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HomeMy WebLinkAbout421-R RogersMr. Russell Rodgers c/o Lawrence M. Otter 120 South Main Street Dublin, PA 18917 Re: 84 -184 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Fehruary 18, 1986 Order No. 421 -R Dear Mr. Rodgers: The State Ethics Commission has received a complaint regarding you and a possible violation of Act 170 of 1978. The Commission has now completed its investigation. Pursuant to your request, this matter is being reviewed hased upon the investigative record and a full evidentiary hearing will not be conducted. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you, a Dublin Borough Councilmemher, are in violation of Section 3(a) of the Ethics Act which prohibits a puhlic official's use of public office or confidential information gained through that office for personal financial gain and or Section 3(c) of the Ethics Act which requires an open and puhlic process if a public official contracts with his or her governmental body for X500 or more by doing business as the owner of Rodgers Garage with your horough for more than $500. A. Finding: 1. You have served as a councilmemher of Dublin Borough since January of 1982, and as such, are subject to the provisions of the State Ethics Act - (Act 1711- 1979). 2. You are also the owner of Rodgers (arage, 114 S. 9th Street, Dublin, PA. 3. Since 1979, you have had an informal agreement with the horough to work on their police vehicles and truck. Mr. Russell Rodgers Fehruary 18, 1986 Page 2 4. The costs to the township under this informal agreement have heen: 1979 - $334.94, 1980 - $385.43, 1981 - $796.14, 1982 - $329.57, 1983 - $9Q9.53, and 1984 - $1,158.47. 5. Information received hy the Commission indicates that the amount expended hy the horough in relation to services rendered by Rodgers Garage for the years 1983 and 1984 are as follows: 1983 1984 Parts = $458.49 Inspection Fees - $ 40.00 Labor - $612.10 Total $1110.59 a. The above services to the horough were provided at a 10% discount and the actual costs to the horough for the total services rendered above amounted to .$999.53. b. The actual' labor costs paid hy the horough to you for services rendered as set forth above totalled $550.89 due to a 10% discount. Parts: - $789.91 Inspection Fees - $ 40.00 Labor - $457.28 Total $1287.19 a. AT1 of the above referenced services were provided to the horough at a discount of 10% and the actual cost to the horough was $1,158.47. Total labor costs to the horough for services rendered hy you a :MO: nted to $411.55 due to the 10% discount. 6. Nei open and puhlic process was used for any of this work until January, 1985, at which time horough council required an open and public process. Rids for this work were obtained at that time. 7. You have never voted to obtain this work for your garage. 8. You did not solicit the automobile repair husiness from the horough. q. As a result of the investigation conducted hy the State Ethics Commission, you voluntarily reimhursed the Rorough of Dublin $550.89 representing your labor costs on Fehruary 3, 1986, representing the amount of funds expended hy the horough for the year 1983. Mr. Russell Rodgers Fehruary 18, 1986 Page 3 R. Discussion: As an elected member of borough council, you are a puhlic official as that term is defined in the State Ethics Act and, as such, your conduct must conform to the requirements thereof. Toohey, 83 -003. The Ethics Act provides that: Section 3. Restricted activities. (a) No public official or puhlic employee shall use his puhlic office or any confidential information received through his holding public office to obtain financial gain other than compensation provided hy law for himself, a memher of his immediate family, or a husiness with which he is associated. 65 P.S. 403(a). A business with which one is associated is defined as follows: Section 2. Definitions. "Rusiness with which he is associated." Any business in which the person or a memher of the person's immediate family is a director, officer, owner, employee or holder of stock. 65 P.S. 402. There is no doubt that you are associated with Rodgers Garage and, as such, could not use your position to obtain financial gain for that husiness. There is no evidence here that you solicited the borough vehicle repair husiness or that you voted to award that husiness to yourself. We, therefore, do not helieve that you violated Section 3(a) of the Act. The Act, however, also provides that: Section 3. Restricted activities. (c) No puhlic official or public employee or a memher of his immediate family or any husiness in which the person or a memher of the person's immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the husiness shall enter into any contract valued at 5500 or more with a governmental holy unless the contract has been awarded through an open and puhlic process, including prior puhlic notice and subsequent puhlic disclosure of all proposals considered and contracts awarded. Any contract made in violation of this suhsection shall he voidahle hy a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract. 65 P.C. 403(c). Mr. Russell Rodgers February 18, 1986 Page 4 The Ethics Commission has reviewed this provision of law on various occasions. The Commission has determined that this provision would apply to situations where a puhlic official contracts in excess of $500 with his own governmental hody. Rryan, 80 -014; Lynch, 79 -047. In such situations, an open -and puhlic process must he employed prior to the award of contracts to such an official. Here, as a horough councilman, you, were clearly doing husiness with your own governmental hody. We note that while the arrangement in this case was "informal" and not pursuant to a written contract, we do not helieve that a more formal agreement is necessary to require the open and puhlic process. The nature of the instant situation clearly fall`s within the parameters of Section 3(c). With relation to the nature of the term "open and puhlic process ", the Commission has determined that this process is net by applying the following standards: L. prior puhlic notice of employment or contracting possihility; 2. sufficient time for a reasonable and prudent competitor /applicant to he ahle to prepare and present an application or proposal; 34 puhlic disclosure of all applications or proposals considered; and 4.. public disclosure of the contract awarded or offered and accepted. See Cantor, 82 -004; Howard 79 -044; and Fields, 82 -006. In'determ'ining whether the requirements of Section 3(c) of the Ethics Act have heen met the Commission has adopted a "reasonahleness test" which means that reasonable and prudent competitors of the husiness should he provided a sufficient time within which to suhmit their proposals and, of course, should havehari prior notice of the opportunity to secure such a contract or emp'1 oyrent . With relation to the $500 limit, the Commission has held that this limit is one of a cumulative nature and not restricted to individual contracts. See Oonati, No. 204. In the instant situation it is clear that until 1985, no open and public process was employed when your garage obtained horough repair husiness. As such, it appears as though there has heen a technical violation of Section 3(c) of the Act in each year that you, As a puhlic official, received more than 5500 in horough husiness. Our investigation has revealed that this occurred in 1983 and 1984 as set forth in the previous findings. We note, however, that in the year 1984 a suhstantial amount of the funds received hy you from the horough was in relation to the purchase of parts and for the payment of inspection fees. In relation to these specific items, you did not receive any financial gain. The Only financial gain you received in relation Mr. Russell Rodgers Fehruary 18, 1986 Page 5 to these items was the amount that the borough had paid for lahor. In 1984 that amount was $411.00 and in 1983 the amount was $ 550.89. In the year 1984, hecause the amount of financial gain that you received did not exceed $500, we will impose no penalty or restitution requirement in relation thereto. However, in relation to the year 1983, you did in fact receive $550.89 in borough funds directly related to labor for the services that'you performed. This Commission and previous case law has clearly upheld the principle that when a puhlic official receives financial gain or compensation` to which he is not entitled as a puhlic official, even if such is received in good faith, the official may not retain for his own purposes such gain See Kestler Appeal, 66 Pa. Commw. 1, 444 A.2d 761, (1982). Pursuant to the State' Ethics Act, this Commission upon the finding of a violation of the State Ethics Act where a public official has obtained financial gain'may offer the official the opportunity to remove himself from the conflict of interest without receiving a financial gain. See McCuthcheon v. State Ethics. Commission, 77 Pa. Comm. 529, 466 A.2d 283 (1982). 65 P.S. , $607(9) We helieve that this result is appropriate in the instant situation and that you should reimburse the Borough of Dublin for the amount of funds obtained in the year 1983. We note, that as a result of this investigation on February 3, 1986, you did in fact return to the Borough of Dublin $550.89. As a result of this restitution, we will take no further action in this matter. C. Conclusion: There was a technical violation of Section 3(c) of the State` Ethics Act when you received business for vehicle repairs in your private enterprise from the borough in which you serve as a councilman without an open and puhlic process. While the amount of husiness was in excess of $500, you did not receive a financial gain in excess of that amount in 1984. You did,' however, receive in excess of that amount in the year 1983 and we helieve that reimbursement in the amount of $550.89 representing the financial gain obtained in 1981 should he returned to the Borough of Dublin. We note that you have already reimhursed the township in this amount and, therefore, we will take no further action in this matter. This order is final and will he released as a puhlic document three days after the issuance of this order. Any person who violates the confidentiality of a Commission proceeding is guilty of a misdemeanor and shall he fined not more than $1,000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). JJC /s fh Ry the � / mmission � c 7 z / Herbert R. Conner Chairman