| Date: | 10/27/2015 |
|---|---|
| Organization: | State Ethics Commission |
| Docket Number: | 14-0007 |
- Appearance for Petitioner: Candies Pruitt-Doncaster, Esq.
- Commissioners: Murphy, Trach and Quinlan[1]/
- Presiding Officer: Commissioner Martin F. Murphy
- This page, In the Matter of Robert Murphy, is offered by
- State Ethics Commission
Decision
Decision In the Matter of Robert Murphy
Table of Contents
I. Introduction & Allegations
This matter concerns allegations that between 2010 and 2012, Robert Murphy, a consultant to the Town of Canton (“Town”) Conservation Commission, repeatedly violated two sections of G.L. c. 268A: § 17(a),[2]/ when, as the President and owner of M&M Engineering, Inc., (“M&M Engineering”), he received private compensation for his work in preparing eight permit applications, assisting M&M Engineering contractors in drafting plans and hiring contractors to present proposals for those private projects to the Conservation Commission, which were particular matters in which the Town had a direct and substantial interest and which compensation was not received by Murphy as provided by law for the proper discharge of his official Conservation Commission consultant duties; and § 23(b)(3)[3]/when, as the Conservation Commission consultant, and while serving as the President and owner of M&M Engineering, he reviewed plans and applications prepared by M&M Engineering, thereby knowingly, or with reason to know, acting in a manner which would cause a reasonable person, having knowledge of the relevant circumstances, to conclude that M&M Engineering could unduly enjoy his favor in the performance of his official duties, without filing a written disclosure with his appointing authority to dispel this appearance of impropriety.
II. Procedural Background
This matter commenced on July 17, 2014, with Petitioner’s issuance of an Order to Show Cause alleging that Murphy repeatedly violated G.L. c. 268A, §§ 17(a) and 23(b)(3) between 2010 and 2012. Murphy responded to the Order to Show Cause on August 7, 2014, denying the alleged violations. On May 13, 2015, the adjudicatory hearing in this matter was held before Commissioner Murphy. Forty-seven agreed-upon documents were admitted as exhibits, including stipulations of fact and law. Petitioner called Debra Sundin as its only witness. Murphy called no witnesses.[4]/ Both parties made closing arguments before Commissioner Murphy at the conclusion of the adjudicatory hearing and subsequently filed briefs.
In rendering this Decision and Order, each undersigned member of the Commission either was present at the hearing or has read the hearing transcript, and all have considered the testimony of the witness at the adjudicatory hearing, the evidence in the record and the arguments of the parties.
III. The Stipulated and Otherwise Undisputed Facts[5]/
Town Contracts with Danena, Inc.
The Town’s Conservation Commission administers the state Wetlands Protection Act and the local by-law as well as the Town’s storm water by-law. From July 1, 2008 through June 30, 2011, and from July 1, 2011 through June 30, 2014, Danena, Inc. (“Danena”) was under two successive three-year contracts with the Town, acting by and through its Board of Selectmen and/or its Town Administrator, to provide consulting services to the Conservation Commission (“Town Contracts”). Exhibits 2 & 3. Danena’s Massachusetts office address was listed as P.O. Box 387, North Easton, MA 02356, in the Town Contracts.
From 2010 through 2012, Murphy was Danena’s President and its sole officer and employee. Murphy is a 49% owner of Danena. Its majority owner, the Murphy Family Nominee Trustee, of which Murphy is Trustee, owns 51% of the company. Murphy signed both Town Contracts on behalf of Danena.
The Town Contracts, each of which identified Murphy as the primary provider of services thereunder, described the consultant’s duties as follows:
Investigates, monitors and makes recommendations to the Conservation Commission on matters involving wetland protection within the Town in accordance with the Massachusetts General Laws Chapter 140, Sec. 8C and the Town’s Wetland By-laws and regulations. Provides support, preparation/participation at scheduled Conservation Commission Meetings. Telephone consultation and site evaluation are also required on a regular basis.
Murphy’s duties, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, also included: (1) reviewing all permit applications and plans filed with the Conservation Commission for completeness; (2) reviewing all such permit applications and plans for compliance with the Wetlands Protection Act and/or the Town’s by-laws/regulations (“regulatory compliance”); and (3) making recommendations to the Conservation Commission.
Murphy served as the Town’s conservation consultant (also referred to as the “Conservation Agent”[6]/)for 22 years, until the fall of 2012. During the relevant time period, this service was provided under the Town Contracts. As the Conservation Agent or consultant, Murphy would take the applications for wetlands permits as well as local by-law permits, review them for accuracy and for compliance with state and local by-laws, and then provide a recommendation to the Conservation Commission as to what to do with them, for example, whether to issue the permit, deny the permit or request more information. The Conservation Commission needed a Conservation Agent or consultant to serve as its technical expert in matters relating to wetlands and storm water management because none of its members had that expertise.
Article 2.3 of the Town Contracts further provided that:
Robert Murphy is a principal in Danena Inc.[,] a company that does civil engineering and MGL, Chapter 268A, Section 17 will prevent Mr. Murphy from acting as an agent for any party other than the Town in which the Town has a direct and substantial interest. Therefore Mr. Murphy will not personally act as an agent for a third party.
Murphy’s duties as Conservation Agent and/or consultant did not require him to receive compensation from anyone other than the Town to prepare permit applications for filing with the Conservation Commission.
M&M Engineering
From 2010 through 2011, Murphy operated M&M Engineering, a company that provided engineering and survey services to property owners and developers. In 2011, M&M Engineering was incorporated under the laws of the State of Delaware. Exhibits in the record, including documents submitted to the Conservation Commission,[7]/ give M&M Engineering’s address as P.O. Box 194, South Easton, MA 02375.
When Murphy accepted payment for services provided by M&M Engineering, he deposited the money into M&M Engineering’s bank account. Murphy was the sole signatory on that account. M&M Engineering’s bank records (Exhibit 43) list its address as P.O. Box 387, North Easton, MA 02356, on the bank statements as well as its checks, which is also Danena’s Massachusetts office address for purposes of the Town Contracts.
From 2010 through 2012, M&M Engineering prepared Notices of Intent (“permit applications”) and plans for approval by the Conservation Commission. Each of those permit applications and plans prepared by M&M Engineering and filed with the Conservation Commission for approval was a particular matter. The Town was a party to and had a direct and substantial interest in those particular matters because the Conservation Commission was its permit-granting authority. Murphy received compensation for the work he performed on behalf of M&M Engineering in relation to the permit applications and plans filed with the Conservation Commission for approval.
Murphy did not inform or tell the Board of Selectmen, the Conservation Commission or its Chair, Debra Sundin, either orally or in writing, about his relationship with M&M Engineering. In August 2012, the Conservation Commission learned of his connection to M&M Engineering when one of its members and the alternate to the Town’s Zoning Board of Appeals (“ZBA”), discovered that a plan which was twice submitted to the ZBA, was first submitted under Danena and then submitted with “M&M Engineering on it.”
From 2010 through 2012, M&M Engineering prepared and filed permit applications and plans with the Conservation Commission for its approval for the following properties: (1) 194 Neponset Street; (2) Lot 1 Old Sheppard Street; (3) 41 Plymouth Street; (4) 756 Turnpike Street; (5) 169 Mechanic Street; and (6) 43 Bolivar Street Lots 2, 3 and 4. The private developers and property owners involved in these projects paid M&M Engineering for its work.
194 Neponset Street
In March 2010, Murphy, as operator of M&M Engineering, gave a developer an estimate of $2,600 to prepare, file and present a permit application and plans for approval by the Conservation Commission for property located at 194 Neponset Street, where the developer proposed to raze an existing structure and build a new single-family dwelling. Murphy, as operator of M&M Engineering, hired a subcontractor to draft plans for filing with the Conservation Commission and assisted the M&M Engineering subcontractor by adding the single-family dwelling detail to the 194 Neponset Street plans. M&M Engineering filed the permit application and plans with the Conservation Commission.
The developer paid M&M Engineering for work performed in relation to the 194 Neponset Street permit application and plans. Murphy, as operator of M&M Engineering, accepted payment from the developer and deposited the funds in M&M Engineering’s bank account, which Murphy controlled. Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to the 194 Neponset Street permit application and plans that M&M Engineering filed with the Conservation Commission for approval.
Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, reviewed the 194 Neponset Street permit application and plans for completeness and regulatory compliance, and made recommendations to the Conservation Commission. In 2010, the Conservation Commission issued an Order of Conditions for 194 Neponset Street.
Lot 1 Old Sheppard Street
In 2010, the owner of Lot 1 Old Sheppard Street proposed to construct a single-family home on the lot and hired M&M Engineering to prepare a permit application and plan and to file them with the Conservation Commission for approval. In the summer of 2010, Murphy, as operator of M&M Engineering, hired a subcontractor to draft the Lot 1 Old Sheppard Street plan for filing with the Conservation Commission, assisted the M&M Engineering subcontractor by adding the house and the septic system details to the plan and prepared the Lot 1 Old Sheppard Street permit application for filing with the Conservation Commission. M&M Engineering filed the permit application and plan with the Conservation Commission.
The owner paid M&M Engineering for work performed in relation to the Lot 1 Old Sheppard Street permit application and plan. Murphy, as operator of M&M Engineering, accepted payment from the developer and deposited the funds in M&M Engineering’s bank account, which he controlled. Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to the Lot 1 Old Sheppard Street permit application and plan M&M Engineering filed with the Conservation Commission for approval.
Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, reviewed the Lot 1 Old Sheppard Street permit application and plan for completeness and regulatory compliance and made recommendations to the Conservation Commission. On July 21, 2010, the Conservation Commission issued an Order of Conditions for Lot 1 Old Sheppard Street.
41 Plymouth Street
In May 2011, Murphy, as operator of M&M Engineering, gave a developer an estimate of $4,250 to prepare and file a Storm Water and Land Disturbance permit application and plans with the Conservation Commission for property located at 41 Plymouth Street, where the developer proposed to demolish an existing four-family dwelling and construct seven condominiums. Murphy, as operator of M&M Engineering, prepared the 41 Plymouth Street permit application for filing with the Conservation Commission, hired subcontractors to prepare the plans and to present those plans to the Conservation Commission at a public hearing, assisted the subcontractors in preparing the plans by adding the sediment and erosion control details to the plans and dug the test pits to calculate the ground water elevations (which details were added to the plans). In October 2011, M&M Engineering filed the permit application and plans with the Conservation Commission.
The developer paid M&M Engineering a total of $7,225, which included payment for drafting and filing the 41 Plymouth Street permit application and plans and presenting them to the Conservation Commission, and filings with the ZBA. Murphy, as operator of M&M Engineering, accepted the $7,225 and deposited the funds in M&M Engineering’s bank account, which he controlled. Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to the 41 Plymouth Street permit application and plans that M&M Engineering filed with the Conservation Commission for approval.
The M&M Engineering subcontractor Murphy hired to present the 41 Plymouth Street permit application and plans to the Conservation Commission, presented the documents at an October 19, 2011 public hearing. Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, reviewed the 41 Plymouth Street permit application and the plans for completeness and regulatory compliance and made recommendations to the Conservation Commission. Specifically, during the October 19, 2011 public hearing, he recommended to the Conservation Commission that a sediment filter be added to the permit. The Conservation Commission accepted Murphy’s recommendation and issued the permit on October 19, 2011.
756 Turnpike Street
In 2011, a developer proposed to repair a septic system at 756 Turnpike Street. The developer hired M&M Engineering to prepare a permit application and plans for filing with the Conservation Commission. Murphy, as operator of M&M Engineering, hired a subcontractor to prepare and present the plans for 756 Turnpike Street to the Conservation Commission, assisted the subcontractor in preparing the plans by adding septic system details to the plan and by digging the test pits to calculate the ground water elevations, (which details were added to the plans). Murphy, as operator of M&M Engineering, also prepared the 756 Turnpike Street permit application for filing with the Conservation Commission. M&M Engineering filed the permit application and plans with the Conservation Commission.
The M&M Engineering subcontractor Murphy hired to present the permit application and plans to the Conservation Commission, presented the documents at a September 21, 2011 public hearing. Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, reviewed the 756 Turnpike Street permit application and plans for completeness and regulatory compliance and made recommendations to the Conservation Commission. The Conservation Commission issued an Order of Conditions for 756 Turnpike Street on September 21, 2011.
In November 2011, Murphy, as operator of M&M Engineering, issued an invoice for $2,750 to the developer for preparing the permit application and septic plan, conducting existing conditions survey, soil exams and a percolation test. The developer paid M&M Engineering for work performed in relation to the 756 Turnpike Street permit application and plans. Murphy, as operator of M&M Engineering, accepted the payment and deposited the funds in M&M Engineering’s bank account, which Murphy controlled. Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to the 756 Turnpike Street permit application and plans that M&M Engineering filed with the Conservation Commission for approval.
169 Mechanic Street
In January 2011, Murphy, as operator of M&M Engineering, gave a developer an estimate of $3,100 to prepare, file and present a permit application and plans for approval by the Conservation Commission for property located at 169 Mechanic Street, where the developer proposed to construct a duplex dwelling. Murphy, as operator of M&M Engineering, prepared the 169 Mechanic Street permit application for filing with the Conservation Commission, hired a subcontractor to prepare the plans and to present those plans to the Conservation Commission, assisted the subcontractor in preparing the plans by adding a house to the existing conditions plan and dug the test pits to calculate the ground water elevations (which details were added to the plans). M&M Engineering filed the permit application and plans with the Conservation Commission in March 2011. Murphy, as operator of M&M Engineering, drafted a March 16, 2011 letter to the abutters of the 169 Mechanic Street property advising them of the filing of the permit application and plans.
The developer paid M&M Engineering for work performed in relation to the 169 Mechanic Street permit application, plans and abutters’ letter. Murphy, as operator of M&M Engineering, accepted the payment and deposited the funds in M&M Engineering’s bank account, which Murphy controlled. Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to the 169 Mechanic Street permit application and plans that M&M Engineering filed with the Conservation Commission for approval.
Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, reviewed the 169 Mechanic Street permit application and plans for completeness and regulatory compliance and made recommendations to the Conservation Commission. On April 6, 2011, the Conservation Commission issued the permits for 169 Mechanic Street.
43 Bolivar Street Lots 2, 3 and 4
The developer of property located on Lots 2, 3 and 4 Bolivar Street proposed to construct two-family dwellings on each lot. In 2011, Murphy, as operator of M&M Engineering, hired subcontractors to draft plans and to present those plans to the Conservation Commission and assisted the subcontractors in preparing the Lots 2, 3 and 4 Bolivar Street plans by adding grading and structure details to the plans. M&M Engineering filed the permit applications for Lots 3 and 4 Bolivar Street on November 23, 2011.
In 2012, Murphy, as operator of M&M Engineering, prepared permit applications for Lot 2 Bolivar Street for filing with the Conservation Commission. M&M Engineering filed the permit application for Lot 2 Bolivar Street on February 23, 2012. The developer paid M&M Engineering for work performed in relation to the Lots 2, 3 and 4 Bolivar Street permit applications and plans. Murphy, as operator of M&M Engineering, accepted the payment and deposited the funds in M&M Engineering’s bank account, which Murphy controlled. Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to the Bolivar Street permit application and plans that M&M Engineering filed with the Conservation Commission for approval.
The M&M Engineering subcontractor Murphy hired to present the Lots 3 and 4 Bolivar Street permit applications and plans to the Conservation Commission, presented the documents at a December 7, 2011 public hearing. In addition, the M&M Engineering subcontractor Murphy hired to present the Lot 2 Bolivar Street permit application and plans to the Conservation Commission, presented the documents at a March 7, 2012 public hearing. Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, reviewed the Lots 2, 3 and 4 Bolivar Street permit applications and plans for completeness and regulatory compliance and made recommendations to the Conservation Commission. The Conservation Commission issued permits for Lots 3 and 4 Bolivar Street on December 7, 2011 and for Lot 2 Bolivar Street on March 7, 2012.
IV. Burden of Proof
To prove a violation of G.L. c. 268A, § 17(a), Petitioner must demonstrate that: (1) Murphy was a municipal employee; (2) who directly or indirectly received compensation from someone other than the Town; (3) in relation to a particular matter in which the Town was a party or had a direct and substantial interest; (4) otherwise than as provided by law for the proper discharge of his official duties. To prove a violation of G.L. c. 268A, § 23(b)(3), Petitioner must demonstrate that: (1) Murphy was a municipal employee; (2) who knowingly, or with reason to know; (3) acted in a manner which would cause a reasonable person, having knowledge of the relevant circumstances, to conclude that any person can improperly influence or unduly enjoy his favor in the performance of his official duties, or that he is likely to act or fail to act as a result of kinship, rank, position or undue influence of any party or person. Proof of Murphy’s timely written disclosure of the relevant circumstances to his appointing authority would avoid a violation of § 23(b)(3).
Petitioner must prove each of these required elements for each violation by a preponderance of the evidence. 930 CMR 1.01(10)(o)2; In Re Jacques, 2013 SEC 2480, 2487; In Re Maglione, 2008 SEC 2172, 2173. The weight to be attached to any evidence in the record, including evidence concerning the credibility of a witness, rests within the sound discretion of the Commission. 930 CMR 1.01(10)(n)3. In Re Jacques, 2013 SEC at 2487; In Re Maglione, 2008 SEC at 2173.
V. Analysis of the Evidence
A. The Common Element: Murphy’s Status as a Municipal Employee
The one element common to both alleged violations of § 17(a) and § 23(b)(3) is whether Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, was a municipal employee for purposes of the conflict of interest law. Petitioner asserts that he was a municipal employee which Murphy denied on the basis that the Town Contracts were with Danena.
Municipal employee is defined broadly in the conflict of interest law 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.” G. L. c. 268A, § 1(g). The Town Contracts which provided for the rendering of consulting services to the Conservation Commission were between the Town and Danena. During the relevant time period, Murphy was Danena’s only officer, as its President, as well as it only employee. Employees of a company do not become municipal employees simply because the company has a contract with a municipality or a municipal agency. In certain situations, however, when a company contracts with a municipality or a municipal agency, an employee, officer or partner of the company who actually performs services for the municipality or municipal agency may be considered a municipal employee for purposes of the conflict of interest law.
We have developed and applied a multi-factor analysis for determining whether a particular individual performing the services in such a situation is a municipal employee. The factors we consider include, but are not limited to, the following: (1) whether the individual's services are expressly or impliedly contracted for; (2) the type and size of the company; (3) the degree of specialized knowledge or expertise required of the service; (4) the extent to which the individual personally performs services under the contract or controls and directs the terms of the contract or the services provided; and (5) the extent to which the person has performed similar services to the municipality or municipal agency in the past. No one factor is dispositive; rather we will balance all of the factors based on the totality of the circumstances. EC-COI-92-13; 89-6; Advisory 06-01 – Consultants and Attorneys Who Provide Services to Government Agencies May be Public Employees Subject to the Conflict of Interest Law.
There is substantial evidence in the record as to each of these five factors to support the conclusion that Murphy was a municipal employee. First, he was specifically named in the Town Contracts as the primary provider of services (thus, the Town specifically selected Murphy to provide the contracted-for services). Second, during the relevant time period between 2010 and 2012, Danena had only one employee - - Murphy. Third, he functioned as the Conservation Commission’s technical expert on wetlands and storm water concerns, providing specialized knowledge and expertise the members of the Conservation Commission lacked. Fourth, Murphy personally reviewed all permit applications and plans for completeness and regulatory compliance and made recommendations to the Conservation Commission as to whether to issue or deny a permit or request additional information. Finally, he served as a consultant to the Conservation Commission for twenty-two years. Accordingly, we find that Petitioner has proved this element by a preponderance of the evidence.
B. The Remaining Elements of a § 17(a) Violation
1. Direct or Indirect Receipt of Compensation From Someone Other Than the Town
Compensation is defined as “any money, thing of value or economic benefit conferred on or received by any person in return for services rendered or to be rendered by himself or another.” G.L. c. 268A, § 1(a). The parties have stipulated to this element as to all the properties described above in Section III, by agreeing, that as to each one, Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to each property’s permit application and plans that M&M Engineering filed with the Conservation Commission for approval.[8]/ In addition, we note that Exhibit 43 includes ten M&M Engineering checks payable to Murphy and signed by him on behalf of M&M Engineering,[9]/ although there is no further evidence indicating the reason for those payments. Based on Murphy’s stipulations, we find that Petitioner has proved this element by a preponderance of the evidence.
2. In Relation to a Particular Matter in Which the Town was a Party or Had a Direct and Substantial Interest
Particular matter is defined as “any judicial or other proceeding, application, submission, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, decision, determination, [and] finding.” G.L. c. 268A, § 1(k). Submissions and applications that require the approval of a municipal agency are particular matters in which the municipality has a direct and substantial interest. EC-COI-93-15.
The parties have stipulated that from 2010 through 2012, M&M Engineering prepared and filed permit applications and plans with the Conservation Commission for approval, that each of the permit applications and plans prepared by M&M Engineering and filed with the Conservation Commission for approval were particular matters, and that the Town was a party to and had a direct and substantial interest in those particular matters because the Conservation Commission was its permit-granting authority. As noted above, the parties have further specifically stipulated that Murphy received compensation from an entity or individual other than the Town for the work he performed on behalf of M&M Engineering in relation to the permit applications and plans, described in Section III above, which were filed with the Conservation Commission for approval.[10]/ We find that Petitioner has proved this element by a preponderance of the evidence.
3. Otherwise Than as Provided By Law for the Proper Discharge of Official Duties
The inclusion in § 17(a) of the qualifying phrase, “otherwise than as provided by law for the proper discharge of official duties,” results in the section prohibiting a municipal employee from directly or indirectly receiving or requesting compensation from anyone other than his municipal employer in relation to any particular matter in which his municipal employer is a party or has a direct and substantial interest unless it is provided by law that the employee may receive such compensation from a non-municipal source for the proper discharge of his official duties as a municipal employee. In EC-COI-03-1, when construing § 4(a), the state employee cognate to § 17(a), we concluded that “the legislature intended, in drafting § 4(a), to allow state employees to collect private compensation provided by law for the proper discharge of their official duties as state employees.” (emphasis in original).[11]/
For instance, an example of private compensation not prohibited by § 17(a) would be a fee paid by a resident to a municipal inspector, such as a Board of Health agent, for conducting an inspection or serving as an observer to an event, such as a percolation test, pursuant to a duly-enacted municipal by-law providing for such compensation. This element of a § 17(a) violation may be established either by proof that no law authorized the municipal employee’s receipt of the compensation or that the compensation was not received by the municipal employee for the proper discharge of his official municipal duties.
In attempting to meet its burden of proof on this element, Petitioner relies on Conservation Commission Chair Sundin’s “No” answer provided in response to Petitioner’s question as to whether “[Murphy’s] duties as a conservation agent and/or consultant require[d] him to receive compensation from anyone other than the [T]own to prepare permit applications for filing with the Conservation Commission.” The relevant question, however, is not whether Murphy’s official duties required him to receive private compensation for his private work, but rather whether Murphy’s official duties required him to prepare permit applications and plans on behalf of private parties for filing with the Conservation Commission and whether any law permitted him to accept compensation from private parties for doing so. Because Sundin’s testimony does not answer those questions, it is therefore necessary to consider whether this element is otherwise established by the evidence in the record.
The record contains substantial evidence that the payments made by the private parties to M&M Engineering, which were received by Murphy, were payments for private engineering services provided by that entity through its consultants and its operator, Murphy. The payments were made in response to M&M Engineering’s estimates and invoices for services of the type commonly known to be provided to private parties by private engineers and not by government officials and employees. There is no evidence in the record that the private payments were made to Murphy for or because of the performance of any official duty (whether or not in the proper discharge of that duty), as the Town’s Conservation Agent or consultant.
In his defense, Murphy relies on Article 2.3 of the Town Contracts, each of which provided as follows: “MGL, Chapter 268A, Section 17 will prevent Mr. Murphy from acting as an agent for any party other than the Town in which the Town has a direct and substantial interest. Therefore Mr. Murphy will not personally act as agent for a third party.” From this, he argues that he did not violate this element (or any other element) of § 17(a), because Article 2.3 only expressly prohibited his acting as agent for parties other than the Town (which he asserts he did not do), and not his doing compensated work for those parties (not involving his acting as agent), as an employee of Danena and that the Town was aware of his private work. This argument is unsupported by both the law as well as the facts in the record.
We note that Article 2.3 failed to include the restriction in § 17(a) which prohibited Murphy, while a municipal employee, from receiving compensation directly or indirectly from someone other than the Town in relation to a particular matter in which the Town was a party or has a direct and substantial interest unless otherwise authorized by law for the proper discharge of his official duties as the Conservation Commission consultant. Although Murphy asserts that the Conservation Commission wanted him as part of his duties to help applicants comply with the Wetlands Protection Act and the Town’s wetlands by-law, he does not argue, nor is there any evidence in the record to support the conclusion that, Murphy believed that the proper discharge of such duties required him, as the operator of M&M Engineering, to prepare and provide estimates for work that needed to be done, to hire subcontractors to do that work, to do some of the work needed for the plans himself and then to have the applicants pay M&M Engineering (directly) and Murphy (indirectly) for such work.
As a matter of law, the Town could not eliminate the restriction on the receipt of private compensation under § 17(a) simply by a provision in a contract. Rather, Murphy’s job duties and responsibilities would need to have been expanded to include such work and, in addition, as noted above, the Town would have needed to adopt a duly-enacted by-law that would allow him to accept private compensation from private parties for properly performing such work as part of his official duties. As far as the record reflects, neither of these things occurred.
Moreover, Murphy’s argument that Article 2.3 permitted him to work for Danena and further that his work for Danena was well-known, is unsupported by the facts in the record as well as his own behavior. As he stipulated, Murphy’s work, which is the subject of the alleged violations, was done as the operator of M&M Engineering, not as a principal of Danena. Although he asserts that Danena operated as Danena Engineering Associates as well as M&M Engineering and that his private work was well-known, the record supports the exact opposite conclusions. Danena and M&M Engineering used different addresses when dealing with the Town. In addition, the documents that M&M Engineering prepared and submitted to the Conservation Commission included in the record[12]/ did not indicate that Murphy had participated in preparing the documents. Murphy did not orally or in writing inform the Board of Selectmen, the Conservation Commission or its Chair, Sundin, about his relationship with M&M Engineering. Rather, as Sundin, whose testimony we credit, stated, she and the other members of the Conservation Commission only learned of Murphy’s connection to M&M Engineering when one of its members and the alternate to the ZBA, discovered that a plan which was twice submitted to the ZBA, was first submitted under Danena and then submitted with “M&M Engineering on it.” Prior to that time, Sundin, who testified that she had known Murphy for fifteen years and that they were friends, was unaware of his connection to, or relationship with, M&M Engineering.
Furthermore, in his November 12, 2012 letter and narrative to the Chair of the Town’s Board of Selectmen regarding the situation, Murphy, in fact, admitted that he “misinterpreted” the Town Contracts: “Prior to entering into contracts for services in [Town], I read the contract between the Town and Danena. I now know that I misinterpreted the disclosure portion of the contract. The problem was compounded by my lack of good judgment in not having our counsel review the contract.” Exhibit 41. He further admitted that he had had a “lapse in judgment.” Id. Murphy explained that M&M Engineering was started to provide a company name for an out-of-work friend to work under, and that Danena, which is and was a 50% owner of M&M Engineering, provided his friend with space in its Easton office and equipment usage. He further explained that in September 2011, his friend was able to solve his financial problems and retire and it was at that time, that Danena took over the operations of M&M Engineering. Id.
As such, Murphy could not have had any reason to expect that the Town would have knowledge of, or be aware of, his connection to M&M Engineering when some of the conduct at issue in this matter was undertaken prior to September 2011, the date he states that Danena took over its operations.[13]/ Moreover, the September 2011 time frame is after the termination of the first Town Contract (Exhibit 2), which ended on June 30, 2011, as well as after the execution of the second Town Contract (Exhibit 3) on August 23, 2011.[14]/ Accordingly, we find that Petitioner has proved by a preponderance of the evidence that Murphy’s compensation was not “as provided by law for the proper discharge of official duties.”
C. The Remaining Elements of a § 23(b)(3) Violation
1. Knowingly or with reason to know
The conflict of interest law does not define the terms knowingly or with reason to know. In In Re Foresteire, 2009 SEC 2220, 2225, we noted that the phrase knowingly has been defined to include “‘in a knowing manner . . . with awareness, deliberateness, or intention’” and reason to know as “‘indicat[ing] or denot[ing] 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.’” (citations omitted).
The parties stipulated that, as to each permit application and plan submitted by M&M Engineering to the Conservation Commission for the properties described in Section III above, Murphy, as the Danena employee identified under the Town Contracts to provide services to the Conservation Commission, reviewed them for completeness and regulatory compliance and made recommendations to the Conservation Commission about those permit applications and plans. They further stipulated that Murphy personally worked on those permit applications and plans filed by M&M Engineering on behalf of private developers and hired subcontractors to prepare and present the plans before the Conservation Commission. In addition, the permit applications had the words, “Prepared by M&M Engineering” on them (Exhibits 9, 14, 23, 26, 31-33), while the plans had “M&M Engineering” on them (Exhibits 8, 13, 16, 20, 22, 25, 29 & 30).
Under these circumstances, Murphy knew or had ample reason to know, that when reviewing those documents as the consultant to the Conservation Commission under the Town Contracts, he was acting officially on permit applications and plans for a company which he operated and further, that he had personally worked on some of those documents. Moreover, his decision to act officially in these situations could not be said to be accidental, but rather, was deliberate. Based on the substantial evidence in the record, his failure to disclose his relationship to M&M Engineering to the Town or the Conservation Commission, including its Chair Sundin, combined with his silence even as subcontractors he had hired as the operator of M&M Engineering, presented projects to the Conservation Commission at public hearings which he attended and during which he made certain recommendations, supports a finding that he acted with awareness, deliberateness and intention. Accordingly, we find that Petitioner has proved this element by a preponderance of the evidence.
2. Acted in a Manner Which Would Cause a Reasonable Person, Having Knowledge of the Relevant Circumstances, to Conclude That Any Person Can Improperly Influence or Unduly Enjoy His Favor in the Performance of His Official Duties, or That He is Likely to Act or Fail to Act as a Result of Kinship, Rank, Position or Undue Influence of Any Party or Person
The parties have stipulated to the facts that Murphy received compensation from someone other than the Town, for the work he performed as the operator of M&M Engineering, to prepare permit applications and plans for submission to the Conservation Commission for properties as described in Section III above and that he was making recommendations as the Conservation Commission consultant to the Conservation Commission on whether to approve those plans and applications. Murphy asserts that because all of the “over [1,200] permit applications for projects” in Town that came before the Conservation Commission while he was a consultant were ultimately approved, and because the Conservation Commission had wanted him to work with applicants to help them comply with the regulations, a person could not be led to conclude that he was unduly influenced by, or unduly favored, M&M Engineering when he, in his capacity as the Conservation Commission consultant under the Town Contracts, reviewed and commented on their proposals.
We do not find Murphy’s argument persuasive. Even if every project permit application was ultimately approved, a reasonable person having knowledge of the facts that some of those applications and plans Murphy was reviewing as the Conservation Commission consultant were prepared by a company he operated, that he had hired subcontractors to do some of that work, that he personally did some of the work on those applications and plans, that the subcontractors he hired on behalf of M&M Engineering presented the applications and plans to the Conservation Commission at meetings that he attended as its consultant and on which he made recommendations, and that he was paid privately to do so, would conclude that M&M Engineering could unduly enjoy his favor in the performance of his official duties.
Moreover, Murphy does not argue, nor is there any evidence in the record, that he made a disclosure under § 23(b)(3) such as to avoid a violation of § 23(b)(3). Indeed, all the relevant evidence in the record, including Sundin’s testimony and excerpts from Murphy’s sworn interview,[15]/ is that he failed to disclose his connection to M&M Engineering until after it was discovered by the Conservation Commission in August 2012. Accordingly, we find that Petitioner has proved this element by a preponderance of the evidence.
VI. Conclusion
Petitioner has proven by a preponderance of the evidence that as the Town’s Conservation Commission consultant, Murphy was a municipal employee who violated G.L. c. 268A, § 17(a) when he received compensation from someone other than the Town in relation to particular matters in which the Town was a party and had a direct and substantial interest, which compensation was not otherwise provided by law for the proper discharge of his official duty. Petitioner has further proven by a preponderance of the evidence that as the Town’s Conservation Commission consultant, Murphy was a municipal employee who violated G.L. c. 268B, § 23(b)(3) when, as the Conservation Commission consultant, he knowingly, or with reason to know, reviewed and acted on matters involving applications and plans submitted by M&M Engineering on behalf of its private clients while he was its operator, thereby causing a reasonable person to conclude that M&M Engineering could unduly enjoy his favor in the performance of his official duties.
VII. Order
Having concluded that Robert Murphy violated G.L. c. 268A, §§ 17(a) and 23(b)(3), the State Ethics Commission hereby ORDERS him to pay a civil penalty of $5,000 for violating § 17(a), and $5,000 for violating § 23(b)(3), for a total civil penalty of $10,000.