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HomeMy WebLinkAbout361 HoganMr. Eugene Hogan Councilman, Plymouth Borough 165 Beade Street - Plymouth, PA 18651 Re: No. 84 -03 -C tau'"* . STATE ETHICS COMMISSION '308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION March 13, 1985 Order No. 361 Dear Mr. Hogan: 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 a member of the Council in Plymouth Borough, you took part in awarding contracts and purchasing services, items and gasoline for the Borough from Bull Run Garage, where you are employed and with which you are associated, without an open and public process in violation of Section 3(a) and (c) of the Ethics Act, 65 P.S. 403(a) and (c) respectively. A. Findings: 1. You serve as a member of Council in the Borough of Plymouth, hereinafter, the Borough, and as such you are a public official subject to the Ethics Act. 2. The Borough trucks need gas and oil, etc. and occasional repairs. a. You state that typically, at the Borough's reorganization meeting in January of even - numbered years, a decision is made as to which service station to use for securing the needed gas, oil, etc. and repairs. Mr. Eugene Hogan March 13, 1985 Page 2 b. You state that this decision was made typically after a member of Council had been assigned to review and compare costs of these items with prior years and solicited cost estimates for service and maintenance from several stations /garages. c. The minutes of the Borough's reorganization meetings of January 4, 1982 and January 3, 1984 record no report or discussion on the subject of buying gas or service /maintenance for Borough vehicles. d. Statements from one source interviewed indicated that the decision on placing Borough maintenance and service business was discussed and usually made at the January reorganization meeting of Council. 3. The Borough did not place advertisements or solicit formal requests for proposals with respect to the Borough's gas, service and vehicle maintenance needs. 4. You are employed as a mechanic by Bull Run Garage, hereinafter, the Garage. a. You are over 18 years of age, unmarried and reside with your parents. b. You have no financial interest, beyond your employment, in the Garage. c. Your father is the sole proprietor of the Garage, which has been in business from 1915, at least. 5. The Garage contracts with the Borough to supply gas, service and maintenance to Borough vehicles. a. The Garage supplied such items to the Borough in 1982 and 1984. b. During 1982, the Garage received approximately $23,000 from the Borough in payment for these items. 6. During the period 1982 -1984, the Borough would, as usual, be presented with a report of bills to he paid at their meetings. a. This report, on occasion, would include bills to be paid to the Garage as described in No. 5, above. b. As a member of Council, you would, typically, vote to pay the hills as presented as funds were available to do so. Mr. Eugene Hogan March 13, 1985 Page 3 7. The minutes of Borough Council meetings from 1982, in addition to the minutes referred to in No. 2, c, above, disclose that: a. February 9, 1982 Minutes: Mr. Evan asked if the purchase of gas was being switched around and you replied, "It will be." b. October 12, 1982 Minutes: Mr. Evan asked why one service station was getting the bulk of the (Borough's) gasoline business. Mr. Kelleher stated that matter would be discussed at the next work meeting. c. November 19, 1982 Minutes: On the motion of Mr. Evan, seconded by Mrs. Zlotek to have the vehicles that use regular gas make purchases from Alex Bouika and the vehicles using unleaded gas purchase from Paul Chervy, along with all repairs. Question: Mr. Saroseck: Inquired if there was a motion on the books stating that the Department Chairman has the authority to direct all gas purchase$. The Solicitor responded that Mr. Evan's motion was in order since he feels there should be a change due to prices. The motion should be voted on. President Kelleher responded with a comparison of gas on the rotation system of the past year; stated the borough was saving money by having the repairs and gas purchases made from one station. Mrs. Zlotek asked the Solicitor if it was proper for the Chairman to give his opinions. The Solicitor stated that the Chairman would be derelect in his duty as a public official if he were not allowed to voice his opinion. ROLL CALL: 2 yes, Mr. Kelleher, no, Mr. Saroscek, no, Mr. Witko, no. Mr. Lukavitch, abstain, Mr. Hogan, abstain. MOTION FAILED. 8. There is no record of any del egation, that we have uncovered, of responsibility for the purchase of gasoline for Borough vehicles to the Department Chairman. B. Discussion: As a Borough Council member, you are a public official bound by the Ethics Act. Your conduct as such must conform to the requirements of the Ethics Act. To review your conduct in these circumstances, we must review the following provisions of the Ethics Act: 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 I :imself, a member of his immediate family, or a business with which he is associated. 65 P.S. 403. Mr. Eugene Hogan March 13, 1985 Page 4 (c) 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 disclosure 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. 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. 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 director, officer, owner, employee or holder of stock. 65 P.S. 402. "Immediate family." A spouse residing in the person's household and minor dependent children. 65 P.S. 402. We review the provisions of Section 3(c) first. From the facts, you do not act as a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the Garage. The State Ethics Commission has applied the requirements of Section 3(c) of the Ethics Act only with respect to contracts between an official and /or a member of his "immediate family" and the governmental body with which the official is associated. Bryan, 80 -014 and Lynch, 79 -047. The governmental body with which you are "associated" is the To Although your father is the sole owner of the Garage, he is not within the definition of your "immediate family" under the Ethics Act. Mr. Eugene Hogan March 13, 1985 Page 5 Consequently, even though the Garage and the Borough (the governmental body you serve entered into a contract or agreement to provide goods and services, the provisions of Section 3(c) of the Ethics Act do not apply or require an open and public process be undertaken. We next review the requirements of Section 3(a) of the Ethics Act. Section 3(a) would apply and restrict your ability to use your public office to benefit a business with which you are associated which by definition includes a business by which you are employed, such as the Garage. Thus, you could not use your public office to benefit the Garage. Numerous Opinions of the State Ethics Commission have held that voting to pay the variable amounts due on discretionary purchases such as were made here to one's employer violates Section 3(a) of the Ethics Act. In voting as a member of Council to pay these amounts to the Garage, you violated Section 3(a) of the Ethics Act. The remedy to be imposed, however, must be considered. In most similar circumstances the Commission directs that the Respondent's future conduct must meet the mandates of the Ethics Act and takes no further action such as referral for criminal prosecution. This case calls for a similar result. However, we must express our opinion as to the application of Section 1 of the Ethics Act, before announcing our final conclusion. Section 1 of the Ethics Act mandates you assure the public that your financial interests do not conflict or appear to conflict with the public trust. In these circumstances, your interest as an employee of the Garage and your duty to the public as a Council member are adverse. You must take the steps necessary to assure the public that the public's interest is protected. We recommend, for example, that the Borough consider soliciting proposals on an annual basis for their projected needs relating to gas and service and maintenance of Borough vehicles. You would, of course, as discussed above be required to abstain from recommendations and votes of Council on the award of any such contract. However, the openness of this process would benefit the public and assure them that their interests were being placed in primary status. C. Conclusion: Section 3(c) of the Ethics Act is inapplicable under these circumstances and therefore an open and public process was not required. No violation of Section 3(c) of the Ethics Act exists under these facts. You violated Section 3(a) of the Ethics Act when, as a member of Council, you voted to pay the variable and discretionary bills of the Garage. You must abstain from such votes in the future. Your conduct must conform to the requirements of the Ethics Act in this respect and we will take no further action on this matter so long as this occurs. We suggest that a conflict or the appearance of a conflict between your financial interests and the public trust may he avoided in the future if the Borough were to adopt a system of projecting needs and selecting a supplier for gas and service and vehicle maintenance in an open and public manner. • Mr. Eugene Hogan Page 6 March 13, 1985 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). HBC /na By the Co • mission Herb B. Conner Chairman