Loading...
HomeMy WebLinkAbout1318 PopkaveIn Re: Murray Popkave, Esq. File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Donald M. McCurdy Michael Healey Paul M. Henry Raquel K. Bergen 02- 096 -C2 Order No. 1318 March 11, 2004 March 25, 2004 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 not filed and a hearing was deemed waived. 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Popkave 02- 096 -C2 Page 2 I. ALLEGATION: That you, Murray Popkave, a public official /public employee, in your capacity as President of the School Board of Directors of the Einstein Charter School, violated the following provisions of the State Ethics Act (Act 93 of 1998) when you solicited something of monetary value from Tutorbots, Inc. including but not limited to employment for your sons, Daniel and David, for positions with Tutorbots, Inc., at a time when Tutorbots, Inc. was providing management services to the Einstein Academy and when you were authorizing payments to that company; when you used the authority of your public office/ employment to obtain positions of employment for your sons with Tutorbots, an Einstein Charter School vendor; when you and a business, D. P. Painting, with which you and /or a member of your immediate family are associated, contracted with Tutorbots in excess of $500.00 without an open and public process; when you approved payments to Tutorbots, Inc. at a time when Tutorbots was employing members of your immediate family and contracting with a business, D. P. Painting, with which you and /or members of your immediate family are associated; when you failed to file a Statement of Financial Interests for the calendar year 2000 by May 1, 2001; and when you failed to disclose on Statements of Financial Interests filed for the 2001 and 2002 calendar years income received from D. P. Painting in excess of $1,300 annually, your office and /or directorship in D. P. Painting and your financial interest in D. P. Painting. Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. (c) Accepting improper influence. - -No public official, public employee or nominee or candidate for public office shall solicit or accept, anything of monetary value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding of that public official, public employee or nominee that the vote, official action, or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. (f) Contract. - -No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent Jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. §1103(a)(c)(f). Section 1104. Statement of financial interests required to be Popkave 02- 096 -C2 Page 3 filed. (a) Public official or public employee. - -Each public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the commission no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Each public employee and public official of the Commonwealth shall file a statement of financial interests for the preceding calendar year with the department, agency, body or bureau in which he is employed or to which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Any other public employee or public official shall file a statement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. Persons who are full -time or part -time solicitors for political subdivisions are required to file under this section. 65 Pa.C.S. §1104(a). Section 1105. Statement of financial interests. (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. (5) The name and address of any direct or indirect source of income totaling in the aggregate $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. (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 Pa.C.S. §1105(b). Section 2. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public f of ce or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa.C.S. §1102(a). II. FINDINGS: Popkave 02- 096 -C2 Page 4 1. The Investigative Division of the State Ethics Commission received a signed, sworn complaint alleging that Murray Popkave violated provisions of the State Ethics Act (Act 93 of 1998). 2. Upon review of the complaint the Investigative Division initiated a preliminary inquiry on December 11, 2002. 3. The preliminary inquiry was completed within sixty days. 4. On February 5, 2003, a letter was forwarded to Murray Popkave, by the Investigative Division 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. 7001 0360 0001 4061 2603. b. The domestic return receipt bore the signature of (illegible), with a delivery date of February 7, 2003. 5. On June 3, 2003, the Investigative Division of the State Ethics Commission filed an application for a ninety day extension of time to complete the Investigation. 6. The Commission issued an order on June 23, 2003, granting the ninety day extension. 7. On August 21, 2003, the Investigative Division of the State Ethics Commission filed an application for a ninety day extension of time to complete the Investigation. 8. The Commission issued an order on September 15, 2003, granting the ninety day extension. 9. On January 22, 2004, a letter was forwarded to Murray Popkave by the Investigative Division advising him that the allegations contained in the notice of investigation dated February 5, 2003, were being amended. a. Said letter was sent by certified mail no. 7002 3150 0000 6075 3948. 10. Periodic notice letters were forwarded to Murray Popkave in accordance with the provisions of the Ethics Law advising him of the general status of the investigation. 11. The Investigative Complaint was mailed to the Respondent on January 26, 2004. 12. Murray Popkave has served on the Einstein Academy Charter School board of trustees since its inception as the National Organization for Children on March 21, 2001. a. Popkave served as the chairman of the board of the Einstein Academy from March 21, 2001, through August 2002. 13. Popkave is a self employed attorney, financial consultant and accountant. a. Popkave business interests include Creative Tax Planners, Inc., and Life Planning, Inc. 14. The origin of the Einstein Academy Charter School began with the creation of the Andrew Foundation Inc. which was incorporated by Murray Popkave on November30, 1998. Popkave 02- 096 -C2 Page 5 a. The Andrew Foundation, Inc., was created by Mimi Rothschild - Mandel and her husband, Howard Mandel, to honor the memory of the Mandel's deceased child, Andrew Mandel. b. The initial intent of the Andrew Foundation, Inc., was to provide information and /or educational services to families with sick or disabled children. 15. Murray Popkave was retained by the Mandels to create and incorporate the Andrew Foundation. a. The Mandels were familiar with Popkave as a result of private business dealings Mimi Rothschild's father had with Popkave. 16. On June 29, 2000, the Andrew Foundation Inc. changed its name to the National Organization for Children. a. As of March 21, 2001, officers of the National Organization for Children included Murray Popkave, Chairman; Agnes Smith, Secretary and Anna Friedrich, Treasurer. 17. The National Organization for Children evolved into R.E.A.C.H. with an eventual name change to T.E.A.C.H. a. The Board of Trustees included Mimi Rothschild, Howard Mandel, Murray Popkave, Judy Rappaport, Karlie Roth, Nesbeth Lane, Paul Cruz, Lillian Kuretu. b. By November 15, 2000, R.E.A.C.H. was doing business as T.E.A.C.H., the E- Academy Charter School. 18. On or about November 15, 2000, charter school applications were filed by T.E.A.C.H. with approximately sixty -two (62) school districts within the Commonwealth. a. For a charter school to operate within the Commonwealth, a charter must be approved by a sponsoring school district. b. Section 17 -1717 of the Charter School Law delineates the following regarding the establishment of a charter school. (c) An application to establish a charter school shall be submitted to the local board of school directors of the district where the charter school would be located by November 15 of the school year preceding the school year in which the charter school will be established, except that for a charter school beginning in the 1997 -1998 school year, an application must be received by July 15, 1997. (d) Within 45 days of the receipt of an application, the local board of school directors in which the proposed charter school is to be located shall hold at least one public hearing on the provisions of the charter application under the Act of July 3, 1986, (P.L. 388, No. 84), known as the Sunshine Act. At least 45 days must transpire between the first public hearing and the final decision of the board on the charter application, except that for a charter school beginning in 1997 -1998 school year, only thirty days must transpire between the first public hearing and the final decision of the board. Popkave 02- 096 -C2 Page 6 No later than 75 days after the first public hearing on the application, the local board of school directors shall grant or deny the application for charter school beginning in the 1997 -1998 school year, the local board of school directors shall grant or deny the application no later than sixty (60) days after the first public hearing. (e)(iv) A charter application shall be deemed approved by the local board of school directors of a school district upon affirmative vote of a majority of all the directors. c. A charter will be granted only for a school organized as a public non - profit organization. 19. On November 15, 2000, the Einstein Academy Charter School submitted a charter school application to the Morrisville Borough School District, Morrisville, PA. a. This application was prepared by Mimi Rothschild. b. This application was submitted by Mimi Rothschild under the name T.E.A.C.H. standing for The E- Academy Charter School. c. The application was reviewed for submission by the Einstein Board. d. The concept for T.E.A.C.H. was to operate a computerized charter school where the curriculum is delivered through the internet. 20. Mimi Rothschild and Howard Mandel had themselves removed from the Board of Directors of R.E.A.C.H. and its successors on or about November 15, 2000. a. Rothschild and Mandel removed themselves from the Board to form Tutorbots Inc. b. Rothschild and Mandel are married and were at that time. c. Tutorbots, Inc.'s, intention was to serve as the for profit management company for Einstein should a charter be granted. 21. T.E.A.C.H.'s charter application identified T.E.A.C.H. as a non - profit entity that will be contracting with Tutorbots, Inc., a firm that specializes in utilizing state of the art technology to enhance and deliver innovative education. Its team includes educators, curriculum developers, software designers, graphics, e- commerce pioneers and start- up experts. Tutorbots, Inc., will manage all aspects of the development and management of the school from a technology, software licensing, relationships with content providers, course selection and approval, creation and maintenance of the infrastructure." a. Tutorbots, Inc., was owned by Mimi Rothschild - Mandel and Howard Mandel. 22. Of the sixty -two (62) school districts Einstein submitted charter school applications to, the Morrisville Borough School District expressed the most interest in approving a charter. a. Einstein focused their efforts to secure a charter from Morrisville based on the district's interest in the concept of an on -line charter school. Popkave 02- 096 -C2 Page 7 23. The Morrisville Borough School District held public meetings on T.E.A.C.H.'s charter school application on January 17, 2001, and March 20, 2001. a. Howard Mandel and Mimi Rothschild were present on behalf of T.E.A.C.H.'s application on January 17, 2001. b. Murray Popkave, Howard Mandel and Mimi Rothschild were present on behalf of T.E.A.C.H.'s application on March 20, 2001. 24. On March 20, 2001, a charter school agreement was entered into between the Borough of Morrisville School District and the E- Academy Charter School (T.E.A.C.H) with an effective date of July 1, 2001. a. This agreement was made at the completion of the March 20, 2001, public meeting. b. This agreement was signed by Murray Popkave and Agnes Smith on behalf of The E- Academy Charter School and all nine members of the Morrisville School Board. c. The charter period is specified as July 1, 2001, through June 30, 2006, unless terminated or extended by any district. 1. The term set was prescribed by Section 17 -1720 of the Charter School Law Regulations. d. T.E.A.C.H. is identified as having to make itself a Pennsylvania non - profit organization by June 1, 2001. e. Under financial management T.E.A.C.H. shall operate in accordance with GAAP or other generally accepted standards for fiscal management. f. T.E.A.C.H's accounting methods shall comply in all instances with any applicable governmental accounting requirements relating to charter schools. As part of the charter agreement, T.E.A.C.H. agrees to pay the Morrisville School District a minimum of $75,000 per year in ten installments and lease space from the district at an annual cost of $25,000. h. Maintenance and custodial services provided by the district will cost an additional $10,000 annually to be paid by T.E.A.C.H. This charter agreement is signed by the Morrisville School District Board of Directors and Murray Popkave and Agnes Smith on behalf of the E- Academy Charter School. g. 25. A fictitious name registry for T.E.A.C.H. was filed with the Pennsylvania Department of State on March 30, 2001. a. Trustees of T.E.A.C.H. included Murray Popkave, Agnes Mae Smith, Nesbeth Lane, Lillian Kuretu, Linda Cruz, Paul Cruz, Mitchell Roth and Karlie Roth. b. Mimi Rothschild and Howard Mandel were removed as trustees. c. Mimi Rothschild identified individuals to serve on the National Organization for Children's Board and its successors. 26. On September 4, 2001, another fictitious name registry was filed with the Pennsylvania Department of State changing the name to the Einstein Academy Charter School. Popkave 02- 096 -C2 Page 8 a. Fictitious name registry was filed by Murray Popkave as Chairman of the Board b. Also effective September 4, 2001, the location of the National Organization of Children was changed from 1225 East Montgomery Avenue, Wynnewood, PA 19096 to 550 West Palmer Street, Morrisville, PA 19067. 1. 550 West Palmer Street, Morrisville, PA is also the address for the Morrisville Borough School District. 27. Upon approval of the charter by the sponsoring school district, a charter school is considered a public entity and subject to all charter school regulations found in 24 P.S. §1701(a). a. Section 17- 1715(a)(i) of the Charter School Laws provide that: "Charter schools are not exempt from statutes applicable to public schools other than this act." 28. Powers and duties of the board of trustees of charter schools are cited in Section 17- 1716(a)(b) of the Charter School Law as follows: (a) Powers of the board of trustees of a charter school shall have the authority to decide matters related to the operation of the school, including but not limited to budgeting, curriculum and operating procedures subject to the school charter. The board shall have the authority to employ, discharge and contract with necessary professional and non - professional employees subject to the school's charter and the provisions of this article. (b) No member of a local board of school directors of a school entity shall serve on the board of trustees of a charter school that is located in the members district. (c) The board of trustees shall comply with the Act of July 3, 1986 (P.L. 388, No. 84) known as the Sunshine Act. 29. Members of a Charter School Board of Trustees are considered public officials pursuant to Section 17- 1727(a) of the Charter School Regulations 24 P.S. §1701(a). 30. General responsibilities of Popkave as chairman of the board of trustees included but may not have been limited to the following: a. Schedule and oversee meetings of the Einstein Academy Charter School Board of Trustees. b. Serve as the liaison between Einstein's Board, the PA Department of Education and the Morrisville School District. c. Negotiate with vendors doing business with Einstein. d. Sign contracts, agreements and other official documents on behalf of Einstein. e. Review and approve for payment invoices submitted for payment by the school's management company (Tutorbots, Inc.). f. Sign Einstein checks issued to Tutorbots, Inc., for management services provided. g. Oversee payment of Einstein expenditures. Popkave 02- 096 -C2 Page 9 h. Travel to various school districts as a representative of Einstein on items such as charter applications, student tuition reimbursements and other litigation. 31. Murray Popkave did not receive any compensation from Einstein for hours worked on Einstein business. a. Popkave was reimbursed for documented expenses for food, travel, lodging and business expenses incurred on behalf of Einstein, as detailed in Finding Nos. 81 and 82. 32. The Einstein Academy began operations as a Cyber Charter School on July 1, 2001, providing educational services starting with the 2001 -02 school year. 33. On August 26, 2001, a Management Agreement was entered into between Tutorbots, Inc., and the National Organization of Children doing business as T.E.A.C.H./The Einstein Academy Charter School. a. The contract was negotiated between the Mandels and Murray Popkave. b. The scope of services to be provided by Tutorbots, was to provide all management and development services necessary to operate the Einstein Academy Charter School. c. Tutorbots shall deliver written reports to T.E.A.C.H. on the status of the Einstein Academy Charter School as required. d. Tutorbots shall provide a full range of non - teaching personnel management functions for T.E.A.C.H. e. Tutorbots shall cause to be prepared written management reports to be presented not later than one week prior to each meeting of the T.E.A.C.H. board of directors. 1. The written report shall contain students status, financial statement and analysis, evaluation of services, administrative and work for the upcoming month. f. The agreement shall commence on March 20, 2001, and may be terminated by any party upon 30 days prior written notice. This agreement will be automatically terminated if the Morrisville School District revokes the T.E.A.C.H. charter. g. h. The agreement itself was signed by Howard Mandel on behalf of Tutorbots and Murray Popkave on behalf of the National Organization for Children /T.E.A.C.H. 34. No other management companies were considered by the Einstein Board. a. Services to be provided by Tutorbots, Inc., were not bid. 35. Mimi Rothschild and Howard Mandel resigned from the T.E.A.C.H. Board of Trustees in November 2000 because of their intent for Tutorbots, Inc., to serve as the management company for T.E.A.C.H. /Einstein provided a charter was granted. a. Tutorborts, Inc. was the mechanism by which the Mandels could receive compensation as a for profit entity running the Einstein Academy. Popkave 02- 096 -C2 Page 10 36. Einstein and Tutorbots shared common office space at 10 Shurs Lane, Philadelphia, PA 19127. a. 10 Shurs Lane, Philadelphia, PA 19127 is not within the geographical boundaries of the Morrisville Borough School District. b. Office space at 10 Shurs Lane, Philadelphia, PA was rented by ELRN, Inc. 1. ELRN, Inc. is a Pennsylvania business corporation owned by Howard Mandel. 37. Funding for the Einstein Academy was provided by the Pennsylvania Department of Education and participating school districts based on student enrollments. 38. The Einstein Academy did not operate with a typical school district structure. a. Einstein did not have a business manager /administrator or business office. b. Einstein did not have anyone serving as superintendent, principal, headmaster or the equivalent. c. These functions were handled by Popkave and Tutorbots. d. Popkave oversaw all the financial operations of Einstein from its inception through March 2002. 39. The Einstein Board of Trustees was not actively involved in the operations of the school while Tutorbots Inc. served as the management entity. a. Tutorbots handled all aspects of the day to day operation of Einstein. b. Popkave was the liaison between Tutorbots Inc. and Einstein's Board. 1. Murray Popkave approved and signed Einstein checks issued to Tutorbots. 40. Around August or early September of 2001, Murray Popkave brought his son, Daniel Popkave, with him to meet Rothschild and Mandel at Tutorbots. a. During this meeting Popkave told Rothschild and Mandel that he wanted them to give Daniel Popkave a job paying $50,000 a year. b. Rothschild had previously met Daniel Popkave on one occasion during a funding hearing in Butler, PA, on or about September 7, 2001. c. At the time of the meeting, Daniel Popkave was unemployed and had withdrawn from college. 41. In September 2001 Tutorbots was hiring new employees and needed office support staff. a. Murray Popkave was aware that Tutorbots was hiring. 42. Rothschild and Mandel agreed to Murray Popkave's request to hire his son, Daniel Popkave, at an annual salary of $35,000 not the $50,000 requested by Murray Popkave. Popkave 02- 096 -C2 Page 11 a. Rothschild and Mandel felt pressured to hire Daniel Popkave due to Murray Popkave's position as chairman of the Einstein Board. b. Daniel Popkave would not have been hired by Tutorbots, Inc., had it not been for the efforts of Murray Popkave and Popkave's position as chairman of the Einstein Board of Trustees. 43. September 11, 2001, was the official first day of classes for Einstein Academy students. a. Daniel Popkave began working for Tutorbots on September 11, 2001. b. The duties performed by Daniel Popkave were clerical in nature, including packaging books and running errands. 44. Murray Popkave issued Einstein Academy check number 1011 in the amount of $231,000 to Tutorbots, Inc., on September 11, 2001, the same day his son Daniel Popkave began working for Tutorbots. a. Popkave previously had only issued one (1) check to Tutorbots; $50,000 on August 19, 2001. 1. Tutorbots services dated back to March 20, 2001. 2. This was the first payment issued to Tutorbots by Einstein for services. 45. Daniel Popkave was employed by Tutorbots, Inc., from approximately September 11, 2001, until January 11, 2002. a. Daniel Popkave encountered employment problems at Tutorbots within weeks of being hired. 1. Daniel Popkave frequently showed up late and /or left early from work. b. Rothschild and Mandel terminated Daniel Popkave's employment with Tutorbots effective January 11, 2002. 46. While employed by Tutorbots, Inc., Daniel Popkave received payments totaling $6,319.70. a. These payments were made from the Tutorbots, Inc., Mellon Bank, Account. b. This account was funded with payments Tutorbots received from Einstein. 1. No deposits were made from any other sources during this period from September 2001 through January 2002. 47. Daniel Popkave received the following payments as an employee of Tutorbots, Inc. a. Date Check No. Amount 09/22/01 97 $ 966.76 10/05/01 10005 $ 966.76 11/02/01 10016 $ 966.76 11/16/01 10029 $ 966.76 11/30/01 10042 $ 966.76 12/14/01 10055 $ 966.76 01/11/02 10092 $ 519.15 Popkave 02- 096 -C2 Page 12 Total $ 6,319.70 48. Tutorbots' payments to Daniel Popkave were deposited into a PNC Account in the name of Daniel Popkave. a. This is a combined checking and savings account for Daniel Popkave. b. Murray Popkave did not have signature authority on this account. 49. In or about December 2001 Murray Popkave again approached Mandel and Rothschild seeking employment for his other son, David Popkave. a. Murray Popkave was assisting his son David Popkave get started in the painting /contracting business. 50. Murray Popkave was providing financial and accounting support to David Popkave d /b /a D. P. Professional Painting, Inc. a. By the end of 2001, Murray Popkave estimated providing financial support to David Popkave in excess of $30,000. 51. Articles of Incorporation on file with the Pennsylvania Department of State include incorporation papers for Dave Popkave Professional Painting, Inc. a. Murray W. Popkave, 1432 Sandy Circle, Narbeth, PA 19072 -1122 is listed as the sole incorporator. b. Incorporation papers were received by The Department of State on February 23, 2001. c. Corporation entity number 2990326 was assigned to this corporation. d. Corporate officers are: President: David G. Popkave Vice President: None Listed Secretary: Murray Popkave Treasurer: Murray Popkave 52. Murray Popkave wanted Rothschild and Mandel to hire David Popkave's printing [sic] company (D. P. Professional Painting) at a rate of $10,000 per month for duties related to Tutorbots. a. At the time of Murray Popkave's solicitation to contract with David Popkave, Tutorbots was in the process of relocating to 10 Shurs Lane, Philadelphia, and needed laborers. b. Murray Popkave wanted Tutorbots to pay David Popkave a $10,000 advance so that David Popkave could purchase a truck. c. Murray Popkave did not disclose to Tutorbots that he was a corporate officer of D. P. Professional Painting. d. No bid process was used for the hiring of D. P. Professional Painting. 53. Mandel and Rothschild felt compelled to hire D. P. Professional Painting because of the ongoing business relationship between Tutorbots and Einstein and Murray Popkave 02- 096 -C2 Page 13 Popkave's continued service as Einstein board chairman. a. Popkave was responsible for issuing Einstein payments to Tutorbots at this time. 54. As a result of Murray Popkave's advance request and intervention in the hiring of David Popkave, Howard Mandel authorized a $10,000 advance on December 5, 2001, from Tutorbots to David Popkave. a. The payment was deposited to an account at Commerce Bank in the name of David Popkave. 55. Tutorbots initially intended to use D. P. Professional Painting for renovations and painting at 10 Shurs Lane. a. David Popkave was not a member of the local union and the property owner did not want to use non -union labor. b. Tutorbots determined that D. P. Professional Painting could provide maintenance, shipping and other business support functions in conjunction with their move to 10 Shurs Lane. 56. D. P. Professional Painting, Inc., would not have been hired by Tutorbots absent Murray Popkave serving as chairman of Einstein's board. a. Rothschild and Mandel were not familiar with David Popkave Painting prior to the introduction by Murray Popkave and his request that his son be hired. b. Tutorbots did not know of the extent of Murray Popkave's financial interest in D. P. Professional Painting when they hired them. 57. D. P. Professional Painting, Inc., was employed by Tutorbots, Inc., from December 2001 through February 2002. a. No formal written contract was entered into between Tutorbots and D. P. Professional Painting. b. Contracting fees were set by Murray Popkave. c. D. P.'s employment by Tutorbots occurred during the winter months when D. P.'s painting business was slow. d. D. P.'s contract with Tutorbots enabled David Popkave to have steady work during winter months that he would otherwise not have. 58. Business records of Tutorbots, Inc. confirm the receipt of the following invoices from D. P. Professional Painting for services and expenses. a. Expense receipts: 01/02/02 Post -it note "Howie there are Dave's out of pocket expenses last month. Check for $10,607.83 should be payable to D. P. Professional Painting, Inc. + give to me, Murray" Receipts for expenses in the amount of $10,607.83 Date Expense Amount 12717701 Ricklins Ace Hardware $12.65 12/11/01 U -Haul $60.54 12/17/01 Narberth Auto Rental $120.00 Popkave 02- 096 -C2 Page 14 12/18/01 12/18/01 12/19/01 Narberth Auto Rental Home Depot Narberth Auto Rental b. 02/01/02 Invoice #020102 (invoice February contract charge DC -14 Hauler Recycled 9 x 12 28 Ib. Padlock 2" Brass & 4 1/s lock key Toyota Mover Chain /cable /rope Lumber & screws Saw Hole 2" w /Arbor Ace Out of town travel Corresponding supplier invoice Saw Hole $ 13.77 Chain /rope /cable $ 4.10 Toyota Mover $129.89 Recycled 9 x 12 $ 48.68 DC -14 Hauler $ 76.19 Lumber & screws $ 26.02 a. Date 12/05/01 01/05/02 02/15/02 02/28/02 02/28/02 Check No. 1145 2052 3026 3082 3085 Total number is the same as the date) $ 10,000.00 $ 76.19 $ 48.68 $ 17.56 $ 129.89 $ 4.10 $ 26.02 $ 13.77 $ 28.98 01/22/02 01/17/02 01/17/02 01/15/02 01/15/02 01/21/02 01/22/02 Padlock $ 17.56 Out of town travel $ 28.98 1. $8,345.19 of this invoice was paid. c. Tutorbots, Inc., did not maintain any other receipts or invoices from D. P. Professional Painting. 59. Payments were made to D. P. Professional Painting from Tutorbots, Inc., on the following dates: Amount $ 10,000.00 $ 10,607.83 $ 8,345.19 $ 106.94 $ 2,000.00 $ 31,059.96 $84.02 $253.98 $76.64 Ace Hardware Ace Hardware Unknown rental company Staples Unknown rental company ($ ($8.99) DMI Home Supply 17.03) DMI Home Supply No receipt No receipt Memo 10 Shurs Office Remodeling Expenses Work in Office 60. Tutorbots payments to D. P. Professional Painting were deposited into a Commerce Bank account. a. Murray Popkave and David Popkave both have signature authority on this account. b. Murray Popkave and David Popkave each wrote checks from this account. c. Murray Popkave signed the front side of approximately 78 of 80 checks issued from this account between November 2001 and March 2002. 61. Mandel and Rothschild became dissatisfied with David Popkave's performance and terminated Tutorbot's relationship with D. P. Professional Painting in February 2002. a. This occurred approximately one month after Tutorbots terminated Daniel Popkave 02- 096 -C2 Page 15 Popkave. 62. As Chairman of the Einstein Academy, Murray Popkave issued payments to Tutorbots, Inc. for management services. a. These payments were made pursuant to Einstein's August 26, 2001, management agreement with Tutorbots, Inc. b. These payments were made based on a percentage of Tutorbots' annual budget instead of actual services provided. c. Murray Popkave was the Einstein official who signed checks payable to Tutorbots. d. The largest payments authorized to Tutorbots by Popkave occurred when Popkave's sons were employed by Tutorbots. 1. No payments to Tutorbots were authorized by Popkave after his sons were terminated by the Mandels. 2. By March 2002 Tutorbots' contract with Einstein was terminated. (See Finding No. 74). 63. The Einstein Academy had a projected budget for the 2001 -2002 school year of $15,456,927. a. Einstein's funding came primarily from the Pennsylvania Department of Education (PDE) and local school districts. b. Einstein also received payments for computer deposits, phone and internet charges and account interest. c. Einstein also was the recipient of loans, from Tutorbots to cover operating expenditures between PDE payments. 64. As of March 12, 2002, the Einstein Academy received funding totaling approximately $4,536,069.74. a. March 12, 2002, was the effective date that Tutorbots no longer was serving as the management company for the Einstein Academy. 65. The Einstein Academy received funding from the following sources between July 1, 2001, and March 12, 2002. a. PDE and Local School Districts $ 4,089,950.07 Computer Deposits $ 127,347.40 Account Interests $ 2,412.35 Phone /Internet $ 359.92 Loans from Tutorbots $ 316,000.00 Total $ 4,536,069.74 66. Einstein Academy financial records confirm payments were made to Tutorbots by Popkave on the following dates: Date Check No. Amount 08/19/01 1003 $ 50,000.00 09/11/01 1011 $ 231,000.00 10/05/01 1039 $ 120,000.00 Date Check Thkr Amount Date Check Thkr Amount Payee 09/11/01 1011 $231,000.00 09/22/01 97 $966.76 Daniel Popkave 10/05/01 1039 $120,000.00 10/05/01 10005 $966.76 Daniel Popkave 11/30/01 1131 $21,053.43 11/30/01 10042 $966.76 Daniel Popkave 12/03/01 1166 $1,200,000.00 12/05/01 1145 $10,000.00 David Popkave 01/01/02 1449 $800,000.00 01/11/02 10092 $519.15 Daniel Po. kave 01/05/02 2052 $10,607.83 David Popkave Popkave 02- 096 -C2 Page 16 10/19/01 1054 $ 22,000.00 11/30/01 1131 $ 21, 053.43 12/03/01 1166 $ 1,200,000.00 01/11/02 1449 $ 800 000.00 Total: $ 2,444,053.93 [sic] 67. As a result of payments Tutorbots received from Einstein at Murray Popkave's direction, Tutorbots had operating capital available to pay expenses, including wages for Daniel Popkave and David Popkave d /b /a D. P. Professional Painting, Inc. 68. Five (5) payments made by Tutorbots, Inc., to Daniel Popkave and David Popkave d /b /a D. P. Professional Painting occurred in close proximity to payments Tutorbots, Inc. received from Einstein after Murray Popkave's approval. a. These payments occurred as follows: Einstein to Tutorbots Tutorbots to DaniellDavid PopkavelD. P. Paintin b. Tutorbots needed funding from Einstein to facilitate payments to David Popkave /D. P. Professional Painting and Murray Popkave. 69. Murray Popkave personally received three (3) payments totaling $8,308.95 from the corporate account of Dave Popkave Professional Painting between December 18, 2001, and February 22, 2002. a. Payments from Tutorbots, Inc. were used to fund this account. b. Payments were issued to Murray Popkave from this account as follows: c. Payments to Murray Popkave could not have been made from this account absent payments from Tutorbots. 70. Murray Popkave received $8,308.95 of the $31,059.96 total Tutorbots paid to D. P. Professional Painting. a. Tutorbots was unaware that Murray Popkave was receiving payments from the D. P. Professional Painting Account. b. These payments were received by Murray Popkave during the same time period when he signed Einstein Academy checks issued to Tutorbots. Check Number Date Amount Memo 121 12/18/01 1,708.95 out of pocket expenses 138 01/18/02 4,600.00 legal fees 168 02/22/02 2,000.00 loan repayment 8,308.95 Total Popkave 02- 096 -C2 Page 16 10/19/01 1054 $ 22,000.00 11/30/01 1131 $ 21, 053.43 12/03/01 1166 $ 1,200,000.00 01/11/02 1449 $ 800 000.00 Total: $ 2,444,053.93 [sic] 67. As a result of payments Tutorbots received from Einstein at Murray Popkave's direction, Tutorbots had operating capital available to pay expenses, including wages for Daniel Popkave and David Popkave d /b /a D. P. Professional Painting, Inc. 68. Five (5) payments made by Tutorbots, Inc., to Daniel Popkave and David Popkave d /b /a D. P. Professional Painting occurred in close proximity to payments Tutorbots, Inc. received from Einstein after Murray Popkave's approval. a. These payments occurred as follows: Einstein to Tutorbots Tutorbots to DaniellDavid PopkavelD. P. Paintin b. Tutorbots needed funding from Einstein to facilitate payments to David Popkave /D. P. Professional Painting and Murray Popkave. 69. Murray Popkave personally received three (3) payments totaling $8,308.95 from the corporate account of Dave Popkave Professional Painting between December 18, 2001, and February 22, 2002. a. Payments from Tutorbots, Inc. were used to fund this account. b. Payments were issued to Murray Popkave from this account as follows: c. Payments to Murray Popkave could not have been made from this account absent payments from Tutorbots. 70. Murray Popkave received $8,308.95 of the $31,059.96 total Tutorbots paid to D. P. Professional Painting. a. Tutorbots was unaware that Murray Popkave was receiving payments from the D. P. Professional Painting Account. b. These payments were received by Murray Popkave during the same time period when he signed Einstein Academy checks issued to Tutorbots. Popkave 02- 096 -C2 Page 17 1. Without payments from Einstein, Tutorbots did not have funding available to pay D. P. Professional Painting. 71. Following termination of both of his sons by Tutorbots within one months time, Popkave told Mandel and Rothschild "you are through with my sons then I'm through with you" referring to Einstein's relationship with Tutorbots. 72. By early 2002 the Einstein Academy was failing to meet its charter obligations to the Morrisville Borough School District. a. The district began charter revocation process with hearings in January 2002. 73. Charter revocation issues raised by the Morrisville Borough School District included but may not have been limited to: a. Einstein's failure to locate its operation within the geographical boundaries of the Morrisville Borough School District. b. Einstein's failure to resolve issues related to special education. c. Einstein's failure to resolve issues related to graduation requirements. d. Einstein's failure to follow generally accepted standards of fiscal management. 74. On or about March 26, 2002, Einstein, the Morrisville Borough School District and the Department of Education entered into a settlement agreement which ended the current litigation and made several modifications to the charter school agreement. Relevant changes to the charter included: a. Einstein had to provide detailed financial records. b. Einstein had to hire a business manager. c. Einstein had to submit all paid and outstanding invoices from Tutorbots, Inc., for review and evaluation by a forensic accounting firm selected by the district. d. Amend the management agreement between Einstein and Tutorbots, Inc., to provide that neither Tutorbots nor its principals shall perform any management or financial management services for Einstein. e. This settlement agreement was signed by Murray Popkave on behalf of Einstein. 75. On April 2, 2002, Murray Popkave and Anna Friedrich on behalf of Einstein entered into an agreement with Tutorbots which transferred business functions and business administration to Einstein on or about March 12, 2002, as demanded in the settlement agreement executed on or about March 27, 2002, between the Pennsylvania Department of Education, the Morrisville Borough School District and Einstein. a. Howard Mandel signed this agreement on behalf of Tutorbots. b. The agreement to remove Tutorbots occurred within weeks of Popkave telling the Mandels he was through with them. 76. Tutorbots, Inc. was replaced by WEBOES as Einstein's management company on or about March 25, 2002. Popkave 02- 096 -C2 Page 18 a. WEBOES did not have any ownership ties to Mimi Rothschild or Howard Mandel or Murray Popkave. 77. As a result of fiscal and operational questions regarding the day to day operation of Einstein, the Morrisville Borough School Board hired the accounting firm of Nihill & Ridley, Suite 720E, Independence Square West, Philadelphia, PA 19106 to conduct an audit of Einstein's operations focusing on its relationship with Tutorbots. a. Nihill & Ridley were engaged by the Morrisville Borough School District ( "MSD ") pursuant to a settlement agreement among the Commonwealth of Pennsylvania, Department of Education ( "PDE "); Charles B. Zogby, Secretary of Education (the' Secretary "); the Einstein Academy Charter School ( "Einstein Academy "); and the MSD. The scope of the engagement included the following: 1. Review all Einstein Academy disbursements and match with supporting documentation including invoices, purchase orders, delivery and receiving reports and determine that there were no improper payments. 2. Account for all monies received and trace all receipts to Einstein Academy bank accounts. 3. Determine if the fees paid to Tutorbots, Inc. ( "Tutorbots ") were proper, reasonable for the services provided and for the purposes permitted under Public School Code ( "PSC ") of 1949. 78. During the course of Nihill & Ridley's contract various other matters came to their attention requiring that the scope of the engagement be expanded to include the following: a. Determine if legal services rendered were proper, reasonable for the services provided and were for the exclusive benefit of Einstein Academy vs. Tutorbots. (Note: this scope was later limited to whether legal services rendered were for the exclusive benefit of Einstein Academy vs. Tutorbots). b. Review computer lease agreements and determine the type, number, delivery date and to whom delivered. Also determine the present inventory of computers related to the lease agreements. c. Review a contract services agreement between Einstein Academy and WEB OES. d. Review certain questioned payments made by Tutorbots. e. Review consulting invoices submitted by James Hanak, CEO of Einstein Academy. 79. On July 3, 2002, Alfred B. Alessi, Jr., on behalf of Nihill & Riedley issued their audit report on the Einstein Academy Charter School to the Morrisville Borough School District. a. Page forty of the audit report included specific "questioned payments by Tutorbots." Identified were payments, "to, Daniel Popkave and David Popkave d /b /a D. P., Children of M. Popkave, COB of Einstein Academy. According to Rothschild and H. Mandel, they felt pressured to hire /engage M. Popkave's sons for compensation that he negotiated and for which his sons did little or no work." C hk e c Number A mount Receipts 1014 635.94 r oom, mileage, food, tolls 1056 1,320.39 staples, har 1057 478.37 staples, i dea maker 1061 322.61 lodging, tolls, meals, mileage 1104 1,844. 1 8 • copies, food, shipping, parking, comm unications 1266 87.86 mileage, tolls, meal 1448 92.63 no records provide d. 2047 746.99 mileage, 01/08/02- 05/13/02, FedEx 2189 1,880.01 PSSA testing for students 2733 611.77 mileage, parking 05/31/02- 10/01/02 Popkave 02- 096 -C2 Page 19 b. Nihill & Ridley's audit also found checks issued to Murray Popkave. 80. The Morrisville Borough School District was not satisfied with Einstein's efforts to comply with chartering requirements and voted 8 -0 to revoke Einstein's charter on October 23, 2002. a. Einstein appealed the revocation to Commonwealth Court which upheld it in an opinion filed October 6, 2003. b. Einstein ceased its operations at the completion of the 2002 -2003 school year. 81. Throughout Popkave's tenure on the Einstein Academy Charter School Board, he received reimbursement payments for expenses incurred while conducting Einstein business. a. Popkave received expense reimbursement payments for items such as travel, meals, lodging, tolls, and postage. b. Popkave submitted receipts documenting expenses incurred. c. Popkave did not receive any wages or salary for services provided to Einstein. 82. Expense records on file with the Einstein Academy include the following expense reports and corresponding payments for Murray Popkave. a. b. Murray Popkave signed the front side of all expense checks issued to himself with the exception of check numbers 2047, 2189 and 2733. 83. Popkave, in his official capacity as a member of the Einstein Academy Charter School board of Directors was annually required to file a Statement of Financial Interests form by May 1 containing information for the prior calendar year. 84. Statements of Financial Interests on file with the Morrisville Borough School District, the chartering district for the Einstein Academy include the following filings by Popkave. a. Calendar Year: 2002 Filed: 04/22/03 on SEC Form 1/03 Position: Board Member Creditors: Bank of America; Fleet Bank; MBNA; Mellon Popkave 02- 096 -C2 Page 20 Direct /Indirect Income: Office, Directorship or Emp. in any Business: Financial Interest in any Business: All Other Financial Interest: b. Calendar Year: Filed: Position: Creditors: Direct /Indirect Income: Office, directorship or Emp. in any Business: Financial Interests in any Business: All Other Financial Interests: c. Calendar Year: Bank; Capital One Almo Corporation; Creative Tax Planners, Inc.; Life Planning, Inc.; Unum Life Insurance Company of America Life Planning, Inc., Secretary/Treasurer Life Planning, Inc., 50% None 2001 04/26/02 on SEC Form 1/02 President of Board Chase Manhattan Bank, 4.9 %; Princeton University, 4% F &G Life Insurance, Creative Tax Planners, Inc., Life Planning Group Life Planning, Inc., Secretary/Treasurer Murray W. Popkave, Attorney at Law, 100 %; Life Planning, Inc., 50% None 2000 No form filed 85. Popkave failed to list his officer, directorship or employment and financial interests in David Popkave Professional Painting, Inc., on Statements of Financial Interests forms filed for the 2001 and 2002 calendar years. a. Popkave has served as the secretary and treasurer of this corporation since its inception on February 23, 2001. 86. Popkave failed to list David Popkave Professional Painting, Inc., as a source of income in excess of $1,300 on his Statements of Financial Interests forms filed for calendar years 2001 and 2002. a. Popkave received payments totaling $1,708.95 during 2001. b. Popkave received payments totaling $7,200.00 during 2002. 87. Murray Popkave did not file a Statement of Financial Interests for the 2000 calendar year by May 1, 2001. a. The charter school agreement was approved on March 20, 2001. 88. Daniel Popkave received payments totaling $6,319.70 from Tutorbots as a result of Murray Popkave issuing payments to Tutorbots. 89. David Popkave /D. P. Professional Painting received payments totaling $31,059.96 as a result of Murray Popkave issuing payments to Tutorbots. a. Murray Popkave personally received $8,308.95 of these funds. 90. Tutorbots payments to Daniel Popkave and David Popkave /D. P. Professional Painting, Inc., only occurred as a result of Murray Popkave serving as the chairman of the Einstein Academy Charter School and soliciting the Mandels to hire his sons. Popkave 02- 096 -C2 Page 21 91. Murray Popkave's use of his public position as chairman of the Einstein Academy Board of Trustees, including pressuring Tutorbots to hire his sons and contract with a business with which he is associated, resulted in a private pecuniary gain to himself and members of his immediate family as follows: Payments to Daniel Popkave: $ 6,319.70 Payments to David Popkave/ D. P. Professional Painting: $ 31,059.96 Total $ 37,379.66 III. DISCUSSION: At all times relevant to this matter, the Respondent, Murray Popkave, hereinafter Popkave, has been a public official 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, 65Pa.C.S. § 1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegations are that Popkave, as Chairman of the Board of Trustees of the Einstein Academy Charter School (Charter School), violated Sections 1103(a), (c), and (f); 1104(a); and 1105(b)(5), (8), and (9) of the Ethics Act when: (1) he obtained positions of employment with Tutorbots, Inc., (Tutorbots), the Charter School's management company, for one of his sons and for a business with which he and another son are associated; (2) he approved payments from the Charter School to Tutorbots while one of his sons and a business with which he and another son are associated were employed by Tutorbots; (3) he solicited employment positions with Tutorbots for one of his sons and for a business with which he and another son are associated when he was authorized to make payments to Tutorbots for management services provided; (4) one of his sons and a business with which he and another son are associated contracted with Tutorbots in excess of $500.00 without an open and public process; (5) he failed to file a Statement of Financial Interests for the calendar year 2000 by May 1, 2001; (6) he failed to list D. P. Professional Painting, Inc. as a source of income in excess of $1,300.00 on Statements of Financial Interests filed for the 2001 and 2002 calendar years; (7) he failed to disclose his positions as Secretary and Treasurer of D. P. Professional Painting, Inc. on Statements of Financial Interests filed for the 2001 and 2002 calendar years; and (8) he failed to disclose D. P. Professional Painting, Inc. as a business entity in which he holds a financial interest on Statements of Financial Interests filed for the 2001 and 2002 calendar years. Pursuant to Section 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. Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Section 1103(c) of the Ethics Act quoted above provides in part that a public official /public employee shall not solicit or accept anything of monetary value based upon any understanding that his vote, official action or judgment would be influenced thereby. Section 1103(f) of the Ethics Act quoted above provides in part that no public official /public employee or spouse or child or business with which he or the spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official/ public Popkave 02- 096 -C2 Page 22 employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure. Section 1104(a) of the Ethics Act quoted above requires that each public official /public employee must file a Statement of Financial Interests for the preceding calendar year, each year that he holds the position and the year after he leaves it. Section 1105(b)(5) of the Ethics Act quoted above requires that every public official/ public employee list the name and address of any direct or indirect source of income totaling in the aggregate of $1,300 or more. Section 1105(b)(8) of the Ethics Act quoted above requires that every public official/ public employee disclose any office, directorship or employment of any nature in any business entity. Section 1105(b)(9) of the Ethics Act quoted above requires that every public official/ public employee and candidate list any financial interest in any legal entity engaged in business for profit. Having noted the issues and applicable law, we shall now summarize the relevant facts. On November 15, 2000, T.E.A.C.H., (The E- Academy Charter School), filed a charter school application with the Morrisville Borough School District (School District) to operate a computerized charter school with a curriculum delivered through the Internet. On March 20, 2001, following two public meetings, T.E.A.C.H./The E- Academy Charter School and the School District entered into an agreement for a charter school with a five year term commencing July 1, 2001, through June 30, 2006. Shortly thereafter, T.E.A.C.H. was registered as a fictitious name with the Pennsylvania Department of State, which fictitious name was subsequently changed to the Einstein Academy Charter School. In August 2001, the National Organization of Children d /b /a T.E.A.C.H/The Einstein Academy Charter School entered into a Management Agreement with Tutorbots, Inc. (Tutorbots), a management firm owned by Howard Mandel and Mimi Rothschild - Mandel (the Mandels). As per the Management Agreement, Tutorbots agreed to provide all management and development services necessary to operate the Einstein Academy Charter School (Charter School). Popkave served as Chairman of the Board of Trustees for the Charter School from March 21, 2001 through August 2002. As Chairman of the Board of Trustees, Popkave's responsibilities included scheduling and overseeing meetings of the Board of Trustees; serving as the liaison between the Board of Trustees, the Pennsylvania Department of Education and the School District; negotiating with vendors doing business with the Charter School; signing contracts, agreements and other official documents on behalf of the Charter School; reviewing and approving for payment invoices submitted for payment by the Tutorbots; signing checks payable to Tutorbots for management services provided; overseeing the payment of the Charter School's expenditures; and traveling to various school districts on Charter School business. Popkave did not receive compensation for serving as Chairman of the Board of Trustees for the Charter School, but did receive reimbursement for food, travel, lodging, and business expenses. In August or September 2001, Popkave introduced his son, Daniel Popkave, to the Mandels. Popkave told the Mandels that he wanted them to give his son a job with a $50,000 annual salary. Popkave was aware that Tutorbots was hiring new employees to serve as office support staff. Given Popkave's position as Chairman of the Charter School Board of Trustees, the Mandels felt pressured to comply with Popkave's request to hire Daniel Popkave. The Mandels agreed to hire Daniel Popkave at an annual salary of $35,000 to perform clerical work such as packaging books and running errands. Popkave 02- 096 -C2 Page 23 On September 11, 2002, Daniel Popkave's first day as a Tutorbots employee, Popkave issued a Charter School check in the amount of $231,000 to Tutorbots. During the course of Daniel Popkave's employment with Tutorbots, he would frequently show up to work late or leave work early. The Mandels terminated Daniel Popkave's employment with Tutorbots effective January 11, 2002. Daniel Popkave received a total of $6,319.70 while employed with Tutorbots as evidenced in Fact Finding 46 -47. The payments were deposited into a bank account in the name of Daniel Popkave. Tutorbots paid Daniel Popkave's salary out of funds it received from the Charter School, through Popkave. In or around December 2001, Popkave once again approached the Mandels to ask them to hire his other son, David Popkave. During this time, Popkave was providing financial and accounting support to his son, who was doing business as D. P. Professional Painting, Inc., a corporation of which Popkave was Secretary and Treasurer. Popkave asked the Mandels to hire D. P. Professional Painting, Inc. at a rate of $10,000 per month. In addition, Popkave asked that Tutorbots advance $10,000 to his son, so that his son could purchase a truck. During Popkave's discussions with the Mandels, he never disclosed that he was a corporate officer of D. P. Professional Painting, Inc. Given Popkave's position as Chairman of the Charter School Board of Trustees, the Mandels felt pressured to comply with Popkave's request to hire D. P. Professional Painting, Inc. The Mandels agreed to hire D. P. Professional Painting, Inc. for maintenance, shipping and other business support functions. D. P. Professional Painting, Inc. started working for Tutorbots in December 2001. On December 5, 2001, Tutorbots advanced $10,000 to David Popkave. Shortly thereafter, the Mandels became dissatisfied with David Popkave's performance and terminated D. P. Professional Painting, Inc.'s employment with Tutorbots in February 2002. During the course of D. P. Professional Painting, Inc.'s employment with Tutorbots, Tutorbots paid D. P. Professional Painting, Inc. a total of $31,059.96, which funds were deposited into a bank account for which both Popkave and David Popkave had signature authority. Unbeknownst to Tutorbots, Popkave received $8.308.95 of the $31,059.96 that Tutorbots paid to D. P. Professional Painting, Inc. As Chairman of the Board of Trustees of the Charter School, Popkave issued payments to Tutorbots for management services as per the Management Agreement between the National Organization of Children d /b /a T. E.A.C.H/The Einstein Academy Charter School and Tutorbots. The payments authorized by Popkave coincided with the periods of time when his sons were Tutorbots employees as evidenced by Fact Findings 62d; and 68a. Payments made by Tutorbots to Popkave, Daniel Popkave, and D. P. Professional Painting, Inc. would not have been possible without payments from the Charter School through Popkave. After the Mandels terminated Popkave's son's employment with Tutorbots, Popkave told the Mandels, "You are through with my sons, then I'm through with you." Popkave did not issue any more payments to Tutorbots. As Chairman of the Board of Trustees of the Charter School, Popkave was required to file Statements of Financial Interests. Popkave failed to file a Statement of Financial Interests for the 2000 calendar year. On Popkave's Statements of Financial Interests for the 2001 and 2002 calendar years, he failed to disclose that he was Secretary and Treasurer of D. P. Professional Painting, Inc.. In addition, Popkave failed to disclose D. P. Professional Painting, Inc. as a source of income in excess of $1,300. Popkave received $1,708.95, and $7,200 from D. P. Professional Painting, Inc. in 2001 and 2002, respectively. Popkave 02- 096 -C2 Page 24 In January 2002, the School District began the process to revoke the Charter School's charter for failing to meet its charter obligations to the School District. In October 2002, the School District voted 8 -0 to revoke the Charter School's Charter. The Charter School ceased operating at the completion of the 2002 -2003 school year. As to the above facts, the Investigative Division has filed a Position Statement in support of its position. Respondent Popkave has not filed a brief. The Investigative Division argues that Popkave, as Chairman of the Board of Trustees of the Charter School violated: (1) Section 1103(a) of the Ethics Act when he used the authority of his public position to obtain positions of employment with Tutorbots for his son, Daniel Popkave, and for D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated; (2) Section 1105(b)(5) of the Ethics Act when he failed to disclose D. P. Professional Painting, Inc. as a source of income in excess of $1,300 on his Statements of Financial Interests filed for the 2001 and 2002 calendar years; (3) Section 1105(b)(5)(8) of the Ethics Act when he failed to disclose his position as Secretary/Treasurer of D. P. Professional Painting, Inc. on his Statements of Financial Interests filed for the 2001 and 2002 calendar years; and (4) Section 1104(a) of the Ethics Act when he failed to file a Statement of Financial Interests for the 2000 calendar year. With respect to the Section 1103(a) allegation, the Investigative Division notes that the Commission may rightfully impose restitution in the amount of $31,059, which is the financial benefit that D. P. Professional Painting, Inc. received. However, the Investigative Division argues that at a minimum, the Commission should order restitution in the amount of $8,308, which represents the amount of financial gain that Popkave personally received from D. P. Professional Painting, Inc, which resulted from the payments he authorized from the Charter School to Tutorbots. Having highlighted the facts and issues, we preliminarily must address a procedural issue that has arisen regarding the receipt of an Answer to the Investigative Complaint. The pleading stage in this case began with the issuance of the Investigative Complaint on January 26, 2004. On its face, the Investigative Complaint stated that an Answer had to be received at this Commission within thirty (30) days of issuance and that the Respondent should take that document immediately to an attorney. In this case, an Answer was not filed. On March 2, 2004, a letter was received from Respondent's counsel requesting that Respondent's Answer to the Investigative Complaint be filed Nunc Pro Tunc. In the March 2, 2004, letter, Respondent's counsel states that Respondent sent the Investigative Complaint to him with the expectation that he would file an Answer on Respondent's behalf, but that he did not file an Answer to the Investigative Complaint by February 25, 2004 due to a family emergency. Respondent's counsel argues that it would be manifestly unjust to Respondent if Respondent is denied a hearing and if sanctions are imposed upon him due to a mistake that he, Respondent's attorney, made. Respondent's counsel further argues that imposing a sanction upon Respondent will not further the purposes of the Ethics Act since Respondent will expect his attorney to pay any sanctions. Finally, Respondent's counsel argues that neither party will be prejudiced or experience injustice if Respondent is permitted to file his Answer Nunc Pro Tunc; however, if Respondent is not permitted to file his Answer Nunc Pro Tunc, Respondent will be prejudiced and the State Ethics Commission will experience an injustice. The Investigative Division filed a Response in opposition to Respondent's request to file his Answer Nunc Pro Tunc. The Investigative Division references Section 1108(e) of the Ethics Act, and Section 21.5 of the Regulations of the Commission which provide that a response must be filed within thirty (30) days of the issuance of the Findings Report unless the time period is extended by the Commission for good cause shown, and that matters not specifically denied in the response are deemed admitted. The Investigative Division cites numerous Commonwealth Court cases to support its position that the Commission should not grant Respondent's request absent a showing of fraud, duress, coercion, a breakdown in the Popkave 02- 096 -C2 Page 25 administrative or postal process, or other circumstances that are non - negligent in nature. The Investigative Division states that Respondent's failure to file an Answer to the Investigative Complaint was due to attorney negligence, which is legally insufficient to form a basis for allowing Respondent to file his Answer Nunc Pro Tunc. It is clear under the Ethics Act and Regulations that a response to the Investigative Complaint must be received within 30 days. 65 Pa.C.S. §1108(e); 51 Pa.Code §21.5(k). Cf., Criss v. Wise, Pa. , 781 A.2d 1156 (2001). As noted above, even the face sheet of the Investigative Complaint states that an Answer must be received within 30 days. The Answer in this case was never received. In order for a late answer to be deemed timely filed, we apply the same standard as is applied by the courts to untimely a peals (see, Getz v. Pennsylvania Game Commission, 475 A.2d 1369 (Pa. Commw. Ct. 1984 applying that standard in administrative proceedings to an untimely request for a hearing). T e standard is that to accept the untimely filing as if it were timely, there must either have been fraud or a breakdown in the administrative process, see, West Penn Power Co. v. Goddard, 460 Pa. 551, 333 A.2d 909 (1975); Bianco v. Robinson Twp., 556 A.2d 993 (Pa. Commw. Ct. 1989), which includes the postal process (Getz v. Pennsylvania Game Commission, 475 A.2d 1 369 (1984)), or there must have been unique and compelling factual circumstances establishing non - negligent failure to file timely, Grimaud v. Dep't of Env. Resources, 638 A.2d 299 (Pa. Commw. Ct. 1994). See also, Criss v. Wise, Pa. , 781 A.2d 1156 (2001). Mere delays in the U.S. mail, even during a holiday season, are considered foreseeable and avoidable and are insufficient grounds to support an Application Nunc Pro Tunc. Criss v. Wise, supra. None of the conditions for allowing the filing of a late Answer is present in this case. In fact, there has not even been any allegation of fraud, any breakdown in the administrative process or the mail delivery system, or any unique and compelling factual circumstances that would establish a non - negligent failure to timely file. The only argument proffered is that an Answer was not filed by Respondent because Respondent's attorney was negligent. That argument presents no basis for allowing the filing of a late Answer. Baxter, Order No. 985. Parenthetically, we note that our Regulations allow for the filing of an application for an extension to file an Answer. 51 Pa.Code §21.5(k). No such request was made in this case prior to the filing deadline. The Application to File Nunc Pro Tunc is denied. Having disposed of the procedural matter, we must now determine whether the actions of Popkave violated Sections 1103(a); 1103(c); 1103(f); 1104(a); and 1105(b)(5), (8) and (9) of the Ethics Act. In applying Section 1103(a) of the Ethics Act to the instant matter, the record reflects uses of the authority of office on the part of Popkave. But for the fact that Popkave was Chairman of the Board of Trustees of the Charter School, he would not have been in a position to obtain positions of employment with Tutorbots for his son, Daniel Popkave, and for D. P. Professional Painting, Inc, a business with which Popkave and his son, David Popkave, are associated. Further, but for Popkave's position as Chairman of the Board of Trustees of the Charter School, he would not have been in a position to authorize payments from the Charter School to Tutorbots so that Tutorbots would have operating capital available to pay expenses, including the wages for Daniel Popkave and D. P. Professional Painting, Inc. Such actions by Popkave were uses of authority of office. See, Juliante, Order 809. Such uses of authority of office resulted in private pecuniary benefits to Daniel Popkave, D. P. Professional Painting, Inc., and Popkave, which private pecuniary benefits consisted of wages that Tutorbots paid to Daniel Popkave and D. P. Professional Painting, Inc. in the amounts of $6,319.70 and $31,059.96, respectively. The record reflects that out of the $31,059.96 paid to D. P. Professional Painting, Inc., Popkave personally received three payments totaling $8,308.95 from the corporate account of D. P. Professional Painting, Inc. Accordingly, we find as follows: (1) Popkave, as Chairman of the Board of Trustees of the Charter School, violated Section 1103(a) of the Ethics Act when he obtained positions of employment with Popkave 02- 096 -C2 Page 26 Tutorbots for his son, Daniel, and for D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated; and (2) Popkave, as Chairman of the Board of Trustees of the Charter School, violated Section 1103(a) of the Ethics Act when he authorized payments from the Charter School to Tutorbots so that Tutorbots would have operating capital available to pay expenses, including the wages for Daniel Popkave and D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated. As to Section 1103(c) of the Ethics Act, we find that Popkave as a public official did solicit employment positions for his son, Daniel Popkave, and for D. P. Professional Painting, Inc.. However, we find a lack of clear and convincing evidence that such solicitations were based upon Popkave's understanding as a public official that his official action or judgment would be influenced thereby. Clear and convincing proof is "[evidence] that is so 'clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear conviction, without hesitance, of the truth of the precise facts in issue. - In Re: Charles E.D.M., 550 Pa. 595, 601, 708 A.2d 88, 91 (Pa. 1998)(Citation omitted). Because there is a lack of clear and convincing evidence that Popkave solicited positions of employment for his son, Daniel Popkave, and for D. P. Professional Painting, Inc. based upon his understanding as a public official that his official action or judgment would be influenced thereby, we find that Popkave did not violate Section 1103(c) of the Ethics Act. As to Section 1103(f) of the Ethics Act, Daniel Popkave and D. P. Professional Painting, Inc. entered into employment contracts in excess of $500 with Tutorbots, which was providing management services as per a contract between the Charter School and Tutorbots, a business with which Popkave is not associated. Because neither Daniel Popkave nor D. P. Professional Painting, Inc. were hired to perform any of the duties included in the original contract between Tutorbots and the Charter School, they were not under subcontracts with Tutorbots. Accordingly, we find that Popkave did not violate Section 1103(f) of the Ethics Act when his son, Daniel Popkave, and D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated, entered into employment contracts in excess of $500 with Tutorbots without an open and public process. With respect to Popkave's Statements of Financial Interests, we find as follows. As to Section 1104(a) of the Ethics Act, Popkave did not file a Statement of Financial Interests for calendar year 2000 as required by the Ethics Act. Accordingly, Popkave violated Section 1104(a) of the Ethics Act when he failed to file his Statement of Financial Interests for the 2000 calendar year. As to Section 1105(b)(5) of the Ethics Act, Popkave filed Statements of Financial Interests for the 2001 and 2002 calendar years, but failed to list D. P. Professional Painting, Inc. as a source of income in excess of $1,300.00 for those calendar years. The record reflects that Popkave received payments totaling $1,708.95 and $7,200.00 from D. P. Professional Painting, Inc. during calendar years 2001 and 2002, respectively. Accordingly, we find that Popkave violated Section 1105(b)(5) of the Ethics Act when he failed to list D. P. Professional Painting, Inc. as a source of income in excess of $1,300.00 on his Statements of Financial Interests for calendar years 2001 and 2002. As to Section 1105(b)(8) of the Ethics Act, the record reflects that Popkave was Secretary and Treasurer of D. P. Professional Painting, Inc. since February 23, 2001; however, he failed to disclose such positions on Statements of Financial Interests filed for the 2001 and 2002 calendar years. Accordingly, we find that Popkave violated Section 1105(b)(8) of the Ethics Act when he failed to disclose that he was Secretary and Treasurer of D. P. Professional Painting, Inc. on Statements of Financial Interests filed for the 2001 and 2002 calendar years. Popkave 02- 096 -C2 Page 27 As to Section 1105(b)(9) of the Ethics Act, we find insufficient evidence that Popkave had a "financial interest" in D. P. Professional Painting, Inc. as that term is defined in the Ethics Act. Accordingly, we find that Popkave did not violate Section 1105(b)(9) of the Ethics Act when he failed to list D. P. Professional Painting, Inc. as a business in which he had a "financial interest" on Statements of Financial Interests for calendar years 2001 and 2002, based upon an insufficiency of evidence. Section 407(13)/1107(13) of the Ethics Act empowers this Commission to impose restitution in instances where a public official /public employee has obtained a financial gain in violation of the Ethics Act. Restitution is warranted in this case. Accordingly, Popkave is directed within 30 days of the date of mailing of this Order to make payment of restitution to the Commonwealth of Pennsylvania Treasurer through this Commission in the amount of $8,308.95 (Popkave's share of the $31,059.96 ). If Respondent has not already done so, he is directed to file, within 30 days of the date of mailing of this Order, a Statement of Financial Interests for the 2000 calendar year, and amended Statements of Financial Interests for calendar years 2001 and 2002 reflecting all reportable sources of income, as well as any business(es) for which he was an officer, director, employee, or partner. The originals of such amended forms are to be filed with the Morrisville Borough School District, with copies sent to the Administrative Division of this Commission for compliance verification purposes. Compliance with the foregoing with result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. The actions of Popkave warrant the referral of this case to a law enforcement agency for review as to a criminal prosecution. Based upon the record before us, Popkave's conduct was intentional and deliberate. Popkave used his public position as Chairman of the Board of Trustees of the Charter School to pressure the Mandels into hiring his son, Daniel Popkave, and D. P. Professional Painting, Inc. When the Mandels complied with Popkave's requests, Popkave authorized payments to Tutorbots; after the Mandels fired Daniel Popkave and D. P. Professional Painting, Inc., Popkave ceased authorizing payments to Tutorbots. Popkave's actions were manipulative and calculated Therefore, we will refer this matter to the appropriate law enforcement agency for review as to a criminal prosecution. IV. CONCLUSIONS OF LAW: 1. Murray Popkave (Popkave), as Chairman of the Board of Trustees of the Einstein Academy Charter School (Charter School), was at all times relevant to these proceedings, a public official subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998. 2. Popkave violated Section 1103(a) of the Ethics Act when in his capacity as Chairman of the Board of Trustees of the Charter School, he obtained positions of employment with Tutorbots, Inc. (Tutorbots) for his son, Daniel Popkave, and for D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated. 3. Popkave violated Section 1103(a) of the Ethics Act when in his capacity as Chairman of the Board of Trustees of the Charter School, he authorized payments from the Charter School to Tutorbots so that Tutorbots would have operating capital available to pay expenses, including the wages for Daniel Popkave and D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated. Popkave 02- 096 -C2 Page 28 4. Popkave did not violate Section 1103(c) of the Ethics Act when he solicited positions of employment for his son, Daniel Popkave, and for D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated, due to a lack of clear and convincing evidence that such solicitations were based upon his understanding as a public official that his official action or judgment would be influenced thereby. 5. Popkave did not violate Section 1103(f) of the Ethics Act when his son, Daniel Popkave, and D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated, entered into employment contracts in excess of $500 with Tutorbots without an open and public process in that the contract was not between the Charter School and Tutorbots, a business with which Popkave is not associated, and neither Daniel Popkave nor D. P. Professional Painting, Inc. were under subcontracts with Tutorbots. 6. Popkave violated Section 1104(a ) of the Ethics Act when he failed to file his Statement of Financial Interests for the 2000 calendar year 7. Popkave violated Section 1105(b)(5) of the Ethics Act when he failed to list D. P. Professional Painting, Inc. as a source of income in excess of $1,300.00 on his Statements of Financial Interests for calendar years 2001 and 2002. 8. Popkave violated Section 1105(b)(8) of the Ethics Act when he failed to disclose that he was Secretary and Treasurer of D. P. Professional Painting, Inc. on Statements of Financial Interests filed for the 2001 and 2002 calendar years. 9. Popkave did not violate Section 1105(b)(9) of the Ethics Act when he failed to list D. P. Professional Painting, Inc. as a business in which he had a "financial interest" on Statements of Financial Interests for calendar years 2001 and 2002, based upon an insufficiency of evidence. In Re: Murray Popkave, Esq. ORDER NO. 1318 File Docket: 02- 096 -C2 Date Decided: March 11, 2004 Date Mailed: March 25, 2004 1. Murray Popkave (Popkave), as Chairman of the Board of Trustees of the Einstein Academy Charter School (Charter School), violated Section 1103(a) of the Ethics Act when he obtained positions of employment with Tutorbots, Inc. (Tutorbots) for his son, Daniel Popkave, and for D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated. 2. Popkave violated Section 1103(a) of the Ethics Act when in his capacity as Chairman of the Board of Trustees of the Charter School, he authorized payments from the Charter School to Tutorbots so that Tutorbots would have operating capital available to pay expenses, including the wages for Daniel Popkave and D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated. 3. Popkave did not violate Section 1103(c) of the Ethics Act when he solicited positions of employment for his son, Daniel Popkave, and for D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated, due to a lack of clear and convincing evidence that such solicitations were based upon his understanding as a public official that his official action or judgment would be influenced thereby. 4. Popkave did not violate Section 1103(f) of the Ethics Act when his son, Daniel Popkave, and D. P. Professional Painting, Inc., a business with which Popkave and his son, David Popkave, are associated, entered into employment contracts in excess of $500 with Tutorbots without an open and public process in that the contract was not between the Charter School and Tutorbots, a business with which Popkave is not associated, and neither Daniel Popkave nor D. P. Professional Painting, Inc. were under subcontracts with Tutorbots. 5. Popkave violated Section 1104(a ) of the Ethics Act when he failed to file his Statement of Financial Interests for the 2000 calendar year 6. Popkave violated Section 1105(b)(5) of the Ethics Act when he failed to list D. P. Professional Painting, Inc. as a source of income in excess of $1,300.00 on his Statements of Financial Interests for calendar years 2001 and 2002. 7. Popkave violated Section 1105(b)(8) of the Ethics Act when he failed to disclose that he was Secretary and Treasurer of D. P. Professional Painting, Inc. on Statements of Financial Interests filed for the 2001 and 2002 calendar years. 8. Popkave did not violate Section 1105(b)(9) of the Ethics Act when he failed to list D. P. Professional Painting, Inc. as a business in which he had a "financial interest" on Statements of Financial Interests for calendar years 2001 and 2002, based upon an insufficiency of evidence. 9. If Popkave has not already done so, he is directed to file, within 30 days of the date of mailing of this Order, a Statement of Financial Interests for the 2000 calendar year, and amended Statements of Financial Interests for calendar years 2001 and 2002 Popkave 02- 096 -C2 Page 30 reflecting all reportable sources of income, as well as any business(es) for which he was an officer, director, employee, or partner. The originals of such amended forms are to be filed with the Morrisville Borough School District, with copies sent to the Administrative Division of this Commission for compliance verification purposes. a. Non - compliance will result in the institution of an order enforcement action. 10. Popkave is directed within 30 days of the date of mailing of this Order to make payment of restitution to the Commonwealth of Pennsylvania Treasurer through this Commission in the amount of $8,308.95 (Popkave 's share of the $31,059.96 ). a. Non - compliance will result in the institution of an order enforcement action. 11. Given the deliberate and intentional nature of the violations by Popkave, this case shall be referred to law enforcement for review as to a criminal prosecution. BY THE COMMISSION, Louis W. Fryman, Chair