Settlement  In the Matter of Collector-Treasurer's/City of Boston

Date:	02/27/1981
Organization:	State Ethics Commission
Docket Number:	140

Disposition Agreement

This agreement is entered into between the State Ethics  Commission ("Commission"), and the following officials and  employees of the City of Boston ("the City"): Newell Cook ("Mr.  Cook"), the former Collector-Treasurer and current Auditor of the  City, Dora Fredman ("Mrs. Fredman"), a clerk in the Collector-  Treasurer's Office, Lowell Richards ("Mr. Richards"), the  Collector-Treasurer of the City, and Kenneth Glidden ("Mr.  Glidden"), the First Assistant Collector-Treasurer of the City,  pursuant to Section 11 of the Commission's Procedures Covering the  Initiation and Conduct of Preliminary Inquiries and Investigations.  The parties agree that upon its execution, this Agreement shall  constitute a final order of the Commission, enforceable in the  Superior Court of the Commonwealth.   

On December 1, 1980, the Commission initiated a Preliminary  Inquiry, pursuant to Section 4 of General Laws Chapter 268B, into  alleged violations of the Conflict-of-Interest Law, General Laws  Chapter 268A ("Chapter 268A"), by certain officials and employees  of the Collector-Treasurer' Office of the City of Boston  ("Treasurer's Office"). Specifically, the Preliminary Inquiry was  initiated after the Commission received a complaint alleging that  a part-time clerk employed by the Treasurer's Office to process  municipal lien certificates, was receiving private fees to expedite  the issuance of said certificates; that the only way to obtain a  certificate within the statutorily required time period was to pay  a private expediting fee; and that these private fees had been  charged and collected for several years with the knowledge and  approval of the officials responsible for the operations of the  Treasurer's Office, and with the full cooperation and participation  of the majority of attorneys who convey real property in the City  of Boston.   

The Commission has concluded its Inquiry into these allegations, and makes the following findings of fact and  conclusions of law to which the parties hereto agree:   

1. A municipal lien certificate ("certificate") is a document furnished by the collector of taxes for all cities or towns of  5,000 residents or more which indicates all taxes and other  assessments, which constitute liens on a particular piece of  property. Almost every transfer of real property entails the  issuance of a certificate.   

2. Pursuant to G.L. c. 60, Section 23, certificates are to be  furnished by the collector of taxes within five business days of  application. The fee schedule, set by statute, and in Boston by  ordinance as well, begins at $10 per certificate for vacant land  and land housing single-family structures, and graduates to $100  for commercial properties.   

3. The issuance of certificates in Boston is handled by the  Collecting Division of the Treasurer's Office. Prior to July of  1977, the entire operation (receipt of applications and processing  of certificates) was handled by two full-time clerks. Approximately  three years ago, one of the clerks, Dora Fredman, retired at age  70 leaving only one clerk to handle the work, with the occasional

aid of other clerks in the Division. Requests for certificates have  frequently been backlogged because of staff shortages.   

4. The Collecting Division issues approximately 6,000  certificates each year. Of the certificates issued during the  period from June 1979-    

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September 1980, (the only period for which precise dates were  available), approximately 40% were furnished within the 5 business  day period as required by statute. Most of the other certificates  were issued within a period of from two to four weeks after  application.   

5. A sampling of thirteen of the many law firms which  regularly received the certificates which they requested within the  5 day statutory period, revealed that all thirteen firms paid  private "expediting fees" to Mrs. Fredman for prompt processing of  their certificates. The amount of the individual fee paid varied  between five and ten dollars per certificate.   

6. Prior to paying these expediting fees to Mrs. Fredman,  several of these firms had regularly paid a similar fee to another  employee of the Treasurer's Office who subsequently retired and  is now deceased.   

7. All thirteen firms contacted were of the understanding that  Mrs. Fredman was a part-time or retired city employee who was  authorized to collect these private fees. Few, if any, of the firms  pursued their inquiry into the legality of this arrangement beyond  asking Mrs. Fredman if the private fees were authorized. However,  if they had inquired of anyone in authority in the Treasurer's  Office, they would have been advised that she had been authorized  by officials in the Treasurer's Office to collect private  expediting fees.   

8. The issuance of a certificate involves the accumulation of  tax-related information from three city departments: the  Treasurer's Office, the Building Department, and the Public  Improvements Commission. Once gathered, this information, is  recorded on a certificate by the clerks in the Collecting Division  of the Treasurer's Office. The actual collection of the tax data  in each department takes only a matter of minutes, however, the  issuance of a certificate when processed through normal channels,  can take several days or even weeks depending on the  characteristics and history of the parcel of property for which the  certificate has been requested and the length of delays in  circulating the application from department to department. When a  certificate is "expedited," it is processed out of order and the  information necessary to its completion is personally gathered from  the other departments by the clerk doing the expediting. It is  possible to expedite up to twenty (20) certificates in a single day  if those certificates do not present any unusual problems. 

9. Although difficult to determine with precision the exact  amount of the expediting fees paid to Mrs. Fredman in the 1978-1980  period, the Commission finds that said payments totaled  approximately $10,000.

History

10. Subsequent to Mrs. Fredman's retirement in June of 1977,  she approached James Young, then Deputy Mayor for Fiscal Affairs,  and Newell Cook, then First Assistant Collector-Treasurer and asked  if it would be possible for her to return to work in the Collecting  Division to process municipal lien certificates on a part-time,  contractual basis. Because Mrs. Fredman had been an extremely  effective employee, who knew all of the quirks in the system, Mr.  Young hired her back on contract at terms which would be consistent  with the requirements of her retirement.   

11. Mrs. Fredman's first contract ran from February 21, 1978  through June 30, 1978 for an amount which was not to exceed $4,000.  Her second contract, again for $4,000, ran from February 26, 1979  through June 30, 1979. Her third contract was increased to a  maximum of $10,000 and became effective on July 7, 1980. Pursuant  to these contracts she was paid $2,280 in 1978, $2,742 in 1979, and  $5,000 in 1980. She also worked from time to time in the  Treasurer's Office, in an uncompensated capacity, during periods  when she was not under the terms of these contracts and after being  permitted to do so as set out in paragraphs 13 and 14 below.   

12. None of the aforementioned contracts between Mrs. Fredman  and the City authorized her to collect private fees for her  services in addition to the compensation paid by the City. Each of  the contracts specifically stated that she "shall be considered an  employee for the purposes of G.L. c. 268A (the Conflict-of-Interest  Law)", and directed her attention to the prohibitions of that law.   

13. Mrs. Fredman approached Newell Cook in 1978 during the  term of her first contract to ask if she could accept private fees  from a limited number of attorneys who she knew and who needed  expedient certificate delivery. Mr. Cook authorized her to collect  these private expediting fees for work she performed on her own  time. Mr. Cook authorized this arrangement because Mrs. Fredman was  on a contract and   

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not in his view a "city employee", and because he felt that this  arrangement would be advantageous to the City by helping to clear  up the backlog of certificates at no additional cost to the City.  When her first contract expired in June 1978, she continued to work  in the Collecting Division on a part-time unpaid basis to service  her private customers for private fees.   

14. Mrs. Fredman's 1979 and 1980 contracts were approved by  then Collector-Treasurer Mr. Richards. During the terms of those  contracts, Mrs. Fredman sought and received authorization from Mr.  Richards, and from First Assistant Treasurer Mr. Glidden to  continue to use the facilities of the Treasurer's Office to  expedite certificates for private fees on her own time. Both Mr.  Richards and Mr. Glidden authorized this arrangement because it  appeared to be advantageous to the City in that this expediting  service would not cost the City any money and would help alleviate  the backlog of certificate requests, and because it was their  understanding that the acceptance of expediting fees was a longstanding   practice in the Treasurer's Office.   

15. Messrs. Cook, Richards and Glidden authorized Mrs. Fredman  to collect these private fees, as noted in paragraphs 13 and 14  above, without checking with or advising Corporation Counsel, and  will full knowledge of the statutory responsibility of the City to  issue certificates within five days of application without the  payment of an expediting fee for that service.   

16. Although Messrs. Cook, Richards and Glidden authorized  Mrs. Fredman to collect these private fees, the full extent of her  expediting business was not known to them. Mrs. Fredman's  private clientele grew from the limited number of attorneys whom she   had known from the past and for whom she was authorized to expedite  certificates, to a large number of attorneys who regularly conveyed  real property in the City of Boston. She collected expediting fees  throughout 1978, 1979, and 1980: both during the periods when she  was under contract with the City, and also during those periods  when she was not under contract but was permitted to conduct her  private business out of the Treasurer's Office. However, during  those periods when she was not under contract with the City, Mrs.  Fredman also performed numerous official tasks for and at the  direction of the Treasurer's Office, for which she received no  compensation.

17. In addition to authorizing Mrs. Fredman to continue to  collect expediting fees, and for the purpose of establishing an  orderly system for giving priority to the issuance of those  certificates that were needed right away, Messrs. Richards and  Glidden set up a parallel expediting system to be run by the City.  Starting in January 1980, applicants for municipal lien  certificates could pay an additional fee of $10, by certified check  made payable to the City, if they wished to be certain of getting  their certificate within the five-day statutory period. This  "official" expediting fee was never adopted by ordinance and  existed in addition to Mrs. Fredman's private expediting business.   

18. The practice of collecting expediting fees, both private  and public, was brought to a stop by the City on October 16,1980,  after being advised by the Commission that the practice raised  substantial questions under Chapter 268A.

Conclusions

19. The practice of City employees expediting the issuance of  municipal lien certificates for an additional private fee has  existed in the office of the Treasurer of the City of Boston for  many years, predating the employment by the City of the  aforementioned employees and officials, and has been explicitly and  implicitly approved by the Corporate City through and by its  officers and employees. During the years 1978-1980, which were  subject to the Commission s Inquiry, it was unlikely that a citizen  applying for a municipal lien certificate from the City could  obtain that certificate within the 5 day statutory period without  paying a private expediting fee for that service.   

20. The receipt by city employees, part-time or otherwise, of  private fees to expedite official actions violates Sections 3 and  17 of the Conflict-of-Interest Law, Chapter 268A, because those  fees are paid to city employees for or because of official acts,  and are paid in relation to matters in which the City is a party  and has a substantial interest. The knowledge of those officials  responsible for the actions of the Treasurer's Office, and their  approval of the receipt of these private expediting fees, in no way  exempts those actions from the prohibitions of the law.   

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21. The authorization of this improper practice by the City  and its officials, while not motivated by considerations of  personal gain, nevertheless, tended to undermine public confidence  in government, in that it created the impression that official acts  could be unduly influenced by those willing to pay private fees to  City employees for those acts, and that employees of the  Treasurer's Office were acting in violation of their public trust,  in violation of the standards of conduct for municipal employees  as set out in Section 23(f) of Chapter 268A.   

WHEREFORE, the Commission has determined that the public  interest would be served by the disposition of this matter without  further proceedings on the basis of the following representations,  terms and conditions hereby made and agreed to by the parties:

A. The City officials and employees who are parties hereto  will forthwith take such steps as are required, including the  issuance of appropriate executive orders, to insure that

1. The practice of accepting private expediting fees by  employees of the Treasurer's Office will not be resumed;   

2. All employees in the Treasurer's office are advised  that the receipt of private fees for public services is  prohibited by the Conflict-of-Interest Law, Chapter 268A,  unless said receipt is specifically authorized by law.

B. The City officials and employees who are parties hereto  will report to the Commission, within 30 days of the execution of  this Agreement, what steps they have taken to implement the terms  set out in paragraph A, above.