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HomeMy WebLinkAbout666-R StartzelMr. Ronald F. Startzel c/o J. Jay Cooper, Esquire Goldberg, Katzman & Shipman, P.C. 319 Market Street P.O. Box 1268 Harrisburg, PA 17108 -1268 Re: 87 -069 -C Dear Mr. Startzel: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION ORDER NO. 666 -R DATE DECIDED: April 19, 1989 DATE MAILED: April 28. 1989 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: I. Allegation: That you, a former Mt. Carmel Township Supervisor, violated the following provision(s) of the State Ethics Act (Act 170 of 1978), when you received compensation not provided for by law in the form of "administrative services pay" from the Township Summer Food Program fund, landfill fund and HUD fund. 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. Code S403(a). A. Findings: 1. You served as a Mt. Carmel Township Supervisor from 1976 until November, 1985 when you voluntarily resigned. a. You also served as Chairman of the Board of Supervisors. Mr. Ronald F. Startzel Page 2 2. Records disclose that beginning in 1980 and continuing through 1985, Mt. Carmel Township participated in a Summer Food Service Program for children which was administered through the Pennsylvania Department of Education. a. This grant program provided funds to qualified sponsors to ensure that during school vacations, children would be able to receive quality meals. b. Grants were provided through the U.S. Department of Agriculture and the Pennsylvania Department of Education. c. Organizations qualified to sponsor the summer program are limited to public or private non - profit school food authorities, residential summer camps and state, local municipal or county government entities. d. Sponsors receive federal funds based on the number of meals served. Reimbursement rates have been established to reflect costs of preparing and serving, and administration costs. The number of eligible meals served multiplied by the appropriate reimbursement rate will be the maximum amount a sponsor may receive for either its administrative or operating costs. For administrative costs, a sponsor will receive the lesser of (1) actual administrative costs; (2) the amount units approved administrative budget; or (3) the amount provided by the rates. For operating costs, the sponsor will receive the lesser of actual operating costs or the amount provided by the rates. e. You signed agreements between the Department of Education and as Chairman of the Board of Supervisors. The agreement provides in part: (i) No Member or Delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this Agreement or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this Agreement if made with a corporation for its general benefit. 3. You provided the following information through your attorney regarding the agreements between the Department of Education and the township: a. You signed the applicable agreements. Mr. Ronald F. Startzel Page 3 b. At the time you signed the agreements, you had no specific knowledge as to the existence of the language referred to in Finding 2(e)(i). 4. Mt. Carmel records disclose that you were paid the following amounts from the Township's Summer Food_ account: a. 1980. Date Date b. 1981. c. 1982. Date d. 1983. July 7, 1980 August 6, 1980 August 6, 1980 September 12, 1980 September 12, 1980 July 30, 1982 August 30, 1982 September 17, 1982 Date August 3, 1983 September 19, 1983 September 19, 1983 Amount $123.76 60.00 20.40 Amount 16.84 66.52 $287.52 Amount $ 33.00 115.14 67.00 $215.14 Check No. Check No. Date Amount Check No. July 3, 1981 $118.00 11 August 13, 1981 122.00 30 October 10, 1981 100.00 48 $340.00 Amount Check No. $ 91.63 16 -82 82.59 26 -82 61.42 37 -82 $235.64 Check No. 13 -83 32 -83 33 -83 Mr. Ronald F. Startzel Page 4 e. 1984. Date f. 1985. July 12, 1984 August 6, 1984 August 6, 1984 October 15, 1984 October 15, 1984 Date July 29, 1985 August 23, 1985 Amount $ 85.00 85.00 60.00 56.90 30.14 $317.04 Amount $200.00 100.00 $300.00 Check No. 13 -84 27 -84 26 -84 44 -84 46 -84 Check No. 17 -85 32 -85 (Three hundred ninety -six dollars, and eighty -five cents ($396.85) was reimbursement for out -of- pocket expenses and not compensation). 5. Leonard Corona, former Mt. Carmel Township Supervisor, and Secretary /Treasurer through 1985 advised as follows: a. He performed bookkeeping services and also shared some administrative duties with you. He organized some of the program and did quite a bit of paperwork. You prepared the daily menu. b. No record or log of hours worked was maintained but he would inform you of his hours worked, and you would make a determination of the amount to be paid to him. c. Since you were a school teacher and had the summer off, you would write the checks for the program. Funds were made available through the Pennsylvania Department of Education as they were completed in this program. d. He had no knowledge of whether or not the township auditors ever approved compensation for the supervisors in regard to this program. 6. You provided the following regarding the statements Leonard Corona in relation to the Summer Food Program: a. You performed the bulk of the administrative made by services. Mr. Ronald F. Startzel Page 5 b. You had no knowledge of Corona keeping a record of his hours worked. Corona would submit a request for payment which would be acted upon by you as Program Administrator. c. You wrote the checks for the program. d. You did not participate in the program solely because you had the summers off. You got involved in the program because the program had to be properly administered, for which the township was responsible, and because you wanted to see that the residents of the township received the benefits of the program to the fullest extent possible. e. You performed substantial services relating to the Summer Food Program, namely that: you prepared the applications for the Department of Education for participation in the Program, you initiated the Program by finding the place to run the Program, by hiring the people to run the Program and by obtaining the equipment to run the Program. You also saw that menu items were properly ordered and delivered, and you checked on the Program on a daily basis by stopping in during hours of operation. Additionally, on numerous occasions you drove to Shamokin and other places to pick up fruit, meat and bread, etc., for the Program. Additionally, you were the person who kept daily records of the number of meals prepared and served, and the persons who compiled weekly records to submit to the Department of Education. You prepared monthly reports to the Department of Education, which you typed and which reports outlined the number of people in attendance, the number of meals served, and the number of reimbursements to which the township was entitled. Finally, you wrote every check for the program, balanced the checkbook and met with inspectors from the Department of Education and the Department of Health. f. A portion of the payments made to you from the food program fund were reimbursement of expenses such as mileage and not compensation. 7. Mt. Carmel Township records disclose that in 1981, the township applied for a grant from the Department of }lousing and Urban Development (HUD) under Title I of the U.S. Housing and Community Development Act of 1977. a. The township received federal funds from July 1, 1981 to July 5, 1985. b. The funds were received in the form of a Community Development Block Grant (CDBG) No. B- 81 -DN -42 -0045. Mr. Ronald F. Startzel Page 6 c. The township entered into agreements with SEDA- Council of Governments and the Northumberland County Redevelopment Authority to provide assistance in the administration of the grant funds. 8. Section 11 of the Grant Agreement between HUD and Mt. Carmel Township provided as follows: a. Interest of Members, Officers, or Employees of Grantee, Members of Local Governing Body, or Other Public Officials. No member, office or employee of the Grantee, or its designees or agents, no member of the governing body of the locality in which the program is situated, and no other public official of such locality or localities who exercises any functions or responsibilities with respect to the program during his tenure or for one year thereafter, shall have any interest, direct or indirect, in any contract or subcontract, or the proceeds thereof, for work to be performed in connection with the program assisted under the Agreement. The Grantee shall incorporate, or cause to be incorporated, in all such contracts or subcontracts a provision prohibiting such interest pursuant to the purposes of this section. 9. You provided the following through your counsel in regards to Section 11 of the Grant Agreement: a. You do not agree that your receipt of compensation for administering the Program necessarily violates that provision. At the time, you received payment from the Program, you had no idea that your receipt of compensation or reimbursement of expenses could be interpreted as a violation of the agreement. 10. Township records disclose that you were paid as follows for services performed in relation to the HUD CBDG Program: a. Invoice submitted under letterhead of Housing Rehabilitation Associates, 71 Main Street, Strong, Pennsylvania, which address is your home address. The invoice bore your signature above a typed signature block bearing your name and requested payment for administrative costs for the period July 1, 1981 to July 5, 1985 for CDBG No. B- 81 -DN -42 -0045 in an amount of $3,000. Services rendered included: Program administration, secretarial, bookkeeping and accounting and miscellaneous. The invoice was marked paid HUD check No. 373 dated July 5, 1985. Mr. Ronald F. Startzel Page 7 b. Mt. Carmel Township Community Development Program. Check No. 0373, dated July 5, 1985, payable to Housing Rehabilitation Associates in amount of $3,000. The check was signed by Norman Basso and you. c. The check was deposited into an account titled Housing Rehabilitation Association at the Central Pennsylvania Savings Association. You established that account and have sole signature authority over that account. 11. A review of the records of the Pennsylvania Corporation Bureau disclosed that no record exists for Housing Rehabilitation Associates. a. The mailing address for Housing Rehabilitation Associates is the same as your home address. 12. By report dated October 30, 1986, the firm of Caryl, Showver, Pittello and Slaton issued an audit report of various funds of Mt. Carmel Township as of December 31, 1985. The various accounts included the General Fund, Landfill, Sewer, Payroll, Liquid Fuels, Summer Food Program and Road Fund. Page 17, Note 3 identified the following: a. Questioned Costs: The following amounts were paid to supervisors during 1985 and are considered questioned costs as the Second Class Township Code does not provide for such payments: Landfill $5,600.00 HUD Program 3,000.00 Summer Food Program 600.00 $9,200.00 The above payments were classified as Administrative Expenses on this report except for the HUD program. Such program is not included in this report as the township was not audited under the Single Auditor Act of 1984. We recommend that the township solicitor review such payments for propriety. 13. By correspondence dated July 16, 1987 to Frank Sawicki, Chairman of the Mt. Carmel Board of Supervisors, HUD accepted the audit report. The HUD letter noted finding Nos. 8, 9, and 9(a) above and finding No. 6 (Section 11 of the Grant Agreement) and noted the following: Mr. Ronald F. Startzel Page 8 a. The payment of $3,000 to the former Township Supervisor violates the above section of the Grant Agreement. In addition, Pennsylvania's Second Class Township Code prohibits such payments. Therefore, in order to resolve this finding, it will be necessary for the Township to repay HUD the $3,000 from non - federal funds. 14. Records of the Central Pennsylvania Savings Association disclosed as follows: a. Savings account authorization card opening a savings account for Housing Rehabilitation Associates, c/o Ronald F. Startzel. Account No. 90412 opened on July 24, 1985. b. Deposit of $3,000 made on July 24, 1985. c. This was the first deposit into that account and as of July, 1986, no other deposits were made. 15. By letter dated August 13, 1987, Frank Sawicki, Mt. Carmel Township Supervisor Chairman, forwarded to HUD Mt. Carmel Township check No. 9500 drawn on the general fund in the amount of $3,000 as reimbursement for disallowed costs. 16. You sent a letter dated July 31, 1987 to Frank Sawicki enclosing Central Pennsylvania Savings Association cashiers check No. 09- 012124 in the amount of $3,000. Your letter noted as follows, "I regret that, due to banking procedures, it was not possible to write a check from Housing Rehabilitation Associates." a. A memo attached to the check bearing the initials of J.W. (Supervisor Joseph Warner) and dated August 2, 1987 noted, "do not deposit this check - there is a problem." b. On August 13, 1987, Donald Geary returned that check to you. 17. Norman Basso, a member of the Mt. Carmel Township Planning Commission from 1978 to the present, advised as follows: a. As a township official he was asked by someone who he could not specifically recall, to sign checks for the township housing program. He signed at least several hundred checks in this role. He signed rent checks made payable to St. Paul Rectory for space used by the township housing program, checks for township housing program telephone bills, checks for bills paid to contractors involved in the housing Mr. Ronald F. Startzei Page 9 program and also checks to the Redevelopment Authority of Northumberland County for their services. b. The normal procedure for him to sign housing program checks was for him to receive a telephone call, usually early in the morning, from Margaret Mall, the township Housing Program secretary. Mrs. Mall -would advise him that she had some checks to be signed and he, in turn, advised her of when he would be available for her to bring the checks to his office. It was his belief that a $3,000 check payable to Housing Rehabilitation Associates was delivered to his office under these procedures. c. He acknowledged that he did sign the check to Housing Rehabilitation Associates but he stated that he basically didn't know what he was signing. He stated his belief that he was the first to sign this check emphasizing his belief that you had not yet affixed your signature. d. He did not know the $3,000 was going to you because the check indicated it was paid to the order of Housing Rehabilitation Associates. e. He never signed another Housing Program check which had your signature affixed. He was never approached by you to obtain his signature for illegal purposes. 18. Margaret Mall, current Mt. Carmel Township Secretary, and formerly the township Housing Program secretary from 1981 through July, 1985 advised as follows: a. She would respond to telephone inquiries regarding the program and interview township residents who were applicants. She would assess the income factors of the applicants and explain the guidelines relating to this factor. b. The S.E.D.A. Council of Governments handled the township's initial application for a Housing Program. Any necessary subsequent applications were also handled by S.E.D.A. Council of Governments. The program then called for the Northumberland County Redevelopment Authority to provide periodic inspections and to write up the results of these inspections and the final close -out papers. She and you did the other necessary work in the Housing Program. The decision to run the Housing Program in this matter was made between S.E.D.A. Council on Governments and you. This decision was made prior to her beginning her employment in 1981, because the necessary funding had to be approved before she could begin work as an employee. Mr. Ronald F. Startzel Page 10 c. On a daily basis, she would make appropriate deliveries such as traveling to the post office to pick up mail and make contact with township officials at their home or places of business with regard to the housing program. At the end of each day, she would have a package to deliver to you. This package would usually contain specifications for individual houses that were t� be rehabilitated and her paperwork that was generated during the day. This package would be usually delivered to the township building where you would open it late in the afternoon or early in the evening and work on it. You would review specifications for individual housing repairs and then reproduce copies of the specification. You had bookkeeping duties which particularly related to an accounts receivable ledger. You would prepare a package of checks to be signed by other township supervisors or officials which were delivered to your desk. On the following morning you would take the checks to the appropriate township officials and have the signing completed. You would occasionally either draft or type letters as part of your duties with the township Housing Redevelopment Program. She received telephone calls from you as late as 10:30 P.M. in the evening, from either the township or Housing Program office, to discuss housing applications or other housing program issues. This occurred on a nearly daily basis up until mid 1985, when the township Housing Program began ,to slow down. d. She had no knowledge of the existence of the Housing Rehabilitation Associates' invoice until sometime during the Spring of 1986 when the propriety of a $3,000 payment to you as Housing Rehabilitation Associates was questioned. She delivered a copy of this invoice in an envelope which directed her to take the envelope to Bobby Pittello of the accounting firm of Caryl, Showver, Pittello and Slaton in Mt. Carmel. e. Norman Basso, member of the township planning commission, co- signed this $3,000 check with you in payment of the HRA voucher. f. She has no recollection of ever receiving the HRA invoice or specifically delivering this check to Mr. Basso for his signature. She had no knowledge that the check existed until the Spring of 1986. This was the only housing program check ever signed by you. Mr. Ronald F. Startzel Page 11 19. Joseph Serovich, a Mt. Carmel Township Supervisor from 1962 to 1985, advised as follows in regards to the payment to Housing Rehabilitation Associates: a. He had no knowledge of the $3,000 payment to you until he read about it in the newspaper. b. He signed very few checks which pertained to the housing project. You and Supervisor Leonard Corona ran this project. 20. Leonard Corona, former Mt. Carmel Township Supervisor, advised as follows regarding the township housing program: a. He personally never received any compensation from this program. This program involved low income housing rehabilitation and involved the handling of grants and low interest loans to the township citizens. SEDA COG helped prepare applications for the township. The township planning commission had check writing authorization in this program due to a regulation of the U.S. Housing and Urban Development Agency. After the applications were prepared, you objected to SEDA COG taking over the entire program. You handled the program after the applications were completed. Your duties included meeting with inspectors, checking out applicants for the program and eventually determining who would be eligible. It was not necessary for you to handle the program this way, but you wanted to maintain control of the program and, therefore, you shaped the procedures in this fashion. b. The housing program checks did not have to be a the board of program supervisors but that all three supervisors had authorization to sign the checks. Members of the township planning commission also had the authority to sign the housing program checks. c. The only check he could recall being signed by Mr. Norman Basso of the township planning commission and you, was the check in the amount of $3,000 with the payee.indicated as Housing Rehabilitation Associates. He had no knowledge of this $3,000 check to Housing Rehabilitation Associates until he was contacted during an investigation by the Northumberland County Detectives. At this time, he saw a copy of the check and also saw that Mr. Norman Basso signed it. 21. You provided the following information, through your attorney, in regards to statements by Leonard Corona relating to your duties with the HUD Program. Mr. Ronald F. Startzel Page 12 a. You performed substantial services relating to the HUD Program, namely that you made sure Program dollars were properly invested, made sure that the number of units to be improved in the target area actually were improved, received and handled complaints from Program applicants and participants, met with HUD inspectors and representatives regarding the Program, generated substantial correspondence to HUD regarding the Program, prepared and typed numerous HUD forms and reports, balanced the books, reconciled savings accounts and bank statements, wrote Program checks, reviewed master bid forms and photocopied and collated these forms for each house prior to bid, and put in many other hours in connection with the Program. b. You believe that there was a good reason for your handling the HUD program in the manner in which you did. You got involved in that program because things were not being done by other agencies, and because the Township, as the applicant for the program, was ultimately responsible for seeing that the program was properly carried out. For that reason because you wanted the program to "provide the needed assistance to Township residents, you did what you could to see that the program as properly conducted. In fact, you believe that due to your efforts, the number of homes within the target area that were included in the program were actually three times more than the originally intended number that were to be included in the program. 22. You provided the following information through your attorney, regarding the audit of the HUD Program and the disallowance of the $3,000 payment to Housing Rehabilitation Associates: a. Although HUD found it necessary for the township to repay to HUD the three thousand ($3,000) dollars paid to you, the HUD program was previously audited in 1985, which audit found no improprieties and which audit was accepted by HUD in August of 1985. b. The audit which lead to a disallowance of the three thousand ($3,000) dollar payment to you was precipitated by a petition for the appointment of an independent auditor to review all township accounts, which petition was made on a motion encouraged by you to look into past payments by the township to supervisors after it came to your attention that the new solicitor had raised questions about the propriety of an invoice submitted in 1985 by you for reimbursement for services performed in connection with the landfill project. You do not know exactly why the check was returned. It is your belief that the township thought that you had not done Mr. Ronald F. Startzel Page 13 anything wrong and had earned the compensation for all the work that you had done. c. You were not responsible to have HUD checks signed in connection with the HUD Program. All checks prepared by you would be left on Margaret Mall's desk to be delivered to the appropriate persons for signature. It is your belief that while Margaret Mall may not recall seeing the HRA check or invoice, the check was given to her to have signed, and it could have and should have been seen by her in view of the procedure utilized with respect to all checks. Additionally, the HRA invoice would have been submitted at the same time and she had an opportunity to see the invoice at that time or at a later time in that it was placed in the file. 23. Mt. Carmel Township records disclose that a voucher dated July 12, 1985 was submitted by you to the township requesting a $1,300 payment for services performed in relation to the operation of the township landfill from January 1, 1985 to June 30, 1985. The voucher identified the following services: a. Administration of landfill. b. Planning, design and implementation of a second phase of landfill. c. Payroll keeping of landfill employees. d. Daily record keeping of landfill account. e. This voucher contains identical language as a voucher submitted by Supervisor Leonard Corona. 24. Township records disclose that you received payments from the township landfill account as follows: Date Check No. Amount a. April 5, 1985 162 $1,000 b. July 30, 1985 211 $1,300 c. You endorsed these checks for deposit into your personal bank accounts. Mr. Ronald F. Startze3 Page 14 d. Minutes of the April 16, 1985 township supervisors' meeting reflect that under Treasurer's Report, payment from the landfill account in the amount of $1,000 to you for administration cost was listed. You voted to approve this payment. e. Minutes of the July 16, 1985 supervisors' meeting confirm that the $1,300 payment to you from the landfill account was listed for approval. You seconded the motion and voted to approve payment. 25. You provided the following information through your attorney, in regards to payments made to you from the Landfill Account: a. Payments to you from the landfill fund were a matter of public record and you made no effort to conceal these payments.. You felt these payments were appropriate. b. You performed substantial services relating to the township landfill project, such as the preparation of account receivable bills for users of the landfill, the preparation of credit vouchers for users of the landfill who paid in advance, that you ran landfill equipment on a number of occasions, that you kept the payroll ledger for the landfill employees, that you reviewed the sign -in sheets and work records of the landfill employees and gave the number of hours and appropriate deductions to the persons who prepared their checks, that you kept DER logs on the daily operations of the landfill, that you prepared, typed and filed monthly reports with DER concerning landfill operations, and engaged in numerous other correspondence with the Department of Environmental Resources. c. The landfill account payments to you were made pursuant to vouchers submitted by you which were placed in the public records and that the payments were presented and approved in public meetings. 26. You also received a payment from the Mt. Carmel Township Sewer fund in 1984. Records reflect as follows:• a. Minutes of supervisors' meeting of December 18, 1984, Treasurer's Report, Sewer Fund Disbursements to you in the amount of $1,000 for administrative cost. You were not present at this meeting. b. Check No. 14 drawn on the Mt. Carmel Township Sewer Fund dated December 26, 1984 payable to you in an amount of $1,000. Check signed by Supervisors Serovich and Corona. Mr. Ronald F. Startzel Page 15 c. You endorsed this check on December 27, 1984 and deposited it in your personal account. 27. You provided the following information, through your attorney, in regards to payments made to you from the sewer fund: a. The payment from the sewer fund to you was presented and approved in public meetings, and you believed that the reasons for and the amount of payment to you is documented in the township records. You did not attempt to conceal your activities regarding said payments and that you acted in good faith and believed that the payments made to you were proper. b. The services rendered by you in connection with the sewer project included your efforts to get the project going by contacting federal and state agencies, and potential developers. You reviewed and established bid procedures and prices on the project, was involved in reviewing the design for the project, that you prepared bid specifications typed those specifications and sent those specifications to the township solicitor for review, that you arranged for advertising of the bid documents, that you reviewed invoices submitted by the contracts and forwarded those invoices to an engineer along with your comments on the invoices, that you made sure that all parties involved kept to the established time deadlines, and that you maintained contact with the Department of Environmental Resources, and made sure that the developers timely completed their role in the project. 28. Former Mt. Carmel Township Supervisor, Joseph Serovich, advised as follows in regards to payments from the Sewer and landfill accounts: a. He did not exactly know why he received a $1,000 check from the sewer fund, but he recalled checking workers at a construction site on a few occasions. He received the check from Supervisor Corona who indicated that you said the payment was legal. b. He did perform duties over a number of years at the landfill and this was the reason he received a payment in April, 1985. He did not know why he did not receive any payments during previous years. He was never told anything by you or Supervisor Corona as to why the payment was being made in 1985, the matter was never discussed at any public meeting. You told Corona to make out the checks in amounts of $1,000 for each supervisor. Mr. Ronald F. Startzel Page 16 c. Both you and Corona said the payments were legal and indicated that a township solicitor had made a ruling. 29. You provided the following information, through your attorney, in regard to comments by Supervisor Serovich: a. You admit that Supervisor Serovich performed duties over the years relating to the landfill project. You deny that no discussion took place at the time of payment as to the reason for payment. It was made clear that the payments were being made in connection with services rendered by the supervisors in connection with the landfill project, and those discussions would have occurred in public meetings. The decision to issue the check was made by all supervisors in the presence of the solicitor. b. You recall no specific discussions concerning the legality of the payment taking place at the time of payment. While the township solicitor had been aware of prior similar payments, and had indicated that if there were any problems such would be raised by the township auditors, no objection to the payments was ever raised by the township auditors or township solicitor. 30. Former Supervisor, Leonard Corona, advised as follows in regards to payments made to the supervisors from the landfill and sewer accounts: a. He received a check in April, 1985 for working at the landfill. He started working during October, 1984, on Saturdays, Sundays and weekly after his regular job was completed. He forwarded a voucher to the township prior to being paid. When calendar year 1985 came around the landfill started to make money, and therefore, he and the other supervisors believed it was their time to get paid. He received an additional check for work at the landfill a few months after the initial check. b. He received a check from the Sewer fund in an amount of $1,000 on December 26, 1984. Two local firms, Cardinal Container and Universal Packaging, were having problems disposing of waste, and thus, the township got involved. He did all the administrative and financial work for the Sewer fund, and he and the other supervisors acted as inspectors for sewer lines that were being installed. c. He was under the impression that yearly auditor approval for supervisors' salaries covered any duties the supervisors performed for the township. Mr. Ronald F. Startzel Page 17 31. Minutes of the Mt. Carmel Township Board of Auditors Reorganization Meetings for the years 1981 through 1987 disclosed that the only compensation approved for the supervisors was the salary for secretary- treasurer and hourly wages for a supervisor acting as superintendent, roadmaster and for working on township roads in any other capacity. a. No wages or compensation was set for administrative duties in regards to the Summer Food program, Sewer, Landfill, or HUD program. b. Auditors who served from 1981 through 1985 advised that the salaries set during that period were mainly applicable to snow removal and road related duties. The salaries set were not open -ended provisions to do any other township work. There was never compensation set for services performed in the Summer Food Program, Landfill, Sewer or HUD program. They were never aware of a solicitor opinion which stated such payments were legal. 32. You provided the following information to State Ethics Commission investigators: a. You served as a township supervisor from 1976 to November, 1985 when you voluntarily resigned. b. Housing Rehabilitation Associates was actually comprised of members of your family. The $3,000 compensation was for work that you performed from 1981 through 1985 wherein many times you worked until 10:30 P.M. "at night" and thus, deprived your family of some things you may have done for them. You always took it upon yourself to see what had to be done with regard to the Housing Program and that this was done no matter how long it took. The check for $3,000 was made out to Housing Rehabilitation Associates because you wanted to show your family that we did it -- rather than it was something that you alone had accomplished. You took it upon yourself to create Housing Rehabilitation Associates in this context. c. You did the work to merit the $3,000 payment. You had no other explanation for using Housing Rehabilitation Associates with regard to your receiving the $3,000 payment from the township Housing Program. You realize that it may have been poor judgement on your part to do such a thing, but you never attempted to conceal your actions. The amount of $3,000 was approximated by you and that you never specifically computed the number of hours he worked on the Housing Program to provide justification for the payment. Mr. Ronald F. Startzel Page 18 d. The township auditors had the authority to disprove or approve this $3,000 payment. The U.S. Housing and Urban Development Agency indicated that it budgeted for administrative services that would be performed by the township with regard to the Township Housing program. e. You admitted that you wrote out the check for $3,000 to Housing Rehabilitation Associates, but you could not recall if this check was the only Housing Program check that you signed for the township. You did not recall whether or not you signed this check before Mr. Norman Basso or after Basso had signed it. f. On July 31, 1987, by letter to Frank J. Sawicki, you returned a check for $3,000.00 to the Township, but the check was not accepted by the new Township officials because of an unspecified problem. g The landfill began to operate sometime around October, 1984. Your duties at the landfill included operating a compactor, bookkeeping, billings and also handling problems that the users of the landfill would run into. You worked many Saturdays and many late in the day hours at the landfill. h. In April, 1985, you received a check from the township in the amount of $1,000 for what you considered to be duties that you performed at the landfill during 1984. A few months later, you received a check from the township in the amount of $1,300 for duties you performed at the township during the period January, 1985 to May, 1985. The reason for the closeness of the two payments you received from the landfill fund was because prior to those payments, the landfill fund was broke. Prior to 1985, the township had very little money. i. Your duties concerning the sewer fund required you to attend meetings, to prepare reports concerning the sewage line, to work with members of the Pennsylvania Department of Community Services and an engineering firm, and to prepare invoices for the project. This sewer line was to run from the township to an industrial park. On December 26, 1984, you received a check in the amount of $1,000 from the township sewer fund. At this time, the sewage project was completed and you then submitted an invoice requesting the payment of $1,000. Former Supervisors Serovich and Corona also worked on the sewer project and they also submitted invoices for their checks of $1,000. Mr. Ronald F. Startzel Page 19 j Former Supervisors Serovich and Corona submitted their requests for payment invoices separately and you never reviewed what work they did to merit their $1,000 payment from the sewage fund. You could not explain why you and the other two former supervisors each received a like amount of $1,000 payment for services. k. The work you performed in the Summer Food Program included picking up food and supplies, participating in preparation of the food and also using your car when required. The amount of reimbursement provided by the Pennsylvania Department of Education was determined by a formula which used the number of meals served at the township times a percentage of so much money in its computation. You dealt with projected amounts in this project. Several college students were employed in this Summer Food Program as counselors. 'The counselors would supervise the recreational activities for children including kickball games and in the case of inclement weather, activities in the basement of a church. 1. You admit to receiving the money but express your view that you had no intent to defraud or deceive the township. 33. You provided additional information through your attorney in regard to the various payments made to you by Mt. Carmel Township: a. The payments made to you from the landfill, the sewer project, and the food program were all reported on discussed and /or approved at public meetings attended by Township Solicitors who either tacitly or expressly approved said payments. b. You believed you were entitled to receive the payments and that there was no attempt to defraud or otherwise violate any law when you received the payments from the various township accounts. c. It is your belief that you did not obtain financial gain or benefit as intended under the State Ethics Act even if you received compensation to which you are not entitled, in that you expended considerable time and effort on the projects for which you received payment, which time and efforts exceeded the value of the payments made to you, and which, if performed by others, would have cost the Township considerable more money. Mr. Ronald F. Startzel Page 20 B. Discussion: Since township supervisors are public officials as the term is defined under the Ethics Act, you, as a Mt. Carmel Township Supervisor are subject to the provisions of the ethics law. 65 P.S. 402; 51 Pa. Code S1.1; Volpe, Order 579 -R. Under Section 3(a) of the Ethics Act quoted above, this Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law, transgresses the above provision of law. Thus, use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak /McCutcheon, Orders No. 128, 129, affirmed McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet, Order No. 412 -R, affirmed Yacobet v. State Ethics Commission, 109 Pa. Commw. Ct. 432, 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own interests; Koslow, Order 458 -R, affirmed Koslow v. State Ethics Commission, Pa. Commw. Ct. , 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. This Commission has specifically determined that financial gain received by second class township supervisors, when not authorized by the Second Class Township Code, transgresses Section 3(a) of the Ethics Act as a "financial gain other than compensation provided by law..." 65 P.S. S403(a). See Neuburger, Order 596, Vachon, Order 607, Spahr, Order 669 -R. See also McCutcheon, Yocabet, supra. The duties and compensation for second class township supervisors are strictly regulated by the Second Class Township Code: "Supervisors may receive from the general township fund, as compensation, an amount fixed by ordinance not in excess of the following: Township Population Not more than 4,999 5,000 to 9,999 10,000 to 14,999 15,000 to 24,000 25,000 to 34,000 35,000 or more Annual Maximum Compensation Fifteen hundred dollars Two thousand dollars Twenty -six hundred dollars Thirty -three hundred dollars Thirty -five hundred dollars Four thousand dollars Such salaries shall be payable monthly or quarterly for the duties imposed by the provisions of this act. The population shall be determined by the latest available official census figures. The compensation of supervisors, Mr. Ronald F. Startzel Page 21 when acting as superintendents, roadmasters or laborers, shall be fixed by the township auditors either per hour, per day, per week, semi - monthly or monthly, which compensation shall not exceed compensation paid in the locality for similar services, and such other reasonable compensation for the use of a passenger car, or a two axle four - wheeled motor truck having a chases weight of less than two thousand pounds when required and actually used for the transportation of road and grudge laborers and their hand tools and for the distribution of cinders and patching material from a stock pile, as the auditors shall determine and approve; but no supervisor shall receive compensation as a superintendent or roadmaster for any time he spends attending a meeting of supervisors." 65 P.S. §65515. "The township supervisors shall meet for the transaction of business at least once each month, at a time and place to be fixed by the board, but they shall not be paid for more than sixteen meetings in any one year, except in any township where, on account of the exercise of governmental functions other than those relating to roads, more meetings are necessary, in which the supervisors may be paid may be increased to any number, not exceeding fifty meetings in any year which shall include hearings by aggrieved parties under the Pennsylvania Sewage Facilities Act and other hearings by aggrieved parties hearings of a judicial or quasi - judicial nature. Two members of any board of supervisors consisting of three members shall constitute a quorum and three members shall constitute a quorum. Except as otherwise provided in this act, an affirmative vote of a majority of the entire board of any supervisors shall be necessary in order to transact any business. Necessary expenses incurred in such meetings, including office rent, stationery, light and fuel, shall be paid out of the general township fund." 53 P.S. §65512. Under the above quoted law, a supervisor may only be compensated for meetings of the township board wherein official township business is transacted. Since the Code allows compensation for those meetings provided for in law, it follows that a supervisor is not authorized to receive compensation for attending those meetings wherein he performs administrative functions. The receipt by a supervisor of compensation for attending non - official township meetings of the board is not authorized in law and hence, would be violative of Section 3(a) of the Ethics Act as a financial gain other than compensation provided by law. As a cross reference, see Township News, May, 1985 wherein Mr. Ronald F. Startzel Page 22 the State Association of Township Supervisors advised that supervisors could not receive compensation for various administrative meetings, other than meetings of the board of supervisors. In applying the above provisions of law, together with the precedent of the courts and this Commission to the instant matter, it is clear that you have engaged in a course of conduct whereby you have used public office for your own personal financial gain. As a township supervisor, you have received financial gain from three separate township activities and programs: the Summer Food Program, the HUD Program and the Landfill and Sewer Funds. Each of these matters will be considered seriatim. As to the Summer Food Program, which was established to provide quality meals to children during the school vacation, the Agreement which you signed as Chairman of the Board of Supervisors provided that no official could receive any benefit from that Program. Despite the foregoing prohibition, you received "administrative" pay in the amount of $1,298.34 from that Program Fund. Your assertion that you had no specific knowledge regarding the restrictive language is unavailing since you signed the Agreement and are thereby bound by its terms. It is quite distressing to this Commission that you used this worthwhile food program to obtain your unauthorized gain. You claim that you performed the bulk of the administrative services and got involved because you wanted the program to be properly administered. If you were involved in the program to the extent you claim, you certainly would have been familiar with the administrative restrictions, namely that you could not benefit from the agreement. Under the Code and the agreement, you were not entitled to compensation; your so- called substantial involvement in the program merely establishes that you were knowledgeable of the non - entitlement of the gain you received. Turning to the HUD GDBG Program, the Agreement between HUD and Mt. Carmel Township contained a specific prohibition against an official in the grantee - township from having any direct or indirect interest in a contract or subcontract in connection with the Program. Initially, you assert that you were not precluded from receiving compensation from administering this program. It is clear from the above cited authority that you were not entitled to receive any compensation for your administrative services. The fact that you received $3,000.00 is bad in and of itself; the fact that you attempted to conceal your receipt through a fictitious and non existent entity, Housing Rehabilitation Associates, is reprehensible. There is no record of Housing Rehabilitation Associates with the Pennsylvania Corporation Bureau; the address for this non - existent entity is your home address. You cosigned the $3,000.00 check to Housing Rehabilitation Associates which was deposited in an account on which you have sole signature authority. After the accounts of Mt. Mr. Ronald F. Startzel Page 23 Carmel were audited, this $3,000.00 payment was one of several questioned costs. Thereafter, HUD, in a July 16, 1987 letter to the Chairman of the Board, found that the $3,000.00 payment violated the terms of the Grant Agreement. In addition, HUD required the township to make repayment from non - federal funds. Once again, there is action on your part to use a laudable social program for your own personal gain. It is especially disconcerting that you sought to camouflage your gain through the subterfuge of your bogus entity, Housing Rehabilitation Associates. You argue that you performed substantial administrative services for the Program, you did not have the responsibility for signing HUD checks and finally you attempted to return the $3,000.00 but do not know why it was refused. Your performance of "substantial services" establishes that you had detailed knowledge of the Program including the HUD restrictions. Secondly, regarding the HUD check signing, Mr. Basso, the cosigner, specifically stated that he did not know what he was signing as to the $3,000.00 check but he did not believe that the money was going to you. Lastly, as to your claim that you do not know why your $3,000.00 check was returned, you knew as well as the other township officials that the check was refused because they did not want to jeopardize any legal actions that would be filed against you. The third matter concerns the Landfill and Sewer Funds. You submitted a voucher for $1,300.00 for various administrative services performed between January 1, 1985 and June 30, 1985 as to the landfill. The Township records reflect a second payment to you of $1,000.00 by check dated April 5, 1985. The minutes of the Board meeting reflect that you voted to approve both of these payments to yourself. You also received $1,000.00 from the Sewer Fund account for administrative work. You did not vote to approve the last item since you were not present at that particular meeting. As to both of these accounts, you received a gain which was not authorized in law; therefore, you violated Section 3(a) of the Ethics Act by the receipt of that gain. However, you state that these payments were of public record, that you made no attempt to conceal the payment and that substantial services were performed by you. As previously noted, those payments have no authorization in the Second Class Township Code. Your receipt of such compensation, which is not authorized in law, is a financial gain other than compensation provided by law. In summary, you violated Section 3(a) of the Ethics Act when you received $1,298.39 from the Summer Food Program, $3,000 from the HUD GDBG Program and $3,300 from the Landfill and Sewer Funds. The penalty provisions of the Ethics Act are found in Section 9, 65 P.S. §409. Mr. Ronald F. Startzel Page 24 Section 9. Penalties. (a) Any person who violates the provisions of Section 3(a) and 3(b) is guilty of a felony and shall be fined not more than $10,000 or imprisoned for not more than five years, or be both fined and imprisoned. 65 P.S. §409(a). (c) 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 Treasury a sum of money equal to three times the financial gain resulting from such violation. 65 P.S. §409(c). The Courts have recognized the right of this Commission to impose a (treble) penalty in McCutcheon, supra or to order restitution in Yocabet, supra. In the instant matter, the gain you have received from the Programs and Funds amounts to $7,598.39. The facts in this case warrant the imposition of an additional 10% payment. Therefore, you are directed to make a total restitution of $8,358.22 to Mt. Carmel Township. In addition, this matter will be referred to the appropriate law enforcement authority for review and appropriate action. C. Conclusion and Order: 1. As a Mt. Carmel Township Supervisor, you are a public official subject to the provisions of the Ethics Act. 2. You violated Section 3(a) of the Ethics Act by using public office to obtain a financial gain from the Summer Food Program, the HUD GDBG Program and the Landfill and Sewer Fund which was other than compensation provided by law. 3. The total gain you received referenced in paragraph 2 amounts to $7,598.39. 4. You are ordered to remit to the State Ethics Commission payable to the order of Mt. Carmel Township the sum of $8,358.22 ($7,598.39 plus 10 %). 5. This matter will be referred to the appropriate law enforcement authority for review and appropriate action if any. Mr. Ronald F. Startzel Page 25 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 5 business days after service (defined as mailing). 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). The confidentiality provision does not restrict respondents consultation with legal counsel. e /4 Helena G. Hug es Chair Dear Mr. Startzel: JJC /na • STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 May 30, 1989 Mr. Ronald F. Startzel c/o J. Jay Cooper Goldberg, Katzman & Shipman, P.C. 319 Market Street 'P.O. Box 1266 Harrisburg, PA 17108 -1268 Re: Order No. 666 -R, File No. 87 -069 -C On May 30, 1989, the State Ethics Commission received your your Check No. 815 dated May 22, 1989, in the amount of $3,000.00 payable to Mt. Carmel Township in partial compliance with the above- referenced Order of the State Ethics Commission issued on April 28, 1989. This payment will be forwarded to Mt. Carmel Township in accordance with Order No. 666 -R. In addition to the foregoing, the Commission has approved the following schedule to complete compliance with the above - referenced Order. Payments in the amount of $150.00 per month beginning July, 1989. These payments will continue for a period of thirty -six months, with the last payment in the amount of $108.22. Please make all checks payable to Mt. Carmel Township and forward same to the State Ethics Commission. All future payments will be due on the first of each month. This letter will be made part of the Order and a public record as such.