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HomeMy WebLinkAbout1335 StevensonIn Re: Cecil Stevenson File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Donald M. McCurdy Paul M. Henry Raquel K. Bergen 03 -060 Order No. 1335 7/15/04 7/20/04 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Stevenson, 03 -060 Page 2 I. ALLEGATION: That Cecil Stevenson, a (public official /public employee) in his capacity as a Supervisor of Greenwood Township, Crawford County, violated the following provisions of the State Ethics Act (Act 93 of 1998) when he used the authority of his office for the private pecuniary gain of himself and /or a business with which he is associated, including but not limited to participating in discussions and actions of the board of supervisors resulting in his company, Stevenson Enterprises, being utilized by the township for welding and fabricating services; and when Stevenson participated in approving payments to Stevenson Enterprises. Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa. C. S. §1103(a). 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 office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "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 P.S. §1102. II. FINDINGS: 1. The Investigative Division of the State Ethics Commission received information alleging that Cecil Stevenson violated provisions of the State Ethics Act (Act 93 of 1998). 2. Upon review of the information the Investigative Division initiated an own - motion preliminary inquiry on October 21, 2003. 3. The preliminary inquiry was completed within sixty days. 4. On December 15, 2003, a letter was forwarded to Cecil Stevenson 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. 7002 3150 0000 6075 5096. b. The domestic return receipt bore the signature of Cecil Stevenson, with a delivery date of December 17, 2003. 5. Periodic notice letters were forwarded to Cecil Stevenson in accordance with the provisions of the Ethics Law advising him of the general status of the investigation. Stevenson, 03 -060 Page 3 6. The Investigative Complaint was mailed to the Respondent on June 4, 2004. 7. Cecil L. Stevenson has served as a Supervisor for Greenwood Township, Crawford County from January 1992 through the present. a. Stevenson has served as the Chairman of the Board of Supervisors in each of the years since 1992. b. Stevenson served a previous term as supervisor prior to his current service. 8. Greenwood Township is a second -class township governed by a three - member board of supervisors. a. The board typically holds one regularly scheduled public meeting per month. 9. The township does not have an administrative building or office. a. A part -time township secretary works from her home. b. Bills and invoices for the township are typically sent to the township secretary at her home. c. The secretary prepares a bill list of all bills received from the date of the last supervisors meeting to present to the supervisors at their meetings. d. All invoices are pre- approved for payment by the supervisors. e. The secretary prepares checks for the supervisors to sign after the approval of the bill lists. 10. The supervisors vote to pay outstanding bills at regular public meetings. a. Bill lists are voted on in their entirety. b. Motions made and seconds are recorded but individual votes are not noted. c. Abstentions and negative votes are noted in the meeting minutes when they occur. 11. All three of the supervisors and the township secretary have signature authority on township financial accounts. a. Township checks require the signatures of the secretary and any two supervisors. b. Checks are signed randomly by the supervisors present at a meeting after the approval of the bill lists. 11. Since 1979 Stevenson has operated a private business known as Stevenson Enterprises. a. Stevenson Enterprises is a welding, repair, and fabrication business operated from a garage at Stevenson's residence. b. Stevenson Enterprises was registered as a Fictitious Name with the PA Department of State on May 14, 1979. c. Cecil L. Stevenson and Joyce J. Stevenson are listed as the owners of Stevenson Enterprises. 1. Joyce J. Stevenson is Stevenson's wife. Stevenson, 03 -060 Page 4 d. From July 1995 through 1998, Stevenson Enterprises was operated as a partnership between Stevenson and his son Douglas Stevenson. 1. The partnership was dissolved in 1998 because the business could not support two partners. e. From 1998 through the present, Cecil Stevenson has been the only employee of the business. 12. For numerous years, Stevenson Enterprises has done various welding, fabrication, and repairs for the Township. a. Stevenson has done work for the Township prior to, in between, and during his service as a supervisor for the Township. 13. Township employees have initiated repair services performed by Stevenson. a. The township employees contact Stevenson either telephonically or deliver the vehicles or equipment to Stevenson's shop when work is needed. 1. The township employees were aware of Stevenson's business. b. The township employees were not directed or encouraged to utilize the services of Stevenson Enterprises by Stevenson or other members of the board of supervisors. c. Several of the township employees have personally utilized the services of Stevenson Enterprises. 14. The township employees were required to receive the approval of a supervisor to have repairs of township vehicles or equipment completed by an outside contractor. a. This included work performed by Stevenson Enterprises. 15. Stevenson was typically the supervisor who gave the approval to the employees for repairs due to his availability. a. Stevenson's shop was located in the township and he was typically available during normal workdays. b. The other supervisors were not readily available during normal work hours because of their full -time employment. 16. Stevenson authorized the repairs of Township vehicles and equipment be made by his company. a. Stevenson did not seek formal approval of the other supervisors regarding the repairs. b. From November 2001 through December 2003 Supervisor Ray Nader served as the full -time roadmaster and would have been aware of repairs performed by Stevenson. 1. Only two repairs were performed by Stevenson after Nader's hiring as township roadmaster. 17. Stevenson submitted invoices from Stevenson Enterprises directly to the township secretary for payment. a. None of the individual repairs completed by Stevenson Enterprises exceeded $500.00. Invoice Date (No.) Amount Description 08 -04 -98 $250.00 Balance Due on Account 09 -22 -98 313 Case Loader Weld and Remach Bucket Pins Mach New Bushings- 5 Hrs. R/R Shoes on Bucket Assemble Unit- 3 Hrs. HT Bushings- $25.00 09 -28 -98 54.00 R/R Lift Knuckle for Blade on Grader- 1.5 Hrs 11 -04 -98 591.47 Weld and Patch on Int. (79) Bed Floor- $54.00 Mach & Sleeve Axle for Int. (79)- $180.00 Install New Packing and Piston Rod w/ Hyd. Cyl. for Chevy Dump- $357.47 11 -20 -98 108.00 Fabricate Guard for Blinker Lite Remachine Ratchet bracket for Spreader (3 Hrs) 12 -22 -98 54.00 Straighten and Repair Spreader on '91 Int. Truck - 1.5 Hrs. 01 -13 -99 32.00 4- Plow Pins 5 1/2" LG 1 1/4 Drill p End- $8.00 Each 01 -20 -99 72.00 Weld Eye of Lift Cylinder '90 Int- 2 Hrs 03 -22 -99 18.00 Straighten Lift Arm for Plow 03 -26 -99 69.61 3/4 Drop 12 "X60" 04 -02 -99 142.00 Weld Guard Rails (Hafers)- $72.00 3/4 Drop 12 "X60 " - $70.00 06 -02 -99 165.74 Repair and Rebuild Pump (Brine)- 4 Hrs. Brg- 6202 2RS- $8.05 Brg- 6302 2RS- $13.69 06 -28 -99 54.00 Weld Lifting Ball on Grader #80- $27.00 Weld Wheel for Massey Ferguson #100- $27.00 02 -04 -00 25.00 Machine Pin for '00 Truck 02 -21 -00 224.00 6 Pcs. -1 1 /2 "X6 1/2"X15"- $194.00 6 Pcs. -1 /8 "X1 1/2"X12"- $30.00 04 -15 -00 16.00 1 -3/8 Pitch 72 Links Chainsaw Chain- $16.00 06 -13 -00 (483313) 78.00 20-1/2" 5 "X12- $3.90 Each 06 -16 -00 (483319) 45.00 Rent Welder 1 Day 08 -07 -00 (483354) 108.00 Weld and Remachine Hydraulic Pump Shaft for Tiger- 3 Hrs. 1 Seal Kit Stevenson, 03 -060 Page 5 b. Some repairs to multiple vehicles were included on one invoices. 18. Stevenson Enterprises submitted twenty -five (25) invoices, totaling $3,457.12, to the Township from August 1998 through April 2002 as follows: Invoice Date (No.) Amount Description 10-16-00 Vote to Pay (481145) 60.00 Face Flywheel to Clean (Tiger Mower) $250.00 08 -04 -98 Repair Housing for Tiger Mower- $25.00 10 -27 -00 (481153) 65.00 New Pivot Pin 751 -State 367.00 Repair and Install Bushings- $40.00 12 -04 -00 (481174) 315.00 Fabricate (7) Shoes for Snowplow- $45.00 Each 03 -09 -01 (481215) 72.00 Weld Eye on Piston Cyl. for International `90 11 -04 -98 11 -20 -98 No 2 -1 /2 "X12X20- $30.60 12 -05 -01 43.30 1-1/4X3X34X30- $5.00 (423281) 12 -22 -98 1 -8 "'C' 11.5 #X20 " - $7.70 3 -0 Yes Mat'I for Rockcreek Bridge 03 -05 -02 104.00 8 -Plow Shoes Fabricate ($55.00 Each)- $440.00 423311 ( ) 482.00 5 -Flat Shoes Drill /Tap CFM.- $42.00 Total: $3457.12 87.61 Check Date Check No./ Fund Check Amount Date of Invoice(s) (Invoice No.(s)) Sign Check Vote to Pay Official Action 08 -03 -98 729 -State $250.00 08 -04 -98 No 3 -0 Yes 10 -05 -98 751 -State 367.00 09 -22 -98 09 -28 -98 No 3 -0 Yes 12 -07 -98 779 -State 699.47 11 -04 -98 11 -20 -98 No 3 -0 Second 12 -30 -98 785 -State 54.00 12 -22 -98 Yes 3 -0 Yes 02 -01 -99 797 -State 104.00 01 -13 -99 01 -20 -99 Yes 2 -0 Second 04 -05 -99 816 -State 87.61 03 -22 -99 03 -26 -99 No 3 -0 Yes 05 -03 -99 823 -State 142.00 04 -02 -99 No 2 -0 Absent 06 -07 -99 836 -State 165.74 06 -02 -99 Yes 3 -0 Yes 07 -06 -99 843 -State 54.00 06 -28 -99 No 3 -0 Yes 02 -07 -00 2832 -Gen 25.00 02 -04 -00 Yes 2 -0 Second 03 -06 -00 2866 -Gen 224.00 02 -21 -00 No 3 -0 Yes 05 -01 -00 911 -State 16.00 04 -15 -00 Yes 3 -0 Yes Stevenson, 03 -060 Page 6 19. The board of supervisors took no official action at board meetings to approve Stevenson Enterprise to perform any work for which the Township was invoiced. a. The remaining members of the board of supervisors were aware that Stevenson was performing the work and informally agreed Stevenson could complete the service. 20. Between August 1998 and April 2002 nineteen (19) checks were issued by the Township in payment of the invoices submitted by Stevenson Enterprises. 21. Stevenson participated in board actions approving payment to Stevenson Enterprises and signed checks, as an authorized signer of the Township issued to Stevenson Enterprises as follows: Check Date Check No./ Fund Check Amount Date of Invoice(s) (Invoice No.(s)) Sign Check Vote to Pay Official Action 07 -03 -00 927 -State 123.00 483313 483319 Yes 3 -0 Yes 09 -05 -00 948 -State 108.00 483354 No 3 -0 Second 11 -06 -00 969 -State 125.00 481145 481153 Yes 3 -0 Second 12 -28 -00 3244 -Gen 315.00 481174 No 3 -0 Yes 04 -02 -01 3373 -Gen 72.00 481215 No 3 -0 Yes 12 -28 -01 3664 -Gen 43.30 423281 No 3 -0 Yes 04 -01 -02 1222 -State 482.00 422211 No 2 -0 -1 Abstain Total: $3457.12 Stevenson, 03 -060 Page 7 22. Stevenson voted to approve payment of 17 of 19 checks issued to Stevenson Enterprises. a. Stevenson was absent from the meeting that check no. 823 was approved for payment. b. Stevenson abstained from the vote to approve payment of check no. 1222. 1. No reason is noted nor could Stevenson recall the reason for the abstention. 2. The Department of Auditor General was auditing the township liquid fuel account during this period. c. Stevenson did not publicly disclose his affiliation with Stevenson Enterprises at any time when voting to approve payments to his company. 23. Stevenson signed 7 of 19 checks issued Stevenson Enterprises. a. Stevenson utilized a signature stamp to affix his signature on some of the checks. b. The signature stamp was not utilized by anyone other than Stevenson. c. Stevenson utilized the signature stamp rather than writing his name on numerous documents. 24. Stevenson Enterprises received income from Greenwood Township totaling $3,457.12 from August 1998 through April 2002 by year as follows: a. 1998: $1,370.47 b. 1999: $ 553.35 c. 2000: $ 936.00 d. 2001: $ 115.30 e. 2002: $ 482.00 25. Stevenson Enterprises typically charges $42.00 per hour for labor and a mark -up of 30% on materials. a. Stevenson did charge the township these rates when repairing township equipment. Year Gross Income (Total Income) Net Profit (Ord. Income) Percent of Profit 1998 $53,076 - $2,166 (Loss) 1999 $11,602 $3,406 29.4 2000 $22,739 - $9,460 (Loss) 2001 $23,199 $1,693 7.3 2002 $10,655 - $7,183 (Loss) 2003 $28,754 $14,146 49.1 Stevenson, 03 -060 Page 8 26. In or around May 2002, the Department of Auditor General concluded its audit of the township's Liquid Fuels Tax Fund for the period of January 1, 1999 through December 31, 2000. a. The audit report noted possible related party transactions including transactions involving Stevenson Enterprises. b. The audit report recommended that the township comply with the Second Class Township Code. c. The township officials offered no official response to this finding. 1. The township secretary and a member of the board of auditors signed off on the audit report. 27. In a Sworn Statement provided to an investigator of the State Ethics Commission on May 14, 2004 and May 24, 2004, Stevenson confirmed the following: a. He made the decision to have his company complete work for the Township. b. There was never any official board action approving his business to do work for the Township. c. He participated in board actions, including approving payments and signing checks, related to Stevenson Enterprises. d. He gave a discount (less than $42.00 per hour for labor) on many of the jobs or did not charge the Township for work performed. e. He was not aware of the provisions of the State Ethics Act as they relate to conflicts of interest. f. He has not done any work for the Township since April 2002 following Nader's hiring as roadmaster. 1. Nader has the expertise to do the work that Stevenson Enterprises did for the Township. 28. Stevenson Enterprises percent of profit in each of the years 1998 through 2003, based on IRS tax filings, were as follows: a. Stevenson did no business with the township in 2003. b. The percent of profit was calculated by dividing the business' gross income (total income) by its net profit (ordinary income) in each year. 29. Stevenson's average annual profit for the period 1998 through 2002 was 7.24 %. a. Based on $3,457.12 in payments made by the township divided by the average annual profit Stevenson realized a private pecuniary gain of $250.30. Stevenson, 03 -060 Page 9 III. DISCUSSION: At all times relevant to this matter, the Respondent, Cecil Stevenson, hereinafter Stevenson, 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 seq., as codified by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegations are that Stevenson, as a Supervisor of Greenwood Township, Crawford County, violated Section 3(a)/1103(a) of the Ethics Act when he approved his company, Stevenson Enterprises, to be used for township welding and fabricating services and participated in approving payments to Stevenson Enterprises. Pursuant to Section 3(a)/1103a) of the Ethics Act quoted above, a public official/ public employee is prohibited from engaging in conduct that constitutes a conflict of interest. Section 3(a)/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. facts. Having noted the issues and applicable law, we shall now summarize the relevant Stevenson has served as supervisor on the three - member board in Greenwood Township, Crawford County, since January of 1992. The supervisors vote to pay outstanding bills at regular public meetings. Motions and seconds are recorded but individual votes are not. Abstentions and negative votes are noted. All three supervisors and the township secretary have signature authority on township financial accounts. Township checks require the signatures of the secretary and any two supervisors. In a private capacity, Stevenson operates a private business known as Stevenson Enterprises which is a welding, repair, and fabrication business. Stevenson Enterprises is a registered fictitious name with Stevenson and his spouse listed as the co- owners. For many years, Stevenson Enterprises has done various welding, fabrication, and repairs for the township. Township employees typically initiate repair services by contacting Stevenson. Such employees are neither directed nor encouraged to utilize the services of Stevenson Enterprises by Stevenson or other board members. However, the township employees are required to receive approval of a supervisor for repairs of township vehicles or equipment when provided by an outside contractor. Since Stevenson as a supervisor was most readily available during normal work hours, the employees typically went to Stevenson to obtain approval for repair services. Stevenson authorized repairs of township vehicles and equipment by Stevenson Enterprises without seeking formal approval of the other two supervisors. Stevenson then submitted the invoices from Stevenson Enterprises directly to the township secretary for payment. None of the repairs individually exceeded $500.00. The details of the various jobs performed by Stevenson Enterprises for the township as well as the amounts of invoices and dates are delineated in Fact Finding 18. Although the board of supervisors never took official action to approve Stevenson Enterprises to perform any work for the township, the other two supervisors knew that Stevenson performed the work and then agreed that Stevenson could perform such services. Between August 1998 and April 2002, 19 checks were issued by the township to Stevenson, 03 -060 Page 10 Stevenson Enterprises totaling $3,457.12. The particulars as to the individual checks are detailed in Fact Finding 21. Stevenson voted to approve payment of 17 of the 19 checks issued to Stevenson Enterprises and also co- signed 7 of those checks. In May of 2002, when the Department of Auditor General concluded an audit of the township's liquid fuels tax fund, the audit noted possible related party transactions involving Stevenson Enterprises and recommended the township comply with the Second Class Township Code. Stevenson has confirmed the following: he made the decisions to have his company perform work for the township, the board never took official action to approve his business to do the work, he participated in board actions including approving payments and co- signing checks to his business, he gave a discount or did not charge the township for work performed as to certain jobs, he did not know the provisions of the State Ethics Act as they relate to conflicts of interest, and he has not done any work for the township since April of 2002 with the hiring of the roadmaster. Of the $3,457.12 in payments to Stevenson Enterprises by the township, Stevenson obtained a private pecuniary gain of $250.30, based upon an average annualized profit of 7.24 %. Having summarized the above relevant facts, we must now determine whether the actions of Stevenson violated Section 3(a)1103(a) of Act 9 of 1989. In applying Section 3(a)/1103(a) of the Ethics Act to the instant matter, there were uses of authority of office on the part of Stevenson. But for the fact that Stevenson is a township supervisor, he would not have been in a position to give the approvals to township employees who wanted to utilize Stevenson Enterprises to perform various repairs or services as to township property. In addition, Stevenson participated in approving invoices as to Stevenson Enterprises as well as co- signing checks to Stevenson Enterprises in payment for services rendered to the township. All such actions were uses of authority of office. See, Juliante, Order 809. The uses of authority of office resulted in private pecuniary benefits consisting of the profits that Stevenson Enterprises made on the repair and service contracts with the township. Lastly, the private pecuniary benefits inured to either Stevenson individually or Stevenson Enterprises, "a business with which . . .. associated" as that term is defined under the Ethics Act. See, 65 P.S. § 402/65 Pa.C.S. §1102. Accordingly, Stevenson violated Section 3(a)/1103(a) of the Ethics Act when he gave approvals to township employees to utilize Stevenson Enterprises, a business with which he is associated, to perform repair services for the township. Further, Stevenson technically violated Section 3(a)/1103(a) of the Ethics Act when he participated in approving invoices and co- signed checks in payment to Stevenson Enterprises for various repairs or services performed as to township property. See, Luzier, Order 1300; Doaty, Order 1221. Section 7(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. Accordingly, Stevenson is directed within 30 days of the date of mailing of this Order to make payment of restitution to the Commonwealth of Pennsylvania through this Commission in the amount of $250.30. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Non - compliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Stevenson, as a Supervisor in Greenwood Township, is a public official subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998. 2. Stevenson violated Section 3(a)/1103(a) of the Ethics Act when he gave approvals to township employees to utilize Stevenson Enterprises, a business with which he is associated, to perform repair services for the township. Stevenson, 03 -060 Page 11 3. Stevenson technically violated Section 3(a)/1103(a) of the Ethics Act when he participated in approving invoices and co- signed checks in payment to Stevenson Enterprises for various repairs or services performed for the township. In Re: Cecil Stevenson File Docket: 03 -060 Date Decided: 7/15/04 Date Mailed: 7/20/04 ORDER NO. 1335 1 Stevenson, as a Supervisor in Greenwood Township, Crawford County, violated Section 3(a)/1103(a) of the Ethics Act when he gave approvals to township employees to utilize Stevenson Enterprises, a business with which he is associated, to perform repair services for the township. 2. Stevenson technically violated Section 3(a)/1103(a) of the Ethics Act when he participated in approving invoices and co- signed checks in payment to Stevenson Enterprises for various repairs or services performed for the township. 3. Stevenson is directed within 30 days of the date of mailing of this Order to make payment in the amount of $250.30 to the Commonwealth of Pennsylvania through this Commission. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair