Conflicts of Interest Bd. v. Salce OATH Index No. 2379/13 (Nov. 8, 2013), adopted, Bd. Dec., COIB Case No (Mar. 27, 2014), appended

Transcription

1 Conflicts of Interest Bd. v. Salce OATH Index No. 2379/13 (Nov. 8, 2013), adopted, Bd. Dec., COIB Case No (Mar. 27, 2014), appended Employee of the Administration for Children s Services received cash payments from a former supervisor to process applications for day care subsidies. $5,000 fine recommended. NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS In the Matter of CONFLICTS OF INTEREST BOARD Petitioner - against ELDA SALCE Respondent 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, a community associate for the Administration for Children s Services (ACS), received $100 to $300 in payments from a former supervisor on three occasions, from October 2009 to July 2010, to process applications for a day care subsidy program, in violation of section 2604(b)(13) of the Charter (ALJ Ex. 1). Respondent resigned from ACS after she was brought up on disciplinary charges arising from these allegations. She claimed any cash payments that she received were nominal gifts for her daughter, permissible under section 2604(b)(5) of the Charter and section 1-01 of the Board s rules (Resp. Answer). At a hearing on September 27, 2013, petitioner relied upon documentary evidence and testimony from respondent s former supervisor and two employees of the Department of Investigation (DOI). Respondent and her daughter testified in respondent s behalf. For the reasons that follow, I find that petitioner proved the charge and recommend a $5,000 fine.

2 - 2 - ANALYSIS Many of the facts are undisputed. From August 2007 to May 2011, respondent was employed by ACS as a community associate in the Transitional Child Care Unit on West 16 th Street in Manhattan. Her responsibilities included processing applications for the former recipients of public assistance who were working and needed help paying for child care. In September 2009, respondent s supervisor, Mariya Rapaport, left ACS. The next month, Rapaport contacted respondent and asked her to process three or four applications for transitional child care subsidies. Respondent later met with Rapaport and received additional applications. Rapaport also gave respondent cash. There was no proof that respondent expedited Rapaport s applications or that those applicants received subsidies to which they were not entitled. The main contested issues were the amount of money that Rapaport paid and the reason for the payments. Petitioner claimed that Rapaport gave respondent $100 to $300 on about three occasions, for a total of $300 to $900, to process the applications. Respondent contended that she received money on three occasions, for a total of about $250, and each payment was a gift from Rapaport for respondent s daughter. Because petitioner proved that respondent received at least $100 from Rapaport on three occasions to process applications, the charge should be sustained. Rapaport, who appeared at the hearing with an attorney, initially invoked her Fifth Amendment right to remain silent (Tr. 11). However, she waived that right after her attorney spoke with a federal prosecutor who said that Rapaport had to testify under a cooperation agreement that she had signed (Tr ). Rapaport had pleaded guilty to conspiracy to commit bribery and was sentenced in May 2012 to three years of probation, including six months of home confinement (Tr ). According to Rapaport, she asked respondent to help expedite processing of certain applications in October 2009 (Tr. 23). Respondent agreed and Rapaport told her that she would be rewarded by grateful day care centers (Tr. 23, 35). Rapaport met respondent outside of Macy s on West 34 th Street and handed her three or four applications for processing, but did not give her any money at that time (Tr. 25). The next month, Rapaport gave respondent another set of applications and $100, $120, or $150 cash in an envelope (Tr. 25). This continued for approximately once per month until

3 - 3 - June 2010 (Tr. 26). Each time, Rapaport gave respondent cash with the applications; it was always the same, between $100, $120, and $150 (Tr. 26). Respondent never asked what the money was for and she always processed the applications (Tr ). Day care centers were paying Rapaport $1,000 per month to process the applications (Tr. 29). Rapaport testified that she gave respondent s daughter gifts for her birthday and Christmas (Tr. 30). The gifts included used clothing, cookbooks, and a camera (Tr ). In 2008, Rapaport gave respondent s daughter a picture frame and $25 for Christmas (Tr. 31). Rapaport denied that the cash payments that accompanied the applications were for respondent s daughter (Tr. 37). DOI Inspector General Michelle Offsey Raimondi testified that respondent s user ID was used to process applications for various day care centers that were the subject of a fraud investigation (Tr ). At 6:00 a.m. on August 18, 2010, Raimondi and a DOI investigator met with respondent at her home (Tr ; 59). During the interview, respondent said that she never received fraudulent applications or received cash or gifts for processing an application (Tr ). After that interview, Raimondi attended a proffer session where Rapaport told federal prosecutors that, beginning in October 2009, she paid respondent $100 to $200 per month to expedite applications (Tr , 61). Raimondi re-interviewed respondent on August 20, When Raimondi mentioned that she learned that respondent had received applications and cash outside of Macy s, respondent conceded that she had been contacted by Rapaport (Tr. 47). Respondent said that she was a fast worker and Rapaport had some child care enrollment applications that needed to be processed (Tr. 47). According to Raimondi, respondent admitted that she had received envelopes containing $100 to $300 with the applications a handful of times (Tr. 48). Raimondi denied that respondent said that the payments were gifts for her daughter (Tr. 61). DOI attorney Robyn Pullio attended a January 2011 proffer session where Rapaport told federal prosecutors about the cash payments to respondent (Tr ). Pullio also attended a proffer session where respondent said that she received cash from Rapaport (Tr. 74). According to Pullio, respondent stated that Rapaport gave her cash as a gift for her daughter, but also admitted that she received cash for expediting and processing applications (Tr. 74).

4 - 4 - Respondent testified that applications for transitional child care subsidies could be received by fax, , or in person (Tr. 87). If an applicant was working and unable to get to respondent s office on West 16 th Street, a community advocate would bring the application (Tr. 87, 92-93). Respondent checked the parent s employment status, family composition, child care arrangements, and eligibility for a subsidy (Tr , 111). Respondent s supervisors reviewed her applications (Tr. 90). After Rapaport left ACS in September 2009, she continued to be friendly with respondent (Tr , ). Rapaport phoned respondent and asked her, as a favor, to process some applications for transitional child care subsidies for people in Rapaport s community who needed help and were unable to make it to respondent s office (Tr. 97). Rapaport went to respondent s office later that day with the applications (Tr ). Rapaport continued bringing three or four applications at a time and they usually met on West 34 th Street, where respondent shopped (Tr. 99, 109). On several occasions, Rapaport gave respondent cash along with the applications to process (Tr. 110). However, respondent testified that she did not think that she was receiving these gifts to process the applications (Tr. 100, 111). Instead, respondent claimed that any money that she received was a gift for her daughter (Tr. 94, 100, 115). Rapaport took an active interest in respondent s daughter s education and upbringing (Tr. 94). Among the gifts that Rapaport gave respondent for her daughter were a camera, clothes, and cookbooks (Tr. 95, 107). Respondent estimated that she took cash from Rapaport on three occasions for a total of $250 and she gave all of that money to her daughter (Tr. 100, 115). Respondent conceded that she told federal prosecutors and DOI interviewers that, on three or four occasions in 2010, she received between $100 and $200 in cash from Rapaport (Tr. 103, 112). But respondent denied that she ever said that the money was for processing applications (Tr ). As far as respondent was concerned, she treated Rapaport like any other community advocate (Tr ). Respondent did not expedite any applications for Rapaport and she only processed legitimate applications (Tr. 104, 106, 110). Respondent was arrested as a result of these allegations, but the criminal charges were dismissed (Tr. 104). However, respondent resigned after ACS brought disciplinary charges against her (Tr ).

5 - 5 - Respondent s daughter testified that Rapaport was very friendly and gave her gifts (Tr. 120). However, Rapaport never gave the gifts directly to respondent s s daughter; instead, the gifts were given to respondent, who gave them to her daughter (Tr. 121). The gifts included clothing, a camera, and money (Tr. 121). In 2008, Rapaport gave respondent s daughter $50 for her 8 th grade graduation, $50 for her birthday, and $50 for Christmas (Tr. 121). For Christmas 2009, Rapaport gave respondent s daughter $25 and a picture frame and in 2010 she gave her $50 for her birthday (Tr. 121). In February 2010, Rapaport gave respondent s daughter $100 and a pair of pants (Tr. 121). Resolution of the contested issues turns on credibility. See Dep t of Sanitation v. Menzies, OATH Index No. 678/98 at 2-3 (Feb. 5, 1998), aff d, NYC Civ. Serv. Comm n Item No. CD A (Sept. 9, 1998) (credibility determinations are based upon factors including witness demeanor; consistency of testimony; corroboration; witness motivation, bias, or prejudice; and extent to which testimony comports with common sense and human experience). On the main contested issues regarding the amount and purpose of the payments, I found petitioner s evidence more credible than respondent s. I gave little weight to Rapaport s testimony. She is a convicted felon who agreed to testify after she was told that her refusal to cooperate would violate a lenient plea agreement with federal prosecutors. Rapaport faced at least 10 years in jail and, as a result of her cooperation, she avoided any jail time. She lacked trustworthiness and had a powerful motive to incriminate respondent. Rapaport s testimony was also vague. She could not recall how much she gave respondent on any particular occasion. Instead, she referred to a range of payments. On the other hand, the DOI witnesses were quite credible. They did not appear to have a motive to lie and their testimony was clear and persuasive. Though they did not record the proffer sessions or interviews with respondent, which would have removed any doubt about what was said, the DOI witnesses took detailed contemporaneous notes or prepared memoranda shortly after the interviews (Pet. Exs. 1, 2, 3, 6, 7, 8). Based on their testimony and reports, I find that respondent admitted in her second interview with DOI that she received $100 to $300 with the applications a handful of times and that she later admitted in a proffer session that she received the cash for expediting and processing applications (Raimondi: Tr. 48; Pullio: Tr. 74).

6 - 6 - In contrast, I did not credit respondent s claim that she never said that she took money to process applications. Nor did I credit respondent s claims that there was no connection between her work and the payments and that all of the payments were gifts for her daughter. The location, timing, and circumstances of the payments undercut respondent s defense. All of the payments were received outside of Macy s, 18 blocks from respondent s office. This supports an inference that respondent knew that the arrangement was improper and she sought to avoid detection at her workplace. Moreover, Rapaport handed respondent the cash payments with the applications. This shows a direct link between the payments and the paperwork. Finally, as respondent conceded, the timing of at least one of the payments was odd (Tr ). In February 2010, Rapaport gave respondent $100 along with the applications. It was not respondent s daughter s birthday and they were not celebrating a holiday, graduation, or other event. The most likely explanation for the payment was the one offered by petitioner respondent was taking cash in exchange for processing applications. There was no evidence that respondent actually expedited or processed an ineligible application. But that is not a defense. Receiving additional payment for doing her job is the essence of the charge against respondent. Section 2604(b)(13) of the Charter states: No public servant shall receive compensation except from the city for performing any official duty or accept or receive any gratuity from any person whose interests may be affected by the public servant s official action. This provision barred respondent from accepting any payment from Rapaport for processing the applications. Respondent was not charged with violating section 2604(b)(5), which prohibits public servants from accepting valuable gifts, except for those that are customary on family and social occasions, from a person doing business with the city. See 53 RCNY 1-01(a) (2013) (valuable gift defined as any gift with a value of $50 or more). That section has no application here. All three payments at issue were for at least $100, well beyond the $50 limit. More importantly, the evidence showed that these payments were not gifts to respondent or her daughter. They were improper cash payoffs to respondent for processing applications. Petitioner proved that respondent received payments of $100 to $300 on three occasions to process applications. By accepting money to perform work that she was already obligated to do, respondent violated the Charter. The charge should be sustained.

7 - 7 - FINDING AND CONCLUSION Petitioner proved that respondent violated section 2604(b)(13) of the City Charter by accepting payment from a private party for performing her official duties, as alleged in the petition. RECOMMENDATION Petitioner requested a penalty of a $15,000 fine (Tr. 128). Emphasizing that respondent violated the Charter on three occasions, petitioner sought a $5,000 fine for each violation (Tr. 128). Without minimizing the gravity of respondent s violations, the requested penalty is excessive. As petitioner acknowledged, the Board has imposed or accepted lesser fines for employees who receive unauthorized payments for performing their official duties (Tr ). See Conflicts of Interest Bd. v. Huertas, OATH Index No. 1110/09 (Jan. 22, 2009), modified, Bd. Dec. (Aug. 4, 2009) (where ALJ recommended $1,000 for former community service aide who accepted $1,000 from private entity for performing his duties, Board adopted findings but increased penalty to $2,000 fine); Conflicts of Interest Bd. v. Forsythe, COIB No (Mar. 31, 2009) (Department of Consumer Affairs inspector fined $4,000 for telling a gas station owner that there were violations at the gas station, accepting $100 from the owner, and then failing to issue a violation); Conflicts of Interest Bd. v Torres, COIB Case No a (Jun. 18, 2013) (two former sanitation workers fined $2,000 for soliciting $10 from homeowner for the removal of household garbage); see also Conflicts of Interest Bd. v. Romano, COIB Case No a (June 14, 2005) (two high-ranking former managers at the Department of Education (DOE) each paid $4,000 fines for accepting laptop computers that cost $2,400 and other valuable gifts, including tickets, dinners, and meat from DOE vendors). Huertas, cited by petitioner, is illustrative. There, an employee of the New York City Housing Authority accepted 14 payments, totaling $1,000, from the advisory board of a tenants association for staying later or cleaning a community center, even though the employee also received compensatory time from the city for the work performed. Huertas, OATH 1110/09 at 4. The employee retired and failed to appear for a hearing at this tribunal. Id. at 1. After the default hearing, petitioner requested and received a recommendation of a $1,000 fine.

8 - 8 - Id. at 7-8. The Board increased the fine to $2,000 (twice the amount of the improper payments) noting that, because of the former employee s failure to accept responsibility, a full hearing and expenditure of scarce government resources was required. Conflicts of Interest Bd. v. Huertas COIB Case No f at 4 (Aug. 4, 2009). Here, as in Huertas, a public servant received multiple improper payments for work for performing official duties and failed to accept responsibility for those actions. However, the total amount received by respondent was between $300 and $900, which was less than the total improper payments of $1,000 in Huertas. Moreover, petitioner confirmed that respondent resigned from ACS after being charged with employee misconduct for her actions (Tr ). In three-way settlements with agencies and employees, the Board routinely considers the value of a suspension in calculating fines. See, e.g., Conflicts of Interest Bd. v. Jefferson, COIB Case No b (Nov. 1, 2006) (in a three-way settlement, community associate suspended 25 workdays, valued at approximately $3,085, for accepting approximately $265 from advisory board for work for which the employee was also compensated by the city). Though respondent did not enter into such a three-way settlement, her loss of her job due to her misconduct should be considered a mitigating factor because it is a significant penalty with a value that far exceeds that of a lengthy suspension. A Charter violation is a separate action from an employee disciplinary matter. Thus, petitioner is entitled to seek an additional penalty. And respondent s actions were a serious form of misconduct. Her job was to assist the working poor in obtaining child care for their children. By accepting cash payments to process applications, respondent shared in Rapaport s corruption and created the appearance that some applicants with special connections could receive preferential treatment. Applicants who used Rapaport s services did not have to take time off from work to go to respondent s office on West 16 th Street to seek child care subsidies. Other applicants were not so fortunate. Even if the applications provided by Rapaport were legitimate and received no priority, respondent had a duty to process them. Day care centers and the working poor did not have to pay respondent for doing her job. The primary purpose of the civil penalty provisions of the conflicts of interest rules is deterrence; punishment is secondary. See Conflicts of Interest Bd. v. Nine Public Servants, OATH Index Nos. 363/95 et al. at 6 (Nov. 14, 1994). Imposing a substantial fine may help

9 - 9 - deter other public servants from accepting illegal payments for performing their assigned tasks. At the same time, respondent s loss of employment is a mitigating factor. Accordingly, I recommend a total fine of $5,000. Kevin F. Casey Administrative Law Judge November 8, 2013 SUBMITTED TO: STEVEN B. ROSENFELD Chair APPEARANCES: BRE INJESKI, ESQ. CAROLYN MILLER, ESQ. Attorneys for Petitioner THE LEGAL AID SOCIETY Attorneys for Respondent BY: KAREN CACACE, ESQ.

10 THE CITY OF NEW YORK CONFLICTS OF INTEREST BOARD x In the Matter of COIB Case No ELDA SALCE OATH Index No. 2379/13 Respondent. x FINAL FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER Upon consideration of all the evidence presented in this matter, and of the full record, 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 Administrative Law Judge ( ALJ ) Kevin F. Casey dated November 8, 2013 (the Report ), in the above-captioned matter. As recommended in the Report, and as further explained herein, the Board imposes a fine of $5,000 upon Respondent for violating Chapter 68 of the City Charter, the City s conflicts of interest law. This enforcement matter involves a former Community Associate for the New York City Administration for Children s Services ( ACS ) who accepted payments of $100 to $300 on three occasions from her former supervisor for processing applications for an ACS day care subsidy program. In each case Respondent accepted payments from her former supervisor, who at that time was working as an agent for private day care centers, to perform Respondent s ACS responsibilities, namely, processing applications for former recipients of public assistance who were working and needed help paying for child care. There was no proof that Respondent expedited these applications or that the applicants received subsidies to which they were not entitled. However, by accepting payments from a private entity for performing her official duties, Respondent violated the following provision of the City s conflicts of interest law:

11 New York City Charter 2604(b)(l3) This section states: No public servant shall receive compensation except from the city for performing any official duty or accept or receive any gratuity from any person whose interests may be affected by the public servant s official action. Petitioner served Respondent with a Notice of Petition on or about June 12, 2013, alleging that Respondent violated Charter Section 2604(b)(13). The Petition set forth, in its Cause of Action, that on three occasions Respondent received compensation from someone other than the City for performing her official duties. As the record herein demonstrates, and as the ALJ found, Respondent was given the opportunity to challenge the allegations about her conduct, and was represented by counsel at the hearing held on September 27, The evidence presented at the hearing included testimony by Michelle Offsey Raimondi, Inspector General at the New York City Department of Investigation ( DOI ); DOI attorney Robyn Pullio; Mariya Rapaport, Respondent s former supervisor who offered the compensation for processing the day care applications; Respondent; and Respondent s daughter, as well as summaries of interviews that Ms. Raimondi conducted. As the ALJ observed, the factual determinations to be drawn from the testimony turned on the credibility of the witnesses. The ALJ found the testimony of the DOI witnesses credible and on the critical points herein did not credit Respondent s testimony. In such circumstances the Board will defer to the ALJ s determination. See COIB v. Lugo, COIB Case No (2012) ( [I]t was for the ALJ to determine issues of credibility, and she did so by rejecting Respondent s testimony as unworthy of belief ) and COIB v. Williams, COIB Case No (2009) ( The evidence at the OATH hearing boiled down to a question of credibility.given the OATH Judge s observation of their testimony, we cannot reject his conclusion that [Petitioner s witnesses] were credible ) This evidence thus established, as the Petition alleged and as the Report found, that Respondent accepted compensation from a private individual (Ms. Rapaport) for performing her City duties. Following the issuance of the Report, Petitioner submitted comments to the Board on November 18, Through her attorney, Respondent submitted her comments on December 10, The Board concurs in the ALJ s determination that the evidence establishes violations of Charter Section 2604(b)(l3), the above-quoted prohibition against receiving compensation from someone other than the City for performing official duties, when Respondent accepted $100 to $300 on three occasions from her former ACS supervisor to process day care subsidy applications. See, similarly, COIB v. Huertas, COIB Case No f (2009) (former community service aide accepted $1,000 from a private entity for

12 performing his City duties for which the Board, following a hearing, imposed a fine of $2,000), and COIB v. Bracone, COIB Case No (2013) and COIB v. Torres, COIB Case No a (2013) (two former New York City Department of Sanitation workers each agreed to pay a fine of $2,000 for soliciting $10 from homeowner for the removal of household garbage). The Board agrees with the ALJ s determination that these payments were not gifts to Respondent or to her daughter but instead improper cash payoffs to [R]espondent for processing applications. Report at 6. With regard to the penalty, while the ALJ recommends a penalty of $5,000, Petitioner continues to request, as it did at the hearing, a fine of $15,000, that is, $5,000 for each of the three occasions on which Respondent accepted these prohibited payments. Respondent submits that any fine should be limited to $5,000. The Board is sympathetic to the argument of Petitioner that the conduct of Respondent, who accepted payments of cash upon her receipt of applications for government action, is more troubling than the conduct described in COIB v. Huertas, supra, the case on which the ALJ principally relied in determining the recommended penalty. That said, in light of the amount of the payments here, a total somewhere between $300 and $900, the Board believes that a fine of $5,000, an amount more than five times greater than even the highest amount received, is, on the facts here, the appropriate amount. A higher fine might well be appropriate if, for example, Respondent had, like the Sanitation workers in Bracone and Torres, supra, solicited these payments. And a higher fine would almost certainly be appropriate if the conduct in question had occurred after November 2, 2010, when the maximum fine provided for under Chapter 68 increased from $10,000 to $25,000 per violation. See Charter Section 2606(b). But in the instant case the Board accepts the ALJ s recommendation to impose a fine of $5,000 upon Respondent for the three violations of Charter Section 2604(b)(l3). For these reasons, the Board finds that Respondent violated Charter Section 2604(b)(13) and, having consulted with Respondent s agency head pursuant to Charter Section 2603(h)(3), determines that the penalty for these violations shall be $5,000. WHEREFORE, IT IS HEREBY ORDERED, pursuant to Charter Section 2606(b), that Respondent be assessed a civil penalty of $5,000 to be paid to the Conflicts of Interest Board within 30 days of service of this Order. Respondent has the right to appeal this Order to the Supreme Court of the State of New York by filing a petition pursuant to Article 78 of the Civil Practice Law and Rules. The Conflicts of Interest Board By: Andrew Irving, Acting Chair Anthony Crowell Burton Lehman Erika Thomas-Yuille March 27, 2014