SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-7576-95T1
EXECUTIVE COMMISSION ON ETHICAL
STANDARDS,
Petitioner-Respondent,
v.
EDWARD H. SALMON,
Respondent-Appellant.
________________________________________
Argued October 21, 1996 - Decided November 13, 1996
Before Judges Petrella, Landau and Kimmelman.
On appeal from the Executive Commission on
Ethical Standards.
Edward N. Fitzpatrick argued the cause for
appellant (DeCotiis, Fitzpatrick & Gluck,
attorneys; Mr. Fitzpatrick, of counsel;
Joseph M. DeCotiis, on the brief).
Sharon M. Hallanan, Deputy Attorney
General, argued the cause for respondent
(Peter Verniero, Attorney General, attorney;
Mary C. Jacobson, Assistant Attorney General,
of counsel; Mr. Hallanan, on the brief).
PER CURIAM.
Appellant Edward H. Salmon (Salmon), a commissioner of the Board of Public Utilities (BPU), appeals from a final order of respondent Executive Commission on Ethical Standards (ECES). The final order entered July 25, 1996, found that Salmon had committed six violations of the Conflicts of Interest Law, N.J.S.A. 52:13D-12 to -27, and the BPU Code of Ethics which was promulgated pursuant
to N.J.S.A. 52:13D-23. The ECES imposed a $3000 penalty ($500 for
each of the six violations) and finding, under N.J.S.A. 52:13D-21(i), that Salmon's conduct constituted a willful and continuous
disregard of the provisions of the Conflicts of Interest Law and
the BPU Code of Ethics, ordered Salmon removed from public office
and barred for five years from holding public office in any
capacity. Pending appeal, Salmon's removal from office was stayed
by the Supreme Court and the hearing of this matter was ordered to
be accelerated.
On May 17, 1995, the ECES filed an eight-count complaint (later amended) against Salmon charging:
Count one: That on November 17, 1991, at a conference of the National Association of Regulatory Utility Commissioners (NARUC), held in San Antonio, Salmon attended a dinner paid for by an attorney whose law firm represented an electric utility regulated by the BPU;
Count two: That on November 15, 1992, at a NARUC conference held in Los Angeles, Salmon attended a dinner paid for by the same attorney whose law firm represented the same electric utility;
Count three: That on May 6, 1992, Salmon attended the annual New Jersey Legislative Correspondents Club dinner and his ticket to the dinner was paid for by the same attorney whose law firm represented the same electric utility;
Count four: That in February 1992, at a NARUC winter conference meeting held in Washington, D.C., Salmon attended a
dinner party paid for by a vice-president of an electric utility
regulated by the BPU;
Count five: That in February 1993, at a NARUC winter
conference meeting held in Washington, D.C., Salmon attended a
dinner paid for by a vice-president of the same electric utility;
Count six: That the same vice-president of the same regulated
electric utility helped Salmon, in July 1993, in his successful
campaign to be a second vice-president of NARUC, which position
ultimately led to Salmon's elevation to president of NARUC in the
fall of 1995;
Count seven: That Salmon organized recreational basketball
games to be played at NARUC conferences held in July of 1992, 1993,
and 1994 and that a utility regulated by the BPU made donations to
local YMCAs or payments to athletic clubs, in order for basketball
courts to be made available for NARUC games organized by Salmon;
Count eight: That the nature of the conduct alleged in each
of the preceding counts constitutes a willful and continuous
disregard of the Conflicts of Interest Law and the BPU Code of
Ethics.
The ECES' complaint demanded judgment that Salmon be fined in
the amount of $500 for each of the foregoing violations, that he be
removed as a Commissioner of the BPU, and that he be barred from
holding any public office or employment in New Jersey for a period
of five years.
Upon Salmon's filing of a contesting answer, the matter was
transmitted to the Office of Administrative Law for a hearing
before an Administrative Law Judge (ALJ). The initial decision by
the ALJ concluded that Salmon was guilty only of counts one, two,
and three, that is, accepting two dinners at NARUC conferences and
accepting a free ticket for attendance at the Legislative
Correspondents Club dinner. A fine of $500 for each of the counts,
totalling $1500 was recommended. The ECES adopted the ALJ's
initial decision on counts one, two, and three and imposed the
recommended maximum fine for each of the counts.
With respect to counts four and five, the ALJ accepted
testimony by Salmon and his assistant that they had requested that
the BPU be billed for the 1992 and 1993 dinners in accordance with
established BPU practice. The ALJ found that although Salmon did
not follow up to determine whether the regulated electric utility
had billed the BPU or whether the BPU had paid the same, Salmon had
alerted the BPU's travel coordinator to be on the lookout for the
bills and to process the same when received. The ALJ determined
that Salmon was not guilty of counts four and five because he found
that Salmon believed that the electric utility had complied with
the instructions to bill the BPU. He also found that it was
difficult to determine compliance because the BPU's travel and
reimbursement records were kept in a "chaotic" fashion, that more
likely than not "no actual request for reimbursement was ever
submitted[,]" and he concluded that Salmon's failure to follow up
was not an ethics violation.
The ECES accepted the ALJ's findings of facts relative to
counts four and five but decided from those findings that Salmon
was also guilty of those counts. The ECES imposed the maximum fine
of $500 for each count.
We do not discuss count six since the ECES adopted the ALJ's
finding of no ethics violation and neither party disputes this
ruling.
The ALJ reasoned that Salmon was not guilty, under count
seven, of accepting gifts by reason of permitting a regulated
utility to pay for the use of local basketball courts at NARUC
conventions. He held that there was no evidence that Salmon was
aware that a regulated utility had paid for the use of such local
facilities. Here again, the ECES accepted the ALJ's factual
findings but drew a different conclusion and found Salmon guilty of
count seven.
Finally, the ALJ rejected count eight, concluding that the
ethics violations found in counts one through three did not rise to
the level of a willful and continuous disregard of the ethics laws
by Salmon. The ALJ stated that there was "[n]othing about Salmon's
conduct [which] suggest[ed] any element of venality" and that
Salmon "did not purposely and knowingly flaunt and ignore standards
which were known to him." Finding no evidence that Salmon ever
compromised the integrity of his office, the ALJ rejected the
complaint's demand that Salmon be removed from office, terming
Salmon to have been an "honest and effective public official." The
ECES did not adopt the ALJ's recommended rejection and found Salmon
guilty of a "willful and continuous disregard" of the ethics laws
as charged in count eight.
The procedural underpinning of this case makes for a particularly complex standard of review. The evidence was heard by an ALJ who found facts and made recommendations. The ECES then considered those recommendations, agreed with some, rejected others, made some of its own findings, and issued its conclusions memorialized in the final order under appeal.
Not to be overlooked in this case are the many roles performed by the ECES in this type of matter. It acted as investigator, prosecutor, sworn witness, and judge. This court has cautioned "that when the prosecutorial and adjudicative functions are concentrated in the same body and exercised in a quasi-judicial setting there is danger that resultant dispositions may be arbitrary . . . ." In re Suspension of License of Silberman, 169 N.J. Super. 243, 255 (App. Div. 1979); See 2 Am.Jur. 2d Administrative Law, §§ 70, 302 (1994). We examine an agency's findings to determine whether they are supported by substantial credible evidence, Dennery v. Bd. of Educ. 131 N.J. 626, 641 (1993), and will affirm if so supported, but we are not bound to do so if the ECES' finding is arbitrary and capricious or wide of the mark. Silberman, supra, 169 N.J. Super. at 255-56; Formosa v. Equitable Life Assurance Society, 166 N.J. Super. 8, 20 (App. Div.)(citing State v. Johnson, 42 N.J. 146, 162 (1964)), certif. denied, 81 N.J. 53 (1979). This court "[o]rdinarily . . . will not reverse the determination of an administrative agency unless it is arbitrary, capricious, or unreasonable . . . ." Dennery, supra,
131 N.J. at 641; see also Impey v. Bd. of Educ.,
142 N.J. 388, 397
(1995); L.M. v. State Div. of Med. Assistance and Health Servs.,
140 N.J. 480, 489-90 (1995). We defer to the expertise of the
State agency "where such expertise is a pertinent factor." Close
v. Kordulak Bros.,
44 N.J. 589, 599 (1965).
In sum, these standards of judicial review requiring an
alertness to agency conclusions which might be "arbitrary and
capricious" and a watchful eye to determine that an agency's
findings are "substantially supported by the record" create a high
threshold for judicial review. However, the particular
circumstance presented here, where the ECES has performed the roles
of prosecutor, investigator, sworn witness, and judge, must
heighten the sensitivity with which we weigh the findings and
conclusions made below against the evidence entered into the
record.
We note the "ancient principle of Anglo-American justice that
`no man shall be a judge in his own cause'" referred to in Pyatt v.
Mayor and Council of Dunellen,
9 N.J. 548, 555-56 (1952) (citing
Bonham's Case, 8 Co., 113 b, 118 a,
77 Eng. Rep. 646, 652 (K.B.
1610). However, in the review of state administrative agency
cases, the accepted practice is contrary to that ancient principle.
The general law on the subject is expressed at 2 Am. Jur.
Administrative Law, § 70 (1994).
It is, in fact, typical for the members of administrative agencies to receive the results of investigations, to approve the filing of charges or formal complaints instituting enforcement proceedings, and then to participate in the ensuing hearings. This
mode of procedure . . . does not violate due
process of law.
The danger of unfairness is particularly
great in an agency in which there is a high
degree of concentration of both prosecuting
and judicial functions, especially where the
functions are combined in the same persons.
The courts have pointed out that in such
situations the agency members must be zealous
in the recognition and preservation of the
right to a hearing by impartial triers of the
facts, and such fusion of functions has been
subjected to considerable criticism.
[Ibid. (citations omitted).]
With these precepts in mind, we now undertake our review of the
contested issues in this case.
On appeal, Salmon does not contest the findings and recommendations of the ALJ, adopted by the ECES, that ethics transgressions inhered in counts one, two, and three involving the November 17, 1991, dinner at a NARUC convention in San Antonio, the November 15, 1992, dinner at a NARUC convention in Los Angeles, and the ticket to the Legislative Correspondents Club dinner held May 6, 1992, all paid for by the attorney whose law firm represented a regulated electric utility. Salmon, however, does contest the characterization by the ECES that the ethics transgressions under counts one, two, and three evidence a willful and continuous disregard of ethics standards.
The Legislature has set forth the boundaries for ethical behavior in the Executive Branch in N.J.S.A. 52:13D-14, N.J.S.A. 52:13D-23(e)6, N.J.S.A. 52:13D-23(e)7, and N.J.S.A. 52:13D-24, which generally prohibit a State officer or employee from
soliciting or accepting gifts which he knows or has reason to
believe is offered to him with the intent to influence him in the
performance or discharge of his official duties or which might
reasonably be expected to create an impression or suspicion among
the public having knowledge of his acts that he may be engaged in
conduct violative of his public trust. Pursuant to N.J.S.A.
52:13D-23(b), the BPU has enacted a code of ethics to guide its own
personnel. Sections 2(d) and 2(e) of the BPU Code of Ethics
generally incorporate the language of N.J.S.A. 52:13D-23(e)7
(upholding the public trust). Section 6 of the BPU Code
incorporates the language of N.J.S.A. 52:13D-14, N.J.S.A. 52:13D-23(e)6, and N.J.S.A. 52:13D-24, and further provides:
Except as noted elsewhere in this Code,
employees are responsible for full payment for
the costs of their meals, beverages, lodging
and entertainment and may not accept the same
from any person, partnership or corporation
doing business with the Board, contemplating
such business, or seeking to influence
official actions. Reimbursement by the Board
for expenses is limited to those allowed by
and in amounts permitted by the President of
the Board.
(a) The acceptance of any gifts,
preferential loans, services at preferential
rates, discounts, gratuities or anything of
monetary value from a person or organization
doing business with the Board or the granting
of special treatment or favors to such persons
or organizations for the purpose of obtaining
personal gain, is a conflict of interest.
Under this section, the term "persons"
includes employees or agents or organizations
doing business with or contemplating doing
business with the Board.
(b) Example [sic] of gifts include cash,
liquor, personal or household goods, use of
cars, lodging and other favored treatment.
This section also includes a specific
prohibition . . . against the acceptance of
beverages or entertainment from persons,
utilities or law firms representing utilities,
doing business with the Board or contemplating
doing business with it. This includes
Christmas parties, open houses and other
social functions given by persons, utilities
or law firms doing business with the Board.
Salmon contends that the ECES' determination of a violation on
each of counts four, five, and seven and the conclusion of "willful
and continuous disregard" of ethics standards with respect to count
eight are arbitrary, capricious, and not supported by substantial
credible evidence in the record. As noted above, the ECES adopted
the facts found by the ALJ with respect to counts four and five but
drew a different conclusion therefrom. These counts charged that
at both the 1992 and 1993 NARUC winter conference meetings held in
Washington, D.C., Salmon attended a dinner party hosted and paid
for by a vice-president of a regulated electric utility.
The facts found by the ALJ and adopted by the ECES were that
on the occasion of each dinner officials of the regulated electric
utility were instructed, by Salmon at the first dinner and by
Salmon's executive assistant at the second dinner, to submit a bill
to the BPU; that the BPU's travel coordinator was advised by Salmon
that when the request for reimbursement arrived, she should "take
care of it"; that this instruction to bill the BPU was in
accordance with a longstanding and accepted BPU practice; but that
Salmon never specifically checked thereafter to determine if
billings had been submitted and paid. The ALJ recommended that
Salmon's failure to follow-up on whether the regulated utility had
been reimbursed for the Washington dinners did not constitute a
basis for finding that he had violated any ethics prohibitions.
The ECES disagreed. Notwithstanding that Salmon testified that it
was not his responsibility to follow-up, the ECES held that Salmon
should have taken personal responsibility for complying with
prohibitions imposed by the Conflicts of Interest Law and the BPU
Code of Ethics against accepting free meals.
In our view, the ECES' findings of ethics violations under
counts four and five are not plainly unreasonable. L.M. v. State
Div. of Medical Assistance and Health Servs.,
140 N.J. 480, 489-90
(1995). The failure of Salmon to follow-up on the billing and
payment for the dinners was found by the ECES to have created the
appearance of impropriety. That judgment was based upon facts
reasonably supportable in the record and we will defer to the
expertise of the State agency. In re Advisory Committee on
Professional Ethics Opinions,
128 N.J. 577, 603 (1992); Marin v.
Maglaki,
126 N.J. 430, 437 (1992); Matter of Warren,
117 N.J. 295,
296-97 (1989); Close v. Kordulak Bros.,
44 N.J. 589, 599 (1965).
Count seven of the amended complaint charged Salmon with committing an ethics violation where a representative of a regulated utility made donations to local YMCAs or payments to local athletic clubs for the purpose of securing the availability of their basketball courts for use by all of the commissioners of various jurisdictions for recreational activity during the 1992,
1993, and 1994 conventions of NARUC. Salmon, who has a keen interest in basketball, was continuing a program that predated his service in NARUC. He organized these "pick-up" basketball games along with a representative of a New Jersey regulated utility. The utility-representative arranged for sites for the games at each meeting venue. Commissioners from the various NARUC jurisdictions, along with Salmon, were players. Each player personally paid a fee for a locker and towel service at each location. The ALJ found as a fact that Salmon did not know and had no reason to know that, beyond the individual fees paid by the playing commissioners, the regulated utility through its representative had been making donations or payingSee footnote 1 for the use of the basketball courts. Consequently, the recommendation was that Salmon be found not guilty on count seven. Again, the ECES did not take issue with the foregoing facts found by the ALJ. It determined, however, that "Salmon's acceptance of the free basketball court use and his acceptance of assistance from [the representative of the regulated utility] in organizing the games were improper . . . ." The ECES concluded "that Salmon violated [the Conflicts of Interest Law and] the BPU Code of Ethics in accepting the use of the basketball courts, acceptance of assistance of [the representative of the regulated utility] in arranging for the games . . . and by perpetuating a close personal relationship with a member of the regulated community." The ECES perceived that the "perpetuation of
a close personal relationship with a member of the regulated
community constitutes conduct that might reasonably be expected to
create an impression or suspicion of a violation of the public
trust in contravention of Sections 2(d) and 2(e) of the BPU Code."
Section 2(d) of the BPU Code of Ethics, which incorporates
N.J.S.A. 52:13D-23(e)(7), prohibits a State officer from
"knowingly act[ing] in any way that might reasonably be expected to
create an impression or suspicion among the public having knowledge
of his acts that he may be engaged in conduct violative of his
trust . . . ." Section 2(e) prohibits "conduct . . . which creates
a justifiable impression among the public that such trust is being
violated."
The "perpetuation of a close personal relationship" was the
wrongful action or conduct perceived by the ECES which might
reasonably be expected to create a justifiable impression or
suspicion that Salmon may be engaged in conduct violative of his
public trust. Salmon was found by the ALJ to be unaware that
donations had been made to the "Y's" and payments had been made to
the athletic clubs for the use of their gyms. We have difficulty
in accepting the ECES' conclusion that the mere allowance by Salmon
of a utility representative to assist in arranging for the use of
the basketball courts created a justifiable impression or suspicion
of a breach of public trust. There are salutary reasons for open
and amicable interface opportunities between regulators and the
regulated, e.g., to foster the promotion of satisfactory and
efficient services for the benefit of the public. What must be
guarded against are the development of associations so close as to
threaten, or appear to threaten, objective regulation in the public
interest, or which violate express ethics mandates. We find
unreasonable the ECES' conclusion of a breach of the Conflict of
Interests Law and the BPU Code of Ethics in this regard.
Similarly, we do not agree that the record fairly sustains a
finding that use of the basketball courts at the NARUC meetings
constituted gifts made personally to Salmon. If anything, the
availability of the basketball courts benefitted the members of
NARUC and not Salmon in particular. After an extensive examination
of the record, we are satisfied that the ALJ's factual findings
that Salmon had no knowledge of the donations and payments for the
use of basketball courts was based upon substantial credible
evidence in the record considering the proofs as a whole and may
not be ignored. See In re Suspension of License of Silberman,
169 N.J. Super. 243, 255-56 (App. Div. 1979), aff'd
84 N.J. 303 (1980).
The ECES' finding to the contrary, that a gift was made, was
arbitrary and unreasonable. Dennery v. Board of Educ.,
131 N.J. 626, 641 (1993); Board of Educ. of Elizabeth v. City Council of
Elizabeth,
55 N.J. 501, 507 (1970); See Jennings v. Cutler,
288 N.J. Super. 553, 562 (App. Div. 1996) (citing In re Dodge,
50 N.J. 192, 216 (1967), and holding that the elements of an inter vivos
gift are the donor's donative intent, actual or symbolic delivery,
and absolute and irrevocable surrender). If, in fact, a gift was
intended to be made, the putative donee lacked the knowledge
requisite under N.J.S.A. 52:13D-14 and BPU Code section 6. In
these sections, knowledge of the gift is specifically required in
view of the provision that "[n]o state officer . . . shall accept
. . . any gift . . . which he knows or has reason to believe is
offered to him with intent to influence him in the performance of
his public duties and responsibilities." See also N.J.S.A. 52:13D-23(e)(8). The State officer must be aware of the gift so that he
can make the judgment call as to whether it has been offered with
the intent to influence him in the performance of his duties.
Even if we indulged in the presumption that a gift was made,
and we do not, the utility's contributions to the gym operators
must be deemed spread over a three-year span and apportioned among
all those utility commissioners from the fifty states and Canada
who played basketball at the conventions. It is unreasonable to
characterize such a de minimis benefit to Salmon as a "gift . . .
or . . . thing of value . . . offered . . . to influence him in the
performance of his public duties and responsibilities." See
N.J.S.A. 52:13D-14, -23 (e)(8); BPU Code of Ethics § 6.
We reverse the ECES' determination of an ethics violation with
respect to count seven of the amended complaint.
Finally, we address count eight of the amended complaint which charges Salmon with a "willful and continuous disregard" of his ethical obligations as a State officer. The ECES rejected the ALJ's recommendation that there was no basis in the factual findings for a determination that Salmon was guilty of a willful and continuous "pattern of violations which bespeak some callous
and knowing disregard of the ethical obligations . . . ." We note
that the ALJ's conclusion of non-willfulness was based upon his
recommendation of guilt with respect to the charges in counts one,
two, and three of the amended complaint. The ECES' conclusion of
a "willful and continuous disregard" was based upon its finding of
guilt with respect to counts one, two, three, four, five, and
seven. Having reversed the ECES on count seven, our determination
will be confined to whether counts one through five reasonably may
be deemed to support the conclusion of "willful and continuous
disregard" of the Conflicts of Interest Law and the BPU Code of
Ethics.
N.J.S.A. 52:13D-21(i) provides:
Any State officer or employee . . . found guilty by the commission of violating any provision of this act or of a code of ethics promulgated pursuant to the provisions of this act shall be fined not less than $100.00 nor more than $500.00 . . . and may be suspended from his office or employment by order of the commission for a period of not in excess of 1 year. If the commission finds that the conduct of such officer or employee constitutes a willful and continuous disregard of the provisions of this act or of a code of ethics promulgated pursuant to the provisions of this act, it may order such person removed from his office or employment and may further bar such person from holding any public office or employment in this State in any capacity whatsoever for a period of not exceeding 5 years from the date on which he was found guilty by the commission.
[(emphasis added).]
In the absence of a definition of the term "willful" contained
in the Conflicts of Interest Law or the BPU Code of Ethics, the
ECES looked to cases arising under section 255 of the Federal Fair
Labor Standards Act (FLSA),
29 U.S.C.A.
§255(a), particularly
Coleman v. Jiffy June Farms, Inc.,
458 F.2d 1139, 1142 (5th Cir.
1971), cert. denied,
409 U.S. 948,
93 S. Ct. 292,
34 L. Ed.2d 219
(1972). In Jiffy June, an infraction of the FLSA was deemed to be
willful when the employer changed employees' rates of pay with
knowledge that the FLSA was applicable to its operations. The
final order of the ECES failed to recognize that the Jiffy June
standard of willful conduct was specifically rejected by the United
States Supreme Court in McLaughlin v. Richland Shoe Co.,
486 U.S. 128, 134,
108 S. Ct. 1677, 1682,
100 L. Ed.2d 115, 123 (1988),
where the Court said the Jiffy June standard "is not supported by
the plain language of the statute (FLSA), we readily reject it."
The Jiffy June standard was criticized by the United States
Supreme Court as permitting "a finding of willfulness to be based
on nothing more than negligence, or, perhaps, on a completely good
faith but incorrect assumption" that the challenged conduct was
lawful. Id. at 135, 1682, 124.
The meaning of "willful" was defined by the McLaughlin Court
as follows:
In common usage the word "willful" is
considered synonymous with such words as
"voluntary," "deliberate," and "intentional" .
. . . The word "willful" is widely used in
the law, and although it has not by any means
been given a perfectly consistent
interpretation, it is generally understood to
refer to conduct that is not merely negligent.
[Id. at 133, 1681, 123 (citations omitted).]
This court is not bound by an agency's interpretation of a
statute. See Mayflower Securities v. Bureau of Securities,
64 N.J. 85, 93 (1973). We reject the Jiffy June standard as no longer
persuasive.
In Fielder v. Stonack,
141 N.J. 101, 125 (1995), the New
Jersey Supreme Court dealt with the meaning of the phrase "willful
misconduct" in the context of a police pursuit. The police officer
who collided with an innocent motorist could not be exonerated
under the applicable statute if his conduct constituted "willful
misconduct." In holding that willful misconduct in the context of
a police pursuit means "the knowing failure [of a police officer]
to follow specific orders[,]" id. at 126, the Court noted that the
phrase "willful misconduct" is not immutably fixed but takes its
meaning from the context and purpose of its use." Id. at 125. The
Court further said:
Although willful misconduct need not involve
the actual intent to cause harm . . . there
must be some knowledge that the act is
wrongful . . . . `Willful misconduct' is the
commission of a forbidden act with actual (not
imputed) knowledge that the act is forbidden.
[Fielder, supra, 141 N.J. at 124.]
Although the Fielder court formulated its "willful" standard
expressly for police-chase scenarios, we find its reasoning to be
pertinent in the context of ethics violations. Both scenarios deal
with possible malfeasance of a person charged with protection of
the public. Cases in the criminal context define the word
"willful" as signifying an intentional execution of an unlawful
plan which has been conceived and deliberated upon. See, e.g.,
State v. DiPaolo,
34 N.J. 279, 295 (1961), cert. denied, 368 U.S.
880,
82 S. Ct. 130,
7 L. Ed.2d 80 (1961).
Interpretation of N.J.S.A. 52:13D-21(i) must center upon its
structure and plain language. Kimmelman v. Henkels & McCoy, Inc.,
108 N.J. 123, 128 (1987). Our consideration is guided by N.J.S.A.
1:1-1 which provides:
In the construction of the laws and statutes
of this state . . . words and phrases shall be
read and construed with their context, and
shall . . . be given their generally accepted
meaning, according to the approved usage of
the language. Technical words and phrases,
and words and phrases having a special or
accepted meaning in the law, shall be
construed in accordance with such technical or
special and accepted meaning.
The evident purpose of N.J.S.A. 52:13D-21 (i) is to delineate
the penalties for those found guilty of violating any provision of
the Conflicts of Interest Law or Codes of Ethics promulgated
pursuant to such Law. Two levels of penalties are established
depending upon the degree of culpability of the ethics offender.
The initial or lower level, in addition to fines, permits an
offender to "be suspended from his office or employment for a
period not in excess of 1 year." The second or more severe level
permits an offender to be removed from his office or employment and
barred from holding any public office or employment for a period
not exceeding five years after crossing a threshold finding that
the conduct of the offender constitutes a "willful and continuous
disregard" of the ethics laws.
Thus, the structure and plain language of N.J.S.A. 52:13D-21(i) contemplate that a distinction be made with respect to the
degree of culpability of the ethics offender. By reserving the
more severe level of punishment for offenders whose conduct
constitutes a "willful and continuous disregard" of the ethics
laws, the Legislature intended to and did draw a distinction
between those offenders whose conduct was merely negligent,
heedless, or unintentional even though the offender was aware of
the ethics laws. By drawing such distinction, it is clear that the
Legislature intended to reject a finding of willfulness for conduct
that was merely negligent, heedless, or unintentional.
Consequently, the Jiffy June standard, which permits a finding of
willfulness based upon nothing more than negligence or, perhaps,
upon a completely good faith but incorrect assumption, was not
within the contemplation of the Legislature as expressed by the
plain language of the statute.
The legislative use of the words "continuous disregard" in
conjunction with the word "willful" conveys the intention that
something more than mere negligence, inattention, or heedlessness
is required for conduct to constitute a "willful and continuous
disregard" of the ethics laws. Accordingly, we determine that
conduct, to be considered willful under N.J.S.A. 52:13D-21(i), must
be intentional and deliberate, with knowledge of its wrongfulness,
and not merely negligent, heedless, or unintentional.
Additionally, under the statute, the offending conduct must be something more than just willful. It must also be continuous. The Supreme Court has defined "continuing" as "pervasive or chronic" in Uricoli v. Police & Fire Retirement System, 91 N.J. 62, 78-79 (1982). We find this definition analogous to the word "continuous" as it is used in section 21(i). Therefore, the willful conduct must involve more than a few isolated acts. We hold that the phrase "willful and continuous disregard" conveys a legislative intent that the offending conduct involve not only a pervasive and chronic disregard of the ethics laws but that the conduct must be: (1) intentional with knowledge of its wrongfulness, (2) deliberate, (3) conceived, and (4) not merely negligent, heedless, or unintentional.
By establishing two levels of penalties in N.J.S.A. 52:13D-21(i), the Legislature required the offender's conduct to evidence something more than negligence, heedlessness, carelessness, a lapse of attention, or a lack of vigilance in order to justify a finding of "willful and continuous disregard" of mandates of the ethics laws. Mere knowledge of the applicable ethics standards, formerly adequate under the now discredited Jiffy June standard, will not suffice to sustain a "willful and continuous disregard" finding under N.J.S.A. 52:13D-21(i). The conduct must be intentional with knowledge of its wrongfulness, deliberate, conceived, not merely negligent, and pervasive and chronic in order to conform to the legislative use of the words "willful and continuous disregard." Short of an offender's conduct rising to that level, the plain legislative intent was that the lesser level of sanctions authorized in N.J.S.A. 52:13D-21(i) would suffice.
We are satisfied that Salmon did have a working, if not
detailed, knowledge of and familiarity with the Conflicts of
Interest Law and the BPU Code of Ethics. The ALJ found as much and
his finding was adequately supported by the record.
Salmon's general knowledge of the less subjective requirements
of the ethics laws is well evidenced by his conduct with respect to
the two dinners at the winter NARUC conferences in Washington, D.C.
held in February 1992, and February 1993. On each occasion, the
representative of the regulated utility was instructed and advised
to submit a bill to the BPU for the cost of the dinner. Salmon
then alerted the appropriate BPU employee to be on the lookout for
the bills and to pay the same. Salmon's failure to follow-up was
deemed an ethics violation by the ECES but his admitted failure to
follow-up can be regarded as nothing more than carelessness or
inattentiveness on Salmon's part due to the press of other
business. The record does not support any inference that his
failure to follow-up was intentional and when coupled with his
instruction that the utility submit a bill to the BPU, his conduct
did not exhibit a willful disregard of the ethics standards. By
reason thereof, the violations of counts four and five found by the
ECES cannot rise to the level of "willful and continuous disregard"
whether considered alone or in conjunction with violations of other
counts of the amended complaint.
Consequently, violations of counts four and five may be
penalized only at the lesser level specified by the Legislature.
The violations of counts four and five may not be used or
weighed to raise the violations of counts one, two, and three up to
the threshold level of "willful and continuous disregard" of the
ethics standards. Factually, the ECES' conclusion of violations
with respect to counts four and five was based upon Salmon's
failure to follow-up on whether the regulated electric utility had
submitted bills for reimbursement for the cost of the two free
dinners. It is not disputed that Salmon and his assistant advised
the utility to charge for the dinners. That action clearly
underscores that there was no willfulness in Salmon's mind. He
wanted the BPU to be billed and had no intention of being the
recipient of a free dinner. At most, he was negligent in not
following-up and, consequently, counts four and five may not be
further used to enhance the level of punishment.
We, therefore, confine our consideration to the violations of
counts one, two, and three relating to Salmon's presence at the
November 17, 1991, dinner at a NARUC conference held in San
Antonio, at the November 15, 1992, dinner at a NARUC conference
held in Los Angeles, and at the May 6, 1992, New Jersey Legislative
Correspondents Club dinner. On each occasion, Salmon's dinner was
paid for by an attorney whose law firm represented a regulated
utility. The issue is whether those three dinners within a twelve
month span exhibit a pervasive and chronic pattern on Salmon's part
to continuously disregard ethics standards. In our view, they do
not.
The ALJ found each dinner to be the result of a lapse of
ethical sensibility and concluded, however, that these violations
were not knowing and intentional. Nevertheless, the ECES,
determined that Salmon's conduct in accepting these dinners was a
"willful and continuous disregard" of ethics standards. It
highlighted in its findings what it termed "prolific"
correspondence and notes between Salmon and the representatives of
the regulated utilities concerning the basketball games and the
NARUC dinners held in Washington, D.C., which were the subject
matter of counts seven, four and five, respectively.
We have reversed the ECES' finding of guilt on count seven and
removed Salmon's conduct under counts four and five from being
categorized as a "willful and continuous disregard" of the ethics
standards. Accordingly, to the extent facts supporting those
counts were deemed necessary by the ECES to strengthen its
determination of "willful and continuous disregard," those findings
must be rejected.
We must consider, then, whether Salmon's conduct with respect
to the violations of counts one, two, and three was sufficient to
constitute "willful and continuous disregard" of ethics standards.
There were three dinners over the course of twelve months hosted by
a lawyer, whose friendship long preceded Salmon's status as a BPU
Commissioner. Such dinners were immediately discontinued when
Salmon realized they were improper. Salmon arranged for changes in
the procedures at the BPU regarding disclosure and reimbursement
for meals paid for by regulated utilities. We do not consider
Salmon's acceptance of these three dinners as a "willful and
continuous disregard" of ethics standards as we have defined that
phrase. See supra part V B.
We are convinced from our review of the record that the
conclusion and finding of "willful and continuous" conduct by the
ECES was arbitrary and capricious, not supported by the record, and
must be set aside. See Dennery v. Bd. of Educ.,
131 N.J. 626, 641
(1993); Mayflower Securities v. Bureau of Securities, supra, 64
N.J. at 93; Close v. Kordulak Bros.,
44 N.J. 589, 599 (1965); Krupp
v. Bd. of Educ.,
278 N.J. Super. 31, 38 (App. Div. 1994), certif.
denied,
140 N.J. 277 (1995); In re Suspension of License of
Silberman, supra, 169 N.J. Super. at 255.
Salmon's violations were against the public interest and
policy, and cannot be countenanced. However, there has never been
a suggestion that his actions proceeded from corrupt or improper
motives. The question of when the remedy of removal from office is
appropriate was ably addressed by Judge Pressler in Golaine v.
Cardinale,
142 N.J. Super. 385, 397 (Law Div. 1976), aff'd o.b.,
163 N.J. 453 (App. Div. 1978), certif. denied,
79 N.J. 497 (1979):
There are certain types of culpable official conduct which are so patently inimical to the public interest and to the public trust upon which the office is predicated that they will, per se, not only justify but virtually compel removal, such as, for example, criminal misconduct in office or misconduct which proceeds from a corrupt or other improper motive. Cf. Reichenstein v. Newark, 130 N.J.L. 115, 123 (Sup. Ct. 1943); Villani v. Duffy, 114 N.J.L. 60, 66-68 (Sup. Ct. 1934)). Because, however, removal for cause is a remedial proceeding, that cause and the culpability upon which it is based need not necessarily involve either commission of a crime or an improper purpose. See McCran v.
Gaul, supra, 95 N.J.L. at 401-402; Finnegan v.
Miller,
132 N.J.L. 192, 194-195 (Sup. Ct.
1944). Where the dereliction charged,
therefore, is not of such intrinsically
reprehensible character, the determination of
whether a specific act or omission constitutes
cause for removal requires an evaluation of
the conduct in terms of its relationship to
the nature of the office itself, and, in that
context, an appraisal of the actual or
potential impairment of the public interest
which may be expected to result from the
conduct in question.
Removed from the taint of willful and continuous misconduct,
counts one through five were not so "culpable" and "patently
inimical" to the public interest and to the public's trust of
Salmon as to warrant the most severe penalty afforded by N.J.S.A.
52:13D-21(i); removal from public office with a five-year bar from
future public service. We note that our inquiries at oral argument
have confirmed that the ECES does not suggest that any or all of
the conduct alleged in the several counts resulted in the public's
interest having been compromised or adversely affected in any
matter before the BPU. It has never been asserted that Salmon has
acted other than impartially with respect to any regulated utility.
R. 2:10-5 authorizes an appellate court to exercise such original jurisdiction as is necessary to the complete determination of any matter on review. The exercise of that jurisdiction is generally reserved for emergent matters implicating the public interest. See State v. Rose, 173 N.J. Super. 478, 483 (App. Div. 1980). We note that Salmon's term of office will expire only a few months from now, in March 1997. The matter implicates the public
interest. Moreover, we have been directed by order of the Supreme
Court, entered August 13, 1996, to process this appeal on an
accelerated basis.
Accordingly, we exercise original jurisdiction to reimpose
penalties in light of our findings on the substantive counts. The
ECES' order directing Salmon's removal from office and barring him
from holding public office or employment for the next five years is
reversed for the reasons set forth above. We hereby order that
Salmon be suspended for ten days for his violation of each of the
counts, one through five, to run consecutively so that there will
be a total suspension of fifty days. We reimpose the maximum
statutory penalty of $500 for each of the five counts for a total
fine of $2500.
Affirmed in part, reversed in part, and modified.
Footnote: 1
The donations and payments totalled approximately $3200
over the three-year period.