|Organization:||State Ethics Commission|
Decision In the Matter of John P. O'Brien, Docket No. 371
This Disposition Agreement (Agreement) is entered into between the State Ethics Commission (Commission) and John P. O'Brien (Mr. O'Brien) pursuant to Section 11 of the Commission's Enforcement Procedures. This Agreement constitutes a consented to final Commission order enforceable in the Superior Court pursuant to G. L. c. 268B, s. 4(j).
On January 11, 1989, the Commission initiated a preliminary inquiry into possible violations of the Financial Disclosure Law, G.L. c. 268B, by Mr. O'Brien. The Commission concluded its inquiry and, on June 19, 1989, found reasonable cause to believe that Mr. O'Brien violated G.L. c. 268B, s. 7 by falling to disclose certain real estate transactions and loans on his 1986 and 1987 Statements of Financial Interests (SFIs).
The parties now agree to the following findings of fact and conclusions of law:
1. Mr. O'Brien is the elected Hampden County Register of Probate. As such, he is a state employee as that term is defined in G.L. c. 268A, s. 1(q) and is required to file an annual Statement of Financial Interests (SFI) pursuant to G.L. c. 268B, s. 5.
2. Mr. O'Brien has conducted a real estate business under the name of O'Brien Real Estate for 28 years. Up until 1986, he was engaged through O'Brien Real Estate in the listing and selling of real estate.
In 1987 Mr. O'Brien joined with Audrey O'Connor in the business of O'Brien & O'Connor Real Estate, which conducted a real estate brokering business at 42 Harkness Street, East Longmeadow, Massachusetts. During the reporting period that followed, O'Brien Real Estate concentrated in renovating dilapidated homes.
3. On April 15, 1987, Mr. O'Brien timely filed his 1986 SFI. He failed to identity the following transactions:
(A) his purchase (with James A. O'Connor) of 72 and 86 Lancaster Street in Springfield from Charlotte A. Carlson, Executrix of the Estate of Emma Carlson, and the assessed values by category of these properties. This information was reportable under section K.2 (Investment and Rental Properties) and section K.3 (Real Property Transfers);
(B) six loans with values ranging from $1,000 to $10,000. Information pertaining to these loans was reportable under section L. (Other Creditor Information).
4. On March 15, 1988, Mr. O'Brien timely filed his 1987 SFI. Mr. O'Brien failed to report:
(A) his ownership ad resale of 72 and 86 Lancaster Street;
(B) his son's purchase of 64 Carnavon Circle from Robert Bonetti, Executor of the Estate of Mary Bransfield.
(C) his son's purchase of 37 Pennsylvania Avenue from Benedict Nowakowski, Executor of the Estate of Jane Haggerty;
(D) his purchase of 160-162 Alden Street from David Burgess;
(E) two 90-day notes from the Chicopee Cooperative Bank, each valued in Category F, ($60,000 - $100,000). This information was reportable under section K.4 (Mortgage Loan Information) which requires identification of each mortgage loan, including second mortgage loans and home equity loans, greater than $1,000 outstanding on December 31, 1987 for which the filer or a family member was obligated.
(F) four loans secured by various life insurance policies, three with values in Category A ($1,001 - $5,000), and one valued in Category B ($5,001 - $10,000). This information was reportable under section L. (Other Creditor Information), which requires that filers report each debt, loan or other liability greater than $1,000 owed by the filer or a family member on December 31, 1987. The filer must report the original amount of the loan, the amount owed as of the end of the reporting year, the loan collateral, and terms of repayment.
5. Mr. O'Brien did not prepare his 1986 and 1987 SFIs personally, but delegated this task to his executive assistant. Mr. O'Brien instructed the assistant to use the previous year's SFI in preparing
the current SFI. Mr. O'Brien, however, did not provide the assistant with the documents or other information necessary to fully complete the 1986 and 1987 SFIs.
6. On December 29, 1988, Mr. O'Brien amended his 1986 SFI and reported his purchase of 72 ad 86 Lancaster Street from the Estate of Emma Carlson. He reported himself and James P. O'Connor as the Record Owner(s) of these properties and their respective assessed values by category. Under section L. (Other Creditor Information), Mr. O'Brien reported a 90-day loan from the Chicopee Cooperative Bank valued in Category A ($1,001 - $5,000). This loan was outstanding as of December 31, 1986 and was, therefore, reportable under section L. as a "debt, loan or other liability in excess of $1,000 owed by you or any FAMILY MEMBER" on December 31st of the reporting year.
7. Mr. O'Brien also amended his 1987 SFI on December 29, 1988. He reported his purchase of 160-162 Alden Street from David Burgess. He also reported his son's purchases of 37 Pennsylvania Avenue and 64 Carnavon Circle and identified the Estate of Jane Haggerty and the Estate of Mary Bransfield as the sellers of these respective properties. He also reported two 90-day notes from the Chicopee Cooperative Bank with values in Category F ($60,001 - $100,000). These loans were used to finance John Peter's purchases of 37 Pennsylvania Avenue and 64 Carnavon Circle.
8. On May 9, 1989, Mr. O'Brien filed supplemental amendments to his 1986 and 1987 SFIs which disclosed certain loans with values in the smaller categories (i.e., Category A ($1,001 - $5,000) and Category B ($5,001 - $10,000), which were not identified by the prior amendments. By this amendment, Mr. O'Brien corrected each nondisclosure identified above.
9. General Laws, chapter 268B, s.7 prohibits the filing of a false SFI. A false Filing need not be willful nor intentional to violate G.L. c. 268B, s.7. The statute requires commitment to a reasonable degree of care and diligence in filing SFIs. See In the Matter of Louis Logan, 1981 SEC 40, 49. The question of whether a filer has exercised a reasonable degree of care and diligence must be decided on the facts of each case.
10. In a private compliance letter issued to former Senator Martin Rellly by the Commission on or about July 20, 1987, the Commission stated its intent to impose public sanctions for negligent SF I filings.
A memorandum accompanied the 1987 SFI instructions which states,
"FILERS ARE RESPONSIBLE FOR EXERCISING CARE AND DILIGENCE TO ENSURE THAT THE INFORMATION PROVIDED IN THEIR SFIs IS COMPLETE AND ACCURATE. SIGNIFICANT OMISSIONS AND/OR INCORRECT INFORMATION CAN RESULT IN THE IMPOSITION OF BOTH CIVIL AND CRIMINAL PENALTIES."
This memorandum accompanies all SFI forms and instructions when the Commission mails them each year.
11. Certain omissions are minor and, as such, are best handled through the amendment process without any sanction. In effect, the public suffers little or no harm from the absence of this information on the form. Thus, for example, if a mortgage loan is identified, including the creditor, amount owed, and the terms of repayment, but the filer neglects to also indicate the original amount owed, that is a minor oversight which should be dealt with by an amendment. The Commission is satisfied to have these dealt with through the amendment process.
12. Omissions which will be deemed to reflect a lack of reasonable care and ordinary diligence, and thus, warrant a public sanction, are omissions which (1) involve a party or transaction over which the filer could exercise official responsibilities as a public employee; (2) are total omissions in that there is no way to identity the transaction from the information appearing on the SFI form; or (3) in number and amount, are material to the filer's overall real estate holdings. Reilly Compliance Letter, July 20, 1987.
13. The omissions of reportable information relating to Mr. O'Brien's purchases of 72 and 86 Lancaster Street and 160-162 Alden Street and his son's purchases of 37 Pennsylvania Avenue and 64 Carnavon Circle were material because (1) each involved a purchase from a probate estate pending in Hampden County, over which Mr. O'Brien was in a position to exercise official responsibilities, (2) the omissions were total in that there was no way to identity these transactions from other information on the SFI forms, (3) the number and amount of these omissions are material to Mr. O'Brien's overall real estate holdings. Thus, the omissions establish negligence in the filing of Mr. O'Brien's 1986 and 1987.
14. Mr. O'Brien's delegating the task of preparing his SFIs to an assistant, without giving that assistant the means to properly prepare them nor the full and complete information required to be reported on the
SFIs, is further evidence of his failure to exercise a reasonable degree of care and diligence in filing his 1986 and 1987 SFIs. Moreover, in reviewing and signing the SFIs, Mr. O'Brien failed to identify the omissions.
15. The Commission has found no evidence that Mr. O'Brien intentionally violated the Financial Disclosure Law. Mr. O'Brien cooperated fully with the Commission's preliminary inquiry.
Based upon the foregoing facts, 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 agreed to by Mr. O'Brien:
1. that he pay to the Commission the amount of five hundred dollars ($500.00) as a civil penalty for violating G.L c 268B s.7 by negligently filing his 1987 SFI, and
2. that he waive all rights to contest the findings of fact, conclusions of law, and terms and conditions proposed under this agreement in this or any related administrative or judicial civil proceeding in which the Commission is or may be a party.
DATE ISSUED: September 6, 1989