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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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Heck 00- 059 -C2 Page 2 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 Page 3 (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 Page 4 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. Heck 00- 059 -C2 Page 5 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 Page 6 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 Heck 00- 059 -C2 Page 7 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 Page 8 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 Page 9 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 Page 10 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) Heck 00- 059 -C2 Page 11 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 Page 12 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. Heck 00- 059 -C2 Page 13 (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. Heck 00- 059 -C2 Page 14 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. Heck 00- 059 -C2 Page 15 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