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HomeMy WebLinkAbout280 FisherMr. Henry Fisher Commonwealth Securities and Investments 1317 Investment Building Pittsburgh, PA 15222 Re: #83 -127 -C Dear Mr. Fisher: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION January 25, 1984 Order No. 280 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 or you, as President of Henry Fisher Municipals, offered or gave political contribution(s) to Jefferson County Commissioners and /or candidates for said office, Andrew Laska, John R. Caldwell and Mark Wildauer, based on the understanding that the vote, official action or judgment of said public officials or candidates for public office with respect to a $8.5 million nursing home bond issue would be influenced thereby in violation of Section 3(b) of the Ethics Act, 65 P.S. 403(b). A. Findings: 1. Henry Fisher is a bond underwriter specializing in the financing of nursing homes. Fisher has done business as Henry Fisher Co., Inc., Henry Fisher Municipals and Commonwealth Securities and Investments, Inc. 2. In 1975 the Jefferson County Commissioners authorized the building of a new county nursing home, Jefferson Manor. Henry Fisher January 25, 1984 Page 2 3. The Jefferson County Commissioners, pursuant to the Municipalities Authorities Act, May 2, 1945, P.L. 382, 53 P.S. 301 et. seq. formed the Jefferson County Municipal Authority (JCMA). a. The JCMA was authorized to handle the financing and construction of the nursing home known as Jefferson Manor. b. Pursuant to statute, the Jefferson County Commissioners appoint the members of the JCMA. c. The Jefferson County Commissioners, however, have no role in the JCMA decisions as to the selection of JCMA financial advisors or as to the selection of bond firms or underwriters for JCMA projects. 4. The JCMA held an organizational meeting on August 7, 1975 and during that meeting Henry Fisher Co., Inc. was appointed as one of the financial advisors along with the firm of Arthurs, Lestrange and Short. 5. Henry Fisher doing business as Henry Fisher Co., Inc., along with Arthurs, Lestrange and Short underwrote the 1975 bond issue in the form of Guaranteed Revenue Bonds, Series A, in the aggregate principal amount of $7,975.000. 6. a. At a special meeting of the JCMA on July 14, 1976 the Authority unanimously adopted a proposal submitted by Arthurs, Lestrange and Short, and Henry Fisher Municipals (a division of Babbit, Myers and Co.) and Loeb, Rhoades and Company for the purchase of $9,315,000 Guaranteed Revenue Bonds, Series of 1976 and $5,000,000 Aggregate Principal Amount of Special Obligation Refunding Bonds, Series 1976, to be issued to refund the Authority's Guaranteed Revenue Bonds. Aggregate principal amount of the Revenue Bonds was not to exceed $9,315,000. b. Also at this meeting, Section 4 of the Resolution established an escrow deposit agreement governing the disposition of the proceeds of the 1976 Bonds and providing for the payment of the principal and interest of the 1975 Bonds. 7. A letter dated August 4, 1978 from Henry Fisher Municipals was addressed to the Jefferson County Commissioners wherein Henry Fisher Municipals submitted a proposal to purchase $8,785,000 par value of General Obligation Bonds, Series 1978 at a price of $8,539,020. The bonds were to be issued for purpose of refunding the $9,140,000 principal amount of Guaranteed Revenue Bonds, Series of 1976. 8. a. At regular meeting of the Jefferson County Commissioners held on January 29, 1980 upon motion by Commissioner Black and seconded by Commissioner Laska, the Jefferson County Commissioners unanimously passed a resolution authorizing the JCMA to restructure the escrow fund through the redemption of certain U.S. Government obligations and to purchase other shorter term U.S. Treasury notes and bonds. Henry Fisher January 25, 1984 Page 3 b. The County Commissioners (Black, Laska and Caldwell) specifically authorized the JCMA to appoint Henry Fisher and Kroll, Annicelli, Inc. as escrow advisers. 9. At a special meeting of the JCMA on February 1, 1980 the Authority passed a resolution to restructure the escrow fund. a. The JCMA approved the restructuring by effecting the redemption of all or a portion of the Government obligations and substituted therefore from the proceeds of the government obligations, direct obligations of, or obligations, the principal and interest which are fully guaranteed by the United States and bearing a higher interest than the Government obligations. b. The JCMA appointed Henry Fisher and Kroll, Annicelli Company as escrow advisors. 10. As a result of the restructuring of the escrow fund on February 7, 1980, Treasury Bonds totalling $3,623,755.22 were redeemed. Treasury Notes totalling $3,238,052.53 were then purchased leaving a balance of $385,702.69. 11. Of the $385,702.69 remaining from the escrow fund Henry Fisher received: a. Disbursements and expenses - $10,000.00 b. Escrow consultant fee - 46,924.11 Total $56,924.11 12. a. An addendum to the closing documents of the escrow fund dated February 7, 1980 discloses that additional proceeds in the amount of $13,757.40 were made available as the result of the recomputation of the penalty for prior redemption as originally computed by the Treasury Department. b. Henry Fisher received an additional escrow consultant fee of $5,000 from those proceeds. 13. Henry Fisher, as an individual, made a contribution to the re- election campaign of Jefferson County Commissioner John Caldwell. a. This contribution was made on June 25, 1979. b. This contribution amounted to $150.00. c. This contribution was reported on Schedule 1 of the Campaign Finance and Expense Report filed by John Caldwell to cover the period June 25, 1979 to October 22, 1979 with the Bureau of Elections, hereafter the Bureau, Department of State, Commonwealth of Pennsylvania, pursuant to Act 171 of 1978. d. John Caldwell secured re- election. Henry Fisher January 25, 1984 Page 4 14. Henry Fisher, as an individual, made a contribution to the re- election campaign of Jefferson County Commissioner Andrew Laska. a. This contribution was made between May 1, 1979 and June 4, 1979. b. This contribution amounted to $200.00. c. This contribution was reported on Schedule 1 of the Campaign Finance and Expense Report filed by Andrew Laska to cover the period May 1, 1979 to June 4, 1979 with the Bureau pursuant to Act 171 of 1978. d. Andrew Laska secured re- election. 15. Henry Fisher, as an individual, made contributions to the 1979 campaign of Jefferson County Commissioner Mark Wildauer. a. These contributions amounted to $150.00. b. Mark Wildauer was defeated in his re- election bid. 16. a. Following the formation of the JCMA, in addition to the Jefferson Manor nursing home, JCMA undertook two other projects -- an addition to a local hospital and the construction of a new county jail. b. Neither Henry Fisher nor Henry Fisher Municipals were selected to serve as financial consultants or bond underwriters on these other projects. 17. There is no evidence that these contributions (Nos. 13 -15 above) were offered or given based upon the understanding that the vote, official action or judgment of any public official or candidate for public office would be influenced thereby. B. Discussion: As a "person," an individual your conduct is subject to our review with respect to Section 3(b) of the Ethics Act, which states that: Section 3. Restricted Activities. (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). Henry Fisher January 25, 1984 Page 5 In reviewing this allegation, we are cognizant of the fact that Section 3(b) of the Ethics Act specifically prohibits the giving and receipt of a "political contribution" based upon any understanding that the vote, official conduct or judgment of the public official or employee or candidate for public office would be influenced thereby. However, as we have previously stated: "This section makes it clear that not all campaign contributions violate Section 3(b) of the Ethics Act. Only those which are given with the understanding that official conduct would be influenced are prohibited. We recognize that in the broadest sense all political contributions are motivated by the giver's desire to see a certain candidate succeed who may be more favorable to the giver's viewpoints and interests. This "motive" does not constitute the type of "understanding" necessary to make an otherwise valid contribution a violation of Section 3(b) of the Ethics Act." O'Pake, No. 158 and Weber, No 245. In the present case, our findings fail to indicate any "understanding" which would transform these contributions into violations of Section 3(b) of the Ethics Act. C. Conclusion: There is no violation of Section 3(b) of the Ethics Act or the appearance of a conflict of interest in the circumstances presented. 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 both, see 65 P.S. 409(e). PJS /jc Ry the Commission,