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HomeMy WebLinkAbout435-R NyeDr. George Nye 603 N. 4th Street DuBois, PA 15801 Re: 84 -163 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 435 -R DEC IDEDAUGn 1,9$8 MAILEDpt `l, . I. Dear Dr. Nye: 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. A hearing was held on May 26, 1986 and this Order includes the evidence and testimony given at that hearing. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you, a Superintendent of Schools in DuBois Area Schools, violated Section 3(a) and /or Section 3(c) of the Ethics Act, which respectively prohibit the use of public office or confidential information for personal financial gain and contracting with your governmental body in an amount of 5500 or more without an open and public process, by purchasing personal art objects with school district funds and - after repaying the school district - for the art objects - using the. school district's tax exempt identification number to avoid paying Pennsylvania sales tax. A. Findings: 1. You have served as Superintendent of the DuBois Area Schools since at least 1978. You are appointed to that position by the school board. You are subject to the provisions of the Ethics Act. 2. The Auditor General, Bureau of School Audits, conducted an audit of the DuBois Area Schools under authority of Section 403 of the Fiscal Code, Act of April 9, 1929, P.L. 343, as amended. The audit report was for the years ended June 30, 1981 and 1982 with findings and recommendations through December 9, 1981. Finding #4, page 11, found as follows: Dr. George Nye Page 2 DUBOIS AREA SCHOOL DISTRICT FINDINGS AND RECOMMENDATIONS "Finding No. 4 - Improper Purchases Made by District Superintendent" "During the 1980 -81 and 1981 -82 school years the district superintendent made personal purchases of over $1,047, for art objects and picture frames, with district funds. The superintendent reimbursed the district fpr all the purchases shortly after or at the time they were paid by the district." Section 610 of the Public School Code provides: "The board of school directors in every school district shall have the right to use and pay out, in the manner herein provided, any funds of the district for any and all of the purposes therein provided, subject to all the provisions of this act. The use or payment of any school funds of any school district, in any manner or for any purpose not provided in this act, shall be illegal. "Recommendations" "The board should ensure that purchases are not made for personal use of an employee with district funds." 3. The following purchases were made by you and charged to DuBois Area School District Accounts. You made reimbursement for those purchases by personal check. a. Date Billed 11 -14 -80 11 -14 -80 1 -24 -81 2 -26 -81 N/A N/A 1 -28 -82 Vendor American Express American Express American Express American Express Peaceable Kingdom Peaceable Kingdom Peaceable Kingdom Amount $ 42.80 $289.95 $289.95 $289.95 $137.60 $165.76 $ 40.64 Date of Reimbursement 8 -11 -80 8 -11 -80 11 -7 -80 1 -) 2 -81 10 -20 -81 11 -18 -81 1 -13 -82 4;, The purchases charged to American Express were for a series of objects - offered exclusively through American Express. You admit those items to the school district credit card and reimbursing the district prior to billing. Check # 2067 2066 2133 2175 2355 2381 2415 pewter art to charging school Dr. George Nye Page 3 8. You 9. You not use a . b. c . a. You purchased these items as an art collector to complement your collection. a. You contend that no sales tax was paid because the purchases were made out of state. 5. The'purchases made from Peaceable Kingdom, an art framing store located in DuBois, were for two prints and one framing. You admit to charging those items to the school district account and reimbursed the school district. a. Pa. Sales Tax would be applicable to those purchases which total $344.00. 6. As a result of the Auditor General Audit Report (finding #2) and exit conference with the auditors, the school board adopted the following policy at a public meeting held on January 12, 1984. a. Mrs. Fyda proposed, that as a result of the Audit Exit Conference, the Board adopt a policy disallowing purchases by any student, staff member, professional or non - professional, Administrators, etc., that are not directly related to school needs, the policy to become effective immediately. Second by Mr. D. Clark and passed on 9 -0 roll call vote. 7. You stated that you used poor judgment in making those purchases and have not made any since 1982. agree with the above findings of facts. contend that there was no violation of Section 3(a) because you did your office or confidential information to obtain a financial gain: There was no confidential information because the American Express solicitation was made to all holders of the American Express card. Although you did have American Express bill you through the school, you paid the district before they received the bill, therefore, you did not obtain a financial gain through these purchases. Sales tax is not a factor on the American Express purchases because at that time the state was not assessing tax on purchases originating out of state. Dr. George Nye Page 4 10. You further submit that the items purchased from Peaceable Kingdom were billed to the school district but you assert that the circumstances also show that you did not use your office or confidential information for financial gain. a. The billing to the school district was done in error by Peaceable Kingdom. b. You did not facilitate or direct this billing. c. You corrected the billing situation as soon as you became aware of it. The last time a mistake in billing occurred was in January of 1982. The Ethics Act provides as follows: Section 3. Restricted activities. d. You immediately wrote the school district a check upon.finding each of the incorrect billings. Your checks predated the payment or the approval of the school district's payment to Peaceable Kingdom. B. Discussion: As a Superintendent for the DuBois Area School District, you are a public official as that term is defined in the State Ethics Act. 65 P.S. §402; Beck, 79 -018. (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. 65 P.S. 403(a). It is clear that in the instant situation, you used the DuBois School accounts to make personal purchases. Your access to these accounts and the use thereof was occasioned only by virtue of your public position. The use of school district funds and accounts for such personal purposes is not part of the compensation provided to you by law and such use is not otherwise permitted by the Public School Code. 24 P.S. 6 -610. Dr. George Nye Page 5 With specific relation to the American Express card, we believe that it is important to note that members of the general public do not have access to the district's credit card. As an art collector, you obviously sought to obtain the limited collection being offered to American Express cardholders. Receipt of these items obviously had a financial value to you. It was only through the use of the District's card that you could have obtained this for your private collection. It was onTy through your public position that you were able to accomplish this purchase. Thus, even though you reimbursed the district for the purchase, we believe that you violated Section 3(a) of the State Ethics Act when you used the school's credit card to purchase art items only available to cardholders. We believe the use of the card to purchase items only available to cardholders who pay a fee for the use of said card did result in the receipt of a financial gain. In relation to the purchases made by you at Peaceable Kingdom and billed through the school district's account, while you contend that such was done in error, no evidence or testimony was offered or presented in support thereof. Based upon all of the circumstances present herein, therefore, we believe that your use of the district's accounts to make personal purchases was also a violation of the State Ethics Act. We note, once again, that in the instant situation you reimbursed the school district for all of the purchases. Most of these reimbursements were made prior to the district being billed for the items. You did, however, realize a financial gain in the form of a tax reduction totaling $20.64, (6% of $344.00). Purchases made by the school district within the Commonwealth of Pennsylvania are tax exempt. By using school district accounts for your personal purchases, you avoided Pennsylvania state sales tax in the above amount. The penalties for violating the State Ethics Act are varied. The Act provides as follows: Section 9. Penalties. (a) Any person who violates the provisions of Section 3(a) and (b) is guilty of a felony and shall be fined not more than $10,000 or imprisoned for not more than five years, or be both fined and imprisoned. 65 P.S. 409(a). (c) Any person who obtains financial gain from violating any provision of this act, in addition to any other penalty provided by law, shall pay into the State Treasury a sum of money equal to three times the financial gain resulting from such violation. 65 P.S. 409(c). Dr. George Nye Page 6 The Commission may make recommendations to law enforcement officials either for criminal prosecution or dismissal of charges arising out of violations of the Act. 65 P.S. §409(ii). The Commission may also provide information for criminal proceedings unless the alleged offender removes himself from the conflict without receiving financial gain. 65 P.S. §407(9)(iii). Because there is no possible justification for your use of the school accounts for personal purchases, we believe that the three times penalty is appropriate. C. Conclusion: You violated Section 3(a) of the State Ethics Act when you, through your position as school district superintendent, charged the purchase of personal items to the school district accounts. You must, within thirty (30) days of this order, remit payment to the State Ethics Commission in the amount of $61.92, three times the amount of the financial gain realized or we will refer this matter to the appropriate law enforcement authority for further review and appropriate action. Payment of the above amount should be made payable to the State Treasurer of Pennsylvania. Upon receipt of said payment, we will take no further: action in this matter. II. Allegation: That you, a Superintendent in DuBois Area Schools, violated Section 3(a) of the Ethics Act by setting your own benefits package. A. Findings: 8. Minutes of meetings of the DuBois Area School Board confirm the following: a. June 23, 1984: Mr. McCully proposed the board approve the salaries /fringes for the 1983/84 and 1984/85 school years for the following: Management team, supervisory and confidential personnel. Motion seconded by Mr. Allshouse. Roll call; aye, McCully, Allshouse, Ahlberg, Fyda, Sheets, nay, D. Clark, Mowrey, Zaffuto, W. Clark. Motion passed on 5 -4 roll call vote. b. August 4, 1983. Item 4: Mr. McCully proposed the board approve re- electing Dr. George Nye as Superintendent for the term of five years, commission to run from July 12, 1984 to June 30, 1989; second by Mr. Zaffuto. The vote was; Directors McCully, Zaffuto, W. Clark, Allshouse, Sheets and Fyda voting aye; D. Clark voting nay, and Mr. Mowrey abstaining, six ayes, one nay and one abstention. c. April 26, 1984: Benefit package for superintendent and principals for 1984/85 school year approved by the board. 9. You admit that you asked the board for a decision on your contract to have some indication of your future. Dr. George Nye Page 7 10. The benefit package you received is no different than that of the other management employees. 11. There is no evidence that you set your own benefits. B. Discussion: You did not, as superintendent of the DuBois Sc'^ol District, have the authority or power to fix your compensation or benefits. These items were set by the school board. You did not, therefore, violate the State Ethics Act. C. Conclusion: You did not violate the State Ethics Act when the school board set, by majority vote, a benefit package for you as school superintendent. Our files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final and will be made available as a public document 5 days after service (defined as mailing) unless you file documentation with the Commission which justifies reconsideration and /or challenge's pertinent factual findings. See 51 Pa. Code 2.38. During this 5 -day period, no one, including the Respondent unless he waives his right to challenge this Order, may violate this confidentiality by releasing, discussing or circulating this Order. Any person who violates the confidentiality of a Commission proceeding is guilty of a misdemeanor and shall be fined not more than $1,000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). By the Commission, A1 ,it.�c� Oao,tiou,o G. Sieber Pancoast Chairman EMS /na Mr. George N. Nye 603 North Fourth Street Apartment 1 -8 DuBois, PA 15801 cc: Public Binder STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 September 10, 1986 Edward M. Seladones Executive Director Re: Order No. 435 -R Dear Mr. Nye: This acknowledges receipt of your check No. 3384 for the amount of $61.92 in accordance with the above referenced Order. This letter will be made part of the original Order and a public record as such. Sincerely,