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HomeMy WebLinkAbout323 Thornburghv STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION May 18, 1984 Order No. 323 The Honorable Dick Thornburgh Governor of Pennsylvania c/o Jay Waldman, General Counsel Room 225, Main Capitol Building Harrisburg, PA 17120 Re: File No. 83 -03 -C Dear Governor Thornburgh: 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 of that complaint. The allegations, conclusions of the Commission, and findings on which those conclusions are based are as follows: I. Allegation: That you used or permitted the use of the Governor's Home, a State owned and operated facility, for fund--raising in conjunction with your January, 1983 Inauguration in contravention of the Ethics Act, 65 P.S. 401, et. seq. A. Findings: 1. As an elected official, the Governor of Pennsylvania, you are a "public official" subject to the Ethics Act. 2. As Governor, you reside in a residence ( "Governor's Home" or "Executive Mansion "), located at Front and McClay Streets, Harrisburg. 3. The Governor's Home was authorized and constructed pursuant to the provisions of the laws of this Commonwealth concerning the Department of General Services, 71 P.S. § 1707.4. 4. Section 2402 of the Administrative Code of 1929 grants to the Department of General Services authority to control, supervise and make repairs, alterations and improvements to the Governor's Home and all other State buildings. a. Over 100 of the other State buildings are leased to Commonwealth officials and employees to be used as homes. b. Each Commonwealth agency is responsible for leasing the buildings which are under its jurisdiction. 5. The Inaugural Committee sent invitations to over 45,000 persons to participate in three activities of your January, 1983 inaugural celebration. a. The Commonwealth of Pennsylvania invited persons to participate in official inaugural ceremonies at the Capitol on January 18, 1983. b. Invitations were extended to attend the Inaugural Ball at Founders Hall, Milton Hershey School, Hershey, Pennsylvania, on January 18, 1983. c. You and Thornburgh invited guests to a reception at your residence, the Governor's Home, at 6:00 p.m. January 18, 1983. 6. Subscriptions were solicited to the Inaugural Ball and the reception at your home, ranging from $75.00 to $1,000.00, with payment for same to be made to the "1983 Inaugural Committee ". 7. On January 7, 1983 Mr. James Pickard, then Inaugural Committee Chairman, requested authorization from the Department of General Services to allow the Inaufgural Committee to hold receptions at your home on January 17 and 18, 1983. His 2 request was directed to Mr. Frank Kandes, who is employed by the Department of General Services as Manager of the Governor's Home. a. Mr. Pickard's request stated that the salaries and overtime pay of all housekeeping, maintenance and support staff, in addition to the reimbursement for the cost of utilities and any other charges incurred or expended in connection with the receptions, were to be billed to the Inaugural Committee. b. On January 13, 1983, Mr. Kandes notified Mr. Gary E. Crowell, Deputy Secretary for Central Services, Department of General Services, of the Inaugural Committee's request, including their proposed reimbursement of costs and expenses. c. Walter Baran, Secretary of the Department of General Services, approved the requested use of the Governor's Home for these inaugural receptions. 8. Following the receptions, on January 24, 1983 Mr. Kandes calculated the costs for regular and overtime work of the Governor's Home employees who staffed the receptions to be $1,506.10, and sent those calculations, with advice that extra lighting for 23.5 hours had also been utilized, to Mr. Crowell. a. Mr. Crowell billed the Inaugural Committee for $2,224.03, consisting of the $1,506.10, plus charges for employee benefits and utilities. b. On February 4, 1983, the Republican State Committee ("RSC") paid this bill. addresses. 9. There was one Inaugural Committee that used different titles and a. "The Inaugural Committee ", P.O. Box 440, Harrisburg, Pennsylvania 17108 was the name and address used by those attending or contributing to various inaugural fund - raising activities. Checks for subscriptions to the . inaugural - 3 - events were to be made payable to the "1983 Inaugural Committee ". These committees were formed in late November or early December, 1982. b. "The Inaugural Committee '83, P.O. Box 1624, Harrisburg, Pennsylvania 17105" was the name used by the committee which registered with the Department of State on January 10, 1983. c. The P.O. Box 1624 address, an existing post office box used by the RSC, was utilized by the Inaugural Committee as it was readily available; the address of 112 State Street in Harrisburg was also used for the convenience of the Inaugural Committee staff. This latter address received payments to the RSC identified in the Contributions and Receipts section of the RSC Campaign Expense Report for the period of January 1, 1983 to March 7, 1983 as follows: (1) January 13, 1983 - $40,000 (2) January 14, 1983 - $50,000 (3) January 28, 1983 - $90,000 d. The expenditures listed in Finding 9(c) were confirmed by: (1) copies of checks submitted to the State Ethics Commission by Mr. Charles E. Dexter, Jr., Finance Director of the RSC; and (ii) the 1983 Campaign Expense Report filed by the Inaugural Committee '83. 10. Those organizing the planning and finances for the inaugural events were the inaugural committees identified in Finding 9, and the RSC. 11. According to Mr. Dexter, the Inaugural Committee '83 and the RSC agreed that all bills of the inaugural events would be paid by the RSC, which would thereafter be reimbursed for such payments by the Inaugural Committee. This method of payment was utilized as follows: a. From December 17, 1982 to January 13, 1983, the RSC paid 25 inaugural related bills totalling $70,753.87. 4 b. On January 13, 1983, the Inaugural Committee reimbursed the RSC in the amount of $40,000 (Findings 9(c) and (d)). c. On January 14, 1983, the RSC paid 18 inaugural related bills totalling $10, 079.48. d. On January 14, 1983, the Inaugural Committee reimbursed the RSC in the amount of $50,000 (Findings 9(c) and (d)). e. From January 15, 1983 to April 1, 1983, the RSC paid 81 inaugural related bills totalling $97,764.67. f. On January 28, 1983, the Inaugural Committee reimbursed the RSC in the amount of $90,000 (Findings 9(c) and (d)). 12. The RSC maintained the financial records of the Inaugural Committee, its expenditures were integrated with those of the RSC, and most of its checks were drawn on the RSC General Fund. a. On August 5, 1983, Mr. Thomas R. Milhollan, Treasurer of the Inaugural Committee '83, provided financial records of the Committee to the State Ethics Commission which reflected the following: (1) Summary of Inaugural Committee - 1983 Total pledged as of 4/20/83 Debit Memos* Disbursements - $ 183,947.00 $ 68,648.00 Check deposited in June $ 500.00 $ 69,148.00 * Checks that were cancelled for insufficient funds. (2) The ledger sheets identify specific payees and check numbers for $180,697 of the disbursements, and note that additional checks totaled $3,250. 5 $ 252,595.00 - $ 7,560.00 $ 252,595.00 (3) The $180,000 shown in the Receipts and Contributions section of the RSC Campaign Financing Report for the period of January 1, 1983 to March 7, 1983, was not reflected in this report, but was accounted for in the records subsequently provided (Finding 13). b. The bills paid by the RSC were not pre - audited by the Treasurer of the Inaugural Committee. 13. On January 6, 1984, Mr. Dexter provided additional financial records at the request of the State Ethics Commission, including: a. A list of contributions received by the Inaugural Committee from its inception through December 31, 1983. b. A copy of the RSC's income and expenditure reports for periods November 23, 1982 through May 2, 1983. c. Copies of checks written directly from funds of the Inaugural Committee '83. d. Bank statements of the Inaugural Committee '83, other than the initial statement which could not be located. e. These records did not segregate entries or items relating to the receptions held at the Governor's Home. 14. The combination of the records provided (Findings 12 and 13) document the activities of the Inaugural Committee. a. Funds received from all activities of the Inaugural Committee were deposited in a bank account in the Drover's and Mechanics Bank, York, ?ennsylvania. b. The committee raised a total of $260,155. c. On July 29, 1983, $69,149 of Inaugural Committee funds were transferred to a Flex Fund in the Mellon Bank, Washington, Pennsylvania. 6 d. This balance, plus the expenditures, equals the total amount raised by the Inaugural Committee. e. The funds raised by the reception at the Governor's Home were not segregated, but all expenditures for the receptions were accounted for in these reports. 15. $4,200 of Commonwealth funds were budgeted by the Department of General Services for costs associated with the official inaugural ceremonies. a. $4,179 of this amount was spent for building materials, supplies, a sound system for the public viewing stands, and related equipment used during the formal swearing in ceremonies at the Capitol on January 18, 1983. b. No other funds were authorized, allocated or used for the swearing in ceremonies. c. None of the $4,200 budgeted by the Commonwealth was spent for the Inaugural Ball or the receptions at the Governor's Home. 16. The Inaugural Committee did not make any payments to you, a member of your immediate family, or a business with which you are or were associated. B. Discussion: As a "public official" your conduct must conform to the requirements of the Ethics Act, which for purposes of our review of this matter, focuses on Sections 1 and 3(a). Section 1. Purpose. The Legislature hereby declares that public office is a public trust and that any efforts 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 7 with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of the public officials, this act shall be liberally construed to promote complete disclosure. 65 P.S. §401. 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. Our initial inquiry is whether the facts and circumstances of this case reveal any "restricted activities" that are prohibited by Section 3(a) of the Act. That issue may be framed as whether the January 18, 1983 reception was a "use" of your public office to obtain "gain" other than compensation provided by law. Because the public provides the Governor's Home for your residence, the Administrative Code of 1929 gives the Department of General Services the authority and responsibility to control and supervise the use of the Governor's Home. The Department properly exercised its authority in approving the use of the Governor's Home for this reception, conditioned upon reimbursement to the Commonwealth for all charges, costs and expenses incurred in connection therewith. Although that reception generated funds, none of the funds were paid to you, your immediate family, or a business with which you are or were associated. We therefore find that the authorized use of the Governor's Home for a reception on January 18, 1983, for which contributions had been solicited from and made by those invited or in attendance, was not a violation of Section 3(a) of the Ethics Act, as all costs associated with the reception were reimbursed to the Commonwealth, and this activity did not provide any financial gain to you, a member of your immediate family, or a business with which you are or were associated. To the contrary, this was a use of 8 private, rather than public, money to pay for the events surrounding the inauguration of the Commonwealth's Chief Executive. The Commission has also considered this matter within the context of Section 1 of the Ethics Act to determine whether the relevant facts and circumstances might have presented the appearance of a conflict of interest. We find that they do not present such an appearance. This conclusion is based upon certain facts and principles, the first of which was our prior conclusion finding an absence of any of the "restricted activities" or conduct that are prohibited by the Ethics Act. Equally important is an understanding of the role that Section 1 of the Ethics Act properly plays in the deliberations of the Commission. Section 1 is a preamble to the Act which articulates the legislative purpose of the Act; it does not prohibit or restrict any conduct. As such, we believe that it is best utilized to express our views about the types of conduct that may be inappropriate for public officials, thereby providing a guide for public officials as to their future conduct. Chief executives have historically and publicly used the White House and their respective state mansions to entertain political supporters and contributors for many years without public concern. For that practice to be discouraged in the future, on a prospective basis, is quite different than dramatically concluding that a given use by a given chief executive suddenly represents the appearance of a conflict of interest on the part of that chief executive. The Commission recognizes that the Executive Mansion is provided to you as a home, where you and your family in fact reside, and we therefore believe that you should be permitted to enjoy its use as you would with any other home or residence. This would obviously include your ability to extend to your friends and supporters the special hospitality of an invitation to your home - which for you is the Executive Mansion. Because, however, your home is provided by the public, we wish to consider this issue within the context of our earlier Cessar ruling (82 -002), so that our views in 9 this case may be clearly stated without any doubt as to our continuing support of the conclusions expressed in Cessar. That ruling was based upon: (i) concerns about public misperceptions which might have arisen where an incumbent public official's re- election campaign was directed from the same office that provided governmental services to the incumbent /candidate's constituents; and (ii) the difficulty in assuring the public that the office expenses attributable to a political campaign which should be reimbursed to the Commonwealth were properly and proportionately separated from the expenses incurred from the governmental use of that same office space. The Cessar ruling and its supporting rationale are hereby reaffirmed by the Commission, although its application cannot logically be extended to the facts now being considered. This case does not present the use of an office, as in Cessar, but of a home, that the public has specifically provided to its successive occupants for use as their residence. As noted above, the public has long been aware that executive mansions are used for a variety of functions, some governmental and some private. The possibility of public misperceptions from its use as your family's home and residence is substantially different from their reaction to an incumbent's office space being used as the nerve center of a re- election campaign. Additionally, because of the supervision and control exercised by the Department of General Services, the public can be assured that none of the expenses which result from a. private use of the Governor's Home will be paid by the public - a policy strictly followed in this case. We therefore have concluded that the facts and circumstances of this case did not give rise to an appearance of a conflict with your public trust. Conclusion: The State Ethics Commission finds that your actions and conduct did not violate Section 3(a) of the State Ethics Act, nor did the facts and circumstances at issue give rise to a Section 1 appearance of a conflict with the public trust. As previously expressed in a prior opinion, the Commission believes that the future private - 10 - use of State owned facilities should be clarified and delineated by appropriate government action. 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). BY THE COMMISSION: Carl Weiss, COMMISSIONER Commissioner Haley joins in the Commission's conclusion and decision as to Section 3(a), but does not join in its conclusion and decision as to Section 1. Commissioner Smith dissents with Opinion. DISSENTING OPINION IN GOVERNOR THORNBURGH ORDER NO. 323 OF MAY 18, 1984 BY PAUL J. SMITH, COMMISSIONER. I respectfully dissent from the opinion and Order of the Commission filed at No. 323. I must and have also considered this matter in light of Section 1 of the Ethics Act to determine whether these circumstances present either a conflict or the appearance of a conflict with the public trust. The question is one reasonably answerable in the affirmative or negative. Indeed, the "closeness" of the answer to this question is reflected in the vote of the Commission on this point which followed lenghty, thoughtful debate by the members of this Commission and which required serious reflection by each member. I therefore do not join in the conclusion as to Section 3(a) nor the conclusion as to Section 1 of the Ethics Act and the following Opinion is based upon this debate and my analysis. In its statement of purpose, the Ethics Act of the Commonwealth of Pennsylvania (1978 -170) declares that "the people have a right to he 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." Since continued incumbency or the attainment of another public office can be considered in the financial interests of a public officeholder, the use of the perquisites of public office for political purposes rather than for official purposes can be interpreted as presenting at least the appearance of a conflict with the public trust. In its decision regarding Representative Cessar, this Commission has already determined that public officeholders cannot use their publicly funded office facilities as centers for election campaigns. When an admission of $500 is charged to an inaugural reception at the Executive Mansion and when the proceeds from that reception are commingled with the funds of a committee of a political party, it is consistent with the principles articulated in the Cessar decision to conclude that the use of the Executive Mansion for such political fund - raising purposes is an inappropriate use of a public facility and involves at least the appearance of a conflict with the public trust. Such a conclusion is influenced not by the political affiliation of a particular officeholder but by the sincere conviction that the Commonwealth's highest elected officer should be required to manifest at least the same degree of public probity and official impartiality in the use of the public facilities at his disposal as is required of members of the Commonwealth's General Assembly and which should be required of all public officials in the Commonwealth. This Commission has already asked the General Assembly to enact legislation and the Governor to establish and enforce regulations for the proper use of residences made available to officials of the Commonwealth and its agencies. By inviting such action, the Commission has already gone on record as indicating that there can be inappropriate uses of facilities which are owned by the Commonwealth and which are made available for the official use and even for the personal convenience of its public servants. Dissenting Opinion May 18, 1984 Page 2 Public residences may be used for the private purposes of their residents, but not for any purpose which can be interpreted as contributing to their personal aggrandizement. Since the use of official premises for political fund - raising can indeed benefit the officeholder whose publicly funded office or residence is used, such use is, in fact, an abuse and tends to undermine the confidence of the public who should he assured that the offices and residences they provide to officials of the Commonwealth are used for official purposes and not for personal benefit. Payment to the Commonwealth to compensate for the special public services required on such occasions is not sufficient to dispel the public impression that an unfair and inappropriate use hes been made of a public facility and that there has been at least the appearance of a conflict with the public trust. Since a contribution to the Inaugural Committee, which was a partisan political entity, was solicited for attendance at the inaugural reception at the Executive Mansion, I conclude that the use of the Executive Mansion for such a reception involved at least the appearance of a conflict with the public trust. I also note and deplore the initial lack of cooperation from officials of the Inaugural Committee and the Republican State Committee -- a lack of cooperation which I believe hampered us from completing our investigation in the timely manner so important to retaining public confidence in this Commission and in the Commonwealth's Chief Executive. •aul J. Commissioner