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In Re: John D. Lynch,
Respondent
STATE ETHICS COMMISSION
FINANCE BUILDING
613 NORTH STREET, ROOM 309
HARRISBURG, PA 17120-0400
File Docket:
X-ref:
Date Decided
Date Mailed:
FACSIMILE: 717-787-0806
WESSITE: www.ethics.pa.gov
19-005
Order No. 1767
1 /22/20
1 /29/20
Before: Nicholas A. Colafella, Chair
Mark R. Corrigan, Vice Chair
Roger Nick
Melanie DePalma
Michael A. Schwartz
Shelley Y. Simms
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted
an investigation regarding possible violation(s) of the Public Official and Employee Ethics
Act ("Ethics Act"), 65 Pa.C.S. § 1101 et she ., 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." A Stipulation of Findings and a Consent Agreement were
subsequently submitted by the parties to the Commission for consideration. The
Stipulated Findings are set forth as the Findings in this Order. The Consent Agreement
has been approved.
ALLEGATIONS:
That John Lynch, a public officiigal/public employee in his capacity astheManager
for Montgomery Borougym11105 bu5ty,1105 be7 Sections 1811010a5,b1904�nd�
1105 b 1), 110a(b}{3), 1105(b)(4), ()� }, ( }
1105�b��10) of the State Ethics Act (Act 9 o 998) by utilizing the authority of Ills public
position to acquire a private pecuniary benefit, when he used a Borough provided/paid
credit card for personal purchases; approved excessive mileage reimbursement
payments to himself; charged fuel purchases on a Borough paid credit card and/or
obtained fuel from the Borough fuel pumps, while receiving mileage reimbursement; failed
to timely file Statement of Financial Interests forms for the 2013, 2015 and 2017 calendar
years; and filed deficient Statement of Financial Interests forms by failing to provide
complete responses to the identity of his governmental entity; any reportable sources of
income; any office, directorship or employment in any business entity; any financial
interest in any legal entity engaged in business for profit; and the identity of any financial
interest which has been transferred to a member of his Immediate family, for the 2014
calendar year; and failing to provide responses as to his current status/current position
as a public official/public employee; the identity of the filing/calendar year; any reportable
real estate interests; any reportable creditors; any reportable travel/hospitality/lodging;
any office, directorship or employment in any business entity; any financial interest in any
legal entity engaged in business for profit; and the identity of any financial interest which
has been transferred to a member ofhisimmediate family upon a Statement of Financial
Interests dated February 17, 2017, presumably intended for the 2016 calendar year.
Lynch, 19-005
Page 2
IL FINDINGS:
John Lynch ("Lynch") was employed as the Montgomery Borough ('Borough")
Manager from June 24, 1995, until August 31, 2018.
a. As the Borough Manager, Lynch was responsible for overseeing the day-
to-day operations of the Borough and its administrative staff.
b. The Borough is governed by a seven -Member Council.
2. Lynch also served as the Executive Director of the Montgomery Borough Water
Authority ("Water Authority") ... from at least 2005 until May 31, 2019.
a. The Water Authority is governed by a five -Member Board.
b. The Water Authority was created by the Borough pursuant to the provisions
of the Municipality Authorities Act.
3. The Borough and the Water Authority share common office space and staff.
a. Operating expenses were allocated on a percentage basis between each
entity based on the nature of the expenditures.
1. Expenses were divided approximately 55% to the Borough and 45%
to the Water Authority based on Lynch's determination.
2. The percentage would fluctuate if a specific expenditure was specific
toward one entity as opposed to the other.
4. The Borough is located in a rural portion of Lycoming County, approximately 8.5
miles southeast of Williamsport and 6 miles southwest of Muncy.
a. The Borough is approately .55 square miles in size with a population of
1,542 as of July 1, 2019xim.
5. The Borough does not have any written policies regarding the personal use of
Borough fuel, mileage reimbursements or Borough credit card accounts.
a. The Borough does not maintain any inventory of equipment, materials or
supplies needed for Borough business.
b. The Borough's informal unwritten policy is that Borough equipment,
materials and supplies are to be used for Borough purposes only.
C. Neither Borough Council nor the Water Authority took any official action
authorizing Lynch's personal use or acquisition of Borough or Water
Authority owned equipment, materials or supplies.
Lynch was never authorized by Borough Council to use any
Borough -issued credit cards for personal purchases.
THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT LYNCH APPROVED
EXCESSIVE MILEAGE REIMBURSEMENT PAYMENTS TO HIMSELF AND
CHARGED FUEL PURCHASES ON A BOROUGH -PAID CREDIT CARD AND/OR
OBTAINED FUEL FROM THE BOROUGH FUEL PUMPS, WHILE SIMULTANEOUSLY
RECEIVING MILEAGE REIMBURSEMENT.
Lynch, 19-095
Page 3
6. The Borough maintains two fuel storage tanks located outside of the Borough's
public works garage.
a. The fuel storage tanks are to be used to fuel Borough vehicles and volunteer
fire department equipment.
b. One fuel storage tank contains regular unleaded gasoline and the other one
contains diesel fuel.
1. Diesel fuel is used primarily by the Borough volunteer fire
department.
7. Borough fuel pumps are operated by an on/off power switch located within the
public works garage.
a. Access to the fuel pumps is not monitored during normal road department
hours.
1. Normal road department hours are Monday through Friday, 7:30
a.m. until 4:00 p.m.
b. Off -hour access to the pumps is limited to those individuals who have 24/7
access to the public works garage and the pumps' on/off switch.
1. Lynch had 247 access to fuel supplies in his capacity as the Borough
Manager.
C. Individuals with unlimited access to the pumps included Lynch, public works
employees, police, EMA officials and the volunteer fire department.
8. In order to document usage, employees and/or officials who utilized the fuel pumps
were expected to record the transaction on a fuel log sheet.
a. The fuel log sheets contain information including the date, pump start and
end readings, gallons pumped, the initials of the person extracting the fuel,
and whether the fuel was for Police, Fire, Civil Defense, Sewer Plant,
Trucks, Mowers or Other.
b. For bookkeeping purposes, the fuel logs are maintained on a monthly basis.
C. A separate monthly fuel log is maintained for both the unleaded gasoline
and diesel fuel pumps.
d. Monthly fuel logs are maintained in the Borough Office with other official
records.
9. Monthly fuel logs contained, at times, reporting errors typically consisting of a
pump's ending reading not being the same as the starting reading for the following
entry.
a. These errors created opportunities for those filling up personal vehicles to
not account for the fuel used for personal use.
1. Other errors included entries not being completed.
b. The Borough did not conduct any audit to determine the amount of fuel
unaccounted for due to the number of employees/officials with access to
the fuel and the lack of safeguards in place.
L nchnch, 19-005
Page 4
1. Lynch, as the Borough Manager, would have been responsible for
the accounting of all fuel usage.
10. Between 2014 and 2018, Lynch routine) filled the fuel tanks of his privately -owned
vehicles with fuel from the Borough anddidnot log his receipt of this fuel.
1. Lynch did not log his receipt of this fuel during the same time that he
was receiving mileage reimbursement.
11. Lynch, as the Borough Manager and the Executive Director of the Water Authority,
received monthly mileage reimbursements.
a. The reimbursement rate per mile was based on standard mileage
reimbursement rates established by the federal government.
b. Lynch's mileage reimbursements were determined by him without review
by Borough Council or the Water Authority Board.
C. Mileage reimbursement payments were split between Borough and Water
Authority operating funds based on payment percentages.
d. Lynch received mileage reimbursements during the same time that he was
also obtaining fuel for his vehicles from Borough supplies.
12. Lynch completed and verified his monthly mileage reimbursement forms submitted
to the Borough.
a. These forms only reported the total number of miles driven for the prior
month.
b. Lynch did not report individual dates, miles driven, or destinations or
purpose of the travel.
C. Lynch did not provide Borough Council or the Water Authority Board with
any support documentation for the miles for which he sought
reimbursement.
d. Lynch did not provide Borough Council or the Water Authority Board with
copies of his monthly mileage reimbursement logs for review.
13. Lynch's monthly mileage reimbursement amounts were included as a line item on
financial reports/bill lists submitted for approval to Borough Council and the Water
Authority Board.
a. Monthly financial reports were provided by Lynch to Borough Council and
Authority Board Members for review several days in advance of their
monthly meetings.
b. Financial reports were approved in their entirety by each entity without
question each month.
I. Borough Council did not question Lynch's mileage reimbursements
as the amounts were consistent each month and Lynch did not
provide detailed mileage reports.
14. Lynch routinely claimed mileage reimbursements in excess of 500 miles each
month.
Lynch, 19-005
Page 5
15. From May 2014 until August 2018, Lynch received mileage reimbursement
payments from the Borough.
a. Lynch did not submit any documentation to the Borough to support the
number of miles claimed.
b. Lynch did not receive an IRS W-2 Wage & Tax Statement or 1099
Miscellaneous Income form reporting this additional compensation.
16. During the same timeframe that Lynch was receiving mileage reimbursements
from the Borough, he routinely utilized fuel from the Borough's unleaded gasoline
tank and also utilized the Borough's Sam's Club credit card issued to him, to
purchase fuel for his personal vehicle(s).
a. Lynch was routinely observed by citizens and Borough emplo ees fueling
his personal vehicle at the Borough gasoline pump on a weekly basis during
the same timeframe that he was also submitting mileage requests and
receiving reimbursements.
b. Lynch concealed his simultaneous receipt of Borough fuel by not reporting
his receipt of Borough gasoline on monthly fuel logs or by maintaining an
accounting of fuel usage.
17. Lynch's failure to report the refueling of his personal vehicles on the monthly fuel
logs concealed the volume of Borough fuel taken while he was simultaneously
receiving mileage reimbursements.
18. Lynch began accounting for a limited amount of Borough fuel by deducting $387.75
from his monthly reimbursements during part of 2017 and 2018.
a. Sometime in 2017, residents began questioning Lynch's fuel usage and
mileage reimbursements.
b. Lynch deducted $264.76 (representing 127 gallons of Borough fuel) from
his mileage reimbursements claimed during 2017.
G. Lynch deducted $122.99 (representing 50 gallons of Borough fuel) from his
mileage reimbursements claimed during 2018.
19. Lynch filled his personal vehicles with fuel at the Borough garage on a weekly basis
from 2014 through 2018.
a. Lynch was never authorized by either Borough Council or the Water
Authority to obtain Borough fuel for personal use.
b. Lynch routinely utilized Borough fuel for his personal vehicles despite
receiving monthly mileage reimbursement payments from the Borough and
charging fuel to the Borough credit card.
20. Lyynch received reimbursements for 25,035 purported business miles between May
2014 and August 2018, as detailed in the previous findings.
a. During this same period, Lynch reported driving 44,044 miles via odometer
readings annually submitted to PennDOT.
b. Borough mileage reimbursement claims represented approximately 56.84%
of the total miles Lynch drove in personal vehicles as reported to PennDOT.
Lynch, 19-005
Page 6
21. As a result of questions being raised by Borough Councilwoman Susan Andrews
in 2018 regarding his mileage reimbursements, Lynch began documenting dates,
miles, destination and reason(s) for mileage reimbursement claims submitted as
Executive Director of the Water Authority from August 2018 through December
2018.
a. Lynch resigned from his position as the Borough Manager effective August
31, 2018.
THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT LYNCH USED A
BOROUGH -ISSUED CREDIT CARD TO MAKE PURCHASES OF A PERSONAL
NATURE,
22. Lynch was issued a Borough -paid credit card from Sam's Club.
a. Lynch was the only Borough representative using that specific card.
b. Over the years the account number changed several times for security
reasons.
23. From at least 2014 through 2018, Lynch utilized his Borou h�-paid Sam's Club
credit card to make purchases for both Borough and persona[ purposes.
a. Lynch took advantage of the Borough's tax-exempt status to avoid paying
Pennsylvania state sales tax on all transactions charged on the card.
b. Lynch did not receive authorization from Borough Council or the Water
Authority Board to make purchases of a personal nature using the card.
24. Lynch's unauthorized personal use of the credit card included, but may not have
been limited to, meals, golf outings, groceries, clothing and other personal items.
a. Lynch would commingle his personal purchases with Borough purchases in
an effort to conceal his actions.
25. Borough Council and the Water Authority each had a practice of purchasing food
for various meetings.
a. Each entity held its regular public meetings during evening hours.
b. Lynch would charge these food purchases on the Borough -issued credit
card.
26. From 2014 through 2018, Lynch submitted few receipts for purchases made with
the Borough credit card in support of the charges.
a. The exception was purchases which were made from Sam's Club.
b. Receipts for these purchases were included as part of the monthly billing
statement.
27. Payment of the Borough's Sam's Club credit card bill was included as a line item
within the monthly financial report.
a. Borough Council and the Water Authority approved payment of the Sam's
Club credit card without being provided any support documentation or
receipts.
Lynch, 19-005
Page 7
Lynch was responsible for providing the Borough and the Water
Authority with such documentation.
b. Payment approval was based on the line item included in the financial report
provided by Lynch.
28. Lynch ceased making personal purchases with the Borough's Sam's Club credit
card after Borough Councilwoman Susan Andrews began questioning his
purchases in 2018.
29. From 2014 through 2018, Lynch used the Borough's Sam's Club credit card to
make unauthorized purchases of a personal nature including golf fees, meals not
associated with a Borough Council or Water Authority regular or special meeting,
groceries, and other miscellaneous personal items.
a. Between May 2014 and April 2016, Lynch used a Borough credit card
thirteen times to charge $1,286.73 for itemsfevents regarding golf outings
which were not related to his public position as follows:
Date
Amount
Charge
Da
05/02/14
$110.24
Judd Caruso Golf Shop, Mill Half PA
Friday
07/04/14
$64.00
White Deer Golf Montgomery,PA
Friday
08/22/14
$226.33
Wvndinq Brook Golf Club Milton PA
Friday
10/13/14
$120.00
White Deer Golf Montgomery, PA
Monday
11/11/14
$105.70
White Deer Golf Mont ome PA
Tuesday
02/17/15
$160.00
Lake Marion Golf Santee SC.
Tuesday
05/20/15
$114.00
White Deer Golf Montgomery,PA
Wednesday
06/26/15
$33.16
White Deer Golf Montgomery,PA
Friday
07/22/15
$84.00
The Club at Sheppard. Hills Waverly,NY
Wednesday
09/20/15
$100.00
Mountainview Country Club Boalsburg, PA
Sunda
10/21/15
$17.50
Wynding Brook Golf Club Milton PA
Wednesday
11/11/15
$131.80
White Deer Golf Montgornery, PA
Wednesday
08/12/16
$20.00
Wynding Brook Golf Club Milton PA
Friday
$1 286.73
b. Lyynch charged lunches and other personal meals to the Borough credit card
43 times totaling no less than $1,772.53 between May 2014 and December
2017.
C. Lynch also used the Borough -issued credit card to make 109 purchases of
a personal nature totaling no less than $1,559.70 between May 2014 and
December 2017.
30. Lynch realized a private pecuniary gain of at least $3,588.84 ($4,618.96 in
purchases - $1,030.12 in reimbursements) as the result of the use of the authority
of his public position to make personal purchases by utilizing a Borough credit card
issued to him solely for government purposes.
a. Between May 21, 2014, and March 1, 2019, Lynch made eleven
reimbursement payments to the Borough's General Fund totaling $1,030.12
for personal purchases.
L nch, 19-005
Page 8
b. Lynch would use a personal credit card or provide cash to Borough
administrative staff, indicating that he was making a reimbursement for
personal purchases.
C. Lynch did not identify to staff the specific personal purchases for which he
was making reimbursement.
THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT LYNCH FAILED TO
FILE AND/OR FILED DEFICIENT STATEMENT OF FINANCIAL INTERESTS FORMS
FOR THE 2013 THROUGH 2O17 CALENDAR YEARS.
31. In his official capacity as the Borough Manager and Executive Director of the Water
Authority, Lynch was annually required to complete a Statement of Financial
Interests form by May 18t reporting financial interests for the prior calendar year.
32. Lynch failed to file Statements of Financial Interests for the 2013, 2015, and 2017
calendar years by May 1, 2014, May 1, 2016, and May 1, 2018, respectively.
33. Lynch's Statements of Financial Interests filed for the 2014 and 2016 calendar
years contained the following reporting deficiencies:
a. The Statement of Financial Interests dated January 13, 2015, intended for
the 2014 calendar year: Boxes 5,13,14 and 15 no response. Box 10, none
checked.
Lynch had unreported income in excess of $1,300.00 from the
Borough during 2014.
b. The Statement of Financial Interests dated February 17, 2017, intended for
the 2016 calendar year: Boxes 3, 4, 7, 8, 9, 12, 13, 14 and 15 no response.
III. DISCUSSION:
As the Borough Manager for Montgomery Borough ("Borough"), Lycoming County,
Pennsylvania, from June 24, 1995, until August 31, 2018, Respondent John D. Lynch,
also referred to herein as "Respondent," "Respondent Lynch," and "Lynch," was a public
official/public employee 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 L nch violated Sections 1103(a), 1104(a), 1105(b)(1 ,
1105(b�(3), 1105(b)(4), 1105(b)(5� 1105(b)(7), 1105(b)(8), 1105(b)(9), and 1105(b)(1 )
of the thics Act:
(1) By utilizing the authority of his public position to acquire a private pecuniary
benefit, when he used a Borough-provided/paid credit card for personal
purchases, approved excessive mileage reimbursement payments to
himself, and charged fuel purchases on a Borough -paid credit card and/or
obtained fuel from the Borough fuel pumps while receiving mileage
reimbursement;
(2) When he failed to timely file Statement of Financial Interests ("SFI") forms
for the 2013, 2015, and 2017 calendar years;
(3) When he filed deficient SFI forms by failing to provide complete responses
to the identity of his governmental entity, any reportable sources of income,
any office, directorship or employment in any business entity, any financial
interest in any legal entity engaged in business for profit, and the identity of
L nch, 19-005
Page 9
any financial interest in any business which had been transferred to a
member of his immediate family, for the 2014 calendar year, and
(4) When he failed to provide responses as to his current status/current position
as a public official/public employee, the identity of the filinglcalendar year,
any reportable real estate interests, any reportable creditors, any reportable
travel/hospitality/lodging, any office, directorship or employment in any
business entity, any financial interest in any legal entity engaged in business
for profit, and the identity of any financial interest in any business which had
been transferred to a member of his immediate family, upon an SFI dated
February 17, 2017, presumably intended for the 2016 calendar year.
Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is
prohibited from engaging in conduct that constitutes a conflict of interest:
§ 1103. Restricted activities
(a) Conflict of interest. ---No public official or
public employee shall engage in conduct that constitutes a
conflict of interest.
65 Pa. C.S. § 1103(a).
The term "conflict of interest" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
ry pecuniabenefit 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 familyor a business with which he
or a member of his immediate family is associated.
65 Pa.C.S. § 1102.
Section 1103(a) of the Ethics Act prohibits a public official/public employee from
using the authority of public office/employment or confidential information received by
holding such a public position for the private pecuniary benefit of the public official/publicemployee himself, an member of his immediate family, or a business with which he or a
member of his immediate family is associated.
Section 1104(a) of the Ethics Act provides that each public official/public employee
must file an SFI for the preceding calendar year, each year that he holds the position and
the year after he leaves it.
Section 1105(b) of the Ethics Act and its subsections detail the financial disclosure
that a person required to file the SFI form must provide.
Section 1105(b)(1) of the Ethics Act requires the filer to disclose on the SFI his
name, address, and pubblic position.
Lynch, 19-005
Pa-ge 10
Section 1105(b)(3) of the Ethics Act requires the filer to disclose on the SFI any
direct or indirect interest in any real estate which was sold or leased to or purchased or
leased from the Commonwealth, any of its agencies or political subdivisions, or which
was the subject of any condemnation proceedings by the Commonwealth or any of its
agencies or political subdivisions.
Subject to certain statutory exceptions, Section 1105(b)(4) of the Ethics Act
requires the filer to disclose on the SFI the name and address of each creditor to whom
is owed in excess of $6,500 and the interest rate thereon.
Subject to certain statutory exceptions, Section 1105(b)5) of the Ethics Act
requires the filer to disclose on the SFI the name and address o any direct or indirect
source of income totaling in the aggregate $1,300 or more.
Subject to certain statutory exceptions, Section 1105(b)(7) of the Ethics Act
requires the filer to disclose on the SF1 the name and address of the source and the
amount of any payment for or reimbursement of actual expenses for transportation and
lodging or hospitality received in connection with public office or employment where such
actual expenses exceed $650 in an aggregate amount per year.
Section 1105(b)(8) of the Ethics Act requires the filer to disclose on the SFI any
office, directorship or employment in any business entity.
Section 1105(b)(9) of the Ethics Act requires the filer to disclose on the SFI any
financial interest in any legal entity engaged in business for profit.
Section 1105(b)(10) of the Ethics Act requires the filer to disclose on the SFI any
financial interest in a business with which he is or has been associated in the preceding
calendar year which has been transferred to a member of his immediate family.
The term "financial interest" is defined in the Ethics Act as "[a]ny financial interest
in a legal entity engaged in business for profit which comprises more than 5% of the equity
of the business or more than 5% of the assets of the economic interest in indebtedness.'
65 Pa.C.S. § 1102.
As noted above, the parties have submitted a Consent Agreement and Stipulation
of Findings. The parties' Stipulated Findings are set forth above as the Findings of this
Commission. We shall now summarize the relevant facts as contained therein.
Lyynch was employed as the Borough Manager from June 24, 1995, until August
31, 2018. Lynch also served as the Executive Director of the Montgomery Borough Water
Authority Water Authority") from at least 2005 until May 31, 2019. The Borough and the
Water Authority share common office space and staff.
The Borough does not have any written policies regarding the personal use of
Borough fuel, mileage reimbursements, or Borough credit card accounts. The Borough
does not maintain any inventory of equipment, materials, or supplies needed for Borough
business. The Borough's informal unwritten policy is that Borough equipment, materials,
and supplies are to be used for Borough purposes only. Borough Council did not
authorize Lynch's personal use or acquisition of Borough -owned equipment, materials, or
supplies, and Lynch was never authorized to use any Borough -issued credit cards for
personal purchases.
The Borough maintains two fuel storage tanks located outside of the Borough's
public works garage. The fuel storage tanks are to be used to fuel Borough vehicles and
volunteer fire department equipment. The Borough fuel pumps are operated by an on/off
power switch located within the Borough public works garage. Access to the Borough
L� nch, 19-005
Page 11
fuel pumps is not monitored during normal road department hours, which are from 7:30
a.m. until 4:00 p.m., Monday through Friday. Off hour access to the Borough fuel pumps
is limited to those individuals who have 24/7 access to the Borough public works garage
and the Borough fuel pumps' on/off switch. As the Borough Manager, Lynch had 24/7
access to Borough fuel supplies. Employees and officials who utilized the Borough fuel
pumps were expected to record the transactions on fuel log sheets that contained
information including, inter alia, the date, pump start and end readings, gallons pumped,
and the initials of the person extracting the fuel. Reporting errors on the fuel log sheets
created opportunities for those filling up personal vehicles to not account for fuel used for
personal purposes. From 2014 through 2018, Lynch filled the fuel tanks of his personal
vehicles with fuel from the Borough's fuel pumps on a weekly basis, and he did not log
his receipt of this fuel.
Lynch, as the Borough Manager and the Executive Director of the Water Authority,
received monthly mileage reimbursements based on standard mileage reimbursement
rates established by the federal government. Lynch's mileage reimbursement payments
were split between Borough and Water Authority operating funds based on payment
percentages. Lynch received mileage reimbursements from the Borough during the same
time frame that he was obtaining fuel from Borough fuel pumps for his personal vehicles.
Lynch's mileage reimbursements were determined by him without review by
Borough Council or the Water Authority Board. Lynch completed and verified his monthly
mileage reimbursement forms that were submitted to the Borough. The mileage
reimbursement forms reported only the total number of miles driven for the prior month.
Lynch did not report individual dates, miles driven, or destinations or purpose of the travel,
and he did not provide Borough Council or the Water Authority Board with copies of his
monthly mileage reimbursement logs for review or with any support documentation for
the miles for which he sought reimbursement.
From May 2014 until August 2018, Lynch received mileage reimbursement
payments from the Borough for 25,035 purported business miles driven. Lynch routinely
claimed mileage reimbursements in excess of 500 miles each month. Borough Council
did not question Lynch's mileage reimbursements as the amounts were consistent each
month and Lynch did not provide detailed mileage reports.
Sometime in 2017, Borough residents began questioning Lynch's fuel usage and
mileage reimbursements. Lynch began accounting for a limited amount of Borough fuel
by deducting $387.75 from his monthly reimbursements during part of 2017 and 2018.
Lynch deducted $264.76 (representing 127 gallons of Borough fuel) from his mileage
reimbursements claimed during 2017, and he deducted $122.99 (representing 50 gallons
of Borough fuel) from his mileage reimbursements claimed during 2018.
From 2014 through 2018, Lynch made purchases for personal purposes by using
a Borough -paid Sam's Club credit card that had been issued to him; Lynch took
advantage of the Borough's tax-exempt status to avoid paying Pennsylvania state sales
tax on transactions charged on the Borough's Sam's Club credit card. Lynch used the
Borough's Sam's Club credit card to purchase fuel for his personal vehicles as well as
meals, groceries, clothing, and miscellaneous personal items. Lynch additionally used
the Borough's Sam's Club credit card to pay for golf outings. Lynch commingled his
personal purchases with Borough purchases in an effort to conceal his actions.
Between May 2014 and April 2016, Lynch used the Borough's Sam's Club credit
card to charge a total of $1,286.73 in relation to golf outings that were not associated with
his public position. Between May 2014 and December 2017, Lynch used the Borough's
Sam's Club credit card to charge personal meals that totaled at least $1,772.53 and 109
purchases of a personal nature that totaled at least $1,559.70. Payment of the Borough's
Sam's Club credit card bill was included as a line item within the monthly financial report
provided by Lynch. Borough Council and the Water Authority Board approved payment
Lynch, 19-005
Page 12
of the Borough's Sam's Club credit card bill without the provision of any support
documentation or receipts by Lynch. Lynch ceased making personal purchases with the
Borough's Sam's Club credit card after Borough Council Member Susan Andrews began
questioning his purchases in 2018.
Lyynch resigned from his employment as the Borough Manager effective August
31, 2018. Between May 21, 2014, and March 1, 2019, Lynch made eleven payments
totaling $1,030.12 to the Borough's General Fund as reimbursements for personal
purchases. The parties have stipulated that Lynch realized a private pecuniary gain of at
least $3,588.84 (consisting of $4,618.96 in personal purchases less $1,030.12 in
reimbursement payments) as the result of using the Borough's Sam's Club credit card to
make personal purchases.
With regard to Lynch's SFIs, Lynch failed to file SFIs for the 2013, 2015, and 2017
calendar years by May 1, 2014, May 1, 2016, and May 1, 2018, respectively. Lynch's SFI
for the 2014 calendar year had no responses listed for blocks 5 (Governmental Entity),
13 (Office, Directorship or Employment in any Business), 14 LFinancial Interest in any
Legal Entity in Business for Profit), and 15 (Business Interests I ransferred to Immediate
Family Member). Lynch's SFI for the 2014 calendar year further failed to report income
in excess of $1,300.00 from the Borough. Lynch's SFI dated February 17, 2017, which
was intended for the 2016 calendar year, had no responses listed for blocks 3 (Status), 4
Public Position or Public Office), 7 Year), 8 (Real Estate Interest, 9 (Creditors), 12
Transportation, Lodging, Hospitality, 13 (Office, Directorship or Employment in any
Business), 14 (Financial Interest in any Legal Entity in Business for Profit), and 15
(Business Interests Transferred to Immediate Family Member).
Having highlighted the Stipulated Findings and issues before us, we shall now
apply the Ethics Act to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations
as follows:
The Investigative Division will recommend the following in
relation to the above allegations:
a. That a violation of Section 1103(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1103(a), occurred when John Lynch, in his
capacity as the Manager for Montgomery
Borough, Lycoming County, received a private
pecuniary benefit when he utilized a Borough
provided/paid credit card for unauthorized
personal purchases.
That a violation of Section 1103(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1103(a), occurred when John Lynch, in his
capacity as the Manager for Montgomery
Borough, Lycoming County, approved
excessive mileage reimbursement payments to
himself, and simultaneously charged fuel
purchases on a Borough paid credit card and/or
obtained fuel from the Borough fuel pumps.
C. That a violation of Section 1104(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1104(a), occurred when John Lynch, in his
capacity as the Manager for Montgomery
Lynch, 19-005
Page 13
Borough, Lycoming County, failed to timely file
Statement of Financial Interests forms for the
2013, 2015 and 2017 calendar years.
That a violation of Section 1104(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1104(a), occurred when John Lynch, in his
capacity as the Manager for Montgomery
Borough, Lycoming County, failed to identify the
filinglcalendar year upon a Statement of
Financial Interests dated Februa 171 2017,
presumably intended for the 2076 calendar
year.
e. That violation(s) of Section(s) 1105(b)(1), (5),
(8), (9), (10) of the Public Official and Employee
Ethics Act, 65 Pa.C.S. §§ 1105(b)(1), (5), Y),
(9), (10), occurred when John Lynch filea
deficient Statement of Financial Interests form
by failing to provide complete responses to the
identity of his governmental entity; any
reportable sources of income; any office,
directorship or employment in any business
entity; any financial interest in any legal entity
engaged in business for profit; and the identity
of any financial interest which has been
transferred to a member of his immediate family,
for the 2014 calendar year.
That violation(s) of Section(s) 1105(b)(1), (3),
(4), (7), ftt(9), (10) of the Public Offfficial and
mployehics Act, 65 Pa.C.S. §§ 1105(b (1),
(3), �4), (7), (8), (9), (10), occurred when ohn
Lyncfiled a deficient Statement of Financial
Interests form by failing to provide responses as
to his current status/current position as a public
official/public employee; any reportable real
estate interests; any reportable creditors; any
reportable travel/hospitality/lodging; any office,
directorship or employment in any business
entity; any financial interest in any legal entity
engaged in business for profit; and the identity
of any financial interest which has been
transferred to a member of his immediate family,
upon a Statement of Financial Interests dated
February 17, 2017, presumably intended for the
2016 calendar year.
4. Lynch agrees to make payment in the amount of $4,338.84 in
settlement of this matter payable as follows:
$3,588.84 payable to Montgomery Borough,
Lycoming County, forwarded to the
Pennsylvania State Ethics Commission within
thirty (30) days of the issuance of the final
adjudication in this matter.
L nch, 19-005
Page 14
On October 30, 2019 Lynch made
payment of $3,500.00 to Montgomery
Borough via a personal check. Lynch is
to be credited that amount towards his
obligation payable to the Borough in
settlement of this matter.
b. $750.00 payable to the Commonwealth of
Pennsylvania, forwarded to the Pennsylvania
State Ethics Commission within thirty (30') days
of the issuance of the final adjudication in this
matter.
5. Lynch agrees to file complete and accurate amended
Statements of Financial Interests with Montgomery Borough,
Lycoming County through the Pennsylvania State Ethics
Commission, for calendar years 2013, 2014, 2015, 2016, and
2017 within thirty (30) days of the issuance of the final
adjudication in this matter.
Lynch a rees to not accept any reimbursement,
compensation or other payment from Montgomery Borough,
Lycoming County representing a full or partial reimbursement
of the amount paid in settlement of this matter.
The Investigative Division will recommend that the State
Ethics Commission take no further action in this matter; and
make no specific recommendations to any law enforcement
or other authority to take action in this matter. Such, however,
does not prohibit the Commission from initiating appropriate
enforcement actions in the event of Respondent's failure to
comply with this agreement or the Commission's order or
cooperating with any other authority who may so choose to
review this matter further.
Consent Agreement, at 2-3.
In considering the Consent Agreement, we accept the parties' recommendations
for findings that violations of Section 1103(a) of the Ethics Act occurred: (1) when Lynch,
in his capacity as the Borough Manager, received a private pecuniary benefit when he
utilized a Borough-provided/paid credif card for unauthorized personal purchases; and (2)
when Lynch, in his capacity as the Borough Manager, approved excessive mileage
reimbursement payments to himself, and simultaneously charged fuel purchases on a
Borough -paid credit card and/or obtained fuel from the Borough fuel pumps.
But for being the Borough Manager, Lynch would not have been in a position to
use the Borough's Sam's Club credit card from 2014 through 2018 to pay for personal
golf outings and make personal purchases that included fuel for his personal vehicles,
meals, groceries, clothing, and miscellaneous personal items. The parties have stipulated
that Lynch realized a private pecuniary gain of at least $3,588.84 as the result of using
the Borough's Sam's Club credit card to make personal purchases. Additionally, but for
being the Borough Manager, Lynch would not have been in a position to fill the fuel tanks
of his personal vehicles with fuel from the Borough's fuel pumps on a weekly basis while
also routinely claiming mileage reimbursements in excess of 500 miles each month.
Based upon the Sti ulated Findings and the Consent Agreement, we hold that a
violation of Section 1103(af of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Lynch,
Lynch, 19-005
Page 15
in his capacity as the Borough Manager, received a private pecuniary benefit when he
utilized a Borough-provided/paid credit card for unauthorized personal purchases.
We further hold that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. t §
1103(a), occurred when Lynch, in his capacity as e Borough Manager, approved
excessive mileage reimbursement payments to himself and simultaneously charged fuel
purchases on a Borough -paid credit card and/or obtained fuel from the Borough fuel
pumps.
Turningto the allegations regarding Lynch's SFIs, we hold that: (1) a violation of
Section 1104a) of the Ethics Act, 65 Pa.C.S. § 1104(a), occurred when Lynch, in his
capacity as the Borough Manager, failed to timely file SFI forms for the 2013, 2015, and
2017 calendar years; (2) a violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. §
1104(a), occurred when Lynch, in his capacity as the Borough Manager, failed to identify
the filing/calendar year upon an SFI dated February 17, 2017, presumably intended for
the 2016 calendar year; (3) violation(s) of Section s) 1105(b)(1), (5), (8), (9), (10) of the
Ethics Act, 65 Pa.C.S. & 1105(b)( ), (5), (8), (9), (10), occurred when Lynch filed a
deficient SFI form by failing to provide complete responses to the identity of his
governmental entity; any reportable sources of income; any office, directorship or
employment in any business entity; any financial interest in any legal entity en aged in
business for profit; and the identity of any financial interest in any business which had
been transferred to a member of his immediate family, for the 2014 calendar year; and
�violation(s) of Section(s) 1105(b)(1), �3), (4), (7), (8), (9), (10) of the Ethics Act, 65
a.C.S. §§ 1105(b)(1), (3),�4), (7), ( ), (), (1 ), occurred when Lynch filed a deficient
SFI form by failing to provide responses as to his current status/current position as a
public official/public employee; any reportable real estate interests; any reportable
creditors; any reportable travel/hospitality/lodging; any office, directorship or employment
in any business entity; any financial interest in any legal entity engaged in business for
pprofit; and the identity of any financial interest in any business which had been transferred
to a member of his immediate family, upon an SFI dated February 17, 2017, presumably
intended for the 2016 calendar year.
As art of the Consent Agreement, Lynch has agreed to make payment in the total
amount ofp$4,338.84 in settlement of this matter as follows:
a. $3,588.84 payable to Montgomery Borough, Lycoming
County, and forwarded to the Pennsylvania State
Ethics Commission within thirty (30) days of the
issuance of the final adjudication in this matter.
1. On October 30, 2019, Lynch made payment of
$3,500.00 to Montgomery Borough via a
personal check. Lynch is to be credited that
amount toward his obligation payable to the
Borough in settlement of this matter.
b. $750.00 payable to the Commonwealth of
Pennsylvania and forwarded to the Pennsylvania State
Ethics Commission within thirty (30) days of the
issuance of the final adjudication in this matter.
Lynch has further agreed to not accept any reimbursement, compensation or other
payment from the Borough representing a full or partial reimbursement of the amount paid
in settlement of this matter.
Finally, Lynch has agreed to file complete and accurate amended SFIs with the
Borongh, through this Commission, for calendar years 2013, 2014, 2015, 2016, and 2017
within thirty (30) days of the issuance of the final adjudication in this matter.
L nch, 19-005
Page 16
We determine that the Consent Agreement submitted by the parties sets forth a
proper disposition for this case, based upon our review as reflected in the above analysis
and the totality of the facts and circumstances.
Accordingly, per the Consent Agreement of the parties, Lynch is directed to make
payment in the total amount of $4,338.84 as follows:
a. $3,588.84 payable to Montgomery Borough, Lycoming
County, and forwarded to the Pennsylvania State
Ethics Commission by no later than the thirtieth (30th)
day after the mailing date of this adjudication and
Order.
On October 30, 2019, Lynch made payment of
$3,500.00 to Montgomery Borough via a
personal check. Lynch is to be credited that
amount toward his obligation payable to the
Borough in settlement of this matter.
b. $750.00 payable to the Commonwealth of
Pennsylvania and forwarded to the Pennsylvania State
Ethics Commission by no later than the thirtieth (30th)
day after the mailing date of this adjudication and
Order.
Per the Consent Agreement of the parties, Lynch is directed to not accept any
reimbursement, compensation or other payment from the Borough representing a full or
partial reimbursement of the amount paid in settlement of this matter.
To the extent he has not already done so, Lynch is directed to file complete and
accurate amended SFIs for calendar years 2013, 2014, 2015, 2016, and 2017 with the
Borough, through this Commission, by no later than the thirtieth (30th) day after the mailing
date of this adjudication and Order.
Compliance with the foregoing will result in the closing of this case with no further
action by this Commission. Noncompliance will result in the institution of an order
enforcement action.
IV. CONCLUSIONS OF LAW:
1. As the Borough Manager for Montgomery Borough ("Borough"), Lycoming Countyy,
Pennsylvania, from June 24, 1995, until August 31, 2018, Respondent John D
Lynch ("Lynch") was a public official/public employee subject to the provisions of
the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et
seq.
2. A violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred
when Lynch, in his capacity as the Borough Manager, received a private pecuniary
benefit when he utilized a Borough-provided/paid credit card for unauthorized
personal purchases.
3. A violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred
when Lynch, in his capacity as the Borough Manager, approved excessive mileage
reimbursement payments to himself and simultaneously charged fuel purchases
on a Borough -paid credit card and/or obtained fuel from the Borough fuel pumps.
Lynch, 19-005
Page 17
4. A violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. 1104(a), occurred
when Lynch, in his capacity as the Borough Manager, failed to timely file Statement
of Financial Interests forms for the 2013, 2015, and 2017 calendar years.
5. A violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. & 1104(a), occurred
when Lynch, in his capacity as the Borough Manager, failed to identify the
filing/calendar year upon a Statement of Financial Interests dated February 17,
2017, presumably intended for the 2016 calendar year.
6. Violation(s) of Section(s) 1105 b)(1), (5), 8), (9), (10) of the Ethics Act, 65 Pa.C.S.
1105( )(1), (5), (8), 9), (10 , occurre when Lynch filed a deficient Statement
o Financial Interests form by failing to provide complete responses to the identity
of his governmental entity; any reportable sources of income; any office,
directorship or employment in any business entity; any financial interest in any
legal entity engaged in business for profit; and the identity of any financial interest
in any business which had been transferred to a member of his immediate family,
for the 2014 calendar year.
7. Violations of Section(s) 1105 b} 1 , (3 , (4 , (7), (8), (9), (10 of the Ethics Act, 65
Pa.C.S. 1105(b)(1), (3), (4 , (), (), (10), occurred when Lynch filed a
deficient Statement off Financial Interests orm by failing to provide responses as
to his current status/current position as a public official/public employee; any
reportable real estate interests; any reportable creditors; any reportable
travel/hospitality/lodging; any office, directorship or employment in any business
entity; any financial interest in any legal entity engaged business for profit; and
the identity in
of any financial interest to any business which had been transferred to
a member of his immediate family, upon a Statement of Financial Interests dated
February 17, 2017, presumably intended for the 2016 calendar year.
In Re: John D. Lynch, File Docket: 19-005
Respondent Date Decided: 1122/20
Date Mailed: 1 /29/20
ORDER NO. 1 767
1. John D. Lynch ("Lynch") violated Section 1103(a) of the Public Official and
Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. 1103(a), when, in his capacity as
the Manager for Montgomery Borough �"Borough"), Lycoming County,
Pennsylvania, he received a private pecuniary benefit when he utilized a Borough-
provided/paid credit card for unauthorized personal purchases.
2. A violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred
when Lynch, in his capacity as the Borough Manager, approved excessive mileage
reimbursement payments to himself and simultaneously charged fuel purchases
on a Borough -paid credit card and/or obtained fuel from the Borough fuel pumps.
3. A violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. 1104(a), occurred
when Lynch, in his capacity as the Borough Manager, failed to timely file Statement
of Financial Interests forms for the 2013, 2015, and 2017 calendar years.
4. A violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. & 1104(a), occurred
when Lynch, in his capacity as the Borough Manager, failed to identify the
filing/calendar year upon a Statement of Financial Interests dated February 17,
2017, presumably intended for the 2016 calendar year.
5. Violation(s) of Sections 1105(b)(1), (5), (8), (9), (10) of the Ethics Act, 65 Pa.C.S.
§§ 1105(b)(1), (5), (8), �9), (10 , occurred when Lynch filed a deficient Statement
of Financial Interests form by failing to provide complete responses to the identity
of his governmental entity; any reportable sources of income; any office,
directorship or employment in any business entity; any financial interest in any
legal entity engaged in business for profit; and the identity of any financial interest
in any business which had been transferred to a member of his immediate family,
for the 2014 calendar year.
Violation(s) of Section(s) 1105lb)(1), (3), (4 , (7), �8), (9), (10) of the Ethics Act, 65
Pa.C.S. §§ 1105(b)(1), {3}, {4 , 7 , (8),}, (10, occurred when Lynch filed a
deficient Statement of Financial Interests form by failing to provide responses as
to his current status/current position as a public officiallpublic employee; any
reportable real estate interests; any reportable creditors; any reportable
travel/hospitality/lodging; any office, directorship or employment in any business
entity; any financial interest in any legal entity engaged in business for profit; and
the identity of any financial interest in any business which had been transferred to
a member of his immediate family, upon a Statement of Financial Interests dated
February 17, 2017, presumably intended for the 2016 calendar year.
Per the Consent Agreement of the parties, Lynch is directed to make payment in
the total amount of $4,338.84 as follows:
$3,588.84 ppayable to Montgomery Borough, Lycoming County, and
to forwarded the Pennsylvania State Ethics Commission by no later
than the thirtieth (30t") day after the mailing date of this Order.
Lynch, 19-005
Page 19
On October 30, 2019, Lynch made payment of $3,500.00 to
Montgomery Borough via a personal check. Lynch is to be
credited that amount toward his obligation payable to the
Borough in settlement of this matter.
b. $750.00 payable to the Commonwealth of Pennsylvania and
forwarded to the Pennsylvania State Ethics Commission by no later
than the thirtieth (30t") day after the mailing date of this Order.
8. Lynch is directed to not accept any reimbursement, compensation or other
payment from the Borough representing a full or partial reimbursement of the
amount paid in settlement of this matter.
9. To the extent he has not already done so, Lynch is directed to file complete and
accurate amended Statements of Financial Interests for calendar years 2013,
2014, 2015, 2016, and 2017 with the Borough, through the Pennsylvania State
Ethics Commission, by no later than the thirtieth (30th) day after the mailing date
of this Order.
10. Compliance with paraggraphs 7, 7a, 7b, 8, and 9 of this Order will result in the
closing of this case with no further action by this Commission.
a. Non-compliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
11
Nidholas A. C—oTa-fe-11a, air Ch