HomeMy WebLinkAbout1585 Grimes
In Re: Ruth Grimes, : File Docket: 10-029
Respondent : X-ref: Order No. 1585
: Date Decided: 6/23/11
: Date Mailed: 7/6/11
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Donald M. McCurdy
Raquel K. Bergen
Nicholas A. Colafella
Mark Volk
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted
an investigation regarding possible violation(s) of the Public Official and Employee Ethics
Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., by the above-named Respondent. At the
commencement of its investigation, the Investigative Division served upon Respondent
written notice of the specific allegations. Upon completion of its investigation, the
Investigative Division issued and served upon Respondent a Findings Report identified as
an “Investigative Complaint.” A Stipulation of Findings and a Consent Agreement waiving
an evidentiary hearing were subsequently submitted by the parties to the Commission for
consideration. The Stipulated Findings are set forth as the Findings in this Order. The
Consent Agreement has been approved.
I.ALLEGATIONS:
That Ruth Grimes, a public official/public employee in her capacity as a
Commissioner for North Versailles Township, Allegheny County, violated Sections 1103(a)
and 1105(b) of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. §§ 1103(a) and 1105(b),
when she used the authority of her public office to facilitate her placement on the Township
health insurance plan at Township expense, without Board discussion or approval and
when she failed to pay costs of the premiums; when she failed to disclose on Statements
of Financial Interests for the 2008 and 2009 calendar years direct/indirect sources of
income, office, directorship or employment in any business and financial interest in any
legal entity engaged in business for profit; when she failed to disclose on a Statement of
Financial Interests filed for the 2007 calendar year office, directorship or employment in
any business and financial interests in any legal entity in business for profit.
II.FINDINGS:
1. Ruth Grimes has served as a North Versailles Township Commissioner, Allegheny
County from January 4, 2008, to the present.
st
a. Grimes serves as the 1 Ward Commissioner of the Township.
b. Grimes served as the Board President in 2010.
Grimes, 10-029
Page 2
2. Professionally, Grimes is the General Manager of Kennywood Messenger Service,
LLP.
a. Grimes is a licensed notary, ID#1015015, in the state of Pennsylvania at
said business.
3. North Versailles Township is a First Class Township governed by a seven Member
Board of Commissioners.
a. The Commissioners hold regular monthly meetings at the Township building
on the third Thursday of each month.
1. The Township holds a citizen speak-out and/or caucus meeting prior
to commencing the regular meeting.
b. Special meetings are held when necessary.
4. North Versailles Township Commissioners are compensated $3,250.00 annually for
their services.
a. Township Commissioners are not required to be present at monthly meetings
in order to receive the compensation.
5. Voting at board meetings occurs in roll call fashion after a motion is made and
seconded.
a. All objections and abstentions are noted within the minutes.
b. The minutes of each meeting are approved for accuracy at each subsequent
meeting.
c. The Secretary is ultimately responsible for generation of the minutes.
1. Hand written notes and the meeting audio recording are utilized in
generating the minutes.
6. Bill lists are generated for review at the monthly meetings.
a. The bill list is approved at the monthly meeting as funds become available.
b. Township general fund checks are signed on an as needed basis.
1. Checks require two live signatures.
aa. Authorized signatories include the Board President, Treasurer,
and Secretary.
bb. Checks can be signed by the combination of any two
signatories.
cc. Signature stamps are not utilized.
c. Invoices are provided to Commissioners for review by the Secretary upon
request.
7. Township payroll is processed by Automated Data Processing (hereafter “ADP”).
Grimes, 10-029
Page 3
a. ADP provides business related services for employers to include payroll
processing, human resources, and benefits.
b. Township payroll is issued on a bi-weekly basis.
8. The Secretary or Accounts Payable Clerk is responsible for submission of payroll
information to ADP for processing.
a. The Accounts Payable Clerk routinely submits the information to ADP.
b. Payroll is not itemized on the monthly bill list.
9. North Versailles Township offers health, vision and dental coverage to full-time
Township employees at Township expense as an employee benefit and
compensation package.
a. Highmark provides medical and vision insurance benefits for Township
employees via Keystone Blue HMO and vision plan, Group #8868541.
1. Township client #019893; bill account #0198930001.
aa. Vision premiums are also invoiced under Highmark.
2. Highmark’s group agreement does not list provisions regarding
coverage for elected Township officials.
b. Guardian Dental provides dental benefits for Township employees.
c. Township insurance plans are processed by Robert Aretta, Aretta Insurance
Group Inc.
10. North Versailles Township Commissioners’ compensation and benefits are
governed by applicable provisions of the First Class Township Code.
a. First Class Township Code, Article VII, Section 703, states in part:
“Each township Commissioner may receive a salary, established by
ordinance, of not more than…,three thousand two-hundred fifty dollars per
year in townships having a population of ten-thousand or more but less than
fifteen thousand…”
b. First Class Township Code, Article XV, Section 1502(63), Insurance states in
part:
“To expend out of the general township fund such amount as may be
necessary…,to make contracts of insurance with any insurance company, or
nonprofit hospitalization corporation, or nonprofit medical service
corporation, authorized to transact business within the Commonwealth,
insuring its employees or commissioners, or any class or classes thereof, or
their dependents, under a policy or policies of group insurance covering life,
health, hospitalization, medical and surgical service…”
c. The Commissioners are authorized to deduct from the employee’s or
Commissioner’s pay, salary or compensation such part of the premium or
charge as is payable by the employee or Commissioner.
Grimes, 10-029
Page 4
d. Such insurance shall not give eligibility preference to or improperly
discriminate in favor of Commissioners.
e. First Class Township Code, Article VI, Section 603, Compensation states in
part:
“Any change in salary, compensation, or emoluments of office shall become
effective at the beginning of the next term of the elected officer…”
11. On or prior to February 27, 2008, Grimes discussed with the Township Secretary,
Kathleen Merolillo, her enrolling in the Township’s health insurance plan.
a. The Township Secretary was subordinate to Township Commissioners.
b. Grimes did not have health insurance coverage as of December 2007.
c. Grimes previously had health insurance under a group plan with her mother,
Amy Grimes.
1. Grimes did not maintain said coverage after her mother received
social security.
12. Grimes referenced the First Class Township Code, Article XV, Section 1502(63),
Insurance regarding commissioners receiving health benefits from the township’s
group plan when discussing health insurance coverage with Merolillo.
a. Grimes did not contact the Township Solicitor, Brimmeier and Associates
Law Firm, to determine if it was permissible for Commissioners to enroll in
the Township’s health plan.
13. Merolillo consulted with a representative from the Township Solicitor’s law firm,
Brimmeier and Associates Law Firm, to determine if it was permissible for
Commissioners to participate in the Township’s health plans.
a. Merolillo contacted a representative from Brimmeier and Associates Law
Firm for advice on the matter of Commissioner enrollment in Township
health insurance plans.
1. Merolillo asserts that a representative from Brimmeier and Associates
Law Firm advised that Commissioners were permitted to enroll in the
Township’s health insurance plans as prescribed in the First Class
Township Code.
i. Brimmeier’s Office did not provide a written opinion.
ii. Merolillo did not discuss with the representative the enrollment
process for Commissioners in the Township’s health plan or
that Commissioners would have to pay their own premiums.
iii. The Board of Commissioners was not informed of the
Solicitor’s opinion regarding Grimes’ enrollment.
14. At the time of her enrollment, Grimes advised Merolillo she would pay for all or part
of the monthly premiums if required.
a. Merolillo informed Grimes that since the Township pays the insurance costs
for full-time employees Grimes would not be required to pay premiums.
Grimes, 10-029
Page 5
15. Aretta, as the Township’s health insurance agent, provided Grimes with an
enrollment/change form to be included on the Township’s health and vision plan.
a. Grimes and Merolillo signed the enrollment/change form without informing
the Board of Commissioners of Grimes’ intent to obtain health insurance
through the Township.
1. Grimes did not inform the Board of Commissioners of her enrollment
in the health plan.
16. Grimes completed an enrollment/change form for Highmark’s Keystone Blue HMO
health plan dated February 21, 2008.
a. Grimes enrolled in single (individual) coverage in the Highmark HMO.
b. The application was signed by Grimes.
c. The effective date of coverage is listed as March 1, 2008.
17. Grimes returned her enrollment/change form directly to Aretta to be added to the
Township’s health plan.
a. Grimes was added to the Township’s health insurance plan as a result of her
submission of the enrollment/change form.
b. Grimes did not discuss with the Board of Commissioners her enrollment prior
to completing said form.
1. Grimes assumed she could enroll as an employee and/or
Commissioner of the Township.
c. Grimes did not enroll in the Township’s dental plan.
18. Township health insurance enrollment/change forms require the signature of an
authorized Township official.
a. Township enrollment/change forms are routinely signed by the Township
Secretary/Manager.
1. Merolillo signed and dated Grimes’ enrollment/change form on
February 27, 2008.
b. Township enrollment/change forms do not require the signature of a
Commissioner.
c. Enrollment/change forms are not reviewed by the Board of Commissioners
for a vote of approval.
19. The North Versailles Township Board of Commissioners did not take action in 2008
authorizing Grimes to participate in the Township’s health insurance plan.
a. The North Versailles Township Board of Commissioners did not discuss
provisions (ordinances, resolutions, etc.) regarding any Commissioners
enrolling/participating in the Township’s health plan in 2008.
b. The North Versailles Township Board of Commissioners did not formally
Grimes, 10-029
Page 6
approve Grimes’ enrollment in Township sponsored health insurance plans
via vote at a public meeting in 2008.
20. At the time of Grimes’ enrollment in the health plan, the Township did not have any
provisions (resolutions, ordinances, etc.) authorizing Commissioners’ participation
in the Township’s health insurance plans.
a. Commissioners did not typically enroll in the Township’s heath care plan.
b. Prior to 2008 only one Commissioner, Victor Milko, was enrolled in the
Township’s health care plan.
21. Former North Versailles Township Commissioner Victor Milko participated in the
Township’s insurance health plan from September 1, 2003, to November 1, 2004.
a. Milko was required to pay the Township for the monthly premium as required
by the Board of Commissioners approval.
b. The vote approving Milko’s enrollment is not documented in the Township’s
minutes.
c. Milko enrolled in the Township’s Highmark Select-Blue Point of Service
health plan.
1. Milko’s enrollment form was signed by Milko on August 18, 2003, and
the former North Versailles Township Secretary Patricia Logo on
August 19, 2003.
d. Grimes was not a Commissioner at the time of Milko’s enrollment.
22. Grimes has participated in North Versailles Township’s health plan from March 1,
2008, to the present.
a. The Board of Commissioners did not authorize or discuss Grimes’ enrollment
in the Township’s health plan in 2008.
23. North Versailles Township is invoiced on a monthly basis for health, dental and
vision coverage provided to plan participants including Grimes.
a. Grimes, member ID#1735468250, is specifically identified by name on
Highmark invoices.
24. Monthly premiums for Grime’s health care plan are reflected on Highmark’s invoices
as follows:
Year Health
2008 $284.14
2009 $389.29
2010 $585.18
25. North Versailles Township invoices for health and vision insurance benefits from
Highmark verify Township payment in the amount of $14,534.78 for health and
vision insurance benefits for Grimes from March 1, 2008, to December 31, 2010.
a. In 2008, Grimes’ monthly health insurance premium was $284.14.
Grimes, 10-029
Page 7
1. Although Grimes first appeared on the monthly Highmark invoice as a
newly added member in May 2008 her effective coverage began
March 1, 2008.
2. Grimes’ total 2008 health insurance premium cost the North
Versailles Township $2,841.40 (ten months coverage multiplied by
$284.14 monthly premium).
b. In 2009, Grimes’ health insurance premium increased to $389.29 a month.
1. Grimes’ total 2009 health insurance premium cost North Versailles
Township $4,671.48 (twelve months coverage multiplied by $389.29
monthly premium).
c. In 2010, Grimes’ health insurance premium increased to $585.18 a month.
1. Grimes’ total 2010 health insurance premium cost North Versailles
Township $7,022.16 (twelve months coverage multiplied by $585.18
monthly premium).
26. Payments for Township provided health insurance coverage are approved by the
North Versailles Township Board of Commissioners via approval of the monthly bill
listing.
a. Township payments to Highmark are documented on monthly bill lists as one
lump sum.
b. Township health insurance invoices are not reviewed by the Board of
Commissioners.
1. Commissioners are provided the Township health insurance invoice
only upon request to the Township Secretary/Manager.
27. Grimes, as a North Versailles Township Commissioner, participated in actions of
the Board to approve bill lists on which payment to Highmark was documented,
which included payment for her monthly health insurance premiums.
a. Grimes was present for thirty-four meetings and voted thirty-three times in
favor to approve the monthly bill lists on which payment to Highmark is
documented in which she received coverage.
1. The January 2009 minutes do not list a vote for the approval of the
bill list.
28. At the Township’s March 19, 2009, regular meeting the subject of Commissioners
receiving Township provided health insurance was discussed by those Board
Members in attendance.
a. A motion was made by Commissioner George Beswick, seconded by
Commissioner Frank Bivins, to permit all Commissioners to participate in the
Township health plan with the following qualifications:
1. Commissioners must reimburse the Township for the costs.
th
2. Payments must be received at the Township by the 10 of every
month.
Grimes, 10-029
Page 8
3. The policy/coverage for those enrolled would be cancelled if payment
was not received.
b. The motion passed via 5-1 vote with Grimes voting in favor of the motion.
29. In April 2009 Grimes began to make reimbursements to the Township for the health
coverage as a result of the March 19, 2009, motion as shown in the chart below:
Check Check Amount Invoice Deposit
Date No. Month
4-8-09 266 $389.29 April 2009 5-1-09
5-7-09 271 $389.29 May 2009 5-14-09
6-9-09 275 $389.29 June 2009 7-6-09
7-9-09 280 $389.29 July 2009 7-17-09
8-10-09 284 $389.29 Aug. 2009 8-26-09
9-9-09 288 $389.29 Sept. 2009 9-24-09
10-8-09 292 $389.29 Oct. 2009 10-23-09
11-6-09 300 $389.29 Nov. 2009 11-13-09
12-10-09 305 $389.29 Dec. 2009 12-11-09
1-12-10 308 $389.29 Jan 2010 1-13-10
2-12-10 310 $389.29 Feb. 2010 2-19-10
3-11-10 313 $585.18 Mar. 2010 3-12-10
4-10-10 316 $585.18 April 2010 4-13-10
5-10-10 320 $585.18 May 2010 5-11-10
6-10-10 323 $585.18 June 2010 6-14-10
7-12-10 328 $585.18 July 2010 7-14-10
8-10-10 331 $585.18 Aug. 2010 8-13-10
Total $7,793.27
30. Grimes did not pay the total monthly premium costs of $4,009.27 for the period
March 2008 to March 2009 (ten months coverage multiplied by $284.14 monthly
premium and three months coverage multiplied by $389.29).
a. Grimes failed to pay the increased monthly premium cost of $585.18 in
January and February 2010.
1. Grimes made reimbursement to the Township in the amount of
$389.29 in January and February leaving a total balance of $391.78
due to the Township ($585.18 - $389.29 x 2 = $391.78).
b. The Board of Commissioners did not attempt to recover from Grimes the
health plan expenses paid for by the Township in relation to her participation
covering said time period.
31. The auditing firm Horovitz, Rudoy, and Roteman, LLC (hereafter, “HHR”) was
selected by the Township in October 2008 to complete the Township’s 2007 and
2008 audits.
a. The Independent Auditor’s Communication of Significant Deficiencies and
Grimes, 10-029
Page 9
Material Weakness Required Pursuant to Statement on Auditing Standards
112 letter, signed by HHR and dated April 13, 2009, to the North Versailles
Board of Commissioners and Management, reflects the following regarding
the Township payment of insurance premiums:
1. Medical insurance premiums were paid on behalf of certain
Commissioners with the expectation that those Commissioners would
reimburse the Township.
2. Commissioner reimbursements were not made during the year 2007.
aa. Commissioner reimbursements were made in years prior to
2007.
bb. It could not be determined which Commissioners HHR referred
to in the April 13, 2009, letter as no Commissioners were
enrolled in the Township’s health plans in 2007.
b. The Independent Auditor’s Communication of Significant Deficiencies and
Material Weakness Required Pursuant to Statement on Auditing Standards
112 letter, signed by HHR and dated December 23, 2009, to the North
Versailles Board of Commissioners and Management, confirms the following:
1. Medical insurance premiums were paid on behalf of certain
Commissioners with the expectation that those Commissioners would
reimburse the Township.
2. Commissioner reimbursements were not made during the year 2008.
aa. Commissioner reimbursements were made in years prior to
2008.
32. The Board of Commissioners became aware of Grimes’ enrollment in the
Township’s health plan as a result of HHR auditors reviewing the Township’s health
insurance account records.
a. While completing the audit, the HHR auditors identified Grimes’ enrollment
and forwarded the information to the Board of Commissioners.
33. At the Township’s August 19, 2010, regular meeting, Ordinance No. 1050 was
approved by the Board regarding Commissioner participation in Township
sponsored health insurance plans.
a. The ordinance authorizes the placement of Township Commissioners on the
municipal health care plan at the same cost as paid by the majority of all
Township employees.
1. The Township currently covers full costs of health insurance
premiums for full-time employees.
b. The ordinance was approved via 4-3 vote with Grimes voting in favor of the
ordinance.
34. A memorandum provided to the Board of Commissioners, dated August 24, 2010,
by [the] North Versailles Township Solicitor advised that Ordinance No. 1050
permits Commissioners to be eligible for health insurance benefits immediately and
Grimes, 10-029
Page 10
Commissioners do not need to wait until re-elected to a new term of office.
a. The memorandum was generated in response to a question by
Commissioner George Beswick at the August 2010 monthly meeting.
35. Grimes continued to make monthly reimbursement to the Township for the health
insurance benefit subsequent to the approval of Ordinance No. 1050 as shown
below:
Check Check Amount Invoice
Date No. Month
9-10-10 333 $585.18 Sept. 2010
10-11-10 338 $585.18 Oct. 2010
11-10-10 502 $585.18 Nov. 2010
12-10-10 504 $585.18 Dec. 2010
a. Grimes continued to make the monthly premium payments upon the advice
of Solicitor Sweeney.
36. Grimes failed to reimburse the Township for her total monthly premiums from March
through December 2008; from January through March 2009; and for January and
February 2010 totaling $4,401.05.
a. Reimbursement due the Township in 2008 for health insurance benefits
received by Grimes totaled $2,841.40.
1. Grimes issued no reimbursement to the Township in 2008.
b. Reimbursement due the Township in 2009 for health insurance benefits
received by Grimes totaled $4,671.48.
1. Grimes issued reimbursement totaling $3,503.61 in 2009.
c. Reimbursement due the Township in 2010 for health insurance benefits
received by Grimes totaled $7,022.16.
1. Grimes made all required reimbursements to the Township for health
insurance benefits received with the exception of the total amount due
in January and February 2010.
2. Grimes issued reimbursement totaling $6,630.38 in 2010.
37. Grimes realized a financial gain of $4,401.05 when she used the authority of her
public position to facilitate her placement on the Township health insurance plan at
Township expense, obtain receipt of Township provided health insurance without
Board discussion or approval, when she participated in votes to approve payment of
health insurance benefits, and when she failed to pay costs for the premiums.
Description Amount
2008 health insurance $2,841.40
2009 health insurance $1,167.87
2010 health insurance $391.78
Grimes, 10-029
Page 11
Total $4,401.05
THE FOLLOWING FINDINGS RELATE TO DEFICIENCIES ON GRIMES’ STATEMENT
OF FINANCIAL INTERESTS FORMS FOR CALENDAR YEARS 2007, 2008, AND 2009.
38. Grimes, as a North Versailles Township Commissioner since January 4, 2008, has
st
annually filed Statements of Financial Interests with the Township by May 1 for
calendar years 2007, 2008, and 2009.
39. Section 1105(b)(5), Required Information, of the State Ethics Act sets forth, in part,
the disclosure of the name and address of any direct or indirect source of income
totaling in the aggregate $1,300.00 or more.
a. Grimes received a yearly compensation of $3,250.00 for serving as a
Commissioner in 2008 and 2009.
b. Grimes failed to disclose North Versailles Township as a direct source of
income on her SFI forms for calendar years 2008 and 2009.
40. Section 1105(b)(8), Required Information, of the State Ethics Act sets forth that any
office, directorship or employment of any nature in business for profit shall be
included in the calendar year with regard to the person required to file the
statement.
a. Grimes failed to disclose her employment with Kennywood Messenger
Service, LLP on her SFI forms for calendar years 2007, 2008, and 2009.
41. Grimes realized a private pecuniary gain of $4,401.05 when she used the authority
of her public position to facilitate her placement on the Township health insurance
plan at Township expense, obtain receipt of Township provided health insurance
without Board discussion or approval, when she participated in votes to approve
payment of health insurance benefits, and when she failed to pay costs for the
premiums.
Description Amount
2008 health insurance $2,841.40
2009 health insurance $1,167.87
2010 health insurance $391.78
Total $4,401.05
42. Grimes asserts that she acted in good faith when she enrolled in the insurance
program, and when she did not pay premiums until the Board of Commissioners
required her to do so.
III.DISCUSSION:
As a Commissioner for North Versailles Township (“Township”), Allegheny County,
from January 4, 2008, to the present, Respondent Ruth Grimes, hereinafter also referred
to as “Respondent,” “Respondent Grimes,” and “Grimes,” is a public officialsubject to the
provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101
et seq.
The allegations are that Grimes violated Sections 1103(a) and 1105(b) of the Ethics
Act: (1) when she used the authority of her public office to facilitate her placement on the
Grimes, 10-029
Page 12
Township health insurance plan at Township expense, without discussion or approval by
the Township Board of Commissioners (“Board”), and when she failed to pay costs of the
premiums; (2) when she failed to disclose on Statements of Financial Interests (“SFIs”) for
the 2008 and 2009 calendar years direct/indirect sources of income, her office,
directorship or employment in any business, and her financial interest in any legal entity
engaged in business for profit; and (3) when she failed to disclose on an SFI filed for the
2007 calendar year her office, directorship or employment in any business and her
financial interests in any legal entity in business for profit.
Pursuant to Section 1103(a) of the Ethics Act, a public official/public employee is
prohibited from engaging in conduct that constitutes a conflict of interest:
§ 1103. Restricted activities
(a)Conflict of interest.—
No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
65 Pa.C.S. § 1103(a).
The term "conflict of interest" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Conflict" or "conflict of interest."
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.
65 Pa.C.S. § 1102.
Section 1103(a) of the Ethics Act prohibits a public official/public employee from
using the authority of public office/employment or confidential information received by
holding such a public position for the private pecuniary benefit of the public official/public
employee himself, any member of his immediate family, or a business with which he or a
member of his immediate family is associated.
Section 1105(b) of the Ethics Act and its subsections detail the financial disclosure
that a person required to file the SFI form must provide.
Subject to certain statutory exceptions not applicable to this matter, Section
1105(b)(5) of the Ethics Act requires the filer to disclose on the SFI the name and address
of any direct or indirect source of income totaling in the aggregate $1,300 or more.
Section 1105(b)(8) of the Ethics Act requires the filer to disclose on the SFI any
office, directorship or employment in any business entity.
Grimes, 10-029
Page 13
Section 1105(b)(9) of the Ethics Act requires the filer to disclose on the SFI any
financial interest in any legal entity engaged in business for profit. The term “financial
interest” is defined in the Ethics Act as “[a]ny financial interest in a legal entity engaged in
business for profit which comprises more than 5% of the equity of the business or more
than 5% of the assets of the economic interest in indebtedness.” 65 Pa.C.S. § 1102.
As noted above, the parties have submitted a Consent Agreement and Stipulation of
Findings. The parties' Stipulated Findings are set forth above as the Findings of this
Commission. We shall now summarize the relevant facts as contained therein.
Respondent Grimes has served as a Township Commissioner from January 4,
2008, to the present. Respondent served as the Board President in 2010. Professionally,
Respondent is the General Manager of Kennywood Messenger Service, LLP.
The Township is a First Class Township. The Board consists of seven
Commissioners. The Township Commissioners are compensated $3,250.00 annually for
their services and are not required to be present at monthly meetings in order to receive
such compensation.
The Township Commissioners’ compensation and benefits are governed by the First
Class Township Code. Per the First Class Township Code, “[a]ny change in salary,
compensation or emoluments of office shall become effective at the beginning of the next
term of the elected officer.” 53 P.S. § 55603.
With regard to insurance coverage, the First Class Township Code authorizes a
township board of commissioners:
To expend out of the general township fund such
amount as may be necessary . . . to make contracts of
insurance with any insurance company, or nonprofit
hospitalization corporation, or nonprofit medical service
corporation, authorized to transact business within the
Commonwealth, insuring its employes or commissioners, or
any class or classes thereof, or their dependents, under a
policy or policies of group insurance covering life, health,
hospitalization, medical and surgical service . . . .
53 P.S. § 56563. A township board of commissioners is authorized to deduct from an
employee’s or commissioner’s pay, salary or compensation such part of the insurance
premium or charge as is payable by the employee or commissioner. Id.
The Township offers health, vision and dental coverage to full-time Township
employees at Township expense. The medical and vision benefits are provided by
Highmark. The Board approves payments to Highmark for such coverage through the
approval of bill lists at regular monthly meetings of the Board. Highmark’s group
agreement for the Township does not list provisions regarding coverage for elected
Township officials.
As of December 2007 Respondent did not have health insurance coverage. On or
prior to February 27, 2008, Respondent discussed with Township Secretary Kathleen
Merolillo (“Merolillo”) Respondent’s interest in enrolling in the Township’s health insurance
plan. During the aforesaid discussion(s), Respondent referenced a provision of the First
Class Township Code regarding commissioners receiving health benefits from a
township’s group plan.
As Township Secretary, Merolillo was subordinate to the Township Commissioners.
Grimes, 10-029
Page 14
Merolillo consulted with a representative from the Township Solicitor’s law firm to
determine whether it was permissible for Commissioners to participate in the Township’s
health plans. Merolillo asserts that a representative from the Solicitor’s law firm advised
that Commissioners were permitted to enroll in the Township’s health insurance plans as
prescribed in the First Class Township Code. Merolillo did not discuss with the law firm’s
representative the enrollment process for Commissioners or that Commissioners would
have to pay their own premiums. The Solicitor’s law firm did not provide a written opinion,
and the Board was not informed of the Solicitor’s opinion regarding Respondent’s
enrollment.
The Township’s health insurance agent provided Respondent with an
enrollment/change form to be included on the Township’s health and vision plan.
Respondent assumed she could enroll in the plan. Respondent completed the form, and
both Respondent and Merolillo signed the form. Respondent was added to the Township’s
health insurance plan as a result of her submission of the enrollment/change form. The
effective date of Respondent’s coverage is listed as March 1, 2008.
At the time of Respondent’s enrollment in the Township’s health and vision plan,
there were no Township provisions (resolutions, ordinances, or the like) authorizing
Commissioners to participate in the Township’s health insurance plans. Respondent did
not inform the Board of her enrollment in the health plan. The Board did not authorize or
discuss Respondent’s enrollment in the Township’s health plan in 2008.
At the time of her enrollment in the Township’s health and vision plan, Respondent
advised Merolillo that Respondent would pay for all or part of the monthly premiums if
required. Merolillo informed Respondent that since the Township pays the insurance costs
for full-time employees, Respondent would not be required to pay premiums.
On March 19, 2009, the Board approved a motion to permit all Commissioners to
participate in the Township health plan subject to the following qualifications: (1)
Commissioners would be required to reimburse the Township for the costs; (2) payments
th
would be required to be received at the Township by the 10 of every month; and (3) the
policy/coverage for those enrolled would be cancelled if payment was not received. The
Board’s vote was 5-1, with Respondent voting in favor of the motion.
From April 2009 through August 2010 Respondent made reimbursements to the
Township totaling $7,793.27 for health coverage as detailed in Fact Finding 29.
On August 19, 2010, the Board approved an ordinance authorizing the placement of
Township Commissioners on the municipal health care plan at the same cost as paid by
the majority of all Township employees. The Township currently covers full costs of health
insurance premiums for full-time employees. The ordinance was approved via a vote of 4-
3 with Respondent voting in favor of the ordinance. In a memorandum dated August 24,
2010, the Township Solicitor advised the Board that the aforesaid ordinance permitted
Commissioners to be eligible for health insurance benefits immediately and
Commissioners did not need to wait until re-elected to a new term of office.
Respondent has participated in the Township’s health plan from March 1, 2008, to
the present. Respondent’s monthly health insurance premium was $284.14 in 2008,
$389.29 in 2009, and $585.18 in 2010. Respondent did not pay the monthly premium
costs for the time period from March 2008 to March 2009. Additionally, in January and
February 2010, Respondent failed to pay the full monthly premiums, leaving a balance of
$391.78 due to the Township for those two months. The parties have stipulated that
Respondent failed to reimburse the Township for monthly premiums totaling $4,401.05,
calculated as the sum of the following: (1) $2,841.40 for March through December 2008;
(2) $1,167.87 for January through March 2009; and (3) $391.78 for January and February
2010.
Grimes, 10-029
Page 15
From March 1, 2008, to December 31, 2010, the Township paid $14,534.78 for
health and vision insurance benefits for Respondent. As a Township Commissioner,
Respondent voted to approve 33 out of 34 monthly bill lists that included payments for
Respondent’s coverage.
The parties have stipulated that Respondent realized a private pecuniary gain of
$4,401.05 when she used the authority of her public position to facilitate her placement on
the Township health insurance plan at Township expense, obtain receipt of Township
provided health insurance without Board discussion or approval, when she participated in
votes to approve payment of health insurance benefits, and when she failed to pay costs
for the premiums.
As for Respondent’s SFIs, Respondent failed to disclose the Township as a direct
source of income on her SFI forms for calendar years 2008 and 2009, despite having
received $3,250.00 from the Township in each of those years for serving as a Township
Commissioner. Respondent failed to disclose her employment with Kennywood Messenger
Service, LLP on her SFI forms for calendar years 2007, 2008, and 2009.
Having highlighted the Stipulated Findings and issues before us, we shall now apply
the Ethics Act to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations
as follows:
3. The Investigative Division will recommend the following in
relation to the above allegations:
a. That an unintentional violation of Section
1103(a) of the Public Official and Employee
Ethics Act, 65 Pa.C.S. §1103(a) occurred when
Grimes facilitated her placement on the
Township health insurance plan at Township
expense without Board discussion or approval
and when she failed to pay costs of the
premiums.
b. That an unintentional violation of Section
1105(b) of the Public Official and Employee
Ethics Act, 65 Pa.C.S. §1105(b), occurred in
relation to Grimes’ failure to disclose all
direct/indirect sources of income, office,
directorship or employment in any business and
financial interest in any legal entity engaged in
business for profit on her Statements of
Financial Interests filed for the 2008 and 2009
calendar years.
c. That an unintentional violation of Section
1105(b) of the Public Official and Employee
Ethics Act, 65 Pa.C.S. §1105(b), occurred in
relation to Grimes’ failure to disclose all office,
directorship or employment in any business and
financial interests in any legal entity in business
for profit on her Statement of Financial Interest
filed for the 2007 calendar year.
Grimes, 10-029
Page 16
4. Grimes agrees to make payment in the amount of $4,401.05 in
settlement of this matter payable to the North Versailles
Township and forwarded to the Pennsylvania State Ethics
Commission within thirty (30) days of the issuance of the final
adjudication in this matter.
5. Grimes agrees to not accept any reimbursement,
compensation or other payment from North Versailles
Township representing a full or partial reimbursement of the
amount paid in settlement of this matter.
6. Grimes agrees to file amended Statements of Financial
Interests for calendar years 2007, 2008 and 2009 disclosing
all required information as appropriate with North Versailles
Township within thirty (30) days of the issuance of the final
adjudication in this matter. Copies of said forms shall be
forwarded to the State Ethics Commission for compliance
verification purposes.
7. The Investigative Division will recommend that the State Ethics
Commission take no further action in this matter; and make no
specific recommendations to any law enforcement or other
authority to take action in this matter. Such, however, does
not prohibit the Commission from initiating appropriate
enforcement actions in the event of Respondent's failure to
comply with this agreement or the Commission's order or
cooperating with any other authority who may so choose to
review this matter further.
Consent Agreement, at 1-2.
In considering the Consent Agreement, we accept the recommendation of the
parties for a finding that an unintentional violation of Section 1103(a) of the Ethics Act, 65
Pa.C.S. § 1103(a), occurred when Respondent facilitated her placement on the Township
health insurance plan at Township expense without Board discussion or approval and
when she failed to pay costs of the premiums.
Respondent used the authority of her public office as a Township Commissioner
when she arranged to be enrolled in the Township’s health and vision plan and completed
and submitted the enrollment form. But for being a Township Commissioner, Respondent
would not have been able to submit or secure the signature of the Township Secretary on
the enrollment form or to receive such coverage at Township expense.
Respondent further used the authority of her public office when, as a Township
Commissioner, she voted to approve 33 out of 34 monthly bill lists that included payments
for Respondent’s coverage.
The parties have stipulated that Respondent realized a private pecuniary gain of
$4,401.05 when she used the authority of her public position to facilitate her placement on
the Township health insurance plan at Township expense, obtain receipt of Township
provided health insurance without Board discussion or approval, when she participated in
votes to approve payment of health insurance benefits, and when she failed to pay costs
for the premiums.
The parties are in agreement that Respondent’s transgression of Section 1103(a) of
the Ethics Act was unintentional. We are aware of the recent decision of the Supreme
Grimes, 10-029
Page 17
Court of Pennsylvania that in order to violate Section 1103(a) of the Ethics Act, a public
official/public employee “must be consciously aware of a private pecuniary benefit for
himself, his family, or his business, and then must take action in the form of one or more
specific steps to attain that benefit.” Kistler v. State Ethics Commission, No. 59 MAP 2009,
slip op. at 12 (Pa. June 22, 2011). Given that the parties have entered into a
comprehensive Consent Agreement, and the parties are in agreement that an unintentional
violation of Section 1103(a) as to the aforesaid private pecuniary benefit would be
appropriate as part of an overall settlement of this case, we shall accept the parties’
proposed disposition.
We hold that an unintentional violation of Section 1103(a) of the Ethics Act, 65
Pa.C.S. § 1103(a), occurred when Respondent facilitated her placement on the Township
health insurance plan at Township expense without Board discussion or approval and
when she failed to pay costs of the premiums.
As for the allegations regarding Respondent’s SFIs, it is clear that Respondent
failed to disclose the Township as a direct source of income on her SFI forms for calendar
years 2008 and 2009, despite having received $3,250.00 from the Township in each of
those years for serving as a Township Commissioner. Respondent failed to disclose her
employment with Kennywood Messenger Service, LLP on her SFI forms for calendar years
2007, 2008, and 2009. The Stipulated Findings do not identify the particular financial
interest that Respondent held in a legal entity in business for profit but failed to disclose on
her aforesaid SFIs. However, the parties are in agreement that at least one such financial
interest was not disclosed by Respondent on her SFIs filed for calendar years 2007, 2008,
and 2009.
We hold that an unintentional violation of Section 1105(b) of the Ethics Act, 65
Pa.C.S. § 1105(b), occurred in relation to Respondent’s failure to disclose all direct/indirect
sources of income, her office, directorship or employment in any business, and her
financial interest in any legal entity engaged in business for profit on her SFIs filed for the
2008 and 2009 calendar years.
We further hold that an unintentional violation of Section 1105(b) of the Ethics Act,
65 Pa.C.S. § 1105(b), occurred in relation to Respondent’s failure to disclose her office,
directorship or employment in any business and her financial interests in any legal entity in
business for profit on her SFI filed for the 2007 calendar year.
As part of the Consent Agreement, Respondent has agreed to make payment in the
amount of $4,401.05 in settlement of this matter payable to North Versailles Township and
forwarded to this Commission within thirty (30) days of the issuance of the final
adjudication in this matter.
Respondent has further agreed to not accept any reimbursement, compensation or
other payment from the Township representing a full or partial reimbursement of the
amount paid in settlement of this matter.
Respondent has agreed to file with the Township, within thirty (30) days of the
issuance of the final adjudication in this matter, amended SFIs for calendar years 2007,
2008 and 2009, disclosing all required information as appropriate, and to forward copies of
said forms to this Commission for compliance verification purposes.
We determine that the Consent Agreement submitted by the parties sets forth the
proper disposition for this case, based upon our review as reflected in the above analysis
and the totality of the facts and circumstances.
Accordingly, per the Consent Agreement of the parties, Respondent is directed to
make payment in the amount of $4,401.05 payable to North Versailles Township and
Grimes, 10-029
Page 18
th
forwarded to this Commission by no later than the thirtieth (30) day after the mailing date
of this adjudication and Order.
Respondent is further directed to not accept any reimbursement, compensation or
other payment from the Township representing a full or partial reimbursement of the
amount paid in settlement of this matter.
To the extent she has not already done so, Respondent is directed to file with the
th
Township, by no later than the thirtieth (30) day after the mailing date of this adjudication
and Order, amended SFIs for calendar years 2007, 2008 and 2009, disclosing all required
information as appropriate, and to forward copies of said forms to this Commission for
compliance verification purposes.
Compliance with the foregoing will result in the closing of this case with no further
action by this Commission. Noncompliance will result in the institution of an order
enforcement action.
IV.CONCLUSIONS OF LAW:
1. As a Commissioner for North Versailles Township, Allegheny County, from January
4, 2008, to present, Respondent Ruth Grimes (“Grimes”) is a public officialsubject
to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65
Pa.C.S. § 1101 et seq.
2. Grimes unintentionally violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. §
1103(a), when she facilitated her placement on the Township health insurance plan
at Township expense without discussion or approval by the Township Board of
Commissioners and when she failed to pay costs of the premiums.
3. An unintentional violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. §
1105(b), occurred in relation to Respondent’s failure to disclose all direct/indirect
sources of income, her office, directorship or employment in any business, and her
financial interest in any legal entity engaged in business for profit on her
Statements of Financial Interests filed for the 2008 and 2009 calendar years.
4. An unintentional violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. §
1105(b), occurred in relation to Respondent’s failure to disclose her office,
directorship or employment in any business and her financial interests in any legal
entity in business for profit on her Statement of Financial Interests filed for the 2007
calendar year.
In Re: Ruth Grimes, : File Docket: 10-029
Respondent : Date Decided: 6/23/11
: Date Mailed: 7/6/11
ORDER NO. 1585
1. As a Commissioner for North Versailles Township, Allegheny County, Ruth Grimes
(“Grimes”) unintentionally violated Section 1103(a) of the Public Official and
Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), when she facilitated her
placement on the Township health insurance plan at Township expense without
discussion or approval by the Township Board of Commissioners and when she
failed to pay costs of the premiums.
2. An unintentional violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. §
1105(b), occurred in relation to Grimes’ failure to disclose all direct/indirect sources
of income, her office, directorship or employment in any business, and her financial
interest in any legal entity engaged in business for profit on her Statements of
Financial Interests filed for the 2008 and 2009 calendar years.
3. An unintentional violation of Section 1105(b) of the Ethics Act, 65 Pa.C.S. §
1105(b), occurred in relation to Grimes’ failure to disclose her office, directorship or
employment in any business and her financial interests in any legal entity in
business for profit on her Statement of Financial Interests filed for the 2007
calendar year.
4. Per the Consent Agreement of the parties, Grimes is directed to make payment in
the amount of $4,401.05 payable to North Versailles Township and forwarded to
th
this Commission by no later than the thirtieth (30) day after the mailing date of this
Order.
5. Grimes is further directed to not accept any reimbursement, compensation or other
payment from the Township representing a full or partial reimbursement of the
amount paid in settlement of this matter.
6. To the extent she has not already done so, Grimes is directed to file with the
th
Township, by no later than the thirtieth (30) day after the mailing date of this
Order, amended Statements of Financial Interests for calendar years 2007, 2008
and 2009, disclosing all required information as appropriate, and to forward copies
of said forms to this Commission for compliance verification purposes.
7. Compliance with Paragraphs 4, 5, and 6 of this Order will result in the closing of this
case with no further action by this Commission.
a. Non-compliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
___________________________
Louis W. Fryman, Chair