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Home My WebLink About1066 SchubenskiIn Re: Terri Schubenski STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: 96- 042 -C2 X -ref: Order No. 1066 Date Decided: 10/2/97 Date Mailed: 10/14/97 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. 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 e �qe 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. Schubeneki, 96- 042 -C2 Page 2 I. ALLEGATION: That Terri Schubenski, a public official /public employee in her capacity as a Purchasing Agent I for the Pennsylvania Department of Transportation, District 12 -4 Office, violated the following provisions of the State Ethics Act (Act 9 of 1989) when she used the authority of her office for the private pecuniary benefit of a member of her immediate family and a business with which a member of her immediate family is associated by participating in actions and /or decisions to purchase and /or approve purchases made by PennDOT from Eagle Industrial Tools and Supplies, a company owned by her brother. 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. Terry Schubenski has been employed by the Pennsylvania Department of Transportation Maintenance District 12 -4, Washington County, since August 8, 1993. a. Schubenski is employed in the capacity of a Purchasing Agent I. 2. The job description for the position of Purchasing Agent I includes, in part, the following relevant duties: a. Performs the detailed work involved in purchasing general commodity groups. This includes the review of requisitions, the preparation of bid invitations the review and award of bids and the preparation of purchase orders. Work includes occasional contact with vendors and various departmental officials concerning purchasing problems. Locates sources of supply capable of furnishing required items or services. Prepares purchase requests, field limited purchase orders, service purchase Schubenski, 96- 042 -C2 Page 3 contracts, or stock encumbrances for needed supplies of a small department or state institution. Inspects material upon receipt for compliance with specification. Performs related work as required. 3. PennDOT Maintenance District 12 -4, utilizes the following purchasing procedures for purchases under $1,500.00: a. Items that are on State Contract are to be obtained using the state contract process. b. Items that are not on State Contract are obtained in the following manner. 1. Purchases under $1,500 are made by way of a Direct Purchase Authorization. 2. For purchases up to $300.00, no bids are required. 3. For purchases of $300.00 to $1,500.00, price quotes over the telephone are accepted. 4. For tool purchases made by District 12 -4, under $1,500.00, a PennDOT Form #M -810, known as a "Request Advance Approval to Purchase" (RAAP's) is used. a. R.A.A.P.'s identify the vendors name and address, a brief description of the item to be purchased, the bid price and a District 12 -4 tool number. b. R.A.A.P.'s are used to record tool numbers for tool inventory control. c. R.A.A.P.'s are to be signed and approved by the County Equipment' Manager and District Equipment Manager. d. Bids are solicited by either the purchasing agent, who was Schubenski, or her supervisor. 5. Procedurally, when a specific tool or material was needed, the employee needing it would contact Storekeeper Charles Yakich, who is employed by District 12 -4 in the capacity as a Store Clerk II. a. If the item was not in stock and not on State Contract, Yakich would advise Terri Schubenski who would initiate a direct purchase. 6. Terri Schubenski, as part of her duties as a Purchasing Agent for PennDOT Maintenance District 12 -4, was responsible for following the purchasing procedure for transactions under $1,500.00. 7. PennDOT District 12 -4's, practice for orders placed under $1,500.00 are made by the Purchasing Agent (Schubenski) for the district . a. Purchases under this procedure were also made by Schubenski's supervisor, Charles Yakich. Schubenski, 96- 042 -C2 Page 4 8. Thomas Mucci, 1204 Meadowbrook Drive, Cannonsburg, PA 15317, is the brother of Terri Schubenski. 9. Mucci owns and operates a business known as Eagle Industrial Tools & Supplies, 23 Campbell Drive, Avella, PA 15312. a. Mucci opened Eagle Industrial Tools & Supplies on or about November 21, 1994. b. Eagle Industrial Tools & Supplies is operated from the lower level of Mucci's parents residence. c. Mucci is the sole employee of Eagle Industrial Tools & Supplies. 10. Eagle Industrial Tool & Supplies (EITS) is listed in the Pennsylvania Department of State fictitious name registry. a. An application for fictitious name for EITS was filed by Tom Mucci on November 21, 1994. b. Mucci is identified as the company's only interested party in the business. c. Terri Schubenski is not identified as having any position or financial interest in EITS. 11. At the time Thomas Mucci opened EITS, his sister Terri Schubenski, was employed as Purchasing Agent I with PennDOT District 12 -4. (See Findings No. 11) 12. EITS and PennDOT Maintenance District 12 -4, commenced a business. relationship on March 29, 1995, with the issuance of a PennDOT, Direct Purchase Authorization Form (DPA) #667078, being issued to EITS for three(3) 6 amp grinders. a. This DPA form was signed by Terri Schubenski. b. The grinders were identified as being received by Charles Yakich on May 5, 1995. c. This DPA correlates to EITS' invoice #09, dated 03/29/95, submitted to PennDOT 13. The business relationship between PennDOT District 12 -4 and EITS was initiated by Charles Yakich. a. Yakich had obtained an EITS business card and contacted them in an effort to price certain supplies. b. Schubenski did not refer EITS to Yakich. c. Yakich was not aware of the relationship between EITS owner, Thomas Mucci, and Schubenski. Schubenski, 96- 042 -C2 Page 5 14. From March 29, 1995, through December 7, 1995, a total of 22 DPA's covering items contained on 23 separate EITS invoices, were issued by District 12 -4. a. Terri Schubenski's signature appears on nineteen DPA's issued to EITS, authorizing purchases totaling $5,682.31. 15. Terri Schubenski issued Direct Purchase Authorizations to Eagle Industrial as follows: DPA# Date Issued Authorized Received 667078 03/29/95 Schubenski Yakich 667159 04/10/95 Schubenski Yakich 667117 04/03/95 Schubenski Yakich 667157 04/08/95 Schubenski Yakich 667125 04/03/95 Schubenski Yakich 667212 04/14/95 Schubenski Yakich 667450 05/05/95 Schubenski Yakich 667437 05/05/95 Schubenski Yakich 667600 05/23/95 Schubenski Yakich 667589 05/22/95 Schubenski Yakich 667656 05/30/95 Schubenski Yakich 667889 06/20/95 Schubenski Yakich 668196 07/18/95 Schubenski Yakich 668261 07/21/95 Schubenski Yakich 668246 07/20/95 Schubenski Yakich 668474 08/07/95 Schubenski Yakich 668165 07/14/95 Schubenski Yakich 668194 07/17/95 Schubenski Yakich 668621 08/30/95 Schubenski Yakich (19)Schubenski DPA No. 667889 was authorized by Schubenski with the order being placed by Yakich. 16. Schubenski placed orders to EITS, identified in Finding No. 24, telephonically from her office in the storeroom at District 12 -4. 17. DPA's authorized by Storeroom Clerk Yakich to EITS included the following: 746460 10/17/95 746812 12/07/95 746870 11/28/95 Yakich Yakich Yakich K. Ashmore Ken Crow John Ciccio Amount $ 284.61 144.10 118.32 270.58 179.63 146.11 82.53 125.68 442.40 180.68 357.80 839.18 435.95 99.54 306.93 24.80 635.55 417.60 590.32 $5,682.31 $326.72 99.90 286.98 $ 713.60 18. Charles Yakich placed the orders for the items identified in Finding No. 26. 19. EITS invoiced PennDOT's District 12 -4, twenty- three(23) times for materials ordered as part of DPA's identified in Finding Nos. 21 and 22. Schubenski, 96- 042 -C2 Page 6 20. Eagle Industrial invoices issued the following invoices to PennDOT District 12 -4, for the aforementioned DPA's. Invoice # 009 006 007 Not !std. 005 010 011 015 016 013 010* 014 018 014* 015* 016* 017 018* 024 026 054 195 130 Invoice Date Amoun DPA # DPA Date 03/29/95 $284.61 667078 03/29/95 04/06/95 179.63 667125 04/03/95 04/07/95 118.32 667117 04/03/95 04/08/95 270.58 667157 04/08/95 04/13/95 144.10 667159 04/10/95 04/18/95 132.12 667212 04/14/95 04/20/95 13.99 Inc 05/07/95 82.53 667450 05/05/95 05/08/95 125.68 667437 05/05/95 05/22/95 180.68 667589 05/22/95 05/23/95 442.40 667600 05/23/95 06/26/95 357.80 667656 05/30/95 06/27/95 839.18 667889 06/20/95 07/14/95 635.55 668165 07/14/95 07/17/95 417.60 668194 07/17/95 07/18/95 435.95 668196 07/18/95 07/20/95 306.93 668246 07/20/95 07/21/95 99.54 668261 07/21/95 08/07/95 24.80 668474 08/07/95 08/30/95 590.32 668621 08/30/95 10/17/95 328.72 746460 10/17/95 12/07/95 99.90 746812 12/07/95 11/28/95 286.98 746870 1 1 /28/95 *Duplicate invoice number used for a different transaction. 21. EITS invoiced PennDOT District 12 -4, on five different occasions using. computer generated invoices which contained invoice numbers previously used. a. These duplicate invoice numbers are for different items. b. Duplicate invoice numbers were used as part of these transactions. c. The duplicate transaction numbers, relating to different transactions, are as follows: Invoice # Date DPA # Da e 010 04/18/95 667212 04/14/95 010 05/23/95 667600 05/23/95 014 06/26/95 667656 05/30/95 014 07/14/95 668165 07/14/95 015 05/07/95 667450 05/05/95 015 07/17/95 668194 07/17/95 016 05/08/95 667437 05/05/95 Schubenski, 96- 042 -C2 Page 7 246 259 441 553 636 746 770 798 829 987 1010 1094 1158 1236 1340 1632 1961 016 018 018 07/18/95 06/27/95 07/21/95 22. The duplicate invoice numbers were the result of poor record keeping by Eagle Industrial Tool & Supply. 23. PennDOT Maintenance District 12 -4, issued the following checks to EITS for the invoices identified Finding #15. Check # Date • Amoun 409 Spray 5/8 x 75' hose Master locks 4' level and case Mops 04/12/95 $450.21 04/17/95 262.42 05/10/95 146.11 05/26/95 284.61 06/12/95 208.21 06/28/95 442.40 06/29/95 180.68 07/05/95 357.80 07/06/95 839.18 08/14/95 406.47 08/14/95 435.95 08/30/95 24.80 09/08/95 635.55 09/25/95. 417.60 10/13/95 590.32 12/01/95 326.72 01/29/96 386.88 Wire connectors 8' levels 6' levels 4 mil plastic Sponge 668196 667889 668261 EITS Invoice # Not listed, 006 005, 007 010, 011 009 015, 016 010 013 014 018 018, 017 016 024 014 015 026 054 195, 130 07/18/95 06/20/95 07/21/95 Endorsed By Mucci Mucci Mucci Mucci Mucci Mucci Mucci Mucci Mucci None Mucci Mucci Mucci None None None None Graphite Grease Butane Power Steering fluid Rivet Gun 24. Employees of PennDOT District 12 -4, with signature authority, are Maintenance; Manager John Secrist, Roadway Program's Coordinator Donald Vega and Charman Marker. a. Terri Schubenski did not sign the front side of any payment issued by District 12 -4 to EITS. b. Schubenski does not have signature authority on District 12 -4 accounts. 25. The backside of twelve (12) checks identified in Finding #21 were signed by Thomas Mucci. The remaining five (5) checks, numbers 987, 1236, 1340, 1632, and 1861, were not endorsed but deposited into EITS, Washington Federal Savings Bank account. 26. A review of PennDOT's DPA's and EITS corresponding invoices reveal the following items were purchased by District 12 -4 from EITS: Schubenski, 96- 042 -C2 Page 8 Wasp spray Simple green Masking tape Mop heads Air fresheners Weed cutter Pipe tap Hand cleaner Cutting wheel Battery protector Air Gun Ultra Torch Hack saw blades Ear plugs Duct tape Spray nozzles Hose hanger Chrome polish Drill bits Screw sets 4.5' grinders Wire brushes Grease guns Jack stands Rakes Bowl Cleaner 7' Grinder C Clamps 668194 07/18/95 EITS 6 pair 668165 08/08/95 EITS EITS EITS Jack stands Per pair 'h " air gun Hand truck 3 ton roller Lysol Chalk 1 Ton come along Work lights Lifting sling 18" pipe wrench Crescent wrenches Hand truck Paint brushes Chain lube PB Plaster Chalk Reel Screw driver set 27. Included with four (4) of the DPA's identified in Finding No. 24 were R.A.A.P.'s, with the following information: DPA# RAAP Date Vendor llam Bid Amount 667078 05/05/95 EITS Grinders (3) $ 94.87 ea 667889 07/06/95 EITS Come along 59.95 EITS C Clamp set 11.95 EITS 7' HD Grinder 149.75 69.61 86.98 98.78 449.79 28. EITS was the only vendor listed on the four (4) R.A.A.P.'s identified in Finding No. 35. 29. H. Levitt Co., 800 Chetopa Street, Pittsburgh, PA 15204; and Midstate Tool & Supply Inc., RD #2, Box 582, Altoona, PA 16601, were EITS' primary suppliers for items EITS sold to PennDOT District 12 -4. 30. EITS sold District 12 -4 a total of 123 different items as part of the DPA's identified in Finding Nos. 24 & 26. a. Ninety -four (94) items were purchased by EITS from H. Levitt Company. b. Twenty -one (21) items were purchased by EITS from Midstate Tool & Supply Co. c. EITS' supplier for eight (8) items were not determined. 31. EITS received payments totaling $579.21, for eight (8) items for which no supplier invoices were located. Schubenski, 96- 042 -C2 Page 9 a. Items for which no corresponding supplier invoices were located include: DPA # Date Item 667157 04/08/95 8' level 667157 04/08/95 (2) 6' level 668474 08/07/95 5/8 x 50' hose 668621 08/30/95 (12) 3/16 hs bit 746460 10/17/95 (24) PB Blaster 746460 10/17/95 (6) 3/8 x '/2 drill bit 646870 11/28/95 (2) % x 1 1/8 bit 646870 11/28/95 8 pc. drill set Total: 32. EITS received payments totaling $6,395.91, for items sold to District 12 -4, as identified in Finding Nos. 24 and 26. 33. EITS had gross sales of $25,915 in 1995. a. The total sales to District 12 -4 of $6,395.91 was approximately 25% of EITS total sales in 1995. 34. EITS paid its suppliers $4,171.39 for items sold to District 12 -4. 35. EITS realized profits from transactions with PennDOT District 12 -4 from March 29, 1995, through December 7, 1995, as follows: a. Total Sales: b. Minus Goods from Unidentified Suppliers: c. Minus Cost of Goods to EITS from Identified Suppliers: d. III. DISCUSSION: $6,395.91 $ 579.21 $4,171.39 Remaining profit to EITS: $1,645.31 Price Charge $ 48.95 57.98 24.80 21.36 90.00 49.14 87.98 199.00 $579.21 At all times relevant to this matter, the Respondent, Terri Schubenski, hereinafter Schubenski, has been a public employee subject to the provisions of the Public Official and Employee Ethics Law ( "Ethics Law "), Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, el seq. The allegation is that Schubenski, as a Purchasing Agent 1 for the Pennsylvania Department of Transportation (PennDOT), District 12 -4 Office, violated Section 3(a) of the Ethics Law by participating in actions as to purchases made by PennDOT from Eagle Industrial Tools and Supplies, a company owned by her brother. 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. Schubenski, 96- 042 -C2 Page 10 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 facts. Schubenski has been employed since August 8, 1993 by PennDOT in District 12 -4 as a Purchasing Agent I with the responsibility of purchasing general commodity groups which includes the review of requisitions, the preparation of bid invitations, the review and award of bids and the preparation of purchase orders. PennDOT District 12 -4 utilizes certain procedures for purchases under $1,500. In particular, if an item is not on State contract, the purchase must be made by way of a Direct Purchase Authorization (DPA). For purchases under $300, no bids are required; for purchases over $300 but less than $ 1,500, price quotes over . the telephone are accepted. For tool purchases under $1,500, a "Request Advance Approval to Purchase" (RAAP) is used. An RAAP identifies the vendor, a description of the item to be purchased, the price, and a tool number. The RAAP is to be signed and approved by the County Equipment Manager and District Equipment Manager with bids solicited by Schubenski's supervisor or Schubenski who must follow District purchasing procedures. Whenever District 12 -4 needed a specific tool or material under $1,500, Schubenski or her supervisor, Charles Yakich, placed the order. Thomas Mucci, the brother of Schubenski, is the owner of a business known as Eagle Industrial Tools and Supplies (EITS), which is listed in the Pennsylvania Department of State under the Fictitious Name Registry. At the time that Mucci opened EITS, his sister, Schubenski, was already employed by PennDOT. A business relationship commenced between EITS and PennDOT Maintenance District 12 -4 on March 29, 1995 with the issuance of a PennDOT DPA for 3 grinders. The DPA form , was signed by Schubenski. The grinders were received by Yakich and an EITS invoice was submitted to PennDOT. The business relationship between PennDOT District. 12 4 and EITS was initiated by Yakich who obtained an EITS business card and contacted EITS for prices of certain supplies. Yakich was unaware of the relationship between EITS owner Mucci and Schubenski. Between March 29, 1995 through December 7, 1995, a total of 22 DPA's covering items on 23 separate EITS invoices were used by District 12 -4 with Schubenski's signature appearing on 19 of the DPA's for authorized purchases totaling $5,682.31. The particulars of such Direct Purchase Authorizations to EITS are delineated in Fact Finding 15. Yakich used DPA's for three purchases from EITS. EITS issued invoices to PennDOT District 12 -4 for the purchases as detailed in Fact Finding 20. Finally, PennDOT District 12 -4 issued checks to EITS in payment of the invoices. Fact Finding 23. Schubenski did not sign the authorization of any of the checks because she does not have signature authority as to District 12 -4 accounts. Although EITS received gross receipts of $6,395.91 from the transactions with PennDOT between March 29, 1995 and December 7, 1995, the profit for EITS on such transactions was $1,645.31. Fact Finding 35. Having summarized the above relevant facts, we must now determine whether the actions of Schubenski violated Section 3(a) of Act 9 of 1989. Schubenski, 96- 042 -C2 Page 11 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, we note that there were uses of authority of office on the part of Schubenski. In particular, it was Schubenski who made the decision as part of her duties to select EITS for purchases. Such actions were uses of authority of office. Juliante, Order 809. The uses of authority of office in this case resulted in private pecuniary benefit as to the profits which were received on these purchases by EITS. Lastly, the private pecuniary benefit enured to a business with which a member of Schubenski's family is associated. In this regard, EITS is owned by Mucci who is the brother of Schubenski. A brother is defined in the Ethics Law to be within immediate family. 65 P.S. §402. Further, since EITS is owned by Mucci, it is a business with which Mucci is associated. Violations of Section 3(a) of Act 9 of 1989 occurred when Schubenski used the authority of her office in signing or issuing DPA's for purchases to EITS, a business with which a member of her immediate family is associated. Schubenski is cautioned that as to any future purchases, she cannot use her position to select EITS or any other business with which she or a member of her immediate family is associated for PennDOT purchases. She must remove herself from participation in those instances and make the necessary written and oral disclosures as required by Section 3(j) of the Ethics Law to her supervisor. 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 Schubenski, have stipulated to a payment of $ 1,000 by Schubenski to be paid in four installments of $250 each with the first payment being due within thirty (30) days of the date of issuance of this Order and the remaining payments every three months thereafter. Therefore, Schubenski is directed, to make such payments 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. Lastly, 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. IV. CONCLUSIONS OF LAW: 1. Terri Schubenski, as a Purchasing Agent I for the Pennsylvania Department of Transportation (PennDOT), District 12 -4 Office, is a public employee subject to the provisions of Act 9 of 1989. 2. Violations of Section 3(a) of Act 9 of 1989 occurred when Schubenski used the authority of her office in signing or issuing DPA's for PennDOT District 12 -4 purchases from EITS, a business with which a member of her immediate family is associated. In Re: Terri Schubenski ORDER NO. 1066 File Docket: 96- 042 -C2 Date Decided: 10/2/97 Date Mailed: 10/14/97 1. Violations of Section 3(a) of Act 9 of 1989 occurred when Terri Schubenski, as a Purchasing Agent I for the Pennsylvania Department of Transportation (PennDOT), District 12 -4 Office, used the authority of her office in signing or issuing DPA's for PennDOT District 12 -4 purchases from EITS, a business with which a member of her immediate family is associated. 2. As per the Consent Agreement of the parties, Schubenski is directed to make payment of $1,000 in four installments of $250 each with the first payment being due within thirty (30) days of the date of issuance of this Order and the remaining payments every three months thereafter through this Commission to the Commonwealth of Pennsylvania. 3. Compliance with the foregoing will result in the closing of this case with no further action by the Commission. BY THE COMMISSION,