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HomeMy WebLinkAbout1100 GroganIn Re: Martin Grogan STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 Fite Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Julius Uehlein Louis W. Fryman John J. Bolger Frank M. Brown Susan Mosites Bicket 96- 028 -C2 Order No. 1 100 12/15/98 12/29/98 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 fig., 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 held. The record is complete. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11, Act 93 of 1998, which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and 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 Chapter 11 of Act 93 of 1998. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $ 1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Grogan, 96- 028 -C2 Page 2 I. ALLEGATION: That Martin Grogan, a public official /public employee in his capacity as a real estate tax collector for Moon Township, Allegheny County, violated Sections 3(a) and 3(f) of the Ethics Law (Act 9 of 1989) when he used the authority of his office for the private pecuniary benefit of himself and a member of his immediate family and when he entered into a contract with the governmental body in excess of $500 without an open and public process by leasing office space for the tax collectors office in a building owned by him and his brother. 11. FINDINGS: A. Admitted Pleadings 1. The Investigative Division of the State Ethics Commission received a signed, sworn complaint alleging that Martin Grogan violated provisions of the State Ethics Law (Act 9 of 1989). 2. Upon review of the complaint the Investigative Division initiated a preliminary inquiry on March 29, 1996. 3. The preliminary inquiry was completed within sixty days. 4. On May 28, 1996, a letter was forwarded to Martin Grogan 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. Z 129 438 604. b. The domestic return receipt bore the signature of M. Grogan, with a delivery date of June 3, 1996. 5. On October 11, 1996, 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 November 4, 1996, .granting the ninety day extension. 7. On February 18, 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 February 20, 1997, granting the ninety day extension. 9. Periodic notice letters were forwarded to Martin Grogan 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 May 23, 1997. 11. Martin Grogan has served as the elected Tax Collector for Moon Township, Allegheny county, since 1959. Grogan, 96- 028 -C2 Page 3 a. Moon Township is a Second Class Township. 12. Grogan's compensation as Tax Collector is set by both Moon Township and the Moon Area School District. a. Joint resolutions are adopted by the Moon Township Supervisors ( "Township "), setting Tax Collector compensation and expenses for four (4) year periods. b. _ The Moon Township School Board of Directors ( "School District ") have approved these resolutions. c. Included in Grogan's compensation package is an allowance for office expense reimbursement. 13. Moon Township Resolution #R -14 -1993, adopted February 10, 1993, by the Township and School District, set compensation for the elected Real Estate Tax Collector covering the period January, 1994, through December, 1997. a. Approved compensation included a salary of $29,500,00, verifiable office expenses totaling $21,500.00, and commission on the receipt of delinquent accounts collected, tax certifications fees, and Moon Transportation Authority tax payments. 14. Verifiable office expenses are split between the Township and School District as follows: a. Moon Area School District $15,000.00 [sic] b. Moon Township $ 6,000.00 '15. Moon Township annually sends a check in an amount of $6,000.00 to the School District to cover its portion of the expenses. a. All expenses payments made to the Tax Collector are then made by the School District. b. Expense payments are made following submission of receipts by the tax paper which verify expenses. 16. Verifiable office expenses was [sic] defined in Moon Township Resolution No. R -14 -1993, as follows: "Personnel, equipment, materials and supplies, including all postage, printing books, blanks, forms and bonds. Expense invoices billed directly to the Township or School District and those bills for mandated expenses such as Tax Collector's bonds, tax printing bills and tax postage, etc., shall be deducted from the Office of the Tax Collector's expenses or reserved for payment prior to any distribution to said office for items not mandated by law. Should insufficient funds remain in the expense accounts for any mandated expense, the expense will then be automatically Grogan, 96- 028 -C2 Page 4 taken from the Office of the Tax Collector's Township and MASD Compensation account." 17. Verifiable office expenses under Resolution No. R- 14- 1993, did not include or reference rental expenses. 18. Section 7, Item 10 of Resolution No. R -14 -1993, provided "the township will no Longer be responsible for providing office space, utilities and associated services to the Office of Tax Collector without cost. The township will endeavor to provide space for this office at a reasonable cost as a public convenience." 19. Township provided office space was included as part of prior Tax Collector Compensation Resolutions. a. Section 7 of Resolution No. R -15 -1989 approved on February 8, 1989, covering the period of January 1, 1990, through December 31, 1993, provided: "Rent for office space and payment of utilities shall be provided by the township, while the tax collector is solely responsible for telephone and all consumable supplies." 20. Grogan operated the Tax Collector's Office from the Moon Township Municipal Building from approximately 1959 until January, 1994. a. Moon Township provided Grogan with rent free office space in the Township building through December 31, 1993. 21. As a result of the passage of Resolution No. R -14 -1993, effective January 1, 1994, Moon Township no longer provided the Tax Collector with free office space in the Township building. a. The Township made Grogan aware of this prior to him running for re- election in 1993. b. On May 7, 1991, Gregory Smith, Moon Township Manager, advised Grogan that at the expiration of Resolution No. R- 15-89, the Township intended to obtain market value rent for the type of office space occupied by Grogan. 22. :Moon Township would no longer provide office space as it was running out of useable space in the municipal building located at 1000 Beaver Grade Road, Moon Township, PA. a. Additional space was needed to accommodate expanding Township departments. b. The supervisors decided to obtain another facility to house certain Township offices due to the space shortage. 23. On December 21, 1992, Moon Township purchased the former Montour Heights County Club, Cherrington Clubhouse, with the intent of converting it into a centrally located Township community service center. Grogan, 96- 028 -C2 Page 5 a. The supervisors wanted to locate all Township offices, its Municipal Authority, Solid Waste Department, and library in the same location for convenience. 24. Between May 7, 1991, through November 10, 1993, there were ongoing discussions and correspondence between Township officials and Grogan regarding Grogan occupying space in the newly acquired Township building. a. There was a series of correspondence primarily between Township Manager Gregory Smith and Tax Collector Grogan regarding these negotiations. b. On August 19, 1993, Smith sent Grogan a letter offering space in the new Municipal Building and forwarded a proposed lease. 25. On November 10, 1993, following Grogan's re- election, Smith advised Grogan of the rental rates for office space in the new municipal building. a. The rate offered was $12.00 per square foot for office space and $6.00 per square foot for all storage space. b. 490 square feet was to be allocated for the Tax Collector's office. c. Grogan was also advised that since office space would not be finished before the start of his latest term, the Township would offer his existing space at $10.00 per square foot and storage space at $4.00 per . square foot beginning in January, 1994. . d. New office space was expected to be completed by May, 1994. e. A written response was needed by November 12, 1993. 26. Rental fees for office space were part of Moon Township Resolution No. R -9- 1 enacted January 12, 1994. a. R -9 -1994 supplemented R -9 -1993. 27. Rental fees for municipal office space set by way of Township Resolution R- 9- 1994, included rates for both the old and new Township buildings. a. Section 12 of R -9 -1994 includes the following rate schedule applicable to the Real Estate Tax Collector. Period 01/01/94-04/30/94 05/01/94 - Present 05/01/94 - Present Building Price /Square Foot Old Twp. $10.00 Old Twp. $18.00 New Twp. $12.00 Grogan, 96- 028 -C2 Page 6 b. The $12.00 square foot rate offered Grogan effective May 1, 1994, was the same rate offered to the Municipal Authority and Earned Income Tax Collector, both of which located in the new building. 28. During the design phase of the new Township building, Township officials were unable to reach an agreement with Grogan for office space. a. Grogan wanted to stay in the space he was occupying in the old Township building. b. Grogan did not want to pay rent at either location. c. The final design allocated 336.7 square feet of office space for the Tax Collector's office. 29. Grogan did not locate the tax office in the Township municipal building. a. From January 1, 1994, to February 1, 1994, Grogan used space in the Township Municipal Building. b. From February, 1994, through the present [sic], Grogan has operated the Moon Township Tax Office, at 767 Narrows Run Road, Moon Township. 30. Martin Grogan, his brother Robert Grogan, and their spouses own th PA. e property located at 767 Narrows Run Road, Moon Township, a. Ownership is recorded in Allegheny County Deed Book, Volume 4809, pages 293 -296. b. This is the same property that Grogan has chosen to locate the tax office. 31. Since February, 1994, Grogan has submitted expenses for reimbursement which have included rent. a. The expense items were submitted to the School District for payment. b. The expenses submitted included receipts for phone bills, payroll, miscellaneous office supplies and rental payments. 32. It is the Tax Collector's discretion as to which expenses he will seek reimbursement for up to the allowable annual amount of $21,500.00 as set by Resolution R -14- 1993. a. Annual expenses exceeding $21,500.00 are the responsibility of the Tax Collector. 33. The payment of expenses for the Real Estate Tax Collector was handled by the Moon Area School District as set by Resolution R- 14 -1993. Grogan, 96- 028 -C2 Page 7 34. As part of requests for expense reimbursements Grogan submitted receipts for rental payments. a. The receipts were made out to Martin Grogan and reflected payments in the form of checks in the amount of $500.00 for monthly rental of the property at 769 Narrows Run Road. b. Check numbers were not reflected on the receipts. c. The receipts bear the signature of Robert Grogan. d. All of the receipts for rent from 1994 through 1996 are numbered in sequence. 35. Grogan submitted office rental invoices to the Moon School District on a monthly basis in the amount of $500.00 from February, 1994, through March, 1996. a. 1994 Month January February March April May June July August September October November December b. 1995 January February March :April May June July August- November c. 1996 December (1995) January February March*** Amount None [sic] $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $5,500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 ** None $3,500.00 $ 500.00 $ 500.00 $ 500.00 $ 500,00 $2,000.00 Amount Paid None $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 0.00* $ 0.00* $ 0.00* [sic] $4,000.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 None N/A $3,500.00 $ 500.00 $ 500.00 $ 500.00 $ 500.00 $2,000.00 Receipt No. N/A 492001 492002 492003 492004 492005 492006 492007 492008 492009 492010 Not Attached 492012 492013 492014 492015 492016 492017 492018 492023 492024 492025 492026 Grogan, 96- 028 -C2 Page 8 Reimbursement payments were not made to Grogan in October, November and December, 1994, as Grogan had received the maximum expenses for that year. Reimbursement for rent was not sought for the period August through November, 1995, because the total maximum yearly expenses of $21,500 had been paid by the School District by August, 1995. No rent reimbursement was sought after March, 1996. 36. The rental receipts submitted by Martin Grogan to the School District were not prepared by Robert Grogan. a. Martin Grogan prepared the receipts for rental payments to facilitate the receipt of expense money from the School District during 1994, 1995 and 1996. If receipts had not been submitted, no rental reimbursements would have been made. 37. Grogan received the following payments from the School District for expense reimbursements, including rent. a. 1994 ** * ** Check No. Date Amount Account Deposited In 32010 04/30/94 $ 8,919.86 Bell Federal Savings & Loan 32521 06/30/94 $ 2,204.41 Bell Federal Savings & Loan 32769 07/31/94 $ 6,874.43 Bell Federal Savings & Loan 33442 09/30/94 $ 3,168.72 Bell Federal Savings & Loan 33860 10/31/94 $ 332.58 Mellon Bank $21,500.00 b. 1995 35214 02/28/95 $ 5,754.61 Bell Federal Savings & Loan 35504 03/31/95 $ 3,333.25 Bell Federal Savings & Loan 36094 05/31/95 $ 6,376.44 Bell Federal Savings & Loan 36367 06/30/95 $ 3,325.67 Bell Federal Savings & Loan 36909 08/31/95 $ 2.710.02 Ellwood Savings Bank $21,500.00 c. 1996 38527 01/31/96 $ 3,320.03 Bell Federal Savings & Loan 38805 02/29/96 $ 3,096.33 Mellon Bank 39136 03/31/96 $ 3,098.04 Ellwood Savings Bank 39516 04/30/96 $ 3,350.80 Bell Federal Savings & Loan 04025 07/31/96 $ 8,041.62 04075 08/31/96 $ 593.18 $20,906.82 38. All of the expense reimbursements checks received by Grogan were deposited into one of three bank accounts. Grogan, 96- 028 -C2 Page 9 Check Number Bank 32010 Bell Federal Savings & Loan 32521 Bell Federal Savings & Loan 32769 Bell Federal Savings & Loan 33442 Bell Federal Savings & Loan 33860 Mellon Bank 35214 Bell Federal Savings & Loan 35504 Bell Federal Savings & Loan 36094 Bell Federal Savings & Loan 36367 Bell Federal Savings & Loan 36909 Ellwood Savings Bank 38527 Bell Federal Savings & Loan 38805 Mellon Bank 39136 Ellwood Savings Bank 39516 Bell Federal Savings & Loan 39. An affidavit dated May 7, 1997, submitted by Martin Grogan to the Investigative Division of the State Ethics Commission asserted that he and his brother along with their wives owned the property at 767 Narrows Run Road, Coraopolis, PA. a. The property consists of two (2) apartments on the second floor and the Tax Collector's office on the first floor. b. The second floor tenants pay a total of $490 per month rent while the Tax Collector pays $ 500 per month. c. The tenants do not have a written lease. d. A joint account titled Martin T. and Beatrice Grogan and Robert P. and Jean Grogan is maintained at the First Western Bank and is used as a rental account. e. The account is used as the depository for all rent collected and from which all bills, including taxes, remodeling and repairs are paid. 40. Martin and Beatrice Grogan maintain an account at Mellon Bank, Account No. 282 -9728. a. Beatrice Grogan is the wife of Martin Grogan. :b. Between July, 1994, and May, 1996, regular payments in the amount of $ 500.00 were made to Martin Grogan. c. The checks were all signed by Beatrice Grogan. 41. Checks were issued to Martin Grogan by Beatrice Grogan as follows: a. Check Number Date Posted Amount 1599 07/11/94 $ 500.00 1626 08/08/94 $ 500.00 1637 09/06/94 $ 500.00 1684 11/04/94 $ 500.00 Grogan, 96- 028 -C2 Page 10 12/05/94 $ 500.00 01/09/95 $ 500.00 02/06/95 $ 500.00 03/20/95 $ 500.00 04/10/95 $ 500.00 05/16/95 $ 500.00 06/05/95 $ 500.00 07/10/95 $ 500.00 08/07/95 $ 500.00 09/18/95 $ 500.00 10/11/95 $ 500.00 11/06/95 $ 500.00 12/04/95 $ 500.00 01/08/96 $ 500.00 02/05/96 $ 500.00 03/18/96 $ 500.00 04/08/96 $ 500.00 05/06/96 $ 500.00 TOTAL $11,500.00 Check numbers 1785, 1846, 1916 and 2017 indicated' "rent" in the memo portion of the check. 42. All of the checks listed [above]. . were deposited into Account No. 7113649 at First Western Bank. a. This account is controlled by Martin Grogan, Robert Grogan and Beatrice Grogan who have signature authority for this account. 1706 1741 1761 1785* 1804 1837 1846* 1871 1892 1910* 1942 1962 1986 2017* 2045 2060 2076 2101 b. This is the same account as referenced ... [above]. 43. Payments from Account No. 7113649 were made in part to pay expenses on the building at 767 Narrows Run Road owned in part by Martin Grogan. Testimony 44. Gregory Smith is the Township manager and secretary /treasurer for Moon Township, Allegheny County. a. The elected Tax Collector for Moon Township is a compensated position paid by both the School District and Township. (1) The School District and Township allow the Tax Collector expenses as per a resolution. b. Prior to 1994, Grogan was provided office space, free of rent, in the Moon Township Municipal Building. c. The Township purchased a building, called "the Community Service Center," wherein all the offices would be consolidated, along with water, sewer and other facilities. Grogan, 96- 028 -C2 Page 11 (1) Officials occupying the building, including Grogan, would be charged rent based upon a square foot calculation. (a) The officials were consulted regarding their needs for office space. (b) Rent was contemplated at a rate of $10 to $12 per square foot. (2) Grogan did not supply definitive information as to his office needs in the new building. (a) The Township allocated more space to Grogan plus storage space. (3) When the Township opened the new building in 1994, Grogan chose to occupy a different office of his choosing. (a) Grogan remained in that office through the end of his term as Tax Collector. (b) The stated monthly rental was $500. d. The Tax Collector has the option of choosing where to locate the Tax Collector's office. e. The resolution for the compensation of the Tax Collector was adopted before the election. 45. Martin Grogan was the Tax Collector for the Township and School District. a. Any employees in the tax office were paid from the Tax Collector's expense account. b. Grogan and his wife maintained several bank accounts relative to the office of Tax Collector. (1) The Bell Federal Savings and Loan account was set up to pay Tax Collector office expenses. (2) The Ellwood Savings Bank account was used for deposits that were not immediately needed so that interest could accrue. (3) The Mellon Bank account was a "regular" account. (4) There was a rental account between Grogan and his brother for rent in First Western, formerly Beaver Trust. c. Grogan states that he submitted the $500 monthly rental invoices to the Township and School District to show the costs of operation of the Tax Collector's office but later stopped because of a ruling of the State Ethics Commission Month Total Expenses Submitted Rent Expenses minus rent Year -to -Date Totals Jan. 1,986.76 261.67 1,725.09 1,986.76 Feb. 2,682.34 500.00 2,182.34 4,669.10 March 2,334.18 500.00 1,834.18 7,003.28 April 2,199.92 500.00 1,699.92 9,203.20 May 2,204.41 500.00 1,704.41 11,407.61 June 3,553.09 500.00 3,053.09 14,960.70 July 3,321.34 500.00 2,821.34 18,282.04 Aug. 3,168.72 500.00 2,668.72 21,450 76 Sept. 3,325.63 500.00 2,825.63 24,776.39 Oct. 3,100.01 500.00 2,600.01 27, 876.40 Nov. 3,103.07 500.00 2,603.07 30,979.47 Dec. 3,322.10 500.00 2,822.10 34,301.57 Totals 34,301.57 5,761.67 28,539.90 Grogan, 96- 028 -C2 Page 12 and because the expenses exceeded $21,500 so that he never got paid anyway. d. The expenses for the office of Tax Collector included wages, telephone, equipment, and similar items. (1) The total expenses for 1994 were $34,301.5 (2) The total expenses for 1995 were $38,092.77. e. Grogan kept the Tax Collector's office in the old municipal office through January, 1994 and then moved into the building owned by his brother and himself. f. The expenses that Grogan was entitled to as Tax Collector were reimbursable up to a maximum of $21,500 per year. Grogan received monthly receipts as to rent for the Tax Collector's office for the period from February, 1994 through March, 1996. C. Documents 46. Exhibit 2 consists of photocopies of documents relating to expenses for Grogan as Tax Collector for the calendar year 1994. g ent for month of January, 1994 paid to Moon Township. 2 Excluding the January, 1994 rental payment, the stated total rent for the Tax Collector's new office would be $5,500.00. Month Total Expenses Submitted Rent Expenses minus rent Year -to -Date Totals Jan. 3,035.53 500.00 2,535.53 3,035.53 Feb. 2,719.08 500.00 2,219.08 5,754.61 March 3,333.26 500.00 1,834.18 9,087.87 April 3,098.56 500.00 2,598.56 12,186.43 May 3,104.88 500.00 2,604.88 15,291.31 June 3,325.67 500.00 2,825.67 18,616.98 July 3, 336.81 500.00 2,836.81 21,953.79 Aug. 3,095.76 500.00 2,595.76 25,049.55 Sept. 3,324.93 500.00 2,824.93 28,374.48 Oct. 3,300.52 500.00 2,800.52 31,675.00 Nov. 3,097.74 500.00 2,597.74 34,772.74 Dec. 3,320.03 500.00 2,820.03 38,092.77 Totals 38,092.77 6,000.00 32,092.77 Month Total Expenses Submitted Rent Expenses minus rent Year -to -Date Totals Jan. 3,096.33 500.00 2,596.33 3,096.33 Feb. 3,098.04 500.00 2,598.04 6,194.37 March' 3,350.00 500.00 2,850.00 9,544.37 April 2,609.12 2, 609.12 12,153.49 May 2,828.58 2,828.58 14,982.07 June 2,603.92 2,603.92 17,585.99 July 2,700.21 2,700.21 20,286.20 Aug. 3,003.76 3,003.76 23,289.96 Sept. 2,741.74 2,741.74 26,031.70 Oct. 2,742.98 2,742.98 28,774.68 Grogan, 96- 028 -C2 Page 13 47. Exhibit 3 consists of photocopies of documents relating to expenses for Grogan as the Tax Collector for the calendar year 1995. Admitted Pleadings reflect this monthly rental submitted in 1996. 48. Exhibit 4 consists of photocopies of documents relating to expenses for Grogan as Tax Collector for the calendar year 1996. Month Total Expenses Submitted Rent Expenses minus rent Year -to -Date Totals Nov. 3,042.48 3,042.48 31,817.16 Dec. 2,858.58 2,858.58 34,675.74 Totals 34,675.74 1,500.00 33,175.74 Grogan, 96- 028 -C2 Page 14 Act 93 of 1998, Chapter 11, §1102. tnterlineations exist as to Expense Payments sheet for the given month III. DISCUSSION: Initially we must consider a Motion to Dismiss filed by Grogan at the hearing. The proffered basis is that the testimony elicited at the hearing warrants a dismissal. The theory for the Motion compels a denial because if we cannot reach a result until after the record is reviewed, there can be no basis for granting this type of motion ab initio. The Motion is accordingly denied. We now will make our analysis and render a decision on the merits. At all times relevant to this matter, the Respondent, Martin Grogan, hereinafter Grogan, was a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401,, ,. /Act 93 of 1998, Chapter 11. The issue is whether Grogan violated Sections 1103(a) and 1103(f) of the Ethics Act when he leased office space for the. Tax Collector's office in a building owned by himself, his brother, and their spouses. Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. Act 93 of 1998, Chapter 11, §1103(a). The term "conflict of interest" is defined under the Ethics Act as follows: Section 1102. 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. The term 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. Grogan, 96- 028 -C2 Page 15 Section 1 103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Section 1 103(f) of the Ethics Act provides: Section 1103. Restricted activities. (f) Contract. - -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 shalt 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. Act 93 of 1998, Chapter 11, §1103(f). Section 1 103(f) of the Ethics Act 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. Grogan was the Tax Collector for Moon Township and the Moon Area School District from 1959 through December 1997. Until January of 1994, Grogan's tax office was housed in the Township Municipal Building. The School District and Township through resolutions approved a salary for the Tax Collector plus verifiable office expenses up to a yearly maximum. Such resolutions are adopted prior to the election of the Tax Collector, with the compensation and maximum expenses set for the following term of office. For the years at issue, 1994 through 1996, the salary was $29,500.00 and the maximum yearly allowance for expenses was $21,500.00 — $15,500.00 paid by the School District and $6,000.00 by the Township. Although the Township had provided free office space for the Tax Collector's office, circumstances changed after December 21, 1992, when the Township Grogan, 96- 028 -C2 Page 16 purchased the former Montour Heights Country Club for the purpose of converting it into a centrally - located Township Community Service Center, which would house all Township offices, the Municipal Authority, the Solid Waste Department, and the library. Ongoing discussions and correspondence occurred between the Township and Grogan regarding the relocation of the Tax Collector's office into the newly- acquired building. The Township Manager advised Grogan that at the expiration of the current resolution, the Township intended to obtain market value rent for the office space occupied by him as Tax Collector. This notice was given to Grogan prior to his running for re- election in 1993. The charging of rent for space applied to all officials who would occupy the new Community Service Center. The Township proposed that Grogan could occupy space in the new building at $10 to $12 per square foot with storage space at about $4 per square foot. However, Grogan did not commit to having the Tax Collector's office relocated into the new building. In January, 1994, Grogan moved out of the old Township Municipal Building and relocated the Tax Collector's office into a building that is owned by Grogan, his brother, and their spouses. From February 1, 1994 through March, 1996, Grogan included on his monthly expense payments as Tax Collector an item of $500.00 for rent for the Tax Collector's office. Grogan obtained monthly rental receipts for the Tax Collector's office in that building. All expenses submitted by Grogan were reimbursed until he reached the maximum of $21,500.00 for that year. For each of the three, years in question, Grogan's expenses exceeded $21,500.00, irrespective of rent.: Grogan stopped submitting the $500.00 monthly rental invoices from April, 1996 through the end of his term. Grogan asserts that he stopped listing rent because of a ruling of this Commission and because rent would not be reimbursed since his other expenses exceeded the $21,500.00 maximum. Having summarized the above relevant facts, we must now determine whether the actions of Grogan violated Sections 1103(a) and 1103(f) of the Ethics Act. We shall first consider an application of Section 1103(a) followed by our analysis of Section 1103(f) of the Ethics Act. As to Section 1103(a) of the Ethics Act, there was a use of the authority of office on the part of Grogan in selecting the building owned by Grogan, his brother; and their spouses as the new office for the Tax Collector. See, Juliante, Order No. 809. But for the fact that Grogan was Tax Collector, he could not have made the selection as to where the Tax Collector's office would be relocated. The only remaining issue is whether there was a private pecuniary benefit that inured to Grogan, his brother, or their spouses as a result of his use of authority of office. The Investigative Division argues that a private pecuniary benefit was received and advocates for a violation on two separate theories. The first argument is that Grogan submitted expenses to the School District on a monthly basis which included rent for the Tax Collector's office. Since Grogan was reimbursed for those expenses up to $21,500.00, the Investigative Division argues that Grogan received reimbursement for rent which was a private pecuniary benefit. Second, the Investigative Division argues that Grogan obtained a private pecuniary benefit because he reduced his out -of- pocket expenditure for the payment of rent by relocating into the building owned by Grogan, his brother, and their spouses rather than relocating into the new Township building or to some other independently -owned building where Grogan would have an outlay of rental expenses. Grogan, 96- 028 -C2 Page 17 We are guided in our analysis by McGuire, Order No. 945, reversed on other grounds, McGuire and Marchitello v SEC, 657 A.2d 1346 (1995). In the cited case, we had to determine whether McGuire violated Section 3(a) of the Ethics Law as to the allegation that he received compensation in excess of that which was authorized in law for an authority board member. We opined that the result under the Ethics Law would not be dependent upon bookkeeping methods (reviewing accounts from which compensation was payable) of the governmental body and that an offset method would be used to determine whether there was_excess compensation (by crediting underpayments of officer's pay to overpayments of board meeting pay): In this case, the Investigative Division attempted to identify particular payments to McGuire as either "meeting pay" or "officer's pay" based upon the account from which the money was drawn. We do not feel that it is necessary or prudent to do so. First, it is clear from the authority meeting minutes that officer's pay in various amounts was authorized to come from both accounts. Second, conformance to Section 3(a) of the Ethics Law does not hinge upon the particular bookkeeping methods of the governmental body. Third, even if such an approach had any validity, there would be overpayments of meeting pay to be offset against underpayments of officer's pay. Our approach shall simply be to determine whether a private pecuniary benefit consisting of excess compensation was received by McGuire. 1d., at 38, 39 (emphasis added). From the principles in McGuire, we will not decide the rent issue by focusing upon the early months of each year but rather the whole year for which the annual expenses are set at a maximum of $21,500.00. Second, we will consider whether Grogan obtained any private pecuniary benefit as to the rental by offsetting rent against other expenses that could have been taken within the context of the $21,500.00 maximum expense allotment that Grogan received in each of the years 1994 through 1996. When we offset the payments received by Grogan for submitted rental expenses against other expenses, to which he was entitled, Grogan received $21,500.00 and no more so that there was no private pecuniary benefit. Regarding the first argument of the Investigative Division, Grogan's expenses for the years 1994 through 1996, exclusive of rent, exceeded the maximum of $21,500.00 to which he was entitled. Thus, whether Grogan did or did not include rent, the amount of expenses he received would be the same, namely, $21,500.00, which was Grogan's maximum expense allotment for each calendar -year. In each of the three years at issue, Grogan received his compensation plus $21,500.00. In each of the three years, Grogan received nothing more. Therefore, the rentals from 1994 into 1996 made no difference in what Grogan received. Even if we were to focus on the early months in each year where rent was submitted and reimbursed, the offset of the rental reimbursement with other expenses would result in Grogan still receiving only $21,500. Grogan did not obtain any private pecuniary benefit because he was entitled to be reimbursed for expenses of $21,500.00 in each of those years, irrespective of rent. The submission for rent by Grogan resulted in no private pecuniary benefit to Grogan, his spouse, brother, or sister -in -law. Parenthetically, a sister -in -law is not a member of Grogan's immediate family as that term is defined under the Ethics Act. The Investigative Division's second argument is that Grogan, by renting in a building owned by Grogan, his brother, and their spouses rather than in the new Grogan, 96- 028 -C2 Page 18 municipal building or some other independently -owned building where Grogan would have a greater outlay of expenses, reduced his out -of- pocket expenditures and obtained a private pecuniary benefit. We recognize that there is a private pecuniary benefit when a public official or employee uses government personnel, facilities, or equipment for private or business purposes, so that he would not have to pay such expenses out -of- pocket. See, Freind, Order No. 800; Rakowsky, Order No. 943; Hessinger, Order No. 931. However, all of those cases involved situations where the public officials /employees used such offices, facilities, equipment, or personnel .ate government expense so they did not have to make such payments themselves. We do not have that situation in the instant matter because there is no government expenditure from which Grogan could benefit. In this case, Grogan basically rented from himself, his brother, and their spouses privately to himself as Tax Collector. The "rent" may be viewed as a gift from Grogan, his brother, or their spouses to himself as Tax Collector. Nowhere did Grogan use government equipment facilities, equipment, or personnel to reduce or eliminate his own out -of- pocket expenses. What we essentially have in this case is a fiction as to rent, certainly as to the School District and Township which did not give any reimbursement over $21,500.00 if rent is considered. No matter how this case is viewed, the end result is the same - Grogan received his compensation and the maximum expense reimbursement, $21,500.00, irrespective of rent. Since Grogan received no more than to which he was entitled, there was no private pecuniary benefit. Accordingly, we find no violation of Section 1 103(a) of the Ethics Act when Grogan as Tax Collector relocated his office into a building owned by himself, his brother, and their spouses in that there was no private pecuniary benefit. We shall now consider whether Grogan's actions violated Section 1103(f) of the Ethics Act regarding the relocation of the Tax Collector's office from the former municipal building into the building that is owned by Grogan, his brother, and their spouses. As to Section 1103(f) of the Ethics Act, in order to establish a violation, there must be a contract between the public official, spouse, child, or business with which associated, and his governmental body of $500.00 or more, which was not done through an open and public process. We see the issue in this case as whether there was in fact a contract. The record establishes that Grogan relocated the Tax Collector's office in February, 1994 to a building that was owned by himself, his brother, and their spouses. There was no written lease agreement. Grogan included a $500.00 monthly fee on his expense reports to the Township and School District. Grogan's spouse wrote checks in the amount of $500.00 from one of the Tax Collector's bank accounts to Grogan as monthly rental payments. Grogan obtained monthly receipts in the amount of $500.00 for rent. While acknowledging that there are documents such as checks and receipts relating to the Tax Collector's office in the building owned by Grogan, his brother, and their spouses, we do not find that there was a contract for rent. There was no consideration for office space by the Tax Collector's office in the building . owned by Grogan, his brother, and their spouses. Just as in our analysis of Section 1103(a) above, Grogan did not receive any private pecuniary benefit, that is, financial gain, as to the rental of this property because he reached the maximum $21,500.00 in each year, regardless of whether rent was listed as an expense. Hence, what we have is a payment of $500.00 by Grogan from himself to himself, his brother, and their spouses. Contracting by a brother or sister -in -law of a public official is not even within Grogan, 96- 028 -C2 Page 19 the prohibition of Section 1 103(f) of the Ethics Act. Based upon these very unique facts and circumstances, we do not believe that a contract existed in that there was no value for a contract. Since there was no contract in this case but merely circular payments from Grogan to himself, his brother, and their spouses, we find no violation of Section 1103(f) of the Ethics Act. IV. CONCLUSIONS OF LAW: 1. Grogan, as a real estate Tax Collector in Moon Township, Allegheny County, was a public official /employee subject to the provisions of the Ethics Law. 2. Grogan did not violate Section 1103(a) of the Ethics Act when he relocated the Tax Collector's office into a building owned by himself, his brother, and their spouses in that no private pecuniary benefit was obtained. 3. Grogan did not violate Section 1103(f) of the Ethics Act as to the relocation of the Tax Collector's office into a building owned by himself, his brother, and their spouses in that no contract existed for the rental of the Tax Collector's, office. In Re: Martin Grogan ORDER NO. 1100 File Docket: 96- 028 -C2 Date Decided: 12/15/98 Date Mailed: 12/29/98 1. Martin Grogan, as a real estate Tax Collector in Moon Township, Allegheny County, did not violate Section 1103(a) of the Ethics Act when he relocated the Tax Collector's office into a building owned by himself, his brother, and their spouses in that no private pecuniary benefit was obtained. 2. Grogan did not violate Section 1103(f) of the Ethics Act as to the relocation of the Tax Collector's office into a building owned by himself, his brother, and their spouses in that no contract existed for the rental of the Tax Collector's office. BY THE COMMISSION, s A 6 a DANEEN E. REESE, CHAIR