Charles Vaughn

A Highland Township supervisor has been cited for allegedly violating the state Ethics Act.

Under the state Ethics Law, “no public official shall engage in conduct that constitutes a conflict of interest.”

The state Ethics Commission, based in Harrisburg, began investigating the case two years ago and issued a multi-page report last fall. A section of the commission’s “order 1450” contains a consent agreement between Vaughn and the state agency.

Terms of this agreement call for Vaughn to make a payment of $7,074.80 to the state. He has a year to make the entire payment, according to a spokesman for the Ethics Commission.

According to the commission, the $7,047.80 figure includes:

    •    $4,380.80 in “profit” realized by Robert Vaughn on eight projects handled by K&B Construction of James City.

    •    $894 in interest saved by K&B Construction as the result of a “loan” from the township to the company.

    •    $1,800 in compensation received by Charles Vaughn as township supervisor at the rate of $50 per meeting over a three-year period. The commission claims Vaughn did not properly file mandatory “statements of financial interest” for this three-year period. The commission alleges that the supervisor “intentionally backdated” the annual forms for two of the years.

The commission alleges that Vaughn “used the authority of his office for the private pecuniary gain” of his son as co-owner of K&B Construction. The commission identifies Kevin Moran as the other co-owner of K&B.

According to the state Ethics Commission, Highland Township from September 2001 through November 2006 “selected” K&B to complete nine projects.

“Only one of the projects was publicly bid,” the commission claims in its report.

According to the commission, the eight projects awarded to K&B without bids include:

    •    A pavilion near the Highland Township Volunteer Fire Hall in James City, $8,739.70.

    •    Remodeling of the bathroom at the township building in James City, $5,465.

    •    Repair of the roof at the township building, $1,156.91.

    •    Installation of a bathroom floor, $625.

    •    Layout of the pavilion, $608.

    •    Repair gutters at the fire hall, $430.08.

    •    Install shelves in the township garage, $400.

    •    Electrical work, $160.

K&B also was awarded a contract of $19,188 for the construction of a salt shed adjacent to the township building. Bids were sought for this project, the commission said.

According to the state Ethics Commission, supervisor Vaughn “routinely participated” in action to approve monthly bills, which included payments to the company co-owned by his son.

The loan questioned by the commission involves a 2005 project at the sewage treatment plant in James City.

According to the commission, K&B received a contract from the Elk County Commissioners to construct a building over a section of the sewer plant.

K&B submitted the low bid of $29,800 for the project, which was funded through the federal community development block grant program, according to the commission.

The state commission claims the contractor “did not want to incur financing charges” to buy materials for the project.

“As the result of K&B’s preference to avoid incurring financing charges, the township Board of Supervisors made a decision to loan K&B $29,800, the total amount of their bid,” the commission said. “The loan was made directly to K&B Construction. The loan was unsecured.”

Supervisor Vaughn did not sign the check given to K&B, but he “actively participated in the board action to loan the money to his son’s business,” the commission said.

During the construction of the project, K&B needed additional materials and documented $5,080 in extra expenses for the job, raising the project cost from the original bid of $29,800 to $34,880, the commission noted in its report.

Upon completion of the sewer plant project, the Elk County Planning Department, which oversees the federal community-development program, issued a check for $34,880.30 to K&B on Oct. 21, 2005, the state Ethics Commission said. On the same day, K&B repaid its $29,800 loan to the township, the commission said.

The $894 in charges to be paid to the state by Supervisor Vaughn represents interest on a three-month $29,800 loan at the rate of three percent, the commission reported.

Vaughn, who has chosen not to appeal the commission decision, said the order issued by the state agency affects him alone, not the township.

“It never cost the township one cent,” Vaughn said. “It only costs Charles Vaughn.”

The full report is available for public view on the Pennsylvania State Ethics Commission website on the Internet.