HomeMy WebLinkAbout364-R WelshMr. Peter Welsh
c/o Rohert Kane, Esquire
Kane and Kane
474 W. Market Street
York, PA 17404
Re: No. R3 -149 -C
pear Mr. Welsh:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
nRnFR nF THE COMMJSSInN
Order No. 364 -9
DECIDED NOV 986
MAILED 6
The State Ethics Commission has received a complaint regarding you and a
possihle violation of Act 17n of 1979, The Commission has now completed its
investigation. The individual allegations, conclusions, and findings on which
those conclusions are hased are as follows:
I. Allegation: That you, nirectnr of Museums of the Pennsylvania Historical
and Museum Commission, violated Section 3(a) of the Ethics Act, 65 P.S.
6403(a), hy using your office or confidential information gained from that
office to obtain financial gain for your wife hy participating in actions to
gain contracts for the firm which employed her.
A. Findings:
1.. Von were employed as the firector, Bureau of Museums, hereinafter the
Rureau, with the Pennsylvania Historic and Museum Commission (PMMC) from 1076
to October 14, 1 and, as such, were a puhlic employee subject to the Fthics
Act.
2. Your wife, Carroline, was a Project firectnr with Marketechs, Incorporated
located in York, Pennsylvania.
a. Marketechs is a firm which designs and constructs exhihits.
h. Marketechs has, in the past, provided services to the Commonwealth of
Pennsylvania, including the Historical and Museum Commission, the
Landis Valley Museum and the Pennsylvania nepartment of
Transportation as well as to entities in ether states and federal
governmental entities. Marketechs has provided services to the
Mr. Peter Welsh
Page 2
Commonwealth of Pennsylvania prior to your association with the
Historical and Museum Cot
c. Your wife receives a salary from Marketechs i_d does not work on a
commi ssior, or i rcentive basi ►�
3. In 1982 -1983, Marketechs was engaged to design and construct a display at
the "Yellow Barn," located at the Farm i.luseum at Landis Valley. Pennsylvania,
referred to herein as the Barn or Farm Museum Project.
a. The idea for this project arose in the se:Amer of 1982.
t 7his project was to be funded by the Pennsylvania Farm Museum Support
Group, I ea di s Valley Associates (LVA) .
e. :_VA is are independent, non- profit organization, operated by four
offi:ers and a 13 member Board of Directors to benefit the Farm
Museu9.
d. E ;cr t:':ouah LVA would fund this Barn Project, standard procedure was
for t _ rsonnel of the PHMC to coordinate, select and super >i se the
contr:otore for this type of project.
e. There fol towed several months of planning in order to get the Barn
Project ir< place and completed.
(1) Burl n2 this time, as Director, you were aware of the project
and the progress of the planning , i ncludi ng the amount
av<ilable and budgeted for same.
(2) Mr. Robert Seiber, Administrator for the Farm Museum in
Lancaster, Pennsylvania, stated that in October of 1982, you
suggested to him that Marketechs would be qualified to design
and construct the exhibit. Seiber further indicted that you
arranged a meeting between Seiber, Nadine Steinmetz, Curator
of the Farm Museum, and your wife - who was representing
Marketechs, to discuss this project.
a. You have denied that you suggested the use of Marketechs on
this project and have stated that Mr. Seiber had requested
of you an indication of whether you had any objections to
the engagement of Marketechs for the Yellow Barn Project.
You have stated that you had no objections based upon the
prior relationship between= LVA and Marketechs.
Mr. Peter Welsh
Page 3
(3) When this
Barn Proj
f. On November 1,
proposed design
budget for this
g•
Marketechs' pri
Farm Museum on
(3)
Expense Voucher
Number
(a) 1698640
meeting was held, you attended, and plans for the
ect were discussed.
1982, your wife, representing Marketechs, submitted a
for this project to LVA and on November 2, 1982 a
project was approved by the LVA Board of Directors.
ce proposal for the Barn Project was received at the
November 13, 1982.
(1) Although your wife communicated with Seiber and Steinmetz over
the next several months, with respect to this project, final
proposals were not made until late February or early April,
1983.
(2) At that time, Hain -Wolf Associates, Incorporated was contacted
and submitted a proposal for this project dated April 28, 1984,
at approximately $25,000 which amounted to almost twice the
amount budgeted by LVA for this project.
Marketechs' price quote of $9,500 for graphics and
construction, plus $1,800 for shipping and installation dated
February 23, 1983, updated to a total of $14,250 by quote date
April 4, 1983, was reasonably close to the amount budgeted by
LVA for the project.
(4) Marketechs received the contract by acceptance of their quote
on April 22, 1984 for this project and was paid for same by
LVA.
4. Throughout the course of the discussion, decisions on and implementation
of the Barn Project you were involved as Director of the Bureau and your
travel expense vouchers submitted as Director for expenses incurred as
Director, include items related to the Yellow Barn Project as follows:
Date of
Travel
7/26/82
Item
Charged
80 miles
Explanation to
Justify Travb1
"Farm Museum - -Re:
To discuss Associate,
Exhibit- Yellow Barn,
Personnel"
Mr. Peter Welsh
Page 4
Expense Voucher Date of Item Exralcnation to
Number Travel Charged ustify Travel
(b) 1698807 11/19/82 80 miles "Warn Museum--
Luncheon w/ William
°, thuhn re: G(11
dec`icition meetings
':: Farm Museum staff
'n exhibit pvans for
" `.,l ? ow Barn."
(c) 1207747 3111/82 miles "Pa. Farm N!!se''m --
meet i ng with
curatorial al ''gaff to
di scuss i nve6 itory,
exhibits and winter
program"
(d) 1207752 2/17/64 1C0 miles "Pergnsylvani. earn
i ncl udi ng Mu seum -- f, :; ? ook
stop i n at design •3f,r,
Strasburg Yellow Barn Exhibit."
5. Som:.time Tlugust of 1982, Dr. Larry Tise, the Executive Director PHMC
and your di rect s p *rior, advised you following his meeting w+th the. 5ccretary
of PennDot c r, Ac gus L7 1982 that PennDot was considering construction
of a di spl a ° the Bureau of rotor Vehicles, Room G -100 area withi tai ^i r
buildinc in ■a• : °risburg.
a. Dr. Ti. r: i ncicated that PennDot might wish to spend El: ;..roxi maLr'iy
$50,,000 u ; ante exhibit and was seeking PHMC assistance on th"s
project, herei rafter referred to as the• PennDot Project.
b. You stated to are Ethics Commission investigator that you had informed
Dr. Tise that PHMC was s:iort of personnel ar°:d /car v;er•e on otider
assignments and vvnr ~. rot able to handle this project. You further
stated, at that time, that you had told Ilse that 2•ou thought
Marketechs would Le able to handle this ;ob. YOU have subsequently
i ndicated that the !.ole information; provided to Dr. Ti se at that
time was that PHMC was not able to perform the job inhouse.
c. Dr. Tise directed you to pursue this :.atter or to assign someone to
explore ideas on this project and to keep him advised of its progress
and outcome. •
Mr. Peter Welsh
Page 5
d. PennDot, in fact, wanted to expend approximately $5 - 10,000 on this
project.
e. By memo of August 18, 1982, you informed Dr. Tise that Ms. Catherine
McElroy would be assigned to represent you at a meeting set for
August 20, 1982 with Dr. Tise to discuss this PennDot project.
f. PennDot Secretary, Thomas Larson, wrote to Dr. Tise on September 22,
1982 concerning this project indicating:
(1) his interests in having the display designed and constructed as
quickly as possible;
(2) he authorized a "$5,000 subvention" for the project;
(3) that Lois Dostalik, Assistant Press Secretary at PennDot, would
be involved as liaison with PHMC on the project.
6. In response to Dr. Tise's direction, you called a meeting between
personnel from PennDot and PHMC to discuss the PennDOT project.
a. You were not able to attend this meeting, but you asked Catherine
McElroy, who at the time was your subordinate, to attend and to keep
you informed on this project.
b. Although Ms. McElroy did not generally get involved in this type of
work, you instructed her to continue to attend such meetings, render
assistance and expertise as needed to PennDot, and to inform you of
the status of the project as outlined above. The reason you could
not attend was that you were otherwise engaged on matters of more
importance.
c. You were, on occasion, within the next several months following this
initial meeting, asked by Dr. Tise for a "progress report" on this
project.
d. PennDOT representatives on this project were at the time and from
time -to -time, John Zogby, Deputy Secretary for Safety Administration,
Lois Dostablik, Project Coordinator, and Phil Deemer, Coodinator of
the Historic Renovation project and Public Service Manager.
7. By quotation and letter dated December 3, 1982, Marketechs, through its
President, Otis Morse, submitted a proposal to design, construct and erect a
permanent display for PennDOT in conjunction with this project.
Mr. Peter Welsh
Page 6
a. This quotation was directed to "Lois Dostelic (sic)."
b. This quotation was a total of $47,.610.25.
c. This quotation bore tie following under the heading "Provisions:"
"PHMC (Pennsylvania Historic and Museum Commission)
provides consultant, script, select ;on of graphics,
and all curatorial assistance as well e all artifact
handling and placement in designated places in
exhibit."
d. Market €rhs designated your wi 'c as Project Di rector on this PennDOT
project. -
8. There is no re-ord of any other contractor or bide:" ^r being a sked to or
having supplied c quotation or proposal to undertake or sccure this PennDOT
project wrrk.
e. 'Noce is, memo dated October 25, 1982 from you to Ms. McElroy
:tat i rlf es follows:
"Another bidder for the PennDOT job is Giltspur
in Pittsburgh. The address and telep one- ncmber°
are
Giltspur Exhibits
4875 Centre Avenue
Pittsburgh, Pennsylvania 15206
(412)362 -1 400"
b. 7h: Sales rvha,rger of Giltspur had no record of any contact with
an; °ore or see' mi tti ng or bei ng asked to submi t a proposal wi th respect
to t;; i s PennDOT project.
9. Correspondence ndernce rel ati nz to this PennDOT project indicates and confirms
that:
a. By memorandum to Dr., Ti se dated October 25, 1982, as he requested
from you or October 20, 1982, you informed him that the PennDOT
Project was "pvoceeding well," that the "script" for this would be
produced by December 1, 1982; that you expected to have "one outside
estimate for the job" prior to December 1; and that PennDOT
"i ndi cated wi 1 1 i ngness to pay up to $50,000 for this exhibit."
Mr. Peter Welsh
Page 7
b. December 3, 1982 - Marketechs' quotation is submitted with respect
to the PennDOT Project.
c. By letter dated March 23, 1983 to Otis Morse, President, Marketechs,
Ms. McElroy of PHMC, advised that PennDOT was uncertain as to whether
they would proceed with the entire project. She suggested that a
bill for services, to date, be submitted to PennDOT in care of the
PHMC, directed to your attention.
d. By memo dated April 20, 1983, you transmitted a bill dated April 14,
1983 from Marketechs for their services relating to this project to
Douglas Tobin, Director of the Motor Vehicle and Licensing Bureau in
PennDOT. In this memo you wrote, "I will look forward to our meeting
at 2:00 p.m. on 26 April to discuss where we go from here."
e. By memo of July 14, 1983, Dr. Tise requested that you provide a
status report on this project and you responded that PennDOT was
still in the process of deciding whether to construct the display
themselves based upon Marketechs' design or to "go outside" for
construction services.
10. There was no contract executed between PennDOT or PHMC and Marketechs for
completion of design or construction work on the PennDOT project.
a. When the design plans were completed by Marketechs and the
invoice sent as described in No. 9, d, above, PennDOT Deputy
Secretary Zogby questioned PennDOT's authorization to pay same.
b. You admit that you contacted Otis Morse, President of Marketechs, and
told him to send you this invoice and you would see what you could do
about getting it paid.
c. PennDOT employees Tobin, Zogby and Deemer have indicated that they
were unaware of your wife's association with Marketechs prior to the
point in time that they were preparing to decide how to process the
aforementioned invoice. They indicated that after learning of this
association, PennDOT declined to process this invoice for payment.
You have asserted that everyone on the PennDOT project knew or had
reason to know that your wife had worked for Marketechs. You
specifically indicate that your wife's employment was disclosed on
your Statements of Financial Interests that had been filed.
d. In February and March, 1983, there were several meetings and
discussions between PHMC personnel and PennDOT regarding the nature
of any contract for services relating to this project.
Mr. Peter Welsh
Page 8
(1) PennlOT wanted any contract to be written between PHMC and
Marketechs.
(2) PHMC expressed, through you, a preference that FennDOi deal
directly with the vendor (Marketechs) and that PHMC would act as
a source of assistance and expertise on this matter.
11. In 1976 or- 1977 you understood and acknowledge hat agreement was made
with the Governor's Office with respect to PHMC, your employment there end
Marketechs and your wife's employment with this firm.
a. You understood this agreement to be that PHMC and Marketechs would
riot assign you or your wife to projects, contracts or work done by
Marketechs for PHMC.
b, A letter dated August 19, 1977 to the former Executive Director of
PHMC ror: the President of Marketechs stated: "For the future wo
certainly Y :ou1d not plan to use Mrs. Welsh on any possible Historical
Museum Cor,..ission projects."
c, The form Executive Director of PHMC stated in i , 3 ttE r dated August
19, 1977 to then Governor Shapp: "I have also been assured that
Mrs. Welsh wi t I not be given any assignment nor will she be involved
in any way with work done for our Commission ... 1 have ch'sen to
remove Mr. Welsh entirely from our relations with :lz:rketec.hs,"
12. By letter of 'SE:otember 8, 1986, you have requested, throug;- your
attorney, that the Commission formally dismiss all actions against yrsu.
P. Discussico: As the Director of the Bureau o f Museums with the
Pennsylvania Historical Musuems Commission (PHMC), you were a public employee
a.; that terry: is defined •:n-the State Ethics Act.- 65 P -3. § Generally,
the State Ethics Act provides and the instant t .'. ut on has been reviewed
within the purviev of Section 403(a) of the State Et►iice Act:
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 busi nese with which
he is associated. 65 P.S. 403(a).
Mr. Peter Welsh
Page 9
The Act further provides that a business with which one is associated is
defined as follows:
Section 2. Definitions.
Business with which he is associated." Any business in
which the person or a member of the person's immediate
family is a director, officer, owner, employee or holder
of stock. 65 P.S. 402.
Additionally, a member of one's immediate family is defined in the Act
which provides:
Section 2. Definitions.
"Immediate family." A spouse residing in the person's
household and minor dependent children. 65 P.S. 402.
Because a member of your immediate family, your wife, was an employee of
Marketechs, Incorporated, you are considered to be associated with that
business as set forth i ri the definitional provisions of the Act. As such, you
could not use your public position or any confidential information obtained in
that position in order to benefit or to obtain a financial gain for that
particular corporation.
The instant situation has presented a series of transactions which must
be reviewed within the above provision of law. There is no doubt that
Marketechs, the business with which you were associated, was engaged in
providing services through the of Pennsylvania for the projects
as identified in the findings of fact. Several of the individuals involved in
these particular projects have indicated that you had played a role in
recommending the employment of Marketechs for the performance of these
projects. You, of course, have denied playi ng any such role i n this
situation. Additionally, the individuals involved in the PennDOT project have
acknowledged that they were unaware of the fact that your wife was
involved with Marketechs until they were called upon to process the invoice
for that project. Once again, you have indicated that these individuals were
at al 1 times aware of this associ ation and your Statements of Fi nanci al
Interests indicated your wife's employment. You have, in your statements to
the Commission, asserted that at no time was any fi nanci al gain obtai ned by
Marketechs that involved the use of public funds. This you assert in light of
the fact that the Yellow Barn Project was to be paid for with private funds
and that the payment for the PennDOT project was never made. As such, you
assert that no financial gain was occasioned and, therefore, no violation of
the Act occurred.
Mr. Peter Welsh
Page 10
We have during the course of these proceedi ngs received the conflicting
evidence and statements,- These conflicting statements havE. created a number
of questions which cannot be further developed thr°ongh the c9r.'ent
proceedings. Thus, while we do not speci final iy determi ne that the Act has
been violated, we do believe that substantial questions have been raised which
should be further reviewed by an appropriate cauthori ty in the Commonwealth of
Pennsylvania. As such, we believe that the matter should be further reviewed
by appropriate law enforcement authorities for their review and disposition as
they may deem appropriate.
C. Conclusion: Because of the substantial questions and conflictir: evs'dehce
that has been developed in the instant matter, we believe that this situation
should be reviewed by appropriate law enforcement - authorities fc•r appropriate
disposition in accordance with their discretion. While we have not made an
a:firm:.tive disposition as to whether or not your conduct violate( `,he
provi sir e of the State Ethics Act, we do believe that the questions i nvolvcc'
herei r . , : -s established -by the facts, warrant review. As such the matter w i l l
he referred in accordance with the above.
Our files in this case will remain confidential in accorda nce eith
Section 8(a) of the Ethics Act,' 65 R.S. 408(a). However, this Order final
and will 'be made available as a public document 5 business days z.tter ser ce
• (defined as mail ngs), •
Any person who violates the confidentiality of a Commi ssT on ;;roceedi ncj i s
guilty of a misdemeanor and shall be fined not more than $1,00(J r impr-isoned
for not mere than 'one year or ;oth, see 65 P.S. 4i (e).
By the Commis.son,
G. Sieber Pancoast
Chai man