Docket No.: 137
Doc. Type: Agreements
Parties: IN THE MATTER OF GEORGE A. MICHAEL
Appearing: Robert J. Cordy, Esq.: Counsel for Petitioner, State Ethics Commission John P. White, Jr., Esq: Counsel for Respondent,
George A. Michael
Commissioners: Vorenberg, Ch.; Kistler, Bernstein, Brickman, McLaughlin
September 28, 1981
DECISION AND ORDER
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I. Procedural History
The Petitioner filed an Order to Show Cause on January 6,1981
alleging that the Respondent, George A. Michael, had violated
Sections 3(b), 6, 23(d), 23(e). and 23(f) of M.G.L. Chapter 268A,
the Conflict-of-Interest Law, Section 7 of M.G.L. Chapter 268B, the
financial disclosure law. The Respondent filed an Answer which
denied any violation of the aforementioned provisions and which,
in addition, raised defenses based on the asserted
unconstitutionality of the Commission's organization and
procedures.
On or about March 26, 1981, Respondent filed in Superior Court
a Complaint for Declaratory Judgment and requested issuance of a
preliminary order against the Commission's proceedings, asserting
the constitutional rights included in his Answer. The Request was
denied by the Superior Court (Ronan, J.) on March 30, 1981 and this
was affirmed on April 3, 1981 by the Appeals Court (Armstrong, J.).
Pursuant to notice, evidentiary hearings were conducted on
April 1,6,8,10, and 28 and June 23, 24, and 30[1] before the
Commission Vice-Chairman, Linda H. Kistler, a duly designated
presiding officer. See, M.G.L. c. 268B, s.4(c). The parties
thereafter filed post-hearing briefs on July 31 and August 4,1981.
In rendering this Decision and Order, each member of the Commission
has heard and/or read the evidence and arguments presented by the
parties.
II. Findings of Fact
1. George A. Michael ("Mr. Michael") was employed as the
Director of the Mass. Division of Food and Drug from 1953 to 1981.
2. The Division of Food and Drug is a division within the
Department of Public Health established by M.G.L. c. 17, s.4. It
has regulatory and inspection authority over the manufacturing,
wholesale and retail sale of most foods, beverages, drugs,
cosmetics, bedding and upholstered furniture in Massachusetts. See,
M.G.L. c. 94 and 94B. It has the authority to embargo and seek
condemnation of merchandise it finds to be misbranded, adulterated,
or otherwise unfit for human consumption, to order destroyed any
article of bedding or upholstered furniture it finds to be
contaminated in any way, to grant and suspend certain licenses, to
seek criminal complaints, and to order the closure of certain
businesses which do not comply with the sanitary requirements of
the law. See, M.G.L. c. 94, 94B; 105 CMR 590.027,590.126,590.127
and 620.005.
3. The Division of Food and Drug is responsible for inspecting
and approving or disapproving for sale to the public all food,
drugs, cosmetics, beverages, tobacco products, bedding and
upholstered furniture which have been exposed to contamination by
fire, flood, or other disaster and which are being reconditioned
for sale to the public ("salvage merchandise"). M.G.L. c. 94,
s.s.189,276, 307.
4. Building 19, Inc. ("Building 19") is a Massachusetts
corporation formed in 1964 by Harry Andler, Gerald Elovitz and one
other individual; it is engaged primarily in the business of
buying, reconditioning and retailing to the public salvage
merchandise.
5. Salvage merchandise owned by Building 19 has been subject
to regular and frequent inspections by the Division of Food and
Drug since 1964. Some of these inspections were conducted by Mr.
Michael personally, and others were conducted by other inspectors
from the Division of Food and Drug at Mr. Michael's direction.[2]
6. On numerous occasions, the President of Building 19, Gerald
Elovitz, discussed with Mr. Michael and received advice from him
on the salvageability of merchandise which had not yet been
purchased by Building 19; on some occasions, the Division of Food
and Drug tested such merchandise for Building 19.
7. Since at least 1972, Mr. Michael personally participated
in the evaluation of salvage merchandise from Building 19. In
addition, on numerous occasions he told inspectors whether to
release embargoed merchandise, what had to
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be done to merchandise before it could be released for sale, and
when it had to be destroyed.[3]
8. During the period from approximately 1964 through 1980, Mr,
Michael accepted discounts, ranging up to sixty percent, on
merchandise he purchased at Building 19 on numerous occasions,
which discounts were not and are not extended or available to
Building 19's regular customers.[4]
9. During the period from approximately 1964 through and
including 1980, Mr. Michael accepted charge account privileges from
Building 19, which privileges were not and are not extended or
available to Building 19's regular customers.
10. During the period from approximately 1975 through and
including 1980, Mr. Michael obtained discounts and charge
privileges for others, including members of his family and staff
at the Division of Food and Drug, from Building 19.[5]
11. During the period from 1975 through and including 1980,
Mr. Michael bought and charged merchandise, for himself and members
of his immediate family and staff, from Building 19, which would
have cost an ordinary customer approximately $7,000, but on which
Mr. Michael received discounts, most of which ranged between 30
and 60 percent; in 1976 through 1980, inclusive, the discounts
received by Mr. Michael totaled at least $100 each year.[6]
12. Gerald Elovitz, the President of Building 19 who, for the
past five years, has been responsible for extension of discounts
and charge privileges, became acquainted with Mr. Michael
exclusively in the context of business and regulatory dealings
between Building 19 and the Division of Food and Drug, and had no
independent social or familial relationship or friendship with him.
13. The maintenance of a cooperative working relationship with
the Division of Food and Drug is and has been important to Building
19's business; in particular the availability of inspectors to
check Building 19's merchandise promptly is and has been of benefit
to the business.
14. The discounts and charge privileges noted in paragraphs
8 through 11 above, were extended to and received by Mr. Michael,
at least in part, for or because of acts within his official
responsibility performed or to be performed by him, as set out in
paragraphs 5 through 7 above; specifically, they were extended to
him in appreciation for the guidance and counsel given to the
management of Building 19 by
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Respondent, and the prompt inspections performed by the Division
of Food and Drug at Building 19.[7]
15. Pursuant to the requirements of M.G.L. c. 268B, Mr.
Michael was designated a "public employee" as defined in Section
1(o) of that chapter, and was required to file and did file
Statements of Financial Interests with the Ethics Commission for
calendar years 1978 and 1979.
16. M.G.L. c. 268B requires the disclosure of gifts received
by "public employees" which aggregate more than $100 in the
calendar year and which come from individuals or businesses which
have a direct interest in a matter or matters before the
governmental body by which the public employee is employed.
17. Building 19 had a direct interest in matters before the
Division of Food and Drug during 1978 and 1979.
18. Building 19 extended discounts to Mr. Michael which
exceeded $100 in aggregate value in both 1978 and 1979.
19. Mr. Michael did not disclose the discounts he received
from Building 19 in 1978 and 1979 in the Statements of Financial
Interests which he filed with the Ethics Commission for 1978 and
1979.
20. The Bargain Center, Inc. ("Bargain Center") is a
Massachusetts company, formed in 1937, and engaged in the business
of buying, reconditioning and retailing to the public salvage
merchandise.
21. From at least 1972 through and including 1980, Mr. Michael
and other Division of Food and Drug inspectors inspected on a
regular and frequent basis and at the times requested by the
Bargain Center, salvage merchandise owned and proposed for sale by
the Bargain Center.[8]
22. From at least 1972 through and including 1980, Mr. Michael
regularly and frequently advised the principals of the Bargain
Center on how to handle and recondition its salvaged products, and
approved, both directly and indirectly, such merchandise for sale
to the public.[9]
23. From at least 1976 through and including 1980, Mr. Michael
accepted discounts of 15 to 25 percent on merchandise purchased at
the Bargain Center, which discounts were not extended or available
to the Bargain Center's regular customers; further, Mr. Michael
availed himself of these discounts approximately ten times a year
during that period and, on at least one occasion in 1979, the value
of the discount exceeded $50,[10]
24. On at least one occasion in 1980, Mr. Michael obtained a
discount for a Diane Hurley, whom he represented to be his
assistant, on merchandise she purchased at the Bargain Center; the
value of the discount was $145.[11]
25. The maintenance of a cooperative working relationship with
the Division of Food and Drug is and has been important to Bargain
Center's business; in particular, the availability of inspectors
to check Bargain Center's merchandise promptly is and has been of
benefit to the business.
26. The discounts noted in paragraphs 23 and 24, above, were
extended to and received by Mr. Michael, at least in part, for or
because of acts within his official responsibility performed
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or to be performed by him, as set out in paragraphs 21 and 22
above.[12]
27. Value Village, Inc, ("Value Village") is a Massachusetts
company, formed in 1968, and engaged in the business of buying,
reconditioning and retailing to the public salvage merchandise.
28. From at least 1973 through and including 1980, Mr.
Michael, and other Division of Food and Drug inspectors at his
direction, on a regular and frequent basis and at times requested
by Value Village, inspected salvage merchandise owned by Value
Village.
29. On at least one occasion, Mr. Michael personally advised
the president of Value Village as to how to recondition products.
On another occasion, three days before Easter in 1976, Mr. Michael
directed two other inspectors to accompany him on the inspection
of a shipment of Easter candy, owned by Value Village. The candy
could not be sold until it was inspected and approved by the
Division of Food and Drug, and Mr. Michael released it for sale the
same day.[13]
30. From approximately 1968 through and including 1980, Mr.
Michael received a 10 to 15 percent discount on merchandise he
purchased at Value Village.
31. From approximately 1968 through and including 1980, Mr.
Michael purchased at least $200-$300 worth of merchandise at Value
Village, on which he received discounts.[14]
32. The discounts set out in paragraphs 30 and 31 above were
extended to and received by Mr. Michael because of the prompt
service which the Division of Food and Drug provided to Value
Village, which service was of importance and benefit to Value
Village.[15]
33. D.G.M. Consultants ("DGM") is a food testing and
consulting company doing business in Massachusetts. It is owned and
operated by Dr. George T. Michael, the son of George A. Michael,
the Respondent.
34. Cumberland Farms, Inc. ("Cumberland Farms") is a company
doing business in Massachusetts, engaged in the business of
manufacturing, processing and retailing food products. It employs
DGM as a technical analytical consultant for its products at a fee
of approximately $500 per month.
35. On March 13,1979, a major ammonia leak occurred in the
Cumberland Farms ice cream processing plant in Canton,
Massachusetts. Inspectors Babineau and Luke from the Division of Food and Drug went to the plant that same day, placed an embargo
on the Cumberland Farms ice cream processing and storage facilities
and on all ice cream raw materials and products then held in those
facilities.
36. On March 13, and 14,1979, Inspectors Babineau and Luke,
of the Division of Food and Drug, took samples of the ice cream
products which had been exposed to the aforementioned ammonia leak
and brought the samples to Mr. Michael's office at the Division of
Food and Drug in Jamaica Plain.
37. On March 13, and 14, 1979, Mr. Michael personally
participated, with others, in the testing of the ice cream samples
from the Cumberland Farms plant.
38. During the period from March 13, 1979, through
approximately April 30, 1979, Mr. Michael personally participated
in the Cumberland Farms matter by assigning Division of Food and
Drug personnel to work on the matter, by testing the aforementioned
ice cream product samples, by participating in decisions on the
reconditioning of some of the Cumberland Farms products which had
been embargoed after the ammonia leak, and by personally contacting
the management of Cumberland Farms with regard to the matter.
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39. On or about March 13, 1979, Dr. George T. Michael, the
owner of DGM and son of Mr. Michael, the Respondent, was asked by
the management of Cumberland Farms to evaluate, test and provide
professional advice on reconditioning of the ice cream exposed to
ammonia by the March 13,1979 ammonia leak,
40. During the period from March 13, 1979 through
approximately April 30, 1979, Dr. George T. Michael tested and
evaluated this ice cream on behalf of Cumberland Farms, provided
professional advice concerning the reconditioning of this product,
in return for compensation, and had a financial interest in the
resolution of this matter.
41. During the period from March 13, 1979 through
approximately April 30, 1979, the Respondent, Mr. Michael knew that
his son, Dr, George T. Michael, was being compensated by Cumberland
Farms for testing and evaluating the aforementioned ice cream
products and for providing professional advice on the
reconditioning of those products.[16]
42. DeMoulas Supermarkets, Inc. ("DeMoulas Markets") is a
company doing business in Massachusetts, and is engaged in the
business of retailing food products to the public.
43. DeMoulas Markets employs DGM as a food consultant.
44. On or about February 2,1977, all foods in the DeMoulas
Markets' warehouse located in Tewksbury, Massachusetts, were seized
by the U.S. Food and Drug Administration due to rodent infestation;
a consent decree was subsequently entered and a bond posted by
DeMoulas Markets.
45. On or about February 4, 1977, DeMoulas Markets hired DGM
to develop and implement a reconditioning program in order to
secure the release of the bond which had been posted pursuant to
the aforementioned seizure, and DGM, therefore, had a financial
interest in the matter.
46. During the period from February 4, 1977 through at least
March, 1977, the Respondent, Mr. Michael, initiated and
participated in several official actions intended to accelerate the
release of the bond which had been posted by DeMoulas Markets,
pursuant to the seizure and consent decree. In particular, he
personally visited the DeMoulas Markets warehouse on February 5,
1977 and told a federal inspector that he had given "them" a clean
bill of health and asked how the reconditioning process could be
expedited; he spoke with the Acting District Director of the U.S.
Food and Drug Administration on February 7, 1977, at which time the
Respondent agreed to assist federal officials in the DeMoulas
matter; he assigned inspectors from the state Division of Food and
Drug to inspect DeMoulas Markets' retail outlets and warehouse, and
to monitor the reconditioning process, and had documentation of the
latter sent to federal authorities shortly before the end of the
seizure and release of the bond on March 4, 1977.[17]
47. In its decision to release the bond on the DeMoulas
Markets' warehouse contents and end the seizure on March 4, 1977,
the federal
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Food and Drug Administration relied, in part, on the results of the
state Division of Food and Drug investigation, conducted at the
initiation and direction of Mr. Michael, the Respondent.[18]
48. During the period from February 5, 1977 through
approximately March 1, 1977, the Respondent, Mr. Michael, knew that
DGM had been retained by DeMoulas Markets to help secure the
release of the warehouse from federal custody, and that his son had
a financial interest in the matters.[19]
49. Seamark Corporation ("Seamark"), is a company doing
business in Massachusetts which is engaged in the business of
importing and wholesaling seafood products.
50. Seamark has retained DGM to test its seafood imports since
approximately 1977; among the services it performs, DGM tests
shrimp for Seamark.
51. On or about April 18, 1978, Purity Supreme Supermarkets
of North Billerica, Massachusetts, purchased and took delivery at
its warehouse of a shipment of MarcaMar brand shrimp from Seamark.
52. On or about April 21, 1978, after a problem with MarcaMar
brand frozen shrimp had arisen in a retail store in Walpole, a
Division of Food and Drug seafood inspector visited the Purity
Supreme warehouse in North Billerica, visually examined and
embargoed 110 cases of MarcaMar shrimp at the warehouse and took
samples for testing.
53. Tests on the shrimp samples from the previously mentioned
retail outlet and from the Purity Supreme Warehouse were not
completed by the Division of Food and Drug until April 24, 1981,
at which time they were found to have a strong odor.
54. On the same day that the aforementioned samples were
collected from the embargoed shrimp at the warehouse, April 21,
1978, and prior to completion of tests on these samples by the
Division of Food and Drug, the Respondent directed and lifting of
the embargo on the shrimp at the warehouse, and the inspector
lifted the embargo.[20]
55. The investigations unit of the staff of the State Ethics
Commission conducted the investigation into the subject matter of
this proceeding. That unit is headed by Robert J, Cordy ("Mr.
Cordy"), Associate General Counsel for Investigation and
Enforcement, who directed the inquiry.
56. On October 16, 1980, Mr. Cordy filed with the Commission
a written recommendation, based on evidence referred to the
Commission by the Department of the Attorney General, that the
Commission authorize a Preliminary Inquiry into the actions of
George A. Michael. The Commission authorized the inquiry on that
date.
57. On December 1,1980, Mr. Cordy filed with the
Commission a report on the Preliminary Inquiry in the Matter of George A. Michael, summarizing the information developed during the inquiry
and recommending that there was sufficient factual basis to support
a finding of "reasonable cause" to believe that Mr. Michael had
violated M.G.L. c. 268A and 268B.
58. Based upon the Preliminary Inquiry Report, the Commission
voted, on December 1, 1980, to find that there was reasonable cause
to
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believe that Mr. Michael had violated the aforementioned laws, and
authorized the staff to conduct a full investigation and, at its
conclusion, initiate adjudicatory proceedings.
59. Following the above-mentioned authorization, Mr. Cordy
drafted and filed an Order to Show Cause why Mr. Michael should not
be found in violation of M.G.L. c. 268A and 268B, on January 6,
1981. The text of that Order was not reviewed by the Commission.
60. Mr. Cordy appeared as Counsel for the Petitioner, the
State Ethics Commission, during the adjudicatory proceedings in
this matter.
61. The members of the State Ethics Commission have acted as
triers of fact and law in the instant proceeding, and have made
findings of fact and conclusions of law as set forth in this
Decision and Order.
III. Decision
The Respondent has been charged with violating M.G.L. c. 268A,
s.s.3(b), 6, 23(d), (e) and (f) and c. 268B, s.7. We will address
these charges separately. First, however, the Commission addresses
certain constitutional issues raised by Respondent.
A. Constitutional Issues
I. Combination of Investigatory, Prosecutorial and
Adjudicatory Functions.
In his Answer, Respondent contends that his due process rights
under the federal and Massachusetts constitutions are violated by
virtue of the organization and procedures of the State Ethics
Commission, in which investigatory, prosecutorial and adjudicatory
functions are combined, in one agency. He also alleges that this
combination of functions, in and of itself, impermissibly deprives
him of an impartial fact-finder.
The Commission finds no merit in Respondent's constitutional
argument. The constitutional validity of such a combination has
been upheld both by the United States Supreme Court, in Withrow v.
Larkin, 421 U.S. 35(1975), and by the Massachusetts Appeals Court
in School Committee of Stougbton v. Lahor Relations Commission,
4 Mass. App. Ct. 262 (1976). In addition, Withrow has been cited and
applied by the Massachusetts Supreme Judicial Court in the case of
Dwyer v. Commissioner of Insurance, 376 N.E. 2d 826(1978), in which
the court affirmed the authority of the Commissioner of Insurance
to conduct a dismissal hearing after having directed a subordinate
to investigate the matter and reviewing the investigative results.
Withrow was also cited by the Massachusetts Superior Court (Ronan,
J.)in George A. Michael v. State Ethics Commission, Superior Ct.
No. 47401, the action in which the Respondent unsuccessfully
attempted to obtain injunctive relief against the Commission's
hearing prior to their commencement. That court also cited the
Opinion of the Justices, 375 Mass. 795 (1978), an opinion which was
rendered to the Massachusetts Senate prior to the passage of M.G.L.
c. 268B (the statute which created the Commission), and which noted
no constitutional defect in the statutory scheme.
2. Alleged Disqualification of Commission
Respondent also contended in his Answer that the Commission
members were disqualified from sitting in judgment on this matter
by virtue of their prior exposure to evidence in the matter, their
ex parte communications with Counsel for Petitioner relative to
the matters in issue, their vote authorizing the filing of an Order
to Show Cause, and their issuance of press releases relative to the
matter.
The only evidence introduced by Respondent in support of this
contention is an affidavit from Counsel for the Petitioner, setting
forth the activities of the Commission and its staff with regard
to this matter prior to the issuance of the Order to Show Cause,
and copies of the Preliminary Inquiry Recommendation and Report
renewed by the Commission during that period.
The Commission, in reviewing this record, finds no support for
the Respondent's argument that the Commission is disqualified as
a matter of law from adjudicating this matter. Rather, the
Commission calls attention to: (a) M.G.L. c. 268B, s.4(a), which
mandates that the Commission initiate a preliminary inquiry upon
receipt of evidence which it deems sufficient . . .thereby
assigning to the Commission the duty of evaluating the sufficiency
of evidence at an early stage; (b) M.G.L. c. 268B, s.4(c), which
permits the Commission to vote to initiate proceedings if a
preliminary inquiry indicates reasonable cause for belief that c.
268A or 268B has been violated -- again, an authorization for the
Commission to review the sufficiency of evidence before
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proceeding to the next phase of a matter; and (c) the Dwyer and
Stoughton cases, cited above, which find no disqualification by
virtue of prior exposure to evidence in an ex parte administrative
context, or by prior issuance of a complaint in a matter,
respectively.
3. Applicability of Ex Post Facto Prohibition to Commission's
Adjudication and Penalization of Conduct Which Occurred Prior to
the Commission's Creation
The Respondent maintains that the Commission is
constitutionally prohibited from penalizing those whom it finds to
have violated M.G.L. c. 268A prior to the enactment of c. 268B,
i.e., prior to the Commission's creation and its assumption of
enforcement powers over such violations.
The Commission rejects this contention by noting that the ex
post facto prohibition is only applicable to criminal or penal
statutes, Calder v. Bull, 3 (U.S.) Dall., 386 (1798); Banken Trust
v. Blodgett, 260 U.S. 647 (1923); Reale v. Judges of the Superior
Court, 265 Mass. 135 (1928) and not to the imposition of additional
civil or regulatory sanctions on past conduct, Helvering v.
Mitchell, 303 U.S. 391,399(1938); Fleming v. Nestor, 363 U.S. 603
(1960). In Opinion of the Justices, 375 Mass. 795 (1978), the
Supreme Judicial Court stated that the imposition of a $1,000
penalty by the State Ethics Commission, envisioned by M.G.L. c.
268B, was not to be imposed where there was a criminal violation,
was not intended to punish the commission of a crime, was not a
"capital or infamous punishment", and was a familiar device
conferred upon administrative bodies to assist them in the
performance of their duties. The Commission considers these
elements sufficient to characterize its enforcement powers as civil
rather than criminal, thus negating any application of the ex post
facto prohibition to its regulatory activities.
B. Jurisdiction
Both parties agree that Respondent was, at all times relevant
to the matter at issue, a state employee within the meaning of
M.G.L. c. 268A, s.1(q) and thus subject to the proscriptions of
that chapter. The parties also agree that Respondent was designated
a "public employee", as defined in M.G.L. c. 268B, s.1(o) and was
required to file (and did in fact file) Statements of Financial
Interests with the Commission for Calendar years 1978 and 1979,
pursuant to that chapter.
C. Chapter 268A Allegations
1. Building 19
a. Section 3
The Petitioner contends that Mr. Michael violated M.G.L. c.
268A, s.3(b) by receiving discounts and charge privileges from
Building 19 as tokens of appreciation for the prompt service and
guidance that his Division provided the store. The Commission
agrees.
Section 3(b) prohibits a state employee
otherwise than as provided by law for the proper
discharge of official duty, directly or indirectly . . . [to]
receive anything of substantial value for himself for or
because of any official act or act within his official
responsibility performed or to be performed by him.
The record is abundantly clear that Mr. Michael received the
discounts and charge privileges from 1964 through 1980.[21] It is
also clear from the sales receipts in the record that discounts
received by Mr. Michael from 1976 through 1980, inclusive, totaled
more than $100 each year, and often considerably more. The
Commission finds that these discounts constitute something of
"substantial value" received by Respondent.[22] See, Commonwealth
v. Famigletti, 4 Mass. App. 584,354 N.E. 2d 890(1976). The record
contains no evidence that the discounts and charge privileges were
provided by law for the proper discharge of official duty, and thus
the Commission concludes that they were not, and that Respondent
violated Section 3(b) in 1976 through 1980, inclusive.
Mr. Michael argues that there was no "quid pro quo" involved
here, and thus no violation of
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Chapter 268A. However, a Massachusetts court has held that, to find
a violation under Section 3(b), corrupt intent need not be shown,
and it is enough that a defendant requested or received something
of substantial value for or because of an official act already
performed or to be performed by him. Commonwealth v Dutney, 4 Mass.
App. 363, 375, 348 N.E. 2d 812 (1976), The Ethics Commission has
followed this ruling, and has found Section 3 to be violated when
extra compensation was received by a public employee for doing the
job she was required to do by virtue of her public employment. See
In the Matter of the Collector-Treasurer's Office of the City of
Boston, et al., Commission Disposition Agreement (March 2,1981).
A public employee need not be impelled to wrongdoing as a
result of receiving a gift or gratuity of substantial value, in
order for a violation of Section 3 to occur. Rather, the gift may
simply be a token of gratitude for a well-done job or an attempt
to foster goodwill. All that is required to bring Section 3 into
play is a nexus between the motivation for the gift and the
employee's public duties. If this connection exists, the gift is
prohibited. To allow otherwise would subject public employees to
a host of temptations which would undermine the impartial
performance of their duties, and permit multiple remuneration for
doing what employees are already obliged to do a good job. Sound
public policy necessitates a flat prohibition since the alternative
would present unworkable burdens of proof. It would be nearly
impossible to prove the loss of an employee's objectivity or to
assign a motivation to his exercise of discretion. If public
credibility in government institutions is to be fostered,
constraints which are conducive to reasoned, impartial performance
of public functions are necessary, and it is in this context that
Section 3 operates.
Thus the Commission disagrees with Respondent's contention
that, because he performed his official duties as provided by law,
his receipt of discounts and charge privileges was not illegal. The
record contains adequate evidence for the Commission to find that
the extension of the privileges was in return for past cooperation
and prompt service by Respondent's Division, and to ensure the
continuation of such service. In so finding, the Commission notes
that it is probably rare to find an explicit expression or open
acknowledgement of such a mutual "understanding," and thus it is
to be expected that such a finding will ordinarily have to be drawn
by inference, as is done here, if Section 3 is to be given a
sensible reading.
b. Section 23
The Commission finds that Respondent violated Section 23(d),
which prohibits "use [ofl official position to secure unwarranted
privileges or exemptions for himself or others." The record
contains adequate evidence to find that, from at least 1975 through
and including 1980, Respondent obtained discounts for himself, his
sister (or sister-in-law) and his secretary/assistant. The
Commission finds most of these discounts to have been "unwarranted"
to the extent that they were not generally available to the public,
not given for reason of merchandise damage in most cases, not the
result of personal, social acquaintance or family relationships
with Building 19's owner, not provided for by law, and thus in
violation of Section 23(d).
The Commission also finds that Respondent violated Section
23(e), which prohibits a state employee by his conduct (giving] reasonable basis for the impression that any person can improperly influence or unduly enjoy his favor in the performance of his official duties...
In sustaining the violation, the Commission notes that the record
shows that Respondent advised Building 19's owner as to whether or
not to purchase certain shipments of salvage merchandise, and
occasionally had such merchandise inspected before Building 19
decided to purchase it. Such advice, even if not improperly given,
nevertheless indicates that Respondent at times was particularly
accommodating towards Building 19. This, coupled with his receipt
of the discount and charge privileges, provides reasonable basis
for the impression that Respondent was influenced in the
performance of his duties with respect to Building 19 because of
the privileges.
2. Bargain Center
a. Section 3
Petitioner asks the Commission to find that Respondent
violated M.G.L. c. 268A, s.3(b) by
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receiving discounts for himself and others from the Bargain Center
which were given for or because of acts within his official
responsibility performed or to be performed by him.
There is sufficient evidence in the record to support the
assertion that Respondent received discounts of 15 to 25 percent
on his purchases from the Bargain Center. There is also sufficient
evidence to find that these discounts were extended for or because
of acts within his official responsibility: Maxwell Van Dam,
president of Bargain Center, testified that his reasons for
providing the discounts were his appreciation for the prompt
service and advice by the Respondent's Division, and Van Dam's
desire to continue to receive such prompt service and advice.
With respect to whether or not the discounts from the Bargain
Center were of "substantial" value, the Commission finds that they
were, on at least two occasions: (a) In 1979, the Respondent
received a discount of over $50 on the purchase of linoelum; and
(b) in 1980, Respondent obtained a discount of $145 on a piece of
furniture purchased by Diane Hurley, Accordingly, the Commission
finds that Respondent violated Section 3(b) on these two occasions.
b. Section 23
The Commission finds that Respondent also violated M.G,L. c.
268A, s.23(d) and (e) by his receipt of discounts from the Bargain
Center,
With respect to Section 23(d), the Commission is pursuaded
that Respondent used his position to obtain these discounts for
himself and for Diane Hurley, and that, at least in the case of the
linoleum purchase, the discount was unwarranted, The Commission
makes no such finding with respect to the discount received by
Diane Hurley since there was evidence in the record to the effect
that the merchandise she purchased was damaged; absent any specific
information as to the extent of the damage, the Commission is
unable to determine to what extent the discount may have been
warranted.
With respect to Section 23(e), the Commission finds that the
Respondent did, by his conduct, give reasonable basis for the
impression that Bargain Center could unduly enjoy his favor in the
performance of his official duties. Specifically, the Commission
finds that Respondent personally performed inspections of
merchandise at Bargain Center and, in doing so, disregarded
the procedures set forth in M.G.L. c. 94 and in the Department of
Public Health regulations. According to Maxwell Van Dam's
testimony, Respondent, on at least one occasion in 1980, looked
over a shipment of tuna, took an entire case as a sample without
leaving a receipt or a copy of his inspection report, and never
communicated with Van Dam any test results; it was Van Dam's
understanding that if he didn't hear from Respondent, he could sell
the tuna, By his disregard for established procedures in his
official dealing with a store which afforded him discounts,
Respondent gave reasonable basis for the impression that Bargain
Center could unduly enjoy his favor in the performance of his
official duties, in violation of Section 23(e).
3. Value Village
a. Section 3
The Petitioner contends that, by receiving discounts on
merchandise he purchased at Value Village, Respondent violated
M.G.L. c. 268A, s.3(b). The Commission deems the record
insufficient to support such a finding.
Although Melvin Van Dam, President of Value Village testified
that he extended a 10 to 15 percent discount to Respondent, he was
certain as to the value of merchandise purchased by Respondent; in
his testimony, he estimated total purchases of $200-$300 by the
Respondent, and was uncertain if this was correct, or a higher
figure he may have quoted during an interview. Because the
uncertainty was unresolved, and because a 10-15% discount on
purchases of $200-$300 is arguably not substantial, the Commission
declines to rule that Respondent's conduct here violated Section
3.
b. Section 23
Petitioner alleges that Respondent used his official position
to secure unwarranted privileges for himself or others, in
violation of Section 23(d). The Commission finds that, by accepting
discounts which were extended to him in part because of the prompt
service his Division rendered to Value Village, Respondent used his
official position to secure unwarranted privileges for himself, and
thus violated Section 23(d).
The Commission also finds that Respondent violated Section 23
(e), by accepting discounts from a business he regulated (Value
Village), and by taking personal action to expedite the
Page 70
inspections necessary to that business on an occasion when the
commercial value of the merchandise to be inspected depended on its
quick approval for sale. With respect to the latter, the Commission
points to the findings of fact, paragraph 29.
4. Building 19, Bargain Center, Value Village
a. Section 23(f)
Petitioner alleges that, by receiving discounts from
businesses subject to his inspection and regulatory authority, and
over which he exercised that authority for a number of years, the
Respondent pursued a course of conduct which would raise suspicion
among the public that he was likely to be engaged in acts that were
in violation of his public trust. The Commission agrees.
The record substantiates the Respondent's regulatory authority
over the three businesses in question (see, e.g. paragraphs 2 and
3 of the Findings of Fact). It also supports the findings that
Respondent personally inspected and exercised other authority over
these businesses. As set forth in the Findings of Fact, Respondent
accepted discounts from all three businesses.
Respondent argues that, because the discounts in issue were
a "private matter" between himself and the stores involved, they
could in no way give rise to suspicion on the part of the public.
The Commission finds this argument unpersuasive for several
reasons: (a) Respondent cites no authority to support his assertion
that actual public knowledge is an element of the offense here
charged; he instead argues an analogy to M.G.L. c. 272 s.s.16 and
53, the statutes on lascivious cohabitation and lewdness, and
common night walkers, respectively, into which courts have read a
requirement of public involvement before a violation will be found;
the Commission considers those statutes and rulings to be
inapposite; (b) to read into Section 23(f) a requirement of actual
public knowledge of any violation of the conflict of interest law
is contrary to common sense and would render the section
meaningless in almost all cases. The Commission considers a more
reasonable reading of the section to require that the course of
conduct, if known, would raise suspicion among the public that the
employee is in violation of his public trust; and (c) further, the
Commission deems the Respondent's conduct sufficient to have given
rise to such a suspicion, in this case. Specifically, sales
personnel in the stores involved were aware of his public office
and of the special treatment he was afforded by the stores'
management; one can infer that others were also aware. For all of
these reasons, the Commission finds that Respondent violated
Section 23(f).
5. Cumberland Farms
a. Section 6
Petitioner contends that Respondent violated M.G.L. c. 268A,
s.6 by participating in his official capacity in testing,
evaluating and deciding to release ice cream products which were
owned by Cumberland Farms, at a time when Respondent knew that his
son had a financial interest in the handling of the same matter for
Cumberland Farms. Respondent admitted his participation in the
matter as alleged, but denied having known of his son's financial
interest in the matter. Respondent's son confirmed in testimony
that his firm was in fact on paid retainer with Cumberland Farms
during the period in question.
Section 6 prohibits a state employee from participating as
such in a particular matter in which to his knowledge a member of
his immediate family has a financial interest (emphasis added).
Thus, the Commission must find that Respondent knew of his son's
interest in the matter at the time of his participation in order
for a violation to be found.
In paragraph 41 of the Findings of Fact, above, the Commission
found that Respondent did know of his son's financial interest in
the matter during the period when Respondent was participating in
the matter in his official capacity. In relying on this finding,
the Commission acknowledges that it is based on hearsay statements
of Respondent introduced through an interviewer, Captain Agnes;
however, the Commission considers these statements to be persuasive
because of the strength and credibility of Captain Agnes'
testimony; because, even if the Commission were bound by the Rules
of Evidence in these proceedings (which it is not), the statements
would be admissible as admissions of a party-opponent.
In view of the facts found, and in the absence of any evidence
that Respondent satisfied any of the exceptions from Section 6, the
Com-
Page 71
mission finds that Respondent's participation in the Cumberland
Farms matter violated Section 6.
b. Section 23(e)
The Commission finds that Respondent also violated Section
23(e) by his participation in the Cumberland Farms matter, in that
he gave reasonable basis for the impression that Cumberland Farms
and his son could improperly influence him or unduly enjoy his
favor in the performance of his official duties.
By virtue of his participation in the testing, evaluation and
decisions in the Cumberland Farms matter, and specifically by
serving as a contact person between the Division of Food and Drug
and the management of Cumberland Farms, Respondent did give
reasonable basis for the impression that Cumberland Farms or his
son could enjoy his favor in the performance of his official
duties, or that he was unduly affected by the kinship of his son
or the position of influence of his son or Cumberland Farms. In
particular, he gave basis for such an impression on the part of his
employees at the Division of Food and Drug, and those individuals
at Cumberland Farms with whom he dealt personally. Had the
Respondent wished to avoid any impropriety in the matter, he should
have abstained from any actions in it and so advised Cumberland
Farms and his son.
6. DeMoulas Markets
a. Section 6
Petitioner contends that Respondent violated M.G.L. c. 268A,
s.6 by participating in decisions and official actions affecting
the federal seizure of the DeMoulas Markets' warehouse in 1977,
while knowing that his son had a financial interest in the matter.
In paragraph 46 of the Findings of Fact, the Commission found
that Respondent participated in a number of official actions with
respect to the DeMoulas consent decree (a judicial proceeding which
qualified as a "particular matter" within the ambit of M.G.L. c.
268A). His participation was personal and substantial, in view of
the findings that he, as the Division of Food and Drug's contact
with the U.S. Food and Drug Administration, offered help in the
investigation, assigned the resources of his office to it, and
caused to be sent to the FDA documentation from the state agency
which was necessary to the release of the bond,
With regard to Respondent's knowledge of his son's financial
interest in the matter, paragraph 48 of the Findings of Fact
ascribes that knowledge to the Respondent. As in the findings in
the Cumberland Farms matter, this is also based in part on hearsay
introduced through Captain Agnes, but nevertheless would qualify
under the admissions exception as discussed above,
In view of these facts, the Commission finds that Respondent
violated Section 6 as alleged.
b. Section 23
Petitioner alleges that, by his conduct, Respondent violated
M.G.L. c. 268A, s.23(d). The Commission agrees that Respondent used
his official position in the DeMoulas matter, and in one respect
finds the evidence sufficient to determine that Respondent
attempted to secure unwarranted privileges or exemptions for
himself or others, in violation of Section, 23(d). The Commission
is persuaded that, in his statement to Jane Howell of the FDA on
February 5,1977, Respondent's representation that either the
stores or the warehouse were in satisfactory condition was unwarranted
(because not all retail stores had been inspected by the Division
as of that date, nor had the warehouse); and that his statement to
her was made in an effort to affect the actions of the federal
inspectors and officers. In that respect, the Commission finds
Respondent's conduct violated Section 23(d). However, with regard
to Respondent's subsequent actions on the matter, the Commission
finds no clear demonstration in the record that his efforts were
directed towards an unwarranted release of the DeMoulas bond and
seizure, and thus the finding of violation is confined to the
incident outlined above.
The Commission also finds that Respondent violated Section
23(e), in particular by visiting the warehouse with Michael
DeMoulas on Febrvary 5, 1977 and by urging the federal inspectors
there to make arrangement to expedite the reconditioning process
so that the DeMoulas stores could be resupplied. In doing so he
gave the federal inspectors reasonable basis for the impression
that Mr. DeMoulas unduly enjoyed his favor in the performance of
his official duties.
Page 72
7. Seamark/Purity Supreme
a. Section 23
The Petitioner alleges that Respondent violated Section 23(d)
by directing the early and unwarranted release of an embargo on
frozen shrimp owned by Purity Supreme Supermarkets, which it had
allegedly bought from Seamark Corporation. The Commission finds the
evidence insufficient to support this allegation.
Although the record clearly demonstrates that Respondent
directed the lifting of the embargo on the same day it was imposed,
the Commission finds the record unclear as to whether the inspector
involved imposed the embargo properly according to statutory
standards, and if not, to what extent Respondent's action may have
been justified. Because the Commission is unwilling, without
further evidence, to substitute its judgment on what appears to be
a matter of discretion, it declines to find that the Respondent's
action was unwarranted.
Petitioner also alleges that Respondent violated Section 23(e)
by using his official position to secure the release of a product
which was imported and sold by a company which employed his son's
firm, thus giving reasonable basis for the impression that the firm
could unduly enjoy his favor in the performance of his official
duties. The Commission also finds the evidence insufficient to
justify such a finding.
Specifically, while the record shows that Seamark and Purity
Supreme used the services of DGM, the embargo documents state that
the shrimp in question originated from "Sea Corp." and there
remains an uncertainty as to whether the names "Sea Corp." and
"Seamark" referred to the same company, either in fact or in the
understanding of those using the terms. In view of this
uncertainty, the Commission is not persuaded that a basis existed
for an unfavorable impression of Respondent's actions in the
matter.
8. Cumberland Farms, DeMoulas Markets, Purity Supreme/Seamark
a. Section 23
With respect to his participation in the Cumberland Farms and
DeMoulas matters, the Commission finds that Respondent engaged in
a course of conduct which would raise suspicion among the public
that he was likely to be acting in violation of his public trust,
as prohibited by Section 23(f), The Commission points to
Respondent's communications with Cumberland Farms personnel and his
own employees on the ice cream matter, and his contacts with
federal inspectors at the DeMoulas warehouse, in support of this
finding.
D. Chapter 268B Allegations
Petitioner has alleged that Respondent's failure to include
the value of the discounts, which he received on purchases he made
from Building 19 in 1978 and 1979, on his 1978 and 1979 Statements
of Financial Interest violated M.G.L. c. 268B, s.7, which states
that
Any person who. . . files a false statement of financial
interests under Section 5 of this chapter shall be punished
by a fine...
In paragraph 15 of the Findings of Fact, the Commission found that
Respondent was extended discounts totaling over $100 from Building
19 in both 1978 and 1979. It also is undisputed that Respondent did
not disclose these discounts on his Statements of Financial
Interests for those years. The position of Respondent is that he
was not required to do so because discounts do not fall within the
definition of "gifts" which are required to be so disclosed. The
Commission disagrees.
Although the definition of "gift" in the Instructions for
Statements of Financial Interests in both 1978 and 1979 does not
specifically include "discount," it does include "anything of
value." Respondent argues that he received nothing of value in
availing himself of the discounts because he gave consideration
(payment) which was equal to or greater than the value of the item
received in exchange. The Commission is not persuaded by this
argument and finds that the amount of the discount is something of
value which is included in the term "gift" and required to be
reported.
In making this finding, the Commission points to an example
given in the Filing Instructions for both years which discusses the
filer's use of a ski chalet for a weekend, where the fair market
value of the rental is $300 but the filer pays the owner $100 in
whiskey. The example explains that this item is required to be
listed, and does not discuss whether the use of the chalet was
worth $100 or $300 or whether the amount
Page 73
paid was sufficient to cover costs. The Commission finds this
example to be analogous to Respondent's payment of a price less
than that charged the public for merchandise he purchased at
Building 19.
The Commission concludes that the example given in the
instructions, even if not completely identical to Respondent's
situation, was sufficiently similar to put a reasonable person on
notice that he should be required to disclose the discounts. As a
result, the Commission finds that his omission of this information
was negligent, in that he should have either requested further
clarification from the Commission, or listed the items in question.
However, the Commission considers the evidence in the record
insufficient to support a finding that Respondent intentionally
omitted the information. The best evidence on intent would
undoubtedly have come from the Respondent himself, but due to his
failure to take the witness stand, the record contains inadequate
evidence to infer intentional failure to file, in the Commission's
view, For this reason, the Commission finds that Respondent
violated Section 7 of M.G.L. c, 268B, but will refrain from
imposing the maximum penalty allowable under that section.
IV. Order
On the basis of the foregoing, the Commission concludes that
George A. Michael violated M.G.L. c. 268A, s.s.3(b), 6, 23(d), (e)
and (f), and c. 268B. s.7. Pursuant to the authority granted it by
M.G.L. c. 268B, s.4(d), the Commission hereby orders Mr. Michael
to pay the civil penalties set forth below. In arriving at these
penalties, the Commission has carefully considered the differences
in frequency and gravity of the offenses, as reflected in the
record, and thus imposes less-than-maximum fines in some instances,
Accordingly, the Commission orders George A. Michael to:
1. Pay $1,000 (one thousand dollars) to the Commission as a
civil penalty for receiving discounts and charge privileges of
substantial value for himself from Building 19 for each of the
years 1976, 1977, 1978, 1979 and 1980, in violation of M.G.L, c.
268A, s.3(b), for a total of $5,000 (five thousand dollars).
2. Pay $1,000 (one thousand dollars) to the Commission as a
civil penalty for obtaining discounts and charge privileges for
others from Building 19 in 1975, 1976, 1977, 1979 and 1980, in
violation of M.G.L. c. 268A, s.23(d).[23]
3. Pay $500 (five hundred dollars) to the Commission for the
false filing of his 1978 Statement of Financial Interests in
violation of M.G,L, c.268B,s.7.
4. Pay $500 (five hundred dollars) to the Commission for the
false filing of his 1979 Statement of Financial Interests in
violation of M.G.L. c.268B,s.7,
5. Pay $1,000 (one thousand dollars) to the Commission as a
civil penalty for receiving discounts of substantial value for
himself from the Bargain Center in 1979, in violation of M.G.L. c.
268A, s.3(b).
6. Pay $1,000 (one thousand dollars) to the Commission as a
civil penalty for obtaining a discount of substantial value for
another from Bargain Center in 1980, in violation of M.G.L. c.
268A, s.3(b).
7. Pay $1,000 (one thousand dollars) to the Commission as a
civil penalty for receiving discounts for himself from the Bargain
Center in 1976, 1977, 1978 and 1980 in violation of M.G.L. c. 268A,
s.23(b),
8. Pay $1,000 (one thousand dollars) to the Commission as a
civil penalty for his participation in the Cumberland Farms matter
in violation of M.G.L. c. 268A, s.6.
9. Pay $1,000 (one thousand dollars) to the Commission as a
civil penalty for his participation in the DeMoulas Markets matter,
in violation of M.G.L. c. 268A, s.6.
We order Mr. Michael to pay these penalties totaling $12,000
(twelve thousand dollars) to the Commission within thirty days of
the receipt of this Decision and Order.
---------------
[1] Additional hearing dates were scheduled for May and early
June, but were continued at the request of Respondent's counsel due
to the ill health of Respondent.
[2] Although there "'as testimony which indicated that
inspectors sometimes received their assignments from individuals
other than Mr. Michael. in the Commission's view there was
sufficient testimonial and documentary evidence to support a
finding that, on some occasions, inspectors were assigned their
duties specifically by Mr. Michael. In addition, the Commission
finds it reasonable to infer from Mr. Michael's occupancy of the
position of Director that he also had some degree of general
responsibility for allocating the personnel resources of his
Division. although the Commission does not consider this inference
to be indispensable to finding the fact stated above.
[3] In his oral argument, Counsel for Mr. Michael pointed out
that, under M.G.L. c. 94, s.189A. either the Commissioner of Public
Health or his agent could release embargoes, and thus any testimony
to the effect that Mr. Michael directed the release of all
embargoes was misleading and not binding. However, the Commission
finds no inconsistency here: the law clearly permitted Mr. Michael,
as an agent of the Commissioner of Public Health, to release
embargoes; in addition, Inspectors O'Hearn, Babineau and Chin of
the Division of Food and Drug all testified that, as a matter of
practice, embargoes were only released after Mr. Michael so
directed.
[4] In cross-examination, counsel for Mr. Michael elicited
testimony which showed that discounts on damaged merchandise were
available to the general public and that the prices paid by Mr.
Michael to Building 19 were sufficient to cover the seller's cost
of the merchandise. Nevertheless, the Commission concludes from a
fair reading of all the evidence that a significant number of the
discounts received by Mr. Michael were not for damaged merchandise,
and thus, not generally available; and that the discounted prices
he paid, even if sufficient to cover costs, were substantially
lower than those paid by others for the same merchandise.
[5] Although the record is not free from doubt on the identity
of those for whom Mr. Michael obtained discounts and charge
privileges, the Commission finds ample evidence to conclude that
he obtained them. This finding is reported by the testimony of
Gerald Elovitz, Thomas Connelly, Peter Stamper, Loretta Pongonis,
and Robert Mahoney and various exhibits in evidence. The Commission
notes in particular that the testimony indicated that these
discounts were given to others only if Respondent accompanied them.
As to the identity of the recipients, the Commission finds the
evidence sufficient to infer that Mr. Michael obtained discounts
and charge privileges for his sister (or sister-in-law) Libby
Michael, his daughters, and his secretary/assistant, Diane Hurley.
The Commission considers the evidence insufficient to warrant such
a finding with respect to purchases which may have been made by a
Michelle Kasinski. The Commission also declines to find that the
discounts and charge privileges from Building 19 received by George
T. Michael, Respondeit's son, were obtained for him by Respondent,
since there was testimony which suggested that the son had an
independent relationship the store's founder and that the son dealt
with the store directly rather than through his father.
[6] Although there was credible testimony to the effect that
Mr. Michael made purchases prior to 1975, the witnesses did not
put a dollar value on those purchases and no documentation of these
sales was introduced into evidence; therefore, the Commission makes
no finding with regard to the number of value of pre-1975
purchases.
Regarding the 1975-1980 purchases, because in some instances
the amount actually paid or the regular price per item is uncertain
(due to purchases being aggregated, and to informal record-keeping)
and because of the volume of documentation, the Commission
considers it expedient: express the discounts received in terms of
a range of percentages.
It should be nod that, for reasons explained at the end of
footnote 5, purchases made and discounts received by George T.
Michael are not included in this finding and not attributed to his
father, the Respondent.
[7] Although Elovitz testified that, in extending these
privileges to Mr. Michael, he was doing so, in part, to continue
a practice initiated by his predecessor. Mr. Andler, he also
testified that he extended them for the reasons given in this
finding. The commission is not persuaded by Mr. Michael's
contention that the privileges were extended wholly or primarily
out of friendship, for the following reasons: (a) the record
contained no evidence of the purported friendship between Andler and
Michael; (b) in the absence of such evidence, it would be improper
to infer that the "tradition" of extending these privileges,
started by Mr. Andler, was based on friendship with Mr. Michael,
just as it would be improper to infer any other rationale, absent
evidence to support it; (c) Mr. Elovitz testified to the reasons
included in paragraphs 12-14, and his testimony was both credible
and uncontradicted on these points.
[8] Because there was no specific testimony or documentary
evidence introduced which related to inspections at the Bargain
Center prior to 1972. the Commission limits this finding to 1972
and subsequent years. Also, because there was no evidence in the
record which would suggest that Mr. Michael specifically assigned
the other inspectors to perform inspections at the Bargain Center,
the Commission does not specifically find that the other inspectors
were acting at Mr. Michael's direction, as alleged.
[9] The record contains specific evidence that Mr. Michael
personally contacted Mr. VanDam of the Bargain Center to approve
the sale of merchandise, and the Commission finds this evidence to
be persuasive of the fact that Mr. Michael directly approved
certain merchandise; on his indirect approval, the comments in
footnote 5 are equally applicable here.
[10] Maxwell VanDam, President of the Bargain Center,
testified that he and his associates have extended discounts to Mr.
Michael since VanDam because president in about 1976, continuing
a policy set by his predecessor, a Mr. Koppelman. Because not
testimony was given regarding how much prior to 1976 this practice
occurred, nor any pre-1976 sales documentation introduced into
evidence, the Commission limits its finding to 1976 through 1980,
inclusive.
[11] As noted in footnote 6, the record was not free from
doubt as to the identity of the person Mr. Michael introduced as
Diane Hurley, but again the Commission considers the evidence
sufficient to sustain this finding Mr. VanDam testified that Mr.
Michael came in with the person, had introduced her to VanDam,
indicated that the merchandise was for her and was present while
VanDam made the sale.
[12] Maxwell VanDam testified that he extended the discount
to Mr. Michael as a continuation of the policy established by his
predecessor, Mr. Koppelmm (now deceased). There is no evidence in
the record of a friendship or personal social acquaintance between
Mr. Michael and either Mr. VanDam or Mr. Koppelman. Mr. VanDam
testified that he gives discounts to people the store does business
with, as a "good business practice"; and he gives them to Mr.
Michael and other Division of Food and Drug employees as a token
of appreciation for their prompt service and advice, and because
he wants to continue receiving their prompt service and
professional advice. The Commission considers this testimony
sufficient to support its finding.
[13] With regard to the actual inspection of Easter candy, the
record is unclear as to the degree of Mr. Michael's participation;
but based on the testimony of Melvin VanDam, William Babineau, and
the documents in evidence. the Commission finds that VanDam
contracted Michael, who initiated the inspection and gave a final
release on that same day; the Commission leaves open the question
of whether Michael inspected the merchandise himself either before
or after the arrival of other inspectors.
[14] Mr. VanDam testified that the purchases totaled perhaps
$200-$300, ht also said that he probably told a staff investigator
the purchases amounted to $100 per year; because the discrepancy
was not resolved by the introduction of any documentation or
further testimony. the Commission restricts its finding to the
lower figure.
[15] Again, the Commission notes that no other evidence, of either
friendship or social relationship between Michael and Melvin
VanDam, was introduced which would suggest any other basis for the
discount.
[16] The only individuals who could give definitive
testimony on this point were the Respondent and his son; the Respondent did not take the witness stand in these proceedings. His son testified
that, during the time period at issue, he may have had a general
discussion with the Respondent about absorption principles and time
lapse for ammonia dissipation, but he recalled no specific mention
of Cumberland Farms at that time. He also testified that his memory
on earlier events would be better in 1979 than in 1981. Capt. Agnes
testified that he interviewed both the Respondent and his son
(separately) in October, 1979, and that in the course of those
interviews, the Respondent said that he and his son had discussed
the ice cream, namely, the kinds of tests the Division of Food and
Drug was performing on it; and that Respondent also said his son
was a consultant for Cumberland Farms but he (Respondent) didn't
know exactly when he (the son) started. Agnes testified that during
an interview, George T. Michael told Agnes that he had had a
conversation with his father concerning the Cumberland Farms ice
cream in question, particularly on whether aeration was a good
reconditioning mechanism, and that the conversation took place
during the period at issue.
The Commission finds the testimony of Capt. Agnes to be the
more persuasive for the following reasons: (a) taken as a whole,
the testimony of George T. Michael was often unresponsive and
obfuscatory; (b) on this particular issue, he could have had strong
motivation, namely, loyalty to his father, not to be completely
forthcoming in his answers; (c) by his own admission, his memory
on facts and issue was clearer in 1979; and (d) even accepting
George T. Michael's version of the facts, namely, that there was
a conversation about ammonia absorption and dissipation generally.
it strains credulity to maintain that during such a specialized
conversation, Respondent would not have realized, if he was not
told outright, that the reason his son was inquiring about these
principles was that he was professionally involved in the matter.
The Commission acknowledges that this finding is based largely
upon hearsay introduced through Captain Agnes. However, the
Commission considers his testimony to be reliable; and the only
person who could refute the testimony (the Respondent) did not take
the stand. Even if the Commission were bound by the Rules of
Evidence, which it is not, the statements would have been
admissible as exemptions to the hearsay rule, as admission of a
party-opponent.
[17] Much testimony centered upon Mr. Michael's comment during
the February 5th conversation that he had given "them" a clean bill
of health, and whether "them" referred to the retail stores or the
warehouse. The Commission sees no relevance in making this
distinction, since in either reading of the comment, Mr. Michael's
assertion was questionable.
[18] According to the record, Davis of the FDA told Michael
that the state's documentation of reconditioning was necessary to
release of the bond; and the bond was released the day after the
documentation was received. Robert Crowell of the FDA, who was the
compliance officer in charge of the DeMoulas matter, also testified
that he relied, in part, on these documents in deciding that the
purpose of the seizure had been fulfilled.
[19] The Commission bases this finding upon: (a) the testimony
of Capt. Agnes, which recounted Mr. Michael's statement to Agnes
in an October, 1979 interview that, during his February 5, 1977
visit to the DeMoulas warehouse, Mr. Michael learned from Michael
DeMoulas that George T. Michael was a consultant for DeMoulas; (b)
during the same interview, Agnes testified, Respondent said he had
had a conversation with his son about the unsatisfactory pesticide
procedures at the DeMoulas warehouse, but Respondent didn't say
when this conversation occurred; (c) George T. Michael testified
that he and his father may have had a general conversation on the
"concept of the problem" during the time the son was working on the
matter; and (d) according to Capt. Agnes' testimony. George T.
Michael told him in an October, 1979 interview that about 2 or 3
weeks after the federal seizure he had a follow-up conversation
with his father (the Respondent) on the DeMoulas matter. The
Commission, in viewing this testimony as a whole, considers it
sufficient to support the finding. and makes the same observations
on George T. Michael's testimony and on the use of hearsay evidence
as in footnote 16.
[20] The Commission notes that the evidence on this issue is
sketchy, but finds it sufficient in several respects to support the
finding that Mr. Michael released the embargo: (a) The embargo
slip, identified by its maker, Frederick Hanna, bears the notation
in his writing, "Released By C.A.M. on 4/21/78 P.M."; (b) Hanna
testified that he asked Chief Inspector Murphy to explain the
release but Murphy told him Mr. Michael had released it, and didn't
explain further and this gave rise to the aforementioned notation;
(c) Several Division of Food and Drug inspectors testified that as
a matter of Division practice, embargoes were not released unless
Mr. Michael so directed.
In crediting Murphy's explanation in (b), above, the
Commission is aware that such an assertion by Murphy might be of
questionable use in a court because of the hearsay rule. However,
as stated in footnote 16. the Commission considers Captain Agnes'
testimony to be reliable, and the Respondent chose not to testify
on this or any other issue; in any event, even if the Commission
were bound by the Rules of Evidence, which it is not, the
statements probably would have been admissible under an exemption
to the hearsay rule, since Murphy is now dead.
[21] The Commission considers it unnecessary to find, as
alleged, that Mr. Michael requested the discounts; it does so
because Section 3 is violated whether the person solicits or
accepts [anything of substantial value] and it has found that Mr.
Michael accepted the discounts.
[22] The Respondent also argued that because the prices he
paid for the merchandise he purchased at Building 19 covered the
store's cost of the items, he did not receive anything of
substantial value but rather paid an amount equal to or greater
than value of the merchandise. The Commission rejects this argument
and finds that, because the prices he paid were substantially lower
than those charged to ordinary customers, Respondent did receive
something of substantial value. With few exceptions, the discounts
were not given because the merchandise was damaged, in which case
a discount might have been generally available.
[23] The Commission possesses the authority under M.G.L. c.
268B s.4(d) to assess civil penalties of up to $1,000 per violation
of M.G.L. c. 268A s.23 for actions which occurred either prior to
our subsequent to the Commission's creation in 1978. Although the
Commission's power to do so was not established and therefore known
to those subject to s.23 prior to 1978. those individuals were on
notice by virtue of the language of s.23 that administrative
sanctions, which could include financial loss (such as an unpaid
suspension from public employment), could be imposed for violations
of s.23.
End Of Decision