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HomeMy WebLinkAbout106 EvansMr. Edgar C. Evans R. D. #1 Alum Bank, PA 15521 Re: #81 -69 -C Dear Mr. Evans: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION February 8, 1982 No. 106 Note: Letter of 3/25/82 to Evans from Smith is part of the Order and should be included when copying Order. 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 finds a violation of Act 170. I. Allegation #1: That you obtained an option to buy real estate in the Industrial Park owned by the Mu- nicipal Authority. When this option was obtained by you, you were treasurer for the Authority and the Chestnut Ridge Economic Development Authority. This option was not awarded pursuant to an open bidding process. In addition, when you obtained this option, you were acting on information that a waiver was to be obtained from the state and federal government to allow housing in the park. This information, while not strictly confidential was not widely known, even to other members of the Authority. Findings /Discussion: 1.a You were appointed to the West St. Clair Township - Pleasantville Borough Municipal Authority, in 1974 and served as Treasurer of the Authority until your resig- nation in May, 1981. You helped create the Chestnut Ridge Economic Development Authority (CREDA) so the Municipal Authority could separate monies received for the Industrial Development Park in Pleasantville and the water system's accounts. Edgar C. Evans February 8, 1982 Page -2- 1.b You are no longer a member of the Authority or CREDA. 1.c You were a public official and are now a former public official under the terms of Act 170. 2. The Board Members of the Municipal Authority also served as Board Members for CREDA. Each person held the same positions in both bodies. 3. On November 9, 1979, you formed a limited partnership (Arlandria Limited sometimes known as Arlandria Associates) with Mr. Robert L. Findley, the general partnership interests were Robert L. Findley and Arlandria, Inc. You were listed as president of Arlandria, Inc. According to this agreement, you "Arlandria, Inc., c/o of Edgar C. Evans," had a 1% General Partnership Interest" and you "Edgar C. Evans" held a 30% Limited Partnership Interest. 4.a On December 7, 1979, the Chestnut Ridge Economic Development Authority (CREDA) and Arlandria L/P signed an option agreement allowing Arlandria L/P "exclusive right to purchase a parcel of land .... of 3.1 acres more or less" in the northeast corner of the Pleasantville Industrial Park. 4.b Mr. Stanley Claycomb, Chairman, signed for the Authority, Mr. Robert L. Findley signed for Arlandria, Inc., and you witnessed Mr. Claycomb's signature. 4.c This option, in our opinion, represents a thing of value, and represented a financial gain for Arlandria, a business with which you were associated. 5. On October 2, 1980, you, as a member of CREDA on Pleasantville Industrial Park, made a motion for the Chairman to sign the deed for 2.9 acres to be sold to Arlandria, Inc. The motion was approved unanimously. 6. There was no open- and - public process evident in any of these transactions, between CREDA and Arlandria Limited or Arlandria Associates nor was there any record of your interest in Arlandria, Inc., Arlandria Limited, or Arlandria Associates being made public before or during these transactions despite the fact that you were an officer, director, owner or holder of stock exceeding 5% of the equity in these businesses. Edgar C. Evans February 8, 1982 Page -3- 7. In December of 1981, you submitted information to the Commission which showed that on May 4, 1981, Robert L. Findley exercised his "option to purchase all rights, title and interest in the one percent (1. %) partnership unit (emphasis added) in Arlandria Associates Limited Partnership." There is no mention of any sale of your 30% Limited Partnership Interest in Arlandria Limited. 8. You did not submit information nor were we able to find documentation that you have divested yourself of the 30% Limited Partnership Interest. This interest is a financial gain acquired by you as a public official and in a transaction involving your governmental body. Section 3(a) of the Ethics Act provides that: No public official or public employee shall use his public office or any confidential information eceived 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. 403(a) The Ethics Act also requires that public officials and public employees avoid even the appearance of a conflict of interest. Sec. 1, 65 P.S. 401. In addition, Section 3(c) of the Ethics Act requires 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 juris- diction if the suit is commenced within 90 days of making of the contract. 65 P.S. 403(c). In the circumstances presented, any contract between the Authority /CREDA and Arlandria should have been made only after an opea- and - pubic process. Section 3(c) was violated where there is no evidence that this process was used. Section 3(a) was also violated by your use of your office to acquire a financial gain. Edgar C. Evans February 8, 1982 Page -4- The Commission is forwarding this information to the District Attorney and recommending prosecution unless you clearly demonstrate that you divest yourself of any interest in Arlandria, Inc., Arlandria Limited, Arlandria Associates, or any of their successors or otherwise divest yourself of your interest in the land in the Industrial Park (see Finding 4.a, above). II. Alle•ation #2: That through your position on CREDA and the Authority, you obtained a deferred -rent arrangement for Grain Fuels, Inc., a company for which you served as Grantsman and Director. The deferred -rent arrangement involved a building on which CREDA was mortgagee. According to a private placement memorandum prepared for prospective investors, no rental payments were to be made on the building until grant funds were obtained. In turn, you used CREDA funds to make the required payments thereby subsidizing a private corporation with public funds. Findings /Discussion: 1. CREDA, by letter of September 7, 1979, signed by you as the Executive - Vice - President, told Mr. Zablotney that the CREDA Directors had approved his "subleasing of the property located in Alum Bank, PA." 2. Grain Fuels, Inc., by letter signed by B. L. Wright, its president, told Mr. Zablotney that Grain Fuels would assume his obligation to CREDA regarding the former Pleasantville Pharmacy Building in Alum Bank, PA. Grain Fuels had tentative occupancy plans for September 1, 1979. 3. On January 4, 1980, you made four interest payments on the mortgage of this building with a CREDA check. This was necessary because CREDA held the original mortgage with the Bank. CREDA was responsible for the bank payments, despite the sublease - agreement with Mr. Zablotney. There is no evidence that these payments were approved by the CREDA Board. 4. On July 9, 1980, Mr. I. Stanley Claycomb, Chairman of CREDA, notified Mr. Zablotney that the mortgage payments were seven months overdue. S. On August 11, 1980, five interest payments on the mortgage of this building were made by Mr. Zablotney. Conclusion: There is no evidence of an actual conflict of interest in the: making of these payments. However, there was an appearance of a conflict when you personally made payments which indirectly benefitted Grain Fuels, a private firm in which you had a financial interest. This or a similar situation should not re- occur. The Commission will take no further action as to this incident. Edgar C. Evans February 8, 1982 Page -5- III. Allegation #3: You used Authority funds to pay a phone bill for Grain Fuels, Inc. Findings /Discussion: 1. You agree, in February 1980, you paid a $221.28 Grain Fuels phone bill with a Municipal Authority check. 2. In February, 1981, you asked the Authority Solicitor to give you a copy of the cancelled check so Grain Fuels could repay the Authority. 3. You received a copy of this check in July 1981 and repayment was made one day later. 4. From February 1980 to February 1981, you were Treasurer of the Authority and a Member of the Board of Directors of Grain Fuels. As Treasurer of the Authority, you would have been responsible for knowing whether Authority funds were correctly used. Conclusion: There was a conflict of interest in the use of Municipal Authority funds to pay a bill for your private business. However, because the amount was minimal and you have reimbursed the Authority, the Commission will take no further action on this allegation. 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 avail- able as a public document within 15 days unless you file documentation with the Commission which justifies recon- sideration and /or challenges pertinent factual findings. During this 15 -day period, no one, including the Re- spondent and /or Complainant, may violate this confidentiality by releasing, discussing or circulating this Order. Any person who violates the confidentiality of a L;ouuaission proceeding is guilty of a misdemeanor and shall be fined not more than $1000 or imprisoned for not ralore than one year or both, see 65 P.S. 409(e). PJS /1; Sincerely, aul J. mith Chairman Mr. Edgar C. Evans R. D. #1 Alum Bank, PA 15521 Dear Mr. Evans: PJS /jc Mailing Address. STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 March 25, 1982 We have reviewed your letter asking that we reconsider our Order of February 8, 1982. Your letter showed no evidence that you had divested yourself of the 30% limited - partnership interest in Arlandria Associates Limited partnership. There was also no evidence that any of our findings or our conclusions should be changed. In fact, your statement that as Chairman of the Bedford Planning and Development Couauission, you also participated in the development of this project reinforces our findings. Our Order is now final and immediately becomes a public document. Sincerely, aul' . ' 5mit Chai man Note: By letter of March 26, 198 from Mr. Evans to Chairman Paul Smith, Mr. Evans stated that he has withdrawn all interests in Arlandria. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania