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HomeMy WebLinkAbout887 ChermakSTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA I71EQ G 1 Q r' In re: JOSEPH CHERMAK : File Docket: 91- 051 -C2 . Date Decided: May 6, 1993 Date Mailed: May-11 1193 Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Roy W. Wilt Austin M. Lee Allan M. Kluger The State Ethics Commission received complaints regarding possible violations of the State Ethics Law, Act No. 170 of 1978 and Act NO. 9 of '1989. Written notice, of the specific allegation(s)`waS- 'Served at .the commencement of the investigation. A Findings Report was is'Aued and served', upon completion of the investigation, which constitute'd the Complaint by the Investigation Division. An Anrswer filed and a hearing was waived. A Consent Order was submitted by the parties to the Ccimneission- for considera- tion which was subsequentljt approved: This ( adjudication of the Commission s hereby issued which sets forth the individual Allega- tions, Findings of Fact,- Discussion, Conclusions Law and Order. This ad- Judi ls" Final' and will' be• =miR el Javai:lable as a public document -fifteen days after_ ic'' Iowe � y- reconsidera- tion may be requested which ° ri11` defer pirlD4datielease of this adjudication pending action on 'the request' •Ib £4'he - Commission.. A request for reconsideration, 'howev4r, does` -net "af€ect. the finality of this adjudication. 1 -1- recoriside'ratibn tieqUWart Must 'be received at this Commission within -fifteen dais -of is suanc & nd must include a detailed explanation `the reaso is `as tb' °wl econsideration should be granted in ci nforiiity•wwith 51 Pa. Coe 2.38. • .'i The files in this case w .lfi remain ` -cordidert ...'= in accordance with Section 8(al of Act 1 of 'i978 and -Act '9� 6Y':1989, 65 P.S. 5408(h), during' the fifteen day period and no one %lithe* s the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However', confidentiality does not preclude discus''gnt r, this case with an • attorney at law. . s . . ( Any 'person who violates contidenti '1ity of' the= Ethics Act is guilty'of a misdemeanor subject' itau fine 'of not more than $1,000 or imprisonment for not more than one year, 6'5' P.S. §409(e). .= • Chermak, 91.01. -C2 page l2 I. 44~L__ xe That Joseph Chermak, A Councilman for the Borough of Clarks Summit, Lackawanna uiLty, violated the following provisions of the State Ethics Act (Act 9 of 1989) when his cosi azay Joseph Chermak, Inc. contracted with the ±horough to perform repairs to borough vehicles without en open and public process; and when he voted to m cg payments to Chermak, l+nc . : Se a 3 RIk1 ricted Activities (a) No public official or public emplee *hall engage in conduct that consututes a conflict of interest.. 65 P.S. 540;(a), ( f) No public official or public employe* or his spouse or child or any busplOPS JA 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 ggvernmental body with which the publig official or public employee is associated, unless the contract has been awarded through an open and public process, including Prior public notice and subsequent publiq disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisor 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. 5403(f), That Joseph Chermak a COURCillIall for the. Borough of Clarks Summit, Lackawanna County, violated the following provisions of the State Ethics set (qt 170 of /910) when his company Joseph Chermak, Inc. cantraete , with the borough to perform repairs to borough vehicles %O.:001M an open and public process; and when he voted to make gaymeAt ic0, Chermak* 1':i'tc, a Section 3 . Restricted Activities. Chermak, 91- 051 -C2 Page 3 II. F : (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. 5403(a). ' (c) No public official or public employee or a member of his immediate family or any business in which the person or a member 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 business shall enter into any contract valued at $500 or more with a governmental body 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. Any contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contact. 65 P.S. S403(c). 1. Joseph Chermak served as a Clarks Summit Borough Councilman from September, 1988, to September 1992. a. He was appointed to till the unexpired:, term of a Councilman. b. Chermak served as Council Vice- P.resident during 1991 and 1992. c. He served on the borough's Public Works Committee during 1991. 2. Chermak owns and operates Chermak Inc., an auto dealership located at 713 North State Street, Clarks Summit, Pennsylvania. a. He has been President of this, auto dealex_ship. since 1981. b. The Chermak family auto dealership has limovided automotive repair services to the g0ner.a1 public since at least. 1950. Chermak, 91-051-C2 Page 4 3. Chermak Inc. has also provided auto repa0.r serv),pgs borsQugh's _police and small vehicles for at � ]re r t Op fast thirty years. a. The repair and maintenance of pgjL veiatcles were treated as emergency services. b. This service was initiated prior tq pseph Chermak's service on council. 4. No written contract was negotiated between; the borough and Chermak Inc. with regard to repair and maintenance services. 5. The borough has traditionally given work to local businesses when all factors are equal. 4. Accessibility, quality wor31 awl timeliness are prime considerations of the borough. 6. Borough officials have been satisfied with the services provided by Chermak Inc. 7. itecords of Chermak Inc. reflect statements submitted to the borough in excess of $500.00 as ;'o11QWs : PATE INVOICE AMWNT COMMENT 0 /09./88 39162 $ 59.45 4 /Y4 /$$ 7269 $ 348 Q /X2/88 7273 $ 1$3 4/13/00 38673 $ 32 09/17/88 38686 6 11 /22488 828q $ 24P : 4, 5. /13/$8 39652. $ y37.0L .fATAL $ __.. ... 04406/88 40:084 $ ?A:40) 04/15/88 347 $. 3,%:41 05/24/88 780 $ 966 5Q 05/15f882 7845 % i35 05/25/88 40880 $, 3,' TOTAL $: . : ' -. - 12/48/89 Various $ - 574.82 This INYWA w,as ones oft Invoices 1 e % a5fii i etkOitt 414 f f etitivo i v+ctits •, A. le i tt 44 ' on Ckermak, 91- 051 -C2 Page 5 4 TOTAL 02/09/90 TOTAL 02/13/90 03/01/90 03/10/90 03/06/90 03/09/90 03/28/90 TOTAL 05/04/90 05/04/90 05/03/90 05/10/90 05/"09/90 TOTAL 08/03/90 TOTAL 10/11/90 TOTAL 02/01/91 02/12/91 0.2/14/`91 02/21/91 TOTAL Various Invoices Balance Car -over $ 4251 $ 42572 $ 9534 $ 956. $ 42761 $ $ 9-755 9'749 9838 43349 9732 Various Invoices Balance of t Account $ 02627 $ 02643: $ . 0:2612 ~L .: ,.. $. $ 5/4.82 597.08 $ 597.08 84.93 74.75 65.96 289,82 598.38 92, $ 98.92 $ 38.53 $ 543.55 $ 36,27 $ _156.05 -$ _223.32 1,3.2;9 $ 1,032.90 Varibua $ 1,742.22 Invoices $ 1,/12,22' he• ' 192.38 ... - 334:68 8/.1x35. the account. This payment covered portions of six invoices. A balance was then carried on the account. 'Ibis payment covered portions of five invoicee,- A balance .. was thew carried carried on the account. This payment was one of four staggered amounts received to cover portions of eight invoices. A balance was then carried on the account. Chermak, 91- 05L -C2 Page .6' 06/12/91 03473 502.400 06/18/91 95:52,1 , 46.tom TOTAL $ 548..'05 Boron mi t d&sclose1i that co .1 app .t k invod.:c,e.s t( Bing #7 ) reguaer =men Imaet as £o l loos» a. October , 19:8:8 T ,Council a e. ma1c zertaxeled : root ,qn fteede :by ;Councilman viii ;to pay the JAY] ] g as present,,ed . Ile ..vote was unenlmous, Chermak invoice of $ 814.7: 4, eluded,. b. June 7, 9;9 - The tdlls to be paid were aa;.oed for PpYyent o* ;notion inade by Councilman :'Bush Couggil a» ;Cherrnalc. (herma s invoice of $3,,183_75 ing.4404. c. DeCA14ff § 151 pe i. - The bills tv 'be -d were unanimously aecep ed f p-r pallypent As presented on a 'notion made by Cop ehe tta-k aid seconded by Councilman Watkins. Cher ak pagoice of . $574.82 - included, Februafy If 4.990 - The bills to be paid were unanimously acgap ed 4 mention made by Councilman Chermak and speo}ded 13y gguncilman Jenkins. Chermak invoice of $§97.08 in6iu404, ,s, April 4, 1990 . The bills were approved for payment on a motion made by Councilman Chermak and seconded by Councilwoman McFarland. Chermak invoice of $1,206.60 included, f. June 6, 1990 : The bills were approved for payment on a motion xade by Councilman Pa11.man and seconded by Councilman Jenkins. Chermak invoice of $873.32 included. A}igust 1., MO - The bills were unanimously approved for B0#11WIt Pn a motion made by Councilman Chermak and sesca}ded by Councilwoman McFarland. Chermak invoice of $1,0 Included, h. * Dc 11, 1990 - check number 6438 was issued on this dale 'hick wad between council meetings and was efronecuslY Tte lis'ted on a bill List to be approved for payment. Chermak invoice of $1..742.22 included. i. March 4, 1991 - A motion to pay the bill as presented WAS oracle by Councilman Jenkins and seconded by Pq411.E ,1 An Mora land Chermak invoice of $515.51 Charm , 91- 051 -C2 Page 7 j. * March 7, 1991 - Three additional invoices in the total amount of $355.84 were added to the approved amount of $515.51. A check in the amount of $871.35 was received by Chermak Inc. k. August 7, 1991 - The bills were approved for payment on a motion made by Councilman Pallman and seconded by Councilwoman McFarland. Chermak invoice of $548.05 included. * TOTAL (Includes the check for $1,742.22 and the amount of $355.84 which were erroneously not submitted to Council for approval. 1. Chermak invoices outlined above totaled $9,444.83. III., DISCUSSION: Initially, it is noted that the allegations in this case relate to both Act 9 of 1989 and Act 170 of 1978 I ethis.regard, Section 9 of Act 9 of 19 8 9 , b P . 26, provides, in part as :fo:2 : "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 purpo of this section, a violation was committed prior to the effective date of this act.if any elements of the violations occurred prior thereto." Section 2. Definitions. "Conflict or conflict of interest." Use' bye: public official or public employee of the Under both Act 170 of 1978 and Act 9 of 1989, as a Councilman for the Borough of Clarks Summit, Lackawanna County, Joseph Chermak, hereinafter Chermak, is a public official as that term is defined under both acts. See also 51 Pa. Code. As Such, his conduct is subject to the provisions of4 laws and the restrictions therein applicable to him: Under Section 3(a) of Act 9 of 1989 quoted above, a public official shall not engage in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under 3 of 1989 as follows: Cherma. c, 91- 551. -C2 Page 8 65 P.S. 5402. authority of his office or employment or any confidential information received throw his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family 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 nimia 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 or his immediate family or a business with which he or a member of his immediate family is associated. Under Section 3(a'), of Act 170 of 1978 quoted above, this COMmisssion has determined that use of office by a public official to obtain a financial gain tor himself or as member of his mediate 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 financial gain which is not authorized as part of his compensation is prohibited by Section. 3(a) c . t 77 Pa. Co w, Ct. 529, 466 A,2d 203 (1983); 3Cac, tbat v . �, .i¢ Eth c,e CommLEApp, 109 Pa, Coming. Ct. 432 531 ).2d 536 (1987) . Similarly, Section 3(a) of the ethics Att would prohibit a public official/ employee from using public office to advance his own financial interests; Koslow ya State ,acs Compassion, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988). Section 3(c) of At 170 of 1978 quoted above provides in part that 'AO' public official /public employee or a somber of his immediate Family may contract with his governmental body if the contract is five hundred dollars or more unless it is awarded . through an open and public process including prior public notice and subsequent public disclosure In addition, Section 3(f) of Act 9 of 1989 specifically provides in past that no public official /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 /employee is associated unless the contract is awarded through an open and public process. Chermak, 91- 051 -C2 Page 9 The issues before us are whether Chermak violated either the conflict provision, Section 3(a) of Act 170 or Act 9 of 1989, and the contracting provision, Section 3(c) of Act 170 or 3(f) of Act 9, regarding his company, Joseph Chermak, Inc., performing vehicle repairs for the Borough. Factually, Chermak served as a Clarks Summit Borough Councilman from September, 1988, through September, 1992. In a private capacity, Chermak owns and operates Chermak, Inc., an auto dealership in Clarks Summit. Chermak, Inc., has provided automotive repair services to the general public since 1950 and to the Borough for the past thirty years. Chermak, Inc., provides emergency services regarding the repair and maintenance of police vehicles which began prior to Chermak's service on Council. Chermak, Inc., and the Borough did not enter into any written contract regarding the repair and maintenance of vehicles although the Borough has traditionally given work to various local businesses on an equal basis. The Borough looked at the accessibility, quality and timeliness as determinative factors in doling out such business. As to Chermak, Inc., the record does reflect that the Borough officials were satisfied with the services provided by Chermak's business. Several of the contracts that Chermak, Inc., had with the Borough exceeded $500.00. As to the invoices submitted by Chermak, Inc., for such services, Chermak as a Councilman either made motions, seconded motions or voted in favor of the unanimous approval of groups of invoices which included those from his business. It does not appear that any of the invoices were disputed or contested. In applying the provisions of Section 3(a) of Act 170 and Act 9 to the instant matter, we find no violation on these particular facts due to the lack of the requisite use of office or use of authority of office. In particular, the Borough was doing business with Chermak, Inc., before Chermak came on Council and the record reflects a continuation of such activity without any action on the part of Chermak as to such contracting. Accordingly, there was a lack of use of office or authority of office which is a crucial and necessary element to establish a violation. The participation by Chermak as to the bill approval process was certainly a use of authority of office. However, in the unique circumstances where bills are routine and uncontested and there is no other activity-on the part of the public official, we held in Krushinski, Order 168, that such activity in and of itself would not rise to the level of a violation. In light of the factual circumstances in this particular case, we find no violation of either Section 3(a) of Act 170 or Act 9. However, as to Section 3(c) of Act 170 or 3(f) of Act 9, we find a technical violation regarding the contracting. There were several repairs done by Chermak's business for the Borough which were in excess of $500.00 contracting threshold and which were nOt Chermak, 91- 051 -C2 Page awarded th €oucgh an g gn and public process. Such action contrays }s, §gt pn 3(e) of Act 170 and 3(f) of Act 9. As noted, the glary:1.SO AP to Borough vehicles was initiated before Chermak cane on Coung lgnd centinued after he came on Council without any action On his part, The foregoing is not a defense as to a contracting violation in that a use of office or authority of office is not a requisite element. However, we reference the foregoing to show the lack of any Intent or action as a mitigating factor, See, peQrrctizo, Order 819, where we reached a similar result regaeing the sales of commodities to a municipality by a business with whei a public official was associated which business was ongoing fie €ore the individual became a public official In fight of the a13Qve finding and the fact that Chermak is no ignger on Cg1}nai4, together with the totality of the facts and e reumstances in this case, we will take no further action. I NCi,u f ois OF LAW; 1, Joseph Cher tak 48 a Councilman in Clarks Summit Borough was a public official subject to the provisions of Act 110 of 1978 and Aet 9 of 1989. 2. Chermak did not vitiate either Section 3(a) of Act 170 or Act 9 of 3989 regarding the repair of Borough vehicles" by Chermak, Inc,, which repair services began prior to Cher:nak' s ' service On Council, in that there Ws no use of office or authority of office. 3. A teohnic41 violation. of Section 3(c) of Act 170 and Section ,3(f) Act 9 occurred when Chermak, Inc. a business with which CherMak W4g 441aoeiatOd Q@atraQte with the Borough to repair BoX -ough lfehielef as tO there contracts which were over $500.00 and were not Warded through an open and public process. In re: JOSEPH CHERMAK : File Docket: 91- 051 -C2 : Date Decided: )tav 6. 1993 : Date Mailed: )tav 11. 1993 OR *MHO. 887 1. Joseph Chermak, as a cOunoiliman in CiarkB EuMMit Borough, did not violate either Section 3(a) of At 170 or At 9 of 1989 regarding the repair of Borough vehicles by Chermak, Inc., which repair services began prior to Chermak's service on Council, in that there was no use of office or authority of office. 2. A technical violation of Section 3(c) of Act 170 and Section 3(f) Act 9 occurred when Chermak, Inc., a business with which Chermak was associated, contracted with the Borough to repair Borough vehicles as to those contracts which were over $500.00 and were not awarded through an open and public process. 3. Based upon the totality of the facts and circumstances, we will take no further action. BY THE COMtISSION,