Craven v. State Ethics Com'n

• Decision Date: 20 September 1983
• Citation: 454 N.E.2d 471,390 Mass. 191
• Parties: James J. CRAVEN, Jr. v. STATE ETHICS COMMISSION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 471

454 N.E.2d 471

390 Mass. 191

James J. CRAVEN, Jr. v. STATE ETHICS COMMISSION.

Supreme Judicial Court of Massachusetts Suffolk.

Argued April 7, 1983.

Decided Sept. 20, 1983.

Lawrence F. O'Donnell, Boston (William R. O'Donnell, Boston, with him), for plaintiff.

Robert V. Greco, Boston, for defendant.

Before HENNESSEY, C.J., and WILKINS, ABRAMS, NOLAN and O'CONNOR, JJ.

O'CONNOR, Justice.

The plaintiff, James J. Craven, Jr., appeals from a judgment of the Superior Court which affirmed a decision of the State Ethics Commission (commission). The commission had found that the plaintiff violated certain provisions of the conflict of interest law, G.L. c. 268A, and had assessed a civil penalty of $1,000. We transferred the case to this court on our own motion. The plaintiff argues on appeal that the judgment of the Superior Court should be reversed and the decision of the commission set aside on the grounds that (1) he was denied due process of law because the chairman of the commission acted in both an investigative and adjudicatory capacity during the proceedings before the commission, (2) he was denied due process of law because the commission improperly applied only a preponderance of the evidence standard of proof in its proceedings, and (3) the decision of the commission is unsupported by substantial evidence. We disagree with all the plaintiff's contentions. Accordingly, we affirm the judgment.

We summarize the relevant facts found by the commission. The plaintiff has been a member of the Massachusetts House of Representatives and a member of its Ways and Means Committee (committee) since 1957. ¹ The committee evaluates and makes recommendations to the House on the budget requests of all State agencies. These recommendations carry great weight with the House membership.

In 1976, the plaintiff assisted in the formation of the Jamaica Plain Community Development Foundation, Inc. (JPCDF), by recruiting persons in the Hispanic community to serve on its board of directors. JPCDF was incorporated in April, 1977. The first executive director of JPCDF was Cornelius Joseph Doyle.

In the late summer or fall of 1978, the plaintiff assisted JPCDF in its efforts to obtain government funds by advising persons associated with the organization of the availability of grant monies in the budgets of the Department of Youth Services (DYS) and the Department of Community Affairs (DCA), which is a State agency within the jurisdiction of the Executive Office of Communities and Development (EOCD). He also arranged and attended a meeting between the Commissioner of DYS and representatives of JPCDF. In December, 1978, JPCDF was awarded an $18,000 contract by DYS. That contract was cancelled in June, 1979. ²

In August or September, 1978, the plaintiff arranged and attended a meeting at the offices of the committee. Also attending the meeting were Doyle, William Flynn, then the secretary of EOCD, and Paul Collis, then Flynn's legislative assistant. At this meeting, the plaintiff recommended that JPCDF be funded by EOCD. Flynn advised the plaintiff that there were several EOCD programs, including the Urban Reinvestment Study (URS) Program, under which JPCDF could apply for funding.

In November, 1978, the plaintiff attended another meeting with Flynn in the committee's offices. Several other State legislators representing sections of Boston also attended this meeting. The subject of the meeting was the funding by EOCD of community development groups in Boston. Flynn advised those present that there were three EOCD programs, including the URS program, under which Boston groups could apply for funding.

During this period, DCA was implementing a $150,000,000 program which could not proceed to the actual construction phase until the committee approved DCA's schedule. This schedule was pending before the committee at the time of these two meetings. At this time, Flynn was aware that the plaintiff was a member of the committee.

On November 21, 1978, the plaintiff attended a meeting at the DCA offices in Boston. Also attending the meeting were Doyle, two professionals who were to conduct research for JPCDF in the event that it received a URS grant from DCA, and Gerald Tuckman and Jeanne Myerson, two DCA staff members who would review any proposal submitted by JPCDF for a URS grant. At this meeting, Tuckman described the "Request for Proposals" for the department's URS grants and explained that this request had been circulated to a number of groups throughout the State. The plaintiff strongly pressed the DCA staff members to award a URS grant to JPCDF and indicated that the DCA budget might be affected adversely if an award were not made. Tuckman was concerned about the plaintiff's comments and reported the conversation to his immediate supervisor, David Entin. Entin subsequently advised EOCD Secretary Flynn and the assistant secretary, Gerald W. Hayes, of the plaintiff's reference to the DCA budget. Hayes was aware that certain schedules of DCA programs were awaiting approval by the committee and consequently became concerned about the plaintiff's comments.

On December 1, 1978, JPCDF submitted to DCA a proposal for a URS grant. DCA received six other proposals for the $30,000 available in URS monies. All seven proposals were evaluated. As a result of these evaluations, the DCA staff submitted to Secretary Flynn a recommendation that three of the groups receive grants, in the amount of $10,000 each. The staff did not recommend that JPCDF receive funding because JPCDF had not proposed strategies to overcome declining financial investment in the community as required in the request for proposals for funding.

Hayes later informed Entin that he had discussed the URS proposals with Flynn and that they had decided to fund two of the groups recommended but not the third group. Hayes explained that he and Flynn had decided instead to commit funds to JPCDF subject to an improvement in JPCDF's proposal to meet the program requirements. The contacts made by the plaintiff with EOCD officials regarding JPCDF and the concern generated by those contacts about the implications for the DCA budget in the event that JPCDF was not awarded funding were major factors in the decision to commit funding to JPCDF.

Doyle and the plaintiff were notified by letter dated January 2, 1979, from Secretary Flynn that an award of $10,000 in URS monies had been approved, subject to two alterations in the program design. The contract between DCA and JPCDF for the award of $10,000 in URS monies was signed on April 30, 1979.

On May 5, 1977, the plaintiff and four of his brothers established the Celtic Realty Trust. The plaintiff and these brothers were named as beneficiaries of the trust. Albert Buchwald, who was then serving as president of JPCDF, and John Lawless, a director of JPCDF, were named as trustees of the trust. At about the same time, the trust purchased a building located at 2-16 Hyde Park Avenue, Jamaica Plain, known as the Minton Building. In the fall of 1977, the plaintiff assigned his twenty per cent beneficial interest in the trust to his daughter. The other four beneficial interests remained in the plaintiff's brothers throughout 1978 and 1979.

During the fall of 1978, it was the intention of JPCDF to use some portion of the URS grant, if received, to pay rent on office space in the Minton Building. ³ The plaintiff had been aware of this intention when meeting with EOCD officials. JPCDF paid to the Celtic Realty Trust $490 in rent from the URS grant monies for the month of June, 1979. JPCDF subsequently received notice from Tuckman not to make further expenditures of URS grant monies.

1. The plaintiff's first argument is that he was denied due process of law because the chairman of the commission assumed both an adjudicatory and an investigative function in the proceedings before the commission. Since the plaintiff's argument to a large extent challenges the statutory scheme under which the commission operates, we briefly discuss the relevant provisions.

The commission, which was created by St.1978, c. 210, § 20, is authorized to "act as the primary civil enforcement agency" of G.L. c. 268A, the conflict of interest law, and G.L. c. 268B, the financial disclosure law. G.L. c. 268B, §§ 2, 3. General Laws c. 268B, § 4, establishes certain procedures by which the commission may investigate and remedy alleged violations of these statutes. Under § 4(a ), the commission may initiate a confidential preliminary inquiry into any alleged violations. Section 4(c ) provides that "[i]f a preliminary inquiry indicates reasonable cause for belief that [the statutes have] been violated, the commission may, upon a majority vote, initiate a full investigation and appropriate proceedings to determine whether there has been such a violation." Section 4(c ) further provides in relevant part that "[a]ny member of the commission ... may hear testimony or receive other evidence in any proceeding before the commission." Section 4(c ) also provides that after the adjudicatory proceedings are completed, "the commission shall meet in executive session for the purpose of reviewing the evidence before it.... [And then the commission] shall publish a written report of its findings and conclusions." The hearing officer does not make findings of fact. Rather, the full commission makes both the findings of fact and the conclusions of law.

In the case at bar, an order to show cause was issued on November 29, 1979, alleging that the plaintiff had violated G.L. c. 268A, §§ 2(b ), 6, and 23(d ). On March 10 and 11, 1980, an evidentiary hearing was held before the chairman of the commission. On June 18, 1980, the commission issued its decision and order, in which the chairman participated. In this decision, the commission made extensive findings of fact and concluded that the plaintiff had violated G.L. c. 268A, §§ 6 and 23(d ), but had not violated § 2(b ).

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