HomeMy WebLinkAbout548 SantoMr. James J. Santo
45 South Fairview Street
Wind Gap, PA 18091
Re: 86 -062 -C
Dear Mr. Santo:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 548
DECIDED N 3 0 1987
MAILE r nA
The Ethics Commission has reviewed the allegation(s) that you have
violated the Ethics Act, Act 1978 -170. The nature of the alleged violation(s)
is as follows:
I. Allegation: That you, President of Wind Gap Borough Council, 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 and Section 3(c) which prohibits a public
official, public employee or 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. from entering into any contract valued at $500 or more
with a governmental body unless the contract has been awarded through an open
and public process, in that you participated in the purchase of a computer for
the borough from a company which employes you.
A. Findings:
1. You served as a Councilrnember in Wind Gap Borough from January 1984 to May
1986 when you resigned. You also were council president from January 1986 to
May 1986, the date of your resignation. You, therefore, are subject to the
requirements of the State Ethics Act.
2. Minutes of the meetings of Wind Gap Borough Councilmembers disclose that
during a meeting of January 6, 1986, the prucedures used to purchase a
computer for the borough were questioned.
a. Councilmen Richard Cimakasky, as a private citizen, advised that the
computer was purchased by the borough during December 1985 but that
no discussion of it occurred at any borough meetings.
Mr. .lames J. Santo
Page 2
b. Mr. Cimakasky questioned whether or not the computer should have been
placed up for bid.
c. He mentioned that the State Ethics Act requires any purchase by the
borough over $500 should be put out fcr hid.
Minutes indicated that Solicitor David Ceraul would check into
whether or not bids should have been t,btained on the computer and
report back to course],
3. Solicitor Ceraul provided an oral opinio; regarding the purchase of the
computer. H.: provided the following information:
et. There was no financial gain by Santo. Santo was prohibited by
Hewlett- Packard regulations from selling products of his employer.
Ceraul was aware that Santo is employed in service and repair duties
for Hewlett - Packard.
b. Ceraul found that the only gain involved in the purchase of the
computer by Wind Gap Borough was that the borough was able to
purchase a computer that was a year and a half old for half of the
original cost.
c. Ceraul decided that the statutory limit of such a purchase under the
Wind Gap Code limit of $4,000.00 lends further credence to the
legality of this purchase.
4. By letter of April 14, 1986, you denied that the personal computer, which
was purchased by Wind Gap Borough during December 1985, was purchased from
your employer, the Hewlett- Packard Company.
a, You stated that the computer was personally owned by Mr. Jack
Jackloski.
b. You related that Mr. Jackloski was selling the computer and
acting as his own agent.
c,. You advised that the list price in the 1985 Hewlett - Packard
Catalog for this computer was $5,495.00
d. You stated that you arranged to purchase the computer for the
borough from Mr. Jackloski for $2,700.00.
Mr. James J. Santo
Page 3
5. Records of Wind Gap Borough reflect that a payment of $2,700.00 was made
to Mr. Jack Jackloski on December 17, 1985, for the purchase of a computer.
a. Records further indicate that a Customer Support Service
Agreement between Wind Gap Borough and Hewlett- Packard Company,
Valley Forge, Pennsylvania, was agreed to on June 2, 1986.
b. The item to be serviced was a touch screen and a 150 MB Winchester
with a 3.5 clutch drive.
c. The charge for the service was listed as $30.00 per month.
6. Mr. Jack Jackloski, Senior Customer Engineer, Hewlett- Packard Company,
advised that he became aware that Mr. Santo was trying to purchase a computer
for the Borough of Wind Gap.
a. Through conversation with Santo, Jackloski learned that Santo
was not able to use his Hewlett- Packard discount because
purchase of such a computer would not be for his personal use or
for the use of his family.
b. Jackloski related that at this time, he was interested in
selling a personally -owned computer so that he could update his
system through the purchase of a larger computer.
c. Jackloski related that he had originally purchased this computer
for $3,200.00 and that he had it for one year.
d. Jackloski stated that he had a one year warranty on this
computer which he never had to use.
e. Jackloski related that after selling the computer to Wind Gap
Borough, he purchased a Vectra system for his own personal use.
7. With regard to the Hewlett- Packard service contract concerning the Wind
Gap computer, Jackloski advised that Customer Engineer Warren DeWitt, who
works out of the Allentown Stocking Office, would normally be the individual
who would service the computer at Wind Gap Borough.
a. Mr. Jackloski related that he and Mr. Santo were both Seniors
Customer Engineers and, as such, were trained and designated to do
repair work on product -type 02 equipment.
Mr. James J. Santo
Page 4
b. Jackloski stated that Mr. DeWitt was trained to do repair work on
product -type 06 equipment and, therefore, would be called if any
repair work under warranty was required at Wind Gap Borough. He
emphasized that DeWitt received assignments as a Customer Engineer.
c. Jackloski related that any assignments to service the Wind Gap
Borough computer would be made from the Hewlett- Packard Valley
Forge Office. (In accordance with a computerized selection system).
d. Jackloski related that in the event that Mr. DeWitt or other customer
engineers in the Allentown Stocking Office were not available to work
on the computer at Wind Gap Borough, there is a possibility that Mr.
Santo would be assigned to do repair work at this location.
e. Jackloski related that should Mr. Santo have to answer a request
for service at the Wind Gap Borough office, he would be at a
disadvantage but would be able to do the work after some
preparation and review of a manual regarding the Wind Gap computer.
f. Jackloski emphasized that all payments for a service contract by
Wind Gap Borough would be made directly to the Hewlett- Packard
Valley Forge Office, and that in no instance would Mr. Santo be
paid directly for any service call that he may be required to
make.
8. You confirmed that all discussions concerning the purchase of the computer
from Mr. Jackloski were held at borough council work sessions only.
9. You stated that the discussions began sometime during June 1985 and
resulted in all seven borough councilmembers agreeing on the purchase of the
computer.
10. You stated that with your business expertise-in computers, you are able
to set up the computer on your own time to the benefit of the borough's
interests.
11„ You confirmed that no open and public process was utilized to purchase
this computer.
12. You emphasized that the purchase of the computer was made from a private
individual, Mr. Jack Jackloski and not your employer the Hewlett- Packard
Company.
Mr. James J. Santo
Page 5
13. You stated that an oral opinion was received from the borough solicitor,
that if the purchase of the computer was not over $4,000.00, there was no
requirement to place the computer up for bid.
B. Discussion: As an elected borough councilmember in Windgap, Pennsylvania,
you are clearly 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 thereof.
Dornalakes, 85 -010. In the instant situation, we must review your conduct
within the purview of Sections 3(a) and 3(c) of the State. Ethics Act.
Generally, Section 3(a) of the 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 provision of law, no public official, including an
elected borough councilman may use his public position to obtain a financial
gain for either themselves, a member of their immediate family, or a business
with which they are associated. The Act further defines business with which
one is associated as follows:
In the instant situation, the evidence establishes that you, as an
individual, received no financial gain from the purchase of the computer by
Windgap Borough. Additionally, no member of your immediate family was
involved in the situation. While a computer that is manufactured by the
company with which you are employed was purchased by Windyap Borough, that
purchase was transacted with a private individual. That individual does, in
fact, work for the company by which you are employed. He was the private
owner of this computer system. As such, your employer, the company with which
you are associated, received no funds from this transaction. All borough
funds were received by the private individual. You did become aware of the
availability of this computer through your employment, however, because there
was no financial gain obtained by the business with which you are associated,
we do believe and find that there was no violation of Section 3(a) of the
State Ethics Act.
Mr. James J. Santo
Page 6
In relation to Section 403(c) of the State Ethics Act, we must similarly
find that because there was no contract between you or a business in which you
are a director, officer, owner or with which a member of your immediate family
member was so associated, Section 3(c) of the State Ethics Act would not be
applicable. As such, we can find no violation of that provision of law.
We do note that in relation to the borouh`s transaction, in relation to
this computer, a service agreement was entered into between the borough and
your business. This agreement provided that the business with which you are
associated, Hewlett- Packard, would perform_certain services on an as needed
basis relating to the repair of the computer. Of course, l ewlett- Packard
would receive a financial gain for this service. That service agreement was
under the $500 limit set forth in Section 3(c) and, therefore, there would be
no violation of that provision of law. Additionally, we note that the
evidence does not indicate whether this service agreement was transacted
through a vote or participation of borough council or whether such was done
administratively through another borough employee. Because of this situation,
and because that there is no evidence to indicate that you have used your
position to obtain any financial gain for your company, we find no violation
of the State Ethics Act.
You are, however, advised that you should be cognizant of the provisions
of the State Ethics Act and generally, this Commission has, in a number of
cases in the past, determined that a public official must abstain from
participating in any.matter that relates to a member of his immediate family
or a business with which he is associated. While your abstention would not
have been required in the,instant situation regarding the purchase of the
computer system from the private individual, your abstention may have been
required if the borough was tranacting any business with your employer.
Additionally, we note that many of the questions that have been raised in this
instant situation, were raised as a r•esrilt of the fact that all of the
transactions in the instant situation were conducted during private work
sessions of the borough council..-As a result of these private sessions and
as a result of the fact that the borough had purchased a computer manufactured
by the business with which you were associated, substantial questions of
conflict of interests were raised. . These questions could have been alleviated
by simply disclosing the facts as they existed. Had'such disclosures been
made from the outset, the time and effort expended in relation to the instant
matter could have been completely eliminated. In the future, you are advised
to be cognizant that the actions of public officials may create certain
perceptions with the public that they are elected to serve. You must be aware
of these perceptions and act in accordance therewith. As an elected official
you are responsible to the public and should make appropriate disclosures in
order to avoid any potential conflicts of interests.
Mr. James J. Santo
Page 7
C. Conclusion: You did not violate the State Ethics Act when the borough on
which you serve, as a councilmember, purchased a computer manufactured by the
company that employes you. This computer was purchased by the borough from a
private individual, rather than from your company and as a result, the company
with which you are associated received no financial gain. You are advised
that in the future you should be more aware of the public's perception of such
situations and the appropriate dislosures should be made in similar
situations.
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).
By the Commission,
G. Sieber Pancoast
Chairman