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HomeMy WebLinkAbout1433 PerzelIn Re: Sheryl S. Perzel, 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 -005 Order No.1433 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 scheduled. 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. Perzel, 05 -005 Page 2 I. ALLEGATIONS: That Sheryl S. Perzel, a public official /public employee, in her capacity as a Member and President of the New Foundations Charter School Board of Directors, violated provisions of the State Ethics Act (Act 93 of 1998) 65 Pa.C.S. § §1103(a); 1103(f); and 1104(a); when she used the authority of her position for the private pecuniary gain of herself, members of her immediate family and /or a business with which she and /or members of her immediate family are associated including but not limited to participating in discussions, decisions and other actions of the Charter School Board of Directors regarding the leasing of real estate owned by her and /or members of her immediate family or by businesses with which she and /or members of her immediate family are associated; when the contracts for the leasing of property in excess of $500.00 were entered into without an open and public process; and when she failed to file a Statement of Financial Interests for the 2000 calendar year by May 1, 2001; and when she failed to file a Statement of Financial Interests for the 2002 calendar year by May 1, 2003. II. FINDINGS: 1. Sheryl Perzel has served as President of the Model Educational Charter Academy Inc. and its successors, The New Foundation Charter Academy Inc., and New Foundation Charter School Inc., since their inception on November 9, 1999, until August 2005. a. Perzel participated in the creation of the entity for the purpose of operating a charter school. b. This entity came about through the efforts of Perzel, as well as various others, including the founding group, board of directors, and individual employees of the charter school. 2. Sheryl S. Perzel was involved with a day school program run by Redeemer Lutheran Church in Philadelphia, Pennsylvania; that organization discussed applying for charter school status but later decided not to follow through on the charter school application process; Sheryl S. Perzel, Paul Stadelberger, Gerald Santilli and others met on a regular basis after the Winter of 1999 to discuss creating a group to apply for a charter school certification in the geographic vicinity of Redeemer Lutheran Church. 3. Articles of Incorporation were filed with the Pennsylvania Department of State for the Model Educational Charter Academy Inc., and its successors on October 29, 1999. a. A statement of correction changing the name to The New Foundation Charter Academy Inc. was filed on November 9, 1999, with an additional name amendment filed on April 13, 2000, changing the name to The New Foundations Charter School Inc. b. The school has continued to operate under the business name of The New Foundations Charter School Inc. since April 13, 2000. 4. For a charter school to operate within the Commonwealth, a charter must be approved by a sponsoring school district. a. The Charter School Law, 24 P.S. § 17.1717 -A, delineates the procedure for establishment of a charter school. b. A charter will be granted only for a school organized as a public non - profit Perzel, 05 -005 Page 3 organization. 5. On or about November 15, 1999, Perzel submitted a charter school application to the Philadelphia School District under the name the New Foundations Charter School. a. Perzel signed the charter application as President of the founding group. 6. The initial charter application referenced three (3) possible school locations in Northeast Philadelphia. a. Section 1.5.B Location and surrounding community of the application reads: The NFCS will be located in the Northeast section of Philadelphia... The founders are considering three potential sites for the school, all of which are located in the same area of Northeast Philadelphia. All three buildings on the sites are existing structures that will need renovations, and all possess enough square footage to easily accommodate the projected enrollment and staff needs. Costs for renovations have been included in the budget in the appendix. One building is a shopping center at 8800 Torresdale Avenue. A second building under consideration is a former warehouse on State Road. The third building being considered, the former Whitman's Chocolate site, is on Roosevelt Boulevard." 7 Upon approval of the charter by the sponsoring school district, a charter school is considered a public entity and subject to all charter school regulations found in 24 P.S. §1701(a). a. Section 17- 1715(a)(i) of the Charter School Law provide[s] that: "Charter Schools are not exempt from statutes applicable to public schools other than this act." 8. On March 13, 2000, the Philadelphia Board of Public Education approved a charter for The New Foundations Charter School to operate covering the period September 1, 2000, through August 31, 2004. 9. New Foundations Charter School received its actual charter from the Philadelphia School District on or about August 28, 2000. a. The initial approved charter period ran from September 1, 2000, through August 31, 2004; including a renewal provision for an additional five year period. b. Sheryl Perzel signed the charter as President of New Foundations Charter School's Board of Trustees. c. On March 18, 2004, the District's School Reform Commission approved a charter renewal covering the period September 1, 2004, through August 31, 2009. 10. The board of trustees for a charter school performs similar functions as a public school board of directors. 11. Powers and duties of the board[s] of trustees of charter schools are cited in Section 17- 1716(a)(b) of the Charter School Law as follows: Perzel, 05 -005 Page 4 a. Powers of the board of trustees of a charter school shall have [sic] the authority to decide matters related to the operation of the school, including but not limited to budgeting, curriculum and operating procedures subject to the school charter. The board shall have the authority to employ, discharge and contract with necessary professional and non - professional employees subject to the school's charter and the provisions of this article. b. No member of the local board of school directors of a school entity shall serve on the board of trustees of a charter school that is located in the member's district. c. The board of trustees shall comply with the Act of July 3, 1986 (P.L. 388, No. 84) known as the Sunshine Act. 12. Members of a Charter School Board of Trustees are considered public officials pursuant to Section 17- 1727(a) of the Charter School Regulations, 24 P.S. §1701(a). 13. New Foundations Charter School initial Board of Trustees was formed on or about April 10, 2000, when board members signed oaths of office, held their first board meeting and received materials published by the State Ethics Commission including Statements of Financial Interests (SFI's) and a guide to the PA Public Official and Employee Ethics Law. a. Resolution 04 -10 -01 was adopted approving by -laws. b. Perzel was elected NFCS Board President. c. Attorney Robert O'Donnell provided Statement of Financial Interests forms to board members. Statement of Financial Interests forms contain written instructions regarding when filing is required. d. Paul Stadelberger (NFCS) was selected as Chief Administrative Officer (CAO), upon resignation from Redeemer Lutheran Church School in June 2000. 14. Funding for the NFCS comes from the Philadelphia School District, Commonwealth of Pennsylvania and Federal Government. 15. The New Foundations Charter School began operations for the 2000 -01 school year. a. The school's initial locations were 1009 Unruh Avenue, Philadelphia, PA (school facilities) and 6901 Hawthorne Street, Philadelphia, PA (Education Building). 16. The New Foundations Charter School Board entered into lease arrangements for temporary classroom and administrative space once the charter was granted by the Philadelphia School District. 17. On August 1, 2000, a lease was entered into between the school and the Oxford Circle Jewish Community Centre Brith Israel for 1009 Unruh Avenue for eleven (11) months (8/01/00 — 6/30/01) at $4,5000 [sic] per month, total lease $49,500. a. This lease was authorized by the board pursuant to Resolution 07 -25 -01 adopted July 25, 2000. Perzel, 05 -005 Page 5 18. On October 10, 2000, the board approved Resolution Number 10 -10 -02 authorizing the lease of additional space at the Oxford Circle Jewish Community Center for no more than eight thousand dollars. 19. On August 25, 2000, NFCS leased 6901 Hawthorne Street, Philadelphia, PA from Johnson United Methodist Church for $3,500 per month, $38,500 total lease for the period August 25, 2000, through June 15, 2001. a. This lease was authorized by the board pursuant to Resolution 09 -12 -04 adopted September 11, 2000. 20. On April 10, 2001, the NFCS board approved Resolution 04 -10 -02 to negotiate a lease with the Oxford Circle Jewish Community Centre for the 2001 -02 school year. a. This resolution was rewritten and approved as Resolution 05 -08 -03 during the board's May 8, 2001, meeting. b. Resolution 05 -08 -03 of 2001 included negotiating lease renewals for both Jewish Community Centre and Johnson United Methodist sites. c. The additional leases were needed for NFCS to continue to operate until a permanent location could be found. 21. Sheryl Perzel in her official capacity as Board President took an active role in locating a permanent location for the New Foundations Charter School. a. Perzel's brother, Samuel Stokes, Jr., assisted with the search. b. NFCS's Principal, Paul Stadelberger, also assisted Perzel in this endeavor, taking a greater role after June 2000. c. Perzel would report back to the NFCS Board of Trustees during closed door meetings and public meetings on potential sites locations. d. Perzel and Stadelberger searched for potential sites, including sites suggested by other board members, such as Gerald Santilli and Realtor Tony Dideo, of Mertz Real Estate, Inc. e. No other NFCS Board Members reported back to the board concerning site evaluations. 22. NFCS did not publicly advertise or solicit bids for rental property for the school's permanent location, however, Tony Dideo, of Mertz Real Estate, Inc., and at least one other real estate agent were contacted regarding the school search. a. More than fifty sites were visited or investigated by employees or board members of New Foundations Charter School, including Perzel, who identified those sites as being the suitable, available real estate sites within the geographic region sought by the founding group of the New Foundations Charter School. 23. Minutes from the New Foundations Charter School Board of Trustee meetings confirm that between April 2000 and August 2001 Perzel and Stadelberger brought various locations for a permanent school site to the board's attention. a. Sites identified by various board members and employees were subject to Perzel, 05 -005 Page 6 criteria of location, cost, building suitability (building supports could not be too close together and there had to be a certain amount of window space among many other criteria for development of existing buildings into suitable school space), and sufficient outdoor space was required to provide for sufficient parking for employees and sufficient play area for the children under the applicable rules. b. Sheryl S. Perzel relied upon chief administrative officer Paul Stadelberger to advise about the suitability of buildings and upon Gerald Santilli to advise about cost factors. c. Of the various sites reviewed, a portion were determined not to be suitable. 24. During the December 12, 2000, board meeting, Perzel discussed seven sites including one located at Torresdale and Rhawn. Minutes of the meeting reflect the following: a. Perzel reports: Vankirk site, agreement of sale on Vankirk site stipulates with clean title on agreement $75,000 for the site and assume all liens on property waiting for signatures. Super Fresh site Torresdale & Rhawn. Howell Street site offer rejected /needs a lot of work/plumbing problems. Franklin Towne High School 18ft pillars /classrooms would look like tunnels. Kmart site Torresdale are not a good spot concerns about walking from Frankford Ave. to Torresdale Ave. Michelles Bakery site too much industry in it. Acme building site: roof leaking but will be fixed, building is buckling. Hechingers site Adams Ave. still looking at that site. Present: Perzel, Braman, Walls, Bauman, Cohen, Lange, Soto, Johns Absent: Ashdale b. Sheryl S. Perzel examined the VanKirk site and the Franklintown High School site. c. Gerald Santilli recommended the Super Fresh site at Torresdale and Rhawn. d. Paul Stadelberger came forward with the Howell Street site, the Torresdale Avenue Kmart site, the Acme building site, and the Michelle's Bakery site. e. Mr. Santilli had examined the Hechinger's site and came forward with that location. 25. Between December 2000 and March 2001 Perzel was the board member most active in the search for a permanent site for the school. a. Sheryl S. Perzel, Paul Stadelberger and Gerald Santilli actively sought out and visited various sites. b. As sites were identified, Sheryl S. Perzel relied on Paul Stadelberger to comment on the suitability of each site based on the building suitability for educational purposes, and on the advice of Gerald Santilli regarding the cost of the different sites. c. The sites that were identified were discussed by the board in closed session and for these sessions minutes were not taken; following the closed session, Sheryl S. Perzel would report on the search in the public meetings of the board. Perzel, 05 -005 Page 7 d. By March 2001 negotiations began to purchase the property at Torresdale Avenue and Rhawn Streets. 26. Minutes of board meetings between February 13, 2001, and August 21, 2001, confirm Perzel's reports on building search and negotiations: a. 2/13/01 Perzel reported that for the last 14 months she has been searching for a building The Frankford Arsenal building is on hold still considering contracting with Noble. Stadleberger Principal's report: I (as well as Ms. Perzel and Mr. Santilli) been out on the road investigating many possibilities for our school facilities since our last meeting I've seen two buildings on Cottman Ave. (west of State Rd.), two buildings on Torresdale Ave., one site on Kensington Ave., another two in the Frankford Arsenal, as well as 2 other sites. I've also been involved in many meetings with the Frankford Arsenal Mgt. Present: Perzel, Braman, Walls, Bauman, Cohen, Lange, Soto, Johns Absent: Ashdale b. 03/13/01 Perzel reports: Building update negotiations/ Super Fresh site @ Torresdale and Rhawn Streets for purchase. Frankford Arsenal for lease /waiting for buying package. May be looking at continuous plan. c. 04/10/01 Sadlebergers Principal Report dated April 10, 2001, the month of May is hand written below the date: Building update: Ms. Perzel, Mr. Santilli and I have met with various people during the last month to finalize an agreement of sale for the property at Torresdale Ave. & Rhawn St. We have met with the architect, investment firms, builders, and others. d. 05/08/01 Perzel Building Update: Still negotiating for the building @ Torresdale and Rhawn St. feels very confident that the site will be our permanent site for New Foundations Charter School. It is hopeful that by the next meeting the chair will have good news. Stadlebergers Principal Report: 1. Building update: "Ms. Perzel, Mr. Santilli and I have met with various people during the last month to finalize an agreement of sale for the property at Torresdale Avenue and Rhawn St. We have met with the architect, investment firms, builders, and others." e. 06/21/01 Perzel Building Update: still negotiating for the building @ Torresdale & Rhawn Streets. Feels very confident that the site will be our permanent site for New Foundations Charter School. Contractors will be in on July 1, 2001. Stadelbreger's Principal Report: Building Update: Ms. Perzel, Mr. Santilli, and I have met with various people during the last month to finalize an agreement of sale for the property at Torresdale Ave. & Rhawn St. We have met with the architect, investment firms, builders, and others. Perzel, 05 -005 Page 8 f. 08/21/01 Stadelberger's Building Update: "I do not have any new information at this time about the building at Rhawn and Torresdale" 27. The NFCS December 12, 2000, meeting was the first public indication that consideration was being given to property located at the intersection of Torresdale Avenue and Rhawn Street, Philadelphia, more commonly known as 8001 Torresdale Avenue. 28. In addition to serving as President of NFCS, Perzel participated in the formation of Friends of New Foundation Charter School and its successor in name, 8001 Torresdale Corporation; serving as President of Friends of New Foundations Charter School from its inception on or about June 15, 2001, until at least November 9, 2001. 29. Friends of New Foundations Charter School and its successor in name, 8001 Torresdale Corporation were created to purchase and own property to be leased to New Foundations Charter School for school operations. 30. On June 15, 2001, Friends of New Foundations Charter School was incorporated with the Pennsylvania Department of State. a. Friends of New Foundations Charter School was formed under Internal Revenue Service guidelines as a 501(c)(3) non profit corporation. b. Original corporate officers included Sheryl Perzel, Jay Braman, Joseph Ashdale, Mindy Lange, Stan Cohen, Candy Brauman, and John Walls. 31. FNFCS' creation coincided with Perzel reporting to the NFCS board on May 8, 2001, and June 21, 2001, that she believed the building at Torresdale and Rhawn would be the permanent home of NFCS. 32. The decision to locate NFCS at 8001 Torresdale was made collectively by the Board of Directors of New Foundations Charter School, including Perzel, Santilli, and Stadelberger. a. Perzel was serving as president of both NFCS and FNFCS at the time. 33. On May 24, 2002, Friends of New Foundations Charter School changed its operating name to 8001 Torresdale Corporation with a registered address of 8001 Torresdale Avenue, Philadelphia, PA 19136. a. Gordon Johnston is identified as the President of 8001 Torresdale Corporation at that time. 1. Gordon Johnston is Sheryl Perzel's nephew. b. Other board members included Gerald Santilli, Michael Thomson, Helen Anhale, and Samuel Stokes, Jr. 34. 8001 Torresdale Corporation annually filed federal corporate tax return form 990 with the Internal Revenue Service as a 501(c)(3) non - profit organization which included the corporation's purpose and board members. a. The stated corporation purpose is to own and lease school facilities to a not - for - profit school." Perzel, 05 -005 Page 9 1. "Organization leases property to New Foundations Charter School, a not - for - profit entity formed under 501(c)(3) (EIN:23- 3040993). b. Corporate officers identified since June 15, 2001, are: Samuel S. Stokes, Jr.: Board Member Gerald L. Santilli: Secretary /Treasurer Helen T. Anhale: Board Member Gordon R. Johnston, III: President Michael C. Thompson: Assistant Secretary c. Samuel S. Stokes, Jr. is Sheryl Perzel's brother. 35. Perzel's position as President was not identified on IRS form 990's filed by 8001 Torresdale Corporation for the returns filed for 2001. a. Perzel was not serving as president by the time Gordon Johnston completed the return for the 2001 -02 school year. b. Perzel resigned as president and board member of the Friends of New Foundations Charter School on or about November 9, 2001. c. IRS form 990 was submitted on or about November 13, 2002. 36. Perzel participated in securing 8001 Torresdale Avenue from the 9 th Pennsylvania AP1 Partnership on behalf of FNFCS. a. Perzel's participation included general input regarding the property purchase and signing closing documents. b. John Parsons, the project's general contractor, served as a Middleman on the property transaction. 37. Perzel served as President of Friends of New Foundations Charter School when the acquisition of 8001 Torresdale Avenue was made from the 9 Pennsylvania AP1 limited partnership. a. Perzel was authorized to act on behalf of FNFCS for this purchase as a result of resolutions 1 and 2. 38. FNFCS resolution #1 gave Perzel the authority to execute an assignment agreement from A &P through the Ninth Pennsylvania A.P. 1 limited Partnership to John Parsons to FNFCS. 39. FNFCS Resolution #2 gave Perzel and Santilli the authority to execute all loan agreements, notes, mortgages against real estate to borrow up to $2,700,000 from Premier Bank for the acquisition of 8001 Torresdale Avenue, Philadelphia. 40. NFCS formally adopted Resolution 02 -13 -01 at their February 13, 2002, meeting which authorized Perzel to execute a suretyship agreement with Premier Bank on behalf of NFCS. a. Premier Bank required the agreement before lending money to FNFCS for the acquisition of Torresdale Avenue. b. The resolution approved by the board of trustees authorized the agreement and guaranteed the repayment of up to the $2,700,000 borrowed by FNFCS. Perzel, 05 -005 Page 10 c. This resolution was adopted by the NFCS board approximately three (3) months after settlement occurred on 8001 Torresdale Avenue (November 9, 2001). 41. Minutes from the NFCS Board of trustees February 13, 2002, meeting include Perzel's participation in the approval of Resolution 02- 13 -01. 42. FNFCS /8001 Torresdale Corporation relied upon NFCS as its source of revenue to make mortgage payments due for the acquisition of 8001 Torresdale Avenue. a. Funding was accomplished through a lease agreement between 8001 Torresdale Corporation and NFCS. b. Perzel was acting as President of both entities in 2001 when initial lease amounts were determined. c. Rental fees were determined to be an amount high enough to cover mortgage requirements. 43. Minutes of the New Foundations Charter School Board of Trustees meetings include discussions and resolutions adopted by the board authorizing Perzel to negotiate and subsequently lease a school facility to serve as the permanent home for the school as follows: (These resolutions relate to 8001 Torresdale Avenue) a. 09/20/01 Resolution 9 -20 -03 Whereas New Foundations Charter School desires to lease a school facility resolved that the board of trustees authorize the board president to negotiate a lease with an initial refundable lease payment of $400,000 further resolved that the board president be authorized to enter into discussions concerning the lease. Present: Perzel, Walls, Johns, Braman, Soto, Cohen, Lange Absent: Ashdale b. 11/13/01 Resolution 11 -13 -04 Whereas New Foundations Charter School needs to enter into a lease agreement with the Friends of New Foundations Charter School for the use of the building at Rhawn and Torresdale Avenues, therefore, be it resolved, that the attached lease be approved with a monthly rent of $32,500.00" 1. Minutes do not reflect any vote of the board to approve this resolution. 2. Resolutions 11- 13 -01, 11 -13 -02 and 11 -13 -03 also discussed during this meeting are recorded as being approved by the NFCS board at this meeting. Present: Cohen, Lange, Braman, Walls, Johns Absent: Perzel, Soto, Ashdale, Bauman. 44. On November 9, 2001, NFCS entered into a lease agreement for property located Perzel, 05 -005 Page 11 at Rhawn and Torresdale Avenue, Philadelphia (commonly known as 8001 Torresdale Avenue) with Friends of New Foundations Charter School Inc. a. The lease term was for twenty (20) years covering the period December 1, 2002, through November 30, 2022. b. The tenant (NFCS) shall acquire no ownership rights to the property. c. Base rent is $325,000 due upon execution of the lease with $32,500 due monthly as base rent. d. The tenant (NFCS) was responsible to maintain the entire building, roof, exterior, walls, structural, and non - structural portions, landscaping, exterior lighting, heating, and air conditioning. e. The tenant (NFCS) also was responsible for taxes, utilities, and insurance on the property. f. The lease was signed by Jay Braman, Vice President NFCS and Gerald Santilli, Treasurer, FNFCS. 45. The November 9, 2001, lease between NFCS and FNFCS was never formally adopted by the NFCS Board. a. The enacting resolution number 11 -13 -04 was included with minutes from the NFCS Board's November 13, 2001, meeting but minutes do not reflect a vote of the board. b. The lease agreement was executed per the conditions listed in the previous finding. c. Resolution 11 -13 -04 was reviewed by the NFCS Board during their November 13, 2004, meeting. d. Perzel purports to have been absent from the November 13, 2001, meeting. 46. The November 9, 2001, lease between NFCS and FNFCS provided the access to the capital that FNFCS needed to obtain financing for the purchase and renovations to 8001 Torresdale Avenue. 47. The NFCS Board is not recorded as taking any official action to select 8001 -8023 Torresdale Avenue, Philadelphia, PA to be the permanent location for NFCS.* a. 8001 Torresdale Avenue was negotiated by Stadelberger and Santilli, with Perzel providing general input regarding the purchase. b. Perzel was the only one of three serving on the NFCS Board. c. Perzel also was on the FNFCS Board. * [Cf., Fact Finding 60.] 48. The only official action taken by either NFCS Board of Directors or FNFCS Board of Directors regarding the lease of 8001 -8023 Torresdale Avenue was the execution of the November 9, 2001, lease agreement between NFCS and FNFCS. a. Perzel did not sign the lease agreement. Perzel, 05 -005 Page 12 49. Settlement documents for the sale of 8001 Torresdale Avenue confirm Perzel acted as the president of FNFCS up to and including November 9, 2001, by exercising signature authority on the following documents: a. November 9, 2001, Assignment Agreement between John Parsons and Friends of New Foundations Charter School. b. First American Title Insurance Company of New York Acknowledgement Form for title insurance. c. HUD Settlement Statement. d. Assignment of leases and rents to Premier Bank recorded with the City of Philadelphia Department of Records ID# 50365286. e. Certification of Articles of Incorporations, Corporate by -laws, Resolution #1 for FNFCS. f. November 9, 2001, Open -end Mortgage Agreement with Premier Bank for $2,700,000 recorded with the City of Philadelphia Department of Records ID #50365285. g. November 9, 2001, Acquisition and Construction Loan Note with Premier Bank for $2,700,000. h. November 9, 2001, Loan Agreement with Premier Bank for $2,700,000. November 9, 2001, construction rider between FNFCS and Premier Bank. j. November 9, 2001, Collateral Assignment of Construction Agreement. k. Environmental Indemnity Agreement. Waiver of liens with Bustleton Services Inc., John Parsons President. m. Post Closing Compliance document FNFCS with Premier Bank. 50. Perzel in her official capacity as President of NFCS Board of Trustees signed the following documents required for settlement of 8001 Torresdale Avenue on November 9, 2001: a. Surety Agreement. b. Security Agreement. c. Disclosure for Confession of Judgment. 51. By the completion of the renovations to 8001 Torresdale Avenue in April 2002 the NFCS began discussing further expansion of the school. a. 8001 Torresdale Avenue, being a corner lot, is limited in possible expansion to abutting land located at 8025 Torresdale Avenue on one side, and properties on Rhawn Street on the other. A train bridge bisecting the rear of the property limits expansion in that direction. 52. Following acquisition of 8001 Torresdale Avenue, there was consideration Perzel, 05 -005 Page 13 undertaken regarding where the school could possibly expand if necessary. a. As a result of environmental concerns with adjoining property on Rhawn Street, the only possible direction was 8025 Torresdale Avenue. b. 8025 Torresdale Avenue is situated between 8001 -8023 Torresdale, already owned by FNFCS, on one side and a railroad bridge on the other. c. Perzel did not place any entry in the minutes of the organization disclosing the fact that she and her siblings owned the real estate situated at 8025 Torresdale Avenue, prior to the sale of that land to the New Foundations Charter School [sic]. 53. Sheryl Perzel, Susan Johnston, Samuel Stokes, Jr., and Sally Ruth inherited 8025 Torresdale Avenue from the estate of Samuel Stokes Sr., as heirs to their father's estate. a. Each heir received a 25% share of the estate. b. 8025 Torresdale Avenue was valued at $73,000 at the time of Samuel Stokes' death, February 26, 1994, for the purposes of Inheritance Taxation. c. Perzel considered it a very open fact that her brother, Sam Stokes, had a business named "Track and Roller" at 8025 Torresdale Avenue. 54. At the same time discussions were ongoing regarding further expansion, FNFCS changed its operating name to 8001 Torresdale Corporation, on May 24, 2002. a. The purpose for the name change was to clearly distinguish between the two entities, since FNFCS and NFCS were very close in name and shared common board members. 55. On February 14, 1997, a quit -claim deed was filed between Susan S. Johnston and Samuel C. Stokes, Jr., co- executors of the Last Will and Testament of Samuel C. Stokes, late of Philadelphia, PA and Susan S. Johnston, Sally S. Ruth, Samuel C. Stokes, Jr., and Sheryl Perzel of Philadelphia, PA. a. The physical location of the subject property was 8025 Torresdale Avenue, Philadelphia. b. This transfer was made for the sum of $1.00. c. This transfer was recorded in Philadelphia County Deed Book #246 pages 045 -048. 56. During the summer of 2002, 8025 Torresdale Avenue was comprised of real property with improvements including a block building approximately 40X80 with an attached two story structure. 57. On July 19, 2002, Gordon Johnston obtained a real estate appraisal on 8025 Torresdale Avenue from PENCO Appraisals, Inc., 1012 Feasterville, PA 19053. a. The appraised value of 8025 Torresdale Avenue including improvements as of July 19, 2002, was $150,400. 58. On October 3, 2002, 8001 Torresdale Corporation entered into a permanent mortgage note, open -end mortgage and security agreement and note purchase Perzel, 05 -005 Page 14 agreement with the Horsham Industrial and Commercial Development Authority and Premier Bank. a. The principal amount of the indebtedness was $2,700,000.00, and recorded by the City of Philadelphia Department of Records as ID# 50565440. b. This agreement served as permanent financing of 8001 Torresdale Avenue. 59. As the initial construction was being completed in 2002, 8001 Torresdale Corporation entered into negotiations for the purchase of 8025 Torresdale Avenue from Sheryl Perzel, Susan S. Johnston, Samuel Stokes, Jr. and Sally S. Ruth. a. The primary interest in the property was for potential future expansion of the school. b. Gordon Johnston handled the negotiations on behalf of 8001 Torresdale Corporation - Sheryl Perzel was not involved in the negotiations. 60. At the time the Board of Directors for NFCS was voting to select 8001 Torresdale Avenue as a permanent location for NFCS,* Perzel did not disclose her ownership interest in 8025 Torresdale Avenue to either Stadelberger and /or Santilli, nor to the board of directors, or the public as a whole. a. Despite the fact that in November 2001, 8025 Torresdale Avenue was the location of a business owned and operated by Samuel Stokes, Perzel's brother, Perzel did not make a record of disclosure regarding her brother's business. b. Perzel and her siblings owned the lan[d] upon which the business owned and operated by sibling Samuel Stokes was located. c. Santilli learned of Perzel's real estate ownership interest during the summer months of 2002 regarding 8025 Torresdale Avenue. d. Stadelberger did believe that Perzel's brother, Samuel Stokes, owned 8025 Torresdale Avenue, but was not aware that Perzel herself had a 1 /4 interest. e. Prior to the summer of 2002, Samuel Stokes was attempting to sell the business located at 8025 Torresdale Avenue, and expected that the real estate would be sold along with the business. f. After the business was sold, the terms of the sale unexpectedly set forth that the purchaser did not wish to purchase the real estate, only the business. Samuel Stokes notified Gordon Johnston that the real estate was available, and Mr. Johnston notified Perzel, Santilli and Stadelberger. h. Negotiations commenced between Stadelberger and Johnston in the summer of 2002 for New Foundations Charter School to purchase the property based on the desire to acquire land at less than market value for expansion, and concern for the potential use of land by a third party in a manner adverse to the interests of the school. g. * [Cf., Fact Finding 47.] 61. On October 17, 2002, Perzel, Johnston, Stokes, Jr., and Ruth entered into an agreement of sale for 8025 Torresdale Avenue to 8001 Torresdale Corporation. Perzel, 05 -005 Page 15 a. The sales agreement was signed by Gordon Johnston on behalf of 8001 Corporation. b. The selling price was $100,000 U.S. currency with all closing costs to be paid by the seller. c. Settlement on this transaction occurred on December 27, 2002. 62. Gordon Johnston negotiated the selling price for 8025 Torresdale Avenue of $100,000 with Samuel Stokes, Jr. a. Johnston felt the selling price being $50,000 below the appraised value (see paragraph [57] (a)) was a bargain for 8001 Torresdale Corporation. b. Johnston handled this transaction representing both the buyer 8001 Torresdale Corporation and the seller heirs to the estate of Samuel Stokes Sr. 63. On December 27, 2002, Samuel C. Stokes, Jr., Sheryl S. Perzel, Sally S. Ruth, and Susan S. Johnston through Gordon R. Johnston Power -of- Attorney conveyed 8025 Torresdale Avenue, Philadelphia to 8001 Torresdale Corporation for the sum of $100,000. a. Gordon R. Johnston acted on behalf of the sellers with Power -of- Attorney. 64. Lenders Abstract LLC, the closing agent for the transfer of 8025 Torresdale Avenue to 8001 Torresdale Corp., maintains a settlement account at Premier Bank, which included the following disbursements to the sellers as a result of the sale: Check # Date Amount Payee 10816 12/27/02 $25,000 Susan S. Johnston 10817 12/27/02 $25,000 Samuel C. Stokes, Jr. 10818 12/27/02 $25,000 Sally S. Ruth 10821 12/27/02 $25,000 Sheryl S. Perzel 65. Perzel did not believe she was required to disclose to the NFCS Board the fact that she received compensation from the sale of 8025 Torresdale Avenue to 8001 Torresdale Corporation, as she was not a member of the Friends of NFCS /8001 Torresdale Corp. at the time. 66. The HUD Settlement Statement for 8025 Torresdale Avenue identifies a mortgage note in the amount of $1,800,000. a. The HUD statement also designated $100,000.00 as the contract sale price paid to sellers: Johnston, Stokes, Jr., Ruth, and Perzel. 67. On December 27, 2002, NFCS executed an addendum to their November 9, 2001, lease agreement with 8001 Torresdale Corporation (formerly known as Friends of New Foundations Charter School). Lease Amendments included the following: a. Amended to add the real property located at 8025 Torresdale Avenue, Philadelphia, PA. b. Amended to add "effective for the installment of base rent due and payable on January 1, 2003, and for each monthly installment thereafter, the monthly installments of base rent shall be forty -five thousand dollars ($45,000)." Perzel, 05 -005 Page 16 c. The lease addendum was signed by Mindy Lange, NFCS and Gordon R. Johnston, 8001 Torresdale Corporation. 68. The NFCS Board did not take official action to ratify the lease addendum until their March 11, 2003, board meeting. a. This lease amendment was approved by the NFCS Board three (3) months after it was executed. 69. On March 11, 2003, Perzel participated in action taken by the NFCS Board authorizing her to negotiate a lease amendment with 8001 Torresdale Corporation. 70. Minutes from the NFCS Board's March 11, 2003, meeting includes Perzel's participation in the approval of resolution 03 -11 -07 authorizing Perzel as Board President to negotiate an addendum to the lease with 8001 Corporation for additional space. Resolution 03 -11 -07 is as follows: a. Whereas New Foundations Charter School currently leases space from 8001 Corporation for use as a school facility and whereas New Foundations Charter School will require additional space for the term of the lease. Therefore resolved that the board of trustees authorize the Board President to negotiate an addendum to the lease with 8001 Corporation for additional space. Further resolved that the board president be authorized to sign the modified lease agreement at an additional cost of 12,500 per month for the term of the lease. Present: Braman, Cohen, Lange, Perzel, Walls Absent: Aniloff, Ashdale, Bauman, Johns b. The lease amendment increased the monthly rental fee paid by NFCS to 8001 Torresdale Corporation from $32,500 to $45,000. 71. The increase in monthly rental payments provided 8001 Torresdale Corporation with the additional capital needed to cover mortgage obligations associated with the $1,800,000 Telford Industrial Development loan acquired on December 27, 2002. 72. NFCS used the services of Foundations Inc. and Santilli & Thomson to serve as the school's business manager /administrator. a. These entities were responsible for issuing NFCS rental payments to 8001 Torresdale Corporation. b. Monthly rental payments are considered approved once the NFCS Board approves the budget. 73. Perzel did not publicly disclose her ownership interest in 8025 Torresdale Avenue prior to its sale to 8001 Torresdale Corporation. a. Perzel states that she believed that all persons involved with New Foundations Charter School were aware that her brother had operated a business at 8025 Torresdale Avenue. b. Perzel states that she notified the financial officer and the attorney of her personal interest in the real estate, however, no formal disclosure was made on advice of counsel, allegedly since Sheryl S. Perzel was not associated with Friends of New Foundations Charter School /8001 Torresdale Perzel, 05 -005 Page 17 Corporation. c. Perzel did not abstain from any NFCS actions or discussions related to the acquisition and funding of 8001 and 8025 Torresdale Avenue by Friends of New Foundations Charter School /8001 Torresdale Corporation. There is no record of her individual vote. d. NFCS actions to approve leases and lease addenda enabled 8001 Torresdale Corporation to obtain funding, used in part, to purchase property at 8025 Torresdale Avenue, property owned by Perzel and her family. 74. Perzel in her official capacity as a member of The New Foundations Charter School Board of Trustees was annually required to file a Statement of Financial Interests form by May 1 containing information for the prior calendar year. 75. On March 1, 2005, NFCS CAO Paul Stadelberger was contacted by the Investigative Division of the State Ethics Commission to review NFCS records including Statements of Financial Interest forms. a. Stadelberger as NFCS CAO is the custodian of these records. b. Stadelberger does not date or time stamp SFI forms he received from NFCS officials. 76. Stadelberger, realizing that several board members, including Perzel, did not have SFI's on file, contacted board member[(s)] to get the forms filed. 77. Perzel filed SFI's for calendar years 2000 and 2002 between March 1, 2005, and the morning of March 3, 2005. 78. Perzel's Statement of Financial Interests forms for calendar years 2000 and 2002 were filed on or about March 1, 2005. a. These forms were due on or before May 1, 2001, for calendar year 2000, and May 1, 2003, for calendar year 2002. b. The filing of Statement of Financial Interests forms for calendar years 2000 and 2002 occurred after the filing deadlines of May 1, 2001, and May 1, 2003, respectively. 79. Perzel, her two sisters and her brother, received $100,000.00, or $25,000.00 each as a result of the sale of 8025 Torresdale Avenue to 8001 Torresdale Corporation. a. The property had an appraised value of $150,400.00. b. Arguably, each individual potentially could have received at least $12,600 more, if the property would have sold at the appraised value. III. DISCUSSION: Respondent Sheryl S. Perzel (hereinafter also referred to as "Respondent," "Respondent Perzel," or "Perzel "), as a Member and President of the New Foundations Charter School ( "NFCS ") Board of Directors /Trustees ( "NFCS Board ") since April 10, 2000, 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. Perzel, 05 -005 Page 18 The allegations are that Perzel violated Sections 1103(a), 1103(f), and 1104(a) of the Ethics Act when she used the authority of her position as a Member and President of the NFCS Board for the private pecuniary gain of herself, members of her immediate family and /or a business with which she and /or members of her immediate family are associated including but not limited to participating in discussions, decisions and other actions of the NFCS Board regarding the leasing of real estate owned by her and /or members of her immediate family or by businesses with which she and /or members of her immediate family are associated; when the contracts for the leasing of property in excess of $500 were entered into without an open and public process; when she failed to file a Statement of Financial Interests for the 2000 calendar year by May 1, 2001; and when she failed to file a Statement of Financial Interests for the 2002 calendar year by May 1, 2003. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted Activities (a) Conflict of interest. —No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The term "conflict of interest" is defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. 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 1103(f) of the Ethics Act imposes certain restrictions as to contracting: § 1103. Restricted activities (f) Contract. —No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which Perzel, 05 -005 Page 19 the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa. C. S. § 1103(f). Section 1103(f) of the Ethics Act provides in part that no public official /public employee or his spouse or child or business with which the public official /public employee or his spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure. 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. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are reproduced above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Respondent Perzel has served as a Member and President of the NFCS Board since its formation on or about April 10, 2000. Prior to becoming a Member and President of the NFCS Board, Perzel was involved with the creation of the NFCS as detailed in Fact Findings 1 -9. Funding for the NFCS comes from the Philadelphia School District, Commonwealth of Pennsylvania and Federal Government. Pursuant to the Charter School Law, boards of trustees of charter schools have authority to decide matters relating to the operation of the school, subject to the school charter. 24 P.S. § 17- 1716 -A. Members of a charter school board of trustees are considered public officials. 24 P.S. § 17- 1715- A(11). The NFCS began operations for the 2000 -01 school year. In August and October 2000, the NFCS Board entered into lease arrangements for temporary classroom and administrative space. In April and May 2001 the NFCS Board approved resolutions authorizing the negotiation of lease renewals so that the NFCS could continue to operate until a permanent location could be found. In her official capacity as NFCS Board President, Perzel took an active role in finding a permanent location for the NFCS. The NFCS Chief Administrative Officer /Principal, Paul Stadelberger ( "Stadelberger"), and Perzel's brother, Samuel Stokes, Jr., assisted with the search. NFCS did not publicly advertise or solicit bids for rental property for the school's Perzel, 05 -005 Page 20 permanent location. The search for potential sites included sites suggested by other NFCS Board members, such as Gerald Santilli ( "Santilli ") and Realtor Tony Dideo ( "Dideo "). At least one other real estate agent in addition to Dideo was contacted regarding the school search. More than fifty sites were visited or investigated by NFCS Board members, including Perzel, or by NFCS employees. Between April 2000 and August 2001, Perzel and Stadelberger brought various locations for a permanent school site to the NFCS Board's attention. Perzel would report back to the NFCS Board during closed -door meetings and public meetings on potential sites locations. No other NFCS Board Members reported back to the NFCS Board concerning site evaluations. During the December 12, 2000, NFCS Board meeting, Perzel discussed seven sites including one located at Torresdale Avenue and Rhawn Street in Philadelphia. See, Fact Finding 24. This was the first instance of any public indication that consideration was being given to that particular property, which property is hereinafter referred to as the 8001 Torresdale Avenue Property." (Per the Fact Findings, the property apparently spans the addresses of 8001 -8023 Torresdale Avenue, see, Fact Findings 47, 48, 52.) Between December 2000 and March 2001, Perzel was the NFCS Board Member most active in the search for a permanent site for the school. Perzel, Stadelberger and Santilli actively sought out and visited various sites. By March 2001 negotiations began to purchase the 8001 Torresdale Avenue Property. Meanwhile, a 501(c)(3) non - profit corporation named "Friends of New Foundations Charter School" ( "FNFCS ") was incorporated on June 15, 2001, to purchase and own property to be leased to NFCS for school operations. Perzel was one of the original corporate officers of FNFCS. Perzel served as President of FNFCS from its inception until at least November 9, 2001. The creation of FNFCS coincided with Perzel reporting to the NFCS Board on May 8, 2001, and June 21, 2001, that she believed the building at the 8001 Torresdale Avenue Property would be the permanent home of NFCS. The decision to locate NFCS at the 8001 Torresdale Avenue Property was made collectively by the NFCS Board, including Perzel, Santilli, and Stadelberger. Fact Finding 32. Perzel was serving as President of both NFCS and FNFCS at the time. Fact Finding 32 a. In November 2001 the FNFCS purchased the 8001 Torresdale Avenue Property from "Ninth Pennsylvania AP1 Limited Partnership." Perzel was President of both FNFCS and the NFCS Board at the time the property was acquired. Perzel had authority to act on behalf of FNFCS for the purchase, including authority to execute all loan agreements, notes, and mortgages against real estate to borrow up to $2,700,000 from Premier Bank for the acquisition of the property. Settlement on the 8001 Torresdale Avenue Property occurred on November 9, 2001. On that date, Perzel signed various documents required for the settlement, including: (1) settlement documents signed in her capacity as FNFCS President; and (2) a Surety Agreement, Security Agreement, and Disclosure for Confession of Judgment signed in her capacity as President of the NFCS Board. Fact Findings 49 -50. Premier Bank required the NFCS Surety Agreement before lending money to FNFCS for the acquisition of the 8001 Torresdale Avenue Property. After taking the aforesaid actions on behalf of FNFCS and NFCS, Perzel resigned as President and Board Member of FNFCS on or about November 9, 2001. Perzel, 05 -005 Page 21 The NFCS Board did not formally authorize Perzel to execute the Surety Agreement with Premier Bank until February 13, 2002, approximately three (3) months after Perzel had done so. The resolution approved by the NFCS Board on February 13, 2002, authorized the agreement and guaranteed the repayment of up to the $2,700,000 borrowed by FNFCS. According to the meeting minutes, Perzel participated in the approval of the aforesaid resolution. FNFCS relied upon NFCS as its source of revenue to make mortgage payments due for the acquisition of the 8001 Torresdale Avenue Property. Funding was accomplished through a lease agreement between FNFCS and NFCS. On September 20, 2001, the NFCS Board authorized Perzel to negotiate the lease. Perzel was present at this meeting. On November 9, 2001, NFCS entered into a 20 -year lease agreement with FNFCS for the 8001 Torresdale Avenue Property. Per Fact Finding 45, the November 9, 2001, lease between NFCS and FNFCS was never formally adopted by the NFCS Board. Per Fact Finding 48, the only official action taken by either the NFCS Board or the FNFCS Board of Directors regarding the lease was the execution of the lease agreement. The lease was signed by Jay Braman as Vice President of NFCS and Santilli as Treasurer of FNFCS. Perzel did not sign the lease agreement. The November 9, 2001, lease between NFCS and FNFCS provided the access to capital that FNFCS needed to obtain financing for the purchase and renovations to the 8001 Torresdale Avenue Property. By April 2002, when the renovations to the 8001 Torresdale Avenue Property had been completed, the NFCS began discussing further expansion of the school. The only possible direction for expansion was via the abutting property at 8025 Torresdale Avenue (hereinafter, the 8025 Torresdale Avenue Property "). The 8025 Torresdale Avenue Property was owned by Perzel and her siblings, Susan Johnston, Samuel Stokes, Jr., and Sally Ruth, who had inherited the property from their father in 1997. Each heir had received a 25% share of the estate. When the NFCS Board was voting to select the 8001 Torresdale Avenue Property as a permanent location for NFCS, Perzel did not disclose her ownership interest in the 8025 Torresdale Avenue Property to Stadelberger, Santilli, to the board of directors, or the public as a whole. Fact Finding 60. Additionally, Perzel did not make a record disclosure regarding her brother's business at the 8025 Torresdale Avenue Property. Fact Finding 60 a. On May 24, 2002, while discussions were ongoing regarding further expansion, FNFCS changed its operating name to 8001 Torresdale Corporation. Perzel's nephew, Gordon Johnston ( "Johnston "), was President of 8001 Torresdale Corporation at that time. Other Board Members of the 8001 Torresdale Corporation included Perzel's brother, Samuel S. Stokes, Jr. Prior to the summer of 2002, Samuel Stokes, Jr. was attempting to sell the business located at the 8025 Torresdale Avenue Property, and he expected that the real estate would be sold along with the business. Ultimately the business was sold without the real estate. Samuel Stokes, Jr. notified Johnston that the real estate was available, and Johnston notified Perzel, Santilli and Stadelberger. The NFCS Board was interested in the property based upon a desire to acquire land at less than market value for expansion and a concern for the potential use of land by a third party in a manner adverse to the interests of the school. Perzel, 05 -005 Page 22 On July 19, 2002, Johnston obtained a real estate appraisal for the 8025 Torresdale Avenue Property. As of July 19, 2002, the appraised value of the 8025 Torresdale Avenue Property with improvements was $150,400. 8001 Torresdale Corporation entered into negotiations for the purchase of the 8025 Torresdale Avenue Property. Johnston negotiated with Samuel Stokes, Jr. Perzel was not involved in the negotiations. On October 17, 2002, Perzel and her siblings entered into an agreement to sell the 8025 Torresdale Avenue Property to 8001 Torresdale Corporation. Johnston signed the sales agreement on behalf of 8001 Torresdale Corporation. Settlement occurred on December 27, 2002. On December 27, 2002, Perzel and her siblings, Samuel C. Stokes, Jr., Sally S. Ruth, and Susan S. Johnston, conveyed the 8025 Torresdale Avenue Property to 8001 Torresdale Corporation for the sum of $100,000, and on that same date, the NFCS executed an addendum to its November 9, 2001, lease agreement with 8001 Torresdale Corporation to add the real property at the 8025 Torresdale Avenue Property. (Fact Findings 63, 67). From the totality of the stipulated findings, it is clear that no open and public process was observed as to these transactions. The value of each transaction was greater than $500. (See, Fact Findings 61 -63, 67 -68; cf., Fact Finding 44). The parties have stipulated that Perzel, her two sisters and her brother each received $25,000 as a result of the sale of the 8025 Torresdale Avenue Property to 8001 Torresdale Corporation. Fact Findings 64, 79. If the property would have sold at the appraised value of $150,400, each individual potentially could have received at least $12,600 more. Perzel did not publicly disclose her ownership interest in the 8025 Torresdale Avenue Property prior to its sale to 8001 Torresdale Corporation. Perzel states that she believed that all persons involved with NFCS were aware that her brother had operated a business at 8025 Torresdale Avenue. Perzel states that no formal disclosure was made on advice of counsel, allegedly since Perzel was not associated with FNFCS /8001 Torresdale Corporation. The parties have stipulated that Perzel did not abstain from any NFCS actions or discussions related to the acquisition and funding of the 8001 Torresdale Avenue Property and the 8025 Torresdale Avenue Property by FNFCS /8001 Torresdale Corporation. There is no record of her individual vote. NFCS actions to approve leases and lease addenda enabled 8001 Torresdale Corporation to obtain funding, used in part to purchase the 8025 Torresdale Avenue Property owned by Perzel and her family. In her official capacity as a member of the NFCS Board, Perzel was required to file a SFI form annually by May 1 containing information for the prior calendar year. Perzel filed SFIs for calendar years 2000 and 2002 in 2005, after the filing deadlines of May 1, 2001, and May 1, 2003, respectively. 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 an unintentional transgression of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred when Perzel, as Member Perzel, 05 -005 Page 23 and President of the New Foundations Charter School Board of Directors, failed to see a potential violation of the Ethics Act by participated [sic] in the process of selecting real estate to house the New Foundations Charter School, which was located on property adjacent to real estate owned jointly by herself and members of her immediate family (siblings), knowing or having reason to believe that future expansion of the New Foundations Charter School may require acquisition of said property; b. That a technical transgression of Section 1103(f) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(f) occurred when the NFCS entered into a contract to purchase property owned by herself and members of her immediate family, adjacent to property housing the New Foundations Charter School, with a sale price of greater than $500.00 and such sale was not conducted through an open and public process; and c. That a violation of Section 1104(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1104(a) occurred in relation to Perzel's oversight in failing to timely file Statements of Financial Interests forms for calendar years 2000 and 2002. 4. Perzel agrees to make payment in the amount of $2,000 in settlement of this matter payable to the Commonwealth of Pennsylvania, and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. 5. Perzel has filed amended Statements of Financial Interests for calendar years 2000 through 2002 which represents the deficient years concerning Statements of Financial Interests, 65 Pa.C.S. §1104(a). 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 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 accept the recommendation of the parties as to the unintentional transgression of Section 1103(a). Perzel used the authority of her public office as a Member and President of the NFCS Board in relation to the relocation of the NFCS to the 8001 Torresdale Avenue Property. In her official capacity as a Member and President of the NFCS Board, Perzel took an active role in finding a permanent location for the NFCS, participating in site visits, bringing various potential sites to the NFCS Board's attention, and reporting to the NFCS Board on potential sites locations. No other NFCS Board Members reported to the NFCS Board concerning site evaluations. It was Perzel who gave the first public indication that Perzel, 05 -005 Page 24 the 8001 Torresdale Avenue Property was a potential site for the NFCS. As negotiations were underway to purchase the 8001 Torresdale Avenue Property, and at or about the time Perzel was actively involved in the creation of FNFCS for the purpose of purchasing and owning property to be leased to NFCS for school operations, Perzel reported to the NFCS Board on May 8, 2001, and June 21, 2001, that she believed the building at the 8001 Torresdale Avenue Property would be the permanent home of NFCS. Perzel participated in the decision of the NFCS Board to locate NFCS at the 8001 Torresdale Avenue Property. On November 9, 2001, Perzel as President of the NFCS Board signed a Surety Agreement, Security Agreement, and Disclosure for Confession of Judgment required for the settlement as to the purchase of the 8001 Torresdale Avenue Property by FNFCS. As Perzel was taking the above actions in her public capacity as a Member and President of the NFCS Board, she knew or had reason to believe that future expansion of the NFCS might require acquisition of the 8025 Torresdale Avenue Property owned by Perzel and her siblings. Indeed, based upon the stipulated findings, the only direction in which expansion could occur from the 8001 Torresdale Avenue Property was via the 8025 Torresdale Avenue Property. We conclude that at the time of Perzel's official actions relating to the consideration and purchase of the 8001 Torresdale Avenue Property for the NFCS, there was a reasonable expectation of a private pecuniary benefit to Perzel and her siblings through a subsequent sale of the 8025 Torresdale Avenue Property for expansion of the NFCS. Cf., Cuppels, Order 1237; Amato, Opinion 89 -002. The private pecuniary benefit to Perzel and her siblings was realized in 2002 through the subsequent sale of the 8025 Torresdale Avenue Property to FNFCS' successor in name, 8001 Torresdale Corporation. The parties have stipulated that Perzel, her two sisters and her brother each received $25,000 as a result of the sale of the 8025 Torresdale Avenue Property to 8001 Torresdale Corporation. Although intent is not a requisite element for a transgression of Section 1103(a) of the Ethics Act (Yocabet v. State Ethics Commission, 531 A.2d 536 (Pa. Cmwlth. 1987); see also, Green, Order 1524; Shaub, Order 1242), it is one of the factors that this Commission may consider in determining the proper disposition of a case. We conclude that the application of the law to the facts before us supports a finding of an unintentional transgression of Section 1103(a) of the Ethics Act. Accordingly, we hold that an unintentional transgression of Section 1103(a) of the Ethics Act occurred when Perzel, as a Member and President of the NFCS Board, failed to see a potential violation of the Ethics Act by participating in the process of selecting real estate to house the NFCS, which was located on property adjacent to real estate owned jointly by herself and members of her immediate family (siblings), knowing or having reason to believe that future expansion of the NFCS might require acquisition of said property. We shall now consider the parties' recommendation that a technical transgression of Section 1103(f) of the Ethics Act occurred when the NFCS entered into a contract to purchase property owned by Perzel and members of her immediate family adjacent to property housing the NFCS, where the sale price was greater than $500 and such sale was not conducted through an open and public process. See, Consent Agreement, paragraph 3 b, quoted above. We note potential factual and legal issues as to the scope of the allegation and the applicability of Section 1103(f). As to the latter, the 8025 Torresdale Avenue Property was sold to 8001 Torresdale Corporation, not to NFCS. Of course, 8001 Torresdale Corporation exists for the purpose of purchasing and owning property to be leased to NFCS, and on December 27, 2002, when the 8025 Torresdale Avenue Property was conveyed to 8001 Torresdale Corporation, the NFCS executed an addendum to its lease Perzel, 05 -005 Page 25 agreement with 8001 Torresdale Corporation to add the 8025 Torresdale Avenue Property. (Fact Findings 34, 63, 67). From the totality of the stipulated findings, it is clear that no open and public process was observed as to these transactions. The value of each transaction was greater than $500. (See, Fact Findings 61 -63, 67 -68; cf., Fact Finding 44). It would appear that for the purpose of resolving the Section 1103(f) allegation in this case, the parties have agreed to treat the conveyance of the 8025 Torresdale Avenue Property as a conveyance to NFCS. Therefore, 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 finding of a technical transgression of Section 1103(f) would be appropriate as part of an overall settlement of this case, we shall accept the parties' proposed disposition as to Section 1103(f). We note that the Section 1103(f) 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 technical transgression of Section 1103(f) of the Ethics Act occurred when the NFCS entered into a contract to purchase property owned by Perzel and members of her immediate family adjacent to property housing the NFCS, where the sale price was greater than $500 and such sale was not conducted through an open and public process. Turning to the recommended violation of Section 1104(a) of the Ethics Act, it is clear from the stipulated findings that Perzel did not timely file her Statements of Financial Interests for calendar years 2000 and 2002 until 2005, well after the respective deadlines of May 1, 2001, and May 1, 2003. We hold that a violation of Section 1104(a) of the Ethics Act occurred in relation to Perzel's oversight in failing to timely file Statements of Financial Interests forms for calendar years 2000 and 2002. In furtherance of the Consent Agreement, Perzel has already filed amended Statements of Financial Interests for calendar years 2000 through 2002. Perzel has also agreed to make payment in the amount of $2,000 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. 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, per the Consent Agreement of the parties, Perzel is directed to make payment in the amount of $2,000 in settlement of this matter, payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of this Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. Respondent Sheryl S. Perzel ( "Perzel "), as a Member and President of the New Foundations Charter School ( "NFCS ") Board of Directors /Trustees ( "NFCS Board ") Perzel, 05 -005 Page 26 since April 10, 2000, 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. An unintentional transgression of Section 1103(a) of the Ethics Act occurred when Perzel, as a Member and President of the NFCS Board, failed to see a potential violation of the Ethics Act by participating in the process of selecting real estate to house the NFCS, which was located on property adjacent to real estate owned jointly by herself and members of her immediate family (siblings), knowing or having reason to believe that future expansion of the NFCS might require acquisition of said property. 3. A technical transgression of Section 1103(f) of the Ethics Act occurred when the NFCS entered into a contract to purchase property owned by Perzel and members of her immediate family adjacent to property housing the NFCS, where the sale price was greater than $500 and such sale was not conducted through an open and public process. 4. A violation of Section 1104(a) of the Ethics Act occurred in relation to Perzel's oversight in failing to timely file Statements of Financial Interests forms for calendar years 2000 and 2002. In Re: Sheryl S. Perzel, Respondent ORDER NO. 1433 File Docket: 05 -005 Date Decided: 3/27/07 Date Mailed: 4/11/07 1 An unintentional transgression of Section 1103(a) of the Ethics Act occurred when Respondent Sheryl S. Perzel ( "Perzel "), as a Member and President of the New Foundations Charter School ( "NFCS ") Board of Directors/Trustees ( "NFCS Board "), failed to see a potential violation of the Ethics Act by participating in the process of selecting real estate to house the NFCS, which was located on property adjacent to real estate owned jointly by herself and members of her immediate family (siblings), knowing or having reason to believe that future expansion of the NFCS might require acquisition of said property. 2. A technical transgression of Section 1103(f) of the Ethics Act occurred when the NFCS entered into a contract to purchase property owned by Perzel and members of her immediate family adjacent to property housing the NFCS, where the sale price was greater than $500 and such sale was not conducted through an open and public process. 3. A violation of Section 1104(a) of the Ethics Act occurred in relation to Perzel's oversight in failing to timely file Statements of Financial Interests forms for calendar years 2000 and 2002. 4. Per the Consent Agreement of the parties, Perzel is directed to make payment in the amount of $2,000 in settlement of this matter, payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, John J. Bolger, Vice Chair Chair Louis W. Fryman and Commissioner Donald M. McCurdy did not participate in this matter.