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HomeMy WebLinkAbout896 Reed (2)STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In re: Stephen Reed File Docket: 85- 163 -C; 86 -109 -C Date Decided: June 28, 1993 Date Mailed: July 7, 1991 Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Dennis C. Harrington Roy W. Wilt Austin M. Lee Allan M. Kluger Joseph W. Marshall, III The State Ethics Commission received a complaint regarding a possible violation of the State Ethics Act, No. 170 of 1978, P.L. 883. Written notice, of the specific allegation(s) was served at the commencement of the investigation. A Findings Report was issued and served, upon completion of the investigation, which constituted the Complaint by the Investigation Division. An Answer was filed and a hearing was waived. The record is complete. This adjudication of the Commission is hereby issued which sets forth the individual Allegations, Findings of Fact, Discussion, Conclusions of Law and Order. This adjudication is final and will be made available as a public document fifteen days after issuance. However, reconsideration may be requested which will defer public release of this adjudication pending action on the request by the Commission. A request for reconsideration, however, does not affect the finality of this adjudication. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code $2.38. The files in this case will remain confidential in accordance with Section 8(a) of Act 170 of 1978 during the fifteen day period and no one unless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, confidentiality does not preclude discussing this case with an attorney at law. 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, 65 P.S. 409(e). Reed, 85- 163 -C; 86 -109 -C Page 2 I. ALLEGATIONS: A. ALLEGATION I: That Stephen Reed, Mayor of the City of Harrisburg, violated Section 3(a) of the Ethics Act which prohibits a public employee or public official's use of office or confidential information gained through that office to obtain financial gain and Section 3(b) which prohibits a public employee, public official or candidate from offering, soliciting or accepting anything of value based on an understanding that the vote, official action or judgment of the public official, public employee or candidate will be influenced when he accepted campaign contributions from firms associated with the underwriting of multi - million dollar bond issues in return for his appointing those firms as part of the financial and engineering teams for the bond issues. B. ALLEGATION II: That Stephen Reed, Mayor of the City of Harrisburg, violated Section 3(a) of the Ethics Act which prohibits a public employee or public official's use of confidential information gained through that office to obtain financial gain; Section 3(b) which prohibits a public employee, public official or candidate from offering, soliciting or accepting anything of value based on the understanding that the vote, official action or judgment of the public official, public employee or candidate will be influenced; and Section 5.12(a) of the State Ethics Commission regulations which requires persons required to disclose shall report all gifts which have a fair market value of $200 or more received by the person required to file, his spouse or minor dependent children in that he established a fund known as the Mayor's Club to serve his private purposes, and he failed to list as gifts on annual Statements of Financial Interests for the 1983, 1984 and 1985 calendar years purchases made by the Mayor's Club for personal purposes. Section 3. Restricted Activities. (a) No public official or public employee shall use his public office or any confidential information received through his holding public office to obtain financial gain other than compensation provided by law for himself, a member of his immediate family, or a business with which he is associated. (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he Reed, 85- 163 -C; 86 -109 -C Page 3 is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 55403(a), (b). II. FINDINGS: The following Findings relate to Allegation I: 1. Stephen Reed has served as the Mayor of the City of Harrisburg, Dauphin County, Pennsylvania (the "City ") since January, 1982. a. Reed sought re- election in 1985 and again in 1989. 2. The City is governed under the Option Third Class City Charter which took effect in 1969 by a voter referendum. a. Under this form of government the executive power of the City is exercised by the Mayor. b. The Mayor may propose bond or note issues but City Council must approve such bond or note issues through debt ordinance. 1) These ordinances may include the appointment of the financing team members proposed by the Mayor, including underwriters, remarketing agents, underwriters' counsel, sinking fund depositaries, trustees, bond counsel, engineers, financial advisors and engineers. 3. In October 1985, the City determined to undertake a project (the "1985 Project ") which generally consisted of the following: a. The planning, design, and construction of a new movable crest dam and 34.4 MW hydroelectric generating transforming and transmission facility. b. Capital improvements including the City Island Infrastructure; the lower river front steps; storm sewer improvements; preservation of the river front; Reed, 85- 163 -C; 86 -109 -C Page 4 development of a lake and recreational facilities; development of a secondary water source; and creation of soil erosion controls on both sides of the Susquehanna River. c. The funding of a debt service reserve fund; a reasonable working capital fund; and a reserve and replacement fund. d. The funding of interest during construction and for six months thereafter. e. The payment of the costs of issuance of the bonds and certain expenses incurred by the City with respect to the 1,985 Project. 4. In 1986, the 1985 Project was revised to reflect the relocation of the dam and the financing of several capital revenue projects of the City (the 1985 Project, as so revised, is referred to herein as the "1986 Project ", and the 1985 Project and the 1986 Project are collectively referred to herein as the "Dock Street Dam Project "). 5. Harrisburg City Council enacted a number of ordinances which related to the financing of the Dock Street Dam Project. a. 10/29/85 b. 07/10/86 c. 07/10/86 Ordinance No. by the City revenue bonds Ordinance No. Bonds issued 1985. 32 of 1985, authorizing issuance of its $215,000,000 electric (the "1985 Bonds "). 15 of 1986, retiring the 1985 pursuant to Ordinance No. 32 of Ordinance No. 16 of 1986, authorizing the issuance by the City of its $391,500,000 electric revenue bonds (the "1986 Bonds). 6. Section 10.02 of Ordinance No. 32 of 1985 authorized the acceptance of a purchase proposal from a group of purchasers consisting of the investment banking firms of Russell, Rea & Zappala; Arthurs, Lestrange & Short; Goldman, Sachs & Co.; and Prescott, Ball & Turben, Inc. to purchase the 1985 Bonds at a private sale by negotiation, which the Harrisburg City Council found was in the best financial interest of the City, as required by Section 701 of the Local Government Unit Debt Act, as amended, of the Commonwealth of Pennsylvania (the "Debt Act "). 1. Brinjac - Kambic engineers were initially selected as engineers for the 1985 Project. Reed, 85- 163 -C; 86 -109 -C Page 5 7. Section 10.02 of Ordinance No. 16 of 1986 authorized the acceptance of a purchase proposal from a group of purchasers consisting of the investment banking firms of Commonwealth Securities and Investments, Inc.; Russell, Rea & Zappala, Inc.; Arthurs, Lestrange & Company, Incorporated; Goldman Sachs & Co.; and Pryor, Govan, Counts & Co., Inc. to purchase the 1986 Bonds at a private sale by negotiation, which the Harrisburg City Council found was in the best financial interests of the City, as required by Section 701 of the Debt Act. 8. Mayor Reed selected all of the firms associated with the engineering, financing and consulting associated with the Dock Street Dam Project, which selections were approved by City Council. (See Findings 6 & 7). a. The fees paid to each firm were negotiated by Reed based on the public finance market conditions then prevailing, perceived risk and difficulty associated with selling and underwriting such bonds, the stated minimum price set forth by firms interested in performing services on the project, size of the issue and complexity of the financing situation. b. Reed retained a financial advisory firm, Public Financial Management, Inc. ( "PFM ") in 1986 to assist in evaluating fee proposals, among other duties, and PFM certified in connection with the issuance of the City's 1986 Bonds that the underwriters' discount and issuance costs of the 1986 Bonds were not unreasonable. 9. Mayor Reed utilized the following criteria when selecting the investment banking firms for the Dock Street Dam Project. a. Policy of non - exclusivity with no one firm or person ever having a monopoly or guarantee of continuing business. b. Proprietary designation whereby if an underwriting firm or an individual brings forth an idea that saves the City some money or is in the best interests of the City, the initiator of the proposal would play a lead role in carrying out this proposal. c. Past experience and knowledge in dealings with bonds. d. The firm's retail capacity, level of capitalization, capacity to syndicate and degree of commitment. e. The size of the issue as well as the amount of effort necessary to retail market the bonds. Reed, 85- 163 -C; 86 -109 -C Page 6 f. Whether the firm would be willing to work strictly on a contingency basis. The cost for the firm's services. g. 10. Firms rendering professional services in connection with financing of the Dock Street Dam Project were paid $9,839,233 in fees from 1985 to the present, representing 1.6% of the total principal amount of the 1985 Bonds and the 1986 Bonds issued pursuant to the 1985 and 1986 Ordinances enacted by City Council and identified in paragraph 5 hereof. The underwriters formed syndicates to assist them in marketing and selling the 1985 Bonds and the 1986 Bonds, such syndicates consisting of not only the City - selected investment banking firms, but over two dozen other investment banking firms not selected by the City. Thus, a substantial portion of these fees were paid to hundreds of brokers, employed by syndicate members, who placed orders for such 1985 Bonds and 1986 Bonds for resale to their own client buyers. 11. Firms associated with the Dock Street Dam Project have contributed a total of $50,135.22 between January 1985 through March 1989 to Mayor Reed's political committees. 12. Mayor Reed was represented by Attorney William R. Balaban, Karen M. Balaban and Patricia C. Zucker of the Harrisburg law firm of Balaban and Balaban as a result of a defamation suit filed against the Mayor in November of 1982 by a former City employee. a. In June 1984, a jury verdict was rendered in favor of the former employee and against the Mayor. b. The Superior Court of the Commonwealth of Pennsylvania affirmed the jury verdict. 13. Mayor Reed believed the costs of his defense of the suit would be covered by the City's insurance carrier because the activities forming the gravamen of the City employee's suit were performed by Reed in his capacity as Mayor -Elect of the City. a. The insurance carrier denied coverage on the eve of the trial. b. William R. Balaban, Karen M. Balaban and Patricia C. Zucker continued their representation of Reed, because it was the ethical duty of each to do so. 14. Balaban and Balaban's legal fees for its representation of Reed totaled $36,618.44. Reed, 85- 163 -C; 86 -109 -C Page 7 a. The legal fees have not been paid. b. Mayor Reed has not paid the legal fees because he was under no obligation to do so, inasmuch as he and the firm of Balaban and Balaban were under the belief that such costs and expenses would be covered by the City's insurance carrier. 15. In the course of its investigation, the State Ethics Commission (the "Commission ") interviewed numerous principals and employees of firms rendering professional services in connection with the Dock Street Dam Project. Not a single person so interviewed stated that there was any understanding with Mayor Reed linking or relating political contributions to Mayor`Reed to the retention of such firms or individuals to perform services on the Dock Street Dam Project, nor indeed were any such contributions ever discussed. The following Findings relate to Allegation II: 16. In 1982 political supporters of Mayor Reed formed the Mayor's Club (the "Club "). a. The Club was started with funds that remained from the 1982 Inaugural conducted for the installation of the Mayor, four City Council members and the City Controller. b. The Club made its private funds available for use by the Mayor's Office for activities and expenditures related to entertainment, city promotion, civic and charitable contributions and related activities of the Mayor's Office. c. The Club received an Employee Identification No. (23- 2253923) from the Federal Internal Revenue Service. 17. The Club did not register as a political committee or charitable organization. a. The Club organizers did not register the Club as either a political committee or charitable organization because of a belief that they were not legally required to do so. 18. Funding for the Club was obtained in the form of fund raising events. a. Printed invitations to the fund raising receptions were distributed to civic, governmental and social figures and political supporters of the Mayor. Ree , 85- 163 -C; 86 -109 -C Page 8 b. Receptions were held as follows: 1. June 30, 1982: Cocktail Reception, Holiday Inn, Center City, $100 per person. 2. September 19, 1983: Reception, Holiday Inn, Center City, $100 per person. 3. July 24, 1984: Reception, John Harris Mansion, $50 per person. 19. Deposited items to the Club's checking accounts totaled as follows: a. 1982: $ 6,700.00 b. 1983: 7,300.00 c. 1984: 1,200.00 10,523.88 d. 1985: 364.98 e. 1986: 3,910.02 f. Sidney Rubenstein, Treasurer of the Club, had sole signature authority for the checking accounts. 1. On occasions Rubenstein gave Reed blank checks which were presigned. 2. Reed would then make expenditures on behalf of the Club with such non - public, private funds. 20. The funds collected by the Club were used to pay for the expenses related to the three receptions, art work and ornamentals for the Mayor's office suite, antiques and City - related memorabilia, dinner meetings and activities for City employees, travel and related expenses of the Mayor, charitable contributions, printing and postage. a. All of the artwork, ornamentals, antiques and memorabilia purchased with Club funds were and have always been assigned to the City, and are listed as part of the City's inventory of capital assets, have always been the property of the City, and never were and are not the personal property of Mayor Reed. All such items have been continuously on and within the premises of the City Government Center and shall remain there. Reed, 85- 163 -C; 86 -109 -C Page 9 21. Expenditures of the Mayor's Club for the period 1982 through 1986 totaled: 22. a. Printing: $2,309.28 Postage: 640.00 Florists: 318.07 Art- Ornamentals: 7,839.79 Advertisements: 180.00 Restaurants- Catering: 1,175.09 Entertainment: 916.50 (tickets- sporting events) Charitable Contributions: 2,131.15 Antiques- Memorabilia 4,111.33 Travel (Mayor) 1,041.46 Gasoline purchases 455.67 Receptions: 1982: 1,072.50 1983: 1,306.20 1984: 1,775.15 Other food expenditures 1,982.99 Meetings, Reception for Lawrence Hochendonner 500.00 a. The expenses noted above for travel for Mayor Reed included $641.94 for a trip to Texas in 1986 for the sesquicentennial celebration of Harrisburg, Texas, now a section of Houston. The grandson of the City of Harrisburg's founder, John Harris, Jr., who was also named John Harris, was the founder of Harrisburg, Texas, which became the first capital of the newly formed Republic of Texas in 1836. As Texas and its communities celebrated their 150th anniversary in 1986, Mayor Reed was invited to be the keynote speaker of events planned in the former Harrisburg, Texas in his capacity as Mayor of Harrisburg, Pennsylvania because of the historical connection between the two communities' founders. Mayor Reed's visit to Harrisburg, Texas was a matter of public record and was publicized in both Harrisburg, Pennsylvania and Harrisburg (Houston), Texas. b. Mayor Reed incurred expenses as follows from March 21, 1986, through March 25, 1986, for his attendance at the Harrisburg, Texas sesquicentennial. Airfare: Hotel 3/21/86 to 3/28/86: Gasoline: Hotel 3/23/86: Incidentals: $258.00 99.90 25.00 30.24 66.62 Reed, 85- 163 -C; 86 -109 -C Page 10 Hotel 3/25/86: 32.06 Rental car: 130.12 $641.94 c. Reed attended in his official capacity as Mayor of Harrisburg and the above - listed expenses were incurred in such capacity. 23. Mayor Reed participated in a trip to Israel sponsored by the American Jewish Congress from New York, NY for the Fifth International Conference of Mayors in Jerusalem. a. The purpose of the conference was to discuss subjects of mutual concern to mayors throughout the world. b. Eleven mayors from the United States, including Mayor Reed of Harrisburg, and eleven foreign mayors were selected to attend the conference. c. The conference took place from Sunday, April 1, 1984, through Saturday night, April 7, 1984. d. Mayor Reed's trip was paid for by the United Jewish Federation of Greater Harrisburg (the "Federation "). 1 Payment was made to the American Jewish Congress for $1,752.00 on Reed's behalf. 2. Payment included $802.00 in airfare and $950.00 in conference fees which was for seven nights' lodging, all meals, transfers, registration, printed materials and kits. 3. Payment of the trip was made to build support for Israel and the Jewish Community. e. Mayor Reed did not return with the rest of the American delegation, but rather, stayed for two additional days. 1. Reed remained in Israel on April 8 and 9, 1984. 2. Some of Reed's additional expenses included his lodging at the Laromme Hotel in Jerusalem in the amount of $183.67. 3. The Club paid for Reed's additional hotel expense of $183.67 when he chose to remain in Israel after the Conference was completed. Other expenses were paid by Reed personally. 4. The additional expenses which the Club paid were Reed, 85- 163 -C; 86 -109 -C Page 11 less than $200.00. Even if payment of such expenses constituted a gift, which has not been determined, the threshold amount of Commission Regulation 55.12, 51 Pa.B. 55.12, was not met, and thus there was no legal requirement that Mayor Reed list payment of these expenses as a gift on any Statement of Financial Interests which he filed. 24. The other expenditures and the receipts of the Club are not at issue and the Club is non - existent, having been terminated by Mayor Reed in 1986. a. Review of the contributions to and receipts by the Club chid not disclose any matter requiring action or disclosure. 25. Mayor Reed has filed Statements of Financial Interests for the 1982 through 1989 calendar years. a. Those statements do not disclose the Texas trip expenses paid by the Club or the trip expenses for the Israel trip paid for by the Federation and the Club. b. Because the expenses paid by the Federation were reimbursement of expenses incurred by Mayor Reed in the performance and discharge of his official duties as Mayor of the City of Harrisburg, the Ethics Act imposed no duty at such time to list the source and amount of such reimbursement on any Statement of Financial Interests which he was required to file. c. Because the expenses paid by the Mayor's Club in connection with the Israel trip were less than $2Q0.00, Mayor Reed was under no legal duty to report payment of these expenses as a gift on any Statement of Financial Interests which he filed. d. Even though Mayor Reed maintains that the expenses incurred in connection with the Harrisburg, Texas trip were incurred in the performance and discharge of his official duties as Mayor of the City of Harrisburg, Pennsylvania, and that his invitation to and attendance at the 150th Anniversary events at Harrisburg, Texas, were because he was the Mayor of Harrisburg, Pennsylvania, and in such capacity, and that payment of such expenses by the Club was not a gift but reimbursement of expenses incurred in connection with public office, in order to resolve this matter he is willing to file an amended Statement of Financial Interests for the year 1986 to reflect such reimbursement. Reed, 85- 163 -C; 86 -109 -C Page 12 III. DISCUSSION: As Mayor of the City of Harrisburg, Reed, is a public official as that term Act, 65 P.S. 5402; 51 Pa. Code §1.1. subject to the provisions of the Ethics therein are applicable to him. initially, it is noted that Section 9 of Act 9 of June 26, 1989, P.L. 26, provides, in part, as follows: This amendatory act shall not apply to violations committed prior to the effective date of this act, and causes of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto. Since the occurrences in this case transpired prior to effective date of Act 9 (June 26, 1989), we must apply provisions of Act 170 of 1978, P.L. 883, to determine whether Ethics Act was violated. Under Section 3(a), quoted above, this Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law transgresses the above provision of law. Thus, use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak /McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283 (1983); Yacobet v. State Ethics Commission, 109 Pa. Commw. 432, 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own financial interests; Koslow v. State Ethics Commission, 116 Pa. Commw. 19, 540 A.2d 1374 (1988), allocatur denied, Pa. , 553 A.2d 971 (1988). Under Section 3(b) shall offer or give to shall solicit or accept contribution based upon action or judgment of influenced thereby. Stephen Reed, hereinafter is defined in the Ethics As such, his conduct is Act and the restrictions the the the of the Ethics Act quoted above, no person a public official and no public official anything of value including a political the understanding that the vote, official the public official /employee would be Section 5.12 of the Commission Regulations, 51 Pa. Code 55.12, follows Section 5(6) of Act 170 of 1978 and requires the disclosure Reed, 85- 163 -C; 86 -109 -C Page 13 of the name and address of the person(s) from whom gifts valued in the aggregate of $200 or more were received together with the value and circumstances of each gift. In the instant matter, we must determine whether Reed violated either Section 3(a) or 3(b) of the Ethics Act regarding the receipt of campaign contributions from firms associated with the underwriting of a multi- million dollar bond issue in return for appointing those firms as part of the financial /engineering teams for those bond issues and secondly whether Reed violated Section 3(a) or 3(b) or Regulation §5.12 regarding the establishment of the Mayor's Club and the failure to disclose gifts on his Financial Interests Statements (FIS's) for 1983. through 1985 as to that club. Reed has served as Harrisburg City Mayor from 1982 to the present. In October of 1985, the City considered undertaking the Dock Street Dam Project to construct a hydroelectric plant for the generation of electricity. In order to implement the project, the City of Harrisburg enacted Ordinance 32 of 1985 authorizing the issuance of $215,000,000 in revenue bonds to finance the project. The Ordinance provided for the acceptance of a purchase proposal from a group of purchasers consisting of the investment banking firms of Russell Rea & Zappala; Arthurs, Lestrange & Short; Goldman, Sachs & Co.; and Prescott, Ball & Turben. Ordinance 15 of 1986 authorized the retiring of the original $215,000,000 bond issue; thereafter, Ordinance 16 of 1986 authorized the issuance of $391,295,000 in revenue bonds. The bond issue was designed to provide funds for the project as well as various costs related to the project. The Mayor selected all of the firms associated with the engineering, financing and consulting relative to the project which firms were approved by City Council. The criteria by which Reed selected the firms for the project are set forth in Fact Finding 9. As to the Mayor's Club, a group of Reed's political supporters started the Club with funds that remained from the 1982 inaugural. The Club is designed to make private funds available to the Mayor for activities and expenditures relative to entertainment, city promotion, civic and charitable contributions vis -a -vis the Mayor's Office. Reed did utilize the funds for such activities. A listing of the deposits into the Mayor's Club account are set forth in Fact Finding 19; all such yearly deposits exceed $200. The utilization of the funds from the Mayor's Club by Reed are set forth in Fact Findings 20, 22, and 23. Two uses of funds by Reed from the Mayor's Club involved a trip in 1984 to Israel to attend a mayoral conference and a trip in 1986 to Harrisburg, Texas to attend the sesquicentennial of that city. In applying the provisions of Sections 3(a) and 3(b) of the Ethics Act to the above facts, we find as to the first allegation that no violation occurred as to either Section since there is no Reed, 85- 163 -C; 86 -109 -C Page 14 evidence that there was a use of office to obtain a financial gain under Section 3(a) or an understanding under Section 3(b) between the campaign contributors and Reed's selection of the firms. In Bartle, Order No. 659, we held that a county commissioner did not violate Sections 3(a) or 3(b) of the Ethics Act in participating in a matter involving a firm from which various individuals contributed to his re- election campaign, since there was no evidence to establish a connection between the involvement by the public official and the re- election campaign contributions by persons in the firm. See also, Wolfgang, Opinion No. 89 -028. Since we find that there was no understanding under Section 3(b) of the Ethics Act and no linkage between the use of office of Reed in voting and the financial gain consisting of the campaign contributions as to Section 3(a), no violation occurred. Our decision is in accord with Gilchrist, Order 802, and Moore, Order 780, wherein we reached the same result as above. Turning to the second allegation, we find no violation as to Section 3(a) or 3(b) for the same reasons as noted above. As to the establishment of the Mayor's Club, there is no evidence to establish a use of office by Reed regarding the creation of that fund. On that basis, we find no violation of Section 3(a). See, Piccolo, Order 735. As to Section 3(b), there is no evidence of any understanding and on that basis we find no violation of that provision of law. As to Section 5.12(a), the funds from the Mayor's Club were gifts in that the monies came from private sources and were utilized for mayoral functions. In the case of the trip to Israel, the decision by Reed to stay for two extra days after the mayoral conference ended was a utilization of the Mayor's Club funds for personal use. However, since the amount was under the reporting threshold, it is not reportable for FIS purposes. We therefore find no violation of Section 5.12(a) of the Regulations as to gifts from the Mayor's Club for the calendar year 1983 through. 1985 noting that we only considered and made a determination as to matters within the scope of the allegation. IV. CONCLUSIONS OF LAW: 1. Stephen Reed, as Mayor of Harrisburg, is a public official subject to the provisions of Act 170 of 1978. 2. Reed did not violate Section 3(a) of the Ethics Act regarding participating or voting as to the Dock Street Dam Project when firms associated with the underwriting of that project made contributions to Reed's election campaign in that no linkage was established between the use of office of Reed as to the project and the receipt of election campaign contributions. 3. Reed did not violate Section 3(b) of the Act regarding Reed, 85- 163 -C; 86 -109 -C Page 15 receiving election campaign contributions from firms associated with the underwriting of bond issues as to the Dock Street Dam Project since there is no evidence to establish an understanding between Reed and the firms as to the receipt of the campaign contributions and his voting. 4. Reed did not violate Sections 3(a)- or 3(b) regarding the establishment of the Mayor's Club in that there was no evidence of a use of office by Reed and no evidence that an understanding existed relative to such fund. 5. Reed did not violate Section 5.12(a) of the State Ethics Commission Regulations regarding the failure to list on Reed's 1983,1984 and 1985 calendar year FIS's gifts from the Mayor's Club. In re: Stephen Reed File Docket: 85- 163 -C; 86 -109 -C . Date Decided: June 28, 1993 Date Mailed: July 7, 1993 ORDER NO. 896 1. Stephen Reed, as Mayor of Harrisburg, did not violate Section 3(a) of the Ethics Act regarding participating or voting as to the Dock Street Dam Project when firms associated with the underwriting of that project made contributions to Reed's election campaign in that no linkage was established between the use of office of Reed as to the project and the receipt of election campaign contributions. 2. Reed Raid not violate Section 3(b) of the Act regarding receiving election campaign contributions from firms associated with the underwriting of bond issues as to the Dock Street Dam Project since there is no evidence to establish an understanding between Reed and the firms as to the receipt of the campaign contributions and his voting. 3. Reed did not violate Sections 3(a) or 3(b) regarding the establishment of the Mayor's Club in that there was no evidence of a use of office by Reed and no evidence that an understanding existed relative to such fund. 4. Reed did not violate Section 5.12(a) of the State Ethics Commission Regulations regarding the failure to list on Reed's 1923, 1984 and 1985 calendar year FIS's gifts from the Mayor's Club. BY THE COMMISSION, JAMES M. HOWL