HomeMy WebLinkAbout463 BehrMr. Timothy G. Behr
Resource Development, Inc.
Atruim - 4 Terry Drive
Newtown, PA 18940
Re: 84 -22 -C
Dear Mr. Rehr:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
March 17, 1986
Order No. 463
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, a former employee of the Department of Commerce,
violated Section 3(e) of the Ethics Act, 65 P.S. 403(e), because you
represented a person before the governmental body with which you were
associated within one year of your leaving that body.
A. Findings:
1. You held various positions in the Department of Commerce from 1972 until
December of 1980 when you resigned. These positions included:
a. Septemher, 1980 through December, 1980: Director of Appalachian
Development and State Grants.
h. 1977 to September, 1980: Action Officer III in the Bureau of
Economic Assistance.
2. (luring your work in the Rureau of Economics Assistance, you were involved
in tax exempt financing actions.
Mr. Timothy G. Rehr
Page 2
3. On December 10, 1980, you incorporated Totem Incorporated. The purpose
of Totem Incorporated was to provide consulting services to those who need
financial assistance from both public and private sources.
4. On August 27, 1981, Thomas Sherwood agreed to purchase Trails End Hotel.
a. Also on August 2.7, 1981, you signed an agreement to lease this
property from Mr. Sherwood, effective October 1, 1981. The lease
was for $12,000.00 per year. Mr. Sherwood is your brother.
5. In the fall of 1981, you applied to the Industrial Development Authority
of Central Pennsylvania for tax - exempt financing. You proposed to purchase
property from Mr. Sherwood and renovate the property with a $440,000.00 loan
requested of the authority.
a. Local development authorities and the Department of Commerce extend
tax exemptions to private lenders to encourage them to loan money at
the low market rates for projects intended to create jobs.
b. On December 17, 1981, the Industrial Development Authority of Central
Pennsylvania forwarded a transmittal signed by Joseph Mazur, Chairman
of the Authority to the Department of Commerce, advising the
Department that a tax free first mortgage to Totem Incorporated was
approved for $440,000.00.
6. On December 18, 1981, the Department of Commerce received the Industrial
Development Authority's request for approval of tax exempt status for
financing Economic Development Project No. 11565 of Totem Incorporated.
a. On December 30, 1981, Shirley Dunaway, Administrator in the Bureau of
Economics Assistance, recommended to Mr. Franklin Plohney, Executive
Deputy Secretary of the Department of Commerce, approval of this
project and request.
b. December 30, 1981, Deputy Secretary Plohney wrote to Michael Sedor,
Solicitor for Industrial Development Authority, advising that the
application had been approved.
c. On December 30, 1921, the Department of Commerce notified you of
their approval.
Mr. Timothy G. Behr
Page 3
7. Ms. Dunaway was a co- worker while you were employed by Commerce. She was
aware of your relationship with Thomas Sherwood because of conversations with
you.
a. She made no record of her knowledge of this relationship or other
research in the project file.
b. After checking with an attorney knowledgeable in a matter of
industrial loans - not a Commerce attorney - and doing other research
she believed the loan was legal and forwarded it to Bureau Director,
Robert Aust, Jr., for approval.
c. The documents submitted to the Industrial Development Authority and
the Department of Commerce contained your name and signature as
President of Totem Incorporated.
B. Discussion:
As the director of the Bureau of Appalachian Development and State
Grants, you were a public employee within the purview of the State Ethics Act.
65 P.S. §402. As such, your conduct must conform to the requirements of the
State Ethics Act. See Bruggeman, 84 -597; Nestico, 84 -512.
The Ethics Act provides as follows:
Section 3. Restricted activities.
(e) No former official or public employee shall represent
a person, with or without compensation, on any matter
before the governmental body with which he has been
associated for one year after he leaves that body.
65 P.S. 403(e).
The rules and regulations of the Commission further define representation
as follows :
Section 1.1. Definitions.
Representation - -- Any act on behalf of any person
including but not limited to the following activities:
personal appearances, negotiating contracts, lobbying, and
submitting bid or contract proposals which are signed by
or contain the name of the former public official or
public employe. 51 Pa. Code 1.1.
Mr. Timothy r. Rehr
Page 4
Pursuant to these provisions of law, the Commission has interpreted the
term representation as used in Section 3(e) of the State Ethics Act to
prohibit personal appearances before the governmental hody with which the
former employee has been associated; attempts to influence that body;
participating in any matters before that body over which the former employee
had supervision, direct involvement or responsibility while employed by the
governmental body and lobbying before that goverrrnental hody. See Russell,
80 -048; Seltzer, 80 -044. The Commission has also held that preparing and
signing a proposal , document, or bid or listing your name as the person who
will provide technical assistance on such a proposal, document, or bid if
submitted to or reviewed by the former governmental hody with which you are
associated, constitutes an attempt to influence that body. See Kilareski,
80 -054. Thus, a former public employee must refrain from these activities
within the first year or after he leaves his former governmental hody.
In the instant situation, as a bureau director, your governmental body
would be the Department of Commerce generally. We must, therefore, determine
whether you have engaged in prohibited representation within the one year
period after you have left that governmental body. You had applied to an
industrial development authority in order to obtain tax exempt financing for
the purchase of the properties set forth in the findings. This industrial
development authority was not within or part of the Pennsylvania Department of
Commerce and you were not associated with that authority in any way. That
authority conducted all of the research on your proposed project and on
December 18, 1981, that authority submitted a request for approval of the tax
exempt status to the Pennsylvania Department of Commerce. The request for
approval contained a certification by the industrial occupant which was Totem,
Inc. You signed that certification on behalf of Totem, Inc. Our evidence
reveals that this is the only action that you participated in before your
former governmental body. You personally did not submit this application to
the Department of Commerce and you were not involved in any other
representation before that governmental body. You only signed this
certification.
The Commission has in the past held that certain documents may be
submitted to a public employee's former governmental body without violating
Section 3(e) of the State Ethics Act. For example, the Commission has stated
that the inclusion of the former employee's name as an employee or consultant
on a pricing proposal may he submitted to his former governmental hody. See
Kotalik, 84 -007. Additionally, the Commission has held that former employees
may submit applications to their former governmental bodies in order to become
certified as qualified sub- contractors or to he certified as qualified
minority business enterprises. See Anderson, 83 -014 and Rhajandas, 85 -5Q ().
Mr. Timothy G. Rehr
Page 5
Rased upon all of the facts in the instant situation, we do not believed that
the submission by the Industrial Development Authority of Central Pennsylvania
of a request for approval of tax exempt financing to the Department of
Commerce, which contained a certification signed by you, was a prohibited
representation under the State Ethics Act. There is no evidence that you
attempted to influence the actions of the Deparment of Commerce or that you
otherwised participated to any extent in the matter.
C. Conclusion:
There was no violation of Section 3(e) of the State Ethics Act when the
Industrial Development Authority of Central Pennsylvania submitted a request
to the Pennsylvania Department of Commerce, your former employer, seeking to
ohtain tax exempt status for the financing of an industrial development
project in which you were involved.
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
he 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 he fined not more than $1,000 or imprisoned
for not more than one year or both, see 65 P.S. 4Oq(e).
JJC /sfb
By the l'omm'ssion,
erbe R. onner
Chairman
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
DISSENTING, OPINION OF
COMMISSIONER PAUL J. SMITH
I dissent from the finding of the majority in this case and submit that I
find the type of conduct spelled out in this record to he exactly the kind of
actions the legislature meant to condemn and prevent in Section 1 of the
Ethics Act when they said the "Legislature hereby declares that puhlic office
is a puhlic trust and that any effort to realize personal financial gain
through puhlic office other than compensation provided by law is in violation
of that trust."
In a recent unanimous decision, the Commission said, "While we have found
no violation of the Act, we do believe that we should point out to you the
purpose and intent of the law. The Ethics Act was promulgated in an effort to
insure the puhlic that the financial interests of public officials neither
conflict nor appear to conflict with the puhlic trust. In this respect,
puhlic officials must remain mindful of public perceptions. In certain
situations even though a violation of the law will not take place, it may he
the Netter course of action for a public official to abstain from
participation in a matter wherein they may he perceived to have financial
interest, even though said interest may he indirect." See Fister No. 448.
Here, we have a case in which Mr. Rehr, a former official of the
Department of Commerce responsihle for Tax Exempt actions while with the
department, and while he was still within the jurisdiction of the Ethics Act
suhmitting a request that he knew would come to'his former governmental body
for final approval. A document containing his signature for a deal involving
his brother - a fact not disclosed.
The record shows that at least one employee in the department knew that
Mr. Rehr and Mr. Sherwood were hrothers. She recommended approval of the
request for tax exempt status after seeking legal advice Outside the
department. The record is not clear as to whether or not she confided this
information to Executive Deputy Secretary Mohney hefore his approval hut it is
clear that she sought legal advice outside the department and that she
apparently made no note of this action or of her knowledge of Mr. Rehr's
relationship with Mr. Sherwood. But Mr. Rehr's signature was on the documents
reviewed by the Department and it is reasonahle to assume that his name should
Paul J. Smith Dissent
Page 2
have heen recognized hecause of his service in that same area of the
department. Ms. Dunaway's concern was demonstrated hy her action of going to
an outside attorney. Rut there is no indication that any other official in
the department was concerned. The Ethics Act requires diligence hy puhlic
officials who are just as responsihile for upholding the Ethics law as any
other law and the officials in the department should have recognized that Mr.
Rehr was a recent official of the agency and determined whether he was meeting
his obligations under the Ethics Act. The Ethics Commission is the agency for
determining whether the law is being violated and the Department of Commerce
officials should he aware of that and take appropriate action. They also have
an obligation to insure that their employees know the requirements of the
Act.
While the Ethics Commission has no role in determining how the department
processes applications for tax exemption status, their failure to have a basic
system that would insure former officials do not violate the Ethics Act and
the fact that an employee of the agency used outside counsel to check on Mr.
Rehr's application raises serious questions about the process.
I find that Timothy G. Rehr violated the puhlic trust as that is
described in Section 1 of the Ethics Act and his personnel record should so
indicate.
Paul J. Sjth, Commissioner