Decision  In the Matter of Paul T. Hickson

Date:	06/25/1987
Organization:	State Ethics Commission
Docket Number:	316

• Appearance for Petitioner: Robert A. Levite
• Appearance for Respondent: Anthony C. Bonavita
• Commissioners: Diver, Ch., Basile, Burns, Epps, Gargiulo

I. Procedural History

The Petitioner filed an Order to Show Cause on December 29,1986 alleging that the Respondent, Paul T. Hickson, was in violation of G.L. c. 268A, s.20[1] by serving as an elected city councilor for the City of Westfield (City) and as a maintenance worker for the Westfield Housing Authority (WHA). In lieu of an adjudicatory hearing, the Petitioner and Respondent stipulated to the relevant facts, submitted briefs, and orally argued before the full Commission on June 8,1987. Based upon a review of the evidence and arguments presented by the parties, the Commission makes the following findings and conclusions.

II. Findings

A. Jurisdiction

The parties have stipulated that the Respondent, in his capacity as an elected city councilor, is a municipal employee within the meaning of G.L. c. 268A, s.1(g).[2]

B. Findings of Fact

1. The Respondent has been employed as a WHA maintenance worker for approximately four years and is paid $20,000 annually.

2. The Respondent has also served as an elected city councilor in the City for approximately three years and is paid $4,000 annually.

3. On September 10, 1985 the Westfield City Solicitor rendered an opinion stating that there is "no express prohibition or inherent wrong in a maintenance employee of the Housing Authority being a member of the City Council..." Opinion of the City Solicitor, September 10,1985.

4. On July 22,1986, the Commission advised the Respondent through a compliance letter,[3] that as an elected city councilor and a maintenance worker for the WHA, he had a prohibited financial interest in a contract made by a municipal agency of the same city, in which the city is an interested party. The Commission noted that the city solicitor's advice was incorrect under s.20 of the conflict of interest law. The Commission informed the Respondent that the violation could be cured if he resigned one of his municipal positions within thirty days.

5. Notwithstanding receipt of the Commission's compliance letter, the Respondent has continued to maintain both positions.

III. Decision

The Respondent, as a municipal employee, is prohibited by G.L. c. 268A, s.20 from having a financial interest, directly or indirectly, in a contract made by a municipal agency of the same city in which the city is an interested party. The Respondent stipulates that he is a municipal employee in his capacity as city councilor. He also has a financial interest in his employment contract with the WHA, a municipal agency, since he is compensated to work pursuant to that contract. The WHA's municipal agency status is plainly articulated in its enabling statute, G.L. c. 121B, s.7. Consequently, the Respondent has a prohibited financial interest in his employment contract with the WHA, a municipal agency. By maintaining his position as a maintenance worker for the WHA while also serving as a city councilor for the City, we conclude that the Respondent has violated and continues to violate G.L. c. 268A, s.20.[4]

This result is consistent with the Commission's conclusion in a nearly identical case, In the Matter of Kenneth R. Strong, 1984 SEC 195, in which an elected common councilor violated s.20 by also serving as a maintenance worker for the city housing authority.[5]

The Respondent makes five arguments in support 

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of his contention that he has not violated G.L. c. 268A: 1) WHA is not a municipal agency because it is funded by the state; 2) the Respondent does not knowingly have a financial interest in his employment contract with a municipal agency; 3) the City is not an interested party in any contract he may have with the WHA; 4) the Commission's application of G.L. c. 268A, s.20 deprives him of his right to be elected under Part I, Art. 9 of the Massachusetts Constitution thus depriving him of equal protection of the law; and 5) that the Order to Show Cause contains various procedural and constitutional defects. For the following reasons, none of the contentions set forth above persuades us to overrule the principles which we articulated in Strong and reaffirm today.

1. The enabling statute which establishes housing authorities, G.L. c. 121B, provides that: 

For the purposes of chapter two hundred and sixty-eight A, each housing and redevelopment authority shall be considered a municipal agency ... 

Prior to the enactment of G.L. c. 121B and before the creation of the State Ethics Commission, the Attorney General ruled that housing authorities are municipal agencies for the purposes of G.L. c. 268A. Attorney General Conflict Op.25 (April 16,1963). G.L. c. 121B codified this conclusion. 

The plain language of G.L. c. 121B is conclusive as a matter of law that the WHA is a municipal agency. The Respondent's assertion that the source of the funding for his DHA salary is federal and state money does not alter this conclusion. The Legislature enacted G.L. c. 121B with the presumed knowledge that housing authorities received funds from various sources, including the state and federal government. Respondent's argument that the source of funding for his WHA salary renders the WHA something other than a municipal agency is an argument the Respondent has with c. 121B, not with the application of the conflict law. 

2. The Respondent is employed by the WHA, a municipal agency, and is paid $20,000 annually. To the extent that the Respondent claims that he had no knowledge of his financial interest in a municipal contract, this question was definitively resolved when the Commission notified him in July of 1986 that he was in violation of G.L. c. 268A, s.20. To the extent that he claims he did not have knowledge because his employment was not a contract made by a municipal agency, we have previously addressed this question in 1.[6] 

3. In the Strong decision, we held that the City is also an interested party to contracts the [housing authority] enters into with Respondent, a municipal employee of the City. The nature of the establishment and operation of a housing authority demonstrate that the City is an interested party in the activities of the (housing authority). Its enabling statute provides that no housing authority may transact business or exercise its powers until a need for the authority has been determined by city officials. Four of the five housing authority members are appointed by the mayor. G.L. c. 121B, s.5. The City's status as an interested party is also reflected in its statutory responsibility to provide safe and sanitary dwellings for families or elderly persons of low income. See G.L. c. 121B, s.3. Strong at 196. 

This conclusion applies equally here. The Respondent has offered no argument which rebuts this reasoning nor are we aware of any facts in this case which would warrant a different conclusion. 

4. The Respondent also challenges the application of G.L. c. 268A on constitutional grounds, arguing that Chapter 268A, s.20 deprives the Respondent of his right to hold elective office under Part 1, Art. 9 of the Mass. Constitution. This argument was addressed and definitively resolved in Strong. In Strong, we noted that the right "to be elected" is not absolute. See, Opinion of the Justices, 375 Mass. 795,811(1978). The conflict of interest law does not interfere with Hickson's right to be elected. Rather, it requires that, if elected, the City Councilor "refrain from contracting with an agency of the same municipality." Conley v. Ipswich, 352 Mass. 201, 205(1967). Strong, supra at 196-197. 

5. The Respondent has raised certain constitutional claims and argues various procedural defects in the Commission's Order to Show Cause, although he neither pursued these claims in his brief nor in oral argument. These contentions are addressed briefly.

The Respondent argues that the Order to Show Cause is barred by the statute of limitations.[7] Irrespective of the Respondent's argument, the statute does not bar enforcement actions against ongoing violations of the law. Hickson presently is violating the law, and the petitioner's case against Hickson is based on these continuing violations.[8]

IV. Penalty

Following a finding of a violation of G.L. c. 268A, the Commission is authorized by G.L. c. 268B, s.4(j) to issue an order requiring the violator to cease and desist from such violation and requiring the violator to pay a civil penalty of not more than $2,000 for each violation of G.L. c. 268A. The Respondent has been aware since July 22,1986 of the consequences under s.20 of his retaining his position as a city councilor in the City and as maintenance worker for the WHA. The Respondent has been collecting two paychecks, one of which he was not entitled to and by which he has profited in violation of the law. In addition, the Commission has precedent 

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squarely on point, In the Matter of Kenneth R. Strong, 1984 SEC 195, which definitively concluded that an individual may not be paid simultaneously to be a city councilor and housing authority employee. However, the Respondent did rely, at least up until July, 1986, on incorrect legal advice and, therefore, the Commission will not levy a maximum penalty. Nonetheless, the Commission orders the following sanctions to reflect the seriousness with which it views the Respondent's continuing violation of the statute, in light of the ample notice given to the Respondent, and in consideration of the city solicitor's earlier opinion.

V. Order

Pursuant to its authority under G.L. c. 268B, s.4(j), the Commission orders the Respondent to:

1. Cease and desist from violating G.L. c. 268A, s.20 by either resigning as a city councilor or terminating his financial interest in his employment contract as a maintenance worker for WHA within thirty (30) day's of the date of this Decision and Order; and 

2. pay five hundred dollars ($500) to the Commission as a civil penalty for violating G.L. c. 268A, s.20.

 [1] G.L.c. 268A, s.20 prohibits a municipal employee from having a financial interest, directly or indirectly, in a contract made by a municipal agency of the same city in which the city is an interested party of which financial interest the employee has knowledge or reason to know. 

[2] "Municipal employee" is defined as a person performing services for or holding an office, position, employment or membership in a municipal agency, whether by election, appointment, contract of hire or engagement, whether serving with or without compensation. on a full, regular, part-time, intermittent or consultant basis, but excluding (1) elected members of a town meeting and (2) members of a charter commission established under Article LXXXIX of the Amendments to the Constitution. G.L. c. 268A. s.1(g). 

[3] A compliance letter is issued in certain cases in which the Commission concludes that there are sufficient facts to warrant a finding of reasonable cause to believe the law has been violated but in which a formal adjudicatory proceeding may not be appropriate at that time. The letter notifies the individual that any further acts in violation of the law may he pursued in the context of a formal proceeding. See State Ethics Commission Enforcement Procedures, s.12 Compliance letters. 

[4] None of the exemptions provided by G.L. c. 268A, s.20 to special municipal employees is available to the Respondent. Specifically. G.L. c. 268A s.1(n) expressly prohibits a member of a city council from being designated a special municipal employee. 

[5] This conclusion was affirmed by the Superior Court. Strong v. State Ethics Commission, Suffolk Superior Court Civil Action No. 72374 (April 30, 1985). The Superior Court decision was later vacated on jurisdictional grounds which are no longer relevant in light of the enactment of St. 1986 c. 12. 

[6] We find no persuasive reason to conclude that c. 121B only applies to a limited number of housing authority employees. 

[7] The Conflict of Interest Statute of Limitations provides that an Order to Show Cause must be issued within three years of the date upon which a disinterested person learned of the violation. 930CMR 1.02(10)(a). 

[8] We address the other procedural defects raised by Hickson by noting that the Order to Show Cause articulates the elements of a s.20 violation, thereby stating a claim upon which relief can be granted, G.L. c. 268B, s.3(i) gives the Commission jurisdiction to act as the civil enforcement agency for conflict of interest violations and although Hickson claims that the Commission is estopped from enforcing its Order to Show Cause, there is no factual or legal basis for this contention. Hickson has not demonstrated that his right to due process has been infringed as a result of the petitioner's maintaining the confidentiality of the complainants identity. Moreover, the parties have stipulated to all the facts which form the basis of the petitioner's case, and the identity of the complainant is irrelevant now.