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HomeMy WebLinkAbout1786 ChilsonPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 In Re: Gordon Chilson, Respondent STATE ETHICS COMMISSION FINANCE, BUILDING (9 1 a E-F-Alummulim im File: Docket: X-ref- Date Decided: Date Mailed: FACSIMILE: 717-787,.0806 WEBSITE: www.ethimpa.go 16-039 Order No. 1786 3/29/2,1 4/1/21 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 sue., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint," An Answer was filed, and a hearing was requested. A Stipulation of Findings and a Consent Agreement 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. I. ALLEGATIONS: That Gordon Chilson, a public official/public employee in his capacity as a Member of the Lawrenceville Borough Authority, Tioga County, violated Sections I I 03(a), I 103(f), and 11 04(a) of the State Ethics Act (Act 93 of 1998) when he utilized the authority of his public position for a private pecuniary benefit of himself and/or a business with which he is, associated, when he participated in actions and discussions of the Authority Board of Directors resulting in the Authority entering into an agreement/contract/leasing agreement for office space in a building owned by Chilson and/or a business with which he is associated; when the entry of the agreement/contract/leasing agreement between the Authority and himself and/or a business with which he is associated in excess of $500.00 was done so absent an open and public process; and when, as a Member of the Authority Board, Chilson failed to file Statements of Financial Interests for calendar years 2013, 2014, and 2015. Chilson, 16-039 Page 2 II. FINDINGS: 1. Gordon Chilson ("Chilson") served as a Member of the Board of the Lawrenceville Borough Authority ("Authority"), Tioga County, from January 2014 until April 2018. The Authority no longer exists, having voted to disband in April 2018. a. Chilson also served as a Member of Lawrenceville Borough Council ("Borough Council") during 2013, 2014, and 2015. 2, The Authority provided public sewer and water services to the Pennsylvania residents of Lawrenceville Borough (`Borough") and portions of Lawrenceville Township, in addition to the residents of Lindley Township in neighboring New York State. a. The Authority Board consisted of five Members, all of whom were appointed by Borough Council. b. Authority Board Members served without compensation. 3. From at least 2014 until August 2016, the Borough and the Authority shared common office space at 6 Mechanic Street, Lawrenceville, Pennsylvania. a. In exchange for office space, the Authority paid a monthly rental fee of $300.00 or $350.001 to the Borough. 1. No written/executed lease arrangement was maintained between the Borough and the Authority. 2. The monthly rental payment included costs associated with the Authority's portion of office space, utilities, phone, fax, and internet service. b. 6 Mechanic Street consists of ground floor office space with kitchen area, restroom, closets, meeting room, and a secure entry area with customer window. 1. A basement was also available for storage. 4. Chilson is the owner of real estate located at 54 Main Street, Lawrenceville, Pennsylvania ("54 Main Street"). 5. Since Chilson became the owner of 54 Main Street in October 2005, it has been utilized as a commercial rental property. 6. Whole Body Wellness Clinic was the most recent tenant prior to the Authority. a. Whole Body Wellness Clinic vacated the property around April 2016. 'The evidence conflicts on this. Chilson, 16-039 Page 3 b. As a tenant, Whole Body Wellness Clinic paid rent in the amount of $500.00 per month to Chilson. C. Chilson consistently collected $500.00 per month from Whole Body Wellness Clinic until April 2016. 7. Chilson's rental property at 54 Main Street remained vacant from approximately May 2016 until September 1, 2016. A dispute between Borough Council and Authority Board Members concerning the shared use of the Borough Building (6 Mechanic Street) manifested itself in 2016. a. One of the main causes of the tension between Borough Council and the Authority Board was each entity's potential access to unsecured files. b. At one point, the Authority Board held meetings in the Borough Building's parking lot in an effort to avoid a physical confrontation with Borough Council. 9. Tensions between the two entities escalated to the point that the Authority Board's use of the Borough Building to hold meetings was openly discussed during a Borough Council meeting held on July 27, 2016. a. At that meeting, Borough Council Member Diana McCullough made a motion to restrict the use of the Borough Building to normal business hours only. 1. McCullough's motion was not seconded. 2. Had the motion passed, the Authority would have been prohibited from utilizing the Borough Building outside normal business hours, to include a prohibition on holding evening meetings. 10. Minutes from the July 27, 2016, Borough Council meeting include the following concerning the continuation of the Authority sharing office space with the Borough: a. "Diana McCullough commented that the borough office is being used for Authority meetings and that she feels this is violating privacy laws, Much discussion ensued. Mansel O'Dell, a council member and an Authority member, voiced that the meetings were held in the borough office because the Authority members needed information off the secretary's computer and hosting the meetings in the actual office saved time. Mansel O'Dell also went on to say that `no Authority member would knowingly do anything underhandedly to anybody.' Robert Penzone did note that the Authority holds monthly meetings in the borough office because they had persons in from the public and there wasn't room in the meeting room for them to host the public. A motion was made by Diana McCullough that the Borough office is to be used only during office hours and not for any after -hour purposes. The motion was not seconded so it was tabled for the time being." Chilson, 16-039 Page 4 11. As a result of the actions and discussions at the July 27, 2016, Borough Council meeting, Members of the Authority Board and Borough Council engaged in informal discussions as to relocating the Authority Business Office. 12. fending a belief that a notice to vacate from the Borough Building would be forthcoming, Authority Board Members held several informal discussions between July 27, 2016, and August 17, 2016, regarding relocating the Authority Business Office. a. During these discussions, several Authority Board Members asked Chilson if they could temporarily relocate to his property at 54 Main Street. b. The Authority Board considered only Chilson's property and an area within the Authority's sewer plant. Relocating the Authority Business Office to the sewer plant was not feasible due to noise and operational 'issues. d. Other available commercial space was limited because the Authority Business Office had to be located within the Borough. 13. The Authority did not utilize the services of any real estate professionals to assist in the search for new office space. 14. During Authority Board meetings held on August 10, 2016, and August 17, 2016, which were advertised and open to the public, the Authority Board discussed relocating the Authority Business Office to Chilson's property at 54 Main Street. a. Chilson attended both meetings as an Authority Board Member. b. There was no recorded discussion (meeting minutes, audio/video, etc.) regarding the Authority Board's August 10, 2016, meeting. 15. Chilson initially offered to let the Authority use the space for $500.00 per month, plus utilities, which was the same rate that he had most recently rented the property to Whole Body Wellness Clinic. The Authority ultimately agreed to pay $400.00 per month, plus utilities. 16. During the Authority Board's August 17, 2016, meeting, the Authority Board voted to relocate the Authority Business Office from the Borough Building to 54 Main Street, the property owned by Chilson. a. Meeting minutes reflect that the motion to relocate was made by Mansel O'Dell and seconded by Robert Penzone. Authority Board Members Cleo Russell, Robert Penzone, Mansel O'Dell, and Robert Kenyon all voted "Yes" to the motion. b. Chilson was present at this meeting and is recorded as having abstained from the vote. Chilson, 16-039 Page 5 1. All five Authority Board Members were present at this meeting (Gordon Chilson, Cleo Russell, Robert Penzone, Robert Kenyon, and Mansel O'Dell). C. The Authority Business Office was to relocate on or before September 1, 2016. d. All of the Authority Board Members felt that relocating to 54 Main Street was the best possible choice. 17. Minutes from the Authority Board meeting held August 17, 2016, include the following action authorizing the relocation of the Authority Business Office to 54 Main Street: a. New Business: "A motion was made by Mansel O'Dell and seconded by Robert Kenyon to move the Authority Business Office to 54 Main Street on or about September I". Gordy (Chilson) abstained from motion." b. Minutes do not state the reason or nature of Chilson's abstention. c. Minutes do not reflect any information as to the scope of the rental payment, i.e., costs, other properties considered, ownership intent of Chilson, etc. 18. A question was raised during Borough Council's September 6, 2016, meeting if Chilson was receiving rental payments from the Authority. a. Chilson was present at this meeting and was questioned as to whether he was receiving rent from the Authority. b. Chilson is on record as responding "yes." C. Residents in attendance at the meeting voiced their concerns as to a conflict of interest. 19. Neither Chilson nor the Authority executed any written agreement regarding the Authority Business Office's relocation to 54 Main Street. a. The Authority occupied the property pursuant to a verbal agreement, the terms of which consisted of a monthly rental payment in the amount of $400.00, plus utilities to be billed at actual usage, effective September 1, 2016. b. The Authority vacated the property in January 2018. 20. Between September 2016 and February 2017, Chilson invoiced the Authority for monthly rent and utilities associated with the Authority Business Office's relocation to 54 Main Street. Chilson, 16-039 Page 6 a. Payment of these invoices was processed through the Authority's normal bill paying process. b. Authority Board Members are generally provided with a list of bills to be paid each month. C. Bills are voted on in their entirety by a single motion. d. Authority checks are live signed by two Authority Board Members. 21. From September 3, 2016, to February 6, 2017, the Authority issued approximately six checks to Chilson, totaling $2,896.76, which included monthly rental payments of $400.00 each. a. All but one of these payments also included utility and/or documented expense reimbursements. b. Chilson did not serve as an Authority signatory on any of these checks. 22. A review of Authority Board meeting minutes for this time period reflect that Chilson abstained from voting to approve bill lists containing, among other items, payments to him on October 26, 2016, and November 2, 2016. 23. Between September 3, 2016, and February 6, 2017, Chilson received rental payments of at least $2,400.00. a. On July 13, 2017, Authority Secretary Grace Kirwin confirmed that Chilson had not invoiced the Authority for a rental payment since February 2017. b. Kirwin also confirmed that the Authority had not paid rent to Chilson since February 2017. C. The Authority paid no rent for the use of 54 Main Street from March 2017 until it vacated the property in January 2018. Chilson also paid the utilities himself during this timeframe. d. Chilson stopped invoicing the Authority at or about the time he received the Notice of Investigation from the State Ethics Commission. III. DISCUSSION: As a Member of the Board of the Lawrenceville Borough Authority ("Authority"), Tioga County, Pennsylvania, from January 2014 until April 2018, Respondent Gordon Chilson, also referred to herein as "Respondent," "Respondent Chilson," and "Chilson," was a public official subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. §1101etsee . Chilson, 16-039 Page 7 The allegations are that Chilson violated Sections 1103(a), 1103(f), and 1104(a) of the Ethics Act when he utilized the authority of his public position for a private pecuniary benefit of himself and/or a business with which he is associated, when he participated in actions and discussions of the Authority Board resulting in the Authority entering into an agreement/contract/leasing agreement for office space in a building owned by Chilson and/or a business with which he is associated; when the agreement/contract/leasing agreement in excess of $500.00 between the Authority and himself and/or a business with which he is associated was entered into absent an open and public process; and when, as a Member of the Authority Board, he failed to file Statements of Financial Interests for calendar years 2013, 2014, and 2015. Per the Consent Agreement, the Investigative Division has exercised its prosecutorial discretion to nolle pros the alleged violations of Sections 1103(f) and 1104(a) of the Ethics Act. We therefore need not address those particular allegations. Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted activities (a) Conflict of interest. —No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The term "conflict of interest" is defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa.C.S. § 1102. Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, a public Chilson, 16-039 Page 8 official/public employee is prohibited from using the authority of public office/employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official/public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. 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. Chilson served as a Member of the Authority Board from January 2014 until April 2018. The Authority, which no longer exists, provided public sewer and water services to the residents of Lawrenceville Borough (`Borough"), Tioga County, Pennsylvania, and the residents of other municipalities. The Authority Board was comprised of five Members who were appointed by Lawrenceville Borough Council ("Borough Council"). From at least 2014 until August 2016, the Borough and the Authority shared common office space in the Borough Building at 6 Mechanic Street, Lawrenceville, Pennsylvania. In exchange for office space, the Authority paid a monthly rental fee of $300.00 or $350.00 to the Borough. No written/executed lease arrangement was maintained between the Borough and the Authority. Chilson owns real estate located at 54 Main Street, Lawrenceville, Pennsylvania ("54 Main Street"). Since Chilson became the owner of 54 Main Street in October 2005, it has been utilized as a commercial rental property. Around April 2016, the tenant of 54 Main Street, Whole Body Wellness Clinic, vacated the property. As the tenant of 54 Main Street, Whole Body Wellness Clinic paid rent of $500.00 per month to Chilson. A dispute between Borough Council and the Authority Board concerning the shared use of the Borough Building manifested itself in 2016. One of the main causes of the tension between Borough Council and the Authority Board was each entity's potential access to unsecured files. At one point, the Authority Board held meetings in the Borough Building's parking lot in an effort to avoid a physical confrontation with Borough Council. Tensions between Borough Council and the Authority Board escalated to the point that the Authority Board's use of the Borough Building to hold meetings was discussed during a Borough Council meeting held on July 27, 2016. At the meeting, a Borough Council Member made a motion to restrict the use of the Borough Building to normal business hours only. The motion was not seconded. Had the motion passed, the Authority Board would have been prohibited from holding evening meetings. As a result of the actions and discussions at the July 27, 2016, meeting of Borough Council, Members of the Authority Board and Members of Borough Council engaged in informal discussions with regard to relocating the Authority Business Office. Due to a belief that a notice to vacate the Borough Building would be forthcoming, Members of the Authority Board held several informal discussions between July 27, 2016, and August 17, 2016, with respect to relocating the Authority Business Office. During these discussions, several Members of the Chilson, 16-039 Page 9 Authority Board asked Chilson if the Authority Business Office could temporarily relocate to his commercial rental property at 54 Main Street, which was then vacant. Other available commercial space was limited because the Authority Business Office had to be located within the Borough. During Authority Board meetings held on August 10, 2016, and August 17, 2016, the Authority Board discussed relocating the Authority Business Office to Chilson's property at 54 Main Street. Chilson attended both meetings as an Authority Board Member. All of the Authority Board Members felt that relocating the Authority Business Office to 54 Main Street was the best possible choice. Chilson initially offered to let the Authority use 54 Main Street for $500.00 per month, plus utilities, which was the same rate at which he had rented the property to Whole Body Wellness Clinic. The Authority Board ultimately agreed to pay $400,00 per month, plus utilities, for the use of 54 Main Street. On August 17, 2016, the Authority Board voted to relocate the Authority Business Office from the Borough Building to 54 Main Street. Chilson abstained from the vote. Chilson and the Authority did not execute a written agreement regarding the Authority Business Office's relocation to 54 Main Street. The Authority Business Office occupied 54 Main Street pursuant to a verbal agreement, the terms of which consisted of a monthly rental payment in the amount of $400.00, plus utilities to be billed at actual usage, effective September 1, 2016. Between September 2016 and February 2017, Chilson invoiced the Authority for monthly rent and utilities associated with the Authority Business Office's relocation to 54 Main Street. Between September 3, 2016, and February 6, 2017, Chilson received rental payments totaling at least $2,400.00 from the Authority. Chilson did not invoice the Authority for rent after February 2017. The Authority paid no rent for the use of 54 Main Street from March 2017 until January 2018, when the Authority Business Office vacated the property, and Chilson paid the utilities himself during this timeframe. Chilson stopped invoicing the Authority for rent at or about the time he received the Notice of Investigation in this matter from the Investigative Division of the Commission. 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: 3. The Investigative Division will recommend the following in relation to the above allegations: a. For purposes of resolution given the terms of this settlement, Chilson agrees that if this matter went to hearing, the Investigative Division could meet the requisite evidentiary standard and convince a fact finder that a violation of Section 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Gordon Chilson, in his Chilson, 16-039 Page 10 capacity as a Member of the Lawrenceville Borough Authority, participated in actions and discussions of the Authority Board of Directors, resulting in the Authority entering into a verbal month -to -month lease agreement for office space in a building owned by Chilson and/or a business with which he is associated. b. That the remaining allegations be nolle prossed. 4. Chilson agrees to mare payment in the amount of $1,000.00 in settlement of this matter payable as follows: a. $1,000.00 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. 5. Chilson agrees to not accept any reimbursement, compensation or other payment from Lawrenceville Borough representing a full or partial reimbursement of the amount paid in settlement of this matter. 6. The Investigative Division will recommend that the State Ethics Commission take no further action in this matter; and mare no specific recommendations to any law enforcement or other authority to tape 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. We find the Consent Agreement to be an appropriate resolution of this case. As a Member of the Authority Board, Chilson attended Authority Board meetings held on August 10, 2016, and August 17, 2016, during which relocating the Authority Business Office to Chilson's commercial rental property at 54 Main Street was discussed. All of the Authority Board Members felt that relocating the Authority Business Office to 54 Main Street was the best possible choice. The Authority Business Office subsequently relocated to 54 Main Street and occupied the property pursuant to a verbal agreement, with terms that included a monthly rental payment of $400.00, effective September 1, 2016, Between September 3, 2016, and February 6, 2017, Chilson received rental payments totaling at least $2,400.00 from the Authority. Chilson, I6-039 Page I I Although Chilson abstained from the Authority Board's vote to relocate the Authority Business Office to his property, he agrees that if this matter proceeded to an evidentiary hearing, the Investigative Division could meet the requisite evidentiary standard and convince a fact finder that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Chilson, in his capacity as a Member of the Authority Board, participated in actions and discussions of the Authority Board, resulting in the Authority entering into a verbal month -to -month lease agreement for office space in a building owned by him and/or a business with which he is associated. As part of the Consent Agreement, Chilson has agreed to make payment in the amount of $1,000.00 payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. Chilson has 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. We conclude 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, Chilson is directed to make payment in the amount of $1,000.00 payable to the Commonwealth of Pennsylvania and forwarded to this Commission by no later than the thirtieth (301h) day after the mailing date of this adjudication and Order. Chilson 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. 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 a Member of the Board of the Lawrenceville Borough Authority ("Authority"), Tioga County, Pennsylvania, from January 2014 until April 2018, Respondent Gordon Chilson ("Chilson") was a public official subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et seq. 2. For purposes of resolution given the terms of the parties' settlement, Chilson agrees that if this matter went to hearing, the Investigative Division would meet the requisite evidentiary standard and convince a fact finder that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Chilson, in his capacity as a Member of the Authority Board, participated in actions and discussions of the Authority Board, resulting in the Authority entering into a verbal month -to -month lease agreement for office space in a building owned by him and/or a business with which he is associated. In Re: Gordon Chilson, File Docket: 16-039 Respondent Date Decided: 3/29/21 Date Mailed: 4/1/21 ORDER NO. 1786 For purposes of resolution given the terms of the parties' settlement, Gordon Chilson ("Chilson") agrees that if this matter went to hearing, the Investigative Division would meet the requisite evidentiary standard and convince a fact finder that a violation of Section 1103(a) of the Ethics Act, 65 Pa. C.S. § 1103(a), occurred when Chilson, in his capacity as a Member of the Board of the Lawrenceville Authority ("Authority"), Tioga County, Pennsylvania, participated in actions and discussions of the Authority Board, resulting in the Authority entering into a verbal month -to -month lease agreement for office space in a building owned by him and/or a business with which he is associated. 2. Per the Consent Agreement of the parties, Chilson is directed to make payment in the amount of $1,000.00 payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission by no later than the thirtieth (30"') day after the mailing date of this Order. 3. Per the Consent Agreement of the parties, Chilson is directed to not accept any reimbursement, compensation or other payment from Lawrenceville Borough, Tioga County, Pennsylvania, representing a full or partial reimbursement of the amount paid in settlement of this matter. 4. Compliance with paragraphs 2 and 3 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, Nicholas A. Colafella, . hair