HomeMy WebLinkAbout1137 JohnsonIn Re: Horace Johnson
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
Julius Uehlein
Louis W. Fryman
John J. Bolger
Frank M. Brown
Susan Mosites Bicket
98- 004 -C2
Order No.1 137
September 30, 1999
October 13, 1999
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 leg., by the above -
named Respondent. At the commencement of its investigation, the Investigative
Division served upon Respondent written notice of the specific allegations. 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 ., 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.
Johnson, 98- 004 -C2
Page 2 -
I. ALLEGATION:
That Horace Johnson, a public official /public employee, in his capacity as the
full -time solicitor for Cumberland County, violated the following provisions of the State
Ethics Act (Act 9 of 1989) when he accepted something of monetary value in the form
of all expense paid trips from a vendor who has contracts with the county based on
the understanding that his official action and judgment in regards to contracts with
that vendor would be influenced thereby; and when he used the authority of his
position of solicitor for a private pecuniary benefit when he accepted all expense paid
trips from a county vendor at a time when he was participating in drafting of bid
specifications and reviewing bids for a contract awarded to that vendor.
Section 3. Restricted Activities
(a) No public official or public employee shall
engage in conduct that constitutes a conflict of interest. 65
P.S. §403(a).
Section 3. Restricted Activities
(c) No public official, public employee or nominee
or candidate for public office shall solicit or accept, anything
of monetary value, including a gift, loan, political
contribution, reward, or promise of future employment
based on any understanding of that public official, public
employee or nominee that the vote, official action, or
judgment of the public official or public employee or
nominee or candidate for public office would be influenced
thereby. 65 P.S. §403(c).
II. FINDINGS:
1. Horace Johnson served as a Solicitor for Cumberland County from January 4,
1988, until retiring on December 31, 1997.
a. Johnson also served as Solicitor for the Cumberland County Sheriffs
Department.
2. On January 4, 1988, Horace Johnson entered into an employment contract with
the Cumberland County Commissioners.
a. The contract was signed by Commissioners Moore, Husted and Myers
and Horace Johnson.
3. Johnson's employment contract with the County provided that Johnson would
serve as Solicitor for the County and for the County Sheriff.
4. Terms of Johnson's 1988 employment contract with the County provided as
follows:
a. Johnson shall receive Twenty -nine Thousand Dollars ($29,000.00) for
the year 1988, payable bi- weekly. Thereafter, said amount shall be
adjusted as prescribed by applicable rules and regulations or as set by the
Salary Board.
Johnson, 98- 004 -C2
Page 3 -
b. In the performance of his duties as Solicitor for the County and in
carrying out his duties as Solicitor for the Sheriff, Johnson shall devote
the amount of time necessary to the satisfactory performance thereof.
In recognition of the fact that the nature of his duties is such that his
hours of work are dictated by circumstances, the aforementioned shall
be paid regardless of the number of hours actually worked.
c. Johnson is a full -time employee and as such shall receive all benefits
presently provided for full -time employees in the Employee Handbook
excepting the following:
1. Johnson shall not be permitted to accrue any sick leave, vacation
leave or holiday hours.
2. Johnson shall not be entitled to any compensatory time.
d. This contract remained in effect during Johnson's tenure as Solicitor.
5. Johnson received longevity and step pay increases received by all full -time
employees during his years of service as County Solicitor.
a. Johnson received health insurance benefits such as life and accident
insurance, dental insurance, health and hospitalization, vision, tuition
reimbursement and workers compensation.
1. Only full -time employees were entitled to receive these benefits.
6. From 1988 until 1997 Johnson received salary step increases authorized by the
County Commissioners.
7. W -2 Wage and Tax Statements for Horace Johnson issued by Cumberland
County confirm the following annual income:
a. 1988:
1989:
1990:
1991:
1992:
1993:
1994:
1995:
1996:
1997:
$28,996.51
$30,102.75
$31,328.05
$33,306.75
$36,121.50
$38,580.00
$38,281.00
$44,705.75
$48,667.51
$53,225.05
8. Johnson began receiving monthly pension benefits from Cumberland County in
January, 1998, following his retirement.
9. Johnson's duties as Solicitor were as outlined in the Fourth Class County Code
and included but were not limited to providing: "legal advice incident to the
office which may be required of him by the commissioners" and for any other
County office that did not have an appointed solicitor.
a. Legal advice included reviewing contracts and participating in litigation
involving the County.
Johnson, 98- 004 -C2
Page 4 -
10. Johnson, as County Solicitor, served as legal advisor to various County
departments and boards.
a. Johnson served as Solicitor to the Cumberland County Prison Board
(CCPB) during his tenure as County Solicitor.
11. The CCPB was established pursuant to the provisions of the Fourth Class
County Code.
a. The CCPB sets policies and procedures and oversees the operation of the
prison.
12. The CCPB consists of the three County Commissioners, County Controller,
County Sheriff, County District Attorney and a judge of the Court of Common,
Pleas.
13. The CCPB authorized the establishment of a commissary for the welfare of the
inmates at the county prison.
a. The commissary is a prison store where inmates can purchase clothing,
personal hygiene items, writing materials and snacks.
14. Prior to May, 1992, the prison commissary was operated by the prison
management.
15. On May 18, 1992, the CCPB voted to enter into a contract with Canteen
Corporation to provide commissary services for the prison.
a. Prior to entering into a contract with Canteen Corporation, the Board of
Commissioners was advised by the County's Assistant Solicitor, Stephen
D. Tiley, that the contract should be competitively bid.
b. Pursuant to the Commissioners' Letter of Intent, Canteen was authorized
to provide commissary services as outlined in Canteen's proposal.
c. The Letter of Intent was effective May 29, 1992.
16. Beginning in late 1993 the Cumberland County Commissioners and the CCPB
began to question possible uses of the profits received from the inmate
commissary funds.
a. Solicitor Horace Johnson was asked by both Boards to provide advice in
this area.
1. Mr. Johnson immediately provided a letter, dated November 23,
1993, to the Commissioners, through which Mr. Johnson
discussed the history of the commissary. Through the letter, Mr.
Johnson noted that:
a. In May, 1992, the CCPB moved to contract with Canteen
Corporation;
b. CCPB authorized the signing of a Letter of Intent and sought
Steve Tiley's advice as to whether it was necessary to bid
the services;
Johnson, 98- 004 -C2
Page 5 -
c. Mr. Tiley advised that, "while it is not extremely clear that
this contract must be bid, please be advised it is my opinion
that the only absolutely safe procedure would be to
competitively bid the services;"
d. On May 29, 1992, the Warden wrote to Canteen
Corporation and authorized Canteen to commence providing
commissary services;
e. On June 2, 1992, Mr. Johnson reviewed the proposed
Canteen Corporation contract and the Letter of Intent, and
met with Warden Egoff;
f. Although Warden Egoff advised Mr. Johnson that he was
unaware of anybody else in the business, Mr. Johnson
made phone calls and learned that there were at least ten
entities which provided commissary service;
On November 19, 1993, Mr. Johnson received a copy of
the proposed Canteen Corporation Service Agreement; a
request for his opinion was also made as to whether it was
okay to sign the Agreement.
b. In accordance with the Commissioner's request that Mr. Johnson provide
his opinion as to whether it was advisable to sign the Agreement with
Canteen Corporation, Mr. Johnson advised that:
1. He concurred with Assistant Solicitor Tiley that the contract
should be awarded pursuant to competitive bidding. Therefore,
the County should not sign the Canteen Corporation Service
Agreement but, rather, should consider the development of
specifications and advertise for bidding;
2. If the County should, nevertheless, decide to enter into the
Agreement, certain changes to the Canteen Corporation Service
Agreement should be made.
c. Mr. Johnson was advised by Warden Egoff that the present 10%
commission may result in the commissary fund having more money than
is permitted; Warden Egof noted that if that occurs, he would seek either
a price reduction or a lesser commission. Mr. Johnson noted that asking
for a lesser commission made no sense at all except to the vendor, but
stated that if he felt it necessary, an adjustment in prices to the inmates
could be made.
g.
17. In response to the requests for advice which were made by the County and the
CCPB, from at least November, 1993 continuing through June, 1996, Johnson
provided legal advice to the Commissioners and the CCPB regarding the Service
Agreement with Canteen, uses of profits from the commissary by the County,
and legal requirements to put the commissary contract out for bid.
a. The primary focus of Mr. Johnson's discussions with the CCPB and the
County with respect to the commissary fund was how commissary
monies could be used by the County, how commissary monies could be
used to pay County expenses which were incurred in connection with the
Johnson, 98- 004 -C2
Page 6 -
19. Paul Cercel became employed with Covenco, Inc.
20, Covenco, Inc., is a vending and food management company located in
Middletown, Pa.
prison and how to lawfully expand the use of commissary proceeds by
the County.
18. Since the early 1970's, Johnson played golf with a close, personal friend named
Paul Cercel. Cercel and Johnson played golf on a regular basis and frequently
shared in paying the costs incidental thereto, e.g., greens fees, cart rental,
drinks, food, etc.
a. Covenco has focused its efforts in acquiring contracts with nursing
homes as its main source of business.
b. In 1994 Covenco expanded its business to include providing commissary
services to county prisons.
c. Covenco hired William McMullen in 1994 to develop this part of the
business.
1. McMullen had been employed by Canteen Corporation, the
County's prior commissary provider.
21. By a November 23, 1993, letter to the County Commissioners, Johnson
recommended the developing of specifications and advertising for bids to award
a contract for management of the commissary.
a. Johnson provided an analysis of the current contract and advised to
continue the present Agreement with Canteen but to prepare
specifications and solicit bids.
b. If the Commissioners decided not to solicit bids, Johnson recommended
maintaining the present arrangement.
22. From at least 1970 through the present, Horace Johnson's close relationship
with Paul Cercel, an employee of Covenco, continued. Mr. Johnson did not
have a relationship with any other employee of Covenco.
a. Johnson was and is a frequent guest on golf trips sponsored by Paul
Cercel through which most expenses were paid for by Cercel, who
submitted those expenses to his employer, Covenco.
23. Paul Cercel is a Vice President of Sales and Marketing for Covenco.
a. His primary responsibilities included securing new accounts and
maintaining existing accounts, which was done in part by fostering
customer good will, which in part was accomplished by providing trips,
gifts, etc., to customers.
24. Johnson accompanied Cercel on golf trips while Cercel was employed by
Covenco.
Johnson, 98- 004 -C2
Page 7 -
a. Covenco provided these trips as a means of trying to maintain an account
at the Cumberland County Nursing Home that Covenco secured in
October, 1990.
1. Nursing home director Robert Slencak accompanied Cercel on
several golf trips provided by Cercel.
2. Other friends of Cercel also accompanied him on these golf trips.
b. Gifts, including trips and entertainment, are provided to customers by
Covenco as part of the company's efforts to maintain accounts.
25. Horace Johnson golfed with Cercel on or about January 12, 1991, through
January 21, 1991, at Myrtle Beach, South Carolina.
a. Also attending was Robert Slencak, Nursing Home Administrator.
b. Expenses related to the trip were charged as business related expenses
by Cercel.
c. Johnson also paid for some of the involved expenses during the trip.
26. Expenses for the 1991 Myrtle Beach golf trip were submitted by Cercel to
Covenco for reimbursement.
a. Covenco approved the expenses as business related and reimbursed
Cercel.
27. Horace Johnson accompanied Cercel on golf trips [to] Myrtle Beach in 1992 and.
1993, during which Cercel paid for most of the expenses.
a. Cercel submitted these expenses as business related.
b. Covenco approved the expenses as business related.
28. A golf trip to Myrtle Beach from January 21, 1994, through January 24, 1994,
which included Johnson contained expenses claimed by Cercel to Covenco as
business related.
a. Covenco approved this trip as business related and reimbursed Cercel for
the expenses submitted.
29. In response to a request by the CCPB, on May 19, 1994, Johnson provided a
memo to the CCPB advising that regulations required that a commissary be
established, a small margin of profit could be realized and that funds shall be
spent for the welfare of the prisoners.
a. In accordance with Assistant Solicitor Tiley's advice on May 29, 1992,
Johnson's analysis of the status of the Canteen Corporation Agreement
was that specifications should be prepared and bids solicited for a new
commissary contract.
30. During the CCPB meeting of May 23, 1994, Mr. Johnson's May 19, 1994,
memo and the use of monies from the commissary fund was discussed.
Johnson, also, again advised the CCPB that they should consider bidding the
commissary services in the future.
Johnson, 98- 004 -C2
Page 8 -
31. On or about August 10, 1994, Covenco sent a letter to Warden Egoff
requesting the opportunity to obtain commissary business through the bidding
process. The letter was signed by William McMullen, a former employee of
Canteen. Mr. McMullen wrote to the Warden that "you trusted me and your
own judgment once before in developing your program, now, I ask that you give
me the opportunity to provide Cumberland County Prison with a comparison
proposal in order to show you why selecting Covenco, Inc., as your vendor for
inmate commissary services would be a great asset to the Cumberland County
Prison."
32. In December, 1994 Earl Reitz was appointed Warden of the Cumberland County
Prison.
a. During this time Reitz restructured the prison computer system upgrading
software to a Digital Solutions, Inc. (DSI) format.
1. DSI is a software program developed to assist with prison
operations.
b. Reitz also wanted to restructure the commissary and was interested in
using another outside company.
1. Reitz was interested in reducing staff time [and] paperwork by
making the computer system compatible with the DSI software.
33. The commissary contract was being discussed by CCPB during December,
1994, through February, 1995, although no decisions had been reached.
34. On November 23, 1994, Paul Cercel purchased four airline tickets to Orlando,,
Florida, for himself, Johnson and two others.
35. Cercel, Johnson and County Home Administrator Slencak participated in a golf
outing in Orlando, Florida from February 14, 1995, through February 16, 1995.
a. Cercel submitted expenses for reimbursement.
b. Cercel was reimbursed by Covenco.
1. The expenses were claimed by Cercel as business related, and
were approved by Covenco on that basis.
36. On March 27, 1995, the CCPB approved a motion authorizing Johnson to
research possible uses of the funds from the commissary fund.
a. Questions had been raised during the review of the commissary fund
regarding the various expenses the County could collect.
37. Johnson issued a memo to the CCPB dated March 29, 1995, wherein he
advised the board on uses of profits from the commissary fund.
a. The memo sets forth a detailed analysis as to the use of funds in the
commissary account.
b. Consistent with Assistant Solicitor Tiley's advice which was rendered as
early as May 29, 1992, and in accordance with his prior position,
Johnson, 98- 004-C2
Page 9 -
Johnson again recommended that a vendor of commissary items should
be determined pursuant to the bidding process.
c. He advised that he would prepare the necessary specifications for
bidding.
1. The legality of the County's specifications was the responsibility
of Johnson.
2. Johnson reviewed all specifications.
3. Each department, in general, was responsible for providing the
framework for the bid specifications to Johnson.
4. Johnson was responsible for finalizing all bid specifications.
38. During the spring of 1995 Warden Reitz conducted a survey of prisons in
surrounding counties regarding the selection of a commissary vendor.
a. Reitz's survey indicated that since taxpayer funds were not being used
in the commissary the selection could be made without competitive
bidding.
b. At that time, some other counties utilizing outside vendors were not
putting the commissary contracts out for bid, while others had.
c. Not all counties were contacted by Reitz.
39. Reitz concluded from his survey that Oasis Inmate Commissary Service was
using DSI software and would take less time to process orders than the
county's current vendor, Canteen.
a. Other counties contacted by Reitz were satisfied with Oasis.
b. Reitz and Whitcomb recommended the county contract with Oasis.
40. Reitz and Alfred Whitcomb, Chairman of the CCPB, believed the commissary
contract was not required to be put out for bid. Neither Reitz nor Whitcomb,
however, are attorneys. Whitcomb strongly recommended that Oasis be used.
41. Both the County's Solicitor and the Assistant Solicitor advised that the contract
should be bid.
42. By issuing Request for Proposals instead of advertising publicly for bids, CCPB
could target specific vendors and request that said vendors submit proposals.
Bidding, however, allows all interested vendors the opportunity to respond.
43. Johnson, in accordance with Assistant Solicitor Tiley's prior 1992 advice,
consistently recommended that the commissary contract be put out for bids.
Johnson, however, left such decision to the County.
a. The bid process ultimately followed allowed all interested vendors to
participate in the process and be selected as the commissary vendor.
Johnson, 98- 004 -C2
Page 10 -
44. On May 15, 1995, the CCPB authorized Johnson, in his capacity of Solicitor,
to prepare specifications for bidding for suppliers of the commissary at the
prison.
a. The authorization was consistent with Johnson's recommendation that
the commissary contract be put out for bid and Johnson's March 29,
1995, memo.
45. Between June, 1995, and August, 1995, Janet Walters, a County paralegal
supervised by Johnson, was directed by Johnson to do a study regarding the
administration and operation of the commissary contract.
a. Walters' research focused on commissions paid by the vendor and the
County's costs in the program.
b. Walters was specifically requested to determine the mechanics and
details of the commissary operation, which information was to be used
for the bid specifications.
46. On October 18, 1995, CCPB Chairman Alfred Whitcomb issued a memo to
Members of the CCPB advising he reviewed the system offered by Oasis Inmate
Commissary Service and felt this system is the one the Board should go with.
a. Warden Reitz concurred with Whitcomb's analysis.
47. No action was taken by the CCPB on Whitcomb's request.
48. On December 18, 1995, the CCPB unanimously approved advertising for bids
for the commissary service.
a. The authorization was made based on Johnson's recommendation.
49. On December 19, 1995, Johnson provided Whitcomb and Reitz a memo and bid
specifications for the commissary contract.
a. The memo recommends a 15% commission be paid by bidders and
describes allowable margins of profit.
b. The memo also requested Whitcomb's and Reitz' comments regarding the
specifications; they provided no comments.
50. After the specifications were finalized, Johnson recommended copies be
provided to Canteen Corporation, Oasis Inmate Commissary Service and
Covenco for review and comments.
a. Canteen Corporation and Oasis Inmate Services are companies that had
been providing inmate commissary services for a number of years.
51. All specifications for the commissary contract were developed by Horace
Johnson, and were based in part on the information developed by Walters as
referenced in [Finding No.] 44 hereof.
52. A standard practice in the County in dealing with bid specifications was for the
department head involved in a particular bid and Janet Walters from the
Solicitor's Office to prepare bid specifications.
Johnson, 98- 004 -C2
Page 11 -
53. Prior to the bid specifications being advertised, Johnson contacted William
McMullen of Covenco and requested his assistance in drafting the bid
specifications. Johnson also contacted other counties.
a. McMullen provided certain specific information and provided commissary
contracts used in Northumberland and Lancaster County.
b. Johnson did not contact any of the other companies which were to be
sent the specifications to ask for their assistance; a pre -bid conference,
however, was required and held to obtain the input of other interested
bidders.
c. Representatives from Oasis contacted Johnson to offer assistance in the
drafting of specifications.
d. Johnson advised Oasis their assistance was not needed.
54. On December 20, 1995, Paul Cercel made airline reservations for a golf trip to
Florida for Johnson, Slencak and himself.
a. Reservations were also made for a John Polk, a friend of Cercel.
55. The golf trip to Ponte Verda Beach, Florida, occurred from January 23, 1996,
until January 26, 1996.
a. The group included Cercel, Johnson, Slencak and John Polk.
56. Certain expenses, including airfare and room charges, related to the trip were
paid for by Cercel who submitted the expenses to Covenco for reimbursement.
57. Cercel was reimbursed for expenses by Covenco for the Florida golf trips.
58. The golf trip to Florida occurred less than a month prior to the County
Commissioners authorizing to advertise the commissary contract.
59. On February 12, 1996, the Cumberland County Commissioners authorized
advertising for bids for inmate commissary services, pursuant to Tiley's and
Johnson's legal advice.
The authorization required submission of bids by March 11, 1996.
a.
b. The motion was approved after the board was advised by Horace
Johnson that the specifications were complete.
60. The bid specifications drafted by Johnson required that sealed bids be submitted
by March 11, 1996, at 1:30 p.m.
a. The specifications required attendance at a Pre -Bid Conference scheduled
for February 29, 1996. The purpose of the Pre -Bid Conference was to
consider amendments to the specifications which would make them more
functional for all involved.
61. On February 29, 1996, approximately one month after Johnson returned from
the Ponte Verda Beach, Florida, golf trip, the Pre -Bid Conference was held;
Johnson, however, was not present at the conference, but his paralegal was.
Johnson, 98- 004 -C2
Page 12 '
62. Prospective bidders representatives included the following:
1. Oasis Mike Evancho
2. Covenco John Legault
Paul Cercel
3. Canteen Ed Ray
4. Keefe Drew Yardley
63. The Pre -Bid Conference resulted in the postponement of bid opening, as well as
numerous changes to the specifications to accommodate the bidders. Following
the Pre -Bid Conference, the Cumberland County Commissioners concurred with
the postponement of the bid openings for the commissary service until March
25, 1996.
64. In accordance with recommendations made at the Pre -Bid Conference,- as
reported by Janet Walter, Johnson made addenda on March 11, 1996, and
March 14, 1996, to the bid specifications following the pre -bid conference.
a. Paragraph 11(a) was amended to read the address of the bidder's facility'
must be located as to enable delivery as set forth in Paragraph 4.
1. Paragraph 4 required deliveries between 10:00 a.m. and 1:00 p.m.
on the day following orders.
b. Paragraph 1 was deleted (eliminated warehouse location requirement).
c. Paragraph 4 was amended to include within six (6) months of the award
of the contract deliveries must be made by bidder's personnel and
equipment.
d. Paragraph 20 was amended to reduce services from a minimum of four
(4) to three (3) correctional facilities.
65. Bids were received from four companies and opened by County Controller Al
Whitcomb during the March 25, 1996, County Commissioners meeting.
a. Oasis Commissary Services $1.52 average price per item.
b. Canteen Corporation $ 1.59 average price per item.
c. Keefe Supply $1.58 average price per item.
d. Covenco $1.61 average price per item.
66. The bids for the indigent kits, which cost would have been borne by the
County, were as follows:
a. Oasis $1.73
b. Canteen $2.56
c. Covenco $1.27
67. The County Commissioners accepted the bids for review and action at a future
meeting.
Johnson, 98- 004 -C2
Page 13 -
a. All four bids were referred to Horace Johnson for his review.
68. Prior to the award of the bid, Canteen, Keefe and Oasis committed to use,
specifically, DSI software, which was in use at the prison, and was preferred
by the Warden for use in the commissary service.
a. Covenco was the only bid that did not specifically mention using the DSI
software.
b. Covenco did sign the bid specifications which included the successful
bidder commit to using DSI software or a comparable software program.
69. Johnson reviewed the bids, and on April 1, 1996, met with Al Whitcomb
(County Controller and Prison Board Chairman), Warden Earl Reitz, Janet
Walter, Solicitor Paralegal, and Janet Scott, prison employee.
a. During this meeting, Johnson recommended that the contract be awarded
to Covenco, based on his evaluation of the bid information.
b. Whitcomb and Reitz expressed concerns that if Covenco got the bid what
would be the assurance that Covenco would utilize DSI software.
c. Since the specifications required the use of DSI or comparable software,
Johnson advised that he would contact Covenco and determine if they
would use DSI software, as opposed to something comparable, which
the specifications allowed.
d. Whitcomb and Reitz agreed that if Covenco used DSI, they would not
object to the award of the contract to Covenco.
70. On April 1, 1996, Johnson called William McMullen of Covenco and asked if
Covenco would sign a contract requiring the use of DSI software.
a. McMullen had been employed by Canteen Corporation and was Canteen's
account representative for the county prison until 1994.
b. McMullen agreed to use DSI software, but wanted to review the
contract.
c. By letter dated April 2, 1996, Johnson provided McMullen with a copy
of the contract and advised McMullen to sign and return it. Johnson
advised McMullen that execution of the contract will be Covenco's
"commitment to using the latest DSI software." McMullen also was
instructed not to date the contract. Johnson indicated that "[s]hould the
County determine to award the contract with Covenco, it will then date
the contract, sign it and provide you with a fully executed copy thereof."
Whitcomb was copied with the April 2, 1996, letter.
71. Following the meeting with Johnson on April 1, 1996, contrary to Whitcomb's
statement that he would have no objection with Covenco if Covenco used DSI,
and after learning that Covenco would use DSI, Whitcomb requested the County
Commissioners delay awarding the contract because there was a need for
further clarification of the commissary bids.
a. Whitcomb advised the Commissioners that a few of the assumptions
made by Johnson were incorrect.
Johnson, 98- 004 -C2
Page 14 -
b. Whitcomb was referring to Johnson's assumption that Oasis and Canteen
discounted certain items in violation of the terms of the specifications.
72. Robert DeGrossa of the Cumberland County Controller's Office conducted a
review of the commissary bids at the direction of Controller Al Whitcomb.
a. The analysis of the bids prepared by DeGrossa dated April 16, 1996,
concluded that all bidders' prices were below Canteen's current baseline.
b. Bid tabulations:
Baseline: $1.59
Canteen Bid: $1.39
Oasis: $1.35
Covenco: $1.59
Keefe: $1.47
c. The report concluded that DeGrossa did not think bidders discounted
prices but that Canteen's current menu, along with Covenco's and
Keefe's bids, provide a high profit.
d. The bids lacked norms, although most tested items fell in line with each,
other, and some were out [of] line.
73. Following the April 1, 1996, meeting, Johnson prepared an analysis of the bids
which was dated April 2, 1996.
a. Two addenda dated May 14, 1996, and May 15, 1996, were
subsequently prepared.
b. These memos outlined Johnson's review of the bids, his alterations and
deletions in various bid items and his comments regarding an analysis of
the bids from the County Controller's Office.
74. Johnson's initial report on the commissary bid dated April 2, 1996, concluded
that Oasis and Canteen got the lowest prices by discounting the "non -hot"
items which was in violation of the bid specifications.
a. "Hot items" and "non -hot items" were not terms used in the bid
specifications but were used by Johnson extensively when evaluating the
bids.
b. Johnson also recommended that Keefe not be considered because he had
difficulty reviewing their bid, Keefe failed to bid on fifteen (15) of the
required items, made changes in the items and did not provide a bid in
regard to the indigent kits.
c. Johnson commented favorably about Covenco's bid. Johnson believed
that Covenco's bid was the best deal for the County.
1. Johnson observed, among other things, that the County pays for
indigent kits and receives no commission therefrom. Covenco's
indigent kit price was $1.27, the lowest of all bidders. Oasis'
indigent kit price was $1.73, which, obviously, caused Johnson
doubt as to whether Oasis was even the lowest bidder. Controller
Whitcomb thought that the bid should be awarded to the
Johnson, 98- 004 -C2
Page 15 -
ostensible lowest bidder, and not the bidder with the best price for
the County.
75. Johnson and paralegal Janet Walter met with Warden Reitz, Controller
Whitcomb, Robert DeGrossa and Janet Scott on May 10, 1996.
a. The focus of the meeting [was on] concerns as to whether the contract
should be awarded to the lowest bidder and the use of the DSI software.
b. Reitz was of the opinion that whoever was awarded the contract should
be required to use the DSI software.
1. Reitz and Johnson believed that since the process had dragged on
for over a year a decision should be reached.
76. Johnson's first addendum to the solicitor's report dated May 14, 1996,
responded to the Controller's analysis.
a. The specifications require a 15% commission[;] so long as bidders meet
that criteria, the motivation should be to go with a higher markup rather
than the lowest markup.
b. The only motivation for bidders Canteen and Oasis to increase hot items
and decrease non -hot items was to get a low average price per item
which the specs do not allow.
c. Where bidders did not bid the same items, he made the appropriate
adjustment to put everyone on a level playing field.
d. It is [in] the best interest of the County to award the bid to Covenco
because its bid meets the specification and produces the greatest
commission for the County.
77. Johnson subsequently prepared a second addendum analysis memo of May 15,
1996, to the Commissioners. Johnson recommended that the bid should be
awarded to the bidder whose prices and bid met the specifications and
produced the most profit for the County. Covenco's average price was $1.61
(per the specifications, the bidders' prices had to be comparable to or less than
those charged by retailers within a one (1) mile radius of the Cumberland
County Prison). Based on such, Johnson recommended that the commissary
contract be awarded to Covenco on the condition that Covenco date and sign
a contract that required the use of the DSI Software and that the same be
returned to the County on or before June 24, 1996. Johnson further
recommended that if Covenco will not use DSI. then the bid should be awarded
to Oasis.
78. Johnson's recommendation to award the contract to Covenco was in
accordance with Paragraph 13 of the instructions to bidders' specifications
titled, "Criteria for Evaluating Bids, " and included his analysis of the bidders'
specifications as follows:
a. Capabilities: Covenco was located in Middletown, PA, approximately 21
miles away and serves four (4) to six (6) other prisons.
Johnson, 98- 004 -C2
Page 16 -
b. Program Quality: Covenco will operate with DSI software which the
prison presently uses and deliveries will be made with its own personnel
and equipment.
c. Compliance: Covenco's bid was the most responsive bid and the
most beneficial to the County.
d. The County pays for the indigent kits and receives no commission for the
same, and Covenco was the lowest bidder on said kits.
79. On May 15, 1996, Johnson directed paralegal Janet Walter to direct a memo
to Whitcomb inquiring as to whether he would prefer the CCPB make a
recommendation to the County Commissioners regarding the bid prior to the
Commissioners taking official action. Said memo was sent.
80. On May 15, 1996, Johnson was the guest of Paul Cercel at the Blue Ridge
Country Club.
a. Expenses for the outing including lunch, green fees and carts were
submitted as business expenses by Cercel.
b. Cercel was reimbursed by Covenco.
81. During the CCPB meeting of May 20, 1996, Johnson advised the CCPB that he
would make a recommendation on the commissary bids at the next meeting.
a. Johnson had already recommended Covenco as set forth in his bid
analysis, with the addenda thereto.
82. Johnson recommended to the CCPB on June 17, 1996, that the commissary bid
be awarded to Covenco.
a. The board voted unanimously to accept Johnson's recommendation and
to advise the county commissioners.
83. On June 17, 1996, Johnson advised the County Commissioners that the CCPB
recommended the commissary bid be awarded to Covenco.
_ a. Based on the CCPB recommendation, the Commissioners unanimously
approved the bid to Covenco.
84. Johnson directed paralegal Janet Walter to advise Paul Cercel of the decision.
a. Walter advised Cercel by letter dated June 19, 1996, of the award.
85. The contract entered into by Cumberland County and Covenco for the Inmate
Commissary Service Agreement was dated June 17, 1996, and was signed by
all three County Commissioners and representatives of Covenco.
a. The Agreement was drafted by Horace Johnson.
86. The contract entered into by the County and Covenco requires the use of DSI,
as opposed to a comparable program which the bidder may already have. Such
was contrary to the bid specifications which permitted the bidder to use either
DSI software or a comparable program, that bidder provide at bidder's expense.
Johnson, 98- 0 -C2
Page 17 -
a. The contract did not require that Covenco provide the County with the
latest DSI software as stated in Item 10 of Johnson's proposed contract
with Covenco. (See Finding No. 89).
87. The contract entered into by the County and Covenco did not require Covenco
to purchase DSI software. Rather, contrary to the April 2, 1996, draft contract,
the contract provided in Item 10 that Covenco will use the DSI software
purchased by the County.
a. Johnson inserted this provision after being advised by Warden Reitz that
his primary concern was that the successful bidder use DSI software.
88. Bid specifications regarding the DSI Jail Management Program provided as
follows:
"The County must be able to transmit orders directly from the County
Prison to the successful bidder by use of its present computer (hardware)
and software programs. Presently, the County Prison uses DSI Jail
Management Program which automatically charges an inmate's account
for items an inmate orders and shows the balance of the inmate's
account. Bidder's computer and software programs must be either DSI
Jail Management Program or a different program that bidder provides at
bidder's expense, provided bidder supplies all necessary software,
hardware and necessary training to personnel using same, which requires
no additional County personnel and which will track inmate's accounts
in like manner ..."
89. The draft contract sent to Covenco on April 2, 1996, provided as follows:
... the contractor provide the county with the latest software developed
by Digital Software Solutions incorporated for use in prisons to enable
County's employees to enter ordered items into a computer which will
display the inmate's balance of funds available for commissary
purchases, will update the Inmate's account and after all inmate orders
have been processed they will be down loaded by modem to the
contractor's off -site warehouse facility. If contractor fails to provide and
maintain said software, county may terminate this agreement on thirty
(30) days notice.
90. The final contract executed between the County and Covenco provides as
follows:
Contractor will use County's software presently used by the county prison
which will enable county's employees to enter ordered items into a computer
which will display the inmate's balance of funds available for commissary
purchases, will update the inmate's account and after all inmate orders have
been processed they will be down loaded by modem to the contractor's off -site
warehouse facility. If contractor fails to effectively use said software, county
may terminate this agreement on thirty (30) days notice."
91. From November, 1993 through February 12, 1996, when the County
Commissioners authorized advertising for bids for the commissary, Horace
Johnson, in accordance with his interpretation of the County Code, consistently
advised the CCPB and the County Commissioners that the contract had to be
bid.
Johnson, 98- 004 -C2
Page 18 -
a. Johnson was opposed to requests for proposals insofar as it was
Johnson's opinion, as well as Tiley's, that the contract should be bid.
92. After Covenco received the commissary contract, Cercel went on a golf trip to
Phoenix, Arizona, with Johnson and Slencak from February 13, 1997, to
February 16, 1997.
93. Cercel charged most of the expenses on a Covenco provided credit card.
a. The expenses were approved by Covenco as business expenses.
94. Other gifts provided to Johnson by Cercel during the period when the
commissary project was being bid included:
10/12/95: Golf Outing; Outdoor Country Club - Golf carts, lunch, dinner,
drinks, raffle tickets; 12/28/95: Cigars; 05/16/96: Lunch, golf, etc. - Blue
Ridge Country Club; 04/24/97: Golf carts, lunch, etc.
95. Beginning in 1993 through the spring of 1997 when he was providing legal
advice regarding the commissary contract to both the County Commissioners
and the CCPB, Johnson was receiving gifts and golf trips from Cercel, who was
reimbursed by Covenco.
96. Johnson benefitted from golf trips sponsored by Cercel and paid for by Covenco
as follows:
1994 Myrtle Beach: Airfare, room, rental car, flight ins.
1995 Orlando, Florida: Airfare, lodging, tips, golf, rental car
1996 Ponte Verda Beach, Florida: Airfare, lodging, golf, meals
1997 Phoenix, Arizona: Airfare, car rental, lodging, golf, meals
and tips
97. The total value of all gifts and expenses set forth above which were paid by
Cercel, who subsequently submitted the same to Covenco, was $4,763.83.
98. Johnson continues to golf with Cercel; most expenses are paid by Cercel and
some of the expenses are paid by Johnson.
99. Johnson was charged in Cumberland County with a violation of 65 Pa.C.S.
§ §409(a), 409(b), to which Johnson pleaded guilty. Johnson had failed to
disclose on his Statements of Financial Interests for the years 1991 through
1996 the value of the golf trips paid for by Covenco.
100. It was noted at the time of Mr. Johnson's plea that ". . . the county suffered
no financial injury as a result of [Johnson's] actions."
101. In accordance with an agreement reached with the Cumberland County District
Attorney's Office, Johnson paid a fine of $1,000 and, pursuant to §409(c) of
the Ethics Act, $4,000 was paid to the County.
Johnson, 98- 0 -C2
Page 19
III. DISCUSSION:
At all times relevant to this matter, the Respondent, Horace Johnson,
hereinafter Johnson, as the full -time Solicitor for Cumberland County, was a public
official /public employee 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, et seq.,
as codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101, el, seq. See P.J.S.
v. State Ethics Commission, 555 Pa.149, 723 A.2d 174 (Pa. 1999).
The issue before this Commission is whether Johnson violated Section 3(a)
(now codified as Section 1103(a)) or Section 3(c) (now codified as Section 1103(c))
of the Ethics Act as to the allegation that he accepted something of monetary value
in the form of all expense paid trips from a vendor who has contracts with the County
based on the understanding that his official action and judgment in regard to contracts,
with that vendor would be influenced thereby; and when he used the authority of his
position as Solicitor for a private pecuniary benefit when he accepted all expense paid
trips from a County vendor at a time when he was participating in drafting of bid
specifications and reviewing bids for a contract awarded to that vendor.
Section 3(a)/1103(a) of the Ethics Act prohibits a public official /public employee
from engaging in conduct that constitutes a conflict of interest. The term "conflict of
interest" is defined in the Ethics Act as follows:
Section 2. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received
through his holding public office or employment for the
private pecuniary benefit of himself, a member of his
immediate family or a business with which he or a member
of his immediate family is associated. "Conflict" or
"conflict of interest" does not include an action having a de
minimis economic impact or which affects to the same
degree a class consisting of the general public or a subclass
consisting of an industry, occupation or other group which
includes the public official or public employee, a member of
his immediate family or a business with which he or a
member of his immediate family is associated.
65 P.S. §402 (For the definition as codified, see, 65 Pa.C.S. §1102).
Section 3(c)/1103(c) of the. Ethics Act provides in part that a public
official /public employee shall not solicit or accept anything of monetary value based
upon any understanding that his vote, official action or judgment would be influenced
thereby.
Having noted the issues and applicable law, we shall now summarize the
relevant facts.
Johnson served as the Solicitor for Cumberland County and for the Cumberland
County Sheriff from January 4, 1988 until he retired on December 31, 1997. As
Solicitor for the County and for the County Sheriff, Johnson was a full -time employee.
Johnson, 98- 004 -C2
Page 20 -
Johnson's duties as Solicitor were as set forth in the Fourth Class County Code.
Those duties specifically included providing legal advice to the County Commissioners
and to any other County office that did not have an appointed solicitor. Such legal
advice included the review of contracts. This case involves contracting as to the
operation of the commissary at the Cumberland County Prison.
As County Solicitor, Johnson served as Solicitor to the Cumberland County
Prison Board ( "CCPB "). The CCPB was the body which authorized the establishment
of the commissary. Prior to May, 1992, the commissary was operated by the prison
management. From May, 1992 forward, the commissary was operated by private
entities.
The first private entity to run the commissary was "Canteen Corporation"
( "Canteen "). On May, 18, 1992, the. CCPB voted to enter into a.contract with Canteen,
to provide commissary services for the prison. However, before entering into a
contract with Canteen, the County Board of Commissioners was advised by Assistant
County Solicitor, Stephen B. Tiley, that the contract should be competitively bid.
Canteen was then authorized to provide commissary services pursuant to a
Commissioners' Letter of Intent effective May 29, 1992.
Pursuant to the stipulated findings, Johnson's involvement in matters pertaining
to the operation of the prison commissary began as early as June, 2, 1992, when
Johnson reviewed the Letter of Intent and proposed Canteen contract and met with
the Warden, who at the time was Warden Egoff. This meeting occurred within a few
days of the Warden writing to Canteen and authorizing it to commence providing
commissary services. Per the stipulated facts, although Warden Egoff advised
Johnson that he was unaware of anyone else in the commissary service business,
Johnson made some telephone calls and learned that there were at least ten entities
which provided commissary service.
Beginning in late 1993, the Cumberland County Commissioners and the CCPB
began to question possible uses of the profits received from the inmate commissary
funds. Johnson was asked by both Boards to provide advice in this regard. Johnson
was also asked by the County Commissioners whether it would be advisable to sign
the proposed Service Agreement with Canteen Corporation. In response the latter
request, Johnson advised that he concurred with Assistant Solicitor Tiley that the
contract should be awarded pursuant to competitive bidding, and that the County
should therefore not sign the Canteen Corporation Service Agreement, but rather,
should consider developing specifications and advertising for bids. Johnson further
advised that if the County would nevertheless decide to enter into the Agreement,
certain changes be made to it.
In a letter dated November 23, 1993, from Johnson to the County
Commissioners, Johnson recommended the developing of specifications and
advertising for bids to award a contract for management of the commissary. Johnson
provided an analysis of the current contract and advised to continue the present
agreement with Canteen but to provide specifications and solicit bids. Johnson
recommended that if the Commissioners decided not to solicit bids, the present
arrangement be maintained.
From at least November, 1993, and continuing through June, 1996, Johnson
provided legal advice to the Cumberland County Commissioners and the CCPB
regarding the service agreement with Canteen, uses of profits from the commissary
by the County, and legal requirements to put the commissary contract out for bid.
Johnson, 98- 004 -C2
Page 21 -
In 1994, Covenco, Inc., a vending and food management company in
Middletown, PA, expanded its business to include providing commissary services to
county prisons. Covenco hired William McMullen, who had previously been employed
by Canteen Corporation, to develop the commissary service part of its business.
Covenco's Vice - President of Sales and Marketing is a man named Paul Cercel.
Cercel and Johnson are close personal friends, and have been so since at least 1970.
Johnson and Cercel have played golf on a regular basis since the early 1970's, before
Johnson became the Cumberland County Solicitor.
Covenco provides gifts, including trips and entertainment, to its customers as
part of its effort to maintain accounts. During the period of time that is pertinent to
this case, Johnson was a frequent guest on golf trips sponsored by Cercel. The
Cumberland County Nursing Home Director, Robert Slencak, also accompanied Cercel,
on several golf trips (Covenco had an existing account at the Cumberland County
Nursing Home). Most of the expenses for these trips were paid initially by Cercel and
reimbursed by Covenco.
Although Johnson was involved in golf trips paid for by Covenco prior to 1994,'
we shall now focus upon Johnson's conduct and the golf outings which occurred from
1994 forward, that is, from on or about the time Covenco expanded its operations to
include the commissary service business.
The stipulated findings reflect that Johnson was included in a golf trip to Myrtle
Beach, South Carolina from January 21, 1994, through January 24, 1994. This trip
involved expenses that were submitted by Cercel to Covenco as business related.
Covenco approved the trip as business related and reimbursed Cercel for the submitted
expenses. Shortly thereafter, in May, 1994, Johnson provided advice to the CCPB
regarding the commissary, which advice included Johnson's analysis - -as to the status
of the Canteen Corporation agreement - -that specifications should be prepared and bids
solicited for a new commissary contract.
On or about August 10, 1994, Covenco sent a letter signed by McMullen to
Warden Egoff, requesting the opportunity to obtain the commissary business through
the bidding process.
In December, 1994, a new Warden, Earl Reitz, was appointed. Warden Reitz
upgraded the Prison computer system to use a Digital Solutions Inc. ( "DSI ") software
program. Reitz also wanted to restructure the commissary and was interested in using
another outside company.
From December, 1994 through February, 1995 the commissary contract was
being discussed by the CCPB, although no decisions had been reached. From February
14, 1995, through February 16, 1995, Johnson and Slencak participated with Cercel
in a golf outing in Orlando, Florida. Cercel submitted expenses from this trip to
Covenco for reimbursement as business related expenses, and Covenco approved the
expenses as business related.
In March, 1995, shortly after the Orlando trip, the CCPB authorized Johnson
to research possible uses of the funds from the commissary fund. Two days later,
Johnson issued a memo to the CCPB setting forth a detailed analysis on that issue and
again recommending that a vendor of commissary items be determined pursuant to the
bidding process. Johnson further advised that he would prepare the necessary
specifications for bidding. This was unusual, because it was a standard practice in the
County for the head of the County department involved in a particular bid to prepare
bid specifications together with Janet Walters, a paralegal with the Solicitor's Office.
Johnson, 98- 004 -C2
Page 22 -
Ordinarily, each County department was responsible for providing the framework for
the bid specifications to Johnson, and Johnson was responsible for reviewing the
specifications, determining their legality, and finalizing them.
During the Spring of 1995, Warden Reitz conducted a survey of prisons in
surrounding counties regarding the selection of a commissary vendor. The survey
indicated that since taxpayer funds were not used in the commissary, the selection of
a commissary vendor did not require competitive bidding. Warden Reitz and Alfred
Whitcomb, who was County Controller and Chairman of the CCPB, were both of the
view that the County's commissary contract was not required to be put out for bid.
Moreover, both Reitz and Whitcomb recommended that the County use Oasis Inmate
Commissary Services ( "Oasis ") rather than Canteen.
Johnson, in accordance with Assistant Solicitor Tiley's 1992 advice,,
consistently recommended that the commissary service contract be put out for bids.
On May 15, 1995, the CCPB authorized Johnson as Solicitor to prepare
specifications for bidding for suppliers of the commissary at the Prison.
During the summer of 1995, Janet Walters, the aforementioned County
Paralegal supervised by Johnson, was directed by Johnson to conduct a study
regarding the administration and operation of the commissary contract. Walters was,
specifically to determine the mechanics and details of the commissary operation, which
information was to be used for the bid specifications.
On October 18, 1995, Whitcomb as CCPB Chairman issued a memo to the
Members of the CCPB advising that he felt that the Oasis Inmate Commissary Service
system was the one the Board should go with. Warden Reitz concurred with that
analysis. No action was taken by the CCPB on Whitcomb's request.
On December 18, 1995, the CCPB unanimously approved advertising for bids
for the commissary service. The authorization was made based upon Johnson's
recommendation. On the following day, December 19, 1995, Johnson provided
Whitcomb and Reitz with a memorandum and bid specifications for the commissary
contract. The very next day, December 20, 1995, Paul Cercel made airline
reservations for a golf trip to Ponte Verda Beach, Florida for Johnson, Slencak, and
himself. Reservations were also made for a man named John Polk, who was a friend
of Cercel.
Before the bid specifications were advertised, Johnson contacted McMullen at
Covenco and requested his assistance in drafting them. Johnson also contacted other
counties, but he did not contact any of the other companies which were to be sent the
specifications to ask for their assistance. A pre -bid conference was required and was
held to obtain the input of other interested bidders. Representatives from Oasis
contacted Johnson to offer assistance in drafting the specifications. Johnson advised
Oasis that their assistance was not needed.
After the bid specifications were finalized, Johnson recommended that copies
be provided to Canteen, Oasis, and Covenco for review and comments.
From January 23, 1996 until January 26, 1996, Johnson participated in the
Ponte Verda Beach, Florida golf trip. Certain expenses, including airfare and room
charges related to the trip, were paid for by Cercel who submitted the expenses to
Covenco for reimbursement.
Johnson, 98- 004 -C2 -
Page 23
On February 12, 1996 —less than one month after Johnson's Ponte Verda Beach
golf trip with Cercel- -the Cumberland County Commissioners authorized the advertising
of the commissary contract pursuant to Tiley's and Johnson's legal advice. Bids were
required to be submitted by March 11, 1996.
Bidders were required to attend a pre -bid conference held on February 29, 1996.
Johnson was not present at the conference but his paralegal was. As a result of that
conference, the bid opening was postponed and Johnson made changes to the bid
specifications to accommodate the bidders.
On March 25, 1996, at a meeting of the Cumberland County Commissioners,
bids were received from four companies and were opened by Whitcomb as County
Controller. The bidders were Oasis, Canteen, a company called "Keefe Supply," and
Covenco. The bids were as set forth in findings 65 -66. Keefe Supply was the only,
bidder which did not bid on "indigent kits." Covenco's bid was the only bid that did
not specifically mention using the DSI software, although Covenco did sign the bid
specifications which required the successful bidder to commit to using DSI software
or a comparable software program. The County Commissioners accepted the bids for
review and action at a future meeting. All four bids were referred to Johnson for his
review.
Johnson reviewed the bids, and on April 1, 1996, he met with County
Controller and Prison Board Chairman Al Whitcomb, Warden Earl Reitz, Paralegal Janet
Walter, and prison employee Janet Scott. During this meeting, Johnson recommended
that the contract be awarded to Covenco, based upon his evaluation of the bid
information. Whitcomb and Reitz expressed concerns as to assurances that Covenco
would utilize DSI software. Since the specifications required the use of DSI Q
comparable software, Johnson advised that he would contact Covenco and determine
whether they would use DSI software, as opposed to something comparable, which
the specifications allowed. Whitcomb and Reitz agreed that if Covenco used DSI, they
would not object to the award of the contract to Covenco.
On that same day, April 1, 1996, Johnson called McMullen at Covenco and
asked if Covenco would sign a contract requiring the use of DSI software. McMullen
agreed, but wanted to review the contract. By letter dated April 2, 1996, Johnson
provided McMullen with a copy of the contract and advised him to sign and return it.
McMullen was instructed not to date the contract. Johnson specifically indicated that
if the County would decide to award the contract to Covenco, the County would sign
and date the contract and would provide a copy to McMullen.
Meanwhile, despite Whitcomb's prior statement that if Covenco would use DSI,
he would have no objection to using Covenco, Whitcomb asked the County
Commissioners to delay awarding the contract because there was need for further
clarification of the commissary bids. Whitcomb advised the Commissioners that a few
of the assumptions that had been made by Johnson were incorrect.
The Cumberland County Controller's Office conducted a review of the
commissary bids at the direction of Controller Whitcomb. The analysis, dated April 16,
1996, was as set forth in Finding No. 72.
Johnson also prepared an analysis of the bids. The analysis consists of an initial
report dated April 2, 1996, and two addenda (discussed further below) which are
dated May 14, 1996 and May 15, 1996. In Johnson's initial report, Johnson .
commented favorably about Covenco's bid. Johnson recommended that Keefe Supply
not be considered because it failed to bid as required. Johnson concluded that Oasis
Johnson, 98- 004 -C2
Page 24 -
and Canteen got the lowest prices by discounting what Johnson termed "non -hot"
items, in violation of the bid specifications.
On May 10, 1996, Johnson participated in a meeting with Warden Reitz,
Whitcomb, and others as to the contract. The meeting focused upon concerns as to
whether as to whether the contract should be awarded to the lowest bidder and the
use of the DSI software.
In the May 14, 1996 addendum to his initial (April 2, 1996) report analyzing the
bids, Johnson responded to the Controller's analysis, and concluded that it would be
in the best interests of the County to award the bid to Covenco. In the second
addendum, dated May 15, 1996, Johnson recommended that the contract be awarded
to Covenco on the condition that Covenco date and sign a contract that would require
the use of the DSI software and that the same be returned to the County on or before,
June 24, 1'996. Johnson further recommended that if Covenco would not use DSI,
then the bid should be awarded to Oasis.
On May 15, 1996, Johnson directed his paralegal to send a memo to Whitcomb
asking whether he would prefer the CCPB make a recommendation to the County
Commissioners regarding the bid before the Commissioners took official action. On
that same day, Johnson was a guest of Paul Cercel at the Blue Ridge Country Club for
an outing which included lunch, green fees and carts, all of which expenses were
submitted by Cercel to Covenco as business expenses, and for which expenses Cercel
was reimbursed by Covenco.
Five days later at a CCPB meeting, Johnson advised the CCPB that he would
make a recommendation on the commissary bids at the next meeting. Of course,
Johnson had already recommended Covenco as set forth in his analysis and addenda
thereto.
On June 17, 1996, Johnson recommended to the CCPB that the commissary
bid be awarded to Covenco. The Board voted unanimously to accept Johnson's
recommendation and to so advise the County Commissioners. On that same day,
Johnson advised the County Commissioners that the CCPB recommended that the
commissary bid be awarded to Covenco. Based upon the CCPB recommendation, the
Commissioners unanimously approved the bid to Covenco. The contract between
Cumberland County and Covenco for the inmate commissary service agreement was
dated that same day, June 17, 1996, and was signed by all three County
Commissioners and representatives of Covenco. The agreement was drafted by
Johnson. Contrary to the bid specifications, the agreement specifically requires the
use of DSI software.
From November, 1993 through February 12, 1996, when the County
Commissioners authorized advertising for bids for the commissary, Johnson, in
accordance with his interpretation of the County Code, consistently advised the CCPB
and the County Commissioners that the commissary contract had to be bid. Beginning
in 1993 and continuing through the spring of 1997 when Johnson was providing legal
advice regarding the commissary contract to both the County Commissioners and the
CCPB, Johnson was receiving gifts and golf trips from Cercel, who was reimbursed
by Covenco. The trips, outings, and gifts provided to Johnson by Cercel and paid for
by Covenco during the pertinent period of time are summarized in findings 92 -97.
According to Stipulated Findings Nos. 99 -101, Johnson pled guilty to charges
in Cumberland County, which appear to have involved his failure to disclose the value
of the golf trips paid for by Covenco on his Statements of Financial Interests for the
years 1991 -1996. It was noted at the time of Mr. Johnson's plea that ". . . the
Johnson, 98- 004 -C2
Page 25 -
county suffered no financial injury as a result of [Johnson's] actions." In accordance
with an agreement reached with the Cumberland County District Attorney's Office,
Johnson paid a fine of $1,000 and, pursuant to §409(c) of the Ethics Act, $4,000
was paid to the County.
Having summarized the above relevant facts, we must now determine whether
the actions of Johnson violated Section 3(a)/1103(a) or Section 3(c)/1103(c) of the
Ethics Act.
The parties have submitted a Consent Agreement together with a Stipulation of
Findings. The consent agreement reflects the parties' agreement that there is
insufficient evidence to establish a violation of Section 3(c)/1103(c) of the Ethics Act
in this case. The parties propose that this case be resolved by this Commission finding
that a violation of Section 3(a). (now codified as Section 1103(a)) of the Ethics Act.
occurred when Horace Johnson, in his capacity as a full -time Solicitor for Cumberland
County, used the authority of his position as Solicitor for a private pecuniary benefit
by accepting all expense paid trips from a County vendor at a time when he was
participating in drafting bid specifications and reviewing bids for a contract awarded
to that vendor, and directing Johnson to make a payment in the amount of $3,500 to
the Commonwealth of Pennsylvania through this Commission within 30 days of the
issuance of this Commission's Order.
We believe that the Consent Agreement is the proper disposition for this case,
based upon our review of the totality of the facts and circumstances.
There is insufficient evidence to establish a violation of Section 3(c)/1103(c) of
the Ethics Act in this case. A violation of Section 3(c)/1103(c) of the Ethics Act as
to a public official /public employee must be supported by clear and convincing
evidence that the public official /public employee solicited or accepted something of
monetary value based upon an understanding of that public official /public employee
that his vote, official action or judgment would be influenced thereby. Based upon the
facts before us, there is insufficient evidence to establish the requisite elements for
such a violation.
However, there is clear and convincing evidence establishing a violation of
Section 3(a)/1103(a) of the Ethics Act as set forth above. Johnson did in fact use the
authority of his position as Solicitor for a private pecuniary benefit by accepting
numerous trips at the expense of Covenco at a time when he was participating in
drafting bid specifications and reviewing bids for the contract that was awarded to
Covenco. As the recipient of such trips and other gifts delineated at length in the
stipulated findings, Johnson had a clear conflict of interest in matters pertaining to the
contract for commissary services. Johnson's duty under the Ethics Act was to abstain
fully from such matters, and to make the disclosures that are required by Section
3(j)/1103(j) of the Ethics Act. Johnson neither abstained nor made the requisite
disclosures. To the contrary, Johnson repeatedly participated in matters pertaining to
the contract, and specifically advocated for the selection of Covenco as the successful
bidder. We find that a violation of Section 3(a)/1103(a) of the Ethics Act did in fact
occur. See, Volpe, Order No. 579 -R; Smith, Order No. 578 -R.
Accordingly, we approve the consent agreement that has been submitted by the
parties. We find a violation of Section 3(a)/1103(a) of the Ethics Act as set forth
above. The parties having agreed that the appropriate payment to be made by
Johnson would be in the amount of $3500 and payable to the Commonwealth of
Pennsylvania, we direct Johnson to make payment in the amount of $3,500 to the
Commonwealth of Pennsylvania through this Commission within 30 days of the date
of this Order. Compliance with the foregoing will result in the closing of this case with
Johnson, 98- 0 -C2
Page 26 -
no further action. Noncompliance will result in the institution of an order enforcement
action.
IV. CONCLUSIONS OF LAW:
1. Horace Johnson, as a full -time Solicitor for Cumberland County, was a
public official /public employee 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, et seq., as codified by Act 93 of 1998, Chapter
1 1 , 65 Pa.C.S. § 1101, et seq.
2. A violation of Section 3(a)/1103(a) of the Ethics Act occurred when
Johnson used the authority of his position of Solicitor for a private
pecuniary benefit by accepting all expense paid trips from a County,
vendor at a time when he was participating in drafting bid specifications
and reviewing bids for a contract awarded to that vendor.
3. Insufficient evidence exists to establish a violation of Section
3(c)/1 103(c) of the Ethics Act in this case.
In Re: Horace Johnson
ORDER NO. 1137
File Docket: _ 98- 004 -C2
Date Decided: September 30, 1999
Date Mailed: October 13, 1999
1. A violation of Section 3(a)/1 103(a) of the Public Official and Employee Ethics
Act ( "Ethics Act "), 65 P.S. §403(a) as codified by 65 Pa.C.S. §1103(a),
occurred when Horace Johnson, as a full -time Solicitor for Cumberland County,
used the authority of his position of Solicitor for a private pecuniary benefit by
accepting all expense paid trips from a County vendor at a time when he was
participating in drafting bid specifications and reviewing bids for a contract
awarded to that vendor.
2. Insufficient evidence exists to establish a violation of Section 3(c)/1103(c) of
the Ethics Act in this case.
3. Per the Consent Agreement of the parties, Johnson is directed to make payment
in the amount of $3,500.00 to the Commonwealth of Pennsylvania through
this Commission within 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,
ogituipu6
DANEEN E. REESE, CHAIR