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HomeMy WebLinkAbout1416 EllsworthIn Re: Stephen C. Ellsworth, Respondent File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella 05 -028 Order No. 1416 10/4/2006 10/20/2006 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 not filed and a hearing was waived. The record is complete. A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Stipulation of Findings is quoted as the Findings in this Order. The Consent Agreement was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with Chapter 11 of Act 93 of 1998. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Ellsworth, 05 -028 Page 2 I. ALLEGATION: That Stephen Ellsworth, a private citizen, violated Section 1103(b) provision of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. §1103(b) when, as a private citizen and an official of Prosocial Solutions Inc., he was solicited and agreed to pay something of monetary value including but not limited to, a reward including payment and /or a promise of future employment to Charles Rembold, Chairman of the Greene County Industrial Development Authority, based on an understanding that Rembold's official action as a public official, including making a recommendation to award a contract to Prosocial Solutions, would be influenced thereby. II. FINDINGS: 1. Stephen Ellsworth is a private United States citizen. a. Ellsworth currently resides at 12124 Club Ridge Dr., Chester, VA, 23836. b. Ellsworth resided at 351 Buna Rd., Fort Lee, VA, 23801 from at least July 1999 until at least July 2005. 2. Ellsworth has served as a Lieutenant Colonel in the United States Army. a. Ellsworth's [sic] recently served in the position of Chief, Exercise Division, at the Logistical Exercise and Simulation Directorate at Fort Lee, Va. b. Ellsworth was serving in the U.S. Army in 2003 and 2004. 3. In addition to his service in the United States Army, Ellsworth also served as a Professor of Criminal Justice at Saint Leo University and as a grant reviewer under a subcontract for service providers to the United States Department of Education (USDOE) and the United States Department of Justice (USDOJ). a. Ellsworth taught criminal justice and investigative procedure topics at Saint Leo University. b. Ellsworth reviewed a wide variety of grant topics for the USDOE and USDOJ that included programs to deter substance abuse, improve the education of incarcerated felons, improve emergency response and crisis management plans, and develop strategies to deter school drop -out rates. 4. Ellsworth is the sole owner /operator of a consulting business known as Prosocial Solutions Research (hereafter Prosocial). a. Prosocial provides services in grant acquisition and project implementation, management, and evaluation among other services. b. Ellsworth provides consulting services to assist in maintaining his instructional skills as a professor. 5. Prosocial was initially licensed as a consulting business in Georgia in approximately 1997. a. Ellsworth performed the majority of his Prosocial work on a pro bono basis both in Georgia and Pennsylvania. 6. Ellsworth moved to Virginia in approximately 1999 and was not active with Prosocial while completing his doctoral dissertation. Ellsworth, 05 -028 Page 3 a. Ellsworth again began performing services through Prosocial during or about 2003. b. Prosocial is not registered as a corporation with the Commonwealth of Virginia Corporation Commission but is a sole proprietorship. 7 Ellsworth previously operated Prosocial from his home residence of 351 Buna Road, Fort Lee, VA, 23801. a. Recent Prosocial documents confirm a new address for the business of 5850 Cameron Run Terrace, #1524, Alexandria, VA 22303. This address was used only for the submission of invoices to the Greene Count [sic] Industrial Development Authority. 8. Ellsworth maintains a social and professional relationship with Charles P. Rembold. a. Ellsworth and Rembold met at the Indiana University, Bloomington, Indiana while performing doctorial work in the summer of 1998. 1. At that the [sic] time Rembold was Superintendent of the West Greene School District. b. Ellsworth interacted with Rembold on a professional basis when Rembold utilized a program developed by Ellsworth when working with at -risk youth. 9. Ellsworth developed the Plus Three Program which was provided to King's Bridge, Inc., a business with which Rembold was associated, for utilization in the PULSE (People Utilizing Leadership Skills Effectively) program. a. Rembold was one of the originators of King's Bridge, Inc. and was one of the creators of the PULSE Program. 1. Rembold implemented the PULSE program through King's Bridge in school districts where he served as a superintendent. 2. These were programs funded by grants from the state of Pennsylvania and federal government. b. From at least February 2001 Ellsworth was utilized by Rembold as a compensated facilitator at various PULSE programs where Rembold also served as a facilitator. 1. This included school districts where Rembold was employed. 2. Ellsworth was paid $3,000 in 2001 by King's Bridge. 10. Rembold served as a member of the Greene County Industrial Development Authority (hereafter IDA) Board of Directors from July 3, 1996 through June 30, 2004. a. Rembold served as the Vice President of the IDA from July 3, 1996 to December 12, 1996. b. Rembold served as the President of the IDA from December 12, 1996 to June 16, 2004. c. Ellsworth was unaware that Rembold's service with the IDA qualified him as Ellsworth, 05 -028 Page 4 a public official or public employee. 11. Rembold resigned from the IDA effective June 30, 2004 as a result of a recommendation from the Greene County Commissioners. a. The county commissioners sought Rembold's resignation due to negative publicity Rembold received as a result of State Ethics Commission Order No. 1303 which documented numerous conflicts of interest relating to Rembold's conduct as West Greene School District superintendent in relation to his contracting with King's Bridge. 12. The IDA concentrates on economic development within Greene County with a focus on the creation, attraction and retention of businesses. a. The IDA offers financial assistance through bond issues, Pennsylvania Industrial Development Authority (PIDA) loans, Machinery and Equipment Loan Financing (MELF), conventional financing, bridge financing, etc. b. The IDA office offers grant writing, business plan development, and training programs for Greene County businesses. 13. The IDA consists of a five - member board appointed to five -year terms by the Greene County Commissioners. 14. As a member of the IDA board, Rembold routinely recommended the pursuit of available grants for which the IDA would serve as the fiscal agent /administrator. a. Rembold actively researched and participated in the application process for various grants applied for by the IDA. b. Ellsworth was unaware that Rembold was serving as a public official in this capacity. 15. In 2002 and 2003 Rembold pursued grants for the IDA through the 21 Century Community Learning Centers Program. 16. The 21 Century Community Learning Centers Program (hereafter 21 CCLC) was established by Congress to award grants to rural and inner -city public schools or consortia of such schools. a. The 21 CCLC Program is designed to provide opportunities to students for academic enrichment during non - school hours or periods when school is not in session (before school, after school, and during the summer). 17. In Greene County, the 21 CCLC Program is an educational partnership coalition of Community Learning Centers that provides educational, health, social services, cultural, and recreational opportunities for students to achieve success. a. A minimum of thirteen Community Learning Centers are currently operational in Greene County including four sites in West Greene School District, three sites in Central Greene School District, two sites in Jefferson Morgan School District, two sites in Carmichaels School District, and two sites in Southeast Greene School District. b. Each site has a committee of students, parents, teachers, administrators, community members, and a Site Coordinator who provides support, input, and direction for the program. Ellsworth, 05 -028 Page 5 18. Linda P. McCracken Director of the 21 CCLC Program for Greene County, assisted Rembold within the filing of grant applications in 2002 and 2003. a. McCracken reports to the Greene County Education Consortium (hereafter Education Consortium) in her position as Director of the 21 CCLC program. b. The Education Consortium is composed of the superintendent of each of the five school districts in Greene County (West Greene, Central Greene, Jefferson Morgan, Carmichaels, and Southeast Greene) and the Director of the Greene County Career and Technology Center. 1. Additional members are included based on projects with other entities in which the Consortium is involved (i.e. representatives from Waynesburg College, IDA representatives, 21 CCLC representatives, etc.). 2. Rembold served as a member of the Education Consortium from at least October 1995 through May 2005. c. The 21 CCLC program and the Education Consortium work in collaboration with the IDA. 1. The 21 CCLC and the Education Consortium pursue various grants for program funding (including child care program funding, drug free community support program funding, community technology center funding, etc.) through the IDA. 2. Grants pursued through the IDA are typically written by McCracken or an IDA representative. 19. Ellsworth and Rembold both maintain a professional relationship with Linda McCracken. a. Rembold was familiar with McCracken in a professional capacity as a result of McCracken's previous employment with Central Greene School District, Greene County, as a result of McCracken's facilitation of the PULSE Program in Greene County, and as a result of McCracken's interaction with the IDA as the Director of the 21 CCLC b. Ellsworth became familiar with McCracken in a professional capacity as a result of McCracken's association with Rembold and the PULSE Program. 20. In or about 2002, the IDA, in conjunction with the 21 CCLC, the Education Consortium, the Greene County Technology Consortium, PBS Literacy Link, and the Childcare Program of Greene County, pursued grant funds through the United States Department of Education for the development of three Community Technology Centers to be located at the Carmichaels Area Jr /Sr HS, Jefferson - Morgan Jr /Sr HS, and Waynesburg Central HS. a. Community Technology Centers provide computer access and educational services using information technology. b. Community Technology Centers provide technology access to individuals, communities, and populations that typically would not otherwise have places to use computer and telecommunications technologies. Ellsworth, 05 -028 Page 6 21. Rembold, in his capacity as the President of the IDA, submitted an application to the United States Department of Education on or about June 30, 2002 for the Greene County Community Technology Center Program seeking a $300,000 grant to be utilized for personnel, fringe benefits, equipment, supplies and other expenses associated with the proposed Community Technology Centers.. a. The application documents Rembold as the Project Director. b. Rembold's signature is documented as the authorized representative of the applicant. c. The application also sought an allocation of $30,000 for an outside consultant to be utilized to assist with the program evaluation. d. The proposed project dates were October 1, 2002 through September 30, 2003. e. On or about September 30, 2002 Rembold received correspondence from the U.S. Department of Education that the application would not be funded. 22. Rembold, as the President of the IDA, submitted a second application to the United States Department of Education on or about July 4, 2003 for the Greene County Community Technology Center Program requesting funding totaling $497,000 to be utilized for personnel, fringe benefits, travel, equipment, supplies, contractual obligations, training stipends and expenses. a. The application documents Rembold as the Project Director. b. Rembold included in the "Contractual" category was an allocation of $30,000.00 to an outside consultant to be commissioned to assist with the program evaluation. c. The application noted the desire to develop a Community Technology Center in each of the five school districts in Greene County (Carmichaels School District, Central Greene School District, Jefferson - Morgan School District, Southeastern School District, and West Greene School District). d. The IDA was advised via correspondence dated October 15, 2003 from Karen Holliday, Team Leader, Community Technology Centers Program, US Department of Education, Office of Vocational and Adult Education that the application was not recommended for funding. 23. The outside consultant for program evaluation listed as part of both grant applications prepared by or on Rembold's behalf was to be Stephen Ellsworth. 24. Linda McCracken and Bertrum Menhart, IDA Director of Special Projects, assisted Rembold with the development of the 2003 Comm -Tech application submitted to the United States Department of Education. a. McCracken was involved in the application due to the fact that the Community Technology Centers were to be located in 21 CCLCs already established. b. Menhart assisted Rembold with the budget. 25. In or abut [sic] the fall of 2003 the IDA sought grant funds through the Claude Worthington Benedum Foundation. Ellsworth, 05 -028 Page 7 a. Charles Rembold participated in this process. 1. Rembold's 2003 application to U.S. Dept. of Education was used to apply for the Benedum Grant. 26. The Claude Worthington Benedum Foundation (hereafter Benedum Foundation) is an entity that serves the general well being of the citizenry of West Virginia and Southwestern Pennsylvania (specifically Allegheny, Fayette, Washington, and Greene Counties). a. Program categories for funding include education, workforce development, economic development, health and human services, and community development. b. The Benedum Foundation typically awards approximately fifteen million dollars per year in grants. c. Two - thirds of the allocation is awarded to West Virginia and one -third is allocated to Southwestern Pennsylvania. 27. The Benedum Foundation is primarily proactive in soliciting projects for funding. a. Solicitation is accomplished via the Benedum Foundation Website, brochures, public presentations, and through personal contacts. 28. James Denova is employed as a Senior Program Officer for the Benedum Foundation. a. Denova's responsibilities include investigating projects for funding and making recommendations to the Benedum Foundation Board. 1. The Benedum Foundation Board routinely follows Denova's recommendation regarding project funding. b. Denova is specifically involved in funding recommendations for education and workforce development programs. 29. On July 10, 2003 Rembold participated in a meeting with Denova in order to discuss funding for the Community Technology Centers. a. The meeting occurred at the IDA office in Waynesburg, Pa. b. Also attending the meeting and participating in the discussion were McCracken, Don Chappel (IDA Executive Director), and Bertrum Menhart (IDA Director of Special Projects). c. Rembold supplied Denova with a copy of the previous Comm -Tech Grant application for review at the meeting. 30. On or about October 3, 2003, Denova again met with Rembold, McCracken, and Menhart to further discuss a grant from the Benedum Foundation to fund the Community Technology Centers. a. The purpose of the meeting was to establish parameters for the grant which would permit funding to the IDA from the Benedum Foundation. Ellsworth, 05 -028 Page 8 1. Exact funding amount for the project was not known. 31. Rembold, McCracken, and Menhart were aware of funding parameters provided by Denova as early as October 21, 2003. a. E -mail communication between McCracken and Denova dated October 23, 2003 documents the following, "Chuck, Bert, and I met on Tuesday to review the Commtech grant as submitted to the federal government for funding and how it could be revised to fit into the money parameters you provided to us...." 32. By November 3, 2003 the Benedum Foundation determined that a grant of $260,000 would be awarded to the IDA. a. The Benedum Foundation held an agenda meeting on November 3, 2003 for the purpose of setting the agenda for the regular board meeting to be held on December 9, 2003. b. Denova determined the specific amount of $260,000 of Benedum Foundation funding to be provided to the IDA at the November 3, 2003 agenda meeting. 1. Denova completed an Agenda Planning Worksheet at the November 3, 2003 meeting which documented the IDA requested amount of $497,000.00 and the Benedum Foundation proposed amount of $260,000.00. b. Denova specified the amount of proposed funding to McCracken on or about November 3, 2003. 33. Denova advised McCracken via e-mail dated December 4, 2003 that the Benedum Foundation trustees would be meeting on December 9, 2003 to approve grants. a. Denova indicated that he did not anticipate a problem with the grant. 34. At the December 9, 2003, meeting of the Benedum Foundation Board of Trustees, Denova presented the trustees with a program staff write -up that summarized the details of the IDA project. a. The document was prepared by Denova with the assistance of information provided by the IDA and through communications with individuals involved with the grant application. 35. Documented in the program staff write -up, along with additional information, is the following: The inspiration and direction of the COMM -TEC model came from Dr. Charles Rembold, superintendent of the Jefferson - Morgan School District, Chair of the Technology and Education Consortium and current Chair of the Industrial Development Authority. Dr. Rembold led prior initiatives on behalf of the Consortium including a distance learning network that allows Waynesburg faculty to provide direct instruction to all five high schools in the County." 36. The program staff write -up presented by Denova included funding for an evaluation of the program in the amount of $30,000.00. Ellsworth, 05 -028 Page 9 a. An evaluation by an outside consultant was part of the original Comm -Tech grant application provided by Rembold to Denova as a reference. b. Denova did not change the evaluation amount of $30,000 from that listed on the original Comm -Tech grant prepared by Rembold. 37. Minutes of the December 9, 2003 Benedum Foundation Board of Trustees confirm the approval of a $260,000.00 grant to the IDA as part of the Southwestern Pennsylvania Grants Program. a. The grant was issued under Grant Reference No. 20020515. 38. Denova advised McCracken via e-mail on December 11, 2003 that the grant was approved for $260,000.00 and that a letter of agreement would be arriving soon. 39. Ellsworth was aware as early as July 2003 that Prosocial would be utilized by Rembold as the evaluator of future grants. a. In e -mail communication to McCracken dated July 28, 2003, Ellsworth wrote, "... It is clear to me that Chuck is engaging in the `scratch each others back' venue..." 1. This was in reference to grants and Rembold's utilization of friends as facilitators. 40. Rembold and McCracken met between the approximate dates of November 3, 2003 and December 12, 2003 and discussed the $30,000.00 set aside for the outside evaluation. a. Rembold devised the scheme where Prosocial would be utilized as the outside consultant for the Benedum grant issued. 1. Rembold informed McCracken that Prosocial would be the grant evaluator. b. Rembold developed the plan that the $30,000.00 paid to Prosocial for the evaluation was to be divided between Rembold, McCracken, and Ellsworth. c. Ellsworth was not aware that Rembold was serving as a public official in relation to the grant and evaluation component. 41. Ellsworth was provided information from Rembold through McCracken that Prosocial would be the evaluator for the project and was provided with general guidance on how the evaluation was to be completed. a. E -mail communication from McCracken to Ellsworth detailed results of a conversation held between Rembold, McCracken, and Menhart as follows: 1. Rembold directed McCracken to give Ellsworth a copy of their last Community Technology Center Grant, a copy of the Community Technology Center guidelines, and the information in the contract with the Benedum so that a "blue ribbon" award Community Technology Center Grant could be submitted in the summer of 2004. 2. Rembold and Menhart wanted the evaluation to be done quarterly (four months, eight months, twelve months, and sixteen months) and to be formative and summative. Ellsworth, 05 -028 Page 10 aa. McCracken noted in the e -mail that this would be Ellsworth's decision. 3. Rembold wanted the evaluation to measure affective [sic] results as well as just data collection. 4. The total for the evaluation would be $30,000.00 and divided into five payments, $6,000.00 to begin for planning, design, etc., and then $6,000.00 at each quarter following the quarterly report. aa. Ellsworth was to invoice the IDA directly for services performed. 5. Ellsworth never received a written contract to act as the evaluator. a. Ellsworth suggested quarterly updates and billings. b. Ellsworth did not suggest quarterly evaluations as the program was better suited for midpoint formative and end of program summative. 42. Subsequent to McCracken's meeting with Rembold, McCracken conveyed to Ellsworth Rembold's direction regarding the division of funds. a. Ellsworth agreed with the division of the evaluation funds and advised McCracken of such in an e-mail dated December 12, 2003. b. Ellsworth stated in an e-mail to McCracken dated December 12, 2003, among other information, "I need to understand how Chuck wants the $30K divided again, just to be sure." 43. McCracken responded to Ellsworth's message via e -mail communication on December 12, 2003, which documented the following: "Chuck just spent several minutes trying to explain to me on how he wants this done -the money thing -I will try to do this the best I can; you may still have to have him explain it to you. He asked if you understood the big picture —for all of us to make money -now and in the future? He wanted to know if you understood that he needed money to help pay his legal fees? OK, here I go. The $30,000 will be divided by 3 (you, me, and him) which equals $10,000 per person. $1,000 from each of us will go to Prosocial for administrative costs and taxes. Taxes: 15% of profit. Costs are 80% deductible (with detailed records). 80% of $30,000 = $24,000 as costs. $6,000 as profit for Prosocial. 15% Taxes for Corporate which is .15 x 6000 = $900 corporate taxes on $30,000. $3000 -$900 = $2100 as profit for Prosocial. Then a new wrinkle; he wants you to pay ET $1500 for consultant services which would leave $600 in Prosocial. I asked why ET; he said two things, one he owes ET some money and secondly it gives ET a legit reason (Brenda) to meet and work with us. He said that all three of us need to keep /document all expenses -when you come here, when we go see you, etc. He says this is only a beginning; as we are successful with future grants you will always be the evaluator. I hope I have explained it clearly enough. Can you live with this? Oh, he wants us to be paid in cash. It doesn't make a difference to me how you pay me if some other way works out for you. Tell me what you think." a. Rembold provided McCracken with all of the information in the e-mail Ellsworth, 05 -028 Page 11 communication for ultimate dissemination to Ellsworth. b. McCracken provided the information to Ellsworth from Rembold's handwritten notes. 1. Analysis by the Pennsylvania State Police verified that Rembold's handwriting is consistent with the written notes utilized by McCracken to disseminate the information. c. "ET" is Rile Edgar Thacker, a partner of Rembold in King's Bridge Inc. d. "Brenda" is Brenda Spratt (Thacker's spouse). 44. Ellsworth acknowledged acceptance of and inclusion in the financial arrangements devised by Rembold via e-mail response sent to McCracken on December 12, 2003, which documented the following: We will make it work, no problem, but the math is a bit fuzzy, as at this time, one can only estimate. However, it sounds like of the 30,000, I get 12000, and you and Chuck get 9000 each. On top of that, we each divvy up ET's share which will be 500 each, so in reality, I get 11500, and you and Chuck get 8500. My share is larger as I have to bear the cost of the taxes, while Chuck's share is tax -free essentially as it is under the table. Your share would be taxable. That is how I read this." 45. The actual division of funds based upon Rembold's instruction to McCracken was to result in Rembold, McCracken, and Ellsworth each receiving $9,000.00 as shown below: Rembold: $9,000.00 McCracken $9,000.00 Ellsworth: $9,000.00 Thacker: $1,500.00 Prosocial: $ 600.00 Taxes: $ 900.00 Total: $30,000.00 a. The amounts for Thacker, Prosocial, and Taxes were to be paid via $3,000.00 of the $30,000.00 evaluation total. 1. The $3,000.00 resulted from a credit of $1,000.00 each from Rembold, Ellsworth, and McCracken of the original $30,000.00 three - way split. b. Prosocial's profit on the books was $6,000.00 or 20% of $30,000.00 as 80% of the total $30,000.00 could be deducted for tax purposes. c. The amount of taxes was calculated at 15% of the profit to Prosocial. 46. Ellsworth's participation in the arrangement and his agreement to return funds to Rembold is confirmed in his e -mail of December 12, 2003. a. Ellsworth received assurances from Rembold via the 12/12/03 e -mail from McCracken that he (Prosocial) would always be the evaluator for future grants. 47. The Benedum Foundation issued the IDA check number 2204, dated December 16, Ellsworth, 05 -028 Page 12 2003, in the amount of $260,000.00 representative of the grant issued. a. The check was deposited into an IDA account at First National Bank (Account No. 200386084) on January 6, 2004. b. The check documented the Grant Reference No. 20020515 in the memo section. 48. The Benedum Foundation Grant received was discussed at the IDA board meeting of December 18, 2003. a. Rembold was present at the December 18, 2003 meeting. 49. Six days after Ellsworth's e -mail communications with Rembold via McCracken, when he agreed to pay Rembold, Rembold recommended to the IDA board that Prosocial serve as the grant evaluator. a. During the December 18, 2003 IDA board meeting when the grant was discussed, Rembold, as President of the IDA board, specifically recommended the use of Ellsworth's company Prosocial. b. Ellsworth was not aware that Rembold ws [sic] serving as a public official in his role with IDA. 50. Following Rembold's recommendation, IDA board member Richard "Skip" Naftzger questioned if any of the board members knew anything about Prosocial. a. Rembold was the only board member responding, and stated that Prosocial had expertise in the area required for the evaluator. b. No IDA board members other than Rembold, had any knowledge of Prosocial prior to Rembold's recommendation. 51. The IDA board unanimously voted to employ Prosocial as the grant evaluator for a fee not to exceed $30,000.00 and to have Prosocial responsible for quarterly reports and the grant closeout. a. The motion was approved based on Rembold's recommendation of Prosocial. b. Ellsworth never received a written contract to act as evaluator. 52. Ellsworth /Prosocial did not submit quarterly reports to the IDA as documented in the motion to retain Prosocial. a. Ellsworth provided only an Evaluation Framework, an Interim Evaluation (dated November 30, 2004), and a Summative Evaluation (dated August 31, 2005) with abridgements of an IDA narrative added on November 30, 2005. 1. The Evaluation Framework provided background regarding the purpose of the grant issued, the program goal, the method by which the evaluation would be conducted, various models considered for the evaluation, and specific evaluation plan phases regarding the evaluation. 2. The Interim Evaluation provided background on the grant issued by Invoice No. Invoice Date Amount Description 004 -01 PA 01/12/2004 $6,000.00 Consulting Services: Program Evaluation, Research Model Determination, Set -Up for Quarterly Reports, Data Collection and Program Advisement for First Quarter Project Initiation, Review the USDOE COMM -TEC Grant Proposal. Vitae for Dr. Stephen C. Ellsworth is attached for inclusion in the GCIDA files 004 -02PA 07/15/2004 $6,000.00 Consulting Services: Program Evaluation, Research Model Determination, Set -Up for Quarterly Reports, Data Collection and Program Advisement for Second Quarter project initiation. 004 -03PA 12/15/2004 $6,000.00 Consulting Services: Interim Program Evaluation, Research, Data Collection, and Program Advisement for Third Quarter 2004. 005 -02PA 02/10/2005 $6,000.00 Consulting Services: Interim Formative Evaluation 005 -03PA 12/20/2005 $2,000.00 Data treatment, summative project evaluation, consulting and evaluation services completion Ellsworth, 05 -028 Page 13 the Benedum Foundation, the program goal, actual figures utilized regarding the goals, and Ellsworth's conclusion that the program initiation was successful, meeting, or was on track in meeting the specified and implied tasks of achieving the desired goals. 3. The Summative Evaluation was an all- encompassing report which included the Evaluation Framework, the Interim Evaluation, and updated data analysis regarding the entire program. 53. Information (i.e. data, figures, etc.) utilized by Ellsworth in compiling the Interim Evaluation and the Summative Evaluation was compiled and provided by McCracken. a. Rembold was not involved in the organization, analysis, or reporting of any data utilized in the production of the Interim or Summative Evaluation. 54. Ellsworth, acting as Prosocial, submitted five invoices totaling $26,000.00 to the IDA requesting payment for services rendered in association with the evaluation for the Community Technology project funded by the Benedum Foundation Grant as shown below: a. All invoices received document Prosocial's address of 351 Buna Road, Fort Lee, VA, 23801 with the exception of Invoice No. 005 -03PA 1. Invoice No. 005 -03PA, the most recent invoice submitted, documented a new address of 5850 Cameron Run Terrace, # 1524, Alexandria, VA, 22303. 2. These are addresses utilized by Ellsworth. b. All invoices received document customer information as Donald Chappel, Director, IDA, 19 South Washington Street, Suite 150, Waynesburg, Pa, 15370. Meeting Date Check Number Check Date Rembold's Vote Final Vote April 21, 2004 5634 03/29/04 Yes 4 -0* August 18, 2004 6003 07/26/04 NA 4 -0 January 19, 2005 6423 01/04/05 NA 5 -0 May 18, 2005 6732 04/20/05 NA 4 -0 Ellsworth, 05 -028 Page 14 c. All invoices received note "Check" as the payment method to be utilized. 55. Between the dates of March 29, 2004 and April 20, 2005, the IDA approved payment and issued four checks from the IDA general account at Community Bank totaling $24,000.00 to Prosocial as shown below: * Board Member Jerome Bartley was absent from the April 21, 2004 meeting. a. Rembold participated in voting to approve check number 5634 noted above. 1. Rembold resigned as an IDA board member on June 30, 2004. b. The IDA has not yet approved payment for Invoice No. 005- 003PA. 56. On November 5, 2004, Ellsworth again verified his support of and participation in the existing Benedum Grant kickback scheme and future schemes devised by Rembold via multiple e -mail correspondence among Rembold, McCracken, and Ellsworth which documented, in part, the following: a. Ellsworth to McCracken: "ET suggests that some Benedum Funds be used to incorporate another corporation. That does not sound right, unless the two are directly linked. What are your thoughts ?" b. Rembold to Ellsworth: "Linda shared your concern about the money from the Benedum to create Syn- Energy, Solutions, Inc. Money is money and your share from the Benedum is $8,000.00 and Linda's is $8,000.00. That leaves $4,000.00 to cover taxes and expenses. When we do the PULSE training in Dec more money is coming. What is wrong with using the Benedum money now to do what we need to do and repaying the account when more money is available? I'm concerned about your concern. As long as we all share equally in the profits, we all need to share the expenses. KBI gave you $1,000.00 to create the non - profit Pro - Social. Ed and I had no concern about that -we knew eventually we would all benefit. We need you to have the same faith. I guess I'm rambling. Chuck." c. Ellsworth to Rembold: The point that I am making is merely to ensure that we do not do anything that could cause problems or controversy. The future is bright, with much potential revenue and growth, and addressing concerns now is far better than addressing them in the future." d. McCracken to Ellsworth: ". . . Chuck walked in as I was checking my e -mail and I shared your concern; I didn't see what he wrote. All he said to me is that the Benedum money is your /Prosocial monies [sic]. He has left already." Check Number Check Date Deposit Date 5634 03/29/04 04/02/04 6003 07/26/04 07/29/04 6423 01/04/05 01/07/05 6732 04/20/05 04/25/05 Ellsworth, 05 -028 Page 15 e. Ellsworth to McCracken: "I am looking forward to coming up there in Dec, as we (especially me) need a much better handle on bookkeeping procedures." 57. Ellsworth did not understand that Rembold wanted him to pay for the incorporation from his personal earnings but rather believed that Rembold was to use funds earmarked for the technology training. 58. Prosocial maintains a checking account with Suntrust Bank in Virginia. 59. All checks received by Prosocial from the IDA were deposited into Prosocial's account at Suntrust on or about the dates shown below: 60. Ellsworth /Prosocial issued three payments to McCracken totaling $6,000.00 in partial fulfillment of the distribution of the funds directed by Rembold. a. Ellsworth provided McCracken a personal check from his checking account in the amount of $2,000.00 on or about April 27, 2004. b. Ellsworth provided McCracken with $1,800.00 in cash on or about July 17, 2004. c. Ellsworth provided McCracken with $2,200.00 in cash on or about September 8, 2004. 61. McCracken maintains a personal checking account at Community Bank in Carmichaels, Pa 15320. a. McCracken did not deposit any of the funds issued to her from Ellsworth /Prosocial into her personal checking account at Community Bank. b. McCracken kept the funds Ellsworth paid her separate from her legitimate income. 1. McCracken utilized the funds from Ellsworth for general spending. 62. Prosocial Solutions made two payments to Rile Edgar Thacker from the Prosocial account. a. By check dated January 6, 2005, Ellsworth paid Thacker $753, for the incorporation of a company named Syn- Energy, Inc. 1. Syn- Energy was to be a successor to Kings Bridge, Inc. b. By check dated January 6, 2005, Ellsworth paid Thacker $2,000 for advice on tax return preparation for Prosocial Solutions. 63. Thacker did nothing for the $2,000 other than send Ellsworth some written material Date Cash Deposit 12/1/2003 400.00 12/9/2003 850.00 3/22/2004 1,000.00 4/16/2004 500.00 6/7/2004 1,850.00 6/15/2004 1,500.00 6/25/2004 1,000.00 8/31/2004 1,000.00 9/13/2004 2,000.00 9/21/2004 400.00 11/16/2004 700.00 12/15/2004 2,000.00 12/22/2004 1,500.00 12/29/2004 400.00 Total $15,100.00 Ellsworth, 05 -028 Page 16 and provide some telephonic tax advice. 64. Ellsworth paid Thacker the $2,000 at Rembold's direction. 65. Rembold performed no duties or services in relation to the grant evaluation to warrant his request of $9,000 from Ellsworth. a. Rembold's sole role was to recommend Ellsworth /Prosocial be chosen as the evaluator in return for a portion of the grant funds. 66. No payments to Rembold from Ellsworth /Prosocial were made by check. a. Ellsworth was specifically instructed by Rembold through the December 12, 2003 e -mail communication from McCracken that all payments to Rembold were to be made in cash. b. Rembold effectively concealed any payments made to him by directing that the payments be made in cash. 67. Rembold and Beverly Rembold (Rembold's spouse) maintain a joint personal checking account with Community Bank in Carmichaels, Pa, 15320. a. Deposit information from Rembold's account spanning the time frame of December 2003 through June 2005 when Ellsworth was being paid by the IDA, documents unexplained cash deposits into Rembold's account totaling $15,100.00 as shown below: 68. Payment by Prosocial to Rembold in accordance with Rembold's solicitation was made as follows: a. Payment of $2,000 in cash on July 24, 2004. b. Payment was made by Ellsworth in Charlottesville, Virginia, in the form of twenty, one hundred dollar bills. Ellsworth, 05 -028 Page 17 c. The money was provided to Rembold in a white envelope in Rembold's motel room. d. This money was paid as a result of Rembold's previously delineated solicitation. III. DISCUSSION: Respondent, Stephen C. Ellsworth (Ellsworth), is a United States citizen who is subject to Section 1103(b) 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 Ellsworth violated Section 1103(b) of the Ethics Act when he, as an official of Prosocial Solutions Inc. (Prosocial), agreed to pay something of monetary value, a reward including payment or a promise of future employment to Charles Rembold (Rembold), Chairman of the Greene County Industrial Development Authority, based on an understanding that Rembold's official action as a public official, including making a recommendation to award a contract to Prosocial, would be influenced thereby. Section 1103. Restricted activities (b) No person shall offer or give to a public official, public employee or nominee or candidate for public office or a member of his immediate family or a business with which he is associated, anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment based on the offeror's or donor's understanding that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. 65 Pa.C.S. § 1103(b). Section 1103(b) of the Ethics Act provides in part that no person shall offer to a public official /employee anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /employee would be influenced thereby. 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. Ellsworth has been an officer in the U.S. Army, a grant reviewer for the U.S. Department of Education and Justice Department and a Criminal Justice professor at St. Leo University. In a private capacity, Ellsworth is the sole owner and operator of a consulting business, Prosocial. Prosocial provides various services, including grant acquisition and project implementation, management and evaluation. Ellsworth maintains both a professional and social relationship with Rembold. Ellsworth developed a Plus Three Program that was provided to Kings Bridge, Inc., a business with which Rembold is associated, for utilization in the People Utilizing Leadership Skills Effectively (PULSE) program. From at least February 2001, Rembold utilized Ellsworth as a compensated facilitator at various PULSE programs. Rembold also served as a member of the Greene County Industrial Development Authority (IDA) from Ellsworth, 05 -028 Page 18 July 1996 to June of 2004 when the County Commissioner sought his resignation due to the negative publicity from Rembold, Order 1303. In that the IDA functions for economic development in Greene County through the creation, attraction and retention of business, Rembold routinely recommended the pursuit of available grants for which IDA would serve as fiscal agent or administrator. In 2002 and 2003, Rembold pursued grants for the IDA through the 21 Century Community Learning Center's Program (Program). The Program was established by Congress for the purpose of awarding grants to rural and inner city public schools. For Greene County, the Program is an educational partnership coalition that provides educational, health, social services, cultural and recreational opportunities for students. Linda McCracken, the Program Director, assisted Rembold with the filing of grant applications. Both Rembold and Ellsworth, who was unaware that Rembold's position on the IDA made him a public official, maintained a professional relationship with McCracken. In 2002, IDA in conjunction with the Program, the Greene County Education Consortium (Education Consortium), Greene County Technology Consortium, PBS Literacy Link, and the Childcare Program of Greene County pursued grant funds from U.S. Department of Education for the development of technology centers. In June of 2002, Rembold, as IDA President, submitted an application to the U.S. Department of Education for the Greene County Community Technology Center Program seeking a $300,000 grant. After Rembold received notification that the U.S. Department of Education would not fund the application, he submitted a second application in July of 2003 to the U.S. Department of Education for the Greene County Community Technology Center Program for funding in the amount of $497,000. In October of 2003, the IDA received notice that the U.S. Department of Education did not recommend funding. For both grant applications, the outside consultant for program evaluation was listed as Ellsworth. In the Fall of 2003, the IDA sought grants through the Claude Worthington Benedum Foundation (Benedum Foundation). The Benedum Foundation provides funding for education, work force development, economic development, health and human services and community development in West Virginia and Southwestern Pennsylvania. In July of 2003, Rembold participated in a meeting with James Denova, a Senior Program Officer for the Benedum Foundation, which is primarily proactive in soliciting projects for funding. Subsequently, in October of 2003, Denova again met with Rembold, McCracken and Menhart, the IDA Director of Special Projects, to further discuss the grant from the Benedum Foundation to fund the Community Technology Centers. In November 2003, the Benedum Foundation determined that a grant in the amount of $260,000 would be awarded to the IDA. In December of 2003, Denova, in a meeting with the Benedum Foundation Board of Trustees, presented a program staff write up that summarized the details of the IDA project. The presentation by Denova also included funding of $30,000 for an evaluation of the program. After the Benedum Foundation Board of Trustees confirmed the approval of the $260,000 grant to the IDA, Denova informed McCracken of the grant's approval. Ellsworth was aware as early as July of 2003 that Rembold would utilize Prosocial as an evaluator for future grants. Rembold set up a scheme whereby Prosocial would be utilized as an outside consultant vis -a -vis the Benedum grant. From the $30,000 paid to Prosocial, that amount would be divided among Rembold, McCracken and Ellsworth. To that end, Ellsworth was provided with information from Rembold through McCracken that Prosocial would be the evaluator for the project. Rembold and Menhart wanted the evaluations to be done quarterly and be both formative and summative. It was proposed that Ellsworth would invoice the IDA directly for services performed and receive five payments of $6,000 each. Ellsworth, 05 -028 Page 19 After McCracken met with Rembold, McCracken conveyed to Ellsworth how Rembold directed the division of the funds. The $30,000 would be divided up according to Rembold's instruction with Rembold, McCracken and Ellsworth each receiving $9,000. As to the remaining $3,000, Thacker, a partner of Rembold in King's Bridge, Inc., would receive $1,500. As to the remainder, $600 would be paid to Prosocial and $900 would be allocated for taxes. Ellsworth agreed to participate in the arrangement and return funds to Rembold as per an e-mail of December 12, 2003. Rembold, through an e -mail from McCracken, gave assurances to Ellsworth that Prosocial would always be the evaluator for future grants. The Benedum Foundation issued a check in the amount of $260,000 to the IDA in December of 2003. Shortly thereafter, Rembold recommended to the IDA Board that Prosocial serve as the grant evaluator. As noted, Ellsworth was not aware that Rembold was serving as a public official in his role with the IDA. When Rembold recommended Prosocial, one of the IDA Board Members asked if any of the Board Members had information about Prosocial. Rembold responded that Prosocial had expertise in the area required as an evaluator. The IDA Board unanimously voted to appoint Prosocial as the grant evaluator for a fee not to exceed $30,000 with Prosocial providing quarterly reports. The motion was approved based upon Rembold's recommendation of Prosocial. Prosocial did not submit quarterly reports to the IDA. Ellsworth only provided an Evaluation Framework, Interim Evaluation and Summative Evaluation. The information utilized by Ellsworth in compiling the Interim Evaluation and Summative Evaluation was provided by McCracken. Ellsworth, through Prosocial, submitted five invoices totaling $26,000 to the IDA requesting payment for services rendered as to the evaluation of the project funded by the Benedum Foundation grant, the details of which appear in Fact Finding 54. Between March of 2004 and April 2005, the IDA approved payments and issued four checks to Prosocial totaling $24,000. See, Fact Finding 55. Rembold participated in voting to approve one of the checks. After Rembold resigned as an IDA Board Member on June 30, 2004, the IDA has not approved payment of the fifth invoice in the amount of $2,000 from Prosocial. In a series of e -mail correspondence on November 5, 2004, among Rembold, McCracken and Ellsworth, the participation in the existing Benedum Grant kickback scheme was confirmed. See, Fact Finding 56. The four checks that Prosocial received from the IDA were deposited into a Prosocial account. Thereafter, Prosocial issued three payments to McCracken totaling $6,000 in partial fulfillment of the disbursement of the funds as directed by Rembold. Prosocial also made two payments to Thacker: a check in the amount of $753 for the incorporation of a company named Syn- Energy, Inc. as a successor to Kings Bridge, Inc.; and a check to Thacker in the amount of $2,000 for tax preparation advice. Thacker did not provide any advice to Ellsworth other than to send him some written material and provide some telephonic tax advice. As to Rembold, he performed no duties or services in relation to the grant evaluation. To the contrary, Rembold's sole role was to recommend Prosocial for the position of evaluator in return for a portion of the funds. No payments from Prosocial were made by check to Rembold who insisted that he be paid in cash. In this regard, Rembold and his spouse maintained a joint personal checking account wherein cash deposits totaling $15,100 were made from December 2003 through December 2004. Such cash deposits occurred when Ellsworth was being paid by IDA. Prosocial made payments to Rembold in cash consisting of $2,000 in July of 2004. Ellsworth, 05 -028 Page 20 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 an unintentional violation of Section 1103(b) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(b) occurred based on the fact that Ellsworth was unaware that Rembold, in his position with the IDA, was a public official when he was participating in the acquisition of the IDA grant and IDA's selection of Prosocial to perform the evaluation component under said grant. 4. Ellsworth agrees to make payment in the amount of $1,000.00 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter." Consent Agreement, ¶3, ¶4. In applying the provisions of Section 1103(b) of the Ethics Act to the stipulated findings, we initially note that this Section applies to persons in general and not just to public employees and public officials. The prohibition of this Section encompasses solicitation or acceptance of anything of value that is based upon the offeror's /donor's understanding that the vote, official action or judgment of the public official or public employee would be influenced thereby. In applying Section 1103(b) of the Ethics Act to the facts of record, Rembold was a public official in his capacity as an IDA Board member. With the IDA being the recipient of a Benedum Foundation Grant in the amount of $260,000, Rembold engaged in two courses of action. First, as an IDA Board Member, he prevailed upon the Board to enter into a $30,000 contract with Prosocial to perform a program evaluation. The second course of action by Rembold was to engage Ellsworth of Prosocial to enter into this arrangement with the IDA so that Rembold and others could obtain portions of that consulting fee for themselves. Ellsworth, not knowing that Rembold was a public official with his Board membership on IDA, went along with the arrangement. Prosocial entered into the arrangement with IDA for the ostensible purpose of providing the evaluation in return for $30,000. In actuality, Rembold structured the arrangement so that part of the $30,000 would be kicked back to him (Rembold) and other individuals. For the details of the actual breakdown of how the $30,000 was intended to be utilized, see Fact Finding 45. In this case, Ellsworth was willing to give Rembold $9,000 from the $30,000 relating to the consulting evaluation report from Prosocial. In return, Rembold as an IDA member had the understanding that his official action and judgment would be influenced whereby he would advocate and participate in the process of the IDA to award the contract to Prosocial to do the evaluation report. Under these factual circumstances, all of the requisite elements for a violation of Section 1103(b) of the Ethics Act occurred in this case. The parties have stipulated to an "unintentional violation" of Section 1103(b) of the Ethics Act. Although we recognize that conceptually an "unintentional" violation of Section 1103(b) of the Ethics Act is unlikely to occur, we accept the Consent Agreement as part of the overall settlement by the parties. Ellsworth, 05 -028 Page 21 Accordingly, "...an unintentional violation of Section 1103(b) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(b) occurred based on the fact that Ellsworth was unaware that Rembold, in his position with the IDA, was a public official when he was participating in the acquisition of the IDA grant and IDA's selection of Prosocial to perform the evaluation component under said grant." Id. See, Myrsiades, Order 1301; Dietrich, Order 1067. 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, Ellsworth is directed to make payment in the amount of $1,000.00 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. 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. Stephen E. Ellsworth, a private citizen, is subject to the provisions of Section 1103(b) of Act 9 of 1989 as codified by Act 93 of 1998. 2. "... [A]n unintentional violation of Section 1103(b) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(b) occurred based on the fact that Ellsworth was unaware that Rembold, in his position with the IDA, was a public official when he was participating in the acquisition of the IDA grant and IDA's selection of Prosocial to perform the evaluation component under said grant." In Re: Stephen C. Ellsworth, Respondent ORDER NO. 1416 File Docket: 05 -028 Date Decided: 10/4/2006 Date Mailed: 10/20/2006 1 "... [A]n unintentional violation of Section 1103(b) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(b) occurred based on the fact that Ellsworth was unaware that Rembold, in his position with the IDA, was a public official when he was participating in the acquisition of the IDA grant and IDA's selection of Prosocial to perform the evaluation component under said grant." 2. Per the Consent Agreement of the parties, Ellsworth is directed to make payment in the amount of $1,000.00 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. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair