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HomeMy WebLinkAbout775 MastersSTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In re: Jack M. Masters File Docket: : Date Decided: : Date Mailed: 88 -103 -C December 6, 1990 December 7, 1990 Before: Robert W. Brown, Vice G. Sieber Pancoast Dennis C. Harrington James M. Howley 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 not 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. Chair 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, 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 the Ethics Act, 65 P.S. 408(a) during the fifteen day period and no one unless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, 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, former Susquehanna County Commissioner, violated the following provisions of the State Ethics Act (Act 170 of 1978) when your firm, Masters Ready Mix Concrete, made sales of concrete and supplies to the County without an open and public process: 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. 5403(a). Section 3(c) of the State Ethics Act provides: 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. 5403(c). II. Findings: 1. Jack M. Masters served as a Susquehanna County Commissioner from January 1976 to January 1988. a. He served as Chairman of the Board of County Commissioners for approximately 11 years. 2. Jack M. Masters is employed by the Masters Ready. Mix Concrete Company, Kingsley, PA. a. He has been employed by this entity from 1949 to Mr. Jack M. Masters Page 2 the present and has served as the General Manager of this company. 3. The Masters Ready Mix Concrete Company is owned by Richard Masters, the brother of Jack Masters. 4. Jack Masters is generally involved in the sale of concrete for the company. He also is involved in the dispatching of trucks, collection of bills, and insuring that repairs are appropriately made to company trucks. a. He is compensated on a salary basis. b. He also receives a profit- sharing package. 5. During the years 1986 and 1987, the Masters Ready Mix Concrete Company supplied concrete to Susquehanna County. 6. Records of the Masters Ready Mix Concrete Company indicate that concrete was supplied to Susquehanna County during 1986 and 1987 as follows: INVOICE DATE ITEM AMOUNT 09/23/86 2.25 Yards Concrete $ 133.00 09/20/86 18 Yards Concrete 864.00 08/29/86 26 Yards Concrete 1,703.00 07/25/86 21.25 Yards Concrete 1,041.25 07/18/86 31 Yards Concrete 1,539.00 07/22/86 6.5 Yards Concrete 318.50 04/28/86 14.5 Yards Concrete 1,594.50 11/25/87 1 Yard Concrete 89.00 10/07/87 4.75 Yards Concrete 267.25 10/02/87 20.5 Yards Concrete 1,045.50 09/19/87 41 Yards Concrete 2,111.00 07/07/87 56 Yards Concrete 2,688.00 7. Records of Susquehanna County indicate that payments were made to Masters Ready Mix Concrete Company by the County, Mr. Jack M. Masters Page 3 in relation to the concrete obtained as outlined above, as follows: CHECK DATE CHECK # AMOUNT 09/24/86 01446 $1,007.00 08/29/86 01418 1,248.00 07/25/86 01396 1,041.25 07/22/86 01388 1,857.50 04/28/86 01326 1,135.50 12/09/87 01718 89.00 10/15/87 01680 267.25 10/02/87 01673 1,045.50 09/21/87 01662 2,111.00 07/07/87 01612 2,688.00 8. All of the payments made by the Susquehanna County Commissioners to Masters Ready Mix Concrete Company, as outlined in Finding No. 7 above, were dispersed from the County Liquid Fuels Account at the County National Hank, Montrose, PA. a. All Checks are signed by the County Commissioners, including Jack M. Masters, and are also countersigned by the County Treasurer. 9. Total payments made by Susquehanna County Commissioners to Masters Ready Mix Concrete Company, during the years 1986 and 1987, were as follows: a. 1986 - $7,803.75 b. 1987 - 6,250.75 10. Records of Susquehanna County indicate that there were no discussions, votes or motions by the board of County Commissioners in relation to purchases made by the County from Masters Ready Mix Concrete Company. 11. The concrete purchased by the County from Masters Ready Mix Mr. Jack M. Masters Page 4 Concrete Company was used in connection with County bridge construction and repair projects. 12. The County Commissioners did not advertise the County's desire to purchase concrete, and the contract regarding the purchase of such concrete was not conducted through a bid process. 13. The office of the Pennsylvania Auditor General conducted an audit of the Liquid Fuels Tax Fund for Susquehanna County for the years 1986 and 1987 and determined that the concrete purchases made by the County, during both years without advertising for bids and without the securing of a written contract, was contrary to the provisions of Pennsylvania State Law. 14. The other County Commissioners who served during 1986 and 1987 were aware of the fact that Jack Masters was employed by the Masters Ready Mix Concrete Company. 15. The County Commissioners believed that there was no reasonable competition from whom concrete products could be purchased in the area where the projects were being completed. 16. In 1988 and 1989, the County issued a request for proposals in relation to the acquisition of concrete, and Masters Ready Mix Concrete Company was the sole bidder. III. Discussion: Jack M. Masters, hereinafter Masters, as a Susquehanna County Commissioner was a public official as that term is defined under the Ethics Law. 65 P.S. 402; 51 Pa. Code §1.1. As such, he is subject to the provisions of the Ethics Law. Initially, it is noted that Section 5 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." Mr. Jack M. Masters Page 5 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. 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. Additionally under Section 3(c) of the Ethics Act quoted above, this provision of law provides, in part, that no public official shall enter into a contract valued at $500 or more with this governmental body unless the contract was awarded through an open and public process. The issue before us is whether Masters violated either Section 3(a) or 3(c) of the Ethics Law regarding the sales of concrete and supplies by the Masters Ready Mix Concrete Company to Susquehanna County. Factually, Masters served as a Susquehanna County Commissioner from January 1976 till January 1988. In a private capacity, Masters was employed by the Masters Ready Mix Concrete Company wherein he was employed from 1949 to the present as the general manager. Although the Masters Ready Mix Concrete Company was owned by Masters brother, Masters himself received a salary and participated in profit sharing package of the company. For the years 1986 and 1987 Masters Ready Mix Concrete Company supplied Susquehanna County; there were seven deliveries in 1986 and five in 1987. Five of the invoiced amounts in 1986 and three of the invoiced amounts in 1987 exceeded the $500 threshold amount contained in Section 3(c) of the Ethics Act quoted above. Although there were no discussions, votes or motions by the Board of County Commissioners relative to the purchases of concrete from Masters Ready Mix Concrete Company, it is noted that Masters did co -sign checks along with the other County Commissioners, to pay the invoices for the deliveries of the concrete to the county. The concrete in question was used for county bridge construction and repair projects. The county commissioners did not advertise for bids Mr. Jack M. Masters Page 6 as to the purchase of concrete and the Pennsylvania Auditor General, after conducting an audit, concluded that the transactions which were done without an open and public process and without a written contract, were contrary to state law. The record reflects that the other County Commissioners knew of Masters relationship to Masters Ready Mix Concrete Company and believed that there was no reasonable from whom concrete could be purchased in the area. Finally, in the subsequent years 1988 and 1989, the County did put out a request for proposals for the acquisition of concrete and Masters Ready Mix Concrete Company was the sole bidder. In applying the provisions of Section 3(a) and 3(c) of the Ethics Act to the above facts, we note that Masters Ready Mix Concrete Company is a business with which Masters is associated. The term "business with which he is associated" is defined in Section 2 of the Ethics Act as follows: Section 2. Definitions. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or holder of stock. 65 P.S. S402. Since Masters is employed as the general manager of Masters Ready Mix Concrete Company, such is a business with which he is associated as that term is defined under the Ethics Act. In the instant matter, we conclude that Masters did violate Section 3(a) of the Ethics Act regarding the purchases of concrete from Masters Ready Mix Concrete Company for the county. Although Masters did not participate in any discussions, votes or motions relative to the concrete purchases, it is noted that he did co -sign, along with the other County Commissioners, the checks to pay the invoices for the delivery of the concrete. Such is a use of authority of office. In addition, a financial gain resulted from the sales which were made by the Masters Ready Mix Concrete Company to Susquehanna County. That financial gain inured to the benefit of the company which is a business with which Masters is associated. Lastly, the financial gain is compensation other than provided for by law because there is no authorization in the County Code for such purchases. Astolos, Order 741. Likewise, we find a violation of Section 3(c) of the Ethics Act in this matter because the Masters Ready Mix Concrete Company, a business with which Masters is associated, entered into eight contracts in 1986 and 1987 with Susquehanna County which were over the $500 threshold of Section (c) of the Ethics Act. These contracts were not awarded through an open and public process and such action was in contravention to Section 3(c) of the Ethics Act. Smythe, Order 733. Mr. Jack M. Masters Page 7 In reviewing the totality of the facts and circumstances in this case, including the fact that Masters did not participate in discussion, votes or motions regarding the purchase of concrete and the fact that there is no evidence of any intent to violate the Ethics Act, we will take no further action in this matter. IV. Conclusions of Law: 1. Jack M. Masters as a Susquehanna County Commissioner official subject to the provisions of the Ethics Law. 2. Masters violated Section 3(a) of the Ethics Act when county checks for the payment of invoices as to concrete from Masters Ready Mix Concrete Company, a business with associated. was a public he co- signed deliveries which he was 3. Masters violated Section 3(c) of the Ethics Act when Masters Ready Mix Concrete Company, a business with which he was associated, made eight sales of concrete in 1986 and 1987 to the county which sales were in excess of $500 and were not awarded through an open and public process. In re: Jack M. !tasters : File Docket: 88 -103 -C : Date Decideds December 6, 1990 : Date Mailed: December 7, 1990 ORDER No. 775 1. Jack M. Masters as a Susquehanna County Commissioner violated Section 3(a) of the Ethics Act when he co- signed county checks for the payment of invoices as to concrete deliveries from Masters Ready Mix Concrete Company, a business with which he was associated. 2. Masters violated Section 3(c) of the Ethics Act when Masters Ready Mix Concrete Company, a business with which he was associated, made eight sales of concrete in 1986 and 1987 to the county which sales were in excess of $500 and were not awarded through an open and public process. 3. Given the totality of the facts and circumstances in this case, this Commission will take no further action. BY THE COMMISSION, ROBERT W. BROWN, VICE CHAIR