| Matter of Rubenfeld v New York State Ethics Commn. |
| 2007 NY Slip Op 06565 [43 AD3d 1195] |
| September 6, 2007 |
| Appellate Division, Third Department |
| In the Matter of Robert I. Rubenfeld, Petitioner, v New York StateEthics Commission, Respondent. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Edward Lindner of counsel), forrespondent.
Mercure, J.P. Proceeding pursuant to CPLR article 78 (transferred to this Court by order ofthe Supreme Court, entered in Albany County) to review a determination of respondent whichfound petitioner guilty of violating Public Officers Law § 73 (5) and assessed against hima civil penalty of $2,000.
In 2002, petitioner was the Director of Interagency Coordination for the Long Island RailRoad East Side Access Project (hereinafter ESAP), a division of the Metropolitan TransportationAuthority (hereinafter MTA). While working on ESAP, petitioner was paid by the Metro-NorthRailroad, where he had previously been employed, so that he could remain in the Metro-Northpension system, but the MTA reimbursed Metro-North for his salary and benefits. His positionwith ESAP involved coordinating implementation of that project among various departments ofthe MTA, including Metro-North. The purpose of ESAP is to construct new tunnels under theEast River that will provide the Long Island Rail Road with access to Grand Central Terminal.As relevant here, ESAP partially funded a contract between Metro-North and Washington GroupInternational (hereinafter WGI) to build a replacement storage yard for Metro-North equipmentdisplaced by ESAP. WGI had bid on other MTA contracts and sought to do business with otherMTA subsidiaries as well.[*2]
WGI purchased a 10-seat table for $10,000 at the 2002Friends of the Transit Museum annual gala benefit dinner, which is held to raise funds for theNew York City Transit Museum, another division of the MTA. Pursuant to an unwritten policy atthe MTA, private vendors who purchased tickets to the gala dinner—such asWGI—could return unneeded tickets to the Museum director, who, with the approval ofthe deputy executive director for community affairs at the MTA, would then distribute these"MTA tickets" randomly to MTA employees. WGI found that it did not require all 10 seats that ithad purchased for the 2002 dinner but it did not return the tickets to the Museum director;instead, WGI's vice-president and general manager, Robert Harvey, called his "friend for many,many years," Howard Sackel—a contract employee who was also petitioner'ssupervisor—to tell him that WGI had an extra dinner ticket and to ask if Sackel needed theticket. Sackel replied that he did not need the ticket, but if Harvey turned it over to him, he wouldchoose an employee to sit at WGI's table. Sackel chose to give the ticket to petitioner, who hadrequested that Sackel notify him if he learned of any available tickets, and petitioner attended thedinner, sitting as a guest at WGI's table. Sackel indicated that he decided to distribute the tickethimself because, if he had returned it to the Museum director, there was no way to ensure thatpetitioner would have received it.
In July 2004, respondent sent petitioner a letter advising him that by accepting the ticket atWGI's table—which respondent initially valued at $500—he may have violatedPublic Officers Law § 73 (5). The relevant version of that provision dictated in pertinentpart that no state employee may, "directly or indirectly, solicit, accept or receive any gift having avalue of [$75] or more . . . under circumstances in which it could reasonably beinferred that the gift was intended to influence him [or her], or could reasonably be expected toinfluence him [or her], in the performance of his [or her] official duties" (Public Officers Lawformer § 73 [5]).[FN1]Following a hearing, the Hearing Officer found that although petitioner did not directly solicit theticket from WGI, he violated Public Officers Law § 73 (5) by accepting a ticket worthconsiderably more than $75 from a private vendor that was doing business with Metro-North andseeking additional business opportunities with the MTA. Concluding that petitioner knew heaccepted a gift from a private contractor, the Hearing Officer recommended that petitioner beassessed a civil penalty in the amount of $500 pursuant to Public Officers Law former § 73(14).[FN2][*3]Respondent adopted the Hearing Officer's findings of fact andconclusions of law, but modified the recommended penalty by increasing it to $2,000. Thisproceeding challenging the determination ensued.
We confirm. As a quasi-judicial determination made after an evidentiary hearing,respondent's conclusion that petitioner violated Public Officers Law § 73 (5) must besustained if supported by substantial evidence (see Matter of McCulloch v New York StateEthics Commn., 285 AD2d 236, 242-243 [2001]; Matter of Finigan v Lent, 189AD2d 935, 936 [1993], appeal dismissed 81 NY2d 1067 [1993], lv denied 82NY2d 657 [1993]). In that regard, "where there is room for choice, neither the weight whichmight be accorded nor the choice which might be made by a court are germane upon an analysisfor the presence of substantial evidence before [respondent]" (300 Gramatan Ave. Assoc. vState Div. of Human Rights, 45 NY2d 176, 180 [1978]; see Matter of Rogers v Sherburne-Earlville Cent. School Dist., 17AD3d 823, 824 [2005]). By its terms, the former Public Officers Law prohibited theacceptance or receipt of a gift valued over $75 when an intent to influence a state employee couldbe reasonably inferred or when the gift "could reasonably be expected to influence him [or her] inthe performance of . . . official duties" (Public Officers Law former § 73 [5]).As respondent asserts, all that is required is a showing that the gift was accepted or received"under circumstances where one could reasonably infer a promise of influence" or reasonablyexpect that the employee would be influenced (Matter of Flynn v State Ethics Commn., Dept.of State, State of N.Y., 87 NY2d 199, 201 [1995]). In other words, even when there is a"lack of proof that the gifts were intended to influence [an employee] in the performance of his[or her] official duties," a finding that section 73 (5) was violated will be upheld if "theacceptance was 'under circumstances in which it could be reasonably inferred' that thegifts were made for an improper purpose" (People v Zambuto, 73 AD2d 828, 829 [1979][citation omitted], quoting Public Officers Law former § 73 [5]).
Here, petitioner does not dispute that he accepted a ticket and attended the 2002 Museumgala dinner, that he did not pay for the ticket, and that the value of the ticket exceeded $75. Heasserts that respondent failed to prove that he knowingly violated Public Officers Lawformer § 73 (5) because he attended the dinner with the permission of, and using a ticketprovided by, Sackel for the purpose of benefitting ESAP. Petitioner maintains that under thecircumstances, the ticket cannot be considered a gift. In addition, because he had no authority toaward contracts to WGI, petitioner maintains that the ticket could not reasonably be expected toinfluence him.
Contrary to petitioner's argument that there is no evidence that he knew Sackel obtained theticket directly from WGI rather than through the MTA, however, respondent was entitled tocredit an affidavit from Harvey stating that petitioner called Harvey two days prior to the dinner,indicated that "he would be attending the gala using the WGI ticket that [Harvey] had provided toSackel," and "thanked [Harvey] for providing a ticket for him." Moreover, petitioner's testimonythat he viewed his attendance at the dinner as a work assignment from Sackel was contradictedby Sackel's testimony that the event was "one of the premier social mixers for the industry inNew York" and petitioner "wanted to go," as well as Sackel's statement to the MTA InspectorGeneral that petitioner approached him and requested a ticket. Giving due deference torespondent's credibility determinations (see Matter of Going, 97 NY2d 121, 124 [2001]),the foregoing constituted substantial evidence—that is, "proof . . . [fromwhich] a conclusion or [*4]ultimate fact may be extractedreasonably[,] probatively and logically" (300 Gramatan Ave. Assoc. v State Div. of HumanRights, supra at 181)—for respondent's conclusion that petitioner sought to attend thedinner and knew that he was accepting the ticket as a gift from a private vendor.
Substantial evidence also supports the determination that petitioner accepted the ticket undercircumstances in which it could be reasonably inferred that the gift was made for an improperpurpose. WGI had a contract with Metro-North—where petitioner remained on the payrolland a member of the pension plan—that was funded by ESAP, and WGI sought to obtainadditional contracts let by the MTA—which petitioner named as his employer—orits other subsidiary agencies. Under the circumstances, a reasonable person could infer thatHarvey hoped that giving the ticket to an employee managed by Sackel would result in additionalWGI contracts funded by ESAP. Furthermore, petitioner's job involved resolving intraagencyfriction between Metro-North and other MTA agencies. Thus, it "could reasonably be expected"(Public Officers Law former § 73 [5]) that petitioner's receipt of the ticket would enhancehis opinion of WGI, influencing him in his official capacity by, for example, generating goodwill that would inure to WGI's benefit if the company became caught up in disputes betweenMetro-North and other MTA subsidiaries during the performance of its contractual obligations.
We note that the determination is also consistent with respondent's long-standinginterpretation of Public Officers Law § 73 (5) as forbidding the acceptance of gifts by stateemployees from any entity that has or seeks contracts with the state agency where the employeeworks, or has or seeks contracts with another state agency, when the benefits of the contract arereceived by the state agency where the employee works (see NY St Ethics CommnAdvisory Op 94-16 [1996]).[FN3]Mindful that respondent's interpretation of a statute that it is charged with administering isentitled to deference if it is not irrational (see e.g. Matter of Schneider v Bress, 194 AD2d36, 38 [1993], lv denied 83 NY2d 759 [1994]; Matter of John v New York StateEthics Commn., 178 AD2d 51, 55 [1992], lv denied 80 NY2d 753 [1992]), we candiscern no error in respondent's reliance on its own interpretation of the statute in finding that animproper purpose may be inferred here. Nor can we deem irrational respondent's determinationthat gifts to state agency employees from private entities that have or seek contracts with thoseagencies violate the statute. As noted above, "proof that the gifts were intended to influence [anemployee] in the performance of his [or her] official duties" is not required to establish aviolation of section 73 (5); all that is required is that "the acceptance was 'undercircumstances in which it could be reasonably inferred' that the gifts were made for animproper purpose" (People v Zambuto, 73 AD2d 828, 829 [1979], supra [citationomitted], quoting Public Officers Law former § 73 [5]). This rule—that proof ofactual intent to influence is not required—is in keeping with the statutory [*5]purpose of deterring "[f]avoritism and the potential for conflicts ofinterest, as well as the mere appearance of such, [which] serve to weaken and erode thepublic's trust and confidence in government" (Governor's Program Bill Mem, Bill Jacket, L 1987,ch 813, at 9 [emphasis added]). The Legislature chose to effectuate this purpose by strengtheningthe "prohibitions against behavior which may permit or appear to permit undue influence orconflicts of interest" (id. [emphasis added]). In our view, it cannot be said thatrespondent acted irrationally in concluding that an appearance of undue influence, favoritism orconflict of interest may be inferred when a private entity that seeks to contract with a state agencymakes gifts to employees of that agency.
In short, because substantial evidence supports respondent's determination that petitionerknew he was accepting the gala ticket from WGI and that the gift was given under circumstanceswhere an improper purpose could reasonably be inferred, we will not disturb that determination.Petitioner's remaining arguments do not require extended discussion. His argument thatrespondent was required to prove that he subjectively believed it was wrong to accept the WGIticket is not supported by either the language of the statute or the case law interpreting it(see Public Officers Law former § 73 [5]; Matter of Flynn v State EthicsCommn., Dept. of State, State of N.Y., 87 NY2d 199, 201 [1995], supra; Peoplev Zambuto, supra at 829; cf. Arthur Andersen LLP v United States, 544 US 696,704-706 [2005]). Nor has petitioner suffered "stigma plus" as a result of respondent'sdetermination, implicating his liberty interests (see Matter of Agnew v North Colonie Cent. School Dist., 14 AD3d830, 831 [2005]; Matter of Board of Educ. of City School Dist. of City of N.Y. vMills, 293 AD2d 37, 39 [2002]). Finally, in determining whether the penalty of $2,000imposed here was excessive, we note that this Court may not "substitute[ ] its own judgment" forthat of respondent "in weighing the facts and their implications against [petitioner's] servicerecord" (Matter of Kelly v Safir, 96 NY2d 32, 39 [2001]). Rather, because the penalty isnot " 'so disproportionate to the offense as to be shocking to one's sense of fairness,' thusconstituting an abuse of discretion as a matter of law," it must be upheld (id. at 38[citation omitted]).
Spain, Mugglin and Kane, JJ., concur.
Carpinello, J. (concurring in part and dissenting in part). In my opinion, the $2,000 civilpenalty imposed in this case is so disproportionate to the offense as to shock one's sense offairness; therefore, I respectfully dissent on this issue (see Matter of Kelly v Safir, 96NY2d 32, 38 [2001]). It is uncontroverted that the actual cost of the subject dinner was $150 andthat persons or entities who purchased tickets at prices in excess of that amount were entitled to acharitable tax deduction for the difference. Indeed, the whole purpose of the event was to raisefunds for the nonprofit New York City Transit Museum.
Moreover, even if petitioner accepted the ticket under circumstances which constituted aviolation of the Public Officers Law, my review of the record supports the conclusion that he didso unintentionally, partially at the encouragement of his supervisor and with the intent of aidinghis employer. I find no proof whatsoever of any "grave moral turpitude [or] grave injury to theagency involved or to the public weal" sufficient to justify such an obscene fine (Matter ofPell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck,Westchester County, 34 NY2d 222, 235 [1974]). I would thus remit the matter to respondentfor imposition of a $300 fine (twice the cost of the ticket), a sum more reasonably related to thevalue of the gift conferred. [*6]Adjudged that the determination isconfirmed, without costs, and petition dismissed.
Footnote 1: The statute was recentlyamended, effective April 25, 2007, to provide that the gift cannot have "more than a nominalvalue" (L 2007, ch 14, § 23).
Footnote 2: Public Officers Law former§ 73 (14) stated that "any person who knowingly and intentionally violate[d]" subdivision(5) was subject to a civil penalty of up to $10,000. Subdivision (14) has been renumbered assubdivision (18) and now indicates that the civil penalty may be up to $40,000 plus the value ofthe gift (L 2007, ch 14, § 27; see also Executive Law § 94 [13]).
Footnote 3: Contrary to petitioner'sargument that respondent relied solely on New York State Ethics Commission Advisory Opinion94-16 (1996) and concluded that the actual circumstances under which he attended the dinnerwere irrelevant, the Hearing Officer—whose decision was incorporated into respondent'sdetermination—concluded that under the circumstances of the case, respondent "need notrely exclusively on Advisory Opinion No. 94-16 to prove that [petitioner] accepted a gift undercircumstances intended to influence him."