HomeMy WebLinkAbout1251 HeckIn Re: Thomas Heck
File Docket:
X -ref:
Date Decided:
Date Mailed:
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Daneen E. Reese
Frank M. Brown
Susan Mosites Bicket
Donald M. McCurdy
Michael Healey
00- 059 -C2
Order No. 1251
9/4/02
9/25/02
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
investigation, the Investigative Division served upon Respondent written notice of the specific
allegation(s). 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 held. The record is complete.
Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11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.
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I. ALLEGATION:
That Thomas Heck, a (public official /public employee) in his capacity as an Analyst for
the Public Utility Commission, Public Utilities Bureau of Conservation, Economics and Energy
Planning, violated the following provisions of the State Ethics Act (Act 93 of 1998) when he
failed to disclose on Statements of Financial Interests for calendar years 1996, 1997, 1998
and 1999 names and addresses of the source of any direct or indirect income, including but
not limited to income received from rental properties; when he failed to disclose financial
interest in any legal entity engaged in business for profit and office, directorship or
employment of any nature in a business entity; when he failed to disclose creditors for
properties he has purchased which are not used as his primary residence; and when he used
the facilities of PUC, including but not limited to telephones, to facilitate his private business
interests.
§ 311103. Restricted activities.
(a) Conflict of interest. - -No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
65 P.S. § 403(a)/65 Pa.C.S. §1103(a).
§ 511105. Statement of financial interests.
(a) Form. The statement of financial interests filed
pursuant to this chapter shall be on a form prescribed by the
commission. All information requested on the statement shall be
provided to the best of the knowledge, information and belief of
the person required to file and shall be signed under oath or
equivalent affirmation.
(b) Required information. The statement shall include
the following information for the prior calendar year with regard to
the person required to file the statement.
(4) The name and address of each creditor
to whom is owed in excess of $5,000/6,500 and
the interest rate thereon. However, loans or credit
extended between members of the immediate
family and mortgages securing real property which
is the principal or secondary residence of the
person filing shall not be included.
(5) The name and address of any direct or
indirect source of income totaling in the aggregate
$1,000/1,300 or more. However, this provision
shall not be construed to require the divulgence of
confidential information protected by statute or
existing professional codes of ethics or common
law privileges.
Heck 00- 059 -C2
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(8) Any office, directorship or employment
of any nature whatsoever in any business entity.
(9) Any financial interest in any legal entity
engaged in business for profit.
65 P.S. § 405(a), (b)(4), (5), (8), (9)/65 Pa.C.S. § 1105(a), (b)(4), (5), (8), (9).
II. FINDINGS:
A. Pleadings
1. On October 27, 2000, a letter was forwarded to Thomas Heck, by the Executive
Director of the State Ethics Commission informing him that a complaint against him
was received by the Investigative Division and that a full investigation was being
commenced.
a. Said letter was forwarded by certified mail, no. 7099 - 3400 - 0012- 4638 -3711.
b. The domestic return receipt bore the signature of Thomas Heck, with a delivery
date of October 31, 2000.
2. On October 3, 2001, a letter was forwarded to Thomas Heck, through his attorney,
informing him that the complaint against him was being amended to include additional
allegations.
a. Said letter was forwarded by certified mail no. 7001 0360 0001 4061 3617.
b. The domestic return receipt bore the signature of George Gallion, with a delivery
date of October 4, 2001.
3. On October 17, 2001, a letter was forwarded to Thomas Heck, through his attorney,
informing him that the complaint against him was being amended to include additional
allegations.
a. Said letter was forwarded by certified mail no. 7001 0360 0001 4061 3655.
b. This letter did not change the nature or scope of the investigation, but rather
merely advised Heck of the specific section of the Ethics Law that was
applicable.
4. The Investigative Complaint was mailed to the Respondent on October 18, 2001.
5. Thomas Heck has been employed by the Commonwealth of Pennsylvania, Public
Utility Commission (PUC), Bureau of Conservation, Economics and Energy Planning
since September 8, 1984.
a. Heck is employed as a Utility Energy & Conservation Analyst 3.
6. Heck's general job duties as an analyst for the PUC include the following:
"Position performs advanced professional analysis and development work in the
Division of Conservation and Load Analysis within the Bureau of Conservation,
Economics and Energy Planning in the Public Utility Commission.
Performs assignments of broad scope in restructuring of electric and natural
Heck 00- 059 -C2
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gas industries. Work involves preparing reports, studies or forecasts on major and
significant utility energy issues using statistical quantification and economic analysis
techniques, and writing Commission orders.
Performs analysis and prepares comments regarding federal energy initiatives
and cases before the FERC.
Work also involves developing methodologies for research and analysis,
designing and conducting studies and recommending strategies or program proposals.
Work is assigned in the form of broad scope projects and the employee exercises a
high degree of independence in planning, scheduling and leading projects to
completion. Work is reviewed for quality and attainment of objectives through status
reports and upon completion.
Leads projects in developing energy and water policy regulation by performing
research assignments in gathering and evaluating data for use in developing rates
and /or policy to meet the Commonwealth's short and long term needs.
Leads project studies, forecasts and research reports on energy and water
issues and resources, appropriate technologies, alternate fuels, environmental impacts
and other related issues.
Designs research methodologies, assigns segments of projects to lower level
analysis, provides direction and assistance within the Commission and the
Commonwealth.
Provides specialized technical assistance within the Commission and the
Commonwealth.
Employs advanced statistical and financial analytical tools and computer
software packages to assist in the completion of projects.
Reviews and evaluates proposed Federal legislation for impact on utility energy
programs.
Critiques complex technical industry reports, academic journals and other
research literature.
Represents the agency at board meetings, task forces, committees and
legislative meetings and hearings, and reports and advises management on energy
issues.
Prepares letters, reports, memoranda and responses as directed.
Assists Division Chief in the performance of various administrative duties.
Performs related work as required."
7. The PUC has developed policies and procedures for employees to follow in the
performance of their duties.
a. These policies are detailed in the Employee Handbook provided to each
employee.
b. The handbook was last revised and distributed to employees, including Thomas
Heck, in July 1999.
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8. The Employee Handbook includes guidelines for supplemental employment and the
requirements for the filing of Statements of Financial Interests.
9. Thomas Heck has received income from - - - various rental properties since at least
1994.
10. Property deeds on file with the Dauphin County Recorder of Deeds confirm the
properties owned by Thomas Heck and the property use.
Property Property Deed Last Sale
Location Use Ref. No. Date Owner
465 High Street Apartments -4 1854 408 11/04/92 Thomas E. Heck, Jr.
Bressler, PA
471 High Street 2 Story Residence 1854 405 11/04/92 Thomas E. Heck, Jr.
Bressler, PA
473 High Street 2 Story Residence 1854 402 11/04/92 Thomas E. Heck, Jr.
Bressler, PA
3242 Walnut Street 2 Story Residence 1947 -437 04/14/93 Thomas E. Heck, Jr.
Harrisburg, PA
*Not included is roperty at 6700 -6704 Jonestown Road, which is used by Heck as
both a rental and personal residence.
11. Mortgage notes filed with the Dauphin County Recorder of Deeds office include the
following mortgages held on properties owned by Heck in the county.
Property Location Mortgage Company Amount Date Entered
3242 Walnut St. Chapel Mortgage Corp. $ 60,950 04/14/93
Harrisburg, PA 315 Main St
Rancocas, NJ
Assigned to:
GMAC Mortgage Corp. 05/05/00
3451 Hammond Avenue
Waterloo, IA 50702
465 High St. Central PA Savings Assoc $ 51,800 02/25/93
Harrisburg, PA 100 W. Independence St.
Shamokin, PA 17872
471 High St. Central PA Savings Assoc $ 45,500 02/25/93
Harrisburg, PA Shamokin, PA 17872
473 High St.
Harrisburg, PA
6700 Jonestown Rd
Harrisburg, PA
Central PA Savings Assoc. $ 44,100
100 W. Independence St.
Shamokin, PA 17872
Accubank Mortgage Corp.
P.O. Box 809068
Dallas, TX 75380
Chase Manhattan Corp $ 25,000
One Chase Square
Rochester, NY
$ 152,000
Satisfied 05/19/99
02/25/93
10/25/95
12/19/95
Heck 00- 059 -C2
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5505 N. Front St.
Harrisburg, PA
Fulton Bank $28,585.80 08/05/96
One Penn Square
Lancaster, PA
Fulton Bank $72,195.60 12/31/98
One Penn Square
Lancaster, PA
PNC Mortgage Corp $ 133,700 04/08/99
75 North Fairway Drive
Vernon Hills, IL 60061
Fulton Bank
One Penn Square
Lancaster, PA
$ 173,300 01/13/99
Satisfied 01/13/99 [sic]
12. Heck had mortgages in excess of $5,000.00 during 1996 and $6,500.00 during 1997,
1998 and 1999 on all Dauphin County properties listed - - - [above].
13. Heck has received rental income during calendar year 1997 from various rental
properties as follows:
a. Rental Location Rental Income Received
3242 Walnut Street $11,700.00
Harrisburg, PA 17109
465- 471 -473 High Street $23,820.00
Steelton, PA 17113
601 Market Street $13,200.00
Lemoyne, PA 17043
6700 Jonestown Road $12,300.00
Harrisburg, PA
b. Total rents received for calendar year 1997: $61,020.00
14. Heck has received rental income during calendar year 1998 from various rental
properties as follows:
a. Property Location Rental Income Received
3242 Walnut Street $15,660.00
Harrisburg, PA
465 High Street $23,825.00
Harrisburg, PA
601 Market Street $16,025.00
Lemoyne, PA
6700 Jonestown Road $14,110.00
Harrisburg, PA
b. Total rents received for calendar year 1998: $69,620.00
15. Heck has received rental income during calendar year 1999 from various rental
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properties as follows:
a. Property Location
3242 Walnut Street
Harrisburg, PA
465, 471, 473 High Street
Bressler, PA
601 -603 Market Street
Lemoyne, PA
6700 -6704 Jonestown Road
Harrisburg, PA
5505 North Second [sic] Street
Harrisburg, PA
Rental Income Rec'd
$16,410.00
$23,880.00
$17,105.00
$15,314.00
$25,205.00
16. Heck confirmed in a sworn statement to investigators for the State Ethics Commission
that he received rental income from these properties in 1996 in excess of $1,000.00.
17. Thomas Heck was required by the Public Utility Commission to annually file
Statements of Financial Interests in his capacity as a Utility Energy & Conservation
Analyst III.
a. The filing of Statements of Financial Interests for PUC employees is highlighted
in the July 1999 employee handbook.
18. Blank Statements of Financial Interests forms are provided to employees of the PUC
for completion from the PUC's Personnel Department on an annual basis.
a. Heck has been provided with these forms.
19. Statements of Financial Interests are multi -part forms which include instructions for
reporting creditors and direct or indirect sources of income.
20. Statements of Financial Interests forms include the following reporting thresholds for
creditors and direct /indirect sources of income:
Calendar Year Creditors Direct /indirect income
1995 $5,000 $1,000
1996 $5,000 $1,000
1997 $6,500 $1,300
1998 $6,500 $1,300
1999 $6,500 $1,300
2000 $6,500 $1,300
21. Statements of Financial Interests on file with the PUC include the following filings for
Heck:
Calendar year: 2000
Filed: 04/24/01 on SEC Form 1/00
Position: Analyst
Creditors: GMAC 7.7 %; PNC 6.5 %; Fulton Bank 6.9 %, 7.9 %; PSECU 7.5%
Direct /Indirect Income: 3242 Walnut Street, Harrisburg, PA; 5505 N. Front Street,
Harrisburg, PA; 465 -473 High Street, Steelton, PA; 6700 Jonestown Road,
Heck 00- 059 -C2
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Harrisburg, PA.
All Other Financial Interests: None
Calendar year: 1999
Filed: 04/19/00 on SEC Form 1/00
Position: Analyst
Creditors: None
Direct /indirect income: Commonwealth of Pennsylvania
All other financial interests: None
Calendar year: 1998
Filed: 04/13/99 on SEC Form 1/99
Position: Analyst
Creditors: None
Direct /indirect income: PUC
All other financial interest: None
Calendar year: 1997
Filed: 04/06/98 on SEC Form 1/98
Position: Analyst
Creditors: None
Direct /indirect income: PUC
All other financial interest: None
Calendar year: 1996
Filed: 04/14/97 on SEC Form 1/96
Position: Analyst
Creditors: None
Direct /indirect income: Commonwealth of Pennsylvania
All other financial interests: None
Calendar year: 1995
Filed: 04/03/96 on SEC Form 1/96
Position: Analyst
Creditors: None
Direct /indirect income: Commonwealth of Pennsylvania, PUC; self rents
All other financial interests: None
22. Heck did not disclose the mortgages on the properties listed in finding no. - - - [10] as
creditors on the Statement of Financial Interests he filed on April 14, 1997, for calendar
year 1996.
23. Heck did not disclose mortgage notes on any of his rental properties as creditors on
Statements of Financial Interests he filed for calendar years 1997, 1998 or 1999.
24. Heck did not disclose rental income received from his Dauphin County properties on
Statements of Financial Interests filed for calendar years 1996, 1997, 1998 and 1999.
a. Heck received rental income in excess of $1,000 from these properties during
calendar year 1996.
b. Heck received rental income in excess of $1,300 from these properties during
calendar years 1997, 1998 and 1999.
25. Heck's 601 -603 Market Street, Lemoyne, Cumberland County property was purchased
for the sum of $70,000 on September 22, 1994.
Heck 00- 059 -C2
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a. This transaction was recorded in Cumberland County deed book 112 page 675-
678.
b. A mortgage in the amount of $52,500 was obtained by Heck from Central
Pennsylvania Savings Association 100 W. Independence Street, Shamokin,
Pennsylvania 17872 on September 22, 1994.
26. Heck did not disclose rental income generated from 601 -603 Market Street, Lemoyne
on Statements of Financial Interests filed for calendar years 1996, 1997, 1998 and
1999.
a. Heck received rental income in excess of $1,000 from this property during
calendar year 1996.
b. Heck received rental income in excess of $1,300 from this property during
calendar years 1997, 1998 and 1999.
27. Heck failed to disclose Central Pennsylvania Savings Association or any assignee as a
creditor on SFIs filed for calendar years 1995 through 1999 for real property located at
601 -603 Market Street, Lemoyne.
a. Heck had a mortgage balance in excess of $5,000 on this property during
calendar years 1995 and 1996.
b. Heck had a mortgage balance in excess of $6,500 on this property during
calendar year 1997, 1998 and 1999.
B. Testimony
28. Carol McLeod is the Human Resource Director of the Public Utility Commission
(PUC).
a. McLeod administers the PUC's Human Resource program and maintains
control of documents and records, namely official personnel folders.
b. I.D. Exhibit 12 reflects a sign -off by Heck that he received the PUC Employee
Handbook as of August 24, 1999.
(1) The PUC employee handbook sets forth policies, rules, and regulations
as to which employees must abide.
c. Financial Interest Statement (FIS) forms are sent from McLeod's office to staff
identified as public officials or public employees along with an informational
cover letter.
d. Based upon a PUC review, Heck is required to file FIS's.
e. It is impermissible to use PUC facilities, including telephones, as part of private
business operations.
(1) Limited personal use of a telephone is allowed.
29. Ahmed Kaloko is the Director of Conservation, Economics and Energy Planning
(CEEP) in the PUC.
a. Kaloko directs and manages CEEP and provides advice to the PUC about
utilities.
Heck 00- 059 -C2
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b. Kaloko holds Masters and Ph.D. degrees from the University of Maryland in
economics and finance.
c. CEEP is divided into two divisions; economic and energy planning and
conservation and load analysis.
d. The research and analysis of CEEP is utilized by the PUC Commissioners, the
12 PUC Bureaus, the General Assembly, and the public.
e. Kaloko hired Heck in 1985 to work at CEEP.
f. Calvin Birge is Heck's supervisor.
g. As an Analyst III, Heck prepares reports on wood, electric, and gas industries.
(1) Heck plays a role as to rate impact studies.
(2) Heck also prepares economic analysis as to utility efficiencies.
(3) Heck has the authority to make recommendations as to his findings.
(4) Heck performs quantitative and regression analysis.
(5) Heck is required to write sophisticated, technical, and analytical reports.
h. Kaloko learned that Heck has real estate holdings but does not have specific
knowledge as to the details of such rental properties.
The PUC Employee Handbook has a provision about employees filing FIS's.
j. Kaloko's management style is to be close with employees and to maintain a
presence by walking around the office.
k. In walking around the office, Kaloko can hear telephone conversations since
the office is an open area with cubicles.
Kaloko has heard Heck on the PUC telephone having conversations regarding
his rental properties.
(1) Heck's PUC duties did not require frequent telephone usage.
(2) Generally, Heck almost on a daily basis used PUC telephones as to his
rental property business.
(a) When Kaloko would walk near Heck's cubicle, Kaloko would hear
snippets of conversations regarding rental properties.
Such telephone usage by Heck did not relate to official PUC business.
Kaloko gave numerous oral warnings to Heck about PUC telephone use
for his rental property business.
(a) Both Kaloko and Calvin Birge have also given written warnings to
Heck about such telephone usage.
(3)
(4)
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m. Kaloko wrote a memo to Heck on November 8, 1995, advising that his outside
business interests were competing with his job performance at the PUC.
(1) Kaloko referenced PUC telephone usage by Heck as being problematic
in doing his job responsibilities.
n. Heck shows a lack of respect and engages in offensive conduct as to his
supervisor Calvin Birge.
o. Calvin Birge sent an e-mail to Heck on December 16, 1999, about Heck
running his business during his PUC working hours which stated in part:
"I gave you those assignments because you sit in your cube and
do nothing but read newspapers and run your business. I have
caught you many times using PUC time running your personal
business. I want this to stop or I am going to take personnel
action."
P.
q.
(1) Heck's use of PUC telephones for his rental property business was
continuous between 1995 and 1999.
Heck's private rental business activities in the PUC office were during normal
work hours.
The PUC permits employees to have reasonable personal calls but not calls
that entail running an outside business.
r. Heck was advised in his performance evaluation reports (PER's) about a
conflict of competing interests relative to PUC telephone use for his real estate
business as far back as 1994.
s. In one incident Heck told Kaloko that Heck could "hurt" Kaloko as to his PUC
employment.
t. Kaloko heard Heck on his cell phone talking about his private business.
u. Heck has been offensive and confrontational with Birge using the following
language in commentary as to Birge: "moronic blunder ", "Mickey Military',
"immature, nonsensical horse's rear end "," bitter old man with white sneakers."
30. Calvin Birge is a supervisor in CEEP for 10 years and an employee of the PUC for 26
years.
a. Birge received a Bachelor's Degree from Clarion State College.
b. Birge runs the Conservation and Load Analysis Bureau (Bureau) in CEEP.
c. The Bureau is advisory to the PUC Commissioners.
d. The PUC has been in the Keystone Building for the last one and one -half years
and his Bureau was in the Barto Building for several years prior to that time.
e. Birge supervises Heck and reports to Dr. Kaloko.
f. Heck's primary responsibility is to complete two reports every month, one on
electricity and the other on natural gas in order to monitor trends, pricing, and
volume.
Heck 00- 059 -C2
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g.
h.
(1) Heck also does technical research related to energy.
(2) An employee, like Heck, in this position exercises independence in
planning, scheduling and leading projects to completion.
(a) Work also entails recommending strategies and program
proposals.
Heck holds a Bachelor's Degree in Economics and an MBA.
Birge walks around the office during the day to be in touch with the daily activity
in his unit.
Birge is able to overhear conversations in the office cubicles as he walks
around the office.
j. Birge knows that Heck has real estate interests but does not know details or the
specifics of such ownership.
k. By overhearing telephone conversations of Heck, Birge became aware that
Heck was using PUC telephones for his rental property business.
(1) Such activity by Heck has been ongoing for years.
(2) Birge heard Heck talking about parts or maintenance as to buildings on
an ongoing basis.
(3) The PUC telephone usage was during normal working hours.
(4) Birge addressed this issue with Heck verbally and in writing through
memos, e- mails, and personnel evaluation reports.
In one memo, ID 18, p8, Birge informed Heck: "You continue to
socialize and conduct outside business activities during work hours for
excessive amounts of time with the use of the telephone. But you
continue to divide your work hours with outside interests, resulting in
deadlines being missed and less than a professional work product.
(a) This specifically related to Heck's rental properties.
(b) The memo documented such activities back to 1994.
Heck has continued to use PUC telephones for his private business even after
he received memos informing him that such activity was problematic.
(1) Heck's use of PUC telephones for his real estate enterprises continued
past the year 2000.
m. Heck also has used his own personal cell phone during PUC working hours for
calls as to his rental properties.
(5)
n. For a certain time period, the PUC Personnel Office made a review and found
that the number of personal calls Heck made were within the norm.
(1) The duration of the calls was not reviewed by the Personnel Office.
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(2) The Personnel Office did not review or consider the substance of the
calls.
o. In a conversation, Heck told Birge that he (Heck) did not report his real estate
holdings on the FIS because he owned the properties.
(1) Heck made a conscious decision not to report the financial interests as
to his real estate holdings.
31. John Miller is employed as a Conservation Analyst III with the Public Utility
Commission (PUC).
a. Miller holds a B.S. in Engineering from West Virginia University, an M.B.A. from
Penn State and a license as a registered professional engineer.
b. Miller has been employed by the PUC for over 16 years.
c. Miller uses mathematical and economic analysis to prepare technical studies on
topical issues related to electricity and natural gas.
d. Miller has known Heck since 1984.
e. When PUC offices were in the Barto Building, Miller sat next to Heck.
(1) Miller could overhear Heck's telephone conversations.
f. Conservation Analysts III travel only occasionally and spend most of their time
in the PUC offices.
g.
From Heck's telephone conversations, Miller knows that Heck owns several
apartment buildings.
(1) Miller does not know the details of Heck's properties such as the
number of tenants, rent, income, and financing.
h. In one instance, Heck rented an apartment to a PUC employee.
Some of Heck's telephone conversations at the PUC related to his rental
properties.
(1) Examples of such calls were repairs to an oil heating system, the smoke
free status of his apartments, and a North Front Street apartment
building that discharged raw sewage into the Susquehanna River.
(a) Problems with the North Front Street property were ongoing and
involved conversations by Heck with a bank and DEP for
months.
(2) Heck's telephone calls as to the rental properties were an irritant to Miller
in preparing his papers for the PUC.
With six people in the PUC Division, Heck's involvement during the
workday as to his rental properties resulted in more work for the other
employees.
(3)
(4) Heck's supervisor, Calvin Birge, confronted Heck a number of times
about his telephone usage.
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Heck's PUC telephone usage as to his North Front Street property was a daily
occurrence for six months.
(1) The telephone calls were both incoming and outgoing.
k. Heck's PUC telephone conversations with people as to his properties had a
formal or adversarial tone as opposed to a familial or friendly tone.
32. Heck used PUC telephones and his PUC work time during normal business hours to
engage in his private real estate rental business.
a. Such usage by Heck occurred at least back to 1994.
(1) Such usage continued by Heck despite numerous verbal and written
admonitions from PUC management.
33. Robert Caruso is the Deputy Executive Director and Director of Investigations of the
State Ethics Commission.
a. After Heck received notice of the investigation, he contacted Caruso.
b. Caruso had conversations with Heck during the investigation.
c. When Heck asked Caruso about the range of possibilities under the Ethics Act,
Caruso responded that, at a minimum, amended FIS's would have to be filed.
(1) Heck acknowledged that the FIS's he filed were deficient.
34. Dan Bender is a supervisor and special investigator with the State Ethics Commission.
a. Bender acted both as a supervising investigator and performed some field work
in the Heck investigation.
b. Income tax returns were obtained to establish that Heck had income from rental
properties that he failed to disclose on his FIS's.
c. Documents were obtained from the County Recorder of Deeds offices to verify
Heck's ownership and mortgages on various properties, such as 6700 -6704
Jonestown Road; 473 High Street; 3242 Jonestown Road; 465, 471 and 473
High Street; 5505 Front Street; 601 -603 Market Street; and 150 -152 Fifth
Street.
d. The income from Heck's rental properties exceeded the reporting threshold
under the Ethics Act.
e. As of May 15, 2002, Heck had not filed amended FIS's as to his real estate
rental business.
f. In an interview with SEC investigators, Heck admitted that he did not take the
FIS "seriously."
(1) As to why Heck did not list his income from rental properties or the
Commonwealth on the FIS, Heck stated that he did not pay much
attention to the FIS form.
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g.
Heck admitted to SEC investigators that the income from his rental properties
exceeded the FIS reporting threshold.
35. Heck knowingly and recklessly failed to list the sources of income and creditors as to
his properties that he used for real estate rentals.
36. Joseph Malloy is a Public Utility Audit Supervisor with the PUC.
a. Malloy has a BS Degree in accounting.
b. Malloy states that there is an ongoing conflict between Heck and Birge.
(1) Malloy's information is indirect, as heard in socializing with co- workers.
c. Malloy is in a different unit on a different floor than Heck.
d. Malloy does not see Heck in his daily working environment.
37. William Hall is an employee of the PUC.
a. Hall has a Bachelor's Degree in geology with graduate credits.
b. Hall stated that he sat adjacent to Heck for six or seven years when the PUC
was housed in the Barto building.
(1) Hall stated that Heck's calls were personal rather than for property
rentals.
c. Hall testified that on a certain day at 10:05, while walking past Heck's cubicle
with a cup of coffee, he observed the following: Birge banged on the file cabinet
and loudly told Heck to get off the telephone; Heck responded that he was
talking to his wife during his assigned break; Birge yelled louder for Heck to get
off the telephone; and Heck stated he would call back and hung up.
d. On cross - examination, Hall stated that he was in the Barto building for about
three years; that he was in his own office for about a year and so he was next to
Heck for the majority of his time in the Barto Building; that there was a five foot
partition with bookcases between Hall and Heck at a point when Hall was
adjacent to Heck; that when Hall was not adjacent to Heck, Hall could not hear
what Heck said; and that he and Heck are long time friends.
e. Hall further testified that he thought the PUC was in the Barto building three,
four, five, or six years and that Hall got a private office in the last year in the
Barto building.
38. Dwight Beard is a complaint overwriter for the PUC and union representative.
a. Beard handled a complaint filed by Heck against his supervisor Calvin Birge.
(1) The complaint which was filed charged that Heck's supervisor was
angry and banged on a cabinet in Heck's cubicle.
(2) There was a labor- management meeting.
(3) Although Beard does not know the details of the resolution of the matter
because it involved management, there was no follow -up action by the
union.
Heck 00- 059 -C2
Page 16
b. At some point there was a review as to Heck's calls.
(1) The telephone calls were non - excessive as to frequency.
(2) The duration of calls was not reviewed.
c. It is inappropriate for a PUC employee to use PUC facilities and equipment to
run a private business enterprise.
39. Frank Wilmarth is the PUC Deputy Chief Counsel.
a. Wilmarth is a close personal friend of Heck.
b. When Wilmarth started at the PUC, he and Heck worked in the area of natural
gas.
c. As to the FIS filing requirements, Wilmarth testified: "Well, I get it each year, as
everyone else does. I don't pay close attention to it or read anymore than I
have to to complete it."
C. Documents
40. ID #1 consists in part of a photocopy of a letter of the Executive Director of the PUC
dated August 24, 2000, referring to this Commission for investigation as to whether
Thomas Heck intentionally falsified FIS's he filed regarding his nondisclosure of his
real estate interests.
41. I D #4 consists of a photocopy of a notice of investigation dated October 27, 2000, with
certified U.S. mail documentation to Heck as to the nondisclosure of financial interest
on his FIS's.
a. The notice charges the failure to disclose the names and addresses of sources
of income as to rental properties.
b. The notice alleges the failure to disclose financial interest /position in a
business.
42. ID #5 consists of a photoco� of a notice letter dated October 3, 2001, with certified
U.S. mail documentation to -leck regarding the nondisclosure of financial interests on
his FIS's and the use of PUC facilities for private business purposes.
a. The notice adds charges as to the failure to report creditors as real estate that is
not used as Heck's residence.
b. The notice adds the allegation as to the use of PUC facilities, including
telephones, for private business activity.
43. ID #6 consists of a notice letter dated October 17, 2001, to Heck's attorney with
certified U.S. mail documentation that restates the allegations as in ID #5 and specifies
that the FIS's encompass the calendar years 1996 through 1999 and references
Section 1103(a) of the Ethics Act as to the use of PUC facilities for private business
purposes.
44. ID #12 consists of a photocopy of a PUC Employee Handbook which Heck
acknowledged receiving on August 24, 1999.
Heck 00- 059 -C2
Page 17
a. Pages 10 and 11, paragraph 6 provides:
6. Misuse of Facilities or Equipment
No employee shall, unless specifically authorized, use any Commonwealth
equipment, supplies or properties for personal gain or for other than officially
designated purposes.
b. Page 25 sets forth the FIS filing requirement for public officials /public
employees.
45. ID #13 consists of photocopies in part of FIS's filed by Heck with the PUC.
a. Heck's 1996 -1999 calendar year FIS's list only the PUC /Commonwealth of
Pennsylvania as a financial interest as direct or indirect sources of income.
(1) For the 1995 calendar year FIS, Heck in addition to listing the
Commonwealth /PUC as a source of income listed "self- rents."
46. I D #14 consists of photocopies in part of tax returns of Heck for the years 1997 through
1999.
a. Heck, for the 1997 tax year, listed multi -unit rental properties at Walnut Street,
Harrisburg; High Street, Steelton; Market Street, Lemoyne; and Jonestown
Road, Harrisburg.
(1) For each of the four rental properties, Heck received rental income that
exceeded the FIS reporting threshold for income and paid mortgage
interest that exceeded the creditors reporting threshold.
b. Heck, for the 1998 tax year, listed multi -unit rental properties at High Street,
Harrisburg; Walnut Street, Harrisburg; Market Street, Lemoyne; Jonestown
Road, Harrisburg; and North Front Street, Harrisburg.
(1) For each of the first four rental properties, Heck received rental income
that was above the FIS reporting threshold for income and paid
mortgage interest that exceeded the creditors reporting threshold.
(2) For the fifth rental property, Heck did not receive income or pay interest
that exceeded the FIS reporting thresholds for those categories.
c. Heck, for the 1999 tax year, listed multi -unit rental properties at High Street,
Bressler; Walnut Street, Harrisburg; Market Street, Lemoyne; Jonestown Road,
Harrisburg; and North Front Street, Harrisburg.
(1) For each of the five rental properties, Heck received rental income that
exceeded the FIS reporting threshold for income and paid mortgage
interest that exceeded the creditors reporting threshold.
47. ID #15 and #16 consist of photocopies of various deeds and mortgages verifying
Heck's ownership of specified property and mortgages as Heck's creditors.
a. ID #15, page 14 et seq., consists of photocopies of a deed of conveyance to
Heck dated September 22, 1994, as to property situated on Market Street in
Lemoyne.
Heck 00- 059 -C2
Page 18
48. ID #18 in part consists of photocopies of memos relating to Heck as to personal
telephone usage, assignments, job performance, leave usage, meeting attendance,
and employee performance reviews (PER's).
a. In a memo dated October 17, 1994, Birge warned Heck to curtail inter alia office
time and telephone usage for outside business activities.
b. In a memo from Birge to Heck dated December 5, 1994, deficiencies in work
assignments were noted as to lack of work product quality and untimeliness as
to deadlines with outside interests cited as the cause.
c. Kaloko, in a memo to Heck dated November 8, 1995, denied a transfer request
citing Heck's outside interests as the cause of problems.
d. In a memo from Birge to Heck dated December 13, 1995, Heck is warned about
personal and business calls, both incoming and outgoing at the PUC, as to
lengthy duration and the negative impact on Heck's assignments.
e. By memo dated July 21, 1995, from Birge to Heck, Birge details Heck's poor job
performance citing instances including failure to continue action on a proposed
rulemaking in three years, a missed deadline and poor work product that was
highly criticized by a PUC Commissioner.
f. In a memo from Birge to Heck dated October 15, 1996, Birge advises Heck
about low sick leave and use of PUC telephones and office space for his private
business: "[you] use the Commonwealth's telephone or its office space to
conduct your outside interests - - - [and] - - - I have repeatedly asked you to
curtail the use of the telephone for unrelated work duties and excessive
personal calls that you both initiate and receive."
In a memo from Kaloko to Heck dated June 8, 1994, Kaloko cites Heck's failure
to attend a meeting and references two years of problems including personal
calls and Heck's "spend[ing] a substantial amount of time conducting personal
business. Frequently, you disappear and the staff does not know where you
are. ... The reason for this is your lack of concentration due to the fact that
you are caught -up in focusing on personal matters.
g.
* **
It is important to state that the problems I have identified in this report has [sic]
been occurring for approximately ten years... It is important to state that our
abuse of the Commonwealth's telephone, disappearing, etc., have [sic] an
adverse impact on both the office operations and the morale of your co-
workers."
h. Following two e-mails between Birge and Heck, Kaloko sent an e-mail on
December 16, 1999, advising Heck: "I gave you those assignments because
you sit in your cube and do nothing but read news papers and run your
business. I have caught you many times using PUC Time [sic] running your
personal business. I want this to stop or I am going to take personnel action."
(Cross- reference Fact Finding 29.0.)
Heck's PER's identify certain problems as to Heck's job performance with the
PUC:
Heck 00- 059 -C2
Page 19
j.
(1) Heck's 1993/94 PER under Work Habits provides: "Mr. Heck
demonstrates a conflict of competing interests which needs to be
improved upon pertaining to telephone use."
(2) Heck's 1994/95 PER under Work Habits provides: "Mr. Heck continues
to demonstrate a conflict of competing interests, excessive leave time
and telephone use."
Heck's 1995/96 PER under Work Habits provides: "The time
management has spent on Mr. Heck's shortcoming is quite
burdensome. Mr. Heck's priority of outside interests over responsibilities
to assignments are unacceptable."
(4) Heck's 1997/98 PER under Work Habits provides: "Mr. Heck's
assignments are completed on time. Mr. Heck continues to allow
outside interests to occupy his normal working hours and continues to
spend too much time on the telephone. Mr. Heck's leave balance is
extremely low (both annual and sick) for a veteran employee."
Heck's 1998/99 PER under Work Habits provides: "Mr. Heck's
assignments are completed on time. Mr. Heck continues to allow
outside interests to occupy his normal working hours and he spends too
much time on the telephone. Mr. Heck continues to maintain a very low
leave balance for a veteran employee."
(6) Heck's 1999/00 PER under Work Habits provides: "Mr. Heck has two
areas of concern that effect [sic] his job performance; low leave balance
and continued use of the Commonwealth equipment to conduct outside
interests. Mr. Heck has been repeatedly asked to curtail the use of the
telephone, fax and copier for unrelated work duties and excessive
personal calls that are both initiated and received from the outside. Mr.
Heck continues to engage in an unsatisfactory behavior pattern."
(3)
(5)
Heck's job description dated April 5, 1999, lists the following duties and
responsibilities:
(1) Position performs advanced professional analysis and development
work in the Division of Conservation and Load Analysis within the
Bureau of Conservation, Economics and Energy Planning in the Public
Utility Commission.
(2) Performs assignments of broad scope in restructuring of electric and
natural gas industries. Work involves preparing reports, studies or
forecasts on major and significant utility energy issues using statistical
quantification and economic analysis techniques, and writing
Commission orders.
(3) Performs analysis and repares comments regarding federal energy
initiatives and cases before the FERC.
(4) Work also involves developing methodologies for research and analysis,
designing and conducting studies and recommending strategies or
program proposals. Work is assigned in the form of broad scope
projects and the employee exercises a high degree of independence in
planning, scheduling and leading the projects to completion. Work is
reviewed for quality and attainment of objectives through status reports
and upon completion.
Heck 00- 059 -C2
Page 20
(5)
Leads projects in developing energy and water policy regulation by
performing research assignments in gathering and evaluating data for
use in developing rates and /or policy to meet the Commonwealth's short
and long term needs.
(6) Leads project studies, forecasts and research reports on energy and
water issues and resources, appropriate technologies, alternate fuels,
alternate energy, economic impacts, conservation, demand -side
management, environmental impacts and other related issues.
(7) Designs research methodologies, assigns segments of projects to lower
level analysis, provides direction and assistance within the Commission
and the Commonwealth.
(8) Provides specialized technical assistance within the Commission and
the Commonwealth.
(9) Employs advanced statistical and financial analytical tools and computer
software packages to assist in the completion of projects.
(10) Reviews and evaluates proposed Federal legislation for impact on utility
energy programs.
(11) Critiques complex technical industry reports, academic journals, and
other research literature.
(12) Represents the agency at board meetings, task forces, committees and
legislative meetings and hearings, and reports and advises management
on energy issues.
(13) Prepares letters, reports, memoranda and responses as directed.
(14) Assists Division Chief in the performance of various administrative
duties.
(15) Performs related work as required.
49. ID #22 consists in part of a photocopy of a portion of a notepad of Birge documenting
Heck's use of PUC telephones and facility as to personal /business interests for the
days November 1, 3, 7, 13, and 17, 2000; December 5 and 19, 2000; and January 5,
2001.
50. R #2 consists of a photocopy of a memo from Birge to Heck dated December 13, 1995,
advising that as to phone usage from July 6, 1995, to September 28, 1995, the
average number of Heck's calls were within the norm but the duration of certain calls
were beyond an acceptable standard.
a. The telephone records did not disclose incoming calls received by Heck.
(Cross- reference Fact Finding 48.d.)
51. R #3 consists of photocopies of memos primarily between Heck and Birge or Kaloko
and PER's of Heck.
a. In an October 13, 1994, memo to Birge, Heck admits PUC telephone usage as
to his real estate: "The house I recently purchased is an extraordinary situation
Heck 00- 059 -C2
Page 21
and involved many phone calls regarding the credit report, the mortgage,
utilities, and repairs which you were apprised of; there is no way these matters
could have been handled outside of regular business hours."
(1) Heck's memo related to real estate that was conveyed to him by deed on
September 22, 1994.
(2) The property location is Market Street, Lemoyne.
(3) Heck used the real estate as a rental property.
b. In a memo dated December 12, 1995, from Heck to Birge, Heck acknowledges
that Birge clearly monitors Heck's telephone usage: "I maintain that if you did
not sit next to me and run in every time my phone rings or I made a call, this
would not be an issue."
c. Heck's 2000/01 PER under Work Habits provides: "Mr. Heck continues to use
Commonwealth equipment to conduct outside interests. Mr. Heck has been
asked to curtail the use of the telephone, including a personal cell phone, fax,
and copier for unrelated work duties and personal calls that are both initiated
and received outside. Mr. Heck continues to engage in an unsatisfactory
behavior pattern, which he wrongfully believes is business as usual."
52. R #9 consists of a photocopy of a sworn statement of Heck.
a. Heck characterized his responsibility as to filing FIS's as follows: "... these are
forms that I never really took seriously and a lot of us don't take these seriously.
I realize that I had nothing that was any type of a conflict of interest with my
position, so I breezed right through it. And, yes, that's how I would explain that.
Again, we don't pay much attention to this. If you were to look at these forms,
you would see a lot of people Just breeze through these, they're an aggravation
and get in the way of our job. Obviously I was wrong about that, but that's
common perception regarding these forms. I didn't see any of these activities
being anything close to a conflict of interest and under the real estate interests
portion in box 8, I check none because I didn't think there was any conflict of
interest with my position."
D. Stipulations
53. The Investigative Division of the State Ethics Commission received information alleging
that Thomas Heck violated provisions of the State Ethics Act (Act 93 of 1998).
54. Upon review of the information the Investigative Division initiated a preliminary inquiry
on September 7, 2000.
55. The preliminary inquiry was completed within sixty days.
56. On October 27, 2000, a letter was forwarded to Thomas Heck, by the Executive
Director of the State Ethics Commission informing him that a complaint against him
was received by the Investigative Division and that a full investigation was being
commenced.
a. Said letter was forwarded by certified mail, no. 7099 - 3400 - 0012- 4638 -3711.
b. The domestic return receipt bore the signature of Thomas Heck, with a delivery
Heck 00- 059 -C2
Page 22
date of October 31, 2000.
(Cross- reference Fact Finding 1)
57. On March 28, 2001, the Executive Director of the State Ethics Commission filed an
application for a ninety day extension of time to complete the investigation.
58. The Commission issued an order on April 9, 2001, granting the ninety day extension.
59. On May 8, 2001, the Executive Director of the State Ethics Commission filed an
application for a ninety day extension of time to complete the investigation.
60. The Commission issued an order on May 15, 2001, granting the ninety day extension.
61. On October 3, 2001, a letter was forwarded to Thomas Heck, through his attorney,
informing him that the complaint against him was being amended to include additional
allegations.
a. Said letter was forwarded by certified mail no. 7001 0360 0001 4061 3617.
b. The domestic return receipt bore the signature of George Gallion, with a delivery
date of October 4, 2001.
(Cross- reference Fact Finding 2)
62. On October 17, 2001, a letter was forwarded to Thomas Heck, through his attorney,
informing him that the complaint against him was being amended to include additional
allegations.
a. Said letter was forwarded by certified mail no. 7001 0360 0001 4061 3655.
b. This letter did not change the nature or scope of the investigation, but rather
merely advised Heck of the specific section of the Ethics Law that was
applicable and the four calendar years involved (1996 -1999) as to the FIS
allegation.
(Cross- reference Fact Finding 3)
63. Periodic notice letters were forwarded to Thomas Heck in accordance with the
provisions of the Ethics Law advising him of the general status of the investigation.
64. The Investigative Complaint was mailed to the Respondent on October 18, 2001.
(Cross- reference Fact Finding 4)
III. DISCUSSION:
At all times relevant to this matter, the Respondent, Thomas Heck, hereinafter Heck,
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 se ., as codified by the Public
Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 6 Pa.C.S. § 1101 et seq.,
which Acts are referred to herein as the "Ethics Act."
The allegations are that Thomas Heck, as an Analyst III for the Public Utility
Commission, violated Sections 3(a)/1103(a), 5(a)/1105(a), and 5(b)(4), (5), (8) and (9)/
1105(b)(4), (5), (8) and (9) of the Ethics Act when he failed to disclose on Statements of
Financial Interests for calendar years 1996, 1997, 1998, and 1999 names and addresses of
the sources of any direct or indirect income from rental properties; when he failed to disclose
Heck 00- 059 -C2
Page 23
his financial interest in any legal entity engaged in business for profit and office, directorship or
employment of any nature in a business entity; when he failed to disclose creditors and
interest rates for properties he purchased which are not used as his primary residence; and
when he used the facilities and telephones of the PUC to conduct his private business
interests.
Pursuant to Section 3(a)/1103(a) of the Ethics Act quoted above, a public official /public
employee is prohibited from engaging in conduct that constitutes a conflict of interest.
The term "conflict" is defined under the Ethics Act as follows:
§ 211102. 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. 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 P.S. § 402/65 Pa.C.S. §1102.
Section 5(b)/1105(b) of Act 9 of 1989/Act 93 of 1998 quoted above requires in part that
every public official /public employee, nominee, and candidate list the name and address of any
direct or indirect source of income totaling in the aggregate of $1,000/$1,300 or more, and
each creditor to whom is owed in excess of $5,000 /86,500 with the interest rate thereon.
Having noted the issues and applicable law, we shall now summarize the relevant facts.
Heck is employed as a Utility, Energy and Conservation Analyst III at the Public Utility
Commission (PUC) in the Bureau of Conservation, Economics and Energy Planning. Heck's
job description reflects in part that he performs advanced professional analysis and
development work; performs assignments in restructuring of electric and gas industries;
prepares reports, studies and forecasts on major utilities; writes Commission orders; works
with a high degree of independence in planning and leading projects to completion; leads
projects to develop energy and water policy regulations; designs research methodologies and
provides direction and assistance within the PUC and Commonwealth; advises management
on energy issues; and performs other specified functions. Specifically, Heck is required to
conduct analyses as to utilities and then write technical analytical reports on wood, electric and
gas industries.
Separate and apart from his employment with the PUC, Heck has engaged in the
private real estate rental business since at least 1984. During PUC normal office hours, Heck
has used the PUC offices and telephones in furtherance of his private real estate rental
business. This has been ongoing for years by Heck despite numerous verbal and written
warnings from Cal Birge, his supervisor, and Dr. Kaloko, the Bureau Director, that such
activity was not permitted and counterproductive to his functioning as a PUC employee.
Despite such admonitions, Heck continued with such practices of using the PUC offices and
the telephones to conduct his private real estate business through the years. See, Fact
Findings 29, 30.
Heck 00- 059 -C2
Page 24
At hearing, Cal Birge, Dr. Kaloko, and John Miller, a co- worker in Heck's unit, detailed
Heck's use of PUC offices during normal working hours and PUC telephones to conduct his
private real estate interests. William Hall, another PUC employee who appeared on behalf of
Heck, testified that for a period of time when he worked near Heck's cubicle, he (Hall) did not
hear Heck engaging in private business conversations over the telephones. In addition to the
above testimony, there are various PUC documents which detail Heck's use of PUC
telephones during normal working hours to conduct his private business. Even the Personnel
Evaluation Reports (PER's) as to Heck recite Heck's usage of the PUC office and telephones
for his private business activities. See, Fact Findings No. 29, 30, 48, 51. Finally, Heck
himself has documented his use of PUC facilities and telephones for his real estate rental
business. See Fact Finding 51a.
As a PUC employee, Heck failed to list the income (sources and addresses) from his
rental business as well as the creditors and interest rates for the real estate that he owns on
the Financial Interests Statements (FIS's) that he is required to annually file as a "public
employee." For the four calendar years in issue, namely 1996 through 1999, Heck only listed
the PUC /Commonwealth of Pennsylvania as a source of income and did not list any creditors.
Parenthetically, for the 1994 calendar year FIS which is not before us, Heck not only listed
the PUC /Commonwealth as a source of income but also "self- rents." Such a statement, aside
from being indeterminable, did not list the names and addresses of such sources of income.
Except for the rental property located at North Front Street in Harrisburg as to pre 1999
calendar years, all of the rental units produced rental income in excess of the FIS reporting
threshold and each of these properties had a mortgage as to which Heck was indebted in
excess of the threshold as to creditors for FIS reporting purposes.
Finally, by letter of August 24, 2000, the PUC Executive Director referred this case to
the Investigative Division for an investigation as to the intentional non - disclosure of Heck's
real estate interests on his FIS's.
Normally we would now consider the Motion to Strike the Amended Notice of
Investigation filed by Heck which was deferred by the hearing officer to the full Commission.
See, 51 Pa. Code §21.26(c). However, we must first address a threshold jurisdictional
question which Heck raises in his brief, namely, the argument that he is not a public employee
subject to the FIS filing requirements and Section 3(a)/1103(a) of the Ethics Act. Heck makes
this argument even though the PUC has determined that he is a "public employee." See, Fact
Finding 28d. To resolve the issue, we must look at Heck's duties and responsibilities as a
PUC Analyst III. The record contains Heck's 1999 job description as well as testimony as to
his job functions. See, Fact Findings 29,30,48. We are reminded by Commonwealth Court
that Ethics Act coverage is broadly applied and a determination of public employee status is
done by an objective standard, that is, by reviewing what an employee may do in a position as
per the job description and classification specification, rather than the more limited duties that
are actually performed. See, Phillips v. SEC, 79 Pa. Commw. 491, 470 A.2d 94983).
Further, exemptions or exclusions from coverage are to be narrowly construed. !Phillips,
supra.
As to Heck's position, he engages in planning, regulating, and taking official action
which has an economic impact of greater than a de minimis nature on the interests of any
person. Hence, Heck as to his job functions at the PUC meets the criteria of subparagraphs 3
through 5 of the definition of public employee under Section 2/1102 of the Ethics Act. See
also, 51 Pa. Code §101, et seq. Consequently, Heck is a public employee subject to the FIS
filing requirement as well as the restricted activities of the Ethics Act.
Having highlighted the facts, issues, and Heck's status as a "public employee, " we shall
now address the Motion to Strike Amended Notice of Investigation and New Matter raised by
Heck. In his Motion, Heck asserts that the Investigative Division is precluded from pursuing
the allegation of Heck's use of PUC facilities to conduct his real estate business. Heck claims
Heck 00- 059 -C2
Page 25
that the Investigative Division was in fact investigating that allegation before Heck was sent a
subsequent notice. Heck's theory is that since the notice was sent merely one day before the
Investigative Complaint was issued, the Investigative Division had to have been investigating
the office /telephone use prior to sending that notice. Heck concludes that the Investigative
Division is precluded from prosecuting this aspect of the case due to noncompliance with
Section 1108(c) of the Ethics Act.
Heck also asserts that the investigation continued for 18 months, implying that the
investigation exceeded the maximum 360 day period allowed by the Ethics Act. A
chronological review of the investigative activity in this case is necessary for us to rule upon
the Motion.
On October 27, 2000, the initial Notice of Investigation was issued, which Notice
specifically referenced alleged violations of Sections 1105(b)(5), (8), and (9) of the Ethics Act.
On October 3, 2001, a second notice of investigation was issued which added the
nondisclosure of creditors as to Heck's real estate rentals and the use of the PUC office and
telephones for private business purposes. Two weeks later, on October 17, 2001, a third
Notice of Investigation was issued which merely inserted a Section 3(a )/1103(a) reference as
to the Ethics Act and specified the FIS calendar years in issue (1995-99) as to the existing
charges. On the following day, October 18, 2001, the Investigative Complaint was issued.
The Investigative Complaint, like the Notice of Investigation letters, alleged violations of
Sections 1103(a) and 1105(b)(5), (8), and (9) of the Ethics Act. Finally, on April 15, 2002 —
nearly six months after the filing of the Investigative Complaint but still nearly a month prior to
the scheduled hearing in this matter — the Investigative Division filed an Amended
Investigative Complaint with cover letter, indicating that the only change from the original
Investigative Complaint was the insertion of a reference to Sections 1105(a) and 1105(b)(4) in
the allegation section.
In order to determine whether the Motion should be granted, a review of the statutory
limitations imposed upon the investigative process is warranted.
Pursuant to Section 1108(c) of the Ethics Act, the process by which investigations are
conducted by the Investigative Division begins either with the filing of a signed, sworn
complaint with this Commission or upon the "own motion" of the Commissions Executive
Director. 65 Pa.C.S. § 1108(a); 51 Pa. Code §§ 21.1, 21.2.
The complaint or own motion triggers the initiation of a "preliminary inquiry" by the
Investigative Division, the purpose of which is to determine whether there is reason to believe
that the Ethics Act has been violated. 65 Pa.C.S. § 1108(b); 51 Pa. Code § 21.3(c). If the
result of the preliminary inquiry is that there is not reason to believe that the Ethics Act has
been violated, the inquiry must be terminated with notice to the complainant and the subject of
the inquiry. 65 Pa.C.S. § 1108(b). If the result of the preliminary inquiry is that there is
reason to believe that the Ethics Act has been violated, the Executive Director initiates an
investigation to determine whether there has been a violation of the Ethics Act. 65 Pa.C.S. §
1108(6).
Section 1108(c) of the Ethics Act provides: "No investigation may be commenced until
the person who is the subject of the investigation has been notified and provided a general
statement of the alleged violation or violations of [the Ethics Act] and other applicable statutes
with respect to such investigation." 65 Pa.C.S. § 1108(c); see also, 51 Pa. Code § 21.5(b).
An investigation is deemed to commence when the Respondent is so notified of the matter as
required. 51 Pa. Code § 21.3(c). Service of the requisite notice to a Respondent is complete
upon mailing of the notice by certified or registered mail. 65 Pa.C.S. § 1108(c); 51 Pa. Code §
21.5(b).
Having stated the above, we shall first address the notice issue and then the timing
issue raised by Heck.
Heck 00- 059 -C2
Page 26
Following the initiation of an investigation, the Investigative Division may come across
or be provided with information suggesting or evidencing potential violations of the Ethics Act
beyond those originally anticipated. Such an occurrence raises issues as to the adequacy of
the notice previously issued to the Respondent and, consequently, the legality of pursuing an
investigation of the new potential violations without providing additional notice to the
Respondent. It has been judicially determined that under such circumstances, investigative
activity may not occur outside the parameters of a proper investigation preceded by adequate
notice to the Respondent. R.H. v. State Ethics Commission, 673 A.2d 1004 (Pa. Commw.
1996).
The necessary conclusion is that when the "new" potential violations would fit within the
scope of the notice already provided to the Respondent—that is, when they would be
encompassed by the notices 'general statement of the alleged violation or violations" of the
Ethics Act —the original notice would be sufficient to satisfy the requirements of the Ethics Act
and Commission Regulations, and no further notice would be required in order to investigate
and subsequently prosecute such new potential violations. However, when the new potential
violations would not fit within the scope of the notice already provided to the Respondent,
further notice to the Respondent would be required prior to investigative activity as to the new
potential violations.
The second Notice added an allegation regarding the use of PUC facilities relative to
Heck's private real estate business. The question now is whether the Investigative Division
started investigating the allegation of the use of PUC facilities before Heck was sent notice of
this charge. The decision of Commonwealth Court in Snyder v. State Ethics Commission,
686 A.2d 843 (Pa. Commw. 1996) is instructive on this issue:
"Although the SEC did not begin its investigation as early
as it could have, no evidence exists to establish that the
investigation was, in fact, begun earlier than August 10, 1993.
Further, we differentiate the facts presented here from those in
R.H.. In R.H., the evidence showed that the SEC had been
obtaining critical evidence against the supervisors for years
before "officially" beginning the preliminary investigation into
violations of the current Ethics Law; moreover, the SEC based its
findings of violation, in part, upon the evidence accumulated
during such time. Also, in R.H., the SEC failed to provide the
supervisors with 90 -day status letters and obtain proper
extensions. Here, there has been no showing that any relevant
evidence was collected before August 10, 1993, much less that
the SEC based its conclusion on any such evidence;
Additionally, the SEC complied with all other requirements of the
Ethics Law, such as timely notifying Snyder of the investigation,
sending Snyder 90 -day status letters and properly requesting
extensions. Thus, Snyder's argument must fail."
First, we note that Heck is mistaken in his assertion that the PUC office /telephone
allegation was not sent until October 17, 2001. To the contrary, the Investigative Division
gave Heck notice of that issue, as well as the FIS creditor reporting issue, in the second of
three notice letters that was issued on October 3, 2001.
On the question of whether any investigative activity occurred before October 3, 2001,
we have reviewed the record to determine whether there is any evidence of investigative
activity on the PUC telephone usage issues prior to October 3, 2001. We found nothing to
substantiate Heck's assertion. Any references to the PUC telephone usage were not part of
the investigation in our review but rather gratuitous information that was supplied to the
investigators. Thus, there are two reports of interview of Birge and Heck's sworn statement,
Heck 00- 059 -C2
Page 27
all of which were introduced by Heck at the hearing. In Birge's interview, there were no
questions about PUC telephone usage; however, Birge added commentary about PUC
telephone usage relative to questions concerning the FIS allegations. There are no questions,
references, or comments as to PUC telephone usage in Heck's sworn statement. From our
review, there is nothing in the record which indicates any investigative activity as to Heck's
use of PUC telephones prior to October 3, 2001.
Heck has not offered any evidence to establish that the Investigative Division did in fact
investigate this particular allegation before Heck was sent notice. Robert Caruso, who is the
Director of Investigations, testified at the hearing in this case but Heck chose not to pursue the
matter through questioning Caruso on this issue. Thus, although Heck had the opportunity to
interrogate Caruso in furtherance of his motion, he failed to develop or establish any facts on
the issue of whether the Investigative Division of this Commission engaged in any
investigative activity prior to informing Heck of the PUC telephone usage allegation.
Heck argues that the 24 hour span (really 15 days) between the additional notice and
issuance of the Investigative complaint is sufficient to establish that the investigation as to
PUC telephone and office use for private business actually started before that notice. From
our review, it appears that such information was "dropped in the lap" of the Investigative
Division as to the subpoenaed information and interviews relating to the FIS allegation. We do
not believe that the passive receipt of any such information prior to the issuance of the second
notice on October 3, 2001, constituted investigative activity. In this regard, there is case law
that suggests that there must be a review and a decision to investigate in order to constitute
the beginning of an investigation. See, LCB v. Fort Washington Operating Company t/a
Holiday Inn of Fort Washington, 457 A.2d 172 (Pa. Commw. Ct. 1983). Further, an
investigation necessitates affirmative rather than passive) action. See, Geiger v. Workmen's
Compensation Appeal Board, 654 A.2d 19 (Pa. Commw. Ct. 1994).
Although Heck seems to argue that the short time differential between the additional
notice and issuance of the Investigative Complaint in and of itself conclusively establishes
impermissible investigative activity prior to the additional notice, we disagree for the reasons
noted above. Further, as noted above, Heck had the opportunity but failed to develop any
facts through testimony or documentary evidence at the hearing.
On the question of whether the Investigative Division exceeded the 360 day maximum
period allowed for an investigation, the record establishes that the investigation commenced
on October 27, 2000, and concluded on October 18, 2001, with the issuance of the
Investigative Complaint. The investigation was confined to the 360 day period. It would seem
that the 18 months to which Heck alludes may involve pre - hearing preparation by the
Investigative Division. Obviously, such is not continuing investigative activity since the
Investigative Complaint was issued on October 18, 2002. In any event, the stipulations
agreed to by Heck establish that the investigative activity was within the 360 day period of the
Ethics Act. In fact, such stipulations establish compliance by the Investigative Division of all
investigative deadlines under the Ethics Act. See, Fact Findings 54 -64.
In this case, we conclude the Investigative Division completed the investigation in a
timely manner and did not embark on investigative activity prior to giving Heck notice by
certified mail. The Investigative Division complied with the statutory constraints imposed by
the Ethics Act. Accordingly, we find that all of the allegations before us meet statutory muster.
See, Snyder v. SEC, supra. Heck's Motion is denied.
Having summarized the above relevant facts and disposed of the Motion, we must now
determine whether the actions of Heck violated Section 1103(a) or 1105(b) of Act 9 of 1989,
as codified by Act 93 of 1998.
Heck 00- 059 -C2
Page 28
The Investigative Division has filed a brief proffering detailed arguments for violations of
the Ethics Act, a penalty to be imposed upon Heck of $1,000 and a referral to a law
enforcement agency for criminal prosecution and a referral to the PUC for disciplinary action.
Heck in his brief seeks no violations based upon the following arguments: he is not a
"public employee "; the FIS form is ambiguous and confusing; there was no motive or intent in
failing to disclose his real estate interests (income /creditors) on the FIS; PUC telephone usage
was rare and the time to operate apartments is insubstantial; the Investigative Division was
reckless and unethical in investigating him; the testimony of Kaloko, Birge and Miller is not
credible; Heck is allowed to make personal telephone calls; Heck's supervisors are aware of
his real estate holdings; and Heck's supervisors are dishonest /unreasonable.
Heck, in a Reply Brief, proffers the following arguments: the financial disclosure
information supplied by him to the investigators was in greater detail than required on the FIS
form; his telephone call, which was overheard by Miller, was not about a rental unit but about
an oil tank at his personal residence; the Investigative Division's claim, that his listing of "rents"
in a prior FIS together with a discussion on financial disclosure with his supervisor established
intentional nondisclosure by him of such interests on his 1996 -99 FIS's, is an invalid
conclusion; the charge that he was "lying" based upon inconsistent statements about his
reading and not reading the FIS instructions is incorrect since he read only part of the
instructions; the Investigative Division's statements that Wilmarth was not credible and was
both an attorney and hearing witness are unfounded; and the investigation as to his use of
PUC offices /telephones was instituted over eight months before the notice of investigation was
sent.
The Investigative Division has not filed a Reply Brief.
We shall address the office /telephone usage allegation first followed by the FIS
allegations.
As to Heck's use of the PUC office and telephones in furtherance of his private real
estate rental business, there have been years of use by Heck in such endeavors. Such uses
have been established through the testimony of Kaloko, Birge and Miller as well as
documentary evidence. Such uses of authority of office resulted in pecuniary benefits to Heck
in two respects. First, Heck received compensation as a PUC employee for time that he was
spending on his real estate business rather than PUC office work. Second, Heck received a
financial gain by not having out of pocket expenses through his use of the PUC office and
telephones. See, Catone, Order 994. The pecuniary benefits received were private because
they were not authorized in law. In fact, such pecuniary benefits were prohibited. See, Fact
Findings 28, 32, 44. Lastly, these private pecuniary benefits inured to Heck himself.
Accordingly, Heck violated Section 3(a)/1103(a) of the Ethics Act through his continued use
through the years of the PUC office and telephones in furtherance of his private real estate
rental business.
As to the above violations, this was not a case where Heck occasionally made a few
calls about one of his rental units. As to the apartment building that Heck purchased on North
Front Street in Harrisburg, Miller testified that Heck almost had a daily use of PUC telephones
for six months dealing with problems stemming in whole or in part from the discharge of raw
sewage from that building into the Susquehanna River. These calls involved officials from the
bank from which Heck bought the property and DEP.
For the Investigative Division, the testimony of Kaloko and Birge is compelling. Both
witnesses in their testimony, which is supported by documentary evidence, established a
pattern by Heck of using PUC telephones and offices for his private rental business. In
addition, there is testimony of John Miller, a co- worker who sat near Heck. We find Miller to be
a credible and reliable witness along with Kaloko and Birge. Miller, who is a disinterested third
party in Heck's PUC bureau, testified with particularity and consistency as to Heck's PUC
Heck 00- 059 -C2
Page 29
telephone usage. Further, unlike Birge and Kaloko who are Heck's Supervisor and Bureau
Director (management), Miller was not a supervisor but a co- worker in the bureau who was
attempting to do his job. We note Miller's status, given Heck's charge that Kaloko and Birge
(management) are biased against him and are not credible. We further note that Heck charges
Miller to be not credible but does not develop any arguments on the point. Miller's recollection
of the events is buttressed given that Heck's telephone usage for business dealings served as
a distraction and annoyance to Miller in attempting to complete his PUC work.
Even Heck, in a memo to his supervisor, acknowledges his use of the PUC
office /telephones as to a real estate rental: "The house I recently purchased is an
extraordinary situation and involved many phone calls regarding the credit report, the
mortgage, utilities, and repairs which you were apprised of; there is no way these matters
could have been handled outside of regular business hours." See, Fact Finding 51(a).
Heck nevertheless argues that he did not conduct his real estate rental business using
the PUC offices /telephones, asserting that rentals are passive, there is a manager, tenants
are at work during the day, Heck's calls were personal (non - business), etc. Heck sought to
utilize the testimony of Hall, a co- worker at the PUC, to establish inter alia that Heck did not
use PUC telephones for private real estate business activities.
We find two major problems with Hall's testimony. First, Heck sought Hall's testimony
to prove a negative, namely, that Heck did not use the PUC telephones for private business
activities. The obvious flaw is the conceptual failure of attempting to prove a negative. The
second problem with Hall's testimony is reliability. In this regard, Hall testified with great
particularity and detail as to an event that occurred a few years ago as to which he was not
personally involved. The event concerned an incident between Heck and his supervisor,
Birge, involving a telephone conversation of Heck. As to this event, Hall testified that: it was
10:05 a.m., he was drinking a cup of coffee, and there was a verbal exchange back and forth
between Heck and Birge with Hall recounting what was said between Heck and Birge.
However, matters that were personal to Hall, such as the length of time that he was stationed
at the Barto building and where and how long he sat relative to Heck were unclear. Hall
testified that his stay at the Barto building was three years, four or five years, five or six years
and six or seven years. Hall testified that he sat adjacent to Heck at the Barto building but
then admitted that he was in a private office during a period of time and consequently could
not hear what Heck was saying on the telephone. Such obvious disparities in Hall's testimony
makes him an unreliable witness. As a consequence, Hall's testimony has no probative value.
Contrary to Heck's assertion that he did not use PUC offices /telephones for his real
estate business, the testimony of Kaloko, Birge, Miller, and even Heck's own statements
establish that he did. Further, Heck's usage of PUC offices /telephones was quite extensive
particularly as to the Market Street, Lemoyne, and Front Street, Harrisburg rental properties.
We shall now address the FIS allegations.
Preliminarily, we note that the income and creditor reporting thresholds for calendar
year 1996 were $1,000 and $5,000, respectively; for subsequent years, the thresholds were
$1,300 and $6,500, respectively. The FIS's for Heck for the four calendar years 1996
through 1999 are part of the record in this case. Each of these four FIS's only lists the
Commonwealth /PUC as a source of income. None of the FIS's lists the names of the tenants
and addresses as sources of income. None of the FIS's lists the banks or financial institutions
that hold the mortgages on the real estate that Heck uses for rental properties. Heck's tax
returns, the county records, and Heck's own admission establish that the income from each of
these rentals (only as to the calendar year 1999 for the North Front Street apartment building
in Harrisburg) exceeded the income threshold and that Heck's liability as to the mortgages
exceeded the creditor reporting threshold. Nevertheless, Heck failed to list such financial
interests. Accordingly, for each of the four calendar years Heck violated Section
5(b)(5)/1105(b)(5) of the Ethics Act in each instance when he failed to list each tenant and
Heck 00- 059 -C2
Page 30
address as to the rental income. In addition, Heck violated Section 5(b)(4)/1105(b)(4) of the
Ethics Act in each instance for each year when he failed to list each creditor and interest rates
as to his real estate that was used for rental units.
As to the FIS allegation concerning the failure to disclose a financial interest in any
legal entity engaged in business for profit, we note that the Investigative Division has not
proffered evidence in support of this change. Since it appears that the Investigative Division is
not pursuing this allegation, we need not address it.
Heck is directed within 30 days of the date of mailing of this Order to file amended
FIS's for the calendar years 1996 through 1999 listing all sources of income including the
names and addresses of tenants from whom Heck received rental income in excess of the
reporting threshold as well as creditors and interest rates as to the real estate that was used
for rentals. Failure to comply will result in the institution of an order enforcement action.
Heck concedes that the nondisclosure was an omission but argues that such action
was unintentional. However, Heck readily admitted that he "...never took [the FIS filing
requirement] seriously...[and]...breezed right through it." In support of his position, Heck
called Frank Wilmarth, the PUC Deputy Chief Counsel, who testified that he does not pay
close attention to the FIS and does not read any more than he has to in filling out the form.
Heck also argues that the FIS is ambiguous and confusing and his failure to disclose
was an omission without any intent to violate the Ethics Act. First, the FIS instructions are
simple and straightforward. The instructions are on one page and broken down block by
block. The instructions for the income block specifically state that "rental income" is to be
listed. We fail to discern what is not understandable about "List ...rental income... ".
As to Heck's mental state in not disclosing his financial interests as to his real estate
interests, the record establishes a knowing, reckless action by Heck which we believe may rise
to the level of intentional action. Heck's statement above establishes a knowing and reckless
disregard on his part of the FIS filing requirements.
Heck offers the testimony of Attorney Frank Wilmarth, the PUC Deputy Chief Counsel,
for the proposition that the FIS form is confusing. As noted, Wilmarth testified that he does
not pay close attention or read any more than he has to in completing the FIS. First, the FIS
form is straightforward and disclosure was required by Heck. As to the second point regarding
Wilmarth's lack of attention to the FIS form, the filing is required by law and is to be taken
seriously. We find it surprising that a Commonwealth attorney, particularly a Deputy Chief
Counsel, would make such a cavalier statement, given the civil and criminal penalties under
the Ethics Act.
Heck's other arguments, that the Investigative Division was reckless and unethical in
investigating him (the case was specifically referred here by the PUC) and that Heck's
supervisors are dishonest /unreasonable, do not merit any response.
As to the various arguments raised by Heck in his Reply Brief, we shall respond to
each point seriatim. First, information obtained in the confidential investigation does not
equate to public disclosure on the FIS form. Second, what Miller overheard as to Heck's
telephone conversations established that calls by Heck related to rental properties. The North
Front Street rental property involved such calls occurring over a six month period. Third,
Heck's state of mind in not disclosing rental income /creditors on his FIS's has been discussed
above. Fourth, the argument relating to inconsistency in Heck's statements about reading and
not reading the FIS form has been considered in our review of the record. Fifth, Wilmarth's
credibility and his role as an attorney advocate for Heck and hearing witness, need not be
discussed given our limited findings as to Wilmarth. Finally, the argument about the
investigation commencing prior to the notice of the additional allegation concerning Heck's use
of the PUC offices /telephones has already been addressed. On this issue, Heck adds
Heck 00- 059 -C2
Page 31
citations in support of his argument: (NIT 254), ID Exhibit 8, ¶8a and SEC 400 -990. As to
the first two cites, the information is devoid of any significance. As for the last cite, those
documents were supplied by the Investigative Division to Heck pursuant to 65 Pa.C.S.
§1108(e), which for the most part (approximately 15% of the pages were introduced as
exhibits) are not part of the record in this case.
In that we have adjudicated the allegations, we shall now consider the Investigative
Division's three requests: a financial penalty to be imposed upon Heck, a referral for criminal
prosecution, and a referral to the PUC for (disciplinary) action as to Heck.
We shall discuss these three issues seriatim. On the first question, we must
determine, in the procedural context of this case, whether there is a legal basis to impose a
penalty upon Heck.
§ 411104. Statement of financial interests required to be
filed
(d) Failure to file required statement. —No public
official shall be allowed to take the oath of office or enter or
continue upon his duties, nor shall he receive compensation from
public funds, unless he has filed a statement of financial interests
as required by this chapter.
65 P.S. § 404(d)/65 Pa.C.S. §1104(d).
The Regulations of the State Ethics Commission similarly provide:
§ 15.2. Public officials and public employes.
(b) A public official may not take the oath of office,
continue upon his duties or receive compensation for holding
office unless a Statement of Financial Interests has been filed.
51 Pa. Code §15.2(b).
Does Section 4(d)/1104(d) apply to public employees, given that the statutory language
is limited to public officials? Because the provision is specifically directed to public officials
and not public employees, Section 4(d)/1104(d) cannot be applied to anyone who does not fall
within the Ethics Acts definition of "public official." 65 Pa.C.S. § 1102.
It is an axiomatic principle of statutory construction that "[w]hen the words of a statute
are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of
pursuing its spirit." 1 Pa.C.S. § 1921(b); see, Ramich v. W.C.A.B., 564 Pa. 656, 770 A.2d
318 (2001). Additionally, where the intent of the legislature is clear from the plain meaning of
the statute, the adjudicative body is not to pursue statutory construction. Id. Section
4(d)/1104(d) is unambiguous and is only applicable to public officials.
Furthermore, there is no obvious error on the part of the General Assembly that would
enable the Commission to conclude that Section 4(d)/1104(d) applies to others. Unlike the
obvious error in Act 170 of 1978 which, in Section 4(a), required public employees to file
Statements of Financial Interests, without any mention of public officials, 65 P.S. § 404(a) yet
at the same time provided for Section 4(d) to apply to public officials who failed to file the
forms, there is no obvious inconsistency in the statutory Ianggua a of the Ethics Act to explain
the absence of the term "public employee" in Section 4(d)/1104(d) as a mere error on the part
of the General Assembly. Since the General Assembly in ct 9 of 1989 corrected the
Heck 00- 059 -C2
Page 32
language of Section 4(a) to include both public officials and public employees but left Section
4(d)/1104(d) unchanged in that regard, we believe that Section 4(d)/1104(d) only applies as to
public officials.
We must now consider whether the restitution and treble penalty provisions of the
Ethics Act, Sections 1107(13) and 1109(c), provide a basis for imposing a penalty under the
circumstances of this case. These Sections provide, in pertinent part, as follows:
§ 1107. Powers and duties of commission
(13) ... Any order resulting from a finding that a public
official or public employee has obtained a financial gain in
violation of this chapter may require the restitution plus interest of
that gain to the appropriate governmental body. . . . This
restitution requirement shall be in addition to any other penalties
provided for in this chapter.
65 Pa.C.S. §1107(13).
§ 1109. Penalties
(c) Treble damages. —Any person who obtains financial
gain from violating any provision of this chapter, in addition to any
other penalty provided by law, shall pay a sum of money equal to
three times the amount of the financial gain resulting from such
violation into the State Treasury or the treasury of the political
subdivision. Treble damages shall not be assessed against a
person who acted in good faith reliance on the advice of legal
counsel.
65 Pa.C.S. §1109(c).
Section 1107(13) authorizes the Commission to order restitution if a public official or
public employee has obtained a financial gain in violation of the Ethics Act, while Section
1109(c) authorizes the Commission to impose a treble penalty upon any person who obtains
a financial gain from violating any provision of the Ethics Act. Both of these provisions
require a nexus between the violation and resulting financial gain.
Certainly these provisions support ordering restitution and /or a treble penalty as to a
public official who violates Section 4(d)/1104(d). However, since Section 4(d)/1104(d) does
not prohibit a public employee from performing his duties or being compensated despite
failure to file a statement of financial interests as required, the public employee non -filer would
be entitled to receive compensation for doing his job. Thus, although the public employee
non -filer would be in violation of the Ethics Act for failing to file a statement of financial
interests as required, there would be no connection between that violation of Section
4(a)/1104(a) and the compensation that he would receive for doing his job. In short, since
Section 4(d)/1104(d) does not prohibit the public employee non -filer from being compensated,
the receipt of such compensation would not constitute a financial gain obtained in violation of
the Ethics Act.
Therefore, Sections 1107(13) and 1109(c) would not provide a basis for applying
Section 1104(d) to public employees.
Five of the six cases in which this Commission ordered a financial penalty under
Section 4(d)/1104(d) involved township supervisors, who were clearly "public officials." The
Heck 00- 059 -C2
Page 33
other Order involved a borough code enforcement officer, described in the Order as a public
official /employee, who arguably would fit within either definition. None of the above Orders
involved individuals who would not fit within the definition of "public official."
There is a statutory basis for imposing penalties upon public officials /public employees
who fail to file or file deficient FIS's. See, 65 Pa.C.S. §1109(f). That process allows for a
penalty of up to a maximum of $250 per occurrence. However, such penalties may be
imposed when a case is processed through the civil penalty process using a rule to show
cause. The instant matter has not proceeded as a civil penalty process but rather as an
investigation. Accordingly, there is not a basis for us in the confines of this case to impose
any type of penalty, even though such is clearly warranted, given the egregious and ongoing
nature of Heck's conduct. Parenthetically, the use of the PUC offices /telephones by Heck
does provide a basis for imposing restitution /treble penalty as to the financial gain; however,
there is no way to quantify the use of PUC telephones and offices by Heck based upon the
record before us.
Parenthetically, we are acutely aware of the irony that as to FIS cases, the civil penalty
process allows for the imposition of penalty but the far more serious investigative cases as to
public employees involving FIS's do not. This is problematic in the Ethics Act but ours is only
a function to administer, not to legislate. See, Richardson, Opinion 93 -006.
We shall now address the matter of whether this case should be referred to a law
enforcement agency for review as to a criminal prosecution.
It is noted that this Commission enforces the Ethics Act in a civil, rather than criminal,
context. Intent is not a requisite element for this Commission to find a violation of the Ethics
Act. See, e.q., Yocabet v. State Ethics Commission, 531 A.2d 536 (Pa. Commw. Ct. 1987)
(holding that the township supervisor in that case violated Section 3(a) of the Ethics Act even
if he did not intend to do so). Therefore, this Commission is not required to find that conduct
was "intentional" in order to find that he violated the Ethics Act.
However, "culpability" must be established as to a criminal violation of the Ethics Act.
See, Commonwealth v. Parmar, 551 Pa. 318, 710 A.2d 1083 (1998) (Opinion by Madame
Justice Newman, in which Mr. Chief Justice Flaherty and Mr. Justice Castille joined, and
Opinion by Mr. Justice Zappala, in which Mr. Justice Cappy joined). Consequently, when
referring a given case to an appropriate law enforcement authority for possible criminal
prosecution, we consider the potential for an ultimate determination of "culpability" in a criminal
context. See, 18 Pa.C.S. § 302(c).
In this case we find, based upon the record before us, that Heck's conduct was
knowing and reckless so as to be blatant and possibly intentional. Heck readily admitted that
he did not take the FIS filing requirement "seriously" based upon his own determination that he
did not have any type of conflict so that he "breezed" through the completion of the FIS form.
We conclude that there is a reasonable expectation that a prosecution would be instituted
against Heck. It is our view that a jury or court as fact finder would have a sufficient basis to
conclude that Heck acted intentionally, knowingly, or, at the very least, recklessly with respect
to the conduct we have reviewed in this matter. See, 18 Pa.C.S. § 302(c). Accordingly, this
case shall be referred to the appropriate law enforcement authority with the Commission's
recommendation for the institution of a criminal prosecution.
Finally, a referral of this matter back to the PUC is warranted for its review as to
disciplinary action. Heck has exhibited a course of conduct for many years which we find to
be egregious. Despite numerous verbal and written warnings against using PUC office and
telephone for his private real estate rental business, Heck has continued in that endeavor. As
to the FIS filing requirement which is the law in Pennsylvania, Heck admits that he "never
really took it seriously" based upon his own determination, that he had no type of conflict.
Such arrogance in disregard of the law, warrants review as to disciplinary action.
Heck 00- 059 -C2
Page 34
IV. CONCLUSIONS OF LAW:
1. Heck, as an Analyst for the Public Utility Commission, Public Utilities Bureau of
Conservation, Economics and Energy Planning, is a public employee subject to the
provisions of Act 9 of 1989 as codified by Act 93 of 1998.
2. Heck violated Section 5(b)/1105(b) of the Ethics Act in each instance when he failed to
list financial interests that exceeded the reporting thresholds for the sources and
addresses of rental income and the names of creditors and interest rates as to all of the
real estate he owned and rented on his 1996, 1997, 1998, and 1999 calendar year
FIS's.
3. Heck violated 3(a)/1103(a) of the Ethics Act when he used PUC offices and
telephones to conduct his private real estate rental business.
In Re: Thomas Heck
ORDER NO. 1251
File Docket: 00- 059 -C2
Date Decided: 9/4/02
Date Mailed: 9/25/02
1. Heck, as an Analyst for the Public Utility Commission, Public Utilities Bureau of
Conservation, Economics and Energy Planning violated Section 5(b)/1105(b) of the
Ethics Act in each instance when he failed to list financial interests that exceeded the
reporting thresholds for the sources and addresses of rental income and the names of
creditors and interest rates as to all of the real estate he owned and rented on his 1996,
1997, 1998, and 1999 calendar year FIS's.
2. Heck violated 3(a)/1103(a) of the Ethics Act when he used PUC offices and
telephones to conduct his private real estate rental business.
3. Heck is directed within 30 days of the date of mailing of this Order to file amended
FIS's for the calendar years 1996 through 1999 listing all sources of income including
the names and addresses of tenants from whom Heck received rental income in
excess of the reporting threshold as well as creditors and the interest rates as to the
real estate that was used for rentals. Failure to comply will result in the institution of an
order enforcement action.
4. Given the egregious nature of the violations by Heck, this matter will be referred to the
appropriate law enforcement authority with the Commission's recommendation for the
institution of a criminal prosecution.
5. This case will also be referred to the PUC for review as to disciplinary action.
BY THE COMMISSION,
Louis W. Fryman, Chair