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HomeMy WebLinkAbout1176 HellerIn Re: John Heller File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair John J. Bolger Frank M. Brown Susan Mosites Bicket 99- 021 -C2 Order No. 1176 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, as codified by Act 93 of 1998, 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 filed and a hearing was held. The record is complete. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11, Act 93 of 1998, which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998.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 9 of 1989 as codified by 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 under Act 9 of 1989 as codified by 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. Heller, 99- 021 -C2 Page 2 I. ALLEGATION: That John Heller, a public official in his capacity as a Supervisor for Tunkhannock Township, violated Sections 3(a)/1103(a) and 3(f)/1103(f) of the State Ethics Act (Act 9 of 1989 as codified by Act 93 of 1998) 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 participating in actions and decisions to award J. E. Heller Excavating & Hauling contracts by the township; when he over billed the township for work performed and subsequently participated in actions to approve payments; and when the contracts entered into by J. E. Heller Excavating & Hauling with the township were entered into without an open and public process. II. FINDINGS: A. Pleadings 1. On May 4, 1999, a letter was forwarded to John Heller, by the Executive Director of the State Ethics Commission informing him that a complaint against him was received by the Investigative Division and that a full investigation was being commenced. a. Said letter was forwarded by certified mail, no. Z 377 194 606. b. The domestic return receipt bore the signature of Mrs. John Heller, with a delivery date of May 5, 1999. 2. John Heller has served as a Supervisor of Tunkhannock Township, Monroe County, from January 1994 until resigning on June 19, 1999. a. Heller served as Assistant Roadmaster in 1996 and Roadmaster in 1997. 3. John Heller filed Statements of Financial Interests (SFI) forms for the 1995- 1997 calendar years with Tunkhannock Township. a. John Heller listed J. E. Heller Excavating and Hauling, Inc, as a direct or indirect source of income on his 1995 -1997 SFI forms. 4. On or about January 7, 1996, Pennsylvania received large amounts of snow fall which resulted in the Commonwealth of Pennsylvania declaring a "state of emergency." a. A second storm occurred from January 11, 1996, through January 13, 1996. b. Tunkhannock Township, Monroe County, was one of the areas affected by these storms. 5. The township's main snow plowing vehicle, a 1985 Ford F800, was inoperable at the time of the blizzard and unable to be used. a. The township used the services of private companies to remove snow caused by the storm and the subsequent blowing and drifting of snow. 6. Tunkhannock Township hired J. E. Heller Excavating and Hauling, Inc., to perform emergency snow plowing and removal during the state of emergency conditions. Heller, 99- 021 -C2 Page 3 7. The decision to use private companies was not made during a board of supervisors' meeting. a. Township Roadmaster and Chairman of the Board of Supervisors Thomas Delese made the decision on which firms to select. b. Bids were not solicited due to the emergency nature of the storm. 8. Heller Excavating performed snow removal services for the township on January 8, 1996, and January 9, 1996. a. Heller Excavating utilized a Mack Truck with plow and John Deere tractor with loader for the removal. b. John Heller was the equipment operator. 9. Prior to 1996 no work was performed by Heller Excavating for Tunkhannock Township. 10. John Heller prepared hand written time sheets of his billable hours for the snow plowing and snow removal for January 8 -9, 1996, for Tunkhannock Township. a. John Heller recorded ten hours of tractor /loader use for snow removal and ten hours of truck/plow use for snow plowing on the January 8, 1996, time sheet. b. John Heller recorded ten hours of tractor /loader use for snow removal and ten hours of truck/plow use for snow plowing on the January 9, 1996, time sheet. 11. John Heller forwarded the completed time sheets for January 8 & 9, 1996, to his wife, Julia Heller, for billing purposes. a. Julia Heller is the secretary /treasurer for J. E. Heller Excavating & Hauling, Inc. b. Julia Heller prepared a billable invoice for the emergency snow plowing and snow removal from John Heller's January 8 -9, 1996, handwritten time sheets. 12. The billable invoice prepared by Julia Heller indicated twenty -eight (28) hours of truck and plow services were used for snow plowing and ten (10) hours of tractor /backhoe services were used for snow removal. a. Twenty -eight (28) hours of plow service was billed at $55 /per hour, totaling $1,540.00. b. Ten (10) hours of backhoe service was billed at $65 /hour, totaling $500.00. 1. Ten hours of backhoe use at $65 /hour totals $650.00, but the township was billed $500.00 for the ten (10) hours of service. c. The total billable invoice for the thirty -eight (38) hours of service was $2,040.00. Heller, 99- 021 -C2 Page 4 1. The total bill should have been $2,190.00 based on ten (10) hours backhoe at $65 /hour ($650.00) and twenty -eight (28) hours plow service at $55 /hour ($1,540.00) 13. Julia Heller submitted the finalized billable invoice for $2,040.00 to Tunkhannock Township Supervisor /Roadmaster Thomas Delese for payment on or about January 9, 1996. 14. Sometime between January 9, 1996, and January 26, 1996, Julia Heller discussed the Heller Excavating invoice with Thomas Delese, Chairman of the Board of Supervisors. a. The meeting occurred at the Heller residence. 15. The revised invoice prepared by Julia Heller and submitted to Tunkhannock Township indicated thirty -eight (38) hours of truck and plow services were used for plowing and thirty (30) hours of tractor /backhoe services were used for snow removal. a. Thirty -eight (38) hours of plow service was billed at $55 /hour, totaling $2,090.00. b. Thirty hours of backhoe service was billed at $65 /hour, totaling $1,950.00. c. The total revised bill for the sixty -eight (68) hours of service was $4,040.00. 16. The difference between the original billable invoice and the revised billable invoice was $2,000.00. 17. Heller Excavating did not provide the additional thirty (30) hours of snow removal services to the township. a. The revised invoice contained ten (10) hours of plow service at $55 /hour for an increase of $550.00. b. The revised invoice also contained twenty (20) additional hours of backhoe service at $65 /hour totaling $1,300.00. 18. Tunkhannock Township issued check no. 203 [sic] from the PA Local Government Investment Trust (PLGIT) state fund account to J.E. Heller Excavating & Hauling, Inc., on January 26, 1996, in the amount of $4,040.00 for emergency snow removal. a. Check No. 103 was signed and authorized by Tunkhannock Township Supervisor Thomas Delese and Tunkhannock Township Secretary Maureen Sterner. b. Check No. 103 was endorsed by J.E. Heller Excavating & Hauling, Inc., and processed on January 31, 1996, and deposited into a Heller Excavating account at First Union Bank. 19. Tunkhannock Township bill list and Treasurer's Report for January 1, 1996, through February 2, 1996, was presented to the Tunkhannock Township Board of Supervisors for approval during their monthly meeting on February 7, 1996. Heller, 99- 021 -C2 Page 5 a. John Heller seconded a motion to pay the bills. b. Motion carried unanimously. 20. Tunkhannock Township submitted an application for disaster assistance to the Federal Emergency Management Agency (FEMA) through the Pennsylvania Emergency Management Agency (PEMA). a. The application requested financial assistance for costs incurred for snow removal associated with the January 1996 snow storms. b. The application was signed by Chairman Thomas Delese and dated February 29, 1996. 21. The board of supervisors approved resolutions on March 6, 1996, designating Thomas Delese as agent for the township for disaster relief projects. a. Resolution 96 -107 covered the snow storm of January 6, 1996, to January 11, 1996. b. Resolution 96 -108 covered the snow storm of January 12, 1996, to January 19, 1996. 22. During an interview on May 25, 1999, with State Ethics Commission, Special Investigator Thomas Sleater, John Heller acknowledged the $4,040.00 J.E. Heller Excavating & Hauling, Inc., received for the emergency snow plowing was not an accurate amount for the work he performed for Tunkhannock Township. a. John Heller reviewed his time sheet logs for January 8 & 9, 1996, and determined no more than forty (40) hours of snow plowing /hauling was performed during the emergency conditions. b. John Heller stated the township was aware of the overpayment. 23. On May 26, 1999, the day after the interview with John Heller by State Ethics Commission investigators, J. E. Heller Excavating & Hauling, Inc., issued business check number 1016 to Tunkhannock Township for $2,000.00. a. Check number 1016 was issued for a payback on check number 103 issued from Tunkhannock Township to J. E. Heller Excavating & Hauling on January 22 [sic], 1996, for emergency snow removal. b. Memo portion of check 1016 reads: Snow Emergency "Overpayment." B. Testimony 24. Thomas Delese is a Supervisor and the Roadmaster for Tunkhannock Township, Monroe County, Pennsylvania. a. Tunkhannock Township has a three member Board of Supervisors. b. As Roadmaster, Delese has the duty to ensure that the township roads are safe for travel. Heller, 99- 021 -C2 Page 6 c. Delese knows Heller as a resident, supervisor, and as an excavator. d. Heller has a trucking /excavating business known as J. E. Heller that is run out of his home. e. On or about January 7, 1996, a blizzard occurred in Tunkhannock Township. (1) Over two feet of snow fell which was too much for the Tunkhannock Township road crew to handle. (2) The Governor declared a state of emergency as a result of the snowstorm. (3) Delese contacted three contractors, J. M. Brennan, Sincavage, and Heller to remove snow from the roads. (a) Delese assigned each contractor to an area of township roads to remove snow. (4) Due to the emergency, there was no special meeting, advertisement, or bid process for plowing snow from the township roads. Delese, who himself was plowing the roads, monitored the contractors' work. (5) (a) Heller plowed the roads using his own equipment. (b) Delese did not know how long it took the contractors to plow the roads. (6) The contractors were to bill based upon the hours worked in removing the snow. (7) Brennan, Sincavage, and Heller submitted bills for snow removal. f. Delese went to Heller's home concerning the snow plowing bill of J. E. Heller. (1) Delese testified that both Heller and his spouse were present. (2) Inside the Heller home, Mrs. Heller informed Delese that she had the bill for the township. (a) When Mrs. Heller inquired of Delese as to whether more money could be obtained, Delese construed that statement to mean that there was more time for which to bill. (b) The first bill prepared by Mrs. Heller was in the amount of $2,040.00. Heller, 99- 021 -C2 Page 7 g. J. (3) 1. Delese told Mrs. Heller to determine the figures for the days worked and write it in the bill. 2. Mrs. Heller prepared a second bill in the presence of Delese. (c) The second bill had the dates of January 7, 8, 9, 10, and 13, 1996 as days for snow removal by Heller. 1. Delese did not write anything on either of the bills. 2. Delese did not provide the five dates on the bill which were written by Mrs. Heller. (d) After Mrs. Heller sought help from Delese in preparing the second bill, Delese wrote out the dates, hours, rate, and equipment used together with horsepower and capacity which appears as the printed portion on ID Exhibit 3. 1. Details were needed for the billing in order to get partial payment from P.E.M.A. 2. Such detailed information was not contained in the first bill Mrs. Heller prepared. 3. The details as to the days and hours worked came from Mrs. Heller. Delese left the Heller home after Mrs. Heller filled out the second bill. (4) Delese gave the J. E. Heller bill to the township secretary. As to township bills, the supervisors have a workshop meeting to review the bills. (1) If there are no discrepancies, the bills are subsequently paid at a monthly meeting. h. The bill list presented to each supervisor prior to the February 7, 1996, meeting contained the bills from Brennan, Sincavage, and Heller. (1) The Brennan bill was $1,560.00, the Sincavage bill was $997.50, and the J. E. Heller bill was $4,040.00. The minutes for the February 7, 1996, meeting of the Board of Supervisors reflect a motion by Delese, second by Heller, to pay bills which motion passed unanimously. (1) The bills of Brennan, Sincavage, and Heller for snow plowing were included in that bills list. At the March 6, 1996, Board of Supervisors meeting, the minutes of the meeting of February 7, 1996, were approved. Heller, 99- 021 -C2 Page 8 k. Tunkhannock Township paid J. E. Heller for snow plowing by a check in the amount of $4,040.00. I. In order to get partial reimbursement to Tunkhannock Township for snow removal expenses, Delese prepared applications to F. E. M.A. /P. E. M.A. (1) Delese needed information from Heller as to the equipment used for snow plowing for the F.E.M.A. /P.E.M.A. application. (2) The township received partial reimbursement for its snow removal expenses relating to the state of emergency. m. In May of 1999, J. E. Heller returned $2,000 to the township as a snow emergency overpayment. (1) The issue of overpayment never came up at a township board meeting prior to the receipt of the check from J. E. Heller. n. The bills for Tunkhannock Township are listed in either of two funds: the general fund or the liquid fuels fund. (1) Bills are grouped for payment under one fund or the other. o. On the first bill prepared by Mrs. Heller, the township was under billed by $150.00. 25. Patricia Moore is a subpoenaed witness for the hearing. a. It was stipulated by the parties that if Moore were called, she would testify as follows: In November of 1997, Ms. Moore was elected to be a supervisor at Tunkhannock Township. She took office in January of 1998. In that interim time period between her election of November of 1997 and January of 1998, she received a telephone call from Mrs. Heller asking Ms. Moore to come to the Heller residence, which she did. At that time, there was some discussion that took place. Mr. Heller was present. But Ms. Moore said that the discussion took place between her and Mrs. Heller, at which time there were some allegations of misconduct made against Thomas Delese, and that there was a phrase that Ms. Moore [sic] stated to watch your back, that Mrs. Heller said to - -- Ms. Moore referring to her dealings with Mr. Delese. At that time, Ms. Moore was shown some papers. One was a handwritten bill, which she - -- looked at some exhibits today and identified the handwritten bill as what - -- ha[s] [been] marked as Exhibit 1 -A. It's also Exhibit 1, the half of the page. - -- the enlargement on Exhibit 1 -A and Ms. Moore would testify that Exhibit 1 -A is what was shown to her by Mrs. Heller. There was also a scratch piece of paper with handwritten calculations on it that Ms. Moore was show[n] by Mrs. Heller. And - -- some exhibits [have been shown] to Ms. Moore. And Ms. Moore Heller, 99- 021 -C2 Page 9 identified Exhibit Number Three which was some handwriting that Mr. Delese had done, - - -, as the handwritten sheet that she saw that had calculations written on it. That with the information - - -, she received copies of those two pieces of paper. She went back at some point and had a discussion with Mr. Delese about the sheets of paper. She showed them to Tom Delese. Mr. Delese's response was that there was some formula that P.E.M.A. required that he used for the calculations that he made. b. In November 1997, Moore, as a supervisor elect, was called by Mrs. Heller to come to Heller's home. (1) Mrs. Heller showed Moore a billing and told Moore to be careful in her dealings with Delese. c. Moore met with Delese subsequently about the Heller billing. (1) Delese told Moore that the figures were calculated from information given to him. 26. Julia Marie Heller is the spouse of Heller. a. Julia Heller is the secretary /treasurer /vice - president of J. E. Heller. b. In January of 1996, Julia Heller and Heller were joint owners of J. E. Heller. (1) The legal status of J. E. Heller has changed from corporate to proprietorship. c. Heller in January of 1996 became involved in plowing snow on township roads due to a snow emergency. d. Mrs. Heller prepares the bills for J. E. Heller. (1) The workers submit worksheets for the hours worked and equipment used. e. Mrs. Heller prepared the first bill to the township for snow removal based solely upon the worksheet Heller prepared. f. Delese came to the Heller home concerning the snow removal services by J. E. Heller for the township. (1) Delese met with Mrs. Heller to advise that the bill of J. E. Heller had to be submitted in a certain way. (2) After Mrs. Heller filled out the second bill, Delese took the second bill and left. Mrs. Heller stated that Heller was not home when Delese was there. (3) (4) Mrs. Heller did not raise any question about redoing the J. E. Heller bill from $2,040.00 to $4,040.00. Heller, 99- 021 -C2 Page 10 g. A check in the amount of $2,000.00 from J. E. Heller was sent to the township as a return for an overpayment. (1) Mrs. Heller did not return the $2,000.00 after a township audit/ report in November of 1997 revealed a problem as to the J. E. Heller billing for the January 1996 snowstorm. (2) The return of the $2,000.00 occurred after SEC investigators met with Mrs. Heller. (3) 27. Heller is an equipment operator for J. E. Heller and a former supervisor in Tunkhannock Township. a. Heller performed snow removal services through J. E. Heller for the township in January 1996. (1) Delese made the decision to hire J. E. Heller to do the January 1996 snow plowing in the township. (2) Exhibit ID 2 accurately reflects the time he worked in January 1996 cleaning snow on township roads. Heller did not work for the township on January 10, 1996, and January 13, 1996. (4) When Delese came to the Heller home regarding the bill, Heller testified that he was not at home and was out plowing snow. (3) Heller was advised by letter of May 4, 1999 that he was under investigation; the $2,000.00 check was returned to the township on or about May 26, 1999. b. At the February 7, 1996, meeting of the Board of Supervisors, Heller voted in favor of the motion to approve bills which motion passed unanimously. (1) Heller states that the last page of the bill list which included the bill of J. E. Heller in the amount of $4,040.00 was not attached. (a) Heller concedes that the page containing the J. E. Heller bill possibly could have been attached to the bill list. (b) Heller admits that the bill of J. E. Heller for snow plowing services would be on a bill list for the supervisors to approve and that he should not vote on a bill of J. E. Heller. c. About October of 1997, Heller was summoned to meet with an auditor concerning the payment of $4,040.00 from the liquid fuels account. (1) The auditor advised that a township supervisor may not work for the township and receive payment from that fund. Heller, 99- 021 -C2 Page 11 (2) Heller did not meet with the auditor; his spouse and Delese had the meeting. d. Heller states that he had a good relationship with Delese until Delese was not reappointed as roadmaster at a township reorganizational meeting in January of 1997. e. The audit of the township did not question the number of hours submitted by J. E. Heller, just the liquid fuels account from which payment was made. f. Heller testified that when he learned from the township audit that the J. E. Heller bill was $4,000[sic], he knew the bill was inflated. 28. At the February 7, 1996, Board of Supervisors meeting, Heller knowingly voted to approve a bill of $4,040.00, which was inflated by $2000.00, of J. E. Heller for snow removal services performed for the township during January of 1996. C. Documents 29. ID -1 is a photocopy of two bills prepared by Mrs. Heller of J. E. Heller for snow removal services preformed for Tunkhannock Township. a. The first bill reflects snow removal services performed on January 7 and 8, 1996, in the amount of $2,040.00. (1) The bill includes a charge for 10 hours of backhoe use @ $65.00 per hour which is listed at only $500.00 and not $650.00. b. The second bill reflects snow removal services performed on January 8, 9, 10, and 13, 1996, in the amount of $4,040.00. 30. ID -4 is a photocopy of Tunkhannock Township check number 103 dated January 26, 1996, in the amount of $4,040.00 to J. E. Heller for providing snow removal services. 31. ID -6 is a photocopy of the minutes of the Board of Supervisors of Tunkhannock Township for February 7, 1996. a. Supervisors present were Heller, Delese and Wieand. b. Delese made a motion to pay bills, second by Heller, which motion carried unanimously. (1) The bill of J. E. Heller in the amount of $4,040.00 for snow removal services was included in the bills list. 32. ID -7 is a photocopy of the minutes of the Board of Supervisors of Tunkhannock Township from March 6, 1996. a. Supervisors present were Delese, Heller and Wieand. b. The minutes of the meeting of February 7, 1996, were unanimously approved. Heller, 99- 021 -C2 Page 12 33. ID -8 is a photocopy of the bill list for Tunkhannock Township from January 1, 1996, to February 2, 1996. a. The bills consist of seven pages of bills payable from the general fund. b. The bills also consist of one page of bills payable from the Liquid Fuels Fund to three entities. (1) A bill of Brennan in the amount of $1,560.00 for snow removal for 24 hours at $65 /hour. (2) A bill of J. E. Heller in the amount of $4,040.00 for emergency snow plowing on January 8, 9, 10, and 13, 1996, without any rate or time. A bill of Sincavage in the amount of $997.50 for 8 hours at $75 /hour plus 6 hours at $75 /hour. 34. ID -9 is a photocopy of documents as to the State funds utilized by Tunkhannock Township for the calendar year 1996. (3) a. A payment in the amount of $4,040.00 was made to J. E. Heller by check number 103 dated January 26, 1996. 35. ID-10 is, in part, a photocopy of a letter from P.E.M.A. to Delese as agent for Tunkhannock Township advising of a grant of $8,139.00 relative to the blizzard of January 1996. a. The P.E.M.A. application has certification requirements, one of which is that: The Applicant agrees to establish internal personnel safeguards which will prohibit employees from using their positions for a purpose that creates, or gives the appearance of creating, a desire for private gain for themselves or for others, particularly those persons who have a family, business, or other tie to the employee." b. ID -10, page 15, reflects, inter alia, an item as a contract in the amount of $4,040.00. 36. ID -14 is a photocopy of a check of J. E. Heller, number 1016, dated May 26, 1999, to Tunkhannock Township in the amount of $2,000.00 with a notation in part of "snow emergency `overpayment'." 37. ID -15 is a photocopy of the resignation of Heller as Supervisor of Tunkhannock Township effective June 18, 1999. 38. ID -16 is a photocopy of portions of an audit by the Department of Auditor General of the Commonwealth of Pennsylvania of the Liquid Fuels Fund of Tunkhannock Township for a two -year period ending December 31, 1996. a. The audit made the following finding: "During our audit, we noted the township expended $4,040.00 from the Liquid Fuels Tax Fund for snow removal during the Blizzard of Heller, 99- 021 -C2 Page 13 65 Pa. C. S. §1103(a). 1996. We further noted that the above amount was paid to John E. Heller who is a supervisor for Tunkhannock Township." "Based on the above - mentioned codes, the monies expended from the Liquid Fuels Tax Fund appears to be nonpermissible." * ** We recommend the Department of Transportation review this finding to determine if any or all of the $4,040.00 should be reimbursed to the Liquid Fuels Tax Fund. We further recommend, in the future, the township comply with the Second Class Township Code and State Ethics Law as noted above." 39. ID -17 is a photocopy of a memo dated April 7, 1999 of the Executive Director initiating a preliminary inquiry as to Heller. 40. ID -18 is a photocopy of a memo dated May 4, 1999 of the Executive Director authorizing the initiation of a full investigation as to Heller. 41. ID -19 is, in part, a photocopy of the notice of investigation sent to Heller by the Executive Director by letter of May 4, 1999. 42. ID -21 are photocopies of the status of the Heller case sent by the Investigative Division dated August 21, 2000; June 5, 2000; March 13, 2000; December 31, 1999; October 12, 1999; and July 23, 1999. 43. The Investigative Division complied with all timing and notice requirements imposed by the Ethics Law as to the Heller preliminary inquiry and investigation. III. DISCUSSION: At all times relevant to this matter, the Respondent, John Heller, hereinafter Heller, has been a public official subject to the provisions of the Public Official and Employee Ethics Law ( "Ethics Law "), Act 9 of 1989 as codified by Act 93 of 1998. The allegation is that Heller used the authority of his office for the private pecuniary benefit of himself and /or a business with which he is associated by participating in actions and decisions to award J. E. Heller Excavating & Hauling contracts by the township; when he over billed the township for work performed and subsequently participated in actions to approve payments; and when the contracts entered into by J. E. Heller Excavating & Hauling with the township occurred without an open and public process. The term "conflict of interest" is defined under Act 9 of 1989 as follows: Section 3(a)/1103(a). Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. Heller, 99- 021 -C2 Page 14 Section 2. 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. "Conflict" or "conflict of interest" 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. 65 Pa. C.S. §1102. Section 3(a)/1103(a) of the Ethics Law 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 3(f)/1103(f) of Act 9 of 1989 provides: Section 3. Restricted activities (f) No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, 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. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa. C.S. §1103(f). Section 3(f)/1103(f) specifically provides in part that no public official /public employee or spouse or child or business with which he or the spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure. Heller, 99- 021 -C2 Page 15 facts. Having noted the issues and applicable law, we shall now summarize the relevant Heller was a Supervisor in Tunkhannock Township between January 1994 and June 19, 1999. In a private capacity, Heller is the joint owner of J. E. Heller Excavating and Hauling, Inc. (J. E. Heller). The legal status of J. E. Heller has now changed from a corporation to a proprietorship; however, given Heller's financial interest in J. E. Heller, it is a "business with which he is associated" as that term is defined under the Ethics Law. See, Section 402/1102 of Act 9 of 1989 as codified by Act 93 of 1998. In January of 1996, a severe snowstorm deposited over two feet of snow in Tunkhannock Township. A second snowstorm occurred approximately one week later. A state of emergency was declared by the Governor. Supervisor Delese, who was the roadmaster, had the responsibility of clearing the snow from township roads. The situation in the township was complicated because some of the township equipment were not operable. Because of the large amounts of snow and the restricted ability of the township to handle the snow emergency, Delese contacted contractors who could plow the township roads: J. M. Brennan and Sons, Inc.; Sincavage Corporation; and J. E. Heller. Delese assigned each of the three contractors to an area of the township for snow removal. Shortly after the blizzard, Delese visited the Heller home. During that meeting, Delese and Mrs. Heller were present. There is contradictory testimony regarding whether Heller was also present during Delese's visit. Discussions ensued concerning a bill of J. E. Heller prepared by Mrs. Heller in the amount of $2,040.00 for snow removal services for the township. At that time a second bill was prepared by Mrs. Heller for snow removal services with the substitute bill totaling $4,040.00. There is also contradictory testimony why the second bill was prepared and substituted for the first bill. Mrs. Heller testified that the second bill was prepared at the direction of Delese who indicated that the first bill was not right. Mrs. Heller also testified that she did not question that $2,000.00 was added to the bill for the snow removal because Delese was the supervisor. Delese, however, testified that the bill had to be redone for two reasons: Mrs. Heller inquired about more money, presumably for additional snowplowing; and the first bill lacked detail in terms of the type of equipment that was used. Delese stated that such detail was necessary in order for the township to submit an application for disaster relief funds as to the emergency snow removal. At a February 7, 1996, meeting of the Board of Supervisors of Tunkhannock Township, Delese made a motion to pay the bills, with a second by Heller. The motion carried unanimously. Typically, the supervisors would have a work session prior to a meeting to review the pending bills in order to resolve any problems. The bill list for Tunkhannock Township was in two parts for the February 7, 1996, meeting. The first part consisted of seven pages of bills that were payable from the general fund. The second part was a one -page document for three bills that were payable from the Liquid Fuels Fund for snow removal services provided by the three contractors: Brennan in the amount of $1,560.00; J. E. Heller in the amount of $4,040.00; and Sincavage in the amount of $997.50. Heller testified that the last page of the bill list, which included the bill of J. E. Heller for snow removal, was not part of the bill list that he had received. Heller based his statement upon his view that he would not have voted to approve a bill submitted by his own business. However, Heller concedes that it was possible that he did have the complete bill list. Heller, 99- 021 -C2 Page 16 At the March 6, 1996, board meeting of the Tunkhannock Township Supervisors, Delese made a motion, second by Heller, to approve the minutes of the January 7, 1996, meeting, which motion carried unanimously. J. E. Heller received a check from the township dated January 26, 1996, in the amount of $4,040.00 which was deposited into the J. E. Heller account. The township subsequently submitted an application for a grant in relation to the snow removal during the state of emergency and received $8,139.00. The matter of the bill by J. E. Heller for the snow removal services became an issue following an audit /report in the fall of 1997 of the Liquid Fuels Tax Fund of Tunkhannock conducted by the Department of Auditor General for the two -year period ending December 31, 1996. As part of that audit, there was a finding of a possible Ethics Code violation. The audit report noted that $4,040.00 was expended from the Liquid Fuels Tax Fund for snow removal by John E. Heller. After reciting that Heller was a supervisor in the township and subject to the Second Class Township Code and the Ethics Law, the report concluded it was impermissible to expend Liquid Fuels Tax Fund monies to pay Heller. The audit made no mention of the $2,000.00 that was added to the bill submitted by J. E. Heller to the township. Following the audit, Heller reviewed the situation but took no action. Approximately one and one half years later, Heller received a letter dated May 4, 1999, from the Investigative Division advising that he was under investigation for the snow removal services performed by his business for the township. A few weeks later, J. E. Heller sent a check to the township in the amount of $2,000.00 for the snow removal services which was characterized as an overpayment. Although Heller concedes that the sum of $4,040.00 was readily apparent to him as an overpayment, he testified that he was not aware of that amount being submitted to the township until after the audit by the Auditor General. Heller through his counsel made a motion to dismiss in the nature of a demurrer following the completion of the case by the Investigative Division at the hearing in this matter. Based upon our findings as to the third and fourth allegations below, we deny the motion. The Investigative Division in its Brief argues for violations of the Ethics Act based on Heller's participating in a vote on a matter of self- interest and his business contracting with the township without an open and public process as to a contract in excess of $500.00. Specifically, it is argued that Heller failed to abstain as to the vote on a J. E. Heller bill in the amount of $4,040.00 which bill was inflated by $2,000.00 over the hours actually worked in snow plowing. The Investigative Division argues that Heller was not credible as to the billing which provided an opportunity to obtain an excess payment because of the availability of government disaster funds. It is asserted that Supervisor Delese was a credible witness who had nothing to gain. The Investigative Division concludes by seeking an order directing payment of $4,040.00 plus interest plus a treble penalty of $12,120.00. Heller proffers in his Brief that there are no violations of the Ethics Act as to the four charges based upon the following main arguments: Heller did not participate in the action to hire his corporation and hence Heller did not use the authority of office; the corporation, not Heller, over billed the township; Heller took action by virtue of the Emergency Management Services Act which extended to Heller's subsequent action of approving payment to his corporation which in essence constituted the confirmation of a prior legal act; and the Emergency Management Services Act obviated the need to advertise for bids as to the contract to Heller's corporation, even though the contract was in excess of $500.00 and was awarded without an open and public process. Heller, 99- 021 -C2 Page 17 We shall now apply the provisions of the Ethics Act to the four allegations which may be broken down as follows: 1. Whether Heller used the authority of office by participating in actions to award a snow removal contract to J. E. Heller; 2. Whether Heller used the authority of office to over bill the township for work performed by J. E. Heller in removing snow from township roads; 3. Whether Heller used the authority of office by participating in actions of the township board of supervisors to approve payments to J. E. Heller for providing snow removal services to the township; and 4. Whether J. E. Heller, a business with which Heller is associated, entered into a contract with the township to perform snow removal services without an open and public process as to a contract in excess of $500.00. In order to establish a violation of the Ethics Act, each of the requisite components of Section 3(a)/1103(a) must be present. The issue as to the first three allegations is whether Heller, as a public official, used the authority of office for a private pecuniary for himself or a business with which he is associated. The record establishes a pecuniary benefit in this case consisting of the overpayment of $2,000.00 which was made to J. E. Heller for snow removal services for the township. That pecuniary benefit inured to J. E. Heller, a business with which Heller is associated. The only remaining question is whether there was a use of authority of office. Without such a use of authority of office, there can be no violation of Section 3(a)/1103(a) of the Ethics Act. See Marchitello & McGuire v. SEC, 657 A.2d 1346 (Pa. Commw. Ct. 1995). As to the allegation that Heller participated in the action to award the snow removal contract to J. E. Heller, the Investigative Complaint contains an (admitted) averment that such decision was solely made by Delese. Since Delese solely made the decision, Heller played no part in it. Consequently, there was no use of authority of office by Heller. Hence, Heller did not violate Section 3(a)/1103(a) of the Ethics Act as to that aspect of the allegation involving the award of the snow removal contract to J. E. Heller. Turning to the second allegation regarding the over billing, our focus again must be on whether there was a use of authority of office on the part of Heller. The parties have delved into the circumstances surrounding the initial bill written by Mrs. Heller as well as the second bill which increased the invoice amount by $2,000.00. As noted, there is conflicting testimony as to whether Heller was present at that meeting with Delese and Mrs. Heller. We need not resolve such issues which are irrelevant. Even assuming that Heller were present at that time, his presence would have been in the capacity of a contractor performing snow plowing services on behalf of J. E. Heller and not as a township supervisor. Hence, there could not have been any use of authority of office by Heller. On that basis, we find no violation as to that particular aspect of the allegation involving the over billing. Passing over the third allegation for the moment, we shall address the fourth allegation involving the contracting which occurred as a result of a declared state of emergency due to the blizzard in January of 1996. In Courter /Dotterer, Opinion 93 -001, we determined that township supervisors, as working employees, may be compensated for their personal time clearing roads during a state of emergency after a snowstorm at the hourly rate set by the township auditors under Section 3(a) of the Ethics Act. In Courter /Dotterer, we did not address the applicability of the contracting provision of the Ethics Law which does not provide any exception for emergency or any other similar situations. Heller, 99- 021 -C2 Page 18 In this case, there was no time for the township board to advertise for bids for snow removal given the dangerous situation that existed. However, we have the contracting provision of the Ethics Act which has a uniform requirement that any contract between the public official or the business with which he is associated and his governmental body must be through an open and public process if the contract is $500.00 or more. In order to have a literal application of the contracting provision, as we must, to the extraordinary facts of this case involving the state of emergency following the blizzard, we find a mere technical violation of Section 3(f)/1103(f) of the Ethics Act when J. E. Heller, a business with which Heller is associated, contracted with the township for snow removal services during a state of emergency when the contract was over $500.00 and not awarded through an open and public process. Returning to the third allegation which involves whether Heller used the authority of office in participating to approve payments to J. E. Heller as to the contract for snow removal on township roads, the issue centers upon the approval of the bills list. In certain instances the action of approving a block of bills in a list by a supervisor may only constitute a technical violation, as for example, in cases where there is a routine uncontested bill submitted by a business with which the public official is associated. In other instances, such an action can be of major import. In this case, we find Heller's conduct to be serious. We have a situation where a bill was inflated by $2,000.00 for snow removal services. That bill was not part of a list of dozens of other bills but was part of only three bills from a separate fund, the Liquid Fuels Fund: one from J. E. Heller and the other two from Sincavage and Brennan. Heller readily admits that he knew a bill of approximately $4,000.00 for the snow removal services was over inflated. Although Heller testified that he was not aware of the amount of the bill until after the audit by the Auditor General, we find that Heller knew about the bill and its amount but nevertheless voted for its approval at the board meeting on February 7, 1996. Such action in seconding the motion to approve the bills as well as voting in favor of that motion constitute uses of authority of office. See, Juliante, Order 809. That use of authority of office resulted in a private pecuniary benefit which consisted of $2,000.00 by which J. E. Heller over billed the township. Lastly, that private pecuniary benefit inured to Heller and the business with which he is associated, J. E. Heller. As to the above, there is no question that Heller knowingly voted to approve the over billing by J. E. Heller at the February 7, 1996, Board of Supervisor's meeting. First, Heller admitted that he knew any bill that he submits to the township would shortly thereafter come before the board for approval of payment. In this regard, Heller performed the services and J. E. Heller submitted the bill in January which appeared on the February bill list for payment. Second, the supervisors had workshops prior to board meetings to go over the bills. Third, Heller admitted that he knew the J. E. Heller bill of $4,040.00 was inflated, although Heller maintains that he did not know the amount of the bill until some time later. Fourth, although Heller states that the bill of J. E. Heller was not part of the bill list he had, he concedes that he could have had that page. Finally, the approved minutes reflect Heller making the second to the motion to approve the bills list, which included the bill of J. E. Heller. That motion was approved by a unanimous vote. Accordingly, Heller violated Section 3(a)/1103(a) of the Ethics Act when he, as a Tunkhannock Township Supervisor, used the authority of office by seconding a motion and voting in favor of that motion to approve the payment of bills which included an inflated payment to J. E. Heller, a business with which he is associated, as to a contract for snow removal services for the township. See, Spotts, Order 1050. Our decision as to the Section 3(a)/1103(a) violation of the Ethics Act follows the decision of Commonwealth Court in Snyder v. SEC, 686 A.2d 843 (Pa. Commw. Ct. 1996). In the cited case, Commonwealth Court affirmed a decision of this Commission, finding a violation by a township supervisor who participated in matters involving a business with which he is associated that had matters pending before the township. Commonwealth Heller, 99- 021 -C2 Page 19 Court held that a public official should not participate in matters with which he has a personal interest and further noted that that prohibition applies even if the public official would not be the deciding vote as to those matters as to which he had a conflict: We are likewise unconvinced by the fact that Snyder's vote was never controlling or necessary for a quorum. Snyder violated the Ethics Law by discussing and voting on issues in which he had a private pecuniary interest, not by affecting the outcome of those votes. Similarly, it is irrelevant whether Snyder improperly used his influence as a Supervisor to gain the Colonial Commons and Blue Meadow contracts; Snyder may have been able to obtain the jobs even if he were not a Supervisor, but as a Supervisor, he should not have considered and voted on issues involving his personal business dealings. Id. at 849. As to the above finding of a violation, we have a straightforward application of the Ethics Law to the operative facts which we do not consider to be in dispute. J. E. Heller submitted a bill which was overstated in the amount of $2,000.00. That over billing was submitted to the township board of supervisors for approval. Heller, as a township supervisor, used the authority of office to approve that bill to the business with which he is associated, J. E. Heller. As a consequence, J. E. Heller received payment, of which $2,000.00 was an over billing, as to snow removal services performed. Such action constituted a violation of Section 3(a)/1103(a) of the Ethics Act. As to the arguments of Heller regarding the above violations of Sections 3(a)/ 1103(a) and 3(f)/1103(f), his argument concerning preemption by the Emergency Management Service Act and the lack of attribution to Heller due to the corporate status of J. E. Heller fail. Whenever a provision of the Ethics Law conflicts with any other law, the Ethics Law prevails. See, 65 Pa.C.S. §1112. Second, even though Heller's business at the time was in corporate form, it is a "business with which he is associated" as that term is defined under the Ethics Law. See, 65 Pa.C.S. §1102. Section 407(13)/1107(13) of the Ethics Law specifically empowers this Commission to impose restitution plus interest in those cases where a public official /employee has received a financial gain in violation of the Ethics Law. The private pecuniary benefit in this case amounted to $2,000.00. The interest at the legal rate of 6% on $2,000.00 from January 1996 when J. E. Heller received that payment until May 1999 when the $2,000.00 "overpayment" was paid back to the township amounts to $400.00. J. E. Heller under billed the township in the computation of the first bill by $150.00. By offsetting the $150.00 against the interest of $400.00 we find that the balance is $250.00. Accordingly, Heller is directed within 30 days of the date of mailing of this order to make payment through this Commission to Tunkhannock Township in the amount of $250.00. Failure to comply will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. John Heller, as a Supervisor in Tunkhannock Township, was a public official subject to the provisions of Act 9 of 1989. 2. Heller did not violate Section 3(a)/1103(a) of the Ethics Act as to the action to award a snow removal contract to J. E. Heller Excavating and Hauling in that such action was solely taken by another supervisor. 3. Heller did not violate Section 3(a)/1103(a) of the Ethics Act as to over billing the township for snow removal services by J. E. Heller Excavating and Hauling in that Heller, 99- 021 -C2 Page 20 there was no use of authority of office by Heller as a Supervisor as to the over billing. 4. Heller violated Section 3(a)/1103(a) of the Ethics Act when he participated in Board action to approve payment for snow removal services as to which J. E. Heller Excavating and Hauling over billed the township by $2,000.00. 5. A technical violation of Section 3(f)/1103(f) of the Ethics Act occurred when J. E. Heller Excavating and Hauling, a business with which Heller is associated, received a no bid contract in excess of $500.00 with the township for snow removal services during a declared snow emergency. In Re: John Heller File Docket: Date Decided: Date Mailed: ORDER NO. 1176 BY THE COMMISSION, 99- 021 -C2 12/12/00 12/27/00 1 John Heller, a Supervisor in Tunkhannock Township, did not violate Section 3(a)/1103(a) of the Ethics Act as to the action to award a snow removal contract to J. E. Heller Excavating and Hauling in that such action was solely taken by another supervisor. 2. Heller did not violate Section 3(a)/1103(a) of the Ethics Act as to over billing the township for snow removal services in that there was no use of authority of office by Heller as a Supervisor as to the over billing. 3. Heller violated Section 3(a)/1103(a) of the Ethics Act when he participated in Board action to approve payment for snow removal services as to which J. E. Heller Excavating and Hauling over billed the township by $2,000.00. 4. A technical violation of Section 3(f)/1103(f) of the Ethics Act occurred when J. E. Heller Excavating and Hauling, a business with which Heller is associated, received a no bid contract in excess of $500.00 with the township for snow removal services during a declared snow emergency. 5. Heller is directed to make payment of $250.00 through this Commission to Tunkhannock Township within thirty days of the date of issuance of this order. a. Failure to comply with the above will result in the institution of an order enforcement action. DANEEN E. REESE, CHAIR