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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