Disposition Agreement


This Disposition Agreement ("Agreement") is entered into between the State Ethics Commission ("Commission") and Richard Penn ("Penn") 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 March 8, 1995, 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 Penn.  The Commission has concluded its inquiry and, on August 8, 1996, found reasonable cause to believe that Penn violated G.L. c. 268A.

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

1. During the time relevant, Penn was a member of the Revere City Council. As such, Penn was a municipal employee as that term is defined in G.L. c. 268A, s.1(g). 

2. Penn is also an employee of Wonderland Greyhound Park, Inc. ("Wonderland"). Wonderland and Westwood Development, Inc. are wholly owned subsidiaries of Westwood Group, Inc. ("WGI").

3. WGI owned fifteen acres of land abutting Wonderland Greyhound Park. WGI had used the land

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to secure a $3 million loan from U.S. Trust Company. In December 1983 WGI conveyed the property to Wonderland subject to U.S. Trust's mortgage, and Wonderland assumed WGI's mortgage note as a co-obligor.  In May 1992 Westwood Development, Inc. used nine acres of the property to secure a $4.5 million note from MSCGAF Realty Trust. Wonderland agreed to act as a guarantor of Westwood Development's $4.5 million note.  On April 15, 1993, Revere Realty Group, Inc. took title to lots 6, 7, & 8 of the parcel.  Thus, Westwood Development owned nine acres of the original fifteen acres, while Revere Realty Group owned the remaining six acres.

4. On March 22, 1993, Penn sought advice from the Commission on whether he could participate in the Revere City Council's review of the special permit application submitted by the Revere Realty Trust. Penn disclosed that Revere Realty Trust was seeking to build a shopping center on land owned by the general manager for Wonderland and by Wonderland itself, and that he was an employee of Wonderland and a city councilor.

5. On April 12, 1993 the Commission's Legal Division issued an informal advisory opinion to Penn, which provided in pertinent part as follows:

Section 19 prohibits municipal employees from participating in particular matters in which they or their immediate family members or partners, or a business organization in which he is serving as officer, director, trustee, partner or employee has a direct or reasonably foreseeable financial interest.  See, e.g. EC-COI-89-19.  The financial interest must be "direct and immediate, or at least reasonably foreseeable." EC-COI-84-123; 84-98; 86-25; 84-96


Under s.19, your employer's financial interests are imputed to you. Since the [Wonderland Greyhound] Park has a financial interest in the special permit, you may not participate as a city councilor in that particular matter.  Participation includes discussion and informal lobbying of colleagues, as well as voting (binding and non-binding).  EC-COI-92-30.  Under s.19, if any financial interest is implicated, no matter how small, or whether the affect is positive or negative, participation is impermissible. EC-COI-84-96.

6. National Development Associates of New England ("National Development"), the developer of the fifteen acres, planned to build a 157,500 square-foot retail shopping complex on the property.  On July 9, 1993, National Development submitted a special permit application to the Revere City Council to exceed the 10% retail use restriction for the zoning area encompassing the property.[1]  National Development's purchase and sale agreement was conditioned on the City's issuance of the special permit.  The permit application listed Revere Realty and Westwood Development as the owners of the affected land. 

7. Pursuant to the advice received from the Commission, Penn attended but did not participate in an August 30, 1993 City Council public hearing on the special permit application.

8. On November 17, 1993, Penn submitted a letter to Revere City Planner Frank Stringi, which provided in pertinent part as follows:

So as to address concerns of the abutters to Wonderland Marketplace, please run the following conditions by Jack O'Neil [National Development's Representative]:


1. No business will be allowed to be open to the public between the hours of 12 midnight to 7:00 a.m.

2. No deliveries nor trash pickups will be allowed between the hours of 10:00 p.m. and 7:00 a.m.  Also, in order to make exiting onto North Shore Rd. safer, I would recommend that the west side of No. Shore Rd. from Butler Circle to Kimball Ave. be designated as no parking. (State approval is needed). The three houses near Kimball should be allowed to purchase resident stickers.  In my opinion, the costs for a pedestrian walkway across No. Shore Rd. at the Wonderland MBTA should be borne by the State and MBTA, not New England Development.


9. According to a November 23, 1993 memorandum from City Planner Stringi to the Site Plan Review Committee[2] and the city council, a December 2, 1993 Site Plan Review meeting was scheduled to discuss issues relating to the revised site plan for National Development's Wonderland Marketplace project.  Stringi's memorandum highlighted nine changes from the original site plan, including the construction of a pedestrian walkway area. In addition, Stringi's
memorandum states that "Other mitigation measures to be discussed at this site plan review meeting include: restriction on hours of deliveries and store operation ...."

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10. On December 13, 1993, the City Council approved the special permit subject to eight pages of conditions, based on recommendations made by the Site Plan Review Committee. Two of Penn's recommendations were incorporated as conditions to the permit: that no deliveries or trash pickup be allowed between the hours of 10:00 p.m. and 7:00 a.m.; and that parking be removed along the west side of North Shore Road. With regard to Penn's recommendation on the pedestrian walkway, the permit required only that National Development study the feasibility of constructing a pedestrian overpass in coordination with the MBTA and the state Highway Department.

11. General Laws c. 268A, s.19 prohibits a municipal employee from participating[3] as such in any particular matter[4] in which, to his knowledge, his employer has a financial interest.[5]

12. The decision by the city council on National Development's special permit application was a particular matter.

13. Penn's employer, Wonderland Greyhound Park, had a financial interest in this particular matter as follows.  First, the likelihood of Wonderland Greyhound Park's, as a guarantor, having to cover Westwood Development, Inc.'s $4.5 million mortgage note was directly linked to Westwood Development, Inc.'s ability to pay its debts.  Second, Westwood Development, Inc.'s (and Revere Realty Group, Inc.'s) ability to pay its debts was certainly affected by its sale of the property securing the note.  Third, the sale of the property was conditioned on the city council's issuance of the special permit.  Therefore, Wonderland Greyhound Park, Inc. had a financial interest in the special permit particular matter.

14. By seeking and receiving an informal advisory opinion from the Commission, Penn knew that his employer, Wonderland Greyhound Park, had a financial interest in the sale.

15. Penn participated as a city councilor in that particular matter on November 17, 1993, by recommending conditions for the special permit to City Planner Stringi.

16. Accordingly, by making recommendations that ultimately helped shape the special permit proposal for a vote, Penn participated as a city councilor in a particular matter in which his employer had a financial interest.  Therefore, Penn violated s.19.

17. Penn's violation is aggravated by his having received an April 12, 1993 warning from the Legal Division not to participate in the matter.[6]

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


(1) that Penn pay to the Commission the sum of five hundred dollars ($500) as a civil penalty for violating G.L. c. 268A, s.19; and

(2) that Penn 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.



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[1] Although Penn's request for advice from the Commission disclosed that Revere Realty Trust was submitting a special permit application for developing the property, National Development actually submitted the application.

[2] The Site Plan Review Committee had the responsibility of developing a list of conditions establishing the terms under which the city council could grant the special permit.

[3] General Laws c. 268A, s.1(j) defines participation as "participate in agency action or in a particular matter personally and substantially as a ... municipal employee, through approval, disapproval, decision, recommendation, the rendering of advice, investigation or otherwise." To participate in the formulation of a matter for a vote through work sessions is to participate in the matter.  Graham v. McGrail, 370 Mass. 133 , 138 (1976).

[4] General Laws c. 268A, s.1(k) defines particular matter as "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."

[5] "Financial interest," 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, 370 Mass. 133 , 345 N.E. 2d 888 (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.

[6] The Legal Division advised Penn that his prohibited participation included "discussion and informal lobbying of colleagues, as well as voting (binding and non-binding)."  The language "discussion and

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informal lobbying" was broad enough to place Penn on notice that he should not inject himself into the process by recommending conditions to be placed on the special permit.

 

End of Decision