HomeMy WebLinkAbout525 McCauliffMr. Russell McCauliff
R.D. #5
Johnstown, PA 15907
Re: 85 -102 -C
Dear Mr. McCauliff:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 525
O AUG 2 0 1986
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:
Alle ation: That you, a Supervisor in Upper Yoder Township, violated Section
a of the Ethics Act which prohibits a public official's use of public
office or confidential information gained through that office or 3(d) of the
Act when you participated in township decisions to install fire hydrants and
had these hydrants installed by McCauliff Brothers Incorporated, with whom you
have an association.
Findings:
1. You have served as an Upper Yoder Township Supervisor since January, 1934.
As an elected official, you are subject to the provisions of the State Ethics
Act.
2. In September, 1934, the Upper Yoder Township Water Authority made a
request to the hoard of supervisors for the installation of fire hydrants.
a. You represented the board of supervisors in meetings with one member
of the authority to discuss costs.
h. This is confirmed in minutes of the Upper Yoder Township Supervisors
of Septelher 17, 1984, and the Upper Yoder Township :Dater Authority
meeting of September 10, 1934.
3. You adroit to seeking and obtaining cost estimates for this project from
McCauliff Brothers, Incorporated.
Mr. Russell McCauliff
Page 2
a. McCauliff Brothers, Incorporated is a general excavating contractor
owned by your uncle.
b. You have had are ongoing bdsi nese, relationship with McCauliff
Brothers. You re„t equi pmcnt from them 7, use some of their
employees on your own jobs.
4. NG other contractors contacted to sAmit quotes.
5. Minutes of the Oci:oter `.t , r°f h►eeti n; of th r dpper Yoder e- n hip
Supervisors coi,fi rms that yo - — .4)c: tea the , °'ice to be between 41,500 and
$2,000 per hydrant—
a. The Supervisors voted at that meetirr:; to give approvei to the Water
Authority to make arrangements for ;lie - - tallatior. of the hydrants.
You seconded the motion but abstained From veti;7a.
6. Minutes of the Upper Yoder Township Water AutL r i':; me2tirc.li disclose the
fol l owi �g :
a. September 10, 1984:
Reported that the Upper Yoder Township Supervise: 'yould :ike a
proposal for the installation of at least two new fire hydrants in
the Menoher Heights area. Gayview Terrace wil be liste *' as first
priority on the list with other hydrants to be left to thr.
recommendation of the fire chief. The supervisors have agreed to pay
for the installation of the new hydrants.
b. November 12, 1984:
Resolution No. 603. Motion Joseph Couffiel, seconded by Louis Guzzi
to install two fire hydrants (1) Menoher Highway at Gayview Terrace
(2) Kenesaw lane at Sunrise Drive at the cost of the Upper Yoder
Township Supervisors.
7. You confirm the McCauliff Brothers did both installations.
a. You did not work on the project as an employee of McCauliff Brothers,
although you did help without remuneration.
Mr. Russell McCauliff
Page 3
8. By invoice dated April 3, 1985, McCauliff Brothers billed the Upper Yoder
Township Water Authority in the amount of $4,892.50 for the installation of
two fire hydrants.
a. That bill was forwarded to the Upper Yoder Township Supervisors for
payment from the fire hydrant account.
9. Minutes of the Upper Yoder Township Supervisors confirms the following:
a. April 16, 1985:
APPROVAL OF GENERAL FUND BILLS IN THE AMOUNT OF $7,766.56 AND ALL
OTHER TOWNSHIP FUNDS - for period of March 30 through April 12,
1985 - discussion held on bill under Fire Hydrant Account for
McCauliff Bros in the amount of $4,892.50 as to bidding requirements.
Green notes that short of emergency, all governmental bodies,
including their agencies, are subject to the $4,000 minimum without
bidding. Russ states hill was only a copy submitted to Water
Authority. Green suggests township receive letter of
explanation /clarification from the Water Authority or their solicitor
when forwarding bill. Lee moves, Bob seconds, that all bills from
all accounts be approved for payment except McCauliff bill in the
amount of $4,892.50. Carried! 5/0
b. May 21, 1985:
APPROVAL- GENERAL FUND BILLS SUBMITTED AND ALL OTHER FUND EXPENDITURES
FOR PERIOD FROM MAY 4, 1985, THROUGH MAY 17, 1985 - discussion held
on three bills submitted by the Upper Yoder Township Water Authority
for installation of two fire hydrants to be paid from the Fire
Hydrant Account. In order to avoid possible surcharge - three bills
held up for payment until receipt of letter of
clarification /explanation from their solicitor. Cowie moved,
Spaulding seconded, that General Fund bills in the amount of
$9,663.58 and expenditures from the Payroll Account and Garbage
Account for period from May 4, 1985, through May 17, 1985, be
approved for payment. Carried! 4/0/1 with McCauliff abstaining.
Mr. Russell McCauliff
Page 4
c. June 18, 1985:
FIRE HYDRANT BILLS - discussion held on three bills from Upper Yoder
Township Water Authority along w the clarification letter from their
solicitor James Walsh. .Cowie states that regardless of letter he
feels we gave bills on a job not bid in excess on bidding
requirements. Bob asks solicitor ii he has any reservations about
paying submitted bills solicitor says no. Bob moves, Dean seconds,
that the Township. approve bills for two fire hydrants as submitted by
Upper Yoder Township Water Authority. Not Approved! 2/2/1 Shaffer
and S, d N voting yes -- Cowie and W i l l i a m s o n voting
no -- McCauliff abstaining.
FIRE HYDRANT BILLS - Roy Shaffer expressed strong dissatisfaction
with action of board not to approve payment to the Water Authority
for two fire hydrants. Cowie read from the minutes of both the
Supervisors' meeting and the Water Authority meeting - both listing
installation as one job. Bills total more than $4,000 which is a
violation of Commonwealth laws. Cowie also notes when Board approved
paying for the installation, it was noted cost would not exceed
$4,000. Bob rescinds previous motion stating that based on advice of
solicitor, he again moves that the bills from the Water Authority for
tw, fire hydrants be paid as submitted. Carried! 3/2 with Cowie and
Wi liamson voting no on fact that they both feel bills are in
violation of bidding requirements. You voted to pay the bill.
10. Prior to the supervisors meeting of June 18, 1985, (Finding #9c) the
Water Authority's solicitor sent correspondence to the Supervisors solicitor.
That letter dated June 17, 1985 advised that the Authority consistently
treated each fire hydrant as a "separate project ". Two bills, each in the
amount of $2,203.64 were submitted with a request for payment as soon as
possible.
11» You admit to voting to pay the McCauliff bill but deny receiving any
financial gain. You claim you voted to settle the matter.
12. You also contend that each hydrant installation was a separate job but
were completed at the same time to save money in the fee charged by Laurel
Management to conduct the inspections.
Mr. Russell McCauliff
Page 5
B. Discussion: As a township supervisor in a township of the second class,
you are clearly a public official as that term is defined in the State Ethics
Act. 65 P.S. Section 402. As such, your conduct must conform to the
requirements of the State Ethics Act. Sowers, 80 -050; Weltz, 86 -001. The
Ethics Act provides as follows:
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. 65 P.S. 403(a).
Within the above provisions of law, a public official may not use his
public office in order to obtain any financial gain for himself, for a member
of his immediate family or for a business with which he is associated, other
than the compensation provided for by law. Such a public official may not use
confidential information for similar purposes.
The Ethics Act defines business with which one is associated as follows:
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.
The act further defines a member of one's immediate family as follows:
Section 2. Definitions.
"Immediate family." A spouse residing in the person's
household and minor dependent children. 65 P.S. 402.
Mr. Russell McCauliff
Page 6
A review of the facts in the instant situation, indicates that you are
not associated with McCauliff Brothers Incorporat J O thi n ',he above
definition of the Act, Th s i s co in l i yht of the fact that you are not a
director, officer, owner, employe:. .ir i;older of stock for that corporation.
Therefore, your actions as a township supervisor in relation to the placement
of the fire hydrants in the township woul c' not have been in vi of i on of
Section 403(a) as you did not obtain financial gain for a "business with which
you were zssociatce," While you do have a business relationship with
McCauliff Brothers Incorporated, this relationship involves your resting of
equipment from thet corporation and your use of the employees of that
corporation for :°ivne projects in which you are involved unrelated to the
business of McCaulifff Brothers Incorporated. Therefore, we do not believe
that within the technical definitions of 403(a) of the Act, you can be deemed
to be associates.' with McCauliff Brothers Incorporated.
Similarly, whi'e the Ethics Act provides that you may not use your public
position in order to obtain financial gain for a member of your immediate
family, McCauliff Brothers Incorporated does not involve any member of your
immediate family as defined in the State Ethics Act. That bus is owned
and operated by your uncle who is neither a spouse or a minor dependent child.
Therefore, once again, within the technic1 provisions of the State 21hics Act
we are bound to find that you have not violated that particular provision, of
the State Ethics Act in light of the specific d ciAi'`ons under which we are
required to interpret the law.
In addition to Section 403(a) of the Act, however, we have also reviewed
this particular situation within Section 403(d) of the State Ethics Act. That
provision of law authorizes this Commission to address other areas of possible
conflict where no opinion has been requested. 65 P.S. 403(d). The parameters
of the types of activity encompased by this provision of law are generally
determined through a review of the purpose and intent of the State Ethics Act.
This particular application of the Act was approved by the Supreme Court of
Pennsylvania in Pennsylvania State Association of Township Supervisors v.
Thornburgh, 496 Pa. 324, 437 A.2d 1, (981). Generally, the purpose and intent
of the Act was to insure the public that the financial interests of their
officials do not conflict with the public trust. 65 P.S. Section 401. In the
instant situation, you served as a township supervisor in Upper Yoder
Township. It was the township's decision, rather than the decision of the
water authority to initiate the fire hydrants project. Indeed, it was the
township board of supervisors who would ultimately fund this project. You
served as the liaison of the township to the water authority. In this
respect, you were responsible for going out and obtaining cost estimates for
the project. The only estimates you, in turn, received were from your uncle's
company, McCauliff Brothers Incorporated. No other bids were requested or
Mr. Russell McCauliff
Page 7
submitted. Indeed, in October of 1985, while you abstained from the vote on
giving the water authority the authorization to do this work, you were second
on the motion that resulted in this project being initiated. The records
clearly reflect that you participated in most of the township's discussions
and considerations of the project even though you abstained from voting in
several instances. Your abstention, however, does not negate the fact that a
conflict of interest was created through .. your participation in-this matter.
See Kindercare, Inc. the Municipality of Monroeville, 160 Pitts. L.J. 163,
(1986). When the township supervisors were thereafter called upon to pay the
bills to McCauliff Brothers Incorporated, you initially abstained from
participating in the township's decision to pay these bills. However, in
light of the fact that the township supervisors became deadlocked as to
whether to pay these bills because several supervisors believed that the
bidding requirements of the Second Class Township Code had been evaded, you
cast the deciding vote to pay the bills to your uncle's company.
Specifically, on June 18, 1985, the issue as to whether to pay these bills was
initially called to the floor. At this time, you abstained from voting and
the bill was not approved because of a two -to -two tie. However, during that
same meeting, the bill was once again called to the floor and you cast the
deciding vote to pay the bill to your uncle. This action was taken by you at
a time when you had an ongoing business relationship with McCauliff Brothers
Incorporated, as set forth in the findings of fact and as you have admitted to
the State Ethics Commission. We, therefore, believe that a conflict of
interest was created by your actions as a township supervisor in this matter.
We, therefore, believe that you have violated Section 403(d) of the State
Ethics Act. We note in passing our belief that the project in question
clearly approved be a single contract rather than individual items. This
Commission, for purposes of the Ethics Act considerations, has uniformly
determined that one contract may not be split into several purchases in order
to evade bidding requirements. Donati, 204.
While your actions were not in accord with the State Ethics Act, we will
impose no restitution requirement upon you. We will, however, refer this
matter to the appropriate law PnfnrcPment authorities for thcir review and
consideration and for whatever action they may deem appropriate.
C. Conclusion: Your actions in voting to pay a disputed bill to a company
with which you had a business relationship and your actions as a major
participant in the entire project created a conflict of interest in violation
of 403(d) of the State Ethics Act. This matter will be referred to
appropriate law enforcement authorities for further review and action in
accordance with their judgement.
Mr. Russell McCauliff
Page 8
Our files in this case will rema'o confidential in arco;dance with
Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final
and will be made availab'ie as a 'ublic document 15 dzlys after service (deoined
as mailing) unless you ii1e documentation with the Commission which justifies
reconsideration anc'/or challenges pertinent factual findings. See 51 Pa. Code
2.38. During this l5 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 Ordcr.
Any parson who violates the conf ident'i l i ty of { Cor,im i ssi on proceeding
is gu`i 1 to of a mi sdemeerror z shall be fined not more tan $1,000 or
imprisoned for not more than o.r .yea: or both, see 65 P.S. 409(e).
By the Commission,
G. SiY =uer Panc ast
Chai rmar,