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Conflicts of Interest Bd. v.Pentangelo
OATH Index No. 422/07 (Mar. 8, 2007), adopted, Bd. Decision (July 13, 2007), appended
Respondent, a manager in the Department of Transportation, violated section 2604(d)(1)(ii) of the City Charter when he approved invoices for payment to a firm while he negotiatedand accepted a position with that firm. $1500 fine recommended.
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NEW YORK CITY OFFICE OF
ADMINISTRATIVE TRIALS AND HEARINGS
In the Matter of
CONFLICTS OF INTEREST BOARD
Petitioner
- against –
ROY PENTANGELO
Respondent
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REPORT AND RECOMMENDATION
KEVIN F. CASEY, Administrative Law Judge
Petitioner, the Conflicts of Interest Board, brought this civil penalty proceeding under Chapter 68 of the New York City Charter and Title 53 of the Rules of the City of New York. The Board alleged that respondent, Roy Pentangelo, an employee of the Department of Transportation, violated section 2604(d)(1)(ii) of the Charter. According to the Board, respondent approved invoices for payment to a firm while he negotiated and accepted a position with that firm. Respondent denied any wrongdoing.
At a hearing on December 8, 2006, the Board relied solely upon documentary evidence and respondent testified in his own behalf. The parties received permission to submit post-hearing memoranda and the record was closed on January 26, 2007.
For the reasons below, I find that respondent is guilty of the charge and recommend a fine of $1,500.
PRELIMINARY ISSUES
Service of the Petition
On August 14, 2006, the Board served the petition on Anette Bonelli, an attorney who had appeared for respondent in 2001 and 2002 in connection with theprobable cause notification in this matter (ALJ Ex. 1-A; Resp. Memo of Law, Jan. 26, 2007, at 8). In his pro se answer, dated August 20, 2006, respondent alleged that the Board violated its rule regarding service of the petition (ALJ Ex. 1-B; ¶¶ 20-22). Thus, respondent argued, the petition should be dismissed for lack of personal jurisdiction. Although the Board may not have followed its rule regarding service of a petition, there is nobasis for dismissal. Respondent had actual notice of the petition, he was not prejudiced by any deficiency in service, and the remedy he seeks is too extreme.
This tribunal’s rules provide that service of a petition shall be made in accordance with the statute, rule, or other provision applicable to the type of proceeding that is initiated. 48 RCNY § 1-23(b). The Board’s rule states, in relevant part, that the petition shall be served on the public servant’s last known address or place of business or “in any manner agreed upon by counsel to the Board and the public servant or his or her representative.” 53 RCNY § 2-05(c)(ii),(iv). Here, there was no agreement between counsel and the Board regarding service of the petition. Thus, the petition should have been served on respondent.
Contrary to petitioner’s suggestion, section 2-05(d) of the Board’s rules is inapplicable. That subsection provides, where a public servant has appeared by a representative, “all other documents” shall be served on the representative. 53 RCNY § 2-05(d). However, that provision expressly excludes “petitions and subpoenas, originating with the Board.” Id.
Despite petitioner’s error, the method of service was reasonable. Once a party elects to be represented by counsel in an administrative or judicial action, the attorney is normally considered the party’s agent in all relevant respects. Bianca v. Frank, 43 N.Y.2d 168, 173, 401 N.Y.S.2d 29, 31 (1977). Bonelli previously appeared on respondent’s behalf in connection with these allegations. Even if that prior involvement was limited, it was reasonable to consider Bonelli to be respondent’s representative at the time of service.
In any event, respondent had actual notice of the petition and he suffered no harm from any defect in service. Respondent conceded that Bonelli gave him the petition (ALJ Ex. 1-B, ¶ 22). Less than a week after the Board mailed the petition, respondent submitted a detailed answer. Because respondent had actual notice of this administrative proceeding, a technical defect in service was irrelevant. See Dep’t of Correction v. Gray, OATH Index No. 930/03, at 4 (May 29, 2003) (jurisdictional prerequisites satisfied where employee had actual notice of charges despite defective service); Drolet v. N.Y.S. Racing & Wagering Bd., 115 Misc.2d 7, 453 N.Y.S.2d 361 (Sup. Ct.NassauCo. 1982).
Because respondent had actual notice of the petition and suffered no prejudice from any defect in service, there is no basis for dismissal due to lack of proper service.
Delayed Commencement of the Action
The charge stems from events that occurred in 1998. In March 2001, the Board found probable cause to believe that respondent had violated the Charter and it served notice of that determination upon him(ALJ Ex. 1-B, ¶ 18). In August 2006, the Board referred the matter to this tribunal for a hearing. Respondent maintains that he is entitled to dismissal of the charges because the Board’s delay violated due process. However, respondent failed to demonstrate that he has been significantly prejudiced by any delay. Thus, dismissal of the charge is unwarranted.
Delayed commencement of an administrative proceeding does not violate due process unless it “significantly or deliberately” interferes with a party’s ability to present its case. O’Keefe v. Leary, 38 N.Y.2d 563, 568, 381 N.Y.S.2d 821, 823 (1976). Among the relevant considerations are: (1) the nature of the private interest allegedly compromised by the delay; (2) the actual prejudice to the private party; (3) the causal connection between the conduct of the parties and the delay; and (4) the underlying public interest or policy advanced by the governmental regulation. See Cortlandt Nursing Home v. Axelrod, 66 N.Y.2d 169, 178, 495 N.Y.S.2d 927, 932 (1985).
After employment in the private sector, respondent has returned to work for the City. He fears that a finding of an ethics violation will harm his reputation and may jeopardize his current position. Respondent also contends that he did not contribute to the eight-year delay in going forward. Those considerations weigh in respondent’s favor, but the remaining factors do not. Under section 2600 of the Charter, the Board is responsible for preserving the trust placed in the public servants, promotingconfidence in government, protecting the integrity of government decision-making, and enhancing government efficiency. Those goals are best served by a decision on the petition’s merits.
Moreover, respondent was not prejudiced by any delay. He identified three potential witnesses who are no longer available. Two of the witnesses were officers at the firm that hired him and the third witness was an attorney on the Board’s staff. As petitioner noted, even if all three witnesses supported respondent’s version of events, it would not change the outcome of this proceeding. The charge was based primarily upon invoices authorizing payment to a firm. Respondent’s testimony established that he signed those invoices while he was negotiating for a position with the same firm. There is no hint that additional witnesses would have changed those central facts. SeeDep't of Correction v. Roman, OATH Index Nos. 1026/05 & 1296/05, at 21-23 (Feb. 10, 2006) (where witnesses who were no longer available would not have strengthened respondent’s case, no prejudice from agency’s delay in going forward); Dep’t of Buildings v. Gelb, OATH Index No. 2155/96 (Mar. 3, 1997).
The delay in serving the petition did not interfere with respondent’s ability to present his case. Thus, he is not entitled to dismissal of the charge.
ANALYSIS
Under section 2604(d)(1)(ii), of the Charter, no public servant shall negotiate or accept any position “with any person or firm who or which is involved in a particular matter with the city, while such public servant is actively considering, or is directly concerned or personally participating in such particular matter on behalf of the city.”
As a Department of Transportation manager,respondent supervised employees who monitored contracts with private companies to manage city-owned parking garages (Tr. 44, 80). Respondent was authorized to certify invoices approving payment of monthly management fees to those companies (Pet. Ex. 8). Two managers had to approve each invoice (Tr. 48-49). In July and August 1998, respondent co-signed ten invoices authorizing payment to Kinney Systems, Inc. (Kinney) (Tr. 79; Pet. Ex. 9a). Thesum of the invoices exceeded $250,000 (Pet. Ex. 8).
During that same time frame, respondent was engaged in employment discussions with representatives of Kinney’s parent company, Central Parking Corporation (Central Parking) (Tr. 79). Respondent testified that he knew that Central Parking owned Kinney (Tr. 79; Pet. Ex. 9a and 9b). According to respondent, he met with a Central Parking regional manager in late June or early July 1998 to discuss privatization of street parking meter collections in other cities (Tr. 52, 55-56, 74, 79). The regional manager asked respondent if he was interested in working for Central Parking(Tr. 56-57). Respondent replied that he would be interested if certain conditions were met (Tr. 56-57). He was unwilling to relocate and unable to participate in matters involving New York City (Tr. 57). A week later, the director of human resources for Central Parking met with respondent to discuss career opportunities at the firm (Tr. 57-58, 75).
On August 9, 1998, respondent accepted an offer of employment from Central Parking (Tr. 48, 76). He continued to certify invoices for payments to Kinney until August 17, 1998 (Pet. Exs. 8N-8R). He stopped working for the City on August 26 and began working for Central Parking on September 8, 1998 (Pet. Exs. 2B, 4, 5).
Respondentoffered a number of defenses. He claimed thatinvoice approval was “pretty close to being ministerial,” his position with Central Parking involved development of street parking meter systems and had nothing to do with management of garages, and he claimed that he made a sincere effort to comply with all conflict of interest rules, including restrictions on post-City employment (Tr. 58, 60-61, 86). While some of those factors may be considered in mitigation, none are a defense to the charge.
According to respondent, approval of invoices was not one of his primary responsi-bilities. He merely provided a second signature if other managers were unavailable. Stressing thatprompt invoice approval was contractually mandated, respondent argued that delays would have exposed the City to financial penalties (Tr. 48-49). The plain wording of the certifications signed by respondent undercut this argument. By signing, respondent certified that the specified services had been “performed satisfactorily and have been verified” (Pet. Ex. 8). The invoices involved substantial sums of money. Respondent was expected to exercise independent professional judgment before approval of each payment. This was not a ministerial task.
Respondent also argued that the position that he discussed with Central Parking had nothing to do with his work for the City. That is irrelevant. Once he began negotiating for any position with Central Parking, he should not have taken any further official action on particular matters involving that firm. Section 2601(17) of the Charter defines “particular matter” as “any case, proceeding, application, request for a ruling or benefit” involving a specific party. Approving invoices for payment and verifying their accuracy directly benefited Kinney, which was owned by Central Parking. This is precisely the type of conduct that section 2604(d)(1)(ii)of the Charter was designed to prevent.
Advisory Opinion No. 93-08 (Feb. 11, 1993),cited by respondent, does not change the analysis. There, the Boardopined that a City employee’s policy research, relied upon by another agency in negotiations with various firms, did not bar the employee from seeking employment with a firm that contracted with other agencies. Relying upon the commentary that accompanied Chapter 68 of the Charter, the Board stressed that the drafters made clear that “particular matter” did not include “general subject matters or policy issues” affecting categories of individuals. Id.at 5-6 (citations omitted).
Here, in sharp contrast, respondent took specific action that benefited a particular firm. This was not a general policy matter involving broad classes of individuals or other agencies. Respondent verified and approved invoices for payment to a corporation while engaging in employment negotiations with that firm. He continued to approve invoices after accepting an employment offer.
Finally, respondentclaimed that he spoke to an attorney at the Board to make sure that he would not run afoul of restrictions on post-City employment and he adhered to those restrictions when he started working for Central Parking (Tr. 61). Those arguments are misplaced. To begin with, such informal advice does not bind the Board. Furthermore,respondent was not charged with violating restrictions on post-City employment. The charge against him is based solely upon actions that he took while employed by the City. Respondent’s efforts to comply with other rules do not excuse his failure to follow the prohibition against taking action on behalf of a firm while seeking employment from that firm.
FINDINGS AND CONCLUSIONS
By verifying and approving invoices for payment to Kinney Systems, Inc. while negotiating for, and accepting, a position with its parent corporation, Central Parking Corporation, respondent violated section 2604(d)(1)(ii) of the Charter.
RECOMMENDATION
For respondent’s violation of the Charter, petitioner seeks a penalty of $7,500. That is excessive. Under similar circumstances, where a City worker sought employment from a firm while also taking official action on behalf of that firm, recent penalties have ranged from $500 to $1,500. SeeConflicts of Interest Bd. v. Fenster, COIB No. 2002-140 (Dec. 15, 2006) (contract specialist fined $500 for seeking and accepting a position with a vendor whose contract he monitored and for appearing before his former City agency within one year of his resignation); Conflicts of Interest Bd. v. Asemota, COIB Case No. 2003-788 (Apr. 20, 2005) (penalties totaling approximately $1,500 imposed upon a City employee who solicited a job with a vendor that he audited); see alsoConflicts of Interest Bd. v. Matos, COIB Case No. 94-368 (Mar. 8, 1996) ($1,000 fine imposed where City employee sought employment with a firm after drafting segments of a request for proposals and recommended awarding a contract to that firm). Unlike respondent, each of those respondents signed settlement agreements and acknowledged wrongdoing. But that fact, alone, does not justify the substantial penalty requested by petitioner.
There are mitigating circumstances. Petitioner conceded that there was no proof of malicious intent. It further acknowledged thatrespondent did not advance the interests of Central Parking over those of the City. He approved bona fide management fees and avoided involvement with City contracts after he started working at Central Parking (Pet. Memo of Law, Jan. 11, 2007,at 6-8). Respondent also credibly testified that, before he began working for Central Parking, he sought advice from an attorney for the Board regarding possible conflicts of interest.
Although respondent clearly violated the Charter by seeking employment with a firm while continuing to take official action on its behalf, it appears that the firm did not receive any tangible, improper benefit and respondent acted in good faith. Under these circumstances, I recommend a fine of $1,500.
Kevin F. Casey
March 8, 2007Administrative Law Judge
SUBMITTED TO:
STEVEN B. ROSENFELD
Chair
APPEARANCES:
CAROLYN LISA MILLER, ESQ.
Attorney for Petitioner
ANETTE BONELLI, ESQ.
Attorney for Respondent
Conflicts of Interest Board’s Decision, COIB Case No. 99-026, OATH Index No. 07/0422, July 13, 2007
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THE CITY OF NEW YORK
CONFLICTS OF INTEREST BOARD
In the Matter of
ROY PENTANGELO
Respondent
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STEVEN B. ROSENFELD, Chairman
FINAL FINDINGS OF FACT
CONCLUSION OF LAW AND ORDER
Upon consideration of all the evidence presented in this matter, and of the full record, including all written comments submitted by counsel for the parties and all papers submitted to, and rulings of, the Office of Administrative Trials and Hearings (“OATH”), the Conflicts of Interest Board (the “Board”) hereby adopts the annexed Report and Recommendation of OATH dated March 8, 2007 (the “Report”), in the above-captioned matter. Accordingly, the Board imposes a fine of $1,500 upon Respondent for violating Chapter 68 of the City Charter, the City’s conflicts of interest law.
This enforcement matter involved a Department of Transportation (“DOT”) manager, who, in July and August of 1998, certified and signed ten invoices which verified that City-owned parking garages were properly managed and operated by a City vendor, Kinney Systems, Inc. (“Kinney”), and authorized DOT’s payment of over $290,000 in management fees to Kinney. During the period when he was certifying and signing these Kinney invoices, Respondent was actively negotiating for, and ultimately accepted, a position with Central Parking Corporation, which he knew was the parent corporation of Kinney.
New York City Charter §2604(d)(1)(ii)
This section states:
“No public servant shall solicit, negotiate for or accept any position … (ii) with any person or firm who or which is involved in a particular matter with the city, while such public servant is actively considering, or is directly concerned or personally participating in such particular matter on behalf of the city.”
Charter §2601(17) defines “particular matter” as:
“anycase, proceeding, application, request for a ruling or benefit, determination, contract limited to the duration of the contract specified therein, investigation, charge, accusation, arrest, or other similar action which involves a specific party of parties, including actions leading up to the particular matter….”
At OATH, Respondent argued that Charter Section 2604(d)(1)(ii) was inapplicable to his conduct in July and August of 1998, because the position he accepted with Central Parking was unrelated to the “particular matter” involving Kinney with which he was concerned at DOT –indeed, that he made it clear to Central that he could not accept any position that involved New York City business in any respect. That argument mischaracterizes the conflict of interest proscribed by Section 2604(d)(1)(ii). Unlike Sections 2604(d)(2) and (4) – which Respondent was not charged with violating, and, insofar as the facts in this record reveal, did not violate – there is no requirement in Section 2604(d)(1)(ii) that the position for which the City employee negotiated, or which he or she accepted, be one which would itself involve City business, or appearances before the employee’s agency. The evil addressed by Section 2604(d)(1)(ii) is the possibility or the appearance that the employee will favor the prospective employer while negotiating for the position, in order to improve the likelihood of obtaining the position, or the terms thereof – not the risk that, once employed in such a position, the former City employee might use his contacts at his former City Agency in order to gain favor for the new employer in its dealings with the City. Thus, in order to establish a violation of Section 2604(d)(1)(ii), it is sufficient that the employee negotiated for and/or accepted a position with a person or firm with which the employee was then involved, on behalf of the City, in a particular matter pending before the City. In this case, that much was clearly established by documentary evidence, as well as Respondent’s own testimony before OATH.