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HomeMy WebLinkAbout1767 LynchPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 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