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HomeMy WebLinkAbout1399 HerronIn Re: Charles Herron, Respondent File Docket: 04 -012 X -ref: Order No. 1399 Date Decided: 5/31/06 Date Mailed: 6/12/06 Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella Reverend Scott Pilarz 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 allegations. 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Herron, 04 -012 Page 2 I. ALLEGATION: That Charles Herron, a (public official /public employee) in his capacity as the Director of Finance for the City of Erie, Erie County violated provisions of the State Ethics Act (Act 93 of 1998) 65 Pa.C.S. § §1103(a); 1105(b)(5), (6), (7), (8), (9), (10) when he retained confidential information obtained by holding public office related to the earned income tax collections by the City of Erie and when he retained the work product of vendors hired by the City of Erie to compile and /or analyze information relating to earned income tax collections. II. FINDINGS: 1. Charles M. Herron served as the Director of Administration and Finance for the City of Erie from January 2, 1998 until April 9, 2003. a. Herron is a Certified Public Accountant. 2. Herron, in his capacity as the Director of Administration and Finance, reported directly to the City of Erie mayor. 3. The duties and responsibilities of the Director of Administration and Finance as outlined in the City of Erie Administrative Code and the Third Class City Optional Charter Law include the supervision and direction of the following bureaus and offices: a. Accounts and finances; b. Central purchasing; c. Computer services; d. Human relations; and e. Other duties as may be prescribed by the Mayor and City Council. 4. The duties and responsibilities of the Director of Administration and Finance as outlined in the City of Erie Classification Job Description include the following: a. Job Summary: Direct the Department of Administration and Finance to assure coordination of the day -to -day activities of component functions (accounting, finance, budget, payroll, human resources, purchasing, computer systems, reproductions, and job training program administration); development of useful operating and capital budgets; and the development of and implementation of new initiatives to improve the quality and /or efficiency of City operations. b. The duties and responsibilities of this position include, in part, the following: 1. Analyze and monitor all budgets and advise Mayor of actions taken to prevent overspending and enhance revenue. 2. Assist the Mayor and Cabinet in development of capital and operating budget parameters, plans, and documents and review and revise or approve preliminary budget requests prior to presentation to Mayor and Council. 3. Review and approve all financial transactions by signing requisitions or vouchers. 4. Review and approve requests for computer access and development of new computer reports. Herron, 04 -012 Page 3 5. The City of Erie has had a 5% Local Earned Income Tax rate in effect during the last 15 years. The local Act 511 Earned Income Tax Collector since 1988 had been Wilma Scalise. a. The process for managing the Local EIT was not in compliance with the provisions of Act 511. In 1990 several Erie County municipalities initiated court actions to force the City into compliance with the Act 511 collection and distribution laws. b. The result of this court action, the City of Erie was ordered by the court to comply with the Act 511 laws and collect and distribute EIT collections as require by the Act. c. Act 511 requires Local Tax Collectors to collect the Earned Income Taxes from employers located in their jurisdictions and automatically remit the taxes to the tax collector where the employee resides. d. During 1993 and 1994, the Tax Collector attempted to manage the EIT operation as required by the court order. e. Due to many circumstances, the EIT collection and distribution system remained out of compliance with the court order and Act 511 statutes. f. During the time from 1996 to 2000, the Tax Collector retained approximately $5 million in funds that were not properly identified and distributed. During 2001, Mr. Herron became involved in analyzing the large amount of unidentified funds at the urging of the independent auditors for the City of Erie. g. h. During 2001, Mr. Herron supervised an analysis of the Income Tax Office to determine the level of compliance with the local Earned Income Tax Ordinances. The analysis showed a one third non - compliance rate in the City of Erie. J. During 2002, the review of the Local Tax Collector continued with the arrival of the new Mayor. k. At the suggestion of Mr. Herron, a task force was assembled to review the results of the situation in the Income Tax Office, and make recommendation for consideration, to comply with the court order and related statutes. 6. On April 3, 2002, Erie City Council enacted a resolution creating the Tax Task Force. a. The purpose of the tax task force was to serve as an advisory group to review the City's tax processes including the process related to the earned income tax. b. The tax task force was to make recommendations to the city administration to make the processes more efficient. c. The tax task force was comprised of city officials and private citizens. 7 Herron, as the Director of Administration and Finance, was an appointee to the tax task force and continued to serve on it through the end of his employment with the City in April 2003. Herron, 04 -012 Page 4 8. The tax task force initially began meeting on April 11, 2002 and had approximately twelve meetings until August 2002. 9. One of the primary focuses of the tax task force was to review and make recommendations regarding the City's earned income tax collection and disbursement system. 10. The City of Erie collects and distributes earned income tax by a method known as the "Claiming System." a. Under the claiming system, earned income tax is paid to the municipality that an individual works, typically by the individual's employer. b. The process for an individual's home municipality to collect the earned income tax is by filing a claim with the taxing body that collected the tax. c. The claiming system relies on individuals filing local tax returns in the municipalities where they reside so that claims can be made for the tax monies. d. There is an informal statute of limitations of five -years on claiming the earned income tax monies. 1. The collecting taxing body retains the earned income tax money if it is not claimed within five years. 2. Because of the informal statute of limitations, records were often not retained beyond five - years. 11. The tax task force made several recommendations based on their findings related to the earned income tax, including the following: a. The City should undertake a detailed reconciliation of all income tax files for all years for which there are records with the objective of determining the appropriate distribution of all funds currently held. 1. It was determined that the reconciliation period would start in 1997 and go forward to the current tax year. b. The City and other taxing bodies should exchange information so that earned income tax monies can be distributed appropriately. c. The City Finance Office with the assistance of outside consultants should perform the reconciliation. d. Herron, as a member of the tax task force, participated in the formulation of the recommendations. e. Herron, as the Director of Administration and Finance, participated in implementing the recommendations of the tax task force. 12. The tax task force developed a procedure for the reconciliation of the earned income tax files, which is summarized below: a. The City needed to determine the amount owed to each taxing body by determining the municipalities of residence from W -2s filed by the employers located in the City. 1. This process is known as "geo- coding." b. The City would determine the amount owed to it by other municipalities by reviewing individual tax returns filed for those who reside in the City and from information shared from other taxing bodies. c. Herron, as the Director of Administration and Finance, participated in the reconciliation process for the City. Herron, 04 -012 Page 5 13. The City entered into contracts with two firms to assist with the earned income tax reconciliation process. a. The City and the firm of Schaffner, Knight, Minnaugh, and Company (SKM) entered into an agreement by letter dated June 21, 2002. 1. SKM's primary function was to oversee and verify the reconciliation process. b. The City and the firm of Erie Custom Computer Applications (ECCA) entered into an agreement by letter dated June 25, 2002. 1. ECCA's primary function was W -2 data entry and geo- coding the W -2 addresses. c. The consultants were retained under agreement with the City of Erie Solicitor's Office to maintain attorney /client privilege in preparation for potential litigation between the City and other taxing bodies. 14. Herron's employment with the City of Erie ended effective April 9, 2003 by way of the execution of a Confidential Agreement and General Release. a. As part of this agreement, Herron would have no further job responsibilities with the City of Erie and was required to immediately return keys and any other City of Erie property and information, and was not permitted to have access to the City of Erie computer systems, unless specifically authorized to assist in transition. b. Mr. Herron would remain available for 90 days for assistance with a transition to benefit the City. c. Due to the unexpected termination of Mr. Herron, the City Council wanted information related to the reasons for the sudden departure of the Finance Director. As a result of their concern, a public hearing was scheduled. d. Since the council had concerns if Mr. Herron had access to information to present at the hearing, the council issued a subpoena for Mr. Herron to appear, and required him to bring information concerning City finances. e. As a result of the subpoena, Mr. Herron was provided with numerous records and information concerning all aspects of City finances to prepare and present at the hearing. 15. In a private capacity, Herron is affiliated with a company known as Municipal Revenue Services, Inc. (MRS) in the capacity of a CPA and Revenue Enhancement Specialist. a. MRS was registered with the Pennsylvania Department of State Corporation Bureau on May 29, 2001. b. Pamela Herron, Herron's wife, filed the original incorporation documents with the Department of State and serves as the President of MRS. 1. No other individuals are listed as incorporators or officers on the documents filed with the Department of State. c. The listed address of MRS was 5511 Blenner Road, McKean, PA.. 1. This is Herron's residence. Herron, 04 -012 Page 6 16. MRS' business focuses on assisting municipal entities and school districts in the areas of real estate taxes and earned income taxes. a. MRS' services related to earned income taxes include evaluating current collection efficiency, recovering unclaimed taxes from other collectors with no risk to the taxing district, and assisting in new technology updates to improve efficiency of tax collectors. b. MRS' services relating to real estate taxes include real estate tax lien transactions providing immediate new revenue, compassionate collection for distressed taxpayers, and a transparent process for taxpayers. 17. Subsequent to his separation from employment with the City in April 2003, Herron began developing MRS' earned income tax services. a. Herron did not pursue this area prior to April 2003. 18. In or around August 2003, Herron, on behalf of MRS, began soliciting taxing bodies in and around Erie County for the purpose of entering into contracts to obtain unclaimed earned income tax money, primarily from the City of Erie, for the taxing bodies. a. Herron specifically mentions in his solicitation letters that only 2% of the $4.3 million dollars collected by the City of Erie belongs to the City. 19. Herron made the initial contact with the taxing bodies by way of an introduction letter. a. The letters were on MRS letterhead with Herron's name, address, phone number, and e-mail address. b. Herron's title, as listed on the letterhead, was Revenue Enhancement Specialist and CPA. 20. Herron sent introduction letters to at least twenty -four (24) separate taxing bodies. a. On occasion, Herron sent introduction letters to more than one individual from the same taxing body. 21. All of the introduction letters were similar in form and content and typically contained the following as its body: "My name is Chuck Herron, CPA, and a revenue enhancement specialist with Municipal Revenue Services. I have over 10 years experience as a chief financial officer in local government. The last five with one of the largest Cities in the Commonwealth. During this time, I guided the City to not only five years with no tax increases, I was able to increase revenues by as much as 20% without increasing taxes. I want to introduce a new company with new revenue opportunities for you. Municipal Revenue Services is a Pennsylvania Company established to assist Pennsylvania Schools and Municipalities in maximizing the revenues available to them. In recent years there have been significant legislative changes and favorable Supreme Court decisions that brings exciting news to Pennsylvania schools and municipalities. As you are aware, one of the regions largest revenue sources has been in turmoil for years. The Earned Income Tax revenues your municipality legally is entitled to, has not been remitted to you as required by law. The enclosed information highlights the fact the City of Erie has completed their audits, and determined that only 2% of the $4.3 million dollars belongs to the City. Herron, 04 -012 Page 7 Municipal Revenue Services specializes in identifying uncollected Earned Income Taxes in your District. These services are available to you now, and can provide much needed revenue for not only the current budget, many services can provide a process to more accurately anticipate your revenues for the coming budget years. I will contact you in a few days to set up an appointment to discuss these exciting opportunities for your (municipality)." a. The information enclosed with the introduction letter consists of newspaper headlines and excerpts from the Erie Times -News, information from the City's Independent Auditors Report, and other information relating to MRS. 22. In or around mid - August 2003, Herron sent introduction letters to the following municipalities and school districts: Municipality School District Albion Borough City of Erie Borough of Edinboro Fort LeBoeuf Conneaut Township General McLane Elk Creek Township Girard Fairview Township Harborcreek Harborcreek Township Millcreek LeBoeuf Township North East McKean Township Northwestern Millcreek Township Wattsburg Area Platea Borough Springfield Township Summit Township Washington Township Waterford Borough Wesleyville Borough 23. Herron was successful in arranging proposals for numerous taxing bodies. 24. Herron's proposal consisted of a Power Point presentation and the dissemination of MRS newsletters and other information. a. The newsletters provided, in part, statistical figures and data in support of Herron's position that he could obtain money for the taxing bodies. 1. Information contained in the newsletters was obtained by Herron from City of Erie confidential documents. 25. Herron primarily distributed two different newsletters related to earned income taxes that contained statistical data with subtitles of "Recap of 1999 Tax Year" and "Total Earned Income Taxes Due 1997 - 2001." a. The newsletters contained the same heading, title, body, and identification of MRS. b. The only difference in the newsletters was the statistical data. 26. The newsletter subtitled "Recap of 1999 Tax Year" is described in the newsletter as Herron, 04 -012 Page 8 the amount due to Erie County School District Taxpayers for the last five years based on an actual analysis of the data" and contains the following information: Actual City Amount City Amount City Liability Actually Owes Amount for Township School 1999 Remitted Municipality 5 Years Concord Corry Area $19,948 $14,887 $5,061 $25,307 Corry Corry Area 45,604 42,520 3,084 15,419 Elgin Corry Area 2,600 1,718 881 4,406 Wayne Corry Area 15,142 5,139 10,003 50,014 Fairvies Fairview 943,819 895,177 47,642 238,211 LeBoeuf Ft. LeBoeuf 57,593 50,988 6,605 33,025 Summit Ft .LeBoeuf 304,617 230,929 73,688 368,440 Waterford B Ft. LeBoeuf 216,787 189,593 27,194 135,972 Millvillage Ft. LeBoeuf 10,509 10,000 509 2,543 Edinboro Gen McLane 165,889 155,371 10,519 52,594 McKean Gen McLane 300,349 270,434 29,915 149,575 Washington Gen McLane 165,355 147,639 17,716 88,578 Girard B Girard 336,464 289,406 47,058 235,291 Harborcreek Harbor Creek 867,831 781,031 86,800 433,998 Lawrence Iroquois 211,587 193,538 18,049 90,243 Park Wesleyville Iroquois 173,132 140,311 32,821 164,105 Albion Northwestern 203,838 147,975 55,864 279,319 Union City B Union City 32,793 28,478 4,315 21,575 Union City T Union City 18,544 15,976 2,568 12,840 Amity Wattsburg 30,175 26,898 3,277 16,387 Greene Wattsburg 297,077 280,879 16,199 80,993 Greenfield Wattsburg 85,817 76,778 9,038 45,191 Venango Wattsburg 122,842 107,790 15,052 75,261 Total Erie County: $4,980,421 $4,419,607 $560,814 $2,804,069 27. The newsletter subtitled "Total Earned Income Taxes Due 1997- 2001" is described in the newsletter as the amount due to Erie County School District Taxpayers for the last five years based on an actual analysis of the data" and contains the following information: Herron, 04 -012 Page 9 Total Earned Income Taxes Due 1997 -2001 Millcreek Township $1,421,049 Fort LeBoeuf 539,981 Girard 235,291 Corry Area 89,839 General McLane 290,744 Wattsburg Area 255,596 Harbor Creek 433,998 Northwestern 279,315 North East 184,782 Fairview 238,211 Union City 34,415 Iroquois 254,347 Total: $4,248,668 28. Once the newsletters began circulating on or about August 2003, City of Erie officials and employees became concerned that Herron may have been in possession of, and attempting to utilize, confidential, privileged, or proprietary information that he obtained while employed by the City of Erie. a. The City's concern was partly based on the phrase in the newsletters "based on an actual analysis of the data." 1. The City believed that the phrase referred to the City's efforts related to the earned income tax reconciliation process in which Herron had been involved. 29. On or around January 20, 2004, City officials referred the matter to the Erie County District Attorney's Office for review. 30. After reviewing information provided by the City, Erie County Chief Detective Larry Dombrowski obtained a search warrant to seize computers and computer related equipment and data at Herron's residence on or about January 23, 2004. 31. As a result of the search warrant, eleven (11) CD Rom disks were provided to the City of Erie containing information found in Herron's residence. 32. The disks and /or jewel cases provided to the Erie Police Department were labeled as follows: Tag No. Label Herron, 04 -012 Page 10 33. At the request of the Erie Solicitor's Office, Patrick Kearney, the City's Chief Information Officer, reviewed the eleven disks to identify their contents. a. Kearney is responsible for managing the City's Office of Computer Systems. 34. Kearney provided his analysis of the eleven disks to Solicitor Curry in a memorandum dated November 23, 2004. a. Kearney determined, in his opinion, that the following five (5) disks contained information that was considered as non - public information of the City of Erie. 1 Tag No. Label 1 Disk- "City of Erie Files 2 Disk Not Labeled Case- "Current Construction Projects- A Great Partnership Can Become Even Greater" 3 Disk- "Water & Sewer Files" Case labeled with printout or directory 4 Disk- "Comprehensive Annual Financial Report" 5 Disk- "Harrisburg Backup" 6 Disk Not Labeled Case- "Current Construction Projects- A Great Partnership Can Become Even Greater" 7 Disk Not Labeled Case - "Current Construction Projects- A Great Partnership Can Become Even Greater" 8 Disk Not Labeled Case- "June 27" 9 Disk Not Labeled 10 Disk- "ECCA Files" 11 Disk- "GG Files" Tag No. Label 1 Disk- "City of Erie Files 5 Disk- "Harrisburg Backup" 8 Disk Not Labeled Case- "June 27" 10 Disk- "ECCA Files" 11 Disk- "GG Files" 2. Kearney provided specific analysis of the disks that contained information, which in his opinion, was non - public information of the City of Erie. Herron, 04 -012 Page 11 3. Kearney did not provide specific analysis of disks tagged nos. 1 and 8, but indicated that, in his opinion, the disks contained information that was considered as non - public information of the City of Erie. 35. An analysis of the files and data on the disk tagged No. 10, labeled "ECCA Files" included, in part, the following: a. This directory named "ECCA Information" that contains eight files and five folders containing an additional 24 files. b. The five folders on the disk are named 1995, 1996, 1998, 1999, and 2000. 1. The files in these folders consist of taxpayer information, including social security numbers for individuals filing tax returns for the respective years in the City of Erie. 2. These files have been identified as records contained on the CityAS- 400 database. 3. Information in these files contained data that is non - public or confidential information. 4. Herron had access to these files while employed by the City. c. Seven of the files in the main ECCA folder were either City tax related files or files developed by SKM or ECCA specific to the earned income tax reconciliation. 1. The files in these folders consist of taxpayer information, including social security numbers for individuals filing tax returns for the respective years in the City of Erie. 2. Information in these files contained data that is non - public or confidential information. d. One of the files in the main ECCA folder was named "PA State Returns 1997.mdb." 1. This file contains income tax information for all PA state returns filed in 1997 where the City of Erie School District was identified as the school district. 2. This file was released to the City of Erie from the Pennsylvania Department of Revenue Bureau of Individual Taxes under a confidentiality agreement signed by Herron. 36. The files and data on the disk tagged No. 5, labeled "Harrisburg Backup" included, in part, the following: a. This disk is comprised of two main folders named "FILEPRO ", which contained sixteen subfolders, and "JAN22 ", which contained no folders or files. 1. All of the files in the FILEPRO folder are of an application type known as FilePro, which is a database application that allows for the querying and manipulation of database records that is menu driven. 2. The City of Erie owns a version of FilePro. b. One of the subfolders is named "ECCA1." 1. This file consists of 97,719 W -2 records for 1999 compiled by ECCA that contain individual taxpayer information including social security Herron, 04 -012 Page 12 numbers and geo -coded addresses. 37. In or around March 2003, Herron instructed Kelli Kinch, the Manager of the City of Erie Office of Computer Information Systems, to contact ECCA and request a copy of a geo -coded file of all 1999 City of Erie employer W -2 tax records. a. At the time, Herron was Kinch's immediate supervisor. b. This was in preparation of a scheduled meeting with the Erie County Tax Collectors. The purpose of this information was to provide a preliminary estimate of how the identification efforts were progressing for the City. This would provide an estimate of any impact on each taxing district compared to the non - compliant system in use by the city. This preliminary estimate was being provided as a result of concerns expressed by other tax collectors as to how a change by the city of becoming compliant might change their revenues. 38. The geo - coding of all 1999 City of Erie employer W -2 tax records was completed by ECCA for the City of Erie under the agreement letter of June 25, 2002. a. This work consisted of data entry of 97,719 individual W -2 records containing names, social security numbers, addresses, employer information, and local income tax information. b. ECCA entered all of the information from the W -2s into its database and geo -coded the records. 39. ECCA records confirm that an Excel spreadsheet file of the 1999 W -2 detail was prepared for Kinch on March 7, 2003. a. ECCA prepared the file for Kinch on behalf of Herron, who was the City's Director of Administration and Finance and a member of the tax task force. b. ECCA would have only provided the file to Herron, or his designee, who was privy to the information, due to the confidentiality agreement with the City of Erie Solicitor's Office. c. The billing sheet indicates there was a .5 hour charge for doing the work to transfer this file. At ECCA's rate of $100 /hour, the cost to transfer this file was $50.00. 40. On or around June 3, 2004, Hank Starr, President of ECCA, reviewed the "ECCA1" file obtained from Herron at the request of the City of Erie Solicitor's office. a. The purpose of Starr's review was to compare the Herron file to the data compiled and prepared by ECCA. 41. In a letter dated July 13, 2004, Starr provided his review of the Herron file to the City, which included the following: a. Starr concluded that the files and information provided on CD Rom by the City (obtained from Herron) are identical to the files produced by ECCA representing the 1999 W -2 data base developed under the agreement with the City. b. The files obtained from Herron contained codes developed by and unique to ECCA. 1. The codes are used by ECCA's data entry department as internal control numbers. c. The coding system used by ECCA to assign a municipality code to the Herron, 04 -012 Page 13 individual taxing districts was established using the date base publicly available from the Erie County Assessment System. 42. ECCA Invoice No. 509593 dated December 9, 2002, in the amount of $18,165.85, delineates the cost to the City of Erie for the data entry and geo- coding of the 1999 employer W -2s as follows: Description Amount $15,243.73 W -2s Year Entry/Validate Standard and and Longitude 1999- Data addresses, Append Latitude W -2s Processed Append $2,922.12 Municipality Code Total: $18,165.85 43. The files and data on the disk tagged No. 11, labeled "GG Files" included, in part, the following: a. This disk is comprised of in excess of 2.6 gigabytes of data that is an accurate copy of the full contents of the network folder of former City employee Gordie Gibbens. b. Gibbens was employed by the City of Erie until February 2003 as a data analyst in the Office of Computer Information Systems. 1. Heron supervised the Office of Computer Information Systems. c. Gibbens' duties with the City included administering the City's data management systems; and processing, analyzing, and manipulating data. d. The contents of this folder include tax records, social security numbers, and other information that is not available to the public, including City of Erie employee pension records. 1. A copy of the 1997 PA state income tax returns file, described above, was also included with these files. 44. One of Herron's tasks related to the earned income tax reconciliation project was to run a trial reconciliation of 1997 records versus "cash on hand" at the City. a. Minutes from the following tax task force meetings reflect Herron's participation in the trial reconciliation: May 3, 2002, May 9, 2002, and May 16, 2002 b. Gibbens took over the primary responsibility of the trial reconciliation on or around May 9, 2002. c. Herron continued to be involved in the trial reconciliation after Gibbens began working on this task. 45. The information Herron in the MRS newsletters and used in other exhibits and presentations was available to Herron while he was employed by the City of Erie in his capacity as the Director of Administration and Finance. a. Herron included this information in documentation and presentations that he Herron, 04 -012 Page 14 prepared on behalf of MRS and provided to other taxing bodies in an effort to secure contracts with those taxing bodies. b. Herron asserts that this information was publicly available in the City of Erie Annual Audits. 46. Some of the information in the "Recap of 1999 Tax Year" newsletter was the same information received from ECCA. a. This information was developed and paid for by the City of Erie under a confidentiality agreement between the City Solicitor's Office and ECCA. 47. Herron obtained the information in the "Total Earned Income Taxes Due 1997- 2001" newsletter from a City of Erie database AS -400 computer software application. a. Herron obtained this information from John Carneval, who at the time was employed as a staff accountant in the City Department of Finance. 1. Herron was Carneval's immediate supervisor while employed in the Department of Finance. 2. Carneval has served as the City's Earned Income Tax Collector since May 2003. 3. Carneval was responsible for manipulating data in the AS -400 as recommended by SKM in an effort to reconcile the City's earned income tax monies. b. This information was non - public, confidential, privileged, or proprietary information of the City or Erie. c. Herron asserts that this information was publicly available in City of Erie Annual Audits. 48. In or around December 2002, Herron requested that Carneval prepare for him an Excel spreadsheet of data consisting of advance and additional payments made to taxing bodies between 1997 and 2002. a. The information was located in a three -ring binder and was originally downloaded and printed from the City's AS -400 database. b. Carneval transferred the information into a spreadsheet for Herron. 49. From July 2002 through April 3, 2003, the City paid SKM a total of $88,795.20 for services rendered relating to the earned income tax reconciliation project. a. This is the period covering the beginning of the project through the end of Herron's employment with the City. b. The City has paid SKM subsequent to April 3, 2003 as the project was on- going. c. In a memo dated May 1, 2004, from SKM Employee Janel Kitcey to Erie City Solicitor Paul Curry, Kitcey advised Curry that information contained on a CD Rom in a folder labeled "Jannel" was her work product that had been prepared pursuant to SKM's contract with the City of Erie. d. This information was contained on CD Rom no. 8 that was obtained by the Erie County District Attorney's Office from the residence of Herron. e. Kitcey's memo to Curry specifically outlines from where she obtained the information on disk no. 8 and how she compiled the data. Herron, 04 -012 Page 15 50. In a letter dated January 15, 2004, Carneval advised Solicitor Curry that he compared the data contained in the newsletter (Total Earned Income Taxes Due 1997 -2001) to the spreadsheet that he prepared for Herron. a. Carneval concluded that the data was virtually identical and that Herron utilized the Excel spreadsheet to prepare the newsletter. b. Herron asserts that this information was publicly available in City of Erie Annual Audits. 51. SKM and ECCA used individual tax returns and W -2s that had been filed with the City to perform the work under its contract with the City. a. This information is, by law, confidential under the provisions of the Local Tax Enabling Act 53 Pa. C.S.A. §6913(v)(f). 52. Herron, on behalf or MRS, secured a contract with Wesleyville Borough to obtain unclaimed earned income tax monies from other taxing bodies, primarily the City of Erie. 53. The purpose of this contract was for MRS to obtain unclaimed earned income tax money for the Borough from other taxing bodies, including the City of Erie. 54. On or around August 12, 2003, Herron sent MRS introduction letters to several Wesleyville Borough officials. 55. On November 17, 2003, Herron attended a Wesleyville Borough public meeting and made a presentation on behalf of MRS. a. Minutes from this meeting included the following: "Charles Herron of Municipal Revenue Services presents a proposal defining service he would like to offer, providing identification and collection of Earned Income Tax Revenues due the Borough, primarily from the City of Erie. Council asks several questions of Mr. Herron and his legal council, Mr. Carley (Karle), also in attendance. A copy of his proposal is on file with the secretary. Mrs. Long is directed to forward copies to the planning commission, council solicitor, and member of council absent this evening. Council agrees to give this proposal consideration. Mrs. Long is directed to request relevant reports, such as total dollars filed and compared to total dollars collected, from Berkheimer and Associates. Council can them determine if it will hire MRS or internally accomplish this goal, to identify and collect Earned Income Tax Revenues due the Borough. 56. On December 10, 2003, after another presentation from Herron, Council voted to accept Herron's proposal subject to the solicitor's final approval. Minutes from this meeting include the following: "William Leonard, of Berkheimer Tax Administrator, addresses Council regarding EIT collection from the City of Erie due to the Borough of Wesleyville. Charles Herron addresses Council regarding a proposal from Municipal Revenue Services to accomplish the EIT collection from the City of Erie due the Borough of Wesleyville for the previous five years. Mr. Herron presents a Consultation Agreement and Addendum to Council. Motion to accept Herron's proposal of MRS, subject to solicitor approval approved unanimously. 57. During the presentations, Herron provided information to Wesleyville officials regarding MRS's service of obtaining unclaimed earned income tax monies from other taxing bodies, primarily the City of Erie. a. The information provided by Herron included two documents titled "Analysis a. Herron, 04 -012 Page 16 of Earned Income Tax Recovery." 1. The documents illustrate the amount the MRS could recover for the Borough from the City of Erie based on two scenarios: one for the period of 1997 forward and one from 1998 forward. b. Herron also provided a sample MRS consulting agreement. 58. The analysis sheets provided by Herron reflect the amount that MRS would attempt to recover from the City of Erie and illustrates the distribution of those funds as follows: a. 1997 forward: City owes Wesleyville: $164,105.00 Est. Wesleyville owes City: 15,000.00 Fee to MRS: 37,276.00 Net Recovery to $111,829.00 Wesleyville: Distribution: 50% to Wesleyville: Less amount owed to City: Less MRS Fee: Net to Borough: 50% to School: Less Fee to MRS: Net to School: $82,053.00 15, 000.00 18,638.00 $48,415.00 $82,053.00 18,638.00 $63,414.00 1 Under this scenario MRS would recover a net amount of $111,829.00 to be distributed in the amounts of $48,415.00 to the Borough; $63,414.00 to the School District; and $37,276.00 to MRS. b. 1998 forward: City owes Wesleyville: $98,463.00 Est. Wesleyville owes City: 9,000.00 Net Recovery to $89,463.00 Wesleyville: Distribution: 50% to Wesleyville: Less amount owed to City: Net to Borough: 50% to School: $49,232.00 9,000.00 $40,232.00 $49,232.00 Herron, 04 -012 Page 17 Net to School: $49,232.00 1 Under this scenario MRS would recover a net amount of $89,463.00 to be distributed in the amounts of $40,232.00 to the Borough and $49,232.00 to the School District. 2. This analysis does not show the amount to MRS which would have been $22,366.00. c. The amounts to MRS are based on a 25% fee of the total amount recovered by MRS not taking into account that the school district would not be a party to the contract. 59. The Consulting Agreement distributed by Herron for MRS to obtain earned income tax monies on behalf of the Borough states, the Consultant possesses the expertise to identify those income taxes held by the City of Erie and which belong to the Municipality" contained the following provisions relating to duties and compensation: a. Scope of Duties: The consultant agrees to perform the following duties: 1. Examine the relevant books and records of the municipality in order to determine the tax liability owed by the City to the municipality. The consultant agrees to examine the relevant records for a period mutually agreed by the parties. 2. Examine the relevant books and records for the City in order to reconcile the tax records of both the municipality and the City. The consultant agrees to examine the relevant records for a period mutually agreed to by the parties. 3. Supervise any legal action that is commenced against the City in furtherance of collecting and sums due and provide accounting support in the event the municipality's claim is litigated in a court of competent jurisdiction. b. Duties of Consultant: After the consultant determines the amount of earned income owed by the City to the Municipality, he will advise the municipality, which will then authorize the consultant to make demand upon the City for payment of all earned income tax due together with interest. In the event that the City denies or disputes the municipality's claim, the consultant is authorized to commence a legal action in the name of the municipality for collection of the sums owed. It shall be the duty of the consultant to obtain competent legal representation in the event it becomes necessary to litigate the municipality's claim. Further, it shall be the responsibility of the consultant to bear all litigation costs and any and all incidental costs connected with this Agreement. 60. After consulting with the William Leonard, Berkheimer Associates, and Edward Betza, Borough Solicitor, Wesleyville Borough Council entered into a consulting agreement with MRS. a. Berkheimer Associates is the Borough's earned income tax collector. 61. The consulting agreement between MRS and Wesleyville Borough was signed between December 10, 2003 and December 29, 2003. a. The consulting agreement was signed by Herron and Pamela Herron on behalf of MRS; and Terry St. Denny, Council President, and Long on behalf Herron, 04 -012 Page 18 of the Borough. b. Based on the execution on the consulting agreement between MRS and Wesleyville Borough, MRS would be paid 25% of all earned income tax monies collected by MRS on behalf of the Borough. c. The exact date the contract was signed is not known because the contract was not dated. 62. On January 23, 2004, Erie County law enforcement officials executed the search warrant at Herron's residence and seized his laptop computer and other digital media storage devices. a. These items included data and information that he obtained as a result of his employment with the City relating to earned income tax. 63. During February 2004, Herron was in contact with Leonard requesting earned income tax information regarding Wesleyville Borough. a. These contacts were via letter and e-mail. 64. On March 30, 2004, the Wesleyville Borough Council President e- mailed Herron and requested a status report on Herron's effort to obtain earned income money from the City of Erie. a. Herron indicated that he was waiting on information from Berkheimer to complete the project. 65. Subsequent to April 9, 2004, the Borough attempted on other occasions to inquire from Herron the status of the project. a. Herron replied that he had not made progress due to an illness and because the District Attorney's office seized his computer and other data. 66. In fall 2004, Wesleyville Borough issued a letter to Herron terminating its contract with MRS due to Herron's lack of fulfilling MRS's contractual obligations. III. DISCUSSION: At all times relevant to this matter, the Respondent, Charles Herron (Herron), has been a public official /employee 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 Herron, as the Director of Finance for the City of Erie (City), violated Section §1103(a) of the Ethics Act when he retained confidential information obtained by holding public office related to the earned income tax collections by the City and when he retained the work product of vendors hired by the City to compile or analyze information relating to earned income tax collections. 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. The term "conflict of interest" is defined under Act 9 of 1989/Act 93 of 1998 as follows: Section 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 Herron, 04 -012 Page 19 pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa. C. S. § 1102. 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. 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. Herron, a CPA, served as the Director of Administration and Finance for the City from January 2, 1998 until April 9, 2003 with duties and responsibilities as to accounts and finances, central purchasing, computer services, human relations and other duties as prescribed. The City levies a 5% local earned income tax (EIT), the administration of which was not in compliance with Act 511 as to collection and distribution. Following a lawsuit, the City was directed by court order to comply with Act 511 in terms of its collection and distribution of the EIT. Although the City tax collector attempted in 1993 and 1994 to bring the City into compliance with the court's order, the collection and distribution system remained out of compliance. For the period 1996 to 2000, the City retained approximately $5,000,000 in funds that were not properly identified and distributed. Herron became involved in analyzing the large amount of unidentified funds and proposed a task force to review and make recommendations to bring the City into compliance. In April of 2002, the City Council enacted a resolution creating a task force that included Herron as an appointed member. The mandate of the task force was to review and make recommendations regarding the City's EIT collection and disbursement system. The City had been using an EIT system known as the "claiming system" whereby the City collected taxes, including those for individuals who worked in the City but resided in other municipalities. The City required such other municipalities to file a claim with the City for such taxes. The task force made the following recommendations to the City: undertake a reconciliation of all income tax files from 1997 forward; exchange information with other taxing bodies; perform the EIT reconciliation through the City Finance Office; have Herron participate in the formulation of recommendations and implement the recommendations of the task force. The task force developed a reconciliation procedure for the EIT known as "Geo- Coding." Geo- Coding consisted of a two part process for the City: determine the amount of EIT owed to each taxing body by reviewing W -2's to determine the municipality of residence; and determine the amount owed to the City by other municipalities by reviewing Herron, 04 -012 Page 20 the individual tax returns filed and information shared from the other taxing bodies. To accomplish the reconciliation, the City entered into contracts with two firms, Schaffner, Knight, Minnaugh, and Company (SKM) and Erie Custom Computer Applications (ECCA). On April 9, 2003, Herron's employment with the City ended with the execution of a confidentiality agreement and general release. The agreement required Herron to immediately return keys, City property and information. In addition, Herron was not permitted to access the City computer systems unless specifically authorized to assist in the transition. Counsel issued a subpoena to Herron to appear and bring any information concerning City finances. To that end, Herron was provided with records and information concerning the City's finances. The genesis of the subpoena arose out of concerns by City Council members, following the sudden and unexpected termination of Herron. In a private capacity, Herron is affiliated with a company known as Municipal Revenue Services, Inc. (MRS) as its CPA and Revenue Enhancement Specialist. Herron's spouse serves as President of MRS, which has an address that is the same as the Herrons' residence. The business purpose of MRS is to assist municipalities and school districts regarding real estate taxes and EITs. Herron began developing EIT services for MRS after his separation from the City in April 2003. By August of 2003, Herron, on behalf of MRS, began soliciting taxing bodies in the Erie County area for the purpose of entering contracts to obtain unclaimed EITs, primarily from the City. In his solicitation, Herron noted that the City was only entitled to 2% of $4.3 million that it collected. Herron made his initial contact to 24 separate taxing bodies on MRS letterhead that identified Herron as a Revenue Enhancement Specialist and CPA. The general phraseology of the letter appears in Fact Finding 21. Herron followed up his contacts with proposals that consisted of Power Point presentations and the dissemination of MRS newsletters and other information. One chart that Herron prepared contained information as to a recap of taxes for the 1999 year with columns that reflected the taxing municipality, school district, the City's liability, the amount paid by the City on its liability and the remainder owed by the City to each municipality. The chart also contained a column reflecting the amount owed for a period of five years. Another chart prepared by Herron encompassed the period 1997 to 2001 and reflected EITs due to various municipalities. Once the newsletters and other materials by Herron began circulating, several officials and employees in the City became concerned that Herron might have utilized confidential, privileged or proprietary information that he obtained while employed by the City. The City referred the matter to the County District Attorney who obtained a search warrant to seize Herron's computers, related equipment and data at his residence in January 2004. As a result of the search warrant, 11 CD Rom discs were obtained from Herron's residence that inter alia contained a disc entitled "City of Erie Files." The City Solicitor's office requested the City's Chief Information Officer to review the 11 discs to identify their contents. Following the completion of the review, a memorandum was prepared regarding the information on the discs. It was determined that that discs contained non - public information of the City. In addition, a disc denominated as a "ECCA Files" contained taxpayer information including social security numbers for City tax filers. That information came from a City AS -400 database of non - public /confidential information to which Herron had access while employed by the City. Seven of the files in that folder had City tax related files or files developed by SKM or ECCA regarding EIT reconciliation. Another file in the ECCA folder was named "PA State Returns 1997.mdb," which file contained income tax information for all PA state tax returns filed in 1997. A Herron, 04 -012 Page 21 subfolder designated "ECCA1" had records for 1999 compiled by ECCA that contained individual tax information including social security numbers and geo -coded addresses. In March of 2003, Herron had instructed the manager of the City's computer information system to contact ECCA and request a copy of the geo -coded file of all 1999 City employee W -2 tax records. The geo- coding for 1999 of the City contained day to day entries for approximately 98,000 individuals, W -2 records that included names, social security information, addresses, employer information and local tax information. The President of ECCA was requested to cross -check the files obtained from Herron with the ECCA file. It was determined that the information on the disc in Herron's possession was identical to the files produced by ECCA as to the 1999 W -2 database. That information was prepared by ECCA for the City at a cost of $18,165.85. Another file in Herron's possession was Disc tagged No. 11, labeled "GG Files ", that included a network folder of a former City employee who was a data analyst in the Office of Computer Information Systems. The data on that disc comprised tax records, social security numbers and other information that was not available to the public, and even included City employee pension records. Herron obtained information in his "Total Earned Income Taxes due 1997 - 2001" newsletter from a City database AS -400 computer software application. Herron obtained that information from a staff account in the City Department of Finance when Herron was his immediate supervisor. Such information constituted non - public, confidential, privileged /proprietary information of the City. In December of 2002, Herron had requested the City staff accountant to prepare an Excel spreadsheet of data consisting of payments made to taxing bodies between 1997 and 2002. From July 2002 through April 3, 2003, the City paid SKM a total of $88,795.20 for services relating to EIT reconciliation. That information was work product that had been prepared pursuant to SKM's contract with the City, and it was found on a disc in Herron's possession at his residence. It was determined that the data prepared by SKM was virtually identical to the information on the Excel spreadsheet for preparation of Herron's newsletter. In this regard, the tax return and W -2 information utilized by SKM and ECCA for the City under the contract is information that by law is confidential under the Local Tax Enabling Act. Herron, on behalf of MRS, entered into a contract with Wesleyville Borough to obtain unclaimed EITs from other taxing bodies but primarily from the City. In making his presentation to Council, Herron provided information about obtaining unclaimed EITs from taxing bodies, including the City, and presented two documents, one of which was titled "Analysis of Earned Income Tax Recovery." The analysis provided by Herron to Council indicated that there would be an attempt to collect approximately $164,000 of funds for Wesleyville from the City. MRS would charge a fee of 25% of the total amount of EITs recovered by MRS. The consulting agreement specifically provided: The consultant possesses the expertise to identify those income taxes held by the City of Erie and which belong to the municipality." See, Fact Finding 59. Wesleyville Borough Council entered into the consulting agreement with MRS in December of 2003, approximately one month before Erie County law enforcement officials executed the search warrant of Herron's residence and seized his laptop computer and other digital media storage devices. In March of 2004, Wesleyville Borough Council President contacted Herron regarding the status of obtaining EITs from the City. Herron responded that he was waiting for information to complete the project. After further attempts by Wesleyville Council to obtain a status report on the project from Herron without avail, the Borough in the Fall of Herron, 04 -012 Page 22 2004 issued a letter to Herron terminating its contract with MRS due to Herron's failure to fulfill his contractual obligations. 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 as follows: "3. The Investigative Division will recommend the following in relation to the above allegations: a. That a violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred in relation to Herron retaining confidential information obtained in his position as Director of Finance for the City of Erie concerning the earned income tax collections by the City of Erie; and b. That a violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred when Herron retained the work product of vendors hired by the City of Erie to compile and /or analyze information relating to Earned income tax collections; and 4. Herron agrees to make payment in the amount of $8,000 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. 5. Herron agrees to turn over to the State Ethics Commission, within thirty days of the date of the Commission's adjudication, all tax, personnel or other confidential information in his possession, regardless of the form in which it is held, including but not limited to CD Roms, floppy disks, USB or hard copy, obtained from the City of Erie during his employment therewith as well as all such information received during the instant proceedings. 6. Herron agrees not to use any confidential information that he obtained from the City of Erie during his employment for personal purposes." Consent Agreement, ¶ ¶3 -6. In applying the provision of Section 1103(a) of the Ethics Act to the stipulated facts in this case, there were uses of authority of office on the part of Herron. But for the fact that Herron was Finance Director for the City of Erie, he would not have been in a position to obtain confidential taxpayer information, such as W -2's, social security numbers and reconciliation information. Herron took that confidential information with him when he terminated service with the City. Such actions were uses of authority of office in obtaining confidential information. See, Juliante, Order, 809. The uses of authority of office with confidential information was Herron's mechanism to obtain municipal, school districts and other clients for MRS, a business with which he is associated as that term is defined under the Ethics Act. Herron's goal, as in the case of Wesleyville Borough, was to obtain clients and assist them in EIT collections, resulting in a fee percentage to MRS from the EIT taxes collected for the municipality. Accordingly, Herron, 04 -012 Page 23 Herron violated Section 1103(a) of the Ethics Act when he retained confidential information obtained in his position as the Director of Finance for the City of Erie relative to earned income tax (EIT) collections by the City. See, Reaves, Order 1260; Metrick, Order 1037; Laverture, Order 1002. Not only did Herron retain confidential information from the City, but he also obtained and retained work product of vendors hired by the City for EIT reconciliations, which necessitated the compiling and analysis of information for the City. Such actions by Herron in retaining and possessing that work product following his termination of service with the City were uses of authority of office as to confidential information. As noted above, such privileged, non - public, confidential information was the lynch pin for Herron to jump start business for MRS as to municipal, school districts and other clients regarding EIT collections. Lastly, the uses of authority of office as to such confidential information would generate fees to MRS on EITs collected. Accordingly, Herron violated Section 1103(a) of the Ethics Act when he retained work product of vendors hired by the City of Erie to compile or analyze information relating to EIT collections. See, Reaves, supra, Metrick, supra, Laverture, supra. 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, Herron is directed to make payment in the amount of $8,000 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. In addition, Herron must turn over to the State Ethics Commission, within thirty days of the date of the Commission's adjudication, all tax, personnel or other confidential information in his possession, regardless of the form in which it is held, including but not limited to CD Roms, floppy disks, USB or hard copy, obtained from the City of Erie during his employment therewith as well as all such information received during the instant proceedings. Lastly, Herron agrees not to use any confidential information that he obtained from the City of Erie during his employment for personal purposes. 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. Charles Herron, as Director of Finance for the City of Erie, for the relevant time period was a public official /employee subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998. 2. Herron violated Section 1103(a) of the Ethics Act when he retained confidential information obtained in his position as the Director of Finance for the City of Erie relative to earned income tax (EIT) collections by the City. 3. Herron violated Section 1103(a) of the Ethics Act when he retained work product of vendors hired by the City of Erie to compile or analyze information relating to EIT collections. In Re: Charles Herron, Respondent ORDER NO. 1399 File Docket: 04 -012 Date Decided: 5/31/06 Date Mailed: 6/12/06 1 Charles Herron, as Director of Finance for the City of Erie, violated Section 1103(a) of the Ethics Act when he retained confidential information obtained in his position relative to earned income tax (EIT) collections by the City. 2. Herron violated Section 1103(a) of the Ethics Act when he retained work product of vendors hired by the City of Erie to compile or analyze information relating to EIT collections. 3. Per the Consent Agreement of the parties, it is ordered that: (a) Herron make payment in the amount of $8,000 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; (b) Herron turn over to the State Ethics Commission, within thirty days of the date of the Commission's adjudication, all tax, personnel or other confidential information in his possession, regardless of the form in which it is held, including but not limited to CD Roms, floppy disks, USB or hard copy, obtained from the City of Erie during his employment therewith as well as all such information received during the instant proceedings; and (c) Herron will not use any confidential information that he obtained from the City of Erie during his employment for personal purposes. 4. Compliance with the provisions of paragraph 3 will result in the closing of this case with no further action by this Commission. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair