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HomeMy WebLinkAbout1406 ThebesIn Re: Keith Thebes, Respondent File Docket: 05 -048 X -ref: Order No. 1406 Date Decided: 8/3/06 Date Mailed: 8/8/06 Before: John J. Bolger, Vice Chair Donald M. McCurdy Raquel K. Bergen Nicholas A. Colafella This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Act, Act 9 of 1989, P.L. 26, 65 P.S. § 401 et seq., as codified by Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was not filed and a hearing was waived. The record is complete. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Thebes, 05 -048 Page 2 I. ALLEGATION: That Keith Thebes, a (public official /public employee) in his capacity as Supervisor for Centre Township, Perry County violated the following provisions of the State Ethics Act (Act 93 of 1998) when he used the authority of office for a private pecuniary gain of himself and /or a member of his immediate family when, in his capacity as a township supervisor, he purchased garbage trucks from the Commonwealth of Pennsylvania, Department of General Services Bureau of Surplus Property and directed that those vehicles be delivered to Fred Thebes, his brother, who owns and operates a garbage collection business; and when he participated in actions of the board of supervisors to award a contract in excess of $500.00 to his brother without an open and public process. II. FINDINGS: 1. The Investigative Division of the State Ethics Commission received a signed, sworn complaint alleging that Keith Thebes violated provisions of the State Ethics Act (Act 93 of 1998). 2. Upon review of the complaint the Investigative Division initiated a preliminary inquiry on October 25, 2005. 3. The preliminary inquiry was completed within sixty days. 4. On December 20, 2005, a letter was forwarded to Keith Thebes, by the Investigative Division of the State Ethics Commission informing him that a complaint against him was received by the Investigative Division and that a full investigation was being commenced. a. Said letter was forwarded by certified mail, no. 7004 0750 0002 8074 7414. b. The domestic return receipt bore the signature of Keith Thebes, with a delivery date of December 21, 2005. 5. Periodic notice letters were forwarded to Keith Thebes in accordance with the provisions of the Ethics Law advising him of the general status of the investigation. 6. The Investigative Complaint was mailed to the Respondent on June 15, 2006. 7 Keith Thebes has been serving as a Centre Township, Perry County Supervisor since January 1986. a. Keith Thebes was appointed as township roadmaster in 1995 and continues to serve in that capacity. b. Thebes has served as chairman of the board of supervisors at various times during his tenure. c. Thebes previously served as a township supervisor between 1972 to 1977. 8. As an elected township supervisor, Keith Thebes performs the following job duties as outlined in Section 65607 of the Second Class Township Code 53 P.S. § 65607: a. Be charged with the general governance of the township and the execution of legislative, executive and administrative powers in order to ensure sound fiscal management and to secure the health, safety and welfare of the citizens of the township. Thebes, 05 -048 Page 3 b. Have the responsibility for maintenance of township -owned equipment and facilities. c. Employ persons as may be necessary for the general conduct of the business of the township and provide for the compensation, organization and supervisor of the person so employed. d. Authorize attendance at conferences, institutes, schools, and conventions. e. Annually, on or before the first day of February, furnish to the board of auditors information on the construction or maintenance of roads or other matters that may be required by any department of the Commonwealth to be included in the annual township report. f. Provide for the annual tax duplicate to be prepared and presented to the tax collector. g. Perform duties and exercise powers as may be imposed or conferred by law or the rules and regulations of any agency of the Commonwealth. 9. As an appointed township roadmaster, Keith Thebes has the following responsibilities and duties: a. Overseeing and directing the daily activities of the township's road employees. b. Inspect township roads and bridges and determine those that need repaired. c. Keep township roads and bridges free from all obstructions. d. Review and approve road employee's recorded hours for payment. e. Organize the purchasing of equipment and heating fuel oil for the township building. f. Obtain quotes on purchases and contracts between $4,000 and $10,000. g. Carry out directives ordered by the board of elected supervisors. 10. The Centre Township complex includes the township office, meeting hall, garage, and contiguous land. a. The township complex consists of approximately five (5) acres. b. In addition to the buildings on the property, there is adequate space for storage of materials for the road department. 11. The Federal Surplus Property Program was established so that Federal surplus property which is donated to the Commonwealth by the Federal Government can be obtained and used by eligible organizations. a. Eligible organizations include most nonprofit, tax - exempt organizations such as: municipalities, councils of government, schools, colleges /universities, licensed day care centers, museums, public libraries, hospitals, fire /rescue departments, shelter /food banks, scout troops, and the Red Cross. b. Eligible organizations must complete an application as well as incur a Thebes, 05 -048 Page 4 minimal service charge to cover the program administration. c. It is possible that the valued property sold could be worth more than what is charged to the eligible organization. 12. The Federal Surplus Property Program (FSPP) operates two distribution centers in Pennsylvania. a. The main distribution center is located at 2221 Forster Street, Harrisburg, PA 17105 while a satellite distribution center is located at 2850 Industrial Road, Hermitage, PA 16161. 13. Centre Township has been making purchases through the FSPP since at least 1995. a. At the direction of the board of supervisors Secretary /Treasurer Ann Chubb annually fills out the application listing all three Centre Township Supervisors as those individuals who will represent the township and make purchases on its behalf. b. Centre Township officials including all three supervisors are authorized to make purchases from Federal Surplus on behalf of the township. c. Keith Thebes has been the only township official to make purchases from Federal Surplus. 14. The Federal Surplus Property Program has guidelines with respect to the acquisition, use, and disposal of surplus property. Guidelines include but may not be limited to: a. Federal surplus property must be placed into use within 12 months from the date of its acquisition. b. Federal surplus property must be used for a minimum 12 -month period from the date it is placed into use. c. Federal surplus property valued new at $5,000 or more must be used for a minimum 18 -month period. Aircraft, boats, and gifts from foreign countries all have extended use periods. d. Federal surplus equipment and supplies are restricted to organizational use only. No personal use of federal property is permitted. e. Federal surplus property cannot be sold, loaned, traded, or torn down for parts during the minimum use period without prior permission from the Program Director. f. Federal surplus property is considered Federal Financial Grant -In -Aid and may require compliance under the Single Audit Act of 1984 and the provisions of OMB circular A -133. Failure to comply with these terms and conditions may require payment to the US Government for the value of the property. g. 15. Francis "Eric" Thebes and Fred Thebes are both brothers of Keith Thebes. a. Both Francis "Eric" Thebes and Fred Thebes own and operate businesses Thebes, 05 -048 Page 5 within the township's geographical boundaries. 16. Francis Thebes is the owner /operator of Perry County Construction Company (PCCC) located at 410 McKeehan Road, New Bloomfield, PA 17068. a. PCCC is an excavating business that has been in operation for approximately 38 years. 17. Fred Thebes is the owner of Dynomite Disposal Inc. (DDI) and Fred D. Thebes & Sons Inc. (FDTS) located at RR 2 Box 555, New Bloomfield, PA 17068. a. DDI has been in operation for approximately 15 years providing the service of garbage collection. b. DDI also has the capability to deliver heating fuel oil but this is not an advertised service to the public. c. FDTS has been in operation for approximately 15 years providing the services of paving, and hauling. 18. On August 15, 1996 the Legal Division of the State Ethics Commission issued Advice of Counsel Number 96 -582 to Richard C. Snelbaker, Esquire on behalf of Keith Thebes regarding his brothers' businesses contracting with the township. a. The issue of the advice was "whether the Public Official and Employee Ethics Law presents any prohibition or restrictions upon a township supervisor regarding his participation in preparing bid specifications for township projects that might be bid by his brothers' firms, in hiring his brothers' firms as to projects involving planned or emergency work, in inspecting work done by his brothers' firms, and in authorizing payment for work performed by his brother' businesses at meetings attended by only 2 of the 3 supervisors. b. The conclusion of Advice of Counsel #96 -582 states As a supervisor for Centre Township, Thebes is a public official subject to the provisions of the Ethics Law. Thebes would have a conflict as to awarding contracts, inspecting the work performed as to such contracts, and possibly preparing the bid specifications for such contracts that would be awarded to businesses with which his brothers are associated. Section 3(f) of the Ethics Law would not apply to such contracts provided Thebes, his spouse or any children would have no financial interests in the businesses of his brothers. Lastly, the requirements of Section 3(j) would apply in those instances where Thebes would have a conflict." 19. On January 14, 1999, Keith Thebes in his official capacity as supervisors /roadmaster for Centre Township purchased two garbage trucks from the Federal Surplus, Harrisburg Distribution Center. a. Both garbage trucks purchased by Centre Township were International models; one was green the other white. b. Keith Thebes handled all aspects of the transaction including selecting the vehicles, arranging for payment and organizing the transportation of the trucks to the township. 1. Neither vehicle was functioning and both were in a state of disrepair. Thebes, 05 -048 Page 6 2. The trucks were being sold as scrap. 3. Titles were not issued at the time of the purchase due to the vehicles poor condition. 20. Federal Surplus Property Program invoice no. 573032 dated January 14, 1999 confirms the purchase of the garbage trucks by Keith Thebes. a. The trucks were two of seven items purchased on January 14, 1999. b. The trucks were identified by numbers 97- 0264 -001 and 97- 0708 -004. c. The price per vehicle was listed at $5.00. d. Keith Thebes is the township official signing the invoice. e. The township issued payment for the trucks on February 2, 1999. 1. Thebes signed the township check no. 1377. 21. Minutes from the Centre Township Board of Supervisors meetings do not include any recorded discussions or official actions by the board authorizing the purchase of garbage trucks from Federal Surplus. a. Township records do not include the receipt for the purchase of the trucks, check, or corresponding invoice. 22. Keith Thebes in his official capacity as township roadmaster /supervisor telephonically contacted his brothers Francis Thebes and Keith [sic] Thebes requesting each provide one low -boy trailer from each of their respective companies to help transport the two full size garbage trucks. a. Centre Township does not own the equipment necessary to haul garbage trucks. b. The garbage trucks were located at the Federal Surplus Property Program's main distribution center located at 2221 Forster Street, Harrisburg, PA 17105. c. The Federal Surplus Distribution Center in Harrisburg, PA is approximately 32 miles form [sic] the Centre Township Building. 23. Keith Thebes was the only Centre Township official involved with the relocation of the garbage trucks from Federal Surplus. a. Other individuals involved with picking up the trucks from the distribution center were Doug "Harvey" Thebes, V.P. /employee of FDTS; Francis Thebes; and Arthur Gardner, friend of Francis Thebes. 1. Keith Thebes meet [sic] individuals at the State Surplus Facility in Harrisburg. b. One garbage truck was loaded onto a low -boy owned and operated by Doug Thebes /FDTS and the other onto a low -boy owned and operated by Francis Thebes. 24. Both of the garbage trucks were taken to Fred Thebes' business location at Keith Thebes, 05 -048 Page 7 Thebes' direction. a. Centre Township never physically took possession of the garbage trucks. b. Keith Thebes had a pre- arranged agreement with his brother Fred Thebes that the garbage trucks would be taken to Fred Thebes' business. c. The garbage trucks remained at Fred Thebes' business for approximately 2 years. 25. Centre Township does not provide a municipal trash disposal service for its residents and did not need the garbage trucks. a. The trucks purchased were not in running condition at the time of their acquisition. b. The township had no intent to utilize the trucks for any purpose. 26. Neither truck had parts which were salvaged by the township. a. The township had a Ford model 9000 while both garbage trucks were International. b. The only parts salvageable from the garbage trucks were rims, a fuel tank saddle, and a tire. c. Fred Thebes owned one International truck used in his business. 27. Fred Thebes retained possession of both garbage trucks at his business until approximately March 12, 2003. a. On or around March 12, 2003, Fred Thebes discussed with Keith Thebes the disposal of the vehicles. b. On March 12, 2003, Keith Thebes and Fred Thebes decided to dispose of the garbage trucks at Perry County Metal Inc. (PCM) located at 163 Sleepy Hollow Road, New Bloomfield, PA 17068. 1. PCM is a salvage yard which buys and sells scrap metal by the pound. 28. The Centre Township Board of Supervisors did not take any recorded official action authorizing Keith Thebes to dispose of the garbage trucks. a. The decision to dispose of the trucks was made solely by Keith Thebes. 29. On March 12, 2003 the garbage trucks were transferred to Perry County Metal by employees of FDTS and sold for scrap. a. PCM cut the garbage trucks up into scrap pieces within two weeks of purchasing them from Keith Thebes. 30. PCM utilizes the following process when purchasing a vehicle sold for scrap. a. The vehicle is put on a weighing station to determine the actual weight of it. b. A dollar rate is applied to how many pounds the vehicle weighs to calculate Thebes, 05 -048 Page 8 how much should be paid for the vehicle (pounds X rate = amount paid). c. On a receipt, a PCM secretary records the weight of the vehicle, a description of it, how much was paid for it, and who /what entity provided the vehicle. d. The secretary will then have the individual who receives the payment; sign the signature line of the receipt. e. PCM makes only cash payments for salvage material. 31. When a vehicle is sold for salvage to PCM, the title of the vehicle is also collected. a. That title will then be sent via postal mail to PennDOT along with PennDOT form MV -7. 1. PennDOT form MV -7 documents the scrapped vehicle's title number, salvage number, the non - repairable vehicle certification number, name of the owner /business that provided the vehicle, and date in which the vehicle was processed (scrapped). 32. Business records of PCM confirm two receipts dated March 12, 2003 for vehicles which were scrapped by Centre Township. a. One receipt identifies that a green International garbage truck was sold for $320.70. 1. Fred Thebes signed the signature line of the receipt documenting that he received the cash for the sale. b. The second receipt identifies that a white garbage truck was sold for $241.50. The receipt was signed by Keith Thebes confirming that he received the cash. 33. Fred Thebes gave both the cash and the receipt to his brother Keith Thebes. 34. Centre Township records do not include any receipt or payment in the form of cash or check for the sale of the green International garbage truck in the amount of $320.70. a. The $320.70 given by Fred Thebes to Keith Thebes was not deposited or credited to any township account. 35. Keith Thebes did not turn over to the township the $320.70 cash he received from Fred Thebes for the sale of the truck. 36. Centre Township records confirm a deposit in the amount of $241.50 as a result of the sale of white International garbage truck to PCM by Keith Thebes. a. The treasurer's report for June 3, 2003 includes a $241.50 deposit into the township's general account fund from the sale of the white garbage truck. 37. Keith Thebes in his public position as supervisor and roadmaster used the authority of his public position to obtain scrap garbage trucks from Federal Surplus and subsequently directed the sale of the garbage trucks for scrap, received cash payments for the sales and retained $320.70 of those funds for his personal use. Thebes, 05 -048 Page 9 The following findings relate to the township purchasing heating fuel oil from Keith Thebes' brother's business, Dynomite Disposal Inc. 38. Centre Township purchases fuel oil to heat the township building and operate a steam generator. a. The township annually spends more than $500 on fuel oil purchases. 39. The Centre Township Board of Supervisors did not take any official action soliciting bids for fuel oil from 2000 to 2006. a. Keith Thebes as roadmaster /supervisor is responsible for making sure that enough oil is purchased for use by the township. b. Dale Lesher, a township laborer, is directed by Keith Thebes to check the level of the oil tank by inserting a measuring stick in to the tank and reporting back to Keith Thebes as to the level of the oil. c. Keith Thebes will then determine whether or not [sic] fuel oil is needed. d. If fuel oil is needed Keith Thebes places an order with Dynomite Disposal Inc. (DDI). 40. Since at least 2000, Keith Thebes has purchased fuel oil for the use by the township exclusively from Dynomite Disposal, Inc. (DDI), the business controlled by his brother. 41. In his capacity as supervisor and roadmaster, Keith Thebes placed orders for fuel oil from DDI without the approval of the township board of supervisors. a. Keith Thebes telephoned Fred Thebes and Doug Thebes at DDI placing orders to deliver fuel to the township building between 2000 to 2005. b. The board of supervisors was not advised by Keith Thebes when he placed orders for fuel form [sic] other's business. 42. DDI does not advertise or generally sell fuel oil to the public. a. DDI obtains fuel oil for distribution to immediate and extended family members of Fred Thebes and for tenants of Fred Thebes. 43. Between December 2000 and July 2005, Thebes authorized purchases of fuel oil from DDI on twenty (20) occasions. a. Thebes did not obtain quotes from companies other than DDI. b. No advertisements were placed in local newspapers seeking quotes or bids for the fuel oil. 44. Records of Centre Township confirm the following invoices from DDI to the township and payments made by the township for fuel oil purchases from DDI as arranged by Keith Thebes in his official capacity as supervisor /roadmaster: Paid by Date of DDI Description of DDI Statement Statement Amount Township Statement Check # 12/4/2000 1012.5 Gallons @ $1.16 $ 1,174.50 1875 Thebes, 05 -048 Page 10 01/18/01 488.6 Gallons @ $1.25 $ 610.75 1914 2/28/2001 385 Gallons @ $1.25 $ 481.25 1937 4/2/2001 395 Gallons @ $1.10 $ 434.50 1956 6/25/2001 344.1 Gallons @ $1.08 $ 371.63 2012 12/19/01 536.9 Gallons @ $1.08 $ 579.85 2137 3/4/2002 476.6 Gallons @ $1.00 and 30' Pipe at $ 487.40 2189 $.36 4/1/2002 73.5 Gallons @ $1.00 $ 73.50 2203 11/7/2002 477.7 Gallons @ $1.03 $ 492.03 2381 2/28/2003 807.9 Gallons @ $1.28 $ 1,034.11 2486 3/18/2003 798.2 Gallons @ $1.46 $ 1,165.37 2486 11/5/2003 424 Gallons @ $1.06 $ 449.44 2648 1/29/2004 729.7 Gallons @ $1.16 $ 846.45 2715 3/1/2004 561.3 Gallons @ $1.25 $ 701.63 2736 4/12/2004 540.1 Gallons @ $1.25 $ 675.13 2801 11/15/2004 516 Gallons @ $1.69 $ 872.04 2946 12/23/2004 534 Gallons @ $1.68 $ 897.12 2964 1/19/2005 420.8 Gallons @ $1.59 $ 669.07 2985 3/25/2005 725 Gallons @ $1.70 $ 1,232.50 3041 7/15/2005 457.6 Gallons @ $1.86 $ 851.14 3134 Total $ 14,099.41 45. Township payments issued to DDI are included as part of monthly bill lists. a. Bill lists are voted on their entirety by a single motion. b. Checks issued are signed by the secretary /treasurer and at least two supervisors. 46. Keith Thebes abstained from voting to approve checks issued to DDI between 2000 and 2005. a. Thebes filed abstention memos stating the reason for the abstention was due to payment(s) being made to his brother Fred Thebes. 47. Keith Thebes in his official capacity as a Centre Township Supervisor signed the front side of check number 2203 in the amount of $73.50 issued to DDI on or about April 1, 2002. a. This check was signed by all three (3) supervisors and the secretary /treasurer. b. This was the only check issued to DDI that Keith Thebes signed. 48. DDI operates on a profit margin of 10¢ per gallon of fuel oil sold. a. DDI's profit on sales of fuel to the township was at least $1,409.94 (14,099.41 X .10 = 1,409.94). Thebes, 05 -048 Page 11 49. Keith Thebes took the following actions in his official capacity as Centre Township Supervisor /Roadmaster with respect to fuel oil purchases made form [sic] his brother's business. a. Selected the vendor without an open and public process. b. Placed fuel oil orders totaling approximately $14,099.41 since December 2000. c. Singed [sic] the front side of check number 2203 in the amount of $73.50. 50. Keith Thebes has been subject to State Ethics Act proceedings in the past, pre- dating the Advice of Counsel he sought in August, 1996. a. Thebes was the Respondent in SEC case number 95- 060 -C2; order number 1027 decided November 4, 1996. b. At issue in that case was Thebes' alleged participation in discussions, actions and /or decisions of the Board of Supervisors which resulted in companies owned by his brothers being selected to work on township projects. c. The Ethics Commission ruled that Thebes technically violated Section 3(a) of Act 9 of 1989 when he took action to engage the services of PCCC and FTSI which are businesses with which members of his immediate family are associated, for equipment rental, repair services, and snow removal duties in Centre Township; and when he made motions, seconded motions, voted to approve or signed checks as to the payment of invoices for PCCC and FTSI. d. Thebes was directed by the Commission to make an $800 payment to Centre Township. 51. Keith Thebes' brother's business DDI realized a total private pecuniary gain of $14,099.41 and net profit of $1,409.94 from the sale of fuel oil to Centre Township. 52. Keith Thebes personally realized a private pecuniary gain of $320.70 as the result of retaining money from the sale of a township garbage truck to PCM for scrap. a. Thebes and /or a business with which he and a member of his immediate family are associated received a private pecuniary gain as a result of contracts being entered into in excess of $500.00 without an open and public process. 53. Total private pecuniary gain realized by Thebes and members of his immediate family totaled $1,729.64. III. DISCUSSION: Preliminarily, we must consider a procedural issue that has arisen regarding the failure to timely file an Answer to the Investigative Complaint. The pleading stage in this case began with the issuance of the Investigative Complaint on June 15, 2006. On its face, the Investigative Complaint stated that an Answer had to be received at this Commission within thirty (30) days of issuance and that the Respondent should take that document immediately to an attorney. No Answer was received by the July 17, 2006 deadline. Thebes, 05 -048 Page 12 On July 19, 2006, Keith Thebes (Thebes) through his counsel filed an Application for Leave to File Answer to Investigative Complaint Nunc Pro Tunc. No Answer to the Investigative Complaint was attached to the Application. After Chief Counsel sent Thebes' counsel an acknowledgement of the receipt of the Application that did not have a proffered Answer attached, counsel subsequently on the same day sent a proffered Answer by fax. The points raised in the Application are summarized in the following narrative. After Thebes received the Investigative Complaint, he contacted Linus E. Fenicle (counsel) for legal representation. Counsel declined representation due to his position as the Township Solicitor. After Thebes was unsuccessful in retaining another attorney, he renewed his request to counsel for representation. Counsel agreed to represent Thebes if the Township would provide a waiver as to any possible conflict. Due to various circumstances, counsel was not aware of the Township's grant of the waiver until he returned to his office after a planned trip from July 14 to July 17, 2006. Counsel contacted Chief Counsel on July 18, 2006 for an extension to file an Answer. Chief Counsel advised counsel that a default letter had been sent on that date. Counsel states that some averments in the Investigative Complaint are inaccurate, that an Answer should be filed to give a complete report to this Commission and that Thebes used due diligence in obtaining legal representation. Inadvertence resulted in the delay of receiving the Township waiver, without any prejudice to the Commission. The Investigative Division, on July 21, 2006, filed an Answer in opposition to the Respondent's Application and a Memorandum of Law. In its Answer to Thebes' Application, the Investigative Division responds seriatim to the averments in the Application and raises New Matter wherein the following is asserted: the proffered circumstances are legally insufficient for the grant of leave to file an answer nunc pro tunc; response times are jurisdictional and may not be extended as a matter of grace; a late answer may only be allowed if there is fraud, or breakdown in the administrative /postal process; the missed deadline was caused by negligence and the absence of Thebes' counsel from his office; a very high standard must be met to grant leave to file an answer nunc pro tunc as per Commission and court rulings; negligence of counsel is not a basis for the late filing of an answer; non - negligent exceptional circumstances as set forth in judicial precedent have not been shown; and Thebes' sole assertion of failure to timely file based upon negligence is not a basis for granting leave to file an Answer Nunc Pro Tunc. The Investigative Division, in its Memorandum of Law, sets forth the following arguments: • Although an Answer to the Investigative Complaint was due by July 17, 2006, no Answer was received until July 19, 2006. • The Ethics Act and State Ethics Commission regulations require the filing of an Answer within 30 days of the issuance of the Investigative Complaint. • Response periods at administrative agencies are jurisdictional. • An administrative agency may not ignore its regulations as to response /appeal deadlines. • An administrative agency may extend an appeal /response time if there is fraud or a breakdown in the administrative or postal process. • Thebes' failure to timely file an Answer was not due to fraud or an administrative /postal process breakdown but was due to negligence. Thebes, 05 -048 Page 13 • An extraordinarily high standard must be met to allow the filing of a late Answer, citing Cooke, Order 1203 and Gulnac, Order 1135. • Thebes failed to meet the very high burden for the allowance of an application for leave to file an Answer nunc pro tunc. • The courts have excused the failure to meet a time deadline if there is non - negligence due to incapacitation. • Thebes has presented no evidence of the type of incapacity that would allow the filing of an answer nunc pro tunc. • Thebes' contact with counsel on or before July 3, 2006 provided ample time to respond to the Investigative Complaint. • The time period for obtaining a conflict waiver for counsel and his unavailability between July 14, 2006 through July 17, 2006 do not present circumstances for the granting of his application. • Thebes has not shown any non - negligent exceptional circumstances to grant leave to file the Answer late. • The negligence of Thebes or counsel does not form a basis to grant leave to file an answer after the 30 day deadline. • This Commission has denied petitions to file answers nunc pro tunc on numerous occasions, including claims of counsel's incapacitation: Holtzman, Order 902; Holupka, Order 1320; Scales, Order 1394; and Popkave, Order 1318, affirmed in a Memorandum Opinion of Pennsylvania Commonwealth Court filed at 2221 CD 2004 on March 11, 2005. Thebes, by letter dated July 24, 2006, makes the following arguments: Section 1108(a) of the Ethics Act allows the Commission to extend the time to file an Answer for good cause shown; the day after the filing deadline, Thebes' counsel contacted the Chief Counsel who indicated that it was too late to file an Answer; Thebes' counsel set forth good cause in the Application for Leave to File an Answer Nunc Pro Tunc; and the Commission may and should grant the Application to File the Answer. It is clear under the Ethics Law and Regulations that a response to the Investigative Complaint must be received within 30 days. 65 Pa.C.S. §1108(e); 51 Pa.Code §21.5(k). Cf., Criss v. Wise, 566 Pa. 437, 781 A.2d 1156 (2001). As noted above, even the face sheet of the Investigative Complaint states that an Answer must be received within 30 days. In this case, an Application for Leave to File an Answer Nunc Pro Tunc without a proffered Answer was received on July 19, 2006, followed by a proffered Answer on that same date, two days after the deadline for filing an Answer. In order for a late answer to be deemed timely filed, we apply the same standard as is applied by the courts to untimely appeals See, Getz v. Pennsylvania Game Commission, 475 A.2d 1369 (Pa. Commw. Ct. 1984) (applying that standard in administrative proceedings to an untimely request for a hearing). The standard is that to accept the untimely filing as if it were timely, there must either have been fraud or a breakdown in the administrative process, see, West Penn Power Co. v. Goddard, 460 Pa. 551, 333 A.2d 909 (1975); Bianco v. Robinson Twp., 556 A.2d 993 (Pa. Commw. Ct. 1989), which includes the postal process (Getz v. Pennsylvania Game Commission, 475 A.2d 1369 (1984)), or there must have been unique and compelling factual circumstances establishing non - negligent failure to file timely, Grimaud v. Dep't of Env. Resources, 638 Thebes, 05 -048 Page 14 A.2d 299 (Pa. Commw. Ct. 1994). See also, Criss v. Wise, supra. Mere delays in the U.S. mail, even during a holiday season, are considered foreseeable and avoidable and are insufficient grounds to support a Petition to File Answer Nunc Pro Tunc. Criss v. Wise, supra. None of the conditions for allowing the filing of a late answer is present in this case. In fact, there has not even been any allegation of fraud, any breakdown in the administrative process or the mail delivery system, or any unique and compelling factual circumstances that would establish a non - negligent failure to timely file. The only argument proffered is one of inadvertent delay in obtaining a waiver from the Township in order for counsel to represent Thebes and a pre - planned trip by counsel. Those arguments do not meet any of the enumerated criteria for the grant of an Application to File Nunc Pro Tunc. Counsel, however, argues that because Section 1108(e) of the Ethics Act allows this Commission to extend the time period for good cause shown and because counsel established good cause in his Application for Leave to File an Answer Nunc Pro Tunc, the Application should be granted. Counsel has ignored the obvious: requests for extensions of time deadlines are to be made before and not after the deadline expires. There is no basis for allowing the filing of a late Answer. Baxter, Order No. 985; Scales, Order 1394. The Regulations allow for the filing of an application for an extension to file an Answer. 51 Pa.Code §21.5(k). No such request was made in this case prior to the filing deadline. The Application for Leave to File Answer Nunc Pro Tunc is denied. Accordingly, the factual averments of the Investigative Complaint are deemed admitted (65 Pa.C.S. §1108(e); 51 Pa. Code §21.5(k)) and become the Findings in this adjudication. At all times relevant to this matter, Thebes has been a public official subject to the provisions of the Public Official and Employee Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. § 401 et seq., as codified by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegations are that Thebes, as a Centre Township Supervisor, Perry County violated Sections 1103(a) and 1103(f) of the Ethics Act when he purchased garbage trucks from the Commonwealth of Pennsylvania, Department of General Services Bureau of Surplus Property and directed that those vehicles be delivered to Fred Thebes, his brother, who owns and operates a garbage collection business; and when he participated in actions of the board of supervisors to award a contract in excess of $500.00 to his brother without an open and public process. Pursuant to Section 1103(a) of the Ethics Act quoted above, 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 the Ethics Act 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 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 Thebes, 05 -048 Page 15 facts. 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. Section 1103(f) of Act 9 of 1989 provides: Section 1103. Restricted activities (f) No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. § 1103(f). Section 1103(f) of the Ethics Act provides in part that no public official /public employee or spouse or child or business with which he or the spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure. Having noted the issues and applicable law, we shall now summarize the relevant Thebes has served as a Centre Township Supervisor since January 1986 and as Roadmaster since 1995. As the appointed Township Roadmaster, Thebes has responsibilities for overseeing and directing the daily activities of the Township employees; inspecting roads and bridges; reviewing and approving Township employee timesheets; organizing the purchase of equipment and heating fuel for the Township; obtaining quotes Thebes, 05 -048 Page 16 on purchases and contracts within certain financial ranges; and carrying out the directives of the Board. Thebes has two brothers who both own and operate businesses in the area: Francis Eric Thebes who owns and operates Perry County Construction Company (PCCC); and Fred Thebes who owns Dynomite Disposal, Inc. (DDI) and Fred D. Thebes & Sons, Inc. (FDTS). On August 15, 1996, the Legal Division of this Commission issued Thebes, Advice, 96 -582, in response to an inquiry regarding Thebes' conduct vis -a -vis his brothers' companies involvement in Township projects or contracts. The Advice concluded that Thebes would have a conflict regarding financial matters involving businesses with which his brothers were associated under Section 1103(a) of the Ethics Act. However, the Advice noted that Section 1103(f) would not apply to contracting by Thebes' brothers in that Section only applies to a public official, spouse, child or business with which the public official, spouse or child is associated. The Federal Surplus Property Program (FSPP) donates federal surplus property to the Commonwealth for the use of governmental bodies, eligible non - profit tax exempt organizations and other qualifying entities. The FSPP has guidelines for the acquisition, use and disposal of surplus property, such as, the time frame in which to start to use the property, the length of time to hold the property, and limitations as to the use and disposal of such property. In January 1999, Thebes, as the Supervisor /Roadmaster purchased two garbage trucks from the Harrisburg Distribution Center of Federal Surplus. The two garbage trucks were non - functioning and in a state of disrepair so that they were sold as scrap without the issuance of titles. Thebes, as a public official, signed the invoices for the two vehicles that were purchased at a price of $5 each. A review of the minutes of the Centre Township Board of Supervisors reflects that there was no discussion or official action by the Board authorizing the purchase of the two garbage trucks. Thebes, as a public official, contacted his brothers and requested each one to bring a low boy trailer to transport the two garbage trucks. Both garbage trucks were taken to a business location of Fred Thebes. Centre Township never took possession of the two garbage trucks. In this regard, since Centre Township does not provide municipal trash disposal services, it had no need for garbage trucks. Fred Thebes retained possession of both garbage trucks at his business until March of 2003. At that time, Thebes and his brother Fred decided to dispose of the trucks at Perry County Metal, Inc. (PCM), a salvage yard that buys and sells scrap metal by the pound for cash. The Centre Township Board of Supervisors did not take any action authorizing Thebes to dispose of the garbage trucks. The garbage trucks were transported to PCM and sold for scrap. In purchasing scrap metal, PCM utilizes a formula whereby it weighs the scrap material and then calculates the purchase price by multiplying the weight by a price per pound. One garbage truck was sold for $320.70 and the other for $241.50. Although the $241.50 was deposited into the Centre Township's account, Thebes did not turn over the $320.70 to the Township from the sale of the other garbage truck. In short, Thebes, as a Supervisor /Roadmaster, obtained two garbage trucks through the FSPP, subsequently sold the two trucks for scrap, received cash payments from the two sales and retained $320.70 of those funds. Turning to the matter of the Township purchases of heating fuel oil, the Board of Supervisors did not take any action to solicit bids for fuel oil during the time frame of 2000 to 2006. During the relevant time period, whenever Thebes determined that fuel oil was needed, he placed an order with DDI, the business that is owned by his brother. Thebes took such action of purchasing fuel oil without the approval of the Township Board of Thebes, 05 -048 Page 17 Supervisors. DDI does not generally advertise or sell fuel oil to the public, but rather to immediate or extended family members. The purchases that Thebes made from DDI for the Township are delineated in Fact Finding 44. The total purchases during the relevant time period amounted to $14,099.41. Township payments to DDI were made as part of the monthly bills list that was voted on in its entirety by a single motion. Thebes abstained from voting to approve the checks and only co- signed one of the Township checks in payment to DDI. Based upon a profit margin of 10¢ per gallon, DDI's profit on the sale of the heating fuel during the relevant time period amounted to $1,409.94. Regarding the purchase of the fuel oil from DDI, Thebes, in his capacity as a Supervisor /Roadmaster, selected DDI as the vendor without an open and public process, placed the fuel oil orders and signed one of the checks in payment. Having highlighted the relevant facts, we must now determine whether the actions of Thebes violated Sections 1103(a) and 1103(f) of the Ethics Act. The Investigative Division has filed a Position Statement on July 25, 2006 raising the following points: • Thebes , in filing an Application for Leave to File an Answer Nunc Pro Tunc and Answer to the Investigative Complaint two days after the July 17, 2006 deadline, has admitted to all the averments in the Investigative Complaint by operation of law, due to the failure to timely file an Answer. • Following a recitation of the facts from the deemed admitted findings, the Investigative Division references various uses of authority of office by Thebes as to the acquisition and subsequent sale of two government surplus garbage trucks and purchases of heating fuel for the Township from his brother's business. • As to the two garbage trucks, Thebes eventually sold both for scrap value and deposited the sale proceeds of $241.50 from the one truck with the Township and retained the $320.70 from the sale of the other, thereby violating Section 1103(a) of the Ethics Act. • From 2000 to 2005, Thebes used his position and made the decision to purchase heating fuel for the Township from DDI, a business with which his brother is associated, in violation of Section 1103(a) of the Ethics Act. • Since the purchase of heating fuel for the Township was in excess of $500 and was awarded without an open and public process, Thebes violated Section 1103(f) of the Ethics Act as to the contracting between the Township and his brother's business. • Based upon purchases of approximately 10,704.5 gallons of heating fuel between 2000 and 2005 with a profit margin of $0.10 per gallon, Thebes' brother's business obtained a private pecuniary benefit of $1,070.45. • Thebes also used the authority of his office as to the heating fuel purchases for the Township from his brother's business when he co- signed one Township check payable to his brother's business. • Thebes has knowledge of his duties and responsibilities under the Ethics Act, given that he was previously found in violation of the Ethics Act in Order 1027 decided on November 4, 1992. Thebes, 05 -048 Page 18 • Thebes has continued as to his prior behavior by purchasing the two surplus garbage trucks and retaining the sale proceeds from one of them and engaging in contracting with his brother's business as to contracts for heating fuel for the Township. • The Commission should find that: 1. Thebes violated Section 1103(a) of the Ethics Act when he purchased and then sold surplus property and retained part of the proceeds. 2. Thebes violated Section 1103(a) of the Ethics Act when he used his position to purchase heating fuel for the Township from a business with which his brother is associated. 3. Thebes violated Section 1103(f) of the Ethics Act when the business with which his brother is associated entered into contracts to sell heating fuel to the Township when the contracts were in excess of $500 and not awarded through an open and public process. 4. Thebes or a member of his immediate family received private pecuniary benefits totaling $1,391.15 ($320.70 + $1,070.45). 5. The Commission should direct Thebes to make payment in the amount of $1,391.15 through the Commission to the Commonwealth within 30 days of the mailing of the Commission's Order. Thebes filed a Memorandum on Monday, July 31, 2006 wherein he interlaces facts with assertions that are not facts of record and legal arguments for no violations as to all allegations. Thebes proffers the following: • As to the purchase of heating fuel for the Township, he purchased the fuel at the lowest price and abstained from voting on any checks made payable to his brother's company. • Except for signing one check, Thebes did not use the authority of office and did not receive any pecuniary benefit. • If the profit to his brother's company is considered on a yearly basis, the resultant amount constitutes de minimis financial gains. • Because the contract was not with a public official, spouse, child or business with which associated, Thebes did not violate Section 1103(f) of the Ethics Act. • Thebes purchased the garbage trucks for the purpose of utilizing salvageable parts for trucks owned by the Township. • Thebes retained $320.70 from the sale of one of the trucks to reimburse him for hauling the trucks. • The $320.70 constitutes a de minimis financial gain. In applying Section 1103(a) of the Ethics Act to the above allegations, there were uses of authority of office on the part of Thebes regarding the purchase of the two garbage trucks through FSPP. But for the fact that Thebes was a Supervisor /Roadmaster, he would not have been in a position as a public official of the Township to purchase the two Thebes, 05 -048 Page 19 vehicles. Such action was a use of authority of office. See, Juliante, Order 809. The use of authority of office resulted in private pecuniary benefits consisting of the payments that Thebes received when the two garbage trucks were sold for scrap. Although the $241.50 received for one truck was deposited into the Township account, the cash received for the other truck in the amount of $320.70 was retained by Thebes. That private pecuniary benefit of $320.70 inured to Thebes himself. All of the elements necessary to establish a violation of Section 1103(a) of the Ethics Act are present in this case. However, there are two statutory exclusions to the conflict, one of which is the de minimis exclusion. That exclusion provides that if the economic consequence has an insignificant effect, then the action does not constitute a conflict. Based upon the prior precedent of this Commission, the amount of $320.70 in this particular case is de minimis. See, Stacknick, Order 1385. See also, Bixler v. SEC, 847 A.2d 785 (Pa. Commw. Ct. 2004). Accordingly, Thebes did not violate Section 1103(a) of the Ethics Act when he purchased garbage trucks from a federal surplus program, sold the two vehicles for scrap and retained the sale price of $320.70 from one truck in that such action was de minimis. Turning to the matter of the purchase of home heating fuel by the Township from DDI, a business of Thebes' brother, there were uses of authority of office on the part of Thebes. But for the fact that Thebes was a Supervisor /Roadmaster, he would not have been in a position to select DDI as the vendor, place the fuel orders with DDI and sign one of the checks in payment to DDI. All such actions were uses of authority of office. The uses of authority of office resulted in private pecuniary benefits consisting of $1,409.94 to DDI. Lastly, DDI is a business with which a member of Thebes' immediate family is associated as that term is defined under the Ethics Act. Accordingly, Thebes violated Section 1103(a) of the Ethics Act when he authorized the purchase for the Township of home heating fuel from DDI, a business with which a member of his immediate family is associated. See, Kurtz, Order 1116. As to the heating fuel purchases by Thebes for the Township, Thebes makes three arguments: he did not use the authority of office, he did not receive a pecuniary benefit and his conduct constituted de minimis actions as to yearly purchases. The arguments are unavailing. First, Thebes used the authority of office because he directed the purchases from his brother's business without Board approval. Even if Thebes did not receive a private pecuniary benefit, his brother, a member of his immediate family, received over $1,400 in profit. Lastly, a private pecuniary benefit cannot become de minimis by fragmenting it into yearly, monthly or other arbitrary parts. As to Section 1103(f) of the Ethics Act, that provision of law allows a public official, spouse, child or business with which the public official, spouse or child is associated to contract with the governmental body. However, when the contract is $500 or more, Section 1103(f) of the Ethics Act requires that the contract be awarded through an open and public process. In this case, Thebes' brother does not fit within the ambit of Section 1103(f) of the Ethics Act that is limited as to contracting involving the public official, spouse, child or business with which the public official, spouse or child is associated. Accordingly, Thebes did not violate Section 1103(f) of the Ethics Act regarding the purchase of home heating fuel by the Township for contracts that were in excess of $500 and awarded without an open and public process in that the contracting was done by Thebes' brother's business and not by Thebes, his spouse or child or business with which Thebes, his spouse or child is associated. See, Yurek, Order 1286. Section 1107(13) of the Ethics Act empowers this Commission to impose restitution in instances where a public official /public employee has obtained a financial gain in violation of the Ethics Act. Restitution is warranted in this case. However, an issue arises as to the amount of the payback. Although the private pecuniary benefit in the sale of the Thebes, 05 -048 Page 20 home heating fuel to the Township by Thebes' brother's business totaled $1,409.94 (Fact Findings 44, 48, 49), the Investigative Division in its Position Statement, presents the amount at $1,070.45. To resolve the issue, we must use the lower amount of $1,070.45. See, Bartholomew v. SEC, 795 A. 2d 1073 (Pa. Commw. Ct. 2002). Accordingly, Thebes is directed within 30 days of the date of mailing of this Order to make payment to the Commonwealth through this Commission in the amount of $1,070.45. Non - compliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Keith Thebes, as a Supervisor for Centre Township, Perry County, is a public official subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998. 2. Thebes did not violate Section 1103(a) of the Ethics Act when he purchased garbage trucks from a federal surplus program, sold the two vehicles for scrap and retained the sale price of $320.70 from one truck in that such action was de minimis. 3. Thebes violated Section 1103(a) of the Ethics Act when he authorized the purchase for the Township of home heating fuel from DDI, a business with which a member of his immediate family is associated. 4. Thebes did not violate Section 1103(f) of the Ethics Act regarding the purchase of home heating fuel by the Township for contracts that were in excess of $500 and awarded without an open and public process in that the contracting was done by Thebes' brother's business and not by Thebes, his spouse or child or business with which Thebes, his spouse or child is associated. In Re: Keith Thebes, Respondent File Docket: 05 -048 Date Decided: 8/3/06 Date Mailed: 8/8/06 ORDER NO. 1406 1 Keith Thebes, as a Supervisor for Centre Township, Perry County did not violate Section 1103(a) of the Ethics Act when he purchased garbage trucks from a federal surplus program, sold the two vehicles for scrap and retained the sale price of $320.70 from one truck in that such action was de minimis. 2. Thebes violated Section 1103(a) of the Ethics Act when he authorized the purchase for the Township of home heating fuel from DDI, a business with which a member of his immediate family is associated. 3. Thebes did not violate Section 1103(f) of the Ethics Act regarding the purchase of home heating fuel by the Township for contracts that were in excess of $500 and awarded without an open and public process in that the contracting was done by Thebes' brother's business and not by Thebes, his spouse or child or business with which Thebes, his spouse or child is associated. 4. Thebes is directed within 30 days of the date of mailing of this Order to make payment to the Commonwealth through this Commission in the amount of $1,070.45. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, John J. Bolger, Vice Chair