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HomeMy WebLinkAbout1197 EshelmanIn Re: Kenneth Eshelman File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Louis W. Fryman, Vice Chair John J. Bolger Frank M. Brown Susan Mosites Bicket Donald M. McCurdy 00- 037 -C2 Order No. 1197 5/15/01 5/30/01 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 filed and a hearing was deemed waived. The record is complete. A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Consent Agreement was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. §1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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 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. Eshelman, 00- 037 -C2 Page 2 I. ALLEGATION: That Kenneth Eshelman, a public official in his capacity as a supervisor for Lower Windsor Township, York County, violated provisions of the State Ethics Act (Act 9 of 1989, 65 P.S. §401 et seq.) when he used the authority of his office for the private pecuniary benefit of himself and /or a business with which he is associated or which a member of his immediate family is associated when he participated in township decisions, actions and payment authorizations to a business when such township payments were subsequently deposited into the accounts of Ken's Auto Body, a business owned by Kenneth Eshelman. II. FINDINGS: 1. Kenneth Eshelman has been a Lower Windsor Township Supervisor since January 1, 1990. a. Lower Windsor Township is a Second Class Township governed by a three member board of supervisors. 2. Kenneth Eshelman owned Ken's Service Station, 66 West Maple Street, East Prospect, Pennsylvania, from at least 1975 until selling the business in January 2000. a. Ken's Service Station was operated as a retail auto repair and gasoline facility. b. Ken's Service Station was operated as a sole proprietorship. c. In addition to Ken Eshelman, Ken's Service Station employed Edward Krepps. 1. Edward Krepps is Ken Eshelman's son -in -law. 3. Lower Windsor Township maintains vehicles to be used by the township police department. a. All mechanical repairs are performed by outside vendors. 4. Since at least 1990, Lower Windsor Township has not sought bids for the general care and maintenance of township police and /or road department vehicles. 5. Township police officers were responsible for determining repairs needing to be made to police vehicles. a. Officers were able to contact a repair facility directly. b. Officers were not required to contact the board of supervisors for authorization for routine repairs. 6. The Lower Windsor Township Police Department has utilized Ken's Service Station for repairs and maintenance of police vehicles since approximately 1990. a. The physical repair of vehicles was performed by Edward Krepps, Ken Eshelman's son -in -law. b. Repairs performed included tune -ups, oil changes, battery service, brake work, tire repair /replacement and air conditioning service. Eshelman, 00- 037 -C2 Page 3 c. Warranty and major repair work was taken to the dealer or specialty shop. 7 This was prior to Eshelman's service as a township supervisor; Eshelman offered to handle repairs to police vehicles. a. Eshelman made the offer while a member of the citizen police advisory board. b. Eshelman continued to repair vehicles after his election to the board of supervisors. 8. The practice of township police vehicles continuing to be repaired at Ken's Service Station, after Eshelman's election to the board of supervisors, was the result of informal discussions between supervisors Dean Graham, Ken Eshelman, Tom Eldridge and township manager Sandra Ruby. a. Supervisors were concerned that police vehicles were not being promptly repaired by some vendors. 1. The supervisors wanted the repairs quickly so that routine patrols would not be compromised. b. The board of supervisors did not take formal action approving the use of Ken's Auto Service. c. It was agreed to continue to take police vehicles to Ken's Service Station because of the convenient location and promise of prompt service. 1. Township police officers did not feel pressured to utilize Ken's Service Station. 9. Between April 20, 1995, and July 9, 1997, Lower Windsor Township regularly was invoiced for repair services provided to the township's police vehicles by Eshelman. a. Eshelman's bills to the township were in the name of Ed's Auto Service. b. Ed's Auto Service is not a registered business in Lower Windsor Township. c. The address on Ed's Auto Service invoices is R.D. #2, Box 743A, York, PA 17406, the home address of Edward Krepps. 10. There is no physical location for Ed's Auto Service independent of Ken's Service Station. a. No repair facility exists at R.D. #2, Box 743A, York, PA. b. The only entity receiving invoices from Ed's Auto Service was Lower Windsor Township. c. Edward Krepps did not bill any other customer using Ed's Auto Service. d. Edward Krepps did not have any ownership interest in Ken's Service Station. 11. Invoices from Ed's Auto Service to Lower Windsor Township were prepared by Edward Krepps, using computer equipment at Ken's Service Station. Eshelman, 00- 037 -C2 Page 4 a. Edward Krepps was a salaried employee of Ken's Service Station between 1995 and 1997. 12. Invoice numbers utilized by Ed's Auto Service when billing Lower Windsor Township were sequential in nature. a. From 1995 through 1997 no other business was being transacted in the name of Ed's Auto Service. 13. Lower Windsor Township was invoiced on 68 occasions by Kenneth Eshelman under the name Ed's Auto Service for parts and labor between April 20, 1995 and July 9, 1997: Parts: $4,203.33 Labor: $2,014.00 Total: $6,217.33 14. Invoices submitted for payment in the name of Ed's Auto Service were included as part of the supervisors monthly bill lists. a. Bill lists are provided to the supervisors for review approximately four (4) days prior to a regular meeting. b. Bill lists are voted on in their entirety by a single motion. c. The supervisors manually sign the bill lists signifying their approval. 15. Eshelman participated in twenty -one (21) of twenty -two (22) board actions approving payments totaling $5,711.05 to Ed's Auto Service between June 8, 1995, and August 14, 1997. 16. Lower Windsor Township checks are manually signed by at least two (2) supervisors and the manager. a. A signature stamp was used by Ken Eshelman due to a hand injury. 17. Twenty -two (22) payments were issued by Lower Windsor Township to Ed's Auto Service between June 1995 and August 14, 1997. 18. Eshelman's signature stamp was included on the front side of twenty (20) checks, totaling $5,528.12 issued to Ed's Auto Service. a. Eshelman's signature stamp was not used on township check number 7273 in the amount of $506.28 issued on September 14, 1995, and check number 8289 in an amount of $182.93 issued on 12/12/96. 19. Checks issued by Lower Windsor Township to Edward Krepps /Ed's Auto Service between June 8, 1995, and May 8, 1997, were deposited directly into the Kenneth Eshelman's Service Station Account, No. 302014 -6, at East Prospect State Bank. 20. East Prospect State Bank account no. 302014 -6 was opened on March 10, 1975, by Kenneth J. and Izetta Eshelman. a. The account was opened in the name of Ken's Service Station. b. Kenneth J. Eshelman and Izetta Eshelman had signature authority on the account from March 10, 1975, until February 1, 1988. Eshelman, 00- 037 -C2 Page 5 c. Signature authority was amended to include James Eshelman effective February 1, 1988. d. Signature authority was again amended to include Edward Krepps effective May 19, 1997. 21. Edward Krepps did not receive any portion of the Lower Windsor Township payments issued to Ken's Service Station. a. At all times relevant to the investigation, Edward Krepps was a full -time employee of Kenneth Eshelman. b. Krepps was paid a weekly salary by Kenneth Eshelman. 1. Krepp's salary was not based in any part on the business Ken's received from Lower Windsor Township. c. Krepps was never given separate checks from Eshelman for the work performed on Lower Windsor Township vehicles. d. Krepps was paid a net weekly salary of $457.64 from June 1995 through December 1995. This amount was increased to $459.12 weekly effective January 1996. 22. Lower Windsor Township ceased taking township vehicles to Ed's Auto Service /Ken's Service Stations in July of 1997 after questions regarding the township doing business with Eshelman were raised by supervisor Dean Graham. a. Graham had disagreements with Eshelman at the time and had proposed that if Eshelman did not run for supervisor, he would forget any possible Ethics violations. b. Eshelman did not agree to Graham's request. 23. The use of Ed's Auto Service as a billing device by Kenneth Eshelman gave the impression that work on township vehicles was not being done by Ken's Service Station. a. No public disclosure was ever made by Eshelman that he was billing the township in the name of Ed's Auto Service. 24. Kenneth Eshelman did not list Ed's Auto Service as a source of income on Statements of Financial Interests filed for calendar years 1996 or 1997. a. A Statement of Financial Interest for calendar year 1995 for Kenneth Eshelman could not be located in Lower Windsor Township records. 25. Between June 1995 and August 1997, Kenneth Eshelman received total payments of $6,217.33 as a result of business dealings he had with Lower Windsor Township under the business name Ed's Auto Service. a. Sale of parts $4,203.00 b. Labor $2,014.00 26. Kenneth Eshelman operated Ken's Service Station on a thirty percent profit margin Eshelman, 00- 037 -C2 Page 6 for parts plus labor. a. These rates were below industry standard in the area. 27. Kenneth Eshelman received a financial gain of $1,260.90 from the sale of repair parts to Lower Windsor Township and his participation in approving payments. a. $4,203 total parts sales x .30% (gross parts cost) = $1,260.90 b. Financial gain did not include business overhead and other expenses related to the business. 28. Kenneth Eshelman received a financial gain of $2,014.00 as the result of labor services provided Lower Windsor Township. a. The gain did not include incidental costs, including salary paid out by Eshelman. III. DISCUSSION: At all times relevant to this matter, the Respondent, Kenneth Eshelman, hereinafter Eshelman, has been a public official subject to the provisions of the Public Official and Employee Ethics Law ( "Ethics Law "), Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, et seq. /Act 93 of 1998, Chapter 11. The allegation is that Eshelman violated Section 3(a)/1103(a) of the Ethics Act when he participated in township decisions, actions and payment authorizations to his own business. Pursuant to Section 3(a)/1103(a) of the Ethics Law, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under the Ethics Act as follows: 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 P.S. §402./65 Pa. C. S. §1103(a) 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 Eshelman, 00- 037 -C2 Page 7 employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are reproduced above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Eshelman has been a Lower Windsor Township Supervisor since January 1990. In a private capacity, Eshelman owned Ken's Service Station between 1975 until January 2000. Lower Windsor Township utilizes outside vendors to service and maintain its vehicles for the police department. The police officers are responsible for determining the repairs needed for the their vehicles and for contacting repair facilities directly. The police department has utilized Ken's Service Station for repairs and maintenance since approximately 1990. Following Eshelman's election to the Board of Supervisors, discussions ensued about certain vendors who did not properly repair police vehicles. Another concern of the supervisors was that police vehicles should be repaired quickly so that routine patrols would not be compromised. Without any formal Board action, it was agreed that the township would take police vehicles to Ken's Service Station because of its convenient location and promise of prompt service. Between April 1995 and July 1997, the township police vehicles were regularly maintained and repaired by Eshelman. Invoices were sent to the township for such services; however, Eshelman's bills were in the name of Ed's Auto Service, which is not a registered business in Lower Allen Township. The address on the invoices for Ed's Auto Service is the home address for Edward Krebs, Eshelman's son -in -law. There was no physical existence of Ed's Auto Service apart from Ken's Service Station. No customer, other than Lower Windsor Township, was ever billed by Ed's Auto Service. All the invoices from Ed's Auto Service to Lower Windsor Township were sequential in nature so that no other business was transacted in the name of Ed's Auto Service. Even the invoices from Ed's Auto Service to the township were prepared by Krebs using the computer at Ken's Service Station. Lower Windsor Township received 68 invoices from Ed's Auto Service between April 1995 and July 1997 for parts and labor totaling $6,217.33. Ed's Auto Service invoices were included as a part of the supervisor's monthly bills list which was voted upon in its entirety by a single motion. Eshelman participated in 21 of the 22 Board actions to approve payments to Ed's Auto Service. Township checks, which need the signature of two supervisors and the manager, were issued to Ed's Auto Service. Of the 21 payments issued by Lower Windsor Township to Ed's Auto Service, Eshelman's signature stamp appeared on 20 of the checks. The township checks issued to Ed's Auto Service were directly deposited to Eshelman's Service Station account. Edward Krebs did not receive any portion of the payments from Lower Windsor Township to Ed's Auto Service /Ken's Service Station. In July 1997, Lower Windsor Township ceased taking township vehicles to Ed's Auto Service /Ken's Service Station after questions were raised by Supervisor Graham regarding the township doing business with Eshelman. Up to that point in time, based upon a 30% profit margin, Eshelman received $1,260.90 on the sale of parts to Lower Windsor Township and $2,014.00 for the provision of labor services to the township. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. Eshelman, 00- 037 -C2 Page 8 The parties' Consent Agreement sets forth a proposed resolution of the allegations. The Consent Agreement proposes that this Commission find a violation of Section 3(a)/1103(a) of the Ethics Act when Eshelman participated in discussions and actions of the board of supervisors to approve payments to Ken's Auto Body /Ed's Auto Service with Eshelman making a payment of $2,500.00 back to the township. In applying Section 3(a)/1103(a) of the Ethics Act to the instant matter, there were uses of authority of office by Eshelman. But for the fact that Eshelman was a supervisor, he could not have participated in the discussions with the other supervisors regarding the continuation of using his own service station to repair and maintain the township police vehicles. In addition, Eshelman participated in the approval of bills lists which included payments to his own service station. Eshelman also cosigned (signature stamp) checks in payment of invoices from his service station. All such actions were uses of authority of office. See, Juliante, Order 809. Such uses of authority of office resulted in the private pecuniary benefits to Ken's Service Station, a business with which Eshelman is association in that he is the owner of such business. See, Section 2/1102 of the Ethics Act. Accordingly, Eshelman violated Section 3(a)/1103(a) of the Ethics Act when he participated in discussions and actions of the Board of Supervisors to approve payments to Ken's Auto Body /Ed's Auto Service, a business with which he was associated. See, Sanders, Order 1119; Joines, Order 978. We determine that the Consent Agreement submitted by the parties sets forth 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, Eshelman is directed within 30 days of the date of mailing of this order to make payment of $2,500 through this Commission to Lower Windsor Township. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Eshelman, as a Supervisor in Lower Windsor Township, is a public official subject to the provisions of Act 9 of 1989. 2. Eshelman violated Section 3(a)/1103(a) of the Ethics Act when he participated in discussions and actions of the board of supervisors to approve payments to Ken's Auto Body /Ed's Auto Service, a business with which he was associated. In Re: Kenneth Eshelman ORDER NO. 1197 File Docket: 00- 037 -C2 Date Decided: 5/15/01 Date Mailed: 5/30/01 1 Eshelman, as a Lower Windsor Township Supervisor, violated Section 3(a)/1103(a) of the Ethics Act when he participated in discussions and actions of the board of supervisors to approve payments to Ken's Auto Body /Ed's Auto Service, a business with which he was associated. 2. As per the Consent Agreement of the parties, Eshelman is directed within 30 days of the date of mailing of this order to make payment of $2,500.00 through this Commission to Lower Windsor Township. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, DANEEN E. REESE, CHAIR