HomeMy WebLinkAbout220 MatsonMr. Robert Matson
Deputy Secretary for Taxation
c/o Charles L. Sieck, Esquire
Office of General Counsel
Commonwealth of Pennsylvania
17th Floor, Harristown #2
333 Market Street
Harrisburg, PA 17120
RE: #82 -72 -C
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
August 19, 1983
ORDER OF COMMISSION
Order No. 220
Dear Mr. Matson:
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 as Deputy Secretary of Revenue you participated in and
made recommendations and decisions relating to tax matters and liabilities of
the steel industry taxpayers in general, and Bethlehem Steel Corporation in
particular, where you were associated with Bethlehem Steel as a long -time
employee prior to entering State services and that such activities violate
Section 1, 3(a) or 3(b) of the Ethics Act.
A. Findings:
1. You served as Deputy Secretary for Taxation in the Pennsylvania
Department of'Revenue, hereafter Revenue or the Department, beginning on
September 4, 1979 until present and, as such, ai°e a public official and
employee subject to the provisions of the Ethics Act.
2. Prior to this service with Revenue, you were employed by Bethlehem Steel,
for some 30 years or since 1951.
a. Immediately prior to joining Revenue you served as Director of State
Government Tax Affairs for Bethlehem Steel.
Mr. Robert Matson
August 19, 1983
Page 2
b. In assuming the post with Revenue, you took a personal leave of
absence from Bethlehem Steel until your 30 -year retirement date with
Bethlehem Steel on April 1, 1981 and from the time of accepting the
Revenue post until April 1, 1981, you continued to accumulate
continuous service credit with Bethlehem Steel only for retirement
purposes.
3. a. In ointment Rase Deputyt Secretaryhwaseannounced, it Revenue
was stated that:
app
"Secretary Cohen and Matson also have entered into an
internal agreement specifying that all Department
matters affecting Bethlehem Steel and thessteel industry
generally will bP�eeof directly
conflibt ofcinterestCohen to
preclude any appearance
b. While you acknowledged and agreed to such a restriction, and did not
participate in Department decisions regarding Bethlehem Steel, except
as set forth below, you state you did not understand that such a
restriction on participation was applicable to matters relating to
the steel industry in general, excluding Bethlehem Steel.
4. a. As a result of your understanding of restrictions on your
participation, you did participate in the discussions and decisions
of the Department which related to entities in the steel industry
other than 3ethlehem Steel.
b. There is no evidence that your participation in steel industry tax
decisions was influenced by the offer of anything of value.
c. There is no evidence that your participation in decisions relating to
the steel industry in general resulted in financial gain for
advalthgeouseor disadvantageous e to Bethlehem a Steel 9 than rto more/less
thesteel
advantage
industry in general.
5. During your tenure with the Department, matters or decisions specifically
relating to Bethlehem review
and
as set forth below.
decision by
a. The Office of the Attorney General (0AG) proposed on or about June 3,
1982, that a Bethlehem Steel Tax case /appeal be settled to dispose of
a 1969 tax matter. This matter was reviewed and recommended for
concurrence by the corporation tax staff in your office and on June
7, 1982, you signed the documents to express concurrence in this
recommended settlement.
Mr. Robert Matson
August 19, 1983
Page 3
b. It is standard procedure for the OAG to refer the question of a
settlement of a case where the tax reduction exceeds $150,000 to the
Department for concurrence.
c. As confirmed by a memorandum from two attorneys in the OAG there were
no negotiations or conferences between the OAG staff and you
regarding the proposed settlement on this matter.
d. You state that your signature on this concurrence was of a routine or
ministerial nature and was affixed without intent to benefit
Bethlehem Steel but to discharge your duties as Deputy Secretary.
e. In April, 1982, the Board of Finance and Revenue, on which you sit,
considered the question of a tax increase with respect to Bethlehem
Steel and because the case: involved an increase of taxes and arose
after your retirement from Bethlehem Steel in March, 1981, you may
not have recused yourself from participation. Since no minutes,
official recordings, or official counts of votes or actions are
reported for these deliberative sessions, it is difficult to verify
the extent of any participation on your part.
f. Persons attending these sessions, though, verify that as a general
rule you abstained from participating in discussions and voting on
matters relating to Bethlehem Steel.
B. Discussion: As a Deputy Secretary in the Revenue Department you are a
public official /employee subject to the requirements of the Ethics Act.
Clearly, the Ethics Act requires that:
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. 403(a).
A "business" with which you are "associated" is defined in the Ethics
Act to include:
"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. 402.
Mr. Robert Matson
August 19, 1983
Page 4
Even if you continued to be "associated with" Bethlehem Steel after you
joined the Department on September 4, 1979 by virtue of any "employment" with
Bethlehem Steel, on these facts we find that there is no evidence to indicate
that you violated Section 3(a) by using your public post to actually obtain
financial gain for Bethlehem Steel.
In addition to concluding that there is no evidence that you have
violated Section 3(a), however, we must review this matter with regard to the
provisions of Section 1 of the Ethics Act as follows:
The Legislature hereby declares that public office is a
public trust and that any effort to realizeapersonal
financial gain through public office other than
compensation provided by=law is a violation of that trust.
In order to strengthen the faith and confidence of the
people of the State in their government, the Legislature
further declares that the people have a right to be
assured that the financial interests of holders of or
candidates for public office present neither a conflict
nor the appearance of a conflict with the public trust.
Because public confidence in government can best be
sustained by assuring the people of the impartiality and
honesty of public officials, this act shall be liberally
construed to promote complete disclosure. 65 P.S. 401.
In light of Section 1, you were expected to avoid even the appearance of
a conflict with the public trust. Especially with respect to your signing of
the concurrence of a tax settlement for Bethlehem Steel discussed above, you
should have been particularly sensitive to the fact that even this ministerial
action was taken. While you indicate this was done at a time of heavy
workload and immediately following a morning spent in the dentist's chair for
root canal work, you should have taken extra care to insure that such
instances did not present themselves. Even though you indicate the Department
typically did not forward Bethlehem Steel matters to you, you should have
guarded more carefully against this protection system failing. This vigilance
was particularly needed where the public had been informed, through the press
release (No. 3 abovej, that you would not even see Bethlehem Steel matters
while with Revenue. Having made such an appropriate agreement and
representation to the public, extreme care should have been taken to insure
the execution of this practice.
Likewise, with respect to your participation in tax matters and decisions
affecting the steel industry generally, it is difficult to assume that
Bethlehem Steel was not indirectly affected by decisions which might be made
on general questions relating to taxation, policy and operations of the Bureau
you headed. As such, even though no specific incident can be identified where
general policies you helped to set or decisions you made can be said to have
Mr. Robert Matson
August 19, 1983
Page 5
been uniquely beneficial to Bethlehem Steel, the connection between these
general policies and decisions and an impact upon Bethlehem Steel as an entity
within the "steel industry" is apparent. Couple this with the Press Release
mentioned previously which unequivocally stated you would be isolated from
matters affecting the steel industry generally and it could be said that the
public would reasonably expect that you had erected a "wall" around you so as
to avoid even the appearance of a conflict of interest as the release appears
to recognize might exist in such decision - making. Having created this
expectation, you nonetheless proceeded to ignore this process. Admittedly,
you contend you did not accept or understand that you were not to participate
in general steel industry tax matters. But rather than retracting the press
release or expressing your significantly different understanding of your
agreement with Secretary Cohen, you simply proceed tolparticipate in steel
industry tax matters.
Essentially, the Department publically pronounced their sensitivity to
the question of your participation in steel industry tax matters, presented
the agreement referenced in the press release as a solution to avoid the
problem of an appearance of a conflict and then neither you nor the Department
abided by this proposal. Neither you nor the Department ever recanted this
statement or modified same to our knowledge. You were content apparently to
say one thing to the public (in the press release) and to do quite another
when you proceeded to participate in steel industry tax matters.
Your participation does not violate Section 3(a) of the Ethics Act.
However, you should have either abided by the publicly promulgated standards
set forth in this press release which we agree would have avoided even the
appearance of a conflict of interest or to just as publicly rescinded same
rather than choosing to participate in steel industry tax matters which would
affect Bethlehem Steel as a member of such industry. In other words, you
should have followed the policy the Department's press release led the public
to expect was in force when it issued the press release referenced above.
C. Conclusion: We find no evidence to conclude that you violated Section
3(a) of the Ethics Act in these circumstances. The policy referred to by the
Department in their original press release regarding your appointment should
have been followed to preclude, as stated in that release, any "appearance of
a conflict of interest."
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 Order, may violate this confidentiality by releasing,
discussing or circulating this Order.
Mr. Robert Matson
August 19, 1983
Page 6
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,
EMS /rdp
Paul J. (SFfith
Chairman
4