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HomeMy WebLinkAbout1138 CardamoneIn Re: Michael Cardamone 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- 053 -C2 Order No. 1138 9/30/99 10/13/99 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 gt eg., 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 seg., 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. Cardamone, 98- 053 -C2 Page 2 - 1. ALLEGATION: That Michael Cardamone, a public official in his capacity as Councilman and President of the Kane Borough Council, McKean County, violated Sections 403(a) and 403(4) [sic] of the State Ethics Act (Act 9 of 1989, 65 P.S. §401 et seq.) when you used the authority of your office for a private pecuniary benefit by directing that borough employees utilize borough equipment to deliver a quantity of bricks to his home, and when he entered into a contract with the borough for the sale of a computer in excess of $500 without an open and public process including prior public notice and public disclosure of all proposals considered and contracts awarded; and when he removed other materials from borough property, including but not limited to woodwork, mantels and doors for his personal use. II. FINDINGS: 1. David Michael Cardamone has served as a councilman for Kane Borough, McKean County, PA, since January 1988. a. Cardamone served as council president from 1994 through 1997 and as chairman of the Public Works Committee in 1997. 2. In 1996, the borough was experiencing problems with inflow and infiltration of the systems and were directed by the Department of Environmental Protection to determine where the problems existed. a. The Sewer Department monitored sewer overflow by reviewing data from flow monitors with the assistance of Karl Schreiter, the borough's consulting engineer. b. Four flow meters were purchased in April, 1997, which recorded data that needed to be downloaded to a laptop computer to be analyzed. 3. Sometime prior to May 14, 1997, . Schreiter discussed with Michael Holtz, borough manager, the borough purchasing their own computer to read the flow meters so that he would not be required to make frequent visits to the borough. 4. On April 17, 1997, Mr. Holtz informed Mike Cardamone the flow monitors had arrived but there was no portable computer with them. 5. Mike Cardamone told Holtz he could sell his business portable computer to the Borough so it would have one and Cardamone would order another one to use in his business. a. Cardamone told Holtz what amount of money he wanted for his computer. b. The price offered by Cardamone was $1,400.00. 6. Cardamone delivered the computer to Holtz on April 18, 1997. 7. No price quotes or bids were solicited from other sources by the borough for the computer. 8. There was no public advertisement that the borough would be purchasing a computer. Cardamone, 98- 053 -C2 Page 3 9. The purchase was not voted upon by borough council prior to the delivery of the computer. a. The other borough council members were not aware of the planned purchase prior to the day that council voted to approve the payment as indicated in finding number 13. 10. Borough policy provided that the chairman of a committee could sign invoices and purchase orders for their respective committees. a. Cardamone signed invoices for the Public Works Committee. 11 A borough purchase order to Mike Cardamone dated May 13, 1997, confirms a laptop computer at a price of $1,400.00. a. Cardamone signed the invoice. 12. Kane Borough issued check number 9098 to Mike Cardamone in the amount of $1,400 on May 13, 1997. a. The check was endorsed and cashed by Mike Cardamone. 13. The payment to Cardamone was approved by a unanimous vote of council on May 12, 1997. a. The payment was part of a listing of bills under the heading "Public Works Committee" and was identified as "Mike Cardamone, Laptop Computer /flow meters, $1,400." b. Cardamone was present at this meeting. 14. The laptop computer sold by Cardamone to the Borough was an ASE XP 148x33, 260 HD, 260 megabyte, serial number AAC011 W2384025, with an ASE XP 8 mb memory module and ASE XP trackball. a. This laptop was originally purchased by Cardamone on September 28, 1994, at a purchase price of $1,923.55. 15. Estimates on the value of the lap top computer sold by Michael Cardamone to the borough were as follows: a. Mr. Cardamone produced an estimate from June 7th of 1999 indicating that the laptop computer, if in very good condition including all original packaging documentation and a new battery, would have had a value from approximately $1,200 to $1,400. b. The Investigative Division of the State Ethics Commission obtained an estimate from an individual who had seen the computer in 1997 in the borough's offices, which estimate indicated that the computer would have been worth, at that time, approximately $500 to $600. 16. In 1997 Kane Borough received a grant from the Pennsylvania Department of Community and Economic Development to make sidewalk curbs in the borough handicap accessible, and repair sidewalks in low to moderate income neighborhoods. Cardamone, 98- 053 -C2 Page 4 - 17. As part of this project, the existing bricks were removed from the sidewalks which were then replaced with concrete. a. Brick was formerly used in sidewalks in some locations throughout the borough. 18. Bricks removed as part of the project were made available free of charge to borough residents who made requests through the borough manager. 19. Borough employees Denny DeMarte and Virgil Hallberg were assigned primary responsibility for moving the bricks. 20. Michael Cardamone saw brick stacked along borough streets and inquired of Manager Holtz as to who owned the bricks, the contractor or the Borough. Mr. Holtz thought the Borough was responsible for them. Mr. Cardamone and Mr. Holtz went to the Borough office and checked the contract and determined that residents could have them if they wanted and the Borough would take the rest as it had the duty to move them from where the contractor stacked them. a. Mr. Holtz testified that Cardamone asked Holtz to have borough employees take a few loads of bricks and dump them behind his home. b. Cardamone denies that he asked Holtz to have borough employees deliver the bricks to his house. 21. Holtz had DeMarte and Hallberg take brick from the corners of Bayard and Dawson and deliver to Cardamone's residence. 22. DeMarte and Hallberg used a borough front -end loader and the borough one ton truck for the delivery to Cardamone. 23. About 3,000 bricks were delivered. a. Cardamone needed about 1,500 as he actually used 1,300. b. This project took approximately two hours to complete. 24. DeMarte and Hallberg were paid at the rate of $10.54 /hour on October 14, 1997. 25. Costs in the Kane area for the rental of a truck and loader to transport the brick to Cardamone's property are as follows: a. Truck: $40.00 /hour including driver b. Loader: $40.00 /hour including driver 26. One other borough resident had brick delivered to their homes on the same day as Cardamone received brick. 27. The cost to deliver brick to Cardamone's home was as follows: a. Labor: DeMarte: Hallberg: 2 hours @ $10.54 /hour = 2 hours @ $10.54 /hour = $ 21.08 $ 21.08 Cardamone, 98- 053 -C2 Page 5 - b. Loader Rental: $40 /hour x 2 hours = $ 58.92 (- $10.54 /hour) c. Truck Rental: $40 /hour x 2 hours = $ 58.92 (- $10.54 /hour) TOTAL $160.00 28. For a period of time prior to 1997 Donald Owens was the owner of a building and warehouse located on Welsh Street in Kane Borough. a. The building was the site of the former Affiliated Industries. 29. On July 2, 1997, a fire severely damaged the Affiliated Industries warehouse. a. For several years prior to the fire the building and warehouse had been vacant. b. Borough Manager Holtz with council approval, initiated conversations with Donald Owens regarding a sale. 30. Owens agreed to sell the building to the borough for One ($1.00) dollar. 31. On December 23, 1997, the borough and Owens entered into an agreement of sale for the Welsh Street property for the sum of One ($1.00) dollar. 32. On January 12, 1998, borough council ratified the 12/23/97 agreement with Owens for the Affiliated property, subject to obtaining clear title. 33. The old Affiliated office building contained ornate wooden fireplace mantels, paneling, wood trim and doors. 34. After the borough purchased the Affiliated site and while still council president, Cardamone and borough manager Holtz discussed the status of the building. 35. Mr. Holtz testified that Cardamone advised Holtz that he was going to take a few doors from the building prior to the demolition. a. Cardamone denies advising Holtz that he was going to take a few doors from the building prior to the demolition but did tell Holtz that he had a man who would like the wood and was going to take it out of the old building, that would be fine. 36. In March, 1998, new council president Geoffrey Perry inquired of Holtz as to whether Cardamone was removing items from the Affiliated office building. 37. During the council meeting of April 13, 1998, council president Perry discussed removal of items from the Affiliated site and questioned whether removal of any items would constitute theft. a. Perry issued a general statement banning the removal of anything from the site. 38. Reddy stopped removing bricks and took the ones he had off his truck. 39. On May 26, 1998, at 8:15 p.m., Cardamone and Reddy were observed by Kane Borough Police removing materials from the Affiliated building. Cardamone, 98- 053 -C2 Page 6 - a. Cardamone and Reddy had loaded wood items from the building onto a one ton dump truck of Reddy's bearing New York license plates. b. The officers had seen the truck there on several occasions both before and after that and Mr. Reddy informed the police this was the third load he had removed. c. Cardamone was directed to cease any further activity. d. The wood was recovered by the borough. 40. Cardamone advised the borough police that he had given permission to. Reddy to remove woodwork and that Reddy had been removing woodwork the past four months. a. A police report indicates that Cardamone provided a statement to police informing them the items were being stored in a barn in Belfast, New York. 41. Police inventory of the items removed on May 26, 1998, and maintained by the borough included the following: a. (2) fireplace mantels (12) inlaid wood panels, wall skirts, 6 short - 6 long (1) 5/8" sheet of plywood (3) 30" x 30" counter top planks (1) work horse (2) skids (6) pieces of white formica 42. The wood removed on May 26, 1998, had an appraised value of approximately $400.00. a. The borough had two separate appraisals of the wood removed by Reddy following the arrest of Cardamone. b. Cardamone believes and avers that the wood removed by Reddy had no value in place in the burned out building because of the cost of removal. 43. On June 2, 1998, Kane Borough Council voted to authorize the police department to file criminal charges against Cardamone for removal of the wood from the Affiliated site. a. The vote was 4 to 3 with Cardamone voting with the minority. 44. On June 5, 1998, Lawrence Anderson, Assistant Chief of Police, Kane Borough, filed Theft By Unlawful Taking charges against Cardamone. 45. The case was referred to the Office of Attorney General on July 31, 1998, by the McKean County District Attorney. 46. On August 18, 1998, the Office of Attorney General advised the McKean County District Attorney that criminal charges against Cardamone were being withdrawn. Cardamone, 98- 053 -C2 Page 7 - a. No further action was taken against Cardamone, and the matter has been closed. 47. Kane Borough has not recovered the other Toads of woodwork. III. DISCUSSION: At all times relevant to this matter, the Respondent, Michael Cardamone, hereinafter Cardamone, 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, seg. as codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101, The issue is whether Cardamone violated Sections 3(a)/1103(a) and 3(f)/1103(f) as to the allegations that he used the authority of his office for a private pecuniary benefit by directing borough employees to utilize borough equipment to deliver a quantity of bricks to his home; by entering into a contract with the borough for the sale of a computer in excess of $500 without an open and public process; and by removing woodwork materials from borough property for his personal use. Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under the Ethics Act as follows: Section 1102. Definitions. "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa.C.S. §1102. Section 1 103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the Cardamone, 98- 053 -C2 Page 8 - public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Section 1103(f) of the Ethics Act imposes certain restrictions as to contracting. Section 1103. Restricted activities. (f) Contract. —No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 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. The case as to Cardamone, who has served as a Council Member for Kane Borough since 1988, involves three separate factual scenarios. The first scenario relates to the purchase of a computer by the Borough from Cardamone. After the Borough purchased monitors to track overflows in the sewage system, a computer was needed to record the data from the monitors. The Borough Manager informed Cardamone about the monitors and lack of a computer. Cardamone then sold his business computer to the Borough for $1,400 without any public advertisement or bid solicitation by the Borough. The purchase of the computer was not voted upon by Borough Council prior to its delivery. Payment to Cardamone of $1,400 was approved by a unanimous vote at a meeting of Council in May, 1997 at which Cardamone was present. Cardamone, 98- 053 -C2 Page 9 - The computer sold by Cardamone had an original purchase price of $1,923.55. Although Cardamone estimated its value to be between $1,200 - $1,400, it appears that the computer was only worth approximately $500 -$600. The second scenario concerns a grant received by the Borough from the Pennsylvania Department of Community and Economic Development to repair certain sidewalks and make sidewalk curbs accessible to handicapped persons. Existing bricks in the sidewalk were removed and replaced with concrete. When Cardamone saw the bricks stacked along the Borough streets, he inquired of the Borough Manager about the ownership of the bricks. The bricks that were removed were made available without charge to Borough residents. According to the Borough Manager, Cardamone asked him to direct Borough employees to take a few loads of bricks and dump them behind Cardamone's home. Cardamone denies that he asked the Borough Manager to take such action. Two Borough employees used a Borough front -end loader and one ton truck to deliver approximately 3000 bricks to Cardamone's home. Based upon an hourly pay rate of $10.54 for the Borough employees and a $40 per hour rate for the truck and loader, the expense in delivering the bricks to Cardamone's home was $160, based upon 2 hours of work time for each employee as well as 2 hours for the loader and the truck. The third scenario involves a building and warehouse which were severely damaged by fire. The owner agreed to sell the building to the Borough for $1. The Borough intended to demolish the building which contained some ornate woodwork such as fireplace mantels, paneling, wood trim and doors. After the Borough purchased the site, Cardamone discussed the status of the building with the Borough Manager. The Borough Manager states, but Cardamone denies, that Cardamone advised that he was going to take a few doors from the building prior to its demolition. In March, 1998, the Borough Council President inquired of the Borough Manager as to whether Cardamone was removing items from the building. Thereafter, Council President issued a general statement banning the removal of any item from the site. However, in May, 1998, Cardamone and another individual were observed removing materials from the building by the police. Cardamone was directed to cease any further activity. Cardamone advised the police that he had given permission to the other individual to remove woodwork from the building. In June, 1998, Borough Council authorized the police department to file criminal charges against Cardamone for removal of wood from the site. The vote carried 4 -3 with Cardamone voting against the motion. The case was referred to the Office of Attorney General by the County District Attorney. In August, 1998, the Office of Attorney General advised the District Attorney that criminal charges against Cardamone were being withdrawn. Having summarized the above relevant facts, we must now determine whether the actions of Cardamone violated Section(s) 1103(a) and (f) of the Ethics Act. In applying Section 1103 of the Ethics Act to the instant matter, Cardamone as a public official used the authority of his office. But for the fact that Cardamone was a Council Member, he could not have sold his computer to the Borough or directed the delivery of bricks to his personal residence by Borough employees using Borough equipment. See, Juliante, Order 809. Such uses of authority office resulted in private pecuniary benefits to Cardamone. The private pecuniary benefits consisted of Cardamone selling his computer to the Borough at a price in excess of its market value and receiving bricks without having to pay labor and transportation expenses. Accordingly, unintentional violations of Section 1103(a) of the Ethics Act occurred when Cardamone as a Borough Councilman used the authority of his office to obtain private pecuniary benefits for himself consisting of the sale of a computer to the Cardamone, 98- 053 -C2 Page 10 Borough at a price in excess of its value and utilizing Borough employees and equipment to transport bricks to his own residence. Regarding the removal of wood products from the building owned by the Borough, we find no violation of Section 1103 of the Ethics Act. Although Cardamone and another individual were caught by the Borough police removing certain wood products from the building, it is unclear from the record whether those wood products were for the use of Cardamone or the other individual. In order to sustain a violation of Section 1103(a), the record must establish a private pecuniary benefit to Cardamone as to the wood products. In this case, the findings as to wood products do not reflect that Cardamone actually received any pecuniary benefit. Accordingly, based upon an insufficiency of the evidence, we find that Cardamone did not violate Section 1103(a) of the Ethics Act regarding the removal of wood products from a building owned by the Borough. Turning to Section 1103(f) of the Ethics Act, the facts reflect that Cardamone sold his computer to the Borough for $1,400. There was no advertisement for bids as to the purchase of the computer. Accordingly, since the contract was $500 or, more and was not awarded through an open and public process, we find an unintentional violation of Section 1103(f) of the Ethics Act when Cardamone as a Borough Councilmember contracted to sell his computer to the Borough. The parties have submitted a Consent Agreement together with a Stipulation of Findings wherein it is proposed to resolve the case by finding unintentional violations of Section 1103(a) of the Ethics Act in relation to the sale of Cardamone's computer to the Borough and the delivery of bricks to Cardamone's home by borough employees using borough equipment; an unintentional violation of Section 1103(f) as to the contract between Cardamone and the Borough for the sale of a computer valued at $500 or more without an open and public process; and a payment of $1,000 within 30 days of the issuance of this Order by Cardamone through this Commission to Kane Borough. Accordingly, Cardamone is directed to make payment as set forth 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. Michael Cardamone, as a Councilman and President of the Kane Borough Council, is a public official subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998, Chapter 11. 2. An unintentional violation of Section 1 103(a) of the Ethics Act occurred when Cardamone used the authority of office to obtain a private pecuniary benefit consisting of the sale of a computer to the Borough at a price in excess of its value. 3. An unintentional violation of Section 1 103(a) of the Ethics Act occurred when Cardamone used the authority of office to obtain a private pecuniary benefit by utilizing Borough employees and equipment to transport bricks to his own residence. Cardamone, 98- 053 -C2 Page 11 4. An unintentional violation of Section 1 103(f) of the Ethics Act occurred when Cardamone sold his computer to the Borough where the contract was for $500 or more and not awarded through an open and public process. 5. No violation of Section 1103(a) of the Ethics Act occurred as to the removal of wood products from a Borough owned building, based upon an insufficiency of evidence. In Re: Michael Cardamone ORDER NO. 1138 File Docket: 98- 053 -C2 Date Decided: 9/30/99 Date Mailed: 10/13/99 1. Michael Cardamone, as a Councilman and President of the Kane Borough Council, unintentionally violated Section 1103(a) of the Ethics Act when he used the authority of office to obtain a private pecuniary benefit consisting of the sale of a computer to the Borough at a price in excess of its value. 2. An unintentional violation of Section 1 103(a) of the Ethics Act occurred when Cardamone used the authority of office to obtain a private pecuniary benefit by utilizing Borough employees and equipment to transport bricks to his own residence. 3. An unintentional violation of Section 1 103(f) of the Ethics Act occurred when Cardamone sold his computer to the Borough where the contract was for $500 or more and not awarded through an open and public process. 4. No violation of Section 1103(a) of the Ethics Act occurred as to the removal of wood products from a Borough owned building, based upon an insufficiency of evidence. 5. Per the Consent Agreement of the parties, Cardamone is directed to make payment of $1,000 within 30 days of the issuance of this Order through this Commission to Kane Borough. 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, t t u DANEEN E. REESE, CHAIR