On appeal from the Executive Commission on Ethical Standards.
Approved for Publication November 19, 1996. As Corrected January 27, 1997. Counsel Amended February 26, 1997.
Before Judges Petrella, Landau and Kimmelman.
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 "nothing about Salmon's conduct [which] suggested 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, 404 A.2d 1164 (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, 622 A.2d 858 (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, 398 A.2d 1301 (App. Div.)(citing State v. Johnson, 42 N.J. 146, 162, 199 A.2d 809 (1964)), certif. denied, 81 N.J. 53 (1979). This court "ordinarily . . . 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, 662 A.2d 960 (1995); L.M. v. State Div. of Med. Assistance and Health Servs., 140 N.J. 480, 489-90, 659 A.2d 450 (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, 210 A.2d 753 (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, 89 A.2d 1 (1952) (citing Bonham's Case, 8 Colo. 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 ...