HomeMy WebLinkAbout528 MartzallMr. Ellis F. Martzall
R.D. #4 (Denver)
Reinholds, PA 17569
Re: 86 -021 -C
Dear Mr. Martzall:
A. Findings:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 528
DECIDED
MAILED
The 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 Supervisor for West Cocalico Township, violated
Section 3(a) of the Ethics Act which prohibits a public employee's or public
official's use of office or confidential information gained through that
office to obtain financial gain when you accepted compensation from the
township from January of 1979 to date, without auditor approval for said
compensation; and that you violated Section 3(c) of the Ethics Act which
prohibits a public official, public employee or member of his immediate family
or any husiness 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 $500 or more with a governmental body unless the contract has been
awarded through an open and public process by contracting with your
governmental hody in excess of $500 annually, from January of 1979 to date,
without an open and public process.
1. You have served as a supervisor of West Cocalico Township from January,
1972 to the present date and, as such, you are suhject to the requirements of
the State Ethics Act.
2. You are the owner of a business known as E. F. Martzall Incorporated,
Post Office 'lox 149, Reinholds, Pennsylvania, 17569.
3. E. F. Martzall Incorporated received payment from West Cocalico Township
for the services and goods as follows:
a. 1979: $295.66 total payments for a grate and office supplies.
h. 1980: No business done with the township.
Mr. Ellis F. Martzall
Page 2
c. 1981: $1,137.57 total payments; $1,086 for renovating the township
office and the balance of the payments for supplies.
d. 1982 and 1983: No business with the township.
e. 1984: $23.80 total payments.
f. 1985: $8.90 total payments.
g. 1986: No business with the township.
4. There was no open and public process for these services and purchases.
The supervisors consider payment of bills in the following manner:
a. A listing of all bills, circulated for review by the supervisors at
the meeting.
b. A supervisor would mark any item he wished to discuss. If no
individual bills were questioned, payment was authorized without a
motion or vote.
5. The renovation of the township office was handled as follows:
a. Minutes of a special meeting called by the supervisors on April 8,
1981 and advertised in the Ephrata Review record that "the
supervisors also agreed to remodel the old office for a police
office. Ellis Martzall was authorized to do the remodeling work,"
There was no motion made nor vote taken.
b. At the regular meeting, July 9, 1981, payment was approved for a bill
for $1,086 from E. F. Martzall.
(1) The bill was submitted by E. F. Mar tzall Incorporated on invoice
number 2279 that read 90 1/2 hours labor, unit price $12 and
total price $1,086.
(2) There was no motion made nor vote taken to pay this bill.
c. You were present at both meetings and chaired the July 9, 1981
meeting. The minutes do not show who chaired the April 8 meeting.
6. You admit that there was no open and public process for any of these
jobs. You state that many of the payments were for office supplies or
for use of a reproduction machine to make copies of documents for use by
township officials.
Mr. Ellis F. Martzall
Page 3
B. Discussion: As a township supervisor in a township of the second class,
you are a public official as that term is defined in the State Ethics Act. 65
P.S. §402. As such, your conduct must conform to the requirements of that
law. Sowers, 80 -050; Weltz, 86 -001. Generally, 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).
The act further 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.
There is no doubt that as the owner of E. F. Martzall Incorporated, you
were associated with that business pursuant to the provisions of the State
Ethics Act. As such, you could not use your public position to obtain a
financial gain for that entity. In the instant situation, it is clear that a
special meeting was called by the township board of supervisors in April of
1981. You attended that meeting. The meeting was held at 9 o'clock in the
morning, a time during which it would appear that the majority of township
citizens would not be able to attend. In addition to the foregoing, no
motions or votes were made and it is difficult to determine how the contract
to renovate the police building was awarded to your corporation. The
supervisors, as a group, simply indicated that you would be performing the
work to renovate the old police building. Your participation in this meeting
and your acquiescence as a township supervisor in simply awarding this
township renovation project to yourself, was clearly a violation of the State
Ethics Act. In this respect, you used your position as a township supervisor
in order to obtain the township contracting business.
Generally, the State Ethics Act would prohibit your use of your position
as a public official to obtain a financial gain other than the compensation
provided for by law. There is no doubt that your receipt of the township
funds for the contracting business was the receipt of a financial gain. It is
Mr. Ellis F. Martzall
Page 4
also clear that this was not part of the compensation that was provided for
you by the Second Class Township Code. The Second Class Township Code clearly
provides a statutory compensation for township supervisors who serve only in
that capacity. 53 P.S. Section 65515. While a township supervisor who works
as a roadmaster, laborer or secretary /treasurer may receive additional
compensation, such must be fixed by the township board of audito ^c. The funds
you received from the township, in the instant situation, for the renovation
of the police building was clearly not part of the compensation that was
provided for by law. See McCutcheon v. State Ethics Commission, 77 Pa. Commw.
Ct. 529 466 A.2d 283, (1982); Hendricks v. East Rockhill Township, 1 DNC 3d
763, (1977); Coltar v. Warminster Township, Apa. Commw. Ct. 163, 302(a) 2d
859, (1973); Synoski v. Hazel Township, Pa. Commw. Ct. 508 2d. 1282,
(1985). In addition to the foregoing, we hasten to note that
not only was the financial gain that you received not part of the compensation
provided for by law in the Second Class Township Code the financial gain that
you received appears to, in part, be completely prohibited by the Second Class
Township Code. In this respect, we note that Second Class Township Code
provides as follows:
(f) Except as herein provided, no township official,
either elected or appointed, who knows, or who by the
exercise of reasonable diligence, could know, shall be
interested to any appreciable degree; either directly or
indirectly, in any contract for the sale or furnishing of
any supplies or materials for the use of the township, or
for any work to be done for such township involving the
expenditure by the township of more than three hundred
dollars ($300) in any year, but this limitation shall not
apply to cases where such officer, or appointee of the
township, is an employe of the person, firm or corporation
to which the money is to be paid in a capacity with no
possible influence on the transaction, and in which he
cannot be possibly benefited thereby, either financially
or otherwise: Provided, however, That in the case of a
supervisor, if he knows that he is within the exception
just mentioned, he shall so inform the supervisor and
shall refrain from voting on the expenditure, or any
ordinance relating thereto, and shall in no manner
participate therein: Provided, further, That any such
official or appointee who shall knowingly violate this
provision shall be subject to surcharge to the extent of
the damage shown to be thereby sustained by the township,
ouster from office, and shall be guilty of a misdemeanor,
Mr. Ellis F. Martzall
Page 4
also clear that this was not part of the compensation that was provided for
you hy the Second Class Township Code. The Second Class Township Code clearly
provides a statutory compensation for township supervisors who serve only in
that capacity. 53 P.S. Section 65515. While a township supervisor who works
as a roadmaster, lahorer or secretary /treasurer may receive additional
compensation, such must he fixed hy the township hoard of auditors. The funds
you received from the township, in the instant situation, for the renovation
of the police building were clearly not part of the compensation that was
provided for by law. See McCutcheon v. State Ethics Commission, 77 Pa. Commw.
Ct. 529 466 A.2d 283, (1982); Hendricks v. East Rockhill Township, 1 D & C 3d
763, (1977); Coltar v. Warminster Township, Pa. Commw. Ct. 163, 302 A.2d
859, (1973); Synoski v. Hazel Township, Pa. Commw. Ct. 508 A.2d 12.82,
(1985). In addition to the foregoing, we hasten to note that
not only was the financial gain that you received not part of the compensation
provided for by law in the Second Class Township Code the financial gain that
you received appears to, in part, he completely prohibited hy the Second Class
Township Code. In this respect, we note that Second Class Township Code
provides as follows:
(f) Except as herein provided, no township official,
either elected or appointed, who knows, or who hy the
exercise of reasonahle diligence, could know, shall he
interested to any appreciable degree; either directly or
indirectly, in any contract for the sale or furnishing of
any supplies or materials for the use of the township, or
for any work to he done for such township involving the
expenditure hy the township of more than three hundred
dollars (8300) in any year, hut this limitation shall not
apply to cases where such officer, or appointee of the
township, is an employe of the person, firm or corporation
to which the money is to he paid in a capacity with no
possihle influence on the transaction, and in which he
cannot he possibly henefited therehy, either financially
or otherwise: Provided, however, That in the case of a
supervisor, if he knows that he is within the exception
just mentioned, he shall so inform the supervisor and
shall refrain from voting on the expenditure, or any
ordinance relating thereto, and shall in no manner
participate therein: Provided, further, That any such
official or appointee who shall knowingly violate this
provision shall he subject to surcharge to the extent of
the damage shown to he therehy sustained hy the township,
ouster from office, and shall he guilty of a misdemeanor,
Mr. Ellis F. Martzall
Page 5
and upon conviction thereof, shall be sentenced to pay a
fine not exceeding five hundred dollars ($500). 53 P.S.
§5802(f). From a review of the above, it is clear that the
funds that you received from the township in excess of
$300 were clearly prohibited by the Second Class Township
Code. You had a direct interest in the company which
performed the renovation work, and you also had a dire+
interest in seeing that that work was awarded to that
company during the April 8, 1981 meeting. As such, the
financial gain that you received in excess of $300 was
clearly a financial gain to which you were not entitled to
by law.
Additionally, we note that while we believe you violated the State Ethics
Act provisions as set forth above, the Act further provides as follows:
Section 3. Restricted activities.
(c) No public official or public employee or a member of
his immediate family dr 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(c).
This Commission has generally determined that the above provision of law
is a procedure to use when a public official or employee contracts with his
own governmental body in excess of $500. See Bryan, 80 -014, Lynch, 79 -047.
We do not beleive, however, that the above provision of law is a general
authorization for a public official to contract with his governmental body
where such is otherwise prohibited by law such as in the Second Class Township
Code. The above provision of law clearly is intended to be a procedure to be
utilized where such contracting is otherwise allowed. If said contract had
been allowed under the Second Class Township Code in excess $500, then you
would have been required to use the above procedure. This procedure would
have required that prior public notice of the contracting possibility be
advertised, that sufficient time for a reasonable and prudent competitor or
applicant be allowed so that individual or company would be able to prepare
and present an application or proposal, public disclosure of all applications
or proposals considered and public disclosure of the contract awarded or
offered and accepted. See Cantor, 82 -004. In the instant situation, it is
Mr. Ellis F. Martzall
Page 6
clear that even if said contract had been allowed in excess of $300, the
contract was awarded durirg a special meeting at 9 o'clock in the morning.
There were no prior announcements and the open and public process was clearly
not employed. As such, we believe that there is also a violation of Section
3(c) of the State Ethics Act in this situation. See Sechrist, 86 -564. The
penalties for violating the State Ethics Act are as follows:
Section 9. Penalties.
(a) Any person: who violates the provisions of Section 3(a)
and (b) is guilty of a felony and dial l be fined not more
than $10,000 or imprisoned for not mo"c than five years,
or be both fined and imprisoned. 65 P.S. 409(a).
(b) Any person who violates the provisions of Section 4 is
guilty of a misdemeanor and shall be fined not more than
$1,000 or imprisoned for not more than one year, or be
both fined and imprisoned. 65 P.S. 409(b).
Finally, ti:: Ethics Act also provides as follows:
Section 9, Penalties.
(.) Any person who obtains financial gain from violating
any provision of this act, in addition to any other
penalty provided by law, shall pay into the State
Treasurey a sum of money equal to three times the
financial gain resulting from such violation. 65 P.S.
409(c).
the State Ethics Commission also has the power and authority to recommend
to appropriate law enforcement authorities, the prosecution of individuals who
are in violation of the Act or the dismissal of charges against individuals.
65 P.S. 407(11). The State Ethics Commission has also been permitted to offer
an individual who has received a financial gain in violation of the State
Ethics Act, the opportunity to divest themselves of the gain received. Upon
such divestiture, the Commission has the discretion of taking no further
action in the matter. See McCutcheon v. State Ethics Commission, 77 Pa.
Commw. Ct. 529, 466, A.2d 283, (1982T. In the instant situation, we believe
that this is an appropriate result. As such, we will offer you the
opportunity to divest yourself of the financial gain that you have obtained in
violation of the State Ethics Act. Upon the divestiture of this financial
gain, we will close our files in this matter and we will not impose the treble
Mr. Ellis F. Martzall
Page 7
damages provision and we will not recommend the matter to be pursued by any
other agency. The financial gain that you have received in violation of the
Act, in the instant situation, would be that amount of money you received in
excess of the statutory language. Clearly, the Second Class Township Code,
appears to allow a township supervisor to be interested in a contract up to
$300. Our review of the situation indicates that in all the yearc, except
1981, you received funds below that figure. However, in 1981, you received
from the township, $1,137.57. Subtracting the amount of funds from that
figure that were permitted to be received, i.e. $300, the financial gain
received by you to which you were not entitled was $837.57. We believe that
this amount of money and a 10% penalty should be returned to 'the governmental
body on which you served. The total to be returned to the township is
$921.32.
C. Conclusion: You violated Section 3(a) and 3(c) of the State Ethics Act
when you were a township supervisor and participated in a special meeting
during which your company was authorized to perform renovation work on a
township police building. The 'receipt of these funds in the township were
strictly prohibited by the Second Class Township Code and, as such, for a
financial gain that was not part of the compensation provided for by law. In
addition to the above, the award of this work was accomplished during a
special meeting at 9 o'clock in the morning and no open and public process was
used for the award of this contract. As such, we believe that a violation of
the State Ethics Act has occurred. We believe that you should refund to the
township the amount of money received in violation of the State Ethics Act
plus 10 %. This would equal the amount set forth above ($921.32). Payment of
this amount should be forwarded to the State Ethics Commission made payable to
West Cocalico Township. Upon the receipt of that payment by you, we will
close our files in this matter and take no further action. Failure to comply
with this order will result in our referral of this matter to appropriate law
enforcement authorities for further review and possible 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 may violate this confidentiality by
releasing, discussing or circulating this Order.
Mr. Ellis F. Martzall
Page 8
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,
„a. fefAi-t-cA.
G. Sieber Pancoast
Chairman
Mr. Ellis F. Martzall
R.D. #4 (Denver)
Reinholds, PA 17569
Re: Order No. 528, File No. 86 -021 -C
Dear Mr. Martzall:
EMS /na
cc: Puhlic Bi nder
STATE ETHICS COMMISSION
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
September 10, 1986
On September 8, 1986, the State Ethics Commission received your payment
for reimbursing West Cocalico Township as required by the above referenced
Order.
We have forwarded your check for the amount of $921.32 to the township.
This letter will be part of the Order and a public record as such.
Si ncerely,
Edward M. Seladones
Executi ve Di rector