HomeMy WebLinkAbout162 AudeyRobert Audey, Chairman
Johnstown Redevelopment Authority
203 Chestnut Street
Johnstown, PA 15906
RE: #82 -27 -C
Dear Mr. Audey:
are:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
October 4, 1982
ORDER OF COMMISSION
Order No. 162
The State Ethics Commission has received a complaint regarding you and a
possible violation of Act 170 of 1978. The Commission has now completed its
investigation into these allegations and will take no further action.
The individual allegations and findings on which our conclusion is based
I. Allegation: That Mr. Robert Audey, Chairman of the Redevelopment
Authority in Johnstown, was paid $3,000.00 to serve as a Consultant to the
Authority at the same time he was serving as Chairman.
A. Findings:
1. You serve as Chairman of the Board of the Johnstown Redevelopment
Authority, hereinafter, the Authority, You are not compensated in this
position.
2. During July, August and September, 1981 you served as a special
consultant to the Authority to deal with administrative problems as to the
State Bond Issue Rehabilitation Program, hereinafter the Rehab Program.
a. The Rehab Program was part of an overall program or attempt to
correct flood damage following a flood in the City of Johnstown
in 1978.
b. The Authority had initially contracted with the City of Johnstown
to administer the reimbursement and rehabilitation portions of
the Program.
c. The Authority selected you to review the City's administration of
the Rehab Program.
Robert Audey, Chairman
October 4, 1982
Page 2
d. You state your selection was made by the Authority Board in July,
1981 at an open and public meeting of the Board and that you
abstained from voting on this question and selection. The
minutes of the Authority indicate you were working as a
"consultant" in June, 1981 but do not contain any express
reference to your initial selection indicating Board approval of
some or verifying your contention that you played no role in the
selection. The records do not reveal any other applications for
appointment to this position were solicited or reviewed.
e. Authority records do not document or reveal any written
contract for the services you were to perform or detail the
hourly rate, duration, etc. of these services.
f. You were paid approximately $3,300 for consultant services by the
Authority.
g. On July 20, 1981 the Solicitor for the Authority opined that you
could, consistent with the Urban Redevelopment Law, perform and
be paid for consultant services.
B. Discussion: Section 3(e) of the Ethics Act requires that:
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. 403(c).
This Section wculd obviously apply and prohibit your consultant contract
with the Authority absent an open and public processif you are deemed to be a
"public official" or "public employee" to whom this Section is addressed. The
question of whether you are a "public official" within the purview of the
Ethics Act and therefore subject to the prohibitions and restrictions of
Section 3(c) therefore is critical and will be reviewed below. We begin with
an analysis of the application of the Ethics Act to the entity on which you
served -- the Authority.
Robert Audey, Chairman
October 4, 1982
Page 3
At one point in time the question of whether municipal authorities were
generally subject to the Ethics Act was an open one being litigated in the
courts. As of February 10, 1981, however, the Commonwealth Court issued its
ruling in Forney v. State Ethics Commission, 425 A.2d 66, and this issue was
resolved. Municipal authorities were generally held to be agencies of the
Commonwealth and paid members of such authorities were held to be "public
officials" subject to the Ethics Act. The question to be answered in your
case, however, is whether unpaid members of such authorities such as you, are
similarly subject to the Ethics Act so that their conduct would be subject to
the requirements of the Ethics Act.
To answer this question we review the definition of "public official" in
the Act more critically. This definition is reprinted below:
"Public official." Any elected or appointed official in
the Executive, Legislative or Judicial Branch of the State
or any political subdivision thereof, provided that it
shall not include members of advisory boards that have no
authority to expend public funds other than reimbursement
for personal expense, or to otherwise exercise the power of
the State or any political subdivision thereof. "Public
official" shall not include any appointed official who
receives no compensation other than reimbursement for
actual expenses. 65 P.S. 402
While appointed, non - compensated persons might be said to be clearly
excluded from coverage, the definition must also be reviewed in light of the
recent ruling in Snider v. Thornburgh, Pa. , 436 A.2d 593 (1981).
In that ruling, issued September 29, 1981, the Supreme Ccurt appeared to alter
the definition of "public official" by removing the exclusion relating to
appointed, non - compensated persons. While this case related to school board
directors, it may affect the scope of the entire definition of "public
official" by including non - compensated appointed persons previously excluded
from the Ethics Act's definition of that term. The State Ethics Commission is
currently assessing the impact of this ruling and if appointed,
non - compensated persons other than school directors are to be affected by this
decision, regulations will be promulgated to implement this portion of the
Snider ruling.
In any event, even assuming that persons such as unpaid authority members
previously exluded from the "public official" definition as it stood prior to
the September 29, 1981 Snider ruling will eventually, by regulations, be held
within the purview of this definition, we are unwilling to apply this Snider
ruling retroactively to affect your conduct during June - September, 1981.
During this period you were not covered by the Ethics Act and we will not
review or judge your conduct at this point when such contract and services
were undertaken at a point in time when your inclusion within the definition
of "public official" was not clear.
Robert Audey, Chairman
October 4, 1982
Page 4
C. Conclusion: The State Ethics Commission will take no further action in
the matter because it has now been determined that you were not subject to the
Ethics Act at the time the contract in question was made. We will not apply
this subsequent court ruling retroactively. This conclusion is not meant to
condone or condemn your conduct. Should you clearly be within the definition
of "public official" as established by the Ethics Act or future regulations of
the State Ethics Commission and should you face a similar situation in the
future, you should solicit the advice of the State Ethics Commission in
relation to conforming your conduct to the requirements of the Ethics Act.
II. Allegation: That Mr. Audey also received $23,400.00 reimbursement grant
for flood repairs to his home before the Authority had undertaken a
rehabilitation program; in addition, he received another $14,000.00 towards
rehabilitation of his home after the Authority had initiated its flood
rehabilitation program.
A. Findings:
1. Previous findings as applicable are incorporated hereby reference.
2. You applied for and received $19,300.00 from the Authority for the
acquisition of a two -story duplex building which was attached to your
residence prior to the flood.
3. You applied for and received approximately $23,400.00 and later
$10,200.00 from the City of Johnstown under the Rehab Program operated by the
City for the Authority. See Findings No. 2(a) and (b) above.
a. Original files relating to these applications and receipts have
been lost but subsequently reconstructed.
b. Portions of the reconstruction work on your properties relating
to these monies received by you were performed by Cambria
Construction Co. which is owned by one of your adult sons.
c. Cambria Construction Co. was the single largest contractor with
the Authority, having approximately $600,000.00 in contracts with
the Authority from July 1, 1981 to December, 1981. During this
period the Authority had control over the administration of the
monies disbursed under this program having discontinued the
contract and agreement with the City.
4. There is no indication that you voted in your official capacity to
approve these payments.
Robert Audey, Chairman
October 4 , 1982
Page 5
B. Discussion: The same discussion related to Allegation I, above,is
applicable to our review of whether your activities here violated the Ethics
Act. The sections of the Ethics Act we believe would apply here, Section
3(c), Section 3(a), and 1, deal with and regulate the conduct of "public
officials." At the time of these activities, the same questions of
applicability of the Ethics Act as discussed previously existed and we must
reach the same conclusion.
C. Conclusion: The State Ethics Commission will take no further action in
the matter because if has now been determined that you were not subject to the
Ethics Act at the time application and reimbursement in question was made. We
will not apply this subsequent court ruling retroactively. This conclusion is
not meant to condone or condemn your conduct. Should you clearly be within
the definition of "public official" as established by the Ethics Act or
existing or future regulations of the Ethics Commission and should you face a
similar situation in the future, you should solicit the advice of the State
Ethics Commission in relation to conforming your conduct to the requirements
of the Ethics Act.
Our files in this case will remain confidential in accordance with
Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final
and will become available as a public document within 15 days unless you file
documentation with the Commission which justifies reconsideration and /or
challenges pertinent factual findings. During this 15 -day period, no one,
including the Respondent unless he waives his right to challenge this Order,
may violate this confidentiality by releasing, discussing or circulating this
Order.
Any person who violates the confidentiality of a Commission proceeding is
guilty of a misdemeanor and shall be fined not.more than $1000 or imprisoned
for not more than one year or both, see 65 P.S. 409(e).
SSC /rdp
Sincerely,
�1 v
Paul J./Smith
Chairman