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HomeMy WebLinkAbout1065In Re: Glenn Hoak STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Roy W. Wilt Boyd E. Wolff Julius Uehlein This is a final adjudication of the State Ethics Commission. 95- 001 -C2 Order No. 1065 10/2/97 10/14/97 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 �t sue., 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. Hoak, 95- 001 -C2 Page 2 1. ALLEGATION: That Glenn Hoak used the authority of his office for a private pecuniary benefit by receiving campaign loans from Abraham Zion at a time when he participated with Abraham Zion in negotiations involving the reopening of a glass plant in the City of Jeannette. 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. II. FINDINGS: 1. Glenn Hoak served as Mayor of the City of Jeanette, Westmoreland County, from 1989 until his resignation on January 31, 1996. a. Hoak was appointed Mayor in 1989 and elected to four year terms in 1989 and 1993. b. Prior to being appointed Mayor, Hoak served as a Jeanette City Councilman from 1980 through 1989. 2. The City of Jeannette has been an economically distressed area due to the closing of several local manufacturing plants. a. These plants were the economic mainstay of the community. b. Their closure seriously hurt the City's tax base. Hoak, 95- 001 -C2 Page 3 3. Due to the depressed economic status of the City, the elected and appointed officials were actively in favor of any economic development to revitalize the City's economy. a. This included pursuing an expressed interest by Abraham Zion to modernize and restart glass producing operations at his plant in Jeannette. b. City officials saw an opportunity to improve the City's economic condition by dealing with Zion. 4. Hoak, as Mayor, along with City Solicitor Peter Troglio, participated in the ongoing negotiations with Zion to ensure that the glass plant project was being advanced. a. As part of that process, Hoak and Troglio would negotiations with Zion regarding certain conditions of process. 5. Abraham Zion is a New York businessman with holdings which not limited to: participate in the renovation include, but are a. Zion Pennsylvania Partnership Corporation. b. Zion Bullitt Avenue Limited Partnership. c. AZ. Holdings. d. Jeannette Glass Research & Development Corporation. e. JGA Corporation. f. These holdings include glass factories at Bullitt and Chambers Avenue. = 6. On or about November 3, 1983, Abraham Zion d /b /a A.Z. Holdings Corporation, purchased the then bankrupt Jeannette Glass Corporation facilities, located at Seventh and Bullitt Avenues, Jeannette, PA, and an additional site located on Chambers Avenue, Jeannette, PA. a. Around 1986, the name of the plant was changed to Zion Bullitt. b. No glass production has occurred at this facility since approximately 1983. 7. Zion's business relationship with the City dates back to at least 1984. 8. Negotiations commenced between City officials and Zion which centered on Zion's requests, which were ongoing over several years, for government grants and /or low interest loans obtained by the City, which were to fund the renovation and reopening of the plant. Hoak, 95- 001 -C2 Page 4 a. As a result of this process, Zion was able to secure funds in the amount of $1,200,000.00, which was given either as grants or low interest loans, with very favorable terms. b. Hoak, along with other City officials, participated in securing these funds for Zion, with Hoak signing and /or executing various legal documents on behalf of the City, which were related to these funds. 9. Negotiations took place for a number of years, between City Officials, including Hoak, and Zion, in an attempt to reopen the glass plant. Despite these negotiations, the glass plant was never reopened. 10. During April, 1993, during the course of ongoing negotiations between the City of Jeannette and Zion, Mayor Hoak received a $5,000.00 campaign contribution /loan from Abraham Zion. 11. Abraham Zion issued check #2997, dated April 21, 1993, in the amount of $5,000.00, made payable to the "Committee to Elect Glenn D. Hoak ". 12. Zion's $5,000.00 campaign contribution was deposited into Community Savings Bank account #1966023714, "Committee to Re -Elect Mayor Glenn D. Hoak ", on April 22, 1993. 13. Glenn Hoak did not disclose the $5,000 received from Abraham Zion on original Campaign Finance Reports. 14. The Commonwealth of Pennsylvania, Office of Inspector General, referred the discrepancies on Hoak's Campaign Finance Reports to the Westmoreland County District Attorney's Office. 15. As a result of this referral, Hoak subsequently filed an amended Campaign Finance Report on March 9, 1995. a. This amended Report was filed six days after Hoak received a Notice-of Investigation by the State Ethics Commission. 16. Hoak issued personal check #0703, dated December 21, 1993, in the amount of $5,000.00, to Abraham Zion, as repayment of the loan by Zion. III. DISCUSSION: At all times relevant to this matter, the Respondent, Glenn Hoak, hereinafter Hoak, 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 allegation is that Hoak violated Section 3(a) of the Ethics Law when he used the authority of his office for a private pecuniary benefit by receiving campaign loans from Abraham Zion at a time when he participated with Abraham Zion in negotiations involving the reopening of a glass plant in the City of Jeannette. 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. Hoak, 95- 001 -C2 Page 5 facts. The term "conflict of interest" is defined under Act 9 of 1989 as quoted above. Having noted the issues and applicable law, we shall now summarize the salient From 1989 until his resignation on January 31, 1996, Hoak served as Mayor of Jeannette, a city which has been economically distressed due to the closing of several local manufacturing plants that were the economic mainstay of the community. Efforts were made by various elected and appointed officials who were actively in favor of economic development to revitalize the City's economy. When Abraham Zion (Zion), a New York businessman, expressed an interest in modernizing and restarting a glass producing operation in Jeannette, City officials saw an opportunity to improve the City's economic condition. Hoak as Mayor participated in negotiations with Zion to advance the glass plant project. On or about November 3, 1983, Zion, d /b /a A.Z. Holdings Corporation, purchased the bankrupt Jeannette Glass Corporation together with an additional site in the City of Jeannette. Negotiations between Zion and City officials occurred regarding Zion's request for City grants or low interest loans to fund the renovation and reopening of the glass plant. Through that process, Zion secured funds in the amount of $1.2 million which were given either as grants or low interest loans. Hoak and other City officials participated in securing those funds for Zion with Hoak signing or executing various legal documents on behalf of the City. Although the negotiation process continued for a number of years between City officials, including Hoak, and Zion in an attempt to open the glass plant project, the plant never reopened. In April, 1993, while negotiations were ongoing between the City of Jeannette and Zion, Hoak received a $5,000 campaign contribution /loan from Zion. The campaign contribution was deposited into an account entitled the "Committee to Re- Elect Mayor Glenn D. Hoak." Hoak did not disclose the $5,000 contribution received from Zion in his; Campaign Finance Reports and the Office of Inspector General of the Commonwealth of Pennsylvania referred the discrepancy to the Westmoreland County District Attorney's Office. Hoak filed an amended Campaign Finance Report on March 9, 1995 which was six days after he received a notice of investigation from the Investigative Division of this Commission. Hoak repaid the $5,000 loan to Zion by a personal check dated December 21, 1993. Having summarized the above relevant facts, we must now determine whether the actions of Hoak violated Section 3(a) of Act 9 of 1989. In order to establish a violation, Section 3(a) requires a use of the authority of office or confidential information by a public official /public employee 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. In applying the provisions of Section 3(a) of Act 9 of 1989 to the instant matter, there was a use of authority of office on the part of Hoak in this case. Hoak, as Mayor of the City of Jeannette, was involved in the process of obtaining grants or low interest loans for Zion as to the glass plant project. Further, Hoak executed various legal documents on behalf of the City relating to such funds. Clearly such actions were uses of authority of office. Juliante, Order 809. The use of authority Hoak, 95- 001 -C2 Page 6 of office resulted in a private pecuniary benefit to Hoak consisting of the $5,000 loan Zion made as to Hoak's re- election campaign. Accordingly, we find a technical violation of Section 3(a) of Act 9 of 1989 as to Hoak's actions in accepting a campaign loan from Zion during the time that Hoak was involved in discussions and negotiations as to grants or loans for Zion's glass plant project in the City of Jeannette. Snyder v. State Ethics Commission, Slip Opinion filed in Commonwealth Court on December 18, 1996 at 817 C.D. 1996, allocatur petition pending in PA Supreme Court. Section 7(13) of Act 9 of 1989, 65 P.S. §407(13), specifically empowers this Commission to impose restitution in those instances where a public official /public employee has obtained a financial gain in violation of the Ethics Law. In this case, the parties, the Investigative Division and Hoak, have stipulated to a payment of $2,500 by Hoak. Therefore, Hoak is directed to make payment of $2,500 in a timely manner through this Commission to the Commonwealth of Pennsylvania. Compliance with the foregoing, whereby Hoak will make the $2,500 payment, will result in the closing of this case with no further action by the Commission. Non- compliance will result in the institution of an order enforcement action. Lastly, we note that the parties have filed a Stipulation of Findings and Consent Agreement which 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. IV. CONCLUSIONS OF LAW: 1. Glenn Hoak, as Mayor of the City of Jeannette, was a public official subject to the provisions of Act 9 of 1989. 2. A technical violation of Section 3(a) of the Ethics Law occurred when Hoak' accepted a $5,000 campaign loan from Abraham Zion at a time when Hoak was, engaged in negotiations with Zion for City grants or loans regarding the opening - of a glass plant by Zion in the City of Jeannette. In Re: Glenn Hoak File Docket: Date Decided: Date Mailed: ORDER NO. 1065 1. Glenn Hoak, as Mayor of the City of Jeannette, technically violated Section 3(a) of the Ethics Law in accepting the $5,000 campaign loan from Abraham Zion at a time when Hoak was engaged in negotiations with Zion for City grants or loans regarding the opening of a glass plant by Zion in the City of Jeannette. - 2. As per the Consent Agreement of the parties, Hoak is directed to make payment of $2,500.00 in a timely manner through this Commission to the Commonwealth of Pennsylvania. Compliance with the foregoing will result in the closing of this case with no further action by the Commission. Non - compliance will result in the institution of an order enforcement action. BY - A 1V COMMISSION, ai Kr/ IV 6 95- 001 -C2 10/2/97 10/14/97 DANEEN E. REESE, CHAIR