Argued: February 12, 2013
BEFORE: HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge
P. KEVIN BROBSON, Judge 
Shawnee Tabernacle Church (Church) and Dennis Bloom (Bloom) (collectively, Petitioners) petition for review of the May 11, 2012 order of the Pennsylvania State Ethics Commission (Commission). In that order, the Commission denied the Church's petition to intervene in an administrative proceeding initiated by the Commission against Bloom under the Public Official and Employee Ethics Act, 65 Pa. C.S. §§ 1101-1113 (Ethics Act). Because the Commission did not abuse its discretion, we affirm the Commission's order.
A. Commission Proceeding
On or about November 10, 2010, the Pocono Mountain School District (School District) filed a formal complaint with the Commission. (Reproduced Record (R.R.) 4a-10a.) In its complaint, the School District contended that Bloom, in his capacity as Chief Executive Officer (CEO) of the Pocono Mountain Charter School (Charter School), violated the Ethics Act. The School District contended that Bloom engaged in a series of self-dealing and conflicts of interest stemming from his role as CEO of the Charter School and his simultaneous role as Senior Pastor of the Church, which happens to be the Charter School's landlord. More specifically, the School District alleged the following:
[D]uring his tenure as Senior Pastor of the Landlord-Church and CEO of the Tenant-Charter School, [Bloom] authorized over $900, 000.00 in public taxpayer funds, to be spent on installing a parking lot on the church-owned land, as well as installing an elevator, gymnasium floor, lockers, etc., without obtaining any off-set credit against the annual rent that the Charter School pays to the Church. The Charter School pays an annual rent of $920, 000.00 to its Landlord, the . . . Church, for use of a building that shares a common entranceway with the Church and whose exterior has a sign stating, "Shawnee Tabernacle", with the Church logo. The . . . Charter School spent approximately $39, 000.00 to install an electronic message board that contained the name "Shawnee Tabernacle Church" in the most prominent location of the sign, and [the] Charter School continues to promote the Church to run messages on the sign, with no charge, pursuant to an unwritten agreement. [Bloom] and his wife drew salaries from the School that approximated $200, 000.00 per year. [Bloom] authorized the Charter School to pay for the gymnasium floor and include the words "Shawnee Tabernacle", on said floor.
(R.R. 6a.) The School District noted in its complaint that on October 6, 2010, its Board of Directors (School Board) voted, after a hearing, to revoke the Charter School's charter based on what the School District characterized as an "entanglement that exists between the Church and the publicly-funded Charter School." The School District asked the Commission to investigate, stating:
A full blown investigation is required so that the mandates of the . . . Ethics Act are upheld and so that . . . Bloom is held accountable for using taxpayer monies for his own pecuniary benefit and/or for his church's benefit, at the cost of the taxpayers.
On or about February 24, 2012, the Investigative Division of the Commission (Investigative Division) filed an Investigative Complaint/Findings Report (Complaint) against Bloom. (R.R. 11a-94a.) In that Complaint, the Investigative Division notes that it received the School District's complaint and initiated a preliminary inquiry, which it concluded in 60 days. Thereafter, it determined that a full investigation was warranted. Based on that full investigation, the Investigative Division filed the Complaint.
The Investigative Division alleges that Bloom served as CEO of the Charter School from its creation in or about 2003 until December 10, 2010—i.e., the period at or around which the School District raised its concerns about Bloom's conflicts of interest and sought to revoke the Charter School's charter. Bloom and his wife formed the Church on or about February 9, 1995. Since that time, Bloom has served as the Founder and Pastor of the Church. On or about June 28, 1999, according to the Complaint, the Church purchased approximately 10.5 acres of land in Monroe County, which would become the future home of the Church and the Charter School (Tobyhanna Property). Bloom incorporated the Church in 2001 by filing appropriate papers with the Pennsylvania Department of State, identifying himself as President.
Between 1999 and 2002, Bloom operated the Tobyhanna Christian Academy (TCA), a private school which ceased operations due to a lack of financial resources. At or around the same time that TCA ceased operations, Bloom began the process of creating a charter school to be operated on the Church's property. He formed another corporate entity, the Pocono Mountain Learning Academy (PMLA), which the Investigative Division alleges is the successor to TCA. The corporate purpose of the PMLA was "to provide charter school educational instruction as an alternative to public school." Bloom later amended the corporate charter to rename the entity as the Charter School.
Bloom filed an application for a charter for the Charter School with the School District, proposing a start date of August 25, 2003, and identifying the proposed location of the school as the Tobyhanna Property. The application disclosed, inter alia, that the Charter School would rent space from the Church and that an addition to the building on the property is under construction to accommodate the students. The School Board approved the application on February 19, 2003.
In his simultaneous capacity as CEO of the Charter School and Founder/President of the Church, Bloom participated in the process that led to the lease agreements between the Charter School and the Church. Indeed, according to the Complaint, Bloom was the point of contact on the leases for both the Charter School, as tenant, and the Church, as landlord. Bloom actively negotiated the leases for 2003, 2004, and 2005, which the Charter School's Board of Trustees approved. The Investigative Division alleges that in 2006, when the charter came up for renewal, questions were raised about Bloom's role, presumably with the Church and the Charter School. From then on, the Investigative Division alleges, Bloom concealed his involvement by having members of the Charter School Board of Trustees sign documents.
The gist of the Investigative Division's Complaint is that Bloom acted for both the Church (landlord) and the Charter School (tenant) from 2003 through 2010 with respect to lease terms and negotiations between the Church and the Charter School. During this time, the leased area increased and the amount of rent paid by the Charter School to the Church increased. In addition, according to the Complaint, in 2006, the Charter School and the Church executed a lease amendment that called for the Charter School to pay 100% of the debt service on the Church's mortgage loan of $2.2 million, incurred from the development and expansion of the facilities on the Tobyhanna Property (Expansion Project).
The Investigative Division also details allegations relating to how Bloom, by using his official capacities with the Church and the Charter School, personally profited from the operations of the Church and the Charter School. Bloom, as CEO of the Charter School, directed the Charter School's business manager to make rent and expense payments to the Church, which were deposited into a business checking account at First National Bank of Palmerton. Bloom and his wife both had signature authority on that account. According to the Complaint, without those lease and expense payments, the Church had difficulty maintaining a positive balance in that checking account. In addition, Bloom, in his capacity as Pastor of the Church, either made payments to himself or directed Church staff to make payments to him out of that same checking account. Indeed, the Investigative Division alleges five specific instances where either on the same day or within one day of the Charter School depositing money in the bank account, a check was issued out of that account to Bloom, ranging from $12, 000 to $45, 000 (a total of $146, 500). The Investigative Division further alleges that while these payments were characterized as loan payments, there is no record substantiating a loan of this size by Bloom to the Church.
The Investigative Division also alleges that Bloom used his position as CEO of the Charter School to hire his son and daughter as part-time employees of the Charter School, for which the Charter School paid them $15, 651.88 and $18, 039.60, respectively.
With respect to the Expansion Project, the Investigative Division alleges that Bloom served as the point man for both the Church and the Charter School on the project and that he secured the financing for the project. It alleges that the financing would not have been possible if not for the lease terms that essentially had the Charter School funding the project through increased rental payments. Bloom, as President of the Church, opened a construction checking account with the lender, with himself and his wife having signature authority on the account.
The Investigative Division alleges that following the solicitation of bids for the Expansion Project in early 2007, Bloom, as Pastor of the Church, selected a company called Radium, Inc. (Radium) to serve as the general contractor. From September 2006 on, Bloom was the sole owner and operator of Radium. Bloom authorized payments from the Church's construction account to Radium and to himself personally in 2007. Though Bloom, in his capacity as CEO of the Charter School, updated the Charter School Board of Trustees on the status of the project during the latter half of 2007 and in January 2008, he never disclosed that Radium, his company, was serving as the general contractor for the project. The Investigative Division alleges that Bloom further concealed his involvement with Radium in other ways, including in a Waiver and Release of Mechanic's lien form for Radium. The affidavit accompanying the form was signed by a Shalako Simon for Radium, who, according to the Investigative Division, was Bloom's son-in-law and had no formal position with Radium.
The Investigative Division alleges that Bloom's multiple and simultaneous positions with the Church and Radium allowed him to choose which portions of the Expansion Project would be paid from the loan proceeds or by the Charter School. Indeed, the Charter School opened its own separate construction account, with Bloom as a signatory. This account was used to pay for expenses of the Expansion Project that were not paid for through the loans taken out by the Church. Bloom, in his capacity as CEO of the Charter School, directed payments out of that construction account for such things as doors, a sign board, an elevator, the parking lot, gym flooring, and bleachers. By directing such expenses to the Charter School, Bloom, the Investigative Division alleges, freed up loan proceeds secured by the Church to be paid to Radium as the general contractor and him, as the owner of Radium, by extension.
The Investigative Division further alleges that Bloom, in his capacity as CEO of the Charter School, gave permission to his daughter to use school-leased facilities to operate her own business—The Tobyhanna Impact Athletic Center (Athletic Center). The Athletic Center, however, did not pay either the Church or the Charter School to use the facilities for its operations. The checking account for the Athletic Center identifies Bloom as one of the authorized signatories for the account. Bloom signed several checks from the account, including a November 25, 2008 check made payable to cash. That same day, Bloom made a $2, 000.00 cash deposit to his personal checking account.
The Investigative Division further alleges that in 2009, Bloom, as CEO of the Charter School, directed the Charter School's business manager to issue bonus checks to Bloom and his wife, which Bloom deposited in his personal checking account. No such bonuses were authorized by the Charter School's Board of Trustees. Soon thereafter, Bloom's wife leased a 2009 Mercedes automobile for $422.63 a month with a $4, 500.00 down payment. Bloom paid for the down payment from his personal checking account. Thereafter, Bloom, as CEO of the Charter School, instructed the business manager to issue monthly $450.00 payments to him as a car expense. Pursuant to this directive, the Charter School paid Bloom $4, 950.00 as a car expense for the period of August 2009 through November 2010. Again, according to the Investigative Division, this expense was not authorized by the Charter School's Board of Trustees. The Investigative Division also alleges Bloom authorized vehicle lease reimbursements by the Charter School to him during the 2003-2004 school year.
Based on the foregoing, the Investigative Decision claims that Bloom, a public official/employee based on his capacity as CEO of the Charter School, violated Sections 1103(a) and (f) and 1105 of the Ethics Act. Section 1103 prohibits a public official or employee from engaging "in conduct that constitutes a conflict of interest." 65 Pa. C.S. § 1103(a). "Conflict" or "conflict of interest" is defined in the Ethics Act as follows:
Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated.
Id. § 1102. Section 1103(f) limits self-dealing by providing:
No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract.
Id. § 1103(f).
Section 1104 of the Ethics Act requires public officials to file a statement of financial interests. The Investigative Division accuses Bloom of failing to include the following required information in his statements of financial interests:
(5) The name and address of any direct or indirect source of income totaling in the aggregate $1, 300 or more. However, this provision shall not be construed to require the divulgence of confidential information protected by statute or existing professional codes of ethics or common law privileges.
(8) Any office, directorship or employment of any nature whatsoever in any business entity.
(9)Any financial interest in any legal entity engaged in business for profit.
Id. § 1105(b).
Pursuant to the Ethics Commission's regulations, specifically 51 Pa. Code § 21.21(a), on or about March 23, 2012, Bloom requested a formal hearing on the charges against him. (R.R. 95a.) He also filed a paragraph-by-paragraph response to the Complaint, along with additional averments under the heading of "New Matter and Affirmative Defenses." (R.R. 96a-170a.) In that document, Bloom denies every ...