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HomeMy WebLinkAbout204 DonatiMs. Donna Donati c/o Richard.Audino, Esq. 306 Central Building West Mercer Street New Castle, PA 16101 Re: #82 -60 -C Dear Ms. Donati: STATE ETHICS COMMISSION 308 FINANCE,BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION June 17, 1983 Order No. 204 Note: When copying this Order, also include Order dated 12/21/83 to Donati. 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. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you have violated Section 3(c) of the Ethics Act by participating in school district matters involving your husband's music business; that contracts of $500 or more have been awarded to that business without the open and public process required by Section 3(c) of the Ethics Act (Act 170 - 1978); and that you violated the Opinion of the State Ethics Commission issued May 23, 1980. A. Findings 1. You are a school director in the New Castle School District and as such are a public official subject to the provisions of the Ethics Act, Act 170 -1978. 2. You also serve as Chairperson of the Education Committee of the New Castle Area School Board and this committee has the authority to make decisions affecting the music curriculum and budget. Ms. Donna Donati June 17, 1983 Page 2 3. Since May 23, 1980, the date of the Commission's opinion issued to Mr. Motto on your behalf, there have been four music businesses in New Castle: a. Donati Music Company, a sole proprietorship, owned and operated by your husband. You are not an owner, partner, shareholder, officer, or director in this company. Donati Music Company sells and services musical instruments and sells musical supplies. The company was in business on March 23, 1980 and still is. b. Nard Instrument Repair. Mr. John Nard, the owner of this business is also 8 teacher in the New Castle School District. The school district solicitor has ruled that the school code prohibits Mr. Nard from doing business with the school district. c. Farone Music Wholesalers. Mr. Chuck Farone is the owner of this business. This company serviced and sold musical instruments. The company was in business on October 21, 1980 and went out of business in February, 1982. d. McConaghy Music. This company has a limited line of instruments but does no servicing. This company was in business on October 14, 1981 and is still in business. 4. On May 23, 1980, the Commission issued an Opinion to Dominic Motto, Solicitor of the New Castle Area School District, who had requested advice on your behalf. The Commission stated, "That Act 170 requires Mrs. Donati to abstain from participating in school district matters concerning her husband's music business." The Commission also stated "that if the school district desires to enter into a contract valued at $500.00 or more, with the Donati Music Company, said contract must be awarded through an open and public process including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded." 5. On February 11, 1981, the New Castle Area School Board adopted a policy conforming to the requirements set forth in that opinion. 6. On March 10, 1982, the New Castle Area School Board adopted a purchasing policy requiring all purchases to be made through a requisition slip approved by the business manager. 7. The New Castle Area School District made purchases from Donati Music Company in excess of $500.00 without an open and public process and approved payments for these purchases as follows: October 18, 1980 - $650.00, February 11, 1981 - $1,607.50, and April 14, 1982 - $739.68. Ms. Donna Donati June 17, 1983 Page 3 a. The purchases of October, 1980 were the results of two invoices; one for $500.00 on July 28, 1980 and one for $150.00 on August 7, 1980. b. The February 11, 1981 purchases included a purchase for $1600.00 made through a purchase order dated December 10, 1980, signed by business manager, Thomas Lorenzo. The other was a supply requisition of January 22, 1981 for $7.50. 1. Purchase Order No. 001682,'dated December 10, 1980, included the purchase of one "Selmer #101 Oboe" for $800.00 as part of the $1600.00 total. The supply requisition (No. 309) for these items including the the Selmer Oboe was dated November 21, 1980. 2. In a letter dated October 21, 1980 to Thomas J. Zumpella, Director of Bands, New Castle High School, Mr. Farone for Farone Music Wholesalers, quoted $720.00 for a "Selmer Oboe #101." 3. In a letter dated August 19, 1980 to Mr. Thomas J. Zumpella, Gordon Taylor, Band Instrument Manager, for Donati School of Music quoted a "delivered price" of $720.00 for a "Selmer 101 Oboe." 4. There is no evidence of quotes on a Selmer #101 Oboe other than those listed in 7 (b), 2 and 3 above. c. The bills approved on April 14, 1982 were for five separate purchases made between December 4, 1981 and March 19, 1982. These bills were for repairs to instruments and the purchase of musical accessories bought by Purchase Orders on December 4, 1981 for $181.50, January 22, 1982 for $115.00, February 11, 1982 for $263.30, February 11, 1982 for $115.00, and February 25, 1982 for $65.88. d. You abstained from voting on the payment for these repairs and purchases cited in 7 a through c. 8. In May of 1981, the school district sought price quotes for various music stands; Donati Music Company was the only firm submitting quotes and received the contract for $535.00. The quote was accepted. a. On September 16, 1981, the school board approved payment of that bill as part of the package totalling $701.50. The other charges were for purchases to cover materials and repairs made on 11 occasions from December 13, 1980 to March, 1981. b. You voted to approve payment of this September 16, 1981 bill. There is no evidence that you participated in the decisions to purchase any of the equipment or services included in this bill. Ms. Donna Donati June 17, 1983 Page 4 B. Discussion: 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 diclosure 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) Your vote on September 16, 1981 to approve payment of a bill for purchases made through an open and public process was not a violation of the Act or our Opinion. The Commission has ruled that if a vote for the payment of bills amounts to concurrence in payment of a pre -fixed undisputed and non - discretionary amount, the official may vote to pay the bill as presented. Your vote on September 16, 1981 was in accordance with this ruling. However, the purchases and contracts listed in No. 7 above for $500.00 or more made without an open and public process present a different problem. Section 3(c) clearly applies to you as a public official aad your husband and prohibits both you and your husband from contracting for $500 or more with your school district unless there is an open and public process. This prohibition is applicable even though you, personally, are not "a director, officer, owner, or holder of stock exceeding 5% of the equity at fair market value of the business" and these purchases were clearly in violation of Section 3(c) of the Ethics Act. Section 3(c) of the Act is violated where your husband contracts with the District without an open and public process. Contracts which violate Section 3(c) are voidable by a Court if a suit is commenced within 90 days of the making of a contract. In this case, these contracts were made more than 90 days prior to our knowledge of them and thus we are unable to consider taking this action. However, you should be aware the Ethics Commission will and any other person may take this action if future contracts are made of violation of Section 3 (c). Ms. Donna Donati June 17, 1983 Page 5 Although the time for filing suit to void the contracts is past, the Commission has an obligation to determime whether the violations require a referral to an appropriate law enforcement agency for possible action under Section 9(b) or (c) of the Ethics Act. Section 9(b) says: (b) Any person who violates the provisions of section 3(c) through (h) or section 4 is guilty of a misdemeanor and shall be fined not more than $1,000 or imprisoned for not more than one year, or be both fined and imprisoned. Section 9(c) says: (c) Any person who obtains financial gain from violating any provision of this act, in addition to any other penalty provided by law, shall pay into the State Treasury a sum of money equal to three times the financial gain resulting from such violation. A Commission decision on referral requires consideration of the public official's intent when participating in official actions. The school district policy delegated certain contracting authority to the business manager and he was allowed to initiate contracts by phone and /or a signature on supply requisitions and purchase documents. Because of this delegation, you assert you were not aware of contracts being let. In addition, you did abstain from participating when the bills were presented for payment. Thus you may be said to have complied with Section 1 of the Ethics Act. However, despite the research and direction of Mr. Dominic Motto, the school district solicitor, on the issue of Donati Music Company doing business with the school district and his advice that the board comply with the Ethics Commission opinion, we are not convinced the requirements of Section 3(c) have been met. The school district's adoption of a policy to conform with the Opinion of the Ethics Commission, the adoption of a new purchasing policy; and the involvement of the solicitor and his research specifically on the issue of Donati Music Company conducting business with the school district convince us that while there were efforts to comply with the Ethics Act, those efforts fell short of the mark. Donna Donati June 17, 1983 Page 6 Specifically, it is difficult to understand the board's adoption of a policy on February 11, 1981 which may have followed our Opinion and then their approval, at that same meeting, of bills which violated that Opinion and a subsequent similar action in April 1982 on purchases made in violation of the Act and our Opinion. Also under these circumstances, the purchase in December, 1980 of a Selmer Oboe from your husband's music company for $800.00 despite a quote of $720.00 only one month earlier from another company is incomprehensible. We must conclude that your husband and his company apparently failed to recognize and comply with the requirements of Section 3(c) of the Ethics Act. This concluion, while reached in the context of this case, would be best reviewed, without further investigation by this Commission by the appropriate law enforcement authorities and we will make this Order and our files in this matter available to them for review. We take this step but make no recommendation as to prosecution because we feel the circumstances relating to the District's contracts with your husband should be reviewed generally. While we understand that you are only one member of the board and cannot control the board's activities, you have a responsibility to insure that you and your husband are conforming to the requirements of the Ethics Act and are are not to do business with the Board unless the requirements of the Ethics Act are met. The lack of an open and public process and the circumstances cited above created an appearance of a conflict of interest and you must insist that all future all contracts for $500 or more between your husband's company and the school district awarded only after an open and public process. The process must be applied to all purchases totaling $500.00 or more during any one calendar year. The open and public process can be met either on each individual contract or by soliciting bids or quotes and awarding an annual contract based on hourly rates for services, a specified percentage of list price of equipment, or similar criteria the board may choose to establish. C. Conclusion: You did violate Section 3(c) of the Ethics Act and the May 23, 1980 Commission Order in the contracting with the school district and your husband's music company. Not only must these practices be immediately discontinued and steps taken to insure that Section 3(c) is observed but also, we are making this Order and our files available to the appropriate law enforcement officers so a general review of the Donati Music Company - District contracts may be undertaken as appropriate. Ms. Donna Donati June 17, 1983 Page 7 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 be made available as a public document 15 days after service unless you file documentation with the Commission which justifies reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code 2.38. During this 15 -day period, no one, including the Respondent unless he waives his right to challenge this Urder, 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). By the Commission, PJS /jc a Chairman Ms. Donna Donati c/o Richard Audino, Esq. 306 Central Building West Mercer Street New Castle, PA 16101 Re: #82 -60 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION December 21, 1983 Order No. 204 (As reconsidered and amended) Dear Ms. Donati: 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. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you have violated Section 3(c) of the Ethics Act by participating in school district matters involving your husband's music business; that contracts of $500 or more have been awarded to that business without the open and public process required by Section 3(c) of the Ethics Act (Act 170 - 1978); and that you violated the Opinion of the State Ethics Commission issued May 23, 1980. A. Findings 1. You are a school director in the New Castle School District and as such are a public official subject to the provisions of the Ethics Act, Act 170 -1978. 2. You also serve as Chairperson of the Education Committee of the New Castle Area School Board and this committee has the authority to make decisions affecting the music curriculum and budget. Ms. Donna Donati December 21, 1983 Page 2 3. Since May 23, 1980, the date of the Commission's opinion issued to Mr. Motto on your behalf, there have been four music businesses in New Castle: a. Donati Music Company, a sole proprietorship, owned and operated by your husband. You are not an owner, partner, shareholder, officer, or director in this company. Donati Music Company sells and services musical instruments and sells musical supplies. The company was in business on March 23, 1980 and still is. b. Nard Instrument Repair. Mr. John Nard, the owner of this business is also a teacher in the New Castle School District. The school district solicitor has ruled that the school code prohibits Mr. Nard from doing business with the school district. c. Farone Music Wholesalers. Mr. Chuck Farone is the owner of this business. This company serviced and sold musical instruments. The company was in business on October 21, 1980 and went out of business in February, 1982. d. McConaghy Music. This company has a limited line of instruments but does no servicing. This company was in business on October 14, 1981 and is still in business. 4. On May 23, 1980; the Commission issued an Opinion to Dominick Motto, Solicitor of the New Castle Area School District, who had requested advice on your behalf. The Commission stated, "That Act 170 requires Mrs. Donati to abstain from participating in school district matters concerning her husband's music business." The Commission also stated "that if the school district desires to enter into a contract valued at $500 or more, with the Donati Music Company, said contract must be awarded through an open and public process including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded." 5. On February 11, 1981, the New Castle Area School Board adopted a policy conforming to the requirements set forth in that opinion. 6. On March 10, 1982, the New Castle Area School Board adopted a purchasing policy requ ring all purchases to be made through a requisition slip approved by the business manager. 7. The New Castle Area School District made purchases from Donati Music Company in excess of $500 without an open and public process and approved payments for these purchases as follows: October 18, 1980 - $650 February 11, 1981 - $1,607.50, and April 14, 1982 - $739.68. Ms. Donna Donati December 21, 1933 Page 3 a. The purchases of October, 1980, were the results of two invoices; one for $500 on July 28, 1980,and one for $150 on August 7, 1980. b. The February 11, 1981 purchases included a purchase for $1600 made through a purchase order dated December 10, 1980, signed by business manager, Thomas Lorenzo. The other was a supply requisition of January 22, 1981, for $7.50. 1. Purchase Order No. 001682, dated December 10, 1980, included the purchase of one "Selmer #101 Oboe" for $800 as part of the $1600 total. The supply requisition (No. 309) for these items including the the Selmer Oboe was dated November 21, 1980. 2. In a letter dated October 21, 1980, to Thomas J. Zumpella, Director of Bands, New Castle High School, Mr. Farone for Farone Music Wholesalers, quoted $720 for a "Selmer Oboe #101." 3. In a letter dated August 19, 1980, to Mr. Thomas J. Zumpella, Gordon Taylor, Band Instrument Manager, for Donati School of Music quoted a "delivered price" of $720 for a "Selmer 101 Oboe." 4. There is no evidence of quotes on a Selmer #101 Oboe other than those listed in 7 (b), 2 and 3 above. c. The bills approved on April 14, 1982, were for five separate purchases made between December 4, 1981, and March 19, 1982. These bills were for repairs to instruments and the purchase of musical accessories bought by Purchase Orders on December 4, 1981 for $181.50, January 22, 1982 for $115, February 11, 1982 for $263.30, February 11, 1982 for $115, and February 25, 1982 for $65.88. d. You abstained from voting on the payment for these repairs and purchases cited in 7 a through c. 8. In May of 1981, the school district sought price quotes for various music stands; Donati Music Company was the only firm submitting quotes and received the contract for $535. The quote was accepted. a. On September 16, 1981, the school board approved payment of that bill as part of the package totalling $701.50. The other charges were for purchases to cover materials and repairs made on 11 occasions from December 13, 1980 to March, 1981. b. You voted to approve payment of this September 16, 1981 bill. There is no evidence that you participated in the decisions to purchase any of the equipment or services included in this bill. Ms. Donna Donati December 21, 1983 Page 4 9. On October 28, 1983, Mr. Vincent J. Donati, husband of Mrs. Donna Donati, and sole proprietor of Donati Music Company, appeared before the Ethics Commission. 10. He did not dispute the facts cited in the original Order. 11. There is no evidence that Ms. Donna Donati or Mr. Donati intended to violate the Ethics Act in her actions involving the contracts entered into between the New Castle School District and Donati Music Company. B. Discussion: 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 diclosure 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) Your vote on September 16, 1981, to approve payment of a bill for purchases made through an open and public process was not a violation of the Act or our Opinion. The Commission has ruled that if a vote for the payment of bills amounts to concurrence in payment of a pre -fixed undisputed and non - discretionary amount, the official may vote to pay the bill as presented. Your vote on September 16, 1981, was in accordance with this ruling. However, the purchases and contracts listed in No. 7 above for $500 or more made without an open and public process present a different problem. Section 3(c) clearly applies to you as a public official and your husband and prohibits both you and your husband from contracting for $500 or more with your school district unless there is an open and public process. This prohibition is applicable even though you, personally, are not "a director, officer, owner, or holder of stock exceeding 5% of the equity at fair market value of the business" and these purchases were clearly in violation of Ms. Donna Donati December 21, 1983 Page 5 Section 3(c) of the Ethics Act. Section 3(c) of the Act is violated where your husband contracts with the District without an open and public process. Contracts which violate Section 3(c) are voidable by a Court if a suit is commenced within 90 days of the making of a contract. In this case, these contracts were made more than 90 days prior to our knowledge of them and thus we are unable to consider taking this action. However, you should be aware the Ethics Commission will and any other person may take this action if future contracts are made in violation of Section 3 (c). Although the time for filing suit to void the contracts is past, the Commission has an obligation to determine whether the violations require a referral to an appropriate law enforcement agency for possible action under Section 9(b) or (c) of the Ethics Act. Section 9(b) says: (b) Any person who violates the provisions of section 3(c) through (h) or section 4 is guilty of a misdemeanor and shall be fined not more than $1,000 or imprisoned for not more than one year, or be both fined and imprisoned. Section 9(c) says: (c) Any person who obtains financial gain from violating any provision of this act, in addition to any other penalty provided by law, shall pay into the State Treasury a sum of money equal to three times the financial gain resulting from such violation. A Commission decision on referral requires consideration of the public official's intent when participating in official actions. The school district policy delegated certain contracting authority to the business manager and he was allowed to initiate contracts by phone and /or a signature on supply requisitions and purchase documents. Because of this delegation, you assert you were not aware of contracts being let. In addition, you did abstain from participating when the bills were presented for payment. Thus, you may be said to have complied with Section 1 of the Ethics Act. However, despite the research and direction of Mr. Dominick Motto, the school district solicitor, on the issue of Donati Music Company doing business with the school district and his advice that the board comply with the Ethics Commission opinion, we are not convinced the requirements of Section 3(c) have been met. The school district's adoption of a policy to conform with the Opinion of the Ethics Commission, the adoption of a new purchasing policy; and the involvement of the solicitor and his research specifically on the issue of Donati Music Company conducting business with the school district convince us that while there were efforts to comply with the Ethics Act, those efforts fell short of the mark. Donna Donati December 21, 1983 Page 6 Specifically, it is difficult to understand the board's adoption of a policy on February 11, 1981, which may have followed our Opinion and then their approval, at that same meeting, of bills which violated that Opinion and a subsequent similar action in April, 1982, on purchases made in violation of the Act and our Opinion. Also under these circumstances, the purchase in December, 1980, of a Selmer Oboe from your husband's music company for $800 despite a quote of $720 only one month earlier from another company is incomprehensible. While we continue to hold our previous conclusion that there was a violation of Section 3(c) of the Ethics Act, we find that the actions were taken either in the belief that they followed the opinion of the solicitor or without full knowledge and understanding of the prohibitions of the law. Therefore, we believe the evidence is insufficient to support a recommendation of prosecution to the D.A. and are notifying him of this recommendation by copy of this Order. While we understand that you are only one member of the board and cannot control the board's activities, you have a responsibility to insure that you and your husband are conforming to the requirements of the Ethics Act and are are not to do business with the Board unless the requirements of the Ethics Act are met. The lack of an open and public process and the circumstances cited above created an appearance of a conflict of interest and you must insist that and the school district awarded only between afteran y open and public company The process must be applied to all purchases totaling $500 or more during any one calendar year. The open and public process can be met either on each individual contract or by soliciting bids or quotes and awarding an annual contract based on hourly rates for services, a specified percentage of list price of equipment, or similar criteria the board may choose to establish. C. Conclusion: You did violate Section 3(c) of the Ethics Act and the May 23, 1980 Commission Opinion in contracting with the school district and your husband's music company. These practices must be immediately discontinued and steps must be taken to insure that Section 3(c) is observed in all contracts agreed to by Donati Music Company and the New Castle School District. We are also notifying the appropriate law enforcement officer that we do not recommend further review of this case. Ms. Donna Donati December 21, 1983 Page 7 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 be made available as a public document 15 days after service (defined as mailing) unless you file documentation with the Commission which justifies reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code 2.38. 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 is nedofor misdemeanor 409(e) or . impriso By the Commission, " aul J Smith Chairman PJS /jc