pa ethics ruling - john street

InRe: JohnStreet, : FileDocket: 11-010Respondent : X-ref: OrderNo. 1636-2

DateDecided: 6/17/14DateMailed: 7/15/14

Before: JohnJ. Bolger, ChairNicholasA. Colafella, ViceChairRaquelK. BergenMarkR. CorriganRogerNickKathrynStreeterLewis

ThisisafinaladjudicationoftheStateEthicsCommission.

Procedurally, theInvestigativeDivisionoftheStateEthicsCommissionconductedaninvestigationregardingpossibleviolation(s) ofthePublicOfficialandEmployeeEthicsAct (“EthicsAct”), 65Pa.C.S. § 1101etseq., bytheabove-namedRespondent. Atthecommencementofitsinvestigation, theInvestigativeDivisionserveduponRespondentwrittennoticeofthespecificallegation(s). Uponcompletionofitsinvestigation, theInvestigativeDivisionissuedandserveduponRespondentaFindingsReportidentifiedasan “InvestigativeComplaint.” AnAnswerwasfiledandahearingwasheld. OnApril24, 2014, thisCommissioninitiallydecidedthismatter. OnMay8, 2014, OrderNo. 1636wasissuedtotheparties. TheInvestigativeDivisionrequestedreconsideration, andthisCommissiongrantedreconsiderationtoretainjurisdictioninordertoconsiderargumentsastowhethertherehadbeenamaterialerroroflaworfact. Oralargumentwasheld. Therecordiscomplete.

I. ALLEGATIONS:

ThatJohnStreet, apublicofficial/publicemployee inhiscapacityasaCommissionerandChairmanofthePhiladelphiaHousingAuthorityviolatedSections1103(a), 1103(f), and1104(a) oftheStateEthicsAct (Act93of1998) whenheusedtheauthorityofhispublicpositionfortheprivatepecuniarybenefitofamemberofhisimmediatefamilyand/orabusinesswithwhichamemberofhisimmediatefamilyisassociatedbyparticipatingindiscussionsandactionsoftheHousingAuthorityBoardofCommissionersresultinginresolutionsbeingadoptedtoawardcontractstoWolfBlockSchorr & Solis-Cohen, LLP (“WolfBlock”), alawfirmthatemployedhissonforservicestobeprovidedbyhisson; whenheparticipatedinthedecisionsoftheBoardtoadoptresolutionsawardingcontractstoabusinesswithwhichamemberofhisimmediatefamilyisassociatedinexcessof $500withoutanopenandpublicprocess; andwhenhefailedtofileaStatementofFinancialInterestsforthecalendaryears2006and2010.

TheInvestigativeDivisionhasexerciseditsprosecutorialdiscretiontonolprostheallegationunderSection1103(f) oftheEthicsAct (see, Discussion, infra).\]

II. FINDINGS:

A. Stipulationsand/orPleadings

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1. TheInvestigativeDivisionoftheStateEthicsCommissionreceivedasigned, sworncomplaintallegingthatJohnStreetviolatedprovisionsoftheStateEthicsAct (Act93of1998).

2. UponreviewofthecomplainttheInvestigativeDivisioninitiatedapreliminaryinquiryonMay18, 2011.

3. Thepreliminaryinquirywascompletedwithinsixtydays.

4. OnJuly15, 2011, aletterwasforwardedtoJohnStreetbytheInvestigativeDivisionoftheStateEthicsCommissioninforminghimthatacomplaintagainsthimwasreceivedbytheInvestigativeDivisionandthatafullinvestigationwasbeingcommenced.

a. Saidletterwasforwardedbycertifiedmail, no. 70092250000038218696.

b. ThedomesticreturnreceiptborethesignatureofJohnStreet, withadeliverydateofJuly18, 2011.

5. OnAugust31, 2011, theInvestigativeDivisionoftheStateEthicsCommissionfiledanapplicationforaninetydayextensionoftimetocompletetheinvestigation.

6. TheCommissionissuedanOrderonSeptember27, 2011, grantingtheninetydayextension.

7. OnJanuary10, 2012, theInvestigativeDivisionoftheStateEthicsCommissionfiledanapplicationforasecondninetydayextensionoftimetocompletetheinvestigation.

8. TheCommissionissuedanOrderonJanuary30, 2012, grantingtheninetydayextension.

9. PeriodicnoticeletterswereforwardedtoJohnStreetinaccordancewiththeprovisionsoftheEthicsActadvisinghimofthegeneralstatusoftheinvestigation.

10. TheInvestigativeComplaint/FindingsReportwasmailedtotheRespondentonJune28, 2012.

11. JohnStreetservedasaCommissionerwiththePhiladelphiaHousingAuthorityPHA”) fromonoraroundApril19, 2004, untilonoraroundMarch4, 2011.

a. StreetservedastheChairmanofthePHAduringhistenureonthePHA.

b. StreetpreviouslyservedasaCommissionerwiththePHAfrom1993until1998.

1. StreetresignedfromthePHABoardtoseektheofficeofMayor.

12. StreetheldelectedofficewiththeCityofPhiladelphiaservingasaMemberofCouncilandlaterasMayor.

a. StreetservedasMayorofPhiladelphiafromJanuary2000untilJanuary2008.

b. StreetservedonCityCouncilfortheCityofPhiladelphiafromJanuary1980untilDecember1998.

Street, 11-010Page3

13. ThePHAwasestablishedbyResolutionbythePhiladelphiaCityCouncilandapprovedbytheMayorofPhiladelphiaonAugust26, 1937, inaccordancewiththeHousingAuthoritiesAct, \[Act\] No. 265approvedbythePennsylvaniaGeneralAssemblyonMay28, 1937.

14. ThePHAwasestablishedtoprovidefortheerectionofdwellingsforfamiliesoflowincomethatwillprovideworkopportunitiesformanypersonsnowunemployedandwillfurtherstimulategeneralbusinessactivities.

15. FundingforthePHAisprovidedprimarilybytheU.S. DepartmentofHousingandUrbanDevelopment (“HUD”).

16. TheBy-LawsofthePHA (HUD) firstadoptedonMarch11, 1939, identifiedtheAuthorityasthePHA.

a. ArticleIIincludesofficerpositionsofChairman, Vice-Chairman, Secretary, AssistantSecretary, TreasurerandAssistantTreasurer.

1. Section2ofArticleIIdefinedtheChairmanastheExecutiveHeadoftheAuthority.

17. Afive-MemberBoardofCommissioners (“Board”) governsthePHA.

a. AppointmentstothePHABoardaremadepursuanttoSection5oftheHousingAuthoritiesAct.

b. Section5oftheHousingAuthoritiesActprovidesthatforCitiesoftheFirstClass (Philadelphia), theMayorshallappointtwomembers, theCityControllershallappointtwomembers, andthefourmembers, thusappointed, shallselectafifthmemberofsuchAuthority.

c. TheCommissionersservestaggeredterms.

18. TheorderofbusinessattheRegularMeetingsofthePHABoardofCommissionersincludestheapprovalofminutesof thepreviousmeetingandtheapprovalofResolutionsidentifiedinagendasgiventotheCommissioners.

a. Voteswererecordedas “Ayes” and “Nays.”

1. Allabstentionsduringavotearerecordedandspecificallynotedintheminutes.

19. MeetingagendasdescribingmeetingtopicstobediscussedareprovidedtothePHACommissionersafewdaysbeforeeachRegularBoardmeeting.

a. TheagendasidentifyResolutionsthePHABoardofCommissionerswouldbevotingon.

20. StreetwasgenerallyprovidedwithanagendawhenheattendedPre-BoardMeetingswithPHAResidentLeaders.

a. ThePre-BoardMeetingswereusuallyheldafewdaysbeforetheRegularBoardMeetings.

b. StreetwasnormallytheonlyPHACommissionerwhoattendedthePre- BoardMeetings.

Street, 11-010Page4

c. AtthePre-BoardMeetingsPHAResidentLeaderswouldidentifytheirconcernsandissues.

21. StreetastheChairmanofthePHAwouldpresideoverthePHABoardofCommissionerMeetings.

a. StreetwouldidentifyeveryResolutionthePHACommissionerswouldbevotingonatthemeetings.

b. StreetwouldcallmeetingstoorderandwoulddeclarewhenResolutionswereadoptedaftervotesweretakenbythePHACommissioners.

22. Sinceatleast1994, thePHAExecutiveDirectorhasbeenauthorizedtoexecutecontractswithoutBoardapproval.

a. From1994to1998, amendmentstothePHABy-LawshavebeenmadebythePHABoardregardingtheissuanceofcontractswithoutBoardapproval.

b. StreetwasaMemberoftheBoardandvotedtoapprovetheamendments.

23. OnJuly21, 1994, thePHABoardofCommissionersapprovedResolutionNo. 9201authorizingdelegationofauthorityoftheBoardofCommissionerstotheExecutiveDirectortoconcludeandexecutecontractsinamountnottoexceedFiftyThousanddollars ($50,000.00) withoutthepriorapprovaloftheBoardofCommissioners.

a. UnderthisResolution, theExecutiveDirectordidnothavetheauthoritytoexecutecontractsandapplicationsforfundingsubmittedtofederal, state, localandprivateagenciesinamountnottoexceedFiftyThousandDollars

50,000.00) withoutpriorBoardapproval.

b. TheResolutionwasapprovedbythePHABoardofCommissionersbya5-0vote.

1. JohnStreetwasaPHACommissionerandvotedinfavorofthisResolution.

24. OnJune23, 1998, thePHABoardofCommissionersapprovedResolutionNo. 10246authorizingdelegationoftheauthorityoftheBoardofCommissionerstotheExecutiveDirectortoconcludeandexecutecontractsinamountnottoexceedOneHundredThousandDollars ($100,000.00) withoutpriorapprovaloftheBoardofCommissioners.

a. ThisResolutionmodifiedandsupersededResolutionNo. 9201datedJuly21, 1994.

b. TheResolutionwasapprovedbythePHABoardofCommissionersbya5-0vote.

1. JohnStreetwasaPHACommissionerandvotedinfavorofthisResolution.

25. OnMay21, 1998, aResolutionwasapprovedbythePHABoardofCommissionersauthorizingtheExecutiveDirectorandtheContractingofficertonegotiateandconcludecontractmodificationsuptoandincluding $150,000.00.

a. Nocontractwaspermittedtobemodifiedinanamountgreaterthan150,000.00withouttheapprovalofthePHABoardofCommissioners.

Street, 11-010Page5

26. AsaresultoftheResolutionsapprovedbytheBoardin1994and1998, thePHArevised \[its\] ProcurementPolicyonApril16, 2002.

27. TherevisedProcurementPolicyincludedunderGeneralProvisionsthePurposeasfollows:

ThepurposeofthisStatementofprocurementPolicyisto: provideforthefairandequitabletreatmentofallpersonsorfirmsinvolvedinpurchasingbyPHA; assurethatsupplies, services, andconstructionareprocuredefficiently, effectively, andatthemostfavorablepricesavailabletoPHA; promotecompetitionincontracting; providesafeguardsformaintainingaprocurementsystemofqualityandintegrity; andassurethatPHApurchasing \[sic\] areinfullcompliancewithapplicableFederalstandards, HUDregulations, andStateandlocallaws.

ExhibitID8-1.

28. TheRevisedPHAProcurementPolicyprovidedforBoardofCommissioners’ approvalofcontractactionsof $100,000ormore.

a. AllcontractswherethebasecontractamountoranyamountoranyoptionexceedsOneHundredThousandDollars ($100,000) arerequiredtobepre- approvedbytheBoard ofCommissioners. Inaddition, allcontractmodificationsinexcessofOneHundredFiftyThousandDollars ($150,000) requirepre-approvalbytheBoardofCommissioners.

29. Asaresultofthe2002 revisions, nocontractover $100,000orcontractmodificationsinexcessof $150,000wastobeenteredintobythePHAwithouttheapprovalofthePHACommissioners.

30. ThePHAProcurementPolicyinArticleIXincludesacodeofconductprovision, EthicsinPublicContracting-PHAConduct.

a. ThecodeofconductincludedaConflictofInterestprovisionwhichprovidedthatnoemployee, officeroragentofPHAshallparticipatedirectlyorindirectlyintheselectionorintheawardoradministrationofanycontractifaconflict, realorapparent, wouldbeinvolved. Suchconflictwouldarisewhenafinancialorotherinterestinafirmselectedforawardisheldby:

1. Anemployee, officeroragentinvolvedinmakingtheaward;

2. His/herrelativeincludingfather, mother, spouse, brother, sisterorchildincluding “half” or “step”;

3. His/herpartner; or

4. Anorganizationwhichemploys, isnegotiatingtoemploy, orhasarrangementconcerningprospectiveemploymentofanyoftheabove.

b. WhileRespondentstipulatestoFactFindings30 - 30aabove, RespondentdoesnotstipulatethathewasboundbysuchPolicy. (Tr. at12).

31. TheProcurementPolicyofthePHAincludedCompetitiveProposalswhichwereusedwhenenteringintocontractswithlawfirms.

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a. SolicitationsissuedbythePHAwouldrequireRequestforProposals (“RFP”) thatwouldclearlyidentifytherelativeimportanceofpriceandotherevaluationfactors, includingtheweightgiventoeachtechnicalfactorandsubfactor.

b. Negotiationswouldbeconductedwithofferorswhosubmitproposalsdeterminedtohaveareasonablechanceofbeingselectedforaward, basedonevaluationagainstthetechnicalandpricefactorsasspecifiedintheRFP.

c. Offerorsshallnotbedirectedtoreducetheirproposalpricestoaspecificamountinordertobeconsideredforaward. Acommondeadline (BestandFinalOfferorBAFO) shallbeestablishedforreceiptofproposalrevisionsbasedonnegotiations.

32. AstheMayorofPhiladelphia, JohnStreetwasfamiliarwiththePublicOfficialandEmployeeEthicsAct (“EthicsAct”), 65Pa.C.S. § 1101etseq., andtherestrictionsplacedupontheMayoronthehiringoffamilymembers.

a. StreetwascognizantoftheEthicsActandconflictofinterestissuessinceservingasapublicofficialinPennsylvaniasince1980invariouscapacitiesthatincludedservingasPHACommissionerfrom1993until1998.

b. \[ RedactedduetotheconfidentialityrequirementsoftheEthicsAct.\]

33. SharifStreetisthesonofJohnStreet.

a. SharifT. StreetisanattorneyhavinggraduatedfromtheUniversityofPennsylvaniaLawSchoolin1999.

1. SharifStreetwasadmittedtothePennsylvaniaBarinJuly2000.

34. SharifStreetwasemployedbythelawfirmWolfBlockbeginninginoraboutJanuary2000.

a. SharifStreetwasemployedbyWolfBlockasanAssociateAttorneyuntilonoraroundMarch4, 2008.

35. ThelawfirmofWolfBlockhadbeendoinglegalworkforthePHAsincethe1990’sandpredatedSharifStreet’semploymentwiththefirm.

36. AsanAssociateAttorneyforWolfBlock, SharifStreetwaspaidanannualsalary.

a. SharifStreetdidnotreceiveanybonusesfortheworkheperformedforWolfBlock.

37. TheContractingOfficeofthePHAadvertisedSolicitationsforRFPforvarioustypesoflegalservices.

a. WolfBlocksubmittedresponsestoatleastoneofthePHARFPs.

b. AlanKessler, aPartneratWolfBlockhadprimaryresponsibilityforrespondingtotheRFPs.

38. WolfBlock’sRFPsweresenttotheattentionofthePHAContractingOfficer.

a. ShuriHamiltonservedastheContractingOfficerforthePHAfrom2005through2008.

Street, 11-010Page7

39. AftertheRFPsweresubmittedforlegalservices, PHASeniorStaffwouldestablishReviewCommitteesforthepurposeofratingandscoringRFPssubmittedbythevariouslawfirms.

a. Followingcompletionofthereviews, theReviewCommitteewouldsubmitevaluationsandrecommendationstothePHACommissionersandtheContractingOfficer.

b. RFPssubmittedbylawfirmswouldnotbereviewedbythePHABoardofCommissioners.

40. OneweekpriortoeachPHABoardmeeting, Commissioners, includingJohnStreet, wouldbeprovidedwithanagendaofwhatwastobediscussedatthemeeting.

a. TheagendawouldidentifyeveryResolutionthePHACommissionerswouldbevotingatthatparticularmeeting.

b. TheResolutionswouldidentifyeverylawfirmthatwasbeingrecommendedtoreceivealegalcontract.

41. ResolutionsrelatingtolegalcontractssubmittedtothePHABoardforapprovalwouldidentifythelawfirmstobeselected.

42. WolfBlockreceivedpaymentsfromthePHAforservicesrenderedunderContractNo. 003598 (003598B) asoutlinedbelow.

Contract Invoice Invoice Payment Paymentof TotalNo. No. Date Date Services Overall

thatwere PaymentsPerformed madetobySharif WolfBlockStreet

003598B 843731 2/29/2008 8/25/2008 $ 305.50 $ 1,715.50003598B 843735 2/29/2008 8/25/2008 $ 1,103.50 $ 22,199.62

1,409.00 $ 23,915.12

43. ThePhiladelphiaHousingAuthoritypaid $30.5millionforoutsidelegalservicesprovidedby15lawfirmsduringtheperiodofApril2007throughAugust2010.

44. SharifT. Street, Esq. wasassignedtotheRealEstatePracticeGroupandtheGovernmentRelationsPracticeGroupofWolfBlock.

45. ThePHABoardofCommissionersmadethefinaldecisionastowhatlawfirmsweregoingtoreceivecontractsbyvotingonResolutionsattheRegularBoardMeetings.

a. ThiswasinaccordancewithPHAProcurementPolicythatallcontractsover100,000hadtobeapprovedbythePHACommission.

b. TheapprovalswouldbebasedonrecommendationsandevaluationsoftheReviewCommittee.

46. BoardMemberswerenotawareofStreet’sneedtoabstainonmattersinvolvingWolfBlock.

Street, 11-010Page8

47. Street’shourlyrateasanAssociateandContractAttorneyrangedfrom $185.00to265.00perhour.

48. JohnStreet, asapublicofficialinhisofficialcapacityastheChairmanandCommissionerofthePHA, wasannuallyrequiredtofileaStatementofFinancialstInterests (“SFI”) formbyMay1 containinginformationforthepriorcalendaryear.

49. Streetwasrequiredtofile \[the\] SFIforcalendaryears2006, 2007, 2008, 2009, 2010and2011asaMemberofthePHA.

50. StreetdidnotfileSFIsforcalendaryears2006and2010withthePHA.

a. Streetdidfile \[an\] SFIwiththeCityofPhiladelphiaforthe2006calendaryearinhiscapacityasMayor.

51. Streetfiled \[SFIs\] withthePHAforcalendaryears2007, 2008, 2009and2011, asfollows:

a. CalendarYear: 2007Filed: NodateonSEC-1REV. 01/08

b. CalendarYear: ( 2008)-NothingListedFiled: 9/23/10onSEC-1REV. 01/10

c. CalendarYear: 2009Filed: 9/23/10onSEC-1REV. 01/10

d. CalendarYear: 2011Filed: 4/26/12onSEC-1REV. 01/12

FactFindings45-45baboveconsistoftheadmittedavermentsofParagraphs51-51boftheInvestigativeComplaint. RespondentadmittedtheseavermentsinhisAnswertotheInvestigativeComplaint. Atthehearing, RespondentmadeamotiontoamendhisAnswertodenytheaverments. (Tr. at13). TheInvestigativeDivisiondidnotobjecttothemotionbeingmade, butstatedthatitwasthisCommission’sultimatedecisionwhetherornotthatwouldbefeasibleunderlaw. (Tr. at13-14). Respondent’smotionisdeniedbecauseRespondent’sadmissionsinhisAnswerarebinding “judicialadmissions.” See, Bartholomewv. StateEthicsCommission, 795A.2d1073 (Pa. Cmwlth. 2002). However, ourdecisioninthiscasedoesnothingeuponFactFindings45-45b.\]

B. Testimony

52. HeatherMcCreary (“McCreary”) isemployedastheExecutiveVicePresidentofSupplyChainManagementforthePHA, havingbeenemployedbythePHAsinceDecember16, 2012.

a. McCrearydidnotworkforthePHAin2007.

b. McCreary’sjobdutiesincluderesponsibilityforthe procurementandcontractsdepartment(s) ofPHA.

c. PHAcontractingproceduresincludethefollowingstepsforservicesorproductsinexcessof $100,000.00:

1) TheidentificationofaneedbyaunitwithinthePHA; 2) Preparationby theuserdepartmentofaStatementofWork,

independentcostestimate, andrequestforservicesensuringthatfundingisavailablefortheproject;

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3) ConfirmationbythePHA’sfinanceorganizationthatfundingisavailable;

4) PreparationbyMcCreary’sdepartmentofa “solicitationpackage” followedbyadvertisementforthesolicitation;

5) Selectionofabidreviewcommitteebasedupon subjectmatterexpertise;

6) ReviewofproposalsbyMcCreary’sdepartmentforsatisfactionofminimumrequirements;

7) Distributionofproposalstoreviewcommittee; 8) Independentreviewofproposalsbyreviewcommittee, which

weighs/scorestheproposalsandrecommendsproposal(s) tothePHABoard;

9) ApprovalofaResolutionbythePHABoardtoproceedwithcontracting; and

10) Executionofcontract(s) withtheapprovedsupplier(s).

d. Contractsforgreaterthan $100,000.00mustgobeforethePHABoardforapproval.

e. Acontractthatisinexcessof $100,000.00cannotbeenteredintobythePHAwithoutaResolution.

f. HUDregulationsrequirePHABoardapprovalforacontractof $100,000.00ormore, andthatparticularrequirementwouldhavebeenineffectin2007.

g. PHACommissionersdonotexecutecontractsforservices.

h. ID28-1 – ID28-2consistsofPHAResolutionNo. 11154 (“ResolutionNo. 11154”). (See, FactFinding70).

i. ID29-1 – ID-29-19consistsofPHAContractNo. 003598Bwithattachments, whichcorrespondstoResolutionNo. 11154. (See, FactFindings73 – 73a).

53. LeighAnnPoltrock (“Poltrock”) is anattorneywiththelawfirmofPepperHamiltoninPittsburgh, Pennsylvania.

a. PoltrockservedasPHA’sGeneralCounselforlitigationfromthebeginningofOctober2003throughDecember23, 2005.

b. PriortoherdeparturefromPHA, PoltrockattendedaPHABoardmeetingatwhichaResolutionforlegalservicecontractscameupforavotebythePHABoard, whichResolutionincludedWolfBlock.

1. Atthismeeting, PoltrockwassittingnexttoCarlGreene (“Greene”) andJohnStreetwassittingtoGreene’sright, suchthatallthreeweresittingtogetherwithinathree-footarea.

2. Atthismeeting, PoltrockleanedovertoGreeneandstatedthatWolfBlockwasin “thisone,” meaningtheResolution, and “Hecan’tvoteonthis,” whereuponGreenenoddedhisheadandleanedovertoJohnStreetandsaid, “Youcan’tvoteonthisone. WolfBlockisinhere.” (Tr. at72, 78-79).

3. WhenGreenemadetheabovestatementtohim, JohnStreetwasdoingsomethingwithhisBlackberrybutnoddedhishead.

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4. JohnStreetcalledforthevoteonthisResolutionandalsovotedinfavorofthisResolution.

C. Documents

54. ID3-1 - ID3-14consistsofthePHABy-laws (“By-laws”) adoptedMarch11, 1939.

a. ArticleII, Section1oftheBy-lawsprovides:

Section1. General. TheofficersoftheAuthorityshallbeaChairman, Vice-Chairman, Secretary, AssistantSecretary, TreasurerandAssistantTreasurer, allofwhomshallbeMembersoftheAuthority.

ID3-2.

b. ArticleII, Section2oftheBy-lawsprovides, inpart:

Section2. Chairman. TheChairmanshallbetheexecutiveheadoftheAuthority. HeshallpresideatallmeetingsoftheAuthority. ExceptasotherwiseauthorizedbyresolutionoftheAuthority, theChairmanshallsignallcontracts, deedsandotherinstrumentsmadebytheAuthority. …

ID3-2 – ID3-3.

c. ArticleVIIIoftheBy-lawsprovides, inpart:

Section2. AdditionalRequirements. Inadditiontothestatutoryrequirementsforthemakingandlettingofcontracts, theAuthoritymay, byResolution, prescribethemannerinwhichcontractsshallbemadeandlet: Provided, however, ThatnosuchResolutionshallconflictwithanygoverningstatute.

ID3-13 – ID3-14.

55. ID5-1 - ID5-2consistsofaPHAResolutionapprovedbythePHABoardonApril28, 1998, whichprovides, inpart:

TheBoardofCommissionersherebydelegatestotheExecutiveDirectorauthoritytoconcludeandexecutecontractsinanamountnottoexceedOneHundredThousandDollars

100,000.00) forProfessionalServiceswithoutthepriorapprovaloftheBoardofCommissioners; subjecttocompliancewithanyapplicablecompetitiveprocurementrequirementsapprovedbytheBoard, and/orcompetitiveprocurementsoftheU.S. DepartmentofHousingandUrbanDevelopment, and, ifapplicable, statelaw.

ID5-1.

56. ID6-1consistsofaPHAResolutionapprovedbythePHABoardonMay21, 1998, whichprovides, inpart:


1. TheContractingOfficershallbechargedwiththenegotiationsandimplementationofallContractModificationsaccordingtoPHA’sprocedure (CPP-534), uptoandincludingtheamountof $150,000.00withoutgainingBoardofCommissionerapproval.

2. TheContractingOfficershallbechargedwiththenegotiationsofallcontractmodificationsthataregreaterthan150,000.00invalueaccordingtoPHA’sprocedure (CPP-

534), butpriortoimplementation, theContractingOfficer, throughtheExecutiveDirector, shallgainBoardofCommissionerapprovalviatheRecommendationofAwardProcess. Nocontractshallbemodifiedinanamountgreaterthan $150,000.00withoutsaidapproval.

ID6-1.

57. ID7-1 - ID7-2consistsofPHAResolutionNo. 10246adoptedbythePHABoardonJune23, 1998, whichprovides, inpart:

TheBoardofCommissionersherebydelegatestotheExecutiveDirectorauthoritytoconcludeandexecutecontractsinanamountnottoexceedOneHundredThousandDollars

100,000.00) withoutthepriorapprovaloftheBoardofCommissioners; subjecttocompliancewithanyapplicablecompetitiveprocurementrequirementsapprovedbytheBoard, and/orcompetitiveprocurementoftheU.S. DepartmentofHousingandUrbanDevelopment, and, ifapplicable, statelaw.

ID7-1.

58. ID8-1 – 8-12consistsoftheProcurementPolicythatisreferencedinFactFindings30 – 30b.

a. TheProcurementPolicywasapprovedbythePHABoardofCommissionersonSeptember25, 1991, andrevisedonApril28, 1998.

b. TheProcurementPolicyprovidesthatpre-approvalofthePHABoardofCommissionersisrequiredforallcontractswherethebasecontractamountoranyoptionexceeds $100,000.00andforallcontractmodificationsinexcessof $150,000.00. ID8-2.

c. TheProcurementPolicyprovides, inpart:

IX. ETHICSINPUBLICCONTRACTING – PHACONDUCT

A. GENERAL

PHAshalladheretothefollowingcodeofconduct, consistentwithapplicableStateorlocallaw.

B. CONFLICTOFINTEREST

Noemployee, officeroragentofPHAshallparticipatedirectlyorindirectlyintheselectionorintheawardoradministrationofanycontractifaconflict, realorapparent, wouldbeinvolved.


Suchconflictwouldarisewhenafinancialorotherinterestinafirmselectedforawardisheldby:

1. Anemployee, officeroragentinvolvedinmakingtheaward;

2. His/herrelativeincludingfather, mother, spouse, brother, sisterorchildincluding “half” or “step”;

3. His/herpartner; or,

4. Anorganizationwhichemploys, isnegotiatingtoemploy, orhasanarrangementconcerningprospectiveemploymentofanyoftheabove.

ID8-11 – ID8-12.

59. ID10-1 – ID10-2consistsofPHAResolutionNo. 11017 (“ResolutionNo. 11017”), whichwasadoptedunanimouslybythePHABoardonDecember16, 2004.

a. Commissioner/MayorJohnF. Street, ChairmanofthePHA, votedtoapproveResolutionNo. 11017.

b. ResolutionNo. 11017authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswithfivelawfirms, includingWolfBlock, toproviderealestatelegalcounselservicesforthePHARealEstateDevelopmentDepartment.

c. ResolutionNo. 11017statedthatthemaximumamountrecommendedtobepaidbythePHAtoWolfBlock, underacontractprovidingforatwo-yearbaseperiodandthreepotentialone-yearoptionperiods, was $5,000,000.00. ID10-1.

1. PerResolutionNo. 11017, themaximumamountrecommendedtobepaidbythePHAtoeachofthefourotherlawfirmswasless, withthenexthighestamountbeingamaximumof $3,750,000.00. ID10-1 - 10-2.

60. ID11-1 – ID-11-14consistsofContractNo. P-003281-Bwithattachment(s), betweenthePHAandWolfBlockforrealestatedevelopmentlegalcounselservices.

a. ContractNo. P-003281-BwasauthorizedbyResolutionNo. 11017.

b. ContractNo. P-003281-BisdatedJanuary11, 2005.

c. ContractNo. P-003281-BbecameeffectivenolaterthanJanuary11, 2005, andwasforaninitialcontracttermoftwoyears, withPHAhavingtheoptiontorenewthecontractforadditionaltermsofthreeone-yearperiods, nottoexceedatotaloffiveyears.

d. ThetotalcontractvalueofContractNo. P-003281-Bwasnottoexceed5,000,000.00. ID11-3.


61. ID14-1 – ID14-2consistsofPHAResolutionNo. 11042 (“ResolutionNo. 11042”) adoptedunanimouslybythePHABoardonMarch29, 2005.


b. ResolutionNo. 11042authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswiththreelawfirms, includingWolfBlock, toproviderealestatetitlereviewwork.

c. ResolutionNo. 11042statedthatthemaximumamountrecommendedtobepaidbythePHAtoeachfirm, includingWolfBlock, undercontractsprovidingforatwo-yearbaseperiodandtwo potential one-yearoptionperiods, was $400,000.00. ID14-1.

62. ID15-1 – ID-15-4consistsofContractNo. 3423Cwithattachment(s), betweenthePHAandWolfBlockforrealestatetitlereviewwork.

a. ContractNo. 3423CisdatedApril22, 2005.

b. ContractNo. 3423Cwasforaninitialcontracttermoftwoyears, withPHAhavingtheoptiontorenewthecontractforadditionaltermsoftwoone-yearperiods.

c. ThetotalcontractvalueofContractNo. 3423Cwasnottoexceed400,000.00. ID15-1.

63. ID18-1 – ID18-2consistsofPHAResolutionNo. 11060 (“ResolutionNo. 11060”) adoptedunanimouslybythePHABoardonJune16, 2005.


b. ResolutionNo. 11060authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswithsevenlawfirms, includingWolfBlock, toprovidelaborandemploymentlawlegalservices.

c. ResolutionNo. 11060statedthatthemaximumamountrecommendedtobepaidbythePHAtoWolfBlockandthreeotherlawfirms, undercontractsprovidingforatwo-yearbaseperiodandthreepotentialoptionperiods, was4,500,000.00each. ID18-1 - 18-2.

1. PerResolutionNo. 11060, themaximumamountrecommendedtobepaidbythePHAtoeachoftheremainingthreelawfirmswas550,000.00. ID18-1 - 18-2.

64. ID19-1 – ID-19-19consistsofContractNo. 003459-Dwithattachment(s), betweenthePHAandWolfBlockforlaborandemploymentlawlegalservices.

a. ContractNo. 003459-DwasauthorizedbyResolutionNo. 11060.

b. ContractNo. 003459-DisdatedJuly1, 2005.

c. ContractNo. 003459-DbecameeffectivenolaterthanJuly1, 2005, andwasforaninitialcontracttermoftwoyears, withPHAhavingtheoptiontorenewthecontractforadditionaltermsofthreeone-yearperiods.


d. ThetotalcontractamountofContractNo. 003459-Dwasnottoexceed4,500,000.00. ID19-2, ID19-4.

1. PHAcoulddeterminetoprovideadditionalfundingtothiscontract. ID19-2.

65. ID22-1 – ID22-2consistsofPHAResolutionNo. 11073 (“ResolutionNo. 11073”) adoptedunanimouslybythePHABoardonSeptember15, 2005.


b. ResolutionNo. 11073authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswiththreelawfirms, includingWolfBlock, toprovidegenerallegalservices.

c. ResolutionNo. 11073statedthatthemaximumamountrecommendedtobepaidbythePHAtoWolfBlock, underacontractprovidingforatwo-yearbaseperiodandthreepotentialoptionperiods, was $7,500,000.00. ID22-2.

1. PerResolutionNo. 11073, themaximumamountrecommendedtobepaidbythePHAtothetwootherlawfirmswasless, withthenexthighestamountbeingamaximumof $5,000,000.00. ID22-2.

66. ID23-1 – ID-23-17consistsofContractNo. 003486Awithattachment(s), betweenthePHAandWolfBlockforgenerallegalservices.

a. ContractNo. 003486AwasauthorizedbyResolutionNo. 11073.

b. ContractNo. 003486AisdatedOctober14, 2005.

c. ContractNo. 003486AbecameeffectivenolaterthanOctober14, 2005, andwasforaninitialcontracttermoftwoyears, withPHAhavingtheoptiontorenewthecontractforadditionaltermsofthreeone-yearperiods.

d. ThetotalcontractamountofContractNo.003486Awasnottoexceed7,500,000.00. ID23-2, ID23-4.


67. ID22-3 – ID22-5consistsofPHAResolutionNo. 11084 (“ResolutionNo. 11084”) adoptedunanimouslybythePHABoardonOctober24, 2005.


b. ResolutionNo. 11084authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswithninelawfirms, includingWolfBlock, toprovideregulatoryandadministrativelegalservices.

c. ResolutionNo. 11084statedthatthemaximumamountrecommendedtobepaidbythePHAtoWolfBlockandfiveotherlawfirms, undercontractsprovidingforatwo-yearbaseperiodandthreepotentialoptionperiods, was5,000,000.00each. ID22-4.


1. PerResolutionNo. 11084, themaximumamountrecommendedtobepaidbythePHAtoeachofthethreeremaininglawfirmswas2,500,000.00. ID22-4.

68. ID24-1 – ID-24-19consistsofContractNo. 003486Hwithattachment(s), betweenthePHAandWolfBlockforregulatoryandadministrativelegalservices.

a. ContractNo. 003486HwasauthorizedbyResolutionNo. 11084.

b. ContractNo. 003486HisdatedDecember29, 2005.

c. ContractNo. 003486HbecameeffectivenolaterthanDecember29, 2005, andwasforaninitialcontracttermoftwoyears, withPHAhavingtheoptiontorenewthecontractforadditionaltermsofthreeone-yearperiods.

d. ThetotalcontractamountofContractNo.003486H wasnottoexceed5,000,000.00. ID24-2, ID24-4.


69. ID25-1consistsofPHAResolutionNo. 11065 (“ResolutionNo. 11065”) adoptedunanimouslybythePHABoardonSeptember15, 2005.


b. ResolutionNo. 11065authorizedthePHAExecutiveDirectortoconcludeandexecuteContractModificationNo. 3toContractNo. P-003000betweenthePHAandWolfBlock, toallowforadditionalcompensationtoWolfBlockintheamountof $1,100,000.00.

c. ResolutionNo. 11065statedthatthereweretwopriorcontractmodificationstoContractNo. P-003000, whichhadaddedanadditional $300,000.00foracontracttotalof $4,425,000.00.

1. WiththethirdmodificationauthorizedbyResolutionNo. 11065, thecontracttotalofContractNo. P-003000was increasedto5,525,000.00.

70. ID28-1 – ID28-2consistsofPHAResolutionNo. 11154 (“ResolutionNo. 11154”) adoptedunanimouslybythePHABoardonJanuary31, 2007. ID28-1 – ID28-2; ID29-1).


b. ResolutionNo. 11154authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswiththirteen lawfirms, includingWolfBlock, toprovidegenerallegalservices.

c. ResolutionNo. 11154statedthatthemaximumamountrecommendedtobepaidbythePHAtoWolfBlockandfourotherlawfirms, undercontractsprovidingforatwo-yearbaseperiodandthreepotentialoptionperiods, was7,500,000.00each. ID28-2.


1. PerResolutionNo. 11154, themaximumamountrecommendedtobepaidbythePHAtoeachoftheremaininglawfirmswasless, withthenexthighestamountbeingamaximumof $5,000,000.00. ID28-2.

d. ResolutionNo. 11154states, inpart:

BEITRESOLVED byandforThePhiladelphiaHousingAuthority, thattheExecutiveDirectorisherebyauthorizedtoconcludeandtoexecutecontractswithWolfBlockSchorrandSolis-Cohen, LLP, BallardSpahrAndrews & Ingersoll, LLP, DuaneMorris, LLP, SchnaderHarrisSegal & Lewis, HangleyAronchickSegal & Pudlin, FlasterGreenberg, P.C., FoxRothschild, LLP, CozenO’Connor, LawOfficeofDeniseSmyler, Cohen & Grigsby, P.C., Kelly, MonacoandNaples, Kolber, Freeman & RandazzoandBooth & TuckerLLPfortheprovisionofgenerallegalservices.

BEITFURTHERRESOLVED that (1) therecommendedcontractor(s) complywithalltermsrequiredbythesolicitation: (2) thecontractissubjecttoapprovalbyPHA’sfundingsourcebeforeacontractshallexist; (3) nocontractshallexistuntilsignedbytheExecutiveDirector; and (4) ifPHAandtheofferorhavenotmutuallyagreedonthetermsofacontractwithinforty-five (45) daysofthenextregularlyscheduledBoardmeeting, thenthisresolutionshallbevoidandtheauthorityoftheExecutiveDirectorshallcease.

ID28-2.

71. Commissioner/MayorJohnF. Street, ChairmanofthePHA, presidedoverthePHARegularMeetingonJanuary31, 2007. ID28-3.

72. January31, 2007, fallswithinthetimeperiodthatthisCommissionmayreviewinthismatterpursuanttoSection1108(m) oftheEthicsAct, 65Pa.C.S. § 1108(m). See, FactFinding76).

73. ID29-1 – ID-29-19consistsofContractNo. 003598Bwithattachment(s), betweenthePHAandWolfBlockforgenerallegalservices.

a. ContractNo. 003598BwasauthorizedbyResolutionNo. 11154.

b. ContractNo. 003598BisdatedApril10, 2007.

c. ContractNo. 003598BbecameeffectivenolaterthanApril10, 2007, andwasforaninitialcontracttermoftwoyears, withPHAhavingtheoptiontorenewthecontractforadditionaltermsofthreeone-yearperiods.

d. ThetotalcontractamountofContractNo. 003598B wasnottoexceed7,500,000.00. ID29-2, ID29-4.



e. TheattachmentstoContractNo. 003598BsetforththehourlyratestobechargedbyWolfBlockfortheworkperformedbyvariouscategoriesofattorneysaswellasparalegals.

1. Fortheinitialcontracttermoftwoyears, thehourlyratestobechargedbyWolfBlockunderContractNo. 003598Bwereasfollows:

Seniorpartner, $320;

Partner, $285;

Associate, $235;

Partnerforservicesatadministrativehearings, municipalcourtandarbitrations ($50,000andunder), $275;

Associateforservicesatadministrativehearings, municipalcourtandarbitrations ($50,000andunder), $225; and

Paralegal, $130.

2. Forthefirstone-yearoptionperiodavailableunderContractNo. 003598B, thehourlyratestobechargedbyWolfBlockwereasfollows:


Partner, $295;

Associate, $245;



Paralegal, $135.

3. Forthesecondone-yearoptionperiodavailableunderContractNo. 003598B, thehourlyratestobechargedbyWolfBlockwereasfollows:


Partner, $300;

Associate, $255;



Paralegal, $140.


4. Forthethirdone-yearoptionperiodavailableunderContractNo. 003598B, thehourlyratestobechargedbyWolfBlockwereasfollows:


Partner, $305;

Associate, $260;



Paralegal, $145.

74. ID30-1 – ID30-3consistsofbillinginformationforinvoicessubmittedtothePHAbyWolfBlockundervariouscontracts.

75. DuringthetimeperiodthatthisCommissionmayreviewinthismatterpursuanttoSection1108(m) oftheEthicsAct, 65Pa.C.S. § 1108(m), RespondentJohnStreethadknowledgeoftherestrictionsandrequirementsofSections1103(a) and1103(j) oftheEthicsAct, 65Pa.C.S. §§ 1103(a), 1103(j). (ID31; FactFinding76).

a. DuringthetimeperiodthatthisCommissionmayreviewinthismatterpursuanttoSection1108(m) oftheEthicsAct, 65Pa.C.S. § 1108(m), andspecificallyonJanuary31, 2007, whenhevotedtoapproveResolutionNo. 11154, RespondentStreethadknowledgethat, pursuanttoSection1103(a) oftheEthicsAct, hewouldbeprohibitedfromusingtheauthorityofpublicofficefortheprivatepecuniarybenefitofhissonorhisson’semployer. 65Pa.C.S. §§ 1103(a), 1102. (ID31; FactFindings75, 76).

D. OtherFindings

76. ThetimeperiodthatthisCommissionmayreviewinthismatter, pursuanttoSection1108(m) oftheEthicsAct, 65Pa.C.S. § 1108(m), isfromJuly15, 2006forward. See, 65Pa.C.S. §§ 1108(c), (m); 51Pa. Code §§ 11.3; 21.3(c), 21.5(b); Fact

Finding4; Cagno, Order1204; Cook, Order1203).

77. TheevidenceofrecordinthiscasedoesnotincludecontractsbetweenthePHAandlawfirmsotherthanWolfBlockthatwereenteredintoundertheauthorizationofResolutionNo. 11154, orthehourlyratesortotalamountsultimatelycharged/receivedbyotherlawfirmsundersuchcontracts.

III. DISCUSSION:

AsaCommissionerofthePhiladelphiaHousingAuthority (“PHA”) fromonoraroundApril19, 2004, untilonoraroundMarch4, 2011, RespondentJohnStreet (hereinafteralsoreferredtoas “Respondent,” “RespondentStreet,” and “Street”) wasapublicofficialsubjecttotheprovisionsofthePublicOfficialandEmployeeEthicsAct (“EthicsAct”), 65Pa.C.S. § 1101etseq.

TheallegationsassetforthintheInvestigativeComplaint/FindingsReportarethatRespondentStreetviolatedSections1103(a), 1103(f), and1104(a) oftheEthicsActwhenhe, asaCommissionerandChairmanofthePHA: (1) usedtheauthorityofhispublic


positionfortheprivatepecuniarybenefitofamemberofhisimmediatefamilyand/orabusinesswithwhichamemberofhisimmediatefamilyisassociatedbyparticipatingindiscussionsandactionsofthePHA BoardofCommissioners (“Board”) resultinginresolutionsbeingadoptedtoawardcontractstoWolfBlockSchorr & Solis-Cohen, LLP

WolfBlock”), alawfirmthatemployedhissonforservicestobeprovidedbyhisson; (2) whenheparticipatedinthedecisionsoftheBoardtoadoptresolutionsawardingcontractstoabusinesswithwhichamemberofhisimmediatefamilyisassociatedinexcessof $500withoutanopenandpublicprocess; and (3) whenhefailedtofileaStatementofFinancialInterests (“SFI”) forthecalendaryears2006and2010.

TheInvestigativeDivisionhasexerciseditsprosecutorialdiscretiontonolprostheallegationunderSection1103(f) oftheEthicsAct. (Tr. at10). Baseduponthenolpros, weneednotaddresstheSection1103(f) allegationthatisnolongerbeforeus.

PursuanttoSection1103(a) oftheEthicsAct, apublicofficial/publicemployeeisprohibitedfromengaginginconductthatconstitutesaconflictofinterest:

1103. Restrictedactivities

a) Conflictofinterest.— Nopublicofficialorpublicemployeeshallengageinconductthatconstitutesaconflictofinterest.

65Pa.C.S. § 1103(a).

Theterm "conflictofinterest" isdefinedintheEthicsActasfollows:

1102. Definitions

Conflict" or "conflictofinterest." Usebyapublicofficialorpublicemployeeoftheauthorityofhisofficeoremploymentoranyconfidentialinformationreceivedthroughhisholdingpublicofficeoremploymentfortheprivatepecuniarybenefitofhimself, amemberofhisimmediatefamilyorabusinesswithwhichheoramemberofhisimmediatefamilyisassociated. Thetermdoesnotincludeanactionhavingademinimiseconomicimpactorwhichaffectstothesamedegreeaclassconsistingofthegeneralpublicorasubclassconsistingofanindustry, occupationorothergroupwhichincludesthepublicofficialorpublicemployee, amemberofhisimmediatefamilyorabusinesswithwhichheoramemberofhisimmediatefamilyisassociated.

65Pa.C.S. § 1102.

Section1103(a) oftheEthicsActprohibitsapublicofficial/publicemployeefromusingtheauthorityofpublicoffice/employmentorconfidentialinformationreceivedbyholdingsuchapublicpositionfortheprivatepecuniarybenefitofthepublicofficial/publicemployeehimself, anymemberofhisimmediatefamily, orabusinesswithwhichheoramemberofhisimmediatefamilyisassociated.

PerthePennsylvaniaSupremeCourt’sdecisioninKistlerv. StateEthicsCommission, 610Pa. 516, 22A.3d223 (2011), inordertoviolateSection1103(a) oftheEthicsAct, apublicofficial/publicemployee:

mustactinsuchawayastoputhis \[office/publicposition\] tothepurposeofobtainingforhimselfaprivatepecuniary


benefit. Suchdirectedactionimpliesawarenessonthepartofthe \[publicofficial/publicemployee\] ofthepotentialpecuniarybenefitaswellasthe motivationtoobtainthatbenefitforhimself.

Kistler, supra, 610Pa. at523, 22A.3dat227. ToviolateSection1103(a) oftheEthicsAct, apublicofficial/publicemployee “mustbeconsciouslyawareofaprivatepecuniarybenefitforhimself, hisfamily, orhisbusiness, andthenmusttakeactionintheformofoneormorespecificstepstoattainthatbenefit.” Id., 610Pa. at528, 22A.3dat231.

Theabovestatutorydefinitionoftheterm "conflict" or "conflictofinterest" containstwoexclusions, referredtohereinasthe "deminimisexclusion" andthe "class/subclassexclusion."

Thedeminimisexclusionprecludesafindingofconflictofinterestastoanactionhavingademinimis (insignificant) economicimpact. Thus, whenamatterthatwouldotherwiseconstituteaconflictofinterestundertheEthicsActwouldhaveaninsignificanteconomicimpact, aconflictwouldnotexistandSection1103(a) oftheEthicsActwouldnotbeimplicated. See, Kolb, Order1322; Schweinsburg, Order900.

Inorderfortheclass/subclassexclusiontoapply, twocriteriamustbemet: (1) theaffectedpublicofficial/publicemployee, immediatefamilymember, orbusinesswithwhichthepublicofficial/publicemployeeorimmediatefamilymemberisassociatedmustbeamemberofaclassconsistingofthegeneralpublicoratruesubclassconsistingofmorethanonemember; and (2) thepublicofficial/publicemployee, immediatefamilymember, orbusinesswithwhichthepublicofficial/publicemployeeorimmediatefamilymemberisassociatedmustbeaffected "tothesamedegree" (innowaydifferently) thantheothermembersoftheclass/subclass. 65Pa.C.S. § 1102; see, Kablack, Opinion02-003; Rubenstein, Opinion01-007. Thefirstcriterionoftheexclusionissatisfiedwherethemembersoftheproposedsubclassaresimilarlysituatedastheresultofrelevantsharedcharacteristics. Thesecondcriterionoftheexclusionissatisfiedwheretheindividual/businessinquestionandtheothermembersoftheclass/subclassarereasonablyaffectedtothesamedegreebytheproposedaction. Kablack, supra.

Section1104(a) oftheEthicsActprovidesthateachpublicofficial/publicemployeemustfileanSFIfortheprecedingcalendaryear, eachyearthatheholdsthepositionandtheyearafterheleavesit:

1104. Statementoffinancialinterestsrequiredtobefiled

a) Publicofficialorpublicemployee.-- EachpublicofficialoftheCommonwealthshallfileastatementoffinancialinterestsfortheprecedingcalendaryearwiththecommissionnolaterthanMay1ofeachyearthatheholdssuchapositionandoftheyearafterheleavessuchaposition. EachpublicemployeeandpublicofficialoftheCommonwealthshallfileastatementoffinancialinterestsfortheprecedingcalendaryearwiththedepartment, agency, bodyorbureauinwhichheisemployedortowhichheisappointedorelectednolaterthanMay1ofeachyearthatheholdssuchapositionandoftheyearafterheleavessuchaposition. AnyotherpublicemployeeorpublicofficialshallfileastatementoffinancialinterestswiththegoverningauthorityofthepoliticalsubdivisionbywhichheisemployedorwithinwhichheisappointedorelectednolaterthanMay1ofeachyearthatheholdssuchapositionandoftheyearafterheleavessuchaposition. Personswhoarefull-timeorpart-timesolicitorsfor


politicalsubdivisionsarerequiredtofileunderthissection.

65Pa.C.S. § 1104(a).

Weshallnowsummarizetherelevantfacts.

RespondentStreetservedasaPHACommissionerfromonoraroundApril19, 2004, untilonoraroundMarch4, 2011. Respondent previouslyservedasaCommissionerwiththePHAfrom1993until1998.

RespondentalsoservedasMayorofPhiladelphiafromJanuary2000untilJanuary2008. Respondent servedonthePhiladelphiaCityCouncil fromJanuary1980untilDecember1998.

ThePHAisgovernedbya five-MemberBoardofCommissioners (“Board”). RespondentservedastheChairmanofthePHAduringhistenureonthePHA. AsChairmanofthePHA, RespondentwasanofficerofthePHA.

Sinceatleast2002, allPHAlegalservicecontractshaverequiredpre-approvalofthePHABoardwhenthebasecontractamountoranyoptionexceeded $100,000.00. Pre- approvalofthePHABoardhasalsobeenrequiredforallcontractmodificationsinexcessof $150,000.00. ThePHAlegalservicecontractshavebeenawardedthroughacompetitiveproposalprocess, whichincludedasolicitationandabidreviewprocessbyaninternalcommitteewhichdidnotincludetheRespondent, andresultedinthesubmissiontothePHABoardoftheevaluationsandrecommendationsofthebidreviewcommitteeandaproposedResolutionforBoardapproval. SuchResolutionshaveauthorizedthePHAExecutiveDirectortoconcludeandexecutecontractswiththerecommendedlawfirm(s).

AsChairmanofthePHA, RespondentpresidedoverPHABoardmeetings. RespondentknewinadvanceofthePHABoardmeetingswhatResolutionstheBoardwouldbevotingon. TheResolutionsidentified everylawfirmthatwasbeingrecommendedtoreceivealegalcontract. AtthePHABoardmeetings, RespondentwouldidentifyeveryResolutionthePHACommissionerswouldbevotingonandwoulddeclarewhenResolutionswereadoptedaftervotesweretakenbythePHACommissioners.

FrominoraboutJanuary2000untilonoraroundMarch4, 2008, Respondent’sson, SharifStreet, wasemployedbythelawfirmofWolfBlock. Duringthetimeperiodunderreviewinthiscase, SharifStreetwasanAssociateAttorneywithWolfBlockandwaspaidanannualsalary. SharifStreetdidnotreceiveanybonusesfortheworkheperformedforWolfBlock.

WolfBlockdidlegalworkforthePHAsincethe1990’s. TheevidencebeforethisCommissionincludesnumerousResolutionsapprovedbythePHABoard, includingRespondent, whichauthorizedcontractingtooccurbetweenthePHAandWolfBlock. However, onlyonesuchResolution, PHAResolutionNo. 11154 (“ResolutionNo. 11154”), wasapprovedbythePHABoardduringthetimeperiodthatthisCommissionmayreviewinthismatterpursuanttothefive-yearstatuteoflimitationsprovisionatSection1108(m) oftheEthicsAct, 65Pa.C.S. § 1108(m).

ResolutionNo. 11154 (ID28-1 – ID28-2) wasadoptedunanimouslybythePHABoardonJanuary31, 2007. RespondentvotedtoapproveResolutionNo. 11154. ResolutionNo. 11154authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswiththirteenlawfirms, includingWolfBlock, toprovidegenerallegalservices. ResolutionNo. 11154statedthatthemaximumamountrecommendedtobepaidbythePHAtoWolfBlockandfourotherlawfirms, undercontractsprovidingforatwo-yearbaseperiodandthreepotentialoptionperiods, was $7,500,000.00each. ID28-2. PerResolutionNo. 11154, themaximumamountrecommendedtobepaidbythePHAtoeach


oftheremaininglawfirmswasless, withthenexthighestamountbeingamaximumof5,000,000.00. ID28-2.

ResolutionNo. 11154states, inpart:

BEITRESOLVED byandforThePhiladelphiaHousingAuthority, thattheExecutiveDirectorisherebyauthorizedtoconcludeandtoexecutecontractswithWolfBlockSchorrandSolis-Cohen, LLP, BallardSpahrAndrews & Ingersoll, LLP, DuaneMorris, LLP, SchnaderHarrisSegal & Lewis, HangleyAronchickSegal & Pudlin, FlasterGreenberg, P.C., FoxRothschild, LLP, CozenO’Connor, LawOfficeofDeniseSmyler, Cohen & Grigsby, P.C., Kelly, MonacoandNaples, Kolber, Freeman & RandazzoandBooth & TuckerLLPfortheprovisionofgenerallegalservices.

BEITFURTHERRESOLVED that (1) therecommendedcontractor(s) complywithalltermsrequiredbythesolicitation: 2) thecontractissubjecttoapprovalbyPHA’sfundingsource

beforeacontractshallexist; (3) nocontractshallexistuntilsignedbytheExecutiveDirector; and (4) ifPHAandtheofferorhavenotmutuallyagreedonthetermsofacontractwithinforty-five (45) daysofthenextregularlyscheduledBoardmeeting, thenthisresolutionshallbevoidandtheauthorityoftheExecutiveDirectorshallcease.

ID28-2.

PursuanttoResolutionNo. 11154, thePHAandWolfBlockenteredintoContractNo. 003598Bforgenerallegalservices (ID29-1 – ID-29-19). ContractNo. 003598BisdatedApril10, 2007. ContractNo. 003598BbecameeffectivenolaterthanApril10, 2007, andwasforaninitialcontracttermoftwoyears, withPHAhavingtheoptiontorenewthecontractforadditionaltermsofthreeone-yearperiods. ThetotalcontractamountofContractNo. 003598Bwasnottoexceed $7,500,000.00, althoughPHAcoulddeterminetoprovideadditionalfundingtothiscontract.

TheattachmentstoContractNo. 003598BsetforththehourlyratestobechargedbyWolfBlockfortheworkperformedbyvarious categoriesofattorneysaswellasparalegals, whichhourlyratesaredetailedatFactFindings73e(1)-(4).

WolfBlockreceivedfromthePHApaymentstotaling $23,915.12forservicesrenderedunderContractNo. 003598B. Ofthatamount, $1,409.00wasforservicesperformedbySharifStreet.

OnJanuary31, 2007, whenhevotedtoapproveResolutionNo. 11154, RespondentStreetknewthat, pursuanttoSection1103(a) oftheEthicsAct, hewasprohibitedfromusingtheauthorityofhispublicofficefortheprivatepecuniarybenefitofhissonorhisson’semployer. 65Pa.C.S. §§ 1103(a), 1102. (ID31; FactFindings75-75a, 76). Additionally, atleastasearlyas2005, RespondentwasspecificallytoldthathecouldnotvotetoapproveaResolutionauthorizingcontractingbetweenthePHAandWolfBlock, whereuponRespondentnoddedhisheadandvotedanyway. (FactFindings53-53b(4)).

DuringtheperiodofApril2007throughAugust2010, thePHApaid $30.5millionforoutsidelegalservicesprovidedby15lawfirms.

WithregardtoRespondent’sSFIs, inhiscapacityasaCommissionerofthePHA, RespondentwasrequiredtofiletheSFIformforcalendaryears2006, 2007, 2008, 2009,


2010and2011. RespondentdidnotfileSFIsforcalendaryears2006and2010withthePHA. RespondentdidfileanSFIwiththeCityofPhiladelphiaforthe2006calendaryearinhiscapacityasMayor.

Havingsummarizedtheaboverelevantfacts, wemustnowdeterminewhethertheactionsofRespondentviolatedSection1103(a) oftheEthicsAct. Asweapplythefactstotheallegations, dueprocessrequiresthatwenotdepartfromtheallegations. Pennsyv. DepartmentofState, 594A.2d845 (Pa. Cmwlth. 1991). AviolationoftheEthicsActmustbebaseduponclearandconvincingproof. 65Pa.C.S. § 1108(g). Clearandconvincingproofis “so ‘clear, direct, weighty, andconvincingastoenablethetrieroffacttocometoaclearconviction, withouthesitance, ofthetruthoftheprecisefactsinissue.’” InRe: CharlesE.D.M., 550Pa. 595, 601, 708A.2d88, 91 (1998) (Citationomitted).

Inconsideringtheevidence, itisclearthatRespondentusedtheauthorityofhispublicofficeasaPHACommissionerwhenhevotedonJanuary31, 2007, toapproveResolutionNo. 11154. AtthetimeRespondentcastthisvote, heknewthat, pursuanttoSection1103(a) oftheEthicsAct, hewasprohibitedfromusingtheauthorityofhispublicofficefortheprivatepecuniarybenefitofhissonorhisson’semployer. 65Pa.C.S. §§ 1103(a), 1102. (ID31; FactFindings75-75a, 76). RespondentknewthatWolfBlockwasamongthelawfirmslistedinResolutionNo. 11154topotentiallyreceiveacontractforlegalserviceswiththePHA. ThereislittleifanydoubtthatRespondentknewthatWolfBlockwashisson’semployer. Lookingatthesefactsfromanon-legalperspective, onecouldeasily conclude that itwasimproperforRespondenttohavevotedtoapproveResolutionNo. 11154.

Werecognizethepublicconcernthatmayarisewhenapublicofficial’sconductappearstoconstituteaconflictofinterest, butaconflictofinterestisnotfoundduetotheapplicabilityofoneormoreoftheaforesaidstatutoryexclusions. However, weareduty- boundtoapplytheEthicsActaspromulgated, andwemayonlyfindaviolationbaseduponclearandconvincingproof. WhilethisCommissiondoesnotcondoneRespondent’sconduct, Respondentargues—andweareconstrainedtoagree—thattheclass/subclassexclusionisapplicableinthiscase, andthereforeweareprecludedfromfindingaviolationofSection1103(a) oftheEthicsAct.

Thefirstcriterionoftheclass/subclassexclusionis established inthiscasebecause, basedupontheevidence, WolfBlockwasamemberofasubclassoffivelawfirms (hereinafteralsoreferredtoas “theFiveLawFirms”) that: (1) wereseekingtocontractwiththePHAtoprovidegenerallegalservices; and (2) wererecommendedbyPHAbidreviewcommittees/staffforPHAcontractstoprovidesuchservicesforatwo-yearbaseperiodandthreepotentialoptionperiodsatamaximumcontractcostof7,500,000.00perfirm.

Thesecondcriterionoftheclass/subclassexclusionisestablishedbecausetheFiveLawFirmswereaffectedtothesamedegreebyResolutionNo. 11154. Specifically, ResolutionNo. 11154authorizedthePHAExecutiveDirectortoconcludeandexecutecontractswiththeFiveLawFirmsforatwo-yearbaseperiodandthreepotentialoptionperiodsatamaximumcontractcostof $7,500,000.00perfirm. AtthetimeRespondentvotedtoapproveResolutionNo. 11154, theproposedcontractshadnotbeenfinalized. ResolutionNo. 11154advancedallfiveoftheFiveLawFirmstothenextstepinthecontractingprocess. AstoeachoftheFiveLawFirms, acontractwouldnotexistunlessitwasapprovedbyPHA’sfundingsource, contracttermswereagreeduponwithinadefinedtimeframe, andthecontractwassignedbythePHAExecutiveDirector.

BecauseWolfBlockwasamemberofasubclassconsistingoftheFiveLawFirmsandwasaffectedbyResolutionNo. 11154tothesamedegreeastheothermembersofthesubclass, weareconstrainedtofindthattheclass/subclassexclusionisapplicableinthiscase.


WeholdthatRespondentStreetdidnotviolateSection1103(a) oftheEthicsAct, 65Pa.C.S. § 1103(a), whenhe, asaCommissionerandChairmanofthePHA, participatedinactionsofthePHABoardtoapprovePHAResolutionNo. 11154, authorizingthePHAtoengageinacontractualrelationshipwithWolfBlock, alawfirmthatemployedhisson, becausehisactionsaffectedtothesamedegreeasubclassoffivelawfirmsincludingWolfBlockthatwereseekingtoprovidelegalservicestothePHA.

Baseduponouraboveholding, thereisnoneedtoaddressRespondent’s1remainingargumentsastotheSection1103(a) allegation.

AsforRespondent’sSFIs, weholdthatRespondentStreetviolatedSection1104(a) oftheEthicsAct, 65Pa.C.S. § 1104(a), whenhe, asaCommissionerandChairmanofthePHA, failedtofileSFIswiththePHAforcalendaryears2006and2010. Totheextenthehasnotalreadydoneso, RespondentStreetisdirectedtofilecompleteandaccurateSFIsforcalendaryears2006and2010withthePHA, throughthisCommission, bynolaterthanththethirtieth (30) dayafterthemailingdateofthisadjudicationandOrder. Non- compliancewillresultintheinstitutionofanorderenforcementaction.

IV. CONCLUSIONSOFLAW:

1. AsaCommissionerofthe PhiladelphiaHousingAuthority (“PHA”) fromonoraroundApril19, 2004, untilonoraroundMarch4, 2011, RespondentJohnStreet

Street”) wasapublicofficialsubjecttotheprovisionsofthePublicOfficialandEmployeeEthicsAct (“EthicsAct”), 65Pa.C.S. § 1101etseq.

2. StreetdidnotviolateSection1103(a) oftheEthicsAct, 65Pa.C.S. § 1103(a), whenhe, asaCommissionerandChairmanofthePHA, participatedinactionsofthePHABoardtoapprovePHAResolutionNo. 11154, authorizingthePHAtoengageinacontractualrelationshipwithWolfBlockSchorr & Solis-Cohen, LLP (“WolfBlock”), alawfirmthatemployedhisson, becausehisactionsaffectedtothesamedegreeasubclassoffivelawfirmsincludingWolfBlockthatwereseekingtoprovidelegalservicestothePHA.

3. StreetviolatedSection1104(a) oftheEthicsAct, 65Pa.C.S. § 1104(a), whenhe, asaCommissionerandChairmanofthePHA, failedtofileStatementsofFinancialInterestswiththePHAforcalendaryears2006and2010.

1 Respondentalsoarguesthat: (1) theevidencedoesnotmeettheKistlerstandardforknowledgeandmotivationonthepartofRespondentsuchthatheputhisofficeatapurposeofobtainingaprivatepecuniarybenefitforhissonorWolfBlock; (2) thereisnoevidenceastowhatRespondent’sknowledgewas, andinparticular, noevidenceRespondentknewhissonworkedatWolfBlock; (3) thereisnoevidencethatWolfBlockdidnotdotheworkorwasnotentitledtopayment; (4) theevidencedoesnotshowwhetheraprofitwasmadebyWolfBlock; (5) thedeminimisexclusionisapplicablebecause: (a) ContractNo. 003598BhadademinimiseconomicimpactonPHA, WolfBlock, andSharifStreet; (b) the $23,915.12paidbyPHAtoWolfBlockunderContractNo. 003598Bwaseightonehundredthsofonepercent (.08%) oftheamount (inexcessof $30million) spentbyPHAonoutsidelegalservicesfrom2007-2010andwasminisculeinproportiontoPHA’stotalannualbudget; (c) therewasnoadverseimpactonthePHAfromRespondent’saction; and (d) SharifStreetbilled $1,409.00underContractNo. 003598BanddidnotreceiveindividualbonusesasaresultofhisworkatWolfBlockduringthecontractperiod; (6) ResolutionNo. 11154merelyauthorizedthePHAExecutiveDirectortonegotiateandconcludecontracts; and (7) RespondentdidnotcastthedecidingvotetoapproveResolutionNo. 11154.

InRe: JohnStreet, : FileDocket: 11-010Respondent : DateDecided: 6/17/14

DateMailed: 7/15/14

ORDERNO. 1636-21. WhilethisCommissiondoesnotcondonetheconductatissueinthiscase, given

theapplicabilityofastatutoryexclusion, thisCommissionisconstrainedtoholdthatasaCommissionerandChairmanofthePhiladelphiaHousingAuthority (“PHA”), JohnStreet (“Street”) didnotviolateSection1103(a) ofthePublicOfficialandEmployeeEthicsAct (“EthicsAct”), 65Pa.C.S. § 1103(a), whenhe, asaCommissionerandChairmanofthePHA, participatedinactionsofthePHABoardtoapprovePHAResolutionNo. 11154, authorizingthePHAtoengageinacontractualrelationshipwithWolfBlockSchorr & Solis-Cohen, LLP (“WolfBlock”), alawfirmthatemployedhisson, becausehisactionsaffectedtothesamedegreeasubclassoffivelawfirmsincludingWolfBlockthatwereseekingtoprovidelegalservicestothePHA.

2. StreetviolatedSection1104(a) oftheEthicsAct, 65Pa.C.S. § 1104(a), whenhe, asaCommissionerandChairmanofthePHA, failedtofileStatementsofFinancialInterestswiththePHAforcalendaryears2006and2010.

3. Totheextenthehasnotalreadydoneso, StreetisdirectedtofilecompleteandaccurateStatementsofFinancialInterestsforcalendaryears2006and2010withththePHA, throughthisCommission, bynolaterthanthethirtieth (30) dayafterthemailingdateofthisOrder.

4. Non-compliancewiththisOrderwillresultintheinstitutionofanOrderenforcementaction.

BYTHECOMMISSION,

NicholasA. Colafella, ViceChair

ChairJohnJ. BolgerandCommissionerRogerNickdissent.

CommissionerMariaFeeleydidnotparticipateinthismatter.

Inre: Street, No. 1636-2 Date: July15, 2014

DISSENTINGOPINION

IdissentfromtheMajorityOpinioninthismatter.

ThebanonuseofpublicofficeforaprivatepecuniarygainforthepublicofficialhimselforimmediatefamilyisattheheartoftheEthicsAct. Toallowaclass/subclasstobecreatedthatdoesnotcurrentlyexistcreatestheopportunitytocircumventthisessentialprovision.

JohnJ. Bolger, Chair

Inre: Street, No. 1636-2 Date: July15, 2014

DISSENTINGOPINION

IdissentfromtheMajorityOpinioninthismatter.

TheInvestigativeDivisionarguesthatfortheclass/subclassexclusiontobeapplicable, theclass/subclassmustexistpriortotheactioninquestion. Iagree. Otherwise, apublicofficialcouldvotetoawardacontracttohisowncompanyifasimilarcontractisawardedtoanothercompany, therebycreatinga “class/subclass.” TheInvestigativeDivisionciteslegislativedebate, indicatinglegislativeintent, thattheclass/subclassisintendedtoprovideanexclusionforapublicofficialwhovotesonamatterwhichinvolvesanexistingclassofindividualsorentities.

TheInvestigativeDivisionalsoarguesthatcaselaw, inparticulartheCommonwealthCourtdecisioninRussellv. StateEthicsCommission, concludedthat

fortheclass/subclassexceptiontoapply, theunderlyingactionthatthepublicofficialorpublicemployeedesirestotakemustbealegalaction. Thisexceptiondoesnotmakeanotherwiseillegalactionlegal.” Id., 987A.2d835, 841 (Pa. Cmwlth. 2009), allocaturdenied, 607Pa. 708, 4A.3d1056 (2010). ThebanonuseofpublicofficeforaprivatepecuniarygainforthepublicofficialhimselforimmediatefamilyisattheheartoftheEthicsAct. Toallowaclass/subclasstobecreatedthatdoesnotcurrentlyexistcreatestheopportunitytocircumventthisessentialprovision.

ForthesereasonsIdissentfromtheMajorityOpinioninthismatter.

CommissionerRogerNick