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HomeMy WebLinkAbout1081 AndzulisIn Re: Michael Andzulis 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 Allan M. Kluger Boyd E. Wolff Julius Uehlein Louis W. Fryman 96- 093 -C2 Order No. 1081 4/30/98 5/11/98 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 Leg., 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. Andzulis, 96- 093 -C2 Page 2 1. ALLEGATION: That Michael Andzulis, a public official /public employee in his capacity as a Supervisor for Clifford Township, Susquehanna County, violated the following provisions of the State Ethics Act (Act 9 of 1989) when he used the authority of his office for the private pecuniary benefit of himself and /or businesses with which he and /or members of his immediate family are associated by participating in discussions and /or actions of the board of supervisors resulting in companies he and /or members of his immediate family are associated with, Holton, Inc. and Andzulis Brothers Construction, being selected for contracts with the township; when said contracts were awarded without an open and public process; and when he participated in actions to approve payments to Holton, Inc., and Andzulis Brothers Construction. 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 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). II. FINDINGS: 1. The Investigative Division of the State Ethics Commission received information alleging that Michael Andzulis violated provisions of the Public Official and Employee Ethics Law (Act 9 of 1989). 2. The Investigative Division initiated a preliminary inquiry on December 24, 1996, in accordance with the provisions of the Ethics Law. 3. The preliminary inquiry was completed within sixty days. 4. On February 18, 1997, a letter was forwarded to Michael Andzulis, 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 487 031 787. Andzulis, 96- 093 -C2 Page 3 b. The domestic return receipt bore the signature of Michael Andzulis, with a delivery date of February 21, 1997. 5. On March 27, 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. On September 8, 1997, the Executive Director of the State Ethics Commission filed an application for a second ninety day extension of time to complete the investigation. 8. The Commission issued an order on October 2, 1997, granting the second ninety day extension. 9. Periodic notice letters were forwarded to Michael Andzulis in accordance with the provisions of the Ethics Law advising him of the general status of the investigation. 10. The Investigative Complaint was mailed to the Respondent on February 2, 1998. Michael Andzulis has served as a supervisor for Clifford Township, Susquehanna County since January, 1996. Andzulis was appointed Vice Chairman of the Board of Supervisors in January, 1998. 12. Andzulis owns a business known as Holton, Inc., which was incorporated on December 2, 1981. Articles of Incorporation for Holton, Inc., confirm that Michael Andzulis is the principal shareholder. The business involves land acquisition and construction related work. The business has no employees other than Andzulis. 11. a. a. b. c. 13. Michael Andzulis has [been] the principal officer, grantor and general partner for Andzulis Brothers Construction since April 1, 1996. a. The principal activity or service is general construction. b. The firm's employer identification number is 23- 2843199. 14. Andzulis Brothers Construction had been operating on a part -time basis from 1985 until April, 1996, by Thomas Andzulis, brother of Michael Andzulis. a. Andzulis Brothers Construction filed applications for general liability and workmans compensation insurance on April 17, 1996, with Tri- County General Insurance. 1. Michael Andzulis was listed as the authorized representative. Andzulis, 96- 093 -C2 Page 4 2. The description of work included road grading for townships and municipalities. 3. It was listed that the business had been in existence for five years. 15. The Statement of Financial Interests (SFI) filed by Michael Andzulis for 1997 (calendar year 1996) listed the following information: a. Andzulis' sources of income included the Lift Inn, Holton, Inc., and Andzulis Brothers Construction. b. He was the owner of the Lift Inn, Holton, Inc., and Andzulis Brothers Construction. c. It was listed that Andzulis held a 100% interest in the Lift Inn; a 100% interest in Holton, Inc.; and a 50% interest in Andzulis Brothers Construction. 16. In January, 1996, Clifford Township experienced significant road flooding and damage due to severe weather conditions. a. Roads were not accessible to school buses, police and emergency vehicles due to flooding and water damage. 17. Susquehanna County was declared a disaster area by Governor Ridge in January, 1996. a. The county was also a Presidentially declared disaster area. b. Clifford Township was included as part of the disaster area. 18. Thomas Robert (T.R.) Williams served as a Clifford Township Supervisor and roadmaster during 1996. a. Due to the emergency conditions caused by the flooding, Williams, as roadmaster, identified township roads that needed immediate repair. 19. Williams identified three roads in most need of repair. a. Sweatland Road b. Old Schoolhouse Road c. Chesnick Road 20. Williams hired all of the contractors for the emergency road projects of 1996. a. None of the contractors were selected by competitive bidding. 21. As a declared disaster area, Clifford Township temporarily suspended the formal requirements pertaining to the performance of public work, entering into contracts, the incurring of obligations, the employment of temporary workers, the rental of equipment, the purchase of supplies and materials, the levying of taxes and the appropriation and expenditure of public funds. Andzulis, 96- 093 -C2 Page 5 22. Williams assigned the following contractors to work on specific roads in the township: a. Holton, Inc. /Andzulis Brothers Construction - Sweatland Road b. Brozonis Excavating - Old Schoolhouse Road c. Marty Barhite - Chesnick Road 23. Williams assigned Michael Andzulis of Holton, Inc., and Andzulis Brothers Construction to work on Sweatland Road. a. Williams picked Andzulis to work on Sweatland Road because he lived in the vicinity of the road. 24. Holton, Inc., submitted an undated invoice for repairs to Sweatland Road and Tinkerbrook Road. a. Sweatland Road Thurs. 01 -25 -96 Type of Equipment No. of Hours Rate of Pay Amount Dozer 10 hrs $40 /hr. $ 400.00 Backhoe 10 hrs $35 /hr. $ 350.00 Dump Truck 9 hrs $35 /hr. $ 225.00 Tandem Dump 5 hrs $35 /hr. $ 175.00 Fri. 01 -26/96 Type of Equipment No. of Hours Rate of Pay Amount Dozer 10 hrs $40 /hr. $ 400.00 Backhoe 10 hrs $35 /hr. $ 350.00 Dump Truck 9 hrs $25 /hr. $ 225.00 Tandem Dump 8 hrs $35 /hr. $ 280.00 b. Tinkerbrook Road Total Sweatland Road $2,405.00 Tues. 01 -30 -96 Type of Equipment No. of Hours Rate of Pay Amount Dozer 8 hrs $40 /hr $ 320.00 Dump Truck 8 hrs $25 /hr $ 200.00 Total Tinkerbrook Road $ 520.00 TOTAL $2,925.00 25. The invoice was prepared by Jill Andzulis, wife of Michael Andzulis. 26. The employees who worked for Holton, Inc., on the Sweatland Road project included Tom Andzulis, David Andzulis and John Peterka. a. Tom and David Andzulis are the brothers of Mike Andzulis. b. Each employee was paid $10.00 per hour. Andzulis, 96- 093 -C2 Page 6 c. Michael Andzulis occasionally operated some of the equipment. d. The equipment used during the course of the job was owned by Tom Andzulis. 27. The work performed on Tinkerbrook Road on January 30, 1996, by Holton, Inc. had not been authorized by Roadmaster T.R. Williams or the Clifford Township Board of Supervisors. 28. Clifford Township issued check number 1055 in the amount of $2,925.00, to Holton, Inc. on February 6, 1996, a. The payment was for the invoice that was submitted by Holton, Inc., for the work that was completed on January 25, 1996, through January 28, 1996. (See Finding No. 24). b. The check was endorsed by Michael Andzulis. 29. The Holton, Inc. invoice of $2,925.00 was approved for payment as part of a group of bills by the Clifford Township Supervisors during the meeting of February 6, 1996. a. The motion to approve payment of bills was made by Michael Andzulis and approved by a unanimous vote. 30. Clifford Township check number 1055 was deposited by Michael Andzulis on February 8, 1996, into a savings account (no. 200 148 972) in his name at Community Bank and Trust. a. Andzulis has sole signature authority for this account. 31. T.R. Williams had assigned Brozonis Excavating to work on OId Schoolhouse Road during the emergency road projects of 1996. (See Finding No. 19). 32. Andzulis Brothers Construction began working on Old Schoolhouse Road before Brozonis Excavating had an opportunity to start working on the road. 33. Williams did not give either Mike Andzulis or anyone from Holton, Inc. or Andzulis Brothers Construction the authorization to work on Old Schoolhouse Road. 34. Andzulis Brothers Construction submitted an undated invoice to Clifford Township for work completed on Tinkerbrook Road and OId Schoolhouse Road. a. Tinkerbrook Road 02 -01 -96 Type of Equipment No. of Hours Rate of Pay Amount Dump Truck 5 hrs $25 /hr $ 125.00 Dozer 5 hrs $40 /hr $ 200.00 02 -02 -96 10:00 - 3:00 Type of Equipment No. of Hours Rate of Pay Amount Andzulis, 96- 093 -C2 Page 7 Backhoe Dump Truck Dozer b. Old Schoolhouse Road 02 -06 -96 Type of Equipment Dozer Loader Dump Trucks (2) 5 hrs 3 hrs 3 hrs Loads of shotrock hauled for 02 -06 = 42 Toads 02 -07 -96 No. of Hours 9 hrs 9 hrs 9 hrs Type of Equipment No. of Hours Dozer 9 hrs Loader 9 hrs Dump Trucks (2) 9 hrs Loads of shotrock hauled for 02 -07 = 54 02 -08 -96 Type of Equipment No. Hours Dozer 9 hrs Loader 9 hrs Dump Trucks (2) 9 hrs Backhoe 1 hr Loads of shotrock hauled for 02 -08 = 57 02 -09 -96 Type of Equipment No. of Hours Dozer 9 hrs Loader 9 hrs Dump Trucks (2) 9 hrs Loads of shotrock hauled for 02 -09 = 52 02 -12 -96 Type of Equipment No. of Hours Loader 6.5 hrs Dozer 6.5 hrs Dump Trucks (2) 6.0 hrs Loads of shotrock hauled for 02 -12 = 26 02 -13 -96 Type of Equipment Truck #310 Truck #9070 Tandems (2) No. of Hours 6.5 hrs 7.5 hrs 2.0 hrs $35 /hr $25 /hr $40 /hr Total Tinkerbrook Road Rate of Pay $40 /hr $55 /hr $25 /hr Rate of Pay $40 /hr $ $55 /hr $ $25 /hr $ Rate of Pay $40 /hr $55 /hr $25 /hr $35 /hr Rate of Pay $40 /hr $ $55 /hr $ $35 /hr $ Rate of Pay $55 /hr $ $40 /hr $ $25 /hr $ Rate of Pay $25 /hr $ $25 /hr $ $35 /hr $ $ 175.00 $ 75.00 $ 120.00 $ 695.00 Amount $ 360.00 $ 495.00 $ 450.00 Amount 360.00 495.00 450.00 Amount $ 360.00 $ 495.00 $ 450.00 $ 35.00 Amount 360.00 495.00 450.00 Amount 357.50 260.00 300.00 Amount 162.50 187.50 140.00 Andzulis, 96- 093 -C2 Page 8 Dozer 8.5 hrs 02 -15 -96 Type of Equipment Dozer Dump Trucks (2) 02 -16 -96 Type of Equipment Dozer Dump Trucks (2) Dozer a. OId Schoolhouse Road 02/22/96 Type of Equipment No. of Hours Dozer 8.5 hrs Dump Truck 8.5 hrs Tandem Dump 8.5 hrs Total Man Hours for this Date = 02/23/96 Type of Equipment No. of Hours Dozer 8.5 hrs Dump Truck 8.5 hrs Tandem Dump 8.5 hrs Total Man Hours for this Date = 02/24/96 No. of Hours 8 hrs 8 hrs No. of Hours 4 hrs 4 hrs 1 hr 25.5 25.5 $40 /hr Rate of Pay $40 /hr $ $25 /hr $ $40 /hr $ Total OId Schoolhouse Road $8,142.50 *Note: The amount totaled on the invoice does not equal the total amount of the individual amounts. 35. An additional invoice was submitted to the township by Andzulis Brothers Construction sometime between February 24, 1996, and March 12, 1996, for work performed on OId Schoolhouse Road. Rate of Pay $40 /hour $25 /hour $35 /hour Rate of Pay $40 /hour $25 /hour $35 /hour Type of Equipment No. of Hours Rate of Pay Dozer 5.0 hrs $40 /hour Dump Truck 4.5 hrs $25 /hour Tandem Dump 4.5 hrs $35 /hour Backhoe 4.0 hrs $35 /hour Total Man Hours for this Date = 18.0 $ 340.00 Rate of Pay Amount $40 /hr $ 340.00 $25 /hr $ 400.00 Amount 160.00 200.00 40.00 TOTAL $8,460.00 TOTAL AMOUNT DUE THIS INVOICE $2,310.00 Amoun $ 340.00 $ 212.50 $ 297.50 Amount $ 340.00 $ 212.50 $ 297.50 Amoun $ 200.00 $ 112.50 $ 157.50 $ 140.00 Andzulis, 96- 093 -C2 Page 9 36. The invoices were prepared by Jill Andzulis. 37. The employees who worked for Andzulis Brothers Construction on the Schoolhouse Road project included Tom Andzulis, David Andzulis and John Peterka. a. These are the same employees who are listed as working for Holton, Inc. b. Each employee was paid $10.00 per hour. c. The equipment utilized during the course of the job was owned by Tom Andzulis. 38. The work performed on Tinkerbrook Road and Schoolhouse Road was not authorized by either Roadmaster T.R. Williams or the Clifford Township Supervisors. a. Andzulis Brothers Construction began working at the direction of Michael Andzulis. 39. The undated Andzulis Brothers Construction invoice totaling $8,460.00 was approved as part of a bill listing by the Clifford Township Board of Supervisors during the meeting of February 6, 1996. a. Michael Andzulis made the motion to approve the bills which was passed by unanimous vote. 40. Clifford Township issued check number 3784 in the amount of $8,460.00 to Andzulis Brothers Construction on February 23, 1996, for work completed on Tinkerbrook Road and Schoolhouse Road from February 1, 1996, through February 16, 1996. a. The check was signed by Michael Andzulis in his capacity as a Clifford Township Supervisor. 41. Michael Andzulis endorsed and cashed check no. 3784 on February 26, 1996. 42. On February 28, 1996, two days after cashing check no. 3784 Michael Andzulis made a cash deposit of $3,400.00 into a money market account (no. 200 148 981) at Community Bank and Trust. a. Michael Andzulis has sole signature authority for this account. 43. Andzulis made an additional cash deposit of $3,450.00 to account no. 200 148 981 on March 5, 1996, six days after cashing check no. 3784. 44. The undated Andzulis Brothers Construction invoice of $2,310.00 was approved for payment by the Clifford Township Board of Supervisors on March 12, 1996. a. Michael Andzulis was absent from that meeting and did not participate in the bill's approval. Andzulis, 96- 093 -C2 Page 10 45. Clifford Township issued check number 3817 in the amount of $2,310.00 to Andzulis Brothers Construction on March 12, 1996, for work completed from February 22, 1996, through February 24, 1996. 46. Michael Andzulis was one of two signatures endorsing the check which was cashed on March 15, 1996. 47. Holton, Inc., maintains a bank account (no. 200 001 961) at Community Bank and Trust. a: Michael Andzulis has sole signature authority for the account. 48. Payments were made from the Holton, Inc., account no. 200 001 961 to employees working for Andzulis Brothers Construction and Holton, Inc. for work performed on Sweatland Road, Old Schoolhouse Road and Tinkerbrook Road. a. The checks were issued by Michael Andzulis. b. All checks were issued to cash and later endorsed and cashed by the employees. 49. The following is a list of the checks that were paid to the employees and businesses from the Holton, Inc., account no. 200 001 961 by Michael Andzulis for work that was completed in Clifford Township: Endorsee Debbie Andzulis (Wife of David Andzulis) John Peterka Elizabeth Peterka (Wife of John Peterka) David Andzulis Slamas Trucking & Excay. Slamas Trucking & Excay. State Aggregates, Inc. John Peterka Debbie Andzulis Check No. Check Date Amount 2711 02/09/96 $ 120.00 2712 02/09/96 2720 02/16/96 2719 02/16/96 2717 02/14/96 2718 Not Dated 2723 02/26/96 2801 03/01/96 2725 03/01/96 Total $ 120.00 $ 180.00 $ 180.00 $ 510.00 $ 150.00 $ 64.94 $ 120.00 $ 120.00 $1,564.94 50. As part of a declared a disaster area, Clifford Township was eligible to receive financial assistance under the Public Assistance Program of the Stafford Act. a. The objectives of the program were to minimize the Toss of state and federal public assistance disaster program funds and maximize financial recovery. b. The federal public assistance program is administered by the Federal Emergency Management Agency (FEMA). c. In Pennsylvania, the Public Assistance Office of the Disaster Recovery Division of the Pennsylvania Emergency Management Agency (PEMA) manages and administers the public assistance program. 51. Under a Presidentially declared major disaster, the Commonwealth (PEMA) is the grantee. Andzulis, 96- 093 -C2 Page 11 a. All applicants applying for federal aid are subgrantees. b. PEMA has the authority, under federal declaration and state statutes, to act on behalf of all recipients under the federal program. 52. T.R. Williams and Michael Andzulis of Clifford Township had attended a PEMA public assistance briefing for Susquehanna County on February 3, 1996, regarding the Public Assistance Program. 53. T.R. Williams and Michael Andzulis filed an application on behalf of Clifford Township for Federal Disaster Assistance on February 3, 1996. a. The Declaration Number was listed as FEMA -1093 DR -PA. b. The Project Application Number was 115-14224. 54. As an applicant for disaster assistance, Clifford' Township agreed to certain terms and conditions including the following: a. The applicant agrees to comply with all applicable federal, state and local procurement laws, regulations or directives. b. The applicant agrees to establish internal personnel safeguards which will prohibit employees from using their positions for a purpose that creates, or gives the appearance of creating, a desire for private gain for themselves or for others, particularly those persons who have a family business, or other tie to the employee. c. The applicant agrees to comply with the Commonwealth's Contractor Integrity Provisions. 1. Under the Contractor Integrity Provision, except with the consent of the Commonwealth, the contractor shall not have a financial interest in any other contractor, subcontractor, or supplier providing services, labor or material on this project. 55. Damage Survey Reports (DSRs) were filed by PEMA on work that was completed in Clifford Township. a. DSRs are the basis from which federal /state inspection teams conduct inspections of damaged sites. b. Once approved the DSR is the document on which obligated funds are based. 56. DSR #61855 was a survey report for the project on Schoolhouse Road. a. The report confirmed the contractor for the project was Andzulis Brothers Construction. 57. Inspectors from FEMA and PEMA estimated the cost to restore Old Schoolhouse Road to the pre- disaster condition would have amounted to $4,482.00. a. Two thousand nine hundred twenty -one ($2,921.00) dollars was for the cost of the contract and $1,561.00 was for the cost of the material. Andzulis, 96- 093 -C2 Page 12 58. Andzulis Brothers Construction was paid a total of $10,075 for the Old Schoolhouse Road project. (See Findings No. 34(b) and 35). a. This was $5,593.00 in excess of the estimated costs. 59. DSR #61861 was a survey report for Tinkerbrook Road. a. The report confirmed the contractor was Andzulis Brothers Construction and Holton, Inc. 60. Inspectors from FEMA and PEMA estimated the cost to restore Tinkerbrook Road to the pre- disaster condition would have amounted to $1,390.00. a. Eight hundred forty -five ($845.00) dollars was for the cost of the contract and $545.00 was for the cost of the material. 61. The amount paid to Andzulis Brothers Construction and Holton, Inc. totaled $1,125.00 for the Tinkerbrook Road project. (See Findings No. 24(b) and 34(a)). 62. Michael Andzulis' actions as a Clifford Township Supervisor resulted in a private pecuniary benefit for himself and /or Holton, Inc. and Andzulis Brothers Construction, businesses with which he and members of his immediate family (brothers) are associated. a. On February 6, 1996, Andzulis made the motion and voted to approve bill listings which included payments of $2,925.00 and $8,460.00 to Holton, Inc. and Andzulis Brothers Construction. (See Findings No. 29 and 39). b. Andzulis signed Clifford Township check no. 3784 in an amount of $8,460.00 payable to Andzulis Brothers Construction. (See Finding No. 40). c. Andzulis deposited check no. 1055 in the amount of $2,925.00 and deposited the funds into his personal savings account. (See Finding No. 30). d. Andzulis endorsed and cashed check no. 3784 in an amount of $8,460 payable to Andzulis Brothers Construction. (See Finding No. 40). e. Andzulis endorsed and cashed check no. 3817 in an amount of $2,310.00 payable to Andzulis Brothers Construction. (See Finding No. 48). f. Andzulis directed that work be performed on Tinkerbrook Road and Old Schoolhouse Road by Holton, Inc. and Andzulis Brothers Construction without authorization of the supervisors or township roadmaster. 63. Payments by Clifford Township to companies with which Michael Andzulis and /or members of his immediate family are associated totaled $13,695.00. a. Check No. 1055 b. Check No. 3784 $ 2,925.00 $ 8,460.00 Andzulis, 96- 093 -C2 Page 13 c. Check No. 3817 TOTAL 65 P.S. §402. $ 2,310.00 $ 13,695.00 64. Expenses incurred by Andzulis Brothers Construction and Holton, Inc. for the Clifford Township projects totaled $1,564.94. (See Finding No. 49). 65. The private pecuniary benefit realized by Andzulis and /or businesses (Holton, Inc. and Andzulis Brothers Construction) with which he and members of his immediate family was associated totaled $12,130.06. $13,659.00 - Total Payments [sic] -$ 1,564.00 - Expenses [sic] $12,130.06 III. DISCUSSION: At all times relevant to this matter, the Respondent, Michael Andzulis, hereinafter Andzulis, has been a public 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, gt seq. The allegations are that Andzulis, as a Supervisor for Clifford Township, Susquehanna County, violated Sections 3(a) and 3(f) of the State Ethics Act (Act 9 of 1989) when he participated in actions of the board of supervisors resulting in companies he or members of his immediate family are associated with, Holton, Inc. and Andzulis Brothers Construction, being selected for contracts with the township; when said contracts were awarded without an open and public process; and when he participated in actions to approve payments to Holton, Inc., and Andzulis Brothers Construction. 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: 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. Andzulis, 96- 093 -C2 Page 14 In addition, Section 3(f) of Act 9 of 1989 quoted above 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. Having noted the issues and applicable law, we shall now summarize the relevant facts. Andzulis has served as a Clifford Township Supervisor since January, 1996. In a private capacity, Andzulis owns Holton, Inc., a corporation involved in land acquisition and construction - related work. In addition, Andzulis has a 50% ownership interest in Andzulis Brothers Construction, which is operated by Andzulis and his brother, Thomas Andzulis. In January 1996, the township experienced major road flooding which caused road damage. After Susquehanna County was declared a state and federal disaster area, T.R. Williams, who is a Clifford Township Supervisor and Roadmaster, identified three township roads that were in the most need of repair: Sweatland Road, Old Schoolhouse Road and Chesnick Road. Due to the declared disaster, the township suspended the requirements pertaining to performing public works, entering contracts, incurring obligations, employing temporary workers, renting equipment, purchasing supplies and materials and appropriating or expending public funds. Supervisor Williams hired all the contractors for the emergency road projects without seeking competitive bids. Williams assigned the following contractors to work on the three township roads: Holton, Inc. - Andzulis Brothers Construction on Sweatland Road; Brozonis Excavating on OId Schoolhouse Road; and Marty Barhite on Chesnick Road. Andzulis was selected by Williams to work on Sweatland Road because Andzulis lived in close proximity to that road. Andzulis' businesses performed repairs not only to Sweatland Road but also on Tinkerbrook Road. Invoices in the amount of $2,405 for the Sweatland Road work and $520 for Tinkerbrook Road were submitted which totaled $2,925. The employees of Holton, Inc. who worked on the Sweatland Road project included two brothers of Andzulis and a third employee. The work performed on Tinkerbrook Road by Holton, Inc. was not authorized by Supervisor Williams or the Township Board. Clifford Township issued a check in the amount of $2,925 to Holton, Inc. in payment of the submitted invoice. That payment was approved as part of a group of bills at the monthly Board meeting. Andzulis made the motion to approve the payment of bills which passed by a unanimous vote. Andzulis deposited the township check into a savings account over which he had sole signature authority. Although Supervisor Williams had assigned Brozonis Excavating to work on Old Schoolhouse Road, Andzulis Brothers Construction began working on that road before Brozonis Excavating had an opportunity to start. Williams did not give Andzulis, Holton, Inc. or Andzulis Brothers Construction any authorization to work on the OId Schoolhouse Road. Andzulis Brothers Construction submitted an invoice to the township based upon $695 for work on Tinkerbrook Road and $8,142.50 for work on Old Schoolhouse Road, with an incorrect total of $8,460. Subsequently, Andzulis Andzulis, 96- 093 -C2 Page 15 Brothers Construction submitted another invoice for additional work done on Old Schoolhouse Road, which totaled $2,310. In that Supervisor Williams did not authorize Andzulis Brothers Construction to work on Tinkerbrook or OId Schoolhouse Road, Andzulis Brothers Construction began working on those two roads at the direction of Andzulis. Subsequently, Andzulis made a motion to approve bills which included the $8,460 invoice from Andzulis Brothers Construction company which motion carried by a unanimous vote. The check in payment to Andzulis Brothers Construction was also endorsed by Andzulis in his capacity as a Clifford Township Supervisor. Andzulis then cashed the check. As to the invoice of Andzulis Brothers Construction for $2,310, that invoice was approved for payment at a Board meeting at which Andzulis was absent. A township check was issued which was co- endorsed by Andzulis as a Supervisor. Because the township was part of the declared disaster area, it was eligible to receive funds under the Public Assistance Program of the Stafford Act. As an applicant for disaster assistance, the township agreed to certain conditions: compliance with all federal, state and local laws; establishment of internal safeguards to prevent employees from using their positions for private gain; and compliance with the Commonwealth Contractors Integrity Provision, which prevents public officials /employees of a municipal applicant from having any financial interest in any contract without the consent of the Commonwealth. Damage survey reports (DSR) were filed by PEMA on work that was completed in the township. The DSR for Old Schoolhouse Road reflected that the contractor was Andzulis Brothers Construction. Although the FEMA /PEMA estimate for the cost of restoration of Old Schoolhouse Road was $4,482, Andzulis Brothers Construction was paid $10,075 for that project. Thus, the payment to Andzulis Brothers Construction exceeded the estimated cost by $5,593. The DSR for Tinkerbrook Road reflected that the contractor was Andzulis Brothers Construction and Holton, Inc. Although the estimated cost to restore Tinkerbrook Road was $1,390, Andzulis Brothers Construction and Holton, Inc. payments were $1,125 for that project, or $265 Tess. The total amount of payments by Clifford Township to Andzulis Brothers Construction and Holton, Inc. for all of the projects amounted to $13,695. By excluding the expenses of $1,564.94 incurred by those two companies for the township projects, the private pecuniary benefit amounted to $12,130.06. Having summarized the above relevant facts, we must now determine whether the actions of Michael Andzulis violated Section(s) 3(a) and 3(f) of Act 9 of 1989. In applying the provisions of Section 3(a) of Act 9 of 1989 to the instant matter, we find no violation of Section 3(a) as to the Sweatland Road project. Since Supervisor Williams selected Holton, Inc. for that road work, Andzulis did not use the authority of office in the award of that contract. Without a use of authority of office, there was no violation of Section 3(a) as to that aspect of the violation. Perino, Order No. 980. We find two separate violations of Section 3(a) when Andzulis used the authority of office to direct road restoration work to Holton, Inc. or Andzulis Brothers Construction for Tinkerbrook and Old Schoolhouse roads. Such actions by Andzulis were uses of authority of office because Supervisor Williams had chosen another company to do the work on OId Schoolhouse Road and no contractor for Tinkerbrook Road. But for the fact that Andzulis was a Supervisor, the businesses with which he was associated would not have obtained those contracts. Juliante, Order 809. Andzulis, 96- 093 -C2 Page 16 Holton, Inc. and Andzulis Brothers Construction are businesses with which Andzulis is associated. The term "business with which associated" is defined under the Ethics Act as follows: any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. 65 P.S. 402. Andzulis owns Holton, Inc. and has a 50% ownership interest in Andzulis Brothers Construction. The uses of authority of office resulted in private pecuniary benefits consisting of the financial gain that Holton, Inc. and Andzulis Brothers Construction received on both of those road restoration projects. In finding these two violations by Andzulis, we follow our decision in Spotts, Order 1050, where we found that Spotts violated Section 3(a) of Act 9 of 1989 when he unilaterally selected himself to be a borough contractor for snow removal work on the borough roads. We find technical violations of Section 3(a) of Act 9 of 1989 regarding Andzulis' actions of making motions, voting to approve bill lists, including payments to businesses with which he was associated, and endorsing township checks in payment to businesses with which he was associated. Thebes, Order No. 1027. The uses of authority of office resulted in private pecuniary benefits consisting of the financial gain received by Holton, Inc. and Andzulis Brothers Construction. Turning to Section 3(f) of Act 9 of 1989, we find three separate violations of that provision of law when Holton, Inc. or Andzulis Brothers Construction performed road restoration work as to Sweatland Road, Old Schoolhouse Road and Tinkerbrook Road. As to each of those restoration projects, the contracts were in excess of $500 and were not .put out for bids. In addition, the contracts were awarded to Holton, Inc. and /or Andzulis Brothers Construction which are businesses with which Andzulis is associated. See, Spotts, supra. Turning to the matter of restitution, 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, since it has been determined that a financial gain has been obtained in violation of the Ethics Law, restitution is appropriate. In fact, restitution is clearly warranted when we consider that Andzulis Brothers Construction was paid $5,593 more than the FEMA /PEMA estimate of $4,482 for the work on Old Schoolhouse Road. Further, Old Schoolhouse Road was assigned to a different contractor by Supervisor Williams but Andzulis had his own business perform the work before the assigned contractor could begin. Similarly, Andzulis had his business do the work on Tinkerbrook Road for which Supervisor Williams had not even assigned a contractor. Lastly, we note that the financial gain was received despite the prohibitions against self - dealing as to the federal /state disaster relief funds that were received. The private pecuniary benefit received by Andzulis or the businesses with which he is associated amounted to $12,130.06 after expenses. However, the foregoing amount includes the $2,405 that was received as to the Sweatland Road work on which we found no violation as to Section 3(a) of Act 9 of 1989. By excluding the sum of $2,405 from the private pecuniary benefit of $12,130.06, we find that the financial gain received amounts to $9,725.06. Andzulis is directed to pay restitution in the amount of $9,725.06 within 30 days of the mailing of this Order through this Commission to Clifford Township. Non - compliance will result in the institution of an order enforcement action. Andzulis, 96- 093 -C2 Page 17 IV. CONCLUSIONS OF LAW: 1. Andzulis, as a Supervisor in Clifford Township, Susquehanna County, is a public official subject to the provisions of Act 9 of 1989. 2. Andzulis did not violate Section 3(a) of Act 9 of 1989 when a business with which he was associated performed road restoration work on Sweatland Road because another supervisor selected Andzulis' business to do that road work. 3. Andzulis violated Section 3(a) of Act 9 of 1989 when he used the authority of office to award road restoration work as to Old Schoolhouse Road to a business with which he was associated. 4. Andzulis violated Section 3(a) of Act 9 of 1989 when he used the authority of office to award road restoration work as to Tinkerbrook Road to businesses with which he was associated. 5. Technical violations of Section 3(a) of Act 9 of 1989 occurred when Andzulis used the authority of office consisting of making motions, voting to approve bills lists or endorsing checks to businesses with which he was associated in payment of services provided by those companies to restore township roads. 6. Andzulis violated Section 3(f) of Act 9 of 1989 when a business with which he was associated contracted with the township to restore Sweatland Road, which contract was in excess of $500 and was not awarded through an open and public process. 7. Andzulis violated Section 3(f) of Act 9 of 1989 when a business with which he was associated contracted with the township to restore Old Schoolhouse Road, which contract was in excess of $500 and was not awarded through an open and public process. 8. Andzulis violated Section 3(f) of Act 9 of 1989 when businesses with which he was associated contracted with the township to restore Tinkerbrook Road, which contract was in excess of $500 and was not awarded through an open and public process. In Re: Michael Andzulis File Docket: 96- 093 -C2 Date Decided: 4/30/98 Date Mailed: 5/11/98 ORDER NO. 1081 1. Andzulis, as a Supervisor in Clifford Township, Susquehanna County, did not violate Section 3(a) of Act 9 of 1989 when a business with which he was associated performed road restoration work on Sweatland Road because another supervisor selected Andzulis' business to do that road work. 2. Andzulis violated Section 3(a) of Act 9 of 1989 when he used the authority of office to award road restoration work as to Old Schoolhouse Road to a business with which he was associated. 3. Andzulis violated Section 3(a) of Act 9 of 1989 when he used the authority of office to award road restoration work as to Tinkerbrook Road to businesses with which he was associated. 4. Technical violations of Section 3(a) of Act 9 of 1989 occurred when Andzulis used the authority of office consisting of making motions and voting to approve bills lists or endorsing checks to businesses with which he was associated in payment of services provided by those companies to restore township roads. 5. Andzulis violated Section 3(f) of Act 9 of 1989 when a business with which he was associated contracted with the township to restore Sweatland Road, which contract was in excess of $500 and was not awarded through an open and public process. • 6. Andzulis violated Section 3(f) of Act 9 of 1989 when a business with which he was associated contracted with the township to restore Old Schoolhouse Road, which contract was in excess of $500 and was not awarded through an open and public process. 7. Andzulis violated Section 3(f) of Act 9 of 1989 when businesses with which he was associated contracted with the township to restore Tinkerbrook Road, which contract was in excess of $500 and was not awarded through an open and public process. 8. Andzulis is directed to make restitution within 30 days of the mailing date of this Order in the amount of $9,725.06 through this Commission to Clifford Township. Noncompliance with the foregoing will result in the institution of an order enforcement action. BY THE COMMISSION, et l a 4 tu.ot) E eu. DANEEN E. REESE, CHAIR