Docket No. 410

In the Matter of Tilcon Massachusetts, Inc.

April 21, 1994

Disposition Agreement


This Disposition Agreement ("Agreement") is entered into
between the State Ethics Commission ("Commission") and the Tilcon
Massachusetts, Inc. ("Tilcon") pursuant to s.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 20, 1989, the Commission initiated, pursuant to
G.L. c. 268B, s.4(a), a preliminary inquiry into possible
violations of the conflict of interest law, G.L. c. 268A, by
Tilcon. The Commission has concluded its inquiry and, on April 18,
1990, found reasonable cause to believe that Tilcon violated G.L.
c. 268A, s.3(a).

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

1. Tilcon is a corporation doing business in Massachusetts
as a paving materials manufacturer and paving contractor. During
the time here relevant, a substantial portion of Tilcon's business
consisted of municipal paving contracts. Tilcon's contract with
the Town of Pembroke was one of at least twenty contracts Tilcon
had with Massachusetts municipalities in 1987. The balance of
Tilcon's business was commercial, with virtually no individual
residential jobs such as driveways. On the rare occasions when
Tilcon paved residential driveways, such paving was usually done
for private customers with whom Tilcon had an ongoing business
relationship or a prior long-standing business relationship.

2. In the Town of Pembroke, the town paving contract[1] is
put out to bid and awarded annually by the Town Highway Surveyor.
At all times here relevant, the Pembroke Highway Surveyor was
Arthur Hermenau ("Hermenau"). As Pembroke Highway Surveyor,
Hermenau was a municipal employee as defined in G.L. c. 268A,
s.1(g).

3. As Highway Surveyor, Hermenau was responsible for the
maintenance and reconstruction of the town roads in Pembroke and
for the operation of the Pembroke Highway Department. As Highway
Surveyor, Hermenau was responsible for overseeing the bidding and
award process by which the town paving contract was awarded
annually. Hermenau annually advertised the availability of the
contract in area newspapers and sent out by mail invitations to bid
to several area paving contractors, including Tilcon. When bids
were received, Hermenau held a public bid opening and awarded the
contracts.[2] After the town paving contract was awarded, Hermenau
was responsible as Highway Surveyor 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.

Page 653

4. In 1986, in bidding for the Pembroke paving contract for
the period of September 1, 1986 through August 31, 1987, Tilcon
submitted the low bid of $27.14 per ton for Class I Bituminous
Concrete in place and was awarded by Hermenau that portion of the
town paving contract. Hermenau awarded the remainder of the
contract to another vendor which had submitted the low bids on the
other two portions of the contract. In 1987, in bidding for the
Pembroke paving contract for the period of September 1, 1987
through August 31, 1988, Tilcon submitted the lowest bid on two out
of three of the contract categories and tied for lowest bid on the
third.[3] Hermenau awarded and split the third portion between
Tilcon and the other low bidding vendor. In 1988, in bidding for
the Pembroke paving contract for the period of September 1, 1988
through August 31, 1989, Tilcon submitted the lowest bid on one
portion of the contract and tied with another vendor for the lowest
bid on the other two contract categories. Hermenau awarded the
contract for the first category to Tilcon and split the contract
award for the other two categories between Tilcon and the other low
bidder.

5. In 1987, Hermenau owned a house in Pembroke with an
unpaved driveway. As of July 1987, Hermenau had personally graded
and prepared the driveway for paving and was anxious to have the
paving done prior to the onset of winter. In July 1987, Hermenau
approached John D'Allesandro ("D'Allesandro"), an employee of
Tilcon with whom he had had dealings as Highway Surveyor in
connection with Tilcon's work for the town, and asked him if Tilcon
could pave his driveway. Hermenau informed D'Allesandro of the
general dimensions of the driveway and told him that he wanted the
work done before winter. D'Allesandro then went to Hermenau's
property, viewed the site and agreed to do the work. According to
Tilcon, D'Allesandro agreed to do the work only after speaking to
and receiving authorization from Tilcon Vice-President and Brockton
Branch Manager Joseph P. McMenimen ("McMenimen"). Before
authorizing the work, McMenimen asked D'Allesandro if Hermenau
agreed to pay for the work and D'Allesandro responded that Hermenau
had agreed to pay for the work, according to Tilcon. Hermenau and
D'Allesandro did not discuss what Hermenau would be charged by
Tilcon for paving his driveway. Hermenau did not ask D'Allesandro
for or receive in advance of the work an oral or written estimate
of the price Tilcon would charge for paving the driveway.[4]

6. According to Hermenau, he sought to have Tilcon pave his
driveway because he wanted his driveway done with a paving machine
and roller, he wanted the job done before winter and because he was
familiar with Tilcon as the town contractor and he had been
satisfied with Tilcon's work for the town. At the time in
question, the reputable smaller paving companies in the Pembroke
area that did residential driveway paving did not possess paving
machines and spread materials by hand and, further, were booked up
to a year in advance with other projects and would not have been
able to pave Hermenau's driveway prior to winter.

7. In July 1987, Tilcon placed 80.21 tons of Class I
Bituminous Concrete on Hermenau's driveway as a base or "binder"
course. The July 1987 work required the use of a Tilcon paving
machine and a roller and a Tilcon crew consisting of a foreman, a
paver operator, a roller operator, two asphalt rakers and two
laborers. In November 1987, Tilcon finished paving Hermenau's
driveway by installing a second layer of 55.18 tons of Class I
Bituminous Concrete. The November 1987 work required the use of a
Tilcon paving machine and a roller and a Tilcon crew consisting of
a foreman, a paver operator, a roller operator, two asphalt rakers
and three laborers. Tilcon's use of a paving machine to install
Hermenau's driveway resulted in a smoother, more aesthetically
attractive and durable driveway than would have been possible by
means of handraking and a roller alone, which would have been the
method employed by a smaller local residential paving contractor.

8. In August 1987, Tilcon submitted a lump sum invoice to
Hermenau and Hermenau paid Tilcon $2,265.53 for Tilcon's July 1987
paving work on his driveway.[5] In November 1987, Tilcon charged
Hermenau and Hermenau paid $1,510.03 for the paving work completing
his driveway. Tilcon's November 1987 bill recited that it was for
"Class I Bit. Concrete in place as directed, 55.18 tons at $27.09
a ton," and contained an "asphalt adjustment" charge of $15.20.[6]

9. In both August and November 1987, Tilcon charged Hermenau
and Hermenau paid the same rate as Tilcon then charged the Town of
Pembroke for paving under the town paving contract that Hermenau
awarded to Tilcon ("the town rate"). During the period here
relevant, Hermenau was the only Pembroke homeowner whose driveway
was paved by Tilcon as an independent project and the only private
customer in Pembroke charged the town rate by Tilcon for paving
work. Tilcon agreed to pave Hermenau's driveway and charged
Hermenau the Pembroke town rate[7] because Hermenau was the
Pembroke Highway Surveyor and also, according to Tilcon, in part
because the company made a profit on the work.[8]

10. The rate for paving charged by Tilcon under the Town of
Pembroke paving contract ("the town rate") was in part determined
by the total quantity of


Page 654

paving purchased by the town, i.e., the town paid less per ton for
paving than it would have paid had it contracted with Tilcon for
significantly less paving. In charging Hermenau the town rate for
the paving of his driveway, Tilcon conferred upon Hermenau the
benefit of the reduced per ton cost charged to the town based upon
the relatively large quantity of paving the town purchased from
Tilcon.[9] In addition to and apart from the benefit represented
by being charged the town rate, Hermenau's access to Tilcon's
paving services was itself a benefit to Hermenau. Not only was
Tilcon able to work before winter as Hermenau wanted, at a time
when other contractors were not available, but Tilcon was able to
do the work at a higher standard of quality than a small local
driveway contractor would have been able to achieve.

11. Section 3(a) of G.L. c. 268A prohibits anyone from giving
a municipal employee anything of substantial value for or because
of any official acts performed or to be performed by the municipal
official.

12. By agreeing to provide Hermenau with residential paving
services that it did not normally perform, by performing those
paving services for Hermenau, and by charging for those services at
the town rate, all while Tilcon was a bidder on the town paving
contract and a town vendor subject to Hermenau's official authority
as Highway Surveyor to award the town paving contract and to
oversee its performance, Tilcon provided Hermenau with benefits
which were of substantial value[10] for or because of acts within
Hermenau's official responsibility performed or to be performed by
Hermenau as Highway Surveyor. In doing so, Tilcon violated G.L. c.
268A, s.3(a).

13. The Commission is aware of no evidence that Tilcon's
employees knew at the time they paved Hermenau's driveway that
their actions violated G.L. c. 268A, s.3.[11] The Commission is
also aware of no evidence that Tilcon sought from Hermenau as
Highway Surveyor any specific official action concerning any matter
which would affect Tilcon in return for its provision to him of the
above-described benefits.[12] However, even if the provision of
the benefits was only intended to create official goodwill, it was
still impermissible.[13]

In view of the foregoing violations of G.L. c. 268A, 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 Tilcon:

(1) that Tilcon pay to the Commission the sum of one
thousand dollars ($1,000.00) as a civil penalty for the
violations of G.L. c. 268A, s.3(a)[14]; and

(2) that Tilcon 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.

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

[1] The town paving contract covers Pembroke's paving needs for the
twelve month period, September 1st through August 31st. During the
time here relevant, the contract had three components, each of
which could be separately awarded to a different vendor with the
lowest bid as to that component or divided between vendors with
tying bids as to a component: (1) 6000 tons of class I Bituminous
Concrete in place; (2) 1500 tons of Bituminous Concrete Type I; and
(3) 1500 tons of Asphalt Stockpile Mix to be picked up at the
vendor's plant.

[2] Hermenau's primary criterion for awarding the contract was the
price bid, i.e., the contract was generally awarded to the lowest
bidder. When the prices bid were close, however, Hermenau had
discretion to consider other factors in awarding the bid, such as
the distance from the town of the bidders' manufacturing plants,
the reputation of the bidders and his own knowledge of any prior
problems with the bidders. During the time here relevant, except
for a single instance not here material, the contract was always
awarded to the low bidder or split between bidders who had
submitted the same low bid.

[3] Tilcon bid a price of $27.09 per ton for Class I Bituminous
Concrete in place.

[4] The price charged Hermenau by Tilcon for its work in paving the
driveway was determined by McMenimen. The agreement pursuant to
which Tilcon paved Mr. Hermenau's driveway was oral and was not
reduced to writing.

[5] Tilcon's records show that this invoice was for 80.21 tons of
binder, tax included.

[6] Hermenau was not charged and did not pay any tax when he paid
Tilcon for the November 1987 work.

[7] The Commission is aware of no evidence that Tilcon and Hermenau
actually negotiated the application of the town rate to Tilcon's
charges for paving Hermenau's driveway. After the July 1987 paving
work was completed, Tilcon unilaterally decided to charge Hermenau
the town rate for the paving of his driveway in part because,
according to Tilcon, the company believed that it was a fair way to
price

Page 655

the work on the driveway (which was similar to a small street).
[8] The Commission is aware of no evidence that Tilcon provided
these benefits to Hermenau in return for his being influenced in
his performance of any specific official act as Highway Surveyor or
any particular act within his official responsibility as Highway
Surveyor.

[9] Hermenau would have paid approximately $500 more than he was
charged by Tilcon for the paving of his driveway if he had dealt
with a private contractor at the then customary market rate.

[10] Anything which has a value of $50 or more is of substantial
value for the purposes of the conflict of interest law. See
Commonwealth v. Famigletti, 4 Mass. App. 584 (1976).

[11] Ignorance of the law is no defense to a violation of the
conflict of interest law. In re Doyle, 1980 SEC 11, 13; see also
Scola v. Scola, 318 Mass. 1, 7, (1945).

[12] The Commission is further aware of no evidence that Tilcon's
above-described private dealings with Hermenau had any effect on
Tilcon's performance of its paving contract with the Town of
Pembroke.

[13] As the Commission made clear in its decision In re Michael,
1981 Ethics Commission 59, 68, and in Advisory No. 8, s.3 of G.L.
c. 268A is violated even where there is no evidence of an


understanding that the gratuity is being given in exchange for a
specific act performed or to be performed. Indeed, any such quid
pro quo understanding would raise G.L. c. 268A, s.2 issues.
Section 2 is not applicable in this case, however, as there was no
such quid pro quo between Tilcon and Hermenau.

[14] While the Commission is empowered to impose fines of up to
$2,000 for each violation of G.L. c. 268A, s.3, the Commission has
determined that it is in the public interest to resolve this matter
with a $1,000 fine because the prohibited conduct in this case was
apparently a single incident and not part of a pattern or practice
of misconduct and involved a relatively small amount of value given
and received.

Page 656