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HomeMy WebLinkAbout1441 KistlerIn Re: Kenneth Kistler, 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 Nicholas A. Colafella 04 -037 Order No. 1441 6/11/07 6/29/07 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 "), Act 93 of 1998, Chapter 11, 65 Pa.C.S. § 1101 et seq., by the above - named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was filed and a hearing was held. The record is complete. 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. Kistler, 04 -037 Page 2 I. ALLEGATIONS: That Kenneth Kistler, a (public official /public employee) in his capacity as President of the Carbon - Lehigh Intermediate Unit Board of Directors violated the following provisions of the State Ethics Act (Act 93 of 1998) when he used the authority of his position for the private pecuniary gain of himself and /or businesses with which he is associated, Kistler Pole Buildings and Kistler Building Products; when he participated in discussions and actions of the board of directors to award contracts to Dale Roth, and /or businesses owned by the same, without an open and public process; and when his company subsequently entered into subcontracts with Roth to construct those buildings. § 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). § 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 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). § 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. Kistler, 04 -037 Page 3 65 Pa. C. S. § 1102. II. FINDINGS: A. Pleadings 1. On August 4, 2004, a letter was forwarded to Kenneth Kistler, by the Investigative Division of the State Ethics Commission informing him that a complaint against him was received by the Investigative Division and that a full investigation was being commenced. a. The domestic return receipt bore the signature of Shannon Kistler, with a delivery date of August 5, 2004. 2. Kistler has served as a member of the Carbon - Lehigh Intermediate Unit Board of Directors since [at least] January 1999. 3. The Carbon - Lehigh Intermediate Unit Board of Directors is comprised of representatives from fourteen (14) School Districts. a. School Districts that comprise the Carbon - Lehigh Intermediate Unit (hereinafter "CLIU ") include Allentown, Catasauqua Area, East Penn, Jim Thorpe Area, Lehighton Area, Northern Lehigh, Northwestern Lehigh, Palmerton Area, Panther Valley, Salisbury Township, Southern Lehigh, Weatherly Area, Whitehall - Coplay, and Parkland. b. Each district gets one representative on the CLIU Board. 4. Kistler was the Northwestern Lehigh School District representative on the CLIU Board. a. Kistler has served as a member of the Northwestern Lehigh Board of School Directors since [at least] January 1994. 5. Professionally Kistler has an ownership interest in Kistler Building Supply and Kistler Pole Buildings. 6. Copies of Statements of Financial Interests forms filed by Kistler with the Northwestern Lehigh School District were forwarded to the Carbon Lehigh Intermediate Unit 21 for record retention purposes. 7 Article[s] of Incorporation on file with the Pennsylvania Department of State, Corporation Bureau include corporate filings for Kistler Building Supply and Kistler Pole Building Company. a. Kenneth Kistler is President of Kistler Building Supply Inc. b. Corporation officers of Kistler Pole Building Company are Kenneth Kistler, President; Roland Keen, Vice President; and Beverly Kistler, Secretary. 8. The CLIU maintained a building and ground committee (hereinafter, "building committee ") consisting of select members of the CLIU board of directors. 9. The building committee was charged with pursuing the board of directors' interest in various construction projects .... a. Non - committee members were permitted to attend committee meetings. Kistler, 04 -037 Page 4 10. Kistler has served as a member of the building committee since [at least] January 1998. 11. Kistler had been the chairman of the building committee from [at least] January 1998 until March 18, 2002, when he resigned from his position as chairman. 12. Keegan was the staff member who was most active with building committee projects. THE FOLLOWING FINDINGS CONCERN THE TRANSPORTATION FACILITY. 13. In late 1999, the CLIU began exploring the possibility of constructing a garage (hereinafter "Transportation facility ") in order to house the buses it utilized to serve Carbon and Lehigh Counties. a. The board of directors no longer deemed the facility previously used to store its buses adequate to meet the growing needs of the intermediate unit. 14. Between March 2000 and November 2001 Kistler advised the CLIU board of developments and /or participated in actions of the board regarding the transportation facility: March 20, 2000: June 22, 2000: July 17, 2000: 2000: Building committee met prior to board meeting to discuss sites for the transportation facility. Motion by Bruchak, second by Foster to request quotes for the cost of a feasibility study for development of a property to build the transportation center. Motion approved unanimously with Kistler voting. February 15, 2001: Kistler reports receipt of the realtor's appraisal, feasibility and zoning studies are underway with reports due by 2/19/2001. Kistler reports the agreement of sale on the White property rescinded on 5/31/01. The committee's first choice was back on the market. November 20, June 18, 2001: Kistler reports Keegen and Tourtellott are researching nine possible sites to house a new transportation facility. Kistler advises building committee will look at land after the board meeting and report back to board with a recommendation on the purchase of land to house the transportation facility. Kistler report[s] the committee narrowed the search for the transportation facility to two sites. July 16, 2001: Kistler provided update of transportation facility. Motion unanimously approved to authorize Barry, (sett & Associates to perform Land Feasibility Study, Phase I Study, and Well- Septic Testing on Lesher property in an amount not to exceed $10,000. Kistler recorded as voting. October 15, 2001: CLIU Assistant Executive Director Keegan reports that after approvals facility can be started in about six months. Kistler, 04 -037 Page 5 November 19, 2001: Kistler turned meeting over to Keegen. Keegen reported meeting with Roth Marz, architectural firm, many options pursued. Roth Marz to get back to Keegen re: square footage costs and lease option costs. 15. ... [In /about June] 2000, ... [site visits were conducted as to] the top four candidates. a. Kistler was in attendance during these visits. 16. Minutes from the CLIU's December 18, 2000, meeting included the following discussion and official action taken by the board to secure property for the transportation facility: "Building and Grounds /Special Education Transportation Committee Report Mr. Kenneth Kistler, Chairperson, discussed the CLIU Transportation Facility and property on which to house such a facility. After discussion, the following motion was brought to the floor: - Motion: The Carbon Lehigh Intermediate Unit Board of Directors grants the Administration permission to bid on a property to house the CLIU transportation facility." a. The motion carried with Kistler voting in its favor. 17. Respondent denies paragraph 30 of the Investigative Complaint as stated but admits that Respondent revealed during the June 18, 2001, Board meeting that the larger " Lesher" property was available and that the purchase price had dropped from $600,000 to $450,000. (Investigative Complaint, at paragraph 30; Answer to Investigative Complaint, at paragraph 30). 18. ... [O]n June 6, 2001, Realtor Briedinger forwarded a letter of intent to purchase the Lesher property. a. The letter was sent to Sharon Gage, a realtor working on behalf of the Leshers. b. The CLIU's offer was accepted by the Lesher's ... [in June] 2001. 19. Dale Roth has an ownership interest in Roth Marz Partnership, P.C. (hereinafter, "RMP "), a firm that addresses architectural needs, as well as construction project planning and management. a. RMP is principally located in Erie, Pennsylvania. b. At all time relevant to the construction of the transportation facility, RMP maintained a Lehigh Valley Office at 2970 Corporate Court, Suite 2, Orefield, PA 18069. 20. On June 13, 2001, Assistant Executive Director Keegan submitted written questions to attorney Charles Watters regarding restrictions on building and leases. Keegan's specific questions were: a. Can the IU own a property and have a building built by a contractor and lease the building? Kistler, 04 -037 Page 6 b. Can the IU enter into a lease /purchase agreement and be relieved of certain construction requirements? 21. Keegan's requested advice on behalf of the CLIU's did not inquire whether Kistler would legally be permitted to enter into a contract regarding the transportation facility. 22. On June 19, 2001, the CLIU signed an agreement of sale regarding the Lesher property. a. The board, including Kistler, voted on June 18, 2001, to approve the purchase. 23. Although not a party to ... [litigation regarding the Lesher property], the CLIU was affected by having construction of the transportation facility delayed until the suit was settled. 24. The choice and relative costs of leasing vs. purchasing the Lesher property during construction were presented to the CLIU board during its public meeting of March 18, 2002, during executive session. a. Kistler was present during this public meeting of the Board of directors. 25. Immediately following an executive session of the March 18, 2002, public meeting of the CLIU board of directors Kistler resigned as Chairman of the Building and Grounds Committee. 26. The CLIU accepted Kistler's resignation and also took action to approve Roth Marz as its agent to pursue the purchase provision of the agreement: a. Building & Grounds /Special Education Transportation Committee Report Per having met with the Building & Grounds /Special Education Transportation Committee prior to our Board meeting, the following motions were made: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors approve the resignation of Kenneth Kistler as Chairperson of the Building and rounds [sic] /Special Education Transportation Committee and approve James Pollard as Chairperson of said committee. Moved: Kenneth K. Kistler; Seconded: John Wieand; Vote: Yes — 13; No — 0; Abstentions — 0; Absent — 1. - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby elects to exercise its option provision under Paragraph 1 in the existing Agreement of Sale for the property in Lehigh Township by signing its purchase rights to a third party. Moved — John Wieand; Seconded: Linda Pacifico; Vote: Roll Call: Yes — Pacifico, Richwine, McGuire, Dorshimer, Pollard, Vavra, Foster, Furst, Auteri, Palmer, Wieand, and Hoffman; No — 0; Abstentions — Kistler; Absent — 1. Motion carried. - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby names Roth Marz as its agent to pursue the purchase provision in the existing Agreement of Sale for the property located in Lehigh Township. Moved: Bryan Dorshimer; Seconded: James Kistler, 04 -037 Page 7 Pollard; Vote: Roll Call: Yes — Richwine, McGuire, Dorshimer, Pollard, Vavra, Foster, Furst, Auteri, Palmer, Wieand, Hoffman, and Pacifico; No — 0; Abstentions — Kistler; Absent — 1. Motion carried. 27. On February 6, 2002, Kistler, prior to his abstention on CLIU actions on the transportation facility, had faxed a bid[ /preliminary cost estimate] to Gary Caldwell, an employee of Roth Marz Partnership regarding project construction costs. 28. Also during the Board's March 18, 2002, meeting, the Directors approved a motion to exercise its option under the Agreement of Sale for the property located in Lehigh Township by [as]signing its purchase rights to a third party. a. Kistler abstained from voting on this motion. 29. On ... [March 26, 2002] Roth met with Kistler. 30. On April 26, 2002, Kistler sent a fax to Gary Caldwell that contained an adjusted proposal to construct the CLIU Transportation facility. a. This offer indicated that the total cost of the project was $553,805.00. 31. On May 28, 2002, Dale Roth sent an email to Kistler informing him what colors Roth desired for the roof, gutters, downspouts, and sidewall panels of the transportation facility. 32. On July 12, 2002, Kistler and Roth sign a contract regarding the CLIU Transportation Facility. a. The contract states that Kistler will perform construction work regarding the CLIU Transportation facility for $550,492.00. 33. On July 12, 2002, Kistler and Roth signed a purchase agreement. a. The agreement is for a 70 foot X 256 foot pole construction building. b. Under the agreement construction is [estimated] to begin on the week of August 19, 2002. 34. On July 15, 2002, the CLIU Board of Directors voted and approved of a four -part motion concerning the Building and Grounds /Special Education Transportation facility. The Board approved the following motion: a. MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby: (1)Authorized its Executive Director to execute the Assignment of Real Estate Sales Agreement as filed with the Official Minutes; (2) Approves the Lease Agreement with Cornerstone, R.E., LLC, and authorized CLIU' Board Resident [sic] to execute the Lease Agreement as filed with the Official Minutes; (3) Approves the Option Agreement with Cornerstone, R.E., LLC, and authorized CLIU'S Board President to execute the Option Agreement as filed with the Official Minutes; and (4) Approves the Subordination, Non - Disturbance, and Attornment Kistler, 04 -037 Page 8 Agreement with Allfirst Bank, and authorized CLIU's Board President to execute such Agreement as filed with the Official Minutes. b. Kistler abstained from the vote on this motion .... 35. On August 1, 2002 CLIU entered into a lease with Cornerstone R.E., LLC regarding the transportation facility. 36. Contemporaneous with the lease, on August 1, 2002, CLIU and Cornerstone entered into an option agreement regarding the transportation facility. 37. On August 15, 2002, Ray Reppert, of Roth Martz Partnership, sent an email to Kistler pertaining to the CLIU Bus Transportation facility. a. The email contained an attachment containing progress drawings for the CLIU us [sic] Transportation facility. b. The email stated that the attached drawings were to enable Kistler to coordinate them with Kistler's pole building drawings, and update accordingly. 38. Kistler filed two Conflict of Interest Abstention Memorandums, each dated August 19 2002, that stated the reasons he abstained from votes on March 18 and July 15 2002. a. He listed the reason for his March 18, 2002, abstention as: May be involved with construction." b. He listed the reason for his July 15, 2002, abstention as: May be involved with construction." c. Kistler already had a signed contract, dated July 12, 2002, when he filed these abstention memoranda. d. Kistler ... had faxed a bid[ /estimate] to Roth on February 6, 2002, five months before the [aforesaid] disclosures. 39. The CLIU began making monthly lease payments to Cornerstone pursuant to the lease of August 1, 2002, on April 9, 2003. Between April 9, 2003, and June 21, 2004, Kistler participated in the approval of these payments [at /about the meeting dates listed below] as follows: a. Amount ($) 21,459.00 21,459.00 21,459.00 21,459.00 21,459.00 21,459.00 21,459.00 21,459.00 3,382.76 34,183.55 Meeting Official Date Action Payment 04/17/03 Vote Rent 05/19/03 Vote Rent 06/16/03 Vote Rent 07/21/03 Vote Rent 07/21/03 Vote Rent 08/18/03 Absent Rent 09/15/03 Absent Rent 10/20/03 Vote Rent (Real estate tax 10/20/03 Vote pymt) 01/15/04 Vote (Includes $12,724.55 Kistler, 04 -037 Page 9 Total b. CLIU bill lists are approved in their entirety by roll call vote. c. Bill lists are approved as part of the same motion ratifying all monthly fiscal matters. 40. The Lesher property contained a golf shack that the CLIU wanted renovated for use in conjunction with the transportation facility. 41. On March 15, 2004, the CLIU board appointed a financing team to present and recommend an appropriate financing plan for purchasing the transportation facility from Cornerstone. a. Kistler voted in favor of the motion. tax pymt) (Includes $380.86 tax 21, 839.86 01/15/04 Vote pymt) (Includes $4,605.89 26,064.89 02/19/04 Vote tax pymt) (Includes $988.25 tax 22,667.25 03/15/04 Vote pymt) 21,459.00 04/19/04 Vote Rent 21,459.00 05/17/04 Vote Rent 21,459.00 06/21/04 Absent Rent 344,187.3 1 42. Having acquired the necessary funding, the CLIU entered in to a special warranty deed with Cornerstone on July 29, 2004, for the purpose of purchasing the transportation facility. a. Consideration was listed as $2,348,882.61. b. The property contained 40.588 acres and is identified as Northampton County parcel Map J2, block 7, lot 5. 43. On August 11, 2004, a mortgage was entered into between the CLIU and the Bank of New York N.A. a. The LLIU [sic] borrowed $2,510,000. b. This mortgage was on property identified as Northampton County parcel Map J2, block 7, lot 5. c. Kenneth K. Kistler signed the mortgage in his official capacity as President to the Carbon Lehigh IU -21 Board of Directors. 44. The CLIU did not solicit bids for the construction of the transportation facility. a. A no bid contract was awarded to Dale Roth of Cornerstone, L.L.C. (1) In response to an Investigative Complaint averment that Dale Roth /Cornerstone, L.L.C. "ultimately subcontracted the [transportation facility] project to Kistler," Respondent pleads as follows: "Respondent further specifically denies that all work was Kistler, 04 -037 Page 10 subcontracted by Cornerstone, R.E. LLC to Respondent. Rather, Respondent merely provided certain construction services limited to erecting the shell of the building." (Investigative Complaint, at paragraph 75 a; Answer to Investigative Complaint, at paragraph 75 a). 45. Kistler submitted invoices to Cornerstone for the construction of the transportation facility at various stages of the projects completion. a. The dates and amounts of the invoices were as follows: Date Amount 07/19/02 $25,000.00 10/01/02 $42,571.00 11/01/02 $82,897.00 12/02/02 $190,839.00 01/02/03 $136,345.00 02/04/03 $61,217.00 Total: 538,869.00 46. Kistler received a total commission of $26,858.45 for constructing the transportation facility. THE FOLLOWING FINDINGS CONCERN THE LEHIGH LEARNING AND ADJUSTMENT CENTER. 47. Contained within the Carbon - Lehigh Intermediate Unit is the Lehigh Learning and Adjustment Center (LLAC). a. The LLAC is devoted to educating ... children with ... [various] needs. 48. On August 20, 1999, the CLIU had entered into a lease with Steven Hirsh (hereinafter "Hirsh ") for the purpose of housing the LLAC in a property located at 7580 Kernsville Road, Orefield, Pennsylvania. a. The lease was to commence on October 1, 1999. b. The lease was for a term of 10 years. 49. The CLIU experienced mold problems in the building leased from Hirsh. a. [Following the first outbreak of mold,] Hirsh attempted to rectify the problems. b. This occurred in or about November 2001. 50. In or about March 2002 the mold problem resurfaced. a. On March 18, 2002, the CLIU board authorized J. Miller and Son to perform a complete environmental evaluation of the property at a cost not to exceed $6,500.00. b. Kistler voted to authorize the study. 51. In or about May 15, 2002, Miller ... provided a report of findings and recommendations. Kistler, 04 -037 Page 11 52. The CLIU board minutes of the June 17, 2002, meeting state in pertinent part: "Termination of Lease - MOTION: The Carbon Lehigh Intermediated [sic] Unit Board of Directors hereby authorizes its solicitor to provide lease termination notice to the Landlord for the property located at 7580 Kernsville Road, Orefield, Pennsylvania." a. b. This motion carried with Kistler voting in favor of breaching the lease. 53. On June 17, 2002, the CLIU board of directors approved a motion authorizing Dale Roth to pursue construction of the LLAC on property adjacent to the Roth's Lehigh Valley office located at 2970 Corporate Court, Orefield Pennsylvania. a. The CLIU's board minutes of the June 17, 2002, meeting state in pertinent part: "Construction of Facility - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby authorizes Dale Roth to pursue construction of a facility on property adjacent to the Lehigh Valley office at 2970 Corporate Court, Orefield, Pennsylvania, for the purpose of providing leased space to the Carbon Lehigh Intermediate Unit Lehigh Learning and Adjustment School." This motion carried with Kistler voting in its favor. 54. Kistler had done work for Roth on ... the CLIU transportation facility. 55. Minutes of the CLIU board meeting of October 20, 2003, confirm the board's authorization for Roth Marz to construct the LLAS: WHEREAS, the Carbon Lehigh Intermediate Unit #21 ( "CLIU ") previously authorized Roth Marz Partnership to initiate the planning process for the construction of a facility for the Lehigh Learning Adjustment School ( "LLAS "); WHEREAS, Township approval for the construction of the LLAS facility has been given; WHEREAS, the Board of Directors of CLIU ( "the Board ") has determined it to be in the best interest of CLIU to pursue the construction of the LLAS Facility; NOW THEREFORE BE IT RESOLVED, by the Board of Directors of Carbon Lehigh Intermediate Unit #21, as follows: 1. The Board hereby authorizes Roth Marz Partnership to begin the construction phase of the LLAS Facility. Any Lease for the Facility shall be subject to the approval of the Board. Motion approved by an 8 to — vote with Kistler abstaining. 56. Kistler met with Roth on April 18, 2003. Kistler, 04 -037 Page 12 57. On May 16, 2003, Ray Reppert sent a fax to Kistler containing the updated floor plan for the CLIU classroom building. a. Reppert advised Kistler to update his proposal and send it to Dale Roth as soon as possible. 58. On October 8, 2003, Kistler sent a fax to Reppert containing a catalog of various roof trusses that may be used in the construction of the CLIU classroom building. a. Kistler obtained the truss information on September 4, 2003. 59. On November 5, 2003, Kistler sent an email to Reppert requesting specific details regarding the classroom building's construction. a. Roth Marz sends a letter to Kistler providing HVAC plans .... 60. Respondent admits that he met with Roth on December 4, 2003, but asserts that the meeting did not pertain to the LLAS or transportation facility; Respondent admits meeting with Roth on September 18, 2003, October 30, 2003, and December 4, 2003, relative to design options for the Northern Lehigh Community Center, and Respondent avers that these meetings, like "many other preliminary contacts," did not result in a contract or compensable work being performed by Respondent. (Investigative Complaint, at paragraph 90 f; Answer to Investigative Complaint, at paragraph 90 f). 61. On May 4, 2004, Ray Reppert, an employee of Roth Marz Partnership, emailed Kistler the floor plan for the CLIU classroom building. 62. On May 17, 2004, the CLIU board approved the Lease Agreement between Dale and Ruth Roth for LLAC. a. The vote was unanimous with Kistler abstaining. 63. On June 17, 2004, Kistler and Roth executed a purchase agreement and a price quote for the CLIU classroom building. a. The purchase agreement and price quote each were in the amount of $641,943.00 [sic]. 64. The CLIU did not solicit bids for the construction of the LLAS classroom building. a. A no bid contract was awarded to Dale and Ruth Roth, who then entered into a subcontract with Kistler. (1) Respondent admits that he became a subcontractor to Roth as to the construction of the LLAS facility, but asserts that this was pursuant to an open and public process within the meaning of the Ethics Act without any applicable competitive bid requirement. (Investigative Complaint, at paragraph 95 a -b; Answer to Investigative Complaint, at paragraphs 95 a -b). b. Kistler's subcontract with Roth was in excess of $500.00. 65. The CLIU began making monthly lease payments to Dale and Ruth Roth pursuant to lease ... [approved] May 17, 2004, on February 10, 2005. Kistler participated in the approval of these payments [at /about the meeting dates listed below] as follows: Kistler, 04 -037 Page 13 Amount ($) Meeting Official Payment Date Action 16,900.00 02/17/05 Absent Rental 16,900.00 02/17/05 Absent Rental 16,900.00 03/21/05 Vote Rental 18,991.85 04/18/05 Vote Rental 16,900; Bottle Gas 2,091.85 16,900.00 05/16/05 Absent Rent 27,672.14 06/20/05 Vote Repairs 10,772.14; Rent 16, 900.00 26,044.93 07/18/05 Absent Taxes 9,144.93; Rent 16, 900.00 Total 140,308.92 b. These payments were approved in the same manner as lease payments made for the transportation center. 66. Reed was the CLIU Solicitor. 67. Kistler submitted invoices to Dale and Ruth Roth for the construction of the CLIU classroom building at various stages of the project's completion. a. The dates and amounts of the invoices were as follows: Date Amount 05/06/04 $10,000.00 06/23/04 $60,000.00 10/25/04 $218,360.00 11/22/04 $300,361.00 01/31/05 $45,712.00 03/31/05 $4,000.00 Total: $638,433.00 b. Roth paid each of Kistler's invoices as follows: 06/21/04 10/21/04 11/23/04 02/01/05 04/01/05 $60,000.00 218, 360.00 300, 361.00 45, 712.00 4,000.00 68. Kistler received a total commission of $31,921.65 for constructing the LLAC classroom building. a. Kistler's commission is 5% of $638,433.00, which total [is] the amount paid by the Roth's. B. Testimony 69. Diane Carfara ( "Carfara ") is an Administrative Assistant and the Secretary for the Carbon Lehigh Intermediate Unit ( "CLIU ") Board of Directors ( "Board "), having served in these capacities since approximately 1991. a. Carfara's duties as secretary for the CLIU Board include taking minutes at the Board's regular public meetings. Kistler, 04 -037 Page 14 (1) Minutes are not taken of the CLIU Board's executive sessions. b. Carfara's duties with the CLIU include preparing any advertisements for any type of bidding for purchases made by the CLIU. c. Carfara was never directed to prepare any bid advertisements for the construction of the Transportation facility. d. Carfara was never directed to prepare any bid advertisements for the construction of the Lehigh Learning Adjustment School ( "LLAS "). e. ID 23 -1 -3 consists of two abstention memoranda dated August 19, 2002, and one abstention memorandum dated November 17, 2003, from Respondent to Carfara. (See, Finding 97). (1) The dates of the abstention memoranda are the dates they were filed. (2) Abstention memoranda were available and were filed by CLIU Board members at least as early as September 17, 2001. 70. Dr. Frank J. Ferrari ( "Ferrari ") served as the Executive Director of the CLIU from 2000 until his retirement on March 30, 2006. a. CLIU Board committees are advisory and take no official action on behalf of the CLIU Board. b. Only the CLIU Board made decisions for the CLIU. c. The CLIU Building and Grounds /Special Education Transportation Committee ( "building committee ") was involved with the Transportation facility project. (1) Respondent served as Chairperson of the building committee as of December 20, 1999, when the building committee was formed by combining two committees. d. The building committee visited approximately four of fifteen sites that had been identified by CLIU staff as potential sites for the Transportation facility. (1) The first property that was considered for the Transportation facility was known as the "White Christmas Tree Farm," which property was ultimately rejected due to its topography and size. (2) The property that was ultimately used for the Transportation facility was known as the " Lesher" property. e. The Lesher property was initially too expensive for the CLIU, but the price was later reduced. f. The CLIU Board decided to lease the property for the Transportation facility from a third party rather than to purchase the land outright and build the facility, based upon information that it would be more cost - effective to do so. (1) Ferrari was informed by other Intermediate Unit Executive Directors that lease- and - purchase arrangements were cost effective and legal. Kistler, 04 -037 Page 15 g. (2) The CLIU administrative staff worked on the development of cost comparisons for purchasing versus leasing with an option to purchase. It was Ferrari's understanding that based upon the cost estimates, the cost of the Transportation facility under a lease- and - purchase arrangement was estimated to be $470,719 less than the cost under an outright purchase approach. (a) Ferrari testified that he believed the cost estimates under the lease- and - purchase approach versus the purchase approach were shared with the CLIU Board prior to the Board's decision on March 18, 2002, to assign its purchase rights to Roth Martz Partnership. (3) The CLIU Board did not put the assignment of its purchase rights or the construction of the Transportation facility out for bid. (1) Ferrari testified that because the CLIU decided to lease the Transportation facility, it did not have to put the project out for competitive bids. h. Ferrari testified that because the Transportation facility was to be leased, the building committee did not discuss contractors. (1) Under a lease arrangement, the CLIU only had to deal with the Lessor. CLIU staff, the "cabinet," and the building committee were involved in providing input as to what was needed for the Transportation facility. (1) The administration advised the building committee, and the building committee forwarded information to the entire CLIU Board for a decision. (a) Only the CLIU Board voted. (2) Ferrari's assistant, Robert Keegan ( "Keegan "), helped plan the Transportation facility and remained involved in the Transportation facility project through construction. (a) Keegan was involved in the day -to -day matters concerning potential sites for the Transportation facility. (b) Keegan reported to Ferrari and the building committee regarding potential sites for the Transportation facility. (3) Keegan provided monthly memoranda /reports to the building committee chairperson to share with the CLIU Board. (a) Keegan testified that during Respondent's tenure as building committee chairperson, it was Respondent's practice to read Keegan's memoranda to the CLIU Board. (b) Sometimes during CLIU Board meetings, Keegan provided reports regarding the Transportation facility project directly to the CLIU Board. Kistler, 04 -037 Page 16 j. The CLIU used architect Dale Roth of Roth Marz Partnership for the Transportation facility due to the CLIU's satisfaction with work that had been performed in the past for the CLIU by that firm. k. Ferrari provided inconsistent testimony regarding Respondent's notifications to Ferrari and the CLIU Board that Respondent might be doing construction work on the Transportation facility. (1) On direct examination, Ferrari testified that after the CLIU Board had approved leasing the Transportation facility from Cornerstone R.E., LLC, Respondent called Ferrari and said that he was going to see whether it would be legal for him (Respondent) to work with Roth on the Transportation facility building. (Tr. at 86). (a) It was not until the March 18, 2002, meeting — immediately after Respondent's resignation as Chairman of the building committee —that the CLIU Board acted to approve exercising its option to assign its purchase rights to third party Roth Marz. (ID 7 -193). (See, Finding 87 h(1)). (2) On cross - examination, Ferrari testified that prior to the March 18, 2002, meeting at which Respondent resigned as Chairperson of the building committee, Respondent notified Ferrari that he (Respondent) was potentially going to be involved in working with Roth in the construction of the Transportation facility. (Tr. at 146 -148). Ferrari provided inconsistent testimony as to whether Respondent was involved in discussions at the March 18, 2002, executive session regarding his participation in the construction of the Transportation facility, stating first that he (Ferrari) was certain that the March 18, 2002, executive session was one of the executive sessions in which Respondent engaged in such discussions (Tr. at 161 -162), and moments later stating that he (Ferrari) was not sure if Respondent made such remarks at the March 18, 2002, executive session or one or two prior to that (Tr. at 163). Respondent resigned as Chairman of the building committee at the CLIU Board's March 18, 2002, meeting. (ID 7 -193). (3) (1) The meeting minutes do not include any disclosure by Respondent that he would be pursuing a subcontract with Roth with regard to the construction of the Transportation facility. (2) The meeting minutes do not include any indication or record of the Solicitor's opinion with regard to Respondent's involvement with any type of construction as to the Transportation facility. (a) Ferrari testified that the Solicitor's opinion on this issue was given at an executive session and was not put in writing. (b) Ferrari testified that the essence of what the Solicitor stated was that there was no problem with Respondent performing work on the Transportation facility because Respondent would be working for an investment group and would not be contracting with the CLIU. (Tr. at 150). Kistler, 04 -037 Page 17 m. Ferrari did not recall any instance following the March 18, 2002, meeting at which Respondent attempted to influence the CLIU Board's deliberations or discussed its actions concerning the Transportation facility. n. After leasing the Transportation facility for a time, the CLIU ultimately purchased the Transportation facility. o. By law, intermediate units are prohibited from owning child classroom space. p. The original LLAS facility was leased from an individual named Stephen Hirsh. q. Because of a mold recurrence problem, the CLIU Board decided to terminate its lease with Mr. Hirsh and find alternative facilities for the students at the LLAS. r. At its June 17, 2002, regular meeting, the CLIU Board voted to approve motions to terminate the lease with Hirsh and to authorize Roth to pursue construction of a new facility for the purpose of providing leased space to the LLAS. ID 7- 232 -233. (See, Finding 87 i). (1) Respondent voted in favor of both motions. ID 7- 232 -233. (See, Finding 87 i). s. The LLAS students were removed from the Hirsh facility and were placed in temporary facilities. t. Construction of the LLAS facility was delayed due to litigation involving appeals from the Township Zoning Hearing Board's approval of the construction of the LLAS facility. (1) The appeals progressed from the County Court of Common Pleas to the Commonwealth Court of Pennsylvania and ultimately to the Pennsylvania Supreme Court. u. At some point, Ferrari became aware that Respondent was going to be involved in the construction of the LLAS facility. (1) Ferrari testified that Respondent informed Ferrari that Respondent was going to be involved in the construction of the LLAS facility, but Ferrari could not recall when that occurred. v. At the CLIU Board's regular meeting on October 20, 2003, the CLIU Board took the following actions. (1) The CLIU Board voted to authorize entering into and executing a lease with R &T Management LLC with regard to the leasing of an Administrative Facility from R &T Management LLC. ID 7 -393. (a) This project related to the construction of a new central services building and was distinct from the LLAS project. (b) R &T Management LLC was a business with which Roth was involved. (c) Respondent voted in favor of this Motion. Kistler, 04 -037 Page 18 (2) The CLIU Board voted to authorize the leasing of administrative facilities from R &T Management LLC based upon a variable interest rate program. ID 7 -394. (a) Respondent voted in favor of this Motion. The CLIU Board voted to authorize Roth Marz Partnership to begin the construction phase of the LLAS Facility. ID 7 -394. (a) Respondent abstained as to this Motion. (b) This vote occurred after Commonwealth Court upheld the Zoning Hearing Board's decision as to the LLAS facility. w. Ferrari testified that at some point in time, Respondent announced that he was going to be involved in the construction of the LLAS facility, but Ferrari did not recall when that announcement occurred. x. At its May 17, 2004, regular Board meeting, the CLIU Board voted to ratify Lease Agreement between Dale and Ruth Roth and the CLIU for the LLAS facility. (See, Finding 87 0(1)). (1) Respondent abstained as to this vote. (2) Ferrari testified that he was sure the CLIU Board knew at the time of the May 17, 2004, meeting that Respondent was involved with the construction of the LLAS facility, but that he (Ferrari) did not recall whether Respondent expressed the reason for his abstention from this vote at that time. y. (3) Ferrari testified that he believed that the CLIU did not begin paying on the lease for the LLAS facility until after taking possession. z. The CLIU did not take possession of the LLAS facility until after the building was completed. 71. James Pollard ( "Pollard ") is a former Member of the CLIU Board, having served on the Board for six years. a. Pollard testified that at the March 18, 2002, CLIU Board meeting, Respondent resigned from the building committee completely, such that he was no longer Chairperson or a member of the committee. (1) Pollard testified that after resigning, Respondent no longer attended building committee meetings. b. Pollard testified that he did not recall Respondent participating in any discussions or offering any comments in regards to the Transportation facility after resigning from the building committee. (Tr. at 246 -247). c. Pollard provided various testimony as to when he learned that Respondent might be doing work on the Transportation facility and who provided that information. (1) Pollard initially testified that it was after Respondent resigned from the building committee that Pollard learned that Respondent might bid on doing work on the Transportation facility. (Tr. at 233 -234). Kistler, 04 -037 Page 19 (2) Pollard subsequently testified that prior to the March 18, 2002, meeting at which Respondent resigned from the building committee, he heard that Respondent was going to have some interest in building the Transportation facility. (Tr. at 240 -241). Pollard testified that after Respondent resigned from the building committee Respondent stated that he might have intentions of bidding on the Transportation facility building job. (Tr. at 233, 234). (4) Pollard also testified that "somebody" said that Respondent resigned from the building committee because there was a good possibility that Respondent might get work on the Transportation facility, but that it might not have been Respondent who said that. (Tr. at 234 -235). Pollard subsequently testified that Respondent announced that he had a potential interest in working on the Transportation facility project. (Tr. at 241). d. Pollard testified that when he (Pollard) asked whether there was going to be a conflict of interest, he was told: that there would not be a conflict of interest; that the solicitor said it would be "okay" for Respondent to do the work on the Transportation facility because it was being leased; that Respondent would still remain on the Board but not on the building committee; and that Respondent would have to abstain from anything having to do with the Transportation facility. (Tr. at 241 -242). e. When Respondent resigned as Chairperson of the building committee, Pollard became the new Chairperson of the building committee. (1) Pollard's building committee reports to the CLIU Board were based upon information provided to Pollard by administrative staff member(s) involved in the day -to -day work on the project development. f. Pollard testified that the building committee discussed using Roth as the architect for the Transportation facility, but that such discussions did not occur until after Respondent was no longer on the building committee. The CLIU Board decided to lease the Transportation facility from Roth Marz rather than buy it outright. (1) CLIU administrative staff provided cost comparison information to Pollard, which indicated that the lease option would result in a savings of $470,719 as compared to the purchase option. h. The CLIU Board named Roth Marz to be the third party to pursue the purchase of the property for the Transportation facility. (1) Pollard testified that he had the cost comparison information prior to voting to assign the purchase rights to Roth Marz. (2) Pollard testified, No other contractor was mentioned. All it was, was Roth Marz, you know." (Tr. at 243). CLIU public board meetings were open meetings that were advertised. g. (3) (5) Kistler, 04 -037 Page 20 J. Respondent abstained from the CLIU Board's action at the October 20, 2003, regular Board meeting to authorize Roth Marz Partnership to begin the construction phase of the LLAS facility. (1) Pollard testified that Respondent stated that he might get the job to build the LLAS facility. (Tr. at 254). k. Pollard's last meeting as a Member of the CLIU Board was in November 2003. 72. John Arthur Young ( "Young ") is a registered architect who served as a consultant to Roth Marz Partnership from approximately 2001 until 2004. a. ID 9, pages 1 -3 consists of a memorandum of a "scope of work" that Young prepared to Dale Roth for the construction of the CLIU Transportation facility as a pole building structure. (1) The date on ID 9 -1 /Roth -3 is November 9, 2001. (See, Finding 89 a). (2) Young spoke to Respondent by telephone for the purpose of gathering information regarding the column spacing for a general pole building structure. (a) Young had not had any prior dealings with Respondent. (b) Young testified that he does not recall whether he identified himself as working for Roth or Roth Marz Partnership. (c) Young testified that he does not recall whether he informed Respondent of the project about which he was inquiring, but that he would generally not reveal such information until further into a project. (d) Young testified that his telephone call with Respondent lasted about ten minutes. b. Young testified that a pole building was an appropriate type of structure for the Transportation facility. c. Young testified that a pole building is more economical than a masonry building. 73. Linda Pacifico ( "Pacifico ") is a former CLIU Board Member who served on the Board for approximately two years commencing in August 2001. a. The CLIU Board considered purchasing the Lesher property versus leasing it with an option to purchase and chose the lease with option to purchase because it resulted in a cost savings. b. Pacifico does not recall whether Respondent ever made statements /disclosures that he might be involved with the construction of the Transportation facility or that he was bidding or submitting bids as to the construction of the Transportation facility. (Tr. at 280 -281). c. Pacifico does not remember Respondent ever talking about the Transportation facility, either before or after the March 18, 2002, CLIU Board meeting. Kistler, 04 -037 Page 21 74. Robert J. Keegan, Jr. ( "Keegan ") is the Executive Director of the CLIU, having served in that capacity since April 1, 2006. a. Keegan has been associated with the CLIU for 23 years. (1) Keegan served as Assistant Executive Director of the CLIU from 2000 to March 31, 2006. (2) Prior to serving as Assistant Executive Director of the CLIU, Keegan served as Director of Special Education. b. Only the CLIU Board has decision - making power as to any type of project at the CLIU. c. CLIU committees make recommendations to the full CLIU Board but do not have ultimate decision - making power. d. Discussions at the CLIU regarding a new Transportation facility began at the December 20, 1999, CLIU Board meeting. (1) At that time, Keegan was Director of Special Education and was responsible for supervising transportation. (2) At or about that time, Keegan was placed in charge of developing a replacement facility for transportation. e. Keegan performed duties with regard to planning the Transportation facility and reviewing potential sites for the facility. (1) The CLIU administration and staff developed information as to what was needed for the Transportation facility. (2) Keegan worked with a realtor and also received suggestions from CLIU Board Members and district board members regarding prospective sites. Keegan reviewed 27 prospective sites for the Transportation facility, which were narrowed down to three sites for consideration. g. (3) (a) Keegan testified that the reduction of the list to three properties under consideration was done by the administration without any input from Respondent. f. Keegan testified that the building committee's prime purpose during the planning and site review phase of the Transportation facility project was to visit and narrow down the potential sites. Keegan prepared monthly "update" reports regarding the Transportation facility project, which reports he provided to the building committee Chairperson shortly before CLIU Board meetings. (1) Keegan's reports were provided to Respondent during Respondent's tenure as Chairperson of the building committee. (2) Keegan's reports were prepared for the benefit of the full CLIU Board. Kistler, 04 -037 Page 22 (3) Keegan's reports were read and provided to the full CLIU Board at the Board's public meetings. (4) Keegan's reports reflected Keegan's day -to -day supervision of the Transportation facility project and did not reflect any substantial input from Respondent. h. ID 6 consists of documents prepared and /or maintained by Keegan, including updates /monthly reports prepared by Keegan regarding the Transportation facility project. (ID 6 -5, 6 -15, 6 -21, 6 -22, 6 -24, 6 -25, 6 -34, 6- 38, 6 -40, 6 -42, 6 -44, 6 -46). (1) Respondent never refused to accept these reports. (2) Respondent never asked Keegan to not send the reports to Respondent because Respondent might have a conflict of interest. J. The Lesher property was chosen for the Transportation facility when the price was reduced from $600,000 to $450,000. Pursuant to action of the CLIU Board at its June 18, 2001, regular meeting (ID 7 -116), the CLIU entered into a purchase agreement for the Lesher property, which agreement included a right to assign purchase rights. (1) Keegan testified that prior to the CLIU Board's approval of the agreement of sale, there was no expectation or commitment on behalf of the CLIU or Keegan to build any particular type of buildings for the Transportation facility. k. Keegan gathered information for consideration by the CLIU Board regarding a purchase transaction as compared to a lease with option to purchase transaction. (1) On June 13, 2001, Keegan requested a legal opinion from Attorney Waters regarding a purchase transaction as compared to a lease with option to purchase transaction for the Transportation facility. (a) Attorney Waters provided his legal opinion (ID 6 -32) by letter dated June 18, 2001. (2) On June 13, 2001, Keegan spoke with Roth and asked Roth to provide cost comparison information related to an outright purchase and build arrangement versus a lease /purchase arrangement for the Transportation facility. (a) Keegan testified that Respondent did not suggest or direct that Keegan talk to Roth about leasing versus purchasing. (b) Keegan testified that to his knowledge, Respondent did not influence anyone else to have Keegan talk to Roth about the lease versus purchase issue. Keegan did not seek any cost proposals or bid proposals from anyone other than Roth with regard to a difference between a purchase and lease with option to purchase. (3) Kistler, 04 -037 Page 23 (4) The information provided by Roth reflected that a lease arrangement would result in a cost savings as compared to a purchase arrangement. Settlement on the Lesher property transaction was delayed due to unrelated litigation involving the property that had to be resolved before the CLIU Board would finalize the transaction. m. On August 22, 2001, Keegan spoke with Respondent regarding the costs and elements of certain environmental testing relative to the Transportation facility. (ID 6 -42). n. On December 13, 2001, Keegan and Respondent discussed the need to get purchase versus lease /purchase costs before the CLIU Board in the event there would be a settlement of the litigation as to the Lesher property. (1) Keegan testified that Respondent was not influencing Keegan with respect to the costs for the type of construction that should be considered. o. Keegan testified that at the executive session of the CLIU Board on March 18, 2002, he (Keegan) presented to the CLIU Board the cost comparison information for purchase versus lease /purchase as to the Transportation facility, as well as information that the litigation involving the Lesher property had been settled. P. (1) Keegan testified that the cost information that he presented to the CLIU Board on March 18, 2002, indicated that per the projected costs from Roth, the lease arrangement with Roth would result in a cost savings to the CLIU in the amount of $470,719 as compared to a purchase arrangement. (a) Keegan testified that the cost savings would be attributable to not bidding the project and not having to pay prevailing wages. (2) Keegan provided inconsistent testimony regarding Respondent's participation in discussions of the CLIU Board regarding the cost comparison information, initially testifying that there were discussions among the Board Members, that Respondent probably participated in those discussions, but that Keegan did not have a recollection of specific words Respondent said (Tr. at 470 -471; 474), and subsequently testifying that his earlier testimony was erroneous and that Respondent remained silent and did not participate in the discussions of the Board (Tr. at 478). The CLIU Board chose the lease and option to purchase arrangement for the Transportation facility despite the opinion of Attorney Waters that the CLIU would be exposing itself to a significant amount of risk of a legal challenge if prevailing wages were not paid in the context of the lease with option to purchase arrangement." (See, ID 6 -32). (1) Keegan testified that the CLIU Board chose the lease with option to purchase arrangement based upon information that other IU boards had successfully used that type of arrangement, and that one IU had prevailed in a legal challenge. Kistler, 04 -037 Page 24 At the March 18, 2002, regular meeting of the CLIU Board, the CLIU Board assigned its purchase rights for the Lesher property to Roth Marz Partnership. ID 7 -193. r. The CLIU Board did not request or receive bids as to the assignment of the purchase agreement. (Tr. at 322). s. Keegan testified that it was his understanding that the School Code did not require bidding for leases for real estate or classroom space. (1) The CLIU has never invited competitive bids for its leases except with respect to leases of multiple /fleet vehicles. t. Dale Roth of Roth Marz Partnership was the chief architect and general contractor for the Transportation facility. (1) Keegan testified that the CLIU Board determined that Roth Marz Partnership would be the architect for the Transportation facility based upon past positive experiences with the firm. u. Keegan testified that he believed that all information concerning the Roth proposal was available for public inspection. v. Keegan worked with Roth and Roth's staff with regard to the design of the Transportation facility and equipment to be included in the Transportation facility. (1) Keegan testified that the building committee did not play any role in designing the Transportation facility. (2) Keegan testified that neither Respondent nor the building committee were involved in any way with the ideas for storage space, office space, and the instructional classroom at the Transportation facility. w. Keegan testified that at the March 18, 2002, executive session of the CLIU Board, Respondent indicated that he had the potential to be involved with the Transportation facility project and that he was going to step down as Chairperson of the building committee. (1) Keegan testified that it was at this time that he became aware of Respondent's potential involvement in constructing a portion of the Transportation facility. (2) Keegan testified that during this executive session, the CLIU Solicitor stated that Respondent was "twice removed" from the project and that there would not be a conflict of interest as to Respondent's involvement in the project. (a) Keegan testified that he recalled the CLIU Solicitor giving this advice three times and that not all of those times occurred at this executive session. q. x. At the March 18, 2002, regular meeting of the CLIU Board, Respondent resigned as Chairperson of the building committee. (ID 7 -193). (1) Keegan testified that after resigning, Respondent did not get involved with the building committee at all. Kistler, 04 -037 Page 25 Keegan testified that following the March 18, 2002, CLIU Board meeting, Keegan had no conversations with Respondent regarding the Transportation facility, and he did not recall Respondent attempting to discuss the Transportation facility with the CLIU Board. z. ID 7, pages 235 -244 consist of the CLIU Board meeting minutes from the July 15, 2002, regular Board meeting. (1) Keegan testified that the agenda for this meeting would have been provided in advance to newspapers and would have included the items listed regarding the Transportation facility. (2) The recorded minutes include Respondent's abstention as to the CLIU Board's vote to authorize the execution of the Assignment of Real Estate Sales Agreement and Lease Agreement and Option Agreement with Cornerstone, R.E., LLC, as well as a bank agreement relating to the Transportation facility. (See, Finding 87 j(1)). The recorded minutes do not include any disclosure by Respondent that three days prior to the July 15, 2002, CLIU Board meeting, he had entered into a Purchase Agreement with Cornerstone, R.E., LLC for the construction of a pole building structure for the Transportation facility. (See, Finding 92). aa. Keegan testified that construction on the Transportation facility began in approximately late August or September 2002. bb. Respondent constructed a portion of the Transportation facility. cc. Keegan testified that he did not talk to Respondent with respect to construction issues arising after construction started. (1) Keegan testified that once construction began, he had contacts with Roth, an individual named "Ray Reppert," whom Keegan assumed worked for Roth, and an individual named "Dennis Trexler" who was an independent contractor contracted for the project by Roth. dd. Keegan testified that the CLIU did not take possession of the Transportation facility or pay on the lease before construction was completed. (1) The CLIU was moving into the Transportation facility in April 2003, although the paving had not been completed at that time. ee. The CLIU lease for the Transportation facility included an option to purchase. (1) Keegan testified that the purchase price of the Transportation facility would have eventually been paid through the lease payments. (Tr. at 537). (2) Keegan testified that the CLIU Board wanted options in case it was not satisfied with the Transportation facility. ff. At the March 15, 2004, regular meeting of the CLIU Board, Respondent voted in favor of Board action to appoint a financing team to perform duties relating to the possible acquisition of the Transportation facility. ID 7 -404. y. (3) Kistler, 04 -037 Page 26 Keegan testified that the financing team recommended that the CLIU engage in some indebtedness to purchase the Transportation facility. hh. At the May 17, 2004, regular meeting of the CLIU Board, Respondent voted in favor of CLIU Board action to borrow $2,510,000 for the purchase of the Transportation facility. ID 7 -422. ii. At the May 17, 2004, regular meeting of the CLIU Board, Respondent voted in favor of CLIU Board action authorizing the execution of an agreement of sale and related documents for the purchase of the Transportation facility per the option agreement with Cornerstone R.E., LLC (ID 7 -422). jj. The CLIU Board purchased the Transportation facility. kk. There was no bidding relative to the CLIU's purchase of the Transportation facility. (Tr. at 323 -324). (1) Keegan testified that there was no bidding as to the CLIU's purchase of the Transportation facility because the Transportation facility was designed for the CLIU, the CLIU was going to purchase it, and there was no other property or facility to meet the CLIU's needs. II. When the second mold outbreak occurred at the LLAS property leased from Hirsh, the CLIU Board voted at its March 18, 2002, meeting to have an environmental study performed. ID 7 -194. gg. (1) Keegan testified that the purchase of the Transportation facility was an option at the time and depended upon how favorable interest rates were for the CLIU. (1) Kistler voted in favor of that motion. mm. Dale Roth contacted Keegan and offered to work with the CLIU on a LLAS facility. nn. The CLIU determined that a new LLAS facility was necessary. oo. At the June 17, 2002, regular meeting of the CLIU Board, the Board voted to authorize the Solicitor to provide lease termination notice to Hirsh and to authorize Dale Roth to pursue construction of a new LLAS facility. ID 7 -232- 233. (1) Respondent voted in favor of both of these motions. ID 7- 232 -233. pp. Dale Roth was the architect and general contractor for the construction of the LLAS facility. qq. No bids were submitted with regard to the construction of the LLAS facility. (Tr. at 326). rr. The CLIU did not discuss purchasing the LLAS facility because by law, intermediate units are not permitted to own classroom space. ss. The construction of the LLAS facility was delayed by litigation involving a zoning issue. Kistler, 04 -037 Page 27 tt. At the October 20, 2003, regular meeting of the CLIU Board, Respondent abstained from voting on a motion authorizing Roth Marz Partnership to begin the construction phase of the LLAS facility. (ID 7 -394). (1) This action of the CLIU Board occurred shortly after the issuance of a decision of the Commonwealth Court of Pennsylvania upholding the decision of the Lowhill Township Zoning Hearing Board to grant a variance for the LLAS facility. (2) Keegan testified that he does not recall Respondent participating in any way in a discussion with respect to the LLAS facility during this meeting. The recorded minutes do not include any disclosure by Respondent of the reasons for his abstention as to the CLIU Board's vote to authorize Roth Marz Partnership to begin the construction phase of the LLAS Facility. (4) The recorded minutes do not include any disclosure by Respondent that he had a prior business relationship with Dale Roth. uu. Keegan testified that he did not recall any time after the October 20, 2003, regular meeting of the CLIU Board when Respondent participated in any discussions with the CLIU Board concerning the LLAS facility. vv. At the May 17, 2004, regular meeting of the CLIU Board, Respondent abstained from Board action ratifying and authorizing a lease agreement with Dale and Ruth Roth for the LLAS facility. (1) Keegan testified that he did not recall Respondent discussing the LLAS facility prior to or following this action by the CLIU Board. (2) The agenda for this meeting was sent to the media. ww. At the October 20, 2003, regular meeting of the CLIU Board, Respondent voted in favor of two motions authorizing the leasing of administrative facilities from R &T Management LLC based upon a variable interest rate program (ID 7- 393 -394). (1) The administrative facilities were not built at the location contemplated by this action, but they were built at another location. (2) Roth was the architect and general contractor for the construction of the administrative facilities. (3) xx. The process for approving payment of CLIU bills is that the bills are calculated and related documents are sent to the CLIU Board Members prior to the Board meeting at which a motion is made to pay the bills and /or approve the payment of bills that has already occurred. (Tr. at 356). (1) Bills are approved by the full CLIU Board at regular monthly meetings. (a) Hundreds of bills are approved by the CLIU Board each month. (2) Respondent participated in CLIU Board votes to pay bills. Kistler, 04 -037 Page 28 (3) To Keegan's knowledge, Respondent never abstained from votes to pay bills. (4) Bills from Cornerstone R.E., LLC for the Transportation facility lease would have been in the amount authorized by the lease. (5) Bills from Dale and Ruth Roth for the LLAS facility lease would have been in the amount authorized by the lease. yy. Public meetings of the CLIU Board are advertised in area newspapers. (1) The CLIU Board's public meeting agendas are provided to the media in advance of the meetings. 75. John Wieand ( "Wieand ") served on the CLIU Board for six years from approximately 1997 to 2003. a. The decisions as to the Transportation facility were made by the entire CLIU Board. b. Cost was an important factor for CLIU Board Members. c. Wieand testified that there were committee /Board discussions regarding purchasing versus leasing the Transportation facility. (1) Wieand testified that there were committee /Board discussions that a lease arrangement would be more convenient and easier for the CLIU Board than being the landowner and having to build the facility. (2) Keegan reported to the Board that there was at least one other Intermediate Unit that had entered into such a lease arrangement. Wieand voted for the lease with option to purchase arrangement based upon his view that the focus of the CLIU Board was to be on special needs education and that it was not the job of the CLIU Board to administer construction costs. (3) (4) Wieand was also motivated to vote for the lease with option to purchase arrangement based upon his awareness of problems arising when a job had to be awarded to the low bidder. d. Wieand became aware that Respondent was going to be involved with the construction of the Transportation facility through a telephone call that Wieand received from Ferrari. (1) Wieand was vice - president of the CLIU Board at the time and was filling in for the Board president. (2) Wieand testified that Ferrari informed Wieand that Respondent had received the bid" for the Transportation facility. Wieand testified that he asked Ferrari whether Solicitor Kevin Reid was comfortable with that and Ferrari responded in the affirmative. (4) Wieand testified that he (Wieand) then stated that he did not have a problem with it. (3) Kistler, 04 -037 Page 29 e. Wieand recalled Respondent resigning from the building committee and stating that he would be abstaining, but Wieand did not recall whether Respondent ever disclosed that he had received "a bid." f. The CLIU Board voted to pay bill lists at its monthly meetings. (1) The CLIU Board Members had an opportunity to review the bills prior to the Board's vote to approve the bills. 76. Stephen Furst ( "Furst ") served on the CLIU Board from in or about February 2002 until October 21, 2003. (See, Finding 109). a. Furst was appointed to serve on the CLIU Board as a Member of the Salisbury Township School Board. b. Furst testified on direct examination that he believed that his service on the CLIU Board commenced in 2000 or 2001. (Tr. at 594). (1) On cross - examination, having reviewed CLIU Board meeting minutes, Furst testified that it appeared his first CLIU Board meeting was on February 21, 2002. (Tr. at 614; ID 7 -178). c. Furst provided inaccurate testimony regarding his attendance at CLIU Board meetings. (1) Furst initially testified that he missed one CLIU Board meeting and that it could have been the September 16, 2002, meeting. (Tr. at 591, 611). (2) Subsequently, having reviewed CLIU Board meeting minutes, Furst acknowledged that he was absent from the April 17, 2003, May 19, 2003, July 21, 2003, August 2003, September 15, 2003, and October 20, 2003, CLIU Board meetings. (Tr. at 615 -616, 618 -619). d. Furst testified that he does not recall Respondent ever formally disclosing to the CLIU Board that he (Respondent) might be involved in the construction of the Transportation facility. (Tr. at 599; 628 -630). (1) Furst testified that he was not saying that such a disclosure by Respondent did not happen, but rather, that he (Furst) did not recall it. (Tr. at 628 -630). e. Furst testified that he did not recall Respondent making any disclosures as to why he was stepping down from the building committee. (Tr. at 604, 628, 632). f. Furst testified that he did not have a recollection of the CLIU Board Solicitor providing any type of legal opinion or legal advice in connection with Respondent's involvement or potential involvement with the construction of the Transportation facility. (Tr. at 599 -600). With respect to the motion at the June 17, 2002, CLIU Board meeting authorizing Dale Roth to pursue construction of the LLAS facility (ID 7 -233), Furst testified that he did not recall Respondent disclosing that he (Respondent) had a prior business relationship with Dale Roth. (Tr. at 607- 608). g. Kistler, 04 -037 Page 30 h. The CLIU Board discussed the pros and cons of purchasing versus leasing property. (1) Furst found the cost savings of the lease arrangement to be significant. Furst testified that he believed the information regarding the cost savings of the lease arrangement as compared to a purchase arrangement was shared with the CLIU Board prior to the vote on March 18, 2002, to assign purchase rights to Roth Marz for the property on which the Transportation facility was to be built. J. Furst testified that he has no recollection of Respondent ever attempting to influence the CLIU Board in connection with the Transportation facility construction or the designation of Roth Marz for the Transportation facility project. 77. Dennis Foster ( "Foster ") served on the CLIU Board for eight years. a. Foster testified that the CLIU Board decided to lease the Transportation facility rather than to purchase the property and build the facility because the lease arrangement was more economical. b. At the regular meeting of the CLIU Board on March 18, 2002, Respondent resigned as Chairperson of the building committee and Pollard became the new Chairperson. (1) Foster testified that during a building committee or executive meeting on March 18, 2002, prior to the regular CLIU Board meeting that same day, Respondent indicated that he (Respondent) was interested in potentially being involved in the Transportation facility project and was going to step down from the building committee chairmanship. (2) Foster testified that he recalled Solicitor Reid stating verbally that this was the proper way of addressing the matter and that there would be no conflicts of interest if this direction were followed. c. When the LLAS facility developed mold, the students and staff had to be moved from the facility. d. Foster testified that the first time he recalls hearing that Respondent was involved with the construction of the LLAS facility was when he was so informed by Commission staff. e. Foster did not recall Solicitor Reid providing an opinion with regard to Respondent's involvement with the construction of the LLAS facility. 78. Bryan Dorshimer ( "Dorshimer ") is a current Member of the CLIU Board, having served on the Board for approximately six or seven years. a. Dorshimer served on the building committee during the Transportation facility project. b. The CLIU Board was initially planning to buy property and build the Transportation facility, but decided instead to lease the facility with an option to purchase in order to save money. Kistler, 04 -037 Page 31 (1) Dorshimer testified that Ferrari or Keegan first suggested the lease arrangement to the CLIU Board. (2) Dorshimer testified that the lease arrangement avoided prevailing wage requirements and therefore was cheaper than buying the property and building the facility. c. Dorshimer testified that he became aware that Respondent was involved in the construction of the Transportation facility during the construction phase, when he drove by the site and observed Respondent's business sign posted on the property. d. Dorshimer testified that he did not recall Respondent disclosing at the March 18, 2002, CLIU Board meeting that he (Respondent) might have an interest in the construction of the Transportation facility. (1) Dorshimer testified that he was not saying such a disclosure did not happen but that he did not remember it happening. e. Dorshimer testified that he did not recall Solicitor Reid ever giving an opinion with regard to Respondent's involvement or potential involvement in the Transportation facility. f. At the June 17, 2002, regular meeting of the CLIU Board, the CLIU Board authorized the Solicitor to provide lease termination notice to Hirsh, the landlord of the prior LLAS facility, which facility had recurring mold problems. ID 7 -232. g. J. At the June 17, 2002, regular meeting of the CLIU Board, the CLIU Board authorized Dale Roth to pursue construction of a new LLAS facility. ID 7- 233. h. The new LLAS facility was to be leased from Dale Roth or his business because by law, the CLIU was not permitted to own classroom space. Dorshimer testified that he became aware that a pole building was being used for the LLAS facility when he drove by the property during construction of the facility. Dorshimer testified that he did not recall Respondent ever disclosing to Dorshimer or to any other CLIU Board Members during a CLIU Board meeting that he (Respondent) might be involved in the construction of the new LLAS facility. 79. Dale Roth (also referred to herein as "Roth ") is a self - employed architect. a. Roth is associated with the following businesses /business interests: Roth Marz Partnership (an architectural practice, also referred to herein as "Roth Marz "); Cornerstone R.E., LLC (also referred to herein as "Cornerstone" and "Cornerstone, LLC "); R &T Management, LLC (also referred to herein as "R &T Management "); and "Dale and Ruth Roth." b. Roth Marz Partnership developed concept plans for site development of the CLIU Transportation facility. c. Cornerstone R.E., LLC constructed /developed the CLIU Transportation facility. Kistler, 04 -037 Page 32 d. Dale and Ruth Roth constructed /developed the CLIU LLAS facility. e. R &T Management constructed /developed an office building for the CLIU. f. Roth testified that Cornerstone R.E., LLC became involved with the Transportation facility as a result of inquiries Roth made to Ferrari and Keegan about providing lease -back arrangements to the CLIU. At Keegan's request, Roth provided cost information comparing prices of a purchase versus a lease arrangement for the Transportation facility. h. Cornerstone R.E., LLC entered into a build /lease back arrangement with the CLIU for the Transportation facility. (1) Under the build /lease back arrangement, Cornerstone purchased and owned the property and designed and built the facility. Roth testified that initially a pre- engineered building was considered for the Transportation facility but a pole building structure was ultimately chosen because that was the least expensive way to properly build the facility. j. Roth testified that between June and November 2001, there were discussions between Roth or his staff and Respondent regarding the possible use of a pole building for construction of the Transportation facility. k. As of November 5, 2001, Roth was still considering using a pre- engineered steel building for the Transportation facility. (Tr. at 802 -803). A few days after November 5, 2001, Roth directed Young to start looking at pole building options. (Tr. at 804; ID 9 -1 /Roth -3). (1) Roth directed Young to contact Respondent for particular spacing information relative to constructing the Transportation facility as a pole building. (Tr. at 784). (2) ID 9 -1 /Roth -3 consists of a memorandum from Young to Roth dated November 9, 2001, which includes a handwritten notation regarding Kistler Pole Buildings. Roth testified that he received this memorandum from Young within a couple days of November 9, 2001. m. Roth testified that it was not until March or April 2002, that Cornerstone R.E., LLC was seriously looking at the pricing of a pole building. n. Roth testified that Respondent's company was chosen to build the Transportation facility because Respondent was the only pole building business owner Roth knew, and Roth knew Respondent to be a reputable contractor. g. (3) (1) Roth did not solicit or receive any bids from any other pole building contractors. o. Roth -5 consists of estimates faxed by Kistler Buildings to Gary Caldwell of Roth's office on February 6, 2002, quoting costs for a main building and ancillary storage building for the Transportation facility. Kistler, 04 -037 Page 33 p. q. (1) Roth testified that as of this fax on February 6, 2002, he had not made any commitment to the type of building he was going to build for the Transportation facility. On March 18, 2002, the CLIU Board voted to assign its rights to purchase the Lesher property to Roth Marz Partnership. Roth's calendar indicates that he met with Respondent on March 26, 2002. (ID 8 -3). (1) Roth testified that the purpose of this meeting with Respondent would have been to talk about the Transportation facility. (2) Roth testified that as of March 26, 2002, he (Roth) had not indicated to Respondent that Respondent would be the contractor for the pole building construction for the Transportation facility. r. ID 10 -1 -9 consists of a scope of services and quote from Respondent for the construction of the Transportation facility. (See also, Roth -13, pages 1 -5). (1) The quote was received by Roth or Cornerstone staff on April 26, 2002. (2) With regard to ID 10 -1 -9, Roth testified, "It's just typed - -- outlining the type of construction and what would be included in his -- -what we call his subcontract, along with a price." (Tr. at 744 -745). s. Roth testified that on or about May 2, 2002, Roth gave Respondent an initial commitment to use Kistler Building for the Transportation facility. t. ID 12 -1 /Roth -15 consists of a memorandum from Roth to Respondent dated May 28, 2002, providing Roth's color selections for the roof, gutters, downspouts, and sidewall panels of the CLIU Transportation facility. (1) This memorandum pre -dated by approximately 11/2 months the formal contract between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility. u. Roth -18 consists of the final agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility. (See also, ID 11 -1). (1) The agreement is dated July 12, 2002. (2) The contract price was $550,492. (3) Per a change order approved July 12, 2002, the contract price was reduced to $539,737. v. Kistler Pole Building Company, Inc. issued an invoice dated July 19, 2002, to Cornerstone, LLC in the amount of $25,000 for a down payment on the Transportation facility work. (ID 14 -2 /Roth 19). w. In or about September 2002, Kistler Pole Building Company, Inc. began working on the Transportation facility project. Check Date Check Number Check Amount 10/24/2002 200 $42,571 11/20/2002 213 $82,897 12/24/2002 229 $190,839 1/21/2003 241 $136,345 2/25/2003 263 $59,717 9/8/2003 332 $14,377 Kistler, 04 -037 Page 34 x. Cornerstone R.E., LLC issued the following 6 checks to Kistler Pole Building Company, Inc. for work on the Transportation facility, which checks were dated from October 24, 2002, through September 8, 2003: y. (Roth -38/ID 14 -27). (1) The total amount of the checks was $526,746. (Roth -38/ID 14 -27). Roth testified that Kistler Pole Building Company, Inc. substantially completed its work on the Transportation facility in February 2003. (1) On May 28, 2003, Ray Reppert of Roth Marz Partnership P.C. notified Tom Golden of Kistler Buildings of construction defect(s) and the need for installation of weather stripping on exterior doors of the Transportation facility. (Roth 65). (2) On July 8, 2003, Ray Reppert of Roth Marz Partnership P.C. notified Tom Golden of Kistler Buildings of construction defect(s) as to the Transportation facility. (Roth 66). z. Roth testified that toward the end of the Transportation facility project, additional work was requested with respect to the renovation of an existing building (referred to as a golf shack or caddy shack), which work included work by Kistler Pole Building Company, Inc. (1) The quotation (ID 13 -2 /Roth -60) for the work by Kistler Buildings on the golf shack was accepted on May 4, 2003, by Dale Roth at a price of $14,377. (2) Roth -61 is an invoice dated June 30, 2003, from Kistler Pole Building Company, Inc. to Cornerstone, LLC in the amount of $14,377 for completion of the golf shack renovation. Check number 332 dated September 8, 2003, in the amount of $14,377 was payment by Cornerstone, R.E., LLC for work by Kistler Pole Building Company, Inc. on the golf shack. Roth -62. aa. Roth testified that Cornerstone R.E., LLC absorbed the cost of the golf shack renovation and did not charge the CLIU for it. bb. Roth testified that he had a discussion with Keegan in or about 2001 regarding whether Roth and Roth's wife would be interested in constructing the LLAS facility. cc. On October 24, 2002, the Lowhill Township Zoning Hearing Board granted the request of Dale and Ruth Roth for special exception approval for the LLAS facility, with certain conditions. Roth -73. (3) Check Date Check Number Check Amount 5/7/2004 000 $10,000 6/21/2004 4562 $60,000 10/21/2004 4592 $218,360 11/18/2004 4603 $300,361 1/26/2005 4637 $45,712 3/29/2005 4672 $4,000 10/4/2005 4752 $3,500 Kistler, 04 -037 Page 35 (1) The decision of the Lowhill Township Zoning Hearing Board was appealed to the County Court of Common Pleas, the Commonwealth Court of Pennsylvania, and the Pennsylvania Supreme Court. dd. Roth testified that he received an initial proposal from Respondent regarding construction of the LLAS facility shortly before April 18, 2003. ee. Roth's initial meeting with Respondent regarding construction of the LLAS facility occurred on April 18, 2003. Roth -75. ff. While the Lowhill Township Zoning Hearing Board decision was on appeal, Roth proceeded with a land development plan based upon an office building. On May 16, 2003, Ray Reppert of Roth Marz Partnership P.C. faxed to Respondent an updated floor plan and elevations for the LLAS facility. Roth - 76. gg . hh. On April 1, 2004, the Lowhill Township Board of Supervisors approved the plan for the LLAS facility. LC -1. ii. On April 22, 2004, Roth met with Respondent regarding the LLAS facility. Roth -97. On May 7, 2004, Roth provided a down payment to Respondent for Respondent's work on the LLAS facility. kk. The lease between Dale and Ruth Roth and the CLIU for the LLAS facility was approved effective May 7, 2004. II. Roth -102 consists of an agreement dated June 17, 2004, between Kistler Pole Building Company, Inc. and Roth and /or Dale and Ruth Roth for the construction of the shell structure for the LLAS facility. (See also, ID 15; ID 16 -1). (1) The contract price was $641,933. mm. On July 19, 2004, Roth reported to the CLIU Board that building of the LLAS facility would begin the week of July 26, 2004, and the projected completion date was January 2005. nn. The following checks were issued to Kistler Pole Building Company, Inc. for work on the LLAS facility, which checks were dated from May 7, 2004, through October 4, 2005: Roth -99. (See also, ID 18). (1) The May 7, 2004, payment was the first payment made to Kistler Pole Building Company, Inc. on the LLAS facility. Kistler, 04 -037 Page 36 pp. qq. (2) Roth testified that Respondent's work on the LLAS facility was basically complete as of January 26, 2005, when 98.8% of the total payments for such work had been made, but that there might have been some touch -up work remaining to be done. (3) The $7,500 that remained due Kistler Pole Building Company, Inc. as of January 26, 2005, was retainage held by the Roths. (4) The total amount of the checks was $641,933. (Roth -99). 00. Roth testified that R &T Management became involved with the construction of an office building for the CLIU as a result of contacts by the CLIU. The CLIU Board approved the execution of a lease with R &T Management LLC for an administrative facility at its regular meeting on October 20, 2003 (ID 7 -393). (1) This action by the CLIU Board authorized R &T Management to begin the conceptual phase of the project. Roth testified that a pole building was not contemplated for the CLIU central services building /administrative facility, because it is a three -story building and a pole building would not be suitable. (Tr. at 912). rr. Roth testified that the first time he ever hired Respondent /Respondent's company to do any work for anything was for the CLIU Transportation facility. (Tr. at 911). ss. Roth testified that in addition to working with Respondent on the Transportation facility and the LLAS, he has worked with Respondent on a band shell for Lynn Township. tt. Both as to the construction of the Transportation facility and the LLAS facility, the individual overseeing construction for Kistler Pole Building Company, Inc. was "Thomas Golden," and the contact person at Roth's office was "Ray Reppert." uu. Roth testified that for all of the paperwork filed relating to the Transportation facility, Cornerstone R.E., LLC was the contractor and all of the people working under Cornerstone were subcontractors. vv. Roth testified that for all of the paperwork filed relating to the LLAS facility, Dale and Ruth Roth were the contractors and all of the people working under them were subcontractors. 80. Patricia Ann Noga ( "Noga ") is a former Member of the CLIU Board. a. Noga served on the CLIU Board for three years ending at or about 2001. b. Noga is a licensed architect. c. The CLIU administration led the site search for the Transportation facility. d. Noga testified that during her tenure on the CLIU Board, Respondent did not say anything about being involved in the construction of the Transportation facility. Kistler, 04 -037 Page 37 e. Noga testified that a pole building was a cost effective choice to use for the Transportation facility. f. Noga testified that the idea of a leaseback arrangement for the Transportation facility was presented to the building committee by the CLIU administration and Roth and was well received. g. (1) Noga testified that using the leaseback arrangement avoided problems associated with competitive bidding. Noga testified that the building committee recommended the leaseback arrangement to the CLIU Board, and it was up to the CLIU Board to make a final decision at a public meeting. h. Noga testified that the building committee meetings were open and advertised. 81. Patricia Dickinson Hoffman ( "Hoffman ") served as a Member of the CLIU Board from 1989 to 2003. a. Hoffman testified that there had been some discussion that Respondent might have an interest in being involved in the building of the Transportation facility, and so to avoid a conflict of interest, Respondent resigned as building committee chair. (ID 7 -193). b. The CLIU Board entered into a lease purchase arrangement with Roth Marz Partnership for the Transportation facility. (ID 7 -193). (1) The CLIU Board was informed that such an arrangement would result in a financial savings to the CLIU. (2) Hoffman testified that to the best of her recollection, Roth had done other projects for the CLIU, and his name was mentioned as someone the CLIU would want to use for the Transportation facility. c. At the June 17, 2002, meeting, the CLIU Board took action regarding the lease for the LLAS building due to a mold problem. (ID 7 -232). d. At the June 17, 2002, meeting, the CLIU Board took action to authorize Roth to pursue construction of a new facility for the LLAS. (ID 7 -232). (1) Hoffman testified that Roth Marz Partnership was chosen by the CLIU Board to construct the LLAS facility because of the CLIU administration's and Board's satisfaction with past work by Roth. 82. Lisa Auteri served as a Member of the CLIU Board from December 2001 until December 2005. a. Auteri testified that the documents in evidence as Keegan 49 were presented to the CLIU Board by either Ferrari or Keegan with respect to discussion as to whether the CLIU Board should build the Transportation facility or should do a lease /purchase arrangement instead. (1) It was financially advantageous for the CLIU to do a lease /purchase arrangement as opposed to building the Transportation facility and owning it outright. Kistler, 04 -037 Page 38 g. J. (2) Auteri testified that a purchase arrangement involving outright ownership of the Transportation facility would have required competitive bidding. It was Auteri's view that competitive bidding was a more complicated and costly procedure offering less choice as to selection of the builder. (3) b. Auteri testified that CLIU was pleased with Roth's construction work. c. Auteri testified that the CLIU Board voted to assign its purchase rights for the Lesher property to Roth Marz to save taxpayer dollars. (Board 20, page 6; ID 7 -193). d. It was Auteri's belief that it was at a CLIU Board meeting that she learned that Respondent would be constructing the Transportation facility. e. Auteri testified that she could not recall who made her aware that Respondent was constructing the Transportation facility but that the CLIU Board was made aware of the fact when Roth hired the builder. f. Auteri testified that Solicitor Kevin Reid was asked whether there was a conflict of interest with regard to Respondent's participation in constructing the Transportation facility. Auteri testified that Reid stated that there was not a conflict of interest /issue with regard to Respondent's participation in building the Transportation facility because another party, not the CLIU, was building it. (1) Auteri testified that Reid made this statement in executive session. (2) Auteri did not recall whether Reid made this statement at a public meeting. h. Auteri testified that after Respondent resigned as Chairperson of the building committee at the March 18, 2002, CLIU Board meeting, Respondent no longer participated in or voted on issues that had to do with the Transportation facility. i. At the June 17, 2002, CLIU Board meeting, Auteri voted in favor of the motion authorizing Dale Roth to pursue construction of the LLAS facility. (Board 23, page 16; ID 7 -233). At the October 20, 2003, CLIU Board meeting, the CLIU Board authorized Roth Marz Partnership to begin the construction phase of the LLAS facility. (Board 39, page 12; ID 7 -394). (1) Respondent abstained from the vote on this matter. (2) When asked whether she recalled Respondent stating a reason for his abstention, Auteri testified: don't remember specifically what he said, but I know that he stopped voting. He never voted on any issues having to do with the Roth construction projects. Kistler, 04 -037 Page 39 (3) (Tr. at 1047). Upon further questioning, Auteri testified that at the same CLIU Board meeting on October 20, 2003, Respondent had voted to approve leasing an administrative facility from R &T Management, LLC. (Tr. at 1049 -1051) (Board 39, page 11; ID 7 -393). k. Auteri testified that she was not aware that Respondent was building the LLAS facility at the time it was being built. I. Auteri testified that Respondent never attempted to steer the CLIU Board on any matter. 83. Respondent Kenneth F. Kistler ( "Kistler ") has an ownership interest in Kistler Pole Building Company, Incorporated and Kistler Building Supply, Incorporated. a. Kistler Pole Building Company, Incorporated (also referred to herein as "Kistler Pole Building Incorporated," "Kistler Pole Building Company, Inc.," "Kistler Pole Buildings," "Kistler Pole Building," "Kistler Pole Building Company" and "Kistler Buildings ") is primarily a construction company. (1) Kistler Pole Building Company, Incorporated builds pole buildings. b. Kistler Building Supply, Incorporated (also referred to herein as "Kistler Building Supply" and "Kistler Building Products ") is a building materials provider. c. Kistler's company built the Transportation facility and the LLAS facility for Roth's organizations. (1) Kistler testified that prior to the construction of the Transportation facility, he never built anything for Roth. (2) Kistler testified that the only buildings he built for Roth were the Transportation facility and the LLAS facility. d. Kistler testified that he recalled receiving a telephone call from Young requesting general information regarding pole buildings. (1) Kistler provided information to Young regarding pole spacing and framing spacings for a pole building. (2) Kistler testified that Young did not indicate where the project was for which he was requesting such information. e. Kistler testified that he sent the document in evidence as Roth -5 to Gary Caldwell at Roth Marz Partnership on February 6, 2002, in response to a request from Caldwell, providing a "ballpark" quote for a main building at $394,453 and an ancillary storage building at $32,589. (1) Kistler knew Roth Marz was the architectural firm that the CLIU used, and he knew that Gary Caldwell worked for Roth Marz Partnership. (2) Kistler testified that he does not believe that when he provided this quote to Gary Caldwell, he knew it was for the Transportation facility. Kistler, 04 -037 Page 40 g. (3) (3) Kistler testified that this quote was prepared based upon general information, and that if he had had specific information, he would have listed it. f. Kistler testified that at some point between March 18, 2002, and the prior CLIU Board meeting, he received a call from Roth, who asked Kistler to come to Roth's office to take a look at a project. (1) Kistler testified that at this meeting, Roth informed Kistler that Roth was considering using a pole building for the Transportation facility. (2) Kistler testified that following this meeting with Roth, Kistler contacted Ferrari. (a) Kistler testified that he told Ferrari that Roth was considering using a pole building, that Kistler would probably need to be away" from the building committee, and that Ferrari would need to find someone else to take over the building committee. Kistler testified that as of the March 18, 2002, executive session of the CLIU Board, it was not definite that he would be building the Transportation facility, but Roth had asked him (Kistler) to provide pricing and planning information, and Roth was going to be providing details and prints to Kistler. h. With regard to the March 18, 2002, executive session, Kistler testified, This was the executive session that we discussed my involvement in the construction and subcontracting portion of the bus garage." (Tr. at 1062- 1063). (1) Kistler testified that Solicitor Reid informed the CLIU Board that as long as Kistler did not vote on anything that involved Kistler and as long as Kistler did not participate in the discussions, that it was going to be all right." (Tr. at 1063; 1136). (2) Kistler testified that he specifically asked Reid whether there was any reason why he (Kistler) should not be involved in the construction of the Transportation facility, and Reid said, "None that I know of." (Tr. at 1063 - 1064). Kistler testified that he asked Reid to check into the matter and that Reid stated that he would do so. (4) Kistler stated that he did not know whether the discussion at the March 18, 2002, executive session regarding his involvement in the construction of the Transportation facility was mentioned in the public meeting on March 18, 2002. Kistler testified that at the meeting following the March 18, 2002, CLIU Board meeting, he asked Reid whether Reid had checked on the issue, and Reid indicated that he (Reid) had done so. (1) Kistler testified that he could not recall whether this meeting was an executive session or a public meeting. (2) Kistler testified that he asked Reid whether there was any reason why he (Kistler) should not be involved in the construction of the Kistler, 04 -037 Page 41 Transportation facility and that Reid said, "Absolutely not." (Tr. at 1082). j. Kistler never asked Reid to provide a written opinion or to state his opinion in the minutes of the CLIU Board as to whether Kistler could potentially be involved in the construction of the Transportation facility. k. Kistler testified that based upon Reid's recommendations to him at the March 18, 2002, executive session, he (Kistler) removed himself from the building committee and from discussion and votes on matters that involved him (Kistler). (Tr. at 1064). I. Kistler testified that at the March 18, 2002, public meeting of the CLIU Board, his intentions were that he resigned completely from the building committee. (1) Following Kistler's resignation from the building committee, he no longer attended building committee meetings. m. Kistler testified that at the March 18, 2002, public meeting of the CLIU Board, when his name was called during the roll call vote as to the motion to assign the CLIU Board's purchase rights for the Lesher property to a third party (Board 20, page 6; ID 7 -193), he specifically stated that he abstained because he might be involved in the construction of the building. (Tr. at 1067- 1068). (1) Respondent testified that it was his habit to announce the reason for an abstention because he believes that a Board Member has an obligation to vote. (Tr. at 1068). (2) Respondent testified that in his capacity as President of the Northwestern Lehigh School Board, he always made sure that individuals stated the reason for their abstentions. (Tr. at 1068). n. Kistler testified that at the March 18, 2002, public meeting of the CLIU Board, when he abstained as to the motion naming Roth Marz as the CLIU Board's agent to pursue the purchase of the Lesher property (Board 20, page 6; ID 7 -193), he stated, "I abstain for the same reasons." (Tr. at 1069). o. Roth -13, pages 1 -5 is a set of specifications and scope of work dated April 26, 2002, which was provided by Kistler for Roth specifically for the construction of the Transportation facility. (See also, ID 10 -1 -5). (1) Kistler testified that the documents at Roth -13, pages 1 -5 were prepared after Roth had provided a floor plan and additional information to Kistler. p. q. (2) Kistler testified that while Roth -5 was a ballpark estimate for the Transportation facility, he does not believe he knew that at the time he prepared Roth -5. Kistler testified that Roth made sure that Kistler knew he (Roth) was looking at other building types for the Transportation facility and that Kistler's company was in competition. (Tr. at 1075). Roth -18 consists of the final agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility. (See also, ID 11 -1). Kistler, 04 -037 Page 42 (1) The agreement is dated July 12, 2002. (See, Finding 92). (2) The contract price was $550,492. r. Respondent testified that it was approximately two weeks prior to the execution of the final agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility (Roth -18) that he (Kistler) had a definitive commitment from Roth that Kistler / Kistler's company was going to build the Transportation facility. s. Respondent abstained from the CLIU Board actions on July 15, 2002, relating to the Transportation facility, including the assignment of purchase rights to Cornerstone, R.E., LLC; approval of a Lease Agreement and Option Agreement with Cornerstone, R.E., LLC; and approval of a related bank agreement. (Board 24, pages 1 -2; ID 7- 235 -236). (1) Kistler did not announce at this CLIU Board meeting that he had just signed a purchase agreement with Roth to construct the Transportation facility. (Tr. at 1127 - 1128). (2) Kistler stated that the reason he did not announce at the July 15, 2002, CLIU Board meeting that he had just signed a purchase agreement with Roth to construct the Transportation facility was that he was following what he thought were the instructions from Reid that he was to remain silent on matters involving the Transportation facility. (Tr. at 1083, 1128; see, similar testimony at Tr. at 1135 -1136 regarding the LLAS facility). (a) Kistler's testimony on this point conflicts with his other testimony that he always announces the reason for an abstention and that he in fact did so at other meetings where the basis for the abstention was that he might work on the construction of a building for the CLIU. (See, Findings 83 m, n, and ff). t. At the CLIU Board's June 17, 2002, Board meeting, the CLIU Board voted to terminate its lease with Stephen Hirsh for the LLAS facility. (Board 23, page 15; ID 7 -232). (1) Kistler participated in this vote. u. Also at the CLIU Board's June 17, 2002, Board meeting, the CLIU Board voted to authorize Dale Roth to pursue construction of a LLAS facility. (Board 23, page 16; ID 7 -233). (1) Kistler participated in this vote. v. Kistler testified that on June 17, 2002, when he voted to terminate the lease with Stephen Hirsh for the old LLAS facility and to authorize Dale Roth to pursue construction of a new LLAS facility, he (Kistler) had no idea that he would be involved in the construction of the LLAS facility. (Tr. at 1091). w. Kistler testified that to his knowledge, as of June 17, 2002, there were no approved plans in place to actually commence physical construction of the LLAS facility. Kistler, 04 -037 Page 43 x. Kistler testified that prior to the June 17, 2002, CLIU Board meeting, he had not had any conversations with Roth or anyone concerning the potential development of a structure that could be used for classroom facilities. (1) Kistler testified that he was unaware of the fact that Keegan had talked with Roth in 2001 about the possibility of building a school on three acres near Roth's office. (See, ID 6 -45 /Keegan 36; Tr. at 1133). Kistler testified that as of June 17, 2002, he had no idea that Roth would consider using a pole building for a classroom facility. (Tr. at 1090). (1) Kistler testified that it was not typical for a classroom building to be a pole building. (Tr. at 1134). (2) Kistler testified that classroom facilities are generally perceived as permanent and require durability and longevity greater than that for which pole buildings are generally classified. (Tr. at 1090- 1091). Kistler testified that architects and engineers rarely consider using a pole building for a classroom building. (Tr. at 1091, 1134). z. Kistler provided consistent testimony that on April 18, 2003, he learned, to his surprise, that Roth was considering a pole building for the LLAS facility, but provided inconsistent testimony as to when he knew he was going to be involved with the construction of the LLAS facility. (1) On direct examination, Kistler testified that April 18, 2003, was definitely the day he learned that he was going to be involved with the construction of the LLAS facility. (Tr. at 1093 -1095; 1134 - 1135). (a) Kistler testified that on April 18, 2003, Roth met with Kistler. (b) Kistler testified as follows regarding his discussions with Roth on April 18, 2003: y. (3) So I sat down in the conference room and he rolled out a floor plan, and he said, we're going to build the LLAS building over here on a piece of property right across from our office. I said okay. And he said, do you want to take a shot at building a pole building. And I said, Dale, would you honestly seriously consider using a pole frame constructed building for this structure. And he said, yes, he would. And I said, then I'm interested in looking at it. And from there on is where we proceeded. (Tr. at 1093). (2) On cross - examination, Kistler testified in part as follows: Dale Roth told me and I asked the specific question, would you consider using a pole building for this structure. And his answer to me was, yes, he would consider using it. That by no means, to me, indicates, number one, that he is going to use a pole building, or number two, we're going to build it....You have no guarantee that you're going to build something until the man says to you -- -looks you in the eye and says, you know what, prepare the documents. We're going to go with you. Kistler, 04 -037 Page 44 (3) (Tr. at 1139). On redirect examination, Kistler testified in part as follows: Dale called me and asked me to come look at a project that he had planned —that he was planning. It would be a fair assumption on my part to assume that he is looking at using a pole building. Well, why would he call me? So I went over to his office. I sat down and I looked at it, and I looked up at him and I said, are you -- -would you really consider using a pole building for this project, the assumption being that that's why I'm there. (Tr. at 1151). aa. Kistler testified that as soon as he became aware that he was being considered for work on the LLAS facility, he stopped participating in any discussions or votes of the CLIU Board with respect to the LLAS facility. (Tr. at 1096- 1097). bb. Kistler testified that he asked Reid whether there was any reason that he should not be involved in the construction of the LLAS facility, and that Reid said, "No, as long as you don't participate in the discussions and as long as you don't vote in anything that has anything to do with you." (Tr. at 1096) (See also, Tr. at 1136). cc. The first meeting following April 18, 2003, at which the CLIU Board considered action involving the LLAS was the October 20, 2003 meeting. dd. Kistler abstained from the CLIU Board's action at the October 20, 2003, meeting to authorize Roth Marz Partnership to begin the construction phase of the LLAS facility. (Board 39, page 12; ID 7 -394). (1) Kistler testified that when he abstained from this matter on October 20, 2003, he stated that he abstained because he might be involved in the construction of the building. (Tr. at 1096). (a) Kistler had previously testified that he knew he would be involved in the construction of the LLAS facility approximately six months earlier on April 18, 2003. (Tr. at 1093 - 1095). (2) Kistler filed an abstention memorandum dated November 17, 2003, regarding his abstention from the October 20, 2003, Board action on the motion approving construction of the LLAS facility. ID 23 -3. (a) Kistler's abstention memorandum states that he abstained for the following conflict /reason: Have worked for Roth Marz Partnership in the past." ID 23 -3. (b) Kistler's abstention memorandum makes no mention of the fact that he was going to be involved in the construction of the LLAS facility. ID 23 -3. ee. At the same October 20, 2003, meeting, Respondent voted in favor of leasing an administrative facility from R &T Management, LLC and approving a particular funding arrangement for the lease. (Board 39, pages 11 -12; ID 7- 393 -394) (See, Finding 87 I). Kistler, 04 -037 Page 45 ff. Kistler abstained from the CLIU Board's action at the May 17, 2004, meeting ratifying and authorizing the Lease Agreement between Dale and Ruth Roth and the CLIU for the LLAS facility. (Board 41, page 10; ID 7 -422). (1) Kistler testified that when he abstained from this matter on May 17, 2004, he stated that he abstained because he might be involved in the construction of the building. (Tr. at 1098). (2) At this point, Kistler was president of the CLIU Board, having been appointed to that office on January 15, 2004. (Board 39a, page 2). By letter dated August 4, 2004, Kistler was notified that he was being investigated for possible violations of the Ethics Act. (S &S -1 /Reid -1). (1) At the time Kistler received this notification, Kistler Pole Building Company, Inc. was already under contract to construct the LLAS facility but had not yet commenced construction. (See, Finding 95; Tr. at 1100- 1101). (2) On Kistler's behalf, a request for an advisory dated August 20, 2004, was faxed to this Commission's former Chief Counsel, asking whether Kistler would be in violation of the Ethics Act if he would proceed to fulfill the contractual obligations he had already undertaken. (S &S -2). By letter dated August 20, 2004, former Chief Counsel responded that an advisory could not be issued because the Commission does not address in an advisory format matters involving past conduct or matters under investigation, and that the scenario raised in the request was part of the ongoing investigation by the Investigative Division. (S &S -3). hh. Kistler contacted Reid's firm and received an opinion letter dated August 27, 2004, from Attorney John Freund, which letter concluded that it was the firm's opinion that there had been no violation of the Ethics Act. (Reid -5). gg. (3) ii. Kistler testified that based upon the opinion letter he received from Freund (Reid -5), he proceeded to build the LLAS facility. jj. Kistler / Kistler's company profited from the construction of the Transportation facility. kk. Kistler / Kistler's company profited from the construction of the LLAS facility. II. The CLIU Board votes to approve lengthy monthly bill lists en masse. mm. Kistler testified that to his knowledge, he has never abstained from voting on any bills that the CLIU has presented for payment. 84. Kevin Reid, Esquire ( "Reid ") served as Solicitor for the CLIU from on or about December 17, 2001, through the middle of 2005. a. Reid testified that on March 18, 2002, prior to the CLIU Board meeting, he received a telephone call from Ferrari who indicated that Respondent intended to remove himself from the building committee and from any of the discussions regarding the Transportation facility because there was a possibility he might be engaged in some of the work. Kistler, 04 -037 Page 46 b. Reid testified that at the CLIU Board's executive session on March 18, 2002, there were discussions regarding Respondent removing himself from the building committee. (1) Reid testified that during this executive session, Respondent indicated that he would be stepping down from the building committee, and that there was a possibility that he might be engaged by the landlord, Dale Roth. (2) Reid testified that at the time Respondent made the aforesaid disclosures, the CLIU Board, Ferrari, Keegan, and Reid were present. c. Reid testified that on March 18, 2002, he shared with Ferrari and the CLIU Board his (Reid's) opinion that it would be appropriate for Respondent to remove himself entirely from the process involving the Transportation facility, including any discussions or deliberations, and to abstain from voting on any matter related to it. d. Reid testified that he provided his opinion during the March 18, 2002, executive session and public meeting of the CLIU Board. (1) The minutes of the March 18, 2002, public meeting do not include any mention of Reid's opinion. e. Reid testified that the discussions that were held in the March 18, 2002, executive session were brought forward into the public meeting. (1) Reid testified that Respondent disclosed his potential involvement in the construction of the Transportation facility in both the March 18, 2002, executive session and public meeting of the CLIU Board. (2) The minutes of the March 18, 2002, public meeting do not include any mention of Respondent's reason for abstaining from votes involving the Transportation facility. f. Reid testified that it was his recollection that on March 18, 2002, Respondent stepped down completely from the building committee. Reid testified that he did not recall Respondent discussing anything with regard to the Transportation facility from March 18, 2002, to March 15, 2004. h. Reid testified that all of the discussions concerning the proposal from Roth, the lease terms, and the option to buy the Transportation facility occurred at open public regular meetings of the CLIU Board. Reid testified that at the time of the June 17, 2002, action by the CLIU Board to terminate the lease between the CLIU and Stephen Hirsh and to authorize Roth to pursue construction of a new LLAS, the process was at a preliminary planning stage, and there was no construction underway. Board 23, pages 15 -16; ID 7- 232 -233. (1) The minutes of the June 17, 2002, CLIU Board meeting do not include any mention of Respondent's potential involvement with the construction of the Transportation facility or of Respondent having any association with a business owned by Roth. g. Kistler, 04 -037 Page 47 J. Reid testified that at the October 20, 2003, CLIU Board meeting, the CLIU Board elected to move into the construction phase of the LLAS facility. (Board 39, page 12; ID 7 -394). k. Reid testified that he does not recall Respondent participating in any CLIU Board discussions regarding the LLAS facility from the time of the October 20, 2003, CLIU Board meeting, when Respondent began abstaining as to the LLAS facility, through the time the CLIU took possession and started paying on the lease for the LLAS facility. I. Reid testified that it was Respondent's practice to always announce a reason for abstention. m. Reid testified that it is customary for members of the Northwestern Lehigh School Board to make disclosures of the reasons for abstentions by board members. n. Reid -4 and Reid -5 are letters referencing the opinion of Reid's firm regarding Respondent's involvement with the LLAS facility and Transportation facility. o. The first time Respondent asked Reid for advice regarding Respondent's potential involvement in the Transportation facility was on the evening of March 18, 2002. (1) Respondent did not ask for a written opinion from Reid regarding Respondent's potential involvement in the construction of the Transportation facility. (2) Reid never provided a written opinion to Respondent regarding Respondent's potential involvement in the construction of the Transportation facility. p. In providing his opinion to Ferrari and Respondent regarding Respondent's potential involvement in the construction of the Transportation facility, Reid did not do any research of rulings under the Ethics Act but based his opinion upon his general knowledge. q. Reid did not have a specific recollection of Respondent indicating to Reid that he (Respondent) was going to be involved in the construction of the LLAS facility. C. Documents 85. ID 4, pages 1 -9 consist of lists of the CLIU Board committee members in various years. a. ID 4 -4 reflects that James Pollard became Chairperson of the Building and Grounds /Special Education Transportation Committee effective 3/18/02. (1) The entry of Respondent's name on this Exhibit under the Building and Grounds /Special Education Transportation Committee has the word "Chairperson" stricken, but there is no line through Respondent's name as a Member of the Committee. 86. ID 6 consists of documents prepared and /or maintained by Keegan, including reports prepared by Keegan regarding the Transportation facility project. (See also, various of the "Keegan Exhibits "). Kistler, 04 -037 Page 48 a. ID 6 -32 /Keegan 23 consists of a letter dated June 18, 2001, from Attorney Charles A. Waters to Keegan regarding various options for structuring the construction of the CLIU Transportation facility project. (1) The letter includes the following: The first question was whether the CLIU could own a property and have a building built by a contractor and then subsequently lease the building from the contractor. It is my opinion, that this type of arrangement would require the CLIU to bid the project and pay prevailing wages. As such, I can see no particular advantage to otherwise doing the project in the traditional manner of owning the property and building the structure and improvements. The next question was whether the CLIU could enter into a lease purchase agreement and thereby be relieved of certain construction requirements such as prevailing wages. If the agreement is structured as a true lease /purchase (Le. the CLIU must purchase the property in the future) then I believe that the project must be bid and subject to prevailing wages. If, however, the agreement is structured as a lease with option to purchase, then an argument could be made that since the option has not yet been exercised, the arrangement is purely a straight forward lease agreement which, in my opinion, would not require competitive bidding and prevailing wages. Having stated this argument, it is my position that the CLIU would be exposing itself to a significant amount of risk of a legal challenge if prevailing wages were not paid in the context of the lease with option to purchase arrangement. The Board has to realize that there is not a tremendous amount of case law which would give clear direction in this situation, and we can probably all agree that we would not want to be the test case. ID 6 -32. b. ID 6 -45 /Keegan 36 is a copy of handwritten notes bearing a date in 2001, which notes include, "Talked to Dale Roth about a School — 3 acres near his offics [sic] available." 87. Both parties have submitted into evidence copies of various official CLIU Board meeting minutes. a. Board 1 consists of the July 19, 1999, CLIU Board meeting minutes at which the CLIU Board approved entering into a 10 -year lease with Stephen Hirsh for building space to house the LLAS at 7580 Kernsville Road, Orefield, PA 18069. Board 1, page 2. b. Board 2 consists of the December 20, 1999, CLIU Board meeting minutes at which the CLIU Board combined the Building and Grounds Committee and the Special Education Transportation Committee and also discussed alternative options for a Transportation facility. Board 2, page 6. c. Board 13/ID 7- 104 -117 consist of the CLIU Board meeting minutes from the June 18, 2001, regular Board meeting. Kistler, 04 -037 Page 49 (1) The minutes include the following: Building & Grounds /Special Education Transportation Committee Report Ken Kistler, Chairperson, brought the Board up -to -date on recent events related to the CLIU Transportation Facility. Since the May 21, 2001 CLIU Board meeting, steps were taken to rescind our agreement of sale on the White property. On May 31, agreement of sale release was signed by Grant White with deposit returned to CLIU. The Committee's first choice, a larger piece of property, was placed back on the market. Mr. Kistler made a motion to enter into an agreement of sale for said property: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors enters into a conditional agreement of sale of land with Fred Lesher at a cost of $450,000. Moved: Patricia Noga; Seconded: John Wieand; Vote: Roll Call: Yes - Hoffman, Cappadocia, Herman, Dorshimer, Kistler, Pollard, Vavra, Foster, McFadden, Noga, Grega, and Wieand; No -0; Abstentions -0; Absent -2. Board 13, page 13; ID 7- 115 -116. d. Board 14/ID 7- 118 -127 consists of the July 16, 2001, CLIU Board meeting minutes at which the following motion was approved by the CLIU Board: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors approves Barry (sett and Associates, Inc., to perform Land Feasibility Study, Phase I Study, and Well and Septic Testing on the Lesher Property in Lehigh Township in an amount not to exceed $10,000. Moved: Kenneth K. Kistler; Seconded: Patricia Noga; Vote: Roll Call: Yes - Hoffman, Richwine, Herman, Dorshimer, Kistler, Pollard, McFadden, and Noga; No -0; Abstentions -0; Absent -6. Board 14, page 8; ID 7 -125. e. Board 17/ID 7- 154 -161 consist of the CLIU Board meeting minutes from the November 19, 2001, regular Board meeting. (1) The minutes include the following: Proposed Transportation Facility Update Ken Kistler, Chairperson of the Building and Grounds /Special Education Transportation Committee, turned the floor over to Mr. Robert J. Keegan, Jr., who reported to the Board on the proposed transportation facility. Since the last Board meeting, Mr. Keegan reported that he had met with the architecture firm of Roth Marz. Many options were pursued in regard to space needs for storage, office space for nonpublic staff, and curriculum and instruction classrooms. The firm will get back to Mr. Keegan with the additional square footage costs and lease option costs of the facility. Mr. Keegan also noted that the court decision on the lawsuit on the property would be appealed to the State Superior Court, which could Kistler, 04 -037 Page 50 delay the project by a proposed six to nine months. Mr. Kistler and Mr. Keegan will continue to keep the Board up -to -date on this project. Board 17, page 7; ID 7 -160. f. The CLIU Board meeting minutes from the December 17, 2001, regular Board meeting record an update by Keegan as to the Transportation facility which included: "CLIU developing costs for purchase or lease purchase of building ..." Board 17, page 6; ID 7 -167. The CLIU Board meeting minutes from the February 21, 2002, regular Board meeting record an update by Keegan as to the Transportation facility which included: "Costs for the project will be shared with the Board next month." Board 19, page 8; ID 7 -185. g. h. Board 20 /ID 7- 188 -195 consist of the CLIU Board meeting minutes from the March 18, 2002, regular Board meeting. (1) The minutes include the following: Building & Grounds /Special Education Transportation Committee Report Per having met with the Building & Grounds /Special Education Transportation Committee prior to our Board meeting, the following motions were made: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors approve the resignation of Kenneth Kistler as Chairperson of the Building and Grounds /Special Education Transportation Committee and approve James Pollard as Chairperson of said committee. Moved: Kenneth K. Kistler; Seconded: John Wieand; Vote: Yes -13; No -0; Abstentions -0; Absent -1. - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby elects to exercise its option provision under Paragraph 1 in the existing Agreement of Sale for the property in Lehigh Township by signing its purchase rights to a third party. Moved —John Wieand; Seconded: Linda Pacifico; Vote: Roll Call: Yes — Pacifico, Richwine, McGuire, Dorshimer, Pollard, Vavra, Foster, Furst, Auteri, Palmer, Wieand, and Hoffman; No -0; Abstentions - Kistler; Absent -1. Motion carried. - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby names Roth Marz as its agent to pursue the purchase provision in the existing Agreement of Sale for the property located in Lehigh Township. Moved: Bryan Dorshimer; Seconded: James Pollard; Vote: Roll Call: Yes - Richwine, McGuire, Dorshimer, Pollard, Vavra, Foster, Furst, Auteri, Palmer, Wieand, Hoffman, and Pacifico; No -0; Abstentions - Kistler; Absent -1. Motion carried. Board 20, page 6; ID 7 -193. (2) The meeting minutes do not include any disclosure by Respondent that he would be pursuing a subcontract with Roth in regard to the construction of the Transportation facility. Kistler, 04 -037 Page 51 J. (3) The meeting minutes do not include any indication or record of the Solicitor's opinion in regard to Respondent's involvement with any type of construction as to the Transportation facility. (4) The CLIU Board commissioned a professional environmental study of the LLAS by vote at its March 18, 2002, regular meeting. Board 20, page 7 /ID 7 -194. Board 23/ID 7- 218 -234 consist of the CLIU Board meeting minutes from the June 17, 2002, regular Board meeting. (1) At this meeting, the CLIU Board voted to terminate its lease with Stephen Hirsh for the LLAS facility: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby authorizes its solicitor to provide lease termination notice to the Landlord for the property located at 7580 Kernsville Road, Orefield, Pennsylvania. Moved: John Wieand; Seconded: Linda Pacifico; Vote: Roll Call: Yes - Hoffman, Pacifico, Herman, Dorshimer, Kistler, Pollard, Vavra, Foster, Furst, Auteri, Palmer, and Wieand; No- 0; Abstentions -0; Absent -2. Board 23, page 15; ID 7 -232. (2) At this same meeting, the CLIU Board authorized Dale Roth to pursue construction of a LLAS facility: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby authorizes Dale Roth to pursue construction of a facility on property adjacent to the Lehigh Valley office at 2970 Corporate Court, Orefield, Pennsylvania, for the purposes of providing leased space to the Carbon Lehigh Intermediate Unit Lehigh Learning and Adjustment School. Moved: John Wieand; Seconded: Dennis Foster; Vote: Roll Call: Yes - Hoffman, Pacifico, Herman, Dorshimer, Kistler, Pollard, Vavra, Foster, Furst, Auteri, Palmer, and Wieand; No -0; Abstentions - 0; Absent -2. Board 23, page 16; ID 7 -233. Board 24/ID 7- 235 -244 consist of the CLIU Board meeting minutes from the July 15, 2002, regular Board meeting. (1) The minutes include the following: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby: (1) Authorizes its Executive Director to execute the Assignment of Real Estate Sales Agreement as filed with the Official Minutes; (2) Approves the Lease Agreement with Cornerstone, R.E., LLC, and authorizes CLIU's Board President to execute the Lease Agreement as filed with the Official Minutes; Approves the Option Agreement with Cornerstone, R.E., LLC, and authorizes CLIU'S Board President to execute the Option Agreement as filed with the Official Minutes; and (3) Kistler, 04 -037 Page 52 Moved: John Wieand; Seconded: Bryan Dorshimer; Vote: Roll Call: Yes -Linda Pacifico, Peter McGuire, Olivia Herman, Bryan Dorshimer, James Pollard, Dennis Vavra, Dennis Foster, Stephen Furst, Lisa Auteri, Julius Palmer, and John Wieand; No -0; Abstentions - Kenneth Kistler; Absent - Patricia D. Hoffman and Terry Richwine. Board 24, pages 1 -2; ID 7- 235 -236. (2) The recorded minutes do not include any disclosure by Respondent of the reasons for his abstention as to the CLIU Board's vote to authorize the execution of the Assignment of the Real Estate Sales Agreement and Lease Agreement and Option Agreement with Cornerstone, R.E., LLC, as well as a bank agreement relating to the Transportation facility. The recorded minutes do not include any disclosure by Respondent that three days prior to the July 15, 2002, CLIU Board meeting, he had entered into a Purchase Agreement with Cornerstone, R.E., LLC for the construction of a pole building structure for the Transportation facility. (3) (1) (4) Approves the Subordination, Non - Disturbance, and Attornment Agreement with AIIFirst Bank, and authorizes CLIU's Board President to execute such Agreement as filed with the Official Minutes. k. The CLIU moved into the Transportation facility in March and April 2003. Board 32, page 6; ID 7 -321; Board 33, page 8; ID 7 -331. Board 39/ID 7- 383 -395 consist of the CLIU Board meeting minutes from the October 20, 2003, regular Board meeting. The minutes include the following: Approval to Lease Administrative Facility from R &T Management LLC WHEREAS, the Carbon Lehigh Intermediate Unit #21 ( "CLIU ") is an Intermediate Unit created by statute. WHEREAS, R &T Management LLC has indicated that it can provide an administrative facility suitable for CLIU's future needs to serve its member school districts; WHEREAS, the Board of Directors of CLIU (the "Board ") has determined it to be in the best interest of CLIU to lease Administrative facilities from R &T Management LLC. NOW THEREFORE BE IT RESOLVED, by the Board of Directors of Carbon Lehigh Intermediate Unit #21, as follows: 1. The Board hereby authorizes the entering into a lease with R &T Management LLC under a Lease Agreement substantially in the form of the Lease Agreement which is appended hereto made part hereof and marked as Exhibit "A "; with any further modifications to the Lease Agreement being subject to the approval of the Board's Solicitor. Kistler, 04 -037 Page 53 2. The Board hereby further authorizes its President, to execute the Leas [sic] Agreement and any other documents related to the Lease or to take any and all necessary and required or appropriate action with regard to the leasing of an Administrative Facility from R &T Management LLC. Moved: Dennis Foster; Seconded: Patricia D. Hoffman; Vote: Roll Call: Yes — Kistler, Pollard, Vavra, Foster, Auteri, Wieand, Hoffman, Richwine, and McGuire; No — 0; Abstentions — 0; Absent — 5. Approval of Fund Lease of New Facility WHEREAS, the Carbon Lehigh Intermediate Unit #21 ( "CLIU ") is an Intermediate Unit created by statute; WHEREAS, the Board of Directors of the CLIU (the "Board ") has determined it to be in the best interest of CLIU to lease Administrative facilities from R &T Management LLC; WHEREAS, R &T Management LLC has presented two Lease Rental Payment options; WHEREAS, the Lease Rental Payment options are to either base the Lease Rentals on the construction costs of the facilities with a fixed interest rate "(Fixed Rate Program ") or to base the Lease Rentals on construction costs of the facilities with a variable interest rate ( "Variable Rate Program "); WHEREAS, the Board has determined it to be in the best interest of CLIU to Lease administrative facilities from R &T Management LLC based upon the Variable Rate Program. NOW THEREFORE BE IT RESOLVED, by the Board of Directors of Carbon Lehigh Intermediate Unit #21, as follows: 1. The Board hereby authorizes the leasing of administrative facilities from R &T Management LLC based upon the Variable Rate Program with the variable interest rate specified as the LIBOR rate plus 1.5 %. Moved: James Pollard; Seconded: Peter McGuire; Vote: Roll Call: Yes — Pollard, Vavra, Foster, Auteri, Wieand, Hoffman, Richwine, McGuire, and Kistler; No — 0; Abstentions — 0; Absent — 5. Approval of Construction of LLAS Facility WHEREAS, the Carbon Lehigh Intermediate Unit #21 ( "CLIU ") previously authorized Roth Marz Partnership to initiate the planning process for the construction of a facility for the Lehigh Learning Adjustment School ( "LLAS "); WHEREAS, Township approval for the construction of the LLAS facility has been given; Kistler, 04 -037 Page 54 WHEREAS, the Board of Directors of CLIU ( "the Board ") has determined it to be in the best interest of CLIU to pursue the construction of the LLAS Facility; NOW THEREFORE BE IT RESOLVED, by the Board of Directors of Carbon Lehigh Intermediate Unit #21, as follows: 1. The Board hereby authorizes Roth Marz Partnership to begin the construction phase of the LLAS Facility. Any Lease for the Facility shall be subject to the approval of the Board. Moved: James Pollard; Seconded: Terry Richwine; Vote: Roll Call: Yes — Vavra, Foster, Auteri, Wieand, Hoffman, Richwine, McGuire, and Pollard; No — 0; Abstentions — Kistler; Absent — 5. Board 39, pages 11 -12; ID 7- 393 -394. (2) The recorded minutes do not include any disclosure by Respondent of the reasons for his abstention as to the CLIU Board's vote to authorize Roth Marz Partnership to begin the construction phase of the LLAS Facility. The recorded minutes do not include any disclosure by Respondent that he had a prior business relationship with Dale Roth. m. Board 40 /ID 7- 399 -405 consist of the CLIU Board meeting minutes from the March 15, 2004, regular Board meeting. (1) The minutes include the following: Financing of Transportation Facility WHEREAS, the Carbon Lehigh Intermediate Unit 21 ("IU ") is considering the acquisition of a transportation facility ( "Project "); and WHEREAS, the Board of School Directors (the "Board ") for the IU, in order to the [sic] fund the Project, is considering the sale and issuance of Bonds (the "Bonds "); and WHEREAS, the Board has determined to appoint a financing team to present and recommend an appropriate financing plan for the Project. NOW, THEREFORE, BE IT HEREBY RESOLVED, by the Board of School Directors for the Carbon Lehigh Intermediate Unit #21, as follows: (3) 1. A financing team (the "Financing Team "), consisting of the Executive Director and the Business Manager of the IU, Kevin C. Reid, Esquire, the IU's Solicitor, Parker /Hunter Incorporated, as Financial Advisors, and King, Spry, Herman, Freund & Faul LLC as Bond Counsel is hereby appointed to plan the financing. 2. The Financing Team is authorized and directed to present a financing plan and to prepare and disseminate a Preliminary Official Statement with regards to the Bonds, to present financial information to rating agencies and bond insurance Kistler, 04 -037 Page 55 companies, to prepare any other necessary preliminary documents with reference to the financing plan. 3. Any issuance of Bonds, however, shall be subject to definitive action by the Board of School Directors for the Carbon Lehigh Intermediate Unit #21 at an advertised public meeting. Moved: Bryan Dorshimer; Seconded: Terry Richwine; Vote: Roll Call: Yes -Hahn, Richwine, McGuire, Eidem, Dorshimer, Kistler, Yeakel, Vavra, Bartlett, Feinberg, Auteri, and Luchansky; No -0; Abstentions -0; Absent -2. Board 40, page 6; ID 7 -404. n. ID 7- 406 -412 consists of the CLIU Board meeting minutes from the April 19, 2004, regular Board meeting. (1) The minutes include the following: Amended Motion — Financing Option —CLIU Transportation Facility/ Walnutport - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors approves Option #1 /Full Wraparound Option, from Parker /Hunter, Inc., and will offset borrowing costs with the first year savings to pay bond issuance costs, for the CLIU Transportation Facility, Walnutport, as filed with the Official Minutes. Moved: Terry Richwine; Seconded: Penny Hahn; Vote: Roll Call: Richwine, Eidem, Kistler, Yeakel, Vavra, Bartlett, McDonnell Feinberg, Auteri, Barbush, Luchansky, and Hahn; No -0; Abstentions -0; Absent -3. ID 7 -407. o. Board 41/ID 7- 413 -423 consist of the CLIU Board meeting minutes from the May 17, 2004, regular Board meeting. (1) The minutes include the following: Ratification of LLAS Lease Agreement - MOTION: The Carbon Lehigh Intermediate Unit Board ratifies and authorizes the Lease Agreement appended hereto between Dale and Ruth Roth and the Carbon Lehigh Intermediate Unit. Moved: Penny Hahn; Seconded: Darlene Yeakel; Vote: Roll Call: Yes -Hahn, McGuire, Eidem, Dorshimer, Yeakel, Vavra, Bartlett, and Auteri; No -0; Abstentions - Kistler; Absent - Stecker, Richwine, Feinberg, Barbush, and Luchansky. Board 41, page 10; ID 7 -422. (a) The minutes do not include any disclosure by Respondent of the reasons for his abstention as to the CLIU Board's vote to ratify the Lease Agreement with Dale and Ruth Roth for the LLAS Facility. (2) Respondent voted in favor of the following motion: Kistler, 04 -037 Page 56 Board 41, page 10; ID 7 -422. Respondent voted in favor of the following motion: Approval to Execute Agreement of Sale for CLIU Transportation Facility - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby authorizes its Board President, the Executive Director, or any other officer of the Board as required, to execute an agreement of sale and any other related documents for the purchase of the Transportation Facility in a manner consistent with Option Agreement entered into between Cornerstone R.E. LLC and CLIU #21 subject to review of any and all such documents by the Solicitor. Moved: Bryan Dorshimer; Seconded: Penny Hahn; Vote: Yes - Eidem, Dorshimer, Kistler, Yeakel, Vavra, Bartlett, Auteri, Barbush, Hahn, and McGuire; No -0; Abstention -0; Absent -4. Board 41, page 10; ID 7 -422. Board 42 consists of the CLIU Board meeting minutes from the July 19, 2004, regular Board meeting. (1) The minutes include the following: Mr. Roth also updated the Board on the progress of the new Lehigh Learning and Adjustment School. He reported that the building pad is done and they are ready to begin building during the week of July 26, 2004. Projected completion date is January 2005. Board 42, page 2. 88. Keegan 26 is the Sales Agreement dated June 28, 2001, between Freddie J. Lesher and Pamela R. Lesher and the CLIU for the property where the Transportation facility was subsequently constructed. p. (3) Approval of Borrowing Resolution for CLIU Transportation Facility - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby adopts the Borrowing Resolution as presented in its entirety authorizing the issuance of the Carbon Lehigh Intermediate Unit #21 Educational Facility Revenue Bonds, Series of 2004, in the aggregate principal amount of $2,510,000. Moved: Penny Hahn; Seconded: Bryan Dorshimer; Vote: Roll Call: Yes - McGuire, Eidem, Dorshimer, Kistler, Yeakel, Vavra, Bartlett, Auteri, Barbush, and Hahn; No -0; Abstentions -0; Absent -4. a. The purchase price was $450,000. 89. ID 9 -1 -3 consists of a memorandum of a "scope of work" that Young prepared to Dale Roth for the construction of the CLIU Transportation facility as a pole building structure. (See also, Roth -3). a. The date on ID 9 -1 /Roth -3 is November 9, 2001, while ID 9 pages 2 -3 bear the date January 29, 2002. (See, Finding 72 a(1)). Kistler, 04 -037 Page 57 90. ID 10 -1 -9 consists of a scope of services and quote from Respondent for the construction of the Transportation facility. (See also, Roth -13, pages 1 -5). 91. Roth -13, pages 1 -5 is a set of specifications and scope of work dated April 26, 2002, which was provided by Kistler to Gary Caldwell for the construction of the Transportation facility. (See also, ID 10 -1 -5). 92. Roth -18 consists of the Purchase Agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility. (See also, ID 11 -1). a. The agreement is dated July 12, 2002. b. The contract price was $550,492. c. The Purchase Agreement is signed by Kenneth K. Kistler as President of Kistler Pole Building Company, Inc. and by Dale H. Roth. 93. ID 19 -1 -37 consist of bills and checks for the CLIU's rental of the Transportation facility from Cornerstone R.E., LLC. 94. ID 20 -1 -28 /Keegan 80 and 81 consist of a deed, mortgage and security agreement, settlement sheet and other documents related to the CLIU's purchase from Cornerstone R.E., LLC, of the Transportation facility property (formerly the "Lesher property ") located at 4850 Mountain View Drive, Lehigh Township, Northampton, PA. a. The contract sales price was $2,348,882.61. b. The deed is dated July 29, 2004. 95. Roth -102 consists of the Purchase Agreement dated June 17, 2004, between Kistler Pole Building Company, Inc. and Dale Roth and /or Dale and Ruth Roth for the construction of the shell structure for the LLAS facility. (See also, ID 15; ID 16- 1). a. The contract price was $641,933. (Roth 102, page 4). b. The Purchase Agreement is signed by Kenneth K. Kistler as President of Kistler Pole Building Company, Inc. and by Dale H. Roth. 96. ID 21 -1 -4 /Roth -23, pages 1 -4 consists of an Option Agreement dated August 1, 2002, between Cornerstone R.E., LLC (Lessor) and the CLIU (Lessee), which provided the CLIU with an option to purchase the Transportation facility leased from Cornerstone R.E., LLC. a. The purchase price for the leased premises was to be equal to the sum of the unpaid principal balances on all loans obtained by Cornerstone R.E., LLC, to purchase the leased premises and construct improvements thereon; the architectural fees of Roth Marz Partnership, P.C. in the amount of $85,000, relative to construction on the leased premises; and the construction overhead and profit of Cornerstone R.E., LLC in the amount of $153,800 for the construction of the leased premises. b. Per the Option Agreement, the CLIU had the option to purchase the Transportation facility at any time during the term of the lease. Kistler, 04 -037 Page 58 97. ID 23 -1 -3 consist of two abstention memoranda dated August 19, 2002, and one abstention memorandum dated November 17, 2003, from Respondent to Carfara. a. The abstention memorandum at ID 23 -1 dated August 19, 2002, references Respondent's abstention from the following issue /motion at the March 18, 2002, CLIU Board meeting, for the stated reason May be involved in the construction ": ID 23 -1. ID 23 -2. Building /Grounds Special Education Transportation Facility - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby elects to exercise its option provision under Paragraph 1 in the existing Agreement of Sale for the property in Lehigh Township by signing its purchase rights to a third party. b. The abstention memorandum at ID 23 -2 dated August 19, 2002, references Respondent's abstention from the following issue /motion at the July 15, 2002, CLIU Board meeting, for the stated reason May be involved in the construction ": Building /Grounds Special Education Transportation Facility - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby: (1) Authorizes its Executive Director to execute the Assignment of Real Estate Sales Agreement as filed with the Official Minutes; (2) Approves the Lease Agreement with Cornerstone, R.E., LLC, and authorizes CLIU's Board President to execute the Lease Agreement as filed with the Official Minutes; Approves the Option Agreement with Cornerstone, R.E., LLC, and authorizes CLIU'S Board President to execute the Option Agreement as filed with the Official Minutes; and (4) Approves the Subordination, Non - Disturbance, and Attornment Agreement with AIIFirst Bank, and authorizes CLIU's Board President to execute such Agreement as filed with the Official Minutes. (3) c. The abstention memorandum at ID 23 -3 dated November 17, 2003, references Respondent's abstention from the following issue /motion at the October 20, 2003, CLIU Board meeting, for the stated conflict/reason, Have worked for Roth Marz Partnership in the past ": Approval of Construction of LLAS Facility WHEREAS, the Carbon Lehigh Intermediate Unit #21 ( "CLIU ") previously authorized Roth Marz Partnership to initiate the planning process for the construction of a facility for the Lehigh Learning Adjustment School ( "LLAS "); Kistler, 04 -037 Page 59 ID 23 -3. WHEREAS, Township approval for the construction of the LLAS facility has been given; WHEREAS, the Board of Directors of CLIU ( "the Board ") has determined it to be in the best interest of CLIU to pursue the construction of the LLAS Facility; NOW THEREFORE BE IT RESOLVED, by the Board of Directors of Carbon Lehigh Intermediate Unit #21, as follows: 1. The Board hereby authorizes Roth Marz Partnership to begin the construction phase of the LLAS Facility. Any Lease for the Facility shall be subject to the approval of the Board. (1) Respondent's abstention memorandum makes no mention of the fact that he was going to be involved in the construction of the LLAS facility. ID 23 -3. 98. Advertise 1 -9 consist of the proofs of publication for public meetings of the CLIU Board for the fiscal years between July 1999 and June 2007 (as of November 9, 2006). a. None of these documents make any mention of the construction of a Transportation facility or LLAS facility. b. None of these documents include the CLIU Board's meeting agenda. 99. TF -1 consists of a demonstrative chart submitted by Respondent as a chronology of events relating to the Transportation facility. 100. LLAS -1 consists of a demonstrative chart submitted by Respondent as a chronology of events relating to the LLAS facility. 101. Keegan 49 consists of cost comparison information provided by Roth Marz for the Transportation facility under a purchase versus purchase /lease arrangement. a. The cost comparison information indicates a cost savings of $470,719 through a purchase /lease arrangement. 102. Keegan 112 consists of a Lease Agreement dated May 7, 2004, between Dale Roth and Ruth Roth ( "Lessor ") and the CLIU ( "Lessee ") for the LLAS facility at 2936 Corporate Court, Orefield, Pennsylvania. a. The Lease Agreement provides for monthly rental installments of $16,900 in 2005; a fixed annual rental of $213,600 payable in equal, advance monthly installments of $17,800 in 2006 and for nine years thereafter; and terms for adjusting the rental thereafter. 103. Reid -3 consists of a letter dated August 23, 2004, from Dale H. Roth to Kevin Reed, Esquire, which letter references controversy concerning a possible conflict of interest regarding Kistler's involvement with the Transportation facility. a. Roth's letter states, in part: "Prior to starting construction on the CLIU Transportation Center, both Kenneth Kistler and Dr. Frank Farrari [sic] indicated to me that Kenneth Kistler had taken the appropriate action, per Kistler, 04 -037 Page 60 your directive, that would allow him to hold a sub - contract with my company Cornerstone LLC." b. Roth's letter further states, in part: "I would appreciate receiving a prompt response to my request for written confirmation of no conflict regarding Kistler Buildings acting as sub - contractor on the CLIU Learning and Adjustment Center." 104. Reid -4 consists of a letter dated August 27, 2004, from Freund to Roth, which letter states in part: We have prepared and delivered to Mr. Kistler our legal opinion that no conflict arises." D. Stipulations 105. The Pennsylvania Supreme Court disposed of the appeal affecting the Zoning Hearing Board decision in Lowhill Township (as to the construction of the LLAS facility) on April 15, 2004. (Tr. at 196). a. The Pennsylvania Supreme Court refused to hear the appeal. (Tr. at 889- 890). 106. The CLIU Board approved the first two rental payments on the LLAS lease to Mr. and Mrs. Roth during the Board's February 17, 2005, meeting. (Tr. at 204). a. That vote occurred with Respondent absent. (Tr. at 204). 107. At the CLIU Board's June 17, 2002, regular meeting, the Board approved the following motion: - MOTION: The Carbon Lehigh Intermediate Unit Board of Directors hereby authorizes Dale Roth to pursue construction of a facility on property adjacent to the Lehigh Valley office at 2970 Corporate Court, Orefield, Pennsylvania, for the purposes of providing leased space to the Carbon Lehigh Intermediate Unit Lehigh Learning and Adjustment School. (Tr. at 205 -206). a. The motion was made by John Wieand and seconded by Dennis Foster and the vote was by roll call with Respondent voting "yes" in favor of the motion. (Tr. at 206). 108. Based upon the report of J. Miller and Son, Inc., regarding the environmental study of the LLAS at the property leased from Hirsh, the CLIU Board decided that it should terminate its lease with Hirsh. (Tr. at 508 -509). 109. Furst resigned from the Salisbury School Board on October 21, 2003, and was no longer available to participate in CLIU Board matters after that time. (Tr. at 617). 110. The minutes of the March 18, 2002, regular CLIU Board meeting are silent as to Solicitor Reid providing any opinion regarding Respondent's potential future involvement with the Transportation facility. (Tr. at 673). 111. On October 20, 2003, Dorshimer left the executive session of the CLIU Board at 9:45 p.m. (ID 7 -392). (Tr. at 714). (See, Finding 78 m(4)). a. As of that time, Respondent had not stated that he had a prior business relationship with Dale Roth. (Tr. at 714). Kistler, 04 -037 Page 61 112. The only relevance of Exhibit ID 9 is that John Young contacted Respondent for particular spacing information (eight -foot on- center spaces) relative to constructing a pole building. (Tr. at 784). 113. ID 11 -1 consists of a page of the final agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility. (Tr. at 786). 114. The sum of the payment requests in Roth 114, 115 and 116 is $300,361. (Tr. at 904). 115. Respondent is not pursuing any procedural challenges relating to: the date that the preliminary investigation was done; the number of extensions granted up through and including the date the Investigative Division filed its Investigative Complaint on July 29, 2005; the time that the Investigative Complaint was filed; manner of service; or the number of updates and the timeliness of updates and extensions of time from the commencement of the investigation through the filing of the Investigative Complaint. (Tr. at 925 -926). 116. The first lease payment for the CLIU Transportation facility was approved on April 17, 2003. (Tr. at 1012 - 1013). 117. Respondent /Respondent's company commenced construction on the CLIU Transportation facility in September of 2002 and completed construction in early February of 2003. (Tr. at 1013). 118. Respondent /Respondent's company commenced construction of the LLAS facility in September of 2004 and completed all work on the LLAS except for minor touch -up work in early January 2005. (Tr. at 1014). 119. The CLIU Board meeting minutes are silent as to whether Respondent announced his potential interest with regard to the Transportation facility and the LLAS facility at the time he abstained. (Tr. at 1217 - 1218). III. DISCUSSION: At all times relevant to this matter, Respondent Kenneth Kistler (also referred to herein as "Respondent," "Respondent Kistler," and "Kistler "), in his capacity as a Member of the Carbon - Lehigh Intermediate Unit ( "CLIU ") Board of Directors ( "Board "), has been 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 Kistler violated Sections 1103(a) and 1103(f) of the Ethics Act when he used the authority of his position for the private pecuniary gain of himself and /or businesses with which he is associated, Kistler Pole Buildings and Kistler Building Products; when he participated in discussions and actions of the Board to award contracts to Dale Roth, and /or businesses owned by the same, without an open and public process; and when his company subsequently entered into subcontracts with Roth to construct those buildings. 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. Kistler, 04 -037 Page 62 Section 1103(f) of the Ethics Act provides in part that no public official /public employee or spouse or child or business with which he or the spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official /public employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure. We preliminarily address a procedural issue raised by Respondent. Specifically, Respondent objected to the simultaneous briefing deadline set by the Hearing Officer. (Tr. at 1225 -1227; March 21, 2007, letter of Healy; Post - Hearing Brief of Respondent, at 1 (Note 1), 34 (Note 11)). We note that it is a standard practice at the Commission to set such a briefing schedule, but in any event, when Investigative Division Counsel broached the subject of filing reply briefs (May 21, 2007, letter of Jacisin), both Counsels reached a stipulation concerning potential supplemental briefs (May 22, 2007, letter of Healy). In that neither party pursued the opportunity to file reply briefs, we deem Respondent's aforesaid objection to have been withdrawn. facts. Having noted the issues and applicable law, we shall now summarize the relevant Respondent Kistler has served as a member of the CLIU Board since at least January 1999. In his private capacity, Kistler has an ownership interest in two corporations, Kistler Pole Building Company, Incorporated and Kistler Building Supply, Incorporated. Kistler Pole Building Company, Incorporated (also referred to herein as "Kistler Pole Building Incorporated," "Kistler Pole Building Company, Inc.," "Kistler Pole Buildings," "Kistler Pole Building," "Kistler Pole Building Company" and "Kistler Buildings ") is primarily a construction company that builds pole buildings. Kistler Building Supply, Incorporated (also referred to herein as "Kistler Building Supply" and "Kistler Building Products ") is a building materials provider. Respondent is President of both corporations. The CLIU Transportation facility: Respondent served as Chairman of the CLIU building committee from December 20, 1999, when the building committee was formed by combining two committees, to March 18, 2002, when Respondent resigned as Chairman of the building committee. The CLIU building committee made recommendations to the CLIU Board but did not have decision - making power. Only the CLIU Board had decision - making power as to any type of project at the CLIU. In late 1999, the CLIU began exploring the possibility of constructing a garage (hereinafter "Transportation facility ") in order to house its buses. The facility then in use was no longer considered adequate to meet the growing needs of the CLIU. At the December 20, 1999, CLIU Board meeting, the CLIU Board initiated discussions regarding alternative options for a Transportation facility. In December 1999, Robert J. Keegan, Jr. ( "Keegan "), who is currently Executive Director of the CLIU, was serving as the CLIU's Director of Special Education and was responsible for supervising transportation. Keegan was placed in charge of developing a replacement facility for transportation. Keegan reviewed numerous prospective sites for the Transportation facility, which were narrowed down to a few sites for consideration. The CLIU administration and staff developed information as to what was needed for the Transportation facility. Keegan Kistler, 04 -037 Page 63 testified that the building committee's prime purpose during the planning and site review phase of the Transportation facility project was to visit and narrow down the potential sites. Building committee members including Respondent participated in site visits. Keegan prepared monthly "update" reports regarding the Transportation facility project, which reports he provided to the building committee Chairperson shortly before CLIU Board meetings. Keegan's reports reflected Keegan's day -to -day supervision of the Transportation facility project and did not reflect any substantial input from Respondent. Keegan's reports were prepared for the benefit of the full CLIU Board and were read and provided to the full CLIU Board at the Board's public meetings. Keegan or the building committee Chairperson would read the reports at the CLIU public meetings. The site ultimately purchased for the Transportation facility was known as the " Lesher" property. The CLIU Board, including Kistler, voted on June 18, 2001, to approve the purchase of the Lesher property. The Sales Agreement between the CLIU and the Leshers is dated June 28, 2001. (Keegan 26). Keegan testified that prior to the CLIU Board's approval of the agreement of sale, there was no expectation or commitment on behalf of the CLIU or Keegan to build any particular type of buildings for the Transportation facility. Commencing prior to the execution of the Sales Agreement for the Lesher property, the CLIU administrative staff began developing information regarding the advantages of a lease- and - purchase arrangement versus a purchase- and -build approach by the CLIU. Dr. Frank J. Ferrari ( "Ferrari ") who served as the Executive Director of the CLIU from 2000 until March 30, 2006, had been informed by other Intermediate Unit Executive Directors that lease- and - purchase arrangements were cost effective and legal. The CLIU administrative staff, and in particular, Keegan, worked on the development of cost comparisons for a lease- and - purchase arrangement versus a purchase- and -build approach. Testimony before this Commission established that a lease- and - purchase arrangement avoided requirements for paying prevailing wages and also allowed greater choice in the selection of the builder than the traditional purchase- and -build approach. On June 13, 2001, Keegan spoke with Dale Roth (also referred to herein as "Roth "), a self - employed architect who had previously done work for the CLIU. Keegan requested that Roth provide cost comparison information related to a lease- and - purchase arrangement versus a purchase- and -build approach for the Transportation facility. Keegan did not seek any cost proposals or bid proposals from anyone other than Roth with regard to a difference between a lease- and - purchase arrangement versus a purchase -and- build approach. On June 13, 2001, Keegan requested a legal opinion from Attorney Charles A. Waters regarding a lease- and - purchase arrangement versus a purchase- and -build approach for the Transportation facility. Attorney Waters provided a legal opinion by letter dated June 18, 2001. (ID 6 -32 /Keegan 23). The opinion letter of Attorney Waters stated, inter alia, that the CLIU would be exposing itself to a significant amount of risk of a legal challenge if prevailing wages were not paid in the context of the lease with option to purchase arrangement." (See, ID 6 -32 /Keegan 23). Despite the advice of Attorney Waters, the lease- and - purchase arrangement remained an option for the CLIU. At this juncture, we note that Roth is associated with the following businesses /business interests relevant to this matter: Roth Marz Partnership (an architectural practice, also referred to herein as "Roth Marz "); Cornerstone R.E., LLC (also referred to herein as "Cornerstone" and "Cornerstone, LLC "); R &T Management, LLC (also referred to herein as "R &T Management "); and "Dale and Ruth Roth." Kistler, 04 -037 Page 64 Settlement on the Lesher property was delayed due to unrelated litigation involving the property. On December 13, 2001, Keegan and Respondent discussed the need to get cost comparison information before the CLIU Board, in the event there would be a settlement of the litigation as to the Lesher property. The cost comparison information provided by Roth was shared with the CLIU Board by CLIU administrative staff at the Board's March 18, 2002, executive session. The information that Roth provided reflected that a lease arrangement would result in a cost savings of $470,719 as compared to an outright purchase arrangement. (Keegan 49). Meanwhile, other significant events occurred leading up to the March 18, 2002, CLIU Board meeting. At some point prior to November 9, 2001, Roth began considering using a pole building for the Transportation facility. The precise point at which this occurred is not established by the evidence before us. Roth testified that between June and November 2001, there were discussions between Roth or his staff and Respondent regarding the possible use of a pole building for construction of the Transportation facility. However, Roth also testified that a few days after November 5, 2001, Roth directed John Arthur Young ( "Young "), a registered architect who served as a consultant to Roth Marz Partnership, to "start" looking at pole building options. The evidence establishes that as of November 5, 2001, Roth was still considering a pre- engineered steel building as one option for the Transportation facility. On or about November 9, 2001, Young spoke to Respondent by telephone for the purpose of gathering information regarding the column spacing for a general pole building structure. Young had not had any prior dealings with Respondent, and Young testified that he does not recall whether he identified himself as working for Roth or Roth Marz Partnership. Young testified that he does not recall whether he informed Respondent of the project about which he was inquiring, but that he would generally not reveal such information until further into a project. Young testified that his telephone call with Respondent lasted about ten minutes. Respondent testified that he recalled receiving a telephone call from Young requesting general information regarding pole buildings. Respondent testified that Young did not indicate where the project was. On February 6, 2002, Respondent faxed the quote in evidence as Roth -5 to Gary Caldwell ( "Caldwell ") at Roth Marz Partnership. Respondent testified that he sent the quote to Caldwell in response to a request from Caldwell. Respondent testified that the fax provided a "ballpark" quote for a main building at $394,453 and an ancillary storage building at $32,589. At the time, Respondent knew Roth Marz was the architectural firm that the CLIU used, and he knew that Caldwell worked for Roth Marz Partnership. However, Respondent testified that he does not believe that he knew the quote was for the Transportation facility at the time he provided it. Respondent testified that this quote was prepared based upon general information, and that if he had had specific information, he would have listed it. Roth testified that as of the February 6, 2002, fax from Respondent (Roth -5), he had not made any commitment to the type of building he was going to build for the Transportation facility. Roth testified that it was not until March or April 2002 that Cornerstone was seriously looking at the pricing of a pole building. Respondent testified that at some point between February 21, 2002, and March 18, 2002, he received a call from Roth, who asked Respondent to come to Roth's office to take Kistler, 04 -037 Page 65 a look at a project. Respondent testified that it was at this meeting that Roth informed Respondent that he was considering using a pole building for the Transportation facility. Respondent testified that following this meeting with Roth, Respondent told Ferrari that Roth was considering using a pole building, that Respondent would probably need to be away" from the building committee, and that Ferrari would need to find someone else to take over the building committee. Respondent testified that as of March 18, 2002, it was not definite that he would be building the Transportation facility, but Roth had asked him to provide pricing and planning information, and Roth was going to be providing details and prints to Respondent. At the March 18, 2002, CLIU Board meeting, the following significant events occurred. First, the CLIU Board held an executive session, which involved the building committee. Immediately following the executive session, the CLIU Board voted to approve the resignation of Respondent as Chairperson of the building committee and to replace him with Board Member James Pollard. The CLIU Board then voted to approve motions to exercise its option to assign its purchase rights for the Lesher property and to name Roth Marz as its agent to pursue the purchase of the property. Respondent made and voted in favor of the first motion, involving his resignation. Respondent abstained as to the other two motions. Kevin Reid, Esquire ( "Reid ") served as Solicitor for the CLIU from on or about December 17, 2001, through the middle of 2005. Reid testified that on March 18, 2002, at both the executive session and the public meeting of the CLIU Board, Respondent disclosed his potential involvement in the construction of the Transportation facility. Reid further testified that at both the executive session and public meeting on March 18, 2002, he (Reid) expressed his opinion that it would be appropriate for Respondent to remove himself entirely from the process involving the Transportation facility, including any discussions or deliberations, and to abstain from voting on any matter related to it. Other witnesses provided varying testimony as to whether Respondent disclosed to the CLIU Board his potential involvement in the construction of the Transportation facility. Respondent testified that Reid informed the CLIU Board that as long as Respondent did not vote on anything that involved Respondent, and as long as Respondent did not participate in the discussions, that it was going to be all right." (Tr. at 1063; 1136). Respondent testified that he specifically asked Reid whether there was any reason why he (Respondent) should not be involved in the construction of the Transportation facility, and Reid said, "None that I know of." (Tr. at 1063- 1064). Respondent testified that he asked Reid to check into the matter and that Reid stated that he would do so. Respondent testified that at the meeting following the March 18, 2002, CLIU Board meeting, he asked Reid whether Reid had checked on the issue, and Reid indicated that he had done so. Respondent testified that he could not recall whether this meeting was an executive session or a public meeting. Respondent testified that he asked Reid whether there was any reason why he (Kistler) should not be involved in the construction of the Transportation facility and that Reid said, "Absolutely not." (Tr. at 1082). Respondent never asked Reid to provide a written opinion or to state his opinion in the minutes of the CLIU Board as to whether Respondent could potentially be involved in the construction of the Transportation facility. The minutes regarding Respondent's resignation as Chairman of the building committee are ambiguous as to whether Respondent stepped down completely from the building committee or only from the position as Chairman. However, other evidence Kistler, 04 -037 Page 66 established that Respondent intended to remove himself completely from the building committee as of March 18, 2002, and that following his resignation, he was no longer involved with the building committee. The CLIU Board's actions at the March 18, 2002, public meeting to exercise its option to assign its purchase rights for the Lesher property and to name Roth Marz as its agent to pursue the purchase of the property followed an executive session discussion concerning the cost comparison information that had been provided by Roth. Keegan provided inconsistent testimony regarding Respondent's participation in discussions of the CLIU Board regarding the cost comparison information, initially testifying that there were discussions among the Board Members, that Respondent probably participated in those discussions, but that Keegan did not have a recollection of specific words Respondent said (Tr. at 470 -471; 474), and subsequently testifying that his earlier testimony was erroneous and that Respondent remained silent and did not participate in the discussions of the Board (Tr. at 478). The CLIU Board's action at the public meeting to exercise its option to assign its purchase rights for the Lesher property and to name Roth Marz as its agent to pursue the purchase of the property constituted the Board's official action to choose a lease- and - purchase arrangement rather than a purchase- and -build approach for the Transportation facility. Keegan testified that the CLIU Board chose the lease with option to purchase arrangement based upon information that other IU boards had successfully used that type of arrangement, and that one IU had prevailed in a legal challenge. The CLIU Board did not put the assignment of its purchase rights or the construction of the Transportation facility out for bid. Ferrari and Keegan testified that because the CLIU decided to lease the Transportation facility, it did not have to put the project out for competitive bids. Keegan testified that the CLIU Board determined that Roth Marz Partnership would be the architect for the Transportation facility based upon past positive experiences with the firm. Respondent testified that at the March 18, 2002, public meeting of the CLIU Board, when his name was called during the roll call vote as to the motion to assign the CLIU Board's purchase rights for the Lesher property to a third party (Board 20, page 6; ID 7- 193), he specifically stated that he abstained because he might be involved in the construction of the building. (Tr. at 1067 - 1068). Respondent testified that when he abstained as to the motion naming Roth Marz as the CLIU Board's agent to pursue the purchase of the Lesher property (Board 20, page 6; ID 7 -193), he stated, "I abstain for the same reasons." (Tr. at 1069). The minutes of the March 18, 2002, public meeting do not include any mention of Respondent's reason for abstaining from votes involving the Transportation facility, or of Reid providing any legal opinion regarding Respondent's potential involvement in the construction of the Transportation facility. Following the March 18, 2002, CLIU Board meeting, Roth met with Respondent on March 26, 2002. Roth testified that the purpose of this meeting with Respondent would have been to talk about the Transportation facility. Roth testified that as of March 26, 2002, he had not indicated to Respondent that Respondent would be the contractor for the Transportation facility. On April 26, 2002, Roth or Cornerstone staff received from Respondent the document in evidence as ID 10 -1 -9, consisting of a scope of services and quote from Respondent for the construction of the Transportation facility. (See also, Roth -13, pages 1 -5). Roth testified that on or about May 2, 2002, Roth gave Respondent an initial commitment to use Kistler Building for the Transportation facility. ID 12 -1 /Roth -15 consists of a memorandum from Roth to Respondent dated May 28, 2002, providing Roth's color selections for the roof, gutters, downspouts, and sidewall Kistler, 04 -037 Page 67 panels of the CLIU Transportation facility. This memorandum pre -dated by approximately 11/2 months the formal contract between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility. Roth -18 consists of the Purchase Agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility. (See also, ID 11 -1). The Purchase Agreement is dated July 12, 2002. The Purchase Agreement is signed by Respondent as President of Kistler Pole Building Company, Inc. and by Dale H. Roth. The contract price was $550,492, but per a change order approved July 12, 2002, the contract price was reduced to $539,737. Respondent testified that approximately two weeks prior to the execution of the final agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction as to the CLIU Transportation facility, he had a definitive commitment from Roth that Kistler /Kistler's company was going to build the Transportation facility. Roth testified that this was the first time he ever hired Respondent /Respondent's company to do any work for anything. Roth testified that Respondent's company was chosen to build the Transportation facility because Respondent was the only pole building business owner Roth knew, and Roth knew Respondent to be a reputable contractor. Roth did not solicit or receive any bids from any other pole building contractors. At the July 15, 2002, regular CLIU Board meeting, the Board approved a motion authorizing the execution of the Assignment of Real Estate Sales Agreement to Cornerstone; approving a Lease Agreement and Option Agreement with Cornerstone; and approving a related bank agreement. Respondent abstained from the vote. The recorded minutes do not include any disclosure by Respondent of the reasons for his abstention. Respondent did not disclose at this meeting that three days earlier he had entered into a Purchase Agreement with Cornerstone, R.E., LLC for the construction of a pole building structure for the Transportation facility. Respondent stated that the reason he did not make such an announcement was that he was following what he thought were the instructions from Reid that he was to remain silent on matters involving the Transportation facility. Respondent's testimony on this point conflicts with his other testimony that he always announces the reason for an abstention and that he in fact did so at other meetings where the basis for the abstention was that he might work on the construction of a building for the CLIU. On August 1, 2002, the CLIU entered into a Lease and Option Agreement with Cornerstone R.E., LLC regarding the Transportation facility. Per the Option Agreement, the CLIU had the option to purchase the Transportation facility at any time during the term of the lease. The purchase price for the leased premises was to be equal to the sum of the unpaid principal balances on all loans obtained by Cornerstone R.E., LLC, to purchase the leased premises and construct improvements thereon; the architectural fees of Roth Marz Partnership, P.C. in the amount of $85,000, relative to construction on the leased premises; and the construction overhead and profit of Cornerstone R.E., LLC in the amount of $153,800 for the construction of the leased premises. On August 19, 2002, Respondent filed two Conflict of Interest Abstention Memoranda, which stated that the reasons he gbstained from votes relating to the Transportation facility on March 18 and July 15 2002 was: May be involved in the construction." Respondent already had a signed contract with Cornerstone, dated July 12, 2002, when he filed these abstention memoranda. Respondent /Respondent's company commenced construction on the CLIU Transportation facility in September of 2002 and completed construction in early February of 2003. The CLIU moved into the Transportation facility in March and April 2003. Kistler, 04 -037 Page 68 Kistler Pole Building Company, Incorporated submitted invoices to Cornerstone and Cornerstone issued payments to Kistler Pole Building Company, Incorporated for a down payment and the construction of the Transportation facility as detailed in Findings 45, 79 v, and 79 x. Respondent received a total commission of $26,858.45 for constructing the Transportation facility. On April 9, 2003, the CLIU began making monthly lease payments to Cornerstone pursuant to the lease of August 1, 2002. Between April 9, 2003, and June 21, 2004, Respondent participated in the approval of these payments as detailed in Finding 39. The Lesher property contained a golf shack that the CLIU wanted renovated. Kistler Pole Building Company, Inc. submitted a quote for the work at a price of $14,377, which quote was accepted by Dale Roth on May 4, 2003. By invoice dated June 30, 2003, Kistler Pole Building Company, Inc. billed Cornerstone, LLC in the amount of $14,377 for completion of the golf shack renovation. Cornerstone, R.E., LLC paid for the work by check number 332 dated September 8, 2003, in the amount of $14,377. Roth testified that Cornerstone absorbed the cost of the golf shack renovation and did not charge the CLIU for it. Except for his participation in approving bill lists that included pre- determined lease payments, Respondent did not vote on matters at the CLIU Board involving the Transportation facility from March 18, 2002, until March 15, 2004, when the CLIU Board appointed a financing team to present and recommend an appropriate financing plan for purchasing the Transportation facility from Cornerstone. Respondent voted in favor of that motion as well as subsequent action of the CLIU Board to borrow $2,510,000 for the purchase of the Transportation facility. Respondent signed the related mortgage in his official capacity as President of the CLIU. There was no bidding relative to the CLIU's purchase of the Transportation facility. Keegan testified that this was because the Transportation facility was designed for the CLIU, the CLIU was going to purchase it, and there was no other property or facility to meet the CLIU's needs. The CLIU Lehigh Learning and Adjustment School facility: In 1999, the CLIU entered into a 10 -year lease with Steven Hirsh (hereinafter "Hirsh ") for the purpose of housing the Lehigh Learning and Adjustment School ( "LLAS ") in a property located at 7580 Kernsville Road, Orefield, Pennsylvania. The CLIU experienced recurring mold problems in the building leased from Hirsh. On March 18, 2002, the CLIU Board authorized a complete environmental evaluation of the property. Respondent voted to authorize the study. At the CLIU Board's June 17, 2002, meeting, the CLIU Board approved motions to terminate its lease with Hirsh for the LLAS facility and to authorize Dale Roth to pursue construction of a LLAS facility on a property adjacent to Roth's Lehigh Valley office. Respondent voted in favor of both motions. Respondent testified that on June 17, 2002, when he cast the aforesaid votes, he had no idea that he would be involved in the construction of the LLAS facility. Respondent testified that prior to the June 17, 2002, CLIU Board meeting, he had not had any conversations with Roth or anyone concerning the potential development of a structure that could be used for classroom facilities. Respondent testified that he was unaware of the fact that Keegan had talked with Roth in 2001 about the possibility of building a school on three acres near Roth's office. Kistler, 04 -037 Page 69 Respondent further testified that as of June 17, 2002, he had no idea that Roth would consider using a pole building for a classroom facility. Respondent testified that a pole building would not ordinarily be used for classroom space. Construction of the LLAS facility was delayed due to a series of appeals on a zoning matter. The appeal process as to the zoning issue ended favorably for the Roths, on April 15, 2004. During the appeal process, Roth proceeded with a land development plan based upon an office building. Respondent testified that on April 18, 2003, in a meeting with Roth, Respondent first learned that Roth was considering using a pole building for the LLAS. In contrast to Respondent's testimony on this point, Roth testified that he received an initial proposal from Respondent regarding construction of the LLAS facility shortly before April 18, 2003. Respondent testified that as soon as he became aware that he was being considered for work on the LLAS facility, he stopped participating in any discussions or votes of the CLIU Board with respect to the LLAS facility. Respondent testified that he asked Reid whether there was any reason that he should not be involved in the construction of the LLAS facility, and that Reid said, "No, as long as you don't participate in the discussions and as long as you don't vote in anything that has anything to do with you." (Tr. at 1096) (See also, Tr. at 1136). Reid testified that he did not have a specific recollection of Respondent indicating that Respondent was going to be involved in the construction of the LLAS facility. On May 16, 2003, Ray Reppert ( "Reppert ") of Roth Marz sent a fax to Respondent containing the updated floor plan for the CLIU classroom building. Reppert advised Respondent to update his proposal and send it to Dale Roth as soon as possible. On October 8, 2003, Respondent sent a fax to Reppert containing a catalog of various roof trusses that could be used in the construction of the CLIU classroom building. Following Respondent's meeting with Roth on April 18, 2003, and the above exchanges of information with Reppert /Roth Marz, the first meeting at which the CLIU Board considered action involving the LLAS was the October 20, 2003 meeting. Respondent abstained from the CLIU Board's action at the October 20, 2003, meeting to authorize Roth Marz Partnership to begin the construction phase of the LLAS facility. (Board 39, page 12; ID 7 -394). Respondent testified that when he abstained from this matter on October 20, 2003, he stated that he abstained because he might be involved in the construction of the building. The recorded minutes do not include any disclosure by Respondent of the reasons for his abstention as to the CLIU Board's vote to authorize Roth Marz Partnership to begin the construction phase of the LLAS Facility. The recorded minutes do not include any disclosure by Respondent that he had a prior business relationship with Dale Roth. On November 5, 2003, Respondent sent an email to Reppert requesting specific details regarding the classroom building's construction. Roth Marz sent a letter to Respondent providing HVAC plans. On November 17, 2003, Respondent filed an abstention memorandum regarding his abstention from the October 20, 2003, Board action on the motion approving construction of the LLAS facility. ID 23 -3. Respondent's abstention memorandum states that he abstained for the following conflict /reason: Have worked for Roth Marz Partnership in the past." ID 23 -3. Respondent's abstention memorandum made no mention of the fact that he was going to be involved in the construction of the LLAS facility. On May 4, 2004, Reppert emailed to Respondent the floor plan for the CLIU Kistler, 04 -037 Page 70 classroom building. On May 7, 2004, following the completion of the aforesaid zoning - related appeals, Roth provided a down payment to Respondent for Respondent's work on the LLAS facility. On May 17, 2004, the CLIU Board approved the Lease Agreement between Dale and Ruth Roth and the CLIU for the LLAS, effective May 7, 2004. Respondent abstained from the vote. Respondent testified that when he abstained from this vote on May 17, 2004, he stated that he abstained because he might be involved in the construction of the building. The CLIU did not solicit bids for the construction of the LLAS facility. On June 17, 2004, Respondent and Roth executed a Purchase Agreement (Roth 102) in the amount of $641,933.00 for the construction of the LLAS facility. The Purchase Agreement is signed by Kenneth K. Kistler as President of Kistler Pole Building Company, Inc. By letter dated August 4, 2004, Respondent was notified that he was being investigated for possible violations of the Ethics Act. (S &S -1 /Reid -1). At the time Respondent received this notification, Kistler Pole Building Company, Inc. was already under contract to construct the LLAS facility but had not yet commenced construction. On Respondent's behalf, a request for an advisory dated August 20, 2004, was faxed to this Commission's Chief Counsel, asking whether Respondent would be in violation of the Ethics Act if he would proceed to fulfill the contractual obligations he had already undertaken. (S &S -2). By letter dated August 20, 2004, Chief Counsel responded that an advisory could not be issued because the Commission does not address in an advisory format matters involving past conduct or matters under investigation, and that the scenario raised in the request was part of the ongoing investigation by the Investigative Division. (S &S -3). Respondent contacted Reid's firm and received an opinion letter dated August 27, 2004, from Attorney John Freund, which letter concluded that it was the firm's opinion that there had been no violation of the Ethics Act. (Reid -5). Respondent testified that based upon the opinion letter received from Freund, he proceeded to build the LLAS facility. Respondent /Respondent's company commenced construction of the LLAS facility in September of 2004 and completed all work on the LLAS except for minor touch -up work in early January 2005. Roth paid invoices submitted by Respondent for the construction of the LLAS facility as detailed in Finding 79 nn. Kistler received a total commission of $31,921.65 for constructing the LLAS facility. Keegan 112 consists of the Lease Agreement dated May 7, 2004, between Dale Roth and Ruth Roth ( "Lessor ") and the CLIU ( "Lessee ") for the LLAS facility at 2936 Corporate Court, Orefield, Pennsylvania. The Lease Agreement provides for monthly rental installments of $16,900 in 2005; a fixed annual rental of $213,600 payable in equal, advance monthly installments of $17,800 in 2006 and for nine years thereafter; and terms for adjusting the rental thereafter. Fact Finding 102 a. The CLIU began making monthly lease payments to Dale and Ruth Roth for the LLAS facility on February 10, 2005. Kistler participated in the approval of these payments as detailed in Finding 65. The CLIU Administrative Facility: Kistler, 04 -037 Page 71 At the October 20, 2003, CLIU Board meeting, immediately prior to abstaining from CLIU Board action to authorize Roth Marz Partnership to begin the construction phase of the LLAS facility, Respondent voted in favor of leasing an administrative facility from R &T Management, LLC (a Roth company) and approving a particular funding arrangement for such lease. Roth testified that a pole building was not contemplated for the CLIU central services building /administrative facility, because it is a three -story building and a pole building would not be suitable. Other facts: Respondent testified that the only buildings he built for Roth organizations were the Transportation facility and the LLAS facility. Respondent admitted in his Answer to the Investigative Complaint that his contractual relationships with Cornerstone as to the Transportation facility and with Dale and Ruth Roth as to the LLAS facility were "subcontracts" under no -bid contracts awarded by the CLIU to Cornerstone and Dale and Ruth Roth respectively. Fact Findings 44(a), 64(a) -(b). Roth described the contractual relationships with Respondent /Respondent's company as "subcontracts." Fact Findings 79 r(2); 79 uu; 79 vv. Respondent also described the contractual relationship with Cornerstone for the Transportation facility in terms of a "subcontract." Fact Finding 83 h. Public meetings of the CLIU Board are open to the public and are advertised in advance, with the agendas being provided to the media. The process for approving payment of CLIU bills is that the bills are calculated and related documents are sent to the CLIU Board Members prior to the Board meeting at which the bills are approved. Hundreds of bills are approved by the CLIU Board each month at the Board's regular meetings. Bills from Cornerstone R.E., LLC for the Transportation facility lease would have been in the amount authorized by the lease. Bills from Dale and Ruth Roth for the LLAS facility lease would have been in the amount authorized by the lease. Having highlighted the facts and issues, we note that the Investigative Division filed a Closing Statement raising the following arguments /contentions: • That prior to March 18, 2002, Respondent was involved in matters pertaining to the Transportation facility when, as early as June 2001, he knew he could /would be involved with the Transportation facility; • That Respondent engaged in a conflict of interest when he actively participated in discussions concerning the decision to assign purchase rights to Roth Marz Partnership, regarding the CLIU's desires to obtain a Transportation facility; • That after March 18, 2002, Respondent never disclosed to the CLIU Board that he was actually awarded a contract with Roth; Kistler, 04 -037 Page 72 • That it is a conflict of interest under the Ethics Act to vote to award business to a company with which one is actively seeking to contract, even if the vote is not for the same project; • That it is irrelevant that the projects Respondent voted on were different from those he was engaged in constructing because all the projects were tied to Roth; • That Respondent violated Section 1103(a) of the Ethics Act when, on June 17, 2002, he voted in favor of authorizing Roth to pursue the construction of the LLAS facility while Respondent was actively engaged in seeking a contract to build the Transportation facility and had a reasonable expectation that he would receive such a contract; • That Respondent violated Section 1103(a) of the Ethics Act when, on October 20, 2003, he voted in favor of leasing an administrative facility from R &T Management, LLC while Respondent was actively engaged in seeking the contract to build the LLAS facility; and • That Respondent violated Section 1103(f) on two occasions when his business entered into subcontracts with Roth for the construction of the Transportation facility and the LLAS facility, when the contracts to Roth were awarded without an open and public process. Respondent has filed a Brief raising the following arguments /contentions: • That the earliest evidence of any contact between Roth Marz Partnership and Respondent regarding the CLIU Transportation facility occurred in November2001; that such contact did not identify the particular project involved; and that following that date, Respondent did not use the authority of his public position with respect to the Transportation facility; • That Respondent announced his potential conflict of interest and resigned from the building committee on March 18, 2002, and that he subsequently abstained from matters pertaining to the Transportation facility; • That Respondent had received 99.56% of the contract price for his work on the Transportation facility before the CLIU paid anything to Roth or Cornerstone under the lease agreement; • That on April 17, 2003, when Respondent voted with a unanimous Board to approve a list of 490 bills, including the initial lease payment for the Transportation facility, Respondent voted to approve payment of the precise sum required under a lease approved by the remaining Board members; Respondent had received all but $2,368 (0.44 %) of his contract price for work on the Transportation facility; the approval was unrelated to the balance due Respondent by Cornerstone; the amount of the lease payment was 0.61 % of the total amount of the bills approved that night and had a de minimis economic impact upon the CLIU; and the bills were approved as to a class /subclass of creditors; • That the golf shack was renovated at no additional expense to the CLIU; • That Respondent first learned that Roth was considering a pole building for the LLAS facility on April 18, 2003, approximately ten months after the June 17, 2002, meeting at which Respondent had voted with a unanimous Board to direct Roth to pursue construction of the LLAS facility on property adjacent to Roth's Lehigh Valley office; Kistler, 04 -037 Page 73 • That following his April 18, 2003, meeting with Roth, Respondent was not convinced he was going to get work on the LLAS facility but abstained from further matters involving the LLAS facility; • That on March 21, 2005, when Respondent voted with a unanimous Board to approve the release of the third lease payment to the Roths, such vote was legitimized for all of the reasons cited above as to the vote on the CLIU lease payment; • That any alleged violation of Section 1103(a) of the Ethics Act based upon Respondent's vote to approve a lease between the Intermediate Unit and R &T Management LLC for a new central services building was not raised in the Investigative Complaint and is not before this Commission (Tr. at 335 -337); • That Snyder v. State Ethics Commission, 686 A.2d 843 (Pa. Cmwlth. 1996), alloc. denied, 1997 Pa. LEXIS 2719 (Pa. Dec. 22, 1997) does not stand for the proposition that a public official must abstain from voting on everything coming before the governmental body relating to a person with whom the public official has any kind of relationship; • That Respondent announced his interests when he abstained, and the CLIU Board Members were aware as early as March 2002 that Respondent had a "potential generalized business interest" with Roth; • That Respondent is not a subcontractor within the meaning of Section 1103(f) of the Ethics Act because he constructed the Transportation facility and the LLAS for private owners who in turn leased those buildings to the CLIU; • That the CLIU could have decided to not purchase the Transportation facility, in which case Cornerstone would have continued to own the structure as constructed by Kistler Pole Buildings; • That by law, the CLIU was barred from owning the LLAS facility; • That absent some special legal authority or provision in the Act, Respondent cannot be qualified as a subcontractor for erecting a building for an owner who thereafter leases the mere right of possession for a period of time to a third party" (Post- Hearing Brief of Respondent, at 64); • That Respondent received 99.56% of his contract price with Cornerstone two full months before the CLIU, a lessor, approved the first lease payment to Cornerstone; • That Respondent received all but 1.17% of his substantial contract price for the LLAS before the CLIU approved any lease payments on the LLAS; • That the requirements of Section 1103(f) for an open and public process do not reference or require competitive bidding; • That Section 1103(f) is to be interpreted based upon the Sunshine Act, 65 Pa.C.S. § 701 et seq., and the Right -to -Know Act, 65 P.S. § 66.1 et seq.; • That the language of Section 1103(f) requiring "subsequent public disclosure of all proposals considered and contracts awarded" requires that the option or options considered by the governmental body be revealed but falls short of requiring multiple proposals; Kistler, 04 -037 Page 74 • That the requirements of Section 1103(f) for an open and public process are satisfied by discussions of contracting opportunities at public meetings and in media coverage, and by awarding contracts at public meetings; • That although some Commission precedents under Section 1103(f) of the Ethics Act expressly require invitations for bids, Bassi, Opinion 86- 007 -R, decided under Act 170 of 1978, found that an open and public process occurred where local news media reported an authority's desire to seek new office space and competitive proposals were in fact received and reviewed by the authority; • That the CLIU's regular meetings are public meetings that are advertised, with the Board agendas provided to the media in advance; • That discussions, reports and actions by the CLIU Board as to the Transportation facility and LLAS occurred in public meetings, such that the public was aware of the CLIU's interest in acquiring such facilities prior to the CLIU entering into leases establishing a commitment with respect to such facilities; and • That the former Chief Counsel's refusal to issue an Advice of Counsel to Respondent as to whether he would violate the Ethics Act by proceeding to construct the LLAS violated a mandatory statutory requirement for issuance of an advice upon request, and resulted in a complete defense to Respondent for any related alleged wrongdoing arising more than 21 days after his August 20, 2004, request for an Advice of Counsel. We must now determine whether the actions of Respondent Kistler violated Section 1103(a) or Section 1103(f) of the Ethics Act. As we apply the facts to the allegations, due process requires that we not depart from the allegations. Pennsy v. Department of State, 594 A.2d 845 (Pa. Cmwlth. 1991). A violation of the Ethics Act must be based upon clear and convincing proof. 65 Pa.C.S. § 1108(g). Clear and convincing proof is "so `clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear conviction, without hesitance, of the truth of the precise facts in issue." In Re: Charles E.D.M., 550 Pa. 595, 601, 708 A.2d 88, 91 (Pa. 1998) (Citation omitted). In applying Section 1103(a) of the Ethics Act and the facts before us to the alleged violations, we first conclude that there is an insufficient basis for finding a violation of Section 1103(a) as to Respondent's actions prior to March 18, 2002, regarding the Transportation facility. There is insufficient evidence to establish that prior to February 2002, Respondent knew or had a reasonable expectation that he would receive a contract to perform work on the Transportation facility. First, there was no prior business relationship between Respondent and Roth. Second, Roth's testimony that between June and November 2001, there were discussions between Roth or his staff and Respondent regarding the possible use of a pole building for construction of the Transportation facility is rendered ambiguous by Roth's additional testimony that a few days after November 5, 2001, Roth directed John Arthur Young ( "Young "), a registered architect who served as a consultant to Roth Marz Partnership, to "start" looking at pole building options. From Roth's testimony, it is not clear whether Young's contact to Respondent on or about November 9, 2001, was the first contact to Respondent or whether there were earlier contacts. As for Young's contact, there is insufficient evidence to establish that Respondent knew Young was calling on behalf of Roth Marz or that Young was calling about the Transportation facility. Kistler, 04 -037 Page 75 Based upon the evidence, February 2002 was the earliest point at which Respondent knew or had a reasonable expectation that he would receive a contract to perform work on the Transportation facility. There were no significant actions taken by Respondent with respect to the Transportation facility from February 2002 up to the time of the March 18, 2002, CLIU executive session and Board meeting. At the March 18, 2002, CLIU Board's executive session, there was a discussion concerning the cost comparison information that had been provided by Roth with respect to a lease- and - purchase arrangement versus a purchase- and -build approach. Keegan provided inconsistent testimony regarding Respondent's participation in discussions of the CLIU Board regarding the cost comparison information, initially testifying that there were discussions among the Board Members, that Respondent probably participated in those discussions, but that Keegan did not have a recollection of specific words Respondent said (Tr. at 470 -471; 474), and subsequently testifying that his earlier testimony was erroneous and that Respondent remained silent and did not participate in the discussions of the Board (Tr. at 478). From the evidence before us we are unable to determine whether Respondent participated in these discussions. We find that there is a lack of clear and convincing proof to support a violation of Section 1103(a) as to Respondent's possible participation in discussions at the March 18, 2002, executive session regarding cost comparison information for the Transportation facility. Respondent /Respondent's company commenced construction on the CLIU Transportation facility in September of 2002 and completed construction in early February of 2003. Except for his participation in approving bill lists that included pre- determined lease payments, Respondent did not vote on matters at the CLIU Board involving the Transportation facility from March 18, 2002, until March 15, 2004. With respect to Respondent's participation in approving lease payments, we conclude from the record before us that such payments were for a pre- determined amount under a lease agreement that had been approved by the CLIU Board without Respondent's participation. The approval of pre- fixed, routine, uncontested bills does not in and of itself rise to the level of a violation of Section 1103(a) of the Ethics Act. See, Krushinski, Order 168; Yezzi, Order 825 at 58; Brooks, Opinion 89 -023; Maholick, Opinion 90 -010. On March 15, 2004, the CLIU Board appointed a financing team to present and recommend an appropriate financing plan for purchasing the Transportation facility from Cornerstone. Respondent voted in favor of that motion as well as subsequent action of the CLIU Board to borrow $2,510,000 for the purchase of the Transportation facility. Respondent signed the related mortgage in his official capacity as President of the CLIU. Such actions were uses of the authority of Respondent's public office. However, based upon the particular terms of the Option Agreement dated August 1, 2002, between Cornerstone R.E., LLC (Lessor) and the CLIU (Lessee) (ID 21 -1 -4 /Roth -23, pages 1 -4), we determine that the CLIU's purchase of the Transportation facility prior to the expiration of the lease did not result in a financial benefit to Respondent, Cornerstone, or Roth. See, Fact Finding 96. We conclude that Respondent's aforesaid actions from March 15, 2004, forward regarding the purchase of the Transportation facility from Cornerstone did not transgress Section 1103(a) of the Ethics Act, based upon the lack of a private pecuniary benefit. There is evidence that Respondent disclosed his potential business relationships with Roth to at least some CLIU Board Members and administrative staff members. Respondent might not have made the requisite disclosures each time and in the manner he was required to make them. However, we do not address any potential violation of Section 1103(j) of the Ethics Act in that the allegations are limited to Sections 1103(a) and 1103(f) of the Ethics Act. Cf., Palovich, Order 1164; Klutzaritz, Order 1078. Kistler, 04 -037 Page 76 We determine that Respondent unintentionally violated Section 1103(a) of the Ethics Act when, on June 17, 2002, he voted in favor of authorizing Roth to pursue the construction of the LLAS facility while Respondent was actively engaged in seeking a contract to build the Transportation facility and had a reasonable expectation that he would receive such a contract. There is no question that as of June 17, 2002, Respondent had a reasonable expectation of getting a contract with Cornerstone to construct the Transportation facility. Roth testified that on or about May 2, 2002, he gave Respondent an initial commitment to use Kistler Building for the Transportation facility. On May 28, 2002, Roth faxed a memorandum to Respondent providing Roth's color selections for the roof, gutters, downspouts, and sidewall panels of the CLIU Transportation facility. Respondent testified that approximately two weeks prior to the execution of the July 12, 2002, agreement between Kistler Pole Building Company, Inc. and Cornerstone, LLC for construction of the Transportation facility, he had a definitive commitment from Roth that Kistler /Kistler's company was going to build the Transportation facility. By Respondent's testimony, he had actual knowledge that he was going to get the contract by the end of June. Thus, Respondent's June 17, 2002, vote in favor of authorizing Roth to pursue the construction of the LLAS facility occurred precisely as Respondent was actively pursing the contract to construct the Transportation facility. The finding of a violation of Section 1103(a) under these circumstances is supported by case law and Commission precedent. In Snyder v. State Ethics Commission, 686 A.2d 843 (Pa. Cmwlth. 1996), alloc. denied, 1997 Pa. LEXIS 2719 (Pa. Dec. 22, 1997), Commonwealth Court affirmed Snyder, Order 979 -2, in which this Commission determined that a township supervisor who had participated and voted on development issues when he had actual or anticipated contracts to perform work in the developments had violated Section 3(a) (now Section 1103(a)) of the Ethics Law. Commonwealth Court, in affirming this Commission's Order, stated that Snyder "should not have considered and voted on issues involving his personal business dealings." Snyder, 686 A.2d at 849. It is our view that "personal business dealings" encompass the persons or entities with which one does business or actively seeks to do business. In Amato, Opinion 89 -002, this Commission held that a reasonable and legitimate anticipation of the development of a financial /business relationship would support a finding of a conflict of interest. On June 17, 2002, when Respondent voted to authorize Roth to pursue construction of the LLAS facility, Respondent clearly had a reasonable and legitimate anticipation /expectation of developing a financial /business relationship with Roth through Cornerstone for the construction of the Transportation facility. We conclude that it is irrelevant that the particular project Respondent voted on, specifically the LLAS facility, was a different project than the Transportation facility for which he was actively pursuing a contract. Both projects were CLIU projects with Roth or Roth organizations. Cf., Kannebecker, Opinion 92 -010. In Respondent's capacity as a public official, Respondent was in a position to vote to award the LLAS facility work to Roth. In Roth's capacity as general contractor for the CLIU, Roth was in a position to award a subcontract to Respondent to construct the CLIU Transportation facility. Under the circumstances of this case, each of these individuals -- Respondent as a public official and Roth as a CLIU general contractor -- exercised the authority of his respective position in a manner that financially benefited the other. Cf., Elisco, Opinion 00 -003; and Confidential Opinion, 05 -004. Based upon the above analysis, we hold that on June 17, 2002, Respondent unintentionally violated Section 1103(a) of the Ethics Act when he voted in favor of authorizing Roth to pursue the construction of the LLAS facility while Respondent was actively engaged in seeking a contract to build the Transportation facility and had a reasonable expectation that he would receive such a contract from Roth /Cornerstone. Kistler, 04 -037 Page 77 Intent is not a requisite element for a violation of Section 1103(a) of the Ethics Act. See, e.q., Yocabet v. State Ethics Commission, 531 A.2d 536 (Pa. Cmwlth. 1987) (holding that the township supervisor in that case violated Section 3(a) of the Ethics Act even if he did not intend to do so). Nevertheless, we specifically conclude that Respondent's aforesaid violation of Section 1103(a) of the Ethics Act was unintentional. Respondent acted based upon his understanding of the legal advice he had received from the CLIU Solicitor. It is unfortunate that Respondent did not contact this Commission for an advisory until August 20, 2004, after Respondent was already under investigation by the Investigative Division. There were no other uses of authority of office by Respondent as to the LLAS facility except for Respondent's participation in approving lease payments. With respect to Respondent's votes to approve lease payments as to the LLAS, we find no basis for a violation of Section 1103(a) for the same reasons set forth above as to the lease payments for the Transportation facility. Such payments were for a pre- determined amount under a lease agreement that had been approved by the CLIU Board without Respondent's participation, and the approval of pre- fixed, routine, uncontested bills does not in and of itself rise to the level of a violation of Section 1103(a). See, Fact Finding 102 a; Krushinski, supra; Yezzi, supra; Brooks, supra; Maholick, supra. We do not address Respondent's October 20, 2003, vote in favor of leasing an administrative facility from R &T Management, LLC. That particular vote is not encompassed within the averments of the Investigative Complaint. See, Pennsy v. Department of State, 594 A.2d 845, 847 (Pa. Cmwlth. 1991). We shall now consider the alleged violations of Section 1103(f) of the Ethics Act. Respondent contends that he is not a subcontractor within the meaning of Section 1103(f) of the Ethics Act as to the construction of the Transportation facility and the LLAS facility for private owners who in turn leased those buildings to the CLIU. We reject this argument for the following reasons. First, Respondent has explicitly admitted in his Answer to the Investigative Complaint that with respect to the LLAS facility, he was a subcontractor under a no -bid contract awarded by the CLIU to Dale Roth /Dale and Ruth Roth. Fact Findings 64(a), (a)(1), (b). Further, Respondent's Answer to Paragraph 75(a) of the Investigative Complaint is an implicit admission that the portion of the work on the Transportation facility project performed by Respondent was subcontracted by Cornerstone, R.E. LLC to Respondent, such that Respondent's contractual relationship with Cornerstone as to the Transportation facility was a subcontract under a no -bid contract awarded by the CLIU to Cornerstone. See, Fact Findings 44(a), (a)(1). We conclude that Respondent has admitted his status as a subcontractor as to both the Transportation facility and the LLAS facility projects, and Respondent is bound by these admissions. Bartholomew v. State Ethics Commission, 795 A.2d 1073 (Pa. Cmwlth. 2002). See also, Finding 83 h. However, even if Respondent had not admitted his status as a subcontractor, an application of the relevant provisions of the Ethics Act to the facts in this case results in the same conclusion that Respondent was a subcontractor as to both the Transportation facility and the LLAS facility projects. The Ethics Act defines the term "contract" broadly: § 1102. Definitions "Contract." An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real Kistler, 04 -037 Page 78 property. The term shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. 65 Pa.C.S. § 1102. The above definition includes "agreements" or "arrangements" for the "use" by the Commonwealth or a political subdivision of services, supplies, equipment, land, and other personal or real property. Intermediate units are part of the public school system of the Commonwealth. 24 P.S. § 9 -951. Intermediate units are also comprised of political subdivisions (school districts). See, 24 P.S. § 9 -952; 65 Pa.C.S. § 1101. In the instant matter, we determine that for purposes of the Ethics Act, the CLIU is both comprised of political subdivisions and is itself a political subdivision organized by the component school districts, which appoint the CLIU Board Members and supply the CLIU with funding. See, 65 Pa.C.S. § 1101 (definition of "political subdivision "); Eiben, Opinion 04 -002. We further determine that the agreements and arrangements between the CLIU and Roth Marz /Cornerstone with respect to the Transportation facility, and between the CLIU and Dale Roth and /or Dale and Ruth Roth for the LLAS facility, were agreements and arrangements for the use of such facilities by both the CLIU and the component school districts to provide for the needs of both. We determine that the above definition of the term "contract" encompasses the lease agreements as well as other related agreements and arrangements: (1) between the CLIU and Roth Marz /Cornerstone with respect to the Transportation facility; and (2) between the CLIU and Dale Roth and /or Dale and Ruth Roth for the LLAS facility. Section 1103(f) of the Ethics Act prohibits a public official or a business with which a public official is associated from entering into any subcontract valued at $500 or more with a "person" who has been awarded a contract with the governmental body with which the public official is associated unless the contract with the governmental body has been awarded "through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded." 65 Pa.C.S. § 1103(f). The terms "business," "business with which he is associated," "governmental body," "governmental body with which a public official or public employee is or has been associated," and "person" are specifically defined in the Ethics Act as follows: § 1102. Definitions "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. Kistler, 04 -037 Page 79 "Governmental body. " Any department, authority, commission, committee, council, board, bureau, division, service, office, officer, administration, legislative body or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any agency performing a governmental function. "Governmental body with which a public official or public employee is or has been associated." The governmental body within State government or a political subdivision by which the public official or employee is or has been employed or to which the public official or employee is or has been appointed or elected and subdivisions and offices within that governmental body. "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. 65 Pa.C.S. § 1102. As corporations, Kistler Pole Building Company, Incorporated and Kistler Building Supply, Incorporated are "businesses." Moreover, they are businesses with which Respondent, as an officer and owner, is associated. The CLIU Board is a "governmental body." At all times during Respondent's service as a CLIU Board Member, the CLIU Board has been a governmental body with which Respondent has been associated. The CLIU Board entered into "contracts " - -as that term is defined by the Ethics Act — with "persons," specifically Roth Marz Partnership and subsequently Cornerstone as to the Transportation facility, and with Dale Roth and /or Dale and Ruth Roth as to the LLAS. Roth Marz Partnership and Cornerstone are "persons" because they are businesses, and the definition of "person" includes businesses. Dale Roth and Ruth Roth are "persons," both because they are individuals and because together they are an "association." The Ethics Act does not define the term "association," but the Statutory Construction Act defines the term (1 Pa.C.S. § 1991), such that for our purposes, the applicable definition is from the Associations Code and encompasses Dale and Ruth Roth: § 102. Definitions "ASSOCIATION." A corporation, a partnership, a limited liability company, a business trust or two or more persons associated in a common enterprise or undertaking. The term does not include a testamentary trust or an inter vivos trust as defined in 20 Pa.C.S. § 711(3) (relating to mandatory exercise of jurisdiction through orphans' court division in general). 15 Pa.C.S. § 102 (Emphasis added). Respondent's business entered into subcontracts under the aforesaid no -bid contracts. Respondent signed these subcontracts in his capacity as President of Kistler Pole Building Company, Inc. The aforesaid contracts and subcontracts were in excess of $500. Kistler, 04 -037 Page 80 The remaining question is whether the requirements of Section 1103(f) were satisfied. Respondent argues: that the requirements of Section 1103(f) for an open and public process do not specifically reference or require competitive bidding; that the language of Section 1103(f) requiring "subsequent public disclosure of all proposals considered and contracts awarded" requires that the option or options considered by the governmental body be revealed but falls short of requiring multiple proposals; and that the requirements of Section 1103(f) for an open and public process are satisfied by discussions of contracting opportunities at public meetings and in media coverage, and by awarding contracts at public meetings. In considering Respondent's arguments, we initially note that public office is a public trust. 65 Pa.C.S. § 1101.1(a). Insofar as public officials and public employees are concerned, the public trust is paramount over private interests. Hutchins, Order 1320; Mohr, Order 1293; Urtz, Order 1274; Billetdeaux, Order 1222; Kannebecker, Opinion 92- 010; Crisci, Opinion 89 -013; see also, 1 Pa.C.S. § 1922. Additionally, the Pennsylvania Supreme Court has declared that the Ethics Act, as remedial legislation, must be liberally construed, Maunus v. State Ethics Commission, 518 Pa. 592, 598, 544 A.2d 1324, 1327 (1988), and that "[t]he duty of government to establish and promote standards of the highest order is perhaps its most compelling obligation, in view of the public trust reposed within its auspices." Id., 518 Pa. 592, 600, 544 A.2d 1324, 1328 (1988). The interpretation of Section 1103(f) of the Ethics Act advanced by Respondent essentially reduces to an assertion that the CLIU Board could steer contracts directly to its architect /general contractor of choice, without competitive bidding, and Respondent could subcontract under such contracts, as long as the public could watch what was happening. We reject the interpretation advanced by Respondent as an absurd and narrow construction that would elevate private interests over the public interest (see, 1 Pa.C.S. § 1922(1), (5)) and that would diminish public trust in government rather than establish and promote standards of the highest order. We likewise reject Respondent's unfounded assertions that Section 1103(f) of the Ethics Act is to be interpreted based upon the Sunshine Act and the Right -to -Know Act; we find no basis whatsoever for these assertions by Respondent. We interpret the requirements of Section 1103(f) for an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded" to mean that there must actually be a meaningful opportunity for competitors to submit proposals. We hold that a meaningful opportunity for competitors to submit proposals requires an actual public solicitation for such proposals through a publicly distributed notice or advertisement. Discussions at a public meeting of the governmental body's intentions to build a facility or to enter into a contract with a particular contractor and /or advertisements of its public meetings and the distribution of its agendas to the media are insufficient to satisfy the requirements of Section 1103(f) of the Ethics Act. Respondent's reliance upon Bassi, Opinion 86- 007 -R, decided undera prior version of the Ethics Act, Act 170 of 1978, is misplaced. In Bassi, not only did the media actually report the authority's desire to seek new office space, but also the authority itself had actively requested and received proposals from the public. The combination of public notice that in fact occurred was found to be adequate in that instance under the former Ethics Act. The instant matter is distinguishable from Bassi because, in the instant matter, no proposals were requested from anyone other than Roth /Roth interests. Additionally, there is no indication in the record that the media reported regarding the CLIU Board's desire for a Transportation facility or LLAS facility. The "proofs of publication" for public meetings of the CLIU Board - -which are in evidence as "Advertise 1- 9 " - -do not make any mention of the construction of a Transportation facility or LLAS facility, nor do they include CLIU Board meeting agendas (Fact Finding 98). Kistler, 04 -037 Page 81 We shall now address Respondent's arguments that the former Chief Counsel's refusal by letter dated August 20, 2004, to issue an Advice of Counsel to Respondent as to whether Respondent would violate the Ethics Act by proceeding to construct the LLAS facility: (1) violated a mandatory statutory requirement for issuance of an advice upon request; and (2) resulted in a complete defense to Respondent for any related alleged wrongdoing arising more than 21 (working) days after Respondent's August 20, 2004, request for an Advice of Counsel. All of Respondent's arguments in this regard lack merit for the following reasons. First, the former Chief Counsel correctly responded that an advisory could not be issued because the Commission does not address in an advisory format matters involving past conduct and matters under investigation. Pursuant to Sections 1107(10) and (11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), an opinion /advice may be given only as to prospective (future) conduct. This is because an advisory affords a defense to an individual who truthfully discloses all of the material facts in advance of taking action and then proceeds to act in reliance upon the advisory. Id. An advisory is not available to afford a defense to a requester who has already taken action and is under investigation. By the time Respondent requested an advisory from this Commission, he was already under investigation by the Investigative Division, and he had been so notified by letter dated August 4, 2004. Furthermore, Kistler Pole Building Company, Inc. was already under contract to construct the LLAS facility. (See, Finding 95; Tr. at 1100- 1101). The latter point is particularly significant in this case. Under Section 1103(f) of the Ethics Act, the "entering into the contract is the conduct prohibited." Bixler v. State Ethics Commission, 847 A.2d 785, 789 (Pa. Cmwlth. 2004). At the time Respondent requested an advisory, he had already entered into the June 17, 2004, purchase agreement with Roth and /or Dale and Ruth Roth in the amount of $641,933.00 for the construction of the LLAS facility. Each element of a violation of Section 1103(f) as to Respondent's subcontract for construction of the LLAS facility had already occurred at the time he requested an advisory from this Commission. (We parenthetically note that the only violation of Section 1103(a) that we have found as to Respondent does not in any way depend upon Respondent's receipt of a financial benefit under the LLAS subcontract.) We hold that Respondent violated Section 1103(f) of the Ethics Act on July 12, 2002, when on behalf of his business, Kistler Pole Building Company, Inc., he entered into a subcontract with Cornerstone for the construction of the Transportation facility, where the contract(s) awarded by the CLIU Board to Roth Marz Partnership and Cornerstone R.E., LLC as to the Transportation facility had been awarded without an open and public process. We further hold that Respondent violated Section 1103(f) of the Ethics Act on June 17, 2004, when on behalf of his business, Kistler Pole Building Company, Inc., he entered into a subcontract with Roth and /or Dale and Ruth Roth for the construction of the LLAS facility, where the contract(s) awarded by the CLIU Board to Dale Roth and /or Dale and Ruth Roth had been awarded without an open and public process. Finally, we note that although Respondent violated Section 1103(f) of the Ethics Act as set forth above, he did so based upon information he received from various professionals (CLIU administrators and Solicitor) upon whom he relied. The focus at the CLIU apparently was upon avoiding a competitive bidding process under the Public School Code; no thought was given to the requirements of Section 1103(f) of the Ethics Act. Although "ignorance of the law is no excuse," Respondent erroneously believed that he could lawfully enter into the aforesaid subcontracts. IV. CONCLUSIONS OF LAW: Kistler, 04 -037 Page 82 1 At all times relevant to this matter, Respondent Kenneth Kistler ( "Kistler "), in his capacity as a Member of the Carbon - Lehigh Intermediate Unit ( "CLIU ") Board of Directors ( "Board "), has been 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. Kistler did not violate Section 1103(a) of the Ethics Act with regard to his official actions prior to March 18, 2002, regarding a new CLIU Transportation facility, based upon an insufficiency of evidence. 3. Kistler did not violate Section 1103(a) of the Ethics Act with regard to his possible participation in discussions at the March 18, 2002, executive session of the CLIU Board regarding cost comparison information for the Transportation facility, based upon an insufficiency of evidence. 4. Kistler did not violate Section 1103(a) of the Ethics Act with regard to his official actions on or after March 15, 2004, in furtherance of the CLIU's purchase of the Transportation facility, based upon the lack of a private pecuniary benefit. 5. On June 17, 2002, Kistler unintentionally violated Section 1103(a) of the Ethics Act when he voted in favor of authorizing Dale Roth ( "Roth ") to pursue the construction of the CLIU Lehigh Learning and Adjustment School ( "LLAS ") facility while Kistler was actively engaged in seeking a contract to build the CLIU Transportation facility and had a reasonable expectation that he would receive such a contract from Roth /Cornerstone R.E., LLC. 6. Kistler did not violate Section 1103(a) of the Ethics Act with regard to his participation in approving CLIU lease payments for the Transportation facility or LLAS facility in that such payments were for pre- determined amounts under lease agreements that had been approved by the CLIU Board without Respondent's participation. 7 Kistler violated Section 1103(f) of the Ethics Act on July 12, 2002, when on behalf of his business, Kistler Pole Building Company, Inc., he entered into a subcontract with Cornerstone for the construction of the Transportation facility, where the contract(s) awarded by the CLIU Board to Roth Marz Partnership and subsequently Cornerstone R.E., LLC as to the Transportation facility had been awarded without an open and public process. 8. Kistler violated Section 1103(f) of the Ethics Act on June 17, 2004, when on behalf of his business, Kistler Pole Building Company, Inc., he entered into a subcontract with Roth and /or Dale and Ruth Roth for the construction of the LLAS facility, where the contract(s) awarded by the CLIU Board to Roth and /or Dale and Ruth Roth as to the LLAS facility had been awarded without an open and public process. In Re: Kenneth Kistler, Respondent File Docket: 04 -037 Date Decided: 6/11/07 Date Mailed: 6/29/07 ORDER NO. 1441 1 Respondent Kenneth Kistler ( "Kistler "), a public official in his capacity as a Member of the Carbon - Lehigh Intermediate Unit ( "CLIU ") Board of Directors ( "Board "), did not violate Section 1103(a) of the Ethics Act with regard to his official actions prior to March 18, 2002, regarding a new CLIU Transportation facility, based upon an insufficiency of evidence. 2. Kistler did not violate Section 1103(a) of the Ethics Act with regard to his possible participation in discussions at the March 18, 2002, executive session of the CLIU Board regarding cost comparison information for the Transportation facility, based upon an insufficiency of evidence. 3. Kistler did not violate Section 1103(a) of the Ethics Act with regard to his official actions on or after March 15, 2004, in furtherance of the CLIU's purchase of the Transportation facility, based upon the lack of a private pecuniary benefit. 4. On June 17, 2002, Kistler unintentionally violated Section 1103(a) of the Ethics Act when he voted in favor of authorizing Dale Roth ( "Roth ") to pursue the construction of the CLIU Lehigh Learning and Adjustment School ( "LLAS ") facility while Kistler was actively engaged in seeking a contract to build the CLIU Transportation facility and had a reasonable expectation that he would receive such a contract from Roth /Cornerstone R.E., LLC. 5. Kistler did not violate Section 1103(a) of the Ethics Act with regard to his participation in approving CLIU lease payments for the Transportation facility or LLAS facility in that such payments were for pre- determined amounts under lease agreements that had been approved by the CLIU Board without Respondent's participation. 6. Kistler violated Section 1103(f) of the Ethics Act on July 12, 2002, when on behalf of his business, Kistler Pole Building Company, Inc., he entered into a subcontract with Cornerstone for the construction of the Transportation facility, where the contract(s) awarded by the CLIU Board to Roth Marz Partnership and subsequently Cornerstone R.E., LLC as to the Transportation facility had been awarded without an open and public process. 7 Kistler violated Section 1103(f) of the Ethics Act on June 17, 2004, when on behalf of his business, Kistler Pole Building Company, Inc., he entered into a subcontract with Roth and /or Dale and Ruth Roth for the construction of the LLAS facility, where the contract(s) awarded by the CLIU Board to Roth and /or Dale and Ruth Roth as to the LLAS facility had been awarded without an open and public process. BY THE COMMISSION, Kistler, 04 -037 Page 84 Louis W. Fryman, Chair