HomeMy WebLinkAbout1359 SmithIn Re: Timothy 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
Paul M. Henry
Raquel K. Bergen
03 -062
Order No. 1359
2/28/05
3/14/05
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 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Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter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, 03 -062
Page 2
I. ALLEGATIONS:
That Timothy Smith, a public official in his capacity as Mayor and a Member of
Council of Perryopolis Borough, Fayette County, violated provisions of the State Ethics Act
(Act 93 of 1998, C.S. 9 of 1989, 65 Pa. C. S. §1101 et seq.) when he used the authority of
his office for a private pecuniary gain, including but not limited to participating in actions
and votes of the council appointing him to a paid position on the Perrysville Area Joint
Authority (PAJA); as a member of the PAJA he participated in actions of the board issuing
payments to himself; and when he failed to disclose on Statements of Financial Interests
filed for the 1998, 1999, 2000, 2001, 2002 and 2003 calendar years real estate interests,
creditors, gifts, transportation and lodging, financial interests in any legal entity in business
for profit and business interests transferred to immediate family members.
II. FINDINGS:
1. Timothy M. Smith has served as the Mayor for Perryopolis Borough, Fayette County
since January 7, 2002.
a. Smith served on Perryopolis Borough Council from January 2, 1996, through
December 2001.
b. Smith served as the President of Council from January 1996- December
1999 and as the Assistant Treasurer from January 2000- December 2001.
2. Perryopolis Borough is governed by a seven - member council and a mayor.
a. Council typically holds one regularly scheduled public meeting per month.
b. Council members and the mayor each receive $50.00 per month for service
to the borough.
1. Council members chose not to receive compensation in 2003 due to
budgetary concerns in the Borough.
3. The Perryopolis Borough mayor is responsible for enforcing Borough ordinances,
policies, and regulations and for oversight of the Borough police department.
a. The mayor is not a regular voting member of council.
b. The mayor receives $50.00 per month for serving in that capacity.
4. Smith has continuously received compensation from the Borough for serving as a
member of Borough Council and as borough mayor while serving in those
capacities.
5. The Perryopolis Area Joint Authority (PAJA) is a joint sewer and water authority
between Perryopolis Borough and Perry Township.
a. The joint authority was organized in November 1990.
b. Perryopolis Borough had its own authority from 1955 until the jointure in
1990.
6. The PAJA is governed by a seven - member board comprised of five members
appointed by the Perryopolis Borough Council and two members appointed by the
Perry Township Supervisors.
Smith, 03 -062
Page 3
a. The authority board has one regularly scheduled meeting per month with
other meetings on an as- needed basis.
7 The Perryopolis Borough Council passed an ordinance in or about 1990 approving
compensation for appointees serving on the PAJA.
a. The ordinance set compensation up to $100.00 month [sic] subject to the
discretion of the PAJA board.
1. The amount was approved by the PAJA consistent with the borough
council ordinance.
8. PAJA members are paid $599.00 per year in quarterly payments for serving on the
authority.
a. This amount has been in effect since at least 1991.
b. PAJA members receive three quarterly payments of $150.00 and one
quarterly payment of $149.00.
c. The payment of $149.00 is made to avoid the issuance of IRS Forms 1099.
1. IRS regulations require the issuance of Form 1099 for income of $600
or more.
9. Smith has served as a member of the PAJA since June 17, 1998.
a. Smith was appointed by Perryopolis Borough to fill a vacancy on the
Authority due to the resignation of member Arnie Traud.
10. Meeting minutes from the June 17, 1998, Perryopolis Borough Council meeting
confirm the appointment of Smith to the authority and his abstention as follows:
"Due to the resignation of Arnie Traud, the Perryopolis Area Joint Authority has a
vacancy. The position was advertised but only one letter was received, Timothy Smith.
Motion R. Schwenk, second J. Martinak to appoint Timothy Smith to Perryopolis
Area Joint Authority board to fill the un- expired term of Arnold Traud. T. Smith's
term will expire on January 1, 2000. Roll Call Vote -4 yes, 1 abstain (Smith), 2
absent (Lombard, Lipovsky)."
a. The date of the expiration of the term noted in the meeting minutes was
incorrect and was actually January 1, 2001.
11. Nicholas Timperio, an associate in solicitor Samuel Davis' firm, was present at the
June 17, 1998, Borough council meeting.
a. Timperio was questioned regarding Smith's appointment to the PAJA during
the June 17, 1998, council meeting.
12. By letter dated June 22, 1998, to the Borough secretary, Timperio addressed
Smith's appointment to the PAJA with the following:
In addition, it is appropriate for Mr. Smith to also serve on the Authority Board."
a. Timperio was not questioned, nor did he provide an opinion, regarding the
appropriateness of Smith receiving compensation for serving on the authority
Check Date
Check No.
Amount
09/08/98
2195
$150.00
12/03/98
2322
149.00
03/08/99
2457
149.00
06/08/99
2585
150.00
08/28/99
2696
150.00
12/09/99
2800
150.00
03/10/00
2933
150.00
06/05/00
3068
150.00
09/07/00
3194
150.00
12/12/00
3304
149.00
Total:
$1,497.00
Check Date
Check No.
Amount
03/06/01
3421
$150.00
06/14/01
3546
150.00
09/13/01
3760
150.00
12/10/01
3880
149.00
03/13/02
4002
150.00
06/11/02
4125
150.00
09/06/02
4246
150.00
12/09/02
4376
149.00
03/11/03
4502
150.00
06/12/03
4639
150.00
Smith, 03 -062
Page 4
board.
13. Smith began receiving compensation for serving on the PAJA in September 1998
and received payments regularly until the end of his term in December 2000, as
follows:
14. Smith was reappointed to the PAJA by Perryopolis Borough Council on January 17,
2001.
a. Minutes from that meeting reflect the following:
"R. Lombard made a motion to reappoint T. Smith to the Joint Authority
Board. P. Black 2end [sic] —J. Martinak voted No —All others yes— Motion
Carries."
b. Smith was present at this meeting and participated in the affirmative vote to
reappoint himself to the PAJA.
c. The vote to reappoint Smith the PAIA [sic] was 6 affirmative and 1 opposed.
15. Smith continued his service as a member of PAJA following his service at [sic]
Perryopolis Borough Mayor beginning in January 2002.
a. At the time of his vote Smith was aware that service on the PAJA was a
compensated position.
16. Payments to board members for service on the PAJA are made by the authority with
approval by the board.
17. Smith received compensation totaling $1,797.00 while serving on the PAJA after he
participated in council actions appointing him to that position as follows:
Check Date
Check No.
Issued to
Smith
Period of
Check
Listing
Date of
Approval
Smith's
Action RE:
Approval
03/06/01
3421
03/01
04/12/01
No Minutes
06/14/01
3546
06/01
07/12/01
Yes
09/13/01
3760
09/01
10/11/01
Yes
12/10/01
3880
12/01
01/10/02
Yes
03/13/02
4002
03/02
04/11/02
Yes
06/11/02
4125
06/02
07/11/02
Yes
09/06/02
4246
09/02
10/11/02
Yes
12/09/02
4376
12/02
01/09/03
Yes
03/11/03
4502
03/03
04/10/03
Yes
06/12/03
4639
06/03
07/22/03
Yes
09/03/03
4741
09/03
10/09/03
Yes
12/12/03
4866
12/03
01/04/04
Yes
Check Date
Check No.
Amount
09/03/03
4741
150.00
12/12/03
4866
149.00
Total:
$1,797.00
Smith, 03 -062
Page 5
a. Smith received $599.00 in PAJA board member compensation while serving
as a Borough Councilman.
b. Smith has received $1,198.00 in PAJA board member compensation since
serving as Mayor for the Borough.
18. The approval of payments to PAJA members is an after - the -fact approval done by
the Authority members approving the Treasurer's Report for the month that the
payments were issued.
a. The Treasurer's Report outlines the authority's various accounts activity and
balances for a specific month.
b. Attached to the Treasurer's Report is a check listing detailing all of the
checks issued during the month.
c. The check listings include quarterly stipend checks to authority members.
19. Smith, as an Authority board member, has participated in approving Treasurer's
Reports and check listings that included quarterly checks to himself after January
17, 2001, as follows:
a. Smith voted to approve payment of at least 11 of 12 quarterly checks issued
to him for serving on the PAJA after January 17, 2001.
1. There are no minutes from the April 12, 2001, meeting on file at the
PAJA to verify Smith's participation in approving check no. 3421.
b. Smith does not have signature authority on PAJA financial accounts and did
not sign any checks issued to himself.
20. Smith has approved and accepted compensation for serving on the PAJA board
throughout his service on the Authority board.
21. Questions concerning Smith serving on the PAJA and receiving compensation were
Smith, 03 -062
Page 6
again addressed in the fall of 2003.
22. Kris Vanderman, the PAJA solicitor, addressed the issue of Smith receiving
compensation for serving on the Authority in a memo to the authority secretary
dated September 3, 2003.
a. The memo states, in part, the following:
On another particular dealing with compensation to elected officials of a
Municipality, my recollection of the particular, when it arose via Mr. Emricko/
Mr. Kmetz who were Township Supervisors, whether or not they were
receiving compensation through the Municipal body. If they were, then my
recollection is I advised they could not receive compensation from the
Authority other than the actual direct reimbursement of out -of- pocket
expenses. My understanding (which is by recollection only) is that you
cannot be paid from two sources, one being elected and one being
appointed through the elected position. I thought I had prepared a Memo on
this particular a few years ago. I will ask you to check/review past minutes.
If you can't find anything, then we can take it up again (if necessary)."
23. By letter dated September 18, 2003, Borough solicitor Sam Davis issued the
following to Ron Krepps, PAJA manager, regarding Smith:
We are not aware of any prohibition that would prevent Timothy Smith, Mayor of
Perryopolis, from being compensated as a member of the Joint Authority. If there is
authority that does exist regarding this matter, please provide this information to my
office."
24. PAJA Solicitor Vanderman issued a written legal opinion regarding "Compensation
of a Board Official While Sitting on an Authority Board" to the authority board
members dated October 9, 2003, that included, in part, the following:
a. An elected borough official, including a councilman and the mayor, can
serve on the authority but that it is inappropriate to collect compensation in
that capacity.
b. Vanderman based his opinion on the Borough Code.
1. Vanderman included the following quote from the Borough Code:
Any elective or appointive officer of the Borough shall be eligible to
serve on any Board, Commission, Bureau, or other agency created on
[sic] or for the Borough... but no Mayor or member of Council shall
receive compensation therefore."
c. Vanderman also based his opinion on a Commonwealth Court case known
as the Koslow case.
d. Vanderman advised that if this issue needed follow -up that an opinion
should be requested from the State Ethics Commission.
25. In his opinion letter, Vanderman specifically addressed corrective action if this
situation occurred as follows:
"Accordingly, to the extent that a Borough official has been receiving compensation
while an Authority member, that would clearly be illegal and those monies, if paid
out, should be immediately returned."
Smith, 03 -062
Page 7
26. By letter dated October 10, 2003, Vanderman advised Davis of his opinion and
requested that Davis review it so the two could come to an agreement and close
this matter.
a. Ron Krepps, Authority manager, forwarded Vanderman's opinion to Davis on
or about October 14, 2003.
27. Borough Council also requested that Davis look into the appropriateness of Smith's
appointment to and receipt of compensation from the PAJA at this time.
a. Council made this request after being forwarded Vanderman's opinion from
the PAJA.
28. Davis did not respond to Vanderman's or Council's request to review this situation
nor did he confer with Vanderman to bring a close to this situation.
a. Davis felt that this was an Authority matter and was not intending to review
the situation.
29. Authority meeting minutes from December 11, 2003, reflect that Smith made a
motion to terminate Vanderman as solicitor.
a. This motion was seconded and approved by way of a 5 -1 -1 vote, with Smith
voting in favor of the motion.
30. Smith continued to receive compensation for serving on the Authority after
Vanderman's October 9, 2003, opinion letter.
a. Smith obtained and negotiated his December 12, 2003, stipend check.
b. Smith obtained stipend checks in March and June 2004, but has not cashed
or deposited the checks.
1. Smith is holding the checks until the completion of this investigation.
31. On or about July 9, 2004, approximately nine months after receiving Solicitor
Vanderman's opinion, Smith requested an advice from the Legal Division of the
State Ethics Commission.
a. Smith requested the advice after being notified of the initiation of an
investigation by the Investigative Division of the State Ethics Commission.
32. Smith's letter of request to the Legal Division included, in part, the following
information:
a. Smith requested an opinion on the legality of sitting on ajoint authority board
and receiving compensation therefore.
b. Smith was appointed to the joint authority in June 1998 while serving as a
member of borough council.
c. Smith was reappointed to the joint authority in January 2001 and participated
as a councilman in that action.
1. The solicitor advised Smith "voting upon myself had no bearing
because it was a reappointment and no one else put in a letter of the
Smith, 03 -062
Page 8
position."
d. The matter of Smith serving on the authority and receiving compensation
was questioned several times and answered by both the authority solicitor
and borough solicitor.
1. Both solicitors stated that Smith could serve on and receive
compensation from the authority while serving on borough council.
2. The compensation for serving on the authority and as a councilman
was $50.00 each per month.
e. Subsequent to July 2003, the authority solicitor questioned the legality of
Smith's appointment to the authority and compensation received in that
capacity.
f. On September 18, 2003, Smith received a letter from the borough solicitor
stating that the solicitor is not aware of any prohibition that would prevent
Smith from being compensated as a member of the joint authority.
33. On August 9, 2004, the Legal Division of the State Ethics Commission issued
Advice of Counsel No 04 -581 to Smith, which included, in part, the following:
a. For the purpose of the advisory, it shall be factually assumed that the
authority was jointly created by one or more municipalities pursuant to the
Municipality Authorities Act, in which case, Smith's position as an authority
board member would not be considered a borough office.
b. Smith would be precluded from using the authority of his Borough office to
participate in any matters that would involve a financial gain to him as an
authority board member.
c. Smith may simultaneously serve as borough mayor and authority board
member and receive compensation as a [sic] authority board member
assuming that the authority, a joint authority, was created by one or more
municipalities pursuant to the Municipality Authorities Act.
34. Advice of Counsel No. 04 -581 did not address the past action of Smith voting for
himself for the paid position on the PAJA.
a. Smith participated as a Borough Councilman in the January 17, 2001, vote
to appoint himself to the paid position on the authority board.
The following findings relate to the allegation that Smith filed deficient Statements of
Financial Interests and failed to file Statements of Financial Interests.
35. Smith, in his capacities as a Borough Councilman, Borough Mayor, and a PAJA
member, was /is required to annually file Statements of Financial Interests (SFIs) by
May 1 of each year for the preceding calendar year.
36. SFIs on file for Smith at the PAJA verified that he filed SFIs as follows for calendar
years 1998 through 2002:
Calendar Year Date Filed /Form
1998 03/11/99 on SEC Form 01/98
1999 None on File
Smith, 03 -062
Page 9
2000 01/18/01 on SEC Form 1/01
2001 01/10/02 on SEC Form 01/02
2002 01/07/03 on SEC Form 01/03
2003 02/19/04 on SEC Form 01/00
37. Smith failed to disclose information on SFIs for calendar years 1998, 2000, 2001,
2002 and 2003 as follows:
a. Smith filed a deficient 1998 SFI by failing to complete blocks 08A
(Occupation); 09 (Real Estate Interests); 10 (Creditors); 12 (Gifts); 13
(Transportation, Lodging, Hospitality); 14 (Office, Directorship, or
Employment in Any Business); 15 (Financial Interest in any Legal Entity in
Business for Profit); and 16 (Business Interest Transferred to Immediate
Family Member).
b. Smith filed a deficient 2000 SFI by failing to complete blocks 06
(Occupation); 08 (Real Estate Interests); 09 (Creditors); 11 (Gifts); 12
(Transportation, Lodging, Hospitality); 13 (Office, Directorship, or
Employment in Any Business); 14 (Financial Interest in any Legal Entity in
Business for Profit); and 15 (Business Interest Transferred to Immediate
Family Member).
c. Smith filed a deficient 2001 SFI by failing to complete blocks 05 (Agency); 06
(Occupation); 08 (Real Estate Interests); 09 (Creditors); 11 (Gifts); 12
(Transportation, Lodging, Hospitality); 13 (Office, Directorship, or
Employment in Any Business); 14 (Financial Interest in any Legal Entity in
Business for Profit); and 15 (Business Interest Transferred to Immediate
Family Member).
d. Smith filed a deficient 2002 SFI by failing to complete blocks 05 (Agency); 06
(Occupation); 08 (Real Estate Interests); 09 (Creditors); 11 (Gifts); 12
(Transportation, Lodging, Hospitality); 13 (Office, Directorship, or
Employment in Any Business); 14 (Financial Interest in any Legal Entity in
Business for Profit); and 15 (Business Interest Transferred to Immediate
Family Member).
e. Smith filed a deficient 2003 SFI by failing to complete blocks 05 (Agency); 06
(Occupation); 08 (Real Estate Interests); 09 (Creditors); 11 (Gifts); 12
(Transportation, Lodging, Hospitality); 13 (Office, Directorship, or
Employment in Any Business); 14 (Financial Interest in any Legal Entity in
Business for Profit); and 15 (Business Interest Transferred to Immediate
Family Member).
38. Smith failed to file a Statement of Financial Interests for the 1999 calendar year by
May 1, 2000.
III. DISCUSSION:
At all times relevant to this matter, Respondent Timothy Smith (also referred to
herein as "Respondent," "Respondent Smith," or "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."
The allegations are that Respondent Smith, a public official in his capacity as Mayor
and a Member of Council of Perryopolis Borough, Fayette County, violated provisions of
Smith, 03 -062
Page 10
the State Ethics Act when: (1) he used the authority of his office for a private pecuniary
gain, including but not limited to participating in actions and votes of the council appointing
him to a paid position on the Perrysville Area Joint Authority (PAJA); (2) as a member of
the PAJA he participated in actions of the board issuing payments to himself; and (3) he
failed to disclose on Statements of Financial Interests filed for the 1998, 1999, 2000, 2001,
2002 and 2003 calendar years real estate interests, creditors, gifts, transportation and
lodging, financial interests in any legal entity in business for profit and business interests
transferred to immediate family members.
The pertinent provisions of the Ethics Act provide as follows:
§ 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).
§ 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. The term does not include an action
having a de minimis economic impact or which affects to the
same degree a class consisting of the general public or a
subclass consisting of an industry, occupation or other group
which includes the public official or public employee, a
member of his immediate family or a business with which he or
a member of his immediate family is associated.
65 Pa.C.S. § 1102.
§ 1104. Statement of financial interests required to be 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.
Smith, 03 -062
Page 11
65 Pa. C. S. § 1104(a).
§ 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:
(1) Name, address and public position.
(2) Occupation or profession.
(3) Any direct or indirect interest in any real estate which
was sold or leased to the Commonwealth, any of its agencies
or political subdivisions or purchased or leased from the
Commonwealth, any of its agencies or political subdivisions or
which was the subject of any condemnation proceedings by
the Commonwealth, any of its agencies or political
subdivisions.
(4) The name and address of each creditor to whom is
owed in excess of $6,500 and the interest rate thereon.
However, loans or credit extended between members of the
immediate family and mortgages securing real property which
is the principal or secondary residence of the person filing
shall not be included.
(5) The name and address of any direct or indirect source
of income totaling in the aggregate $1,300 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.
(6) The name and address of the source and the amount of
any gift or gifts valued in the aggregate at $250 or more and
the circumstances of each gift. This paragraph shall not apply
to a gift or gifts received from a spouse, parent, parent by
marriage, sibling, child, grandchild, other family member or
friend when the circumstances make it clear that the motivation
for the action was a personal or family relationship. However,
for the purposes of this paragraph, the term "friend" shall not
include a registered lobbyist or an employee of a registered
lobbyist.
(7) The name and address of the source and the amount of
any payment for or reimbursement of actual expenses for
transportation and lodging or hospitality received in connection
with public office or employment where such actual expenses
for transportation and lodging or hospitality exceed $650 in the
course of a single occurrence. This paragraph shall not apply
to expenses reimbursed by a governmental body or to
expenses reimbursed by an organization or association of
public officials or employees of political subdivisions which the
public official or employee serves in an official capacity.
(8) Any office, directorship or employment of any nature
Smith, 03 -062
Page 12
whatsoever in any business entity.
(9) Any financial interest in any legal entity engaged in
business for profit.
(10) The identity of any financial interest in a business with
which the reporting person is or has been associated in the
preceding calendar year which has been transferred to a
member of the reporting person's immediate family.
65 Pa. C. S. § 1105(b).
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.
Pursuant to Section 1104(a) of the Ethics Act, 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) of the Ethics Act details the substantive information that must be
disclosed on the Statement of Financial Interests form.
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 material facts as contained therein.
Respondent Smith has served in various public offices, specifically, as a Member of
Council of Perryopolis Borough ( "Borough ") from January 2, 1996, through December
2001; as Borough Mayor since January 7, 2002; and as a Member of the "Perryopolis Area
Joint Authority" ( "PAJA ") since June 17, 1998.
The PAJA is a joint sewer and water authority. It was organized in November 1990
by the Borough and Perry Township. PAJA members receive compensation for serving on
the joint authority.
In June 1998, Borough Council appointed Respondent to his first term as a PAJA
Member. Respondent was a Borough Council Member at the time, but he abstained from
Council's vote to appoint him. Respondent's first term as a PAJA member ended in
December 2000.
On January 17, 2001, Borough Council reappointed Respondent to the PAJA.
Respondent was present at the meeting and voted in favor of his own reappointment.
During the period following his reappointment to the PAJA, Respondent received
compensation totaling $1,797.00 as a PAJA Board Member. Respondent voted to approve
payment of at least 11 of 12 quarterly checks issued to Respondent for serving on the
PAJA after January 17, 2001, as set forth in Finding 19.
In the fall of 2003, an issue arose as to whether Respondent could be compensated
as a PAJA Member. The Borough solicitor did not review the issue but indicated that he
was not aware of any prohibition that would prevent Respondent from being compensated
as a PAJA Member. The PAJA solicitor issued an opinion letter stating that compensation
received by a Borough official for serving as an authority member would be illegal and
should be immediately returned. The PAJA solicitor advised that if the issue needed
follow -up, an opinion should be requested from the State Ethics Commission.
Smith, 03 -062
Page 13
In the summer of 2004, after being notified that he was being investigated by the
Investigative Division of the State Ethics Commission, Respondent requested an advisory
from the Commission's Legal Division. An Advice was issued to Respondent, but the
Advice did not address Respondent's past conduct. Only Respondent's prospective
conduct was addressed. The Advice determined, inter alia, that consistent with Section
1103(a) of the Ethics Act, Respondent could simultaneously serve as Borough Mayor and
as a member of a joint authority and could receive compensation as a member of the joint
authority based upon the assumption that the joint authority was created by one or more
municipalities pursuant to the Municipality Authorities Act. Smith, Advice 04 -581.
Finally, with regard to Respondent's Statements of Financial Interests, the parties
have stipulated that in each of his capacities as a Borough Councilman, Borough Mayor,
and PAJA Member, Respondent has been subject to the requirement to annually file
Statements of Financial Interests pursuant to Sections 1104 and 1105 of the Ethics Act.
Respondent failed to timely file a Statement of Financial Interests for the 1999 calendar
year. Respondent filed deficient Statements of Financial Interests for calendar years 1998
and 2000 -2003 as detailed in Finding 37.
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 the following proposed resolution of the
allegations:
"3. The Investigative Division will recommend the following in relation to
the above allegations:
a. Than [sic] an unintentional violation of Section 1103(a)
of the Public Official and Employee Ethics Act occurred
when Timothy Smith participated in the vote of council
to reappoint him on January 17, 2001, to the Perrysville
Area Joint Authority.
b. That Timothy Smith violated Sections 1105(b)(4), (6),
(7), (8), (9), (10) of the Public Official and Employees
[sic] Ethics Act by failing to complete, on the Statement
of Financial Interests filed for the 1998 calendar year,
creditors; gifts; transportation, lodging and hospitality;
office, directorship or employment in any business;
financial interest in any legal entity in business for
profit; and business interests transferred to immediate
family members; and
That Timothy Smith violated Sections 1105(b)(4), (6),
(7), (8), (9), (10) of the Public Official and Employee
Ethics Act when he failed to complete sections of the
Statement of Financial Interests filed for the 2000
calendar year relating to creditors; gifts; travel, lodging,
hospitality; employment; financial interest in any legal
entity in business for profit; and business interests
transferred to immediate family members; and
That Timothy Smith violated Sections 1105(b)(4), (6),
(7), (8), (9), (10) of the Public Official and Employee
Ethics Act when he failed to complete sections of the
Statement of Financial Interests filed for the 2001
Smith, 03 -062
Page 14
calendar year relating to creditors; gifts; travel, lodging,
hospitality; employment; financial interest in any legal
entity in business for profit; and business interests
transferred to immediate family members; and
That Timothy Smith violated Sections 1105(b)(4), (6),
(7), (8), (9), (10) of the Public Official and Employee
Ethics Act when he failed to complete sections of the
Statement of Financial Interests filed for the 2002
calendar year relating to creditors; gifts; travel, lodging,
hospitality; employment; financial interest in any legal
entity in business for profit; and business interests
transferred to immediate family members; and
That Timothy Smith violated Sections 1105(b)(4), (6),
(7), (8), (9), (10) of the Public Official and Employee
Ethics Act when he failed to complete sections of the
Statement of Financial Interests filed for the 2003
calendar year relating to creditors; gifts; travel, lodging,
hospitality; employment; financial interest in any legal
entity in business for profit; and business interests
transferred to immediate family members.
c. That Timothy Smith violated Section 1104(a) of the
Public Official and Employee Ethics Act when he failed
to file a Statement for the 1999 calendar year by May 1,
2000."
Consent Agreement at 2 -3.
In addition, as part of the Consent Agreement, Respondent has agreed to make
payment in the amount of $500.00 in settlement of this matter, with said amount to be
payable to the Commonwealth of Pennsylvania and forwarded to this Commission within
thirty (30) days of the issuance of the final adjudication in this matter.
In considering the Consent Agreement, it is clear that the elements for the
recommended violation of Section 1103(a) have been established. On January 17, 2001,
Respondent participated as a Borough Council Member in the vote of Borough Council to
reappoint Respondent to the PAJA. During the period following his reappointment to the
PAJA, Respondent received compensation totaling $1,797.00 as a PAJA Board Member.
Respondent's vote to reappoint himself to a compensated public position constituted a use
of the authority of Respondent's office as a Borough Council Member for the private
pecuniary benefit of himself. See, Crile, Order 1182; Marcolini, Order 1188.
Although intent is not a requisite element for a violation of the Ethics Act, Yocabet v.
State Ethics Commission, 531 A.2d 536 (Pa. Cmwlth. 1987), it is one of the factors that this
Commission may consider in determining the proper disposition of a case. Based upon
the Stipulated Findings, it would appear that Respondent did not intend to violate the
Ethics Act in taking the above actions. We conclude that the application of the law to the
facts before us supports a determination that an unintentional violation of Section 1103(a)
of the Ethics Act occurred when Respondent participated in the vote of Borough Council to
reappoint Respondent on January 17, 2001, to the PAJA.
As for the allegation that Respondent violated the Ethics Act when as a Member of
the PAJA, he participated in actions of the Board issuing payments to himself, it would
appear from the Consent Agreement that the Investigative Division has exercised its
Smith, 03 -062
Page 15
prosecutorial discretion to not further pursue that particular allegation. Therefore, we shall
treat it as a non pros.
We shall now consider the allegations and proposed violations relating to
Respondent's Statements of Financial Interests.
The parties have stipulated that Respondent failed to file a Statement of Financial
Interests for the 1999 calendar year by May 1, 2000. There is no question that pursuant to
Section 1104(a) of the Ethics Act, Respondent was required to file the 1999 calendar year
Statement of Financial Interests by the May 1, 2000, deadline. We determine that
Respondent violated Section 1104(a) of the Ethics Act when he failed to file a Statement of
Financial Interests for the 1999 calendar year by May 1, 2000.
The parties have further stipulated that Respondent's Statements of Financial
Interests for calendar years 1998 and 2000 -2003 were deficient because Respondent
failed to complete certain sections of the forms, including those sections requiring
disclosure as to creditors; sources of gifts; transportation /lodging /hospitality received in
connection with public office or employment; office, directorship or employment in any
business entity; financial interest in any legal entity in business for profit; and business
interests transferred to immediate family members. There is no question that Section
1105(b) of the Ethics Act requires disclosure of such information.
We note that the violations proposed by the Consent Agreement as to Respondent's
Statements of Financial Interests do not encompass non - disclosure of real estate interests.
It would appear that the Investigative Division has exercised its prosecutorial discretion to
not further pursue that particular portion of the allegations.
Finally, we note differences between the allegations and proposed violations with
respect to the 1999 calendar year form and references to Section 1105(b)(8) of the Ethics
Act. However, we agree in principle with the Consent Agreement, and with the parties
having agreed to be bound by it, we accept the Consent Agreement.
We hold that Respondent violated Sections 1105(b)(4), (6), (7), (8), (9), and (10) of
the Ethics Act when he failed to complete, on his Statements of Financial Interests filed for
the 1998 and 2000 -2003 calendar years, sections of the forms relating to creditors;
sources of gifts; transportation /lodging /hospitality received in connection with public office
or employment; office, directorship or employment in any business entity; financial interest
in any legal entity in business for profit; and business interests transferred to immediate
family members.
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, Respondent Smith is directed
to make payment in the amount of $500.00 to the Commonwealth of Pennsylvania through
this Commission by no later than the thirtieth (30 day after the mailing date of this Order.
If he has not already done so, Respondent is directed to file with the Borough and the
PAJA a Statement of Financial Interests for calendar year 1999 and amended Statements
of Financial Interests for calendar years 1998 and 2000 -2003, providing full financial
disclosure as required by the Ethics Act, and to forward copies verifying such filings to this
Commission by no later than the thirtieth (30 day after the mailing date of this Order.
Compliance with the foregoing will result in the closing of this case by this
Commission. Noncompliance will result in the institution of an order enforcement action.
IV. CONCLUSIONS OF LAW:
Smith, 03 -062
Page 16
1. As a Member of Council of Perryopolis Borough ( "Borough ") from January 2, 1996,
through December 2001; Borough Mayor since January 7, 2002; and Member of the
"Perryopolis Area Joint Authority" ( "PAJA ") since June 17, 1998, Respondent
Timothy Smith ( "Smith ") has at all times relevant to this matter been a public official
subject to the provisions of the Ethics Act.
2. Smith unintentionally violated Section 1103(a) of the Ethics Act when he
participated in the vote of Borough Council to reappoint him on January 17, 2001, to
the PAJA.
3. Smith violated Sections 1105(b)(4), (6), (7), (8), (9), and (10) of the Ethics Act when
he failed to complete, on his Statements of Financial Interests filed for the 1998 and
2000 -2003 calendar years, sections of the forms relating to creditors; sources of
gifts; transportation /lodging /hospitality received in connection with public office or
employment; office, directorship or employment in any business entity; financial
interest in any legal entity in business for profit; and business interests transferred
to immediate family members.
4. Smith violated Section 1104(a) of the Ethics Act when he failed to file a Statement
of Financial Interests for the 1999 calendar year by May 1, 2000.
In Re: Timothy Smith
ORDER NO. 1359
File Docket: 03 -062
Date Decided: 2/28/05
Date Mailed: 3/14/05
1 Timothy Smith ( "Smith "), a public official in his capacities as a Member of Council of
Perryopolis Borough ( "Borough ") from January 2, 1996, through December 2001;
Borough Mayor since January 7, 2002; and Member of the "Perryopolis Area Joint
Authority" ( "PAJA ") since June 17, 1998, unintentionally violated Section 1103(a) of
the Ethics Act when he participated in the vote of Borough Council to reappoint him
on January 17, 2001, to the PAJA.
2. Smith violated Sections 1105(b)(4), (6), (7), (8), (9), and (10) of the Ethics Act when
he failed to complete, on his Statements of Financial Interests filed for the 1998 and
2000 -2003 calendar years, sections of the forms relating to creditors; sources of
gifts; transportation /lodging /hospitality received in connection with public office or
employment; office, directorship or employment in any business entity; financial
interest in any legal entity in business for profit; and business interests transferred
to immediate family members.
3. Smith violated Section 1104(a) of the Ethics Act when he failed to file a Statement
of Financial Interests for the 1999 calendar year by May 1, 2000.
4. If he has not already done so, Smith is directed to file with the Borough and the
PAJA a Statement of Financial Interests for calendar year 1999 and amended
Statements of Financial Interests for calendar years 1998 and 2000 -2003, providing
full financial disclosure as required by the Ethics Act, and to forward copies
verifying such filings to this Commission by no later than the thirtieth (30 day after
the mailing date of this Order.
5. Per the Consent Agreement of the parties, Smith is directed to make payment in the
amount of $500.00 to the Commonwealth of Pennsylvania through this Commission
by no later than the thirtieth (30 day after the mailing date of this Order.
6. Compliance by Respondent with paragraphs 4 and 5 of this Order will result in the
closing of this case by this Commission.
a. Non - compliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
Louis W. Fryman, Chair