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HomeMy WebLinkAbout1151 BrociousIn Re: George D. Brocious STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Julius Uehlein Louis W. Fryman John J. Bolger Frank M. Brown Susan Mosites Bicket 99- 027 -C2 Order No. 1151 4/12/2000 4/28/2000 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation as to the above -named Respondent regarding a possible violation of the Public Official and Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq., as codified by the Public Official and Employee Ethics Act ( "Ethics Act "), Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101 et seq., which inter alia provides for the completion of pending matters under that Act. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Consent Agreement was subsequently approved and the Stipulation of Findings appears as the Findings in this adjudication. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with the Ethics Act. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Brocious, 99- 027 -C2 Page 2 I. ALLEGATION: That George Brocious, a public employee in his capacity as a County Maintenance Manager, District 10 -5, for the Pennsylvania Department of Transportation, violated Sections 3(a) and 5(b)(5) of the State Ethics Act (Act 9 of 1989) when he used the authority of his office for the private pecuniary benefit of himself and /or a business with which he is associated by directing subordinate employees for the Department of Transportation to design and build a device known as a side dozer while on Commonwealth time resulting in the company with which he is associated receiving sales commissions; and when he failed to disclose income received in excess of $1,300 on Statements of Financial Interests filed for the 1996 and 1997 calendar years. I1. FINDINGS: 1. George D. Brocious was employed by the Pennsylvania Department of Transportation from September 16, 1971, until May 14, 1999. a. Brocious was employed as a Highway Maintenance Foreman, District 10 -3, Clarion County, from September 1971 until April 1979. b. Brocious was employed as a County Maintenance Manager, District 10 -5, Jefferson County, from April 1979 until May 1999. 1. Brocious resigned as County Maintenance Manager effective March 8, 1985, but was reinstated effective June 4, 1985. 2. The job description for County Highway Maintenance Manager position held by Brocious includes, in part, the following duties: a. Plan and organize the operations of a medium -sized county maintenance organization. b. Maintain county maintenance budget, distributing and controlling the expenditure of funds from maintenance budget and special work authorizations. Review and act on requisitions or purchase orders for materials or equipment. 3. Programs have existed since at least the early 1980's to encourage PennDOT employees to be creative in the use of or development of necessary tools. a. Incentives have been offered in association with these programs. 1. Incentives are non - monetary and have included hats and shirts. 2. Incentives do not differ due to an employee's position. 4. Equipment developed from employee ideas is viewed by PennDOT as PennDOT property if: a. Equipment is built on PennDOT time. b. Equipment is built with PennDOT materials. c. Parts manufactured outside of PennDOT are paid for by PennDOT. Brocious, 99- 027 -C2 Page 3 5. PennDOT has not formalized a policy on employees working on ideas on PennDOT time. a. Employees have not been formally advised that ideas developed in the course of PennDOT employment are PennDOT property. 6. Edge Development, Inc., is a company owned by George Brocious. a. Brocious is the Chief Executive Officer and Treasurer of Edge Development, Inc. b. Edge Development, Inc., was incorporated by Brocious on February 21, 1986. c. Edge Development, Inc., is a company involved in the development of new ideas /inventions. 7. Brocious has been issued patents for ideas and inventions he has developed. a. Brocious was issued Patent Number 3,764,287 for a glass melting and refining method and apparatus on October 9, 1973. b. Brocious was issued Patent Number 4,820,078 for an apparatus for road surface repair with fiber - reinforced asphalt on April 11, 1989. c. Brocious was issued a trademark under registered number 1,901,106 for an organic enzyme on June 20, 1995. 8. Since at least 1985 Brocious was working on ideas for developing equipment to remove the build -up of dirt and debris under road guide rails. a. Problems for PennDOT have existed for many years regarding the buildup of dirt and debris under road guide rails. b. Attempts made in the past by PennDOT to develop equipment for the purpose of removing this buildup were inefficient. 9. Brocious first recorded an idea for a side dozing piece of equipment in a notebook on December 12, 1985. a. Brocious identified this book as his "brainstorming" notebook. b. Brocious records ideas for inventions in this notebook as they occur. c. Brocious was an employee during this time period and was aware both through his public position and his private business activities of debris build -up under guard rails. 10. In late winter /early spring of 1995, Brocious discussed the idea for a piece of berm clearing equipment with Wayne C. Snyder. a. Snyder was the Mechanic Supervisor and the acting equipment manager at PennDOT District 10 -5 from November 26, 1994 to March 31, 1995, during the construction of the first side dozer. Brocious, 99- 027 -C2 Page 4 b. Brocious was Snyder's supervisor in Snyder's capacity as the acting equipment manager. c. Brocious and Snyder discussed berm clearing prior to 1995 but could not agree on the design. 1. It was Snyder's idea to place the side dozer on a machine that ran parallel with traffic and pushed a blade perpendicular to the guide rails. 11. Brocious advised Snyder that he wanted a piece of equipment developed to clear the road berms. a. Snyder believed that he had Brocious' approval to obtain whatever parts were necessary for development as long as the equipment worked. 12. Clifford W. Smith has been employed as a welder at PennDOT District 10 -5 since approximately March of 1995. a. Wayne Snyder is one of Smith's supervisors. b. Snyder discussed with Smith the possibility of building a side dozer shortly after Smith was hired. c. Smith informed Snyder he could not build the side dozer at the District 10 -5 garage because the state did not have the necessary equipment. 13. Smith enlisted the assistance of his cousin, Brian Smith, in manufacturing the side dozer. a. Brian Smith is the Vice - President of GS Hydraulics, Inc., then known as GS Mining Repair, Inc. 1. GS Hydraulics specializes in hydraulic equipment. 14. Brian Smith manufactured the components for the side dozer at GS Mining, based on Snyder's design, sometime prior to March 20, 1995. a. Smith manufactured pins, bushings, brackets, and the cylinder for the side dozer. b. Smith billed PennDOT District 10 -5 for fees associated with labor and cost of materials. 15. GS Mining billed PennDOT $ 1,825.00 in association with the manufacture of the first side dozer. Date 03/15/95 Invoice # 8289 P.O. # 306423 Description 1 hydraulic cylinder, 2 bore, 2" rod, 50" stroke Amount $1,200.00 03/20/95 7950 - 2 pins and brackets for side dozer boom "bobcat" material labor $625.00 Brocious, 99- 027 -C2 Page 5 16. An ID -61 PennDOT departmental invoice was utilized in approving payment to GS Mining in the amount of $1,825.00. a. David L. Reams signed the ID -61 in his capacity as a Highway Manager 1 for District 10 -5. 17. On April 24, 1995, GS Mining Repair was issued Check #05790471 in the amount of $1,825.00 from the Commonwealth of Pennsylvania, State Treasury Department, Harrisburg, PA. 18. Richard Hogg, District 10 -0 District Engineer, first learned of the construction of the side dozer at District 10 -5 in the spring of 1995. a. Hogg was Brocious' immediate supervisor. b. Brocious informed Hogg during a telephone conversation that he was building a side dozer at District 10 -5. 19. Smith assembled the first side dozer in the PennDOT District 10 -5 garage in or about March 1995. a. Smith assembled the side dozer during slow work periods. b. Smith did not work on the side dozer daily. c. Smith assembled the side dozer during his regular hours as a PennDOT employee. 20. Smith did not record all of his time spent assembling the side dozer on his daily time sheets. a. Smith estimated approximately 20 -30 hours total work on the side dozer. b. PennDOT employees are to document the number of hours worked on equipment by equipment number and work order number on their daily time sheets. 21. Smith and Kevin Villella ( PennDOT Diesel Mechanic) are the only PennDOT District 10 -5 employees who recorded time on the side dozer as shown below: a. Smith claimed 2 hours on 03/20/95 and 04/14/95. b. Villella claimed 1 hour on 06/08/95. 22. PennDOT employees were paid regular wages for time associated with assembling the side dozer. a. Smith's rate of pay in 1995 was $10.19 per hour. Brocious, 99- 027 -C2 Page 6 b. Villella's rate of pay in 1995 was $13.14 per hour. 23. Smith utilized various PennDOT materials in assembling the side dozer, including paint, torches, welding rods, welders, nuts, and bolts. a. Smith did not keep an accurate count of the quantity of materials used. 24. The exact cost of PennDOT equipment, materials and manpower used in assembling the side dozer was not maintained by PennDOT. time a. si -dozer b Y B ocious, devoted Snyder and Smith development as personal, non - PennDOT time. 25. Brocious occasionally checked on the progress of the side dozer project in the District 10 -5 weld shop. a. Snyder also periodically checked on the side dozer project. 1. Neither Snyder nor Brocious provided major input, beyond their initial ideas, to the side dozer as it was built. 26. Brocious and Snyder did not perform actual work on the side dozer. 27. In or around June 1995, GS Mining manufactured and assembled a second side dozer. a. This side dozer was built due at the request of Ron Irwin, District 10 -5 Equipment Manger. b. The second side dozer was delivered assembled to District 10 -5. c. No District 10 -5 employees logged any time on the second side dozer. 28. The second side dozer had several modifications from the original. 29. On June 7, 1995, GS Mining billed PennDOT $1,438.00 by invoice no. 7973 for the labor and material costs associated with the custom hydraulic cylinder on the second side dozer: a. Invoice 7973 bears the signature of R.W. Irwin in the "received by" section. 30. An ID -61 PennDOT departmental invoice was utilized in approving payment to GS Mining in the amount of $1,438.00. a. Brocious signed the ID -61 in his capacity as County Maintenance Manager approving payment. 31. amount of $1,438 00 from Mining i omo wealth of Pennsylvania, State Treasury a m � ry a Department, Harrisburg, PA. 32. Brocious approached Snyder and Smith shortly after the assembly of the first side dozer and suggested the possibility of obtaining a patent on the equipment. Brocious, 99- 027 -C2 Page 7 a. Snyder and Smith both supported the idea to obtain a patent on the side dozer. 33. Brocious, Snyder, and Smith met with George C. Atwell from the law firm of Atwell & Morrow, 421 North Main Street, Butler, PA, regarding obtaining a patent for the side dozer in or around May 1995. a. The fee for the patent search was $575.00. 1. Brocious paid $192.00 of this fee with Check #220 dated May 4, 1995, from the account of Edge Development at Keystone National Bank. 2. The remaining $383.00 was paid by Snyder and Smith. 34. On May 6, 1995, Snyder and Smith entered into an exclusive licensing agreement with Edge Development, Inc., R. D.1, Box 81, Mayport, PA, regarding the side dozer. a. Brocious, Snyder, and Smith all signed the agreement. 35. The licensing agreement provided specific terms, which included the following: a. All commissions earned by Edge Development were to be divided equally between Edge Development, Snyder, and Smith. b. Edge Development maintained the right to deduct reasonable expenses incurred from marketing and applying for and maintaining patent protection from commissions earned. 36. On May 6, 1995, Edge Development entered into an exclusive licensing agreement with GS Mining Repair, Inc., regarding manufacturing, marketing, and selling the side dozer. a. Brocious signed the agreement on behalf of Edge Development. b. Eugene Smith, owner, and Kimberly Smith, secretary, signed the agreement on behalf of GS Mining Repair, Inc.. 37. The licensing agreement provided specific terms which included the following: a. GS Mining Repair agreed to pay Edge Development a minimum commission of $600.00 on each unit sold or 15% of the selling price, whichever was greater. 1. If Edge Development was successful in obtaining patent protection, the minimum commission would become $750.00 or 20% of the selling price, whichever was greater. b. GS Mining Repair agreed to maintain adequate liability insurance regarding the manufacture, marketing, or use of the side dozer. 38. Brocious did not actively market the side dozer to PennDOT or other municipalities. Brocious, 99- 027 -C2 Page 8 a. Brocious authored an article regarding the side dozer which appeared in the July 1998 issue of Better Roads magazine. b. Brocious videotaped a demonstration of the side dozer being utilized under the direction of PennDOT District 10 -0 equipment manager, Joseph Boyer. 39. Mining Repair sold a total of five side dozers to various PennDOT districts resulting in $3,742.50 in commission paid to Edge Development: District/ County 10 -4/ Indiana 10-1/ Armstrong 4 -5/7/ Susquehanna 2 -2/ Clearfield 4 -2/ Lackawanna Sold By GS Mining GS Mining GS Mining GS Mining GS Mining Date Sold 08/07/95 08/08/95 01/31/96 05/22/96 08/12/96 Cost $4,990 $4,990 $4,990 $4,990 $4,990 Commission to Edge $748.50 $748.50 $748.50 $748.50 $748.50 Date Commission Paid 01/10/96 01/10/96 04/08/96 06/20/96 09/23/96 Check 6265 6265 6464 6628 6821 All of the commission checks were made payable to Edge Development, Inc. The above listed checks were endorsed as "For Deposit Only," Edge Development, Inc., under Account #0375179, with then Keystone National Bank, now National City Bank. 40. Edge Development was issued Patent #5,701,693 on December 30, 1997, for a Berm Clearing Attachment for Road Clearing Vehicles (side dozer). a. The application for the patent was filed on January 22, 1996. 41. Expenses incurred to Edge Development associated with obtaining patent protection for the side dozer totaled $4,728.00, as detailed below: a. b. Date 05/04/95 01/20/96 03/11/96 03/04/97 Check Number 220 224 227 237 Check Amount $ 192.00 $1,426.00 $2,000.00 $ 290.00 Memo Patent search Side Dozer Side Dozer Patent 95 -080 Amendment Brocious, 99- 027 -C2 Page 9 07/11/97 239 $ 820.00 Side Dozer patent a. The $192.00 expense documented Brocious' one -third of the patent search. b. The $1,426.00 and $2,000.00 expenses addressed the initial filing fee for the patent. c. The $290.00 expense addressed an amendment to the initial application d. The $820.00 expense addressed the patent issuance fee, copy fees, recording of the assignment, and attorney fees and costs. e. All of the above listed checks were issued by Brocious from Edge Development, Inc., Account #0375179. 42. Seigworth Road Supply began to market the side dozers in or about August 1997. a. Seigworth Road Supply provides road building and maintenance equipment and supplies. 43. Seigworth was contacted by Brocious in June 1995 after the second side dozer was developed to come to GS Mining Repair to discuss the side dozer. a. Seigworth became acquainted with Brocious when Brocious worked for PennDOT in Clarion County sometime prior to April 1979. b. Seigworth provided input to the side dozer design in regard to safety. 44. GS Mining Repair manufactured the side dozer for Seigworth Road Supply to market and sell in or about August 1997. a. Seigworth agreed to pick up liability insurance on all side dozer attachments made to that point because GS Mining Repair was unable to maintain adequate liability insurance on the side dozer. 1. Inability to carry liability insurance on the side dozer negated the licensing agreement between GS Mining Repair and Edge Development. b. Seigworth initially purchased the side dozers from GS Mining Repair and paid the commission to Edge Development directly. c. Seigworth purchased a total of four side dozers from GS Mining Repair between the time period of August 26, 1997, to February 5, 1998. 45. The side dozer patent was assigned to Seigworth Road Supply from Edge Development on June 15, 1998. a. Brocious and Snyder approached Seigworth and offered the patent assignment to Seigworth. b. Brocious did not want Edge Development to own the patent due to the product liability issue. cisTricitS Purchaser ana Diner Sold By SI.dLUN I et.iiLli Date Sold IW 111 Y-./. / t( v..,v Cost ... vv.....,. Commi- sion to Edge .....c, - 8 Date Commission Paid Check # PennDOT Shippenville Seigworth 10/03/97 $7,950.00 $750 10/13/97 2393 Applied Polymerics Mount Airy, NC Seigworth 09/24/98 $5,722.29 $750 10/13/97 2393 PennDOT Stroudsburg Seigworth 12/16/98 $6,497.49 $600 01/26/99 4461 PennDOT Doylestown Seigworth 12/22/98 $6,472.49 $600 01/26/99 4461 PA Turnpike Harrisburg Seigworth 02/03/99 $6,645.00 No record of payment PennDOT Schuylkill Haven Seigworth 03/29/99 $6,679.98 $600 04/29/99 4937 PennDOT Allentown Seigworth 03/29/99 $6,685.20 $600 04/29/99 4937 PennDOT Easton Seigworth 03/29/99 $6,685.20 $600 04/29/99 4937 Brocious, 99- 027 -C2 Page 10 c. Seigworth paid $1.00 to Edge Development for the patent assignment. d. Seigworth agreed to pay Edge Development a $600.00 commission on each side dozer sold. 46. The assignment of the patent provided Seigworth with exclusive manufacturing, marketing, and selling rights to the side dozer. a. Seigworth continued manufacturing the side dozer through GS Mining Repair until August 1998 when GS Mining Repair could not produce the side dozer in a timely fashion. b. In August 1998, Seigworth began utilizing Gledhill Road Machinery, an Ohio company, to manufacture the side dozer. 47. Between the dates of January 29, 1998, and May 12, 1998, the Regional Facility for PennDOT Engineering District 2 -0 manufactured a side dozer for Maintenance District 2 -2, Hyde, Pennsylvania. 48. On October 21, 1998, a cease and desist letter was issued to John Hill, District 2 -0 Equipment Manager, by Atwell referencing a side dozer patent infringement. a. The letter was sent on behalf of Seigworth Road Supply as a result of PennDOT's manufacturing of the side dozer in 1998. 49. Seigworth Road Supply has sold a total of 10 side dozers to various PennDOT �.__ �:.... a� inn nn �., �nmmiccinnc h Ainn nairl to D.O.T. Seigworth 05/03/99 $6,889.00 $600 07/19/99 5338 Austin, TX D.O.T. Seigworth 05/17/99 $6,750.00 $600 07/19/99 5338 Manassas, VA Brocious, 99- 027 -C2 Page 11 a. Check numbers 2393, 4937, and 5338 were made payable to Edge Development, Inc. b. Check number 4461 was made payable to Brocious. c. Check numbers 2393, 4461, 4937, and 5338 were endorsed as "For Deposit Only," Edge Development, Inc., under Account #0375179. d. Brocious is the sole owner of Account No. 0375179. 51. Brocious utilized funds from the account of Edge Development to pay for various miscellaneous expenses not associated with patent expenses. a. Brocious occasionally loans money to Edge Development. b. Brocious has issued nine loans to Edge Development totaling $7,300.00 since March 11, 1994. 52. Brocious and Snyder each loaned Edge Development $1,000.00 on February 29, 1996. a. These loans were utilized by Edge Development for payment of the remaining balance of the side dozer patent filing fee. b. Both Snyder and Brocious were reimbursed by Edge for the $1,000.50 loan. 53. Brocious has not been reimbursed for any other loans he issued to Edge Development. 54. Edge Development has not issued any commission profit to Snyder or Smith. a. Snyder and Smith suggested Brocious use accumulated side dozer commissions for legal expenses. 55. Brocious has maintained control over all funds in the Edge Development account. 56. During the time that he was establishing Edge Development, Inc., Brocious filed a Supplemental Employment Request with PennDOT's Office of Personnel pursuant to rules that mandate no employee shall engage in or accept private or other public employment or render services for private or other public interests unless such employment or service is approved in advance by the agency head to which the employee is assigned. a. State employees must submit a Supplementary Employment Request for any employment beyond their state employment. Brocious, 99- 027 -C2 Page 12 57. Brocious submitted a Supplementary Employment Request dated May 2, 1986, to the PennDOT Bureau of Personnel. a. Brocious submitted this request to pursue ideas and inventions through Edge Development, Inc. b. Item No. 11 of Brocious' request describes his duties as being "a participant in a corporation formed to develop new ideas and technology. Work will be performed during evenings and weekends in spare time." c. Item No. 12(b) of the request Brocious advised that the business activity "could possibly be considered related if our corporation develops something related to highway maintenance. However, since my sphere of influence is confined to Jefferson County, no actual or apparent conflict exists as long as our corporation does no business with Jefferson County or PennDOT." d. Brocious' signature appears on the request. 58. Brocious submitted an affidavit with his Supplementary Employment Request which stated the following: "My signature below is evidence that I have read and to fully n understand that the following conditions apply ply to my supplementary m P Y 1) I may not conduct business with any Commonwealth agency or other Commonwealth entity; 2) I may not use information or data obtained or derived from Commonwealth employment to further private business interests; 3) I may not accept private business conflicting with or accruing from Commonwealth employment; 4) I may not solicit work in connection with my supplementary employment during working hours or at Commonwealth facilities; 5) I may not use Commonwealth property for my supplemental activities; 6) I must comply with Management Directives 205.8 and 205.14 and am prohibited from conducting any private business in Commonwealth offices at any time before, during, or after normal working hours or anywhere during normal working hours; 7) Violation of any of the above conditions may result in disciplinary action by the Department of Transportation, including but not limited to suspension and /or dismissal. a. Brocious' signature appears on the affidavit. 59. Brocious received correspondence dated December 9, 1986, from Sharon Wright, PennDOT Bureau of Personnel, advising that his request had been denied. Brocious, 99- 027 -C2 Page 13 a. More information was required on the nature of Edge Development's business; specifically, if Edge Development would be working on ideas created on Commonwealth time. 60. Brocious submitted a follow -up letter to PennDOT Bureau of Personnel dated December 22, 1986, with accompanying documentation addressing his Supplementary Employment Request assuring that his inventions were not created on Commonwealth time. a. He noted that his departmental duties do not allow time to develop devices during working hours. b. Brocious' letter noted that Edge Development will not conduct business with any Commonwealth agencies, nor would he represent the Commonwealth in any dealings with any agency doing business with Edge Development. 61. Brocious received correspondence dated January 21, 1987, from PennDOT Bureau of Personnel that his request had been denied. a. The reason for disapproval was that Brocious had failed to indicate that his inventions would not relate to Commonwealth business and if said inventions would be highway related or not. 62. Brocious submitted a second follow -up letter dated February 5, 1987, addressing his Supplementary Employment Request. a. Brocious referenced his signed affidavit dated May 2, 1986, in response to the reasons for the denial. 63. Brocious was granted his Supplementary Employment Request on April 2, 1987, based on his prior submissions. 64. In 1995, PennDOT's affidavit for supplemental employment was revised. a. All personnel that had an approved supplemental employment request prior to this revision were asked to sign the new affidavit. b. Brocious signed the revised affidavit on August 4, 1995. 65. The revised affidavit stated the following: "My signature below is evidence that I have read and fully understand that the following conditions apply to my supplementary employment: 1. I may not conduct business with the Department or any state agency; 2. I may not represent any private interest on any matter, whether or not for payment, before the Department or any state agency. 'Represent' means any action taken by a Department employe, including but not limited to, appearances by the employe, communications of any nature by the employe, submissions by anyone of the employe's work whether or not it identifies the employe, or involvement by the employe in any preliminary activities which become part of those submissions. I will take reasonable precautions to ensure that my work will not be submitted by anyone to the Department or any state agency; Brocious, 99- 027 -C2 Page 14 3. I may not use the information or data obtained or derived from employment with the Department or any state agency to further business interests; 4. I may not accept private business conflicting with or accruing from employment with the Department or any state agency; 5. I may not solicit work in connection with my supplementary employment during work hours or at facilities of the Department or of any state agency; 6. I may not use the property of the Department or of any state agency for my supplemental activities; 7. I must comply with Management Directive 205.14 and am prohibited from conducting any private business in the offices of the Department or any state agency at any time before, during or after normal working hours or anywhere during normal working hours; and 8. The above conditions apply at all times regardless of whether I am in an active or an inactive employment status. Inactive employment status includes but is not limited to all periods of unpaid leave with or without benefits, absences without leave and disciplinary suspensions. 9. Violation of any of the above conditions may result in disciplinary action against me by the Department of Transportation including, but not limited to, suspension and /or dismissal." 66. Brocious was terminated from his PennDOT employment on May 14, 1999, in a May 14, 1999, letter from Jacob Simonton, Director, Bureau of Personnel. a. PennDOT's letter stated Brocious's involvement in the development, assembly and patenting of berm clearing side -dozer device violated important assurances he provided and the terms of his approved Supplementary Employment. Specifically, in the referenced correspondence dated December 22, 1986, he assured the Department that ". . . my inventions are not created on Commonwealth time." b. PennDOT concluded that the referenced invention was assembled on PennDOT work time, at a PennDOT work site, using PennDOT materials. c. PennDOT ruled that the berm clearing side -dozer device Brocious developed and patented clearly related directly to highway maintenance work. d. Brocious appealed the dismissal to the Civil Service Commission. 1. A ruling is pending. 67. Edge Development received payments of $9,442.50 from commissions as the result of the sale of side dozers to PennDOT facilities and other companies. 68. During the time that he was involved with the side -dozer project, Brocious never made any attempt to hide his activities, or business interest, regarding the side dozer. Brocious, 99- 027 -C2 Page 15 a. Brocious' supervisors encouraged the development of the side dozer. 69. Brocious did not disclose income from the sale of real estate interests at Treasure Lake, Clearfield County, Pennsylvania, on his Statement of Financial Interests for the 1996 calendar year. a. Brocious did disclose the sale of the property on the Code of Conduct forms filed with PennDOT. 1. Code of Conduct Forms are financial disclosure forms filed by employees under the Governor's jurisdiction. III. DISCUSSION: At all times relevant to this matter, the Respondent, George D. Brocious, hereinafter Brocious, has been a public employee subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, et seg. as now codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101, et seq. The issue is whether Brocious violated Sections 3(a) and 5(b)(5) as to the allegations that he used the authority of his office for the private pecuniary benefit of himself or a business with which he is associated by directing subordinate employees of the Department of Transportation (PennDOT) to design and build a device known as a side dozer while on Commonwealth time, resulting in the business receiving sales commissions; and when he failed to disclose income received in excess of $1,300 on Statements of Financial Interests (FIS's) filed for the 1996 and 1997 calendar years. Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The term "conflict of interest" is defined under the Ethics Act as follows: Section 1102. Definitions. "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. Brocious, 99- 027 -C2 Page 16 65 Pa.C.S. §1102. Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Section 1105(b) of the Ethics Act requires that every public official /public employee and candidate list the name and address of any direct or indirect source of income totalling in the aggregate of $ 1,000 or more. Section 1105. Statement of financial interests. (b) Required information. - -The statement shall include the following information for the prior calendar year with regard to the person required to file the statement. (5) The name and address of any direct or indirect source of income totaling in the aggregate $ 1,300 or more. However, this provision shall not be construed to require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges. 65 Pa.C.S. §1105(b)(5). Having noted the issues and applicable law, we shall now summarize the relevant facts. Between 1971 and 1999, Brocious was employed by PennDOT, first as a Highway Maintenance Foreman and then as a County Maintenance Manager. In a private capacity, Brocious is the Chief Executive Officer, Treasurer and owner of Edge Development, Inc., a company involved in the development of new ideas or inventions. Since the early 1980's, PennDOT has encouraged its employees to be creative as to the development of necessary tools. Such equipment is viewed by PennDOT as its property when the equipment is built on PennDOT time with PennDOT materials and with parts paid by PennDOT. PennDOT does not have any formal policy on this matter that its of employees enDOT employment are PennDOT materials developed during nDOT property . Since approximately 1985, Brocious had been working on ideas for developing equipment to remove the buildup of dirt and debris under road guide rails. Dirt and debris under road guide rails had been a problem for PennDOT for many years. PennDOT attempted with little success to develop equipment to remove such buildup. An idea for a side dozing piece of equipment was first recorded by Brocious in a notebook in December, 1985. At that time, Brocious was a PennDOT employee and was aware of the debris buildup problem under guard rails. In 1995, Brocious discussed the idea of berm cleaning equipment with Wayne C. Snyder, the Mechanic Supervisor and the acting Equipment Manager at PennDOT District 10 -5. Brocious specifically advised Snyder that he wanted to build a piece of equipment to clean the road berm. Snyder then discussed the possibility of building the sidedozer with Clifford Smith, a welder employed by PennDOT. Smith in turn contacted his cousin, Brian Smith, who is Vice - President of GS Hydraulics, Inc. (then known as GS Mining Repair, Inc.), a company that specializes in hydraulic equipment, regarding Brocious, 99- 027 -C2 Page 17 manufacturing components for the sidedozer. Brian Smith manufactured the components at GS Mining based upon the submitted design. GS Mining then billed and received payment from PennDOT in the amount of $1,825 for the manufacturer of the first sidedozer. Smith and Kevin VilleIla, a PennDOT diesel mechanic, assembled the first sidedozer at the District 10 -5 garage in March, 1999, during slow work periods. Smith utilized various PennDOT materials in assembling the sidedozer including paint, torches, welding rods, welders, nuts and bolts. However, there is no exact cost available as to the PennDOT equipment and manpower used in assembling the sidedozer. Although neither Brocious nor Snyder did any actual work on the sidedozer, both men periodically checked on the work and progress of the project. In June of 1995, GS Mining manufactured a second modified sidedozer which was completely assembled when delivered to PennDOT District 10 -5. GS Mining billed PennDOT in the amount of $1,438 for certain labor and material costs associated with the custom hydraulic cylinder on the second sidedozer. After the first sidedozer was assembled, Brocious approached Snyder and Smith about the possibility of obtaining a patent on the equipment. Since Snyder and Smith were receptive to the idea, all three met with an attorney in order to obtain a patent for the sidedozer. Snyder and Smith also entered into an exclusive licensing agreement with Edge Development, Inc., regarding the sidedozer which agreement was signed by Brocious, Snyder, and Smith. The licensing agreement provided for all commissions to be divided equally between Edge Development, Snyder, and Smith after Edge Development would deduct reasonable expenses incurred in marketing and applying for and maintaining the patent. Edge Development then entered into an exclusive licensing agreement with GS Mining Repair, Inc., regarding the manufacture, marketing, and sale of the sidedozer. Brocious did not actively market the sidedozer to PennDOT or other municipalities but did write an article regarding the sidedozer which appeared in the July, 1998, issue of Better Roads magazine. Subsequently, Mining Repair sold five sidedozers to various PennDOT Districts resulting in $3,742.50 commissions paid to Edge Development. In December, 1997, Edge Development was issued a patent for the sidedozer, after incurring $4,728 in expenses to obtain the patent. GS Mining Repair began manufacturing the sidedozer for Siegworth Road Supply which began marketing the sidedozers in August, 1997. The sidedozer patent was assigned to Siegworth Road Supply from Edge Development in June, 1998 because Brocious was concerned about product liability issues. Siegworth paid $1 to Edge Development for the patent assignment, but agreed to pay a $600 commission to Edge Development on each sidedozer sold. The patent assignment to Siegworth provided exclusive manufacturing, marketing, and sale rights for the sidedozer. Siegworth has sold a total of 10 sidedozers to PennDOT districts and other states resulting in $5,700 in commissions being paid to Edge Development. Between January and May of 1998, PennDOT Engineering District 2 -0 manufactured a sidedozer but received a cease and desist letter on October, .1998, from Siegworth Road Supply. Brocious has utilized funds from the Edge Development account to pay various miscellaneous expenses not associated with the patent. Brocious occasionally loaned money to Edge Development and he along with Snyder each loaned Edge Development Brocious, 99- 027 -C2 Page 18 $1000 in February, 1996, for the payment of the remaining balance of the sidedozer patent filing fee. Brocious has not been reimbursed for any loans he issued to Edge Development. In turn, Edge Development has not issued any commission profits to Snyder or Smith. Brocious has maintained control over all the funds in the Edge Development account. Brocious submitted a supplementary employment request to PennDOT dated May 2, 1986, for the purposes of pursuing ideas and inventions through Edge Development, Inc. As part of that request, Brocious submitted an affidavit where he acknowledged that he read and understood certain conditions and conflict provisions as to supplementary employment, the details of which are set forth in Fact Finding 58. Brocious received correspondence in December, 1986, from PennDOT advising that his request had been denied. Brocious then submitted a follow up letter asserting that his inventions were not created on Commonwealth time. Brocious then received additional correspondence on January 24, 1989, noting that his request had been denied because he did not indicate that his inventions were unrelated to Commonwealth business. After a second follow up letter was submitted, Brocious was granted a supplemental employment request in April, 1987, based on his prior submissions with a revised affidavit, the details of which are set forth in Fact Finding 65. Brocious was terminated from PennDOT employment on May 14, 1999, based upon Brocious' involvement in the development and assembly of the sidedozer in violation of the assurances contained in the affidavit of supplementary employment. Brocious has appealed the dismissal to the Civil Service Commission which appeal is currently pending. Edge Development has received payment of $9,442.50 in commission as a result of sale of sidedozers to PennDOT and other companies. During that time, Brocious never made any attempt to hide his activities or business interest regarding the sale of the dozer. Lastly, Brocious did not disclose on his 1996 calendar year FIS the sale of real estate at Treasure Lake, Clearfield County. The parties have submitted a Consent Agreement together with a Stipulation of Findings wherein it is proposed to resolve this case by finding an unintentional violation of Section 3(a) of the Ethics Act when Brocious participated in the building of a side dozer on Commonwealth time using Commonwealth provided materials and a technical violation of Section 5(b)(5) of the Ethics Act when he failed to disclose income from the sale of property of Treasure Lake on his FIS for 1996. In addition, Brocious agrees to make payment of $2500 within 30 days of the date of issuance of this Order through this Commission to the Commonwealth of Pennsylvania with Brocious divesting himself of any future commissions from the sale of side dozers. Finally, Brocious agrees to file an amended FIS for the calendar year 1996 reporting the income from the sale of the property of Treasure Lake. In applying the provisions of the Ethics Act to the stipulated facts, it is clear that there was a use of authority of office on the part of Brocious. As a PennDOT employee on Commonwealth time using Commonwealth resources, Brocious developed the side dozer. Not only were PennDOT employees and materials used for the development of the side dozer, but the Commonwealth made payments to GS Mining for the production of the first model of the side dozer. Despite PennDOT's policy, that equipment developed on PennDOT time with the utilization of PennDOT equipment belongs to the Commonwealth, Brocious pursued a course of action to patent the side dozer for a business with which he is associated, Edge Development. The use of authority of office resulted in a private Brocious, 99- 027 -C2 Page 19 pecuniary consisting of the commissions on the sales of side dozers. Lastly, such financial gain inured to Brocious and the business with which he is associated as to those commissions. Accordingly, we find that an unintentional violation of Section 3(a) of the Ethics Act occurred when Brocious participated in the development of a side dozer on Commonwealth time utilizing Commonwealth provided materials. See, Catone, Order 994. As to the FIS allegation, the record reflects that Brocious did not report income from the sale of the property of Treasure Lake on his FIS for the calendar year 1996. Since the Ethics Act requires the reporting of all sources of income of $1300 or more and since Brocious failed to report such income, we find that a technical violation of Section 5(b)(5) of the Ethics Act occurred when Brocious failed to report income from the sale of the property of Treasure Lake on his FIS for the calendar year 1996. We find no violation of Section 5(b)(5) of the Ethics Act by Brocious as to his 1997 calendar year FIS based upon an insufficiency of evidence. We believe that the Consent Agreement is the proper disposition for this case based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, Brocious is directed to make payment of $ 2500 to the Commonwelath of Pennsylvania within 30 days of the date of this Order. Further, Broscious must divest himself of any future commissions from the sale of side dozers. Lastly, Brocious must file an amended FIS for the calendar year 1996 reporting the income from the sale of the property of Treasure Lake. Compliance with the foregoing will result in the closing of this case with no further action. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. George D. Brocious, as a County Maintenance Manager in PennDOT, was a public employee subject to the provisions of Act 9 of 1989 as now codified by Act 93 of 1998. 2. Brocious unintentionally violated Section 3(a) of the Ethics Act when he participated in the building of a side dozer on Commonwealth time using Commonwealth provided materials which resulted in the issuance of a patent for the side dozer to a business with which he is associated. 3. Brocious technically violated Section 5(b)(5) of the Ethics Act when he failed to disclose income from the sale of the property of Treasure Lake on his FIS for the calendar year 1996. 4. Brocious did not violate Section 5(b)(5) of the Ethics Act as to his FIS for the calendar year 1997 based upon an insufficiency of evidence. In Re: George D. Brocious ORDER NO. 1151 File Docket: 99- 027 -C2 Date Decided: 4/12/2000 Date Mailed: 4/28/2000 1. George D. Brocious, as a County Maintenance Manager in PennDOT, unintentionally violated Section 3(a) of the Ethics Act when he participated in the building of a side dozer on Commonwealth time using Commonwealth provided materials which resulted in the issuance of a patent for the side dozer to a business with which he is associated. 2. Brocious technically violated Section 5(b)(5) of the Ethics Act when he failed to disclose income from the sale of the property of Treasure Lake on his Financial Interests Statement for the calendar year 1996. 3. Brocious did not violate Section 5(b)(5) of the Ethics Act as to his 1997 calendar year Financial Interests Statement based upon an insufficiency of evidence. 4. Per the Consent Agreement of the parties, Brocious is directed to make payment of $2500 within 30 days of the issuance of this Order through this Commission to the Commonwealth of Pennsylvania with Brocious divesting himself of any future commissions from the sale of side dozers and to file an amended FIS for the calendar year 1996 reporting the income from the sale of property of Treasure Lake. a. Compliance with the foregoing will result in the closing of this case with no further action by the Commission. b. Non- compliance will result in the institution of an order enforcement action. BY THE COMMISSION, DANEEN E. REESE, CHAIR