HomeMy WebLinkAbout1350 SmithIn Re: Leigh S. Smith
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
Raquel K. Bergen
04 -011
Order No. 1350
11/29/04
12/8/04
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. A Consent Agreement and Stipulation of Findings were submitted by the parties
to the Commission for consideration. The Stipulation of Findings is quoted as the Findings
in this Order. The Consent Agreement was subsequently approved.
Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter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.
Smith, 04 -011
Page 2
I. ALLEGATION:
That you, Leigh Smith, in your former position as the director of the Bureau of
Housing Service for the City of York violated Section 1103(a) of the Public Official and
Employee Ethics Law, 65 Pa. C.S. §1103(a) when you used the authority of your office in
that position to obtain a private pecuniary benefit for yourself and /or members of your
immediate family by insuring that collections proceedings would not be initiated against
you and /or members of your immediate family for your /their failure to make loan
repayments to the City relating to a critical needs loan that you and /or your parents had
obtained through the City's Bureau of Housing Services; and that you violated Section
1104(a) of the Public Official and Employee Ethics Law, 65 Pa. C.S. §1104(a) when you
failed to timely file a Statement of Financial Interests for calendar years 1998 and 1999 as
the Director of the Bureau of Housing Services for the City of York and as the former
director of the York City Redevelopment Authority for calendar year 2001
II. FINDINGS:
1. Leigh Smith was employed by the City of York from September 25, 1996, through
August 1, 2001.
a. As an employee of the City of York, Smith held the following positions:
September 25, 1996 — December 15, 1998 Development Assistant
December 16, 1998 — December 19, 2000 Director of Bureau of
Housing Services
December 20, 2000 — August 1, 2001 Director of Redevelopment
Authority
b. Smith was employed by the Redevelopment Authority as its Director on a
part -time basis from May 11, 2001, until August 1, 2001.
c. Smith believes she went to work for the Redevelopment Authority in
September 2000.
2. Leigh Smith held the position of Director of Housing Services for the City of York
from December 16, 1998, through December 19, 2000.
a. The job description for the Director of Housing include the following typical
examples of work for the position of Housing Services Director:
1. Assesses housing and community development needs by maintaining
contact with applicable entities, devises and implements plans and
programs to address identified needs and strategic comprehensive
plan strategies.
2. Oversees all bureau operations including revenue and expenditure
activities, payroll, employee supervision and employee evaluations.
3. Coordinates bureau operations with other local, state and federal
agencies and officials.
4. Represents bureau before various boards and commissions as
needed including a variety of other governmental, public policy
oriented organizations, social service and neighborhood
organizations.
5. Recommends policy and program initiatives to the Director of
Smith, 04 -011
Page 3
Community Affairs.
6. Prepares public statements and media releases and serves as a
spokesman for the bureau as needed.
7 Maintains communication with bureau staff regarding bureau activities
and project status, and offers technical assistance as needed.
8. Manages various housing development projects including the process
of acquisition of property, project development, oversees the bureau's
construction and inspection services.
9. Prepares and submits grant applications and annual bureau budget
reports, administers grant monies and budget upon approval, and
prepares applicable legal documentation.
10. Upon requests, prepares studies, reports and related information for
decision - making purposes.
11. Ensures the maintenance of accurate and complete records of bureau
activities and of records pertinent to housing and community
development programs and projects.
12. As necessary, responds to local citizens inquiring about housing
programs and services, regulations and ordinances and resolves
complex disputes.
13. The above responsibilities cover the most significant duties
performed, but makes good other occasional work assignments not
mentioned.
3. Smith, as the Housing Services Director also had supervisory responsibility over the
City's Critical Needs Loan program and City employees administering said program.
a. Smith supervised approximately three (3) employees.
4. The City of York offers 0% to 3% low interest loans to property owners for repairs
and renovations through its owner occupied and rehabilitation program.
a. Within this program are two sub - programs known as the critical needs
program and regular rehabilitation program.
b. By definition the critical needs program addresses immediate health and
safety in housing deficiencies and handicapped accessibilities.
c. These programs are offered in order to bring properties in compliance with
City codes.
d. Loans are offered at 0% to 3% depending on the financial need of the owner
and nature of the work performed by definition.
e. Deferred payment loans are offered when circumstances require immediate
intervention.
5. On May 31, 1996, William D. Snyder, Gail Snyder, Leigh Smith and Vince Smith
applied for a critical needs loan through the Bureau of Housing.
Smith, 04 -011
Page 4
a. William D. Snyder and Gail Snyder are Leigh Smith's parents.
b. Vince Smith was Leigh Smith's husband at the time.
6. The Snyder /Smith May 31, 1996, critical needs loan application was made
approximately four (4) months prior to Leigh Smith being hired as a Development
Assistant by the City.
a. Leigh Smith became a City of York employee effective September 25, 1996.
7 The Snyder /Smith critical needs loan application was initially reviewed by Evelyn J.
Cartagena, Program Delivery Specialist, Office of Housing Rehabilitation.
a. On August 23, 1996, Cartagena submitted a loan approval request to
Suzanne Mc Conkey, Director of Program Policy Department.
b. The Snyder /Smith loan application was approved by Suzanne Mc Conkey on
August 23, 1996.
8. On August 23, 1996, Evelyn Cartagena issued a memo outlining the Snyder /Smith
loan request and their eligibility.
a. The loan amount applied for was $14,752.50.
b. Designated repairs consisted of updating the electric, installing a new
furnace thermostat, new roof, spouting, bathroom plumbing and shower floor
repairs.
c. Lowest bidders are identified as:
d.
Ford Electric:
Quality Labor Services:
Contingency 5 %:
Total
$ 7,150.00 (Electrical)
$ 6,900.00 (Everything else)
$ 702.50
$14,752.50
Financial analysis for loan consideration:
Annual Income: Is within the mod income level of a six member
household
Credit Rating: Snyders: satisfactory; Smiths: unsatisfactory as a
result of a 1991 chapter 7 bankruptcy
Debt /Income Ratio: 70 %, $2,277.91 monthly expenses of $3,245.21
monthly income. This ratio includes monthly housing
expenses and liabilities. The debt /income ratio
exceeds the program required rate of 50 %.
Equity: The Credit Bureau property search, as reported on
June 13, 1996, references one open mortgages. The
mortgage was recorded for $81,000.00 on June 15,
1994, and is held by York Federal Savings and Loan.
The balance on this mortgage is approximately
$79,500.00. The consideration is $90,000.00. 110%
of the first mortgage is $99,000.00. The available
equity after the critical need rehabilitation loan, would
result in a $4,747.50 figure.
Smith, 04 -011
Page 5
Insurance /Tax:
Loan Term:
Loan Servicing Agent:
Loan Type:
Term:
Interest:
Loan Amount:
Monthly Payment:
100% of consideration
Less 1 mortgage balance
Less critical needs
Total Remaining Equity
York Federal
Critical Need
15 Year
0%
$14,603.10
$ 81.13
A notice will be sent to York Federal
Consideration - $90,000.00
110% of consideration - $99,000.00
$99,000.00
$79,500.00
$14, 752.50
$ 4,747.50
Applicants have met the insurance requirement and
are current with real estate taxes.
Critical need housing rehabilitation loan will be
$14,752.50 with no monthly payments. Financial re-
evaluation in one year.
9. On November 19, 1996, a mortgage in the amount of $14,603.10 was recorded in
York County Mortgage book number 1277, page 6238.
a. The mortgage is identified as being between William D. & Gail M. Snyder,
Vince E. & Leigh Smith, and the City of York on property known as 446 -448
West Market Street, York.
b. Stated mortgage conditions indicate that the indebtedness hereinabove
stated was incurred pursuant to the Emergency Rehabilitation Program of
the City of York. As such, no interest shall be charged on this indebtedness,
nor is a scheduled time of repayment set forth herein. This indebtedness is
payable in full, immediately, when the subject real estate is sold, transferred
or assigned to or by any person not identified herein as mortgagor.
c. The actual mortgage note was not filed until all of the work was completed to
allow for any unexpected repair costs.
d. Leigh Smith was working for the City by the time the mortgage was filed with
the York County Recorder of Deeds.
10. On April 28, 1998, Evelyn Cartagena issued a memo to Leigh Smith documenting
Smith's ability to begin making payments on the loan. Cartagena's memo detailed
the following with respect to Smith's annual financial re- evaluation.
a. A financial re- evaluation was due to take place. The re- evaluation would
determine the Smith's and Snyder's ability to begin repaying their principal
deferred Housing Rehabilitation Loan. Mrs. Leigh Smith has informed me
that there is no need to schedule a financial re- evaluation. They are willing
and able to begin the repayment process. Therefore, their $14,603.10
deferred Housing Rehabilitation will be scheduled for repayment in the
following manner:
b. York Federal Savings & Loan was the lending institution designated as the
Smith, 04 -011
Page 6
collection agent for this loan.
c. Leigh Smith was a development assistant with the City as of April 28, 1998.
11. Monthly payments in the amount of $81.13 on the Snyder /Smith critical needs loan
should have been made starting no later than June 1, 1998.
a. No monthly payments were made on this loan.
12. The Smith /Snyder loan was not forwarded to York Federal Savings & Loan for
repayment.
a. Neither the Smiths nor Snyders received a payment book from York Federal
and neither pursued getting one.
b. Evelyn Cartagena was responsible for establishing repayment of loan, and
did not do so.
13. Leigh Smith became the Director of Housing Services effective December 16, 1998.
a. Collection of Critical Needs Loan payments due fell under Smith's
supervisory duties as Director.
b. Subordinate employees Evelyn Cartagena and /or Debra Painter were
responsible for loan collections and delinquencies.
14. Effective December 16, 1998, Smith, in her capacity as Director of Housing
Services, had ultimate oversight responsibility for the repayment process of loans
through the Critical Needs Loan Program, including the loan received by her family
and her.
a. Smith served as Director of Housing Services from December 16, 1998,
through December 19, 2000.
b. Smith did not require any payments to be made on the loan by herself,
husband or parents.
1. Smith did not require any payments from any of the loan recipients.
c. Subordinate employees Cartagena and Painter did not have the
responsibility to require monthly payments be made by Smith during this time
frame.
d. Neither Cartagena nor Painter brought the non - payment of the loan to either
Smith or Smith's immediate supervisors' attention.
15. As Housing Services Director, Smith took no action to effectuate the repayment of
her loan.
a. Smith's duties as Director included such actions.
b. Annual financial re- evaluations were under Smith's ultimate supervision as
Housing Services Director.
16. Evelyn Cartagena, a subordinate employee of Smith, was responsible for identifying
loan recipients who were delinquent on monthly payments.
Smith, 04 -011
Page 7
a. Cartagena did not bring to Smith's attention that the loan was delinquent.
17. Records of the York County Recorder of Deeds include the following deed and
mortgage history on 446 -448 Market Street, York, PA since June 15, 1994.
Transfer Date
06/15/94
09/03/98
Transfer Date
06/30/00
08/28/01
02/27/04
1404
1454
1636
Recorded
Date Book Pages
06/15/94 918
11/19/96 1277
09/15/98 1337
09/15/98 1337
09/21/98 1337
06/10/99 1367
07/11/00 1404
08/07/00 1406
01/18/01 1422
09/04/01 1454
09/27/01 1457
11/28/01 1466
03/01/01 1636
04/12/04 1644
Deeds
Book Pages
918 493 -495
1337 1281 -1282
Book Pages
2445 -2447
1171 -1173
196 -198
Mortgages /Mortgage Satisfactions
496 -505
6238 -6239
1295 -1296
1283 -1288
6060 -6061
1223 -1224
2448 -2459
8322 -8323
5443 -5448
1174 -1194
3800 -3801
8646 -8647
218 -219
6120 -6121
Mortgage
Amount
$81,000.00
$14,603.10
Postponement
$102,000.00
Satisfaction
Assignment
$114,750.00
Satisfaction
$5,842.23
$107,000.00
Satisfaction
Satisfaction
Satisfaction
Satisfaction
Names
William D. Snyder, Gail M. Snyder
Vince E. Smith, Leigh S. Smith
Vince E. Smith, Leigh S. Smith
Names
Vince E. Smith
Vince E. Smith, Robyn Smith
Kevin B. Fuko, Karen L. Fuko
Lender
York Federal Savings
City of York
City of York
First Union Home Equity
York Federal Savings
First Union National Bank
Ameriquest Mortgage Co.
First Union Home Equity
Household Realty Corp.
First Franklin Financial Corp.
Household Realty Corp.
Ameriquest Mortgage
City of York
First Franklin Financial
Services include three (3)
18. File records maintained by the Bureau of Housing
subordinations or postponements on this mortgage.
a. Subordinate /postponements occurred on or about August 18, 1998; June 29,
2000; and an unspecified date in 2001.
b. The August 18, 1998, subordination was to allow for the removal of William
D. Snyder and Gail M. Snyder, Smith's parents, from the deed.
c. The June 29, 2000, subordination was to allow for the removal of Leigh
Smith from the deed.
d. The 2001 subordination related to a $108,000 mortgage by American Bank
which is not included on the mortgage history for this property.
19. Leigh Smith and Vince Smith went through divorce proceedings during 2000.
a. As part of the distribution or marital assets, Vince Smith retained ownership
of property subject to the critical needs loan at 446 -448 Market Street, York,
Smith, 04 -011
Page 8
PA.
b. Leigh Smith had her name removed from the deed on this property effective
June 30, 2000.
20. On June 30, 2000, an agreement of mortgage assumption was entered into
between the City of York (lender) and William D. & Gail M. Snyder and Vince E. and
Leigh S. Smith (borrower) and Vince E. Smith.
a. As a result of the mortgage assumption the City discharges and releases the
borrower of any and all indebtedness, obligation and responsibility rising out
of or in any way connected with the note and Mortgage and agree that Vince
E. Smith shall hereafter be solely responsible for fulfilling all the terms and
conditions thereof.
b. This agreement contains the signatures of Vince Smith, Leigh Smith, William
Snyder and Gail Snyder.
c. No city officials are listed as signing it nor is the document properly notarized
or certified in any manner.
d. This agreement was entered into while Leigh Smith was serving as the
Housing Services Director.
21. The mortgage assumption agreement removed Leigh Smith, William Snyder and
Gail Snyder from any financial obligation for the repayment of the critical needs
loans effective June 30, 2000.
a. This agreement was made as part of Leigh Smith and Vince Smith's divorce.
22. The City of York, Bureau of Housing Services, took no action to collect monthly
payments on this loan from Vince Smith between July 1, 2000, and December 20,
2000, while Leigh Smith was still serving as Housing Services Director.
a. No financial re- evaluation occurred on this loan at the time.
b. No payment waiver was requested or granted at the time.
23. During Smith's tenure as a City employee, no payments were made on this loan.
24. From February 1, 1999, through June 30, 2000, seventeen (17) monthly payments
in the amount of $81.13 each were due on this loan.
a. The Smiths and Snyders should have repaid $1,379.21 of the loan during
this time frame.
b.
c.
Smith had supervisory control over this loan during this timeframe.
Payments were due during this time frame as follows:
Due Date
02/01/99
03/01/99
04/01/99
05/01/99
06/01/99
07/01/99
08/01/99
Payment Amt.
$ 81.13
$ 81.13
$ 81.13
$ 81.13
$ 81.13
$ 81.13
$ 81.13
Due Date
02/01/00
03/01/00
04/01/00
05/01/00
06/01/00
Payment Amt.
$81.13
$81.13
$81.13
$81.13
$81.13
Smith, 04 -011
Page 9
09/01/99
10/01/99
11/01/99
12/01/99
01/01/00
Total:
$ 81.13
$ 81.13
$ 81.13
$ 81.13
$ 81.13
$1,379.21
25. No payments were made on this loan by Vince Smith between July 1, 2000, and
December 20, 2000.
a. Leigh Smith continued to serve as the Housing Services Director during this
time frame.
b. Vince Smith did not request a waiver of monthly payments due during this
time frame.
c. Monthly payments in the amount of $81.13 were still due pursuant to the
April 28, 1998, agreement to pay.
26. Vince Smith should have made six (6) monthly payments in the amount of $81.13
totaling $486.78 on this loan between July 1, 2000, and September 20, 2000, when
Leigh Smith was serving as Housing Services Director.
a. Leigh Smith took no action to collect this debt from her ex- husband.
27. Vince Smith has not made payments on the loan as required.
a. The loan is in delinquent status.
b. Leigh Smith has had no responsibility for the loan since June 30, 2000.
28. Smith was annually required to file a Statement of Financial Interests form by May 1
containing information for the prior calendar year in her official capacity as Housing
Services Director and Redevelopment Authority Director.
a. Statements of Financial Interests for City of York public officials /public
employees are maintained by City Clerk Dianna L. Thompson.
b. Thompson annually received blank SFI forms from the State Ethics
Commission for distribution to City of York public officials and public
employees.
c. Thompson annually made blank SFI forms available to City officials and
employees for completion.
d. Thompson maintained complete SFI forms in a secured file cabinet within
the office of City Clerk.
29. Statements of Financial Interests on file with the City of York include the following
filings by Smith:
a. Calendar Year: 1998
Position: Director of Housing Services
No form filed.
b. Calendar Year: 1999
Position: Director of Housing Services
Smith, 04 -011
Page 10
No form filed
c. Calendar Year: 2000
Position: Executive Director Redevelopment Authority
Creditors: Allfirst Bank 2.9%
Direct /Indirect Income: City of York
All other financial interests: None
d. Calendar Year: 2001
Position: Former Executive Director Redevelopment Authority
No form filed
30. Smith failed to file a Statement of Financial Interests form by May 1, 1999, for
calendar year 1998 in her official capacity as the City's Director of Housing
Services.
a. Smith held this position from December 16, 1998, through December 19,
2000.
b. Smith did not file this SFI because she did not believe that she met the
definition of a public employee as the City's Housing Services Director.
31. Smith failed to file a Statement of Financial Interests form by May 1, 2000, for
calendar year 1999 in her official capacity as the City's Director of Housing
Services.
a. Smith held this position from December 16, 1998, through December 19,
2000.
b. Smith did not file this SFI because she did not believe that she met the
definition of a public employee as the City's Housing Services Director.
32. Smith failed to file a Statement of Financial Interests form by May 1, 2002, for
calendar year 2001 in her official capacity as the former Executive Director of the
City's Redevelopment Authority.
a. Smith held this position from December 20, 2000, through August 1, 2001.
b. Smith asserts that she was unaware of her filing requirement for calendar
year 2000.
33. During the years when Smith failed to file Statements of Financial Interests Smith
was compensated as follows:
1998: $31,618.20
1999: $38,447.61
2000: $40,460.41
III. DISCUSSION:
At all times relevant to this matter, the Respondent, Leigh S. Smith, hereinafter
Smith, 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."
Smith, 04 -011
Page 11
The allegations are that Smith, as the York City Director of the Bureau of Housing
Service, violated Section 3(a)/1103(a) of the Ethics Act when she ensured that collections
proceedings would not be initiated against her or members of her immediate family for the
failure to make loan repayments to the City relating to a critical needs loan program; and
violated Section 4(a)/1104(a) of the Ethics Act when she failed to timely file Statements of
Financial Interests (SFI's) for calendar years 1998 and 1999 and for calendar year 2001 as
a former public employee.
Pursuant to Section 3(a)/1103(a) of the Ethics Act, a public official /public employee
is prohibited from engaging in conduct that constitutes a conflict of interest.
The term "conflict of interest" is defined under Act 9 of 1989/Act 93 of 1998 as
follows:
Section 2/1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family
or a business with which he or a member of his immediate
family is associated. "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. § 402/65 Pa. C. S. § 1102.
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.
Section 4(a)/1104(a) of the Ethics Act 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.
As noted above, the parties have submitted a Consent Agreement and Stipulation of
Findings. The parties' Stipulated Findings are reproduced above as the Findings of this
Commission. We shall now summarize the relevant facts as contained therein.
Smith was employed by the City of York (City) from September of 1996 to August of
2001, holding various positions including the Director of the Redevelopment Authority
(Authority) from May until August of 2001. As the Authority Director, Smith had various
duties and responsibilities as delineated in Fact Finding 2.
The City offers 0 % -3% low interest loans to property owners for the purpose of
repairs and renovations. This is offered through an owner occupied and rehabilitation
program that includes two sub - programs known as the critical needs program and regular
rehabilitation program. Loans are made based upon the need to bring properties into
compliance with city codes. The loan rate is determined based upon the financial need of
Smith, 04 -011
Page 12
the owner and the work to be performed. Deferred payment loans are offered when
circumstances require immediate intervention.
On May 31, 1996, Smith, her spouse, and her parents (Snyder) applied for a critical
needs loan through the Bureau of Housing. The Snyder /Smith critical needs load
application was made approximately four months before Smith was hired as a City
employee in September of 1996. The Snyder /Smith application was initially reviewed by
Evelyn Cartagena (Cartagena) and approved by Director Suzanne McConkey. In August
of 1996, Cartagena issued a memo outlining the Snyder /Smith loan request and eligibility
as detailed in Fact Finding 8. In November of 1996, a mortgage in the amount of
$14,603.10 was recorded at the county seat with Snyder /Smith as mortgagors. In April of
1998, Cartagena issued a memo to Smith documenting her ability to begin making
payments on the loan. Monthly payments of $81.13 on the Snyder /Smith critical needs
loan should have started no later than June 1, 1998; however, no loan payments were
made. The Smith/ Snyder loan was not forwarded for repayment. Although Cartagena had
the responsibility for establishing the repayment of the loan, she failed to do so.
Smith /Snyder never received a payment book but never attempted to obtain one.
When Smith became Director of Housing Services in December of 1998, the
collection of critical needs loan payments came under her supervision. Smith had ultimate
oversight responsibility for the repayment process of loans through the critical needs loan
program including the loan received by her family and herself. As the Housing Director,
Smith took no action to effectuate the repayment of her loan, even though her duties as a
Director included such actions. However, Smith's subordinate employee Cartagena who
was responsible for identifying delinquencies by loan recipients failed to bring to Smith's
attention that her loan was delinquent.
During the pendency of the mortgage, there were three subordinations: the first
was for the removal of Smith's parents from the deed, the second was for the removal of
her spouse from the deed due to divorce proceedings, and the third related to a mortgage
by American Bank which was not included in the history for the property. Thereafter, on
June 30, 2000, an agreement for mortgage assumption was entered into between the City
and the four mortgagors whereby Smith and her parents were discharged from
responsibility which then solely remained with her former spouse. The City took no action
to collect money from the former spouse between July and December of 2000 while Smith
served as Housing Services Director. During Smith's tenure as a City employee, no
payments were made as to the loan.
From February 1999 through June 2000, 17 monthly payments, each in the amount
of $81.13, were due on the loan. As to the non - payments on the loan by Smith's former
spouse between July and December of 2000, he did not request a waiver of monthly
payments. Although Smith's former spouse should have made six payments in that time
period totaling $486.78, no payments were made. Smith took no action to collect the debt
from her former spouse.
As a public employee of the City, Smith was required to file SFI's on an annual
basis. A review of the SFI's on file with the City reflect that Smith did not file for the
calendar years 1998 and 1999, filed for the calendar year 2000, and did not file for the
calendar year 2001 as a former public employee.
Having highlighted the Stipulated Findings and issues before us, we shall now apply
the Ethics Act to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations.
The Consent Agreement proposes that this Commission find:
"a. That an unintentional violation of Section 1103(a) of the Ethics Act occurred when
Smith, 04 -011
Page 13
Smith failed to take actions against members of her immediate family and her to
ensure the repayment of critical needs loan owed by Smith, her husband and her
parents, while she served as Director of Housing Services.
b. That a violation of Section 1104(a) of the Ethics Act occurred when Smith did not
file Statements of Financial Interests for the 1998 and 1999 calendar years in .. .
[her] position as the City's Housing Services Director.
c. That a violation of Section 1104(a) of the Ethics Act occurred when Smith did not
file Statements of Financial Interests for the 2001 calendar year in ... [her] position
as the former Director of the Redevelopment Authority."
In addition, Smith agrees to pay $1,379.21, as well as file SFI's for the 1998, 1999 and
2001 calendar years. Said amount is payable to the City of York through this Commission
within thirty (30) days of the issuance of this Order. The SFI's are to be filed with the City
of York, with copies forwarded to this Commission for compliance verification.
In applying Section 3(a)/1103(a) of the Ethics Act to the above allegation, Smith as
a City employee had duties and responsibilities as to repayments under the critical needs
loan program. Although Smith's subordinate did not apprise Smith of the failure to make
the repayments on the loan by her spouse, her parents, and herself, Smith had the
ultimate responsibility as to this aspect of the loan repayments. Smith who was a party to
the critical needs loan was certainly aware of the obligation to make repayments and failed
to do so. Smith's failure to proceed as to the repayment would suggest that her failure was
deliberative. However, such failure constitutes inaction. A question exists as to whether
the inaction of Smith constitutes a use of authority of office under the Ethics Act.
There is judicial precedent on the issue of when nonfeasance constitutes actionable
conduct. See, In re 1983 Audit Report of Belcastro, Controller, 528 Pa. 29, 595 A.2d 15
(1991); Kraines v. Pennsylvania State Ethics Commission, 805 A.2d 677 (Pa. Commw.
2002), petition for allowance of appeal denied, 572 Pa. 761, 818 A.2d 506 (2003).
However, given that this is a consent agreement in which the respondent has conceded
and acknowledged an unintentional violation, we need not and do not address this issue.
It is clear that Smith, her (now former) spouse, and parents, who are members of her
immediate family as that term is defined under the Ethics Act, received a private pecuniary
benefit consisting of the financial gain that was made by not fulfilling the requirements of
the critical needs program to repay the loan to the City. Consequently, Smith
unintentionally violated Section 3(a)/1103(a) of the Ethics Act when she failed to take
action against herself and members of her immediate family as to the repayment of the
critical needs loan owed by Smith, her spouse, and her parents to the City while she
served as Director of Housing Services.
Turning to the SFI allegations, the stipulated findings reflect that Smith failed to file
as a public employee of the City SFI's for the calendar years 1998 and 1999 and also
failed to file an SFI for the calendar year 2001 as a former public employee. Accordingly,
Smith violated Section 4(a)/1104(a) of the Ethics Act when she failed to file SFI's for the
calendar years 1998 and 1999 as the City's Housing Services Director. Additionally, Smith
violated Section 4(a)/1104(a) of the Ethics Act when she failed to file an SFI for the
calendar year 2001 as a former Director of the Redevelopment Authority.
We determine that the Consent Agreement submitted by the parties sets forth the
proper disposition for this case, based upon our review as reflected in the above analysis
and the totality of the facts and circumstances. Accordingly, within 30 days of the mailing
of this Order, Smith is directed to pay $1,379.21 to the City of York through this
Commission and file SFI's for the calendar years 1998, 1999, and 2001 with the City of
York, with copies forwarded to this Commission for compliance verification. Compliance
Smith, 04 -011
Page 14
with the foregoing will result in the closing of this case with no further action by this
Commission. Noncompliance will result in the institution of an order enforcement action.
IV. CONCLUSIONS OF LAW:
1. Smith, as a former Director of the Bureau of Housing Service for the City of York
was a public employee subject to the provisions of Act 9 of 1989 as codified by Act
93 of 1998.
2. Smith unintentionally violated Section 3(a)/1103(a) of the Ethics Act when she failed
to take action against herself and members of her immediate family as to the
repayment of the critical needs loan by Smith, her spouse, and her parents to the
City while she served as Director of Housing Services.
3. Smith violated Section 4(a)/1104(a) of the Ethics Act when she failed to file SFI's for
the calendar years 1998 and 1999 as the City's Housing Services Director.
4. Smith violated Section 4(a)/1104(a) of the Ethics Act when she failed to file an SFI
for the calendar year 2001 as a former Director of the Redevelopment Authority.
In Re: Leigh S. Smith
ORDER NO. 1350
File Docket: 04 -011
Date Decided: 11/29/04
Date Mailed: 12/8/04
1 Smith, as the Director of the Bureau of Housing Service for the City of York,
unintentionally violated Section 3(a)/1103(a) of the Ethics Act when she failed to
take action against herself and members of her immediate family as to the
repayment of the critical needs loan by Smith, her spouse, and her parents to the
City while she served as Director of Housing Services.
2. Smith violated Section 4(a)/1104(a) of the Ethics Act when she failed to file
Statements of Financial Interests for the calendar years 1998 and 1999 as the
City's Housing Services Director.
3. Smith violated Section 4(a)/1104(a) of the Ethics Act when she failed to file a
Statement of Financial Interest for the calendar year 2001 as a former Director of
the Redevelopment Authority.
4. Per the Consent Agreement of the parties, Smith is directed to pay $1,379.21 to the
City of York through this Commission and file Statements of Financial Interests for
the calendar years 1998, 1999, and 2001 with the City of York, with copies
forwarded to this Commission for compliance verification.
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