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HomeMy WebLinkAbout1102 DuvallIn Re: Gerald Duvall Before: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 • File Docket: X -ref: Date Decided: Date Mailed: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Julius Uehlein Louis W. Fryman John J. Bolger Frank M. Brown Susan Mosites Bicket 97- 014-C2 Order N'o. 1 102 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 seq., by the above - named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was filed and a hearing was waived. The record is complete. A Consent Agreement was submitted by the parties to the Commission for consideration which was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11, Act 93 of 1998, which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998.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 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Duvall, 97- 014-C2 Page 2 I, ALLEGATION: That Gerald Duvall, a public official /public employee, in his capacity as a Supervisor for Providence Township, Lancaster County, violated Sections 3(a) and 3(f), 65 P.S. § §403(a) and (f) of the State Ethics Law (Act 9 of 1989) when he used the authority of office for the private pecuniary benefit of himself and /or a business with which he is associated by participating in discussions, actions and /or decisions of the Board of Supervisors resulting in purchases being made from Dombach Brothers, a business with which he is associated without an open and public process and when he participated in approving payments to that company; and when he participated in discussions and actions resulting in the purchase of a vehicle from a dealership owned by his brother. 11. FINDINGS: 1. Gerald Duvall has served as a supervisor for Providence Township, Lancaster County, since January, 1990. a. Duvall has annually been appointed Chairman of the Board of Supervisors since January, 1992. Gerald Duvall is employed as Vice President of Dombach Brothers, Inc, 3. Dombach Brothers business included selling hardware supplies, plumbing, heating and air conditioning equipment. a. In January, 1996, the hardware department was discontinued. b. There are a total of nine (9) employees including Gerald Duvall. c. Gerald Duvall manages the daily operations of the business. Duvall held a 1% interest in Dombach Brothers for 1992 through 1996. a. Duvall owns one share of company stock. 5. Duvall is paid an hourly wage by Dombach Brothers. a. Duvall does not receive any sales commission. 6. Dombach Brothers has been doing business with Providence Township since at least 1985. a. When Duvall became a Providence Township Supervisor, the practice of purchasing supplies at Dombach Brothers continued. b. Providence Township has purchased various hardware and plumbing supplies from Dombach Brothers. c. The purchases made were piecemeal. 7. The Providence Township Board of Supervisors did not advertise for bids or quotes for the business that was awarded to Dombach Brothers. a. The Providence Township Board of Supervisors never took any official action to award any business to Dombach Brothers. Duvall, 97- 014-C2 Page 3 8. The township purchased supplies at Dombach Brothers at the direction of the board of supervisors which included Gerald Duvall. a. The purchases were made by the township employees and occasionally the township supervisors. 9. The township employees also purchased hardware supplies at E.M. Herr. a. The decision to either use Dombach Brothers or E.M. Herr depended upon the location in the township the employees were working. 10. The following number of purchases in the aggregate were made at Dombach Brothers by employees of Providence Township for the years noted: Year No. of Purchases Total of Invoices: a. 1992 44 $ 4,488.88 b. 1993 46 $ 2,060.62 c. 1994 34 $ 4,508.08 d. 1995 6 $ 1,147.42 e. 1996 7 $ 593.95 Total $12,798.95 11. Of the above purchases, 113 were under $100 and 16 were under $ 200. 12. The following purchases included in the above totals made from Dombach Brothers were in excess of $500.00 and were not made through an open and public process, including prior public notice and public disclosure of all proposals considered and contracts awarded: a. 05/13/92 $2,674.24 Water Well Pump b. 01/14/94 $1,920.00 Water Heater c. 05/06/94 $ 844.38 Free Standing Water Cooler 13. The Providence Township Board of Supervisors approved all payments to Dombach Brothers for the purchases outlined in above. a. Duvall signed the township checks in his capacity as a supervisor. 14. Providence Township made payments to Dombach Brothers and action was taken by Duvall as a supervisor to approve the bill list which included the payments made to Dombach Brothers in the following situations where the total bill exceeded $500. Duvall. 97- 014-C2 Page 4 Check Number 11876 13150 13390 14524 Date of Amount Meeting Action by Duvall and Check of Check Date Vote to Approve Bill List 05/28/92 $2,732.19 06/01/92 3 -0 01/14/94 $1,920.09 02/07/94 3 -0 05/16/94 $ 936.71 06/06/94 3 -0 02/01/96 $1,043.24 02/02/96 3 -0 15. The profit made by Dombach Brothers for the equipment and supplies sold to Providence Township was 25% of the total sales as estimated by Robert Dombach, CEO of Dombach Brothers. a. Twenty -five (25%) of the sales in excess of $ 500 ($5,438.62) totaled $1,359.65. 16. In November or December of 1993, the Providence Township Board of Supervisors were considering purchasing a passenger vehicle that was going to be used by the zoning officer. 17. Gerald Duvall saw a vehicle on the lot of Duvall Chevrolet and contacted his brother, Robert Duvall, about purchasing a vehicle from his dealership for the township. 18. Robert Duvall is the President and CEO of Duvall Chevrolet, Inc. a. Robert Duvall is the brother of Providence Township Supervisor Gerald Duvall. 19. Duvall Chevrolet sells new and used automobiles and repairs vehicles. 20. In December, . 1993, Robert Duvall and Gerald Duvall discussed a 1985 Pontiac 6000 available for sale to the township. a. On November 9, 1993, the title for a 1985 Pontiac 6000 (VIN No. 2G2AF19X2F1214417) was listed as Duvall Chevrolet. b. The odometer reading confirmed mileage to be 54,160. 21. Sometime in either December, 1993, or January, 1994, Gerald Duvall and Providence Township employee Charles Waltman went to Duvall Chevrolet to inspect the 1985 Pontiac 6000. a. Following the inspection, Gerald Duvall agreed to purchase the vehicle from his brother's dealership. 22. On January 27, 1994, re- assignment of title for the 1985 Pontiac 6000 (VIN No. 2G2AF19X2F1214417) from Duvall Chevrolet to Providence Township was filed with the Pennsylvania Department of Transportation. a. The mileage reading on the vehicle when the title was reassigned was 54,165. 23. On January 27, 1994, Providence Township entered into a sales agreement with Duvall Chevrolet for the 1985 Pontiac 6000 (VIN No. 2G2AF19X2F1214417) in the amount of $3,525.00. a. The mileage of the vehicle when purchased was 54,165. Duvall. 97- 014 -C2 Page 5 b. The total contract price was $3,525.00 which included $3,500.00 for the purchase price and $25.00 for the license and title fees. c. The vehicle was in fair condition when it was sold to the township. d. The vehicle was sold to the township on an "as is" basis with no warranty. _ 24. The Kelly Blue Book Used Car Guide for January through June of 1994, indicated the average retail value of a 1985 Pontiac 6000 was $2,850. a. Gerald Duvall believed that the vehicle was more likely worth $3,025. 25. The Providence Township Board of Supervisors did not obtain any bids or quotes for the purchase of the 1985 Pontiac 6000 or any other vehicle. a. The sales agreement to purchase the vehicle was entered into by Gerald Duvall and Robert Duvall. 26. Providence Township issued check number 13157 to the order of Duvall Chevrolet in the amount of $3,525.00 on January 27, 1994. a. Gerald Duvall signed the check in his capacity as a township supervisor. 27. On February 7, 1994, the Providence Township Board of Supervisors voted to approve the bill list which included a payment made to Duvall Chevrolet in the amount of $3,525.00. a. The motion to approve the payment of bills was approved by a 3 to 0 vote with Gerald Duvall voting in favor of the motion. 28. Duvall Chevrolet made a profit of approximately $ 500 on the sale of the 1985 . Pontiac 6000 to the township. a. Sale Price - $3,525.00 - Duvall's Estimated Value - $3,025.00 = $500.00 29. Providence Township has had repair work done on township vehicles at Duvall Chevrolet in 1993 and 1994. 30. Duvall Chevrolet invoiced Providence Township for repairs that were made on township vehicles on six occasions for a total of $1,095.87 from 1993 through 1994. a. None of the individual repair bills were over $500. 31. Gerald Duvall participated in actions taken by the Board of Supervisors to approve the payment of bills which included the payments made to Duvall Chevrolet for the repair work done on township vehicles. Duvall, 97- 014 -C2 Page 6 Check Check Amount Meeting Action by Duvall Number Date of Check Date and Vote 12969 10/08/93 $299.05 13574 09/07/94 $575.13 13903 03/06/95 $221.69 11/01/93 3 -0 09/07/94 3 -0 03/06/95 3 -0 III. DISCUSSION: At all times relevant to this matter, the Respondent, Gerald Duvall, hereinafter Duvall, has been 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, §gg. /Act 93 of 1998, Chapter 11. The issue is whether Duvall violated Sections 1103(a) and 1 103(f) of the Ethics Act when he participated in actions of the Board of Supervisors as to purchases from Dombach Brothers, a business with which he is associated without an open and public process; when he participated in approving payments to that business; and when he participated in discussions and actions resulting in the purchase of a vehicle from a dealership owned by his brother.. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest. Section 1103. Restricted activities. (a) Conflict of interest. —No public official or public employee shall engage in conduct that constitutes a conflict of interest. Section 1103(a), Act 93 of 1998, Chapter 11. 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. Section 1102, Act 93 of 1998, Chapter 11. Section 1103(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 Duvall, 97- 014 -C2 Page 7 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 1103(f) of the Ethics Act imposes certain restrictions as to contracting: 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 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. Section 1103(f), Act 93 of 1998, Chapter 11. In addition, Section 1103(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. Duvall has served as a Supervisor for Providence Township since 1990 and as Board Chairman :since 1992. In a private capacity, Duvall is employed as Vice President of Dombach Brothers, Inc. which sells plumbing, heating, and air conditioning equipment and hardware supplies. Dombach Brothers has been doing business with the Township since at least 1985, which predated Duvall's service on the Township Board. Purchases from Dombach Brother were usually made by Township employees and occasionally by Township Supervisors. The Township Board of Supervisors did not advertise for bids or quotes for contracts that were awarded to Dombach Brothers. Further, the Board never took any official action to award any contracts to Dombach Brothers. The purchases from Dombach Brothers from 1992 through 1996 were mostly under $100, with a few under $200, and three purchases in the range between $850 and $2700. All such purchases from Dombach Brothers were paid by the Township Board of Supervisors as part of bill lists. Duvall participated in approving such bill lists for Duvall, 97- 014 -C2 Page 8 payment and signed the Township checks to Dombach Brothers in his capacity as a Township Supervisor. The profit made by Dombach Brothers on individual purchases which were in excess of $500 amounted to $1,359.65. In 1993, the Board of Supervisors considered purchasing a vehicle for the Township Zoning Officer. Duvall saw a used 1985 Pontiac on the lot of Duvall Chevrolet, a dealership owned by his brother Robert. Duvall discussed the purchase of the vehicle with his brother and then took _a Township employee to inspect the 1985 Pontiac. In January, 1994, the Township entered into a sales agreement with Duvall Chevrolet to purchase the 1985 Pontiac for $3,525. Although the book value for the vehicle was $2,850, Duvall believed that the vehicle was worth $3,025. The Board of Supervisors did not obtain any bids or quotes for the purchase of the 1985 Pontiac or any other vehicles. Rather, a sales agreement to purchase the vehicle was entered into between Gerald Duvall and his brother Robert. Providence Township issued a check, signed by Duvall, in the amount of $3,525 to Duvall Chevrolet. The Board of Supervisors with Duvall participating, voted to approve payment of bills which included payment to Duvall Chevrolet for the 1985 Pontiac. Duvall Chevrolet made a profit of approximately $500 on the sale of the 1985. Pontiac to the Township. In 1993 and 1994, it was necessary for the Township to have repair work done on Township vehicles at Duvall Chevrolet. Repairs to Township vehicles were performed on six occasions, totaling $1,095.87. None of the individual repair bills equaled or exceeded the $500 contracting threshold of Section 1103(f) of the Ethics Act. Lastly, Duvall participated in actions of the Board to approve bill lists which included payments to Duvall Chevrolet for the repair work on Township vehicles. Having summarized the above relevant facts, we must now determine whether the actions of Duvall violated Sections 1 and 1103(f) of the Ethics Act. In applying the provisions of Section 1103(a), there were uses of authority of office on the part of Duvall. In particular, Duvall participated to approve payments for purchases from Dombach Brothers, a business with which he is associated, as that term is defined under the Ethics Act. Similarly, as to Duvall Chevrolet, a business with which a member of his immediate family is associated, Duvall likewise participated as to matters involving the purchase of the 1985 Pontiac. Duvall also participated in approving payments for the repairs on other Township vehicles. The uses of authority of office on the part of Duvall resulted in private pecuniary benefits to both Dombach Brothers and Duvall Chevrolet, consisting of the profits that were made on the respective contracts with the Township. Accordingly, we find that Duvall violated Section 1103(x) of the Ethics Act when he participated in actions regarding the purchase of a vehicle from Duvall Chevrolet. In addition, we find technical violations both as to Duvall's actions in participating to approve payments to Dombach Brothers, as well as payments to Duvall Chevrolet relating to vehicle repair services performed for the Township. Turning to Section 1103(f) of Act 93 of 1998, Chapter 11, there were three instances of purchases by the Township from Dombach Brothers which were $ 500 or more and not awarded through an open and public process as required by the Ethics Act. Accordingly, we find three violations of Section 1103(f) when Dombach Brothers, a business with which Duvall is associated, contracted with the Township which contracts were valued at $500 or more and not awarded through an open and public process. However, we find no violation as to Section 11 regarding the repair services performed by Duvall Chevrolet for the Township in that none of such services equaled or exceeded the $500 threshold of Section 1103(f) of the Ethics Act. Duvall, 97- 014-C2 Page 9 The parties have filed a Stipulation of Findings and Consent Agreement in which the parties propose to resolve this case by finding technical violations of Section 1103(a) as to Duvall's participation in Board action to approve payments to Dombach Brothers for purchases and to Duvall Chevrolet for vehicle repairs; one violation of Section 1103(a) as to the purchase of the 1985 Pontiac from Duvall Chevrolet; three violations of Section 1103(f) as to the purchases from Dombach Brothers which exceeded the $500 threshold of the contracting provision of the Ethics Act; and no violation of Section 1103(f) as to the services by Duvall Chevrolet which were under the $500 contracting threshold. In addition, Duvall is to make a payment in the amount of $1,859.65 through this Commission to Providence Township over a one -year period, in the amount of $155 per month for eleven months and a final payment of $154.65, with the first payment commencing within thirty days of the date of issuance of this order. Accordingly, Duvall is directed to make the payment of $1,859.65 as per the terms noted above. Compliance with the foregoing will result in the closing of this case with no further action. Noncompliance will result in the institution of an order enforcement action. As to the Stipulation of Findings and Consent Agreement filed by the parties, we believe that the Consent Agreement is the proper disposition for this case based upon our review as reflected in the above analysis and the totality of the facts and circumstances. IV. CONCLUSIONS OF LAW: 1. Duvall, as a Supervisor in Providence Township, Lancaster County, is a public official subject to the provisions of Act 9 of 1989/Act 93 of 1998, Chapter 11. 2. Technical violations of Section 1103(a) of the Ethics Act occurred when Duvall participated in actions of the Township Board of Supervisors to approve payments to Dombach Brothers, a business with which he is associated, regarding various purchases made by the Township which exceeded $500. Three violations of Section 1103(f) of the Ethics Act occurred as to those sales between Dombach Brothers, a business with which Duvall is associated, and the Township which were $ 500 or more and not awarded through an open and public process. 4. Duvall violated Section 1103(a) of the Ethics Act when he used the authority of office for a private pecuniary benefit as to the purchase of a vehicle by the Township from a business owned by his brother. 5. Technical violations of Section 1103(a) of the Ethics Act occurred when Duvall participated in actions to approve payments for repair services on Township vehicles by_: a business owned by his brother. Duvall did not violate Section 1103(f) of the Ethics Act regarding vehicle repair services rendered to the Township by a business owned by his brother, in that such individual services did not equal or exceed the $500 threshold of Section 1103(f) of the Ethics Act. In Re: Gerald Duvall File Docket: Date Decided: Date Mailed: BY THE COMMISSION, DANEEN E. REESE, CHAIR 97- 014-C2 12/15/98 12/29/98 ORDER NO. 1102 1. Gerald Duvall, as a Supervisor in Providence Township, Lancaster County, technically violated Section 1103(a) of the Ethics Act when he participated in actions of the Township Board of Supervisors to approve payments to Dombach Brothers, a business with which he is associated, regarding various purchases made by the Township which exceeded $500. 2. Three violations of Section 1103(f) of the Ethics Act as to those sales between Dombach Brothers, a business with which Duvall is associated, and the Township which were $500 or more and not awarded through an open and public process. Duvall violated Section 1103(a) of the Ethics Act when he used the authority of office for a private pecuniary benefit as to the purchase of a vehicle by the Township from a business owned by his brother. Technical violations of Section 1103(a) of the Ethics Act occurred when Duvall participated in actions to approve payments for repair services on Township, vehicles by a business owned by his brother. Duvall did not violate Section 1103(f) of the Ethics Act regarding vehicle repair services rendered to the Township by a business owned by his brother, in that such individual services did not equal or exceed the $500 threshold of Section 1103(f) of the Ethics Act. 6. As per the Consent Agreement of the parties, Duvall is directed to make a payment in the amount of $1,859.65 through this Commission to Providence Township. The payments are to be made over a one -year period, in the amount of $155 per month for eleven months and a final payment of $154.65, to begin within thirty days of the date of issuance of this order. a. Compliance with the foregoing will result in the closing of this case with no further action. b. Noncompliance will result in the institution of an order enforcement action. etriiittma6 auLi