HomeMy WebLinkAbout675 GourleyMr. James P. Gourley
c/o James G. Arner, Esq.
Attorney At Law
721 Wood Street
P.O. Box 328
Clarion, PA 16214
Re: 88 -001 -C
DATE DECIDED: September 28, 1988
DATE MAILED: October 13, 1988
Dear Mr. Gourley:
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 member of the Redbank Valley School
Board, violated the following provisions of the Ethics Act (Act 170 of
1978), when your firm, Gourley Packing Company, entered into a
contract with the school district without an open and public process:
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 §403(a).
(c) No public official or public employee or a
member of his immediate family or any business in
which the person or a member of the person's
immediate family is a director, officer, owner or
holder of stock exceeding 5% of the equity at fair
market value of the business shall enter into any
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG. PENNSYLVANIA 17!20
ORDER OF THE COMMISSION
ORDER NO. 675
Mr. James P. Gourley
Page 2
A. Findings:
contract valued at $500 or more with a
governmental body unless the contract has been
awarded through an open and public process,
including prior public notice and subsequent
public disclosure of all proposals considered and
contracts awarded. Any contract made in
violation of this subsection shall be voidable by
a court of competent jurisdiction if the suit is
commenced within 90 days of making of the
contract. 65 P.S. S403(c).
L. You serve as a member of the Board of School Directors for the
Redbank Valley School District, New Bethlehem, Pennsylvania.
a. You have served in that position since December 8, 1987,
when you were administered the oath of office.
2. You were the incorporator for Gourley Packing Company,
Incorporated, R.D. 2, New Bethlehem, Pennsylvania.
a. You also serve as a director for this company.
5. This business was incorporated on December 21, 1266.
c. This entity is in the business of supplying meat, :iLh and
poultry products.
. :statement of Financial Interests on file with the State Ethics
Coin Q - -.,.Pan for you dated March 10, 1987, indicates that Gourley
P�.c} `.ompany, Incorporated, R.D. 2, New Bethlehem, Pennsylvania,
1 62" , iro a direct or indirect source of income in excess of $50.
a. 7ou list Gourley Packing Company, Incorporated, as a
?)usiness in which you have a financial interest.
b. :.you list your positions with Gourley Packing as president
and director.
Minutes of the meetings of the board of school directors for the
Redbank Valley School Board indicate that the following events
occurred in relation to this situation:
a. December 8, 1987: the oath of office was administered to
you by the hoard solicitor.
Mr. James P. Gourley
Page 3
(1)
A motion was made by Gale Hepler second by William
Reddinger to approve the November, 1987 milk and
cafeteria expenditures amounting to $32,122.49.
Motion Carried roll call No. 6; 8 yes, 1 abstain
(Gourley).
(2) Board memo No. 337 indicated that part of the above
expenditures related to payments to Gourley Packing
Company as follows:
(3)
b. January 4, 1988:
(a) Check No. 1908 drawn on the account of the
Redbank Valley Schools Milk and Cafeteria Fund at
the First Seneca Bank, dated November 30, 1987 in
the amount of $2,312.40 payable to Gourley Packing
Company.
Documents of the school board indicate that payment was
being made in conjunction with the following invoices
from Gourley Packing Company, R.D. 2, New Bethlehem,
Pennsylvania.
Invoice No. Date
104206 10/28/87
104131 10/26/87
104102 10/21/87
106724 10/14/87
107278 10/9/87
104132 10/28/87
107302 10/9/87
104134 10/28/87
107304 10/9/87
104133 10/28/87
107303 10/9/87
107305 10/9/87
104135 10/28/87
(4) All of the foregoing invoices were related to sales
made by Gourley Packing Company to Redbank High School;
Hawthorn Elementary School; Mahoning Elementary School;
Porter Elementary School; and New Bethlehem Elementary
School.
(1) Motion made by William Reddinger second by Shirley
Pastor to approve the December, 1987, milk & cafeteria
expenditures amounting to $29,493.32 motion carried
roll call No. 3, 8 yes, 1 abstain. (You are listed as
abstaining).
Mr. James P. Gourley
Page 4
(2) Mr. Veronesi asked Mr. Gourley if he h<1 any response
from the State Ethics Commission. He sta. -d he has
received an opinion but has not had a chance to review
this opinion with his attorney. The school sol?.c:itor
stated he would be attending a meeting �.omorrow with
Mr. Gourley and his attorney and he advised the board
that there would be no violation of law until he issues
an opinion.
(3) Board memo No. 353 indicated that part of the above
expenditures related to payments to Gourley Packing
Company as follows:
(a) Check No. 1933 drawn on the same account as noted
in Finding 4a(2)(a) above dated January 7, 1988 in
the amount of $1,272.04 payable to Gourley Packing
Company.
(4) Documents of the school board indicate that payment was
being made in conjunction with the following invoices
from Gourley Packing Company:
Invoice No. Date
106137 11/25/87
105096 11/20/87
104367 11/11/87
104366 11/4/87
106133 L1/25/87
104437 11/6/87
104438 11/6/87
106134 ]J/25/87
106135 11/25/87
104439 110"6/87
106136 ii/7.5/87
104440 11/6/37
(5) All of the above invoices were retraced to sales .,ade
by Gourley Packing Company to the previo'sly noted
schools. (See Finding 4a(4).
c. February 1, 1988:
(1) Mr. Veronesi asked Mr. Gourley if he had ar.y
statements to make concerning the Gourley Packing
Company situation. Mr. Gourley informed the Poard he
will no longer have an account with the district as
long as he is on the Board.
Mr. James P. Gourley
Page 5
(3)
r4)
(2) The following letter from Robert B. Filson, Solicitor,
was read by Mr. Veronesi, Mr. Veronesi: "This is to
advise that I have been in touch with the Board of
Education in Harrisburg relating to the matter of the
district being able to do business with a corporate
provider when the provider is an officer of the
provider corporation sitting as a school board member.
I am convinced that the overwhelming opinion is to the
effect that under these circumstances the District
cannot do business with such provider. I am therefore
compelled to advise that the District must immediately
find another provider for those items purchased from
Gourley Packing Company, and that you are no longer
able to purchase from that company so long as Mr.
Gourley is a member of the District Board. In the
event you fail to change the provider as of this date,
the Department of Education is prepared to proceed
through the Attorney General, against the Board and any
individual involved." Letter dated February 1, 1988.
A motion was made by George Veronesi second by Shirley
Pastor, WHEREAS, the Redbank Valley School District has
been doing business with Gourley Packing Company, by
purchasing certain provisions therefrom for the school
cafeteria; and WHEREAS, an officer of Gourley Packing
has been elected to and sworn in as a member of the
Board governing said School District; and WHEREAS,
pursuant to the opinion of the Ethics Commission and
other persuasive legal opinion, it is illegal for any
person to sit as a director on any school board and
transact any business with such Board and at the same
time be an officer of such provider corporation. NOW
THEREFORE, BE IT RESOLVED: That from and after this
date, Redbank Valley School District shall cease
transacting any business with Gourley Packing Company
for so long as James P. Gourley is a member of the
School Board of Redbank Valley School District. Motion
Carried Roll Call No. 1, 7 yes, 1 no, 1 abstain. (You
abstained on this vote).
A motion was made by William Reddinger second by
Shirley Pastor to approve the January, 1988 milk &
cafeteria fund expenditures amount to $25,371.98.
Motion Carried, roll call No. 7; 8 yes, 1 abstain.
(You abstained on this vote).
Board memo 369 indicated that part of the above
expenditures related to payments to Gourley Packing
Company as follows:
Mr. James P. Gourley
Page 6
(
3. March 7, 1988:
(a) Check No 1957 drawn on the same account as noted
in Finding 4 aC2) a) above dated February 2, 1988
in the amou} o' $591.88 payable to Gourley
Packing Company.
Cocaments of the school board vindicate that payment was
being made in conjunction with the following invoices
from Gourley Packing Company:
I ivoice No. Dh ze
112150 12/23/87
105990 12/7/87
106336 12/2/87
111600 12/23/87
111113 12/16/87
105991 :Y 2/16/87
112148 12/23/87
112148 12/23/87
111115 12/16/87
112149 12/23/87
111114 12/16/87
6) All of the above invoices were related to sales mate
Gourley Packing Company to the previously noted
schools. (See Finding 4a(4)).
(] Motion was made by William Reddinger second by Ga:e
Fepier to approve the February, 1988 milk & ca
fund expenditures amounting to $32,533,89. Mo:ioa
carried, rol3. call No. ".yes, 1 abstain. You
abstained.
Board memo 397 indicated that part of the , bove
expenditures related to payments to Gourley Packing
Company as follows:
Check No. 1982 drawn on the same account as previously
noted dated March 2, 1988 in the amount of $982.11
payable to Gourley Packing Company.
Documents of the school board indicate that payment was
being made in conjunction with the following invoices
from Gourley Packing Company.
Invoice No. Date
113262 1/29/88
112;)34 1/18/68
1 . 12533 1/13/88
Mr. James P. Gourley
Page 7
112413 1/14/88
112535 1/15/88
112398 1/11/88
112536 1/15/88
112410 1/13/88
112776 1/15/88
112411 1/11/88
112537 1/15/88
112412 1/11/88
(4) All of the above invoices were related to sales made by
Gourley Packing Company to the previously noted
schools. (See Finding 4a(4)).
e. April 14, 1988:
(1) A motion was made by William Reddinger second by
Shirley Pastor -to approve the March, 1988 milk &
cafeteria fund expenditures amounting to $36,715.23.
Motion carried; roll call No. 4, 7 yes, 1 abstaining.
(2) Board memo 416 indicated that part of the above
expenditures related to payments to Gourley Packing
Company as follows:
(a) Check No. 2012 drawn on the previously noted
account dated April 14, 1988 in the amount of
$274.96 payable to Gourley Packing Company.
(3) Documents of the school board indicate that payment was
being made in conjunction with the following invoices
from Gourley Packing Company:
Invoice No. Date
113258 2/1/88
113259 2/1/88
113260 2/1/88
113261 2/1/88
(4) All of the above invoices relative to sales made by
Gourley Packing Company to the previously noted
schools. (See Finding 4a(4)).
5. Gourley Packing Company also transacted business with the Clarion
County Area Vo -Tech School.
a. Redbank Valley School District was a member of the Vo -tech
school board.
Mr.. James P. Gocrley
Page 8
L. Three Redbank Valley School board members serve on the Vo-
tech school board.
c. You do not serve on the Vo -tech school board.
6. Records of Clarion County Area Vo -Tech School indicate the
following regarding sales by Gourley Packing Company.
a. Invoice No. 22181 dated December 4, _987 in the amount cf
$329.57 from Gourley Packing to the vo -tech school for
various meats.
(1.) Check No. 002271 drawn on the account of Clarion
County Area Vocational Technical School at First
Seneca Bank dated December 16, 1987 in the amount of
$329.57 payable to Gourley Packing.
b. Invoice Nos. 21980 and 21956 dated January 8, 1985 and
January 13, 1988 respectively totaling $248.74 from Gourley
Packing to the Vo -tech school for var : °ous meats.
(1) Check No. 0239 drawn on the same account as noted
above dated January 25, 1988 in the amount of $248.74
payable to Gourley Packing.
c. Invoice Nos. 22062, 22471, 22503, 22519, and 22531 dated
January 23, 1988, January 29, 1988, February 8, 1988,
February 10, 1988 and February 12, 1996 totaling $594.2
from Gourley Packing to the Vo -tech school for various
meats.
(1) Check No. 002524 drawn on the same account as noted
above dated February 29, 1988 in the amount of $594.72
payable to Gourley Packing.
7. You ceased doing business with the Vo -Tech School on or about
March 4, 1988.
a. This was based upon an opinion of the Solicitor of the
school indicating that the school should stop using Gourley
Packing as long as you are a director on the participating
school board.
8. By letter dated November 25, 1987 from Charles Steele, Esquire,
David Farley, Superintendent of Redbank Valley Schools was advised of
the provisions of the State Ethics Act.
a. This letter was written specifically in relation to the
instant situation.
Mr. James P. Gourley
Page 9
b. The letter references to Section 3(c) of the State Ethics
Act.
c. It is advised that an opinion of the Commission be
obtained.
9. By letter dated December 10, 1987 from James Arner to the State
Ethics Commission, a request is made for an advisory opinion from the
Commission:
a. This request was made on your behalf.
b. You are identified as an office and stockholder of Gourley
Packing Company.
c. The company is identified as selling food products.
d. It is indicated that the company seeks to conduct a
business relationship with Redbank Valley School District.
e. You are identified as a member of the Redbank Valley School
District.
f. An opinion is requested regarding whether your company may
transact such business under these circumstances.
10. On December 24, 1987, the Commission issued Advice of Counsel No,
87 -654 regarding the above request:
a. Said advice concluded that you were a public official
within the purview of the State Ethics Act and subject to
the provisions thereof.
b. Said advice concluded that the Act would prohibit a
business in which a school board member is an officer and
stockholder from receiving any financial gain that is
strictly prohibited by law.
c. Said advice concluded that a school board member who
received such gain would violate the provisions of the
State Ethics Act.
d. You were also advised that the Ethics Act would require
that allowable contracts be awarded through an open and
public process and that if contracting was otherwise
allowed, you could not participate in the school district's
decisions or actions in relation thereto.
11. This advice was transmitted to you by your counsel on December
30, 1988.
Mr. James P. Gourley
Page 10
12. On January 8, 1988, an appeal of the .above referenced Advice of
Counsel was filed with the State Ethics Commission.
a. That appeal was subsequently withdrawn.
13. David R. Farley, Superintendent for the Redbank Valley School
District, provided the following information in relation to this
situation:
a. There was informal conversation prior to the time that you
were elected to office regarding whether you could serve as
a school board member while providing goods to the district.
b. This matter was brought to your attention prior to your
taking office.
c. In October of 1987, Solicitor Filson opined that you could
serve as a member of the board and contract with the
district.
d. The matter was first discussed with you at the December,
1987 meeting of the board. This was done in executive
session.
e. At that time, you agreed to seek the opinion of the State
Ethics Commission.
f. In January, 1988, he met with a representative of the State
Department of Education and was told that a school board
member could not contract with his school district and that
the Department of Education could proceed against the school
district in such cases.
g Solicitor Filson was, thereafter, persuaded that his
original opinion was totally in error ar..3 he issued a
letter to the school board, advising that it cease doing
business with Gourley Packing.
h. As a result, the school board stopped pureaasing its meats
from Gourley Packing.
i. All bills that were paid by the board in February, March and
April were for purchases made in months before February.
7. Gourley Packing has transacted business with the school
district since around 1950.
The amount of business transacted between the district and
Gourley Packing did not increase after you were elected to
the board and may have decreased.
Mr. James P. Gourley
Page 11
1. The district had the use of the products purchased.
14. Your Counsel, James G. Arner, provided the following information
by way of letter dated August 12, 1988:
a. You and your wife are the sole owners of Gourley Packing
Company.
b. You have decreased your involvement in operating the daily
management of the business during the last few years.
c. You did not personally accept any of the orders placed by
the school district.
d. The head of the cafeteria placed the orders with a company
employee.
e. Legal Counsel, at the time that you became a board member,
focused upon the issue regarding whether Section 3(c) of the
State Ethics Act required the contract to be bid out.
f. You acted promptly, upon assuming office to seek a
resolution of the question through the State Ethics
Commission.
g.
There were no purchases from Gourley Packing after February
1, 1988.
h. Bills paid in March and April related to sales in prior
months.
i. You received no personal financial gain as a result of the
sales to the school district.
7.
There was no use of public office by you.
k. There was no violation of the school code as no "private
person" did business with the district but rather the
corporate entity did.
15. You provided the following information in relation to this
situation:
a. You first became aware of a potential problem in relation to
this situation in August or September 1987, when three
school board members advised you that they had discussed
this matter.
b. You were never required to bid on the school cafeteria
business.
Jwres P. Gourley
!age 12
c. ° ou continued to do business with the distr4 r t rrc u
w '-' rr:j elected based on the advice of your counsel,
The amount of profit to Gourley Packing oa these t;
sales is less than 2 %.
e. You stopped doing business with the sch&1 di:`ri.ct a ter
February, 1, 1988.
B. Discussion: As a member of the Board of Redbank Val?e• School
District, you are a public official as that term is defired under thE
Ethics Act, 65 P.S. Section 402; 51 Pa. Code Section 1.1; *cleaver
Opinion 85 -014. As such, your conduct is subject to the -rovisions of
the Ethics Act and the restrictions therein are applicable co you.
As quoted above, Section 3(a) of the Ethics Act provides that no
public official may use his public office or confidential in''_3rmation
received through holding public office to obtain a firaac!.ai ^faah for
himself or a business with which he is associated. 65 P.S.
The term "business with which he is associated" is d Unctoi Hie
Ethics Act as follows:
Section 2. Definitions.
"Business with which he is associated. " _.y
business in which the person or a member %f the
person's immediate family is a director, office_:
owner, employee or holder of stock. 65 P,S. St42.
Under Section 3(c), quoted above, no public off c9 .1 or any
business in which the official is a director, officer, owne. 'r
holder of stock exceeding 5% of the equity at fair market va •-e c .he
business shall enter into a contract valued at $500 or mores with Li
governmental body unless the contract has been awarded througn an der
and public process. As to Section 3(c) of the Ethics 1i�t this
Commission has determined that the above provision is a procedrre 4�
Y - e used when a public official contracts with his own governmental,
Jody in excess of $500. Brian, Opinion 80 -014; Lynch, Opinion 79-0,7.
However, this Commission has also determined that the above prcv.:'sian
of law is not a general authorization for a public official to
contract with his governmental body where such is otherwise rcthibited
by law, Such a provision in law does exist and is founr' in Section
324 of the Public School Code which provides:
No school director shall, during the term cf.
which he was elected or appointed, as a privates
person engage in any business transactio< with
the school district in which he is elected or
appointed, be employed in any capacity by the
school district in which he is elected .Dr
Mr. James P. Gourley
Page 13
appointed, or receive from such school district
any pay for services rendered to the district
except as provided in this act. 24 P.S. 53 -324.
In applying the above provisions of the Ethics Act to the facts
of this case, it is noted that you were the incorporator and serve as
director of Gourley Packing Company, a firm which has contracted with
the Redbank Valley School District since 1950. You were elected and
served on the school board since December 8, 1987.
The minutes of the Redbank Valley School District from the time
you became a member of the school board reflect a consistent pattern
of your abstentions on voting on matters concerning your business,
Gourley Packing Company. Since you did not use public office
regarding any contract with Gourley Packing Company, this Commission
finds that you have not violated Section 3(a) of the Ethics Act under
the above facts and circumstances. McCaique, Order 392.
However, under Section 3(c) of the Ethics Act, it is noted that
your company, Gourley Packing, received several contracts in excess of
$500 which were not awarded through an open and public
process. However, motions were made and approved with your
abstention as to cafeteria expenditures which included payments in
various amounts for Gourley Packing for contracts that were made
before you became a school board member. The foregoing contracts did
not violate Section 3(c) of the Ethics Act. However, on March 7,
1988, you abstained on a motion to approve expenditures which resulted
in a payment to your company of $982.11. In that instance, there was
a payment made on a contract with your company which was in excess of
$500 which was not put out on bids and which was entered into when you
were a member of the school board. Such action violated Section 3(c)
of the Ethics Act. Fyda, Order 438 -R.
Lastly, this Commission finds no violation of §3(c) as to the
contracts between your firm and Clarion County Area Vo -Tech School
since you do not serve on the Vo -Tech School Board.
C. Conclusion and Order:
1. You, as a Redbank Valley School Director are a public
official subject to the provisions of the Ethics Act.
2. You did not violate Sections 3(a) of the Ethics Act
regarding the award of contracts to a business with which
you are associated since you abstained in such
transactions.
Mr . James P. Gourley
Page 14
-ou violated Section 3(c) of the Ethics Act when your
c')mpany, Gourley Packing Company entered into a contract
specifically regarding the goods supplied in January ''
(approved March 7, 1988) in excess of $500 with the Rodba.nk
Valley School District without an open and public process.
4. You did not violate Section 3(c) of the Ethics Act when
Gourley Packing Company entered into contracts with Cl -lion
County Area Vo -Tech School.
This matter will be referred to the appropriate law
enforcement authority for review and consideratio:i for 6 ny
action deemed appropriate.
Our files in this case will remain confidential in accordancE
'Pith Section 8(a) of the Ethics Act, 65 P.S. 5408(a). However, tk
Order is final and will be made available as a public document 15
after service (defined as mailing) unless you file documentation ki•h
the Commission which justifies reconsideration and /or challenges
partinent factual findings. See 51 Pa. Code §2.38. During t:hi.s 15
cal period, no one, including the respondent unless he waives his
right to challenge this Order, may violate this confidentiality b4~
releasing, discussing or circulating this Order
Any person who violates the confidentiality of a CommissiL—
proceeding is guilty of a misdemeanor and shall be fined not ,r% Liar...
$1,000 or impri=-oned for not more than one year or both, sou 6b
5405(e.
By the Commission,
Joseph W. Marshall, II1
Chairman