| Date: | 12/17/2014 |
|---|---|
| Organization: | State Ethics Commission |
| Docket Number: | 13-0010 |
This matter concerns Respondent Stephen Hyde, Sr.’s alleged use of his position as Chief of the Town of Southampton Fire Department (“SFD”) to secure for himself and his son unwarranted payments and benefits of substantial value, and Hyde’s alleged presentation to the Town of Southampton (“Town”) of false or fraudulent claims for payment. Specifically, the Commission’s Enforcement Division (“Petitioner”) alleges that Hyde, knowingly or with reason to know: (A) used his official position: (1) to secure for his son payments by the Town totaling approximately $6,646 for work his son did not perform, and (2) to secure for himself use of a Town-owned generator for about two years, in violation of G. L. c. 268A, § 23(b)(2)(ii);[2] and (B) presented false payrolls to the Town in order to cause the $6,646 in payments to his son in violation of G. L. c. 268A, § 23(b)(4).[3] In his defense, Hyde asserts that the payments to his son were for mechanical, electrical and body work (hereinafter “repair and maintenance work”) that his son performed for the SFD; and that his use of the generator at his home was within his authority as Fire Chief under the so-called “Strong Chief Law,” G. L. c. 48, § 42, and for the public’s safety, and that any personal benefit from the use was de minimis. Hyde denies violating G. L. c. 268A, §§ 23(b)(2)(ii) and 23(b)(4).
This matter commenced on October 28, 2013, with Petitioner’s issuance of an Order to Show Cause alleging that Hyde violated G. L. c. 268A, §§ 23(b)(2)(ii) and 23(b)(4) in 2011 while serving as SFD Fire Chief. Hyde answered on November 15, 2013, denying most of the allegations and asserting seven affirmative defenses. An adjudicatory hearing was held on June 23, 2014, at which ten exhibits were admitted into evidence, five witnesses, including Hyde and his son, testified and the Parties made their closing arguments before the Presiding Officer. Respondent moved to dismiss at the end of Petitioner’s case and again at the close of all evidence. Both motions were denied by the Presiding Officer. The parties submitted their final briefs on August 27, 2014.
In rendering this Decision and Order, each undersigned member of the Commission has considered the testimony of the witnesses at the adjudicatory hearing, the evidence in the public record and the arguments of the parties.
The Petitioner must prove its case and each element of the alleged violations by a preponderance of the evidence. 930 CMR 1.01(10)(o)2. The weight to be attached to any evidence in the record, including evidence concerning the credibility of witnesses, rests within the sound discretion of the Commission. 930 CMR 1.01(10)(n)3.
Petitioner alleges that Hyde violated § 23(b)(2)(ii) by using his position as SFD Fire Chief to: (a) secure for his son payments for work he did not perform; and (b) secure for himself the free use at his home of a Town-owned generator. In order to have established that Hyde violated § 23(b)(2)(ii), Petitioner must have proved, as to each alleged violation, each of the following elements by a preponderance of the evidence: that Hyde (1) was a municipal employee, (2) who knowingly, or with reason to know, used or attempted to use his official position, (3) to secure for himself or others unwarranted privileges or exemptions, (4) which were of substantial value and (5) not properly available to similarly situated individuals.
Petitioner also alleges that Hyde violated § 23(b)(4) by presenting to the Town false or fraudulent claims for payment. In order to have proved that Hyde violated § 23(b)(4), Petitioner must have proved each of the following elements by a preponderance of the evidence: that Hyde (1) was a municipal employee, (2) who knowingly or with reason to know, (3) presented a false or fraudulent claim to his employer for a payment or benefit of substantial value.
There is no dispute that Hyde was, at all relevant times, the SFD Fire Chief and a full-time employee of the Town. As such, Hyde was, at all relevant times, a municipal employee as defined in G. L. c. 268A, § 1(g). Thus, this element is established as to each of the three alleged violations.
We will first discuss the alleged § 23(b)(2)(ii) violation arising from the payments to Hyde’s son. Then we will discuss Hyde’s alleged violation of § 23(b)(4). Finally, we will discuss the alleged § 23(b)(2)(ii) violation arising from Hyde’s use of the SFD generator.
Hyde Knowingly or with Reason to Know Used His Official Position to Secure Privileges for His Son.
Hyde had access to the SFD call sheets, prepared SFD payrolls and presented them to the Town for payment, all in his capacity as SFD Fire Chief. Hyde could not have removed the call sheets from the lockbox, altered them to add his son, prepared payrolls showing payments due to his son based on or backed-up by the altered call sheets and presented the payrolls to the Town except through the use of his official position. Thus, Hyde used his official position.
The evidence establishes that Hyde as Fire Chief intentionally added his son’s name to call sheets for fire and ambulance calls and daytime station coverage when he knew his son had not responded to the calls or provided the daytime coverage the call sheets indicated. The evidence also establishes that Hyde as Fire Chief intentionally prepared and presented to the Town for payment SFD payrolls based on and/or backed-up by falsified call sheets. Hyde further sometimes deliberately included his son on SFD payrolls in order to pay him, not for work done during the relevant pay period, but instead for work his son purportedly performed at another time, sometimes weeks or months earlier. Given that Hyde acted intentionally, he also acted knowingly or with reason to know.
Hyde’s defense is that he only intended to pay his son for work that his son performed and thus, implicitly, that his intent in preparing and presenting the payrolls based on and/or backed-up by the altered call sheets was to cause the Town to pay his son for the repair and maintenance work that his son performed for the SFD rather than to secure for him an unearned benefit. The preponderance of the credible evidence shows, however, that Hyde’s son was paid for at least about 156 hours of work that he did not perform. The evidence further shows that Hyde failed to document or record his son’s work, failed to require his son to record his work on call sheets, and otherwise made no effort whatsoever to accurately keep track of the repairs and maintenance his son purportedly performed and the amount of time he spent performing that work so as to ensure that his son was not overpaid. Hyde’s failure to keep such records was reckless and gave him reason to know that the Town’s payments to his son were excessive and thus unwarranted privileges. A reasonable person of ordinary prudence and intelligence in Hyde’s situation would have been able to infer that his son was being paid for hours of work he did not perform.
The payments the Town made to Hyde’s son as a result of the payrolls based on and/or backed-up by the falsified call sheets that Hyde presented to the Town were special benefits and, thus, privileges.[15]
Therefore, the evidence establishes that Hyde, by intentionally causing the Town to pay his son based on false payrolls he deliberately prepared and submitted as Fire Chief, knowingly or with reason to know used his official position as Fire Chief to secure privileges for his son.
The preponderance of the credible evidence shows that the Town payments to his son which Hyde secured through the use of his official position were without legitimate reason or justification. First, the payments resulted from Hyde’s presentation of SFD payrolls to the Town for payment which falsely represented that his son had worked a certain number of hours during the relevant pay period. Second, because Hyde did not maintain any records of the work his son had purportedly performed, the payments to his son were based on Hyde’s uncertain knowledge and memory of that work. Given that the payments were based on both deliberately false and recklessly uncertain information about Hyde’s son’s work for the SFD, the payments were without legitimate reason or justification and thus were unwarranted privileges. Finally, where the preponderance of the evidence shows that Hyde’s son was paid in 2011 for at least about 156 more hours of work than he actually performed, those excess payments were unwarranted privileges.
Each Town payment to Hyde’s son of $50 or more was of substantial value.[17] In 2011, Hyde’s son received at least 16 payments of $50 or more from the Town as a result of the SFD payrolls prepared and presented for payment by Hyde which contained false information regarding hours worked by his son. Each of these payments was an unwarranted privilege of substantial value. In addition, where the excess payments to Hyde’s son totaled over $2,000, they were cumulatively of substantial value.
The payments to Hyde’s son were unwarranted privileges that were not properly available to similarly situated individuals. First, no SFD firefighter/EMT was entitled to be paid for call and station coverage work he had not performed. Second, no SFD firefighter/EMT was entitled to be paid for more hours of repair and maintenance work than he actually performed. Accordingly, each of the payments was an unwarranted privilege of substantial value which was not properly available to Hyde’s son or to similarly situated individuals.
Accordingly, we find that the preponderance of the evidence establishes that between January and December 2011, Hyde knowingly or with reason to know used his official position as Fire Chief to secure for his son unwarranted privileges of substantial value, i.e., multiple payments of $50 or more from the Town, that were not properly available to similarly situated individuals. Therefore, we find that Petitioner has proved that Hyde violated § 23(b)(2)(ii) with respect to the 2011 Town payments to his son.
The evidence establishes that, between January and December 2011, Hyde deliberately and intentionally prepared and presented to his employer, the Town, sixteen payrolls seeking, among other things, payments of substantial value to his son for work his son had not performed. Insofar as these payrolls requested Town payments to Hyde’s son based on work he had not performed, they were false or fraudulent claims for payment.
First, the evidence establishes that the payrolls were false claims for payment in that they requested payments under false pretenses. That is, the payrolls sought payments to Hyde’s son for hours and types of work that he had not in fact performed during the relevant periods. Second, the evidence establishes that the payrolls were false claims for payment in that they sought payments to Hyde’s son for a total of at least about 156 hours of work that he did not perform at all.
The evidence further establishes that Hyde knew or had reason to know of both of these falsities at the time he presented the payrolls for payment. Hyde’s testimony concerning how he purposefully altered the call sheets on which the payrolls were based in order to pay his son for repair and maintenance establishes his knowledge of false pretenses under which the payrolls were presented. Hyde’s knowledge or reason to know of the overpayments sought by the payrolls he presented is established by the evidence of his recklessness in failing to take reasonable steps to ensure that his son’s work was accurately recorded.
Accordingly, we find that the preponderance of the evidence establishes that between January and December 2011, Hyde knowingly or with reason to know presented to his employer, the Town, sixteen false or fraudulent claims for payments of substantial value to his son for work his son had not performed. Therefore, we find that Petitioner has proved that Hyde violated § 23(b)(4) with respect to the 2011 Town payments to his son.
The evidence establishes that Hyde, acting on his authority as Fire Chief, had the SFD generator installed at his home and connected to his home’s electrical power system. Hyde testified that he did so in the interest of public safety in order to power his SFD radio during power outages. Having the generator so installed spared Hyde the inconvenience of returning to his home during extended power outages in order to refuel the generator as he had done previously, and was of some benefit to Hyde personally in ensuring that his home would not freeze.
There is no evidence of the value of any personal benefit to Hyde derived from having the SFD generator installed at his home. The purchase cost of the generator does not establish the value of its use. More importantly, there is no evidence that having the generator so installed was an unwarranted privilege not properly available to similarly situated individuals. The fact that other SFD firefighters were not provided with generators for their homes does not prove this element of the alleged violation given that they were not similarly situated individuals to Hyde as the fulltime SFD Fire Chief. Thus, the evidence does not support the conclusion that it was an unwarranted privilege for Hyde to use the SFD generator at his home to power his SFD radio. The fact that Hyde received a personal benefit incidental to that use does not prove that the use was unwarranted.
Accordingly, we find that the preponderance of the evidence does not establish that Hyde by installing the SFD generator at his home knowingly or with reason to know used his official position as Fire Chief to secure for himself an unwarranted privilege of substantial value that was not properly available to similarly situated individuals. Therefore, we find that Petitioner has failed to prove that Hyde violated § 23(b)(2)(ii) with respect to his use of the SFD generator.
For the above stated reasons, we conclude and find that Petitioner has proved by a preponderance of the evidence that Hyde violated G. L. c. 268A, § 23(b)(2)(ii), by, as Fire Chief, causing unwarranted payments of substantial value to be made by the Town to his son. We further conclude and find that Petitioner has proved by a preponderance of the evidence that Hyde violated G. L. c. 268A, § 23(b)(4) by, as Fire Chief, presenting false payrolls to the Town for payments of substantial value to his son. Finally, we conclude and find that Petitioner has not proved that Hyde violated § 23(b)(2)(ii) with respect to his use of the generator.[18]
Accordingly, having found that Hyde violated G. L. c. 268A, § 23(b)(2)(ii) and § 23(b)(4) as specified above, the Commission, pursuant to the authority granted it by G. L. c. 268B, § 4(j), hereby ORDERS Hyde to pay a civil penalty of $7,500.[19]
