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State of New Jersey v. Robert K. Thompson

October 26, 2011

STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
ROBERT K. THOMPSON, HAROLD E. FOX AND DAVID M. GAVIN, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Mercer County, Indictment No. 06-08-0090.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 12, 2011

Before Judges Parrillo, Grall and Alvarez.

This is an interlocutory appeal from a pre-trial order in a criminal prosecution for official misconduct. The indictment charges employees of the New Jersey Department of Treasury (Treasury) and OSI Collection Services, Inc. (OSI), which provided a variety of tax-collection services through various contracts with Treasury between 1995 and 2007. The prosecution is based on allegations that some of Treasury's employees accepted personal benefits - such as meals, drinks and entertainment - from OSI employees and improperly performed their official duties related to the award, extension and administration of OSI's contracts. State v. Thompson, 402 N.J. Super. 177, 182, 184 (App. Div. 2008). By order of the trial court, affirmed as modified on a prior interlocutory appeal, the forty-two-count indictment is now limited to six counts. Id. at 181-82.

Defendant Harold E. Fox, formerly the deputy director of Treasury's Division of Taxation, and David M. Gavin, the assistant director of Taxation's compliance activity are charged together in one remaining count.*fn1 The charge against Fox and Gavin is official misconduct in violation of N.J.S.A. 2C:30-2a and N.J.S.A. 2C:2-6. More particularly, this count alleges their participation in selecting members of a committee that evaluated bids on a contract for collection of delinquent taxes awarded to OSI in 2004, with a purpose to benefit themselves or others and with knowledge that their conduct was unauthorized. See Thompson, supra, 402 N.J. Super. at 183, 186-87. According to the State, an e-mail written by Gavin on May 7, 2004 is "the basis for" its case against Fox; it concerns appointment of the committee members.

On this appeal, the State challenges an order precluding the use of hearsay statements made by Gavin in the May 7 e-mail as proof of Fox's guilt. The State contends that the statements are not excluded because they fall within N.J.R.E. 803(b)(3)-(5).*fn2 For the reasons stated below, we affirm.

I

Treasury's Division of Taxation collects taxes, and to accomplish that Taxation uses and oversees OSI's tax-collection services. As noted above, Gavin and Fox were employed in Taxation. Although Fox and Gavin were subordinate to the Director of Taxation, Robert K. Thompson, Fox was Gavin's superior and rated his performance. As the assistant director of compliance activity in Taxation, Gavin and employees assigned to compliance were expected to supervise and work with OSI employees. Between 1995 and 2004, OSI or its predecessor collected delinquent taxes pursuant to contracts with the State.

The State acknowledges that it has no direct evidence that Fox ever accepted a personal benefit from OSI, and relies on evidence indicating that Gavin and others in Taxation did. Because OSI's contract to recover delinquent taxes would expire in July 2004, toward the end of 2003 employees in two divisions of Treasury began the steps to award a new three-year contract for delinquent tax-collection services.

Treasury's Division of Purchase and Property oversees the award of State contracts for services. Because of the cost and nature of the contract, the Director of the Division of Purchase and Property would award it to the "responsible bidder whose [conforming] bid . . . will be most advantageous to the State, price and other factors considered." N.J.S.A. 52:34-12g.

As explained in documents submitted to the trial court, the first step for the State in the process of procuring contracts for services is preparation of a request for proposal (RFP) used to solicit bids. RFPs are developed by the Purchase Bureau in the Division of Purchase and Property and the State agency or agencies using the service, in this case Taxation. David Kern, a senior buyer in Treasury's Bureau of Purchase in the Division of Purchase and Property, was assigned as the Purchase Bureau's senior buyer for this contract.

In December 2003, Gavin was working on a RFP for the delinquent tax contract. He sent a revised version of the RFP to Linda Eagleton and Steven Itell, employees in the compliance section that reported to Gavin and worked with OSI, and asked for their suggestions. Gavin copied Fox on that e-mail, and on January 6, 2004, Gavin sent Fox a draft RFP. In the e-mail, Gavin pointed to a provision of the RFP addressing start-up time and observed that it favored OSI because OSI would not need any start-up time. Gavin invited Fox's "comments, edits etc." There is no direct evidence of a response from Fox on that draft. Gavin sent another e-mail to Fox on February 5, providing him with a copy of a RFP that he had "just sent" to the Purchase Bureau.

On February 17, 2004, Kern, as the senior buyer for the Purchase Bureau, sent Gavin a timeline that called for delivery of the RFP that day. Kern asked Gavin to review the Purchase Bureau's report on Taxation's RFP and reply with comments.

Later that day, Gavin forwarded Kern's e-mail to Fox, noted that there were "no real changes" and said he intended to write Kern to clarify that the contract was for an hourly not a contingent fee. Fox responded, reminding Gavin of a conversation they had with their director, Thompson, about a penalty provision to apply if the contractor failed to meet performance levels for minimum guaranteed collections. Fox noted that the provision in the draft RFP was not an adequate penalty.

On February 20, 2004, Fox asked counsel for Taxation to meet with him and Thompson to discuss use of an hourly rather than a contingency fee. Fox did not copy Gavin on that e-mail.

The attorney agreed to meet, and on March 3 she sent a revised provision on liquidated damages to Fox and Thompson. Fox approved the draft, and on March 4 the attorney sent it to an acting chief in the Division of Purchase and Property, inviting the chief's comments. The attorney copied Gavin on that e-mail.

Between March 4 and April 13, 2004, Gavin communicated with Kern, the acting chief, and Taxation's counsel. Fox was not a recipient of any of those e-mails.

On April 14, 2004, Gavin e-mailed Kern and advised the RFP had been reviewed and revised to state "guaranteed minimum amounts . . . to further protect [the] State's interest." Gavin copied Fox on that e-mail. Kern returned the RFP to Gavin with marginal comments on May 4 and sought his reaction. Gavin sent the marked-up copy to Fox, bringing Fox's attention to comments Gavin had highlighted and saying he would "refrain from comment until" Fox looked at the provisions. The employees from the Department of Purchase and Property questioned the justification for the high guaranteed minimums stated in the RFP.

On May 5, 2004, Kern wrote to the acting chief of Purchase and Property. Kern advised the chief that he had told Gavin the RFP "was weighted to[o] much in the favor of the incumbent." He also reported that Gavin had asked for a meeting to discuss the issue with the acting chief. Kern asked the chief to schedule one, and she suggested a meeting the next day. Although no one from Taxation was copied on either of those e-mails, the chief has notes indicating a May 6 meeting with Gavin and Fox on a contract for tax-collection services.

On the morning of May 7, 2004, Kern e-mailed Gavin and asked him to "decide on four (4) members to participate on the committee" that would evaluate the bids returned on delinquent tax recovery RFP. Fox was not copied.

The record includes the following description of a bid evaluation committee and its role in the process of awarding a contract. Prior to receipt of bid proposals, the Director of the Division of Purchase and Property decides whether to appoint an evaluation committee to review bids and make a recommendation on award of the contract. If an evaluation committee is used, the director may accept or reject its recommendation in making the final decision. The committee members are "generally State employees." Ordinarily, there are five members: one from the Purchase Bureau, who serves as the committee chair; one or more from the agency or agencies that will use the service and have pertinent expertise, one of whom will draft the committee report; and one or more ...


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