority of the public position or confidential information received by being in that 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. The parties have stipulated that Gorman did not personally receive any private pecuniary benefit in this case. Thus, any violations of Section 3(a) in this case must be based upon a private pecuniary benefit to PNC Bank as a business with which Gorman is associated. PFPC is clearly a business with which Gorman is associated (See, Anaelini, Order No. 677 at 18). Yet, Gorman has repeatedly represented that he is an employee of PNC Bank (see, Findings 49, 52, 56, 75, 76, and 81), and the negotiated Consent Agreement reflects the consensus of the parties that PNC Bank is a business with which Gorman is associated. Accordingly, based upon the facts before us and the Consent Agreement, we find that PNC Bank is a business with which Gorman is associated. We find that a Section 3(a) violation has been established as to Gorman's participation in his official borough capacity in the process utilized by the Borough regarding the award of a contract to PNC Bank to administer the Borough's Police Pension Fund. Although Gorman abstained from the actual vote to select PNC Bank as the Police Pension Fund Manager, the use of the authority of office is not limited to mere voting, but "extends to all of the tasks needed to perform the functions of a given position." Juliante, Order No. 809 at 16. Gorman repeatedly used the authority of his office as a Borough Council Member in the process utilized by the Borough regarding the award of the contract to administer the Borough's Police Pension Fund. Gorman also committed a technical violation of Section 3(a) when he participated as a Borough official — the Borough Treasurer — in the administration of Gorman, 95- 026 -C2 Page 24 the aforesaid contract. Again, Gorman used the authority of his public position extensively and repeatedly as to this matter. The private pecuniary benefit to PNC Bank was substantial. As noted above, PNC. Bank earned approximately $11,000 to $ 14,000 in 1994, and approximately $24,000 to $28,000 in 1995, as the result of being named Police Pension Fund Manager. Gorman committed a technical violation of Section 3(a) when he participated as a Borough official in the official process for a tax anticipation loan from PNC Bank for the Borough. As Borough Treasurer, Gorman used the authority of his office in overseeing the receipt, deposit, and disbursement of the tax anticipation notes. The private pecuniary benefit to PNC Bank from handling the tax anticipation loan was in the nature of earned interest income and was again substantial, as set forth in Finding 85. Gorman did not violate Section 3(a) in relation to the use of confidential information for the private pecuniary benefit of a business with which he was associated in that the parties have stipulated that no such information was used. The Stipulation of Findings and Consent Agreement which the parties have filed sets forth a proposed resolution of the allegation. 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. We note that Joseph Gorman asserts that his conduct was exclusively motivated by his desire to serve the interest of Lansdowne and fulfill his fiduciary duty as an elected member of borough council. The investigation conducted by the Ethics Commission has found no evidence to contradict this assertion. Furthermore, Joseph Gorman asserts that he was not motivated by an intention to confer any financial benefit upon PNC Bank to the detriment of the Borough of Lansdowne. The investigation conducted by the Ethics Commission has found no evidence to contradict this assertion. Based upon all of the above, the proposed Consent Agreement is approved. The parties have negotiated an agreement whereby Gorman shall make payment to the Borough of Lansdowne (but forwarded to the State Ethics Commission) in the total amount of $10,000, to be paid over a period of twenty -four months in equal installments of $416 and with a final payment of $432. Payments shall be made on the first day of each month, commencing next month, so that the first payment is due on or before April 1, 1997. Conditioned upon Gorman's compliance with the above, we shall take no further action in this matter. Gorman, 95- 026 -C2 Page 25 IV. CONCLUSIONS OF LAW: 1. Joseph Gorman ( "Gorman "), as a Council Member for Lansdowne Borough, Delaware County, and as the Lansdowne Borough Treasurer, has at all times relevant to this case been a public official subject to the provisions of Act 9 of 1989. 2. Gorman violated Section 3(a) of Act 9 of 1989 when he participated in his official borough capacity in the process utilized by the Borough of Lansdowne regarding the award of a contract to administer the Borough's Police Pension Fund to PNC Bank, a business with which he was associated. 3. Gorman committed a technical violation of Section 3(a) of Act 9 of 1989 when he participated as a borough official in the administration of the PNC Bank contract to administer the Borough's Police Pension Fund. 4. Gorman committed a technical violation of Section 3(a) of Act 9 of 1989 when he participated in the official process for a tax anticipation loan through PNC Bank, a business with which he was associated. 5. Gorman did not violate Section 3(a) of the'€thics Law in relation to the use of confidential information for the private pecuniary benefit of a business with which he was associated in that no such information was used. In Re: Joseph Gorman ORDER NO. 1041 File Docket: 95- 026 -C2 Date Decided: 2/20/97 Date Mailed: 3/7/97 1. Joseph Gorman ( "Gorman "), as a public official of Lansdowne Borough, Delaware County, violated Section 3(a) of Act 9 of 1989 when he participated in his official borough capacity in the process utilized by the Borough of Lansdowne regarding the award of a contract to administer the Borough's Police Pension Fund to PNC Bank, a business with which he was associated. 2. Gorman committed a technical violation of Section 3(a) of Act 9 of 1989 when he participated as a borough official in the administration of the PNC Bank contract to administer the Borough's Police Pension Fund. 3. Gorman committed a technical violation of Section 3(a) of Act 9 of 1989 when he participated in the official process for a tax anticipation loan through PNC Bank, a business with which he was associated. 4. Gorman did not violate Section 3(a) of the Ethics Law in relation to the use of confidential information for the private pecuniary benefit of a business with which he was associated in that no such information was used. 5. Per the negotiated agreement of the parties, Gorman is directed to make payment to the Borough of Lansdowne through this Commission in the total amount of $10,000. Said payment is to be made over a period of twenty -four (24) months in equal installments of $416 and with a final payment of $432. Payments are to be made on or before the first of each month, commencing next month, so that the first payment is due on or before April 1, 1997. a. Compliance with the foregoing will result in the closing of this case with no further action. b. Failure to comply will result in the institution of an order enforcement action. BY THE COMMISSION, 66 aL4A_J DANEEN E. REESE, CHAIR