HomeMy WebLinkAbout478 ReillyMr. Thomas J. Reilly
103 Brookside Lane
Mars, PA 16046
Re: No. 84 -107 -C
84 -108 -C
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
May 2, 1986
Order No. 478
Dear Mr. Reilly:
The State Ethics Commission has received a complaint regarding you and a
possihle violation of Act 170 of 1978. The Commission has completed its
investigation. The individual allegations, conclusions, and findings on which
those conclusions are based are as follows:
I. Allegation: That you have violated Section 3(b) of the Ethics Act, 65
P S 5403 h
• •�, by threatening to evict or, in the alternative, allowing a
puhlic official to continue as a tenant in the property you own; known as .
Canterbury Village, Inc., which comprises the Borough of Seven Fields in order
to influence the official judgment /action of said official within said
borough.
A. Findings:
1. You are the President and major stockholder of Canterbury Villa e
and have held these positions since at least 1979. 9 Inc.
2. You are also the Vice - President of Managers Properties, Inc.
3. Managed Properties, Inc. manages an apartment complex located in Seven
Fields Rorough.
4. You are subject to the requirements of Section 3(b) of the Ethics Act
insofar as they pertain to any person's involvement with a
pub
public employee or candidate for public office and their official official,
responsibilities.
Mr. Thomas J. Reilly
Page 2
May 2, 19R6
5. Seven Fields Borough was established by court order in August of 1983.
a. You initiated action to secede from Cranberry Township and
establi shed Seven Fields Borough.
b. You took this action as president of Canterbury Village, Inc.
c. Seven Fields Borough consisted of an apartment complex owned by
Canterbury Village, Inc.
d. The elected officials of Seven Fields Borough were residents of the
apartment complex who paid rent to your corporation.
6. In November, 1983, seven persons were elected as borough councilmembers
for Seven Fields Borough. They were:
a. Dennis J. Springer
Rosemary B. Hetrick
Bannister B. Allen, III
Lee Van Syckle
Edward B. Robison
Edward J. McCaul
Dana F. Anchor
b. Dana F. Anchor resigned before the swearing in ceremonies and was
replaced by Edwin Watt.
c. Lucy A. Rossellini was also elected mayor and Karen Speakman was
elected tax collector.
7. During November and December of 1983, the councilmembers, mayor, and tax
collector elect met to prepare to take office. According to their records
they took the following actions and had the following discussions:
a. November 11, 1983: A meeting to acquaint themselves with
governmental procedures and requirements.
b. November 25, and 27, 1983: Study sessions at the home of Edward
Robison. At the November 27th meeting, Mr. Paul Chernicky - acting
on your behalf - offered a barn owned by Canterbury Village as a
meeting place for the borough.
c. November 29, 1983: Meeting between council, a Department of
Community Affairs Representative, Jane Finely, and you to discuss the
responsibilities of the new borough government. You did not make the
beginning of the meeting but telephoned at 7:30 to invite everyone to
meet you for dinner and discussions at a local restaurant.
Mr. Thomas J. Reilly
Page 3
May 2, 1986
d. The meeting was continued at the restaurant where you, your attorney
Edward Zemprel li , Tony Morocco, Canterbury Vi 1 lage Building
Inspector, Ed Krall, your partner, and Attorney Kenneth Perkins who
had handled the election met with the members of council.
e. According to members of council you offered an interest free loan to
assist the borough in getting on its feet. You deny this statement
and claim that council came to you asking for money.
8. December 18, 1983: `Another study session was conducted that included
discussion of a tentative budget, a decision to draft several budget
possibilities and present them to you and ask for your assistance.
9. December 27, 1983: Councilmembers elect Springer and Allen met with you
to discuss tentative budget possibilities and to request a grant for the
borough from you.
10. About December 29, 1983 a set of documents containing the following
information was ci rculated:
a. A memorandum "to the Residents of Seven Fields..." signed
"Sincerely, Canterbury Village, Inc." This memorandum noted that the
newly formed council was considering enacting taxes and that
Canterbury Village as owner and the residents take an active role in
the decisions to enact taxes, hire employees, etc.
b. A financial outline titled "Proposed by Boro Council" that included
proposals for taxes, a buildi ng permit fee, and occupancy permit.
c. A second financial outline titled " Proposed by Canterbury Village,
Inc." This also involved taxes, building and occupancy permit
fees. This document stated that no real property, earned income
taxes, or occupational privilege taxes were needed. It also urged
enactment of the real estate transfer tax.
11. December 30, 1983: Dr. Robi son ci rculated additional information at your
request. His cover letter said "Mr. Reilly has suggested that, if we follow
his budget proposal completely, and if he falls short of his predictions about
the number of units he sells, he will underwrite the difference to avoid a
deficit. He intends to have his attorney write a legal document to this
effect." A letter from you was attached. The letter commended the mayor and
council on their dedication, said you, as President of Canterbury Village,
Inc. were offering the "enclosed proposed budget for your consideration."
Documents listing sources of income and another listing of Seven Fields budget
expenses were attached.
12. Councilmembers, the mayor and the tax collector officially took office on
January 3, 1984 and off.ici al mi nutes show the fol1owi ng:
Mr. Thomas J. Reilly
Page 4
May 2, 1986
a. January 3, 1984: councilmembers, the mayor and tax collector were
sworn in. Edward Robison was elected president of council, Edward
McCaul was elected vice - president, Karen Speakman was appointed as
borough secretary, and Kenneth D. Perkins as borough solicitor. Mr.
Ed Watt was appointed to the vacancy created by the resignation of
Dana Anchor. In addition, various ordinances and resolutions were
passed and adopted. The meeting ended after discussion by various
members of the public who were present. During public discussion you
agreed that Mr. Dave Wartor; would continue to provide the borough
with police protection and security until a budget was enacted and
the bo ^eugh's fiscal matters under control.
b, January 9, 1984; the first regular meeting of the council, councilman
D. J. Springer, chairperson for the Budget Finance and Tax Committee,
reported and pointed out that the "letter received from Canterbury
Village, Inc. to all residents was misleading" because it captioned
the work study sheet alternatives for the budget as a "proposed
budget fc:A the Borough of Seven of Fields ".
Ordinance #4 pertaining to any structure within the borough
complyi ng with the bui l di ng codes was amended to refuse a
b u i l d i n g permit if the structure was not in compliance with the
building codes. The motion was made by Councilmember Watt,
seconded by Councilmember McCaul and accepted unanimously.
The personnel committee was asked to place an ad ir. the
Pittsburgh Press asking for resumes for a building inspector
position.
January 23, 1984: Mr. James Gagliano from the Department cf
Community Affairs net with council and explained that it was vital
for the community to have order and di rection for the future.
Chairman Robison explained that the Borough of Seven Fields had one
major land owner who had his own master plan and it would be
council'; responsibility to develop a comprehensive plan for the
borough .nd devise a planning ordi nance. Mr. Gagli ano pointed out
that by law the borough no longer needs a comprehensive plan and may
accept developers plans. Other items discussed included the
borough's water lines and sewage plant. Mr. McCaul noted that the
borough's sewage system was maintained and financed by the developer
of Canterbury Village, Inc.
On a motion by Councilmember Springer seconded by Councilmember
Van Syckle, a borough budget was unanimously adopted.
d_ February 13, 1984: Councilman Allen reported that while he did not
want to resign from council, he would be required to because he no
1 onger resided within the borough.
Mr. Thomas J. Reilly
Page 5
May 2, 1986
g.
e. February 27, 1984: Councilmember Hetrick read a letter drafted to
Canterbury Village, Inc. informing you as president that it was
council 's responsibility to review and approve all plans for further
development before they are processed through the Butler County
Planning Commission and also stating that council members will offer
their time to that organization for meetings and deliberations. The
draft was accepted as written. In addition, a letter of introduction
was sent to Edward P. Zemprelli, attorney for Canterbury Village,
Inc. introducing Al Baker as the borough's building inspector /code
enforcement officer. The letter included a request for an accurate
survey of the borough's boundaries and asked for access to blue
prints, water lines, etc. The letter also notified the attorney of
the real estate transfer taxes and all real property sales in the
borough and noted that they became effective February 23, 1984.
f. March 12, 1984: Al Baker, the borough's building inspector and code
enforcement officer, reported that he had met with you, Ken Perkins
and Tony Morocco, your foreman, and presented the building permit
forms and explained fees for the permits.
Karen Speakman, Secretary and Tax Collector for the borough,
reported that the occupational privilege tax forms were
delivered to the office of Canterbury Village, Inc. and are to
be paid by March 26, 1984; the building permit forms were
delivered to Canterbury Village, Inc. and were due on April 16,
1984.
April 9, 1984: You were reported to have offered to absorb the cost
for a meeting room at the Quality Inn for the Neighborhood Crime
Watch Program meeting with residents, council and the Butler State
Police.
Solicitor Perkins reported a number of items including letters
he would send to Edward Krall and Senator Zemprelli concerning
real estate taxes and addresses for tax statements, a request
to Canterbury Village to complete and send to the borough the
occupational priviledge tax forms which are past due, a request
that completed occupancy permits be sent to the borough with
payment. These had been sent to Canterbury Village, Inc. March
14, 1984 and must be returned to the borough within thirty
days; aski ng Canterbury Village whether a permit application
for the sewer plant had been applied for, and asking for
specific information pertaining to the sewage treatment plant,
water lines, roads, buildings, etc.
Councilmember McCaul stated that the new survey of the
borough's boundaries had been received from Senator Zemprelli
but the boundaries still did not close. A meeting was planned
with Senator Zemprelli later that week or the next week.
Mr. Thomas J. Reilly
Page 6
h. April 23, 1984: Secretary Karen Speakman reported that occupational
privilege tax forms had been delivered to Mrs. Maryann Palma on
February 27, 1984 and were due on July 31, 1984. The occupancy
permits due April 4, 1984 and Canterbury Village, Inc. was
deli nquent. The secretary also reported that reference to the
occupancy permits was made in a communication to Senator Zemprelli
(your attorney) from Solicitor Perkins February 22, 1984. Reference
was again made to them in a registered letter sent to Canterbury
Village, Inc. April 11, 1984. They were discussed with Mr. Krall
and Senator Zemprelli at a meeting March 29, 1984, and referred once
again i n communications i n writing from Borough Soli citor Perkins
expressing the pertinence of these forms to the Borough for tax
records of April 10, 1984 to the Senator. In a letter from Senator
Zemprelli April 4, 1984, no mention was made of the occupancy
permits." President Robison added that he wanted to schedule a
meeting "Lo later than next week, otherwise attempts will have to be
made to correct the occupancy permit deli nquenci es."
i. May 14, 1984: Borough Solicitor Perkins resigned explaining that his
firm also represented Canterbury Village, Inc. and he was resigning
in the spirit of the code of professional responsibil'ty requiring
the avoidance of conflicts of interest.
Ccuncil President Robison reported that he had been notified by
you that he is no longer welcome to reside in the development
and that he had been informed that a law suit for liable had
been filed against him by you or Canterbury Village, Inc. for a
statement he had made at the April 23, 1984 council meeting.
He stated that May 30th was the apparent deadline for leaving
his home.
Karen Speakman, the borough secretary and tax collector,
reported that she had been asked to leave the Borough of Seven
Fields. She had been told on May 4, 1984, by Borough Solicitor
Ken Perkins, that she would either have to retract or clarify
information printed on the report she gave at the April 23,
1984 council meeting or she would be required to leave the
borough. He stated that she had also received a telephone call
from you sayi ng that you believed that she was not happy living
in the borough, she should leave. You also told her you were
not renewing her lease, but as of that date she had not
received an eviction notice.
May 29, 1984, President Robison announced that he had letters of
intent to resign from Councilperson's Hetrick, McCaul, Van Syckle,
and himself and also had letters from Mayor Rosel li ni and Tax
Collector Speakman. Mr. McCaul was going to resign due to
1
May 2, 1986
Mr. Thomas J. Reilly
Page 7
May 2, 19R6
circumstances beyond council 's control, Ms. Hetrick I s letter stated
that she was going to resign because other members of council had
been treated and exposed to threats to the pursuit of home and
happiness and she did not wish to live with those problems,
Councilmember Van Syckle stated in his letter that an elected
governing body cannot be manipulated and perform effectively. As his
last action, he asked Solicitor Weinrich to petition the court to
appoint new members from the community to fill the council vacancies.
President Robison noted that he had been force to relocate outside of
the Borough of Seven Fields.
13. Various councilmembers were notified that they could not continue to be
tenants in the Borough of Seven Fields as follows:
a. Edward Robison, President of Council;
(1) January 23, 1984, a letter notifying him to vacate the premises
known as 120 Mosside Loop within thirty days of the date of the
letter because the term of his lease had expired. This letter
was signed by Ronald M. Buick, Attorney for the landlord.
(2) January 24, 1984, a letter signed by you as President of
Canterbury Village, Inc. notifying Mr. Robison that this was a
formal notice for him to vacate his premises within thirty days
of the date of the notice because his lease had expired.
(3) February 1, 1984, a letter from you notifying him that the
previous thirty day notice to vacate his premises was not in
affect as of the date noted and that he would be on a
month -to -month lease as of March 1, 1984.
(4) April 30, 1984, a letter from you as President of Canterbury
Village, Inc. notifying Mr. Robison to vacate the premises
within thirty days of the date of the notice because the term
of the lease had expired.
b. Bannister J. Allen; a letter of January 2, 1984, telling him that
because of his refusal to sign a lease renewal and his repeated late
rental payments for the months of October, November, and December of
1983 and January, 1984 you were exercising your 30 day option and
directed him to vacate his premises by January 31, 1984.
On January 23, 1984, Mr. Bannister responded to your letter
which he noted was posted on his door on January 11, 1984. He
stated that he had not refused to sign a lease renewal because
he had never been offered one, that although the grace period
for the January rent did not end until January 5, 1984, you
Mr. Thomas J. Reilly
Page 8
May 2, 19R6
have al ready stated that in a letter dated January 2, 1984 that
his rent was late, and that January was the only month which he
had paid a late charge. In addition he noted that his rent
check for December, 1983 did clear his bank on the second
deposit and this was the only time that had happened.
14. On June 14, 1985, you were interviewed. Your Attorney, Senator Edward
Zemprelli, was present at the interview. At this interview you made the
following statements:
a. Borough council came to you for money, you did not offer them an
interest free loan to get council started.
b. Council had not prepared a budget but a list of things to do and had
asked for your suggestions. You took their list and made your
suggestions based upon what you had done with the services over the
past three years.
e. You sent no letters to the tenants telling them what your
recommendations were.
d. That you told council that if they got into a situation where they
needed help, that you would take over the services because you had
been doing those services for the past three years.
e. You did meet with Councilmen Springer and Allen about budget
suggestions but they didn't want to hear your suggestions. -
f. That no one had been evicted nor had any person not had their lease
renewed because of activities on council.
That you had never called Council President Robison on the phone and
accused him of threatening you with bad publicity. That neither you
nor your attorney had asked council to remove Mr. Al Baker from his
position as zoning enforcement officer.
h. That Council President Robison had called you and at that time you
told him that if he dosen't like living in Seven Fields, he should
move.
1 . That you did not ask Attorney Perkins to tell Karen Speakman that
unless she retracted statements made to the press, that she would be
the next to go.
That you do not have an automatic lease renewal policy.
g.
•
Mr. Thomas J. Reilly
Page 9
May 2, 1985
B. Discussion:
The State Ethics Act provides as follows:
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).
Clearly, under the above provision of law, if any person makes any offer of
anything of value to a public official, in order to influence that official's
public actions, that person would be in violation of the above provision of
law. In the instant situation, we must initially note that when the apartment
development, owned by you, petitioned the court to become a borough and when
that petition was granted incorporating the Borough of Seven Fields, the
individuals who were elected to the position of borough councilmember, mayor
and tax collector became public officials within the purview of the State
Ethics Act. See 53 P.S. §45202; 65 P.S. §402. The Borough of Seven Fields
became a governmental body within the definition as set forth in the State
Ethics Act and that governmental body became subject to the Borough Code as
well. As a result, if you had, as a person and private developer, offered the
individuals who were elected to positions of office in the Borough of Seven
Fields, anything of value, based upon the understanding that their official
judgement would be influenced thereby, you would be in violation of the State
Ethics Act. A review of the findings in this matter indicates the following:
1. On November 27, 1983, a meeting place was offered to the members of
borough council in order to conduct business (Finding 7b).
2. On November 29, you invited the councilmembers to dinner at a local
restaurant. (Finding 7c).
3. It is alleged that you offered the members of borough council an
interest free loan in order to assist the borough in initiating its
operation. You have denied this statement but rather assert that the
borough councilmembers came to you seeking a loan. (Finding 7e).
Mr. Thomas J. Reilly
Page 10
May 2, 1986
4. Dr. Robison, a member of borough council, indicated in a letter dated
December 30, 1983 that you had offered a suggested budget for
consideration to the borough council and further offered to
underwrite any deficit that would develop as a result of your
failure to sell development units. This was the only indication of
this offer and a review of the proposed budget submitted by you does
not contain reference to this particular offer. (Finding 11).
5. On April 9, 1984, it was reported that you offered to absorb the cost
of a meeting involving a Neighborhood Crime Watch Program held by
borough council and the residents.
6. On January 23, 1984, you requested the president of the borough,
Edward Robison, to vacate the premises in the Borough of Seven Fields
that he was leasing from you. Also in January of 1982, you had
requested t'iat Bannister J. Allen, another member of the borough
council, vacate the premises which he leased from the Borough of
Seven Fields. Tax Collector Speakman stated that she would be
evicted if she did not alter a borough report.
Based upon a complete review of all of the circumstances contained in
this situation, we do not believe that there is a sufficient amount of
evidence to clearly indicate that you violated Section 403(b) of the State
Ethics Act. The offer to provide a meeting place for the borough council and
the offer to meet with the individuals during dinner at a local restaurant do
not appear to have been made with the intent to influence any action by the
borough council . The borough council , at that poi nt i n time, was a newly
elected body and no facilities were available for the conduct of official
business. Therefore, we do not believe that these situations rise to a level
of a violation of the Act. With relation to the offer of an interest -free
loan, while such may have been a violation of the Act, if provable, there is
conflicting evidence as to the actual occurrence of this situation and,
therefore, we do not believe that we can find a violation of the Act.
Simila.°ly, with relation to the offer to underwrite the cost of any deficit if
caused by Canterbury Villiage's failure to sell units in the development, the
only evidence existing is the statement made by Mr. Robison in his letter of
December 30, 1983. We do not believe that this, i n and of it :elf, i s
sufficient to find a violation of the Act.
A more troubling question is presented by the fact that you had forwarded
notices to vacate the premises to two members of borough council and
allegedly threatened a third officer with eviction. The notices were
forwarded in January of 1983. In fact., on January 23, 1983, Mr. Robison
received his notice. This date is the same date on which borough council
decided that it wz.s going to implement its own planni ng ordi nance. A measure
that could have an adverse effect on your development efforts. Additionally,
during the period from January, 84 through March of 84, the borough council
was considering the implementation of various ordinances, building
Mr. Thomas J. Reilly
Page 11
May 2, 1986
requirements, occupational privilege fees, and other taxes that would affect
you as the primary landowner and only developer in the community. As a
result, it is arguable that your efforts to terminate the leases of Mr.
Robison and Mr. Allen were calculated to intimidate them to act in a certain
way. On the other hand, we must note that Mr. Robi son's lease had in fact
terminated and there was no automatic renewal provision in the lease. In
addition, Mr. Allen apparently had been late in paying rent on several
occasions and had encountered some additional problems in paying rent. As a
result, it is equally arguable that you had just cause for the termination of
these leases. Additionally, the only evidence in relation to the allegation
that you threatened the tax collector with eviction is her statement and your
denial. Because of the conflicting situation, we do not believe that the
evidence clearly establishes that you violated Section 403(b) of the State
Ethics Act when you attempted to terminate the leases of two members of
borough council who had been active in suggesting the implementation of
programs and proposals that would be to the detriment of your private
venture.
While we have found no violation of the State Ethics Act in the instant
situation, we feel that it is necessary to make several comments relating
thereto. Initially, we do not believe that you are sensitive to the fact that
once the Borough of Seven Fields was incorporated, it became a public body;
the members of which are public officials. You must deal with these officials
at this point in time as public officials. That is, you must not offer these
individuals anything of value if you will also be presenting the council with
various proposals for building, zoning, or anything else that will enure to
the benefit of your private corporation. Such offers clearly can be perceived
as attempts to influence the official decisions of borough council. You are a
private developer and owner of most, if not all, of the land situated in the
borough. As a result, you will be proceeding before borough council routinely
in order to obtain the approval of council regarding various projects.
Council will be obligated to make decisions in relation to your projects.
These individuals are now to be considered public officials who are to serve
the public trust and not the personal interest of your corporation or
projects. As a result, you must stay detached from the dealings of borough
council in relation to projects that involve your private corporation or
financial i nterest. We advise that you must, i n the future, refrain from
offering anything to the members of borough council if they have been or will
be considering proposals that relate to your private dealings.
In addition to the foregoing, we feel equally obligated to comment upon
what appears to be a most incompatible situation. The members of borough
council are residents of the Borough of Seven Fields only because they rent
units from your corporation. A member of borough council, in order to serve
on the council, must be a registered elector and resident of the borough.
That is, these individuals can only serve on borough if they live in your
development. These individuals, however, do not own their property, but
Mr. Thomas J. Reilly
Page 12
May 2, 1986
rather lease the property from you. As a result, in effect, you are able to
terminate, at will, the term of office of any borough councilmember who is
leasing from you. This may be done simply by failing to renew the lease of
the individual. The individual would then be forced to vacate the premises
and, therefore, leave the borough. As the owner of the real estate in the
borough and as the only developer who will be submitting proposals to the
borough, we believe that this presents a most incompatible situation. We do
not understand how the members of borough council will be able to, without
engaging in conflicts of interest, rule upon matters that involve the
individual from whom they rent their premises. While we do not here address
this particular situation, we feel obligated to make note of it and advise
that you must proceed cautiously when involved in such situations.
C. Conclusion: Based on all of the foregoing information, we do not believe
that there is sufficient evidence to warrant a finding that you were
in violation of the State Ethics Act. We do note, however, that as the owner
of most of the land in the Borough of Seven Fields and as the landlord for all
of the Lorough councilmembers, you must proceed cautiously in your dealings
wth the council as these individuals are public officials who must now rule
upon matters involving your personal private interests.
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 nailing) unless you file documentation with the Commission which justifies
reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code
2.3C. 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,
G. Sieber Pancoast
Chai rman