|Organization:||State Ethics Commission|
- Appearance for Petitioner: Nancy R. Hayes, Esq.
- Appearance for Respondent: Michael Angelini, Esq.
- Commissioners: Diver, Ch., Brickman, Burns, Mulligan, Sweeney
|Organization:||State Ethics Commission|
The Petitioner initiated these adjudicatory proceedings on August 16, 1984 by filing an Order to Show Cause pursuant to the Commission's Rules of Practice and Procedure, 930 CMR 1.01(5)(a). The Order alleged that the Respondent, George Najemy, (1) violated s. 19 by directing the Worcester city treasurer's office to deposit the insurance proceeds on property which he owned and (2) violated s. 23(par. 2)(2) and s. 23 (par. 2)(3) by negotiating for and purchasing property which was the subject of condemnation proceedings before the Worcester Building Inspection Committee (BIC), a committee which he represented as assistant city solicitor.
An adjudicatory hearing was held on January 10 and 11, 1985 before Commissioner Frances Burns, a duly designated presiding officer. See G.L. c. 268B, s. 4(c). The parties thereafter filed post-hearing briefs and presented oral argument before the full Commission on February 26, 1985. In rendering this decision and order, each member of the Commission has heard and/or read the evidence and arguments presented by the parties.
1. George Najemy has been employed by the City of Worcester Law Department since 1973, and served as an assistant city solicitor during the period at issue in this proceeding. His appointing official is the city manager and his direct supervisor is the city solicitor.
2. On June 14, 1983, Mr. Najemy was formally appointed by the city manager as the law department representative on the Worcester's BIC. Pursuant to City Executive Order No. 13, the BIC is charged with specific responsibilities with respect to the demolition of condemned structures under G.L. c. 139, including the authority to decide whether or not a c. 139 hearing will be held. As the law department representative on the BIC, Mr. Najemy's duties included advising the BIC relative to any legal matters or questions which arose at various stages of the condemnation and demolition proceedings and drafting the necessary legal documents and correspondence; checking court records for any appeals from demolition orders made by property owners and arranging the necessary court hearings; and litigation of the appeal for the BIC if an appeal had in fact been filed, Mr. Najemy also attended BIC meetings, although he was not a voting member.
3. The property at 7-9 Woodland St. (the property) was condemned and ordered demolished at a hearing in March of 1982. Following a series of continuances of the demolition order and a fire, the property was again ordered demolished in June of 1983. On July 19,1983, Mr. Najemy signed off as the law department representative on a Request to Demolish the property, a copy of which was sent to the property owner's (Mr. Ali's) attorney.
4. The city's policy regarding insurance proceeds claimed on fire damaged property was to retain a certain amount for the city pending the owner's rehabilitation or demolition of the building, and releasing the rest to the owner. The amount retained by the city, usually $10,000, was based on the recommendation of the BIC. Mr. Najemy had the responsibility for preparing the necessary documents for the partial release of insurance proceeds,
5. Mr. Ali referred his attorney to Mr. Najemy, either (a) by mentioning Mr. Najemy by name and noting Mr. Najemy's familiarity with the insurance proceeds withholding process or (b) by mentioning that there was a person at the law department of Mr. Ali's ethnic and cultural background. Mr. Ali's attorney then had discussions with Mr. Najemy during the summer of 1983 concerning the amount of insurance proceeds to be withheld on the property and the options available to Mr. Ali to free up that money. In his official capacity as assistant city solicitor, Mr. Najemy acted as a liaison to the BIC in September of 1983 by making a written request to determine the amount to be withheld. On October 12, 1983, the required $10,000 insurance draft was received by the law department. The city solicitor, in Mr. Najemy's absence due to illness, forwarded the draft to the city
treasurer with instructions to hold the draft until rehabilitation of the property was complete.
6. Mr. Najemy began negotiating with Mr. Ali, the owner, to purchase the property sometime in October of 1983. On November 14, 1983, Najemy wrote the vice-chairman of the BIC on private letterhead indicating that he was negotiating to purchase the property, and asking whether the city would release the $10,000 to Mr. Ali if he (Najemy) put down $5,000 as security for the rehabilitation or demolition of the property. Following the November 16, 1983 BIC meeting, at which Mr. Najemy was not present, the vice-chairman informed Mr. Najemy that the request was denied.
7. Mr. Najemy purchased the property from Mr. Ali on December 12, 1983. Within the next 3 days, Mr. Ali endorsed the insurance draft received $10,000 from Mr. Najemy, and on December 15,1983, signed a document prepared by Mr. Najemy in which he (Ali) assigned his rights in the $10,000 draft held by the city to Mr. Najemy. Mr. Ali subsequently left the country.
8. Following conversations with the assistant city treasurer on the subject, Mr. Najemy wrote to her on January 26, 1984, using law department letterhead, giving her instructions as to the handling of the of the draft. He advised her to deposit the $10,000 draft relating to the property into an escrow account, which by city policy is to be an interest bearing account, so that when the lien on the property was released a check could be written out to the new owner." The check was deposited in such an account the next day.
For the reasons stated below, the Commission concludes that the evidence supports the finding of a G.L. c. 268A, s. 19 violation on Mr. Najemy's part, but not a s. 23(par. 2)(2) or s. 23(par. 2)(3) violation.
Section 19 prohibits a municipal employee from participating as such an employee in a particular matter in which he has a financial interest. That the Respondent was, and continues to be a "municipal employee" subject to Chapter 268A in view of his position as an assistant city solicitor is not in dispute. The Commission finds that the Respondent violated s. 19 by, in his official capacity, advising the assistant city treasurer in January, of 1984 to deposit a $10,000 draft representing insurance proceeds which had previously been assigned to him.
Participation for purposes of G.L. c. 268A, s. 19 is defined as participation 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." G.L. c. 268A, s. 1(j) (emphasis added). A particular matter is 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 G.L. c. 268A, s. 1(k).
The Commission finds that the decision as to whether the treasurer's office would deposit the $10,000 insurance draft into an escrow account constitutes a particular matter. Both the city treasurer and the assistant city treasurer testified that the treasurer's office followed instructions from the law department concerning the disposition of such drafts. Inasmuch as the origin instructions as to this particular draft were to hold the draft pending rehabilitation, the $10,000 draft was deposited only after receiving the Respondent's letter of instructions. The Commission concludes that the Respondent's personal and substantial participation in the particular matter, by deciding that the draft should be deposited and subsequently advising the assistant city treasurer to this effect, was established by a preponderance of the evidence.
The Respondent contends that his role in instructing the treasurer's office to deposit the draft was a nondiscretionary act and therefore did not constitute participation for s. 19 purposes. The evidence did establish that the city manager's written policy dated March 14, 1983 provided that checks representing insurance proceeds withheld by the city were to be delivered to the City Treasurer to be held in an interest bearing escrow account Yet despite the fact that the Respondent may have been acting in accordance with city policy, his letter dated January 26, 1984 to the assistant city treasurer precipitating the deposit of the insurance draft nonetheless constitutes "participation" under 19. For purposes of s. 19, "participation" is not limited to discretionary and/or final decisions. It is enough that he interjected himself personally into the making of a decision by a state agency whether his duties required it or not, and that participation is deemed substantial. See, e.g., EC-COI-
82-143. The Commission finds that the Respondent substantially participated in the treasurer's office decision to deposit the draft because (1) the treasurer's office followed law department instructions in that regard and (2) until the Respondent's letter of January 29, 1984, the draft was not deposited
The Commission finds that the Respondent's financial interest in the disposition of the $10,000 draft was established by the evidence. As long as a financial interest is "direct and immediate, or at least reasonably foreseeable," s. 19(a) applies.
EC-COI-84-98. The Respondent himself testified that he had been assigned the rights by Mr. Ali to the $10,000 insurance proceeds the draft represented, and that he would receive the $10,000 plus interest once the property was rehabilitated. These facts sufficiently identify the Respondent's financial interest for s. 19 purposes. See Commonwealth v. Cola, 18 Mass. App. 598 (1984). The fact that the city also had an interest in the draft is irrelevant.
The Commission finds that the Respondent's disclosure to the vice-chairman of BIC that he was negotiating to purchase the property does not qualify as the disclosure required by G.L. c. 268A, s. 19(b). That disclosure was made in the Respondent's self interest, in an attempt to obtain a reduction in the amount of insurance proceeds to be withheld, and was made to an individual who had no authority to require the Respondent to abstain from participation. See Buss, The Massachusetts Conflict of Interest Statute: An Analysis, 45 B.U.L Rev. 299, 362 (1965) [disclosure to the wrong person, and any resulting exemption under s. 6 [state equivalent to s. 19] is of no force or effect]. The exemption procedure outlined in G.L. c. 268A, s. 19(b) requires the full disclosure of one's financial interest to one's appointing official, and that official's advance written determination that the interest is not so substantial as to be deemed likely to affect the integrity of one's municipal services. Since giving such advice to the city treasurer's office was part of the Respondent's official duties, he should have disclosed his financial interest to the city manager and/or the city solicitor, either of whom could then have determined the proper course to take. The record reflects the Respondent's failure to make such a disclosure and in fact evidences the Respondent's intent to conceal his identity as the present owner of the property: in his reference to the "new owner" instead of himself in his January 26,1984 letter to the assistant city treasurer.
Section 23(par. 2)(2) prohibits a municipal employee from using or attempting to use his official position to secure unwarranted privileges or exemptions for himself or others. The Commission has held that this section requires public employees to refrain from engaging in private business with individuals who have pending matters subject to the public employee's official authority due to the exploitability inherent in such situations. See, e.g. EC-COI-84-61; 83-156; 82-124; 82-64.
However, the evidence in this case does not sufficiently support the existence of a public relationship between Mr. Najemy and Mr. Ali at a time when the relationship could have been exploited to Mr. Najemy's personal benefit. It may be true that Mr. Najemy had an official relationship with Mr. Ali during the summer of 1983 concerning the city's process of withholding insurance proceeds. However, the Commission is not persuaded Oat such a relationship extended beyond early September, the date of Mr. Najemy's official correspondence to determine the amount of Mr. Ali's proceeds to be withheld. By all accounts, purchase negotiations concerning the property did not commence until a month later (October, 1983).
This is not to say that a s. 23(72)(2) inherent exploitability violation necessarily requires the public relationship and private business dealings to be simultaneous. Where there is evidence that an employee has capitalized on the public relationship arising from his official dealings For a private party has been pressured to engage in private business with an employee in order to maintain goodwill in the public relationship, a s. 23(par. 2)(2) violation may be found regardless of a timing gap. The evidence presented by the parties did not support such a finding in this case.
The Commission also finds that the Petitioner failed to established a violation of s. 23(par. 2)(3) by a preponderance of the evidence. A s. 23(par. 2)(3) violation requires a showing that the Respondent, as a municipal employee, gave a reasonable impression by his conduct that any person can improperly influence or unduly enjoy his favor in the performance of his official duties. The Commission finds that by the time the Respondent entered into negotiations with Mr. Ali to purchase the property, the bulk of BIC involvement with the property had already occurred. The Respondent's more significant roles in the process - e.g. giving the BIC legal advice pertaining to the condemnation and demolition of the property and signing off on the Request to Demolish the property - had already been accomplished with respect to this property. Thus, there would be no opportunity for the Respondent's official acts to be influenced based on his on-going negotiations to purchase the property. Similarly, the evidence on record does not demonstrate that the Respondent's officials acts pre-dating the beginning of negotiations were conducted in. such a way as to foster the development of such negotiations. In summary, the Commission concludes that the overlap of public and private roles in this instance does not rise to the level of a s. 23(par. 2)(3) "appearance of a conflicts violation. Compare, In the Matter of John J. Rosario, 1984 Ethics Commission 205; In the Matter of Louis Logan, 1981 Ethics Commission 40.
On the basis of the foregoing, the Commission concludes that Mr. George Najemy violated G.L c. 268A, s. 19. Pursuant to its authority under G.L. c. 268B, s. 4(d), the Commission hereby orders Mr. Najemy to:
Pay $500.00 (five hundred dollars) to the Commission as a civil penalty for participating as a municipal employee of the City of Worcester in a particular matter in which he had a financial interest.
The Commission orders Mr. Najemy to pay this penalty of $500.00 (five hundred dollars) to the Commission within thirty days of the receipt of this Decision and Order.