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HomeMy WebLinkAbout992 AndersenIn re: George R. Andersen STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Roy W. Wilt Allan M. Kluger John R. Showers Rev. Joseph G. Quinn Boyd E. Wolff File Docket: 91-017-C Date Decided: 12/7/95 Date Mailed: 12/15/95 The Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the State Ethics Act, Act 170 of 1978, P.L. 883. Written notice of the specific allegations was served at the commencement of the investigation. A consent agreement was submitted by the parties to the Commission for consideration which was subsequently approved. This adjudication of the Commission is hereby issued which sets forth the individual Allegations, Findings of Fact, Discussion, Conclusions of Law and Order. This adjudication is final and will be made available as a public document fifteen days after issuance. However, reconsideration may be requested which will defer public release of this adjudication pending action on the request by the Commission. A request for reconsideration does not affect the finality of this adjudication. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §2.38. The files in this case will remain confidential in accordance with Section 8(a) of Act 170 of 1978. Any person who violates confidentiality of the Ethics Law is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year, 65 P.S. §409(e). Confidentiality does not preclude discussing this case with an attorney at law. Andersen, 91 -017 -C Page 2 I. ALLEGATION: That George Andersen, former Deputy Executive Director of the Pennsylvania Lottery, violated the following provisions of the State Ethics Act (Act 170 of 1978), when he received gifts valued in the aggregate of $200.00 or more in the form of meals and beverages from Lewis, Gilman & Kynett (LG&K), British American Bank Note Company (BARN) and Control Data Corporation (CDC), firms having contracts with the Lottery, and when he failed to report receipt of these gifts on Statements of Financial Interests filed for the 1988 and 1989 calendar years: Section 5. Statement of financial interests (b) The statement shall include the following information for the prior calendar year with regard to the person required to file the statement. (6) The name and address of the source and the amount of any gift or gifts valued in the aggregate of $200 or more and the circumstances of each gift. This paragraph shall not apply to a gift or gifts received from a spouse, parent, parent by marriage, sibling, child, grandchild, other family member or friend when the circumstances make it clear that the motivation for the action was a personal or family relationship. However, for the purposes of this subsection, the term "friend" shall not include a registered lobbyist or an employee of a registered lobbyist. This paragraph shall not be applied retroactively. II. FINDINGS: 1. George Andersen served as Deputy Executive Director of the Pennsylvania Lottery (Lottery). a. Andersen held this position in 1988 and 1989. b. Andersen resigned in October, 1989, to accept other employment. 2. One of Andersen's duties as Deputy Executive Director of the Lottery required regular and frequent business meetings in connection with services required by such contractors. 3. One of Andersen's duties as Deputy Executive Director of the Lottery was to participate in the evaluation process of Andersen, 91 -017 -C Page 3 proposals submitted to the Lottery. a. Proposals for Services were obtained through Requests for Proposals (RFP's). b. A committee within the Lottery Office reviewed proposed contracts and formulated recommendations regarding the proposals. c. Andersen reviewed the recommendations and passed them along to the Lottery Director, who in turn made a recommendation to the Secretary of Revenue. d. No meals or beverages were received during this committee evaluation process. 4. The firm of Lewis, Gilman & Kynett (LG &K) of Philadelphia was under contract with the Pennsylvania Lottery in 1988 to provide certain advertising services. a. This contract was in effect between July 1, 1988, and June 30, 1991. b. In exchange for its services, LG &K was to receive a sum of $12.2 million dollars per year under the contract. 1. This sum is not a gross profit, rather it is the amount provided to LG &K to effectuate various advertising services. 5. The British American Bank Note Company (BABN) was under contract with the Pennsylvania Lottery during 1988 and 1989. a. BABN was contracted to provide the Lottery with instant tickets. 6. Control Data Corporation (CDC) was under contract with the Lottery during 1988 and 1989. a. CDC was contracted to operate the Lottery's online computer system. 7. Corporate Expense Reports indicated that employees of LG &K, BABN and CDC provided Andersen with meals and beverages during 1988 and 1989 calendar years. a. LG &K b. BABN 1988 1989 $529.00 $336.00 $ 96.00 $179.00 Andersen, 91 -017 -C Page 4 c . a . CDC $ 25.00 $395.00 8. Receiving meals and beverages from vendors in connection with business meetings was a regular practice involving Lottery officials. Andersen and other lottery officials received meals from LG&K, BABN and CDC. 9. Andersen did not demand meals from vendors but company representatives offered and paid. a. The meals provided were pursuant to business meetings or discussions, and to accommodate the schedules of those involved. b. It was an industry standard for advertising companies to take Lottery officials to dinner and /or lunch. c. Andersen was authorized to incur business expenses and to be reimbursed by the Commonwealth. 10. George Andersen filed a Statement of Financial Interests for the 1988 calendar year on March 28, 1989. a. The form bears the signature of George R. Andersen. b. Line 12 of the Statement of Financial Interests titled "Gifts" discloses "None." 11. Andersen did not report as gifts the meals and received from LG&K in excess of $200.00 in calendar on his Statement of Financial Interests filed on 1989. beverages year 1988 March 28, 12. George R. Andersen filed a Statement of Financial for the 1989 calendar year on April 5, 1990. a. The form bears the signature of George R. Andersen. b. Line 12 of the Statement of Financial Interests titled "Gifts" properly discloses the receipt of retirement gifts from LG &K and CDC. Interests 13. Andersen did not report as gifts in the form of meals and beverages received from LG &K and CDC in excess of $200.00 in calendar year 1989 on his Statement of Financial Interests filed on April 5, 1990. a. The above - listed failures to disclose were unintentional on Andersen's part, as he was unaware that the aggregate Andersen, 91 -017 -C Page 5 III. DISCUSSION: Since effective provisions Ethics Act value of the meals and beverages exceeded $200,00 as to the companies and years in question. In his former capacity as the Deputy Executive Director of the Pennsylvania Lottery, George R. Andersen, hereinafter Andersen, would be a public official /public employee as defined in the Ethics Act, 65 P.S. §402; 51 Pa. Code §1.1. As such, his conduct would be subject to the provisions of the Ethics Act and the restrictions therein would be applicable to him. Initially, it is noted that Section 9 of Act 9 of June 26, 1989, P.L. 26, provides, in part, as follows: This amendatory act shall not apply to violations committed prior to the effective date of this act, and causes of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto. the occurrences in this case transpired prior to date of Act 9 (June 26, 1989), we must apply of Act 170 of 1978, P.L. 883, to determine whether was violated. the the the Section 5(b)(6) of Act 170 of 1978 requires that a public official /employee list in his Statement of Financial Interests any gift or gifts valued in the aggregate at $200.00 or more, except for gifts received from the individual's spouse, parents, parents by marriage, siblings, children or grandchildren. Where disclosure of a gift or gifts is required, such disclosure must include the name and address of the donor and the value and the circumstances of each gift. The issue before us is whether Andersen violated Section 5(b)(6) of Act 170 of 1978 regarding the allegation that he received gifts valued in the aggregate at $200.00 or more in the form of meals and beverages from Lewis, Gilman & Kynett(LG&K), British American Bank Note Company (BABN), and Control Data Corporation(CDC), firms having contracts with the Lottery, which gifts he failed to report on his Statements of Financial Interests filed for calendar years 1988 and 1989. Factually, the parties have stipulated that receiving meals and beverages from vendors in connection with business meetings was dersen, 91 -017 -C Page 6 a regular practice involving Lottery officials. Andersen as well as other Lottery officials received meals from LG &K, BABN,'and CDC. In 1988, LG &K was under contract with the Pennsylvania Lottery to provide certain advertising services. During 1988 and 1989, BABN was under contract with the Pennsylvania Lottery to provide "instant tickets," while CDC was contracted to operate the Lottery's on -line computer system. In both years, according to corporate expense reports, employees of each of these three vendors provided Andersen with meals and beverages. The values of these gifts are detailed in Finding 7. The meals and beverages provided to Andersen by BABN were less than $200.00 for each year. The meals and beverages provided to Andersen by CDC were under the $200.00 threshold in 1988 but they exceeded the threshold in 1989. LG &K provided Andersen with meals and beverages valued in excess of $200.00 in both years, 1988 and 1989. It is noted that Andersen did not demand meals from the vendors, but rather, the company representatives offered to provide them. Furthermore, the meals provided were pursuant to business meetings or discussions, to accommodate the schedules of those involved. It is also significant that Andersen was authorized to incur business expenses and to be reimbursed by the Commonwealth. Finally, we would note that the facts before us reflect that no meals or beverages were received during the committee evaluation process of proposed contracts (Finding 3). Andersen filed Statements of Financial Interests for calendar years 1988 and 1989 which failed to disclose the aforesaid gifts. Specifically, Andersen failed to disclose gifts in excess of $200.00 in the form of meals and beverages received from LG &K in both 1988 and 1989 and from CDC in 1989. The 1989 calendar year Statement of Financial Interests did, however, properly disclose the receipt of retirement gifts from LG &K and CDC. In applying Section 5 (b) (6) of Act 170 of 1978 to the above facts, we find technical violations as to Andersen's failure to disclose the aforesaid gifts of meals and beverages from LG &K in 1988 and 1989 and from CDC in 1989. It is clear that these gifts exceeded the $200.00 threshold and should have been disclosed. In light of the fact that Andersen has voluntarily agreed to amend the Statements of Financial Interests for the 1988 and 1989 calendar years to include these gifts, we shall take no further action. We approve the consent agreement which we believe to be the proper disposition for this case given the totality of the facts and circumstances. We specifically note the fact that Andersen's failure to make the requisite disclosures was unintentional in that he was unaware that the aggregate value of the meals and drinks from these companies had exceeded $200.00 for the years in question. Andersen, 91 -017 -C Page 7 IV. CONCLUSIONS OF LAW: 1. In his former capacity as Deputy Executive Director of the Pennsylvania Lottery, George R. Andersen would be a public official /public employee subject to the provisions of Act 170 of 1978. 2. A technical violation of Section 5(b) (6) of Act 170 of 1978 occurred when Andersen received gifts valued in the aggregate at $200.00 or more in the for of meals and beverages from Lewis, Gilman & Rynett and failed to report receipt of these gifts on his Statement of Financial Interests filed for calendar year 1988. 3. A technical violation of Section 5(b)(6) of Act 170 of 1978 occurred when Andersen received gifts valued in the aggregate at $200.00 or more in the for of meals and beverages from Lewis, Gilman & Rynett and Control Data Corporation and failed to report receipt of these gifts on his Statement of Financial Interests filed for calendar year 1989. 4. No violation of Section 5(b)(6) of Act 170 of 1978 occurred as to gifts in the form of meals and beverages received by Andersen from British American Bank Note Company or Control Data Corporation in calendar year 1988 in that such gifts were not valued in the aggregate at $200.00 or more. 5. No violation of Section 5(b)(6) of Act 170 of 1978 occurred as to gifts in the form of meals and beverages received by Andersen from British American Bank Note Company in calendar year 1989 in that such gifts were not valued in the aggregate at $200.00 or more. In re: George R. Andersen File Docket: . Date Decided: Date Mailed: 91 -017 -C 12/7/95 12/15/95 ORDER NO. 992 1. A technical violation of Section 5(b) (6) of Act 170 of 1978 occurred when George R. Andersen, in his former capacity as Deputy Executive Director of the Pennsylvania Lottery, received gifts valued in the aggregate at $200.00 or more in the form of meals and beverages from Lewis, Gilman & Kynett and failed to report receipt of these gifts on his Statement of Financial Interests filed for calendar year 1988. 2. A technical violation of Section 5(b) (6) of Act 170 of 1978 occurred when Andersen received gifts valued in the aggregate at $200.00 or more in the form of meals and beverages from Lewis, Gilman & Kynett and Control Data Corporation and failed to report receipt of these gifts on his Statement of Financial Interests filed for calendar year 1989. 3. No violation of Section 5(b)(6) of Act 170 of 1978 occurred as to gifts in the form of meals and beverages received by Andersen from British American Bank Note Company or Control Data Corporation in calendar year 1988 in that such gifts were not valued in the aggregate at $200.00 or more. 4. No violation of Section 5(b)(6) of Act 170 of 1978 occurred as to gifts in the form of meals and beverages received by Andersen from British American Bank Note Company in calendar year 1989 in that such gifts were not valued in the aggregate at $200.00 or more. 5. Andersen is directed within 30 days of issuance of this Order to file amended Statements of Financial Interests for calendar years 1988 and 1989 to reflect the acceptance of meals and beverages in excess of $200.00 from Lewis, Gilman & Kynett as to 1988 and 1989 and from Control Data Corporation as to 1989. a. Compliance with the above will result in this case with no further action. b. Failure to comply with the above will institution of an order enforcement action. the closing of result in the BY THLFOMMISSION, Atio,vu DANEEN E. REESE, CHAIR