Loading...
HomeMy WebLinkAbout804 PirolliIn re: Michael A. Pirolli STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 : File Docket: 88 -019 -C : Date Decided: July 12, 1991 : Date Mailed: July 16, 1991 Before: Robert W. Brown, Chair Dennis C. Harrington, Vice Chair James M. Howley Daneen E. Reese Roy W. Wilt Austin M. Lee The State Ethics Commission received a complaint regarding a possible violation of the State Ethics Act, No. 170 of 1978, 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 filed and a hearing was 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 fifteen days after issuance. However, reconsideration may be requested which will defer public release of this adjudication pending actin on the request by the Commission. A request for reconsideration, however, 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 52.38. The files in this case will remain confidential in accordance with Section 8(a) of Act 170 of 1978 during the fifteen day period and no one unless the right to challenge this Order is waived, may violate confidentiality does not preclude discussing this case with an attorney at law. 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, 65 P.S. 409(e). ADJUDICATION I. ALLEGATION: That you, a member of the Lower Bucks County Joint Municipal Authority, violated the following provisions of the State Ethics Act (Act 170 of 1978), when a firm with which you are associated contracted with the Authority to sell fuel oil without an open and public process: II. FINDINGS: Section 3. Restricted Activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. 65 P.S. S403(a). Section 3. Restricted activities. (c) No public official or public employee or a member of his immediate family or any business in which the person or a member of the person's immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business shall enter into any contract valued at $500 or more with a governmental body 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. Any contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract. 65 P.S. S403(c). 1. Michael A. Pirolli served as a member of the Lower Bucks County Joint Municipal Authority from January of 1968 to July of 1980. a. Pirolli was reappointed to the Authority in July of 1982 and has served in that position to the present time. b. Pirolli has received a salary of $250 a month from the Board for holding the position of Treasurer. 2. The Lower Bucks County Joint Municipal Authority consists of the municipalities of Bristol Township, Falls Township, Mr. Michael A. Pirolli File No. 88 -109 -C Page 3 Middletown Township and Tullytown Borough. a. Members of the Authority are appointed by Bristol Township and Tullytown which each appoint three members for five year staggered terms. 3. The Lower Bucks County Joint Municipal Authority ( LBCJMA) was incorporated by Tullytown Borough and Bristol Township on May 20, 1952 pursuant to Municipal Authorities Act of 1945. The life of the Authority extends to December 1, 2020. a. The LBCJMA was empowered to acquire, hold, construct, improve, maintain and operate, own or lease sewer systems, sewage treatment works, including works for treating and disposing of industrial waste, waterworks, water supply works and water distribution systems. 4. During the early 1980's, the LBCJMA began construction at its sewer plant. There was a need for 50 gallon drums of kerosene to heat pipes and for other areas. a. Upon completion of construction, the Authority no longer had a need for kerosene. The Authority began using fuel oil. 5. The LBCJMA was initially purchasing kerosene from Bristol Fuel Company, but Bristol Fuel would not provide delivery. a. The Authority subsequently began purchasing kerosene from M &M Fuel Oil. b. Prior to 1986, the kerosene purchases were not put out for bid. c. The Authority began purchasing fuel oil without bids from M &M Fuel Oil once construction of the sewer plant was completed. 6. Minutes of the Lower Bucks County Joint Municipal Authority Board meetings indicate the following discussions took place concerning the purchase of fuel oil from M &M Fuel Oil Company and the attempts to put the purchases out for bid: June 17, 1986 Board member, Jack Kelly, questioned the purchases from M &M Fuel Oil Company stating he felt the purchase should be on a bid basis because of the amount. Mr. Michael A. Pirolli File No. 88 -109 -C Page 4 August 19, 1986 Sept. 16, 1986 April 21, 1987 Bids relating to the purchase of fuel oil and kerosene were opened. M &M bid Read: Number 2 fuel oil at $.75 per gallon. This is a current cash price and is subject to change with no carrying or late charges. Same date delivery. $.90 per gallon for kerosene. Meehan Oil Company Read: For 1986 - 1987 Heating Season - Number 2 fuel oil - Meehan commercial consumer tank car price at $.47 per gallon. The delivered price would be $.495 per gallon. (No kerosene bid included.) The bids opened on August 19, 1986 were discussed. Mr. Pantano stated that bids for gasoline, kerosene and oil have not been awarded as of yet. Mr. Pantano stated that he has reservations whether the bids received were actually considered bids. From what the bids state, the companies will supply the material at that day going rate. This does not seem like a bid, and the company would not be locked in at any given rate. Solicitor Sirott stated that the bids read on a day -to -day basis, it is really a non -bid. Mr. Sirott suggested that the Authority re- advertise for a period of one year and have the managing engineer draw up the specifications. Mr. Sirott further suggested that the Authority make their purchase from the present low bidder until we have some type of definite specs, then re- advertise. Mr. Pantano presented an idea to the board which would permit the Authority to join a group of township and municipal authorities, in the area, known as "County Consortium" for the purpose of making purchase through group contracts. The motion adopting this resolution passed unanimously. A copy of the resolution is attached to the minutes. Mr. Michael A. Pirolli File No. 88 -109 -C Page 5 7. The Lower Bucks County purchased fuel oil and Company for use at the 1986 and 1987. LBCJMA payments to M &M. Many Michael Pirolli: For The No. Of Date Period Gallons Signatures 1/28/85 12/12/84 to 7,245.7 $4,705.89 1/7/85 522.9 (Kerosene) 2/28/85 1/7/85 to 4,511.8 $8,302.49 2/5/85 4/1/85 2/9/85 to 8,505.5 $9,261.21 3/11/85 193.6 (Kerosene) 4/24/85 3/25/85 2,355 $2,590.50 5/1/85 3/16/85 to 1,667.6 $1,792.07 3/31/85 5/29/85 4/5/85 to 3,904.4 $4,212.77 5/9/85 6/26/85 5/15/85 to 939.9 $1,098.65 6/15/85 7/24/85 6/17/85 to 603.9 $ 634.10 6/27/85 Joint Municipal Authority kerosene from M &M Fuel Oil sewer and water plants in 1985, invoices reflect billings and of the checks were co- signed by Check Amount Number 257 550 Loretta Wurm & William Keyser 407 Michael Pirolli & William Keyser Herbert Hale & Michael Pirolli 658 Michael Pirolli & Joseph Marrare 717 Michael Pirolli & Joseph Marrare 804 Michael Pirolli & Joseph Marrare 926 Michael Pirolli & George Grispin 1010 Michael Pirolli & Joseph Mr. Michael A. Pirolli File No. 88 -109 -C Page 6 Marrare 8/28/85 7/9/85 to 674.3 $ 708.02 1132 Michael 7/22/85 Pirolli & Joseph Marrare 9/25/85 8/6/85 to 935.1 $ 981.86 1276 Michael 8/19/85 Pirolli & Joseph Marrare 10/23/85 9/16/85 445.1 $ 469.35 1389 Michael Pirolli & Joseph Marrare 11/20/85 10/1/85 to 1,111.3 $1,214.31 1490 Michael 10/23/85 Pirolli & Joseph Marrare 1/3/86 11/1/85 to 4,512.9 $5,499.43 1066 Michael 12/4/85 234 Pirolli & (Kerosene) Joseph Marrare 1/29/86 12/8/85 to 7,552.9 $8,687.13 1157 Herbert 1/9/86 Hale & Joseph Marrare 3/5/86 1/16/86 to 7,904.6 $8,646.72 1310 Herbert 2/10/86 219.3 Hale & (Kerosene) Joseph Marrare 4/23/86 3/1/86 to 4,704.9 $4,854.95 1572 Herbert 3/26/86 212.7 10 Hale & (Kerosene) Joseph Marrare 6/1/86 4/5/86 to 4,462.2 $3,882.70 1709 Herbert 5/14/86 Hale & Joseph Marrare 7/2/86 5/21/86 to 696.6 $ 580.60 1859 Herbert 6/5/86 Hale & Joseph Mr. Michael A. Pirolli File No. 88 -109 -C Page 7 Marrare 7/23/86 6/17/86 to 619.5 $ 495.60 1910 Herbert 6/25/86 Hale & Joseph Marrare 8/27/86 7/8/86 to 1,412 $1,007.38 2071 Herbert 7/28/86 Hale & Joseph Marrare 9/24/86 8/20/86 to 1,034.9 $ 776.18 2184 Herbert 9/4/86 Hale & Joseph Marrare 10/29/86 9/16/86 to 1,697.3 $1,272.97 2307 Herbert 10/1/86 Hale & Joseph Marrare 11/26/86 10/14/86 to 4,259.6 $3,024.60 2440 Herbert 11/4/86 Hale & Joseph Marrare 12/24/86 11/7/86 to 2,783.5 $1,948.45 2532 Michael 11/25/86 Pirolli & Joseph Marrare 12/24/86 11/24/86 3,016.1 $2,111.27 2518 Michael Pirolli & Joseph Marrare 1/28/87 11/29/86 to 5,242.5 $3,712.32 2703 Michael 12/31/86 Pirolli & Edward Hunt 3/25/87 2/12/87 to 4,117.9 $3,237.91 2937 Michael 3/4/87 Pirolli & Edward Hunt 4/29/87 3/5/87 to 2,499.4 $1,874.55 3116 Michael 3/9/87 Pirolli & Edward Mr. Michael A. Pirolli File No. 88 -109 -C Page 8 Hunt 8. Minutes of the Lower Bucks County Joint Municipal Authority Board meetings indicate payments to M &M Fuel Oil Company were approved at the following meetings with board member, Michael A. Pirolli, participating in the vote: January 15, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. February 19, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. April 2, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. June 18, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. July 16, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. August 20, 1985 Pirolli was absent. September 17, 1985 Pirolli was present, but there was no motion to approve payment of accounts payable. October 15, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. November 12, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. December 17, 1985 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. January 21, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. February 18, 1986 Pirolli was present, and the motion to Mr. Michael A. Pirolli File No. 88 -109 -C Page 9 approve payment of accounts payable passed unanimously. March 18, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. April 15, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. April 29, 1986 Pirolli was present, but there was no motion to approve payment of accounts payable. June 17, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. July 15, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. August 19, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. September 16, 1986 Pirolli arrived late, and the motion to approve payment of accounts payable passed unanimously. October 21, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. November 18, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. December 16, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. January 20, 1987 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. The Accounts Payable list accompanied the minutes. February 17, 1987 Pirolli was present, and the motion to approve payment of accounts payable Mr. Michael A. Pirolli File No. 88 -109 -C Page 10 passed unanimously. The Accounts Payable list accompanied the minutes. February 24, 1987 Pirolli was present, but there was no motion to approve payment of accounts payable. March 17, 1987 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. February 18, 1986 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. The Accounts Payable list accompanied the minutes. April 21, 1987 Pirolli was present, and the motion to approve payment of accounts payable passed unanimously. The Accounts Payable list accompanied the minutes. 9. M &M Fuel Service maintains a checking account at the Bucks County Bank and Trust Company to Account No. 1501 - 302705. a. The account was established on October 16, 1978. b. Matthew Pirolli, Mark Pirolli and Ida Mae Pirolli have signature authority for this account. 10. Records of the Commonwealth of Pennsylvania, Department of State, Corporation Bureau confirmed the following regarding M &M Fuel: a. Articles of incorporation were filed on July 29, 1986. b. The incorporator was listed as Edward I. Dobin, 250 W. Pennsylvania Avenue, Morrisville, PA 19067. c. The corporation is M &M Fuel Service, Inc. d. The location of the registered officer is 603 Main Street, P.O. Box 1642, Tullytown, PA 19007. 11. The personal residence of Michael A. Pirolli is 603 Main Street, Tullytown, PA 19007. 12. Nick Eberle has been an employee of the Lower Bucks County Municipal Authority since 1954 and has been Superintendent of the Sewer Plant since 1984. Mr. Michael A. Pirolli File No. 88 -109 -C Page 11 a. In 1980, the Authority began construction work and needed 50 gallon drums of kerosene. The Authority purchased the kerosene from Bristol Fuel Company, but they required the Authority to pick the kerosene up at their facility. b. Michael Pirolli, Jr. of M &M Fuel Oil Company agreed to deliver the kerosene at a lower price than Bristol Fuel Oil was charging. c. The Authority's needs changed from kerosene to fuel oil when the construction was completed. d. The Authority personnel called around and found that M &M Fuel Oil was willing to sell the fuel oil at a lower price. e. As the need for fuel oil increased, Eberle checked with the business manager to ascertain if the Authority has a contract with any company. He was advised they didn't, and he should continue to get price quotes. He did, and they showed M &M had the lowest price. f. He wasn't aware that Michael Pirolli, Jr. was related to board member, Michael A. Pirolli, until sometime in 1982 or 1983. g• He never discussed the purchases with board member Pirolli. h. He never tried to regulate the purchase to keep them under the $4,000 limit required by the Municipal Authorities Act for bids. i. The Authority had maintained a file of the price quotes, but they couldn't be found. They may have been lost when the Authority transferred records to the computer. k. He obtained quotes from Meehan Fuel Oil Company, Morrisville Fuel Oil Company and Eggert Fuel Oil Company in addition to the quotes from M &M Fuel Oil. Authority employee, Michelle Zuchero, obtained the quotes. 1. Meehan Fuel Oil Company gave them a lower price in 1985 but required them to sign a contract for a year, but they wouldn't guarantee the price for Mr. Michael A. Pirolli File No. 88 -109 -C Page 12 the year. 13. Michelle Zuchero was a clerk at the Lower Bucks County Joint Municipal Authority's Sewer Plant from 1982 to 1987. She is now employed as a computer clerk at the Authority's Administration Building. a. It was her responsibility to order the fuel oil. b. Nick Eberle or John Cocordas told her to call around and get the cheapest price. c. She copied down the price quotes and maintained them on a piece of paper at the Sewer Plant. d. She attempted to locate the papers but found that her replacement threw the papers away. e. She recalls obtaining price quotes on 4 or 5 occasions during 1986 and 1987; calling Eggert Fuel Oil Company, Meehan Fuel Oil Company, and M &M Fuel Oil Company. f. M &M consistently had the lowest price. Meehan would not deliver on an "as needed" basis but wanted to put the Authority on a schedule. Eggert had the lowest on one occasion, and she ordered from them. g. M &M Fuel Oil was owned by Mark and Matthew Pirolli, sons of board member, Michael A. Pirolli. She knows the younger Pirolli, because they are acquaintances of her husband. h. She never discussed the purchase with board member, Michael A. Pirolli. i. She did not purchase the fuel oil from M &M when M &M's price was higher. 14. Joseph Pantano is the Managing Engineer at the Lower Bucks County Joint Municipal Authority, holding that position since September 4, 1986. a. The policy of purchasing fuel oil from M &M Fuel Oil Company was questioned before he started with the Authority. Mr. Michael A. Pirolli File No. 88 -109 -C Page 13 b. The purchase of fuel oil was put out for bid, and he reviewed the bids in September of 1986. c. John Cocordas, the Authority's former Business Manager, did not properly write up the specifications for the bids and that led to confusion. d. Meehan Fuel Oil Company submitted one price but wouldn't lock in the price for a year. Meehan's price was lower than M &M Fuel Oil Company's price, but they wanted to be able to change the price at any time. Meehan would not sell the fuel oil at the lower price unless the Authority signed a contract for a one year period. e. M &M Fuel Oil Company's price was a flat price at the going rate. f. After discussing the matter with the Solicitor, they decided to continue the practice of obtaining price quotes whenever the Authority purchased fuel oil. g. The Authority Joined the Bucks County Consortium in 1987 and began purchasing fuel oil through them. 15. Jack Sirott is the Solicitor of the Lower Bucks County Joint Municipal Authority. a. The purchasing of fuel oil from M &M Fuel Oil Company started when the Authority was doing construction work at the sewer plant. Kerosene was needed to heat pipes, and the Authority had difficulty in purchasing it in 50 gallon drums. b. M &M Fuel Oil was willing to deliver the kerosene in 50 gallon drums and make frequent deliveries. c. The Authority continued to purchase from M &M after the need changed to fuel oil. d. Business Manager Cocordas should have been careful about the deliveries not exceeding the $4,000 limit that would require a bid. e. Sirott does not know if board member Pirolli has a financial interest in M &M and doesn't recall Mr. Michael A. Pirolli File No. 88 -109 -C Page 14 hearing Pirolli deny ownership of the company at a board meeting. f. He advised the board that the bids submitted in 1986 were improper, because they didn't lock in the price of the oil. The companies could raise the price of the oil at any time. g. He believes the fault was with Business Manager, John Cocordas, not writing up the bids properly and not consulting with him. 16. Jack Kelly was appointed to the Lower Bucks County Joint Municipal Authority from Bristol Township in February of 1986. a. He noticed the bills that came before the board from the M &M Fuel Oil Company exceeded the $4,000 limit requiring a bid by the Municipal Authority Act. b. Board Chairman Marrare and Solicitor Sirott told him that M &M was a small company, and there was no problem with the purchases. c. Some one in the press picked up the story and told him that M &M was not registered with the state and that it was owned by board member Pirolli. d. He brought the matter up at a meeting and board member Pirolli denied owning the company. Pirolli stated his sons own the business, and he didn't have any financial interest in the company. e. Superintendent of the Sewer Plant, Nick Eberle, told him that he called around for the best price and found M &M had the lowest price of the area dealers. f. He contacted the people at Meehan Fuel Oil Company, and they told him that they didn't get any calls from the Authority for price quotes. If they did, the Authority personnel did not identify themselves. g. The Authority decided to put the purchases out for bid, and the bids came in from Meehan and M&M. Meehan couldn't guarantee the price, but M &M would. Mr. Michael A. Pirolli File No. 88 -109 -C Page 15 h. The solicitor decided it wasn't a proper bid and told them to remain with the present low bidder. i. The Authority decided to purchase fuel oil through the Bucks County Consortium. 17. John Cocordas was employed at the Lower Bucks County Joint Municipal Authority for 36 years and last held the position of Business Manager in 1988. a. Michael A. Pirolli was a board member at the Authority for approximately 20 years. b. Nick Eberle, Superintendent of the Sewer Plant, began purchasing fuel oil from M &M Oil Company. c. He doesn't recall being consulted about the purchases. d. He asked Eberle why he was buying from M &M and was told it was because of the convenience. M &M would make late night deliveries and deliver on holidays when other companies would not. e. The monthly purchases were usually below the $5,000 limit that would require a bid. f. In 1986, board member, Jack Kelly, questioned the purchase being made without a bid. He was instructed to prepare bid specifications and publish them in the newspapers. h. They received bids from M &M Fuel Oil Company and Meehan Fuel Oil Company. Meehan was the lowest bidder. g. i. Solicitor Sirott and Managing Engineer Pantano threw the bids out, and Pantano was instructed to take over the process. He was never told the reason why. The purchases were eventually made through the Bucks County Consortium. k. He did not know who owned the company until Eberle told him it was owned by members of the Pirolli family. Eberle did not mention board member Pirolli as one of the owners. i. Mr. Michael A. Pirolli File No. 88 -109 -C Page 16 1. Board member Pirolli never spoke to him concerning the purchases. m. He had no say in the matter of fuel oil purchases. Eberle made the purchases and forwarded the invoices to the board for their approval. n. Board members appoint each member of the board as officers which enables them to receive a salary of $250 a month. 18. Rich Eggert is the owner of Eggert Fuel Oil Company in Bristol, Pennsylvania. a. He did not receive any calls requesting a price quote from anyone at the Lower Bucks County Joint Municipal Authority until April of 1987. That is when he sold the Authority fuel oil at $.69.9 a gallon. b. He is familiar with the controversy over the fuel oil purchases because the matter was in the newspapers. c. His records reflect a list of prices at which he would have sold the fuel oil, on the fist of each month, to the Authority if they called him. The second price is the amount he would have charged the Authority if they had signed a contract with him: 1985 Regular Price Price With Month Quote Contract January $ .94.9 $ .87.9 February .96.9 .89.9 March .95.9 .88.9 April 1.03.9 .96.9 May .97.9 .90.9 June .91.9 .84.9 July .97.9 .90.9 August .90.9 .83.9 September .99.9 .92.9 October 1.01.9 .94.9 November 1.06.9 .99.9 December 1.07.9 1.00.9 Mr. Michael A. Pirolli File No. 88 -109 -C Page 17 1986 Regular Price Price With Month Quote Contract January $1.03.9 $.96.9 February .76.9 .69.9 March .76.9 .69.9 April .65.9 .58.9 May .66.9 .59.9 June .57.9 .50.9 July .56.9 .49.9 August .63.9 .57.9 September .62.9 .55.9 October .59.9 .52.9 November .60.9 .53.9 December .62.9 .55.9 1987 Regular Price Price With Month Quote Contract January $.67.9 $.60.9 February .69.9 .62.9 March .65.9 .58.9 April .69.9 .62.9 May .69.9 .62.9 June .73.9 .66.9 d. He could not give a set price on a contract for a year, because he would have to store the fuel after buying it at the bidded price, and he doesn't have that storage capacity. 19. Harry Hyatt is Vice President for Commercial Sales at Meehan Fuel Oil Company. a. He submitted a bid to the Lower Bucks County Joint Municipal Authority for the sale of fuel oil in August of 1986. b. He received information on the bid either from the newspaper or from Business Manager, John Cocordas. c. He was informed by Cocordas that Meehan was the low bidder but was not going to get the business. Mr. Michael A. Pirolli File No. 88 -109 -C Page 18 d. Cocordas could not give him a reason why Meehan wasn't going to receive the business. e. The specifications never mentioned the bid price was to be for a year. f. He could have given a yearly rate, as his company has the capacity to store 14 million gallons of fuel oil, and it has been possible to set a price and store the Authority's fuel. M &M Fuel Oil Company would not have the same capacity as they don't have the fuel tanks and only have one truck. g• h. The prices charged the Authority by M &M appear to be retail prices. i. He would have sold fuel oil to the Authority at the following prices had they been under contract with Meehan: 1985 Date Price /Gallon January 23, 1985 $.87.8 February 28, 1985 .85 April 1, 1985 .90.5 May 1, 1985 .81 May 29, 1985 .81 June 26, 1985 .76.5 July 24, 1985 .75.5 August 28, 1985 .81 September 25, 1985 .85.5 October 23, 1985 .89 November 20, 1985 .89 December 1, 1985 .91.5 1986 Date Price /Gallon, January 1, 1986 February 1, 1986 March 1, 1986 April 1, 1986 May 1, 1986 June 1, 1986 July 1, 1986 $.90 .66 .66.5 .65.5 .54.5 .47.5 .41.5 Mr. Michael A. Pirolli File No. 88 -109 -C Page 19 a. 1985 b. 1986 August 27, 1986 September 24, 1986 October 22, 1986 November 26, 1986 December 24, 1986 1987 Date Price /Gallon January 1, 1987 February 1, 1987 March 1, 1987 April 1, 1987 May 1, 1987 June 1, 1987 20. The excess cost to the Lower Bucks County Joint Municipal Authority, as a result of purchasing fuel oil from M &M Fuel Oil Company and not purchasing fuel oil from Eggert or Meehan is tabulated as follows: Purchased From M &M Eggert's Regular Price Excess Cost Purchased From M &M Eggert's Contract Price Excess Cost Purchased From M &M - $40,682.10 Meehan's Contract Price - 33,114.16 Purchased From M &M - $35,891.80 Eggert's Regular Price - Purchased From M &M Excess Cost - $ 7,567.94 Excess Cost - - $40,682.10 - 37,533.40 - $ 3,148.70 - $40,682.10 - 34,884.52 - $ 5,797.58 31,166.59 $ 4,725.21 - $35,891.80 .50.5 .47.25 .46.25 .50 .53.25 $.54 .56.5 .57.25 .57 .57.25 .60.75 Mr. Michael A. Pirolli File No. 88 -109 -C Page 20 c. 1987 Eggert's Contract Price - 27,283.29 Purchased From M &M Meehan's Contract Price Excess Cost Purchased From M &M Eggert's Regular Price Excess Cost - $ 8,608.51 Excess Cost - $ 563.78 Purchased From M &M - $5,078.12 Eggert's Contract Price - 4,051.12 Excess Cost - Purchased From M &M - Meehan's Contract Price - Excess Cost - TOTALS FOR 1985. 1986 & Purchased From M &M Eggert's Regular Price Excess Cost 1987: - $35,891.80 - 25,579.85 - $10,311.95 - $5,078.12 - 4,514.34 $1,027.00 $5,078.12 3,758.22 $1,269.90 - $81,652.02 - 73 214.33 - $ 8,437.69 Purchased From M &M - $81,652.02 Eggert's Contract Price - 66,218.93 Excess Cost - $15,433.09 Purchased From M &M - $81,652.02 Meehan's Contract Price - 62,452.23 Excess Cost - $19,149.79 21. Ida Mae Pirolli wrote a number of checks on the M&M Fuel Service checking account, no. 1501- 302705, at the Bucks Mr. Michael A. Pirolli File No. 88 -109 -C Page 21 County Bank and Trust Company. a. The checks were made payable to cash and were endorsed by Ida Mae Pirolli. b. Checks were issued as follows: Date Check No. Amount 12/27/85 1600* $1,000 TOTAL $1,000 Date Check No. Amount 4/18/86 2604 1,876 6/4/86 2177 430 6/10/86 2596 1,500 6/13/86 2182 836 7/3/86 2597 500 10/2/86 2392 2,000 12/18/86 2393 2,000 TOTAL $9,142 Date Check No. Amount 1/28/87 2394* $2,000 2/6/87 2601* 2,000 4/23/87 2593* 2,000 TOTAL $6,000 TOTAL 1985 - 1987 = $16,142 * Marked "For Deposit Only - Penn Manor Inn" c. Checks were also written by Mark J. Pirolli on the M &M Fuel Service checking account payable to cash and stamped "For Deposit Only Penn Manor Inn ": Date Check No. mount 1/22/85 1601 $2,000 4/6/85 1616 1.900 TOTAL $3,900 Mr. Michael A. Pirolli File No. 88 -109 -C Page 22 22. Checks were written on the M &M Fuel Service checking account to pay various bills for services received at the 603 Train Street, Tullytown, Pennsylvania address. The checks were written by M. Pirolli: a. Lower Bucks County Joint Municipal Authority (Account #0105045): Date Check No. Amount 3/25/85 1585 $ 34.13 6/7/85 1683 197.50 9/15/85 1772 129.15 1/6/86 1911 146.91 2/28/86 2035 123.58 5/22/86 2167 198.90 12/16/86 2418 169.31 3/13/87 2533 128.96 TOTAL $1,120.44 b. Bell Telephone Company for telephone number (215) 946 -3255: Date Check No. Amount 1/14/85 1482 $ 44.30 2/15/85 1538 40.85 8/25/85 1591 41.30 5/3/85 1647 75.59 6/7/85 1677 40.60 6/28/85 1697 28.54 8/8/85 1735 77.27 9/16/85 1769 65.26 10/28/85 1823 69.69 11/18/85 1849 57.46 1/6/86 1914 66.78 2/4/86 1974 144.95 2/28/86 2032 145.00 4/11/86 2096 173.98 5/5/86 2141 109.51 7/15/86 2221 58.66 7/28/86 2236 67.93 10/20/86 2348 78.62 11/22/86 2388 133.16 12/16/86 2421 98.35 5/13/87 2634 S 59.60 TOTAL $1,746.69 Mr. Michael A. Pirolli File No. 88 -109 -C Page 23 c. Oxford Cable Vision for service at 603 Main Street, Tullytown, Pennsylvania: Date Check No. Amoun 4/23/86 2120 $ 52.74 5/5/86 2140 26.37 5/22/86 2159 26.37 9/16/86 2191 52.74 11/11/86 2385 52.74 5/3/85 1649 105.12 6/7/85 1682 111.79 6/28/85 1698 90.28 9/16/85 1773 463.06 10/28/85 1824 152.70 11/18/85 1851 96.93 1/6/86 1915 118.30 2/4/86 1977 282.11 2/28/86 2034 152.00 3/14/86 2057 33.20 5/5/86 2143 115.87 5/22/86 2166 115.09 6/16/86 2187 118.97 7/15/86 2218 191.17 8/20/86 2261 277.48 10/20/86 2345 88.42 10/20/86 2397 112.06 12/16/86 2426 199.29 1/13/87 2455 146.83 3/13/87 2526 $ 260.74 TOTAL $3,641.21 23. Records on file at the Oxford Valley Cablevision Company indicate Customer Number 11- 006918C is registered to M. Pirolli at 603 Main Street, Tullytown, Pennsylvania. The date of installation of service was August 1, 1980. 24. Records on file at the Lower Bucks County Joint Municipal Authority indicate Customer Number 0105045 is registered to Michael Pirolli at 603 Main Street, Tullytown, Pennsylvania. The exact date of service was not on file, but records indicate it was in the late 1950s or early 1960s. 25. Records on file with the State of Pennsylvania Corporation Bureau, Room 308, North Office Building, Harrisburg, PA 17120, indicate Penn Manor Inn is located at 578 Main Street, Tullytown, PA 19007. Mr. Michael A. Pirolli File No. 88 -109 -C Page 24 a . b. The directors were identified as: Michael Pirolli, 603 Main Pennsylvania 19007 Ida Mae Pirolli, 603 Main Pennsylvania 19007 Dominic Pirolli, 603 Main Pennsylvania 19007 Street, Tullytown, Street, Tullytown, Street, Tullytown, The incorporators, the number and class of shares subscribed by each are: Michael Pirolli, 603 Main Street, Tullytown, PA, 49 Shares Ida Mae Pirolli, 603 Main Street, Tullytown, PA, 49 Shares Dominic Pirolli, 555 Main Street, Tullytown, PA, 2 Shares c. The document is signed by Michael A. Pirolli, Ida Mae Pirolli and Dominic Pirolli with the date, December 27, 1968. 26. Documents on file at the Borough of Tullytown, PA contain the following information in the Occupational Privilege Tax File: Form OPT -1, Employers Return for 1986 for Penn Manor Inn, Inc., 578 Main Street, Tullytown, PA 19007, signed by Ida Mae Pirolli, dated 4/29/86, with her title listed as Secretary Treasurer. Form OP -2, Occupational Privilege Tax for Penn Manor Inn, 578 Main Street, Tullytown, PA 19007, signed by Michael Pirolli. OPT -1, Employers Return 1986 for Penn Manor Inn, Inc., 578 Main Street, Tullytown, PA 19007, signed by Ida Mae Pirolli, dated 7/29/86, with her title listed as Secretary Treasurer. 27. State Ethics Commission's Statement of Financial Interest on file at the Lower Bucks County Joint Municipal Authority indicates it was submitted by Board Member, Michael A. Pirolli, 603 Main Street, Tullytown, PA, telephone number 946 -3255. The form was dated 4/14/88. Pirolli lists Penn Manor Inn as his only direct or indirect source of income. Under office or directorship or employment in any business for profit, Pirolli lists Penn Manor Inn. Mr. Michael A. Pirolli File No. 88 -109 -C Page 25 28. Ida Mae Pirolli was married to Michael Angelo Pirolli on September 10, 1949. a. They reside at 603 Main Street in Tullytown, Pennsylvania. b. Their home telephone number is 946 -3255. c. There isn't anyone else in the family with the name Ida Mae Pirolli. d. Ida Mae Pirolli's signature appears on the signature card for M &M Fuel Oil's checking account at Bucks County Bank and Trust Company. e. She presently holds the position of President of M &M Fuel Company. She held that position when the company first started and for the last five years. f. She does not receive any compensation for her position. g. ]- She is Secretary /Treasurer and Manager of the Penn Manor Inn. h. Her husband, Michael, is the President of the Corporation that owns the Penn Manor Inn. i. Her sons, Mark and Matthew, own M &M Fuel Oil Company. Her son, Michael Jr., was one of the original owners. k. She wrote a number of checks on M &M's checking account to cash, and her signature appears as the endorsement on the back of the check. She could not give an explanation of why she wrote the checks. She felt it may have been a convenience for her sons, as she is the one who usually goes to the bank. (Checks listed in 17a.) 1. She wrote a number of checks on M &M's checking account to cash and deposit them in the account, Penn Manor Inn. She could not give an explanation of why she wrote the checks. (Checks listed in 17b.) m. M &M Fuel Oil Company paid the utility bills for her family in 1977, 1978 and 1979. The company Mr. Michael A. Pirolli File No. 88 -109 -C Page 26 paid the bills because of the family's tight financial situation. n. She admitted that a series of checks written on M &M checking account indicate that M &M Fuel Oil Company paid the utility bills for her residence in 1985, 1986 and 1987. (Checks listed in Finding No. 22). o. Her sons, Matthew and Mark, lived at home without paying room and board and that the payments made by M &M were their compensation for their room and board; the use of the house for the oil business; her answering of the phone; and the parking of the oil trucks in the driveway of their home. 29. Michael A. Pirolli provided a statement to an investigator from the State Ethics Commission: a. He was appointed to the Lower Bucks County Joint Municipal Authority by Tullytown Borough Council in January of 1983. b. M &M Fuel Oil Company was started by his three sons, Michael, Jr., Mark and Matthew, working out of his house. Two of the sons are out on their own and the third still lives at home. c. He was never involved in the M &M Fuel Oil Company and had nothing to do with any of their business practices. d. Although his sons worked out of his house, they had a separate telephone for their business. e. He never had any financial benefit from the company. f. He had nothing to do with their bank account; purchasing or registering their vehicles; or any of the dealings required for the business. g. He owns the Penn Manor Inn and that is the source of his income. h. He pays the taxes and the utility bills for his residence. i. He doesn't know how his sons began to do business Mr. Michael A. Pirolli File No. 88 -109 -C Page 27 j• with the Lower Bucks County Joint Municipal Authority. He had nothing to do with the Authority doing business with them. He wasn't aware of M &M doing business with the Authority until he saw the company's name on the list of bills that the Authority's Board had to approve. k. He never gave it a thought as to whether the purchase should have been put out for bid. 1. It was the responsibility of the Authority's business manager to make sure the purchase should have been put out for bid. m. He feels the blame should be spread equally among the six board members. III. DISCUSSION: Michael A. Pirolli, hereinafter Pirolli, as a member of the Lower Bucks Municipal Authority, is a public official as that term is defined under the Ethics Act. 65 P.S. 402;51 Pa. Code §1.1. As such, his conduct is subject to the provisions of the Ethics Act and the restrictions therein are applicable to him. Initially, it is noted that Section 5 of Act 9 of 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 prior to the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 170 of October 4, 1978, P.L. 883 to determine whether the Ethics Act was violated. Mr. Michael A. Pirolli File No. 88 -109 -C Page 28 Under Section 3(a), quoted above, this Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law transgresses the above provision of law. Thus, use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak /McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet v. State Ethics Commission, 109 Pa. Commw. Ct. 432 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own interests; Koslow v. State Ethics Commission, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. In addition, Section 3(c) of Act 170 of 1978 specifically provides in part that no public official or member of his immediate family or business with which he or a member of his immediate family is a director, officer, owner or holder of stock exceeding 5 percent of the equity at fair market value may enter into a contract with his governmental body valued at five hundred dollars or more unless the contract is awarded through an open end public process. In the instant matter, we must determine whether Pirolli violated either Section 3(a) or 3(c) of the Ethics Act regarding contracts between the Authority and a firm which supplied home heating fuel to the Lower Bucks County Joint Municipal Authority (Authority). Factually, Pirolli served as a member of the Authority between 1968 and 1980 and from 1982 to the present time. The Authority is a joint municipal authority covering Crystal Falls and Middletown Townships and Tullytown Borough which municipalities appoint authority members to five year staggered terms. Following the completion of the Authority sewer plant in the early 1980's, the Authority switched from kerosene to fuel oil for its operational needs. Neither the purchase of kerosene prior to 1986 or fuel oil prior to the completion of the sewer plant was done through a bid process. The minutes of the Authority reflect that one board member in June 17, 1986 questioned purchases from the M &M Fuel Oil Company. In the September 16, 1986 meeting, a question arose as to whether the bids submitted were through an open public process since they were offered at a given daily rate. After the solicitor suggested that the Authority re- advertise for a bid for a one year period, the Authority decided to purchase its fuel at that time from the then low bidder. Mr. Pantano at the April 21, 1987 meeting suggested that the Authority make its purchases from the County Consortium for the purpose of making purchases through group contracts. From January 1985 through April 1987, the firm of M &M sold either kerosene or fuel oil to the Authority. Of the twenty -eight foregoing transactions, all but two Mr. Michael A. Pirolli File No. 88 -109 -C Page 29 involved contracts exceeding five hundred dollars in value (Fact Finding 7). Further, the minutes of the Authority reflect numerous votes with Pirolli participating in the votes and approving payments to M &M Fuel Oil Company (Fact Finding 8). The M &M Fuel Oil Company was incorporated in Pennsylvania with the location of the registered officer at Pirolli's residence. Pirolli's wife holds the position of President of M &M Fuel Company but does not receive compensation for her position. Pirolli's wife has written a number of checks from the M &M's checking account to cash followed by a deposit in the account of Penn Manor Inn of which Pirolli is the president; she has written checks to pay the utility bills for the family residence in 1987 through 1979. Nick Eberly, the current Authorities Superintendent has indicated that M &M Fuel Oil was selected because Authority personnel called around and found M &M to have the lowest price. Eberly states that he was not aware that Mike Pirolli Jr. of M &M was related to Pirolli until sometime in 1982 or 1983. Eberly never discussed purchases with Pirolli. In addition, Michelle Zuchero, a former Authority clerk and current computer clerk, indicates that both Nick Eberly and John Cocordas instructed her to call around to get the cheapest price for heating fuel. Ms. Zuchero further notes that M &M had the lowest price and the Mehan Oil would not deliver on an as needed basis. Zuchero also confirms that she did not discuss fuel purchases with Board member Pirolli. Further, Joseph Pantano, the Authority Managing Engineer, states that the policy of purchasing fuel oil was questioned before he started working for the Authority and that the purchase of fuel oil was put out for bids in September of 1986. Pantano stated that Mehan Fuel Oil Company did submit a lower price but would not guarantee that price for the year. Jack Sirott, the Authority Solicitor, states that he advised the Board in 1986 that the bids were improper because they did not lock in a price for the fuel oil. Jack Kelly, an Authority member, advised that he noticed the bills coming from M &M's Fuel Oil Company exceeded the four thousand dollar limit found in the Municipalities Authorities Act but the Board Chairman and Solicitor dismissed the concern on the basis that M &M was a small company. Upon reading a newspaper article that Pirolli had a financial in M &M, Kelly brought up the matter at a board meeting wherein Pirolli stated that M &M was his son's business and that he did not have any financial interest therein. Kelly states that the Authority decided to put the matter out for bids but the Solicitor advised that the bids were not proper and suggested remaining with the low bidder. However the Authority decided to purchase the fuel oil through the Bucks County Consortium. John Cocodoras, the current Authority Business Manager, advises that he was not consulted regarding fuel oil purchases but was advised by Eberly that fuel oil was purchased from M &M because of convenience both as to late night deliveries and deliveries on holidays. Cocodoras also advised that after an authority member questioned the purchases without bids, he (Cocodoras) was instructed to advertise for bids. After bids were Mr. Michael A. Pirolli File No. 88 -109 -C Page 30 submitted, the Solicitor threw out the bids and Pantana was instructed to take over the process. The purchases were eventually made through the Bucks County Consortium. Cocordas does note that Pirolli never spoke to him regarding fuel oil purchases. Rich Eggert, the owner of Eggert Fuel Oil Company, stated that he did not receive calls from the Authority regarding price quotes but he is familiar with the controversy over the fuel oil purchases due to the publicity in the newspapers. In addition, Harry Hyatt, the vice - president for commercial sales of Mehan Fuel Oil Company, stated that he submitted a bid to the Authority based upon information received either from the newspaper on Business Manager Cocordas. Hyatt advised that he was informed by Cocordas that Mehan was the low bidder but that they would not receive the business and that he was not advised about any specifications for a bid price for a period of one year. A cost comparison of purchasing the fuel oil from M &M versus purchasing the fuel oil from either Eggert of Mehan Fuel Oil Company reflects a higher cost to the Authority for purchasing fuel oil from M &M (Fact Finding 20). As noted above, various checks from the account of M &M were written to pay various bills for services at 603 Train Street which is the residence of Pirolli, his wife, and sons. Said bills included payments for the service by the Authority, telephone bills and cable vision. Further, various checks were written to the order of cash and deposited in the Penn Manor Inn of which Pirolli is president. No explanation has been offered as to why funds from the M &M account were deposited via checks to the account of Penn Manor Inn. The foregoing raises a question in light of Pirolli's statement that he has no interest in nor has received any financial benefit from M &M. In applying the above quota provisions of Sections 3(a) and 3(c) of the Ethics Act to the incident matter, we find violations of Section 3(a) and 3(c). As to Section 3(a), there has been a use of office by Pirolli in approving the bills for payment of the fuel oil to M &M fuel oil company (Fact Finding 8). Further, the use of office resulted in a financial gain consisting of the payments and profits received by M &M from supplying the authority with fuel oil between 1985 and 1987. Finally, the financial gain was for himself in that various checks from M &M were written to cover various expenses for Pirolli's residence as well as being deposited in the Penn Manor Inn account. Finally, the compensation was other than provided for by law because there is no provision in the Municipalities Authorities Act which would authorize such purchases of fuel oil. To the contrary, Section 310 D in fact would appear to prohibit such activity, 53 P. S. 312 D. As to Section 3(c) of the Ethics Act, the findings indicate that 26 of the 28 documented purchases of fuel oil from M &M exceeded the five hundred dollar threshold limit. In addition, the record reflects that the purchases were not through an open and public process. Therefore, since M &M, a business in which a member of Pirolli's immediate family (spouse) is a director, officer (spouse is president of M &M), owner or holder of stock exceeding five percent of the equity Mr. Michael A. Pirolli File No. 88 -109 -C Page 31 at fair market value, entered into these contracts with the Authority, Section 3(c) of the Ethics Act was violated as to such purchases. The right of this Commission to order restitution in cases of financial gain by a public official in derogation of Section 3(a) of the Ethics Act has been upheld by Commonwealth Court in Yocabet vs. SEC,supra. In the instant matter, we believe that restitution in the amount of $8,437.69 (Fact Finding 20) is appropriate and accordingly order Pirolli to make restitution to the Authority through this Commission in that amount. With the payment of restitution, this Commission will take no further action. However, if restitution is not made, this matter will be referred for an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Michael A. Pirolli, as a member of the Lower Bucks County Joint Municipal Authority, is a public official subject to the provisions of the Ethics Act. 2. Pirolli violated Section 3(a) of the Ethics Act when he used public office to vote to approve payments of bills for fuel oil provided by M &M Fuel Oil Company which was a financial gain other than compensation provided for by law to Pirolli in that M &M company issued checks in payment of various bills for Pirolli's residence as well as issued checks which were deposited in the account of Penn Manor Inn of which Pirolli is president. 3. Pirolli violated Section 3(c) of Act 170 of 1978 when M&M Fuel Oil Company, a business with which his wife is president, contracted with Pirolli's governmental body, the Lower Bucks County Joint Municipal Authority, to supply fuel oil when the contracts exceeded $500.00 and were not awarded through an open and public process. In re: Michael A. Pirolli : File Docket: 88 -109 -C : Date Decided: July 12, 1991 : Date Mailed: July 16, 1991 ORDER No. 804 1. Michael A. Pirolli, as a member of the Lower Bucks County Joint Municipal Authority, violated Section 3(a) of the Ethics Act when he used public office to vote to approve payments of bills for fuel oil provided by M &M Fuel Oil Company which was a financial gain other than compensation provided for by law to Pirolli in that M &M company issued checks in payment of various bills for Pirolli's residence as well as issued checks which were deposited in the account of Penn Manor Inn of which Pirolli is president. 2. Pirolli violated Section 3(c) of Act 170 of 1978 when M &M Fuel Oil Company, a business with which his wife is president, contracted with Pirolli's governmental body, the Lower Bucks County Joint Municipal Authority, to supply fuel oil when the contracts exceeded $500.00 and were not awarded through an open and public process. 3. Pirolli is hereby ordered to make restitution in the amount of $8,437.69 to the Authority through this Commission as a result of the financial gain received in violation of the Ethics Law. 4. Based upon the totality of the facts and circumstances, this Commission will take no further action as to the findings of violations. However, if restitution is not made, this matter will be referred to the appropriate law enforcement authority for an order enforcement action. BY THE COMMISSION, / AAP"d ROBERT W. BROWN, CHAIR