HomeMy WebLinkAbout1231 FutulesIn Re: William Futules
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
01- 008 -C2
Order No. 1231
2/4/02
2/15/02
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
Act, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq., as codified by Act 93 of 1998, Chapter 11,
65 Pa.C.S. §1101 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. A Consent Agreement and
Stipulation of Findings were submitted by the parties to the Commission for consideration.
The Consent Agreement was subsequently approved. The averments in the Stipulation of
Findings are quoted verbatim as the Findings in this Order. The record is complete.
Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter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.
Futules, 01- 008 -C2
Page 2
I. ALLEGATION:
That William Futules, a public official /public employee in his capacity as a
councilman for Verona Borough, Allegheny County, violated Sections 1103(a) and 1103(f)
of the Public Official and Employee Ethics Law 65 Pa.C.S. §1103(a) and 65 Pa.C.S.
§1103(f) when a business with which he is associated contracted with Verona Borough
without an open and public process to provide excavating services in excess of $500.00;
and when Futules participated in discussions and actions of council regarding the award of
contracts and the approval of invoices authorizing payment to his company.
II. FINDINGS:
1. William Futules has served as a councilman for Verona Borough, Allegheny
County, since January 1994.
a. Futules has served as the Council President since January 1998.
b. Futules has served as the Road Committee Chairman since January 1994.
c. Futules also served as borough mayor from 1982 through 1989.
2. Futules has operated a heavy equipment business known as Futules Hauling,
Excavating and Light Demolition since 1996.
a. Futules Hauling, Excavating and Light Demolition is a sole proprietorship.
b. Futules is the only employee of this business.
c. Futules owns a backhoe, high -lift, and dump truck as part of his business.
d. Futules has owned heavy equipment since 1990.
e. These enterprises are not Futules' primary source of income.
f. Futules also has other business interests unrelated to heavy equipment.
3. Verona Borough is governed by a seven - member council and a mayor.
4. Verona Borough employs a road crew comprised of three full -time employees,
including a road foreman and two laborers.
a. The road crew receives their daily work assignments from the borough road
committee.
5. The borough road committee is comprised of three council members, one of which
[sic] serves as the committee chairman.
a. The committee chairman serves as the liaison between council and the road
crew.
b. Futules has served as Chairman of the Road Committee since 1994.
6. Road crew workers receive directions and work orders from Futules and other
members of the road committee.
7 In March 2000 Verona Borough sought funding from the Commonwealth of
Pennsylvania for repairs and /or improvements to the borough garage through the
Futules, 01- 008 -C2
Page 3
Community Revitalization Program.
8. On March 15, 2000, the borough submitted a Grant Application to the Department
of Community and Economic Development (DCED).
a. A grant in the amount of $10,000 was requested for the installation of drains
in the borough maintenance garage and to supply electricity for the borough
gazebo.
b. Futules, as council president, signed the grant application on behalf of the
borough.
9. The application delineated the following costs for the various work to be completed
with the grant money:
a. Electrical: Total project costs: $3,979.00: $2,000.00 paid with grant money
and $1,979.00 paid by the borough.
1. The borough received an estimate for the electrical work from
Pastucha Electric, Springdale, PA in the amount of $3,979.00.
2. The estimate was included in the grant application.
b. Drain System: Total Costs: $11,000.00: $8,000.00 paid with grant money
and $3,000.00 paid by the borough.
1. The borough received an estimate for the drain system from Nave
Plumbing, Verona, PA in the amount of $13,600.00.
a. This price included all supplies, material, permit, and labor
costs.
b. The estimate was not included with the grant application.
10. Futules was the primary borough council member coordinating the grant
application.
11. By letter dated June 2000, the borough was awarded DCED grant funding in the
amount of $10,000.00.
12. Futules signed the Grant Contract on behalf on the borough on July 12, 2000,
accepting the grant.
a. The borough manager also signed the contract.
b. The contract duration was from July 1, 1999 through June 30, 2001.
13. Council took no official action to approve entering into the contract with DCED.
14. The DCED contract signed by Futules, titled Compliance with Applicable Statutes
and Department Regulations states, in part:
The contractor (Verona Borough) shall not have a financial interest in any other
contractor, sub - contractor, or supplier providing services, labor, or material on this
project. Financial interest is defined as ownership of more than 5% in any business
or holding a position as an officer, director, trustee, partner, employee, or the like or
holding any position of management."
Futules, 01- 008 -C2
Page 4
15. The DCED contract signed by Futules also contains a section titled Interests of
Parties and Others which states, in part:
No officer, member, employee, independent contractor, or elected official of the
Commonwealth and no member of its governing body who exercises any functions
or responsibilities in the review or approval of services being performed under this
contract shall participate in any decision relating to this contract which reflects
his /her personal interest or the interest of any corporation, partnership or
association in which he /she is directly interested; nor shall any such officer,
member, elected official or employee of the Commonwealth or any member of its
governing body have any interest, direct or indirect, in this contract or the proceeds
thereof."
The contractor (Verona Borough) covenants that the contractor (including
directors, officers, members, and employees of the contractor) presently has no
interest and shall not acquire any interest, directly or indirectly, which would conflict
in any manner or degree with the performance of services required to be performed
under this contract. The contractor further covenants that no person having such
interest shall be employed in the performance of services for this contract."
16. On or around August 29, 2000, the borough submitted a Payment Requisition form
to DCED for the release of the grant money.
a The borough was required to place the grant money in an escrow account
until the completion of the project.
b At the completion of the project, DCED would give the borough the
authorization to transfer the grant money from the escrow account into the
borough general funds that contractors could be paid.
17. Verona Borough did not utilize the services of Nave Plumbing, the company which
provided the estimate to install the drains.
18. The borough did not advertise for bids or solicit any other quotes or estimates for
the drainage system.
19. The drainage system was installed in the borough garage between November 9,
2000, and November 16, 2000.
20. William Futules and /or Futules Hauling, Excavating and Light Demolition performed
the work associated with the installation of the drains.
a. Futules supervised all aspects of the project and made all of the
arrangements for the necessary supplies and services.
21. Members of council were aware that Futules' company was going to install the
drainage system.
22. Futules utilized borough employees to assist with the installation of the drainage
system in the borough garage.
23. It was contemplated by Council that the work would be done by Borough employees
in conjunction with Futules to provide the direction and heavy equipment.
24. The following work was performed by Futules' company and borough employees in
relation to the drain system installation:
Futules, 01- 008 -C2
Page 5
a. A "U- shaped" area and an area connecting the existing sewer line to the
area of the new drain was cut from the existing concrete garage floor.
1. Futules hired a company to saw the concrete.
2. This invoice was paid by the borough.
b. The concrete was removed and the areas were trenched.
1. Futules used his equipment to remove the concrete and trench.
c. A pre -cast concrete trough was installed in the trench as well as a concrete
catch basin.
1. Futules purchased the trough and catch basin.
2. Futules used his equipment to install the trough and catch basin.
d. The trough was concreted into place.
1. Futules had concrete delivered to the work site.
2. This invoice was paid by the borough.
3. Futules and borough employees performed this work.
e. The new drain was connected to the existing sewer line with PVC pipe and
fittings via the catch basin.
1. Futules purchased the pipe and fittings.
2. A borough employee installed the pipe and fittings.
f. Metal grates were installed over the concrete troughs.
25. Verona Borough Street Department Daily Work Details confirmed that the street
employees assisted Futules in the installation of the drain system from November 9,
2000, through November 16, 2000.
26. The borough street department foreman and the daily work details verified that the
borough street department employees worked with Futules on the drain project as
follows:
November 9, 2000: Russ Frazier
Tom Gravelle
(3.0 Hours worked
November 13,2000: Russ Frazier
Tom Gravelle
(3.0 Hours worked
November 14, 2000: Russ Frazier
Tom Gravelle
(3.0 Hours worked
November 15, 2000: Russ Frazier
Tom Gravelle
by each employee)
by each employee)
by each employee)
Futules, 01- 008 -C2
Page 6
Robert Guggie
(7.0 Hours worked by each employee)
November 16, 2000: Russ Frazier
Tom Gravelle
(3.0 Hours worked by each employee)
27. In 2000, the street department employees were compensated at the following hourly
rates:
Robert Guggie:
Russ Frazier:
Tom Gravelle:
$15.10
$13.94
$11.59
28. The minimum amount of compensation paid to the street department employees, by
the borough, for assisting Futules in installing the drain system totaled $590.77.
a. Robert Guggie: 7.0 Hrs x $15.10= $105.70
b. Russ Frazier: 19.0 Hrs x $13.94= $264.86
c. Tom Gravelle: 19.0 Hrs x $11.59= $220.21
29. Allegheny County Department of Health regulations specify that any plumbing work
completed in Allegheny County, other than that done by the owner of a property for
his primary residence, needs to be completed by a registered master plumber.
a. A registered master plumber needs to file a plan and receive a permit prior to
the work being started.
b. A county plumbing inspector has to approve the work prior to being
completed.
1. The inspector has to verify that a "trap" is installed on the system.
2. A trap is a safety device that ensures that sewer gas does not enter a
building from the sewer line.
30. Futules did not use the services of a master plumber, submit a plan or receive a
permit prior to completing the drain installation as required by Allegheny County
Health Department regulations.
31. In December 2000, Allegheny County Plumbing inspector Flawzell Hall performed a
spot check inspection at the borough maintenance garage and determined that
plumbing work had been completed without a plan being filed, without a permit, and
had been completed without an inspection.
32. Hall sent several letters to the borough informing of the violation and that action
would be taken if the borough did not correct the situation.
33. Futules subsequently hired registered master plumber Julius Zangrille to comply
with the County Health Department regulations.
34. Futules paid all of Zangrille's costs associated with this work totaling $430.00.
Futules, 01- 008 -C2
Page 7
35. On March 13, 2001, Hall inspected and passed the drain system in the borough
maintenance garage.
36. On January 5, 2001, Futules submitted an invoice to the borough in the amount of
$10,000.00 for the installation of drains in the borough maintenance garage.
a. The invoice amount was in the exact amount of the DCED grant which
Futules signed for as a member of council.
37. The bill list that included the Futules invoice was presented to council at the regular
council meeting held on January 9, 2001.
a. The vote was unanimous and no roll call vote was recorded in council
meeting minutes.
b. Futules was present during this meeting.
c. In a sworn statement to an Ethics Commission investigator on August 30,
2001, Futules admitted that he participated in the council vote to approve
this payment to himself.
38. On February 7, 2001, Futules was paid $10,000.00 from the borough general fund
with Check No. 23386 made payable to Futules Hauling and Excavating.
a. Futules' signature stamp appeared on the check as an authorized signatory
for the borough.
1. Futules gave the borough manager the authority to use his signature
stamp to conduct borough business as needed.
b. Futules endorsed and deposited this check into a Futules Hauling,
Excavating, and Light Demolition business account at PNC Bank, Account
No. 10- 0566 -0379.
39. The work performed by Futules was not publicly advertised, bid, or awarded
through an open and public process.
40. Council members approved Futules installing the drainage system because Futules
estimated that he could do the job for less than Nave Plumbing's estimate.
41. In November 2000, during the time that he was installing drains in the borough
building, Futules purchased windows for the borough maintenance building.
a. The windows were not part of drain system project.
42. Futules purchased windows for the borough maintenance building from Thermo -
Twin Industries, Inc., Oakmont, PA, at a cost of $3,381.00.
a. The price included the purchase and installation of nine single hung
windows.
b. Futules made a cash deposit of $381.00 when he ordered the windows.
43. Futules paid the balance of the windows with Futules Hauling, Excavating, and
Light Demolition Check No. 196 dated January 25, 2001.
a. The balance was paid after the installation of the windows.
Futules, 01- 008 -C2
Page 8
44. Futules did not include the price of the windows on the invoice that he submitted to
the borough in January 2001.
a. Futules did not request or receive any payments from the borough for the
windows.
45. Council did not formally approve Futules to purchase the windows on behalf of the
borough.
46. Council members were aware that Futules purchased the windows from discussions
with Futules.
47. Futules also performed services in relation to the installation of electric [service] in
the borough gazebo, the other project for which the borough received funding from
DCED.
48. In or around November 2000, Futules dug a two hundred foot trench from the
borough building to the gazebo and installed conduit and water lines.
a. Futules estimated his costs associated with this work at $760.00.
b. Futules' estimated cost included twelve hours of backhoe service at
$50.00 /hr and eight hours of labor at $20.00 /hr.
49. Futules did not include costs for the installation of electric lines on the invoice that
he submitted to the borough in January 2001 in the amount of $10,000.00.
50. During November 2000 when working on the borough building, Futules traded
goods and services with the borough in relation to some of the costs associated
with the drain system installation.
51. Futules gave the borough a generator in exchange for the borough paying the
invoice for the concrete cutting.
a. The concrete cutting was listed on the June 5, 2001, bill Futules sent to the
borough.
b. The amount paid by the borough for the concrete cutting was $500.00.
c. The estimated cost of the generator was approximately $1,000.00.
52. Futules gave the borough a concrete barrier and installed it as a safety barrier on a
borough road in exchange for the borough paying the invoice for the concrete.
a. The amount paid by the borough for the concrete was $449.63.
b. Futules estimated the cost of the barrier and installation at approximately
$600.00.
53. Futules has receipts verifying the purchase and payment of the following materials
and supplies used in the drain system installation:
Item: Cost:
Hardware- $ 79.59
Concrete Catch Basin /Grate- 66.78
Pre -cast Concrete Trough- 2,439.00
Item
Cost
Drain Installation:
$6,935.37
Dump Truck Service
(640.00)
Backhoe Service
(1,200.00)
Labor
(480.00)
Pipe
(79.59)
Concrete (Trade for
Generator)
(1,000.00)
Catch Basis and Grate
(66.78)
Concrete Trench
(2,439.00)
Saw Cutting (Trade for
Concrete Barrier and
Installation)
(600.00)
Plumber
(430.00)
Windows:
3,381.00
Gazebo:
760.00
Total:
3,711.00
Futules, 01- 008 -C2
Page 9
Total: $ 2,585.37
54. The borough has not requested transfer of the $10,000 grant funds from the escrow
account as of September 18, 2001.
a. Futules was paid with borough funds for all work performed and not with the
DECD funds.
55. In a sworn statement to Ethics Commission investigators on August 30, 2001,
Futules admitted that it was his and council's intention to pay for the drain system
installation, window installation, and gazebo electrical work using the DCED grant
money.
a. Neither Futules nor the borough manager reviewed the grant provisions
restricting any council member[s] interest in contracts which were paid from
grant funds.
b. After Futules became aware of DCED regulations prohibiting him as a
council member, from receiving any proceeds of the grant money, he and the
manager requested that DCED amend the contract to be used for electrical
projects only.
56. The total cost to the borough associated with Futules performing the drain
installation was approximately $10,590.77.
a. Futules: $10,000.00
b. Borough employees $ 590.77
$ 10, 590.07
57. Futules provided an itemized breakdown to an Ethics Commission investigator of all
of the work and costs that he paid for with the $10,000.00 payment received from
the borough, as follows:
a. The windows and gazebo work were not listed on the invoice that Futules
submitted to the borough.
Date of
Work
Description
Time /Rate
Amount
Check No.
& Amount
Check
Date
4 -01 -96
Dump Truck
$7.50 /ton
$150.00
19255
6 -20 -96
20 Ton of Sweeper
$550.00
Dirt and Trash
4 -22 -96
Remove and haul
asphalt basketball
court from Cribbs
Flat Rate
$400.00
Field
8 -16 -96
Backhoe and dump
10 Hrs. @
$400.00
19899
5 -14 -97
8 -20 -96
truck
$40.00 /I-Urr.
$400.00
8 -22 -96
Arch St. Sewers at
Park
4 -14 -97
Cleanup behind new
6 Hrs. @
$270.00
19860
4 -28 -97
borough building
$45.00/ Hr
$543.80
Tree stumps, Limbs,
ties, and debris
4 -14 -97
Valley Landfill
7.26 ton @
$273.80
$33.00 /ton
(plus tax)
7 -06 -98
Storm damage
21110
9 -11 -98
7 -07 -98
Dump Truck
70 Hrs. @
$4,150.00
7 -08 -98
$40.00 /1- r
$2,800.00
7 -14 -98
Backhoe
60 Hrs. @
21188
10 -29 -98
7 -15 -98
$45.00/ r
$2,700.00
$3,000.00
7 -16 -98
Backhoe Rental
7 Hrs. @
7 -20 -98
$30.00
$ 210.00
7 -21 -98
Loads Dumped
18 @
Futules, 01- 008 -C2
Page 10
b. The trades to the borough for concrete and saw cutting are included.
c. Futules' original invoice to the borough was not itemized.
58. Futules realized a difference of $4,033.63 between payments made to him and /or
his company for installing a drain system and windows in the borough maintenance
garage and the costs for such projects as follows:
Payment from borough: $10,000.00
Receipts from drain installation: - 2,585.37
Cost of Windows: - 3,381.00
Total: $ 4,033.63
a. Futules' profit in association with this project was $1,682.02.
1. Futules' profit was based on his business' percentage of profit for
2001.
59. Since starting his hauling and excavating business in 1996, Futules has done
heavy equipment work for the borough from1996 through 2001.
60. Futules invoiced Verona Borough and was paid for performing heavy equipment
and other work from 1996 to 2001 as follows:
Date of
Work
Description
Time /Rate
Amount
Check No.
Amount
Check
Date
7 -23 -98
Quinlan /Conway
$80.00 /Ld.
$1,440.00
543.80
Quinlan /Conway
2 -19 -99
Install water line.
Flat Rate
$1,500.00
21701
5 -18 -99
4,150.00
Remove pavement
and concrete slab.
10 -29 -98
21188
$1,500.00
Futules Stamp /Conway
05 -18 -99
Dig Trench 200 Ft.
long and 4 Ft. deep.
1,500.00
Futules Stamp /Conway
06 -08 -99
21763
2,000.00
Backfill with 1 Ft. of
sand and install 1 1/2
in. pipe. Backfill with
dirt. Backfill with B3
stone. Haul extra dirt
away. Backhoe and
dump truck service 4
06 -10 -99
21789
1,800.00
Futules Stamp /Conway
Days.
4 -03 -99
Verona Borough
Flat Rate
$3,800.00
21763
6 -08 -99
driveway and
sidewalk
$2,000.00
21789
6 -10 -99
$1,800.00
Check Date
Check No.
Amount
Authorized By
06 -20 -96
19255
$550.00
Quinlan /Conway
04 -28 -97
19860
543.80
Quinlan /Conway
05 -14 -97
19899
400.00
Quinlan /Conway
09 -11 -98
21110
4,150.00
Futules Stamp /Conway
10 -29 -98
21188
3,000.00
Futules Stamp /Conway
05 -18 -99
21701
1,500.00
Futules Stamp /Conway
06 -08 -99
21763
2,000.00
Futules Stamp /Conway
06 -10 -99
21789
1,800.00
Futules Stamp /Conway
Futules, 01- 008 -C2
Page 11
61. Futules would often perform work following discussions with the road foreman.
62. Work completed by Futules was occasionally discussed by council during council
meetings.
a. These discussions are not recorded in the minutes of the council meetings.
b. In a sworn statement on August 30, 2001, Futules confirmed that he
participated in all council discussions and decisions that resulted in him
performing work for the borough.
c. Futules would inform some of the council members that he was going to do
work outside of council meetings.
63. The borough never solicited phone quotes or advertised for bids relating to any of
the work done by Futules.
64. In the past, phone quotes had been attempted, but historically had never received
any favorable responses and the borough believed it was futile to continue
attempting such solicitations.
65. Borough records verify that checks issued to Futules were authorized as follows for
services:
Check No.
Amount
Approval Date
Official Action
19255
$550.00
06 -11 -96
Yes Vote
19860
543.80
04 -08 -97
Made Motion
19899
400.00
05 -13 -97
Seconded
Motion
21110
4,150.00
09 -08 -98
Yes Vote
21188
3,000.00
10 -13 -98
Yes Vote
21701
1,500.00
05 -11 -99
Yes Vote
21763
2,000.00
06 -08 -99
Yes Vote
Futules, 01- 008 -C2
Page 12
66. Futules' signature stamp appears on five of the eight checks issued to him for
performing heavy equipment work for the borough.
a. Futules authorized the borough manager to use a facsimile of his signature
on borough checks as needed to conduct borough business.
67. Futules participated in actions of borough council to approve payments to him for
heavy equipment work.
68. Futules voted to approve all bil s lists at council meetings that included payments to
him for performing heavy equipment work.
a. Votes to pay bills passed unanimously with no recorded roll call vote.
b. In a sworn statement on August 30, 2001, Futules confirmed that he never
abstained from a vote to pay bills that included payment to him and that he
participated in all council actions to pay bills.
69. Verona Borough checks were issued to Futules in the name of Futules Hauling and
Excavating or Futules Excavating, and were deposited into accounts held by
Futules.
70. None of the work performed by Futules for work in excess of $500.00 was awarded
through an open and public process.
71. Futules was paid a total of $13,943.80 from 1996 through 2001 for performing
heavy equipment work for the borough as follows:
1996: $ 950.00
1997: 543.80
1998: 7,150.00
1999: 5,300.00
Total: $13,943.80
a. Futules' profit in association with this work was $5,368.60.
1. Futules' profit was based on his business' percentage of profit for
each year. (See Finding No. 96) [sic]
72. Futules also provided heavy equipment service as a subcontractor for a borough
project.
73. In October 1996, Futules performed heavy equipment work as a subcontractor for
the borough through U & S Construction, Sharpsburg, PA.
Futules, 01- 008 -C2
Page 13
74. U & S Construction was awarded the contract on September 9, 1996, to serve as
general contractor on the borough building renovation project.
a. Futules participated in council actions awarding the contract to U & S
Construction.
75. U & S Construction typically selects local contractors for various aspects of projects
that it supervises.
a. U & S Construction employees learned that Futules did excavation work
through conversations with Futules when eating at Futules' Restaurant.
76. Futules did not inform representatives of U & S Construction that he was a member
of the borough council.
77. Futules invoiced U & S Construction in the amount of $460.00 for work performed at
the borough building on October 7, 1996.
a. The invoice included eight hours of backhoe work at a cost of $40.00 per
hour and four hours of dump truck use at $35.00 per hour.
78. Futules received payment from U & S Construction in the amount of $460.00 on
October 11, 1996 with U & S Construction Check No. 4805.
a. Futules endorsed and deposited this check into a personal account at PNC
Bank, Account No. 00- 0709 - 07389.
79. U & S Construction received its first payment from the borough on November 7,
1996, in the amount of $34,844.55.
a. Futules participated in official council actions approving this payment to U &
S Construction.
1. Futules participated in all council actions approving payment to U & S
Construction.
b. Futules did not publicly disclose his business relationship with U & S
Construction.
80. Futules received payments totaling $24,403.80 between 1996 and 2001 from the
borough for heavy equipment rental and other contracts as follows:
Drain Installation: $ 10,000.00 (See Finding No. 47) [sic]
Various Heavy Eq. Work: 13,943.80 (See Finding No. 86) [sic]
Subcontractor: 460.00 (See Finding No. 92) [sic]
(U &S Construction) Total: $ 24,403.80
81. Tax records provided by Futules indicated that the percentage of profit for his
business during each of the years 1996 through 2001 were as follows:
1996: Not Applicable
1997: Not Applicable
1998: 42.4 %
1999: 44.1
2000: 38.6
2001: 41.7 %
Futules, 01- 008 -C2
Page 14
a. Percentage of profit is not applicable in 1996 and 1997 because Futules
Hauling, Excavating, and Light Demolition operated at a loss in those years.
b. Percentage of profit for 2001 was determined by averaging the percent of
profit for 1998 through 2000.
1. There were no tax records available for 2001 to make an exact
calculation for percent of profit at the time of this investigation.
c. Percentage of profit for each year was calculated by dividing net profit by
gross receipts.
1. Net profit and gross receipts for Futules' business were listed on IRS
1040 Schedule C Profit or Loss from Business (Sole Proprietorship)
tax filings for 1996 through 2000.
82. Futules received a private pecuniary gain of $7,050.62 for work done for the
borough from 1996 through 2001 is as follows:
Drain Installation: $ 1,682.02 (See Finding No. 71) [sic]
Various Heavy Eq. Work: 5,368.60 (See Finding No. 86) [sic]
Total: $ 7,050.62
83. Futules believed that he could save the borough a substantial amount of money by
performing the drainage and other projects at reduced costs.
84. Borough council believed that Futules' costs were less than at that of other potential
vendors /contractors.
III. DISCUSSION:
At all times relevant to this matter, the Respondent, William Futules, hereinafter
Futules, has been a public official subject to the provisions of the Public Official and
Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, et seq., as codified
by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S.
§1101 et seq., which Acts are referred to herein as the "Ethics Act."
The allegations are that William Futules, as a Verona Borough Councilman, violated
Sections 3(a)/1103(a) and 3(f)/1103(f) of the Ethics Act when he participated in
discussions and actions of council regarding the award of contracts and the approval of
invoices to his business, which contracted with Verona Borough in excess of $500 without
an open and public process.
Pursuant to Section 3(a)/1103(a) of the Ethics Act, 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 Act 9 of 1989/Act 93 of 1998 as
follows:
Section 2/1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family
Futules, 01- 008 -C2
Page 15
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. §1102.
Section 3(a)/1103(a) of the Ethics Act prohibits a public official /public employee
from using the authority of public office /employment or confidential information received by
holding such a public position for the private pecuniary benefit of the public official /public
employee himself, any member of his immediate family, or a business with which he or a
member of his immediate family is associated.
Section 3(f)/1103(f) of the Ethics Act imposes certain restrictions as to contracting.
Section 3(f)/1103(f) of the Ethics Act provides:
Section 3/1103. 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 P.S. §403(f)/65 Pa.C.S. §1103(f).
In addition, Section 3(f)/1103(f) of the Ethics Act 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.
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.
Futules, 01- 008 -C2
Page 16
Futules has served as a Verona Borough Councilman since January of 1994. As
one of the three road committee council members and road committee chairman, Futules
directs and gives work orders to the borough road crew.
In March of 2000, Futules, as borough council president, signed a grant application
to the Department of Community and Economic Development (DCED) for $10,000 to install
drains in the borough garage and to supply electrical service for the borough gazebo. The
application was based upon estimates of $4,000 for the electrical project and $11,000 for
the drain project with a project cost split of approximately $5,000 from the borough and
$10,000 from DCED. The amount for the drain project was based upon an estimate from
Nave Plumbing. DCED awarded the grant in June of 2000 and Futules signed the grant
contract on behalf of the borough. The DCED contract contained a standard conflict of
interest provision that no elected official or employee could have any direct or indirect
interest in the contract or the proceeds thereof.
The borough did not advertise for bids or solicit quotes and did not use the services
of Nave Plumbing in the execution of the drain installation contract. Council members
agreed to utilize Futules to install the drain system because Futules indicated that he could
do the job at a lower cost than Nave Plumbing. The borough drainage system was
installed by Futules or Futules Hauling, Excavating and Light Demolition (Futules
business), a sole proprietorship operated by Futules.
Because there was joint funding by DCED and the borough, it had been
contemplated that borough employees would be utilized in the project. Thus, council
members were aware that Futules would install the drainage system and utilize borough
employees to work on the project. Futules and borough employees completed the
installation of drain project in November of 2000. The work was not done by a registered
master plumber as required by the Regulations of the Allegheny Department of Health.
When an Allegheny plumbing inspector conducted a spot inspection, he determined that
the plumbing work had been completed without a plan, without a permit, and without an
inspection. The inspector sent a letter informing the council members of a violation and
stated that action would be taken if the borough did not remedy the situation.
Futules then hired a registered plumber to comply with the county health
department requirements and paid the costs associated with the registered plumber's
work. In March of 2000, the drain system passed inspection. In January of 2001, Futules
submitted an invoice in the amount of $10,000 to the borough for the drain installation
project. The invoice was included in a bills list for presentation to council. The bills list
was unanimously approved without any roll call vote at a meeting which Futules attended.
Futules subsequently received a $10,000 check issued from the borough general fund in
payment.
Around that time, Futules purchased windows for the maintenance garage in the
amount of approximately $3,400 for which he made payment without submitting any
invoices or receiving any reimbursement from the borough. Furthermore, Futules provided
certain services for the installation of the electric lines to the borough gazebo without
receiving any payment by using his equipment to dig a 200 feet trench. In addition,
Futules purchased approximately $2,600 in materials and supplies relative to the drain
system installation. The payment Futules received as to the drain installation project did
not come from the DCED escrow account but rather from borough funds. Parenthetically, it
was Futules' original intent that the drain system, window installation, and gazebo
electrical work would be paid using DCED grant money.
As to the $10,000 payment Futules received for his work on the borough drain
project, the associated expenses plus the purchase and installation of the windows and the
gazebo work totaled $3,711. From the balance of $4,033.63, Futules realized a net profit
of $1,682.02.
Futules, 01- 008 -C2
Page 17
Aside from the drain installation project, Futules performed hauling and excavation
work for the borough from 1996 through 2001. A listing of such services performed by
Futules for the borough, including the dates, times, and amounts are delineated in the
record. See, Fact Finding 60. Fautules participated in council discussions and decisions
which resulted in his performing such borough jobs which were never advertised for bids.
After Futules performed such services, he received payment from the borough. See, Fact
Finding 65. Futules participated in actions of borough council to approve payments to
himself for such work. See, Fact Finding 67. Futules' signature also appears on five of the
eight checks that were issued to him in payment for such services. Even though some of
the work that Futules did for the borough in the relevant time period was over $500, no
public bidding was ever done. For that time period, Futules received payments totaling
$13,943.80. The resultant profit Futules received was $5,368.60.
Separate and apart from the above, Futules provided heavy equipment work as a
subcontractor for U & S Construction Company which was awarded a contract in
September of 1996 to act as the general contractor for a borough building renovation
project. Futules performed such work, invoiced U & S Construction in the amount of $460,
and subsequently received payment from that business. U & S Construction, in turn,
invoiced and received payment from the borough in the amount of $34,844.55. As to that
project, Futules did not publicly disclose his business relationship with U & S Construction
and did not inform U & S Construction that he served as a member of borough council.
As to the three scenarios involving the drain installation, the various work that
Futules directly performed for the borough, and the subcontract work for U & S
Construction, Futules received payments totaling $24,403.80. Through the application of a
profit percentage, the private pecuniary gain that Futules received as to these three
separate activities totaled $7,050.62.
Having highlighted the Stipulated Findings and issues before us, we shall now apply
the Ethics Act to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations.
The Consent Agreement proposes that we find: a violation of Section 3(a)/1103(a) when
Futules participated in discussions and actions of Verona Borough Council regarding the
award of various contracts or approvals to perform work for the borough, the approval of
invoices authorizing payment to his business and the issuance of payments to his
businesses; and technical violations of Section 3(f)/1103(f) when Futules' business
constructed /performed various borough projects in excess of $500 without such contracts
being awarded through an open and public process. In addition, Futules agrees to make
payment in the amount of $5,000.00 to Verona Borough through this Commission within
thirty (30) days of the issuance of this order.
In applying Section 3(a)/1103(a) of the Ethics Act to the above allegations, there
were numerous uses of authority of office on the part of Futules. Futules, as a borough
council member, participated in discussions and actions relative to the contracts for
providing various services to the borough by Futules or his business. Futules also
participated in the votes to approve invoices that he submitted for performing such
services. In addition, several of the borough checks that were issued in payment to
Futules contained his signature as a borough council member. Such actions were uses of
authority of office. See, Juliante, Order No. 809. Such uses of authority of office resulted
in private pecuniary benefits consisting of the profits that Futules obtained in providing
such services. Lastly, those private pecuniary benefits inured to Futules and his sole
proprietorship, a business with which he is associated as that term is defined under the
Ethics Act. Accordingly, Futules violated Section 3(a)/1103(a) of the Ethics Act in each
instance that he participated in discussions and actions of borough council regarding the
award of various contracts and the approvals to perform the work, the approval of invoices
Futules, 01- 008 -C2
Page 18
and the authorization of payments to his business, and the issuance of payments to his
business. See, Walters, Order 1143.
As to Section 3(f)/1103(f) of the Ethics Act, the record reflects that in all instances
when Futules provided services to the borough, there was never an advertisement for bids.
Although Section 3(f)/1103(f) of the Ethics Act provides that a public official or a business
with which he is associated may contract with his governmental body provided the process
is open and public as to contracts that are $500 or more, this was never done. The record
reflects that some of the contracts were less than $500 and others were over the $500
threshold of Section 3(f)/1103(f) of the Ethics Act. Accordingly, Futules technically violated
Section 3(f)/1103(f) of the Ethics Act in each instance when he contracted to provide
services to the borough of $500 or more when such contracts were not awarded through
an open and public process. See, Fantaskey, Order 1166.
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, Futules is directed to make
payment in the amount of $5,000 payable to Verona Borough through this Commission
within 30 days of the date of 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. Futules, as a Verona Borough Councilman, is a public official subject to the
provisions of Act 9 of 1989 as codified by Act 93 of 1998.
2. Futules violated Section 3(a)/1103(a) when he participated in discussions and
actions of Verona Borough Council regarding the award of various contracts or
approvals to perform work for the borough, the approval of invoices authorizing
payment to his business, and the issuance of payments to his business.
3. Technical violations of Section 3(f)/1103(f) occurred when a business with which
Futules was associated performed various projects for the borough in excess of
$500 without such contracts being awarded through an open and public process.
In Re: William Futules
ORDER NO. 1231
File Docket: 01- 008 -C2
Date Decided: 2/4/02
Date Mailed: 2/15/02
1 Futules, as a Verona Borough Councilman in Allegheny County, violated Section
3(a)/1103(a) when he participated in discussions and actions of Verona Borough
Council regarding the award of various contracts or approvals to perform work for
the borough, the approval of invoices authorizing payment to his business, and the
issuance of payments to his business.
2. Technical violations of Section 3(f)/1103(f) occurred when a business with which
Futules was associated performed various projects for the borough in excess of
$500 without such contracts being awarded through an open and public process.
3. Per the Consent Agreement of the parties, Futules is directed to make payment in
the amount of $5,000 payable to Verona Borough through this Commission within
30 days of the mailing of this Order.
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