Public Enforcement Letter 00-2

In the Matter of Janis Montalbano

April 11, 2000

Janis Montalbano
c/o C. Deborah Phillips, Esq.
Nickless & Phillips
495 Main Street
Fitchburg, MA 01420

Dear Ms. Montalbano:

As you know, the State Ethics Commission ("the Commission")
has conducted a preliminary inquiry into allegations that you, as
a member of the school committee for the Narragansett Regional
School District, violated the state conflict of interest law,
General Laws c. 268A, by approving payment warrants in which
companies owned by your husband and son had financial interests.
Based on the staffs inquiry (discussed below), the Commission voted
on March 29, 2000, that there is reasonable cause to believe that
you violated the state conflict of interest law, G.L. c. 268A, s.s.
19 and 23(b)(3).

For the reasons discussed below, the Commission does not
believe that further proceedings are warranted. Instead, the
Commission has determined that the public interest would be better
served by bringing to your attention, and to the public's
attention, the facts revealed by the preliminary inquiry and by
explaining the application of the law to the facts, with the
expectation that this advice will ensure your understanding of and
future compliance with the conflict of interest law. By agreeing to
this public letter as a final resolution of this matter, you do not
admit to the facts and law discussed below. The Commission and you
have agreed that there will be no formal action against you in this
matter and that you have chosen not to exercise your right to a
hearing before the Commission.


I. Facts


1. During the time relevant, you were a member of the school
committee for the Narragansett Regional School District ("the
District").[1] There are eight school committee members.

2. Your son William owns a company known as MEESD, Inc., a
dealership that sells and services computers. Your husband Charles
owns Montalbano Electric. Both entities received contracts for
goods and services from schools within the District[2] and both
submitted invoices to the school committee for payment over the
years. In fact, your husband has done work for the school
department for about fifteen years.

3. Each month, after the school department received invoices
from various vendors, the superintendent reviewed and approved the
purchase orders, with the in-

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voices attached, thereby authorizing the school department treasurer
to process payment for that item or service. The treasurer also
received verification from the teacher or principal that the items or
services had been received.

4. The treasurer then prepared the warrant for the school
committee to review and approve that month. Each warrant was a
computer printout listing the vendors and the payments due. The
school committee members then reviewed the warrant and approved the
payments therein by signing at the bottom. The school committee
members did not review each individual bill presented for payment.
The invoices themselves were not attached to the warrants, but they
were available in the superintendent's office for review. Usually,
one school committee member reviewed the invoices on behalf of the
committee.

5. As a member of the school committee, you signed warrants
authorizing payments to your husband's and son's companies on
various occasions between May 1, 1996, and May 11, 1998.[3] The
warrants listed all vendors in alphabetical order and the payments
due for that period. The following chart describes the payments
approved for your family's companies:

Warrant Date Company Amount

7/15/96 Montalbano Electric $460.00
12/17/96 MESD $827.70
1/21/97 MESD $508.46
2/11/97 Montalbano Electric $429.00[4]
3/18/97 MESD $963.35
5/12/97 MESD $1,062.78
" " Montalbano Electric $560.00
6/17/97 MESD $1,500.00
2/10/98 MESD $450.00
3/17/98 MESD $1,225.00
5/11/98 MESD $506.25
" " Montalbano Electric $100.00

The total for MESD is $7,043.54, and the total for Montalbano
Electric is $1,549.00.

6. You provided the following information: You have been very
careful to avoid participating in any contract discussions or other
matters concerning your son's or husband's businesses, but you
could not say if you signed warrants to which your husband's and/or
son's invoices may have been attached. You never looked at the
warrants or the bills. It is possible that you signed warrants
reflecting payment for bills from your husband's and son's
companies. If you signed such warrants, then you were just
approving the total amount. The school committee members never
reviewed individual bills on the warrant. Certainly, you never
discussed any of your husband's or son's bills that were submitted
for payment.

You admitted that you knew that your husband and son were
doing work for the schools, and thus could have known that they
would have to be paid, but you did not realize at the time that you
signed the warrants that your family members' businesses were
listed therein for payment.


II. Discussion


As a member of the school committee for the Narragansett
Regional School District, you are a municipal employee as that term
is defined in G.L. c. 268A, s. 1 (g). As such, you are subject to
the conflict of interest law G.L. c. 268A generally and, in
particular, to the following sections of that statute.

Section 19[5] prohibits a municipal employee from
participating[6] in particular matters[7] in which she or, among
others, a member of her immediate family[8] has a financial
interest.[9] The concern of this section is that the objectivity
and integrity of municipal employees can be compromised if they act
on matters affecting the financial interests of people or
businesses with whom they are closely related. You should be aware
that the Massachusetts Supreme Judicial Court has determined that
participation involves more than just voting, and includes any
significant involvement in a discussion leading up to a vote. See
Graham v. McGrail
, 3 70 Mass. 13 3, 13 8 (1976). In that case the
Court advised, "The wise course for one who is disqualified from
all participation is to leave the room." Id.

Each decision by the school committee for the Narragansett
Regional School District to sign the warrant authorizing payments
to vendors - including companies owned by your husband or son - was
a particular matter. Your husband and/or son had financial
interests in those particular matters as their companies were among
the vendors on the warrant list. You participated in those
particular matters as a member of the school committee by signing
the warrants to signify approval of the payments. This
participation was personal and substantial because the school
committee's approval was necessary to authorize the vendor
payments. See EC-COI-98-5 (school committee member would violate s.
19 if she approved wan-ants authorizing payments to a company in
which she served as director); EC-COI-87-32. When you so
participated, you knew that your husband and/or son were doing or
had done work for the school department, and you knew that the
school committee authorized such vendor payments by signing the
warrants. Therefore, you violated s. 19.

In addressing your conduct publicly, the Commission wants to
emphasize the following point. Section 19 requires that you have
"knowledge" that the particular matter is one in which your family
member has a financial interest. In this case, you knew that your
husband

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and son were doing work for the schools and that they would
eventually seek payment as vendors. You knew that sooner or later
the school committee would review warrants listing the names of
your husband's and/or son's companies as vendors, and that your
signing of those warrants would authorize payment to them as
vendors. Yet, you consciously chose to sign the warrants without
reading them or reviewing the relevant invoices to ascertain
whether your husband's and/or son's companies were included among
the vendors listed in the warrants. Even accepting your contention
that you had no actual knowledge that their companies' invoices
were among those being approved when you signed particular
warrants, your conduct demonstrated willful blindness to the
conflicts.

"If a person confronted with a state of facts closes his eyes
in order that he may not see that which would be visible and
therefore known to him if he looked, he is chargeable with
'knowledge' of what he would have seen had he looked. Demoulas v.
Demoulas
, 428 Mass. 555, 577 (1998) (quoting West's Case, 313 Mass.
146, 151 (1943)). "Proof of actual knowledge is frequently shown
where one is in possession of information of such weight and
reliability that men commonly act upon it as true. Absolute
certainty is not required." West's Case, 313 Mass. at 150. Where
one has sufficient information to know a fact, then one cannot
avoid the consequences of knowledge by remaining in willful
ignorance. Id. at 1505 1. See also Van Christo Advertising, Inc. v.
AVACOMILCS
, 426 Mass. 410, 416-17 (1998) (claim of willful ignorance
will not be excused if information would have been known had person
simply not consciously disregarded it).

The evidence indicates that you, in effect, "closed your eyes"
to the facts that would have informed you of the conflicts. You
knew that your husband and son had done work for the school
department which meant that their companies' names would end up on
one or more warrants. Yet, knowing that, you chose not to read the
warrants when you signed them. Under such circumstances, the
Commission will apply the doctrine of willful blindness and charge
you with the knowledge that you would have had if you had read the
names listed in the warrants. Therefore, the Commission deems that
you had knowledge of your family members' financial interests and,
consequently, there is reasonable cause to believe that you
violated s. 19.[10]

The Commission is not unsympathetic to the fact that school
committee members are called upon to review and approve a
significant volume of paperwork while, at the same time, addressing
various agenda items. This can result in a board member's failing
to notice that a family member's name or company is listed in the
vendor warrant presented for authorization. You could have avoided
this problem by alerting the school committee staff who prepared
the vendor warrants that any warrant which included payments to
your family members' companies should not have been presented to
you for signature. There appear to have been enough board members
available to authorize such warrants in your absence. In making
this suggestion, of course, the Commission does not mean to
discount the importance of board members' personally reviewing the
documents that they sign.


III. Disposition


Based upon its review of this matter, the Commission has
determined that your receipt of this public enforcement letter
should be sufficient to ensure your understanding of and future
compliance with the conflict of interest law.

The Commission is authorized to resolve violations of G.L. c.
268A with civil penalties of up to $2,000 for each violation. The
Commission chose to resolve this case with a public enforcement
letter, rather than imposing a fine, because there has been no
Commission precedent directly addressing willful blindness in
regard to the s. 19 knowledge element. Therefore, the Commission
perceives the need to educate more than to punish in this area.

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

[1] You were a member of the school committee for about 12
years. You left the board in May 1998.

[2] The principal at each school within the District acts as
the contracting officer for that school and chooses the vendors.

[3] The Commission decided not to review warrants signed
before May 1,1996.

[4] The warrant is difficult to read, but the figure appears
to be $429.

[5] Section 19 provides in pertinent part,

(a) Except as permitted by paragraph
(b) a municipal employee who participates as such an
employee in a particular matter in which to his knowledge
he, his immediate family or partner, a business
organization in which he is serving as officer, director,
trustee, partner or employee, or any person or
organization with whom he is negotiating or has any
arrangement concerning prospective employment has a
financial interest, shall be punished by a fine of not
more than three thousand dollars or by imprisonment for
not more than two years, or both.

[6] Participate" means to 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.

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[7] "Particular matter" means 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.

[8] Immediate family" means the employee and his spouse, and
the parents, children, brothers and sisters.

[9] "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, 370
Mass. 13 (1976). This definition has embraced private interests, no
matter how small, which are direct, immediate or reasonably
foreseeable. See EC COI-84-98. The interest can be affected in
either a positive or negative way. See EC-COI-84-96.

[10] Your conduct would also lead a reasonable person to
conclude that your family members could unduly enjoy your favor in
the performance of your official duties, in violation of
s.23(b)(3). Section 23(b)(3) prohibits a municipal employee from
knowingly, or with reason to know, acting in a manner which would
cause a reasonable person, with knowledge of the relevant facts, to
conclude that anyone can improperly influence or unduly enjoy his
or her favor in the performance of official duties, or that he or
she is likely to act or fail to act as a result of kinship, rank,
position or undue influence. This subsection's purpose is to deal
with appearances of impropriety and, in particular appearances that
public officials have given people preferential treatment. This
subsection goes on to provide that the appearance of impropriety
can be avoided if the public employee discloses in writing to his
appointing authority (or if he does not have an appointing
authority, files a written disclosure with the town clerk) all of
the relevant circumstances which would otherwise create the
appearance of conflict. The appointing authority or town clerk (for
elected employees) must maintain that written disclosure as a
public record. You made no disclosures to dispel the appearance of
impropriety. You should note, however, that a s.23(b)(3) disclosure
will not excuse a s. 19 violation. The two sections of the law are
distinct and carry their own particular provisions for excusing
violations.

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End of Decision