Docket No. 455

In the Matter of P.J. Keating Company

October 20, 1992

Disposition Agreement




This Disposition Agreement (Agreement) is entered into
between the State Ethics Commission (Commission) and P.J. Keating
Company (Keating) 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 September 11, 1991, the Commission initiated, pursuant to
G.L. c. 268B, s.4(j), a preliminary inquiry into possible
violations of the conflict of interest law, G.L. c. 268A. The
Commission has concluded its inquiry and, on September 10, 1992,
found reasonable cause to believe that Keating violated G.L. c.
268A, s.3, through the acts of its employees.

The Commission and Keating now agree to the following
findings of fact and conclusions of law:

1. Keating is an asphalt manufacturing and construction
corporation doing business in Massachusetts. During the times
here relevant, a substantial portion of Keating's business
consisted of municipal paving contracts.

2. In the Town of Winchendon, the town paving contract
(herein after referred to as "the contract") is put out to bid
and awarded annually by the selectmen. The contract covers
Winchendon's paving needs for a 12 month period.

3. At all times here relevant, Michael Murphy (Murphy) was
the Winchendon Department of Public Works (DPW) superintendent.
As such, Murphy was a municipal employee as that term is defined
in G.L. c. 268A, s.1.

4. As the DPW superintendent, Murphy is responsible for the
maintenance and reconstruction of the town roads in Winchendon
and for the operation of the Winchendon Highway Department. As
the DPW superintendent, Murphy also participates in the annual
bidding and contract award process. Winchendon annually
advertises the availability of the contract. When the bids are
received, Murphy reviews them and makes a recommendation to the
selectmen. The contract is generally awarded to the lowest
bidder. After the contract is awarded, Murphy is responsible as
the DPW superintendent for determining town paving needs covered
by the contract (i.e. for ordering paving and/or paving materials
pursuant to the contract) and for overseeing the contractor's
performance of its obligations under the contract.

5. In June 1987, Keating submitted the low bid for the
Winchendon contract. Murphy reviewed the bids and recommended the
selectmen award the contract to Keating, which they did on June
22, 1987. Murphy supervised Keating's performance of the
contract.[1] Thus, he insured that the proper thickness of
asphalt was laid down, signed delivery slips acknowledging the
town's receipt of specified amounts of materials, and reviewed
and approved Keating's bills regarding the materials delivered.

6. At some point in 1987, Murphy approached one of Keating's
employees (who was involved in paving Winchendon streets pursuant
to the contract) and asked him if Keating would pave Murphy's
driveway at his personal residence in Winchendon.

7. OD the morning of July 29, 1987, Keating did a certain
amount of paving in Winchendon pursuant to the contract. After
completing that paving, Keating employees went to Murphy's house,
waited for the asphalt material to be delivered from the Keating
plant and then paved Murphy's driveway.

8. Approximately 60 tons of asphalt materials were used to
pave Murphy's driveway at a fair market cost of approximately
$2,000 (labor and materials).

9. Murphy never expected to pay nor was he ever billed by
Keating for the driveway. Keating absorbed the material and labor
costs associated with Murphy's driveway.[2]

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10. In giving Murphy a free driveway, Keating employees were
motivated in part by the fact that Murphy was the Winchendon DPW
superintendent who, as such, had and would perform official acts
regarding Keating's paving contracts with the town.

11. Section 3(a) of G.L. c. 268A, prohibits anyone from,
directly or indirectly, giving a municipal employee anything of
substantial value for or because of any official act performed or
to be performed by the municipal employee. Anything with a value
of $50 or more is of substantial value for s.3 purposes.[3]

12. By giving Murphy a free driveway, while Murphy as the
Winchendon DPW superintendent was supervising Keating's contract
performance, and where Murphy was involved in and would be
involved in contract awards in which Keating was or would be a
bidder, Keating employees gave Murphy an item of substantial
value for or because of Murphy's official acts performed or to be
performed by him.[4]

13. As a corporation, Keating acts through and is
responsible for the acts of its agents and employees. This
conclusion applies even if these acts are unauthorized. Thus,
Keating violated G.L. c. 268A, s.3(a) when its employees provided
Murphy with the free driveway, notwithstanding Keating's claim
that their policy prohibited gratuities to public officials and
that the act was not authorized by that policy.[5]

In view of the foregoing violations of G.L. c. 268A, s.3(a),
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 Keating:

1. that Keating pay to the Commission the sum of two
thousand dollars ($2,000.00) as a civil penalty for violating
G.L. c. 268A, s.3(a);

2. that Keating undertake measures, agreeable to the
Commission, to assure that in the future no gratuities be given
by Keating or by any of Keating's agents, officers or employees
to any Massachusetts state, county, or municipal employee or
official in violation of s.3; and

3. that Keating 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.

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[1] Keating received the following amounts from Winchendon
for street paving: FY 87 - $229,554.86; FY 88 - $203,745.16; FY
89 - $52,711.17; and FY 90 $56,824.22.

[2] The Town of Winchendon did not pay for either the
materials or the labor involved in Murphy's driveway.

[3] See Commonwealth v. Famigletti, 4 Mass App. 584 (1976).

[4] As the Commission stated in In re Michael, 1981 SEC 59.
68.

A public employee need not be impelled to wrongdoing as a
result of receiving a gift or a gratuity of substantial
value in order for a violation of Section 3 to occur.
Rather, the gift may simply be 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 obligated
to do -- a good job.

[5] See In re Ackerley, 1991 SEC 518 (corporation liable for
agent's act under s.3 even if unauthorized or against corporate
policy).

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