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HomeMy WebLinkAbout1069 WagnerIn Re: David Wagner STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: X -ref: • Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Allan M. Kluger Rev. Joseph G. Quinn Julius Uehlein 96- 081 -C2 Order No. 1069 11/3/97 11/7/97 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seg., 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. 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. Wagner, 96- 081 -C2 Page 2 1. ALLEGATION: That David Wagner, a public official in his capacity as a Commissioner for Clarion County, violated the following provisions of the State Ethics Act (Act 9 of 1989) when he used the authority of his office for a private pecuniary benefit of himself and /or a business with which he is associated by participating in actions of the Board of Commissioners to award grants to municipalities in the county for street and other street related improvements at a time when he should have known that a business with which he is associated would perform said improvements and be paid from such grant funds. 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). 11. FINDINGS: 1. The Investigative Division of the State Ethics Commission received a signed, sworn complaint alleging that David Wagner violated provisions of the State Ethics Act (Act 9 of 1989). 2. Upon review of the complaint the Investigative Division initiated a preliminary inquiry on October 24, 1996. 3. The preliminary inquiry was completed within sixty days. 4. On December 18, 1996, a letter was forwarded to David Wagner, by the Executive Director of the State Ethics Commission informing him that a complaint against him was received by the Investigative Division and that a full investigation was being commenced. a. Said letter was forwarded by certified mail, no. P 487 031 690. 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. Wagner, 96- 081 -C2 Page 3 b. The domestic return receipt bore the signature of Vicki Casper, with a delivery date of December 27, 1996. 5. On April 30, 1997, the Executive Director of the State Ethics Commission filed an application for a ninety day extension of time to complete the Investigation. 6. The Commission issued an order on May 29, 1997, granting the ninety day extension. 7. Periodic notice letters were forwarded to David Wagner in accordance with the provisions of the Ethics Law advising him of the general status of the investigation. 8. The Investigative Complaint was mailed to the Respondent on September 10, 1997. 9. David Wagner has served as a Clarion County Commissioner since January, 1996. 10. Wagner is the sole owner of Canaan Construction, RD #2, Box 74 -A, Clarion, Pennsylvania 16214. a. Canaan Construction operates from Wagner's residence. 11. Canaan Construction was incorporated in the Commonwealth of Pennsylvania, Department of State as follows: Corporation #: 914826 Filing date: 04/04/86 Address: RD #2, Box 74 -A Clarion, PA 16214 Owner: David A. Wagner RD #2, Box 74 -A Clarion, PA 16214 Nature of Business: To engage in the construction of driveways, parking lots and other acts incident thereto. •12 Wagner filed Statements of Financial Interests with Clarion County which included the following regarding his interest in Canaan Construction. a. Calendar year: 1996 Filed: 03/31/97 on SEC Form 01/97 Position: County Commissioner Direct /Indirect Income: Canaan Construction Office Directorship or Employment in any Business: Canaan Construction- Owner; County Commissioner Financial Interests in any Business: Canaan Construction All Other Financial Interests: None Wagner, 96- 081 -C2 Page 4 b. Calendar year: 1995 Filed: 02/26/96 on SEC Form 01/95 Position: Commissioner Candidate Creditors: None Direct /Indirect Income: Canaan Construction Office Directorship or Employment in any Business: Canaan Construction, owner Finance Interest in any Business: Canaan Construction All other Financial Interests: None c. Calendar year: 1994 Filed 02/21/95 on SEC Form 01/95 Position: Commissioner Candidate Direct /Indirect Income: Real estate rentals Gifts: None Office Directorship or Employment in any Business: Canaan Construction Financial Interest in any Business: Canaan Construction, owner All other Financial Interests: None 13. Foxburg Borough, a municipality in Clarion County, contracted with Canaan Construction for street projects prior to 1996. a. In 1995, while looking for a paving contractor to complete a project on Railroad Street in Foxburg Borough, Council President Jim Preston was referred to David Wagner. 14. Canaan Construction contracted with the borough for work on Railroad Street in 1995. a. While Canaan Construction was working on Railroad Street, Preston asked Wagner about a project on Harvey Street to replace and install a culvert. b. Wagner looked at Harvey Street and advised Preston that his company could do the work. 15. During the September 5, 1995, Foxburg Borough Council Meeting, Canaan Construction was hired to replace the culvert on Harvey Street for the quoted price of $2,200.00. a. Canaan Construction was the low bidder. b. Ecks' Dirt Work submitted a quote for Harvey Street, of $3,200.00, on August 8, 1995. 16. Canaan Construction was unable to complete the work on Harvey Street in 1995, because of previous job commitments. a. Canaan purchased the materials for the job on September 12, 1995. b. Preston advised Wagner that Canaan could complete the work in the Spring of 1996. Wagner, 96- 081 -C2 Page 5 17. Clarion County receives liquid fuels money twice a year from the State, which the County then makes available to the municipalities in the county for road repair /maintenance. 18. Clarion County does not maintain any roads or streets within the County. a. Road maintenance is handled by PennDOT and the local municipalities. 19. Municipalities request liquid fuels funds by submitting a PennDOT Application for County Aid, Form MS -339, to the County for approval. a. Form MS -339 Applications in Clarion County are filed with County Chief Clerk, Donna Hartle. b. Hartle presents applications to the County Board of Commissioners for consideration and approval. 20. In 1996, after the borough was advised of the availability of County Aid for road related work, Council President Preston included Harvey Street as one of three projects to be included on the Borough's Application for County Aid. a. The projects were chosen based on need and citizen complaints. b. Council discussed and informally approved the projects to be included on the Application. 21. At the January 24, 1996, meeting of Foxburg Borough Council, Preston reported that he reviewed an application for County Aid. The application would involve Church Street, road and ditch repairs and repairs to a culvert on Harvey Road when the weather breaks officially to do it. 22. At the February 5, 1996, meeting of council, Jim Preston reported that he was going to take the application for County Aid to the Clarion County Courthouse on Wednesday. The allocation request of $9,500.00, to be used as follows: $2,400.00 for culvert on Harvey Road; $2,100.00 for Church Street repairs; $4,500.00 to correct spring run -off on N. Palmer. a. Council did not formally vote to approve submitting the application to the county. 23. Foxburg Borough had not applied for County Aid prior to 1996. 24. Foxburg Borough submitted an Application for County Aid dated February 5, 1996, in the amount of $9,300.00. a. The application was signed by three representatives of Foxburg Borough Council and the Secretary/Treasurer. b. The Project Description included the following: Install culvert on Harvey Street Tar and chip Church Street Install storm sewer on North Palmer Wagner, 96- 081 -C2 Page 6 c. Contractors for the projects were not identified. 25. The Harvey Street culvert project was the same project Canaan contracted to complete in 1995. 26. At the February 12, 1996, meeting, of the Clarion County Board of Commissioners, the Application for County Aid by Foxburg Borough in the amount of $9,300 was approved by a 3 -0 vote, with Commissioner David Wagner participating and voting in favor. 27. Section II of the Application for County Aid for Foxburg Borough was completed by Clarion County and contained the signatures of the three Commissioners, Wagner, Martin and Minich. a. Section II confirmed that the Application was approved on 02/12/96 by the county commissioners. b. The approved amount was $9,300.00. 28. The Foxburg Borough Application for County Aid was assigned Project #96-16 - 404 -01 -CA and submitted to PennDOT for approval. a. PennDOT approved the Application on 04/26/96. 29. Foxburg Borough Council President, James Preston, contacted contractors to complete the projects identified on the Application for County Aid prior to submitting the Application to Clarion County. (See Finding No. 24) a. Preston contacted three different contractors because he determined that each project required a different expertise. b. Preston did not contact more than one contractor for each project or advertise for bids because the amounts were less than $4,000.00 and not subject to bid requirements of the Borough Code. c. Contractors offered verbal bids prior to submitting written quotes. d. Canaan Construction was contacted regarding the Harvey Street project. 30. Foxburg Borough received a written bid proposal from Canaan Construction, dated 03/27/96, for the repair work on Harvey Street, in the amount of $2,400.00. a. This was after the funds had been approved by the county and was a follow up to the verbal bids that had been received. b. The written bid proposal was submitted to Foxburg Borough Council President James Preston by David Wagner. c. Preston was given the verbal quote prior to submitting the application to PennDOT. d. Preston accepted Wagner's proposal on 05/07/96. Waaner, 96- 081 -C2 Page 7 31. Contractors utilized on other Foxburg Borough projects included in the Application for County Aid were Seal Coating and Ecks' Dirt Works. a. Foxburg Borough Council did not take official action in 1996, to hire the contractors. 32. The Pennsylvania Department of Transportation (PennDOT) conducts inspections of projects receiving funding through the county aid program. 33. PennDOT's Completion Report (form #MS -933), reflects that the Foxburg projects started on 06/10/96, and were completed on 07/06/96. a. Project costs totaled $9,150.00, $ 150.00 Tess than the aid approved by Clarion County. 34. At the August 5, 1996, Foxburg Borough Council Meeting James Preston reported that the County Aid Grant Project Completion Report was submitted to the Department of Transportation for storm drain on Spring Street and Railroad Street; culvert on Harvey Road; and ditching and drainage pipe on Church Street. After final inspection of projects by the Department of Transportation, Foxburg Borough will be reimbursed for projects. 35. Foxburg Borough received invoices from the contractors involved in the projects identified in the Application for County Aid as follows: Invoice Data Contractor 06/12/96 Canaan Constr. 06/26/96 Seal coating 07/11/96 Ecks' Dirt Works Amount $2,400.00 $3,550.00 $3,200.00 TOTAL $9,150.00 Description Install culvert and rock to prevent erosion on road for Foxburg Borough Application of MC -70 and #8 gravel; labor for ditching and drainage pipe Install 15" storm drain at Spring and RR Streets - with catch basin at junction with existing 8" drain 36. The Canaan Construction invoice was $200.00 higher than the 1995 estimate because costs for reseeding were not included in the original estimate. 37. PennDOT submitted the Final Project Completion Report to Clarion County on or about 09/03/96, which approved costs relating to Foxburg Borough Project #96 -16- 404- 01 -CA, not to exceed $9,150.00. a. The report identified the contractors used, including: Canaan Construction; Seal Coating; and Ecks' Dirt Works. Wagner, 96- 081 -C2 Page 8 38. Foxburg Borough received Liquid Fuels Funds for Project No. 96 -16- 404 -01 -CA through Clarion County Requisition No. 72564 dated September 9, 1996, in an amount of $9,150.00. 39. Requisition #72564, was signed by all three Clarion County Commissioners, as follows: Sara Minich Keith Martin David Wagner September 10, 1996 September 10, 1996 September 11, 1996 40. Requisition #72564, was not listed in the minutes of the Clarion County Commissioners Meeting, with other requisitions which were approved for payment. a. Requisition #72564, was completed by Donna Hartle, Chief Clerk, on 09/09/96, and signed by the Commissioners on 09/10/96 and 09/11/96. b. Requisitions require the approval of the Board of Commissioners before they are paid. (1) The Chief Clerk is responsible for preparing the requisitions and presenting them to the Commissioners for their signature. c. Meetings of the Clarion County Commissioners occurred on 09/09/96, and 09/23/96. d. Requisition No. 72564 was not submitted to the Commissioners. 41. After receiving payment of the allocation of liquid fuels money from Clarion County, Foxburg Borough paid the three contractors on Project 96-16- 404 -01- CA, from the borough general fund accounts, as follows: Check # Date Contractor Amount 3329 09/17/96 Seal Coating $3,550.00 3330 09/17/96 Canaan Construction 2,400.00 3200 09/17/96 Ecks' Dirt Works 3,200.00 $9,150.00 42. Check #3330, issued to Canaan Construction from the Foxburg Borough General Fund Account, in the amount of $2,400.00, was deposited into the account of Canaan Construction, owned by David Wagner. a. The deposit was made on 09/23/96. b. The reverse side of the check reflects a stamp indicating "credited to the account of the within named payee Absence of Endorsement Guaranteed PFC Bank New Bethlehem, PA 16242 ". 43. Commissioners Martin and Minich were unaware that Canaan Construction, owned by Wagner, was going to be the contractor on one of the projects identified in the Foxburg Borough Application for County Aid. Wagner, 96- 081 -C2 Page 9 44. Wagner did not disclose his involvement to the Board of County Commissioners with the Foxburg Borough project at any time. a. Canaan's normal profit is approximately 33% but was roughly 14% for the Foxburg project. 45. The following is a breakdown of Canaan Construction costs and profit on the Foxburg Borough Harvey Road Project: Amount Received $2,400.00 Costs: Pipe $ 278.31 Seed $ 20.00 Hauling of dirt $ 296.00 Wages (not including Wagner) $ 574.00 Backhoe rental $ 750.00 Compactor rental $ 150.00 Total Costs: $2,068.31 Net Profit $ 331.69 Profit Percentage 13.8% 46. Wagner participated in actions of the Clarion County Commissioners which resulted in a $9,300 grant being awarded to Foxburg Borough for road projects, which included $2,400 to be paid to his company, Canaan Construction. a. Wagner voted on February 12, 1996, to approve Foxburg Borough's application for the $9,300 grant. (See findings 26 & 27). b. Wagner signed Requisition No. 72564 on September 11, 1996, to approve release of $9,300 grant funds to Foxburg Borough resulting in the borough making a $2,400 payment to his company. (See findings 39, 41, 42). 47. The financial gain received by Canaan Construction was $331.69. III. DISCUSSION: At all times relevant to this matter, the Respondent, David Wagner, hereinafter Wagner, 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, .?tom• The allegation is that Wagner violated Section 3(a) of the Ethics Law when he participated in actions of the County Board of Commissioners to award a grant to a municipality for street related improvements at a time when his business performed the improvements and received the grant funds. 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 quoted above. Wagner has been a Clarion County Commissioner since January, 1996. In a private capacity, he is the sole owner of Canaan Construction, a Pennsylvania corporation engaged in the construction of driveways, parking lots, and related road projects. In 1995, Foxburg Borough, a municipality in Clarion County, needed to perform certain road repair work. Inquiries were made for a paving contractor by Council President who was told that Wagner's company, Canaan Construction, could do the work. Council president contacted Canaan Construction which contracted with the Borough for a road project which was completed in 1995. Subsequently, Council President asked Wagner about another Borough project of replacing a culvert. Wagner advised the Council President that his company could do culvert work. At a September 5, 1995 Foxburg Borough Council meeting, Canaan Construction as low bidder was awarded the contract to replace the culvert. Although the culvert project was started in 1995, Canaan Construction was not able to complete the project until 1996 due to prior job commitments. Clarion County receives state liquid fuels funds which are available to municipalities within the County for road repairs or maintenance. The municipalities submit a PennDOT application for County aid. The applications are filed with the Chief Clerk of the County for presentation to the County Board of Commissioners for consideration and approval. When Foxburg Borough was advised of the availability of the County aid for road related work, Council President submitted an application for three projects, one of which was the culvert contract awarded to Canaan Construction. Foxburg Borough Council informally agreed to apply to the County for $9,500 with $2,400 allocated for the culvert project. The listing of the three projects did not identify the businesses which would do the work. At a February 12, 1996 meeting of the Clarion County Board of Commissioners, Foxburg Borough's application for aid, which was reduced to $9,300, was approved by a 3 -0 vote with Wagner participating. Wagner never informed the other two County Commissioners of his ownership of Canaan Construction or his involvement with the Foxburg Borough project. The Foxburg Borough application was then submitted to PennDOT which gave its approval on April 26, 1996. PennDOT conducts inspections of the projects that receive funding through County aid programs. PennDOT's completion report for the Foxburg Borough project reflected total costs of $9,150 which was $150 less than the aid approved by Clarion County. Foxburg Borough received invoices from the contractors including one from Canaan Construction in the amount of $2,400 for the culvert replacement. Foxburg Borough received liquid fuels funds in the amount of $9,150 as per a Clarion County requisition which was signed by all three Commissioners. Foxburg Borough then paid all three contractors for the completed projects. As to the $2,400 received by Canaan Construction for the culvert project in Foxburg Borough, Canaan Construction made a net profit of $331.69. Wagner, 96- 081 -C2 Page 10 Having noted the issues and applicable law, we shall now summarize the relevant facts. Wagner, 96- 081 -C2 Page 11 Having summarized the above relevant facts, we must now determine whether the actions of Wagner violated Section 3(a) of Act 9 of 1989. In order to establish a violation of Section 3(a), there must be 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 analyzing this case, we are guided by our decision in Snyder, Order 979 -2, affirmed Snyder v. SEC, 686 A.2d 843 (1996), allocatur petition pending in Pennsylvania Supreme Court. In Snyder, supra, which is analogous to the instant case on its facts, we found that a township supervisor violated Section 3(a) of Act 9 of 1989 when he participated in board decisions concerning two development projects wherein his business had contracts to do building work. Commonwealth Court, in affirming our decision, noted: Snyder never disclosed to the Board his business relationship with Colonial Commons. We are likewise unconvinced by the fact that Snyder's vote was never controlling or necessary for a quorum. Snyder violated the Ethics Law by discussing and voting on issues in which he had a private pecuniary interest, not by affecting the outcome of those votes. Similarly, it is irrelevant whether Snyder improperly used his influence as a Supervisor to gain the Colonial Commons and Blue Meadow contracts; Snyder may have been able to obtain the jobs even if he were not a Supervisor, but as a Supervisor, he should not have considered and voted on issues involving his personal business dealings. (Emphasis added). Snyder v. SEC, at 849. Just as in Snyder, the actions of Wagner implicated Section 3(a) of the Ethics Law. There were uses of authority of office on the part of Wagner. In particular, at the February 12, 1996 meeting of the County Board of Commissioners, the Foxburg Borough's application for. County aid was approved by a 3 -0 vote with Wagner participating. Such action occurred while the culvert repair project was ongoing. In addition, Wagner along with the other two Commissioners signed the Clarion County requisition for the receipt of liquid fuels funds for the Foxburg Borough project. Such actions by Wagner constituted uses of authority of office. Juliante, Order No. 809. There was a private pecuniary benefit in this case consisting of the net profit of $331.69 which Canaan Construction received as to the culvert project in Foxburg Borough. Lastly, the private pecuniary benefit enured to Canaan Construction, a business with which Wagner is associated as the sole owner of the company. 65 P.S. §402. Accordingly, Wagner violated Section 3(a) of Act 9 of 1989 when he used the authority of office to obtain a private pecuniary benefit for Canaan Construction Company, a business with which he is associated, by participating in actions of the County Board of Commissioners to award a grant to a municipality for street related improvements at a time when his business performed the improvements and received the grant funds. Taliff, Order No. 954. Section 9(c) of Act 9 of 1989, 65 P.S. §409(c), provides as follows: Wagner, 96- 081 -C2 Page 12 Section 9. Penalties (c) Any person who obtains financial gain from violating any provision of this act, in addition to any other penalty provided by law, shall pay a sum of money equal to three times the amount of the financial gain resulting from such violation into the State Treasury or the treasury of the political subdivision. Treble damages shall not be assessed against a person who acted in good faith reliance on the advice of legal counsel. In this case, since Wagner participated in County Board actions as to grant funds in which he knowingly had a financial interest, a treble penalty is warranted. Wagner is directed to pay $995.07 through this Commission into the State Treasury within 30 days of the mailing date of this Order. Non - compliance will result in the institution of an order enforcement action. In that Wagner remains in office, he is reminded that public office is a public trust. As to any future actions of Wagner which would involve a private pecuniary benefit to himself, a member of his immediate family, or business with which associated, he must abstain and observe the written and oral disclosure requirements of Section 3(j) of Act 9 of 1989. IV. CONCLUSIONS OF LAW: 1. David Wagner (Wagner), as a Commissioner for Clarion County, is a public official subject to the provisions of Act 9 of 1989. 2. Wagner violated Section 3(a) of Act 9 of 1989 by participating in actions of the County Board of Commissioners to award a grant to a municipality for street related improvements at a time when his business performed the improvements and received the grant funds. In Re: David Wagner • File Docket: Date Decided: Date Mailed: ORDER NO. 1069 BY THE COMMISSION, 96- 081 -C2 11/3/97 11/7/97 1. David Wagner (Wagner), as a Commissioner for Clarion County, violated Section 3(a) of Act 9 of 1989 by participating in actions of the County Board of Commissioners to award a grant to a municipality for street related improvements at a time when his business performed the improvements and received the grant funds. 2. Wagner is directed to pay a treble penalty in the amount of $995.07 within thirty dates of the date of issuance of this Order through this Commission to the Commonwealth of Pennsylvania. Non - compliance will result in the institution of an order enforcement action. et efatt DANEEN E. REESE, CHAIR