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HomeMy WebLinkAbout1043 PovichIn Re: Stanley Povich STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: 96- 039 -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 g §gg,., 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 not filed and a hearing was deemed waived. The record is complete. A consent agreement was submitted by the parties to the Commission for consideration which was subsequently approved. This adjudication of the State Ethics Commission will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with Act 9 of 1989, 65 P.S. §408(h). Any person who violates confidentiality of the Ethics Law is guilty of a misdemeanor subject to a fine of not more than $ 1,000 or imprisonment for not more than one year, 65 P.S. §409(e). Confidentiality does not preclude discussing this case with an attorney at law. Povict1, 96- 039 -C2 Page 2 1. ALLEGATION: That Stanley Povich, a public official /public employee, in his capacity as a Member and Chairman of the Mon - Valley Sewage Authority, violated Sections 3(a) and 3(f) of the State Ethics Act (Act 9 of 1989) when he used the authority of his office for a private pecuniary benefit by participating in actions of the authority to approve payments for constable fees for delinquent water bills which he subsequently shared as a constable; and when he entered into a contract to post delinquent water /sewer bills at $500 or more with the Authority without an open and public process. II. FINDINGS: 1. Stanley Povich has served as a member of the Mon Valley Sewer Authority (MVSA) since 1980. 2. The MVSA provides sewer services for the communities of Donora, Washington County and Monessen, Westmoreland County. a. The MVSA operates by a five member board. Three (3) members are appointed from Monessen and two (2) members are appointed from Donora. b. MVSA Board members serve five (5) year terms. 3. Stanley Povich has served as an elected constable for the First Ward of Monessen for approximately the past twenty -five (25) years. a. Monessen has a total of four (4) constables including Povich. b. Monessen's elected constables have jurisdiction throughout the Commonwealth of Pennsylvania. 4. Customers of the MVSA are billed for sewage service on a quarterly basis. a. Billings are handled by authority clerical employee Julia Polkabla. 5. If an account becomes over thirty (30) days delinquent, a written notice is sent to the customer. a. If no payment is received by the time an account becomes forty -five (45) days delinquent, a final notice is sent indicating that the account must be paid by the end of the month. b. If no payment is made after sixty (60) days, the property is posted by a local constable for water service to be shut off, effective after the account becomes sixty -six (66) days delinquent. 6. Constables utilized by the MVSA to post delinquent accounts receive five (5) dollars per property posted. a. The five dollar posting fee per property is paid to the constable by the MVSA. Povich, 96- 039 -C2 Page 3 b. The MVSA assesses the five dollar posting fee to the customer. 7. Payments made to constables for delinquent postings occur on a quarterly basis. a. Constables receive a single quarterly payment from the MVSA to cover the postings for that quarter. b. The MVSA receives reimbursement for the posting fees from the customer when the bill is eventually paid. 8. Payments made to constables are included as part of the authority's monthly bill list for the month that the payment is made. a. Authority bill lists are prepared by Julia Polkabla. b. Bill lists are provided to board members as part of their meeting packet for review. c. Bill lists are voted on by the board in their entirety. 9. The MVSA Board does not take any action directing that delinquent accounts be posted by a constable. a. This course of action is automatically handled by MVSA office staff. b. Constables are contacted for the postings by either the manager or office staff. c. The MVSA Board's role in the process is to approve the quarterly payment to the constable. 10. The number of postings a constable receives is dependent upon the number of delinquent accounts for that particular quarter. 11. The MVSA has used a constable from Monessen to post delinquent accounts within Monessen and one from Donora to post delinquent accounts within Donora. a. There is no requirement that the constable be from the specific jurisdiction that the postings are located in. 12. Constable Forrest Loulis handled the postings for Monessen from 1986 through April, 1994. a. Loulis was selected by former Authority Manager Donald Campbell to post delinquent properties in Monessen. b. No contractual agreement existed between Loulis and the Authority to handle the postings. 13. Stanley Povich assisted Forrest Loulis post delinquent billing notices for Monessen from 1986 through April, 1994. 01/13/92 Vote 5 -0 6205 $ 340.00 04/13/92 Vote 5 -0 6428 335.00 Povich, 96- 039 -C2 Page 4 14. Povich assisted Loulis with the postings because Loulis was physically unable to do all the postings. a. The two (2) would work together handling the postings. b. Loulis would complete the return of services for the postings filed with the authority. 15. Povich did not disclose to the board that he was assisting Loulis post delinquent notices. 16. Payments made to Loulis for the postings handled by Loulis and Povich from January, 1992, through April, 1994, occurred as follows: Date 01/13/92 04/13/92 07/13/92 11/09/92 02/08/93 04/12/93 07/12/93 10/11/93 02/14/94 04/11/94 17. Loulis split the $4,710.00 he received from the MVSA from 1992 through April 1994 equally with Povich resulting in payments to Povich totaling $2,355.00. a. The MVSA board was unaware of this arrangement 18. Povich, in his official capacity as a MVSA Board Member, took the following official action on bill lists which included payments to Forrest Loulis identified in Finding #24. Meeting Date a. Payments made by the Authority for postings during this period were made directly to Forrest Loulis. b. Loulis would cash the checks and split the posting fees evenly with Povich. c. No other constables from Monessen were utilized to assist with posting delinquent properties. Number of Postings 68 67 86 71 101 117 105 121 85 9 2 Official Action Check # Amount 6205 6428 6672 6934 7154 7332 7561 7791 8070 8267 TOTAL PAYMENTS Vote $ 340.00 335.00 430.00 355.00 505.00 585.00 525.00 605.00 425.00 $ 605.00 $4,710.00 Check # Amount 07/13/92 2nd /vote 5 -0 6672 430.00 11/09/92 Motion /vote 5 -0 6934 355.00 02/08/93 Motion /vote 5 -0 7154 505.00 04/12/93 Motion /vote 5 -0 7332 585.00 07/12/93 Vote 5 -0 7561 525.00 10/11/93 Motion /vote 5 -0 7791 605.00 02/14/94 2nd /vote 5 -0 8070 425.00 04/11/94 vote 5 -0 8267 605.00 Povich, 96- 039 -C2 Page 5 19. Forrest Loulis discontinued posting delinquent properties in Monessen in May, 1994, for medical reasons. 20. Stanley Povich succeeded Forrest Loulis posting delinquent properties in Monessen Borough. a. Secretary Julia Polkabla was instructed either by Povich or Manager Levendosky to use Povich. She is not sure which one gave her the directive. b. The MVSA did not solicit applications for a Constable to serve delinquent notices in Monessen. c. No other constables from Monessen were considered for the postings. 21. Povich has posted delinquent properties in Monessen on a quarterly basis since July, 1994. a. Povich began the postings after being notified by the MVSA staff. b. No board action occurred to select Povich to do the postings. c. Povich has not had any assistance. 22. Records of the MVSA reflect that Povich has been compensated for posting 1,578 delinquent properties in Monessen since July, 1994. a. Povich received compensation totaling $7,890.00 for these postings at the rate of $5.00 per posting. 23. Povich was compensated as follows for delinquent postings: Date Paid Number of Postings Check # Amount 07/11/94 113 8513 $ 565.00 07/11/94 Vote 5 -0 8513 $565.00 10/10/94 Vote 5 -0 8786 820.00 11/09/95 Vote 5 -0 9005 715.00 04/10/95 Vote 4 -0* 9240 765.00 07/10/95 Vote 4-0* 9475 670.00 10/09/95 Vote 4-0* 9727 700.00 01/11/96 Vote 4 -0* 9960 915.00 04/08/96 • Vote 4 -1 10205 855.00 07/08/96 Vote 4 -1 10466 925.00 10/14/96 Vote 3-0** 10737 960.00 Povich, 96- 039 -C2 Page 6 Date Paid 10/10/94 164 8786 820.00 01/09/95 143 9005 715.00 04/10/95 153 9240 765.00 07/10/95 134 9475 670.00 10/09/95 140 9727 700.00 01/08/96 183 9960 915.00 04/08/96 171 10205 855.00 07/08/96 185 10466 925.00 10/14/96 10737 960.00 1,578 $7,890.00 24. Povich, in his official capacity as a MVSA Board Member, participated in the following actions to ratify bill lists which included payments to himself. Meeting Date Number of Postings Check # Amount Official Action Vote Check # Amount *One member absent. * *Two members absent. 25. The issue of whether Povich could serve as a board member while posting delinquent properties for the authority was discussed with Attorney Robert Durrant in February 1992. a. Durrant was representing the authority on an unrelated labor matter at the time. b. Durrant met with authority representatives including Manager Levendosky, Board Member Povich, and Solicitors Arnold W. Hirsch and Frank Bialon. Povich, 96- 039 -C2 Page 7 c. During the meeting, Povich asked Durrant's opinion on the posting issue. d Durrant does not specifically recall providing the advice. e Durrant did not furnish a written opinion on the subject. 26. The issue of whether MVSA Board Member Stanley Povich could receive a fee for posting delinquent sewer accounts as a constable, while simultaneously serving as a board member, was raised by Board Member Ronald Luci at the MSVA's April 10, 1995, meeting. a. Ronald Luci questioned the payment for the posting of Monessen properties for delinquent sewage bills by an Authority Board member who is a bonded constable. b. The solicitor responded that there was an oral opinion given to the Authority by Robert E. Durrant, Esq., at a meeting attended by Frank Bialon, Ben Levendosky, Stanley Povich, and Robert E. Durrant, Esq., concerning various legal matters of which payment for posting properties was one of them. c. Luci requested that a written statement be obtained from Robert E. Durrant, Esq., and that Robert Durrant's Opinion be put in the file in the Authority's office. d. Povich was present at this meeting. 27. Manager Levendosky contacted George M. Aman III, Solicitor for the Pennsylvania Municipal Authorities Association for a written opinion at the request of board member Steven Major. a. Aman was contacted because of his expertise in municipal law. 28. By way of correspondence dated May 9, 1995, to Manager Benjamin Levendosky, PMAA Attorney George M. Aman, III, provided the authority with the following opinion on the issue: I was glad that I was able to discuss with you briefly your question concerning the propriety of the Authority hiring one of its Board members to provide the service of posting properties where water is to be shut off because of delinquent charges. Your concern arose from the provisions of Section 10(D) of the Municipality Authorities Act which prohibits the authority board members from having an interest in a contract. You stated that there was no written contract between the Authority and the board member. It is necessary to reconcile Section 10(D) of the Act with Section 7(C) of the Act which authorizes the Board to determine the number of officers, agents, and employees of the Authority and their compensation, and which also permits the appointing of board members, to such offices, with powers, duties, and compensation as the Board may deem proper. This language is Povich, 96- 039 -C2 Page 8 ambiguous, but the State Ethics Commission has interpreted it to permit the hiring of an Authority Board member as plant manager. There is a narrow line between employment under Section 7(C) and a contract in certain cases. for instance, it would be improper for an authority Board member to sell insurance to the Authority. However, in this case, the activity consists solely of providing personal services of an individual, and therefore I believe it falls within the permission granted by Section 7(C) and therefore Section 10(D) is not applicable here. 29. After receiving Aman's written opinion that it was permissible for Povich to simultaneously serve as an Authority Board Member and post delinquent notices as constable, he has continued to do so up to and including the present time. 30. Povich, in his capacity as a MVSA Board Member, participated in at least twenty (20) separate board actions to approve bill lists which included payments for constable fees to himself and /or Forrest Loulis. a. Povich participated in the approval of ten (10) bill lists which included payments totaling $4,710.00, to Forrest Loulis as detailed in Finding #18. (1) Povich received $2,355.00, one -half of the posting fees made to Loulis. b. Povich participated in the approval of ten (10) bill lists which included payments totaling $7,890.00 to himself as detailed in Finding #30. 31. Povich received total payments of $10,245.00, as a result of delinquent account postings he was involved with since January, 1992: a. These payments are based on the $2,355.00, Povich received from Loulis between 01/01/92 - 04/11/94, plus the $7,890.00 he has received since 07/01/94. 32. Until April 1994, Povich participated in the delinquent billing notice postings through Constable Loulis. 33. Stanley Povich received payment from the Authority for his direct delinquent billing notice postings prior to obtaining the advice of the Pennsylvania Municipal Authorities Association solicitor as follows: Date Amount 07/11/94 $ 565.00 10/10/94 $ 820.00 ;L 11/09/95 $ 715.00 04/10/95 $ 765.00 Total $ 2,865.09. 34. Stanley Povich received payment from the Authority for his direct delinquent billing notice postings, after receiving the notice of investigation (6/28/96) in the instant matter as follows: Povich, 96- 039 -C2 Page 9 Date Amount 07/08/96 $ 925.00 10/14/96 $ 960.00 Total $ 1 ,885,Q0 35. The total payments to Stanley Povich, as outlined in Finding Nos. 33 and 34 above is $4,750.00. 36. There is no evidence to indicate that Stanley Povich intended to violate the provisions of the Ethics Law. a. Povich, in part, acted upon the oral advice of one attorney and the written attorney of the second. III. DISCUSSION: At all times relevant to this matter, the Respondent, Stanley Povich, hereinafter Povich, 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, The issues before us are whether Povich, as a Member and Chairman of the Mon - Valley Sewage Authority, violated Sections 3(a) and 3(f) of the State Ethics Act (Act 9 of 1989) as to the allegation that he used the authority of his office for a private pecuniary benefit by participating in actions of the authority to approve payments for constable fees for delinquent water bills which he subsequently shared as a constable; and when he entered into a contract to post delinquent water /sewer bills at $500 or more with the Authority without an open and public process. 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: 65 P.S. §402. 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. Povich, 96- 039 -C2 Page 10 Section 3(f) of the Ethics Law imposes certain restrictions as to contracting. Section 3(f) of Act 9 of 1989 provides: 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). Section 3(f) of Act 9 of 1989 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 Povich serves as one of five Members of the Mon - Valley Sewer Authority (MVSA), which provides water and sewer service to residents of Donora in Washington County and Monessen in Westmoreland County. Povich is also a Constable in Monessen. When an MVSA customer's account becomes 30 days delinquent, a written notice is sent. If no payment is received within 45 days, a final notice is sent. If no payment is made within 60 days, the property is posted by a local Constable to give notice of a service shut -off after 66 days of delinquency. For posting delinquent MVSA accounts, the Constable receives a fee of $5 which is assessed against the delinquent customer. Povich, 96- 039 -C2 Page 11 Constables are paid by MVSA on a quarterly basis. The Constable fees are included in MVSA bill lists which are provided to Board Members for review and approval. The MVSA Manager or office staff directs the Constables to post notices. The MVSA Board's role in such process is merely to approve the quarterly payments to the Constables. The number of notice postings a Constable receives in any given quarter depends solely upon the number of delinquent accounts. From 1986 through April, 1994, MVSA utilized Constable Forest Loulis to handle the notice postings for Monessen. There was no contractual arrangement between Loulis and MVSA in that Loulis was selected by the Manager. During that time, Loulis used Povich to assist him. Povich did not disclose to the MVSA Board that he was assisting Loulis. All MVSA payments for notice postings in Monessen were paid to Loulis who then split the fees equally with Povich. From 1992 through April, 1994, Loulis received $4,710 and made a payment of $2,355 to Povich. As to the fees which Loulis received, Povich as a MVSA Board Member participated in approving the bill lists through voting and in some instances making or seconding motions, all of which passed by 5 -0 votes. After Loulis discontinued posting notices in Monessen in May of 1994 for medical reasons, Povich succeeded Loulis. The MVSA Secretary was instructed either by the Manager or Povich himself to utilize Povich for the notice postings. No other Constables were considered. Since July, 1994, Povich has received $7,890 for notice postings in Monessen. From May, 1994 forward, Povich as an MVSA Board Member continued to approve bills, including payments to himself as Constable. In most instances, the bills were unanimously approved as part of a bills list. The details of the notice postings, Povich's actions, and payments received are detailed in Fact Findings 16, 18, 22 -24. In February, 1992, Povich requested an opinion from an attorney who was representing MVSA on a labor issue, as to whether he (Povich) could serve as a Board Member while posting notices for MVSA as a Constable. The attorney did not furnish a written opinion and does not specifically recall providing Povich with advice. After the issue of Povich's simultaneous service as a MVSA Board Member and Constable was raised at an April 10, 1995 meeting, the Manager contacted the Solicitor for the Pennsylvania Municipal Authorities Association who wrote a letter dated May 9, 1995 in which he compared Sections 10(d) and 7(c) of the Act and concluded that the activity was permissible as a personal service provided by a Board Member. With that written opinion, Povich continued to serve as a MVSA Board Member and post MVSA notices as a Constable. Since January, 1992, Povich received $ 10,245 from postings including $2,355 which he received from Loulis. Povich received $7,890 in his own name from MVSA since July 1, 1994. The fees which Povich received before obtaining advice from PMAA amounted to $2,865. The amount Povich received after he was notified that he was under investigation by this Commission was $1,885. The sum of these latter two groups of payments totaled $4,750. Lastly, there is no evidence to indicate that Povich had any intent to violate the Ethics Law but rather acted upon the oral advice of one attorney and the written advice of a second attorney. Povich, 96- 039 -C2 Page 12 Having summarized the above relevant facts, we must now determine whether the actions of Povich violated Sections 3(a) and 3(f) of Act 9 of 1989. In order to establish a violation, Section 3(a) requires a use of the authority of office or confidential information by a public official /employee for the private pecuniary benefit of himself, a member of his immediate family, or business with which he or a member of his immediate family is associated. We find a violation of Section 3(a) of Act 9 of 1989. Povich participated as a MVSA Board Member in either making motions, seconding motions, or voting to approve bills which included the Constable fees for posting notices on behalf of MVSA. The use of authority of office by Povich resulted in a pecuniary benefit consisting of the $5 posting fees he received. In addition, the pecuniary benefit was private because there was no authorization in law for Povich to either authorize or take action to pay fees to himself. Lastly, the private pecuniary benefit enured to Povich himself. We also find a violation of Section 3(f) of Act 9 of 1989 in that the notice postings constituted service contracts which were not awarded through an open and public process. We find a violation for those years in which Povich received $500 or more in Constable fees for MVSA notice postings. Accordingly, Povich violated Section 3(f) of Act 9 of 1989 when he provided notice postings, either on a sub- contract basis for another constable, or directly during the years 1992 through 1996 (in such situations where the payments were $500 or more), when such services were provided to the MVSA without having been secured through an open and public process. We note that the parties have filed a Stipulation of Findings and Consent Agreement which sets forth a proposed resolution of the allegations. We believe that the Consent Agreement is the proper disposition for this case based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Povich has agreed to make a payment in the amount of $4,750 through this Commission to MVSA in two installments of $2,375 within thirty (30) and sixty (60) days respectively of the date of issuance of this Order, pursuant to the Consent Agreement of the parties. Compliance with the foregoing will result in the closing of this case with no further action. Non - compliance with the above will result in the institution of an order enforcement action in this case. IV. CONCLUSIONS OF LAW: 1. Povich, as a Member and Chairman of the Mon - Valley Sewage Authority, is a public official subject to the provisions of Act 9 of 1989. 2. Povich violated Section 3(a) of Act 9 of 1989 by participating in Authority action to pay for the constable postings from January, 1992 through October, 1996, when he provided such services either directly or indirectly or in conjunction with another constable. 3. Povich violated Section 3(f) of the Ethics Law when he provided notice postings, either on a sub - contract basis for another constable or directly during the years 1992 through 1996 (in such situations where the payments were $500 or more), when such services were provided to the Authority without having been secured through an open and public process. In Re: Stanley Povich ORDER NO. 1043 File Docket: 96- 039 -C2 Date Decided: 2/20/97 Date Mailed: 3/7/97 1. Povich, as a Member and Chairman of the Mon - Valley Sewage Authority, violated Section 3(a) of Act 9 of 1989 by participating in Authority action to pay for the constable postings from January, 1992 through October, 1996, when he provided such services either directly or indirectly or in conjunction with another constable. 2. Povich violated Section 3(f) of the Ethics Law when he provided notice postings, either on a sub - contract basis for another constable or directly during the years 1992 through 1996 (in such situations where the payments were $500 or more), when such services were provided to the Authority without having been secured through an open and public process. 3. Povich is directed to make payment in the amount of $4,750 through this Commission to MVSA in two installments of $2,375 within thirty (30) and sixty (60) days respectively of the date of issuance of this Order, pursuant to the Consent Agreement of the parties. Compliance with the foregoing will result in the closing of this case with no further action. Non- compliance will result in the initiation of an order enforcement action. BY THE COMMISSION, etrO/ittikKJ eudit. DANEEN E. REESE, CHAIR