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HomeMy WebLinkAbout1213 NapotnikIn Re: Jacob Napotnik 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- 043 -C2 Order No. 1213 8/23/01 9/7/01 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 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. §1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Napotnik, 00- 043 -C2 Page 2 I. ALLEGATION: That Jacob Napotnik, a public official in his capacity as a Supervisor for East Wheatfield Township, Indiana County, violated Sections 4(a)/1104(a) and 5(b)(9) and (10)/1105(b)(9) and (10) of the Ethics Act when he failed to file Statements of Financial Interests with the township for 1997, 1998 and 1999 calendar years, by May 1 St of the following calendar years; and when he failed to disclose all businesses in which he had a financial interest. II. FINDINGS: 1. Jacob Napotnik served as a Supervisor for East Wheatfield from January 1998 through December 1999. a. Napotnik served as vice - chairman of the Board of Supervisors in 1998 and 1999. 2. Napotnik is retired and was the former owner of Napotnik Welding, Inc. 3. Roberta Naugle has served as East Wheatfield Township Secretary /Treasurer since at least 1998. 4. In 1998 and 1999 Naugle distributed blank Statements of Financial Interests to elected officials and public employees for filing. a. Naugle provided a blank form to Jacob Napotnik on February 12, 1998. 5. Napotnik did not file a Statement of Financial Interests by May 1, 1998. a. The filing was due for financial interests for 1997, the preceding calendar year. 6. During the May 11, 1998, board of supervisors meeting, Secretary Naugle advised the board that State Ethics forms were due May 1, 1998, and Umholtz and Napotnik have not submitted their forms. a. Napotnik asked why the forms were necessary. Secretary Naugle advised that it is required. Napotnik responded "do not get me to talk about that." 7 On June 8, 1998, during a regular board meeting Supervisor Stiles brought up the Ethics forms stating they are filled out every year and are due by May 1 . a. Napotnik questioned why the form had to be filed. b. Napotnik stated that they filled them out last year. c. Napotnik refused to file the form based on principle. d. Stiles advised that they have to be filled out each year due to the position that was held. e. Napotnik advised that you do not have to put anything on them as to monetary /money, it is not necessary, he had checked that out, you do not have to put down how much money you make or any of that kind of stuff. Napotnik, 00- 043 -C2 Page 3 f. A lengthy discussion followed. 8. Sometime prior to June 11, 1998, the Investigative Division of the State Ethics Commission received information that East Wheatfield Township public officials /employees, including members of the board of supervisors, failed to file Statements of Financial Interests. 9. A Statement of Financial Interests Compliance Review was conducted by an investigator for the State Ethics Commission on June 11, 1998, and June 12, 1998. a. Only supervisors Umholtz and Jacob Napotnik were determined to have failed to file by May 1, 1998. 10. Napotnik filed a Statement of Financial Interests with the township on June 13, 1998, while the compliance review was being conducted. a. The Statement of Financial Interests was for calendar year 1997 and was dated June 13, 1998. b. The form was completed by Napotnik's daughter Susan. 11. On February 5, 1999, Roberta Naugle received blank statements of financial interests from the Administrative Division of the State Ethics Commission. a. Naugle provided blank forms to members of the board of supervisors, including Napotnik, on February 5, 1999. 12. During the February 8, 1999, meeting of the board of supervisors, Naugle advised the board of supervisors that the township received 12 forms and that more forms were being mailed. She also advised that forms are due to be filed by May 1, 1999. 13. On July 19, 1999, Naugle advised the board that Ethics forms have been turned in by everyone except Kenneth A. Umholtz and Jacob Napotnik. a. Umholtz advised that he and Napotnik will fill out the forms. 14. Napotnik did not file a Statement of Financial Interests for the 1998 calendar year by May 1, 1999. 15. At the time that he failed to file a Statement of Financial Interests for calendar year 1997 and 1998, Napotnik was aware of the filing requirement and that he had not complied with such. 16. Napotnik intentionally failed to file a Statement of Financial Interests for calendar years 1997 and 1998. 17. Jacob Napotnik filed a Statement of Financial Interests for the 1998 calendar year with the township on August 7, 2000. a. Umholtz [sic] filed the form for the 1998 calendar year during the preliminary inquiry of this matter and after he became aware of the fact that he was the subject of a State Ethics Commission inquiry. 18. Napotnik filed a Statement of Financial Interests for calendar year 1999 on August 7, 2000. Napotnik, 00- 043 -C2 Page 4 a. Napotnik was given the form by Naugle on January 25, 2000. b. The form was due to be filed by May 1, 2000, for the year after Napotnik left office. 19. Napotnik did not disclose ownership of Napotnik Welding, Inc., a welding and fabricating business, on Statements of Financial Interests filed late for calendar years 1997, 1998, or 1999. a. Napotnik had operated Napotnik Welding for some time prior to incorporating the business. 20. Articles of Incorporation for Napotnik Welding, Inc., on file with the Department of State Corporation Bureau, identify Napotnik as an officer and incorporator of the corporation. a. The business was incorporated June 1, 1988. b. No Amendments to the original documents have been filed. c. Napotnik is shown as holding 1,000 shares of Class "A" Common Stock (voting); and 8,000 shares of Class "B" Common Stock (non- voting). 21. In approximately 1993, two companies owned by Napotnik's son, Norman Napotnik, were merged with Napotnik Welding, Inc., which continued as the surviving corporation. a. Napotnik was listed as 49% owner of the business. 22. Jacob Napotnik received no compensation from Napotnik welding in 1997, 1998 and 1999. 23. Income Tax Returns filed jointly by Jacob and Imelda Napotnik for 1997, 1998 and 1999 confirm that interest income in excess of $1,600 was received by Napotnik. a. The interest income and the sources were not disclosed on the Statements of Financial Interests filed by Napotnik for the 1997, 1998 and 1999 calendar years. 24. Napotnik asserts that he relinquished all rights and he believed that he had no ownership, management or financial interest in Napotnik Welding, Inc., after 1992. 25. Napotnik asserts that through inadvertence and mistake of counsel specifically retained to handle same, the corporate records for Napotnik Welding, Inc., were never amended to remove Napotnik as a stockholder of the company in 1993 -94. 26. Napotnik asserts he never intentionally set out to obstruct or otherwise interfere with his reporting obligations to the State and has now complied with his reporting obligations. III. DISCUSSION: At all times relevant to this matter, the Respondent, Jacob Napotnik, hereinafter Napotnik, 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 Napotnik, 00- 043 -C2 Page 5 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 allegation is that Napotnik violated Section 4(a)/1104(a) of the Ethics Act when he failed to file Statements of Financial Interests (FIS's) with the township for the 1997, 1998, and 1999 calendar years by May 1 of the following years and violated Section (b) (9) and (10)/1105(b)(9) and (10) when he failed to disclose all businesses in which he had financial interests. Section 4/1104. Statement of financial interests required to be filed. (a) Public official or public employee. - -Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the commission no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Persons who are full -time or part -time solicitors for political subdivisions are required to file under this section. 65 P.S. § 404(a)/65 Pa.C.S. §1104(a). Section 5/1105. Statement of financial interests. (b) Required information. - -The statement shall include the following information for the prior calendar year with regard to the person required to file the statement. profit. (9) Any financial interest in any legal entity engaged in business for (10) The identity of any financial interest in a business with which the reporting person is or has been associated in the preceding calendar year which has been transferred to a member of the reporting person's immediate family. 65 P.S. § 405(b)/65 Pa.C.S. §1105(b). Section 4(a)/1104(a) of the Ethics Act quoted above requires that each public official /public employee must file an FIS for the preceding calendar year, each year that he holds the position and the year after he leaves it. Section 5(b)(9) and (10)/1105(b)(9) and (10) quoted above requires that the statement shall include any financial interest in any legal entity engaged in business for profit and the identity of any financial interest in a business with which the reporting person is or has been associated in the preceding calendar year which has been transferred to a member of the reporting person's immediate family. Napotnik, 00- 043 -C2 Page 6 facts. Having noted the issues and applicable law, we shall now summarize the relevant Napotnik served as an East Wheatfield Township Supervisor from January 1998 through December 1999 and as Board Vice Chairman in 1998 and 1999. Both in 1998 and 1999, the township secretary /treasurer distributed blank FIS's to the elected officials and public employees within the township. The secretary also gave Napotnik an FIS form on January 25, 2000, for the calendar year 1999; this occurred after Napotnik had left office. Although blank FIS forms were specifically given to Napotnik, he did not file his FIS's by the May 1 deadlines. During the May 11, 1998, Board meeting, the secretary advised the Board that the FIS's were due by May 1, 1998 and that Napotnik and Supervisor Umholtz had not filed their forms. When Napotnik asked why it was necessary to file FIS's, the secretary advised that it was a legal requirement that the FIS's had to be completed and filed. At a June 8, 1998, meeting when Napotnik again questioned why FIS's had to be filed, Supervisor Stiles responded that FIS's had to be filed every year. Sometime prior to June 11, 1998, the Investigative Division received information that the public officials and public employees of East Wheatfield Township failed to file FIS's. A compliance review was done in the township by the Commission on June 11 -12, 1998. The review reflected that Umholtz and Napotnik were the only individuals who failed to file FIS's by May 1, 1998. Napotnik then filed his 1997 calendar year FIS with the township on June 13, 1998. In February 1999, the township secretary provided the blank forms to the members of the Board of Supervisors, including Napotnik. At a February 8, 1999, Board meeting, the secretary advised the Board members that the FIS forms had to be completed and filed on or before May 1, 1999. On July 19, 1999, the township secretary advised the board that the FIS forms had been filed by everyone except Umholtz and Napotnik. Thus, Napotnik knew of the FIS filing requirement but intentionally failed to timely file the FIS's for the calendar years 1997, 1998, and 1999. As to the 1998 and 1999 calendar year FIS's, Napotnik filed these two forms on August 7, 2000. Napotnik failed to disclose his ownership in Napotnik Welding, Inc. for the calendar years 1997, 1998, and 1999. Napotnik asserts that he relinquished all rights in Napotnik Welding, Inc. in 1992 but, through inadvertence or a mistake of counsel, Napotnik's name remained on the corporate records. Having summarized the above relevant facts, we must now determine whether the actions of Napotnik violated Section 4(a)/1104(a) and 5(b)(9) and (10)/1105(b)(9) and (10) of Act 9 of 1989/Act 93 of 1998. For the relevant time period, Napotnik, as an East Wheatfield Township Supervisor, was a public official required to annually file an FIS on or before May 1 for the prior calendar year. Further, as a former public official in 2000, Napotnik was required to file an FIS for the calendar year 1999. In this case, the record reflects that Napotnik was very well aware of the filing requirements under the Ethics Act. The secretary of the township in all three years handed out the FIS forms to Napotnik. In addition, there were several discussions at the board regarding FIS filing requirements. Nevertheless, Napotnik failed to file FIS's for the calendar years 1997, 1998, and 1999 on or before each May 1St deadline. Accordingly, Napotnik violated Section 4(a)/1104(a) of the Ethics Act when he failed to timely file FIS's for the calendar years 1997, 1998, and 1999. Napotnik, 00- 043 -C2 Page 7 For these three calendar years, Napotnik's FIS's were deficient in that he failed to disclose his business interests in Napotnik Welding, Inc. Napotnik asserts that his interest was not completely transferred to his son in 1992 due to a mistake or inadvertence of counsel. Napotnik technically violated Section 5(b)(9) and (10)/1105(b)(9) and (10) when he failed to list his business interests in Napotnik Welding, Inc. on his 1997, 1998, and 1999 calendar year FIS's. The parties' have entered into a Consent Agreement which sets forth a proposed resolution of the allegations: violations of Section 4(a)/1104(a) of the Ethics Act by Napotnik as to his failure to timely file FIS's for 1997, 1998 and 1999 calendar years; technical violations of Section 5(b)(9) and (10)/1105(b)(9) and (10) of the Ethics Act by Napotnik as to his failure to list business interests on his 1997, 1998, and 1999 calendar year FIS's; and a payment of $100 by Napotnik through this Commission to the Commonwealth of Pennsylvania within 30 days of the issuance of this adjudication. 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, Napotnik is directed to make payment in the amount of $100 to the Commonwealth of Pennsylvania through this Commission within 30 days of the mailing of this order. 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. For the relevant time period, Napotnik, as a Supervisor in East Wheatfield Township, was a public official subject to the provisions of Act 9 of 1989/Act 93 of 1998. 2. Napotnik violated Section 4(a)/1104(a) of the Ethics Act when he failed to timely file FIS's for the calendar years 1997, 1998, and 1999. 3. Napotnik technically violated Section 5(b)(9) and (10)/1105(b)(9) and (10) for calendar years 1997, 1998, and 1999 when he failed to list on his FIS's his business interests in Napotnik Welding, Inc., which interest was not completely transferred to his son in 1992 due to a mistake or inadvertence of counsel. In Re: Jacob Napotnik ORDER NO. 1213 File Docket: 00- 043 -C2 Date Decided: 8/23/01 Date Mailed: 9/7/01 1 Napotnik, as a Supervisor in East Wheatfield Township, violated Section 4(a)/1104(a) of the Ethics Act when he failed to timely file Financial Interest Statement's (FIS's) for the calendar years 1997, 1998, and 1999. 2. Napotnik technically violated Section 5(b)(9) and (10)/1105(b)(9) and (10) for the calendar years 1997, 1998, and 1999 when he failed to list on his FIS's his business interests in Napotnik Welding, Inc., which interest was not completely transferred to his son in 1992 due to a mistake or inadvertence of counsel. 3. As per the Consent Agreement, Napotnik is directed within 30 days of the date of issuance of this order to make payment of $100 through this Commission to the Commonwealth of Pennsylvania. 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