Public Enforcement Letter 89-5

Charles Smith
c/o Michael McCarthy, Esq.
70 Allen Street
Pittsfield, MA 01201

February 14, 1989

Dear Mr. Smith:

As you know, the State Ethics Commission has conducted a
preliminary inquiry regarding an allegation that as the Mayor of
Pittsfield, you traveled at the expense of the ServiceMaster
Company, a private custodial services company, to Chicago to view
the ServiceMaster home offices and laboratories, subsequent to
which the City of Pittsfield entered into a contract with
ServiceMaster for school custodial services. The results of our
investigation (discussed below) indicate that the conflict of
interest law may have been violated in this case. In view of
certain mitigating circumstances (also discussed below), the
Commission, however, does not feel that further

Page 392

proceedings are warranted. Rather, the Commission has determined
that the public interest would be better served by bringing to your
attention the facts revealed by our investigation and by explaining
the application of the law to such facts, trusting that this advice
will ensure your fiiture understanding of the 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 bearing before the Commission.



I.The Facts



1. At all relevant times, you were the Mayor of Pittsfield. and,
by virtue of that position, a voting member of the Pittsfield
School Committee, and as such, a "municipal employee" as defined
in G.L. c. 268A, s.1(g). ServiceMaster is a private company, based
in Chicago, Illinois, which provides cleaning supplies and
maintenance and custodial management services to its clients.

2. During the summer of 1986, ServiceMaster approached the City
of Pittsfield and proposed conducting a survey of the city's
buildings in order to assess maintenance problems and to propose
a custodial management plan. (Until that time, city custodial
personnel had handled all janitorial duties in city buildings.)
ServiceMaster's "sales pitch" in making their proposal centered on
the claim that their proposed local operations would have the
support and backup of the corporate offices in Illinois. Pursuant
to their claims, ServiceMaster repeatedly extended invitations to
city officials, in particular School Committee members, to visit
its corporate headquarters.

3. You felt that the trip was necessary in order to determine
the accuracy of ServiceMaster's representations and what the city
would be purchasing were they to accept ServiceMaster's proposal.
You allowed ServiceMaster to pay the expenses of the trip so that
city funds could be preserved.

4. On Monday, August 11, 1986, you and the Superintendent of
Schools met at the school administration building and drove to the
Albany airport. You boarded a 5:00 P.M. flight to Chicago, paid
for by ServiceMaster at a cost of $540 for each round trip ticket.
Upon your arrival in Chicago, you went to dinner at the Ninety Nine
Restaurant, which was paid for by ServiceMaster in an amount
totaling $261.09 ($52.22 per person). You were then taken to. the
Sheraton Naperville Hotel where you were provided with a room at
ServiceMaster's expense, costing $74.12.

5. The next morning, five of you had breakfast at the hotel,
paid for by ServiceMaster in an amount of $32.66 ($6.53 per
person). You were then driven to ServiceMaster's corporate
headquarters where you spent the day touring the facilities and
speaking with ServiceMaster personnel. Lunch was served at the
headquarters in a private dining room and was followed by more
tours of various ServiceMaster departments. At the end of the day,
you went directly to the airport and flew back to Albany, New York.

6. In September, 1986, the City Council voted not to recommend
hiring ServiceMaster for city buildings (other than school
buildings). The School Committee, however, maintained an interest
in ServiceMaster's proposal.

7. In the fall of 1986, you appointed a committee to study the
issues of maintenance in the public schools. This committee was to
study the feasibility of having city personnel continue handling
custodial management of the school buildings, rather than
contracting the services out to a management company.

8. During the late fall of 1986 and early winter of 1987, the
School Committee considered three options for custodial management:
ServiceMaster's proposal, a proposal by the Crothall-American
Company, and local proposals. In February, 1987, the mayoral
committee voted that, with minor modifications and an upgrading of
equipment, the existing system of building custodial maintenance
for the city schools was sufficient. In February, 1987, however,
the Superintendent of Schools recommended that the School Committee
award ServiceMaster the contract.

9. On March 4, 1987, the School Committee, acting on the
Superintendent's recommendation, approved the ServiceMaster
proposal. You voted for such approval. This is a three-year
agreement, contingent on annual renewal by the School Committee,
with a total cost of $1,496,222.00 (which includes the payroll for
all school department custodial employees).

10. The trip to Chicago was a "no frills" trip. There were no
gifts or lavish entertainment. Thus, the only benefits enjoyed by
you consisted of the direct payments for your travel, lodging and
meals as described above.

11. The Commission finds no corrupt intent on your part in
connection with the above-described

Page 393

conduct.

12. The Commission knows of no evidence that you were aware
that these payments may have violated the law. In fact, there
appears to be a widespread misconception among public employees
that such payments are permissible.



II.The Conflict Law



As Mayor and, therefore, a member of the Pittsfield School
Committee, you were a mumcipal employee for the purposes of the
conflict of interest law, G.L. c. 268A. Section 3(b) of G.L. c.
265A prohibits a municipal employee, otherwise than as provided by
law for the discharge of his official duties, from requesting or
accepting for himself anything of substantial value for or because
of official acts performed or to be performed.

Your acceptance of, ServiceMaster paying for your trip expenses
as described above raises serious concerns under s.3(b). As the
Commission said in EC-COI-88-5 (issued on February 3,1988),

A selection committee's work on behalf of a procuring agency of
the commonwealth to evaluate prospective vendors would clearly
'constitute the performance of an official act. Receipt of
anything "of substantial value"[1] for such travel would
generally constitute a violation of s.3(b) [citations omitted].
This subsidized travel is available to selection committee
members precisely for or because of their official acts
....[T]ravel expenses which are paid by the manufacturer would
be of substantial value in most, if not all, situations and
would violate s.3(b) of the statute [footnotes omitted].

The Commission also made clear in EC-COI-85-5 that it rejects the
contention that the value of the trip expenses in cases like this
accrues to the municipality and not to the individual traveler.
In the Commission's view the value is a benefit to the individual
traveler. See, 1986 EC 271.

There are good public policy reasons for prohibiting these kinds
of payments. As the Commission stated in EC-COI-82-99 (dealing
with members of a state board of registration traveling to view
types of equipment proposed by a manufacturer for approval by the
board where travel expenses were to be paid by the manufacturer),

A system wherein the manufacturers of products pay for trips by
state employees is clearly open to abuse by the state employees
as well as the manufacturers. State employees could exploit
this system in order to procure unwarranted privileges. And the
public impression that state employees were improperly
influenced in their decisions could arise. Manufacturers, on
the other hand, may view the quality of the accommodations and
accouterments on these trips as more important than the quality
of their product.

We would note that G.L. c. 44, s.53 may provide a statutory
vehicle by which a private party may pay travel expenses for public
officials. This section of the municipal finance law would appear
to allow a city to accept grants or gifts of funds from a
charitable foundation, private corporation or an individual and,
in turn, the city may expend such funds for the specific purpose
intended with the approval of the mayor and the board of aldermen.
Chapter 44, s.53A also states that such funds shall be deposited
with the treasurer of such city and held in a separate account.
In other words, if ServiceMaster desired to pay the travel expenses
of members of the School Committee to attend a fact-finding trip
to ServiceMaster's headquarters, ServiceMaster probably could do
so by providing the necessary amount to the city Treasurer stating
that the "gift" is to be used to pay such travel expenses.[2] This
mechanism provides for scrutiny by the city treasurer/auditor as
to the reasonableness of the expenses incurred by public employees.
Presumably, the use of such a mechanism would substantially reduce
the potential for abuses described in EC-COI-82-99.



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 of interest law.[3] This matter is now closed. If you have
any questions, please contact me at 727-0060.

---------------

[1] It has been held that $50 in cash is "of substantial value."
Commonwealth v. Famigletti, 4 Mass. App. 584(1976).

[2] The application of G.L. c. 44, s.53A to trips such as
these is ultimately a matter of municipal finance law. Before the School
Committee were to rely on this section, it probably should review
the issue with

Page 394

corporation counsel. (Alternatively, the city presumably could
reimburse an employee for trip expenses in the normal course, then
bill ServiceMaster for those costs. Again this alternative should
be reviewed with corporation counsel.)

[3] Commission could have directed the staff to commence
adjudicatory proceedings in which, if you were found to have
violated s.3, fines of up to $2,000 for each violation could be
imposed. The Commission chose to resolve this matter with a public
enforcement letter because (1) there appears to be a widespread
misconception among public employees that such payments are
permissible; (2) there were no "frills" involved in these trips;
and (3) the Commission knows of no evidence that you were aware
that these payments violated the law.