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HomeMy WebLinkAbout733 SmytheORDER OF THE COMMISSION Order No. 733 Before: Helena G. Hughes, Chair Robert W. Brown, Vice Chair G. Sieber Pancoast Dennis C. Harrington James M. Howley Date Decided: December 4, 1989 Date Mailed: December 15, 1989 Mr. Robert F. Smythe c/o Carmen P. Belefonte 200 North Jackson Street Media, PA 19063 Re: 88 -062 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 Dear Mr. Smythe: The State Ethics Commission received a complaint regarding you and a possible violation of the State Ethics Act, No. 170 of 1978, 65 P.S. 401 et. seq. You were notified in writing as to the commencement of the investigation and as to the specific allegation(s). The investigation has now been completed and a Findings Report was issued to you which constituted the Complaint by the Investigation Division of the State Ethics Commission. An Answer was filed and a hearing was held. The record is now completed. This Order of the Commission is hereby issued which sets forth the individual allegations, findings, discussion and conclusion as follows: I. Allegation: That you, a Chief of Police in Darby Borough, Delaware County, violated the following provisions of the Ethics Act (Act 170 of 1978), when you received monies from the borough for work performed on police cars at an automobile repair shop in which you are a partner and for failing to file Statements of Financial Interests as Borough Police Chief: 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 Mr. Robert F. Smythe Page 2 A. Findings: of his immediate family, or a business with which he is associated. 65 P.S. 5403(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 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. 5403(c). 1. You serve as the Chief of Police for the Borough of Darby, Delaware County, Pennsylvania. a. You have served in this position for approximately 5 years. b. You have served on the Darby Borough police force for approximately 19 years. 2. Records of the Pennsylvania Department of State, Bureau of Corporations, indicate the following regarding Del -Co Auto Body, Incorporated. a. Date of Incorporation - April 8, 1987. b. Corporate Address - East Corner of Mill and Walnut Streets, Darby, Delaware County, Pennsylvania, 19023. c. Aggregate number of shares, 1,000, with no par value. d. Name of Incorporators: Thomas Foster, 324 S. 3rd Street, Colwyn, Pennsylvania, 19023. e. Robert F. Smythe, 480 Pinecrest Road, Springfield, Pennsylvania,- 19064. f. Shares issued per incorporator: 250. Mr. Robert F. Smythe Page 3 3. Records of Darby Borough indicate the following regarding bills submitted by Del -Co Auto Body, Incorporated, to Darby Borough for services rendered: a. Invoice dated 1/29/88 for car No. 4728 identified as a 1983 Plymouth, 4 door, license No. MG99821, Serial No. 2P3BB2644DR233514. (1) Services rendered are indicated as: Replace left 3/4 front, sheet metal and parts, refinish entire car complete. (2) Total cost: $2,100. (3) Bill contains approval stamp with handwritten date of 4/27/88 app. and bears the signature of Robert Mawhinney. (4) The bill is signed and submitted by Tom Foster. b. Invoice dated 2/9/88 regarding a 1984 Chevrolet Impala, 4 door, license No. MG93411, Serial No. 2G1AL696GE9267509. (1) The repair order indicates damage to the front end and lists various repairs and parts totalling $1,910.68. (2) Costs parts are listed as $956.48 while labor costs are identified as $634.40. (3) The bill contains a stamp approval with handwritten notation "App. 4- 27 -88" and bears the signature of Robert Mawhinney. (4) The bill is signed and submitted by Tom Forester. c. Invoice dated 2 -20 -87 regarding 1978 Chevrolet Sedan containing no further information regarding vehicle make or type. (1) Bill indicates services rendered as right front door, special door molding, paint and material, paint and refinish right front door. (2) Total costs: $275. (3) Bill contains stamp approval with handwritten notation of date, 3/11/87, bearing the initials S.D.G. Mr. Robert F. Smythe Page 4 4. Records of the Darby Borough contain the following estimates that were submitted by Gricco's Auto Body, Hook Road and Darby Creek, Darby Township Pennsylvania, 19079, regarding repairs on borough vehicles: a. Invoice dated 12 -2 -87 regarding a 1984 Impala, License No. 93411. b. Estimate relates to repairs for front end damage. c. Costs not to exceed $2,150. d. Invoice dated 12 -21 -87 regarding a 1983 Plymouth. (1) Services rendered to include repair to front end and refinishing car. (2) Costs not to exceed $2,400. 5. Records of Darby Borough indicate the following regarding payment to Del -Co Auto Body for services rendered as identified in finding 3 above. a. Borough of Darby check No. 14950, Borough of Darby General Fund, account No. 3080082, Fidelity Bank, North America, dated 4- 28 -88, payable to Del -Co Auto Body in the amount of $4,010.68. b. The check was stamped on the reverse side for deposit only Del -Co Auto Body, Inc., Robert Smythe - Treasurer with a date of April 29, 1988. 6. Records of Darby Borough indicate that the Borough maintained monthly expenditure sheets listing all disbursements made by the Borough: a. Expenditure sheets regarding the Public Safety Committee for March and April of 1988 indicate no expenditures or disbursements regarding. Del -Co Auto Body. b. Expenditure sheet for the Public Safety Committee for May, 1988 indicates a payment to Del -Co Auto Body in the amount of $4,010.68. (1) This expenditure sheet is signed by the Chairman, Robert Mawhinney, and is dated July 18, 1988. 7. Records of Darby Borough indicate that a meeting of Darby Borough Council members was conducted on May 4, 1988. Mr. Robert F. Smythe Page 5 a. No specific indication is recorded in the minutes regarding payments to Del -Co Auto Body. b. The minutes indicate that a motion was made to approve vouchers and that motion passed by a vote of six to two. 8. Minutes of the Darby Borough Council meetings from June 3, 1987 through and including May 4, 1988 indicate no discussion or reference to bids or estimates submitted by auto repair shops regarding services rendered in relation to damage to police vehicles. 9. Records of Darby Borough Council, Public Safety Committee meetings during the period May 13, 1987 through and including April 27, 1988 contain no reference or discussion of any estimates for repair submitted by auto body shops regarding services rendered in relation to damage to police vehicles. 10. Minutes of the Darby Borough Council meeting of August 3, 1988 indicate the following in relation to the instant situation: a. Borough Mayor Saraullo raised the issue of repairs to borough police vehicles by Del -Co Auto Body, Incorporated. b. The mayor expressed his support for Chief of Police Smythe. c. d. Saraullo referred to the minutes of the March 5, 1975 meeting and stated that a motion was passed at that time allowing Del -Co Auto Body to be involved in the borough's towing and storage of vehicles. e. The Mayor stated that Mr. Smythe was a police officer at the time and his interest in Del -Co Auto Body was made known publicly. The solicitor at that time, Peter Dunn, advised that there was no conflict of interest. f. Solicitor Nolan then discussed this issue in relation to Section 1404 of the Borough Code. He stated that in order for that section to apply, the person involved must know of the statute and its prohibitions and intentionally and knowingly enter into a transaction. Mr. Nolan concluded that Chief of Police Smythe's statement that he did not know of or was unaware of this prohibition was sufficient to prove that he did not violate Section 1404. g. Saraullo stated the purpose of having the vehicles repaired at Del -Co Auto Body was to save money. Mr. Nolan indicated that Del -Co Auto Body was the low estimate and saved the borough approximately $500. Mr. Robert F. Smythe Page 6 h. Mr. Nolan advised that Police Chiefs and Police Officers have been found by the courts to be employees and not public officials, consequently Section 1404 does not apply. 11. Minutes of the Darby Borough Council meeting from March 5, 1975 indicate the following regarding proposals for the towing and storage of abandoned and illegally parked vehicles in the. Borough: a. Borough Manager, DiGregorio advised that two proposals had been received for towing and storing abandoned and illegally parked vehicles. The service will be provided free of charge to the borough. b. Further discussion occurred regarding the proposals received. c. A motion was made by a Mr. McBride to have Borough Council accept the proposal which was submitted by Del -Co Auto Body and this motion was seconded by Mr. Luke. d. Mayor Sanders questioned the potential conflict of interest in obtaining the services of Del -Co Auto Body in that a member of the Darby Borough police force was also an employee of Del -Co Auto Body. e. Mr. Dunn, Solicitor, stated that no conflict of interest was occasioned by this situation. f. After further discussion on the fines that would be levied on vehicles, the motion was passed by a vote of 5 to 3. 12. Minutes of the Borough of Darby Council meeting for June 4, 1975 indicate, in part, the following under the heading report of the Mayor: a. The Mayor returns to Borough Council the towing and storage charges ordinance with his disapproval for the following reasons: (1) Approval of the ordinance will automatically allow the Del -Co Auto Company to start towing vehicles and assessing a towing. and rental charge too. Objection is made to Del -Co Auto Company being the designated towing agent for the Borough of Darby. (2) This objection is based upon the fact that a member of the Darby Borough Police Department is employed and is an involved member of this business establishment. Mr. Robert F. Smythe Page 7 (3) Approval of this ordinance will be executed when a legal and proper towing agent is approved by borough council. b. Borough Council did not adopt a towing or storage ordinance at that meeting but did approve a Towing and Storage Agreement at a March 5, 1975 meeting which was implemented immediately at that time. c. The report of the Mayor was accepted upon unanimous vote of council. Such action merely reflected acceptance of the report but not necessarily the adoption of the substance of the report itself. 13. Robert Mawhinney provided the following information in relation to the instant situation: a. He served as a Darby. Borough Council member and Chairman of the Public Safety Committee since 1988. b. Regarding the process for repairing damaged police vehicles, once he is informed that an accident has occurred, he instructs the borough manager to take the police cars out to local shops to obtain estimates regarding the costs of repair. c. Police vehicles are normally sent to Suburban Collision, Gricco's Auto Body and Del -Co Auto Body for estimates. d. The estimates are returned to the borough through the office of the Borough Manager, Mr. Gallagher, who brings these estimates to his attention. e. He then reviews the estimates at the committee meetings and picks the lowest bidder. Normally, there is no discussion on these matters unless a bid has been required. f. He then directs the Chief of Police to have the vehicle repaired at the selected shop. g. Regarding the two police vehicles repaired by Del -Co Auto Body, estimates were given to him at a Committee Meeting and he directed the vehicles be taken to the Del -Co Auto Body. h. He was aware, at the time, that Chief of Police Smythe had an interest in that entity. Mr. Robert F. Smythe Page 8 i. Del -Co Auto Body was the lowest estimate and he was attempting to save the borough money. Upon repair of the vehicles, the bills were submitted to the business manager and thereafter, presented to him for signature. The bills were then presented to the full council at a regular council meeting for final approval. j It is a requirement of Darby Borough Council to approve all bills before they can be paid. k. Approval to pay bills to Del -Co Auto Body regarding repair of the two vehicles was given at the May 4, 1988 meeting of the Darby Borough Council. 1. He could not explain why the check was disbursed and cashed prior to the May 4, 1988 meeting. He advised that there may have been a shortage of vehicles and thereby required to pay the bill before it was approved by the entire council in order to obtain a return of the vehicles. m. Public Safety Committee meetings are open to the public and are advertised in a local newspaper. The payment of bills are not specifically reviewed during borough council meetings unless a bid has been required. He was not aware of the Ethics Act's open and public process requirements when a public official is interested in a business transaction. 14. Philip Gallagher provided the following information in relation to the instant situation: a. He served as the Darby Borough Manager. b. Darby Borough Police Department had two police vehicles that were - damaged in accidents and repaired by the Del -Co Auto Body in 1988. c. Del -Co Auto Body submitted to the borough bills outlining the repairs completed on the vehicles for payment by the borough. Robert Mawhinney, Chairman of the Public Safety Committee, approved these bills prior to submission to borough council for final approval. d. Payment to Del -Co Auto Body for the services rendered were made by way of borough check No. 14950 in the amount of $4,010.60. Mr. Robert F. Smythe Page 9 e. This check was signed by Gallagher and his business manager and Robert Layden, a borough councilmember who is Chairman of the Finance Committee. f. Borough Council's final approval of payment of the bill submitted to Del -Co Auto Body was rendered at the May 4, 1988 regular borough council meeting. 15. Joseph Gricco provided the following information in relation to this situation: a. He was the proprietor of Gricco Auto Body. b. He submitted bids to Darby Borough in 1987 regarding the estimated costs of repairing two damaged police vehicles. c. He could not recall who contacted him regarding providing these estimates. d. On at least one occasion, he travelled to the police station to observe a damaged vehicle. Chief of Police Smythe was present at that time. e. On the second occasion, he sent a tow truck to the police station to pick up the vehicle and return it to his shop. f. Both estimates were mailed to the township although he did not obtain either job. He did repair work on other township vehicles such as trash trucks and smaller trucks. h. He received business from Del -Co Auto Body shop which is owned in part by Mr. Smythe. i. He submitted a written estimate for a damaged borough vehicle in 1988. After reviewing the amount charged by Del - Co. to repair the vehicle, he believes that the Del -Co repair was for less than he could have done it and probably was done at the cost of the parts. g. 16. You provided the following information in relation to this situation in the presence of your attorney: a. You have served on the Darby Borough Police Department for 19 years and have been the Chief of Police for the last 5 years. Mr. Robert F. Smythe Page 10 b. Del -Co Auto Body is a corporation that has 1,000 shares of common stock. Five hundred shares have been issued and you and your partner, Thomas Foster, each own 250 shares. c. Regarding the 1983 Plymouth that was repaired by Del -Co Auto Body, this vehicle was a police car and was damaged in the pursuit of a stolen car. d. Regarding the repair of borough vehicles, the police committee of borough council is notified of damaged vehicles and they decide if the auto should be repaired. The president of borough council is also involved in this process. e. Accident reports are presented to the Committee along with the estimates for the repairs and that Committee then authorizes repair of the vehicle. f. After approval you, along with the borough manager, would take care of the repair process. g. If a car was mobile, you would have one of the police officers drive the vehicle to the body shop for estimates. If the vehicle was not mobile, such as the 1983 Plymouth, the vehicle would be towed to the place of repair for the receipt of estimates. h. Both Suburban Collision and Gricco's Auto Body gave estimates on the 1983 Plymouth repair job. i. The estimate received from Del -Co Auto Body was handled either by your partner, Tom Foster, or the estimator Bill LaVine. You were not present during the estimating process. j. The estimating process was not a sealed bid procedure. k. You probably became aware of the fact that Del -Co was going to do the work when the Borough Manager told you to take the car to Del -Co Auto Body and get it fixed. 1. You and your partner had previously agreed that any borough vehicles would be repaired at cost. This was done so that the borough would have more money available to fight crime. m. The same procedure was followed regarding the repair of the police Chevrolet Impala, a 1984 vehicle that was damaged in an auto accident. Mr. Robert F. Smythe Page 11 n. You were not involved in estimating the damage on this vehicle. o. You do not recall if the decision to use Del -Co Auto Body was made at a council meeting. p. All members of Council knew that you were involved with Del - Co Auto Body through the course of attending meetings and dealing with council on a daily basis. Everyone already knew of your connection with Del -Co Auto Body and no one confronted you about that situation. q. In the mid 1970's, an issue came up regarding your company providing work for the borough and it was decided, at that time, that there would be no conflict of interest. r. You have not filed any Statements of Financial Interests in your position as Chief of Police or as Police Officer in that you were never supplied the statements and were unaware of the fact that you had to file them. 17. Records of Darby Borough indicate no Statements of Financial Interests on file for you, except for a Statement dated March 7, 1989 which contains no designation as to calendar year. a. The Borough manager in a letter of October 30, 1989 advises that your statement was filed for the 1989 year. 18. You provided the following testimony: a. Del -Co has not done any borough repair work since 1988 nor any towing and storage work for more than 10 years. b. Del -Co did some work for the borough in 1988 but did not charge the borough for either parts or labor. c. You and your partner decided that Del -Co would basically do borough repair work at cost so that the borough could save money. d. The contracting procedures were established by council and you did not participate in that process. e. When a borough vehicle was damaged, you were told to send the vehicle for estimates which would be submitted to council. You had no discretion as to where to send the vehicles. f. Council made the decisions to award contracts. Mr. Robert F. Smythe Page 12 g. The matter of Del -Co's contracting with the borough was reviewed by two different borough solicitors who opined that there was no conflict based upon the manner in which the contracting was handled. h. You filed a Financial Interests Statement with the borough for the first time in 1989 because, prior to that time, you were not given the form and were not aware of the filing requirements. i. You acknowledge that you use the Crimes Code handbook which contains a copy of the Ethics Act. B. Discussion: As the Police Chief for Darby Borough, you are a public employee as that term is defined under the Ethics Act and Regulations of this Commission. 65 P.S. S402; 51 Pa. Code 1.1. As such, you are subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. Initially, it is noted that Section 5 of Act 9 of June 26, 1989 provides, in part, as follows: This amendatory act shall not apply to violations committed prior to the effective date of this act, and cause of action initiated for such violations shall be governed by the prior law, which is continued in effect for the purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto." Since the occurrences in this case transpired prior to the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 170 of October 4, 1978, P.L. 883 to determine whether the Ethics Act was violated. Under Section 3(a), 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 v. State Ethics Omission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet v. Mr. Robert F. Smythe Page 13 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 v. State Ethics Commission, 116 Pa. Commw. Ct. 19, 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. Additionally under section 3(c) of the Ethics Act quoted above, this provision of law provides, in part, that no public official shall enter into a contract valued at $500 or more with this governmental body unless the contract was awarded through an open and public process. In the instant matter we must determine whether your actions have violated Section 3(a) of the Ethics Act and secondly whether Section 3(c) of the Ethics Act has been violated as to the contracting between the borough and Del -Co, a business with which you are associated due to your 50% partnership interest therein. In 1987, Del -Co, an automobile repair shop, billed the borough for $275 for repairs on a 1978 Chevrolet; by invoice dated January 29, 1988, Del -Co billed the borough in the amount of $2100 for repairs on a 1983 Plymouth and by invoice dated February 9, 1988, Del -Co submitted a bill totalling $1,910.68 for repairs on s 1984 Chevrolet. The record reflects that you had no involvement as police chief as to the borough procedures for repairing damaged vehicles which did not involve on open and public process for bidding. In addition, you testified that you had no discretion as to where the damaged vehicles would be sent for estimates or where the vehicles would be fixed. Finally, you stated that you and your partner in Del -Co decided to do any borough repairs at cost so that the savings could be passed on to the borough. In applying the above circumstance to Section 3(a) of the Ethics Act, we do not find any evidence to establish that you used public office to obtain a financial gain for Del -Co, the business with which you were associated. The decisions to award contracts for the repairs of damaged borough vehicles were made by council; you as police chief did not participate or vote in those decisions. Accordingly, we find on the facts presented that you did not violate Section 3(a) of the Ethics Act. Regarding the allegation concerning Section 3(c) of the Ethics Act, we note that Del -Co did submit invoices for the repairs of vehicles. In 1988, two invoices were submitted which exceeded the $500 threshold of Section 3(c). In addition, the awarding of contracts for the repair of vehicles was not done through an open and Mr. Robert F. Smythe Page 14 public process but was apparently awarded to the lowest bidder as to the bids which were solicited. Under these circumstances we find that you did violate Section 3(c) of the Ethics Act when the business with which you were associated, Del -Co, entered into two contracts in 1988 which exceeded $500 and which were awarded without an open and public process. Finally, we note that you have been a policeman for Darby Borough for 19 years and police chief for the last five years. As police chief you are a public employee required to file the Statement of Financial Interests. Coyle, Opinion 82 -013. You, however, have not filed any statements except for a form dated March 7, 1989 for an undesignated calendar year. Such action violated Section 4(a) of the Ethics Act which provides: Section 4. Statement of financial interests required to be filed. (a) Each public employee employed by the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency or bureau in which he iF employed no later than May 1, of each year that he holds such a position and of the year after he leaves such a position. Any other public employee shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. 65 P.S. §404(a). In light of the above deficiencies, you are hereby directed within 30 days of the issuance of this Order to file an amended Financial Interests Statement to reflect the appropriate calendar year. In addition you are directed to file Financial Interests Statements for the other years when you served as police chief. If you comply with the above within the 30 day period, no further action will be taken in this case. Failure to comply will result in the referral of this matter to the appropriate law enforcement authority. C. Conclusion and Order 1. As Darby Borough Police Chief, you are a public employee subject to the provisions of the Ethics Act. Mr. Robert F. Smythe Page 15 2. You did not violate Section 3(a) of the Ethics Act regarding the repair of borough vehicles at Del -Co, a business with which you were associated, because the evidence does not establish any use of office on your part to obtain a financial gain. 3. You violated Section 3(c) of the Ethics Act when Del -Co, a business with which you were associated, contracted for the repair of two borough vehicles in 1988 when the contracts exceeded $500 and were not awarded through an open and public process. 4. You violated Section 4(a) of the Ethics Act when you failed to file Statements of Financial Interests for all years that you served as police chief, except for a Statement dated March 7, 1989. 5. You are directed within 30 days of the issuance of this Order to file an amended Statement to reflect the appropriate calendar year as to the Statement referenced in paragraph 4. 6. You are directed within 30 days of the issuance of this Order to file Statements of Financial Interests for all other years when you served as police chief. 7. Failure to comply with the provisions of paragraphs 5 and 6 will cause the referral of this case to the appropriate law enforcement authority. This Order is final and will be made available as a public document fifteen days after issuance. However, you may request reconsideration which will defer public release of this Order pending action on your request by the Commission. A request for reconsideration, however, does not affect the finality of this Order. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of your reasons as to why reconsideration should be granted in conformity with 51 Pa. Code 52.38. The files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a) during the fifteen day period and no one, including yourself, unless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, confidentiality does not preclude you from discussing this case with your attorney at law. Mr. Robert F. Smythe Page 16 Any person who violates 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, 65 P.S. 409(e). By the omission, ./ / �C elena G. Hughes Chair Dear Attorney Belefonte: STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 January 9, 1990 Mr. Robert F. Smythe c/o Carmen P. Belefonte Cherry, Ferrara, Mutzel, Belefonte McFadden & Wesner 220 North Jackson Street P.O. Box 1670 Media, PA 19063 Re: Order No. 733, File No. 88 -062 -C On January 2, 1990, the State Ethics Commission received your Statements of Financial Interests as required by State Ethics Commission Order No. 733. This letter will become part of the Order when such becomes public record. JJC /na ccs Public Binder Si erely j Execut e Director