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HomeMy WebLinkAbout984 CarrIn Re: Michael J. Carr Before: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: 94- 032 -C2 Date Decided: 09/07/95 Date Mailed: 09/08/95 Daneen E. Reese, Chair Austin M. Lee, Vice Chair Roy W. Wilt Allan M. Kluger John R. Showers The Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the State Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq. Written notice of the specific allegation(s) was served at the commencement of the investigation. A Findings Report was issued and served upon completion of the investigation which constituted the Complaint by the Investigation Division. . An Answer was not filed and a hearing was deemed waived. The record is complete. 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 thirty 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 thirty 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 §21.29(b). The files in this case will remain confidential in accordance with Act 9 of 1989, 65 P.S. §408(h). 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. Carr, 94- 032 -C2 Page 2 I. ALLEGATION: That Michael J. Carr, a public official /public employee, in his capacity as a councilman for Dunmore Borough, Lackawanna County, violated the following provisions of the State Ethics Act (Act 9 of 1989) when he utilized his position and participated in council actions to sell a trash packer which was purchased by a third party and immediately transferred to him. II. FINDINGS: Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 P.S. 5403(a). 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. 1. On May 24, 1994, the Investigative Division of the State Ethics Commission received a signed, sworn complaint alleging that Michael J. Carr violated provisions of the State Ethics Act (Act 9 of 1989). 2. Upon review of the complaint by the Director of Investigations a recommendation was made to the Executive Director to commence a preliminary inquiry. 3. At the direction of the Executive Director, the Investigative Division initiated a preliminary inquiry on June 2, 1994. Carr, 94- 032 -C2 Page 3 4. The preliminary inquiry was completed within sixty days. 5. On July 29, 1994, a letter was forwarded to Michael J. Carr, by the Executive Director of the State Ethics Commission informing him that a complaint against him was received by the Investigative Division and that a full investigation was being commenced. 6. The full investigation was commenced at the direction of the Executive Director of the State Ethics Commission. 8. The Commission issued an order on December 15, 1994, granting the ninety day extension. On January 27, 1995, the Executive Director of the State Ethics Commission filed a second application for a ninety day extension of time to complete the investigation. a. Said letter was forwarded by certified mail, No. P 016 239 405. b. The domestic return receipt bore the signature of Michael Carr, with a delivery date of August 10, 1994. On November 29, 1994, the Executive Director of the State Ethics Commission filed an application for a ninety day extension of time to complete the Investigation. 10. The Commission issued an order on February 23, 1995, granting the extension. 11. The Investigative Complaint was mailed to the Respondent on July 24, 1995. 12. Michael J. Carr served as Borough of Dunmore Councilman from January of 1988 to the present. a. Carr served as Borough Council President from January of 1992 to January of 1994. 13. Carr has owned 50% of Evergreen Sanitation, Inc. hauling firm operated from his residence at 320 Street, Dunmore, PA since May of 1991. a. Carr is co -owner of the firm with Gerard Perry, Street, Dunmore, PA. b. Carr is in charge of the daily operation of company. a trash Gibbons 601 Mill the 14. During the period between October and November, 1992, Dunmore Carr, 94- 032 -C2 Page 4 Borough Council was considering the purchase of garbage trucks to upgrade the borough fleet. a. Michael Carr participated in those discussions. 15. Borough Council decided to purchase three used trucks. a. The cost for new trucks was prohibitive. 16. The minutes of the November 18, 1992 Dunmore Borough Council meeting confirm that Carr made a motion to let a Request For Proposals for garbage collection vehicles with of Public Works Supervisor Joseph Straub writing the specifications. a . b. The two oldest garbage trucks were going to be removed from service. The motion was seconded by Councilman Dominic Verrastro and passed unanimously. 17. At the December 16, 1992 Dunmore Borough Council meeting the following proposals for new and used refuse collection vehicles were received: Eagle Equipment Corp. Uwchland, PA McNeilus Truck Mfg. Morgantown, PA Pinnacle Truck Dunmore, PA Five Star Equipment Dunmore, PA 1984 Crane Carrier Heil 5000 1985 Crane Carrier Heil 5000 New New New New Used New Used $51,702.27 each $61,950.00 each $74,830.00 each $76,635.00 each $46,500.00 each $55,960.00 each $21,500.00 each Char moves to accept all of the proposals and refer to committee for review. The motion was seconded by Verrastro and carried. 18. No action was taken on the bids reviewed at the December 16, 1992, meeting. 19. In February of 1993 the Borough of Dunmore purchased the following vehicles from Auto Wholesalers of Hollidaysburg, PA for a total of $44,100: Carr, 94- 032 -C2 Page 5 1985 Crane Carrier Heil 5000 20. The trucks were delivered to the Borough on February 18, 1993. 21. The trucks were assigned Borough Vehicle Numbers Gi, G4 and G5. 22. In March of 1993 Department of Public Works Supervisor Straub decided to place 2 of the Borough's older trash trucks, a 1978 International which had been assigned Borough Vehicle Number G4 and a 1979 International which had been assigned Borough Vehicle Number Gi, in storage at the Borough's yard behind the Borough's Administration Building. 23. In May of 1993 the Borough advertised the sale of the two trash trucks which had been placed in storage. 24. At the May 26, 1993 Borough Council meeting Carr reported that only one bid had been received for the used garbage trucks. a. Carr read the bid from DeNaples Auto Sales, 400 Mill Street, Dunmore, PA, stating it was for $3,220.00 for the 2 vehicles with a certified check for $600.00 enclosed. b. The bid was signed by Louis DeNaples, President of DeNaples Auto Sales. c. Carr made a motion, seconded by Verrastro, to accept the bid from DeNaples Auto Sales. 25. On June 8, 1993 Borough Business Manager Richard Carr notified Louis DeNaples that the Borough had accepted his bid for the 2 vehicles and the vehicles would be ready for pickup at his convenience. a. DeNaples was also notified that the balance of $2,620.00 would be due upon receipt of the vehicles. 26. The vehicles were turned over to DeNaples on July 23, 1993. 27. On July 26, 1993 Councilman Carr, in his capacity as owner of Evergreen Sanitation, Inc., purchased the 1978 International truck (Borough Vehicle No. G4) from DeNaples Auto Sales. 28 The transaction was recorded on DeNaples Auto Sales Invoice Number A037793 which was dated 7/26/93. 29 The invoice indicates the price of the truck was $2,500 and contains the handwritten notation "Paid in full, L. DeNaples" 30. Evergreen Sanitation maintains a checking account at the First Carr, 94- 032 -C2 Page 6 National Bank of Dunmore, PA. a. Payment to DeNaples Auto Sales for the trash truck was not made from that account. 31. Michael Carr maintains a personal checking account at the First National Bank of Dunmore, PA. a. Payment to DeNaples was not made from that account. 32. Carr asserts he paid for the truck with cash from his personal funds which he loaned to Evergreen Sanitation, Inc. 33. Carr has no records to confirm the $2,500.00 loan he made to Evergreen Sanitation for the purchase from DeNaples. 34. DeNaples Auto Sales has no record of receiving a $2,500.00 cash payment from Michael Carr on or about July 26, 1993. 35. Carr paid $543.00 to the Commonwealth of Pennsylvania which included a payment of $378.00 for tags; $15.00 for the title; and $150.00 for sales tax on the vehicle. a. The $543.00 was paid with Evergreen Sanitation, Inc. check number 1783, dated July 26, 1993, drawn on an account at the First National Community Bank of Dunmore. 36. DeNaples has not paid the remaining $2,620.00 owed for trucks. 37. The Borough of Dunmore has forwarded bills on September 28, 1993 and December 10, 1993 to DeNaples Auto Sales requesting payment of the remaining $2,620.00 owed for the 2 trucks. a. DeNaples has not acknowledged those invoices. 38. Evergreen Sanitation and Michael Carr has [sic] engaged in a business relationship with Louis DeNaples since at least 1992. a. DeNaples owns Keystone Sanitary Landfill located in Dunmore, Pennsylvania. b. Evergreen Sanitation dumps refuse it collects at the Keystone Landfill and transports sewage for Keystone. III. DISCUSSION: As a councilman for Dunmore Borough, Lackawanna County, Michael J. Carr, hereinafter Carr, is a public official as that term is defined under Act 9 of 1989. 65 P.S. §402. As such, his conduct is subject to the provisions of the Ethics Law and the restrictions therein are applicable to him. Carr, 94- 032 -C2 Page 7 Initially, it is noted that Section 9 of Act 9 of June 26, 1989 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. Since the occurrences in this case transpired after the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 9 to determine whether the Ethics Act was violated. Under Section 3(a) of Act 9 of 1989, a public official /employee shall not engage in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under Act 9 of 1989 as quoted above. The issue before us is whether Carr violated the conflict provision of the Ethics Law, Act 9 of 1989, relative to the allegation that he used his position and participated in council actions to sell a trash packer to a third party who immediately transferred the vehicle to Carr. Carr has served as a Councilman in Dunmore Borough from January, 1988 to the present and as Borough Council President from January, 1992 to January, 1994. In a private capacity, Carr is a 50% owner of Evergreen Sanitation Inc., a trash hauling business operated out of Carr's private residence. In the fall of 1992, with Carr's participation, Borough Council decided to purchase three used trash packers and remove the oldest two trucks from service (Fact Findings 14, 15). The minutes of the November, 1992 Borough Council Meeting reflect that Carr made a motion which passed unanimously for the Department of Public Works (DPW) Supervisor to write up specifications for a request for proposals for the purchase of trash collection vehicles (Fact Finding 16). Although bids from four different companies were received and reviewed at a December 16, 1992 Council meeting, no official action was taken on the bids (Fact Findings 17, 18). In 1993, the Borough did purchase three used trash packers from a company that had not submitted a bid proposal (Fact Finding 19). The DPW Supervisor in March, 1993 decided to place two of the Borough's older trash packers, a 1978 International with Borough Carr, 94- 032 -C2 Page 8 Vehicle Number G4 and a 1979 International with Borough Vehicle Number G1 in storage (Fact Finding 22). The Borough advertised for the sale of these two trash packers in May, 1993 (Fact Finding 23). Carr at the May 26, 1993 Council Meeting reported that only one bid had been received for the used trash packers, that being from DeNaples Auto Sales offering $3,220.00 for the two vehicles with a certified check in the amount of $600.00 enclosed (Fact Finding 24) . At that meeting Carr made a motion which was seconded by Verrastro to accept the bid from DeNaples Auto Sales (Fact Finding 24). The Borough business manager notified DeNaples on June 8, 1993 that his bid was accepted and that the balance of $2,620.00 would be due upon receipt of the vehicles (Fact Finding 25). The vehicles were turned over to DeNaples on July 23, 1993 (Fact Finding 26) . On July 26, 1993, Carr as owner of Evergreen Sanitation Inc., purchased the 1978 International Truck (Borough Vehicle Number G4) from DeNaples Auto Sales. The transaction is reflected on a DeNaples Auto Sales invoice number AO37793 dated 7/26/93 (Fact Findings 27, 28). The invoice indicates that the price of the truck was $2,500.00, and it contains the handwritten notation "Paid in full, L. DeNaples" (Fact Finding 29). Although the First National Bank of Dunmore maintained checking accounts both in the names of Evergreen Sanitation and Michael Carr, no payment to DeNaples was made from either account (Fact Findings 30, 31). Carr asserts that he paid for the truck with cash from his personal funds that he loaned to Evergreen Sanitation Inc. (Fact Finding 32) . There are no records to confirm that Carr made a $2,500.00 loan to Evergreen Sanitation for the purchase of the truck from DeNaples (Fact Finding 33). Similarly, DeNaples Auto Sales has no record of receiving a $2,500.00 cash payment from Carr on or about July 26, 1993 (Fact Finding 34). Check Number 1783, drawn from the Evergreen Sanitation Inc. account in the First National Community Bank of Dunmore and payable to the Commonwealth in the amount of $543.00, was issued on July 26, 1993 for the payment of tags, title and sales tax on the trash packer (Fact Finding 35). As to the remaining $2,620.00 owed by DeNaples to the Borough for the two trucks, no payment has been made despite the Borough's forwarding bills on two occasions to DeNaples (Fact Finding 37). Lastly, Evergreen Sanitation and Michael Carr have had a business relationship with DeNaples since at least 1992 in that DeNaples owns Keystone Sanitary Landfill where Evergreen Sanitation dumps refuse, and Evergreen Sanitation transports sewage for Keystone (Fact Finding 38). In applying the provisions of Section 3 (a) of Act 9 of 1989 to Carr, 94- 032 -C2 Page 9 the instant matter, we do not believe that there is clear and convincing proof to establish a violation of the Ethics Law. Carr did use the authority of office as to participating in discussions to sell the two older Borough trash packers and in making the motion to accept the offer from DeNaples Auto Sales. The record further reflects that three days after DeNaples obtained the two Borough trash packers, he sold one of those vehicles to Carr. The proximity of these occurrences does raise the question of whether DeNaples acted as a middleman or agent for Carr in obtaining the one Borough trash packer. However, to establish a violation of Section 3(a) of Act 9 of 1989, it is necessary that the use of authority of office result in a prohibited private pecuniary benefit. All that we know of record is that two Borough trash packers were sold for a total of $3,220.00 to DeNaples and that an invoice from DeNaples reflects the subsequent sale of one of those trucks to Carr for $2,500.00. Since there was no "paper trail" of any funds between Carr and DeNaples, we cannot create a finding as to what probably occurred in this case. In making our adjudication, we are limited by the confines of the record before us. We do not know the fair market value of the truck obtained by Carr. The only indicia of value that we have is the $3,220.00 that DeNaples offered to pay for two vehicles. Therefore, since we do not know the fair market value of the vehicle, we cannot make a comparison between fair market value and the $2,500.00 that Carr purportedly paid for this vehicle to determine whether there was a prohibited private pecuniary benefit. We therefore do not have clear and convincing proof as to the receipt of a private pecuniary benefit and on that basis we find no violation of Section 3(a) of Act 9 of 1989. The Ethics Law does empower this Commission to refer cases: "An order may include recommendations to law enforcement officials." 65 P.S. §408(a); and The commission shall, however, have the authority to refer the case to law enforcement officials during a preliminary inquiry or anytime thereafter without providing notice to the subject of the inquiry." 65 P.S. §408(a). A referral of this case is appropriate. In this case De Naples Auto Sales, which has a business relationship with Carr, submitted the only bid for the two trucks followed by the purported purchase of one of those trucks by Carr just three days later without any financial "paper trail." It seems to this Commission that such circumstances are too suspicious to pass as mere coincidence. Accordingly, we shall refer this case to a law enforcement agency for further review. IV. CONCLUSIONS OF LAW: Carr, 94- 032 -C2 Page 10 1. Michael J. Carr as a Dunmore Borough, Lackawanna County Councilmember is a public official subject to the provisions of Act 9 of 1989. 2. In the absence of clear and convincing proof to establish a private pecuniary benefit, we cannot find that Carr violated Section 3(a) of Act 9 of 1989 regarding his use of office and participation in Council decisions to sell a trash packer which was purchased by DeNaples and immediately transferred to Carr. In Re: Michael J. Carr File Docket: 94- 032 -C2 Date Decided: 09/07/95 Date Mailed: 09/08/95 ORDER NO. 984 1. In the absence of clear and convincing proof to establish a private pecuniary benefit, we cannot find that Michael J. Carr as a Dunmore Borough, Lackawanna County Councilmember violated Section 3(a) of Act 9 of 1989 regarding his use of office and participation in Council decisions to sell a trash packer which was purchased by DeNapies and immediately transferred to Carr. 2. Pursuant to Section 7(13) and 8(a) of the Ethics Law, this case will be referred to a law enforcement agency for further review. BY THE COMMISSION, DANEEN E. REESE, CHAIR