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.