HomeMy WebLinkAbout1619 Holden
In Re: John Holden, : File Docket: 12-014
Respondent : X-ref: Order No. 1619
: Date Decided: 7/9/13
: Date Mailed: 7/12/13
Before: John J. Bolger, Chair
Nicholas A. Colafella, Vice Chair
Raquel K. Bergen
Mark R. Corrigan
Roger Nick
Kathryn Streeter Lewis
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 allegation(s). Upon completion of its investigation, the
Investigative Division issued and served upon Respondent a Findings Report identified as
an “Investigative Complaint.” An Answer was not filed and a hearing was deemed waived.
The averments in the Investigative Complaint are admitted and are set forth as the
following Findings. The record is complete.
I.ALLEGATIONS:
That John Holden, a (public official/public employee) in his capacity as a Member of
Yeadon Borough Council, Delaware County, violated the following provisions of the State
Ethics Act (Act 93 of 1998) when he used the authority of his public position to obtain a
private pecuniary benefit for himself and/or members of his immediate family by using his
position to receive payment from the Borough for the costs of private health insurance;
when he subsequently participated in actions of Council to approve payments issued to
him for private health care insurance costs; and when he failed to disclose on Statements
of Financial Interests filed for the 2010 and 2011 calendar years all direct/indirect sources
of income.
§ 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).
§ 1102. Definitions
"Conflict" or "conflict of interest."
Use by a public
official or public employee of the authority of his office or
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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.
§ 1105. Statement of financial interests
(b) Required information.--
The statement shall
include the following information for the prior calendar year
with regard to the person required to file the statement:
(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.
65 Pa.C.S. § 1105(b)(5).
II.FINDINGS:
1. The Investigative Division of the State Ethics Commission received a signed, sworn
complaint alleging that John Holden violated provisions of the State Ethics Act (Act
93 of 1998).
2. Upon review of the complaint the Investigative Division initiated a preliminary
inquiry on March 28, 2012.
3. The preliminary inquiry was completed within sixty days.
4. On May 24, 2012, a letter was forwarded to John Holden by the Investigative
Division of the State Ethics Commission, informing himthat a complaint against him
was received by the Investigative Division and that a full investigation was being
commenced.
a. Said letter was forwarded by certified mail, no. 7011 0470 0002 7997 0509.
b. The domestic return receipt bore the signature of what appears to be J.
Holden, with a delivery date of June 9, 2012.
5. On September 4, 2012, the Investigative Division of the State Ethics Commission
filed an application for a ninety day extension of time to complete the investigation.
6. The Commission issued an order on September 24, 2012, granting the ninety day
extension.
Holden, 12-014
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7. On January 3, 2013, the Investigative Division of the State Ethics Commission filed
an application for a second ninety day extension of time to complete the
investigation.
8. The Commission issued an order on January 28, 2013, granting the ninety day
extension.
9. Periodic notice letters were forwarded to John Holden in accordance with the
provisions of the Ethics Act advising him of the general status of the investigation.
10. The Investigative Complaint/Findings Report was mailed to the Respondent on May
16, 2013.
11. John Holden has served as a Council Member for Yeadon Borough, Delaware
County, since January 4, 2010.
a. Holden was elected to Council during the general municipal election of
November 2009.
b. Holden served as President of Yeadon Borough Council from January 2012
until August 2012.
1. Holden was removed as Council President on August 16, 2012.
12. Yeadon was incorporated as a Borough in Delaware County, Pennsylvania, on
March 9, 1893.
a. According to the United States Census Bureau, the population of Yeadon
Borough was 11,443 at the 2010 census.
13. Yeadon Borough is governed by a seven-Member Council and Mayor.
a. Historically, Council will hold two (2) meetings each month.
1. Council holds workshop meetings on the first Thursday of each
month.
2. Council holds legislative meetings on the third Thursday of each
month.
3. Council holds special meetings as necessary.
14. Compensation to be received by Members of Borough Council is capped by the
Borough Code, 53 P.S. § 45101 et seq.
a. Borough Council Member compensation is determined by the Borough’s
population.
b. Specifically, the Borough Code reads:
Members of council may receive compensation to be fixed by ordinance as
follows:
(1) In boroughs with a population of less than five thousand, a maximum of
eighteen hundred seventy-five dollars ($ 1875) a year.
Holden, 12-014
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(2) In boroughs with a population of five thousand or more but less than ten
thousand, a maximum of two thousand five hundred dollars ($ 2500) a year.
(3) In boroughs with a population of ten thousand or more but less than
fifteen thousand, a maximum of three thousand two hundred fifty dollars ($
3250) a year.
(4) In boroughs with a population of fifteen thousand or more but less than
twenty-five thousand, a maximum of four thousand one hundred twenty-five
dollars ($ 4125) a year.
(5) In boroughs with a population of twenty-five thousand or more but less
than thirty-five thousand, a maximum of four thousand three hundred
seventy-five dollars ($ 4375) a year.
(6) In boroughs with a population of thirty-five thousand or more, a maximum
of five thousand dollars ($ 5000) a year.
The salaries shall be payable monthly or quarterly for the duties imposed by
the provisions of this act.
Benefits provided to members of council under section 1202(26) shall not be
considered pay, salary or compensation, but payment for all or a part of the
premiums or charges for the benefits shall be in accordance with section
1202(26).
Any change in salary, compensation or emoluments of the elected office
shall become effective at the beginning of the next term of the member of
council.
53 P.S. § 46001.
15. Council Members are compensated at a scale of $150.00 monthly ($1,800.00
annually) for their service.
a. The population of Yeadon Borough is 11,443, which would make Council
Members eligible to receive compensation of $3,250 per year.
b. Attendance at the monthly Council meeting is not required in order for
Council Members to receive compensation.
c. Per the Borough Code (53 P.S. § 46001), Council Members of Yeadon
Borough could be compensated a maximum of $3,250.00.
16. In addition to compensation allowed for by law, Members of Borough Council are
eligible to participate in Borough-funded insurance programs.
a. The pertinent portion of the Borough Code regarding Council Members’
participation in Borough-funded insurance plans is found at 53 P.S. § 46202
(26), which reads:
(26) OTHER INSURANCE.
(i) Workers’ compensation insurance. To appropriate an amount as may
be necessary to secure insurance or compensation in accordance
with Article VI of the act of June 2, 1915 (P.L. 736, No. 338), known
as the “Workers’ Compensation Act,” for:
Holden, 12-014
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(A) volunteer fire fighters of companies duly recognized by the
borough, by motion or resolution, killed or injured while going
to, returning from, or attending fires, or while performing their
duties as special fire police; and
(B) other borough employes as “employe” is defined in section 601
of the “Workers’ Compensation Act.”
(ii) Life and health insurance. To make contracts of insurance with any
insurance company, association or exchange, authorized to transact
business in the Commonwealth, insuring borough employes, or any
class or classes of employes, or mayor and council, or their
dependents, under a policy or policies of insurance covering life,
health, hospitalization, medical and surgical service or accident
insurance.
(iii) Pension contracts. To contract with an insurance company, granting
annuities or pensions, for the pensioning of borough employes, or any
class, or classes of employes, and to agree to pay part or all of the
premiums or charges for carrying the contracts, and to appropriate
moneys from the borough treasury for such purposes.
(iv) Liability insurance. To make contracts with any insurance company,
association or exchange, authorized to transact business in this
Commonwealth, insuring any public liability of the borough, and to
appropriate moneys from the borough treasury for such purpose.
(v) Nothing in this clause shall affect any contract, right or coverage of
insurance vested or existing on the effective date of this clause.
Contract, as used in this clause, includes an annuity contract,
provided that the option to renew continues to provide the same rights
to the annuitant that existed on the effective date of this clause.
53 P.S. § 46202(26) (emphasis added).
17. Yeadon Borough provides health insurance coverage for its employees through a
policy managed by Independence Blue Cross.
a. Participants in the Borough’s insurance plan pay no insurance premium.
b. The Borough policy consists of two (2) groups: the Police policy group, and
all other Borough employees.
1. The Borough’s Employee (non-police) group consists of no less than
fourteen (14) members.
18. Upon amendment of the Borough Code in 2001, which amongst other provisions,
allowed the participation of Council Members in a Borough-funded health insurance
program, Yeadon Borough permitted elected officials to receive/participate in the
same insurance benefit program that was otherwise provided to Borough
employees.
a. During calendar year 2010, only one Member of Council participated in the
Borough’s health insurance plan.
Holden, 12-014
Page 6
19. In or around 2008, Council reviewed the Borough’s health insurance costs, and
noted that the cost for Council Members’ health insurance was projected to exceed
$64,000.00 for fiscal year 2009.
a. Yeadon Borough Council adopted a budget for fiscal year 2008 at the end of
calendar year 2007, that included a total of $22,762 for Borough-provided
health insurance benefits.
1. Actual costs for health insurance benefits for the year 2007 were
$29,521.84.
b. The costs exceeded budgeted funds due to some Council Members
participating in a family coverage plan.
20. As part of a cost-savings attempt, in 2008 Council directed Interim Borough
Manager Paul Janssen to prepare a Resolution for Borough adaptation which
limited/capped the costs of benefits provided to Yeadon Borough Council Members.
a. All matters involving a financial expenditure with Yeadon Borough are first
presented and reviewed by the Manager and Finance Director.
21. All Members of Council present at a meeting are to participate in voting on motions
presented.
a. The Mayor votes only in the case of a tie.
22. Council’s voting procedures on matters involving financial expenditures or accounts
payable occur in roll call fashion.
a. Votes on all other matters occur via a group “YES/NO” manner.
b. All objections and/or abstentions are noted within the minutes.
23. On December 18, 2008, Yeadon Borough Council President Vivian Ford requested
Council to consider a Resolution which would limit Council health insurance costs
to less than $5,000.00.
a. Meeting minutes for December 18, 2008, reflect the following:
President Ford asked Council to receive and consider a
resolution to restrict the compensation Borough Council
members can receive as part of Borough paid health benefits
to $5,000
Upon Motion of Vice President Byrne and Seconded by
councilor McDonald the adoption of a resolution to restrict the
compensation Borough Council members can receive as part
of Borough paid health benefits to $5,000 was accepted
unanimously by a vote of 6 to 0.
b. Actual language of the approved Resolution No. 2008-12 reads, in pertinent
part:
NOW, THEREFORE, BE IT RESOLVED
that the Yeadon Borough Council,
Delaware County, Pennsylvania, hereby restricts the costs which Councilors
and the Mayor may incur utilizing benefits as an elected official to $5,000 per
official per year, and
Holden, 12-014
Page 7
TH
RESOLVED AND ENACTED THIS 18 DAY OF DECEMBER 2008.
24. Resolution No. 2008-12 does not authorize elected officials of Yeadon Borough to
be reimbursed for their private insurance or insurance provided through an
employer or other entity.
25. Yeadon Borough never enacted or established any type of policy that authorized
elected officials to be reimbursed for their private insurance or insurance provided
through an employer or other entity in lieu of enrolling/participating in a Borough-
funded health insurance program.
26. Following the 2009 general municipal election, at or about the time Holden
assumed office, Interim Borough Manager Paul Janssen approached Holden and
informed him that as a newly-elected Council Member, he was entitled to receive
compensation as delineated in the Borough Code, including the option of
participating in the Borough’s health insurance program.
a. Janssen informed Holden that he (Holden) could either participate in the
Borough-funded health insurance plan or be reimbursed by the Borough for
health insurance expenses, up to $5,000.00 annually.
b. Holden opted not to participate in the Borough-provided health insurance
benefit plan offered to employees/elected officials.
1. Holden was not an employee of Yeadon Borough.
c. Holden did not seek immediate reimbursement for costs associated with his
employer-provided health insurance costs.
1. Holden refused to provide employer benefit information and/or a
Social Security Number to Interim Borough Manager Janssen;
Janssen could not process any payment to Holden, even Holden’s
Council Member compensation, because of Holden’s refusal to
provide Janssen necessary identification/tax/reimbursement
documentation.
27. In a non-governmental capacity, Holden was employed by the University of
Pennsylvania Health System (“UPHS”), from October 20, 2008, until October 9,
2011.
a. As an employee of UPHS, Holden received as part of his compensation a
salary and benefits.
b. Holden’s insurance benefits were provided to him as an employee of UPHS
by way of payroll deductions.
1. Holden’s biweekly pay reflected deductions for health insurance
benefits.
28. The costs of Holden’s insurance benefits, as deducted from his pay with UPHS,
totaled $116.89 per month, as of December 2010, as follows:
a. Penn Care: $45.43
Delta Dental: $6.56
Davis Premium Vision: $1.96
Total: $53.95(biweekly)
Holden, 12-014
Page 8
29. On August 19, 2010, Janssen was removed as the Interim Borough Manager by a
majority vote of the Yeadon Borough Council.
a. Holden voted in favor of Janssen’s removal.
b. The position of Borough Manager remained vacant from August 2010 until
approximately April 2011.
30. Following Janssen’s removal from office, on or around December 14, 2010, Holden
provided a heavily redacted copy of his pay statement and employer-provided
benefit information to Yeadon Borough Finance Director Tyrone Jordan.
a. Holden provided the information to Jordan in order to secure reimbursement
from Yeadon Borough for the costs associated with Holden’s employer-
provided health insurance.
31. Holden previously declined to receive Borough-provided health insurance and was
informed by Janssen that non-out of pocket expenses for health care
costs/insurance were not eligible for reimbursement from the Borough.
a. It was only after Janssen was terminated that Holden sought reimbursement.
b. Holden waited until Janssen was terminated before he sought
reimbursement for employer-provided health care costs, since Janssen
previously informed him that Holden would be required to provide some
documentary evidence of his expenses prior to a determination being made
as to whether his expenses were eligible for reimbursement from the
Borough.
32. Holden directed Yeadon Borough Finance Director Tyrone Jordan to initiate
reimbursement payments to him.
a. Holden’s employer-provided health insurance costs totaled $116.89 per
month.
33. Payments for health insurance reimbursements were placed on the accounts
payable lists for Council approval at a regular legislative meeting of Council.
a. Council receives accounts payable lists prior to monthly meetings in meeting
packets.
b. Accounts payable lists represent expenditures not yet paid by the Borough.
34. On December 14, 2010, Holden received one (1) retroactive reimbursement
payment from Yeadon Borough, as reimbursement for his (Holden’s) employer-
provided health insurance costs.
a. The December 14, 2010, reimbursement payment totaled $1,428.70, and
represented payment in the amount of $119.06 for twelve (12) months
($1,428.70 ÷ 12 ≈ $119.06) and represented payment for the year 2010.
1. Holden abstained from voting on this expenditure.
b. This payment exceeded Holden’s employer-provided health insurance costs
of $116.89 per month.
Holden, 12-014
Page 9
c. Holden began receiving regular monthly payments in the amount of $116.89
beginning in January 2011.
35. Payments made to Holden by Yeadon Borough for the reimbursement of his
insurance benefits provided to Holden by UPHS were as follows:
Date of Check Check No. Amount Vote by Holden approving payment
12/14/2010 3785 $1,428.70 Abstained
1/21/2011 3923 $116.89 Yes
2/18/2011 4022 $116.89 Yes
3/18/2011 4125 $116.89 Abstained*
4/22/2011 4216 $116.89 Abstained
5/20/2011 4296 $116.89 Yes*
Total $2,013.15
*[Cf., Fact Findings 35 c, 36 b].
a. A lump sum payment was made to Holden on December 14, 2010, for all of
2010.
b. Holden abstained from voting to approve the payment in December 2010,
stating that he did not have a chance to review the accounts payable list.
c. At the regular legislative Borough Council meetings for April 21, 2011, and
May 19, 2011, separate motions were made to approve the reimbursements
for each Council Member including Holden, in which Holden abstained from
voting.
1. The separate motions were made at the direction of Borough Solicitor
Robert Scott and President of Borough Council Asher Kemp Jr.
36. Holden continued to receive “reimbursement” payments on a monthly basis, as a
result of Borough Council actions approving the accounts payable lists at the
monthly meetings.
a. Beginning on April 21, 2011, Yeadon Borough Council initiated the practice
of approving separate motions regarding the voting to approve
reimbursement of employer-provided insurance benefits, in order to allow the
affected Council Member to abstain from voting.
b. Holden abstained from voting on two (2) separate motions to approve
payments to himself, once at the meeting on April 21, 2011, and again on
May 19, 2011.* Actual payments were made on March 18, 2011, and April
22, 2011.
1. The abstentions by Holden were made on the advice of the Borough
Solicitor.
c. Holden abstained from voting for his insurance reimbursements on the
advice of Yeadon Borough Solicitor Robert Scott.
*[Cf., Fact Finding 35].
Holden, 12-014
Page 10
37. Concerns were raised by citizens of Yeadon Borough regarding the
appropriateness of Council Members being reimbursed for employer-provided
health insurance …[redacted due to confidentiality requirements of the Ethics Act.]
38. [Redacted due to confidentiality requirements of the Ethics Act.]
39. Following the questions being raised regarding Yeadon Borough providing
employer health costs reimbursement to its Council Members, Council enacted
Resolution No. 2011-09, on July 21, 2011, restricting the value of the
reimbursement, which read in part:
NOW THEREFORE BE IT RESOLVED
, effective for the Calendar year of
2011 and going forward, the Yeadon Borough Council shall restrict the value
of the health insurance, accident insurance, and life insurance benefits per
official per year to an amount not to exceed the single rate (no children)
premium of the health insurance plan provided to non-union Borough
employees.
ST
RESOLVED THIS 21 DAY OF JULY 2011
40. Following the enactment of Resolution No. 2011-09, Holden opted not to be
included as part of the Yeadon Borough insurance plan available to officials and
employees of the Borough.
a. Holden did not continue to collect the $116.89 monthly “reimbursement” from
the Borough following the enactment of Resolution 2011-09 on July 21,
2011.
41. [Redacted due to confidentiality requirements of the Ethics Act.]
42. Holden realized a private pecuniary benefit of $2,013.15 in his capacity as a
Yeadon Borough Council Member, as a result of being reimbursed by Yeadon
Borough for insurance benefits that were provided to Holden through his employer,
UPHS.
a. Holden used the authority of his public position to receive insurance
payment by providing payroll information to Borough officials which
confirmed his health insurance deductions thereby enabling the Borough to
issue one retroactive payment of $1,428.70 and monthly payments of
$116.89 thereafter.
b. Holden provided a heavily redacted payroll/Health Insurance Statement,
issued to him by his employer UPHS, to Yeadon Borough Finance Director
Tyrone Jordan with the intent of being reimbursed by Yeadon Borough for
his employer-provided health insurance costs.
c. Holden, as a Yeadon Borough Council Member, approved the accounts
payable list that included payments made to himself, representing insurance
reimbursement.
The following findings relate to the allegations that Holden failed to disclose on his
Statements of Financial Interests filed for the 2010 and 2011 calendar years all
direct/indirect sources of income.
43. As a Yeadon Borough Council Member, Holden is required to file a Statement of
st
Financial Interests (“SFI”) by May 1 annually.
Holden, 12-014
Page 11
44. On May 9, 2012, Yeadon Borough Manager Caren Andrews provided all SFIs filed
for Borough officials for calendar years 2007 through 2011 to representatives of the
State Ethics Commission – Investigative Division pursuant to a Statement of
Financial Interests compliance review.
a. Yeadon Borough Manager Caren Andrews certified to representatives of the
State Ethics Commission that the provided documents were true and correct,
complete filings made with Yeadon Borough.
45. Within Holden’s filed 2010 calendar year and 2011 calendar year SFIs, Holden
indicated “Direct or Indirect Sources of Income” as “None.”
a. Holden’s pay stub with UPHS for calendar year 2010 lists wages and
benefits that exceeded $1,300.00.
b. Payroll register statements from Yeadon Borough confirm Holden’s income
at $1,800 for 2010 and 2011.
46. Statement of Financial Interests filing requirements for public officials and public
employees are mandated by Section 1104 of the State Ethics Act.
st
a. Holden was required to file an SFI by May 1 annually in his position as a
Yeadon Borough Council Member.
47. Section 1104(d) of the State Ethics Act mandates that “No public official shall be
allowed to take the oath of office or enter or continue upon his duties, nor shall he
receive compensation from public funds, unless he has filed a statement of financial
interests as required by this chapter.”
a. Holden received compensation as a Member of the Borough of Yeadon
Council in the amount of $1,800.00 in 2012, at a time when Holden did not
have an accurate and complete calendar year 2011 SFI filed with Yeadon
Borough.
III.DISCUSSION:
As a Council Member for Yeadon Borough (“Borough”), Delaware County, since
January 4, 2010, Respondent John Holden, also referred to hereinafter as “Respondent,”
“Respondent Holden,” and “Holden,” has been a public official subject to the provisions of
the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq.
The allegations are that Holden violated Sections 1103(a) and 1105(b)(5) of the
Ethics Act when he used the authority of his public position to obtain a private pecuniary
benefit for himself and/or members of his immediate family by using his position to receive
payment from the Borough for the costs of private health insurance; when he subsequently
participated in actions of Borough Council to approve payments issued to him for private
health care insurance costs; and when he failed to disclose on Statements of Financial
Interests (“SFIs”) filed for the 2010 and 2011 calendar years all direct/indirect sources of
income.
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
Holden, 12-014
Page 12
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.
We shall now summarize the facts pertaining to this case. Given Respondent’s
failure to file an Answer to the Investigative Complaint, the facts as averred by the
Investigative Complaint are deemed admitted by Respondent. 65 Pa.C.S. § 1108(e); 51
Pa. Code § 21.5(k)(1).
The Borough is governed by a seven-Member Council and a Mayor. Holden was
elected to Borough Council during the general municipal election in November 2009, and
he has served as a Member of Borough Council since January 4, 2010. Holden served as
President of Borough Council from January 2012 until August 2012. Borough Council
Members are compensated $1,800.00 annually for their service and are not required to be
in attendance at monthly meetings in order to receive such compensation.
With respect to insurance coverage for members of a borough council, the Borough
Code authorizes a borough to “make contracts of insurance with any insurance company,
association or exchange, authorized to transact business in the Commonwealth, insuring
borough employes, or any class or classes of employes, or mayor and council, or their
dependents, under a policy or policies of insurance covering life, health, hospitalization,
medical and surgical service or accident insurance.” 53 P.S. § 46202(26)(ii).
Holden, 12-014
Page 13
After the Borough Code was amended in 2001 to allow the participation of borough
council members in a borough-funded health insurance program, the Borough permitted
elected officials to receive/participate in the same insurance benefit program provided to
Borough employees. The Borough provides health insurance coverage for its employees
through a policy managed by Independence Blue Cross. Participants in the Borough’s
insurance plan pay no insurance premium.
In or around 2008, Borough Council reviewed the Borough’s health insurance costs
and noted that the cost for Council Members’ health insurance was projected to exceed
$64,000.00 for fiscal year 2009. As part of a cost-savings attempt, Borough Council
directed Interim Borough Manager Paul Janssen (“Janssen”) to prepare a Resolution
which limited/capped the costs of benefits provided to Borough Council Members.
On December 18, 2008, Borough Council adopted Resolution No. 2008-12, which
restricted the cost of Borough-paid health benefits for Borough Council Members and the
Mayor to $5,000 per elected official per year. Resolution No. 2008-12 does not authorize
elected officials of the Borough to be reimbursed for their private insurance or insurance
provided through an employer or other entity, and the Borough never enacted or
established any type of policy that authorized elected officials to be reimbursed for their
private insurance or insurance provided through an employer or other entity in lieu of
enrolling/participating in a Borough-funded health insurance program.
Holden was employed by the University of Pennsylvania Health System (“UPHS”)
from October 20, 2008, until October 9, 2011. As an employee of UPHS, Holden received
as part of his compensation insurance benefits that were provided to him by way of payroll
deductions. As of December 2010, the costs of Holden’s insurance benefits as deducted
from his UPHS pay totaled $116.89 per month.
At or about the time Holden assumed office as a Borough Council Member, Janssen
approached Holden and informed him that as a newly-elected Council Member, he was
entitled to receive compensation as delineated in the Borough Code. Janssen further
informed Holden that he could either participate in the Borough-funded health insurance
plan or be reimbursed by the Borough up to $5,000.00 annually for health insurance
expenses.
Holden opted not to participate in the Borough-provided health insurance plan, and
he did not seek immediate reimbursement for costs associated with his employer-provided
health insurance. Holden had been informed by Janssen that non-out of pocket expenses
for health care costs/insurance were not eligible for reimbursement from the Borough and
that Holden would be required to provide some documentary evidence of his expenses
prior to a determination being made as to whether his expenses were eligible for
reimbursement from the Borough. Holden refused to provide employer benefit information
and/or a Social Security Number to Janssen, and Janssen could not process any payment
to Holden because of his refusal to provide necessary identification/tax/reimbursement
documentation.
On August 19, 2010, Janssen was removed as the Interim Borough Manager by a
majority vote of Borough Council. Holden voted in favor of Janssen’s removal. The
position of Borough Manager remained vacant until approximately April 2011.
Following Janssen’s removal from office, on or around December 14, 2010, Holden
provided a heavily redacted copy of his pay statement and employer-provided benefit
information to Borough Finance Director Tyrone Jordan (“Jordan”) in order to secure
reimbursement from the Borough for the costs associated with Holden’s employer-provided
health insurance. Holden directed Jordan to initiate reimbursement payments to him.
Holden, 12-014
Page 14
Payments for health insurance reimbursements were placed on accounts payable
lists for Borough Council approval at regular legislative meetings of Council. The accounts
payable lists represent expenditures not yet paid by the Borough.
On December 14, 2010, Holden received one retroactive reimbursement payment
from the Borough in the amount of $1,428.70, as reimbursement in the amount of $119.06
per month for his employer-provided health insurance costs for the year 2010. The
retroactive reimbursement payment exceeded Holden’s employer-provided health
insurance costs of $116.89 per month. Holden abstained from voting on the retroactive
reimbursement payment, stating that he did not have a chance to review the accounts
payable list.
Holden began receiving regular monthly payments in the amount of $116.89
beginning in January 2011, and he continued to receive reimbursement payments on a
monthly basis as a result of Borough Council actions approving the accounts payable lists
at the monthly meetings. From January 2011 through May 2011, Holden voted to approve
three of five monthly payments in the amount of $116.89 each that were made to him by
the Borough as reimbursement for his employer-provided insurance benefits.
Concerns were raised by Borough citizens regarding the appropriateness of
Council Members being reimbursed for employer-provided health insurance, and on July
21, 2011, Borough Council enacted Resolution No. 2011-09, which restricted the yearly
value of insurance benefits for Borough officials. Following the enactment of Resolution
No. 2011-09, Holden opted not to be included as part of the Borough insurance plan
available to Borough officials and employees, and he discontinued collecting the $116.89
monthly reimbursement payment from the Borough.
Per admitted Fact Finding 42, Holden realized a private pecuniary benefit of
$2,013.15 in his capacity as a Borough Council Member as a result of being reimbursed by
the Borough for insurance benefits that were provided to him through his employer.
As a Borough Council Member, Holden is required to annually file an SFI by May 1.
Holden filed SFIs for calendar years 2010 and 2011, each of which listed “Direct or
Indirect Sources of Income” as “None.” However, Holden’s pay stub from UPHS for
calendar year 2010 lists wages and benefits that exceeded $1,300.00, and payroll register
statements from the Borough confirm Holden’s income at $1,800.00 for 2010 and 2011.
We must now determine, based upon the record, whether the actions of
Respondent Holden violated the Ethics Act. As we apply the facts to the allegations, due
process requires that we not depart from the allegations. Pennsy v. Department of State,
594 A.2d 845 (Pa. Commw. Ct. 1991). A violation of the Ethics Act must be based upon
clear and convincing proof. 65 Pa.C.S. § 1108(g). Clear and convincing proof is “so
‘clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear
conviction, without hesitance, of the truth of the precise facts in issue.’” In Re: Charles
E.D.M., 550 Pa. 595, 601, 708 A.2d 88, 91 (1998) (Citation omitted).
Based upon the particular factual averments of the Investigative Complaint that
Holden is deemed to have admitted, the necessary conclusion is that Holden violated
Section 1103(a) of the Ethics Act when he used the authority of his public position to
obtain a private pecuniary benefit for himself and/or members of his immediate family by
using his position to receive payment from the Borough for the costs of private health
insurance and when he subsequently participated in actions of Borough Council to
approve payments issued to him for private health care insurance costs.
Holden used the authority of his public position as a Borough Council Member when
he provided a copy of his pay statement and employer-provided benefit information to
Borough Finance Director Jordan and directed Jordan to initiate reimbursement payments
Holden, 12-014
Page 15
to Holden in order to secure reimbursement from the Borough for the costs associated with
his employer-provided health insurance. Holden further used the authority of his aforesaid
public position when he voted to approve three of five monthly payments that were made to
him in 2011 by the Borough as reimbursement for his employer-provided insurance
benefits. Per admitted Fact Finding 42, Holden realized a private pecuniary benefit of
$2,013.15 in his capacity as a Borough Council Member as a result of being reimbursed by
the Borough for insurance benefits that were provided to him through his employer.
With each element of a violation of Section 1103(a) of the Ethics Act established,
we hold that Holden violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a),
when he used the authority of his public position to obtain a private pecuniary benefit for
himself and/or members of his immediate family by using his position to receive payment
from the Borough for the costs of private health insurance and when he subsequently
participated in actions of Borough Council to approve payments issued to him for private
health care insurance costs.
We further hold that Holden violated Section 1105(b)(5) of the Ethics Act, 65
Pa.C.S. § 1105(b)(5), when he failed to disclose on SFls filed for the 2010 and 2011
calendar years all direct/indirect sources of income.
Section 1107(13) of the Ethics Act empowers this Commission to require restitution
in instances where a public official/public employee has obtained a financial gain in
violation of the Ethics Act. We determine that restitution is warranted as to the private
pecuniary benefit in the amount of $2,013.15 that Holden realized as a direct result of the
violation of Section 1103(a) of the Ethics Act referenced herein.
Accordingly, Holden is directed to make payment of restitution in the amount of
$2,013.15 payable to Yeadon Borough and forwarded to this Commission by no later than
th
the thirtieth (30) day after the mailing date of this adjudication and Order.
Holden is further directed to not accept any reimbursement, compensation or other
payment from the Borough representing a full or partial reimbursement of the aforesaid
restitution.
To the extent he has not already done so, Holden is directed to file with the Borough
amended SFIs for calendar years 2010 and 2011, disclosing all required information, and
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to forward copies of such filings to this Commission by no later than the thirtieth (30) day
after the mailing date of this adjudication and Order.
Noncompliance will result in the institution of an order enforcement action.
IV.CONCLUSIONS OF LAW:
1. As a Council Member for Yeadon Borough (“Borough”), Delaware County, since
January 4, 2010, Respondent John Holden (“Holden”) has been a public official
subject to the provisions of the Public Official and Employee Ethics Act (“Ethics
Act”), 65 Pa.C.S. § 1101 et seq.
2. Holden violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he
used the authority of his public position to obtain a private pecuniary benefit for
himself and/or members of his immediate family by using his position to receive
payment from the Borough for the costs of private health insurance and when he
subsequently participated in actions of Borough Council to approve payments
issued to him for private health care insurance costs.
Holden, 12-014
Page 16
3. Holden violated Section 1105(b)(5) of the Ethics Act, 65 Pa.C.S. § 1105(b)(5), when
he failed to disclose on Statements of Financial Interests filed for the 2010 and
2011 calendar years all direct/indirect sources of income.
In Re: John Holden, : File Docket: 12-014
Respondent : Date Decided: 7/9/13
: Date Mailed: 7/12/13
ORDER NO. 1619
1. As a Council Member for Yeadon Borough (“Borough”), Delaware County, John
Holden (“Holden”) violated Section 1103(a) of the Public Official and Employee
Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), when he used the authority of his
public position to obtain a private pecuniary benefit for himself and/or members of
his immediate family by using his position to receive payment from the Borough for
the costs of private health insurance and when he subsequently participated in
actions of Borough Council to approve payments issued to him for private health
care insurance costs.
2. Holden violated Section 1105(b)(5) of the Ethics Act, 65 Pa.C.S. § 1105(b)(5), when
he failed to disclose on Statements of Financial Interests (“SFIs”) filed for the 2010
and 2011 calendar years all direct/indirect sources of income.
3. Holden is directed to make payment of restitution in the amount of $2,013.15
payable to Yeadon Borough and forwarded to the Pennsylvania State Ethics
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Commission by no later than the thirtieth (30) day after the mailing date of this
Order.
4. Holden is directed to not accept any reimbursement, compensation or other
payment from the Borough representing a full or partial reimbursement of the
aforesaid restitution.
5. To the extent he has not already done so, Holden is directed to file with the
Borough amended SFIs for calendar years 2010 and 2011, disclosing all required
information, and to forward copies of such filings to the Pennsylvania State Ethics
th
Commission by no later than the thirtieth (30) day after the mailing date of this
Order.
6. Non-compliance with paragraph 3, 4, or 5 of this Order will result in the institution of
an order enforcement action.
BY THE COMMISSION,
___________________________
John J. Bolger, Chair