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HomeMy WebLinkAbout1169 PrattIn Re: William Pratt File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair John J. Bolger Frank M. Brown Susan Mosites Bicket 99- 075 -C2 Order No. 1169 12/12/00 12/27/00 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation 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., by the above -named Respondent. 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." An Answer was not filed and a hearing was waived. The record is complete. A Consent Agreement was submitted by the parties to the Commission for consideration which was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11, Act 93 of 1998, which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998. 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 Chapter 11 of Act 93 of 1998. Any person who violates confidentiality of the Ethics Law 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. Pratt, 99- 075 -C2 Page 2 I. ALLEGATION: That William Pratt, a public official, in his capacity as a Councilman for Penn Hills Borough, Allegheny County, violated Section 5(b)/1105(b) of the State Ethics Act (Act 9 of 1989/Act 93 of 1998) when he failed to disclose all creditors on Statements of Financial Interests filed for the 1995, 1996, 1997, and 1998 calendar years. II. FINDINGS: 1. William A. Pratt served as a council member for the Municipality of Penn Hills from January 1996 through December 1999. a. Pratt was a candidate for a position on the Municipality of Penn Hills Council in the 1995 primary and general election. 2. In 1995, as a candidate for Penn Hills Borough Council, Pratt filed a Statement of Financial Interests dated March 4, 1995, which reported financial information for the 1994 calendar year. 3. On April 17, 1996, Pratt filed a Statement of Financial Interests for the 1995 calendar year with the borough as an incumbent member of council. a. The form contained information for the 1995 calendar year. 4. Pratt filed a Statement of Financial Interests on February 29, 1997, as an incumbent council member reporting financial interests for the 1996 calendar year. 5. In Category 11 related to indirect and direct sources of income of the Statements of Financial Interests filed on April 17, 1996, and February 29, 1997, Pratt identified his sources of income as: US Air; Cellular Phone Franchise; and Curtis -Green Rental Property, 1112 Success Street, Pittsburgh, PA 15212. 6. Pratt did not disclose income and /or gifts received from the Lincoln Park Community Center in 1995 and 1996 on Statements of Financial Interests dated April 17, 1996, and February 29, 1997. 7 Lincoln Park Community Center compensated Pratt in the amounts of $3,100.00 in 1995 and $1,800.00 in 1996. 8. In a June 4, 1999, letter to Pratt from the State Ethics Commission, Pratt was advised of specific deficiencies relating to failure to disclose sources of income contained in his Statements of Financial Interests for calendar years 1995 and 1996. a. Pratt was advised that Block 11 relating to income was deficient in regard to income in excess of $1,000.00 from Lincoln Park Community Center, and Block 12 relating to gifts valued at $200.00 or more from Lincoln Park Community Center, which was not indicated on his Statements of Financial Interests for calendar years 1995 and 1996. b. Pratt was given a period of twenty (20) days within which to correct the noted deficiencies. 9. On June 8, 1999, Pratt filed Amended Statements of Financial Interests for calendar years 1995 and 1996. Pratt, 99- 075 -C2 Page 3 a. The amended forms were received by the State Ethics Commission Harrisburg Office on June 10, 1999. 10. Pratt's amended Statement of Financial Interests for calendar year 1995 reflected the addition of Lincoln Park Community Center under Categories 11 - Sources of Income; and 12 - Gift. a. Pratt disclosed that he had received a stipend of $250.00 from Lincoln Park Community Center under Category 12. b. The amended filing was signed by Pratt on 6/7/99. 11. Pratt's amended Statement of Financial Interests for calendar year 1996 reflected the addition of Lincoln Park Community Center under Category 11 - Sources of Income. a. Pratt signed and dated the amended filing on 6/8/99. 12. Pratt had a mortgage with PNC Bank during calendar years 1995 through 1998. a. Pratt had a mortgage of $9,858.00 on a property he was purchasing located at 1112 Success Street, Pittsburgh, PA. b. The property at 1112 Success Street was rental property and was not Pratt's primary or secondary residence. 13. Records of the Recorder of Deeds Office of Allegheny County included an Assignment of Mortgage to PNC Bank on March 13, 1992, Mortgage Book Volume 11959, Page 13. a. The PNC Bank mortgage was satisfied in 2000. b. The loan payoff was in excess of $6,500.00. 14. Pratt did not disclose PNC Bank as a creditor in excess of $5,000 for the calendar years 1995 and 1996 on Statements of Financial Interests filed on April 17, 1996; February 29, 1997, and the amended form filed on June 9, 1999 [sic]. 15. Pratt filed Statements of Financial Interests as a Penn Hills Councilman for the 1997, 1998 and 1999 calendar years as follows: a. 1997: April 23, 1998 b. 1998: June 7, 1999 c. 1999: May 1, 2000 16. Records of the Beaver County Recorder of Deeds Office include a mortgage to William A. Pratt, Jr., from Alternative Mortgage Source, Inc., for $27,000.00 on property at 105 and 107 Third Avenue, Aliquippa, Pennsylvania. a. The mortgage is dated 07/31/98. b. The mortgage is identified as Instrument No. 3007113. c. The mortgage term is 15 years. Pratt, 99- 075 -C2 Page 4 17. The property at 105 and 107 Third Avenue, Aliquippa, Pennsylvania, is rental property and is not Pratt's principal or secondary residence. 18. On February 10, 1999, First Union Mortgage Corp. acquired the Pratt loan from Alternative Mortgage Corp. 19. Pratt failed to disclose Alternative Mortgage Source, Inc., as a creditor on Statements of Financial Interests for calendar year 1998, dated 04/30/99, and calendar year 1999, dated 05/01/00. a. The Statement of Financial Interests for the 1998 calendar year was amended on 05/10/00 but did not disclose the mortgage. 20. Pratt's Statement of Financial Interests for calendar year 1999, filed on May 1, 2000, did list First Union Mortgage Corp. as a creditor. 21. Pratt believed that reporting First Union as a creditor alleviated the need to report Alternative Mortgage Corp. as First Union had acquired the loan. 22. Following receipt of the Notice of Investigation dated February 1, 2000, - -- Pratt filed Amended Statements of Financial Interests for calendar years 1995, 1996, 1997, and 1998. a. Pratt used SEC -1 Revised 1/00 Statement of Financial Interests forms. b. The form was dated May 10, 2000. 23. In Category 9 of the amended forms filed for calendar years 1995, 1996, and 1997, Pratt identified creditors as PNC Bank - 10 %, and US Air Credit Union at 7.5 %. a. Said creditors were in addition to the previously disclosed Peoples Bank of Unity /S &T Bank. 24. In Category 9 of the amended form filed for calendar year 1998, Pratt identified PNC Bank as a creditor. a. Said creditor was in addition to the previously disclosed S &T Bank. 25. Following an interview with an investigator for the State Ethics Commission, Pratt filed additional Amended Statements of Financial Interests on June 10, 2000, to include sources of income not previously disclosed on Statement of Financial Interests forms filed for the calendar years 1995 and 1996. a. These additional sources of income were not disclosed on amended forms filed on June 7, 1999 [sic], for the 1995 calendar year and June 8, 1999, for the 1996 calendar year. 26. Amended forms filed by Pratt included Sources of Income as indicated below: Calendar Years 1995 1996 1997 1998 US Airways Same Same Same Cellular Phone Franchise Same - Pratt, 99- 075 -C2 Page 5 1995 Lincoln Park Comm. Ctr. Curtis Green - Rental 1112 Success St., Pgh, PA Vivian Pratt - Rental 131 Duff Street, Aliquippa, PA Craig Pratt - Rental 105 -107 Third Ave., Aliquippa, PA - - - Advanced Technology Systems 27. Pratt filed a Statement of Financial Interests form dated May 1, 2000, filed for calendar year 1999, which identified the following in Block 9 - Creditors; and Block 10 - Sources of Income: Creditors Sources of Income S &T Bank - 8.5% US Air Advanta Mortgage Corp. - 13.753% Municipality of Penn Hills First Union - 11.9% Rental Property: PNC Bank - 10% 131 Duff St., Aliquippa, PA 105 -107 Third Ave., Aliquippa, PA 1112 Success St., Pittsburgh, PA 28. Pratt failed to disclose PNC Bank as a creditor on the following Statements of Financial Interests: Calendar Year Date of Filing 1995 04/17/96 1996 02/27/97 1997 04/23/98 1998 06/07/99 1999 05/01/00 Calendar Years 1996 1997 1998 Same Same Same Darryl Washington Same Same Same Same Same Same Municipality Same Same of Penn Hills 29. Pratt did amend Statements of Financial Interests for the 1995 through 1999 calendar years to disclose PNC Bank as a creditor. a. The amendments followed an interview with an investigator for the State Ethics Commission. 30. Pratt did not disclose Alternative Mortgage Source, Inc., as a creditor for the 1998 and 1999 calendar years. III. DISCUSSION: Pratt, 99- 075 -C2 Page 6 At all times relevant to this matter, the Respondent, William Pratt, hereinafter Pratt, has been a public official subject to the provisions of the Public Official and Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, et seq., as codified by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101, et seq., which Acts are referred to herein as the "Ethics Act." The issue is whether Pratt violated Section 5(b)/1105(b) of the Ethics Act as to the allegation that he failed to disclose all creditors on Statements of Financial Interests filed for the 1995, 1996, 1997, and 1998 calendar years. Section 5(b)(4) of the Ethics Act provides as follows: Section 5. Statement of financial interests (b) The statement shall include the following information for the prior calendar year with regard to the person required to file the statement. (4) The name and address of each creditor to whom is owed in excess of $5,000 and the interest rate thereon. However, loans or credit extended between members of the immediate family and mortgages securing real property which is the principal or secondary residence of the person filing shall not be included. 65 P.S. § 405. This Commission changed the reporting thresholds for the first time by action at a public meeting on February 21, 1997. For creditors, the threshold was raised from $5,000.00 to $6,500.00. The new thresholds were effective for forms filed in 1998. Act 93 of 1998 included these new thresholds. facts. Having noted the issues and applicable law, we shall now summarize the relevant Pratt served as a member of the Penn Hills Borough Council from January 1996 through December 1999. Pratt filed Statements of Financial Interests for the calendar years 1995 through 1999. During the calendar years 1995 through 1998, Pratt was indebted to PNC Bank pursuant to a mortgage loan for property located in Pittsburgh, Pennsylvania. The property was not Pratt's primary or secondary residence, but was a rental property. Although the loan payoff was in excess of the $5,000.00 reporting threshold then in effect under Act 9 of 1989, Pratt failed to disclose PNC as a creditor on his Statements of Financial Interests filed for the calendar years 1995 and 1996 and on his amended Statements of Financial Interests filed for those same years. In or around May 2000, after Pratt received a Notice of Investigation from this Commission, he filed Amended Statements of Financial Interests for calendar years 1995, 1996, 1997, 1998, and 1999 wherein he identified PNC Bank as a creditor to whom he was indebted at an interest rate of 10 %. In July 1998, Pratt executed a fifteen -year $27,000.00 mortgage with Alternative Mortgage Source, Inc. encumbering a rental property located in Aliquippa, Pennsylvania that he owned. Despite the fact that the payoff amount for the mortgage loan exceeded the reporting threshold, Pratt failed to disclose Alternative Mortgage Source, Inc. as a creditor on his Statement of Financial Interests for the 1998 calendar year. Pratt amended his Statement of Financial Interests for 1998, but again failed to disclose Alternative Mortgage Source, Inc. as a creditor. Pratt, 99- 075 -C2 Page 7 In February 1999, Alternative Mortgage Corporation, Inc. assigned its loan to First Union Mortgage Corporation. Pratt's Statement of Financial Interests for the 1999 calendar year listed First Union Mortgage Corporation as a creditor, but omitted Alternative Mortgage Source, Inc. Pratt believed that he was not required to list Alternative Mortgage Source, Inc. since he listed First Union Mortgage Corporation, the assignee of the loan. In or around May 2000, Pratt filed an amended Statement of Financial Interests for the 1999 calendar year wherein he listed First Union Mortgage Corporation as a creditor, but again omitted Alternative Mortgage Source, Inc. Having summarized the above relevant facts we must now determine whether the actions of Pratt violated Section 5(b)/1105(b) of the Ethics Act. The parties have submitted a Consent Agreement together with a Stipulation of Findings wherein they propose to resolve the case by finding a violation of Section 1105(b) of the Ethics Act in relation to Pratt's failure to disclose on his Statements of Financial Interests for the 1998 and 1999 calendar years, Alternative Mortgage Company, a creditor to whom Pratt owed in excess of $6,500.00, and in relation to Pratt's failure to disclose on his Statements of Financial Interests for the 1995, 1996, 1997, 1998, and 1999 calendar years, PNC Bank, a creditor to whom Pratt owed in excess of $6,500.00; by Pratt agreeing to make a payment of $750.00 in 10 equal monthly installments of $75.00, the first payment commencing within 30 days of the issuance of this Order through this Commission to the Commonwealth of Pennsylvania, and a payment each month thereafter until this obligation is satisfied in full; and by Pratt agreeing to file with this Commission within 30 days of the issuance of the final adjudication in this matter amended Statements of Financial Interests for calendar years 1998 and 1999 listing Alternative Mortgage Company as a creditor. As to Section 5(b)/1105(b) of the Ethics Act, the Findings reflect that during the years 1995 through 1999, PNC Bank held a mortgage encumbering a rental property owned by Pratt. Although the payoff amount for the loan exceeded the applicable reporting threshold, Pratt failed to disclose PNC Bank as a creditor on his Statements of Financial Interests for the calendar years 1995 and 1996, and on his amended Statements of Financial Interests filed for those same years. After Pratt received a Notice of Investigation from this Commission, he amended his Statements of Financial Interests for calendar years 1995 through 1999 by listing PNC Bank as a creditor. The Findings also reflect that Alternative Mortgage Source, Inc. held a mortgage encumbering a rental property located in Aliquippa, Pennsylvania that was owned by Pratt. Although the payoff amount exceeded $6,500.00, Pratt repeatedly failed to disclose Alternative Mortgage Source, Inc. as a creditor on his Statement of Financial Interests for the 1998 calendar year, on his amended Statement of Financial Interests for the 1998 calendar year, and on his Statement of Financial Interests for the 1999 calendar year. As to Pratt's failure to disclose all creditors on Statements of Financial Interests filed for the years 1995 through 1998 (and the 1999 year added by agreement of the parties), we find violations of Section 5(b)/1105(b) of the Ethics Act. As to the Stipulation of Findings and Consent Agreement, 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, Pratt is directed to make the payment of $750.00 in 10 equal installments, commencing with payment of $75.00 within 30 days of the issuance of this Order through this Commission to the Commonwealth of Pennsylvania, and a payment of $75.00 each month thereafter until this obligation is satisfied in full; and to file with this Commission within 30 days of the issuance of the final adjudication in this matter amended Statements of Financial Interests for calendar years 1998 and 1999 listing Alternative Mortgage Company as a creditor. Compliance with the foregoing will result in the closing of this case Pratt, 99- 075 -C2 Page 8 with no further action. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Pratt, as a member of the Penn Hills Borough Council, Allegheny County, was a public official subject to the provisions of Act 9 of 1989/Act 93 of 1998, Chapter 11. 2. Pratt violated Section 5(b)/1105(b) of the Ethics Act when he failed to disclose on his Statements of Financial Interests for the 1998 and 1999 calendar years, Alternative Mortgage Company, a creditor to whom Pratt owed in excess of $6,500.00, and when he failed to disclose on his Statements of Financial Interests for the 1995, 1996, 1997, 1998, and 1999 calendar years, PNC Bank, a creditor to whom Pratt owed in excess of ($5,000.00)/$6,500.00. In Re: William Pratt ORDER NO. 1169 File Docket: 99- 075 -C2 Date Decided: 12/12/00 Date Mailed: 12/27/00 1 Pratt, as a member of the Penn Hills Borough Council, violated Section 5(b)/1105(b) of the Ethics Act when he failed to disclose on his Statements of Financial Interests for the 1998 and 1999 calendar years, Alternative Mortgage Company, a creditor to whom Pratt owed in excess of $6,500.00, and when he failed to disclose on his Statements of Financial Interests for the 1995, 1996, 1997, 1998, and 1999 calendar years, PNC Bank, a creditor to whom Pratt owed in excess of ($5,000.00)/$6,500.00. 2. As per the Consent Agreement, Pratt is directed to make the payment of $750.00 in 10 equal installments, commencing with payment of $75.00 within 30 days of the issuance of this Order through this Commission to the Commonwealth of Pennsylvania, and a payment of $75.00 each month thereafter until this obligation is satisfied in full; and to file with this Commission within 30 days of the issuance of the final adjudication in this matter amended Statements of Financial Interests for calendar years 1998 and 1999 listing Alternative Mortgage Company as a creditor. a. Compliance with the foregoing will result in the closing of this case with no further action. b. Noncompliance will result in the institution of an order enforcement action. BY THE COMMISSION, DANEEN E. REESE, CHAIR