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In Re: James "TS," Scott,
Respondent
STATE ETHICS COMMISSION
FINANCE BLJILDNC
613 Noi:zm STREET, ROOM 309
FIARRISBURG, PA 171 20-0400
File Docket:
X-ref:
Date Decided:
Date Mailed:
FACSIMILE: 717-787..0806
WEBsi"m: vvy tjjjjqs.p , jay
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19-032
Order, No. 1803
6/28/22
6/29/22
Before: Mark R. Corrigan, Acting Chair
Roger, Nick
Melanie DePalma
Michael A. Schwartz
Shelley Y. Simms
Rhonda Hill Wilson
Paul Parsells
This is, a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted an
investigation regarding possible violation(s) of the Public Official and Employee Ethics Act
("Ethics Act"), 65 Pa.C.S. § 1101 et sue., by the above -named Respondent. At the commencement
of its investigation, the Investigative Division served upon Respondent written notice of the
specific allegations. Upon completion of its investigation, the Investigative Division issued and
served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer
was filed, and a hearing was requested. A Stipulation of Findings and a Consent Agreement were
subsequently submitted by the parties to the Commission for consideration. The Stipulated
Findings are set forth as the Findings in this Order. The Consent Agreement has been approved.
T. ALLEGATIONS:
That James "TS" Scott, a public official/public employee in his capacity as a Supervisor
for Mahoning Township ("Township"), Montour County, violated Sections 1103(a), 1105(b)(5),
and 1105(b)(8) of the Ethics Act when he used the authority of his public position for the private
pecuniary benefit of his spouse and/or a business with which his spouse is associated, namely
Service I" Federal Credit Union, when he participated in discussions and actions of the Township
Board of Supervisors, including but not limited to attempting to influence the Township Board of
Supervisors and casting the deciding vote to invest Township funds with Service I't Federal Credit
Union; and when he filed deficient Statements of Financial Interests by failing to include the
Township as a reportable source of income upon -filings made for calendar years 2017 and 2018
and failing to disclose his office, directorship or employment with Liberty Mutual Insurance
Company upon filings made for calendar years 2016, 2017, and 2018.
Scott, 19-032
Page 2
IL FINDINGS:
1. James "TS" Scott ("Scott") has served as a Member of the Mahoning Township
("Township"), Montour County, Board of Supervisors since August 4, 2016.
a. The Township is a Second Class Township.
b. The Township Board of Supervisors ("Board of Supervisors") expanded to five
Members effective January 2, 2018.
C. Scott was appointed to the Board of Supervisors following the resignation of
Supervisor Wayne Myers.
d. Scott served as Vice -Chairman of the Board of Supervisors in 2018 and 2019.
e. Scott previously served as a Member of the Mahoning Township Planning
Commission.
2. On Statements of Financial Interests ("SFIs") on file with the Township for calendar years
2016 through 2019, Scott reports his occupation as "Claims Manager."
a. Scott reported Liberty Mutual Insurance Company as a source of income.
3. In or around 2016, after he was appointed to the Board of Supervisors, Scott participated
in and was involved in discussions and actions of the Board of Supervisors to move
accounts to Service 1st Federal Credit Union ("Service I"'), where his spouse is employed
as a loan officer.
a. The Board of Supervisors, which included Scott, took actions, including moving
accounts from First National Bank to Service I" and moving to sell water/sewer
assets and invest these funds in excess of $9.5 million with Service 15t although
another financial institution offered a greater return on the investment.
b. While Scott was initiating actions to move Township assets to Service I", his wife
was promoted to a Financial Specialist II position.
4. Prior to Scott becoming a Member of the Board of Supervisors, the Township utilized First
National Bank and the Pennsylvania Treasury for financial and/or investment services.
5. In August 2016, the Board of Supervisors initiated actions to disband the Mahoning
Township Water and Sewer Authority ("Water and Sewer Authority") and to appoint
Service I" as the Township's financial institution and transfer proceeds of the sale of the
Water and Sewer Authority's assets to Service l't
Scott, 19-032
Page 3
a. Scott initiated and directed the dissolution of the Water and Sewer Authority to
effectuate the sale of its assets to a third party.
b. Scott participated in discussions with other Members of the Board of Supervisors
regarding the transfer of Township financial accounts to Service 1"
6. Service I` operates as a Member -owned, "not for profit" cooperative financial institution,
providing personal and business financial services for its Members.
a. Financial services provided include personal and business checking and savings,
loans and credit, and retirement and investment services.
7. Karen Scott, Scott's spouse, has been employed by Service l st since April 4, 2011.
a. Since 2016, during Scott's tenure as a Supervisor, Karen Scott has held the
positions of Financial Specialist I and Financial Specialist 11.
b. Karen Scott was reclassified as a Financial Specialist II effective December 23,
2018.
8. Service Pt maintains job descriptions for both the Financial Specialist I and Financial
Specialist II positions held by Scott's wife.
a. The primary job responsibilities of each position (Financial Specialist I and
Financial Specialist II) relate to consumer lending and customer service.
b. Although promoted from Financial Specialist I to Financial Specialist II, Karen
Scott's primary job responsibilities did not change.
9. Scott and his wife share joint financial accounts at Service I" and USAA Bank.
10. In or about October 2016, approximately two months after his appointment to the Board of
Supervisors, Scott initiated multiple discussions with Township Treasurer Ken Houck
("Houck"), expressing his (Scott's) displeasure with the quality of service the Township
was receiving from First National Bank.
a. Scott did not bring any of his questions or concerns about the services being
provided by First National Bank to the Board of Supervisors during a public
meeting for consideration prior to initiating the change to Service I".
1. Scott and other Supervisors were not satisfied with the time First National
Bank took to respond to Township inquiries.
2. Scott expressed his displeasure with First National Bank to Supervisor Bill
Lynn ("Lynn") and Treasurer Houck.
Scott, I9-032
Page 4
b. Scott requested Treasurer Houck to complete the necessary paperwork to open an
account for the Township at Service I".
1. Treasurer Houck is a subordinate employee to Scott and the Board of
Supervisors.
2. There was no vote of the Board of Supervisors authorizing the opening of
an account at Service Pt.
11. On November 18, 2016, Treasurer Houck opened a Township account with Service ISM at
the direction of Scott.
a. Treasurer Houck opened the Township's Service I" account three days prior to any
action or approval by the Board of Supervisors.
12, From November 21, 2016, through June 19, 2017, as a Member of the Board of
Supervisors, Scott participated in discussions and official actions taken by the Board of
Supervisors, including directing and recommending the transfer of Township financial
accounts to Service 1 Sc,
a. All of Scott's actions occurred while his spouse was an employee of Service Pt
13. The Board of Supervisors discussed and took official action to open an account at Service
I" on November 21, 2016.
a. Scott was present at the November 21, 2016, Board of Supervisors meeting and
participated in the discussion.
b. At no time did Scott disclose to or inform the Board of Supervisors that he had
directed Treasurer Houck to open an account with Service I" for the Township
prior to November 18, 2016.
14. According to the official minutes of the November 21, 2016, Board of Supervisors meeting,
the following discussion and action ensued concerning the Township opening an account
at Service 1st:
a. "Treasurer Houck asked the Board of Supervisors to open an account with Service
First. He reported that Service First can have one account which can handle all the
escrow accounts (escrow account are the funds required to be retained by the
township from developers that must comply with the Mahoning Township
Subdivision Ordinance. if the developer fails to install the infrastructure properly
the township would use these funds to correct problems. When the township
received a deed of dedication of the various infrastructure such as road paving,
street lights, water and sewer lines, the amount left is returned to the developer after
a specific time) but show individual statements for each escrow account. He
reported that there is no charge (service fees) and he also got a look at their on-line
Scott, 19-032
Page 5
which is available for Mahoning. Service First will also provide the treasurer a
check reader which is used to deposit checks into the various township accounts.
Treasurer Houck also would like to set up a credit card with Service First to keep
all accounts under one umbrella. A question was asked the current credit card Bank
of America is used for what type of purchases. Treasurer Houck reported it is used
when supplies are needed quickly and this was echoed by the secretary who needed
toner for his copier for the many reports. Supervisor Scott reported that his wife is
a Financial Service Specialist for Service First and he further noted that Service
First will not have her be given any access to materials regarding the township.
Motions of [to] approve the requests were made by vice Chairman Lynn and
seconded by Chairman Woodruff. Motions passed. (2) yeas."
Present: Scott, Lynn, Woodruff.
b. Meeting minutes do not record a roll call vote.
1. The motion carried with two "yea" or affirmative/yes votes.
2. Meeting minutes do not contain a recusal, abstention, or conflict of interest
memorandum by Scott.
C. Scott stated to Commission Investigators that he voted affirmatively for the motion,
which passed unanimously.
15. The Township opened one primary account with Service 1 ", which includes multiple share
accounts within the primary account.
a. First National Bank had maintained separate accounts for each individual Township
account held.
b. With Service 0, all Township account activity was consolidated into one monthly
statement, itemized by shares.
C. Township funds transferred to Service I" included numerous escrow accounts, the
General Fund, and the Liquid Fuels Fund.
16. Once a Township account was opened at Service I", Township funds totaling
$3,637,642.16, which were on deposit with First National Bank, were transferred to Service
I" between November 2016 and February 2017 as follows:
a. A transfer of $6,300.00 was initiated at Scott's direction prior to the November 21,
2016, Board of Supervisors vote.
b. The remaining transfers were made following the Board of Supervisors' November
21, 2016, vote.
Scott, 19-032
Page 6
17. Scott made the motion and voted in favor of moving the remaining funds in the Township's
Recycling Account with First National Bank to Service 1st during the Board of Supervisors'
June 19, 2017, meeting.
a. Minutes from that meeting document that Scott made the motion and voted to
approve a resolution to move the remaining funds from the Recycling Account at
First National Bank to Service 15Y
18. From November 2016 through December 2017, Scott sought advice as to recusals, conflicts
of interests, and nepotism.
a. Meeting minutes record the following regarding Scott seeking advice as to conflicts
of interests:
1. March 2, 2017:
"Scott then asked the Solicitor regarding a "recusal" definition and the
Solicitor said that an elected official abstain from voting on a personal
matter and excusing yourself from that matter. Labor Attorney Melissa
Kelso was asked for an example of this. She reported that an elected official
must excuse themselves from a discussion or decision primarily regarding
themselves or a family member that benefits the person or family member
financially, and any discussions or any decision which would show an
impropriety. Attorney Tira reported nepotism was use of your position or
power to benefit a family member but also actively participates in
discussions which would have enrichment for a family member. Scott said
when an individual does not excuse themselves from discussions regarding
a member matter, this is nepotism. He reported that as long as he (is) here,
he would not allow that anyone receive more than a dime unless it is owed
or justified on his watch and that he will not be threatened or intimidated."
Present: Scott, Lynn, Woodruff.
2. December 11, 2017:
"Scott wanted to discuss concerns of there being a conflict of interest with
his son being a member of the board of auditors. General practice is the
board of auditors set the hourly rate for the roadmaster, which supervisors
ca choose to become. This is done each year at the reorganization meeting,
which is held in January. Scott will not be named roadmaster. The other 4
have a choice to be one or not. Since Scott has no intention of being a
roadmaster, there should be no problem.
Scott made a motion that we direct our solicitor to request an opinion
regarding if a conflict of interest exists specifically in this instance.
Scott, 19-032
Page 7
According to the solicitor, a motion can be made in a workshop meeting
because we are agreeing to direct him to take an action. Lynn seconded.
Marlene Gunther asked if the board of auditors sets the pay for supervisors
meeting pay. Scott said no, the pay is determined by the township code.
Molly questioned who the auditors are; Holly Greenly, Bob Casner and
Tristan Scott. Tristan was a write in. They conduct one meeting per year.
Just after the first of the year. They sit with the treasurer and review the
audit. At that time, they set how much the hourly rate for the roadmaster is
going to be. They don't meet again until the following January. Each auditor
receives $25.00 for the meeting and the secretary receives an extra $10.00
for typing the meeting minutes."
Present: Scott, Lynn, Woodruff.
3. December 18, 2017:
"Scott reported that Solicitor Ryan did send a letter to the Ethics
Commission regarding the discussion held last week for the position of
auditor. A copy was sent to both papers."
Present: Scott, Lynn, Woodruff.
b. There is no official record of Scott seeking a legal opinion regarding his
participation in actions relating to the Township investing funds with or moving
accounts to Service ISM, a business with which his spouse is associated.
19. In September 2016, the Board of Supervisors took action to formally dissolve the Water
and Sewer Authority.
a. Scott participated in the decision, including initiating the action by making the
motion and voting to dissolve the Water and Sewer Authority.
b. Pursuant to provisions of the Municipality Authorities Act, as the incorporating
governmental body, the Township assumed ownership of the Water and Sewer
Authority's assets.
1. The Township operated the Water and Sewer Authority's physical plant
(water treatmentisewage treatment) as a Township Water and Sewer
Department pending the sale of the system.
20. Scott participated in all of the Township's efforts to dissolve the Water and Sewer
Authority and find a buyer for the water and sewer system.
a. Scott actively participated in all discussions and decisions of the Township
regarding the dissolution of the Water and Sewer Authority, from the decision to
Scott, 19-032
Page S
dissolve the Water and Sewer Authority on September 6, 2016, through and
including the sale of the Water and Sewer Authority's assets to SUEZ North
America on March 29, 2019.
21. Township meeting minutes detail Scott's participation in actions by the Board of
Supervisors to dissolve the Water and Sewer Authority and sell its assets to SUEZ North
America:
a. September 6, 2016:
"Supervisor T.S. Scott made a motion to dissolve the township water and sewer
authority effective January 16, 2017. Vice Chairman Bill Lynn then seconded the
motion."
Present: Scott, Lynn, Woodruff.
b. February 2, 2017:
"Supervisor Scott then announced the Authority dropped their objection of our
action to dissolve the Authority. The Authority Board voted this morning to
dissolve the Authority immediately and transfer everything to Mahoning
Township."
Present: Scott, Lynn, Woodruff.
C. August 14, 2017:
"Supervisor Scott reported the update of the sale of the Water and Sewer
Department is that a meeting was held today with 3 largest water and sewer
companies being Mid -America, Aqua and Suez in attendance. All expressed
interest in purchasing the Water and Sewer Department and the Supervisor are
anticipating the response date about a month to give the people more time to put
their packages together. And in conjunction with that it was necessary that us hire
a valuation company on our system. There are only 3 companies that are approved
by the Commonwealth of PA to provide this service. This will give us knowledge
of what our Water and Sewer System is to be worth. The company is Scottmadden
Management Consultants of Westborough, MA. And the cost of this service is
$30,000.00. Vice Chairman Lynn made a motion to accept the plan for $30,000.00
for the assessed value of the Water and Sewer Department, Supervisor Scott
second."
Present: Scott, Lynn, Woodruff.
d. September 11, 2017:
Scott,19-032
Page 9
"Woodruff reported the Water and Sewer Bids proposals are to be in by October
5th at 3:30pm and the bids will be opened on the 6th of October at 10:30 am. Scott
told all present that bid opening meeting is open to the public."
Present: Scott, Lynn, Woodruff.
C. October 5, 2017:
"Water and Sewer Bid Opening.
Suez Water Pennsylvania, Inc. $9,500,000. ($7,000,000 Water & $2,500,000
Sewer).
Aqua Pennsylvania, Inc. $7,500,000."
Present: Scott, Lynn, Woodruff.
f. October 9, 2017:
"Scott allotted each water & sewer bidder 15 minutes to present in detail their
company. (Aqua & Suez made presentations) ... The bids will be reviewed by LDG
engineer, Dave Walters and Attorney Ben Landon and the supervisors have 60 days
to make a decision... Scott in reference to any bid being accepted and the transfer
of funds from the sale, reported the three current supervisors would put the money
in an Investment Trust whereby the interest earned on the investment could be used
by future supervisors but the principal deposit could not be used for anything other
than a catastrophic event." (emphasis in original)
Present: Scott, Lynn, Woodruff.
g. October 16, 2017:
"Attorney Ben Landon spoke on the sale of the water & sewer department. We
started out with three interested companies, however only two proposals were
recorded. Aqua America proposed $7.5 million and Suez Water Pennsylvania
proposed $9.5 million... Scott made a motion to sell the Mahoning Water & Sewer
Department to Suez Water Pennsylvania for $9.5 million dollars. Lynn seconded
the motion."
Present: Scott, Lynn, Woodruff.
h. April 23, 2018:
"Solicitor Tira reported that the asset purchase agreement for the sale of the water
& sewer department is finished. Supervisor Scott spoke with the counsel right
before the meeting and told them the address changes to apply to pages 1, 4 & 11,
which will be corrected with an insert. Just another step in the process. This enable
Scott, 19-032
Page 10
Suez to file with the PUC. Supervisor Scott motioned to accept the asset purchase
agreement between Mahoning and Suez. Supervisor Whelan seconded."
Present: Scott, Lynn, Whelan, Robertson, Shultz.
February 25, 2019:
"Scott stated that the treasurer has transmitted bank financial information for the
transfer of the proceeds of the sale... Scott noted that the Suez purchase may be
completed by the end of March."
Present: Scott, Lynn, Whelan, Robertson, Shultz.
March 11, 2019:
"Supervisor Scott talked about the Suez sale ... Super -visor Scott motioned that we
the board empower Bill Lynn to sign all instruments, documents, agreements
otherwise associated with the sale of the water & sewer Department. Supervisor
Robertson seconded."
Present: Scott, Lynn, Whelan, Robertson, Shultz.
k. March 25, 2019:
"Solicitor Tira presented a Resolution authorizing the Chairman and the secretary
to execute all necessary documentation to consummate the transfer of assets
pursuant to the asset purchase agreement between Mahoning and Suez Water
Company. Scott moved to consummate the resolution and Whelan seconded."
Present: Scott, Lynn, Whelan, Robertson, Shultz.
22. In February 2017, Scott initiated actions to move the Municipal Authority Account at 1"
Keystone Bank to Service I". Minutes from the February 13, 2017, and February 20, 2017,
meetings include the following actions advocated by Scott:
a. February 13, 2017:
"Signature Cards: Supervisor Scott moved to have the former Mahoning Township
Authority Account at I" Keystone Bank moved to Service First and have the
Treasurer Ken Houck and Secretary/Asst. Treasurer Joe Oberdorf, sign the
Signature Cards for the Account. Treasurer Houck will handle the transitions."
Present: Scott, Lynn, Woodruff.
b. February 20, 2017:
Scott, 19-032
Page 11
"Signature Cards: Supervisor Scott moved to have the former Mahoning Township
Authority Account at I" Keystone Bank moved to Service First and all other
accounts including JSSB and have the Treasurer Ken Houck and the Secretary, sign
the Signature Cards for the Accounts. The motion was seconded by Vice Chairman
Lynn. Motion passed."
Present: Scott, Lynn, Woodruff.
23. Scott's advocacy in Board of Supervisors actions to sell Water and Sewer Authority assets
resulted in the Township receiving $9.5 million in revenue after the Board of Supervisors
voted to accept SUEZ North America's purchase offer.
a. Scott made the motion at the Board of Supervisors' October 16, 2017, meeting to
sell the assets of the Water and Sewer Authority to SUEZ Water Pennsylvania for
$9.5 million.
24. Following the sale of the Water and Sewer Authority's assets, the Township formed a sub-
committee (the "Investment Committee"), consisting of Treasurer Houck and Supervisors
John Whelan ("Whelan") and Molly Shultz ("Shultz"), to research and advise the Board of
Supervisors as to investment options for the proceeds of the sale of the Water and Sewer
Authority's assets.
25. From approximately November 2017 through April 2019, Supervisors Whelan and Shultz
and Treasurer Houck contacted financial institutions to collect information on investment
products for the $9.5 million in proceeds from the sale of the water system.
a. Most of the contacts with financial institutions were initiated by Supervisor Whelan
and Treasurer Houck.
b. Multiple inquiries were made to banks and investment services to determine the
safest way to invest the $9.5 million, yielding the Township the highest return while
being compliant with regulatory guidelines for the investment of municipal funds.
26. As a result of Investment Committee inquiries, the Board of Supervisors received proposals
for consideration from Jersey Shore State Bank ("JSSB") and Service 1".
a. JSSB submitted two separate proposals, dated November 20, 2018, and April 4,
2019.
1. The April 4, 2019, proposal was an updated submission including the same
terms as the initial November 20, 2018, proposal.
2. Both JSSB proposals contained the same interest rate for a 30-month
savings CD of 2.85% and 2.75% for a savings account.
b. Service 1" submitted a proposal dated February 13, 2019.
Scott, 19-032
Page 12
I. Service I" offered an interest rate of 2.60% for a 36-month savings CD.
2. The Service I" proposal was submitted to the Board of Supervisors by
Jordan Frederick, Assistant Marketing Manager, at a mid -day Board of
Supervisors meeting.
aa. Service I" employee Thomas Rambo ("Rambo") was unavailable to
attend the meeting.
C. The Service I" proposal was .25% lower than the rate offered by JSSB, which
would have resulted in a lower return on investment for the Township.
1. Rambo called Treasurer Houck on February 15, 2019, to inquire about the
proposals and if Service I" could do better.
27. Scott informed Commission Investigators that he made the determination to become
involved in the investment proposal process because of his personal dissatisfaction with
the efforts set forth by Supervisors Whelan and Shultz.
a. Scott met with Gary Surak ("Surak") of Service V to instruct him on how to
structure their investment proposal to the Board of Supervisors some time prior to
their February 13, 2019, presentation to the entire Board of Supervisors.
I. Scott advised Surak as to what he felt the Service I" investment proposal
should include.
b. Surak followed the guidance provided by Scott for the Service 1St February 13,
2019, investment presentation to the Board of Supervisors.
28. Rambo was the Service lst employee responsible for preparing and submitting investment
proposals to the Township on behalf of Service V.
29. Rambo used a standard rate schedule available to all Service 1" Members as the basis for
his February 13, 2019, proposal submitted to the Township.
a. Investment and loan rates included in that proposal were taken directly from a
monthly rate schedule approved by the Service I st Rate Review Committee.
b. The Service I" Rate Review Committee is a leadership team consisting of six
people who meet on at least a monthly basis to review interest and investment rates
for Members of Service I".
C. The Service I" Rate Review Committee consisted of William Lavage
(President/CEO), Mike Thomas (Chief Financial Officer), Linda Brown (Chief
Scott, 19-032
Page 13
Administrative Officer), Karen Wood (Chief Experience Officer), Jay Reed (Chief
Information Officer), and Jeff Balestrini (Chief Lending Officer).
30. Rambo did not serve on the Service I" Rate Review Committee and did not have any
responsibility regarding establishing interest rates.
a. Rambo did have the authority to offer an investment rate of .25% higher than the
rate established by the Service ISt Rate Review Committee.
b. William Lavage ("Lavage"), in his capacity as the President and CEO of Service
I", had the authority to offer an investment rate of .50% higher than the rate set by
the Service I" Rate Review Committee.
C. Investment rate offers higher than these must be approved by the Service V Rate
Review Committee, taking into consideration the profitability of the investment for
Service 1 ".
31. The sale of Water and Sewer Authority assets to SUEZ North America closed prior to any
decision being made by the Board of Supervisors as to how the Township would ultimately
invest the sale proceeds.
a. Treasurer Houck opened a share account with Service I" in order to deposit $9.5
million to temporarily hold the sale proceeds until a decision by the Board of
Supervisors as to a long-term investment could be made.
b. Although there was no vote of the Board of Supervisors authorizing this deposit
with Service I", the Board of Supervisors was aware of the transaction.
Treasurer Houck was able to open the account at Service I" as a result of
actions by Scott to move all Township accounts to Service 1$'.
32. Service I" received the initial wire transfer of $9,486,910.97 from the Township's sale of
the Water and Sewer Authority's assets to SUEZ North America on March 29, 2019.
a. This wire transfer was deposited into Service I" Share Number 48, titled "Water
and Sewer Sales Proceeds."
b. There were two additional deposits from. SUEZ North America to Service 1st Share
Number 48.
1. $503.75 was deposited on April 2, 2019, and $1,045.12 was deposited on
April 22, 2019.
33. Service ls' officials were aware, as early as February 25, 2019, that the Township would
be depositing the Water and Sewer Authority sale proceeds with Service I".
Scott, 19-032
Page 14
a. On February 25, 2019, Rambo advised Service I" Chief Experience Officer Karen
Wood ("Wood"), via email, that the Township would be wire transferring
approximately $9.5 million on March 29, 2019, and that the funds would be kept in
a Share ID48 Account.
b. On March 22, 2019, Rambo advised Wood and Lavage by email that he had sent
wiring instructions to the Township and that $9,486,910.97 should be wired to
Service I" at or around 10:00 a.m. on March 29, 2019.
C. On March 29, 2019, Rambo informed Wood, Lavage, and Service I" Chief
Financial Officer Mike Thomas via email as follows:
".... the money is in!!! ! $9,486,910.97 is how much that was deposited!"
34. In an April 15, 2019, email, Supervisor Whelan informed the entire Board of Supervisors,
including Scott, of the results of the Investment Committee's research into investment
rates.
a. Whelan informed the Board of Supervisors via email that the Investment
Committee's research determined that JSSB was offering the Township the best
investment interest rate and that the Investment Committee recommended that the
$9.5 million be invested there.
35. The text of Supervisor Whelan's April 15, 2019, email was as follows:
a. Apr 15, 2019, at 3:00 p.m., John Whelan:
"All,
As requested Molly, Ken and 1 researched different investment opportunities that
comply with the guidelines for Pa Class II Townships. We spoke or met with a local
credit union, a bank, the Pa Treasury INVEST and an investment firm. The best
rates were offered by Jersey Shore State Bank. They offer a 30 month Savings CD
account with a 2.85% interest rate. One additional deposit or withdrawal per year
without penalty. They also offer us a Savings Account with an interest rate of
2.75%. This account allows 6 transactions per month. We are recommending
transferring $8 million into the CD account at 2.85% interest. We furthermore
recommend transferring $1.5 million into the savings account at 2.75% apr. We
will need to act on this quickly and I recommend a discussion and vote at our next
public meeting on Monday. If you have any questions, please contact Ken, Molly
or me.
Thanks and best regards,
John Whelan"
b. Scott received Supervisor Whelan's email.
Scott, 19-032
Page 15
36. Immediately after reviewing Supervisor Whelan's email recommendation, Scott contacted
Rambo to advise him of the Investment Committee's recommendation and to discuss
options for Service Ist
a. Rambo is a Market Manager for Service 1st
1. Rambo's responsibilities include managing three locations, including two
in Danville and one in Bloomsburg.
2. Scott's wife is employed at one of these branch locations.
b. After his contact with Rambo, Scott sent an email to Supervisors Whelan and Shultz
advising them to contact Rambo at Service I" to allow Service I" an opportunity
to submit another proposal.
C. Scott did not request/direct or authorize contacting JSSB to allow for a revised
proposal.
37. At 4:04 p.m. on April 15, 2019, Scott placed a 21-minute call to Supervisor Lynn's
cellphone number.
a. Approximately one hour later, at 5:22 p.m., Scott placed a four -minute phone call
to Rambo.
38. On April 15, 2019, Scott emailed Supervisors Whelan and Shultz, directing them to contact
Rambo.
a. Scott's email was sent less than an hour after he spoke to Rambo.
b. April 15, 2019, at 6:46 p.m., Scott emailed as follows:
"John and Molly -
Service 1" Marketing Manager Tom Rambo has asked that we reconsider Service
I't; that they will meet or beat any offer such as that below. I have cc'd Mr. Rambo.
Please reach out to Tom at [redacted] to discuss before Monday's meeting."
39. Supervisors Whelan and Shultz opposed Scott's directive and believed that Service I"
should not be afforded another opportunity to submit a proposal.
40. Scott's April 15, 2019, email to Supervisors Whelan and Shultz resulted in the following
email exchange among the Supervisors:
a. Whelan's response:
April 15, 2019, at 7:32 p.m.
Scott, 19-032
Page 16
"TS,
I can talk to Torn but I do not believe that is very ethical. We gave everyone an
equal opportunity to give us a proposal. Service I st was given first crack at an offer.
I have already spoken to JSSB to verify what I put in my email was still valid. It is
not fair to then give Service I st another shot. They should have come in with their
best offer right off the bat. I can talk to Tom but what I would do is offer to go to
them with the water and sewer funding and possibly the CD's that mature in May.
This would be well over one million $. If they can still match the JSSB proposal at
that time, we could work with them."
b. Shultz's response:
April 15, 2019, at 7:32 p.m.
"I agree with John, we met with Service I", first they gave us their proposal, they
[k]new what is offered and said they couldn't meet that."
41. Scott responded to Supervisors Whelan and Shultz 28 minutes later in an email advocating
for Service I".
a. April 15, 2019, at 8:00 p.m.
"You don't understand. JSSB is not a local bank- Service Ist is and has supported
our initiatives such as Cooper Water and Sewer; we have a long relationship with
them- if they would match the offer, then we have the advantage of the offer and
the pre-existing relationship. There is nothing unethical about shopping the best
deal, leveraging advantages - this is business. This is about future relationships and
the best deal we can get. Obviously you did not go back and forth- you simply took
the first offer and walked with it."
b. On April 16, 2019, at 8:27 a.m., Supervisor Larry Robertson ("Robertson") added
his opinion which included offering both Service I" and JSSB another opportunity
to provide a revised quote.
"Having slept on this, here are my thoughts. I agree that Service 1st should have
given us their best offer from the start. Since they didn't, I think this is what we
should do. Since this is a competitive process we should ask both of them for best
offers on paper. The written offers should include all details of the proposed
investment instruments as well as the specifics of how security will be guaranteed
in full compliance with state requirements. Ideally their submission will be signed
by an officer of the institution. If we do this we probably won't be able to vote on
it at our next meeting. The three criteria that must be considered by us, per state
guidelines, when making a decision are: A - Security, B - Return on investment
and C - Liquidity. There are other things that we may want to consider, but they
are secondary. I am also concerned about using only a single institution for our
entire investment."
Scott, 19-032
Page 17
C. JSSB's branch is located less than one mile from the Township.
42. Also on April 15, 2019, Scott engaged in a series of cellular telephone calls with Supervisor
Lynn and Rambo.
a. 7:52 p.m., thirteen minutes to Supervisor Lynn.
b. 8:41 p.m., five minutes to Supervisor Lynn.
C. 9:21 p.m., nine minutes to Rambo.
d. 9:30 p.m., nine minutes to Supervisor Lynn.
e. These calls occurred after Scott's multiple emails with Members of the Board of
Supervisors.
43. On the morning of April 16, 2019, Rambo contacted Scott before sending a revised quote
to the Board of Supervisors with an increased interest rate.
a. At 10:37 a.m. Scott received a three -minute call from the main number for the
Service I" branch that Rambo manages.
b. At 11:03 a.m. Rambo sent an email to the Board of Supervisors and Treasurer
Houck offering an investment rate of 3.05%.
1. The email was sent 26 minutes after the call from Service 1" was placed to
Scott.
44. Rambo reported to Service I" Chief Financial Officer Mike Thomas ("Thomas") the JSSB
rates and inquired if they could offer the Township a better rate.
a. Rambo advised Thomas of his understanding from Treasurer Houck that the
investment did not have to be Act 72 compliant.
b. Thomas then conferred with Lavage, who authorized Service I" to offer the
Township a 3.05% investment rate.
C. A 3.05% interest rate was offered predicated on Service I" bclieving that the
investment did not have to be Act 72 compliant.
45. Thomas prepared a rate comparison for Rambo to provide to the Township that compared
the Service 15t 3.05% rate to those offered by JSSB.
a. This rate proposal was approved by the Board of Supervisors on April 22, 2019.
Scott, 19-032
Page 18
46. On or before April 25, 2019, Thomas contacted the Pennsylvania Treasury to determine
whether the investment of the Township funds had to be Act 72 compliant before
proceeding further.
a. Thomas learned from a Pennsylvania Treasury representative that the investment
did have to be Act 72 compliant.
b. Thomas shared the Act 72 compliant requirement information with Lavage and
Rambo.
47. Lavage decided that Service lst could not honor the 3.05% rate offer and make a profit on
the investment with the Act 72 requirement.
a. Lavage was unwilling to sustain a loss for Service 1st on the investment to be Act
72 compliant.
b. Lavage's decision resulted in Service 1" reverting to its initial 2.60% rate proposal.
48. Service 1st does not provide its employees with training on Act 72 requirements given the
limited number of those investment accounts that they manage.
49. Rambo utilized the investment rates the Township received from JSSB as the basis for his
revised proposal.
a. JSSB's rate proposal was known to the Board of Supervisors at that time.
b. Both proposals were obtained based on information requested by the Investment
Committee as opposed to a formal Request for Proposals or sealed bidding process.
50. Rambo's revised proposal included the following commentary and analysis:
a. "Thank you for letting me give you another option. We fully appreciate the
relationship we have with Mahoning Township and are proud to have our office in
the Township right next door to you. Service I5, PCU is fully invested in the
community, and we do a lot of volunteer work and monetary donations to invest in
this community. Your funds are collateralized and insured with our collateralization
agreement we have had in place since establishing the membership with us back in
2016. So rest assured the funds are safe. We will offer you:
30 Month CD at 3.05%. You can withdraw or deposit penalty free from this
account. So if you have future items coming due you can just deposit them into this
account at the 3.05% rate.
Business Checking Account at 2.40%. This is fully liquid and has no deposit or
withdraw limitations.
Scott, 19-032
Page 19
My projections are based on your email showing how you were going to invest in
each product, also for each scenario I did not re -invest the dividends so if you keep
compounding interest you will make more.
JSSB
Service
I" Scenario
2.85% CD 30
589,685
3.05% CD 30
632,504
Months
Months
2.75%
$102,940
2.40%
$90,580
Savings
Business
Account
Zhecking
$100,000
glance or
neater
Total
$692,625
rotal
S723,084
Estimated
Estimated
Dividends
Dividends 30
30 Months
Months
Increase ove
/A
ncrease over
�SSB
$30,459
JSSB
Any questions please feel free to reach out to me. Thanks,
Tom Rambo"
51. Following Rambo's submission, Scott continued to place calls to and receive calls from
Supervisor Lynn on April 16, 2019, and April 17, 2019. These calls occurred as follows:
a. 4/16/19, 11:12 a.m., Scott to Lynn, 23 minutes.
b. 4/16/19, 1:37 p.m., Scott to Lynn, I 1 minutes.
c. 4/16/19, 8:44 p.m., Scott to Lynn, 31 minutes.
d. 4/17/19, 12:33 p.m., Scott to Lynn, 1 minute.
C. 4/17/19, 1:06 p.m., Lynn to Scott, 18 minutes.
52. Scott also participated in calls/voicemails exchanged between himself, Supervisor Lynn,
and Rambo on April 18, 2019, and April 19, 2019, as follows:
a. 4/18/19, 11:16 a.m., Rambo to Scott, 3 minutes (voicemail).
b. 4/18/19, 11:17 a.m., Rambo to Scott, 14 minutes.
C. 4/18/19, 12:14 p.m., Scott to Lynn, 19 minutes.
d. 4/18/19, 12:53 p.m., Lynn to Scott, 11 minutes.
C. 4/18/19, 3:41 p.m., Scott to Rambo, 2 minutes.
f. 4/18/19, 4:27 p.m., Scott to Lynn, 19 minutes.
Scott, 19-032
Page 20
g. 4/18/19, 6:07 p.m., Scott to Lynn, 11 minutes.
h. 4/19/19, 2:16 p.m., Rambo to Scott, 1 minute (voicemail).
i. 4/19/19, 9:03 p.m., Scott to Lynn, 1 minute.
j. 4/19/19, 10:59 p.m., Scott to Lynn, 1 minute.
k. These calls were made prior to the Board of Supervisors' scheduled April 22, 2019,
meeting to consider proposals to invest Township funds.
53. Scott did not place any calls or emails to, or receive any calls or emails from, JSSB
regarding their proposals.
54. Minutes from the Board of Supervisors' April 22, 2019, meeting included the following
actions to award the investment of the proceeds of the sale of the Township water system
to Service lst.
a. April 22, 2019:
"Whelan noted a past discussion was held with Service First, PA Invest, and Jersey
Shore State Bank, regarding the distribution of the funds from the sales of the Water
and Sewer Department from Suez. After reviewing these institutions, Supervisor
Whelan recommended that Mahoning move to put proved to deposit $8,000,000.00
in the Service First Credit Union at 3.05% for 30 Months. Robertson seconded.
Robertson then moved to place the remainder $1,500,000.00 at 2.75%interest
bearing account at Jersey Shore State Bank and Mahoning Township will be
allowed to withdraw funds up to six times per month. This action was contingent
upon Act 27, which ensures municipalities comply with state regulations regarding
investments. Whelan seconded. There was a majority of yeas. Lynn and Scott voted
nay. (3 to 2) Scott then reviewed his ideas of various repairs needed throughout the
township (signals, traffic conditions and other needed repairs like dredging some
water run-off areas and culverts) and that what we are doing with your money and
he would like to have the funds at Service First. Scott also reviewed the insurance
policy offered by Service First to cover the funds should be considered when
making this decision. Lynn also would like to keep the funds in Service First."
Present: Scott, Lynn, Whelan, Robertson, Shultz.
b. The minutes reflect that there was no recorded roll call vote on the investment with
Service 15t
C. Scott participated in a unanimous voice vote of the Board of Supervisors to approve
the $8 million investment at Service 1" which was not included as part of the written
meeting minutes.
Scott, 19-032
Page 21
d. Scott lobbied and voted against the motion to invest $1.5 million with JSSB.
e. The motion to invest $1.5 million with JSSB passed over Scott's nay vote.
55. The Board of Supervisors' decision to invest the $8 million with Service I" was predicated
on the Service I" quote of a 3.05% rate of return on the investment.
a. The increase in the Service I` quote was a result of Scott intervening and directing
the Investment Committee to give Service 1 s an opportunity to increase its offer.
56. On April 25, 2019, Thomas informed Rambo and Lavage by email that "CD's are not an
acceptable form of collateral for securing public fund deposits." The email exchange
included the following:
From: Mike Thomas
Sent: Thursday, April 25, 2019 8:59 AM
To: Tom Rambo; Bill Lavage
Subject: RE: [EXTERNAL] RE: Suez Sale Investment
Toni,
Bad news. I had a call with the Treasury Department. CD's are not an acceptable form of
collateral for securing public deposits. She specifically mentioned FNMA and GNMA
bonds are the most common acceptable forms of collateral. These bonds are paying very
little due to the current position of the yield curve. If you have any other questions for me,
please let me know.
Thanks,
Mike
From: Tom Rambo
Sent: Thursday, April 25, 2019 9:03 AM
To: Mike Thomas; Bill Lavage
Subject: RE: [EXTERNAL] RE: Suez Sale Investment
So I should let there know we cannot do the 3.05% CD, and that we cannot offer anything
to secure that much
Hey Bill,
I did also hear from Bill Lynn (supervisor) who would like to keep the money here, he did
ask if we could go higher on the rate and I informed he we cannot. I did ask him to confirm
with JSSB that the rates they were quoted were for Government accounts. He said he did
not think that they were and appreciated us giving it a shot and for the 2.60% offer. Neither
him or John seemed bitter over it. However I wouldn't be surprised to hear from TS later
tonight or for you to get a call as well.
Scott, 19-032
Page 22
I am off tomorrow but if you have any other questions let me know. But that is all the
communication there has been that I can give you before the board meeting.
Thanks,
Tom
Mike Thomas response to Rambo and Lavage: Correct
57. On April 25, 2019, at approximately 2:27 p.m., three days after the Board of Supervisors
voted to invest with Service 1st, Rambo emailed the Board of Supervisors to inform it that
Service Pt could not honor the 3.05% CD it had previously quoted and be Act 72 compliant.
a. Service Ist rescinded its 3.05% offer because of a lack of profitability for Service
1st
b. At 2.34 p.m. on April 25, 2019, Supervisor Whelan emailed Rambo inquiring
whether Service 1st had a "proposal in mind for what you [Service 0] can offer on
a 30 month CD."
The other Members of the Board of Supervisors, including Scott, were
copied on this email.
58. On April 25, 2019, at 3:22 p.m., Rambo emailed a response to Supervisor Whelan,
indicating that "The best we [Service 1s`] can do that financially makes sense is 2.60%, and
that would be Act 72 Compliant with the bonds held as collateral as recommended by our
legal team and the PA Treasury."
a. The Service I" offer of 2.60% was identical to the offer made in its February 13,
2019 proposal, which was rejected by the Board of Supervisors.
l . The offer was .25% less than JSSB's quote.
b. At that point, Rambo believed Service 1" was out of contention to receive the
investment due to its lower rate of return.
59. On April 25, 2019, at 7:48 p.m., Scott emailed the Board of Supervisors and Treasurer
Houck outlining his recommendation to persuade the Board of Supervisor to deposit the
water system sale proceeds with Service I".
a. "Here are my recommendations:
Regarding the $1.5 mil voted to go to JSSB. That is a done deal and was a separate
motion and vote from the $8mil.
The deposit of $1.5 mil to JSSB should be acted on - with the caveat that It be
collateralized with FNMA and GNMA Bonds.
Regarding the $8mil in CD, the previous vote is now void as the condition of the
vote applying to the security has changed. Therefore, a new vote will be necessary.
Scott,19-032
Page 23
In the mean time, the $$mil is still earning 2.5% right now, so we are gaining some
interest as we go back to gather fresh information.
Per Torn Rambo's email below, PA Treasury under the Act 72 will require any
amount over $Imil be collateralized with FNMA and GNMA Bonds. Until this
year, insurance was an option, but starting this year, insurance only applies up to
$1 mil.
I recommend that John and Molly go back to JSSB and have them verify in writing
that they understand, per Act 72, that they would have to collateralized [sic] our
investment of $8mil with FNMA and GNMA Bonds, and verify that their initial
percentage rate offering is still available under such conditions. If I remember
correctly, it was higher than the 2.60 Service 1st is now offering. At 2.60 plus the
cost of the required bonds, Service 1 st will only be breaking even on the proposal.
JSSB however, may have an advantage where they can pay for the bonds and offer
a higher rate, effectively taking a loss. Banks are subject to the Community
Reinvestment Act, they must invest a portion of their total assets into community
non- profits - applying as a loss, this is an advantage, in this circumstance, that a
Credit Union does not have.
I have no concern with Molly and John communicating the circumstances under
which this revisit occurs with JSSB.
Once Molly and John have the requested follow ups from JSSB, they should be
disseminated to the rest of the Board for consideration and a new vote should be
scheduled for the next available public meeting.
TS"
60. On May 7, 2019, at 9:39 a.m., Rambo sent the following email to Lavage, Thomas, and
Wood regarding the Service 1st proposal to the Township:
From: Tom Rambo
Sent: Tuesday, May 7, 2019 9:39 AM
To: Bill Lavage, Mike Thomas, Karen Wood
Hello All,
Time for an update on our good old Mahoning Township's money.
Got a call from Bill Lynn, and he said right now the push is to keep the money in the
township and with a group that "gives back to the community" I explained to him the
difference in rate over the 30 months is only $52,192 and he said that they feel its enough
to justify just keeping it with us. Right now they have 3 votes to keep it here, so that is
enough to get it to pass. They will be voting Monday night at their meeting.
Scott, 19-032
Page 24
Fingers Crossed.
Let me know if you have any questions.
Tom
61. Scott participated in further discussions advocating for the continued investment of $8
million with Service I" at the lower interest rate during the Board of Supervisors' May 13,
2019, meeting.
a. During the Board of Supervisors' May 13, 2019, meeting, Scott made the motion
and participated in a 3-2 vote to invest the $8 million with Service I" at the revised
proposed rate of 2.60% for 30 months.
b. JSSB's proposed rate for the same period was 2.85% for 30 months.
62. The May 13, 2019, meeting minutes document Scott's advocacy for Service I" and efforts
to influence the Board of Supervisors' discussion:
"A discussion was held concerning where to invest the 8 Million dollars from the Water &
Sewer sale. Supervisor Whelan noted that all investment firms compliant with Act 72.
Supervisor Whelan motioned to award JSSB the bid at 2.85% for 30 months. Supervisor
Robertson seconded. The motion became null and void because the other 3 supervisors
were Nay's. Supervisor Scott noted that while other institutions are meeting the
requirements, they are not as responsive as Service 1 st. Service 1 st uses federal/mortgage
bonds, which are more secure and are community involved. The branch we do service with
is right next door and the corporate headquarters is in Cooper Township. Money is invested
right back in to this community. A lot more to be considered than the interest rate.
Supervisor Scott motioned to invest the 8 million with Service Ist at 2.6% for 30 months.
Supervisor Shultz seconded. Supervisor Whelan and Supervisor Robertson were Nay's.
Supervisor Whelan said we already have 5 CD's with JSSB and that we also have 1.5
million that we just invested with JSSB and they are very accommodating. He also stated
that when we knew we were coming into this money, they appointed a committee. They
even looked at independent investment firms. They gave Service 1st a second crack but
they couldn't match JSSB. He cannot understand going with a lower interest rate, which
will cost taxpayers $50,000. It's a lot of money to walk away from and he can't understand
why we wouldn't want to go with the institution that will give a higher return. Supervisor
Scott explained that when Ken Woodruff was a supervisor, that JSSB never responded to
their needs, once they had our money and said that perhaps if it were a different vendor,
we would have changed our minds. Supervisor Robertson said that JSSB meets all of the
criteria for municipalities to put the investment. Resident Bryan Campbell asked about
going back to Service 1st to see if they will match JSSB. Supervisor Scott explained that
they cannot do any better because they are a credit union, not a bank. Bryan thinks we
should go with the higher rate. This is a split decision coming out of the committee."
Present: Scott, Lynn, Whelan, Robertson, Shultz.
Scott, 19-032
Page 25
a. The vote to invest with Service I" was 3-2 with Scott voting in the affirmative.
63. The Board of Supervisors' decision to invest the $8 million with Service I" resulted in a
loss to the Township of at least $52,192.00 in interest that it would have otherwise received
over the 30 month investment period had the $8 million been deposited with JSSB.
a. The 2.60% offer from Service I" was 0.25% less than the 2.85% initially offered
by JSSB.
64. On May 23, 2019, the $8 million held by Service I" was internally transferred into Share
Number 60 titled "30 Month Certificate."
a. Share Number 60, "30 Month Certificate" was scheduled to mature on November
23, 2021.
65. During the period from 2016 through 2019, when Scott was a Member of the Board of
Supervisors, his spouse, Karen Scott, was promoted and received pay increases and
bonuses from Service I sr
a. There is a lack of evidence to show that Karen Scott received a private pecuniary
gain from Scott's actions.
b. There is no evidence to show that Karen Scott's promotion was a result of Scott's
actions.
66. Scott, in his official capacity as a Member of the Board of Supervisors, is annually required
to file an SFI by May 1, reporting financial interests for the prior calendar year.
67. Township public officials, including Scott, were provided with a blank SFI form to
complete each January.
a. The blank SFI packet provided to Township officials included a blank SFI form,
instructions page, and toll -free number for the Ethics Commission to address any
questions.
b. Completed SFI forms are maintained by the Township Secretary as a public record.
68. SFI forms maintained by the Township include the following filings for Scott for calendar
years 2016 through 2019:
a. Calendar Year: 2019
Dated: January 11, 2020 on form SEC-1 REV. 01/19
Position: Supervisor
Occupation: Claims Manager
Scott, 19-032
Page 26
Creditors: Service I" Credit Union, 2.09%; Independence Honda; Great Lakes,
4.25%; Discover Student Loans, 5.74%
Direct/Indirect Income: Liberty Mutual Insurance; Mahoning Township
Office, Directorship or Employment in any Business: Liberty Mutual, Employee.
All Other Financial Interests: None
b. Calendar Year: 2018
Dated: January 3, 2019 on form SEC-1 REV. 01/18
Position: Supervisor
Occupation: Claims Manager
Creditors: Service I" Credit Union, 2.09%
Direct/Indirect Income: Liberty Mutual Insurance
All Other Financial Interests: None
C. Calendar Year: 2017
Dated: January 2, 2018 on form SEC-1 REV. 01/06
Position: Supervisor
Occupation: Claims Manager
Creditors: Service I" Credit Union, 2.09%; USAA Federal Savings Bank, 8.09%
Direct/Indirect Income: Liberty Mutual Insurance
All Other Financial Interests: None
d. Calendar Year: 2017
Dated: April 13, 2017 on form SEC-1 REV. 0 1/ 15
Position: Supervisor
Occupation: Claims Manager
Creditors: Service I" Credit Union, 2.09%, %; USAA Federal Savings Bank,
8.09%
Direct/Indirect Income: Liberty Mutual Insurance
All Other Financial Interests: None
e. Calendar Year: 2016
Dated: August 9, 2016 on form SEC-1 REV. 0 1/ 16
Position: Supervisor
Occupation: Claims Manager
Creditors: USAA Federal Savings Bank, 7.25%
Direct/Indirect Income: Liberty Mutual Insurance
All Other Financial Interests: None
69. Scott failed to report his employment with Liberty Mutual Insurance Company in Box #
13 (office, directorship or employment of any nature whatsoever in any business entity) on
SFIs filed for the 2016 through 2018 calendar years.
70. Scott failed to report direct/indirect income in excess of $1,300.00 that he received from
the Township upon SFIs filed for the 2017 and 2018 calendar years.
Scott, 19-032
Page 27
a. Township records reflect that Scott received gross wages of $1,400.00 from the
Township during calendar year 2017 and gross wages of $1,850.00 from the
Township during calendar year 2018.
71. Scott filed amended SFI forms for calendar years 2016 through 2018 on November 10,
2020.
a. These amended filings were to correct deficiencies on his original filings as
reported in the previous findings.
b. Scott added the Township as a direct/indirect source of income in Box #10 on each
of his amended filings.
C. Scott reported his employment with Liberty Mutual Insurance Company in Box
#13, Office, Directorship or Employment in any Business, on each of his amended
filings.
111. DISCUSSION:
As a Supervisor for Mahoning Township ("Township"), Montour County, Pennsylvania,
since August 4, 2016, Respondent James "TS" Scott ("Scott") has been a public official subject to
the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa. C.S. § 1101
et see .
The allegations are that Scott violated Sections 1103(a), 1105(b)(5), and 1105(b)(8) of the
Ethics Act when he used the authority of his public position for the private pecuniary benefit of
his spouse and/or a business with which his spouse is associated, namely Service 1" Federal Credit
Union, when he participated in discussions and actions of the Township Board of Supervisors
("Board of Supervisors"), including but not limited to attempting to influence the Board of
Supervisors and casting the deciding vote to invest Township funds with Service I" Federal Credit
Union; and when he filed deficient Statements of Financial Interests ("SFIs") by failing to include
the Township as a reportable source of income upon filings made for calendar years 2017 and 2018
and failing to disclose his office, directorship or employment with Liberty Mutual Insurance
Company upon filings made for calendar years 2016, 2017, and 2018.
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:
§ 1103. Restricted activities
(a) Conflict of interest. —No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
65 Pa.C.S. § 1103(a).
Scott, 19-032
Page 28
The term "conflict of interest" is defined in the Ethics Act as follows:
§ 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 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.
The term 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.
Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or
"conflict of interest," 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, a public
official/public employee is prohibited 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. A spouse is a member
of "immediate family" as the Ethics Act defines that term. 65 Pa.C.S. § 1102.
Section 1105(b) of the Ethics Act and its subsections detail the financial disclosure that a
person required to file the SFI form must provide.
Subject to certain statutory exceptions, Section 1105(b)(5) of the Ethics Act requires the
filer to disclose on the SFI the name and address of any direct or indirect source of income totaling
in the aggregate $1,300 or more.
Section 1105(b)(8) of the Ethics Act requires the filer to disclose on the SFI any office,
directorship or employment in any business entity.
As noted above, the parties have submitted a Consent Agreement and Stipulation of
Findings. The parties' Stipulated Findings are set forth above as the Findings of this Commission.
We shall now summarize the relevant facts as contained therein.
Scott has served as a Township Supervisor since August 4, 2016. Scott served as Vice -
Chairman of the Board of Supervisors in 2018 and 2019. The Board of Supervisors consisted of
three Members until January 2, 2018, when the Board of Supervisors expanded to five Members.
Scott's spouse, Karen Scott, has been employed with Service I" Federal Credit Union
("Service I"') since April 4, 2011. Karen Scott held the position of Financial Specialist I when
Scott, 19-032
Page 29
Scott began serving as a Township Supervisor in August 2016. Karen Scott was promoted to the
position of Financial Specialist II effective December 23, 2018.
Prior to Scott becoming a Member of the Board of Supervisors in August 2016, the
Township utilized First National Bank and the Pennsylvania Treasury for financial and investment
services. In or about October 2016, Scott initiated multiple discussions with Township Treasurer
Ken Houck ("Treasurer Houck") by which Scott expressed his displeasure with the quality of
service that the Township was receiving from First National Bank. Scott and other Township
Supervisors were not satisfied with the length of time that it took for First National Bank to respond
to Township inquiries. Scott directed Treasurer Houck to complete the paperwork needed to open
an account for the Township at Service I".
On November 18, 2016, Treasurer Houck opened a Township account with Service 1$1. At
a meeting of the Board of Supervisors on November 21, 2016, Scott participated in a discussion
of the Board of Supervisors about opening an account at Service I". Scott did not disclose to the
Board of Supervisors that he had already directed Treasurer Houck to open an account with Service
I"for the Township. During the meeting, Scott informed the Board of Supervisors about his wife's
employment with Service 1". Meeting minutes do not reflect that Scott participated in a 2-0 vote
of the Board of Supervisors that approved opening a Township account with Service 1"t
The Township opened one primary account with Service I", with multiple share accounts
within the primary account. Once the Township account was opened at Service I", Township
funds totaling $3,637,642,16, which were on deposit with First National Bank, were transferred to
Service Ist between November 2016 and February 2017. The Township funds transferred to
Service 1" included numerous escrow accounts, the General Fund, and the Liquid Fuels Fund. A
transfer of $6,300.00 was initiated at Scott's direction prior to the November 21, 2016, vote of the
Board of Supervisors that approved opening a Township account with Service ISM, and the rest of
the Township funds were transferred following the November 21, 2016 vote. At the Board of
Supervisors meeting on June 19, 2017, Scott made a motion and voted to approve a resolution to
move the funds in the Township's Recycling Account with First National Bank to Service I".
In September 2016, Scott made a motion and participated in a unanimous vote of the Board
of Supervisors to dissolve the Mahoning Township Water and Sewer Authority ("Water and Sewer
Authority") effective January 16, 2017. Pursuant to the Municipality Authorities Act, the
Township, as the incorporating governmental body of the Water and Sewer Authority, assumed
ownership of the Water and Sewer Authority's assets, including the water and sewer system. The
Township operated the water and sewer system while the Township sought a buyer for the Water
and Sewer Authority's assets. In February 2017, Scott participated in actions of the Board of
Supervisors to move the Water and Sewer Authority's account at I" Keystone Bank to Service ISf.
Following the dissolution of the Water and Sewer Authority, Scott participated in efforts
by the Board of Supervisors to find a buyer for the Water and Sewer Authority's assets. In October
2017, the Board of Supervisors voted to accept an offer by SUEZ North America to purchase the
Water and Sewer Authority's assets for $9.5 million. The sale of the Water and Sewer Authority's
assets was not completed until March 2019.
Scott, 19-032
Page 30
In or around November 2017, a committee (the "Investment Committee") consisting of
Treasurer Houck and Township Supervisors John Whelan ("Township Supervisor Whelan") and
Molly Shultz ("Township Supervisor Shultz") was formed to research and advise the Board of
Supervisors as to investment options for the proceeds of the sale of the Water and Sewer
Authority's assets. The members of the Investment Committee made multiple inquiries to banks
and investment services to determine the safest way to invest the $9.5 million in sale proceeds that
would yield the Township the highest return while being compliant with regulatory guidelines for
the investment of municipal funds.
As a result of Investment Committee inquiries, the Board of Supervisors received an
investment proposal dated November 20, 2018, from Jersey Shore State Bank ("JSSB"), which
offered an interest rate of 2.85% for a 30-month certificate of deposit ("CD") and 2.75% for a
savings account. The Board of Supervisors also received an investment proposal dated February
13, 2019, from Service 1 ", which offered an interest rate of 2.60% for a 36-month CD. The Service
I" investment proposal was presented to the Board of Supervisors by Jordan Frederick
("Frederick"), Assistant Marketing Manager for Service I", at a meeting of the Board of
Supervisors. Prior to Frederick's presentation to the Board of Supervisors, Scott met with Gary
Surak ("Surak") of Service 1" to instruct him on how Service I` should structure its investment
proposal. Surak followed the guidance provided by Scott for the investment proposal.
Thomas Rambo ("Rambo"), who is employed as a Marketing Manager for Service I", was
responsible for preparing the Service lst investment proposal that was submitted to the Township.
The interest rate for the investment proposal was based on a standard interest rate schedule
approved by the Service I" Rate Review Committee, which reviews investment and loan interest
rates for Members of Service 1st. Rambo did not have the authority to offer an investment interest
rate higher than that established by the Service I" Rate Review Committee. William Lavage
("Lavage"), the President and Chief Executive Officer of Service 1st, had the authority to offer an
investment rate that was .50% higher than that set by the Service 1st Rate Review Committee.
On March 29, 2019, the Township sold the Water and Sewer Authority's assets to SUEZ
North America for $9.5 million. Because the sale of the Water and Sewer Authority's assets
occurred prior to the Board of Supervisors making a decision as to how the Township would invest
the sale proceeds, Treasurer Houck opened a share account with Service I" to temporarily hold
the sale proceeds pending a decision by the Board of Supervisors as to a long-term investment.
Treasurer Houck was able to open the share account at Service I" as a result of actions taken by
Scott to move all Township accounts to Service 1'. On March 29, 2019, an initial deposit of sale
proceeds in the amount of $9,486,910.97 was made to the share account. Additional deposits of
sale proceeds were made to the share account in April 2019.
On April 15, 2019, Township Supervisor Whelan informed the Board of Supervisors via
email that the Investment Committee had determined that JSSB was offering the Township the
best investment interest rate. The Investment Committee recommended that the Township transfer
$8 million into a CD account at 2.85% interest and $1.5 million into a savings account at 2.75%
interest.
Scott, 19-032
Page 31
After Scott reviewed Township Supervisor Whelan's email, he contacted Rambo to advise
him of the Investment Committee's recommendation and to discuss options for Service lst. Scott
then sent an email to Township Supervisors Whelan and Shultz that advised them to contact
Rambo to allow Service 1st an opportunity to submit another proposal. When Township
Supervisors Whelan and Shultz informed Scott via email of their opposition to affording Service
I" an opportunity to submit another proposal, Scott sent them an email in which he advocated for
seeking a matching offer from Service 1st.
On April 16, 2019, Rambo sent a revised proposal to the Board of Supervisors and
Treasurer Houck that offered an increased interest rate of 3.05% for a 30-month CD. Rambo had
asked Service I" Chief Financial Officer Mike Thomas ("Thomas") if they could offer the
Township a better rate than those offered by JSSB, and he had advised Thomas of his
understanding from Treasurer Houck that the products used to invest the Township funds did not
have to comply with the requirements of Act 72 regarding forms of collateral for securing public
deposits. Thomas had then conferred with Lavage, who authorized Service 15t to offer the
Township a 3.05% interest rate based upon the belief that the investment products for the Township
funds did not have to be compliant with Act 72's requirements.
On April 22, 2019, the Board of Supervisors took action to invest the proceeds from the
sale of the Water and Sewer Authority's assets. Scott participated in a unanimous voice vote of
the Board of Supervisors that approved investing $8 million with Service I" at an interest rate of
3.05% for 30 months. Although Scott lobbied and voted against a motion to deposit the remaining
$1.5 million in sale proceeds with JSSB, the motion passed despite his opposition to it.
On or before April 25, 2019, Thomas contacted the Pennsylvania Treasury to determine
before proceeding further whether the investment products for the Township funds would have to
comply with the requirements of Act 72. After Thomas learned from a Pennsylvania Treasury
representative that the investment products would have to be compliant with Act 72's requirements
and that a CD would not be compliant, he shared this information with Lavage and Rambo. Lavage
then decided that Service I" could not make a profit if it honored the 3.05% rate offered to the
Township while providing the Township with investment products that would be compliant with
Act 72's requirements.
On April 25, 2019, Rambo informed the Board of Supervisors via email that Service 15t
could not honor the 3.05% interest rate it had previously quoted and provide investment products
that would meet the requirements of Act 72. Rambo indicated that the best that Service I" could
offer would be an interest rate of 2.60% on investment products which would comply with Act
72's requirements.
During a meeting of the Board of Supervisors on May 13, 2019, Scott advocated for
investing $8 million in proceeds from the sale of the Water and Sewer Authority's assets with
Service Ist at the interest rate of 2.60% for 30 months instead of with JSSB at the interest rate of
2.85% for 30 months. Scott contended that there was more to consider than the interest rates
offered by the two institutions. A motion to invest $8 million with JSSB failed by a vote of 3-2,
with Scott voting against the motion. Scott then made a motion to invest $8 million with Service
15t at the interest rate of 2.60% for 30 months. The motion passed by a vote of 3-2, with Scott
voting in favor of the motion. As a result of the Board of Supervisors' decision to invest $8 million
Scott, 19-032
Page 32
in Township funds with Service I" instead of with JSSB, the Township received approximately
$52,190.00 less in interest over the 30-month investment period.
From 2016 through 2019, Scott's spouse, Karen Scott, was promoted by Service I" and
received pay increases and bonuses from Service I". The parties have stipulated that there is no
evidence to show that Karen Scott's promotion was a result of Scott's actions or that Karen Scott
received a private pecuniary gain from Scott's actions.
As a Township Supervisor, Scott is annually required to file an SFI by May I containing
information for the prior calendar year. Scott failed to disclose his employment with Liberty
Mutual Insurance Company on his SFIs for calendar years 2016, 2017, and 2018. Although Scott
received gross wages from the Township that totaled $1,400.00 in 2017 and $1,850.00 in 2018, he
failed to disclose the Township as a direct or indirect source of income on his SFIs for calendar
years 2017 and 2018. On November 10, 2020, Scott filed amended SFIs for calendar year 2016
through 2018 to correct the deficiencies on his original filings for those calendar years.
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 sets forth a proposed resolution of the allegations as
follows:
3. The Investigative Division will recommend the following in relation
to the above allegations:
a. That no violation of Section 1103(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1103(a), occurred in relation to Scott's participation
in discussions and actions of the Board of
Supervisors to invest Township funds with the
Service 1" Federal Credit Union because there is a
lack of evidence that his wife received a private
pecuniary benefit.
b. That a violation of Section 1103(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1103(a), occurred in relation to Scott's participation
in discussions and actions of the Board of
Supervisors to invest Township funds with the
Service 1 st Federal Credit Union resulting in a private
pecuniary benefit to a business his wife was
employed with — Service 1st Federal Credit Union.
C. That violations of Section 1105(b)(5) and (8) of the
Public Official and Employee Ethics Act, 65 Pa.C.S.
§ 1105(b)(5) and (8), occurred when Scott failed to
disclose the Township as a reportable source of
Scott, 19-032
page 33
income upon [Statements of Financial Interests he
filed for calendar years 2017 and 2018] and when he
failed to disclose his office, directorship, or
employment with Liberty Mutual Insurance
Company on Statements of Financial Interests he
filed for calendar years 2016, 2017, and 2018.
4. Scott agrees to make payment in the amount of $750.00 in
settlement of this matter payable to the Commonwealth of
Pennsylvania and forwarded to the Pennsylvania State Ethics
Commission within thirty (30) days of the issuance of the final
adjudication in this matter. This penalty is solely for the Statement
of Financial Interests violations found in paragraph 3(c). There is no
penalty for the violation found in paragraph 3(b) due to Scott not
obtaining the benefit himself.
a. Scott agrees to resign as Supervisor for Mahoning
Township within thirty (30) days of the issuance of
the final adjudication in this matter and agrees to
neither seek nor hold public office as to be defined as
a "public official" in the Ethics Act for a period of
five (5) years following said resignation.
5. On November 10, 2020, Scott filed complete and accurate amended
Statements of Financial Interests with Mahoning Township for
calendar years 2016, 2017, and 2018.
6. Scott agrees to not accept any reimbursement, compensation or
other payment from the Mahoning Township, Montour County,
representing a full or partial reimbursement of the amount paid in
settlement of this matter.
7. The Investigative Division will recommend that the State Ethics
Commission take no further action in this matter; and make no
specific recommendations to any law enforcement or other authority
to take action in this matter. Such, however, does not prohibit the
Commission from initiating appropriate enforcement actions in the
event of Respondent's failure to comply with this agreement or the
Commission's order or cooperating with any other authority who
may so choose to review this matter further.
a. The Respondent has been advised that as a matter of
course, all orders from the Commission are provided
to the Attorney General, albeit without any specific
recommendations pursuant to paragraph 7, above.
Scott, 19-032
Page 34
b. The Respondent has been advised that all orders
become public records and may be acted upon by law
enforcement as they deem appropriate.
C. The non -referral language contained in this
paragraph is considered an essential part of the
negotiated consent agreement.
Consent Agreement, at 1-3.
In considering the Consent Agreement in light of the facts of this case, we determine that
the parties' two recommendations with regard to the Section 1103(a) allegation may be
appropriately combined to reflect that the parties' recommendation for a finding of a violation of
Section 1103(a) of the Ethics Act is based upon a private pecuniary benefit to Service I" and not
upon a private pecuniary benefit to Scott's wife.
Service I` is a business with which a member of Scott's immediate family ---- namely his
wife, Karen Scott — is associated in her capacity as an employee. Scott used the authority of his
office as a Township Supervisor in matters involving Service 1` (1) when he directed Treasurer
Houck to complete the paperwork to open an account for the Township at Service 1"; (2) when he
participated in actions of the Board of Supervisors to move the account of the Water and Sewer
Authority, which had been dissolved, to Service 1"; (3) when he met with a Service I" employee
to instruct him on how Service I't should structure a proposal for the investment of proceeds from
the sale of the Water and Sewer Authority's assets; (4) when he advocated to other Township
Supervisors for Service Vt to have an opportunity to submit an investment proposal that would
match an investment proposal from JSSB; (5) when, in response to a revised proposal from Service
I", he voted to approve investing $8 million in proceeds from the sale of the Water and Sewer
Authority's assets with Service J." at an interest rate of 3.05% for 30 months; (6) when he
advocated for continuing to invest the $8 million in sale proceeds with Service I" at a reduced
interest rate of 2.60% after Service I" determined that it could not honor the offered rate of 3.05%;
and (7) when he made a motion and voted to invest the $8 million with Service I" at the rate of
2.60%. Although the parties have stipulated that there is no evidence to show that Karen Scott
received a promotion from Service 1st as a result of Scott's actions or that Karen Scott received a
private pecuniary benefit as a result of Scott's actions, it is clear that Scott's actions were
undertaken to effectuate a private pecuniary benefit to Service I". A private pecuniary benefit to
a business with which an immediate family member is associated, such as Service I" in this matter,
may satisfy one of the elements for establishing a violation of Section 1103(a) of the Ethics Act.
Based upon the above, we hold that a violation of Section 1103(a) of the Ethics Act, 65
Pa.C.S. § 1103(a), occurred in relation to Scott's participation in discussions and actions of the
Board of Supervisors to invest Township funds with Service 1st — a business that employed his
wife — because although there is a lack of evidence that his wife received a private pecuniary
benefit, Service I" received a private pecuniary benefit.
We agree with the parties, and we hold, that violations of Section 1 I05(b)(5) and (8) of the
Ethics Act, 65 Pa.C.S. § 1105(b)(5) and (8), occurred when Scott failed to disclose the Township
Scott, 19-032
Page 35
as a reportable source of income on SFIs he filed for calendar years 2017 and 2018 and when he
failed to disclose his office, directorship, or employment with Liberty Mutual Insurance Company
on SFIs he filed for calendar years 2016, 2017, and 2018.
As part of the Consent Agreement, Scott has agreed to make payment in the amount of
$750.00 payable to the Commonwealth of Pennsylvania, representing a civil penalty for his SFI
violations, with such payment to be forwarded to this Commission within thirty (30) days of the
issuance of the final adjudication in this matter. Scott has agreed to not accept any reimbursement,
compensation or other payment from the Township representing a full or partial reimbursement of
the amount paid in settlement of this matter.
Scott has further agreed that he will resign from his position as a Township Supervisor
within thirty (30) days of the issuance of the final adjudication in this matter and that he will neither
seek nor hold public office such as to be defined as a "public official" in the Ethics Act for a period
of five years following said resignation.
We determine that the Consent Agreement submitted by the parties sets forth a proper
disposition for this case, based upon our review as reflected in the above analysis and the totality
of the facts and circumstances.
Accordingly, per the Consent Agreement of the parties, Scott is directed to make payment
in the amount of $750.00 payable to the Commonwealth of Pennsylvania and forwarded to this
Commission by no later than the thirtieth (301h) day after the mailing date of this adjudication and
Order.
Scott is directed to not accept any reimbursement, compensation or other payment from
the Township representing a full or partial reimbursement of the amount paid in settlement of this
matter.
Scott is ordered to fulfill his agreement that he will resign from his position as a Township
Supervisor by no later than the thirtieth (30'h) day after the mailing date of this adjudication and
Order and that he will neither seek nor hold public office such as to be defined as a "public official"
in the Ethics Act for a period of five years following said resignation.
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.
IV. CONCLUSIONS OF LAW:
As a Supervisor for Mahoning Township ("Township"), Montour County, Pennsylvania,
since August 4, 2016, Respondent James "TS" Scott ("Scott") has been a public official
subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65
Pa. C.S. § 1101 et seq.
2. Scott violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), in relation to his
participation in discussions and actions of the Township Board of Supervisors to invest
Township funds with Service I" Federal Credit Union — a business that employed his wife
Scott, 19-032
Page 36
--- because although there is a lack of evidence that his wife received a private pecuniary
benefit, Service Ise Federal Credit Union received a private pecuniary benefit.
Violations of Section 1105(b)(5) and (8) of the Ethics Act, 65 Pa.C.S. § 1105(b)(5) and
(8), occurred when Scott failed to disclose the Township as a reportable source of income
on Statements of Financial Interests he filed for calendar years 2017 and 2018 and when
he failed to disclose his office, directorship, or employment with Liberty Mutual Insurance
Company on Statements of Financial Interests he filed for calendar years 2016, 2017, and
2018.
In Re: Jaynes "TS" Scott, File Docket: 19-032
Respondent Date Decided: 6/28/22
Date Mailed: 6/29/22
ORDER NO. 1803
1. James "TS" Scott ("Scott"), as a Supervisor for Mahoning Township ("Township"),
Montour County, Pennsylvania, violated Section 1103(a) of the Public Official and
Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1103(a), in relation to his participation
in discussions and actions of the Township Board of Supervisors to invest Township funds
with Service 1st Federal Credit Union — a business that employed his wife — because
although there is a lack of evidence that his wife received a private pecuniary benefit,
Service I` Federal Credit Union received a private pecuniary benefit.
2. Violations of Section 1105(b)(5) and (8) of the Ethics Act, 65 Pa.C.S. § 1105(b)(5) and
(8), occurred when Scott failed to disclose the Township as a reportable source of income
on Statements of Financial Interests he filed for calendar years 2017 and 2018 and when
he failed to disclose his office, directorship, or employment with Liberty Mutual Insurance
Company on Statements of Financial Interests he filed for calendar years 2016, 2017, and
2018.
Per the Consent Agreement of the parties, Scott is directed to make payment in the amount
of $750.00 payable to the Commonwealth of Pennsylvania and forwarded to this
Commission by no later than the thirtieth (30th) day after the mailing date of this Order.
4. Scott is directed to not accept any reimbursement, compensation or other payment from
the Township representing a full or partial reimbursement of the amount paid in settlement
of this matter.
Scott is ordered to fulfill his agreement that he will resign from his position as a Township
Supervisor by no later than the thirtieth (30th) day after the mailing date of this Order and
that he will neither seek nor hold public office such as to be defined as a "public official"
in the Ethics Act for a period of five years following said resignation.
6. Compliance with paragraphs 3, 4, and 5 of this Order will result in the closing of this case
with no further action by this Commission.
a. Non-compliance will result in the institution of an order enforcement action.
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