Date:  March 4, 2014

Disposition Agreement

The State Ethics Commission (“Commission”) and James McCormick (“McCormick”) enter into this Disposition Agreement 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, § 4(j). 

On May 18, 2012, the Commission (a) found reasonable cause to believe that James McCormick (“McCormick”) violated G.L. c. 268A, §§ 19 and 23(b)(3); and (b) authorized the initiation of adjudicatory proceedings.  On June 4, 2012, the Enforcement Division filed an Order to Show Cause initiating public adjudicatory proceedings.

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

Findings of Fact

  1. The Merrimack Special Education Collaborative (the “Collaborative”) is a public agency established in 1976, pursuant to G.L. c. 40, § 4E, to provide its member municipalities with, among other services, educational, vocational, and therapeutic programs for persons with special needs. 
  2. The Merrimack Education Center, Inc. (the “Center”) is a private, non-profit corporation that provides various educational programs and services, including administrative and transportation services to the Collaborative and a license to the Collaborative to use certain real property owned by the Center.  The Collaborative pays the Center for these programs, services and property rentals.  Much of the Center’s income has been derived from providing these programs and services for a fee.
  3. McCormick, a resident of Leominster, served on the Collaborative’s Board of Directors from in or about 1993 through June 2006.  
  4. McCormick served on the Center’s Board of Directors from in or about 1993 through June 2006.  
  5. On June 5, 2006, the Collaborative’s Board of Directors, with McCormick participating, voted 5-0 to approve a Settlement Agreement between the Collaborative and the Center under which the Collaborative agreed to pay $5.5 million to the Center.  The Settlement Agreement called for an immediate payment to the Center by the Collaborative of $4 million, followed by six additional annual payments of $250,000 each.
  6. At the time McCormick voted to approve the payment of $5.5 million from the Collaborative to the Center, he was negotiating with or had an arrangement concerning prospective employment with the Center.
  7. McCormick became an employee of the Center beginning July 1, 2006. 
  8. On October 18, 2012, as a result of claims that included the June 5, 2006 $5.5 million payment from the Collaborative to the Center, the Collaborative and the Center entered into a settlement agreement under which, among other things, the Center paid the Collaborative $4.1 million.

Conclusions of Law

  1. As a member of the Collaborative’s Board of Directors, McCormick was a municipal employee within the meaning of G.L. c. 268A.
  2. In relevant part, § 19(a) prohibits a municipal employee from participating as such in a particular matter in which, to his knowledge, he or a business organization in which he is serving as a director, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest.
  3. The Collaborative board’s June 5, 2006 vote to approve the payment of  $5.5 million by the Collaborative to the Center was a particular matter.
  4. McCormick participated in that particular matter by voting as a Collaborative board member to approve the payment of $5.5 million by the Collaborative to the Center.
  5. The Center was a business organization because much of its income was derived from providing programs and services for a fee.
  6. At the time he voted as a Collaborative board member to approve the payment to the Center, McCormick was serving as a member of the Center’s Board of Directors and was negotiating with or had an arrangement concerning prospective employment with the Center.
  7. The Center had a financial interest in the vote because it was to be the recipient of the $5.5 million. 
  8. When he participated in this vote, McCormick was aware of the Center’s financial interest in that decision.
  9. Therefore, by voting as a Collaborative board member to approve the payment of $5.5 million to the Center while he was also a member of the Center’s Board of Directors and while he was negotiating with or had an arrangement concerning prospective employment with the Center and knew that the Center had a financial interest in the vote, McCormick violated § 19.            

Resolution

In view of the foregoing violation of G.L. c. 268A by McCormick, 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 McCormick:

(1)  that McCormick pay to the Commonwealth of Massachusetts, with such payment to be delivered to the Commission, the sum of $2,000[1]as a civil penalty for violating G.L. c. 268A, § 19; and

(2)  that McCormick waive all rights to contest, in this or any other administrative or judicial proceeding to which the Commission is or may be a party, the findings of fact, conclusions of law and terms and conditions contained in this Agreement.

By signing below, James McCormick acknowledges that he has personally read this Disposition Agreement, that it is a public document, and that he agrees to all of the terms and conditions therein.

STATE ETHICS COMMISSION

//signed//                      3/4/14
Karen L. Nober           Date
Executive Director

//signed//                      1/24/14
James McCormick

 



[1] At the time of McCormick’s violation of § 19, the maximum civil penalty was $2,000 per violation.