| Date: | 01/29/2025 |
|---|---|
| Organization: | State Ethics Commission |
| Docket Number: | 24-0013 |
| Location: | Boston, MA |
| Referenced Sources: | G.L. c. 268A, the Conflict of Interest Law, as Amended by c. 248, Acts of 2024 |
- This page, Final Decision and Order in the Matter of Scott Callahan, is offered by
- State Ethics Commission
Decision
Decision Final Decision and Order in the Matter of Scott Callahan
Table of Contents
FINAL DECISION AND ORDER ON PETITIONER’S MOTION FOR SUMMARY DECISION
I. Introduction and Procedural History
In an Order to Show Cause filed on May 9, 2024, Petitioner alleges that Scott Callahan, a Foreman at the Auburn Water District (“Water District), violated G.L. c. 268A, § 23(b)(2)(i) twice when he accepted lodging at a ski trip to Sugarloaf, Maine in 2018 and at a ski trip to Stowe, Vermont in 2019 at the expense of a distributor and/or manufacturer from which the Water District regularly purchased water meters.
On September 13, 2024, Petitioner filed a Motion for Summary Decision (“Motion”). Respondent’s Authorized Representative, who is not an attorney, filed Respondent’s Opposition to Petitioner’s Motion for Summary Decision (“Opposition”) on October 11, 2024.[1] Regarding resolution of a motion for summary decision, 930 CMR 1.01(6)(e) states: “A Presiding Officer may deny a Motion for Summary Decision, but only the Commission may grant such a motion.” After hearing oral argument on the Motion on October 25, 2024, the Presiding Officer referred the Motion to the full Commission on November 8, 2024. The full Commission heard argument on the Motion on December 19, 2024.
II. Standard Regarding a Motion for Summary Decision
A motion for summary decision is the administrative equivalent of a motion for summary judgment. McGovern v. State Ethics Commission, 96 Mass. App. Ct. 221, 225 n.9 (2019); 930
CMR 1.01(6)(e). Summary decision may be granted “’if the pleadings, depositions, answers to interrogatories, . . . together with the affidavits, . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’” Taylor v. Board of Appeals of Lexington, 68 Mass. App. Ct. 503, 508 (2007) (quoting Mass. R. Civ. P. 56).
As the party moving for summary decision, Petitioner must demonstrate that there is no triable issue of fact on every relevant issue raised by the pleadings and that Petitioner is entitled to judgment as a matter of law. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 711 (1991). In making the determination, the Commission must view all evidence in the light most favorable to Respondent as the non-moving party. Williams v. Hartman, 413 Mass. 398, 401 (1992).
III. Facts in the Light Most Favorable to Respondent
The facts below are from the list of Undisputed Facts in the Petitioner’s Motion, as supported by the exhibits to the Motion. Among these exhibits are Callahan’s Sworn Interview, Amended Answer and Response to Requests for Admissions. Some factual clarifications were provided at oral argument. In his Opposition, Callahan does not dispute the Undisputed Facts.
Scott Callahan has been an employee of the Auburn Water District for more than 25 years. At all relevant times, he was a Foreman, and he purchased, installed and maintained water meters for the Water District. Throughout its service area, the Water District has used one brand of water meter made by an Alabama-based manufacturer and sourced from the manufacturer’s sole authorized New England distributor. Petitioner refers to the manufacturer and distributor collectively as “the vendors.”
Through sales representatives, the distributor invited Callahan to the following two
multi-day ski trips, and Callahan accepted the invitations:
- A trip to Sugarloaf, Maine on or around February 28-March 2, 2018.
- A trip to Stowe, Vermont on or around March 13-15, 2019.
Two sales representatives at the distributor interacted with Callahan at the Water District. Callahan was friendly with the first sales representative, but he was not friends with him outside of work. Callahan met the second sales representative at work and “once or twice” went to hear him play in a band locally. Callahan never bought him a gift and doubted that he ever even had bought him a drink. No person at either the distributor or the manufacturer had a friendship with Callahan pre-dating his professional relationship with that person, and there was no one at either vendor with whom Callahan socialized regularly.
The attendees of each trip principally consisted of staff from each of the vendors and their customers. In a Request for Admissions, Petitioner defined “Water Industry Event” as “an event where the invitees and attendees are chiefly people who work in the water industry, though spouses and other guests may attend due to their connections to people who work in the water industry.” In his response to the Request for Admissions, Callahan admitted that each of the ski trips was a Water Industry Event. In each year that he went on a ski trip, Callahan did not socialize with the attendees of the trip or any of the employees of the co-hosting vendors except at Water Industry Events.
One or both of the vendors paid for the two ski trips. An e-mail sent to Callahan by one of the sales representatives on March 8, 2019, identified the person at the distributor who was in charge of the Stowe trip and included information from that person about the lodging venue and schedule of events, including meals, skiing and snowmobiling. These e-mails did not say anything about guests paying for any part of the trip.
Callahan has admitted that when he accepted the invitations to the two ski trips, he understood that one or both of the vendors would pay for his lodging.
The Sugarloaf resort invoiced the distributor for the lodging for the ski trip. An invoice from Sugarloaf indicates that the cost for two nights of lodging was at least $298. Callahan stayed overnight only one night. The cost for the one night was at least $149.
One or both of the vendors paid for Callahan’s lodging for the Stowe ski trip. The cost of a hotel room at the Grey Fox Inn was $100 a night, plus tax and an 8.5% resort fee. Callahan took part in the Stowe trip from at least Wednesday, March 13 to Thursday, March 14, 2019.
An Employee Handbook for the Water District that was in effect from 2004 until August, 2018 included the following paragraph in a section called “Employee Guidelines:”
4.3 Conflict of Interest
The conflict of interest law states that any employee may not (a) engage in similar business ventures, (b) use work time for private gain, (c) use District property for private or financial gain, or (d) behave in any way that may give the appearance of bias or conflict with the employee’s responsibilities.
An Employee Handbook that subsequently was in effect from August, 2018 forward stated:
4.3 Conflict of Interest
Pursuant to the Commonwealth of Massachusetts’ conflict of interest law, Massachusetts General Laws Chapter 268A, employees may not (a) engage in similar business ventures, (b) use work time for private gain, (c) use District property for private or financial gain, or (d) behave in any way that may give the appearance of bias or conflict with the employee’s responsibilities.
On November 5, 2018, Callahan acknowledged that he received and read “these guidelines outlining the District’s policies” and “understands that his/her employment is covered by the provisions contained herein.”
Callahan never completed training about the conflict of interest law until May, 2024.
IV. Elements as to Which There is No Dispute
The elements of a violation of § 23(b)(2)(i) are that (1) a municipal employee (2) knowingly or with reason to know (3) solicited or received anything of substantial value for such municipal employee (4) which is not otherwise authorized by statute or regulation (5) for or because of the employee’s official position. “Substantial value is $50 or more.” 930 CMR 5.05, EC-COI-93-14.
Callahan does not dispute that Petitioner has met the burden of proving the following three elements of the § 23(b)(2)(i) violations.
- Callahan was a municipal employee. A water district is a municipal agency and, as Foreman for the Water District, Callahan was a municipal employee for purposes of the conflict of interest law at all relevant times. SeeIn the Matter of Paul Enis, 1996 SEC 779, Disposition Agreement (member of the Dracut Water Commission for the Dracut Water Supply District), In the Matter of Hugh K. Hubbard, 1999 SEC 933, Disposition Agreement (member of the Water District Commission for the Belchertown Water District), Advisory 84-2: Municipal Districts and Authorities and Their Special Municipal Employees (“…local water and fire districts are municipal agencies for purposes of the conflict law, and their members and employees are municipal employees.”).
- Callahan received something of substantial value from the vendors. The Undisputed Facts and supporting exhibits demonstrate that Callahan received lodging of substantial value when he stayed at Sugarloaf at a cost of at least $149 and at Stowe at a cost of at least $100 plus tax and an 8.5% resort fee. Callahan asserts that he did not ski during either ski trip, but admits that he stayed overnight for at least one night during each trip. In his Amended Answer, he admitted that one or both vendors paid for the lodging for his one-night stay from March 1-2, 2018 during the Sugarloaf ski trip and for the first night of the Stowe ski trip. While he objects that he did not know the value of the lodgings at the time he went on the trips, he has admitted to the authenticity of the invoices included as exhibits in Petitioner’s Motion and does not dispute that the value of what he received in each instance was more than $50.
- Receipt of the ski trips was not authorized by statute or regulation. Callahan does not dispute that there was no statute or regulation which authorized his receipt of the ski trips.
V. Analysis of Arguments about Remaining Elements
Callahan argues that Petitioner has not met its burden that it is entitled to summary decision with regard to two elements of a § 23(b)(2)(i) violation: that he received the ski trips from the vendors for or because of his official position as Foreman at the Water District and that he did so knowingly or with reason to know. We decide these questions in favor of Petitioner, as explained below.
Receipt for or because of Callahan’s official position
On the summary decision record, the facts strongly demonstrate that Callahan received the lodging at the ski trips for or because of his official position. The invitations to the trips came from sales representatives for a distributor that did business with the Water District. Callahan had no personal relationship with either sales representative. He knew neither of the sales representatives before he started working for the Water District and met both of them because of his interactions with the distributor as an employee of the Water District. He knew both of them only through work, and he did not socialize with either of them with the exception that he went to hear one sales representative’s band “once or twice.”
At his Sworn Interview, Callahan said that his understanding about why he was invited to the ski trips is that “we were all friends.” Even when he said this, however, Callahan’s next statement was that one of the sales representatives “was a friend of mine through work…” and “was not a friend outside of work.”
Callahan has admitted that he knew that the ski trips were Water Industry Events as the term is defined in Petitioner’s Request for Admissions. He admitted that the attendees of the 2018 trip to Sugarloaf and the 2019 trip to Stowe were principally staff of the distributor, the manufacturer and their customers. Callahan also admitted that in 2018 and 2019, he did not socialize with anyone affiliated with the distributor or manufacturer outside of Water Industry Events.
Crucially, save for one or two attendances at one sales representative’s musical performances, Callahan asserts no relationship with either of the sales representatives or with anyone connected to the manufacturer or distributor apart from seeing them at Water Industry Events and having contact with them through his employment and his work with the Water District. The Undisputed Facts demonstrate that the Water District was the customer of the vendors and that, but for being an employee of the Water District, Callahan would not have been invited to the two ski trips.
Callahan counters that he received the invitations to the ski trips not because of his official position, but rather because the distributor’s sales representative for Auburn Water District “knew Mr. Callahan’s passion for skiing.” As a factual matter, it is not clear whether Callahan is asserting that only one or both of the sales representatives knew of his passion for skiing. Even if both sales representatives knew that Callahan had a passion for skiing, however, that does not serve to establish that Callahan’s official position was not the reason he was invited.
Finally, Callahan argues that the Superintendent of the Water District has a fixed annual budget, that Callahan cannot purchase anything that is not within the approved budget, and that he is obligated to purchase water meters from the one distributor because it is the local distributor for the water meter and associated billing package that the Water District and its Board of Commissioners have chosen. The apparent thrust of this argument is that receipt of the ski trips could not have influenced his decisions to buy water meters from the distributor. However, the fact that only one brand of water meter was used or even that repeated purchases of the same brand of water meters from the distributor were a foregone conclusion does not exempt Callahan from the rule barring his acceptance from the distributor or manufacturer of anything of substantial value given for or because of his official position.
Based on the Undisputed Facts, and particularly on the facts that Callahan has admitted, we find that Petitioner has met the burden of proving that Callahan received the two ski trips for or because of his official position.
Knowingly or with reason to know
To be granted summary decision, Petitioner must meet the burden of showing that Callahan knowingly or had reason to know that he received the ski trips for or because of his official position.
As stated in the Decision and Order in In the Matter of Frederick Foresteire, 2009 SEC 2220, 2225-2226:
“Knowingly” is not defined in the conflict of interest law. It has been defined as “in a knowing manner ... with awareness, deliberateness, or intention.” Webster’s Third New International Dictionary 1252 (1993). See Still v. Commissioner of Employment and Training, 423 Mass. 805, 812 (1996) (act done knowingly “‘if it is [the] product of conscious design, intent or plan that it be done, and is done with awareness of probable consequences’”), quoting Black’s Law Dictionary 872 (6th ed. 1990). “Reason to know” is also not defined in the conflict of interest law. It has been defined to “indicat[e] or denot[e] that the actor has, within his knowledge, facts from which a reasonable person of ordinary prudence and intelligence might infer the existence of a certain fact in question. Alternatively, the actor could regard the existence of the particular fact in question as so legally probable that he would base his conduct upon the assumption that the fact existed.” Fidler v. Eastman Kodak Co., 555 F. Supp. 87, 92 (D. Mass. 1982), aff’d, 714 F.2d 192 (1st Cir. 1983).
The facts discussed above, which demonstrate that Callahan received the ski trips for or because of his official position, also demonstrate that he did this knowingly or with reason to know. We agree with Petitioner that no other conclusion is possible.
Callahan asserts that he did not receive the ski trips “knowingly, or with reason to know” because, at the time, he did not know who was paying for the trips. In the exhibits attached to the Motion, his statements about this were somewhat contradictory. At his Sworn Interview, he said that he did not know who paid for his lodging and that he thought he would be paying for it, but he later said that he did not pay for it himself. Further, he subsequently admitted in his Response to Petitioner’s Request for Admissions that when he accepted the ski trips, he understood that the vendors would pay for his lodging. Ultimately, his own admission defeats his argument.
As a second contention, Callahan denied that he could have violated § 23(b)(2)(i) because, as he stated in his Amended Answer, he “was uneducated and unaware that the acceptance and attendance of such events by the vendors was a violation of this law.” In cases in which conflict of interest violations are alleged which include “knowingly” or “to his knowledge” as elements, knowledge that conduct is legally prohibited by G.L. c. 268A or intent to violate the law is not required. See Commonwealth v. Dutney, 4 Mass. App. Ct. 363, 375 (1976) (for a violation of § 3(b), “it is enough that a defendant requested or received something of substantial value for or because of an official act to be performed by him”); In the Matter of Louis L. Logan, 1981 SEC 40, 46-47 (where state employee argued that he was unaware of the provisions of G.L. c. 268A and had no intent to violate the statute, his intent is irrelevant to a finding of violation of § 3(b)); In the Matter of William G. McLean, 1982 SEC 75, 77 (regarding § 19, which prohibits a municipal employee to participate in a particular matter in which “to his knowledge” certain financial interests are relevant, the element of knowledge applies to knowledge of the financial interest, not knowledge of the violation.)
What Callahan needed to know or have reason to know in order to have violated §23(b)(2)(i) was that he received the ski trips of substantial value for or because of his official position. He did not need to know that receiving them was a violation of the conflict of interest law.
Next, Callahan asserts as a defense that he received no training in the conflict of interest law prior to May, 2024. In his Opposition, Callahan states, “As an employee for 30 years with the Auburn Water District Mr. Callahan has never been asked or mandated to take any Code of Ethics training by any of his Superintendents nor the Auburn Water District Board of Commissioners.”
Section 27 of the conflict of interest law requires that the city or town clerk furnish a summary of the conflict of interest law to municipal employees and that municipal employees file an acknowledgment of receiving it with the city or town clerk within 30 days of becoming a municipal employee and on an annual basis thereafter. Section 28 requires every municipal employee to complete an online training program prepared by the State Ethics Commission within 30 days after becoming a municipal employee and every two years thereafter.
The facts support Callahan’s assertion that he received no training about the conflict of interest law until after the ski trips. One Undisputed Fact is that he never completed training about the conflict of interest law until May, 2024. Callahan asserts that when he finally attended a training in 2024, he did so on his own and not at the direction of the Water District. The Employee Handbook for Water District employees mentions the conflict of interest law, but the exhibits that Petitioner submitted with the Motion indicate that he received it for the first time in November, 2018, which was after the trip to Sugarloaf. The Water District did not produce any acknowledgment by Callahan that he received the Employee Handbook at an earlier time. Viewed in the light most favorable to Callahan, even when Callahan received the Employee Handbook, the reference to the conflict of interest law at paragraph 4.3 of the Handbook did not mention a precise prohibition on accepting anything of substantial value from an outside source.
Be that as it may, the fact that Callahan received no training about the conflict of interest law does not excuse his violation of the law. Individual municipal employees have the responsibility to comply with the law. Any failure by the Water District or the City Clerk to require Callahan to take training about the law, while unfortunate and troubling, does not serve to exonerate him.
Essentially, Callahan’s argument is that he was not informed by his agency that acceptance of the ski trips would be a violation of the conflict of interest law, so he cannot be held accountable for it. However, long-standing precedent supports a conclusion that Callahan’s ignorance of the law is no defense.
In In the Matter of William G. McLean, 1982 SEC 75, 79, a member of the Woburn Golf and Ski Authority who was a director and Treasurer of the Woburn Golf and Social Club approved and subsequently benefitted from a contract between the Authority and the Club. The contract provided funding to the Club which the Club used to pay him and his son for services. McLean argued that he had no knowledge that he was in violation of the law when he approved the contract, so no violation could exist. The Commission concluded that McLean violated § 19 and § 20 of the conflict of interest law, finding that “ignorance of the law is no defense to a violation of M.G.L. c. 268A.” Id. at 79, citing In the Matter of Logan, 1981 SEC 40, In the Matter of Doyle, Scola v. Scola, 318 Mass. 1, 7 (1945). The Commission stated, “Mr. McLean was responsible for being aware of any statutes or regulations which governed his behavior as a municipal employee including M.G.L. c. 268A….” McLean, 1982 SEC at 79.
Likewise, in In the Matter of Joseph C. Doyle, 1980 SEC 11, a case regarding § 4(c), an aide to a member of the General Court argued that he had acted in good faith and was not aware that his actions violated the conflict of interest law when he applied for grants from the Department of Youth Services and the Department of Community Affairs on behalf of a private, non-profit foundation for which he served as Clerk and Secretary and later as Executive Director. The Commission found that “section 4(c) establishes an objective standard of conduct for state employees.” Id. at 13. Accordingly, the Commission held that ignorance of the law was no defense. Id. The Commission observed that a state employee commits a violation of § 4(c) “whenever he fails to act in accordance with the standard of conduct and behavior established therein.” Id.
Callahan disputes the fairness of being subject to civil penalties for violation of the conflict of interest statute, given his claims that he was unaware of the statute’s application to his conduct. To the extent that this objection implicates due process concerns, the principle that ignorance of the law is no excuse has been recognized even in the context of criminal law with regard to “public welfare” or “strict liability” offenses. Commonwealth v. Belanger, 30 Mass. App. Ct. 31, 33 (1991). The theory behind these offenses “is that where a danger is posed to the health and safety of the general public, that danger justifies placing the burden on the individual to ascertain whether his conduct is encompassed by the statutory prohibition.” Commonwealth v. Einis, Memorandum of Decision and Order on Defendant’s Motion to Dismiss, CR2012-00063 (Mass. Super. Ct. Dec. 27, 2012). With regard to such offenses, the court in Belanger commented, “When statutes impose punishment out of considerations of public policy, lack of knowledge of the law or of the fact that the law has been violated does not exonerate the person who may have unwittingly violated the statute.” Belanger, 30 Mass. App. Ct. at 33.
The conflict of interest law imposes sanctions for acceptance of gratuities predicated on considerations of public policy. The Commission has observed:
One of the fundamental principles upon which the conflict law, in general … are based, is public confidence that the judgment of public employees and their decisions are based on the public's interest, and are not made because an official has been influenced, or appears to be influenced, by gratuities….
The acceptance of gratuities ‘negates the trust that the public is entitled to place in public employees: that the public, not private interests, are furthered when the employee performs his duties. In such a case the private citizen may reasonably ask why a public official is entitled to compensation or benefits over and above what the taxpayer has authorized and from which he has been excluded,’ thus creating an environment where ‘those who serve the people are treated better than the people themselves.’ EC-COI-86-14; see also, EC-COI-83-4. [2]
While this is a civil case and Callahan’s violation of § 23(b)(2)(i) is not a strict liability offense, the nature of his violation – acceptance by a municipal employee of a gift of lodging offered to him by a supplier of products when his work includes purchase of the products – is such a fundamental conflict of interest and concern regarding fair government that a person with common knowledge would be expected to recognize it as such.[3] As with a strict liability offense, Callahan was “in a position to prevent it with no more care than society might reasonably expect and no more exertion than it might reasonably exact from one who assumed his responsibilities.” Einis, quoting Morissette v. United States, 342 U.S. 246, 256 (1952) (parenthetical explanation omitted). Callahan’s ignorance of the law does not exonerate him. G.L. c. 268B, § 4(j).
Additionally, as Petitioner points out in its Motion, if a violation of the conflict of interest law could be avoided by claiming ignorance of the legal requirements, unscrupulous employees could make sure to have a ready excuse by failing to take conflict of interest training or learn their legal obligations, fostering the type of corruption that the conflict of interest law was enacted to prevent. On the basis of precedent and public policy, Callahan’s ignorance of the law provides no defense.
Callahan’s final argument in his Opposition is that the Water District condoned his conduct. About each of the ski trips, he states that the Superintendent was aware that he was attending the ski event at the invitation of the distributor, never advised Callahan that this was a conflict of interest, and approved of Callahan’s personal time out of the office.
The law is clear, however, that condonation of a respondent’s conduct by another municipal employee does not justify the respondent’s violation. As the Commission stated in McLean, supra, “…we have consistently held that condonation by one’s appointing official or superior does not exempt an employee from the prohibitions of M.G.L. c. 268A. See, In the Matter of Louis L. Logan, supra, at 29; In the Matter of the Collector-Treasurer's Office of the City of Boston, et al., Commission Disposition Agreement, p. 8 (March 2, 1981).” McLean, 1982 SEC at 77-78. The Commission noted that the United States Supreme Court has reached the same conclusion about comparable conflict of interest laws covering federal employees. Id., citing United States v. Mississippi Valley Generating Co., 364 U.S. 520, 561 (1961) (Congress “recognized that an agent’s superiors may not appreciate the nature of the agent’s conflict, or that the superiors might, in fact, share the agent’s conflict of interest…”).
Further support is found in In the Matter of Howard Hansen, 2017 SEC 2604, 2616. There, the Commission found that Stoughton Town Moderator Howard Hansen had violated
§ 19, § 20 and § 23(b)(2) by repeatedly approving invoices from his own printing company for materials he used as Town Moderator and submitting the invoices to the Town Accountant for payment. As a defense, Hansen asserted that for years the Town Accountant had approved and paid the amounts to Hansen’s company. Noting that condonation by other governmental employees has been considered a mitigating factor when the Commission considered penalties, the Commission emphasized that condonation does not provide a defense. The Commission commented,
To be clear, we do not regard the fact that other Town officials provided actual or de facto approval of Hansen’s actions as an excuse for his repeated violations. The conflict of interest law demands that each public employee take responsibility for the integrity of his own governmental service, and we do not suggest that Hansen was relieved of such responsibility because other Town officials did not take action to prevent his violations.
As these cases make clear, condonation of a municipal employee’s conduct by superiors does not excuse Callahan’s violation.
Order
For the reasons stated above, we find that Petitioner has met its burden of proving that Callahan violated § 23(b)(2)(i) twice by knowingly or with reason to know receiving lodging of substantial value from the vendors given for or because of his official position as Foreman for the Water District. Petitioner’s Motion for Summary Decision is ALLOWED.
As mentioned previously, we regard these violations as ones that are clear-cut and easily could have been avoided, and in our judgment, the penalty we assess must reflect the weight of these concerns. Acceptance by municipal employees of gifts of substantial value from outside sources with whom they do business erodes public trust, and Callahan, who reasonably should have been aware of this after decades of public service, accepted such gifts not once but twice.
In eight recent instances, the Commission has entered into Disposition Agreements with employees of water districts and water or public works departments who also accepted ski trips, meals, or entertainment from vendors from whom their agencies purchased water meters.[4] These agreements provide some guidance when assessing a penalty. As compared with employees who accepted multiple ski trips or stayed longer or were accompanied by a guest or accepted additional gratuities, Callahan stayed the first night of each of two ski trips. CompareIn the Matter of Thomas Gaughan (civil penalty of $6,000 paid by Water Superintendent for the Southampton Water Department who went on a ski trip to Okemo, Vermont and a golf outing in 2020).
Taking these considerations into account, we assess a civil penalty of $3,000 for Callahan’s acceptance of the lodging provided by the distributor and/or manufacturer at Sugarloaf in 2018 and a civil penalty of $3,000 for his acceptance of the lodging provided by the distributor and/or manufacturer at Stowe in 2019.
DATE AUTHORIZED: January 22, 2025
DATE ISSUED: January 29, 2025