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HomeMy WebLinkAbout1370 SeitzIn Re: John Seitz File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella 04 -010 Order No. 1370 6/6/05 6/17/05 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 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Seitz, 04 -010 Page 2 I. ALLEGATION: That John Seitz, a public official /public employee, in his capacity as Executive Director of the Lehigh County Housing Authority, violated Sections 1103(a), 1103(d), 1105(b)(5), and 1105(b)(8) provisions of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. § §1103(a), 1103(d), 1105(b)(5) and 1105(b)(8) when he used the authority of his office for the private pecuniary gain of himself and /or businesses with which he is associated, including but not limited to using personnel, office equipment and facilities of the housing authority for personal matters, including but not limited to his personal business, Valley National Properties; when he failed to disclose income received from Valley National Properties on Statements of Financial Interests filed for the 2000, 2001 and 2002 calendar years; when he failed to disclose income in excess of $1,300 from American Century Investments on his Statement of Financial Interest filed for the 2000 calendar year; when he failed to disclose Valley National Properties as a source of income in excess of $1,300 on the Statement of Financial Interests for the 2001 calendar year; when he failed to disclose Valley National Development Corporation as a source of income on the Statement of Financial Interest for the 2003 calendar year; when he failed to disclose his office, directorship and /or employment in Valley National Properties and Valley National Development Corporation on Statements of Financial Interests filed for the 2000, 2001, 2002, and 2003 calendar years; and when he accepted honorarium from the National Association of Housing and Redevelopment Offices (NAHRO) as payment in recognition of his appearances and /or speeches /presentation at conferences sponsored by NAHRO. II. FINDINGS: 1. John Seitz served as the Executive Director of the Lehigh County Housing Authority from January 1, 1976 until October 22, 2004. 2. The Lehigh County Housing Authority (LCHA) was established in 1975 under the Housing Authorities Law of the Commonwealth of Pennsylvania to provide affordable housing for qualified individuals in accordance with the rules and regulations prescribed by HUD. a. A five - person board of commissioners appoints the Authority's executive director and governs the Authority. b. The Authority owns and manages approximately 289 public housing units under its Consolidated Annual Contributions Contract with HUD. 3. The Executive Director of the Lehigh County Housing Authority has "general supervision over the administration of the business and affairs of the Authority, subject to the direction of the Authority. He is be [sic] charged with the management of the housing projects of the Authority.[ "] a. The executive director, chairman, secretary, and treasurer are all authorized to sign checks for all Authority accounts. b. Officers and the executive director are also empowered to handle other functions related to the authority's depository account including deposits and withdrawals. All checks and withdrawals will require two authorized signatures. 4. In 1982, the Authority created an entity known as Valley Housing Development Corporation (VHDC). a. The Authority formed this nonprofit corporation to provide low- and Seitz, 04 -010 Page 3 moderate - income household opportunities for low cost rental housing. b. A board of commissioners, consisting of 11 -21 members, governs the corporation. 5. Valley Housing Development Corporation (VHDC) was created to develop and operate housing projects for low and moderate income individuals, which due to program and funding restrictions cannot be developed and operated by the Authority. a. The Authority agreed to provide personnel to VHDC at an agreed upon fee in order to enable VHDC to develop and operate housing projects. b. VHDC appoints the Authority to provide services for VHDC in the development and management of housing projects for low and moderate income individuals. c. The Authority provides the services of the executive director, deputy director and housing expeditor. d. The Authority receives fees from VHDC as compensation for the services. 6. As of December 2003, the VHDC held an interest in 46 limited partnerships in which it served as the general partner. a. It primarily funded its limited partnerships through a combination of private investment (in exchange for federal housing tax credits), commercial loans, and loans the corporation made using funds it received in exchange for 1- year state tax credits. b. In total, these partnerships operate more than 1,300 units of low- income housing. 7 Since November 1990, the Authority has assisted VHDC, for a fee, to enable it to develop and operate its housing projects for low- and moderate - income households. a. The authority also shares common management with the corporation. b. Employee wages are charged back to VHDC. 8. Pursuant to the foregoing, Seitz served as the Executive Director of VHDC. a. Compensation for his service was paid directly to the LCHA. 9. In addition to Seitz[s] employment as Executive Director of LCHA and VHDC, he has personal business interests including Valley National Properties LLC, Nesquehoning School Associates LP, Summit Hill Associates LP, and Valley National Development LLC. 10. Valley National Properties LLC, 6464 Indian Creek Road, Zionsville, PA 18092 filed papers with the Pennsylvania Department of State, Corporation Bureau establishing a limited liability company on December 12, 1995. a. Company members are John Seitz, President and Valley National Realty Corporation, Vice - President. Seitz, 04 -010 Page 4 b. The business address of Valley National Properties LLC, 6464 Indian Creek Road, Zionsville, PA 18092 also serves as Seitz home address. 11. Nesquehoning School Associates, 6464 Indian Creek Road, Zionsville, PA 18092 filed papers with the Pennsylvania Department of State, Corporation Bureau establishing a limited partnership on October 10, 1997. a. Valley National Properties is recorded as the general partner. b. The business address of Nesquehoning School Associates is 6464 Indian Creek Road, Zionsville, PA 18092 also serves as Seitz[s] home address. 12. Summit Hill School Associates, 1908 Allen Street, Allentown, PA 18104 filed papers with the Pennsylvania Department of State, Corporation Bureau establishing a limited partnership on December 12, 1995 and an amended limited partnership on May 9, 1997. a. Valley National Properties is recorded as the general partner. 13. Seitz in his official capacity as Executive Director of the LCHA -VHDC had access to office equipment, telephone, computers, and fax machines of both entities. 14. Seitz, on occasion, utilized his office at LCHA -VHDC and office equipment, telephones and fax machines for his outside business interests in Valley National Properties, LLC. 15. Staff of the LCHA -VHDC, on occasion, received incoming and outgoing fax transmissions related to Seitz's personal business activities. 16. Seitz used the LCHA phone and fax machine in furtherance of his personal business interests. a. Seitz did not attempt to conceal the fact that personal business calls or correspondence were being directed to him at the LCHA offices. b. Staff would transfer calls and deliver correspondence to Seitz unrelated to LCHA business. 17. Seitz utilized the LCHA fax number (215) 967 -6955 on stationery used for Valley National Properties. a. This stationery was used until approximately September 2003 when the Authority's fax number was no longer included. 18. Business records supplied by Seitz confirm Seitz's use of Authority facilities including the fax machine and e -mail for personal business (transmission or receipt), on at least 50 occasions. a. Seitz used his LCHA e -mail address for correspondence related to private business. b. Seitz used the LCHA fax and phone numbers as a point of contact for personal business. c. Seitz sent and /or received faxes at the LCHA relating to private business. Seitz, 04 -010 Page 5 19. Seitz as the Executive Director of LCHA and VHDC had access to agency computers including a Premio computer tower, Serial Number 200019356 and Wave computer tower, serial number 98020051. a. These computers were the property of LCHA and VHDC. b. Seitz only had access to them in his official capacity as Executive Director of LCHA and VHDC. c. Seitz[s] access to these computers and related internet access was to facilitate LCHA and VHDC business. 20. Seitz utilized his computers at LCHA and VHDC for non work related activities including accessing personal /personal business finance, business correspondence, personal /business and other non business related websites. 21. Seitz's non - employment related uses of these computers were for the purpose of composing correspondence and exploring websites. 22. Following Seitz[s] terminating his employment with the LCHA effective October 22, 2004, a number of documents relating to Seitz's private business interests were located in his office at the LCHA. a. Records left by Seitz related to Nesquehoning School Associates, Summit Hill Associates, Valley National Group and Valley National Properties. 23. Seitz realized a financial gain as a result of his use of the Authorities [sic] and VHDC's offices, equipment, and other accommodations for personal purposes. THE FOLLOWING FINDINGS RELATE TO SEITZ'S RECEIPT OF PROHIBITED HONORARIUM 24. The National Association of Housing and Redevelopment Officials is a housing and community development advocate for the provision of adequate and affordable housing and strong, viable communities for all Americans - particularly those with low- and moderate - incomes. a. NAHRO holds several conferences a year at various locations throughout the country. b. NAHR[O] conferences explore issues confronting agencies and effective strategies that can be employed in working with staff, policy makers, residents and other participants in the process of providing affordable housing as well as information from experts on how to implement new regulations and uncover valuable resources. 25. Seitz participated as a speaker at two (2) NAHRO conferences held in 2002. a. Seitz was selected to participate as a speaker on the subject area of "Creating a Nonprofit Development Organization ". b. Seitz was selected based on his experiences as executive director of a housing authority with a nonprofit development affiliate. Seitz, 04 -010 Page 6 c. Seitz[s] knowledge of this topic area stemmed directly from his public position as Executive Director of the Lehigh County Housing Authority. 26. Seitz utilized vacation leave to attend the NAHRO conferences. 27. On April 16, 2002, Colleen Moore, of NAHRO, sent an email communication to Seitz at his place of employment LCHA/VHDC thanking Seitz for agreeing to participate in the middle Atlantic Regional Conference in Ocean City Maryland on May 22, 2000. a. Colleen "Grogan Moore" is the Director, Home Project NAHRO, Washington DC. b. Moore's email was sent to Seitz[s] work email address John@lcha- vhdc.orq. c. Moore's email offered Seitz a $500 per day stipend plus expense reimbursement. d. Moore included a copy of the conference agenda and session description along with her email. e. Moore requested that Seitz share his experience as executive director of a housing authority with an active, successful nonprofit development affiliate." f. The agenda reflects the session as "Pros and Cons of Creating Nonprofits for Development" was scheduled for Wednesday, May 22, 2002 from 1:30 p.m. to 2:45 p.m. g. The session description was as follows: In recent years, many local housing authorities have created separate nonprofit organizations for a variety of purposes, but especially as vehicles to implement their development objectives. In this session, we will discuss the advantages and disadvantages of creating these nonprofits, from an organizational and financial perspective and weigh the opportunities presented against the additional responsibilities entailed in guiding and staffing separate, nonprofit development organizations. 28. The NAHRO Spring 2002 Regional Conference was held May 22 -24, 2002 at the Clarion Resort Hotel, 10100 Coastal Highway, Ocean City, MD. a. Seitz was a speaker at the workshop "Pros and cons for creating Nonprofits for Development." 29. Lehigh County Housing Authority leave records include seven (7) hours of vacation leave used by Seitz on May 22, 2002. a. Seitz also used 3.5 hours of vacation leave on May 21, 2002, the day before the conference. 30. On May 31, 2002, Colleen Moore sent an email communication to Seitz at his place of employment LCHA/VHDA thanking Seitz for his participation at the conference. a. Moore requested Seitz's expenses for the Ocean City session be forwarded to her for payments [sic]. Seitz, 04 -010 Page 7 b. Moore's email was sent to Seitz[s] work email address John@lcha- vhdc.orq. c. Moore's email went on [to] invite Seitz to participate in a similar session at the NAHRO summer conference in New York on July 12, 2002. d. Moore indicated that for the New York session we would be happy to reimburse you for your expenses and provide you with a stipend or reimburse your agency for your time, at your preference." 31. Seitz submitted an undated invoice for services to Colleen Grogan Moore in the amount of $587.20 for expenses incurred for the Ocean City conference." a. Seitz[s] itemized expenses included: Preparation and presentation $500.00 Hotel $ 87.20 Total: $587.20 b. Seitz included a receipt in the amount of $87.20 for one (1) room at the Clarion Resort Fontainebleau Hotel for May 21, 2002. c. Seitz used the address of Valley Housing Development Corporation, 635 Broad Street, Emmaus, PA 18049 for the room. d. Seitz requested that NAHRO's payment be issued to 6464 Indian Creek Road, Zionsville, PA 18092 (Seitz[s] home address). e. Seitz did not receive any reimbursement from the LCHA for expenses incurred on this trip. 32. On June 20, 2002 Seitz was issued check number 9160 in the amount of $587.20 from the National Association of Housing and Redevelopment Officials, 630 Eye [sic] Street, Northwest, Washington D.C. 20001 for his contribution as a speaker at [the] 2002 NAHRO spring conference. 33. The NAHRO Summer 2002 conference was held July 11 -14, 2002 at the Hilton, New York City, NY. a. Seitz was a speaker for concurrent Session "Pros and Cons of Creating Non- profits." b. Seitz[s] session was held on Friday, July 12, 2002. 34. Lehigh County Housing Authority leave records include seven (7) hours of vacation leave used by Seitz on July 12, 2002. 35. On August 5, 2002, Michael Nail, Deputy Executive Director, NAHRO sent statistical information gathered evaluating Seitz's contribution as a speaker at the summer 2002 conference in New York City. a. Nail[`]s correspondence was sent to "Mr. John C. Seitz, Executive Director, Lehigh County Housing Authority/Valley Housing Corporation, 33 Ridge Street, Emmaus, PA 18049.[ "] b. Colleen Grogan Moore moderated this session with Seitz and Judd Roth serving as speakers. Seitz, 04 -010 Page 8 36. Seitz submitted an undated invoice for services to Colleen Grogan Moore in the amount of $580.00 for expenses incurred for his "conference presentation — July 12, 2002." a. Seitz[s] itemized expenses included: Preparation and presentation Parking and Tolls $500.00 $ 48.00 $548.00 b. Seitz included receipts for parking $42,00 [sic] and tunnel tolls $6.00 incurred on July 12, 2002. c. Seitz requested that NAHRO's payment be sent to 6464 Indian Creek Road, Zionsville, PA 18092 (Seitz's home address). 37. On August 27, 2002[,] Seitz was issued Check Number 9568 in the amount of $548.00 from the National Association of Housing and Redevelopment Officials, 630 Eye [sic] Street, Northwest, Washington D.C. 20001 -3736 for his contribution as a speaker at the 2002 NAHRO summer conference. 38. Seitz utilized the LCHA/VHDC as his point of contact in private business dealings with the NAHRO. 39. Seitz received $1,000 in recognition of the presentations that he made for NAHRO. 40. Seitz, in his official capacity as Executive Director of the Lehigh County Housing Authority, was annually required to file a Statement of Financial Interests form by May 1 containing information pertaining to the prior calendar year. 41. Statements of Financial Interests forms on file with the Lehigh County Housing Authority include the following filings by Seitz: a. Calendar year: 2003 Filed: 03/23/04 on SEC Form 1/03 Position: Executive Director Creditors: Sovereign Bank, 6% Direct /indirect Income: Lehigh County Housing Authority Financial interest in any business: Valley National Properties LLC, 50% All other financial interests: None b. Calendar year: 2002 Filed: 04/10/03 on SEC Form 1/00 Position: Executive Director Creditors: Sovereign Bank, 6% Direct /indirect Income: Lehigh County Housing Authority; Valley Housing Development Corporation Financial interest in any business: Valley National Properties LLC, 50% All other financial interests: None c. Calendar year: 2001 Filed: 04/01/02 on SEC Form 1/00 Position: Executive Director Creditors: None Direct /indirect Income: Lehigh County Housing Authority; Valley Seitz, 04 -010 Page 9 Housing Development Corporation Financial interest in any business: Valley National Properties LLC, 50% All other financial interests: None d. Calendar year: 2000 Filed: 04/02/01 on SEC Form 1/00 Position: Executive Director Creditors: None Direct /indirect Income: Lehigh County Housing Authority; Valley Housing Development Corporation Financial interest in any business: Valley National Properties LLC, 50% All other financial interests: None 42. Seitz did not disclose American Century Investments, P.O. Box 419200, Kansas City, MO. as a source of income in excess of $1,300 on his Statement of Financial Interests form filed for calendar year 2000. a. On January 28, 2000, Seitz deposited a check in the amount of $30,048.60 into Valley National Properties First Union Account # 2014111395627. 1. This check was issued to John C. Seitz and Brenda J. Seitz from American Century Investments. b. On March 20, 2000, Seitz deposited a check in the amount of $14,297.00 into Valley National Properties First Union Account # 2014111395627. 1. This check was issued to John C. Seitz and Brenda J. Seitz from American Century Investments. c. On June 8, 2000, Seitz deposited a check in the amount of $10,745.00 into Valley National Properties First Union Account # 2014111395627. 1. This check was issued to John C. Seitz and Brenda J. Seitz from American Century Investments. 43. Seitz did not disclose Valley Housing Development Corporation as a source of income in excess of $1,300 on his Statement of Financial Interests form filed for calendar year 2003. a. Income was not paid to Seitz by Valley Housing during 2003. b. All of Seitz's compensation was paid by LCHA. 44. Seitz failed to list Valley National Properties as a source of income in excess of $1,300.00 on his Statement of Financial Interests form filed for calendar year 2001. a. Seitz disclosed income from Valley National Properties in the amount of $4,286 on his federal income tax return for the 2001 calendar year. 45. Seitz failed to list his officer position or employment with Valley National Properties and Valley National Development Corporation on Statements of Financial Interests forms filed for calendar years 2000, 2001, 2002 and 2003. a. Seitz did list VNP as a business in which he had a financial interest for Seitz, 04 -010 Page 10 calendar years 2000 -2003 inclusive. b. Seitz did list VHDC as a source of income for calendar years 2000 -2002. III. DISCUSSION: Respondent, John Seitz, (also referred to herein as "Respondent" or "Seitz "), has at all times relevant to these proceedings been a public official /public employee subject to the provisions of the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., which Act is referred to herein as the "Ethics Act." The allegations are that Seitz, as Executive Director of the Lehigh County Housing Authority ( "Housing Authority "), violated Sections 1103(a), 1103(d), 1105(b)(5), and 1105(b)(8) of the Ethics Act when he used the authority of his office for the private pecuniary gain of himself and /or businesses with which he is associated, including but not limited to using personnel, office equipment, and facilities of the Housing Authority for personal matters including, but not limited to, his personal business, Valley National Properties; when he failed to disclose income received from Valley National Properties on Statements of Financial Interests filed for the 2000, 2001 and 2002 calendar years; when he failed to disclose income in excess of $1,300 from American Century Investments on his Statement of Financial Interest filed for the 2000 calendar year; when he failed to disclose Valley National Properties as a source of income in excess of $1,300 on his Statement of Financial Interests for the 2001 calendar year; when he failed to disclose Valley National Development Corporation as a source of income on his Statement of Financial Interests for the 2003 calendar year; when he failed to disclose his office, directorship and /or employment in Valley National Properties and Valley National Development Corporation on his Statements of Financial Interests filed for the 2000, 2001, 2002, and 2003 calendar years; and when he accepted honorarium from the National Association of Housing and Redevelopment Offices ( "NAHRO ") as payment in recognition of his appearances and /or speeches /presentation at conferences sponsored by NAHRO. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest. § 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). The term "conflict of interest" is defined in the Ethics Act as follows: 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 Seitz, 04 -010 Page 11 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. 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. § 1103. Restricted activities (d) Honorarium. - -No public official or public employee shall accept an honorarium. 65 Pa.C.S. §1103(d). The term "honorarium" is defined in the Ethics Act as follows: § 1102. Definitions "Honorarium." Payment made in recognition of published works, appearances, speeches and presentations and which is not intended as consideration for the value of such services which are nonpublic occupational or professional in nature. The term does not include tokens presented or provided which are of de minimis economic impact. 65 Pa.C.S. §1102. § 1105. Statement of financial interests (b) Required information. - -The statement shall include the following information for the prior calendar year with regard to the person required to file the statement: (5) The name and address of any direct or indirect source of income totaling in the aggregate $1,300 or more. However, this provision shall not be construed to require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges. (8) Any office, directorship or employment of any nature whatsoever in any business entity. 65 Pa.C.S. §§ 1105(b)(5), (8). Section 1105(b)(5) of the Ethics Act, which requires that every public official /public employee and candidate list the name and address of any direct or indirect source of Seitz, 04 -010 Page 12 income totaling in the aggregate of $1,300 or more. Section 1105(b)(8) of the Ethics Act requires that every public official /public employee and candidate list the name and address of the source and amount of any gift valued in the aggregate of $200 or more and the circumstances of each gift. 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. Respondent Seitz served as the appointed Executive Director of the Housing Authority from January 1, 1976 to October 22, 2004. The Housing Authority was created pursuant to the Housing Authorities Law to provide qualified individuals with affordable housing. As Executive Director, Seitz's responsibilities generally included supervising the administration of the business and affairs of the Housing Authority and managing the Housing Authority's housing projects. In 1982, the Housing Authority formed Valley Housing Development Corporation ( "VHDC "), a non - profit corporation, to provide low cost rental housing opportunities to low and moderate income households. In exchange for a fee, the Housing Authority agreed to provide personnel to VHDC to help VHDC develop and operate housing projects. Pursuant to the agreement between the Housing Authority and VHDC, Seitz served as Executive Director of VHDC. Seitz's compensation as VHDC's Executive Director was paid directly to the Housing Authority. In addition to serving as the Housing Authority's Executive Director and VHDC's Executive Director, Seitz in a private capacity, served as President of Valley National Properties LLC. The business address of Valley National Properties LLC was Seitz's home address. Valley National Properties LLC was a general partner of Nesquehoning School Associates, and Summit Hill School Associates. While serving as Executive Director of the Housing Authorityand VHDC, Seitz utilized office personnel and office equipment including, telephones, computers, and fax machines to further his private business interests relative to Valley National Properties LLC, Nesquehoning School Associates, and Summit Hill School Associates. In particular, Seitz used staff of the Housing Authority and VHDC to receive incoming and outgoing fax transmissions and telephone calls, used the Housing Authority e-mail address for correspondence, and used the Housing Authority and VHDC computers to access the internet for personal purposes. While serving as Executive Director of the Housing Authority and VHDC, Seitz was selected to speak at two conferences held by the National Association of Housing and Redevelopment Officials ( "NAHRO "). One conference was held in Ocean City, Maryland from May 22 - 24, 2002 and the other conference was held in New York City, New York from July 11 - 14, 2002. Seitz was selected based upon his experience as an executive director of a housing authority and a non - profit development affiliate. In anticipation of the May 2002, conference, on April 16, 2002, Colleen Moore ( "Moore ") of NAHRO e- mailed Seitz at his work address thanking Seitz for agreeing to participate in the conference and offering Seitz a $500 per day stipend plus expense reimbursement. In the e-mail, Moore asked Seitz to share his experience as an executive director of a housing authority with an active, successful non - profit development affiliate. At the May 2002 NAHRO conference, Seitz spoke at the workshop entitled, "Pros and Cons for Creating Nonprofits for Development." After the conference, Moore e- mailed Seitz, 04 -010 Page 13 Seitz at his work address thanking him for his participation, asking him to forward his expenses to her for payment, and requesting him to participate in a similar conference to be held in New York in July. In response to Moore's e-mail, Seitz submitted an invoice to Moore in the amount of $587.20 ($500 for preparation and presentation + $87.20 for hotel accommodations). On June 20, 2002, a check was issued to Seitz in the amount of $587.20 from NAHRO for his speaking engagement at the May 2002 NAHRO conference. On July 12, 2002, Seitz was a speaker at NAHRO's July 2002 conference in New York City. Seitz spoke at the concurrent session entitled, "Pros and Cons of Creating Non- profits." After the conference, Seitz submitted an invoice in the amount of $548.00 ($500 for preparation and presentation + $48 for parking and tolls). On August 27, 2002, a check was issued to Seitz in the amount of $548.00 for his speaking engagement at the July 2002 NAHRO conference. On his Statement of Financial Interests filed for calendar year 2000, Seitz disclosed, inter alia, his public position as Executive Director; the Housing Authority and VHDC as direct /indirect sources of income; and Valley National Properties LLC as a business in which he held a 50% financial interest. Seitz did not disclose American Century Investments, P.O. Box 419200, Kansas City, MO as a source of income in excess of $1,300 despite the fact that in 2000, American Century Investments issued three (3) checks to John C. Seitz and Brenda J. Seitz, each of which was in an amount in excess of $1,300. Seitz also did not disclose Valley Housing Development Corporation as a source of income; or his officer or employment positions with Valley National Properties LLC and VHDC. On his Statement of Financial Interests filed for calendar year 2001, Seitz disclosed, inter alia, his public position as Executive Director; the Housing Authority and VHDC as direct /indirect sources of income; and Valley National Properties LLC as a business in which he held a 50% financial interest. Seitz did not disclose Valley Housing Development Corporation as a source of income, although he did disclose income received from that entity in the amount of $4,286 on his federal tax return for the 2001 calendar year; or his officer or employment positions with Valley National Properties LLC and VHDC. On his Statement of Financial Interests filed for calendar year 2002, Seitz disclosed, inter alia, his public position as Executive Director; the Housing Authority and VHDC as direct /indirect sources of income; Valley National Properties LLC as a business in which he held a 50% financial interest; and Sovereign Bank as a creditor. Seitz did not disclose Valley Housing Development Corporation as a source of income for calendar year 2002, or his officer or employment positions with Valley National Properties LLC and VHDC. Finally, on his Statement of Financial Interests filed for calendar year 2003, Seitz disclosed, inter alia, his public position as Executive Director; the Housing Authority as a direct /indirect source of income; and Valley National Properties LLC as a business in which he held a 50% financial interest. Seitz did not disclose VHDC as a source of income in excess of $1,300 for calendar year 2003 in that he did not receive compensation from VHDC that year, or his officer or employment positions with Valley National Properties LLC and VHDC. 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: "3. The Investigative Division will recommend the following in relation to the above allegations: Seitz, 04 -010 Page 14 a. That Seitz violated Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1103(a) when he utilized the personnel, office equipment and facilities of the Authority to advance the activities of Valley National Properties, a business with which he is associated. b. That Seitz did not violate Section 1105(b)(5) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1105(b)(5) when he failed to report Valley National Properties as a source of income for calendar years 2000 and 2002, as there was no evidence that Seitz received income in excess of $1,300 from Valley National Properties in these years. c. That Seitz violated Section 1105(b)(5) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1105(b)(5) when he failed to report Valley National Properties as a source of income in excess of $1,300 on his Statement of Financial Interests form filed for calendar year 2001, although Seitz did report his financial interests in Valley National Properties. d. That Seitz violated Section 1105(b)(5) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1105(b)(5) when he failed to report American Century Investments as a source of income in excess of $1,300 on his Statement of Financial Interests form filed for calendar year 2000. e. That Seitz did not violate Section 1105(b)(5) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1105(b)(5) when he failed to report Valley Housing Development Corporation as a source of income in excess of $1,300 on his Statement of Financial Interests form filed for calendar year 2003, as VHDC did not directly compensate Seitz but reimbursed the Authority for services rendered by Seitz. f. That Seitz did not violate Section 1105(b)(8) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1105(b)(8) by failing to list his office, directorship or employment in Valley National Properties as Seitz did list Valley National Properties as a business in which he had a financial interest for each of the noted calendar years thereby constituting substantial compliance for purposes of the filing requirements. That Seitz did not violate Section 1105(b)(8) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1105(b)(8) when he failed to list his office, directorship or employment in Valley National [sic] Development Corporation for calendar years 2000 through 2002 as Seitz did list Valley National [sic] Housing Development Corporation as a direct or indirect source of income for each of the calendar years thereby constituting g. Seitz, 04 -010 Page 15 substantial compliance for purposes of the filing requirements. h. That Seitz violated Section 1105(b)(8) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1105(b)(8) by failing to list his office or employment in Valley Housing Corporation [sic] on his Statement of Financial Interests form filed for calendar year 2003. That Seitz violated Section 1103(d) of the Public Official and Employee Ethics Law, 65 Pa.C.S. § 1103(d) by accepting honoraria from the National Association of Housing and Redevelopment Offices in recognition of appearances and /or speeches /presentations at conferences sponsored by that association. 4. Seitz agrees to make payment in the amount of $1,000 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter." Consent Agreement, paragraphs 3 -4. In considering paragraph 3(a) of the Consent Agreement quoted above, it is clear that the elements for a violation of Section 1103(a) of the Ethics Act have been established as to Seitz's utilization of personnel, office equipment and facilities of the Authority to further his private business interests relative to Valley National Properties LLC, a business with which he is associated. But for the fact that Seitz was the Executive Director of the Housing Authority, he would not have been in a position to access Housing Authority personnel, equipment and facilities for personal purposes. Such uses of authority of office resulted in a private pecuniary benefit to Seitz contrary to Section 1103(a) of the Ethics Act. Accordingly, we conclude that the application of the law to the facts before us supports a determination that Seitz violated Section 1103(a) of the Ethics Act when he utilized the personnel, office equipment, and facilities of the Housing Authority to advance the activities of Valley National Properties LLC, a business with which he is associated. In considering paragraph 3(b) of the Consent Agreement quoted above, we find that Seitz did not violate Section 1105(b)(5) by not listing Valley National Properties LLC as a source of income for calendar years 2000 and 2002, given that the Stipulated Findings do not establish that Seitz received income in excess of $1,300 from Valley National Properties LLC during those particular years. Accordingly, we find that Seitz did not violate Section 1105(b)(5) of the Ethics Act by not listing Valley National Properties LLC as a source of income for calendar years 2000 and 2002 based upon an insufficiency of evidence. In considering paragraph 3(c) of the Consent Agreement quoted above, the Stipulated Findings reflect that on his Statement of Financial Interests for calendar year 2001, Seitz disclosed his 50% financial interest in Valley National Properties LLC. Seitz did not, however, list Valley National Properties LLC as a source of income in excess of $1,300 when, in fact, he received income from that entity in the amount of $4,286 as reflected by his federal income tax return for 2001. Accordingly, we find that Seitz violated Section 1105(b)(5) of the Ethics Act when he failed to report Valley National Properties LLC as a source of income in excess of $1,300 on his Statement of Financial Interests for calendar year 2001. Seitz, 04 -010 Page 16 In considering paragraph 3(d) of the Consent Agreement quoted above, we find that in calendar year 2000, Seitz received three (3) checks from American Century Investments, each of which was in an amount in excess of $1,300. However, Seitz failed to report American Century Investments as a source of income in excess of $1,300 on his Statement of Financial Interests for calendar year 2000. Accordingly, we find that Seitz violated Section 1105(b)(5) of the Ethics Act when he failed to report American Century Investments as a source of income in excess of $1,300 on his Statement of Financial Interests for the 2000 calendar year. In considering paragraph 3(e) of the Consent Agreement quoted above, the Stipulated Findings reflect that on his Statement of Financial Interests filed for calendar year 2003, Seitz disclosed the Housing Authority as a direct /indirect source of income, but did not list VHDC as a direct /indirect source of income. However, in that Seitz did not receive compensation from VHDC that calendar year (see, Fact Findings 43(a),(b)), we find that Seitz did not violate Section 1105(b)(5) of the Ethics Act by not listing VHDC as a direct /indirect source of income in excess of $1,300 on his Statement of Financial Interests filed for calendar year 2003. In considering paragraph 3(f) of the Consent Agreement quoted above, Seitz served as President of Valley National Properties LLC in calendars years 2000, 2001, 2002, and 2003. However, on his Statements of Financial Interests filed for these calendar years, he failed to list Valley National Properties LLC as a business in which he was an officer, director, employee or had a financial interest. Nevertheless, based upon the Supreme Court ruling in In re Benninghoff, 578 Pa. 402, 852 A.2d 1182 (2004), we find that Seitz substantially complied with Section 1105(b)(8) of the Ethics Act when he listed Valley National Properties LLC as a business in which he had a financial interest in calendar years 2000 through 2003. Accordingly, we find that Seitz did not violate Section 1105(b)(8) of the Ethics Act by failing to list his office, directorship or employment in Valley National Properties LLC, as Seitz did list Valley National Properties LLC as a business in which he had a financial interest for each of the noted calendar years thereby constituting substantial compliance for purposes of the filing requirements. In considering paragraph 3(g) of the Consent Agreement quoted above, Seitz served as Executive Director of VHDC in calendars years 2000, 2001, and 2002. However, on his Statements of Financial Interests filed for these calendar years, he failed to list VHDC as a business in which he was an officer, director, employee or had a financial interest. Nevertheless, based upon the Supreme Court ruling in In re Benninghoff, 578 Pa. 402, 852 A.2d 1182 (2004), we find that Seitz substantially complied with Section 1105(b)(8) of the Ethics Act when he listed VHDC as a direct /indirect source of income in excess of $1,300 in calendar years 2000 through 2002. Accordingly, we find that Seitz did not violate Section 1105(b)(8) of the Ethics Act by failing to list his office, directorship or employment in VHDC, as Seitz did list VHDC as a direct /indirect source of income for each of the calendar years thereby constituting substantial compliance for purposes of the filing requirements. In considering paragraph 3(h) of the Consent Agreement quoted above, although Seitz served as Executive Director of VHDC in calendar year 2003, he failed to list VHDC as a business in which he was an officer, director, employee or had a financial interest. Seitz did not list VHDC as a direct /indirect source of income on his Statement of Financial Interests for calendar year 2003 as he did on his Statements of Financial Interests filed for calendar years 2000, 2001, and 2002. Therefore, we are precluded from making a finding of substantial compliance. Accordingly, we find that Seitz violated Section 1105(b)(8) of the Ethics Act by failing to list his office or employment in VHDC on his Statement of Financial Interests filed for calendar year 2003. Seitz, 04 -010 Page 17 In considering paragraph 3(i) of the Consent Agreement quoted above, Section 1103(d) is an absolute prohibition against accepting honoraria. In determining whether a particular payment is an honorarium prohibited under Section 1103(d) of the Ethics Act, the threshold issue is whether the payment falls within the types of payments specified in the definition of "honorarium" as set forth in the Ethics Act. If not, Section 1103(d) does not apply. If so, the remaining issue to be addressed is whether the exception set forth in the statutory definition applies. See, Baker, Opinion 91 -004. To resolve the latter issue, we shall apply certain criteria including the following: the private occupation of the public official /public employee; the expertise of the public official /public employee in the area; the history of activity in the occupation prior to public service; the purpose for the invitation; the capacity in which the public official /public employee is invited; the subject of the speech, work or presentation; the group spoken to and the composition as to members or non - members of the group; the purpose for gathering the group; the amount of the fee relative to the services performed; the source of the invitation; the event at which the speech is given; the subject matter of the speech or published work as compared to the normal subject matter dealt with by the occupational/ professional group and any other relevant factors. Baker, supra. We note that legitimate payments intended as consideration for services relative to speaking engagements, appearances, presentations, or published works undertaken in Seitz's private capacity and unrelated to his public position would not constitute "honoraria" under the definition of the Ethics Act. Such payments would therefore would not be prohibited by Section 1103(d). Baker, supra. In the instant matter, it is clear from the Stipulated Findings that Seitz's speaking engagements at the NAHRO conferences in May and July 2002 and were given in connection to his public position as Executive Director of the Housing Authority. Seitz was specifically selected by NAHRO based upon his experience as an executive director of a housing authority and a non - profit development affiliate and his speeches were clearly related to such. Therefore, the payments that Seitz received from NAHRO were honorarium prohibited by Section 1103(d) of the Ethics Act. Accordingly, we determine that Seitz violated Section 1103(d) of the Ethics Act by accepting honoraria from NAHRO in recognition of appearances, speeches or presentations at conferences sponsored by that association. See, Fiorello, Order 1363. 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, Seitz is directed to make payment of $1,000 to the Commonwealth of Pennsylvania through this Commission within thirty (30) days after the date of mailing of this Order. Seitz is further directed to file amended SFIs as agreed by the parties within thirty (30) days after the date of mailing of this Order. Compliance 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. John Seitz ( "Seitz "), as Executive Director of the Lehigh County Housing Authority ( "Housing Authority ") was at all times relevant to these proceedings, a public official /public employee subject to the provisions of the Ethics Act. 2. Seitz violated Section 1103(a) of the Ethics Act when he utilized the personnel, office equipment, and facilities of the Housing Authority to advance the activities of Valley National Properties LLC, a business with which he is associated. Seitz, 04 -010 Page 18 3. Seitz did not violate Section 1105(b)(5) of the Ethics Act by not listing Valley National Properties LLC as a source of income for calendar years 2000 and 2002 based upon an insufficiency of evidence. 4. Seitz violated Section 1105(b)(5) of the Ethics Act when he failed to report Valley National Properties LLC as a source of income in excess of $1,300 on his Statement of Financial Interests for calendar year 2001. 5. Seitz violated Section 1105(b)(5) of the Ethics Act when he failed to report American Century Investments as a source of income in excess of $1,300 on his Statement of Financial Interests for the 2000 calendar year. 6. Seitz did not violate Section 1105(b)(5) of the Ethics Act by not listing Valley Housing Development Corporation as a direct /indirect source of income in excess of $1,300 on his Statement of Financial Interests filed for calendar year 2003 in that Seitz did not receive compensation from Valley Housing Development Corporation. 7 Seitz did not violate Section 1105(b)(8) of the Ethics Act by failing to list his office, directorship or employment in Valley National Properties LLC, as Seitz did list Valley National Properties LLC as a business in which he had afinancial interest for the calendar years 2000 through 2003 thereby constituting substantial compliance for purposes of the filing requirements. 8. Seitz did not violate Section 1105(b)(8) of the Ethics Act by failing to list his office, directorship or employment in Valley Housing Development Corporation for the calendar years 2000 through 2002, as Seitz did list Valley Housing Development Corporation as a direct /indirect source of income for each of the calendar years thereby constituting substantial compliance for purposes of the filing requirements. 9. Seitz violated Section 1105(b)(8) of the Ethics Act by failing to list his office or employment in Valley Housing Development Corporation on his Statement of Financial Interests filed for calendar year 2003. 10. Seitz violated Section 1103(d) of the Ethics Act by accepting honoraria from the National Association of Housing and Redevelopment Officials in recognition of appearances, speeches or presentations at conferences sponsored by that association. Seitz, 04 -010 Page 19 In Re: John Seitz ORDER NO. 1370 File Docket: 04 -010 Date Decided: 6/6/05 Date Mailed: 6/17/05 1 John Seitz ( "Seitz "), as Executive Director of the Lehigh County Housing Authority ( "Housing Authority ") violated Section 1103(a) of the Ethics Act when he utilized the personnel, office equipment, and facilities of the Housing Authority to advance the activities of Valley National Properties LLC, a business with which he is associated. 2. Seitz did not violate Section 1105(b)(5) of the Ethics Act by not listing Valley National Properties LLC as a source of income for calendar years 2000 and 2002 based upon an insufficiency of evidence. 3. Seitz violated Section 1105(b)(5) of the Ethics Act when he failed to report Valley National Properties LLC as a source of income in excess of $1,300 on his Statement of Financial Interests for calendar year 2001. 4. Seitz violated Section 1105(b)(5) of the Ethics Act when he failed to report American Century Investments as a source of income in excess of $1,300 on his Statement of Financial Interests for the 2000 calendar year. 5. Seitz did not violate Section 1105(b)(5) of the Ethics Act by not listing Valley Housing Development Corporation as a direct /indirect source of income in excess of $1,300 on his Statement of Financial Interests filed for calendar year 2003 in that Seitz did not receive compensation from Valley Housing Development Corporation. 6. Seitz did not violate Section 1105(b)(8) of the Ethics Act by failing to list his office, directorship or employment in Valley National Properties LLC, as Seitz did list Valley National Properties LLC as a business in which he had afinancial interest for the calendar years 2000 through 2003 thereby constituting substantial compliance for purposes of the filing requirements. 7 Seitz did not violate Section 1105(b)(8) of the Ethics Act by failing to list his office, directorship or employment in Valley Housing Development Corporation for the calendar year 2000 through 2002, as Seitz did list Valley Housing Development Corporation as a direct /indirect source of income for each of the calendar years thereby constituting substantial compliance for purposes of the filing requirements. 8. Seitz violated Section 1105(b)(8) of the Ethics Act by failing to list his office or employment in Valley Housing Development Corporation on his Statement of Financial Interests filed for calendar year 2003. 9. Seitz violated Section 1103(d) of the Ethics Act by accepting honoraria from the National Association of Housing and Redevelopment Officials in recognition of appearances, speeches or presentations at conferences sponsored by that association. Seitz, 04 -010 Page 20 10. Per the Consent Agreement of the parties, Seitz is directed to pay $1,000 to the Commonwealth of Pennsylvania through this Commission within thirty (30) days after the date of mailing of this Order. 11. Per the Consent Agreement of the parties, Seitz is directed to file amended Statements of Financial Interests as agreed by the parties within thirty (30) days after the date of mailing of this Order. 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