In The Matter of Joseph W. Daly
June 23, 2008
DISPOSITION AGREEMENT

The State Ethics Commission and Joseph Daly enter into this Disposition Agreement pursuant to Section 5 of the Commission's Enforcement Procedures. This Agreement constitutes a consented-to final order enforceable in the Superior Court, pursuant to G.L. c. 268B, s. 4(j).


On July 25, 2006, the Commission initiated, pursuant to G.L. c. 268B, s. 4(a), a preliminary inquiry into possible violations of the conflict of interest law, G.L. c. 268A, by Joseph W. Daly. The Commission concluded its inquiry and, on October 17, 2007, found reasonable cause to believe that Daly violated G.L. c. 268A.


The Commission and Daly now agree to the following findings of fact and conclusions of law.


Findings of Fact

  1. From December 2002 to September 2004, Daly was the Randolph Housing Authority ("the RHA") executive director.

  2. The RHA owns approximately 256 housing units in Randolph. It rents these units for less than fair market value to individuals who qualify on the basis of income. [1] The subsidy provided to each tenant is greater than $50 per month.


    Arthur and Mary Hilliard's Sale of 223 Oak Street and Placement in an RHA Unit

  3. On September 30, 2003, Arthur and Mary Hilliard applied for a handicapped accessible RHA housing unit. At the time there was a long waiting list for such units. As a general rule, units were made available based on one's place on the waiting list. There were exceptions, [2]but the Hilliards' circumstances did not warrant immediate placement in an RHA unit.

  4. Daly reviewed the Hilliards' application and as RHA executive director met with Arthur Hilliard ("Arthur"). Arthur told Daly the Hilliards' home was owned by a trust. Daly advised Arthur that if the trust evicted the Hilliards, they could qualify for emergency placement in an RHA housing unit on the basis of imminent homelessness.

  5. At the time, the Hilliards' home at 223 Oak Street ("the Property") in Randolph was owned by the Hilliard Nominee Trust ("the Trust"), of which the Hilliards were the sole trustees and beneficiaries.

  6. On or about December 3, 2003, the Hilliards' daughter signed a Notice to Quit, initiating eviction proceedings on behalf of the Trust seeking possession of the Property. On December 30, 2003, the Hilliards executed an agreement for judgment with the Trust, agreeing to vacate the Property within 60 days. Daly signed the eviction papers as constable and served them on the Hilliards. On January 6, 2004, the Quincy District Court entered a judgment awarding possession of the Property to the Trust. On January 29, 2004, the court issued an Execution Writ for possession of the Property against the Hilliards.

  7. On or about January 30, 2004, Arthur provided a copy of the Execution Writ to Daly. Daly as RHA executive director filed the copy with the Hilliards' application for an RHA housing unit at the RHA and selected the Hilliards for immediate placement in a vacant handicapped accessible housing unit, based on emergency circumstances due to imminent homelessness.

  8. Also on or about January 30, 2004, Daly notified the Hilliards of their RHA placement and offered them a handicapped accessible RHA unit.

  9. On or about February 4, 2004, Daly negotiated with the Hilliards a Purchase and Sale agreement to purchase the Property from the Trust for $200,000.

  10. Daly, however, did not purchase the Property. Instead, he discussed the purchase with his father, Edward Daly, who advised Daly that he could not purchase the Property based on conflict of interest concerns.

  11. Thereafter, Daly informed the Hilliards that he would be unable to purchase the Property.

  12. Arthur then contacted Edward Daly and offered to sell the Property to him. Edward Daly agreed to purchase the Property for $200,000.

  13. On February 21, 2004, Daly as RHA executive director and the Hilliards executed a lease agreement for the Hilliards' occupancy of an RHA housing unit. The finalization of the RHA lease allowed the Hilliards to proceed with the sale of their home ("the Property").

  14. March 19, 2004, Edward Daly purchased and took possession of the Property. The purchase price was $200,000.

  15. The same day, the Hilliards moved into a handicapped accessible RHA housing unit.

  16. After performing renovations to the Property, Edward Daly sold the Property on December 13, 2004 for $395,000.

  17. Daly did not disclose his private dealings with the Hilliards to his RHA appointing authority, the RHA board of directors.

  18. Daly's father, Edward Daly, owns and rents approximately 90 private residential property units in Randolph. Edward Daly receives regular income from the tenants of these properties.

  19. In November of 2003, Randolph resident Judith Shultz submitted an application for an RHA housing unit. At the time of her application, Shultz resided at 9 Allen Court in Randolph. She was a tenant of Edward Daly, but because of financial difficulties was not making monthly rent payments to him.

  20. Shultz received preference points for placement in an RHA unit, based on her status as a former spouse of a veteran. Daly reviewed Shultz's application and notified her that she would be placed immediately in an RHA housing unit.

Shultz moved into an RHA housing unit in January of 2004. After Shultz vacated the unit at 9 Allen Court, Edward Daly was able to and did rent the unit to other tenants and collected rental payments from these tenants.


Conclusions of Law


  1. As RHA executive director, Daly was a municipal employee as defined by G.L. c. 268A, s. 1(g).

  2. Daly's father Edward Daly is Daly's immediate family member as defined by G.L. c. 268A, s. 1(f).

    Daly's Placement of the Hilliards in an RHA Unit

    Section 19

  3. Section 19 prohibits a municipal employee from participating as such in any particular matter in which, to his knowledge, he or a member of his immediate family has a financial interest.

  4. The RHA's decision to place Arthur and Mary Hilliard in RHA housing and the RHA lease agreement with the Hilliards for the occupancy of an RHA unit were particular matters.

  5. Daly had a financial interest in these particular matters because the Hilliards' pending occupancy of an RHA housing unit allowed them to agree to sell Daly the Property.

  6. Daly's father, Edward Daly, also had a financial interest in these particular matters because the Hilliards' occupancy of an RHA housing unit allowed them to ultimately sell the Property to him.

  7. Daly participated as the RHA executive director in these particular matters by deciding to place the Hillards in an RHA unit and by signing the Hilliards' RHA lease on February 21, 2004.

  8. When Daly signed and finalized the Hillard RHA lease, he knew that he and/or his father Edward Daly had financial interests in the finalization of the lease as placement in the RHA unit allowed the Hilliards to proceed with the sale of their home.

  9. Accordingly, Daly violated s. 19 by participating as the RHA executive director in particular matters in which, to his knowledge, he and/or a member of his immediate family had financial interests.


    Section 23
  10. Section 23(b)(2) of G.L. c. 268A prohibits a municipal employee from, knowingly or with reason to know, using or attempting to use his official position to secure for himself or others unwarranted privileges or exemptions of substantial value not properly available to similarly situated individuals.

  11. The Hilliards' emergency placement in an RHA housing unit was a privilege. This privilege was unwarranted because the Hilliards did not meet the criteria for emergency placement at the time of either their application or selection for placement in an RHA unit. While homelessness due to displacement is a valid basis for emergency tenant selection pursuant to 760 CFR 5.09, this qualification is limited to certain reasons for displacement. Eviction absent certain conditions is not included as a qualifying reason for displacement. Moreover, Daly knew or had reason to know the eviction relied on to justify the Hilliards' placement was a contrivance. Thus, Daly knew or had reason to know that the Hilliards were not eligible for emergency placement.

  12. Daly used his official RHA position to secure this privilege for the Hilliards by, as RHA executive director, advising the Hilliards how they could qualify for emergency placement by creating an imminent homelessness condition, filing the Execution Writ issued by the Quincy District Court with the Hilliards' application for RHA housing, selecting the Hilliards for emergency placement in an RHA handicapped accessible unit, and signing the lease between the RHA and the Hilliards for an RHA housing unit.

  13. The unwarranted privilege of emergency placement was of substantial value, based on the fair market value of the RHA housing unit subsidy provided to the Hilliards.

  14. Because the Hilliards' emergency placement was contrary to applicable regulations, the privilege was not properly available to other RHA housing unit applicants.

  15. Therefore, Daly violated s. 23(b)(2), by as described above, knowingly or with reason to know, using his official position to secure for the Hilliards an unwarranted privilege of substantial value not properly available to similarly situated individuals.


    Daly's Agreement to Purchase 223 Oak Street

    Section 23

  16. Daly's opportunity to purchase the Property was also a privilege. This privilege was unwarranted because, at the time Daly negotiatied with them a purchase and sale agreement regarding the property, the Hilliards were subject to Daly's official authority or regulatory jurisdiction.

  17. A public employee negotiating terms of a private transaction with persons under his official authority may provide the employee with unwarranted privileges by virtue of the employee's power over the person under his jurisdiction. In short, such negotiations may be inherently coercive and exploitive. It is difficult or impossible for the person subject to the public employee's jurisdiction to refuse the terms negotiated by the public employee. Thus, by negotiating the terms of a private transaction with a person under his official power, the employee may use his official position to obtain an unwarranted privilege.

  18. A public employee's private business relationship with a person within his regulatory jurisdiction violates s. 23 unless (1) the relationship is entirely voluntary; (2) it was initiated by the person under the supervisory employee's jurisdiction; and (3) the supervisory employee's public written disclosure under s. 23(b)(3) states facts clearly showing elements (1) and (2). Thus, failure to meet elements (1) or (2) will violate s. 23(b)(2); failure to make the disclosure required by (3) will violate s. 23(b)(3). [3]

  19. By negotiating with the Hilliards to buy the Property and later offering to substitute his father in the transaction to purchase the Property from the Hilliards while the Hilliards' application for placement in a subsidized RHA housing unit was pending before him as RHA executive director and they were under his official authority, Daly used or attempted to use his official position to secure an unwarranted privilege for himself and/or his father. Daly did not publicly disclose to his appointing authority his private dealings with the Hilliards.

  20. This privilege was of substantial value, as evidenced by the profit realized by Edward Daly on the sale of the property.

  21. Because Daly's opportunity to purchase the Property arose in the context of a regulatory relationship between Daly and the Hilliards, the privilege was not properly available to similarly situated persons.

  22. Therefore, Daly violated s. 23(b)(2), by as described above, knowingly or with reason to know, using or attempting to use his official position to secure for himself an unwarranted privilege of substantial value not properly available to similarly situated individuals.


    Daly's Selection of Judith Shultz for Placement in an RHA Housing Unit

    Section 19


  23. The RHA's decision to place Judith Shultz in an RHA unit was a particular matter.

  24. Daly's father, Edward Daly, had a financial interest in this particular matter because at the time of her application for RHA housing, Shultz was his tenant and was having difficulty making her rent payments. Shultz's placement in an RHA unit allowed Edward Daly to rent her unit to other tenants and to collect rent payments from them.

  25. Daly participated as the RHA executive director in this particular matter by:

    a. selecting Shultz for placement in an RHA housing unit; and

    b. finalizing Shultz's placement in January of 2004.

  26. When Daly so participated, he knew that Shultz was his father's tenant and that she was having difficulty making rent payments to him. Therefore, Daly knew that his father had financial interests in the particular matter.
  27. Accordingly, Daly violated s. 19 by participating as the RHA executive director in a particular matter in which, to his knowledge, an immediate family member had financial interests.

Resolution


In view of the foregoing violations of G.L. c. 268A by Daly, the Commission has determined that the public interest would be served by the disposition of this matter without further enforcement proceedings, on the basis of the following terms and conditions agreed to by Daly:


(1) that Daly pay to the Commission the sum of $5,000 as a civil penalty for repeatedly violating G.L. c. 268A sections 19 & 23;


(2) Daly waive all rights to contest the findings of fact, conclusions of law and terms and conditions contained in this Agreement in this or any other related administrative or judicial proceedings to which the Commission is or may be a party.


STATE ETHICS COMMISSION



[1] The RHA was established pursuant to the provisions of G.L. c. 121B. Eligibility for RHA tenancy is regulated by 760 CMR 1.00 et seq.

[2] 760 CMR 5.09 establishes criteria for priority placement and certain preference categories.

[3] See EC-COI-92-7. See also In the Matter of Scott Trant (2006) (The Commission fined a police officer $10,600 for attempting to purchase property from a person seeking police assistance in connection with the property).