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HomeMy WebLinkAbout1139 CampbellIn Re: Edward Campbell, Jr. STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: X -ref: Date Decided: Date Mailed: Before: Austin M. Lee, Vice Chair Julius Uehlein John J. Bolger Frank M. Brown Susan Mosites Bicket 98- 065 -C2 Order No. 1 139 11/22/99 12/7/99 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq., by the above - named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific 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 not 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 seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under that Act. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with the Ethics Act. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Campbell, 98- 065 -C2 Page 2 I. ALLEGATION: That Edward Campbell, Jr., a public official in his capacity as a member of the board of directors of the Elizabeth Forward School District violated Sections 1 103(a) and 1103(f) of the State Ethics Act (Act 93 of 1998, 65 Pa.C.S. §1101 et se=.) when he used the authority of his office for the private pecuniary benefit of a member of his immediate family and /or a business with which a member of his immediate family is associated by participating in board discussions, negotiations and votes leading to the awarding of a contract to Lucent Technologies, a business with which his father is associated; and when the contract with Lucent Technologies was entered into without an open and public process. I1. FINDINGS: 1. Edward Campbell, Jr. has been a member of the Elizabeth Forward School District Board of Directors since December 1995. a. Campbell was appointed vice president of the board in 1998. b. Campbell served as Chairman of the Facilities Planning Committee from January 1996 through at least 1998. 2. The Facilities Planning Committee is responsible for overseeing all capital improvements and renovations in the district including improvements to communication systems. a. The FPC consisted of Campbell as Chairman and board members Frank Adams, Carol Druga and Kirk Greenwald. b. Until 1998, Deputy Superintendent Paul Mueller also participated with the FPC. 3. In 1993, Elizabeth Forward School District Assistant Superintendent Paul Mueller began researching the possibility of integrating the district on an ATM Wide Area Network which would provide the school district with an enhanced voice system, a state -of- the -art data connection and data transfer system, and a state -of- the -art video conferencing system (network system). a. Mueller was not officially assigned this task by the EFSD board of directors. 4. On February 20, 1997, the EFSD board of directors voted unanimously to authorize a network technology project as part of the renovations to school district buildings. a. The board had previously voted to approve a bond issue for construction /renovation projects. 5. The network system was to be developed in conjunction with the remodeling of elementary schools and was intended to Zink the various schools via telephones and video systems. 6. Mueller conferred with representatives of various companies in order to research the available technology which would best serve the district. Campbell, 98- 065 -C2 Page 3 a. Companies contacted by Mueller included Fore Systems, Bay Networks, Ciscio Systems, and Lucent Technologies. 1. The district was using Lucent Technologies communication equipment at the time. 7. In 1996 and 1997 Campbell accompanied Mueller on a number of occasions to research what an ATM Wide Area Network could do for the school district. a. Campbell was present during consultations with Fore Systems and Lucent Technologies. 8. On May 13, 1997, presentations on network systems were made to the Elizabeth Forward School District Board of Directors by TCI Communications, Lucent Technologies, and Bell Atlantic. 9. At the May 15, 1997 school board meeting, the board unanimously voted to advertise for bids for the project. a. Campbell participated in the vote. 10. The project specifications were drafted by Mueller with the assistance of Lucent Technologies, and Tom Armbruster of the Allegheny County Intermediate Unit. 11. Meetings were held on March 28, 1997, April 28, 1997, May 7, 1997, and May 13, 1997 between representatives of the EFSD and Lucent Technologies. a. Edward Campbell attended those meetings as a school district representative along with Paul Mueller, deputy superintendent and Tom Armbruster. 12. The work on the account by Lucent and the agreements to proceed with the EFSD was 90% completed [sic] prior to the district advertising for bids. a. These details and agreements were made through Mueller and Campbell. 13. The Elizabeth Forward School District advertised for proposals for a "district - wide, multi -media solution which incorporates all voice, video and data needs of the district in an integrated system using ATM as its transmission protocol." a. The advertisement ran on 5/24, 5/31, and 6/2/97 in the Daily News, a local McKeesport, PA, paper. b. Deadline for proposals was 6/3/97, to be awarded at the 6/5/97 board meeting. 14. The district publicly advertised for RFP's for the network system. 15. Elizabeth Forward School District received the Lucent Technologies proposal on June 3, 1997 for the network system. a. No other proposals were received. b. Fore Systems had requested a bid package, but subsequently declined to submit a proposal. Campbell, 98- 065 -C2 Page 4 16. A special meeting of the board was held on June 5, 1997 to discuss the network system. a. The agenda for the 6/5/97 special meeting listed, as Item #9, the contract for a district -wide multi -media communications system. b. Board action was delayed until the overall cost of the network system was received from Mueller. 17. During the EFSD meeting of June 5, 1997, an estimated project cost of 2.7 million dollars was discussed by Campbell. a. Campbell had entered into discussions with Lucent Technologies and assured the board that the actual cost would be lower than the estimated 2.7 million dollars. b. During a meeting with Lucent Technologies representatives, Campbell actively attempted to get Lucent to reduce their costs and challenged every price for every line item in the contract. 18. On June 10, 1997, the Facilities Planning Committee met for the purpose of discussing the district multi -media communications system. a. The discussion centered on the attributes of Lucent Technologies as a company. b. No decision was made during that meeting. c. Campbell was present for that meeting. 19. Between June 3, 1997, the date proposals were due and June 19, 1997, meetings occurred between Lucent Technology representatives and representatives of the EFSD. a. Campbell, Armbruster and Mueller attended on behalf of the school district. b. Some of the meetings focused on costs of the project. c. Campbell was negotiating for reduced costs from Lucent. 20. The majority of the financial review of the RFP was handled by the Lucent Account Executive, with the emphasis on trimming costs. a. Revised costs were then presented to the district. b. Agreements as to costs were then made between Campbell on behalf of the EFSD and Lucent. 21. The original proposal submitted by Lucent Technologies for the network system totaled $2,751,604.00. The proposed system included the following: Monthly Price Installation Maintenance Voice communications for 7 schools $335,235.00 $94,533.00 $3,571.00 Campbell, 98- 065 -C2 Page 5 Centralized voice mail - 700 subscribers $37,492.00 $4,461.00 $212.00 Homework Hotline Distribution System Requirements Data communications and video Totals 22. Some additional discount was given on the contract by Lucent Technology in exchange for the district's agreement to offer their [sic] network system as a showcase for other school districts interested in a similar type of system. a. This aspect of the agreement was developed at the suggestion of Campbell. 23. The Tentative Agenda for the June 19, 1997 EFSD meeting, supplied to board members at the June 12, 1997 Work Session, did not include a reference to awarding of the network contract. a. The network system was not included on the Tentative Agenda because a definite dollar figure had not been established. 24. The Final Agenda for the June 19, 1997 EFSD board meeting, dated June 17, 1997, included a recommendation by the Facilities Planning Committee and the administration to award the network contract to Lucent Technologies. The agenda included the following statements under "New Business ": "Contract for district wide multi -media communications system. It is the recommendation of the Administration and the Facilities Planning Committee that the Board of School Directors approve a contract with Lucent Technologies for a district wide multi -media communication system, in the amount of $2,552,763.00." b. $49,405.00 $3,854.00 $251.00 $ 100,570.00 $ 159,450.00 N/A $1,785,460.00 $164,500.00 $12,590.00 $2,308,162.00 $426,818.00(sicl $16,624.00 Board members are supplied with a Tentative Agenda at work sessions held one week prior to the regular meetings. a. Campbell was chairman of the FPC and participated in making the recommendation. 25. At the June 19, 1997 EFSD board meeting, Campbell participated in the board decision to award the contract for the network system to Lucent Technologies in an amount not to exceed $2,552,763.00. a. Campbell made the motion to award the contract to Lucent. b. The contract was approved by a 5/0 vote. Four members were absent. 26. Edward F. Campbell, Sr. is the father of Edward Campbell, EFSD board member. a. Edward Campbell, Sr. is employed as a Software Associate for the Business Communications Division of the Large Business Division of Lucent Technologies. Campbell, 98- 065 -C2 Page 6 27. Edward Campbell, Sr.'s duties as a Software Associate for Lucent Technologies include the following: - Completing station reviews, - Obtaining equipment line location information, - Inputting system detail information into System Administration Terminal, - Creating the system tape, and - Operating the post- customer help desk. 28. Paul Luff is employed as a Project Manager for Lucent Technologies. a. Luff was assigned to be the manager for the EFSD project in June 1997 after the contract was awarded to Lucent. 29. A Lucent Technologies Project Scheduler assigns personnel to a project based on a request for services from the project manager. a. The project scheduler makes assignments based on availability and skill level for each job. 30. Edward Campbell, Sr. was assigned to the Implementation Team through a Project Scheduler based out of a Lucent Technologies office near Philadelphia, 31. Paul Luff requested personnel from four areas to handle the voice end of the project, including the following positions: - Software Specialist to handle the system network trunking, - Software Associate to handle the station detail, - Technical Support to handle the installation, [and] - Trainer. 32. As Project Manager, Paul Luff had the authority to make changes in the assignments to the Implementation Team made by the Project Scheduler. 33. Luff wanted Edward Campbell, Sr. assigned to the Elizabeth Forward School District project's Implementation Team because of the complexity of the project, Campbell's experience, and reputation for being detail oriented. a. Edward Campbell, Sr. did not request to be assigned to the Elizabeth Forward School District project. 34. Edward Campbell, Sr. did not participate in Lucent Technologies presentations to the EFSD board of directors prior to the awarding of the contract. 35. Edward Campbell, Sr. was the only software associate involved in meetings of Lucent's Implementation and Provisioning Teams in preparation of Lucent Technologies' RFP. a. Edward Campbell, Sr. did all of the work on the EFSD project in relation to programming the telephone system. 36. As a Software Support/Technician employee, Edward Campbell, Sr. did not receive commissions, bonuses or awards based on the contract awarded to Lucent Technologies by the Elizabeth Forward School District. Ck # Ck Date Amount Mtg Date Campbell's Action Vote 1706 10/17/97 $779,620.62 10/16/97 Motioned 8/0 1843 04/24/98 16,586.00 04/23/98 Motioned 9/0 1847 05/22/98 78,187.00 05/21/98 Motioned 8/0 1848 06/19/98 33,533.63 06/18/98 Seconded 7/0 1849 07/21/98 300,000.00 07/16/98 Motioned 9/0 1859 08/21/98 16,827.78 08/20/98 Motioned 7/0 1865 10/16/98 300,000.00 10/15/98 Motioned 8/0 1869 12/11/98 400,000.00 12/10/98 - 6/0 1876 02/19/98 [sic] 200,000.00 02/18/98 [sic] - 7/0 Campbell, 98- 065 -C2 Page 7 37. Campbell participated in board action to approve payments to Lucent Technologies for the network system. a. Payments by the EFSD made from a Bond Issue Construction Fund were approved individually and were not included on the list of regular bills approved for payments. 38. The Facilities Planning Committee reviewed all bills paid from the Bond issue Construction Fund prior to approval for payment by the board at a regular meeting. a. Invoices from Lucent Technologies were reviewed by Paul Mueller, who determined whether the entire invoice amount would be paid. b. Mueller performed this function as he was most familiar with the technical nature of the network system. 39. Between June 19, 1997 and March 1998, nine checks were issued to Lucent Technologies from the 1994 Bond Issue Construction Fund Account. The checks and Campbell's actions in regard to the approval of the payments were as follows: Total Payments: $2,126,554.90 40. Campbell discussed his father's employment with Lucent Technologies with EFSD Solicitor Jack Cambest in regard to the awarding of the network systems contract. I11. DISCUSSION: At all times relevant to this matter, the Respondent, Edward Campbell, Jr., hereinafter Campbell, 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 Campbell, 98- 065 -C2 Page 8 P.S. §401, s_ea. . as codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101, et The issue is whether Campbell violated Sections 1103(a) and 1 103(f) as to the allegations that he used the authority of his office for the private pecuniary benefit of a business with which a member of his immediate family is associated by participating in board discussions, negotiations and votes leading to the award of a contract to Lucent Technologies, a business where his father is employed, when that contract was awarded without an open and public process. Section 1 103. 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 1 is prohibited from engaging The term "conflict of Section 1102. 65 Pa.C.S. §1102. 103(a) of the Ethics Act, a public official /public employee in conduct that constitutes a conflict of interest. interest" is defined uhder the Ethics Act as follows: Definitions. "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. Section 1 103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Section 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 Campbell, 98- 065 -C2 Page 9 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). 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. Campbell has been a member of Board of Directors of the Elizabeth Forward School District (School District) since December 1995 and Chairman of the Facilities Planning Committee (FPC) from January 1996 through at least 1998. FPC is responsible for overseeing all capital improvements and renovations in the School District including improvements to communication systems. Until 1998, the School District Deputy Superintendent Paul Mueller (Mueller) served on FPC along with Campbell and three other board members. In 1993, Mueller voluntarily began researching the possibility of integrating the School District with an enhanced voice system, a state -of- the -art data connection and data transfer system, and a state -of- the -art video conferencing network system. On February 20, 1997, the Board unanimously voted to authorize a network technology project as part of the School District's building renovations to link the various schools through telephones and video systems. On May 13, 1997, Lucent Technologies, TCI Communications, and Bell Atlantic made presentations on network systems before the Board. On May 15, 1997, the Board, with Campbell participating, unanimously voted to advertise for bids for the project. Prior to the advertisement of bids, Mueller drafted the project specifications with the assistance of Lucent Technologies and Tom Armbruster (Armbruster) of the Allegheny County Intermediate Unit. A number of meetings were also held between Lucent Technologies and Mueller, Campbell and Armbruster regarding the School District project. Campbell, 98- 065 -C2 Page 10 The School District then advertised for proposals in a local publication for a "district -wide, multi -media solution which incorporates all voice, video and data needs of the district in an integrated system using ATM as its transmission protocol." The deadline for proposals was June 3, 1997. The contract was to be awarded at the June 5, 1997 Board meeting. On June 3, 1997, the School District received only one proposal which was from Lucent Technologies. A special meeting of the Board was held on June 5, 1997 to discuss the network system. During that meeting, Campbell mentioned a project cost of an estimated 2.7 million dollars, but assured the Board that the actual cost would be lower. The Board delayed its action until it received an overall project cost from Mueller. On June 10, 1997, FPC met to discuss the network system and the attributes of Lucent Technologies but made no decision at that time. Campbell was present at that meeting. Between June 3, 1997 and June 19, 1997, representatives of Lucent Technologies met with Mueller, Campbell and Armbruster to discuss matters including the cost of the project. Campbell attempted to persuade Lucent Technologies to reduce its cost by challenging every price for every line item in the contract. Lucent Technologies reviewed the Request for Proposal (RFP) with a focus on trimming costs and then presented revised costs to the School District. Agreements as to costs were made between Lucent Technologies and Campbell, acting on behalf of the School District. The original proposal submitted by Lucent Technologies for the network system totaled $2,751,604.00. At the suggestion of Campbell, Lucent Technologies agreed to build in additional discounts if the School District agreed to showcase its network system to other interested school districts. On June 17, 1997, the Final Agenda for the June 19, 1997 Board meeting included a recommendation by FPC and the School District Administration to award the network contract to Lucent Technologies in the amount of $2,552,763.00. Campbell, as Chairman of FPC, participated in making that recommendation. At the June 19, 1997 Board meeting, Campbell made the motion to award the contract for the network system to Lucent Technologies which passed by a vote of 5 -0. Campbell's father, Edward F. Campbell, Sr. (Edward) is employed as a Software Associate for the Business Communications Division of the Large Business Division of Lucent Technologies. Paul Luff is employed as a Project Manager for Lucent Technologies. Luff was assigned to manage the School District's project in June 1997 after the School District awarded the contract to Lucent Technologies. Luff asked for personnel from four areas including a software associate to handle the station detail. Luff specifically asked that Edward be assigned to the Implementation Team for the School District's network systems project. Edward did not ask to be assigned to that project and did not participate in the presentation given by Lucent Technologies to the School Board. Luff chose Edward based upon his experience, his reputation for being detail oriented, and the complexity of the project. Edward was the only Software Associate involved in the preparation of Lucent Technologies' RFP at meetings of the Implementation and Provisioning Teams. Edward performed all the work related to programming the telephone system for the School District project. As a software support/technician employee, Edward did not receive commissions, bonuses or awards. Campbell participated in the Board's action to approve disbursements from the Bond Issue Construction Fund to pay Lucent Technologies for the network system. Mueller, as a member of FPC, reviewed all Lucent Technologies invoices before the Board approved any payments at its regular meetings. Nine checks were issued to Lucent Technologies from the 1994 Bond Issue Construction Fund Account. Having summarized the above relevant facts, we must now determine whether the actions of Campbell violated Sections 1 103(a) and 1 103(f) of the Ethics Act. Campbell, 98- 065 -C2 Page 11 The parties have submitted a Consent Agreement together with a Stipulation of Findings wherein it is proposed to resolve the case by finding that a technical violation of Section 1103(a) of the Ethics Act occurred when Edward Campbell, Jr. participated in actions of the Elizabeth Forward School District resulting in the hiring of Lucent Technology, a firm that employs his father; and that no violation of Section 1103(f) occurred because the School District advertised for the proposals through an open and public process as required by the Ethics Act. 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. As to Section 1103(a) of the Ethics Act, Campbell used the authority of office to obtain a private pecuniary benefit for a business with which a member of his immediate family, . his father, Edward F. Campbell, Sr. was employed. In particular, Campbell was instrumental in negotiating the final project cost, working out the project details, and making the recommendation to the Board to approve the contract with Lucent Technologies. At the June 19, 1997 Board meeting, Campbell participated in the Board's decision by making a motion to award the contract to Lucent Technologies. However, Campbell also attempted to persuade Lucent Technologies to reduce its cost as to the contract with the School District. Accordingly, a technical violation of Section 1 103(a) occurred when Campbell used the authority of office to participate in the process' as to the award of a School District contract to Lucent Technologies, a business with which his father is associated. As to the award of the School District's contract, we find that there is insufficient evidence to establish a violation of Section 1 103(f) of the Ethics Act. As to that particular project, the findings reflect that the School District properly advertised for bids. The only bid received was from Lucent Technologies. Since the contract as to the network systems project was $500 or more and was awarded through an open and public process, we find no violation by Campbell under Section 1 103(f) of the Ethics Act. IV. CONCLUSIONS OF LAW: 1. Edward Campbell, Jr., as a member of the Board of Directors of the Elizabeth Forward School District, is a public official subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998, Chapter 11. 2. A technical violation of Section 1103(a) of the Ethics Act occurred when Campbell used the authority of office to participate in the process as to the award of a School District Contract to Lucent Technologies, a business with which his father is associated. 3. Campbell did not violate Section 1 103(f) of the Ethics Act regarding the School District contract for the network systems project because the contract, which was $500 or more, was awarded through an open and public process. In Re: Edward Campbell, Jr. ORDER NO. 1139 File Docket: 98- 065 -C2 Date Decided: 11/22/99 Date Mailed: 12/7/99 1. Edward Campbell, Jr., as a member of the Board of Directors of the Elizabeth Forward School District, technically violated Section 1103(a) of the Public Official and Employee Ethics Act (Ethics Act) when he used the authority of office to participate in the process as to the award of a School District Contract to Lucent Technologies, a business with which his father is associated. 2. Campbell did not violate Section 1103(f) of the Ethics Act regarding the School District contract for the network systems project because the contract, which was $500 or more, was awarded through an open and public process. BY THE COMMIS ION, AUSTIN M. LEE, VICE CHAIR