HomeMy WebLinkAbout660 BrownMr. Larry B. Brown
506 West Chestnut Street
Lancaster, PA 17603
Re: 86 -115 -C
Dear Mr. Brown:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
ORDER NO. 660
DATE DECIDED: August 18. 1
DATE MAILED: September 22, 1988
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:
T. Allegation: That you, former employee of the City of Harrisburg,
violated Section 3(e) of the Ethics Act which prohibits a former
public official or public employee from representing 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,
in that within one week of resigning from the City's Office of
Minority Business Enterprise, you obtained contracts from the City for
c eaning and sealing abandoned city houses; and, that you violated
Faction 4(a) which requires that public employees file a statement o
financial interests with the governing authority of the political
subdivision by which he is employed no later than May 1 of each year
that he holds such a position and of the year after he leaves such a
position.
A. Finding :
1. You were employed by the City of Harrisburg in the Office of
Minority Business Enterprise as a Construction Specialist from
February 11, 1985 to December 2, 1985. As a public employee you were
subject to the provisions of the State Ethics Act.
2. £lformation disclosed that Office of Minority Business Enterprise
(OMBE) was created in October, 1984 by Executive Order of Harrisburg
Mayor Stephen Reed. OMBE was made a branch of the Department of
Cormunity Eind Economic Development.
Mr. Larry B. Brown
Page 2
a. OMBE received a five year federal grant, and staff
began working in March of 1985.
b. OMBE duties included certifying women and minority
businesses and assisting these enterprises in securing
contracts.
3. City of Harrisburg Department of Personnel provided a job
description for the position of Construction Specialist which
disclosed that the position is a combination of field and office
work to assist Minority Business Enterprises (MBE's) in becoming
highly competitive bidders and successful responders to
procurement processes.
a. Examples of Duties:
For properties to be rehabilitated, assist MBEs in
identifying by inspection and /or reading and
accurate interpretation of plans and
specifications, those deficiencies which will have
to be corrected.
Drafts detailed and accurate specifications to
correct deficiencies for MBEs.
Prepares realistic costs estimates to be used by
MBEs in bidding.
- Assist award winning MBEs in preparation of draw
schedules. Insures MBEs proposals rationale
construction management and payment schedules.
- Performs final walk through tours with all
interested parties at contract signing to insure a
total understanding of specifications.
- Monitors construction work in progress to insure
adherence to specifications. In the event work is
not in keeping with specifications advises MBEs on
issues and enforcement of Field Correction
Notices.
Inspects property to confirm satisfactory
completion of work; advises and insures that
requests for payment by MBEs are in accordance
with the draw schedule and items and conditions of
agreements executed.
;`r. Larry B. Brown
' ; tee 3
- Advises MBEs on preparation of change orders.
- For new construction perform all applicable skills
as required above for rehabilitation.
4. E1ana Morgan, Director of the Office of Minority Business
Enterprise, provided the following information:
a. One of your duties was to teach minority businesses to
become competitive bidders with regard to City
contracts.
b. You were
contracts
federally
programs.
c. Counselor
you would
to encourage minority firms to bid on city
and provided them with information regarding
funded rehabilitation and clean and rec1
Too was one of the minority business firms
have had to work with in your position.
d. She had no first hand knowledge of your spending
excessive time with Counselor Too bids, but staff
members did tell her that you were working on Counselor
Too bids.
e. You were friendly with Horace Morancie, Department of
Community Economic Development Executive Director, but
she had no knowledge of Morancie passing DCED estimates
of housing rehabilitation projects to you.
f. She believed that your conscientious approach to work
was the reason you spent extra time on Counselor Too
bids. She also believed that your expertise with the
rehabilitation program would enable you to figure out
approximately what the bid would be on any given
project. Your estimates would be based on your
experience and information concerning cost factors that
you may have gained from prior bid submissions.
g. No minority contractors complained to her in regards to
their receiving unequal treatment by you when receiving
assistance in preparing bids for city contracts.
5. The City of Harrisburg, through the Department of Community
Economic Development (DCED), provides grants for home repairs for
those in low to moderate income groups.
a. The neighborhood rehabilitation grants are obtained
through the federally funded Community Development
Block Grant program.
Mr. Larry B. Brown
Page 4
b.
c. Grants are provided on
$20,000.
6. The following procedures are followed by
grants for housing rehabilitation.
a. Homeowners submit applications.
eligibility requirements are then
intake interview.
Grants are made available to city residents whose
income does not exceed certain limits.
a sliding scale not to exceed
DCED when awarding
Applicants meeting
scheduled for an
b. Rehabilitation specialists prepare a work write -up of
repairs needed and an internal cost estimate.
c. The City DCED then advertises a list of properties to
be rehabilitated and requests that an itemized bid be
submitted for costs of repairs.
d. Bids submitted are compared to DCED's internal cost
estimate. The bid closest to the DCED estimate is
awarded the contract.
e. Rehabilitation contracts are signed between DCED and
the homeowner and the homeowner and contractor before
work begins.
f. All contracts contain a completion deadline once an
order to proceed is issued. If not completed by the
deadline, the contractor is penalized daily.
Payments are made to the contractor after an inspection
is made by a DCED rehabilitation specialist.
7. Records obtained from OMBE disclosed the following regarding
Counselor Too:
a. April 18, 1984 - Patricia Hoffman, Counselor Too
President, submitted a Product and Services Inventory
to OMBE identifying the firm as owned by minority group
members. The firm listed professional services as
services available. The form did not list construction
- rehabilitation services.
b. June 24, 1985 - Application for certification of Women
and Iinority Business Enterprise form noted the firm
was started in 1984 as a general contractor and
management consultant. Owners identified were Patricia
Hoffman with 40% of the stock and G.N. Miller with 7%
Mr. Larry B. Brown
Page 5
c. July 15, 1985 - Evaluation form recommending suspending
approval due to 53% of stock not accounted for, and
consistency of job titles and responsibilities.
d. August 14, 1985 - Evaluation form recommending
suspending approval pending clarification of stock
distribution.
e. August 29, 1985 - Stock transfer ledger received by
Linda Walker, OMBE from Patricia Hoffman, identifying
that in March, 1984 Hoffman purchased 200 shares for
$400.
f. November 14, 1985 - Evaluation from approving Counselor
Too as a minority business enterprise because 52% of
the stock held by minorities, remaining stock
apparently not distributed.
8. Pennsylvania Bureau of Corporation records disclose that
Counselor Too, Incorporated, 118 North 17th Street, Harrisburg,
Pennsylvania was incorporated on October 19, 1979 as a social
club and entertainment center. Two hundred shares of no par
value stock was issued. The lone incorporator was Ottis Nash.
9. DCED records disclose that twenty -five (25) neighborhood
rehabilitation grant contracts were entered into with Counselor
Too. Twenty of those contracts were entered into after you began
employment with Counselor Too. Those properties along with
contract amount, date of proceed order and completion date are as
follows:
Contract
Property Amount
320 S. 15th St. $12,110
414 Muench St. $14,675
1729 Catenation St. $13,145
of the stock. 53% of the stock was outstanding.
Officers identified were Patricia Hoffman, President
and Gary N. Miller, Treasurer.
Other stockholders identified as Gary Miller, Arlene
Prentius and D. Wright.
Attached was an undated document transferring ownership
of Counselor Too to Hoffman from Ottis Nash for a .sum
of $400.
Date of
Contract
12/15/85
12/6/85
12/9/85
Proceed
Order
11/12/85
12/17/85
12/17/85
Completion
9/8/86
9/3/86
:3/20/86
Mr. Larry B. Brown
Page 6
Property
1209 Bailey St.
1209 Carnation St.
1610 Wayne St.
87 N. 17th St.
1937 Mulberry St.
1154 Mulberry St.
2037 N. 4th St.
1808 Holly St.
2701 N. 6th St.
925 Grand St.
2215 N. 4th St.
1507 N. 6th St.
1929 Boas St.
2644 N. 5th St.
652 Emerald St.
2343 Logan St.
630 Harris St.
Contract
Amount
$23,275
$ 9,600
$ 9,235
$14,705
$ 8,885
$14,545
$10,840
$ 9,900
$ 7,075
$12,007
$11,835
$11,090
$14,985
$ 8,045
$10,800
$ 8,515
$ 9,235
Date of
Contract
12/10/85
12/12/85
12/12/85
12/13/85
12/16/85
12/30/85
12/31/85
1/15/86
1/21/86
1/23/86
1/29/86
1/30/86
2/6/86
7/30/86
8/1/86
2/24/86
Not executed
Proceed
Order
1/13/86
1/16/86
11/18/85
11/17/85
1/8/86
2/12/86
2/14/86
1/2/86
2/18/86
1/30/86
2/18/86
2/18/86
6/1/86
None
None
None
None
Completion
Incomplete
6/18/86
5/8/86
5/23/86
5/7/86
Terminated
8/6/86
8/18/86
8/6/86
Terminated
8/18/86
7/11/86
Incomplete
Incomplete
Incomplete
Incomplete
Incomplete
b. Review of DCED files for each of the above properties
confirmed that DCED estimates for rehabilitation costs
were completed while you were still employed as
Construction Specialist for OMBE.
c. Bid openings for the awarding of rehabilitation
contracts occurred on November 5, 1985, November 12,
1985, November 19, 1985 and November 21, 1985.
d. A review of all bids for the above listed period
disclosed that where Counselor Too was the successful
bidder, other bidders were significantly higher
Mr. Larry B. Brown
Page 7
usually from $1,000 to $9,000. In cases where
Counselor Too was not the low bidder C.T. bids were
significantly higher. Counselor Too was the only
contractor to submit bids lower than DCED estimates.
10. Information obtained from City of Harrisburg, Department of
Community and Economic Development regarding the property at 1154
Mulberry Street disclosed:
-a. April 22, 1985 - DCED estimated the costs to
rehabilitate at $11,530.
b. November 19, 1985 - bids for rehabilitation were
opened. Counselor Too was low bidder at $12,215. The
next lowest bid was $13,425. Counselor Too bid signed
by Patricia Hoffman.
c. December 30, 1985 - The contractor /homeowner
rehabilitation agreement was signed by you as Executive
Assistant for the contractor.
d. March 18, 1986 - Change orders were submitted
increasing the contract price to $14,545.00. You
signed the change order form for the contractor.
e. April 9, 1986 - you initialled receipt for stage
payment.
f. September 22, 1986 - the DCED terminated the Counselor
Too contract because of poor quality work and failure
to complete work in a timely manner.
11. DCED records regarding the rehabilitation of the property
located at 1209 Bailey Street disclosed:
a. August 22, 1985 - DCED estimated the rehabilitation
costs at $21,225.
b. November 5, 1985 - bids were opened. Counselor Too was
low bidder at $14,822. Other bids .varied between
26,965 and 29,760.
c. December 10, 1985 - Contractor /homeowner rehabilitation
agreement was signed by you as Executive Assistant for
Counselor Too.
d. February 14, 1986 - you received payment of $13,965 for
Counselor Too.
Mr. Larry B. Brown
Page 8
12. DCED records regarding the rehabilitation of property
located at 1709 Carnation Street disclosed:
a. March 27, 1985 - DCED completed estimates for
rehabilitation costs at $12,729.
b. October 17, 1985 - bids specifications were sent to
contractors.
c. November 5, 1985 - bids were opened. Counselor Too was
low bidder at $12,900. Other bids varied between
$13,505 to $15,714.
d. The contractor /homeowner agreement was signed on
December 12, 1985 by Patricia Hoffman for Counselor
Too.
13. DCED records regarding the rehabilitation of the property at
1729 Carnation Street disclosed:
a. January 16, 1985 - DCED estimated the rehabilitation
costs at $11,476. That figure was increased to $11,971
on October 23, 1985.
b. January 24, 1985 - Counselor submitted an estimate of
$13,530.
c. November 12, 1985 - Bid opening. Counselor Too was the
low bidder. Other bids were $14,385 and $-16,421.
d. Contractor /homeowner rehabilitation agreement was
signed by Larry Brown for Counselor Too.
14. DCED records regarding property at 1610 Wayne Street
disclosed:
a. February 14, 1985 - DCED estimated rehabilitation costs
at $9,559.
b. Bids were opened on November 12, 1985. Counselor Too
was low bidder at $9,235. Other bids were $9,515 to
$15,812.
15. DCED records disclosed the following relative to the
rehabilitation of the property at 87 N. 17th Street:
a. March 18, 1985 - DCED estimated rehabilitation costs
at $16,430.
Mr. Larry B. Brown
Page 9
b. October 8, 1985 - bids specifications sent to
contractors.
c. November 5, 1985 bid opening held. Counselor Too was
low bidder at $14,832. Bid changed to $21,995. Other
bids were $24,227 and $24,945.
d. December 13, 1985 - you signed the contractor /homeowner
agreement as Executive Assistant for Counselor Too.
February 14, 1986 - you received stage payment in an
amount of $5,882.
16. DCED records disclosed the following regarding the
rehabilitation of property at 2037 North Fourth Street:
a. On March 8, 1985 - DCED estimated rehabilitation costs
at $10,735.
b. November 19, 1985 - bid opening. Counselor Too low bid
at $9,880. Other bids were $12,210 and $13,490.
c. December 31, 1985 - you signed the contractor /homeowner
rehabilitation agreement.
17. DCED records confirmed the following regarding the
rehabilitation of property located at 925 Grand Street:
a. April 15, 1985 - DCED estimated rehabilitation costs at
$10,542.
b. November 19, 1985 - Bid opening held. Counselor Too
low bid at $10,185. Other bids ranged from $10,900 to
$13,300.
c. January 23, 1986 - You signed the contractor /homeowner
rehabilitation agreement as Executive Assistant.
18. DCED records confirmed the following regarding the
rehabilitation of property at 1937 Mulberry Street.
a. January 28, 1985 - DCED estimates rehabilitation costs
at $8,250.
b. November 12, 1985 - bid opening held. Counselor Too
low bid at $8,885. Other bids $9,741 and $9,965.
c. December 16, 1985 - Contractor /homeowner
rehabilitation agreement signed by Patricia Hoffman.
Mr. Larry B. Brown
Page 10
d. March 13, 1986 - You signed a change order increasing
the contract price by $2,300.
e. You signed for and received final payment.
19. DCED records disclosed the following relative to the
rehabilitation of the property located at 2215 North Fourth
Street:
a. November 18, 1985 - DCED estimates rehabilitation costs
at $14,738. April 17, 1985 - Original estimate was
$13,115.
b. November 21, 1985 bid opening held. Counselor Too
low bidder at $13,890. The other bids were $15,550 to
$17,239.
C. January 29, 1986 - You signed the contract /homeowner
rehabilitation agreement as Counselor Too Executive
Assistant.
d. April 21, 1986 - Change order submitted by Counselor
Too in an amount of $1,425.
e. May 12, 1986 - Change order submitted by Counselor Too
in an amount of $335.
20. DCED records disclosed the following regarding the
rehabilitation of property located at 1507 North Sixth Street:
a. March 6, 1985 - DCED estimates repair costs at $10,468.
b. November 18, 1985 - DCED revises repair estimates to
$12,562.
c. March 26, 1985 - Counselor submits bid of $10,890.00.
21. DCED records disclosed the following information relative to
the rehabilitation of property located at 414 Muench Street:
a. December 23, 1984 - DCED estimates rehabilitation costs
at $11,938.
b. November 1, 1985 - DCED increase estimate to $14,325.
c. September 27, 1985 - bid specifications mailed to
contractors.
Mr. Larry B. B.'own
Page 11
d. November 5, 1985 - bid opening. Counselor Too low
bidder at $14,200. Other bidders were $17,489 and
$17,940. Counselor Too bid was not dated.
e. December 6, 1985 - You signed contractor /homeowner
rehabilitation agreement as Executive Assistant for
Counselor Too.
f. March 18, 1986 - You signed change order No. 1
increasing costs by $430.00.
g. May 13, 1986 - Change order No. 2 increasing costs by
$45.00.
22. DCED records disclosed the following regarding the
rehabilitation of property located at 1808 Holly Street.
a. March 27, 1985 - DCED estimates rehabilitation costs at
$8,330.
b. November 12, 1985 - bid opening. Counselor Too low bid
of $9,715. Other bids ranged from $9,950 to $12,644.
c. January 15, 1986 - you signed the contractor /homeowner
rehabilitation agreement as Counselor Too Executive
Assistant.
d. April 9, 1986 - you signed a change order increasing
costs by $185.00.
e. April 18, 1986 - you received stage payment of $4,320
23. DCED records disclosed the following relative to the
rehabilitation of property at 2701 North Sixth Street:
a. DCED estimates rehabilitation costs at $15,217.00
b. November 19, 1985 - bid opening. Counselor Too low bid
of $17,285. Other bids ranged from $17,968 to $25,160.
c. January 21, 1986 - you signed the contractor /homeowner
rehabilitation agreement as Counselor Too Executive
Assistant.
d. November 19, 1985 - bid opening. Counselor Too awarded
the bid. Other bids ranged from $12,200 to $15,956.
e. January 30, 1986 - You signed the Contractor /he_eowner
rehabilitation agreement as Executive Assist:nt for
Counselor Too.
Mr. Larry B. Brown
Page 12
24. DCED records disclosed the following regarding the
rehabilitation of the property at 1929 Boas Street:
a. March 18, 1985 - DCED estimates rehabilitation costs at
$17,922.
b. June 12, 1985 - Counselor Too submits bid of
$16,280.00.
19, 1985 - bid opening. Counselor Too awarded
Other bids ranged from $19,835 to $24,927.
31, 1986 - Counselor Too revises bid to
$14,985.00.
e. February 6, 1986 - You signed the contractor /homeowner
rehabilitation agreement as Executive Assistant for
Counselor Too.
-c. November
the bid.
d. January
25. DCED records disclosed the following regarding the
rehabilitation of property located at 320 South 15th Street:
a. March 22, 1985 - DCED estimates rehabilitation costs as
$14,955.
b. August 26, 1985 - DCED costs estimate revised to
$17,944.
c. March 29, 1985 - Counselor Too submits bid of
$11,560.00 bid unsigned.
d. November 12, 1985 - Bid opening. Counselor Too low
bidder. Other bids were $14,863 and $16,390.
e. December 4, 1985 - Contracts signed.
Contractor /homeowner agreement signed by Patricia
Hoffman.
f. March 20, 1986 - You received stage payment in an
amount of $4,600.
26. DCED records disclose the following regarding the
rehabilitation of property located at 2644 North Fifth Street:
a. April 16, 1985 - DCED estimates rehabilitation cost at
$10,185.
b. April 17, 1985 - bid specifications submitted by
contractors. Counselor Too - $10,800. Others $10,850
and $11,559.
Mr. Larry B. Brown
Page 13
c. November 12, 1985 - bid awarded to Counselor Too.
d. August 7, 1986 - rehabilitation agreement signed by
Patricia Hoffman.
27. An OMBE construction specialist advised as follows:
a. He worked as a construction specialist during the
period in 1985 when Counselor Too was awarded most of
the city contracts.
b. He never observed you favoring Counselor Too in regard
to city contracts. Prior to you terminating city
employment, he accompanied you to the offices of
Counselor Too where you then had a closed door meeting
with Patricia Hoffman for approximately 20 to 30
minutes. You never explained the purpose of that
meeting.
28. DCED employee associated with the Community Development
Block Grant Program advised as follows:
a. The City maintained a list of qualified bidders for all
contracts awarded. These bidders also had to meet
certain minimum criteria. Counselor Too was not on the
list of qualified bidders and should not have been
permitted to bid on any projects. She was concerned
because she had no back -up information available on
Counselor Too.
b. The first round of bidding for properties to be
rehabilitated occurred in the latter part of 1985,
probably November or December. Counselor Too was one
of the firms bidding, even though they were not on the
list of approved bidders. DCED Director, Horace
Morancie, was informed of that fact, however, Morancie
said he would take care of the matter.
c. During this first bid opening, Counselor Too was the
low bidder on most projects. None of their bids were
itemized which should have eliminated the bids from
consideration. Instead, Horace Morancie took the bid
sheets and returned them to Counselor Too. It was
believed that Morancie gave Counselor Too twenty -four
hours to itemize the bids. This was never done for any
of the other bidders. The bid simply would have not
been considered.
Mr. Larry B. Brown
Page 14
d. During that time, she went to your office in the Office
of Minority Business, to discuss something about bid
procedures. At that time, she observed that you were
itemizing Counselor Too bids. She told you if you were
submitting bids for Counselor Too, not to use pencil.
e. Subsequently, she observed you going through project
files which were located between the DCED and OMBE
offices. Information contained in those files included
DCED's estimates of costs to repair /rehab homes.
Knowledge of DCED's estimates would be of great help to
contractors wanting to obtain city projects.
f. Counselor Too was the low bidder on most rehabilitation
projects awarded. In many cases, Counselor Too's bids
were very close to DCED estimates. Counselor Too
consistently failed to itemize or correctly add its
estimates, which should have disqualified the bid.
Horace Morancie would never disqualify Counselor Too.
g. You and Morancie had frequent meetings, usually in
private. Some of these meetings included Patricia
Hoffman and Gary Miller from Counselor Too.
29. A secretary in the DCED advised as follows:
a. During the fall of 1985, while still a city employee,
you increased your contact with Horace Morancie, and
you were a frequent visitor in Morancie's office.
b. Morancie did not normally meet with other contractors,
but his office was frequently visited by Patricia
Hoffman and Gary Miller of Counselor Too.
c. In the fall of 1985, she opened mail addressed to
Morancie from Caribbean Travel, a New York City based
travel agency. A bill was contained for airline
tickets to Jamaica for Patricia Hoffman and Gary
Miller.
d. There were other travel related bills which included
literature for Morancie, Hoffman, Miller and you to
travel to Trinidad. Morancie did travel to Trinidad
for two to three weeks in February, 1986.
30. City of Harrisburg, Department of Personnel records disclose
that you filed a Statement of Financial Interests on April 26,
1985 for the 1984 calendar year.
Mr., Larry B. Brown
Page 15
a. Records failed to disclose any filing for you for the
1985 calendar year.
31. You provided the following information to a State Ethics
Commission investigator:
a. You were employed by the Office of Minority Business
Enterprise as a construction specialist from February
to December, 1985.
b. Within one week of leaving city employment, you began
working for Counselor Too as an Executive Assistant a;:
the same salary you were paid while employed by the
City.
c. Your duties as a construction specialist with the .;ity
were to help minority contractors bid on city
contracts.
d. You helped Counselor Too and other minority contractors
complete city documents, and you tried to teach them
the bidding process.
e. You denied ever completing bid sheets for Counselor Too
while a city employee. You also denied any knowledge
of DCED Executive Director, Horace Morancie giving
Counselor Too additional time to complete a bid sheet
and then passing the bid sheets to you for completion.
f. While still a city employee, you admitted to having
closed door conversations with Morancie and Patricia
Hoffman of Counselor Too. The substance of these
conversations was the possibility of you obtaining
employment with Counselor Too. You eventually took the
job with Counselor Too at the same rate of pay and felt
it was a lateral move. Your duties as Executive
Assistant were to supervise the various rehabilitation
projects.
g.
You admit that Counselor Too initially was not on
approved bidders lists approved by the City. You
stated that this was not a particular problem for any
minority firm.
h. You denied participating in any bid rigging as a City
of Harrisburg employee or while employed by Counselor
Too.
Mr. Larry B. Brown
Page 16
i. You specifically denied as a City employee going
through records of city inspectors regarding individual
property rehabilitation estimates and bids. You denied
passing confidential information during closed door
meetings to Hoffman and Morancie.
The confidential records, i.e. rehabilitation costs
estimates and bids, were kept in an area between the
DCED office and OMBE office and were easily accessible
to anyone working in either office. On most mornings,
the inspection reports were laying on an open table for
use by city employees.
k. In June, 1986, you travelled to Montego Bay, Jamaica to
vacation at a villa owned by Patricia Hoffman and Gary
Miller. You were accompanied by DCED Executive
Director Horace Morancie and Janet McLeod. McLeod was
to do some consulting work for Counselor Too, but in
reality, she was a girlfriend of Morancie. He went on
other trips on 1986.
1. At about this time, Morancie seemed to be in control of
Counselor Too. You observed Morancie in the Counselor
Too Offices going through Counselor Too records. You
asked what was going on, but was told it was none of
your business. You also learned that Morancie was
going to get a $50,000 consulting contract from
Counselor Too for work on a planned housing project in
Jamaica. You observed the contract but are unaware if
Morancie was ever paid.
m. Prior to travelling on trips to Jamaica in 1986, you
were given sealed envelopes to deliver to either
Hoffman or Miller by Lethie Miller and Aileen Stanton.
You delivered the contents of these envelopes.
j
B. Discussion: As a construction specialist in the Office of
Minority Business Enterprise (OMBE) in the Department of
Community and Economic Development (DCED) in the City of
Harrisburg, you were a public employee and as such, your conduct
is subject to the provisions of the Ethics Act. 65 P.S. §402; 51
Pa. Code §1.1. Upon the termination of your service on December
2, 1985, you became a former public employee as that term is
defined under the Ethics Act. 65 P.S. 5402.
Section 3(e) of the Ethics Act provides:
Mr. Larry B. Brow
Page 17
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.
° The intent of the above quoted provision of law generally is
that during the term of a person's public employment he must act
consistently with the public trust and upon departure from the
public sector, that individual should not be allowed to utilize
his association with the public sector, officials or employees to
secure for himself or a new employer, treatment or benefits that
may be obtainable only because of his association with his former
public employer. See Anderson, Opinion 83 -014; Zwikl, Opinion
85 -004.
In this case, your governmental body would be DCED which
would include OMBE.
In respect to the one year representation this Commission
has promulgated regulations to 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 employee.
51 Pa. Code X1.1.
In order to determine whether your conduct has transgressed
the provisions of Section 3(e) quoted above, it is necessary to
highlight the facts as stated above. After OMBE was created in
October, 1984, as part of DCED, your function as a construction
specialist was to assist minority businesses in becoming
competitive bidders and successful responders in the procurement
process. After OMBE received a five year federal grant, those
monies were used to provide rehabilitation grants for home
repairs as to low and moderate income groups. In this process, a
homeowner would submit an application and if the homeowner met
the eligibility requirements and the application was approved,
the rehab specialists would do a work -up as to the cost of the
Mr. Larry B. Brown
Page 18
repairs and arrive at an internal cost estimate. Thereafter DCED
would advertise the properties and contractors could bid on them
and the contractor who was closest to the DCED internal estimate
would be awarded the contract.
The evidence in the instant matter indicates that you spent
an inordinate amount of time with Counselor Too (CT), a firm
which received 25 contracts under this program, 20 of which were
awarded immediately after you left OMBE and assumed employment
with CT. You also spent time with Horace Morancie, who was
Executive Director of DCED and who subsequently received a
$50,000 consulting contract with CT. CT was originally
incorporated as a social club and entertainment center. An
April, 1984 submission by CT reflects that it would provide
professional services but not construction /rehabilitation
services. The foregoing was conveniently changed in May of 1985
when an application reflects CT as a general contractor and
management consultant. The fact that CT obtained 25 contracts,
20 of which were awarded immediately after you began employment
with them, is not within the realm of factual coincidence. A
review of the bids awarded to CT reflects that all other
competitive contractors were much higher than the CT bid.
Indeed, at times CT bids were even below the internal DCED
estimates. It was the only contractor to underbid the estimates.
This establishes that CT had inside confidential information as
to what the internal cost estimate was; they used this
confidential information to insure that they would be awarded
these bids. In this regard, a DCED employee advises that while
still a public employee you were observed going through the
files which contained the internal cost estimates. That employee
also noted that CT was not even on the list of qualified bidders
nor did it even itemize its bids, although you were seen
itemizing the bids for them during your working hours as a public
employee. It is clear that you used public employment to obtain
inside confidential information and gave that information to your
future employer as a means of insuring that they would be awarded
a substantial number of bids and derivatively that they would
hire you and continue your employment with them. Thus, even
prior to the termination of your service, it is obvious that you
were in fact, representing your own private personal interest and
the interest of your future employer CT, in violation of the
public trust. This raises serious questions under Section 3(b)
of the State Ethics Act which prohibits a public employee from
receiving anything of value including a promise of future
employment based upon the understanding that his official action
would be influenced thereby.
Mr. Larry B. Brown
Page 19
When you were hired by CT, which received 20 contracts right
after you began employment, you signed numerous agreements as
Executive Assistant for CT which were submitted to DCED. You
signed such agreements on behalf of CT with DCED as to the
following properties: 1154 Mulberry Street, 1209 Bally Street,
87 North 17 Street, 2037 North 4th Street, 925 Grant Street, 2215
North 4th Street, 414 Muench Street, 1808 Holly Street, 2701
North 6th Street and 1929 Boas Street. In addition, you signed a
changed order for the 1937 Mulberry Street property.
Under these facts and circumstances, you violated Section
3(e) by your conduct of representing your new employer CT before
your former governmental body. You used public office and the
confidential inside information consisting of internal costs
estimates and funnelled that information to CT as a means of
securing your employment and as a means of insuring that CT would
get the bids on these projects which would perpetuate your
employment with CT. Immediately, upon changing your employment,
you then signed numerous agreements on behalf of your new
employer and submitted them to your former governmental body;
such actions violate Section 3(e) of the Ethics Act.
Lastly, your conduct and that of others in this case leads
this Commission to believe that violations of other laws may have
occurred; consequently, this Commission will forward this matter
to the appropriate law enforcement authority with a strong
recommendation that they carefully review this matter to
determine whether there is a basis for further civil or criminal
action against you and other individuals.
As to the matter of the Statement of Financial Interests,
Section 4(a) of the Ethics Act provides:
Section 4. Statement of financial interests
required to be filed.
(a) Each public employee employed by the
Commonwealth shall file a statement of
financial interests for the preceding
calendar year with the department, agency or
bureau in which he is employed no later than
May 1, of each year that he holds such a
position and of the year after he leaves such
a position. Any other public employee shall
file a statement of financial interests with
the governing authority of the political
subdivision by which he is employed no later
than May 1 of each year that he holds such a
position and of the year after he leaves such
a position. 65 P.S. S404(a).
Jr. Larry B. Brown
Page 20
Since you terminated your governmental service in December
of 1985, you became a former public employee at that time and
were required to file a Statement of Financial Interests after
your termination of service for the calendar year 1985. The
Department of Personnel records in the City of Harrisburg
reflects that although you filed your calendar year 1984
Statement of Financial Interests, you did not file for the 1985
calendar year. Your failure to file the 1985 Statement of
Financial Interests violated Section 4(a) of the Ethics Act.
You_are hereby directed to file said statement within 30 days of
the date of this order.
C. Conclusion and Order:
1. As a Construction Specialist in the Office of Minority
Business Enterprise in the Department of Community and Economic
Development in the City of Harrisburg, you were a public employee
and upon termination of your service, you became a former public
employee subject to Section 3(e) of the Ethics Act.
2. You violated Section 3(e) of the Ethics Ac;=. when you entered
ii,to agreements within one year after the termination of service
on behalf of your new employer with your former governmental
body.
3. You violated Section 4(a) of the Ethics Act when you failed
to file a Statement of Financial Interests for the calendar year
1985.
4. You are hereby directed to file, within 30 days of the date
of this Order, a Statement of Financial Interests with your
former governmental body, the City of Harrisburg, for the
calendar year 1985.
5. This matter will be referred to the appropriate law
enforcement authority with this Commission's strong
recommendation that this matter be reviewed in order to determine
whether any criminal or civil actions should be initiated and
regarding any other laws that may have been violated.
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,
Mr. Larry B. Brown
Page 21
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. 5409(e).
By the Commission,
Joseph W. Marshall, III
Chairman