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HomeMy WebLinkAbout271 MatsonMr. Robert Matson 35 Fairfax Village Harrisburg, PA 17112 Re: No. 82 -73 -C Dear Mr. Matson: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION January 6, 1984 Order No. 271 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 while serving as Deputy Secretary of Revenue you participated in and made recommendations and decisions relating to tax matters and liabilities of a corporate taxpayer whose Chief Tax Attorney is a personal friend of yours 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, are 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, hereafter Beth Steel. Robert Matson January 6, 1984 Page 2 b. During your employment with Peth Steel and in the course of said employment you were associated with a "Commission on State Taxation," an organization within the Chambers of State Commerce, hereafter the Commission. c. While associated with this Commission and other similar bodies you met many other corporate employees and tax officers thereof and you became professional, and on occasion, personal friends of some of these persons. d. One such individual you met through these professional groups and meetings was James Peters, who is the Chief Taxing Officer for American Telephone & Telegraph (ATT). 3. You are not associated with James Peters in any manner except as professionals within the taxation field. a. You have no business relationships or financial dealings with James Peters. b. You have, on occasion, attended social functions associated with tax and other professional conferences which you both attended and may have had dinner with James Peters on another occasion, but you cannot be said to be close personal friends with James Peters. 4. While serving as Deputy Secretary and while attending a tax conference or meeting, you were told by Mr. Peters that one reason ATT would not consider or be able to expand in Pennsylvania was the unfair capital stock tax program and structure in this state. 5. As a result of this assertion (No. 4 above) you directed members of the staff of the Department to conduct a review to determine whether there was any validity to same. a. In the course of this review, members of the Department's staff undertook a review of the legal and factual aspects of the tax status of ATT within this Commonwealth. b. The tax status of ATT under review was based upon a 1962 Agreement and Court Order - stipulation approved then by the Attorney General, the Auditor General and the Department of Revenue and re- approved by these persons /offices periodically to present. c. This Commission is without authority to and will not herein review or question this settlement or tax status of ATT but is concerned only with the process by which this was reviewed during your tenure at the Revenue Department. Robert Matson January 6, 1984 Page 3 d. There is no evidence that the role you played with respect to this review process was designed to or did result in direct or indirect personal financial gain. e. There is also no evidence that remarks that you would "keep the lid on" this review of ATT or "put the baby to bed" attributed to you during a meeting of Revenue staff staff to review the ATT case indicated a course of action by you to give special benefits to ATT which would be detrimental to the public or from which you would realize personal financial gain. 6. You resigned from Commonwealth service effective September 1, 1983. 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 when you served as a public official /employee you conform your conduct to Section 3(a) which states: 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: 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 dsirector, officer, owner, employee or holder of stock. 65 P.S. 402. You were not on its face "associated" with ATT while employed at or serving the Department of Revenue. On the facts as found above, while you had a professional and personal acquaintance with James Peters, who was employed by ATT, this relationship does not give rise to any "association," on your part, with the financial interests of ATT or Mr. Peters. We find there is no evidence that you were associated with ATT or that you violated Section 3(a) by using your public office /employment to obtain financial gain for yourself or a business with which you were associated. Robert Matson January 6, 1984 Page 4 In addition to concluding 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: Section 1. Purpose. The Legislature hereby declares that public office is a public trust and that any effort to realize personal 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 while serving in public office. Although we can imagine situations where the extreme closeness of a personal relationship between the regulator and the regulated could rise to the level of a conflict of interest or give the appearance of a conflict of interest, this does not mean the mere existence of a personal relationship, in and of itself, creates any conflict or an appearance of a conflict. We also believe it would be unlikely that you would initiate a review of the ATT tax matter by involving a number of professional career members of the ,Department if you had planned to violate your public trust and make a decision or retard the review of ATT tax status or which would personally benefit you. We believe remarks such as putting the baby to bed, even if they were made, could be interpreted as an expression of favoritism toward ATT and are not sufficient to conclude that your conduct was improper under the Ethics Act. In the present case, however, we do not find that your relationship with James Peters was of such a nature as to require you to remove yourself from the aspects of the review of ATT tax status in order to avoid any appearance of a conflict with the public trust under Section 1 of the Ethics Act. Robert Matson January 6, 1984 Page 5 C. Conclusion: We find no evidence to conclude that you violated Section 3(a) 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 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 of a misdemeanor and shall be fined not more than $1,000 or imprisoned for not more than one year or hoth, see 65 P.S. 409(e). PJS /jc By the Commission,