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HomeMy WebLinkAbout1259 McCartyIn Re: John McCarty File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Frank M. Brown Donald M. McCurdy Michael Healey 02- 020 -C2 Order No. 1259 12/4/02 12/16/02 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Act, Act 9 of 1989, P.L. 26, 65 P.S. §§ 401 et seq., as codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its investi9ation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investi9ation the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was not filed and a hearing was waived. The record is complete. A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Stipulation of Findings is quoted as the Findings in this Order. The Consent Agreement was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with Chapter 11 of Act 93 of 1998. 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. Confidentiality does not preclude discussing this case with an attorney at law. McCarty 02- 020 -C2 Page 2 I. ALLEGATION: That John McCarty, a public official /public employee, in his capacity as Deputy Secretary for Administration, Department of General Services, violated Section 1103(a) of the Ethics Act (Act 93 of 1998) when he used the authority of his office for a private pecuniary gain, including but not limited to authorizing and /or using subordinate department employees to plan and organize a going away party for him through the use of, including but not limited to Commonwealth employees, equipment, materials and supplies; and when he participated in actions authorizing subordinate employees to solicit vendors who have contracts with the Commonwealth to contribute money towards a going away gift for him. II. FINDINGS: 1. John R. McCarty was employed by the Commonwealth of Pennsylvania as the Deputy Secretary for Administration, Department of General Services (DGS) from January 30, 1995, to July 13, 2001. a. As Deputy Secretary, McCarty was part of the DGS executive management staff. 2. McCarty voluntarily resigned his position with DGS to accept an appointment as the Citizen Member of the Pennsylvania Board of Claims, effective July 16, 2001. a. McCarty holds the position of Vice - Chairman. 3. McCarty's duties /responsibilities as the Deputy Secretary for Administration included but were not limited to the following: a. Direction and coordination of planning and policy development for all administrative and management programs in the Department. b. Advising the Secretary on all matters concerning programs and services for personnel, fiscal management, affirmative action, contract compliance, government donated foods, management services, and any attendant or auxiliary functions. 4. McCarty, as the Deputy Secretary for Administration, had oversight responsibility for all Bureaus within the Deputate for Administration, including the following: Bureau of Contract Administration and Business Development Bureau of Financial and Management Services Bureau of Publications Bureau of Human Resources Bureau of Commonwealth Media Services Bureau of Management Information Systems (BMIS) 5. BMIS provides the Information Technology support for all units and sub -units within DGS and consists of two divisions, computer operations and computer analysis. a. Various employees of BMIS deal with information technology vendor representatives on a routine basis regarding services and /or equipment. 1. These employees or their supervisors report to McCarty. b. This bureau participates in decision making regarding technology vendors and software purchases. McCarty 02- 020 -C2 Page 3 c. As Deputy Secretary McCarty participated in and made decisions regarding vendors selected and /or recommended by BMIS. 6. From 1997 until December 2001, Kelly Hazzard served as the Director of BMIS. a. McCarty was Hazzard's immediate supervisor. b. McCarty and Hazzard maintained both a professional and social relationship during McCarty's tenure as Deputy Secretary for Administration. 7. Hazzard supervised, scheduled, and directed a staff of approximately twenty -three systems analysts, programmers, technicians, and information specialists. a. Included under Hazzard's supervision were: Michael Guzy (Information Technology Generalist Administrator), Candace Noon (Administrative Assistant), Michael Settino (Information Technology Generalist Supervisor - Computer Analysis Division), and Marcel Coleman (Chief, Operations Division). 8. During McCarty's tenure as Deputy Secretary for Administration golf outings were organized by employees of the department. a. Monthly outings from April through October were sponsored by BMIS employees for BMIS staff and vendors. Michael Guzy, Information Technology Generalist Administor [sic], and a subordinate of Kelly Hazzard, BMIS, organized the outings and notified individuals via e- mails. d. McCarty regularly attended the outings. e. Costs associated with the outings were paid on an individual basis. 9. In or about the end of May /beginning of June 2001, DGS employees learned that McCarty would be resigning to accept an appointment to the Board of Claims. b. c. The outings were encouraged by the Secretary of DGS to encourage development of working relationships between staff and vendors. 10. On June 26, 2001, BMIS hosted a golf outing at Fairview Golf Club. a. Those attending the golf outing contributed $1.00 to pay for McCarty's greens fees and an additional $1.00 to pay for McCarty's dinner following the round of golf. 1. Approximately $35.00 was collected. b. Paying of the green fees and dinner for McCarty was a goodwill gesture and a farewell to McCarty. 11. On or about June 27, 2001, McCarty and Hazzard discussed via the telephone a farewell party for McCarty. a. Hazzard agreed to organize a party because of his close relationship with McCarty. 12. During the initial conversation McCarty and Hazzard discussed the type of party, location, entertainment and gift. McCarty 02- 020 -C2 Page 4 a. When discussing the gift, McCarty informed Hazzard that he was considering buying a new set of golf irons, but he did not specify the brand or price of golf irons he wanted. 13. On June 28, 2001, Hazzard held a meeting in his office and enlisted the assistance of his subordinates Guzy, Noon, and Settino, in organizing McCarty's party. a. Hazzard assigned specific duties to each of the individuals during the group's first meeting. 1. Guzy was responsible for creating the wording for the party flyer and posting the party information on the DGS bulletin board (electronic). 2. Noon was responsible for obtaining a location for the party; organizing the food /catering and entertainment; and collection of money from individuals interested in attending the party. 3. Settino was responsible for developing the party flyer and the power point presentation about McCarty. b. Hazzard informed the group during the initial meeting that McCarty discussed golf irons as a gift. c. The meeting occurred on Commonwealth time and lasted approximately 30 minutes. 1. A minimum of three to four other planning meetings of the same approximate length were held regarding the party. d. The group discussed the estimated cost of the party at the first meeting. e. McCarty did not review the detailed preparations of the Planning Committee. 14. On June 28, 2001, McCarty and Hazzard traveled to Dick's Sporting Goods Store, Hampden Commons, and 4070 Jonestown Road to locate golf irons for McCarty. a. McCarty selected a set of Callaway Tungsten Hawkeye Irons at the Harrisburg Dick's Sporting Goods and placed the golf irons on layaway. 1. The golf irons cost $1,324.99 ($1,249.99 plus $75.00 sales tax). 2. McCarty paid the 20% layaway deposit ($265.00) with a personal credit card. b. While placing the golf clubs on layaway, Hazzard told McCarty that the planning group would be in trouble if enough money to pay for the clubs was not raised. c. McCarty informed Hazzard that he would cover the difference. 15. The Marysville VFW Club was selected as the party site. a. Hazzard received a reduced price of $100.00 for the rental of the banquet room and a catering charge of $5.00 per person due to his personal relationship with the VFW Steward. b. A party date of July 16, 2001, was set. McCarty 02- 020 -C2 Page 5 16. After determining the cost of McCarty's clubs and the party expenses, the planning group determined that approximately $2000.00 would be needed to cover the costs of the party and gift. a. The group estimated that approximately 100 people would attend the party. 1. The farewell party was to be limited to Departmental employees and non - departmental individuals that McCarty would specifically ask the planning group to invite. b. Ticket prices were set at $20.00 each to reach the $2000.00 goal. 17. Guzy distributed e-mail invitations to Departmental employees and also posted the party information on the DGS electronic bulletin board. a. At the planning group's request, McCarty supplied a listing to the group of non - Departmental individuals whom he wished to be invited. b. Interested individuals were to contact Noon to purchase tickets. c. The e-mail and electronic bulletin board are accepted practices for notifying DGS staff of retirement parties. 18. Hazzard also solicited DGS Bureau Directors directly supervised by McCarty to make donations for McCarty's gift greater than the $20.00 ticket price. a. Hazzard solicited the following: Greg Green: Gary Lee: Donald Gibas: Barbara Sexton: Carlton Sherwood: Bureau of Human Resources Bureau of Contract Administration Bureau of Publications Bureau of Financial and Management Services Media Services 19. Bureau Directors Gary Lee and Greg Green each made $50.00 donations. 20. Directors Gibas and Sherwood did not contribute cash for the party. a. Gibas authorized state employees under his supervision to produce a life size cardboard cutout of McCarty. 1. The cut -out was made on Commonwealth time, by Commonwealth employees using Commonwealth material. 2. The cost to produce was $320.08. b. Sherwood authorized a DGS photographer to be used at the party. 1. A photographer was authorized 5 hours compensatory leave for taking pictures at the party. 2. The photographer's wages were $98.50 (5 hours x $19.70 /hour). 21. McCarty was unaware of the actions taken by Gibas and Sherwood. 22. During or about the first week of July 2001 the group (including Hazzard, Noon, Guzy McCarty 02- 020 -C2 Page 6 and Settino) met in Hazzard's office to review the status of the party. a. The amount of money raised at that point was insufficient to fund the party and the cost of the golf clubs. b. The group discussed expanding the list of invitees to include various vendor representatives who knew of McCarty. 1. Individuals considered were vendor representatives who had participated in BM IS golf outings and /or had done business with DGS while McCarty served as Deputy Secretary. 2. Most of the individuals did not have a social /close relationship with McCarty. c. McCarty was not initially aware of the decision to solicit vendor representatives. 23. The motive for inviting vendor representatives was to generate sufficient revenue to pay for the costs associated with the party, including the golf clubs. 24. McCarty and Hazzard frequently took daily "smoke breaks" together in front of the North Office Building while they were employed at that location. a. Hazzard would apprise McCarty of the status of the party during these breaks. b. Hazzard informed McCarty during one such "smoke break" in early July that the group was soliciting vendors to attend the party and to make cash donations. c. Hazzard informed McCarty that they intended to invite vendor representatives to the party because the group feared not having enough money to pay for the costs associated with the party. d. Hazzard also informed McCarty at this time thath [sic] he intended to ask bureau directors to contribute extra funds to pay the party expenses. e. McCarty, upon learning of Hazzard's worries, said he would personally cover any shortfall from his own funds. 25. McCarty informed Hazzard that he did not want to know the details regarding who gave money and /or how much was given. a. McCarty did not tell Hazzard not to solicit vendors. 26. On July 2, 2001, Guzy prepared an e-mail on Commonwealth time which was distributed, via Commonwealth e-mail, consisting of an invitation to at least thirteen vendor representatives, who do or have done business with the Commonwealth, regarding McCarty's farewell party. a. The e-mail noted the date, time of the party, and a cost of $20.00 per person. 27. Hazzard and Guzy made direct telephone contact to vendors in addition to distributing the e-mail invitation. a. Some vendors not originally listed on the e-mail distribution list were also contacted directly by telephone. b. Several vendor representatives were contacted by telephone on more than one Vendor Representative Attend Party Donation Ajilon, Inc Terry Brode Yes $ 20.00 Giber, Inc. Phillip Gring No 100.00 Perfect Order, Inc. John Gomery No 100.00 Diversified Data Systems, Inc Eric Lohr Yes 20.00 PA Industries For the Blind & Handicapped Alfred Baker Yes 100.00 Computer Aid, Inc. Erald Warwas Yes 100.00 Cisco Systems, Inc. Jim Burke No 100.00 The Technology Advisory Group James Dee Yes 25.00 EPlus Technology of Pa, Inc. Sally McGee No 100.00 Dell Marketing, LP Jeffrey Nelson No 25.00 McCarty 02- 020 -C2 Page 7 occasion in order to generate a response. 28. Marcel Coleman, Distributor, Systems Administrator II of BMIS, was also contacted by Hazzard and requested to solicit vendors who had business relationships with Coleman. a. Hazzard was Coleman's immediate supervisor. b. Coleman solicited Jeff Nelson, Dell Computer's representative for state contracts. c. The solicitation occurred while Coleman was on state time. d. Coleman was reluctant to make the solicitation. 29. The telephone contacts made by Guzy and Hazzard and Coleman were made during regular business hours of BMIS. a. The following vendors were telephonically contacted including the following: Terry Brode Eric Lohr Jim Burke Philip Gring Alfred Baker James Dee John Gomery Erald Warwas Sally McGee Jeff Nelson Allison King 30. During the telephone contacts, vendor representatives were questioned if they would be willing to donate money towards McCarty's gift in addition to attending the party. a. Vendor representatives were informed that if a donation over the $20.00 ticket price was given, there would be no need to pay the $20.00 per person cost. b. Hazzard, Guzy and Coleman did not specify to vendor representatives the amount of money that should be donated. c. Vendor representatives were informed that some companies donated as much as $100.00. 31. Vendor representatives made donations to McCarty's farewell party as listed below: a. At least one vendor representative felt compelled to make a donation in order to stay in good standing with DGS. McCarty 02- 020 -C2 Page 8 b. Of the ten vendor representatives who supplied donations to the party, only five actually attended. 32. One vendor, Xerox Corporation, which had representatives solicited by Guzy on more than one occasion, declined to make a donation. a. Company policy forbade monetary donations to clients or potential clients. b. At the time of the solicitation Xerox was attempting to make a sale of a color copy machine to BM IS. 33. On July 13, 2001, three days prior to the party McCarty and Hazzard traveled to Dick's Sporting Goods, Colonial Park Mall, 5070 Jonestown Road, Harrisburg, Pa, in McCarty's Commonwealth assigned vehicle during normal working hours to pick up the golf irons. a. Prior to leaving the North Office Building, Noon gave Hazzard a white envelope containing approximately $1,350.00 cash. 1. The cash came from donations and vendor contributions. b. The cash was used to pay for the clubs. c. Upon returning to DGS offices, the clubs were given to Noon for gift wrapping. 34. On July 16, 2001, at approximately 12:00 p.m., Guzy and Noon utilized avan assigned to the BM IS unit (Dodge Caravan, equipment # 006 -05 -4692) to transport the supplies and goods for the party to the Marysville VFW. a. Neither Guzy nor Noon requested or received authorization to utilize the van. b. Guzy and Noon utilized the Bureau van in order to transport the life -size cardboard cut -out of McCarty which had been prepared by the Bureau of Publications and Paperwork Management, DGS, and power point presentation equipment. c. Shortly after taking the vehicle, Guzy and Noon experienced mechanical difficulties with the van and replaced it with a loaner van from the Commonwealth garage. 1. Noon authorized the replacement vehicle. d. McCarty was not aware that Commonwealth vehicles were used to transport items related to the party. 35. Guzy and Noon set up for the party at the Marysville VFW. a. Nancy Chavez assisted Guzy and Noon in setting up for the party. b. Guzy and Noon returned to the North Office Building at approximately 4:00 p.m. but did not return to work. 36. Approximately 100 individuals (including Departmental employees, vendor representatives, and other individuals) attended the July 16, 2001 party at the VFW. a. A listing of those individuals who had paid in advance was generated by Candace Noone [sic] and utilized at the VFW door to check off the attendee's Description Expense Callaway Irons $1,324.99 VFW Rental 600.00 Entertainment (DJ) 100.00 Decorations /Cake 34.00 Total $2,058.99 McCarty 02- 020 -C2 Page 9 names. 1. The listing was destroyed after the party. b. Various individuals attending the party who had not purchased tickets in advance paid at the door. 37. Noon paid the VFW $600.00 to cover the cost of the room rental ($100.00) and catering charge of $500.00 (100 x $5 per person). a. The cash payment was made from funds collected for the party. 38. Documented expenses associated with the cost of McCarty's farewell party totaled at least $2058.99 as shown below: a. Approximately $400.00 remained from the money raised in association with the party after all documented expenses had been paid. 39. Hazzard took the remaining $400.00 and gave it to the bartender to provide an open bar to the attendees. a. Attendees were initially responsible for purchasing their own drinks. b. Hazzard told the bartender to subtract the cost of drinks purchased from the $400.00 until the money was gone. 1. Drink costs included $ .50 for draft beer and $1.25 for mixed drinks. c. The entire $400.00 credit was exhausted prior to the end of the party. 1. A second collection was taken from individuals at the party to keep the bar open once the $400.00 was spent. 40. A power point presentation consisting of a roast of McCarty's life was prepared by Michael Settino. a. Commonwealth equipment used for the presentation including an NEC -MC820 projector. b. The equipment was removed by Noon from DGS offices on the day of the party and taken to the VFW. 1. The equipment was returned the following day. 41. McCarty was presented with and took possession of the Callaway Hawkeye Irons during his farewell party on the night of July 16, 2001. a. McCarty was also presented with a plaque specifically from individuals within McCarty 02- 020 -C2 Page 10 the BMIS department. 1. The money raised from BMIS employees for the plaque was separate from the money raised in association with the party. 42. On or about August 3, 2001, the Office of Inspector General initiated an investigation regarding the raising of funds for the party and the use of employees' time and department equipment in the organization of the event. a. The inquiry was initiated as a result of information received by the Governor's Chief Counsel that vendors were solicited to make contributions towards a farewell gift for John McCarty. 43. The OIG's investigation was completed on or about January 14, 2002, and concluded the following: a. Hazzard and Guzy solicited Commonwealth vendors to pay for McCarty's golf irons. b. McCarty knew prior to the party that vendors were solicited for contributions to defer costs in purchasing the golf irons. c. Perception among vendors was that, when asked, it was a good idea to make contributions if you want to do business with the Commonwealth. 44. Hazzard and Guzy both received disciplinary action as a result of their solicitation of vendors and overall participation in McCarty's farewell party based on OIG's finding and recommendations. a. Hazzard received a one -week suspension without pay, a demotion to the position of Special Assistant to the Deputy Secretary for Procurement, and a reduction in salary of approximately $12,000. b. Guzy received a one -week suspension without pay. 45. As part of the OIG investigation, John McCarty provided a statement to investigators for the Office of Inspector General on December 6, 2001. a. McCarty thought that Nancy Chavez, Administrative Officer, Executive Offices, DGS and /or his executive secretary, Janette Danner, first broached the subject of having a farewell party for him. 1. Kelly Hazzard asked if he (Hazzard) could plan a party for him. b. McCarty denied asking Hazzard to arrange a farewell party for him. c. McCarty knew that the format of the party would be along the lines of a roast. d. McCarty assumed that some of the planning for the party would have been conducted on Commonwealth time because some arrangements would have had to be made during normal business hours. e. McCarty discussed the gift with Hazzard and informed him that he intended to buy a set of Calloway Hawkeye Irons. 1. Hazzard told McCarty he would get the clubs as a farewell gift. McCarty 02- 020 -C2 Page 11 2. The planning group had originated the idea of inviting vendors and asking them to contribute funds beyond costs of their attendance at the party in order to purchase the golf irons. f. McCarty was informed by Hazzard that some vendors wanted to attend the party. Hazzard advised McCarty that bureau directors would "kick in some extra money." g. h. McCarty told Hazzard he did not want to know how much each bureau director gave. j. He accompanied Hazzard to Dicks Sporting Goods to select the clubs and at later date to complete the purchase. McCarty denied knowing, until just prior to the party, that vendors had been solicited to make cash donations. 1. On the way back to the office from the retrieval of the golf irons at Dick's and after payment for them, Hazzard disclosed to McCarty that vendors had made contributions. 2. Upon learning of the contributions, McCarty expressed concern but failed to order Hazzard to cease solicitations or return funds that had been received. k. He attended about one -half of the golf outings hosted by BMIS. I. McCarty did not pay his greens fees for the last BMIS golf outing. 1. He received an e-mail indicating that one dollar would be collected from attendees to pay for his greens fees. 46. Following the conclusion of the Office of Inspector General investigation, John McCarty issued letters of apology and reimbursements to vendors who were solicited to make donations toward the going away gift. a. Letters of apology were sent to the following vendor representatives: Barry Reber Giber, Inc. Bob Rosborough Perfect Order, Inc. Mark Browning Xerox Corp. Roger Clark Xerox Corp. Allison King Xerox Corp. William Hitz Intellimark James Harlacher Intellimark Karen Kimberling ePlus Technology Marie Hopkins Gateway Business Gerald Rutledge Computer Integration Group 47. McCarty's letters to the above listed individuals dated January 31, 2002, contained the following information: "Several months ago, prior to my departure at the Department of General Services, members of the MIS staff at the agency organized a going —away party to which I am told you were invited. It is my understanding now that you were further solicited for an McCarty 02- 020 -C2 Page 12 additional donation to help defray the cost of the party, which included a going -away gift for me. The purpose of this letter is to profoundly apologize to you for that happening. The solicitation should not have been made and you should not have been placed in that situation. I am truly sorry if you were in any way affected by those actions. Please know that I am personally embarrassed for not having written sooner. Again, I apologize for any inconvenience this may have caused you. Sincerely yours, John R. McCarty" 48. McCarty also sent an apology letter to vendor employees dated January 31, 2002, which contained identical language as the previously documented, but which included the following additional information. "I am enclosing a check in the amount I am told you gave to MIS. Please accept it with the knowledge that I am personally embarrassed for not having acted sooner." 49. McCarty sent personal checks as reimbursements to the following: Terry Brode, Ajilon Inc. $ 20.00 Philip Gring, Giber, Inc. $ 100.00 John Gomery, Perfect Order, Inc. $ 100.00 Erich Lohr, DDS, Inc. $ 20.00 Alfred Baker, PIBH $ 100.00 Erald Warwas, Computer Aid $ 100.00 Jim Burke, Cisco Systems $ 100.00 James Dee, Technology Advisory Group $ 25.00 Sally McGee, ePlus Technology $ 100.00 Jeffrey Nelson, Dell Marketing $ 25.00 Total $ 690.00 50. All of the vendors solicited have had contracts with the Department of General Services which John McCarty participated in reviewing and /or approving. 51. McCarty filed a Statement of Financial Interests for the 2001 calendar year on April 29, 2002. a. On line 11, Gifts, McCarty disclosed the following: "On July 16, 2001, at a retirement party given for me by employees of the Department of General Services, I received a gift valued at approximately $1,300. The gift was paid for from the proceeds of donations from approximately 120 employees, friends and others. Even though no single donation approached the $250 or more in the aggregate" in value specified in the instructions as reportable, in the spirit of full disclosure, I am reporting the receipt of this gift. Furthermore, of the approximately $3,100 collected to cover the cost of the retirement party expenses, a total of $690 came from 10 (ten) outside business people. That $690 was returned to the donors." III. DISCUSSION: At all times relevant to this matter, the Respondent, John McCarty, hereinafter McCarty, has been a public employee subject to the provisions of the Public Official and Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. § 401, et seq., as codified by McCarty 02- 020 -C2 Page 13 the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegations are that McCarty, as Deputy Secretary for Administration, Department of General Services, violated Section 1103(a) of the Ethics Act when he authorized and /or used subordinate department employees to plan and organize a going away party for him with the use of Commonwealth employees, equipment, materials and supplies; and when he participated in actions authorizing subordinate employees to solicit vendors who have contracts with the Commonwealth to contribute money towards a going away gift for him. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under Act 93 of 1998 as follows: Section 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public f of ce 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 minimis 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 of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa.C.S. § 1102. Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are reproduced above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. McCarty served as the Deputy Secretary for Administration in the Department of General Services (DGS) from January 1995 to July 2001, when he accepted the appointment as a member of the Pennsylvania Board of Claims. As Deputy Secretary for Administration of DGS, McCarty directed and coordinated the planning and policy development for all administrative and management programs. Specifically, McCarty had oversight responsibility for the Bureau of Contract Administration and Business Development, Financial and Management Services, Publications, Human Resources, Commonwealth Media Systems, and Management Information Systems (BMIS). McCarty participated and made decisions regarding the selection of vendors and recommendations by BMIS. While McCarty was the Deputy Secretary for Administration, golf outings were organized by employees of DGS. Monthly outings from April through October were sponsored by BMIS employees for staff and vendors with McCarty regularly attending the outings. McCarty 02- 020 -C2 Page 14 Michael Guzy, the IT Generalist Administrator under the supervision of Kelly Hazzard in BMIS, organized the outings. In May /June of 2001, after DGS employees learned that McCarty would be resigning, BM IS hosted a golf outing at the Fairview Golf Club with attendees contributing a dollar to pay for McCarty's green fees and an additional dollar to pay for McCarty's dinner after the round of golf. The amount of money collected for McCarty was approximately $35. In the latter part of June of 2001, McCarty had a discussion with Hazzard, who as the BM IS Director was a subordinate to McCarty, regarding a farewell party for McCarty. McCarty and Hazzard discussed the type of party, location, entertainment, and gift. During the discussions about a gift, McCarty informed Hazzard that he was considering buying a new set of golf clubs. Hazzard, in a meeting with subordinates during Commonwealth working hours, assigned DGS employees certain responsibilities as to the party and informed the group that McCarty discussed a set of golf clubs as a gift. On June 28, 2001, McCarty and Hazzard traveled to a sporting goods store where McCarty selected a set of Callaway Tungsten Hawkeye Golf Clubs priced at $1,324.99, tax included. McCarty paid $265 as a 20% layaway deposit using his own credit card. McCarty informed Hazzard that if insufficient money were raised for the clubs, he (McCarty) would cover the difference. The planning group for McCarty's party determined that the cost of the party and gift would be approximately $2,000. Since it was estimated that 100 people would attend the party, the ticket prices were set at $20 per person. A DGS employee on the planning committee distributed e-mail invitations and posted the party information on the DGS electronic bulletin board which is a customary practice for DGS staff retirements. Hazzard personally solicited DGS bureau directors to make donations to McCarty's gift in excess of the $20 ticket price. One DGS director authorized Commonwealth employees to produce a life size cardboard cut -out of McCarty which would cost $320.08, based upon work done on Commonwealth time with Commonwealth employees using Commonwealth materials. In addition, another DGS director authorized the use of a photographer at the party forfive hours. The Commonwealth wages for the photographer would be $98.50. McCarty was unaware of the actions taken by these two DGS bureau directors at that time. When the planning group determined that insufficient money was raised to fund the party and pay for the golf clubs, the group discussed expanding the list of invitees to include various vendor representatives so that sufficient revenue would be generated to pay for the cost of the party and set of golf clubs. When McCarty and Hazzard discussed the status of the party and Hazzard informed McCarty that vendor representatives were to be invited to the party because there was not enough money and bureau directors would be asked to contribute extra funds, McCarty indicated that he would personally cover any shortfalls. During Commonwealth working hours, various vendors were contacted either directly by telephone or through e-mails for the purpose of inviting them to McCarty's farewell party. Hazzard contacted Marcel Coleman, a systems administrator of BMIS, to solicit vendors who had business relationships with Coleman. Although Coleman was reluctant to do so, he made a solicitation of Dell's representatives for State contracts which solicitation occurred on Commonwealth time. During such telephone contacts, the vendor representatives were asked if they would be willing to donate money towards McCarty's gift and attend the party. The list of vendors, their representatives, the donations, and attendance status are delineated in Fact Finding 31. Only half of the vendor representatives who supplied donations attended the party and at least one vendor stated that he felt compelled to do so to stay in good standing with DGS. Although solicited, Xerox Corporation declined to make any donation based upon its policy which prohibits donations to clients or potential clients. McCarty 02- 020 -C2 Page 15 During Commonwealth working hours and in McCarty's Commonwealth assigned vehicle, he and Hazzard traveled to pick up the golf clubs a few days before the party. Hazzard had approximately $1,350 in cash in an envelope from donations and vendor contributions. After returning to DGS, the golf clubs were given to a DGS employee for gift wrapping for McCarty. On the date of the party, July 16, 2001, two DGS employees utilized a Commonwealth van assigned to BM IS unit without authorization to transport the life size cardboard cutout and Commonwealth PowerPoint presentation equipment for use at the party. At the time, McCarty was unaware of the use of the Commonwealth vehicle for the transport of goods /supplies for his party. Approximately 100 individuals, including department employees, vendor representatives, and others attended the party for McCarty. The facility was paid $600 for the room rental and the catering charge for the party. From the funds collected, $400 was provided to the bartender to provide an open bar to the party attendees who were responsible for purchasing their own drinks. After the $400 was exhausted, a second collection was made to keep the bar open. During the party McCarty accepted the Calloway Hawkeye Golf Clubs. In August of 2001, the Office of Inspector General began an investigation regarding the raising of funds and the use of Commonwealth employees and equipment for McCarty's party. After the investigation was completed, Hazzard and Guzy received disciplinary action as a result of their solicitation of vendors and participation in McCarty's party. The investigation concluded that Hazzard and Guzy solicited Commonwealth vendors to pay for McCarty's golf clubs, that McCarty knew prior to the party that vendors were solicited for contributions to defer costs for the golf clubs and the perception among vendors was that it was a good idea to make contributions if they wanted to do business with the Commonwealth. McCarty himself gave a statement to the Inspector General expressing limited knowledge or denials as to various aspects of the retirement party. McCarty subsequently issued letters of apology and reimbursements to vendors who were solicited to make donations for his retirement party gift. The reimbursements which McCarty made are detailed in Fact Finding 49. Parenthetically, all of such vendors solicited had had contracts with DGS as to which McCarty participated in the review /approval process. Finally, McCarty in his Statements of Financial Interests (SFI's) for2001 calendar year made a disclosure as to the retirement party which is set forth in Fact Finding 51. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement proposes that this Commission find an "unintentional violation" of Section 1103(a) of the Ethics Act when McCarty approved issuance of invitations to vendors to his retirement party, and after being informed that the planners had also solicited vendors to contribute to a going away gift for him, failed to take positive actions to direct the planners to cease such solicitations and return funds already collected. McCarty agrees to make payment in the amount of $500 to the Commonwealth of Pennsylvania through this Commission within 30 days of the issuance of this Order. In applying Section 1103(a) of the Ethics Act to the instant matter, there were uses of authority of office on the part of McCarty as Deputy Secretary for Administration in DGS of the Commonwealth of Pennsylvania regarding his retirement party. Specifically, beginning in June of 2001 after McCarty's announced his resignation and future appointment to the Board of Claims, he had discussions with Hazzard regarding a farewell party for himself. On Commonwealth time, McCarty and Hazzard went the sporting goods store to select golf clubs. Subsequently, on Commonwealth time and using his Commonwealth assigned car, McCarty and Hazzard went to the sporting goods store to pick up the clubs for himself. Through conversations with Hazzard, McCarty was informed about the party, the gift, the expenses and McCarty 02- 020 -C2 Page 16 the solicitation of vendors to cover the expenses. But for the fact that McCarty was Deputy Secretary for Administration in DGS of the Commonwealth of Pennsylvania, he would not have been in a position to engage in such activities. Such activities included the above as well as the utilization of Commonwealth employees, equipment, and material on Commonwealth time. Such uses of authority of office resulted in pecuniary benefits to McCarty consisting of the golf clubs, the party, the facilities, and the open bar, all of which were done without any out of pocket expenses on the part of McCarty. The pecuniary benefits were private in that there is no authorization in law to use office for personal financial gain. In fact, such is prohibited by the Ethics Act. Lastly, that private pecuniary benefit inured to McCarty himself. Accordingly, an "unintentional violation" by McCarty occurred when he approved issuance of invitations to vendors to his retirement party, and when informed the planners had also solicited vendors to contribute to a going away gift for him, failed to take positive actions to direct the planners to cease such solicitations and return funds already collected. See, Catone, Order 994. We determine that the Consent Agreement submitted by the parties sets forth the proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, McCarty is directed to make payment in the amount of $500 to the Commonwealth of Pennsylvania through this Commission within 30 days of the issuance of this Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. In that McCarty is now a member of the Board of Claims of the Commonwealth of Pennsylvania and continues in public service, McCarty needs to understand that public office is a trust. His actions certainly failed in that regard while he served as Deputy Secretary for Administration in DGS. Public office is not to be used for personal financial gain. McCarty is to comport his conduct such that his actions will from this time forward be within both the letter and spirit of the Ethics Act. IV. CONCLUSIONS OF LAW: 1. McCarty, as Deputy Secretary for Administration with the Department of General Services, was a public employee subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998. 2. An unintentional violation of the Ethics Act occurred when McCarty approved issuance of invitations to vendors to his retirement party and when informed the planners had also solicited vendors to contribute to a going away gift for him, failed to take positive actions to direct the planners to cease such solicitations and return funds already collected. In Re: John McCarty ORDER NO. 1259 File Docket: 02- 020 -C2 Date Decided: 12/4/02 Date Mailed: 12/16/02 1. McCarty, as Deputy Secretary for Administration with the Department of General Services, unintentionally violated Section 1103(a) of the Ethics Act when he approved issuance of invitations to vendors to his retirement party and when informed the planners had also solicited vendors to contribute to a going away gift for him, failed to take positive actions to direct the planners to cease such solicitations and return funds already collected. 2. Per the Consent Agreement of the parties, McCarty is directed to make payment in the amount of $500 to the Commonwealth of Pennsylvania through this Commission within 30 days of the issuance of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair