Docket No. 417

In the Matter of Richard Burgess

March 24, 1992

Disposition Agreement



This Disposition Agreement (Agreement) is entered into between
the State Ethics Commission (Commission) and Richard Burgess (Mr.
Burgess) pursuant to s. 5 of the Commission's Enforcement
Procedures. This Agreement constitutes a consented to final
Commission order enforceable in the Superior Court pursuant to G.
L. c. 268B, s. 4(j).

On January 24, 1990, 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 Mr.
Burgess. The Commission has concluded that inquiry and, on November
14, 1990, found reasonable cause to believe that Mr. Burgess
violated G.L. c. 268A, s. 19.

The Commission and Mr. Burgess now agree to the following
facts and conclusions of law:

1. At all times material herein, Mr. Burgess was a member of
the Swansea Planning Board, and its chairman since 1985. As such,
he was a municipal employee within the meaning of G.L. c. 268A, s.
1.

2. Among his responsibilities as a planning board member was
the review and approval of subdivision plans pursuant to G.L. c.
41, s. 81. That process involved the planning board first accepting
the plan (which set in motion certain time periods for approval),
having a public hearing, approving or disapproving the plan, and
ultimately endorsing the plan with respect to the question of
whether the construction of roads and installation of utilities was
adequately secured by an appropriate surety or bond. The planning
board would also be called on to review and approve certain so
called "approval not

Page 570

required" (ANR) plans where the only role of the board was to
determine that each lot shown on the plan had adequate frontage on
an approved way.

3. Beginning in or about April 1986, Mr. Burgess became
associated as a real estate agent with Michael McNally (McNally),
the sole proprietor of M.J. McNally and Associates of Fall River.
McNally did not compensate Burgess as a conventional employee,
rather he treated him as an independent contractor. Under this
arrangement, McNally's agency would receive the sales commissions
for those sales made by Burgess, and then compensate Burgess with
50% of those commissions. McNally lists and sells real estate in
the Swansea, Fall River, Freetown, and Berkeley areas.[1]

I. Cheryl Drive

4. On February 23, 1987, McNally sold a certain piece of raw
land in Swansea to Dillon Lane Construction.

5. Mr. Burgess was aware of the above sale. He also knew that
under normal trade practice whenever a realtor sold raw land to a
developer, if that land was later developed as a subdivision, it
was reasonably foreseeable the realtor would be the broker
regarding the sale of the individual lots.

6. On April 21, 1987, Dillon Lane Construction filed a
subdivision plan (Cheryl Drive Subdivision) regarding the foregoing
raw land.

7. McNally had Cheryl Drive Subdivision lots under purchase
and sale agreements as follows: two of the lots on May 22, 1987,
and one additional lot on May 26, 1987; June 16, 1987; August 6,
1987; and August 21, 1987. Each lot sold for approximately
$50,000. According to the purchase and sales agreements, McNally
would receive a total of $23,200 in commissions for the sales of
these lots. All purchase and sale agreements were contingent upon
the approval of the subdivision plan by the planning board. (Mr.
Burgess did not act as an agent for the Cheryl Drive Subdivision
and received no commissions for the sales of the subdivision's
lots).

8. On June 8, 1987, Mr. Burgess, as a planning board member,
along with two other planning board members, conducted the required
public hearing regarding the Cheryl Drive Subdivision plan. On June
15, 1987 and on July 20, 1987, respectively, Mr. Burgess with two
other members voted to approve and then endorse the Cheryl Drive
Subdivision plan. (A quorum of three members is required to vote on
planning board business.) At this time, there were four active
members on the planning board.[2] One active member, Steven Torres,
was not present for the June 8, 1987 and July 20, 1987 meetings.[3]
(No board member, present or absent, ever sought to disqualify
himself from the Cheryl Drive matters).

9. Section 19 of G.L. c. 268A provides in relevant part that
except as otherwise permitted in that section,[4] a municipal
employee is prohibited from participating[5] in a particular
matter[6] in which a business organization by which he is employed
has a financial interest.[7]

10. The decisions to approve and endorse the Cheryl Drive
Subdivision plan were particular matters.

11. Mr. Burgess participated in these particular matters by
conducting the June 8, 1987 public hearing and by voting to approve
and then endorse the plan on June 15, 1987 and July 20, 1987,
respectively.

12. When he acted as described above, Mr. Burgess knew that
McNally had a financial interest in those particular matters
inasmuch as he knew that McNally would be selling the lots in the
subdivision which was the subject of those particular matters, and
that their sale was contingent on planning board approval. Indeed,
by the June 8, 1987 public hearing, McNally already had several
lots under agreement.

13. McNally, as a sole proprietor, is a business organization
for purposes of s. 19.

14. By participating in these various Cheryl Drive Subdivision
decisions in which he knew McNally had a financial interest, Mr.
Burgess participated in particular matters in which he knew a
business organization by which he was employed[8] had a financial
interest, thereby violating s. 19.

II. Warhurst Park

15. On June 27, 1986, Mr. Burgess, as McNally's agent, sold
certain raw land known as Warhurst Park to P&H, Inc. Mr. Burgess
knew that P&H's owners intended to develop the land for a
subdivision. He also knew that being the real estate agent who sold
the raw

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property to P&H, it was reasonably foreseeable he would have the
opportunity to sell the individual lots if and when they were
developed as part of the subdivision.

16. On June 15, 1987, P&H filed a subdivision plan for
Warhurst Park with the planning board. Mr. Burgess abstained at
that meeting from the vote to accept the filing of the plan because
of his financial interest in the eventual sale of the lots in that
proposed subdivision.[9]

17. Ultimately, Mr. Burgess did sell 15 of the 16 lots in the
Warhurst Park Subdivision, earning $24,984.00 in commissions.

18. The purchase and sale agreements were contingent on
planning board approval.

19. On July 20, 1987, Mr. Burgess, along with two other
planning board members, conducted the required public hearing as to
the Warhurst Park Subdivision. Thereafter, on October 26, 1987, Mr.
Burgess voted as a planing board member to approve modifications to
the Warhurst Park plan. (Absent the board's October 26, 1987 vote,
it is likely the Warhurst subdivision plan would have been
constructively approved on October 28, 1987[10].

20. The decision to approve the Warhurst Park Subdivision
modifications was a particular matter.

21. Mr. Burgess participated in this particular matter by
attending the public hearing and by voting to approve the plan
modifications.

22. Mr. Burgess knew that he had a personal financial interest
as the real estate agent regarding these lots when he so
participated, in that the purchase and sales agreements were
contingent on planning board approval. (At the July 20, 1987
hearing, Mr. Burgess disclosed this financial interest).

23. By participating as a planning board member in decisions
affecting the Warhurst Park Subdivision at a time when he knew he
was likely to receive a future financial interest from those
decisions, Mr. Burgess participated in particular matters in which
he had a financial interest, thereby violating s. 19.

24. By way of defense, Mr. Burgess contends that the Rule of
Necessity should apply to his participating in the Cheryl Drive and
Warhurst Park particular matters. He contends that at the time he
took each of the actions described above, there were only three
planning board members present. Consequently, in order to create
the required quorum of three so that the board could act, he
invoked the Rule of Necessity which, in his view, allows a board
member who has a conflict to participate if his participation is
necessary to create a quorum. Moreover, Assistant Town Counsel,
Kevin Waldron, was present at the July 20, 1987 meeting and did not
object to Burgess' participation.

25. Two responses are in order. First, Mr. Burgess did not, in
fact, explicitly invoke the necessity rule on any of the
above-described occasions, except as to his July 20, 1987
participation in the public hearing on the Warhurst Park
subdivision matter. Second, Mr. Burgess' basic premise - that the
Rule of Necessity may be invoked to create a quorum - is not
correct as applied to these facts. The rule cannot be invoked where
the mere absence of a member prevents a quorum. See, Graham v.
McGrail, 370 Mass. 133, 138 (1976); Commission Fact Sheet, Rule of
Necessity. Efforts must be made to reschedule the matter so that a
quorum of members (without conflicts) can be obtained.[11]

26. In participating in the Cheryl Drive and Warhurst Park
matters, Mr. Burgess' purpose appears to have been to facilitate
town business by providing a quorum. Thus, the evidence suggests
Mr. Burgess' violation of G.L. c. 268A, s. 19 was
unintentional.[12]

III. ANR Plan

27. On August 21, 1986, McNally and Charles Baldwin entered
into a purchase and sale agreement to buy a certain parcel of
property on Route 6 and Old Fall River Road, Swansea. They arranged
this purchase using Charles Baldwin's spouse, Patricia Baldwin, as
the nominal purchaser.

28. On November 17, 1986, an ANR plan was submitted to the
planning board by which the above parcel would be divided into
three separate lots. On that same date, the planning board, with
Burgess participating, voted to approve the ANR plan.

29. The division of the parcel into three lots would make the
parcel more valuable.

30. Mr. Burgess knew that McNally and Charles Baldwin had this
property under agreement at the time he so voted.

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31. The decision to approve the ANR plan was a particular
matter.

32. Mr. Burgess participated in the above ANR decision by
voting to approve the application.

33. When he so voted, he knew that McNally had a financial
interest in the vote in that McNally, along with Baldwin, had
signed a purchase and sale agreement to buy the property.

34. By approving the ANR plan at a time when he knew McNally
had a financial interest in the decision, Mr. Burgess participated
in a particular matter in which he knew a business organization by
which he was associated had a financial interest, thereby violating
s. 19.

Based on the foregoing, the Commission has determined that the
public interest would be served by the disposition of this matter
without further Commission enforcement proceedings on the basis of
the following terms, to which Mr. Burgess has agreed:

1. that he pay the Commission a sum of five hundred dollars
($500.00)[13] forthwith for violating G.L. c. 268A, s. 19; and

2. that he waive all rights to contest the findings of fact,
conclusions of law, and conditions contained in the agreement in
this or any related administrative or judicial proceeding to which
the Commission is a party.

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

[1] Before joining McNally Associates, Burgess sought advice
on potential employment conflicts with his planning board duties
from assistant town counsel, Kevin Waldron. Waldron orally advised
Burgess to avoid participating in planning board matters that
affected his financial interest, his family's financial interest,
and the financial interest of businesses he owned or managed. Only
written legal advice, however, made a matter of public record and
filed with the Commission constitutes a valid conflict of interest
defense. See, G.L. c. 268A, s. 22; In re Lavoie, 1987 SEC 286; In
re Deleire, 1985 SEC 236.

[2] After March 24, 1986, a fifth member, Brian Gingras,
rarely attended meetings.

[3] Torres attended meetings on June 15, 1987, June 22, 1987,
June 29, 1987, July 7, 1987 and July 13, 1987.

[4] None of the exceptions apply here.

[5] "Participate," participate in agency action or in a
particular matter personally and substantially as a state, county
or municipal employee, through approval, disapproval, decision,
recommendation, the rendering of advice, investigation or
otherwise. G.L. c. 268A, s. 1(j).

[6] "Particular matter," any judicial or other proceeding,
application, submission, request for a ruling or other
determination, contract, claim, controversy, charge, accusation,
arrest, decision, determination, finding, but excluding enactment
of general legislation by the general court and petitions of
cities, towns, counties and districts for special laws related to
their governmental organizations, powers, duties, finances and
property. G.L. c. 268A, s. 1(k).

[7] The term "financial interest" means any economic interest
of a particular individual that is not shared with a substantial
segment of the population of the municipality. See, Graham v.
McGrail, 379 Mass. 133, 138-39 (1976). This definition has embraced
private interests, no matter how small, which are direct, immediate
or reasonably foreseeable. See, EC-COI-8498. The interest can be
affected in either a positive or a negative way. See, EC-COI-84-86.
Burgess was unaware of Graham.

[8] Mr. Burgess argued that on these facts he was not employed
by McNally, rather his relationship was that of an independent
contractor. The Commission, however, will construe the term
"employed" broadly so as to include independent contractor
relationships where a significant portion of the subject's annual
compensation as an independent contractor is derived from that
relationship. See, EC-COI-83-34 (portion of income earned from
business organization and time spent serving organization
determining factors whether official is "employee"). Here,
virtually all of Mr. Burgess' annual income was received from
McNally.

[9] As of June 15, 1987, Mr. Burgess, through McNally, had 10
such lots under purchase and sale agreements.

[10] G.L. c. 41, s. 8U provides in relevant part, "the failure
of a planning board either to take final action or to file with the
city or town clerk a certificate of such action regarding the
definitive plan submitted by an applicant

Page 573

within one hundred thirty-five days after such submission, or such
further time as may be agreed upon at the written request of the
applicant, shall be deemed to be an approval thereof. n The
Warhurst Subdivision plan was submitted on June 15, 1987.

[11] In fact, Burgess need only have waited less than forty
minutes for the tardy Torres to appear on June 15, 1988 to have
obtained a quorum of members without conflicts to vote on the
Cheryl Drive Subdivision. At that time, Burgess did not know when
Torres would arrive.

In the case of the October 26, 1988 meeting, an effort to
reschedule would have been futile due to public meeting notice
requirements and the imminent constructive approval on October 28,
1987.

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

[13] Pursuant to G.L. c. 268B, s. 3, the Commission is
authorized to impose a fine of up to $2,000 for each violation of
G.L. c. 268A. Here, the Commission has imposed only $500 because it
found substantially mitigating Mr. Burgess' assertions that in the
majority of the instances where he participated, he believed his
involvement was necessary in order to establish a quorum so the
board could act, and that before starting as a real estate agent he
sought advice from town counsel in an attempt to avoid violations.
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