HomeMy WebLinkAbout1434 TancrediIn Re: Joseph Tancredi,
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 -050
Order No.1434
3/27/07
4/11/07
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 ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the
commencement of its investigation, the Investigative Division served upon Respondent
written notice of the specific allegations. Upon completion of its investigation, the
Investigative Division issued and served upon Respondent a Findings Report identified as
an "Investigative Complaint." An Answer was filed and a hearing was requested. A
Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were
subsequently submitted by the parties to the Commission for consideration. The
Stipulation of Findings is quoted as the Findings in this Order. The Consent Agreement
has been approved.
This adjudication of the State Ethics Commission is issued under the Ethics Act 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 the Ethics Act. Any
person who violates such confidentiality commits a misdemeanor and, upon conviction,
may be 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.
Tancredi, 05 -050
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I. ALLEGATIONS:
That Joseph Tancredi, a public official /public employee, in his capacity as Chairman
and Member of the Shenandoah Municipal Authority, Schuylkill County, violated Sections
1103(a); 1104(a), (d); 1105(b)(5), (8), and (9) provisions of the State Ethics Act (Act 93 of
1998), 65 Pa.C.S. § §1103(a), 1104(a), (d); and 1105(b)(5), (8), and (9) when he used the
authority of his office for a private pecuniary gain, including but not limited to claiming,
submitting, and receiving expense payments for attendance at American Waterworks
Conventions in excess of actual expenses incurred; when he submitted and received
reimbursement from the SMA for expenses for attendance at AWW conventions which he
did not attend and which were personal in nature; and when he failed to file a Statement of
Financial Interests with the authority for the 2003 calendar year by May 1, 2004 and then
subsequently filed a backdated form to give the impression that the form was timely filed;
and when he failed to report on Statements of Financial Interests filed for the 2002, 2003,
2004, and 2005 calendar years all sources of income in excess of $1,300, any office,
directorship, or employment of any nature whatsoever in any business entity, and any
financial interest in any legal entity engaged in business for profit.
II. FINDINGS:
1. Joseph Tancredi has been serving as Chairman and Member of the Municipal
Authority of the Borough of Shenandoah for approximately the past fifteen (15)
years.
2. As a Board Member /Chairman, Joseph Tancredi is responsible for performing the
following duties:
a. Preside over board meetings.
b. Participate in board votes to approve or disapprove financial aspects
involving the Authority and /or its members.
c. Review bids submitted on behalf of companies.
d. Hire employees and /or companies to work for the Authority.
e. Oversee the operations of the Authority and implement improvements when
necessary.
f. Provide signatures on checks, checks requests, and expense reports to
approve payments.
g. Enter into contractual agreements with entities on behalf of the Authority.
3. The Authority was incorporated on October 14, 1941, for the purpose of acquiring,
holding, constructing, improving, and monitoring water works, water supply works,
and water distribution system in Shenandoah Borough, and Mahoney Township.
4. The BSMA is operated by a five (5) member Authority Board.
a. Board members are appointed by Shenandoah Borough Council.
b. Board members are appointed by council to five year terms.
5. Since April 1, 1952, Authority operations have been managed by a subsidiary
company of American Water Works.
Tancredi, 05 -050
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a. Throughout the years the name of the management company has changed.
b. The current name of the management company is American Commonwealth
Management Services Company Incorporated (ACMS).
6. The current agreement between ACMS and the Authority was entered into by the
Authority Board on November 30, 1995.
7 As a result of the management agreement between the BSMA and ACMS, ACMS
agreed to provide the Authority with the following services:
a. Provide a team of professional personnel for management services for the
Authority and water system.
b. Maintain complete and accurate books and records relating to the business
in accordance with generally accepted accounting principles.
c. Make expenditures and disburse funds in accordance with budget and policy
guidelines approved by the Authority.
d. Prepare and provide on a quarterly basis statements of revenue and
expenses.
e. Assist in the preparation of rate schedules and annual budget for the
Authority.
f. Attend required Authority and regulatory agency meetings.
8. Joseph Faley, Project Accountant, ACMS was the ACMS representative to the
Authority.
a. Faley's actual duties performed for the Authority included but were not
limited to the following:
1. Attend Authority Board meetings which are held quarterly.
2. Present quarterly reports at board meetings to inform the members of
issues involving the Authority.
3. Procure equipment and products at a cheaper rate to be used by the
Authority.
4. Manage /oversee financial aspects for the Authority and its board
members.
5. Provide signatures on checks, check requests, and expense reports
to approve and /or request payments.
9. Each year, Joseph Faley receives notifications from the American Water Works
Association informing him of upcoming conventions scheduled to be held.
a. The purpose of AWWA conventions is to inform the pubic and individuals
within the industry of new procedures and technologies that can be used to
improve the quality /supply of water.
b. Faley will inform the Authority Board of the convention notices he receives
and provide them for review.
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10. The annual conference is the largest event that the American Water Works
Association sponsors.
a. The annual conference is usually held during the month of June and lasts for
5 days.
b. Approximately 10,000 to 13,000 individuals typically attend the conferences
which are held in major cities.
11. Due to the large number of attendees, registration with the AWWA is required.
12. Faley, at an Authority Board meeting held on May 15, 2002, informed those
members in attendance that the American Water Works Association has made
plans to hold its annual conference in New Orleans, LA from June 16, 2002,
through June 20, 2002.
a. Faley informed the board that safety issues relating to water systems
because of terrorism would be addressed at the convention.
b. Faley recommended that someone from the board consider going.
13. Minutes from the Authority's May 15, 2002, meeting include the following recorded
discussion on the 2002 New Orleans convention:
a. "Joe Faley said that there are two conventions — AWWA and PMAA
(Pennsylvania Municipal Authority Association), and at various times, the
authoritie's (sic) he has goes to them. The one this year for AWWA is in
New Orleans and there's a lot on this agenda, especially safety issues with
water systems — because of terrorism. Joe Faley recommends the board or
someone from the board consider going. Faley said he has material on the
convention for anyone to review.
Chairman Tancredi said the whole board is welcome to go. That he wants to
go, because, he has never been at a convention in the 15 years he's on the
board, so he will go to this one.
Date of convention is June 16 — 20.
On motion of Joseph Yezulinas, seconded by Donna Kulpowicz, with all ayes
— no nays, approval was given to attend the convention at New Orleans.
Joseph Faley also extended going to this convention to Loretta Dallazia,
Authority Supervisor and Gino Bruni, Chief Plant Operator. This to be
included in the above motion approval."
b. This motion passed by a 4 -0 margin with members Joseph Tancredi, Samuel
Matta, Joseph Yezulinas, and Donna Kulpowicz present.
14. On or about April 11, 2002, Board Member Samuel Matta contacted Katrina's Travel
Agency to make flight arrangements for him and Tancredi for a trip to New Orleans,
LA.
15. Tancredi learned of the convention prior to the May 15 meeting as he advised
Failey to bring up the convention and board attendance at the convention for
consideration at the May 15 meeting.
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16. On April 11, 2002, Katrina Lennartz, President /General Manager for Katrina's
Travel Agency generated an invoice billing Samuel Matta's personal Visa credit
card number )000( )000( )000( 3197 in the amount of $656.00 for 3 round trip
tickets to New Orleans, LA aboard US Airways.
a. The Authority does not have a credit card that can be used to pay Authority
expenses.
b. Tickets were purchased for Matta, Tancredi, and his wife Isabel Tancredi.
17. Katrina's Travel Agency invoice (itinerary receipt #109713) dated April 11, 2002,
confirmed that the following travel arrangements were made for Samuel Matta,
Joseph Tancredi, and Isabel Tancredi (wife of Joseph Tancredi) regarding the New
Orleans trip:
Date: June 15, 2002
Flight: US Airways 997V
Departure: Philadelphia, PA 8:20 AM
Arrival: New Orleans, LA 10:35 AM
Individuals: Joseph Tancredi
Seat 20 -F
Isabel Tancredi
Seat 20 -E
Samuel Matta
Seat 21 -F
Date: June 19, 2002
Flight: US Airways 975V
Departure: New Orleans, LA 10:45 AM
Arrival: Philadelphia, PA 2:39 PM
Individuals: Joseph Tancredi
Seat 11 -D
Isabel Tancredi
Seat 11 -E
Samuel Matta
Seat 11 -C
18. The charges Matta incurred to book the flight arrangements for himself, Joseph
Tancredi, and Isabel Tancredi through Katrina Travel were as follows:
Cl-- e Description of Charges
$480.00 3 round trip tickets
$ 20.00 Service Charge
$ 60.00 Service Fee
$ 96.00 Tax
Total: $656.00
a. Katrina Travel actually booked the flights with US Air.
19. The 2002 AWWA convention in New Orleans had activities scheduled from 9:00
a.m. on June 15, 2002, through 10:00 p.m. on June 19, 2002.
a. Daily activities began no later than 9:00 a.m. and typically ended by 7:00
p.m. with the exception of an evening session held on June 19, 2002, from
7:00 p.m. to 10:00 p.m.
b. Attendees were charged additional amounts to attend certain event
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sessions.
1. These additional charges ranged from $8.00 to $350.00.
20. General training sessions during the 2002 convention included topic areas such as:
a. Counter terrorism and security in the water industry.
b. Arsenic removal compliance.
c. Understanding and controlling the taste and odor of drinking water.
d. Regulatory issues.
21. Tancredi and Matta both missed the morning of June 15, 2002.
b. Neither were present for June 19, 2002.
22. Between June 15, 2002, and June 19, 2002, the Tancredis stayed in the New
Orleans Marriott Hotel located at 555 Canal Street, New Orleans, LA 70140.
a. Marriott records confirm that on June 15, 2002, the Tancredis arrived at the
hotel at 11:54 a.m. and departed on June 19, 2002.
1. Tancredi's return flight departed at 10:45 a.m. on June 19, 2002.
23. The New Orleans Marriott was one of several sites AWWA convention events were
held between June 15, 2002, and June 19, 2002.
24. For an individual to attend and gain admission to the conference, a registration fee
was required to be paid.
25. Financial records of the BSMA include no payments made to the AWWA for
registration and /or other fees associated with attending the 2002 convention.
a. Neither Tancredi nor Matta expended any personal funds to cover those
costs.
26. Business records of the AWWA include no record of Tancredi or Matta attending
seminars or other workshops associated with the 2002 convention.
27. Tancredi did not attend any workshops, seminars or training associated with the
2002 AWWA convention in New Orleans, LA.
a. Upon arrival at the conference site, Tancredi became ill with a respiratory
problem and was unable to attend the conference sessions.
28. Tancredi did not provide any information or reports to BSMA board members on the
2002 convention during subsequent board meetings.
a. Tancredi did submit an expense reimbursement request for payment.
29. For an Authority Board Member to be reimbursed for expenses that he or she
incurred while attending a convention, an Expense Claim Form must be filled out by
the board member.
a. Attached to the form should be copies of the invoices /receipts that document
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the expenses for which reimbursement is being requested.
b. Once the expense claim form is completed, it is submitted to Joseph Faley
for auditing.
c. Completed forms should be signed by the member who submitted it and
Joseph Faley as auditing it.
30. Once the Expense Form is completed and audited, Joseph Faley and a board
member completes a Check Request Form.
a. The check request form identifies how much, to whom, and for what reason a
check should be issued to an Authority Member.
b. This form should be signed by Joseph Faley, requestor, and by a board
member granting approval for the check to be issued.
c. After the form is approved /signed, office staff will issue a check to the
individual.
d. Final approval is considered granted when the Chairman of the Authority
and Faley sign the prepared check.
31. Tancredi and Matta requested a $100 per day per diem after learning members of
other municipal authority boards received such compensation for attending
conventions.
32. The $100 per day payment was in addition to being reimbursed for actual expenses
incurred.
33. On June 20, 2002, Joseph Tancredi filled out an expense claim form seeking
reimbursement for the following expenses:
Date Description of Expense Amount
6/15/02 Taxi $ 80.00
6/18/02 Crescent Dinner $ 91.25
6/19/02 Marriott Room $ 975.56
6/19/02 $100 per for 5 days $ 500.00
$1,646.81
a. Tancredi signed the form as the claimant certifying that the expenses
detailed above were incurred on company business and receipts are
attached."
b. Joseph Faley's signature also appeared on the form as the "authorized
signatory" indicating that expenses and receipts were "confirmed."
1. A confirmed expense is one that a receipt is provided for.
34. Tancredi provided Faley with receipts for the Crescent City Brewhouse and Marriott.
35. Tancredi's receipt from the Crescent City Brewhouse indicates that 3 guests
incurred the following meal expenses on June 18, 2002, at 7:24 p.m.:
a. Description of Expense Amount
Cup Soup $4.95
Cup of Gumbo $4.95
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2 Ribs $37.90
Tuna Orleans $17.95
Coffee $1.50
Dessert Tray $0.00
Fruit Basket $6.95
Tax $7.05
Tip $10.00
Total: $91.25
b. This meal receipt was submitted while Tancredi simultaneously requested a
$100 per day per diem.
c. The three (3) guests for this meal were Tancredi, his wife and Matta.
d. The portion of the meal attributable to Tancredi's wife is 1/3 of the bill or
$30.41.
d. Tancredi sought reimbursement for meal expenses incurred by his wife.
36. Tancredi's invoice from the Marriott Hotel, for the period June 15, 2002, to June 19,
2002, identified that the Tancredis incurred the following expenses:
Date Charge Amount
06/15 Pool /Bar $ 19.01
06/15 Room $177.00
06/15 Room Tax $ 21.24
06/15 Cty /Tax $ 3.00
06/16 Pool /Bar $ 24.02
06/16 Room $177.00
06/16 Room Tax $ 21.24
06/16 Cty /Tax $ 3.00
06/17 Cafe DU $ 43.22
06/17 Room $177.00
06/17 Room Tax $ 21.24
06/17 Cty /Tax $ 3.00
06/18 Cafe DU $ 22.16
06/18 RM Sery $ 62.19
06/18 Room $177.00
06/18 Room Tax $ 21.24
06/18 Cty /Tax $ 3.00
06/19 BK Card
Total: $975.56
37. Tancredi's Marriott receipt confirmed Tancredi had incurred meal and /or bar
charges totaling $170.60.
a. Individual charges included the following:
Date Location Char e Time In Time Out
06/15/02 Gazebo Bar $19.01 3:53 p.m. 4:34 p.m.
06/16/02 Gazebo Bar $24.02 1:44 p.m. 1:53 p.m.
06/17/02 Cafe Du Marche $43.22 9:45 a.m. 10:43 a.m.
06/18/02 Cafe Du Marche $22.16 9:10 a.m. 11:03 a.m.
06/18/02 Room Service $62.19 1:09 p.m. 1:46 p.m.
$170.60
b. Tancredi claimed meal and /or beverage reimbursements totaling $170.60
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Page 9
from the Marriott Hotel while simultaneously requesting a $100 per day per
diem.
c. One half of the cost of food ($85.30) at the Marriott was for Tancredi's wife.
38. Tancredi's Marriott receipt details meals being charged to his room during normal
convention session hours on June 15, 16, 17, and 18, 2002.
39. Meal expenses outlined in the previous two (2) findings document the following
times Tancredi consumed meals instead of attending conference sessions:
a. Date Meals Session Hours (Finding #37)
06/15/02 3:53 p.m. — 4:34 p.m. 9:00 a.m. — 5:00 p.m.
06/16/02 1:44 p.m. — 1:53 p.m. 9:00 a.m. — 5:00 p.m.
06/17/02 9:45 a.m. — 10:43 a.m. 8:30 a.m. — 9:00 a.m.
9:30 a.m. — 11:00 p.m.
06/18/02 9:10 a.m. — 11:03 a.m. 9:00 a.m. — 12:00 p.m.
1:09 p.m. — 1:46 p.m. 12:00 p.m. (conference luncheon)
2:00 p.m. — 5:00 p.m.
40. On June 26, 2002, Joseph Faley filled out a check request form for Joseph
Tancredi for expense reimbursements totaling $1,646.81.
a. Tancredi, in his official capacity as Chairman, signed the check request form
approving the payment to himself.
41. On June 27, 2002, check #15938 was issued to Tancredi in the amount of
$1,646.81.
a. The front side of the check was signed by Tancredi and Joseph Faley.
42. Tancredi did not seek any reimbursement for airfare expenses incurred by Tancredi
or his wife.
a. Samuel Matta paid for Joseph Tancredi, Isabel Tancredi, and Samuel Matta
to travel to New Orleans, LA.
b. On or about June 10, 2002, Samuel Matta submitted a Katrina's Travel
Agency invoice indicating that his ticket to travel to New Orleans cost
$656.00.
c. On June 10, 2002, five days before the aforementioned individuals flew to
New Orleans, Matta was issued authority check #15910 in the amount of
$656.00.
1. Tancredi signed Authority check #15910 approving the payment.
43. Tancredi submitted, approved, and received reimbursement for expenses incurred
on behalf of his wife.
a. The total cost attributable to Tancredi's spouse equaled $115.71.
b. Tancredi also received $100 per day for five days ($500) as an additional
expense payment.
THE FOLLOWING FINDINGS RELATE TO TANCREDI'S FAILURE TO LIST SOURCES
OF INCOME AND OTHER FINANCIAL INTERESTS ON STATEMENT OF FINANCIAL
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INTERESTS FORMS FILED.
44. Tancredi in his official capacity as a BSMA Board Member was annually required to
file a Statement of Financial Interests form by May 1 containing information for the
prior calendar year.
a. Authority Board Members have annually been provided with blank
Statements of Financial Interests (SFI) forms from the State Ethics
Commission to complete and file with the Authority.
45. Statement of Financial Interests forms on file with the Authority as of December 19,
2005, included the following filings for Tancredi:
a. Calendar year: 2004
Filed: 2/2/05 on SEC Form 01/05
Position: Not listed
Creditors: Minersville Safe Deposit
Interest Rate: None
Direct /indirect sources of income: None
Office, directorship or employment in any business: None
All other financial interests: None
b. Calendar year: 2003
No form filed
c. Calendar year: 2002
Filed: 1/16/03 on SEC Form 01/03
Position: None
Creditors: Minersville Safe Deposit and Trust Company
Interest Rate: None
Office, directorship or employment in any business: None
All other financial interests: None
46. Tancredi filed an SFI for calendar year 2005 with the Authority on or about
February 16, 2006. Tancredi's calendar year 2005 form included the following
information:
a. Calendar year: 2005
Filed: 2/16/06 on SEC Form 01/06
Position: Municipal Authority Board
Creditors: Minersville Safe Deposit and Trust Company (no rate listed)
Direct /Indirect income: None
All other financial interests: None
47. On August 23, 2006, Mark Semanchik, counsel for Tancredi, forwarded SFIs to the
State Ethics Commission on Joseph Tancredi's behalf for calendar years 2000,
2001, 2002, and 2003 under the guise that the forms were timely filed with the
BSMA.
48. Statements of Financial Interests forms filed with the SEC on August 23, 2006, on
Tancredi's behalf included the following forms:
a. Calendar Year: 2000
Filed: 5/30/01 on SEC form 1/99
Position: Chairman MABS
Political Subdivision /Agency: Shenandoah Municipal Authority
Real Estate Interests: Washington St. property
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Creditors: Minersville S/D Bank
Interest Rate: 7
Direct /Indirect Sources of Income: Commercial Building Washington St.
Property
Office, directorship or employment in any business: None
All other financial interests: None
b. Calendar Year: 2001
Filed: 2/5/02 on SEC form unknown
Position: Not listed
Political Subdivision /Agency: Not listed
Real Estate Interests: None
Creditors: Minersville Safe Deposit & Trust Co.
Interest Rate: None
Direct /Indirect Sources of Income: None listed
Office, directorship or employment in any business: None
All other financial interests: None
c. Calendar Year: 2002
Filed: 1/16/03 on SEC 01/03
Position: Not listed
Political Subdivision /Agency: Not listed
Real Estate Interests: None
Creditors: Minersville Safe Deposit & Trust Co.
Interest Rate: None
Direct /Indirect Sources of Income: None listed
Transportation, Lodging, Hospitality: New Orleans Convention
Value: ?
Office, directorship or employment in any business: None
All other financial interests: None
d. Calendar Year: 2003
Filed: 2/2/04 on SEC form 01/05
Position: Not listed
Political Subdivision /Agency: Not listed
Real Estate Interests: None
Creditors: Minersville Safe Deposit
Direct /Indirect Sources of Income: None listed
Office, directorship or employment in any business: None
All other financial interests: None
49. Tancredi failed to list sources of income in excess of $1,300 on SFI's filed for
calendar years 2001 through 2005.
a. Tancredi received income in excess of $1,300 annually from rental
properties located at 22 North Bower Street, Shenandoah, PA and 140 East
Washington Street, Shenandoah, PA.
50. Joseph Tancredi and his wife, Isabel Tancredi, own real estate in the Borough of
Shenandoah commonly known as 224 North Bower Street and 140 East
Washington Street.
51. Currently the property is leased by Northwestern Human Services and the Villa
Daycare Center.
a. Northwestern Human Services, Schuylkill Mountain Center leases 224 North
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Page 12
Bower Street, Shenandoah, PA 17976.
b. Villa Daycare Center Inc. leases 140 East Washington Street, Shenandoah,
PA 17976.
c. Both leases are in excess of $1,300 annually.
52. Financial records of NHS confirm the following rental payments made to the
Tancredis between 2000 -2005.
Fiscal Year Monthly Rental Payments Yearly Totals
2000 $2,429.52 $29,154.24
2001 $1,500.00 $18,000
2002 $1,500.00 $18,000
2003 $1,550.00 $18,600
2004 $1,575.00 $18,900
2005 $1,600.00 $19,200
53. On or about November 1, 2002, the Tancredis leased 140 East Washington Street,
Shenandoah, PA to the Villa Daycare Center.
a. The lease agreement commenced on November 1, 2002, and is for a term of
5 years.
b. Annual rental payments shall total $18,000, payable in equal monthly
installments.
54. The Villa Daycare Center made monthly rental payments to the Tancredis in the
amount of $1,500 consistent with terms of their lease agreement.
55. Tancredi did not disclose income received in excess of $1,300 annually from
Northwestern Human Service on SFI's filed for calendar years 2001 through 2005.
56. Tancredi did not disclose income received in excess of $1,300 annually from Villa
Daycare Center on SFI's filed for calendar years 2002 through 2005.
III. DISCUSSION:
Respondent Joseph Tancredi (hereinafter also referred to as "Respondent,"
"Respondent Tancredi," or "Tancredi "), as Chairman and a Member of the Shenandoah
Municipal Authority ( "Authority ") in Schuylkill County for approximately the past fifteen
years, is a public official subject to the provisions of the Public Official and Employee
Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
The allegations are that Tancredi, as Chairman and a Member of the Authority,
violated Sections 1103(a); 1104(a), (d); and 1105(b)(5), (8), and (9) of the Ethics Act when
he used the authority of his office for a private pecuniary gain, including but not limited to
claiming, submitting, and receiving expense payments for attendance at American
Waterworks Conventions in excess of actual expenses incurred; when he submitted and
received reimbursement from the Authority for expenses for attendance at AWW
conventions which he did not attend and which were personal in nature; when he failed to
file a Statement of Financial Interests with the Authority for the 2003 calendar year by May
1, 2004, and then subsequently filed a backdated form to give the impression that the form
was timely filed; and when he failed to report on SFIs filed for the 2002, 2003, 2004, and
2005 calendar years all sources of income in excess of $1,300, any office, directorship, or
employment of any nature whatsoever in any business entity, and any financial interest in
any legal entity engaged in business for profit.
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Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is
prohibited from engaging in conduct that constitutes a conflict of interest:
65 Pa.C.S. § 1103(a).
§ 1103. Restricted Activities
(a) Conflict of interest. —No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
The term "conflict of interest" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family
or a business with which he or a member of his immediate
family is associated. The term does not include an action
having a de minimis economic impact or which affects to the
same degree a class consisting of the general public or a
subclass consisting of an industry, occupation or other group
which includes the public official or public employee, a
member of his immediate family or a business with which he or
a member of his immediate family is associated.
65 Pa.C.S. § 1102.
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 1104(a) of the Ethics Act provides that each public official /public employee
must file a Statement of Financial Interests for the preceding calendar year, each year that
he holds the position and the year after he leaves it.
Section 1104(d) of the Ethics Act provides that no public official shall be allowed to
take the oath of office, enter or continue upon his duties, or receive compensation from
public funds unless he has filed a Statement of Financial Interests as required by the
Ethics Act.
Sections 1105(b)(5), (8), and (9) of the Ethics Act require the filer to disclose on the
Statement of Financial Interests the following information: the name and address of any
direct or indirect source of income totaling in the aggregate $1,300 or more; any office,
directorship or employment in any business entity; and any financial interest in any legal
entity engaged in business for profit. The term "financial interest" is defined in the Ethics
Act as "[a]ny financial interest in a legal entity engaged in business for profit which
comprises more than 5% of the equity of the business or more than 5% of the assets of the
economic interest in indebtedness." 65 Pa.C.S. § 1102.
Tancredi, 05 -050
Page 14
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.
The Authority is operated by a five - member board ( "Authority Board "). Respondent
Tancredi has been serving as Chairman and a Member of the Authority for approximately
the past fifteen (15) years. As a Board Member /Chairman, Tancredi's duties include
participating in Authority Board votes to approve or disapprove financial aspects involving
the Authority and /or its Members, and providing signatures on checks, checks requests,
and expense reports to approve payments.
Since April 1, 1952, Authority operations have been managed by a subsidiary
company of American Water Works ( "AWW "). The current name of the management
company is American Commonwealth Management Services Company Incorporated
( "ACMS "). Joseph Faley ( "Faley ") has served as the ACMS representative to the
Authority. Faley's duties performed for the Authority have included managing /overseeing
financial aspects for the Authority and its Board Members and providing signatures on
checks, check requests, and expense reports to approve and /or request payments.
At an Authority Board meeting held on May 15, 2002, Faley informed the Authority
Board Members in attendance that the American Water Works Association ( "AWWA ") had
made plans to hold its annual conference in New Orleans, Louisiana, from June 16, 2002,
through June 20, 2002 (which conference is hereinafter referred to as the New Orleans
Conference "). Minutes from the Authority's May 15, 2002, meeting indicate that Tancredi
stated that the whole Board was welcome to go to the New Orleans Conference and that
he was going to go to it. Tancredi participated in the unanimous vote of the Authority
Board approving attendance at the New Orleans Conference. Fact Finding 13.
Flight arrangements for Tancredi, his wife Isabel Tancredi, and another Authority
Board Member, Samuel Matta ( "Matta "), for travel to the New Orleans Conference were
made by Matta in April 2002, approximately one month prior to the Authority Board's
consideration and approval of attendance at the conference. Matta initially paid the
charges for the flight arrangements, at a total cost for the three travelers of $656. On or
about June 10, 2002, Matta submitted an invoice indicating that his ticket to travel to New
Orleans cost $656. Matta was issued Authority check #15910 in the amount of $656.
Tancredi signed Authority check #15910 approving the payment to Matta.
Upon arriving at the New Orleans Conference site, Tancredi became ill with a
respiratory problem and was unable to attend any of the conference sessions, workshops,
seminars or training.
Neither Tancredi nor the Authority had paid the requisite conference registration fee
for Tancredi's attendance at the New Orleans Conference. However, Tancredi did incur
various expenses relative to the New Orleans Conference, for which he requested and
received reimbursement from the Authority.
The Authority's procedures for expense reimbursements are detailed at Fact
Findings 29 -30. The procedures require the Authority Board Member claiming expenses to
submit an Expense Claim Form with copies of the invoices /receipts documenting the
expenses for which reimbursement is being requested. The Expense Claim Form is
submitted to Faley for auditing. Completed forms are to be signed by the Member who is
claiming the expenses and by Faley who audits them. After the Expense Claim Form is
audited, a Check Request Form is prepared, which identifies the amount, recipient, and
reason for the requested check. The Check Request Form is to be signed by the
requester, Faley, and a Board Member granting approval for the check to be issued. After
the Check Request Form is approved /signed, office staff issues a check to the individual.
Final approval is considered granted when Tancredi as Chairman of the Authority and
Tancredi, 05 -050
Page 15
Faley sign the prepared check.
On June 20, 2002, Tancredi submitted an Expense Claim Form to the Authority
requesting reimbursement for the following expenses in the total amount of $1,646.81,
relative to the New Orleans Conference: taxi, $80.00; "Crescent Dinner," $91.25; "Marriott
Room," $975.56; and "$100 per for 5 days," $500. (Fact Finding 33). Tancredi signed the
Expense Claim Form as the claimant certifying that the expenses detailed above were
incurred on company business and receipts are attached." (Fact Finding 33 a). Faley's
signature appeared on the form indicating that expenses and receipts were "confirmed,"
meaning receipts had been provided for them. In his official capacity as Authority
Chairman, Tancredi signed the related Check Request Form, approving the payment to
himself. On June 27, 2002, Authority check #15938 was issued to Tancredi in the amount
of $1,646.81. The front side of the check was signed by both Tancredi and Faley. Their
signatures on the check constituted final approval of the expense reimbursement to
Tancredi.
With regard to the claimed expenses, the parties have stipulated that Tancredi and
Matta both requested a $100 per day per diem from the Authority after learning that
members of other municipal authority boards received such compensation for attending
conventions. The $100 per day payment was in addition to being reimbursed for actual
expenses incurred.
Tancredi claimed and received reimbursement from the Authority for meals totaling
$91.25 at the Crescent City Brewhouse. This meal receipt was submitted while Tancredi
simultaneously requested a $100 per day per diem. Of the $91.25 reflected on the
Crescent City Brewhouse receipt, $30.41 was for food consumed by Tancredi's wife.
Tancredi claimed and received reimbursement from the Authority for meal and /or
bar charges at the New Orleans Marriott Hotel in the total amount of $170.60. Tancredi
claimed reimbursement for these actual meal and /or beverage expenses totaling $170.60
from the Marriott Hotel while simultaneously requesting a $100 per day per diem from the
Authority Board. Of the $170.60 listed on the Marriott Hotel invoice for meal and /or
beverage expenses, $85.30 was for Tancredi's wife.
As an Authority Board Member, Tancredi was required to file SFI forms each year
with the Authority. Tancredi timely filed SFIs for calendar years 2002, 2004, and 2005.
However, as of December 19, 2005, Tancredi had no SFI form on file with the Authority for
calendar year 2003. Tancredi's counsel subsequently forwarded various SFIs of Tancredi
to the Investigative Division, including a SFI for calendar year 2003. Tancredi's SFI for
calendar year 2003 was dated February 2, 2004, but was on a form which, per the printer's
number of "01/05," did not exist as of February 2, 2004.
Tancredi failed to list sources of rental income in excess of $1,300 on SFIs filed for
calendar years 2001 through 2005. Fact Findings 49 -56.
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 allegation
as follows:
3. The Investigative Division will recommend the following in relation to
the above allegations:
a. That a violation of Section 1103(a) of the Public Official
and Employee Ethics Law, 65 Pa.C.S. §1103(a)
occurred when Tancredi, as a Member of the
Tancredi, 05 -050
Page 16
Shenandoah Municipal Authority received per diem
expense payments of $100 per day for five days
attendance at a conference when such was not officially
authorized by the Authority; and
b. That no violation of Section 1103(a) of the Public
Official and Employee Ethics Law, 65 Pa.C.S. §1103(a)
occurred in relation to Tancredi's receipt of expense
reimbursement for a conference that he did not attend
as Tancredi's failure to attend the conference sessions
was due to illness that occurred after his arrival at the
conference location; and
c. That a violation of Section 1103(a) of the Public Official
and Employee Ethics Law, 65 Pa.C.S. §1103(a)
occurred in relation to Tancredi's receipt of
reimbursement from the Authority for meal expenses
incurred for his spouse; and
d. That an unintentional violation of Section 1105(b)(5) of
the Public Official and Employee Ethics Law, 65
Pa.C.S. §1105(b)(5) occurred in relation to Tancredi's
failure to disclose rental income in excess of $1,300 on
forms filed for calendar years 2002 -2005; and
e. That an unintentional violation of Section 1104(a) of the
Public Official and Employee Ethics Law, 65 Pa.C.S.
§1104(a) occurred in relation to Tancredi's failure to file
a timely Statement of Financial Interests for calendar
year 2003 by May 1, 2004.
f. That no violation of Sections 1105(b)(8) and (9) of the
Public Official and Employee Ethics Law, 65 Pa.C.S.
§ §1105(b)(8) and (9), occurred as Tancredi did not
have a financial interest or employment in any business
entity or hold any office or directorship that was
required to be reported on a Statement of Financial
Interests.
4. Tancredi agrees to make payment in the amount of $1,615.71 in
settlement of this matter as follows: $615.71 payable to the
Shenandoah Municipal Authority and $1,000.00 payable to the
Commonwealth of Pennsylvania, both payments to be forwarded to
the Pennsylvania State Ethics Commission within thirty (30) days of
the issuance of the final adjudication in this matter.
5. Tancredi agrees to file amended Statement[s] of Financial Interests
for calendar years 2002 -2005 inclusive correcting the deficiencies in
no. 3(d) above and to file a Statement of Financial Interests for
calendar year 2003.
6. The Investigative Division will recommend that the State Ethics
Commission take no further action in this matter; and make no
specific recommendations to any law enforcement or other authority
to take action in this matter. Such, however, does not prohibit the
Commission from initiating appropriate enforcement actions in the
event of Respondent's failure to comply with this agreement or the
Tancredi, 05 -050
Page 17
Commission's order or cooperating with any other authority who may
so choose to review this matter further.
Consent Agreement, at 2 -3.
In considering the Consent Agreement, we shall first consider the parties'
recommendation that a violation of Section 1103(a) of the Ethics Act occurred when
Tancredi, as an Authority Board Member, received per diem expense payments of $100
per day for five days attendance at the New Orleans Conference when such per diem
payments were not officially authorized by the Authority. Each element of a violation of
Section 1103(a) has been established.
Tancredi used the authority of office by submitting an Expense Claim Form to the
Authority requesting reimbursement for the unauthorized per diem expenses with a
certification that the expenses had been incurred; by signing the related "Check Request
Form" in his official capacity as Authority Board Chairman, thereby approving payment to
himself of these unauthorized expenses; and by signing the front side of the check paying
himself for these unauthorized expenses.
The resulting payment to Tancredi of the per diem expenses in the amount of $500
was a private pecuniary benefit because the Authority Board had not authorized per diem
expenses for the New Orleans Conference attendees. We determine that the
unauthorized per diem expenses requested and received by Tancredi in the total amount
of $500 were significant under the facts of this case, where Tancredi not only received the
unauthorized per diem expenses but also submitted actual meal and beverage expenses
for days for which he had claimed the per diem.
Accordingly, we hold that a violation of Section 1103(a) of the Ethics Act occurred
when Tancredi, as an Authority Board Member, received per diem expense payments of
$100 per day for five days attendance at the New Orleans Conference when such per diem
expense payments were not officially authorized by the Authority.
We shall accept the parties' recommendation that we find no violation of Section
1103(a) of the Ethics Act with respect to Tancredi's receipt of expense reimbursement for
the New Orleans Conference when he failed to attend the conference sessions due to
illness. We hold that no violation of Section 1103(a) of the Ethics Act occurred in relation
to Tancredi's receipt of expense reimbursement for a conference (the New Orleans
Conference) that he did not attend, as Tancredi's failure to attend the conference sessions
was due to illness that occurred after his arrival at the conference location.
The parties are in agreement that a violation of Section 1103(a) of the Ethics Act
occurred in relation to Tancredi's receipt of reimbursement from the Authority for meal
expenses incurred for his spouse during the New Orleans Conference.
Tancredi used the authority of office by submitting an Expense Claim Form to the
Authority requesting reimbursement for the aforesaid expenses for his wife's meals; by
signing the related "Check Request Form" in his official capacity as Authority Board
Chairman, thereby approving payment to himself of these expenses; and by signing the
front side of the check paying himself for these expenses.
The reimbursement to Tancredi for his wife's meal expenses was a private
pecuniary benefit, as there is no authorization in law that would permit an Authority Board
Member to be reimbursed for a spouse's meal expenses during a conference. The total
value of such meal expenses was in the amount of $115.71.
We are mindful of the recent judicial decision in Bixlerv. State Ethics Commission,
847 A.2d 785 (Pa. Cmwlth. 2004) (holding that a net profit in the amount of $561.77
Tancredi, 05 -050
Page 18
resulting from business transactions between a township supervisor's employer and the
township would fall within the "de minimis" exclusion to the definition of "conflict of
interest "). If the parties had not determined to enter into a Consent Agreement, we might
have been presented with factual and legal issues as to whether, under the circumstances
of this case, Bixler would apply as to the reimbursement of the aforesaid meal expenses
incurred for Tancredi's spouse. However, given: (1) that the parties have entered into a
comprehensive Consent Agreement with the benefit of legal counsel to assist them in
weighing all relevant factual and legal considerations, and (2) the parties are in agreement
that a violation of Section 1103(a) as to such expenses would be appropriate as part of an
overall settlement of this case, we shall accept the parties' proposed disposition. We note
that this determination in this case based upon the agreement of the parties should not be
considered as precedent for other cases, which would be determined based upon their
facts and circumstances.
Per the Consent Agreement of the parties, we hold that a violation of Section
1103(a) of the Ethics Act occurred in relation to Tancredi's receipt of reimbursement from
the Authority for meal expenses incurred for his spouse during the New Orleans
Conference.
We accept the parties' recommendation and hold that an unintentional violation of
Section 1105(b)(5) of the Ethics Act occurred in relation to Tancredi's failure to disclose
sources of rental income in excess of $1,300 on his Statement of Financial Interests forms
filed for calendar years 2002 through 2005. Based upon the stipulated findings, it was
necessary for such sources to be disclosed, but there is no basis for concluding that
Tancredi's failure to do so was intentional.
Likewise, we accept the parties' recommendation that an unintentional violation of
Section 1104(a) of the Ethics Act occurred in relation to Tancredi's failure to file a timely
Statement of Financial Interests for calendar year 2003 by May 1, 2004. There is no
question the form was not timely filed, but there is no basis in the stipulated findings for
concluding that Tancredi's failure to timely file the form was intentional.
The parties have agreed that no violation of Sections 1105(b)(8) and (9) of the
Ethics Act occurred, as Tancredi did not have a financial interest or employment in any
business entity or any business - related office or directorship that was required to be
reported on a Statement of Financial Interests. We accept the parties' recommendation
and find no violation of Sections 1105(b)(8) and (9) of the Ethics Act for the reasons
stated. There is no basis in the stipulated findings for concluding that Tancredi had any
financial interest or employment in any business entity or any business - related office or
directorship that would have been required to be reported on the Statements of Financial
Interests in question.
As for Section 1104(d) of the Ethics Act, it appears that the Investigative Division in
the exercise of prosecutorial discretion has elected to non pros this allegation.
As part of the Consent Agreement, Tancredi has agreed to make payment in the
amount of $1,615.71 in settlement of this matter as follows: $615.71 payable to the
Shenandoah Municipal Authority and $1,000.00 payable to the Commonwealth of
Pennsylvania, with both payments to be forwarded to this Commission within thirty (30)
days of the issuance of the final adjudication in this matter.
Tancredi has also agreed to file amended Statements of Financial Interests for
calendar years 2002 through 2005 inclusive, correcting the deficiencies noted in
paragraph 3(d) of the Consent Agreement quoted above, and to file a Statement of
Financial Interests for calendar year 2003.
Tancredi, 05 -050
Page 19
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, Tancredi is directed to make payment in the amount of $1,615.71 in
settlement of this matter as follows: $615.71 payable to the Shenandoah Municipal
Authority and $1,000.00 payable to the Commonwealth of Pennsylvania, with both
payments to be forwarded to this Commission within thirty (30) days of the issuance of this
Order.
Tancredi is further directed to file with the Authority amended Statements of
Financial Interests for calendar years 2002 through 2005 inclusive and a Statement of
Financial Interests for calendar year 2003, providing full financial disclosure as required by
the Ethics Act and specifically including sources of rental income in excess of $1,300, and
to forward to this Commission copies of all of the aforesaid filings for compliance
verification purposes.
Compliance with the foregoing will result in the closing of this case with no further
action by this Commission. Noncompliance will result in the institution of an order
enforcement action.
Tancredi, 05 -050
Page 20
IV. CONCLUSIONS OF LAW:
1. Respondent Joseph Tancredi ( "Tancredi "), as Chairman and a Member of the
Shenandoah Municipal Authority ( "Authority ") for approximately the past fifteen
years, is a public official subject to the provisions of the Public Official and
Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
2. Tancredi violated Section 1103(a) of the Ethics Act when he, as an Authority Board
Member, received per diem expense payments of $100 per day for five days
attendance at the American Water Works Association ( "AWWA ") annual
conference held in New Orleans, Louisiana, in June 2002 (the New Orleans
Conference "), when such per diem expense payments were not officially authorized
by the Authority.
3. No violation of Section 1103(a) of the Ethics Act occurred in relation to Tancredi's
receipt of expense reimbursement for a conference (the New Orleans Conference)
that he did not attend, as Tancredi's failure to attend the conference sessions was
due to illness that occurred after his arrival at the conference location.
4. Tancredi violated Section 1103(a) of the Ethics Act in relation to his receipt of
reimbursement from the Authority for meal expenses incurred for his spouse during
the New Orleans Conference.
5. An unintentional violation of Section 1105(b)(5) of the Ethics Act occurred in
relation to Tancredi's failure to disclose sources of rental income in excess of
$1,300 on his Statement of Financial Interests forms filed for calendar years 2002
through 2005.
6. An unintentional violation of Section 1104(a) of the Ethics Act occurred in relation to
Tancredi's failure to file a timely Statement of Financial Interests for calendar year
2003 by May 1, 2004.
7 No violation of Sections 1105(b)(8) and (9) of the Ethics Act occurred as Tancredi
did not have a financial interest or employment in any business entity or any office
or directorship that was required to be reported on a Statement of Financial
Interests.
In Re: Joseph Tancredi,
Respondent
ORDER NO. 1434
File Docket: 05 -050
Date Decided: 3/27/07
Date Mailed: 4/11/07
1 Respondent Joseph Tancredi ( "Tancredi "), a public official in his capacity as
Chairman and a Member of the Shenandoah Municipal Authority ( "Authority "),
violated Section 1103(a) of the Ethics Act when he, as an Authority Board Member,
received per diem expense payments of $100 per day for five days attendance at
the American Water Works Association ( "AWWA ") annual conference held in New
Orleans, Louisiana, in June 2002 (the New Orleans Conference "), when such per
diem expense payments were not officially authorized by the Authority.
2. No violation of Section 1103(a) of the Ethics Act occurred in relation to Tancredi's
receipt of expense reimbursement for a conference (the New Orleans Conference)
that he did not attend, as Tancredi's failure to attend the conference sessions was
due to illness that occurred after his arrival at the conference location.
3. Tancredi violated Section 1103(a) of the Ethics Act in relation to his receipt of
reimbursement from the Authority for meal expenses incurred for his spouse during
the New Orleans Conference.
4. An unintentional violation of Section 1105(b)(5) of the Ethics Act occurred in
relation to Tancredi's failure to disclose sources of rental income in excess of
$1,300 on his Statement of Financial Interests forms filed for calendar years 2002
through 2005.
5. An unintentional violation of Section 1104(a) of the Ethics Act occurred in relation to
Tancredi's failure to file a timely Statement of Financial Interests for calendar year
2003 by May 1, 2004.
6. No violation of Sections 1105(b)(8) and (9) of the Ethics Act occurred as Tancredi
did not have a financial interest or employment in any business entity or any office
or directorship that was required to be reported on a Statement of Financial
Interests.
7 Per the Consent Agreement of the parties, Tancredi is directed to make payment in
the amount of $1,615.71 in settlement of this matter as follows: $615.71 payable to
the Shenandoah Municipal Authority and $1,000.00 payable to the Commonwealth
of Pennsylvania, with both payments to be forwarded to this Commission within
thirty (30) days of the issuance of this Order.
8. Tancredi is further directed to file with the Authority amended Statements of
Financial Interests for calendar years 2002 through 2005 inclusive and a Statement
of Financial Interests for calendar year 2003, providing full financial disclosure as
required by the Ethics Act and specifically including sources of rental income in
excess of $1,300, and to forward to this Commission copies of all of the aforesaid
filings for compliance verification purposes.
Tancredi, 05 -050
Page 22
9. Compliance with paragraphs 7 and 8 of this Order will result in the closing of this
case with no further action by this Commission.
a. Non - compliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
Louis W. Fryman, Chair