Letter Ruling  Public Education Letter in the Matter of Julian Perez

Date:	12/04/2024
Organization:	State Ethics Commission
Referenced Sources:	G.L. c. 268A, the Conflict of Interest Law, as Amended by c. 248, Acts of 2024

Public Education Letter

December 4, 2024

Julian Perez
c/o Peter J. McQuillan, Esq.
Law Office of Peter J. McQuillan
30 Massachusetts Avenue, Suite 203
North Andover, MA 01845

Dear Mr. Perez:

As you know, the State Ethics Commission (“Commission”) conducted a preliminary inquiry into whether you, as a City of Lawrence building inspector, violated the state conflict of interest law by using your position to alter a city record to re-approve your own building permit, thereby participating in a particular matter in which, to your knowledge, you had a financial interest and knowingly using your position to secure for yourself an unwarranted privilege. 

On October 24, 2024, the Commission voted to find reasonable cause to believe that, as described below, you violated sections 19 and 23(b)(2)(ii) of the conflict of interest law, General Laws chapter 268A, and authorized adjudicatory proceedings. The Commission further determined, however, that, instead of commencing adjudicatory proceedings against you, the public interest would be best served by issuing to you this Public Education Letter which discusses the facts revealed by the preliminary inquiry and explains the application of the law to those facts. The Commission decided to resolve this matter with this public education letter instead of adjudicatory proceedings in part because the City of Lawrence has imposed financial and other sanctions upon you for your conduct described below, and also suspended you due to the Commission’s investigation. 

The Commission and you have agreed that this matter will be resolved with this Public Education Letter and that there will be no formal proceedings against you. You have chosen not to exercise your right to a public hearing before the Commission.

Facts

You have worked for the City of Lawrence Inspectional Services Department (“ISD”) since 2014, and as a building inspector there since 2018. Privately, you are a licensed real estate agent and have owned three properties in Lawrence during the last five years, one of which is your primary residence. 

In 2019, you purchased, renovated, and sold 4-6 Packard Street, Lawrence. Soon thereafter, the city placed you on paid administrative leave while it investigated whether your actions in connection with the Packard Street property complied with the law. Apparently, some city personnel were concerned that it was inappropriate for you, as a city employee, to buy, renovate, and sell privately owned property in the city and had additional concerns about the way in which you were addressing the structural integrity of the property’s foundation. The city concluded its investigation by requiring you to show that the work on the property was structurally sound and to obtain advice from the Commission’s Legal Division as to whether, as a building inspector, you could buy, renovate, and sell investment property in Lawrence. You complied with these requirements in 2019 and returned to work with a six-month probationary period during which the city did not raise any further concerns with your actions regarding your properties or your employment. The Commission’s Legal Division advised you that, under the conflict of interest law, G.L. c. 268A, you could lawfully buy privately owned property for investment in Lawrence and explained to you how to avoid violations of §§ 17, 19, 20 and 23 of the statute in your dual roles as building inspector and real estate investor/developer. 

In 2021, you purchased 233 Jackson Street, Lawrence (the “Property”) for $200,000, as an investment. Two months later, you deeded the Property to an LLC, for which you are the manager and registered agent, for $100. The LLC remains the owner of the Property as of the date of this letter. The Property, which suffered a serious fire in 2020, was a distressed, state-licensed 10-unit rooming house when you acquired it. On November 8, 2021, you had your contractor apply for a building permit for the Property and pay the required $2,460 permit fee. Lawrence’s building commissioner issued the building permit on November 18, 2021.   

As part of your renovation of the Property, you increased the angle of the exterior walls of the top floor, making them more vertical and less sloped. The city official assigned as the building inspector for the Property in early 2022 confirmed that he had approved the change to the exterior walls of the top story as you proposed “as long as there was no increase in height of the existing ridge” and that, based on this approval, you and your development team uploaded drawings for the project which the Lawrence building commissioner approved, and that you and your team performed the construction in a manner consistent with those drawings. 

On or about January 13, 2022, the Lawrence building commissioner issued a stop work order for the Property, for “working beyond the scope of the permit.” On January 18, 2022, the building commissioner issued you a notice of violation and correction order for building code violations, citing your conversion of the Property from a rooming house to an apartment building and your alleged addition of a story to the structure. On February 3, 2022, the building commissioner changed the permit status for the Property in the city’s permit management software from “issued” to “withdrawn.”

On April 11, 2022, you applied to the Lawrence planning board for approval to convert the Property into an apartment building by adding bathroom and kitchen fixtures to each unit. In March 2023, however, you withdrew your planning board application based on your claim that the Property was listed as an apartment building with the Lawrence city assessor’s office.

On September 28, 2022, you used your position as building inspector, including your access to the permit management software, to modify the building permit for the Property, including by changing its status from “withdrawn” to “approved.”

The city eventually found out about your actions of September 28, 2022. On April 25, 2023, following a period of required paid leave and a city investigation, you and the city agreed you would serve a 10-day unpaid suspension for altering the permit for the Property in the permit management software to re-approve the building permit, as memorialized in an executed suspension agreement.[1] Your lost pay from this suspension, which you served from April 24, 2023 to May 5, 2023, was around $2,250.

On or about April 25, 2024, shortly after the Commission’s Enforcement Division summonsed the city to produce certain records and although the Commission summons did not identify you as a subject of investigation,[2] the city placed you on paid administrative leave. An undated letter from a city official stated, “The City has received information that you are currently being investigated by the Massachusetts State Ethics Commission regarding your employment as a building inspector. During the pendency of this investigation, I am placing you on administrative leave effective immediately.”[3] Months later, the city informed you in writing that it was investigating you.[4]

We understand that work on the Property is now complete, however, the city has not provided you with the approvals necessary to rent or sell the property. We further understand that, while still on paid administrative leave, you retired from your position as a Lawrence building inspector effective October 27, 2024. 

Legal Discussion

As a building inspector for the Lawrence ISD, you were a municipal employee. As such, you were subject to the restrictions of the Massachusetts conflict of interest law, General Laws chapter 268A.

Section 19

Section 19 of the conflict of interest law prohibits a municipal employee from participating as such an employee in a particular matter in which, to his knowledge, he has a financial interest.[5]

The Commission found reasonable cause to believe that you violated § 19 when, on September 28, 2022, using your building inspector position to access the ISD permit management software, you modified the status of the building permit for the Property, changing it from “withdrawn” to “approved,” thereby participating as a municipal employee in the particular matter of the decision whether or not to approve the building permit for the Property. At the time you acted, you knew that, through your LLC, you had a financial interest in the approval of the building permit for the Property (and in the removal of the “withdrawn” status) so that work on the Property could continue and your investment in purchasing and developing the Property could pay off.

Section 23(b)(2)(ii)

Section 23(b)(2)(ii) of the conflict of interest law prohibits a public employee from knowingly or with reason to know using or attempting to use his official position to secure for himself an unwarranted privilege of substantial value that is not properly available to similarly situated individuals.[6] The Commission found reasonable cause to believe that you violated § 23(b)(2)(ii) when you used your building inspector position to access the ISD permit management software and alter the city record for the Property, specifically by changing its building permit status from “withdrawn” to “approved,” thereby securing for yourself an unwarranted privilege of substantial value not properly available to similarly situated individuals.  

A building permit is a privilege. When a city official has issued a stop work order and withdrawn a building permit, effectively re-approving it without authorization is unwarranted.[7]

Even if you disputed the veracity of the claims underlying the stop work order, the notice of violation and correction order, and the withdrawal of the building permit for the Property, your use of your position to alter the building permit for a property you ultimately own was not properly available to you or to similarly situated individuals. In fact, it was egregious misuse of your official position, which you knew or had reason to know, including from advice you received from the Commission’s Legal Division.

Changing the status of one’s own building permit from “withdrawn” to “approved” is a very serious violation of the conflict of interest law because it involves the deliberate falsification of a city record which certifies that construction is in compliance with local laws and state building codes. Such violations of the law are potentially subject to civil penalties of up to $10,000 per violation.  As noted above, however, as the City of Lawrence has already taken significant administrative action again you in connection with the misconduct about which the Commission found reasonable cause to believe you violated §§ 19 and 23(b)(2)(ii) of the conflict of interest law,[8] and has further sanctioned you because of the Commission’s investigation, the Commission decided not to require you to enter into a disposition agreement and pay a civil penalty to resolve this matter.

Disposition

Based upon its review of this matter, the Commission has determined that the public interest will be best served by the issuance of this Public Education Letter to you and that your receipt of this letter should be sufficient to ensure your understanding of and future compliance with the conflict of interest law. This matter is now closed.             

Sincerely,

David A. Wilson
Executive Director                                                                                                            

[1]The city failed to produce a copy of the executed suspension agreement to the Commission’s Enforcement Division despite receiving a summons to which the agreement would have been responsive. City personnel suggested to Enforcement staff that the parties had not executed the suspension agreement and that you had not served the suspension, but later admitted that the executed agreement, which the Enforcement Division obtained from you, was genuine.

[2]The Commission endeavors to conduct its investigations confidentially and depends upon the cooperation of witnesses and others to maintain that confidentiality. Throughout the preliminary inquiry, Enforcement Division staff requested that witnesses, including city personnel, not discuss the questions Enforcement asked or the responses that they provided during sworn interviews conducted by Enforcement staff.  All summonses for documents and testimony issued by the Enforcement Division in the preliminary inquiry stated at the top of the summons in bold red font: “CONFIDENTIAL” and did not identify any subject of an investigation.

[3] The city’s inference that you were being investigated by the Commission appears to have been the sole reason why you were placed on paid administrative leave in April 2024. While the placement of public employees on administrative leave is generally a matter left to the discretion of the employing public agency, the Commission strongly disapproves of and cautions against the placement on administrative leave, even if paid, of an employee simply because their agency believes them to be the subject of a Commission investigation. The employing agency’s inference as to who is under investigation may be mistaken and oftentimes the person being investigated has in fact not engaged in misconduct, in which case the administrative leave, even if paid, would be an injustice to the employee and an injury to the public due to the loss of the employee’s services during the leave.

[4]On August 9, 2024, the city sent you a letter stating, “On April 25, 2024, the City of Lawrence hand delivered to you a Notice of Paid Administrative Leave due to an ongoing investigation by the Massachusetts State Ethics Commission. Since that time, the City has initiated its own investigation with respect to your conduct and employment as a building inspector.”

[5] Participation” under the law includes, without limitation, personal and substantial approval, disapproval, or other decision-making. G.L. c. 268A, § 1(j). “Particular matter” includes, without limitation, an “application, …decision, or determination.” G.L. c. 268A, §1(k).

[6] Anything worth $50 or more is of substantial value within the meaning of § 23(b)(2)(ii). 930 CMR 5.05.

[7] This unwarranted privilege was of substantial value in two ways: first, because the building permit itself cost $2,460 and therefore was of substantial value and second, because the re-approved permit allowed work to continue at the Property which in turn increased the value of the Property by more than $50.

[8] The Commission did not make any findings with respect to any possible violations of the building code or other statutes or regulations by you in your capacity as a private developer. Such matters are not within the Commission’s jurisdiction.