Public Enforcement Letter 88-2

Senator John P. Burke

December 3, 1987

Dear Senator Burke:

As you know, the State Ethics Commission has conducted a
preliminary inquiry regarding your receipt of a rifle from Savage
Industries of Westfield, Massachusetts, given in recognition of
your efforts as a State Senator on behalf of that company.

The results of our investigation (discussed below) indicate that
you may have violated the conflict of interest law in this case.
Nevertheless, in view of certain mitigating factors, also discussed
below, the Commission has determined that adjudicatory proceedings
are not warranted. Rather, the Commission has concluded that the
public interest would be better served by disclosing the facts
revealed by our investigation and explaining the applicable
provisions of law, trusting that this advice will ensure both your
and other government employees' future understanding of and
compliance with the conflict law. By agreeing to this public letter
as a final resolution of this matter, the Commission and you are
agreeing that there will be no formal action against you and that
you have chosen not to exercise your right to a hearing before the
Commission.

I. Facts

1. You are the State Senator for the Chicopee, Westfield,
Holyoke and Southampton area. You have served in that capacity for
approximately nine years. One of your Senate responsibilities is
the chairmanship of the Legislature's Banks and Banking committee.

2. Savage Industries (Savage) is a gun manufacturing company
which currently operates in Westfield. The company was previously
located in Chicopee.

3. Approximately one week before Thanksgiving, 1985, you
received a telephone call from Tim Sullivan, head of the employees
union at Savage, asking if you would attend a lunch with retirees
of Savage. At that time, Sullivan explained to you that Savage was
having substantial financial difficulties and it appeared that the
company might go bankrupt. Sullivan requested your help in
attempting to keep the company operating.

4. From that point through April, 1986 you spent substantial
hours attempting to keep Savage from going out of business. You
contacted Fleet National Bank in Rhode Island, with which Savage
had a substantial debt. At the time all proceeds of gun sales that
came in as accounts receivable to Savage were turned Over to Fleet
National, which in turn provided a check to Savage to cover the
minimum cost of a maintenance crew. By this time Savage was no
longer operating and the maintenance crew was paid merely to keep
the building and machinery from going into disrepair.

5. You met with one of Fleet National's lawyers and an agreement
was reached to provide Savage time to find alternative financing.
Fleet National also agreed

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to provide Savage additional money from accounts receivable to
cover the costs of health benefits for laid off employees. At this
time Savage had a negative net worth.

6. You additionally met with Paul Eustace, Secretary of Labor
for the Commonwealth, and discussed the possibility of obtaining
state loan money which is available to help distressed companies.
Secretary Eustace had independently determined to send in a
management team, which analyzed the situation.

7. Secretary Eustace, through the Industrial Service Program,[1]
began working with Fleet National towards relieving Savage's
financial problems. You participated in these discussions at the
request of both Secretary Eustace and Fleet National.

8. Bay State Investors began reviewing the Savage situation and
considered investing in the business. Bay State Investors agreed
to do so if Thrift Fund[2] money was available from the state of
Massachusetts. A loan was made available to Savage from the
Industrial Services Program and additional money was made available
from the Thrift Fund. You state that you had no contact with Bay
State Investors until after Secretary Eustace had involved them in
the process.

9. The above described arrangements were consummated in April
of 1986, and the company and union had an awards ceremony where
Paula Gold, Secretary of Consumer Affairs, presented a $2,000,000
check from the Thrift Fund to the company. Both Secretary Eustace
and you were honored at the ceremony and presented with plaques.
Sometime after the ceremony Tim Sullivan and Savage's Chief
Executive Officer, General Freedman, presented you with a rifle
manufactured by Savage.

10. When originally contacted by this office, you stated that
you thought that the rifle was not meant to be used and could not
be fired. You subsequently checked into this and found that the gun
can be fired, but was not designed for actual use. Apparently, the
gun was one of a group that was made by the company to be given as
gifts, but should not be used for hunting or shooting purposes. You
state that you are not a hunter and you had not taken the gun out
of the original box. Your recollection was that someone told you
that the rifle was worth approximately $700 at the time that it was
presented to you. A check with the company revealed that the retail
value of the gun is $428. On November 6,1987 you returned the rifle
to Savage.

II. The Conflict Law

As a State Senator, you are a state employee for the purposes
of the conflict of interest law, G.L. c. 268A. Section 3(b)
prohibits a state employee, otherwise than as provided by law for
the proper discharge of his official duty, from accepting 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.

As the Commission stated In the Matter of George Michael, 1981
SEC 59,68:

A public employee may not be impelled to wrongdoing as a result
of receiving a gift or gratuity of substantial value in order
for a violation of s.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 s.3 in to 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.

For the purposes of G.L. c. 268A, "substantial value" has been
determined to be anything valued at more than $50. See Commonwealth
vs. Famigletti, 4 Mass. App. 584,587(1976); Commission Advisory
No.8, February 25,1986.

The facts set forth in this letter, if proven, would appear to
establish a violation of s.3. Thus you accepted the rifle as a
token of gratitude by the company for your efforts as a Senator in
obtaining refinancing for the company. This is exactly the kind of
conduct covered by the language quoted from Michael, above. See,
also, A Practical Guide to the Conflict of Interest Law and
Financial Disclosure Law for State Employees, p. 3-4.

Nevertheless, there are several mitigating factors here. The
role that you took in assisting Savage was a normal part of your
constituency services you were helping a company which is located
in your district and employs over 400 people. In addition, you
listed the gift in your financial disclosure form, so that
obviously you were not attempting to conceal its receipt.
Furthermore, the gift was given after the services were rendered
and after all the critical steps involving state assistance had
been completed, so that it clearly represents a token of
appreciation rather than an inducement to you to intervene on
behalf of the company. Last, you have returned the rifle to Savage.

Because of the above mitigating factors, the Commission has
decided that this case does not warrant the initiation of formal
adjudicatory proceedings.

III. Disposition

Based on its review of this matter, the Commission has
determined that the sending of this letter should be sufficient to
ensure your understanding of, and your future compliance with, the
conflict law. This matter is now closed. If you have any questions,
please contact me at 727-0060.

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[1] The Industrial Services Program was established by legislation
several years ago to help "mature" Massachusetts industries deal
with severe financial difficulties. The program is jointly run
through the Executive Office of Consumer Affairs and the Executive
Office of Labor,

[2] The Thrift Fund is a $100 million direct lending pool
established to facilitate economic development initiatives
throughout Massachusetts. The Fund's paramount objective is the
creation and retention of jobs. The funds come from banking
institutions. Targeted areas include mature industries such as
Savage.