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HomeMy WebLinkAbout1132 StellaIn Re: Robert M. Stella, Jr. 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 Louis W. Fryman John J. Bolger Frank M. Brown Susan Mosites Bicket 97- 045 -C2 Order No. 1 132 8/30/99 9/7/99 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et 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 replaced by the Public Official and Employee Ethics Act ( "Ethics Act "), Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under that Act. 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 the Ethics Act. 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. Stella, 97- 045-C2 - Page 2 - - 1. ALLEGATION: That Robert Stella, Jr., a public official /public employee, in his capacity as a Commissioner for Plains Township, Luzerne County, violated Sections 3(a) and 3(f) of the Public Official and Employee Ethics Law (Act 9 of 1989 as amended 65 P.S. §403(a)(f)) when he used the authority of his office for the private pecuniary benefit of himself and /or a member of his immediate family and a business with which he and /or a member of his immediate family is associated by participating in actions /decisions of the board to award a contract and approve payments to a business when that business later entered into a subcontract with another business with which Stella or a member of his immediate family was associated; and when such transpired without an open and public process. II. FINDINGS: 1. Robert M. Stella, Jr. has served as a Plains Township, Luzerne County, Commissioner since January of 1996. a. Stella served as Chairman of the Board of Commissioners from March 1996 through 1997. 2. Plains Township is a First Class Township governed by a five (5) member Board of Commissioners. 3. Robert M. Stella, Jr. has been employed by Steil Enterprises as a laborer and machine operator for the last ten (10) years. a. Stella, Jr. neither owns stock nor is an officer or director in Steil Enterprises. -. b. Steil Enterprises was reported as a source of income on Statements of Financial Interests by Robert Stella, Jr. 4. Steil Enterprises, Inc. was incorporated in 1982. a. Arlene Stella is President and Secretary of Steil Enterprises. b. Arlene Stella is Robert M. Stella, Jr.'s mother. c. Arlene Stella resides at 23 Birch Avenue, Plains, Pennsylvania. 5. _ Steil Enterprises is in the asphalt paving, excavating and trucking business. 6. Robert Stella, Sr., Robert M. Stella, Jr.'s father, has served as a Member of the Plains Township Planning Commission since January of 1995. a. Robert Stella, Sr. is employed as Superintendent for Steil Enterprises. b. Robert Stella, Sr. was one of the original share holders in Steil Enterprises but turned his 500 shares over to his wife, Arlene, on March 17, 1986. 7. Northampton Fuel Supply Company (NFSC), 1 Horwith Drive, Northampton, Pennsylvania, is an affiliate of U.S. Generating Company, Bethesda, Maryland. a. Northampton Fuel Supply Company has had contracts with various municipalities in Northeast Pennsylvania for culm bank reclamation. Stella, 97- 045 -C2 Page 3 b. The municipalities, through ordinances, require payments of various amounts from NFSC for permission to do reclamation work at the culm banks. 8. CuIm banks are deposits of rocks and coal stored in mounds at former coal mining sites. a. CuIm bank reclamation projects entail the separation of coal from dirt and rocks at the abandoned mining sites. 9. Bruce M. Tetkoskie is the Fuels Manager for NFSC at their Northampton Generating Plant. 10. Fred C. Spotts and Associates served as an Engineer for NFSC. 11. In 1995, NFSC entered into a contract with Pagnotti Coal Company for a culm bank reclamation project in Plains Township. a. Pagnotti Coal Company owns the Prospect site where the reclamation process was to take place. 12. In July of 1995, NFSC requested a special exception to the Plains Township Zoning Ordinance, Section 2.05, for the purpose of a culm bank reclamation project at the Pagnotti /Prospect Colliery site in Plains Township. a. The Zoning Ordinance (Section 2.05), in part sets forth the permitted excavations in Plains Township including coal stripping and mining and the fees in relation thereto. b. The request was submitted to Plains Township Zoning Officer Richard Piekutowski. c. Piekutowski denied the request on November 9, 1995 stating the application needed Zoning Hearing Board approval. 13. The Plains Township Zoning Hearing Board met on December 4, 1995 to review NFSC's application and determined that NFSC met all of the requirements [of] the Township Ordinance and did not need Board approval. a. The Zoning Hearing Board further determined that Section 2.05 of the Township Ordinances governs the excavation of coal and since the culm banks contain 10% coal[,] the NFSC reclamation project would meet the definition in that Section of the Township Ordinance and therefore required Zoning Hearing Board approval. 14. On December 4, 1995, the Zoning Hearing Board approved NFSC's application stating the company must comply with the Plains Township Zoning Ordinance at all times. 15. On December 21, 1995, the NFSC filed a Land the Plains Township Planning Commission. a. In the application it was estimated that would be 1998 and the reclamation work to three years. Development application with the start time for the project would take approximately two Stella, 97- 045 -C2 Page 4 16. The Planning Commission voted 4 -0 at the December 21, 1995 meeting to grant NFSC final approval of their land development plan. 17. The Planning Commission informed the representatives from NFSC that they had to adhere to the tonnage fees as set forth in Section 2.05 of the Township Ordinances or as negotiated with the Township Commissioner Board. 18. In January of 1997, Timothy Charlesworth, Counsel to NFSC, and Tetkoskie met with members of the Plains Township Board of Commissioners to negotiate an agreement under Section 2.05 of the Township Ordinance regarding the fees to be paid by NFSC. 19. Plains Township Commissioners Robert M. Stella, Jr. and Frank Pizzella participated as the negotiators for the Township. 20. Tetkoskie met with Commissioners Stella and Pizzella at the Biscontini Distributors Warehouse, Main Street, Plains, PA to discuss the proposed Agreement. a. Pizzella and Stella wanted Tetkoskie to grant Biscontini Distributors permission for its trucks to use a road NFSC was to build from Main Street in Plains Township to Washington Avenue, in the City of Wilkes - Barre, as part of the Agreement with the Township in order to relieve traffic problems in that area of the township. 21. Tetkoskie met with Commissioner Stella, in February of 1997, at the Steil Enterprises garage to discuss the Agreement between NFSC and the Township. a. Tetkoskie informed Commissioner Stella, at the February, 1997 meeting, that he may be able to use Steil Enterprises for excavating work at the reclamation site. 22. On February 18, 1997, Tetkoskie informed John Szczepaniak, Chief Design Engineer for Fred C. Spotts and Associates, by memorandum, that he wanted Steil Enterprises as well as another company to be included on the list of contractors who would be notified of the bid proposals for the work at the Prospect Colliery site. a. Tetkoskie stated that he invited Steil Enterprises to bid because he believed that their bid would be competitive as their location was adjacent to the site in question and they would not have to pay mobilization costs. 23. On March 13, 1997, the Plains Township Board of Commissioners, during a regularly scheduled township meeting, approved the Agreement between the Township and NFSC. a. The Board approved the Agreement by a 4 to 1 vote with Commissioner Stella voting with the majority. 24. As Chairman of the Board of Commissioners, Stella signed the Agreement, dated March 13, 1997, between the Township and NFSC. a. The Agreement was signed by NFSC Senior Vice President P. Christian Tribe on June 11, 1997. Stella, 97- 045 -C2_ Page 5 25. The Agreement provided, in part: a. Within sixty (60) days of approval of the contract, NFSC would pay the Township $55,000 and $5,000 per year, for each year the reclamation project lasted beyond 4 years. b. NFSC will build a private road between Main and Washington Streets in the City of Wilkes Barre and give limited use to other parties in order to divert truck traffic from the intersection of Ann and Maffie Streets in Plains Township. 26. On April 3, 1997, John Szczepaniak, of Fred C. Spotts and Associates, faxed information to a number of area contractors notifying them that NFSC was seeking bids for the construction of a haul road on the Prospect culm bank site. 27. Steil Enterprises was one of the companies Szczepaniak notified of the bid proposals. 28. On April 4, 1997, Szczepaniak sent to Tetkoskie the list of companies he notified concerning the bid proposals. a. The list included Steil Enterprises. 29. On April 11, 1997, Szczepaniak faxed information to a number of area contractors notifying them that NFSC was seeking bids for the site preparation of the Prospect culm bank site. 30. Steil Enterprises was again one of the companies Szczepaniak notified of the bid proposals. 31. Szczepaniak had previously notified Steil Enterprises of bid proposals that NFSC put out for work at another culm bank site in Jenkins Township. 32. Steil Enterprises did not respond to the previous notifications of bid proposals from NFSC. 33. Steil Enterprises did not contract with NFSC for any projects prior to the Prospect Colliery culm bank site work in Plains Township. 34. The following companies submitted bids for the Haul Road project -Bid Package No. 1. Date of Bid April 15, 1997 April 15, 1997 April 16, 1997 April 15, 1997 April 15, 1997 Date of Bid Company Steil Enterprises Kaminski Brothers Locust Ridge Quarry Popple Construction Co. American Asphalt Co. 35. The following companies submitted bids for the site preparation project -Bid Package No. 2. Company Amount of Bid $39,740.00 $39,454.97 $82,403.00 $45,059.00 $40,593.00 Amount of Bid Amount of Bid for Alternate Work $13,365.00 $42,611.92 $13,365.00 $53,051.00 $43,597.60 Amount of Bid for Alternate Work Stella, 97- 045 -C2 Page 6 Apri 22, 1997 Apri 22, 1997 Apri 22, 1997 Apri 23, 1997 Apri 23, 1997 Apri 23, 1997 Steil Enterprises $129,523.25 Kaminski Brothers $204,155.83 Locust Ridge Quarry $116,116.80 Popple Construction Co. $157,802.00 American Asphalt Co. $128,736.31 Charles J. Merlo, Inc. $155,178.00 $ 11,147.00 $209,808.35 $ 8,557.60 $152,622.40 $131,258.55 $ 13,512.00 36. The bids were opened by Tetkoskie at his office in Northhampton, PA. 37. Tetkoskie rejected the bids and requested the companies to resubmit the bids combining both projects into one bid. 38. The following bids were submitted combining both projects: Amount of Bid Date of Bid Company Amount of Bid for Alternate Work May 1, 1997 Steil Enterprises $159,885.00 $ 5,000.00 April 29, 1997 Kaminski Brothers $229,307.96 $ 14,097.52 April 29, 1997 Locust Ridge Quarry $163,000.00 No cost listed for alternate April 28, 1997 Popple Construction $199,000.00 $212,000.00 April 25, 1997 American Asphalt $165,807.00 $170,991.00 39. The three (3) sets of bids submitted to NFSC by Steil Enterprises were signed by Arlene Stella, Secretary and President of Steil Enterprises. a. George J. Plevel, Layout Engineer and Estimator for Steil Enterprises, prepared the bid documents. 40. NFSC awarded Steil Enterprises the contract for' the Haul Road construction and the site preparation work on May 2, 1997. a. The contract called for NFSC to pay Steil Enterprises $159,885.00, plus $5,000 for the alternate work. 41. Tetkoskie had discussed the proposed bid with Robert M. Stella, Jr. prior to awarding the contract to Steil Enterprises. 42. Steil Enterprises rented two scrapers and two dozers, along with operators, from Latona Trucking and Excavating Company to complete the work required by the NFSC contract. a. Steil paid Latona $40,285.17 for use of the equipment and operators. 43. Steil Enterprises' final bid was faxed to NFSC on May 1, 1997. a. This was the last bid submitted by any company. 44. One day after Steil Enterprises faxed its May 1, 1997, bid to NFSC, U.S. Generating Company Officials drew up the contract between NFSC and Steil Enterprises on May 2, 1997. 45. Steil Enterprises began work at the NFSC site on May 3, 1997 and completed the work by June 24, 1997. 46. NFSC paid Steil $167,325 on July 9, 1997, with check number 03640. Stella, 97- 045, -C2_ Page 7 a. This occurred one month after NFSC finalized its agreement with the township. III. DISCUSSION: At all times relevant to this matter, the Respondent, Robert M. Stella, Jr., hereinafter Stella, 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, ems. /Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101, , Beg. The issue is whether Stella as a Plains Township Commissioner violated Sections 1 103(a) and 1103(f) as to the allegations that he used the authority of his office for the private pecuniary benefit of a business with which he is associated by participating in actions of the board to award a contract to a business when that business later entered into a subcontract with another business with which Stella is associated; and when such transpired without an open and public process. 65 Pa.C.S. §1103(a). The term "conflict of interest" is defined under the Ethics Act as follows: Section 1102. Definitions. 65 Pa.C.S. §1102. Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. "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 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 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. Stella, 97- 045-C2_ Page 8 (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. 65 Pa.C.S. §1103(f). In addition, Section 1103(f) 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. Stella has served as a Commissioner in Plains Township since January of 1996. In a private capacity, Stella is employed as a laborer and machine operator with Steil Enterprises, a corporation in the asphalt, paving, excavating and trucking business. Stella neither owns stock nor holds any officer or director position with Steil Enterprises. However, Stella's father is a Superintendent for Steil Enterprises and Stella's mother is the President and Secretary of the company. Northhampton Fuel Supply Company (NFSC) contracts with various municipalities in Northeastern Pennsylvania for culm bank reclamation. Agreements are entered into with municipalities so that NFSC can reclaim culm banks by separating the coal from the dirt and rocks at abandoned mining sites. In return, NFSC pays a specified sum to the municipalities. In 1995, NFSC entered into a contract for a culm bank reclamation project in Plains Township with the Pagnotti Coal Company which owns the reclamation site. NFSC then requested a special exception from the Plains Township Zoning Ordinance for the purpose of the culm bank reclamation project at the Pagnotti /Prospect Colliery site. The zoning officer denied the request noting that the application needed Zoning Hearing Board approval. In December, 1995, the Plains Township Zoning Hearing Board met to review NFSC's application and determined that NFSC met all the requirements of the Stella, 97- 045 -C2_ Page 9 Township Ordinance. The Zoning Hearing Board then approved NFSC's application noting that the company had to comply with the Plains Township Zoning Ordinance at all times. NFSC then filed a land development application with the Plains Township Planning Commission wherein it estimated that the project would begin in 1998 and take approximately two to three years to complete. The Planning Commission voted to grant final approval of NFSC's land development plan. In January, 1997, NFSC's Counsel and Fuels Manager met with members of the Plains Township Board of Commissioners to negotiate an agreement under the Township Ordinance regarding the fees that would be paid to the Township. Stella and another Commissioner participated on behalf of Plains Township in the negotiations with NFSC. The negotiations also included a separate issue regarding NFSC allowing others to use its road as a traffic relief route. When a representative of NFSC subsequently met with Stella in February, 1997, at the Steli Enterprises garage to discuss the Agreement, Stella was informed that NFSC might be able to use Steil Enterprises for excavation work at the reclamation site. Steps were taken by NFSC to ensure that Steil Enterprises would be included in the list of contractors that would be notified of the bid proposals for work at the Prospect Colliery site. In March, 1997, the Plains Township Board of Commissioners approved the Agreement between the Township and NFSC in a 4 -1 vote with Stella voting with the majority. Stella as Board Chairman signed the Agreement on behalf of the Township with NFSC. That Agreement provided that NFSC would pay the Township $55,000 plus $5000 per year for each year the reclamation project extended beyond four years. In addition, NFSC agreed to build a private road and give limited use to others in order to divert truck traffic from an intersection in the Township. When NFSC sought bids for both the construction of a haul road and site preparation projects, Steil Enterprises was notified about the bids solicitation. Steil Enterprises and other companies submitted bids for the haul road and site preparation projects. However, when the bids were opened, a representative of NFSC rejected the bids and requested that all companies resubmit bids combining both projects into one bid. Five companies, including Steil Enterprises, then submitted bids for the combined two projects. In May, 1997, NFSC awarded the contract involving the haul road and site preparation to Steil Enterprises for $159,885 plus $5000 for alternate work. Steil Enterprises began the work in May, 1997, and completed the work in the following month. NFSC paid Steil $167,325 in July, 1997, which was one month after NFSC finalized its agreement with Plains Township. Having summarized the above relevant facts, we must now determine whether the actions of Stella violated Sections 1103(a) of the Ethics Act. As to Section 1103(a) of the Ethics Act, there was a use of authority of office on the part of Stella when he voted as a Plains Township Commissioner to approve the Agreement between the Township and NFSC. In addition, Stella as Chairman of the Board signed the Agreement. Such use of authority of office resulted in a private pecuniary benefit. First, NFSC received a financial gain from the contract it obtained from the Township. Steil Enterprises then received a subcontract from NFSC after NFSC obtained the contract with the Township. Steil Enterprises is a business with which Stella is associated as that term is defined in the Ethics Act. Such circumstances constituted a conflict for Stella. A public official has a conflict in matters where he has a reasonable expectation that a business with which he is associated could subsequently receive a financial gain following action on another matter. See, Amato, Opinion 89 -002. In this case, one month prior to the vote on the Agreement with NFSC, Stella had discussions with its Fuel Manager about Steil Enterprises performing excavation work at the reclamation site. In such circumstance, Stella, 97- 045 -C2 Page 10 - - Stella should have abstained but participated instead as to the approval of the contract to NFSC. Accordingly, Stella violated Section 1103(a) of the Ethics Act when he used the authority of office for a private pecuniary benefit which resulted in a subcontract being awarded to Stell Enterprises by NFSC following the award of the Township contract to NFSC. As to Section 1103(f) of the Ethics Act, this provision requires that whenever a public official contracts with his governmental body, the contract, if $500 or more, must be awarded through an open and public process. In this case, the facts reflect that the contract was between the Township and NFSC. Since Stella has no financial interest in NFSC, it is clear that Section 1103(f) of the Ethics Act is not impacted. Accordingly, Stella did not violate Section 1103(f) of the Ethics Act in that the contract awarded by the Township to NFSC was not to a business with which Stella is associated. The parties have submitted a Consent Agreement together with a Stipulation of Findings wherein it is proposed to resolve the case by finding no violation as to Section 1103(f) of the Ethics Act, a violation of Section 1103(a) of the Ethics Act and a payment of $2,000 within 30 days of the issuance of this Order by Stella through this Commission to Plains Township. Accordingly, Stella is directed to make the payment of $2,000 as 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. Lastly, as to the Stipulation of Findings and Consent Agreement, 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. Robert M. Stella, Jr., as a Commissioner in Plains Township, is a public Official subject to the provisions of Act 9 of 1989 /Act 93 of 1998, Chapter 11. 2. Stella violated Section 1103(a) of the Ethics Act when he participated in actions of the Plains Township Board of Commissioners as to the award of a contract to a business, when that business subsequently entered into a subcontract with Stell Enterprises, a business with which Stella is associated. 3. Stella did not violate Section 1103(f) of the Ethics Act as to a contract between Plains Township and NFSC in that NFSC is not a business with which Stella is associated. In Re: - Robert M. Stella, Jr. File Docket: - 97- 045 -C2 Date Decided: 8/30/99 Date Mailed: 9/7/99 ORDER NO. 1132 1. Robert M. Stella, Jr., as a Commissioner in Plains Township, violated Section 1103(a) of the Ethics Act when he participated in actions of the Township Board of Commissioners as to the award of a contract to a business, when that business subsequently entered into a subcontract with Steil Enterprises, a business with which Stella is associated. 2. Stella did not violate Section 1103(f) of the Ethics Act as to a contract between Plains Township and Northampton Fuel Supply Company (NFSC) in that NFSC is not a business with which Stella is associated. 3. Per the Consent Agreement of the parties, Stella is directed to pay $2,000 through this Commission to Plains Township within thirty (30) days of the issuance of this order. a. Compliance with the foregoing will result in the closing of this case with no further action by the Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, &Au/KJ& Ptal DANEEN E. REESE, CHAIR