HomeMy WebLinkAbout825 YezziIn Re: Joseph D. Yezzi
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
File Docket: 90- 018 -C2
. Date Decided: February 20, 19$2
. Date Mailed: February 27, )992
Before: Dennis C. Harrington, Chair
James M. Howley, Vice Chair
Daneen E. Reese
Roy W. Wilt
Austin M. Lee
James P. Gallagher
Allan M. Kluger
The State Ethics Commission received complaints regarding
possible violations of the State Ethics Law, Act No. 170 of 1978 and
Act No. 9 of 1989. Written notice, of the specific allegation(s) was
served at the commencement of the investigation. A Findings Report
was issued and served, upon completion of the investigation, which
constituted the Complaint by the Investigation Division. An Answer
was filed and a hearing was held. The record is complete. This
adjudication of the Commission is hereby issued which sets forth the
individual Allegations, Findings of Fact, Discussion, Conclusions of
Law and Order.
This adjudication is final and will be made available as a public
document fifteen days after issuance. However, reconsideration may be
requested which will defer public release of this adjudication pending
action on the request by the Commission. A request for
reconsideration, however, does not affect the finality of this
adjudication. A reconsideration request must be received at this
Commission within fifteen days of issuance and must include a
detailed explanation of the reasons as to why reconsideration should
be granted in conformity with 51 Pa. Code §2.38.
The files in this case will remain confidential in accordance
with Section 8(a) of Act 170 of 1978 and Act 9 of 1989, 65 P.S.
408(h), during the fifteen day period and no one unless the right to
challenge this Order is waived, may violate confidentiality by
releasing, discussing or circulating this Order. However,
confidentiality does not preclude discussing this case with an
attorney at law.
Any person who violates confidentiality of the Ethics Act is
Joseph D. Yezzi
Page 2
guilty of a misdemeanor subject to a fine of not more than $1,000 or
imprisonment for not more than one year, 65 P.S. 409(e).
I. ALLEGATION$:
That, Joseph D. Yezzi, Chairman of the Center Township Water
Authority, Beaver County, violated the following provisions of the
State Ethics Act (Act 170 of 1978), when he used his position to sell
life insurance policies to authority employees and when he failed to
file Statements of Financial Interests for the 1984, 1985, 1986 and
1987 calendar years:
Section 3. Restricted Activities.
(a) No public official or public employee
shall use his public office or any confidential
information received through his holding public
office to obtain financial gain other than
compensation provided by law for himself, a member
of his immediate family, or a business with which
he is associated.
Section 3. Restricted activities.
(b) No person shall offer or give to a public
official or public employee or candidate for
public office or a member of his immediate family
or a business with which he is associated, and no
public official or public employee or candidate
for public office shall solicit or accept,
anything of value, including a gift, loan,
political contribution, reward, or promise of
future employment based on any understanding that
the vote, official action, or judgment of the
public official or public employee or candidate
for public office would be influenced thereby.
Section 4. Statement of financial interests
required to be filed.
(a) Each public employee employed by the
Commonwealth shall file a statement of financial
interests for the preceding calendar year with the
department, agency or bureau in which he is
employed no later than May 1 of each year that he
holds such a position and of the year after he
leaves such a position. Any other public employee
shall file a statement of financial interests with
the governing authority of the political
subdivision by which he is employed no later than
May 1 of each year that he holds such a position
Joseph D. Yezzi
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and of the year after he leaves such a position.
And that he violated the following provisions of Act 9 of 1989,
when he used his position to participate in the sale of cancer
accident and disability insurance policies to the authority:
II. FINDINGS:
A. PLEADINGS:
Section 3. Restricted Activities.
(a) No public official or public employee
shall engage in conduct that constitutes a
conflict of interest.
1. Joseph Yezzi has served as a member of the Center Township Water
Authority (CTWA) since October 9, 1984.
a. Yezzi has served as the Chairman of the Center Township
Water Authority, continuously, since 1988.
b. Yezzi's term expires on December 31, 1992.
c. Yezzi was appointed to the CTWA by the Center Township
Commissioners.
2. The CTWA employs a maintenance department to perform necessary
repairs and maintenance to the township water system.
a. The CTWA employs both full -time and part -time employees.
b. Full -time employees are eligible to become members of the
International Brotherhood of Electrical Workers Union.
(1) Employees are eligible after serving a (90) day
probationary period.
c. Full -time employee wages and benefits are set by union
contract.
d. Part -time employee wages, raises and benefits are approved
by board action.
3. The Center Township Water Authority has no written or formal
guidelines for hiring of employees.
a. All hiring and firings are to be by Board action.
Joseph D. Yezzi
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4. Minutes of the CTWA disclose the following regarding the hiring
of part -time employees.
a. July 28, 1987:
Page 3, #4, Item 6, Hiring of a Meter Reader: "The Board
instructed Mr. Sisk to hire Mr. David Dechellis as the new
meter reader. He has filed an application with the
Authority. He will begin reading meters the 1st of August."
Present: Cercone, Panetta, Brizzi, and Yezzi who arrived at
7:35 p.m.
b. October 20, 1987:
Page 8, #13, Committee Reports Section 5, Personnel:
"Mr. Panetta and Mr. Cercone - The Chairman reviewed the
current applications for employment on file. There may be a
need to hire another part -time employee to complete the fire
hydrant flushing program."
Present: Yezzi, Brizzi, Cercone and Panetta
c. May 17, 1988:
Page 8, Section 13, Committee Reports #5, Personnel:
"There are now two additional part -time summer employees
working, and we hope to be receiving manpower personnel
soon."
Present: Cercone, Brizzi, Panetta, and Onderick who
arrived after the bid opening.
d. June 21, 1988:
Page 6, #7, Part -Time and Manpower Employees: "On the
solicitor's recommendation, the Board took the following
action regarding the hiring of part -time and Manpower
employees for the summer ":
Motion, Mr. Brizzi, seconded by Mr. Panetta, to confirm
approval of the hiring of all the part- time and Manpower
summer employees in the maintenance department.
Messrs. Cercone, Brizzi, Panetta and Onderick voting in
favor thereof. Mr. Yezzi abstained. Motion carried.
At this time, the Board took the following action:
Motion, Mr. Brizzi, seconded by Mr. Cercone, to adjourn to
Executive Session for the purpose of discussing personnel
Joseph D. Yezzi
Page 5
and legal matters. All voting in favor thereof. Motion
carried. Adjourned to Executive Session at 8:15 p.m.;
meeting reconvened at 8:50 p.m."
Present: Cercone, Brizzi, Panetta, Onderick, and Yezzi who
arrived at 7:50.
e. Mav 18, 1989:
Page 3, Item 9, Hiring a Summer Employee: "At this time,
the Board took the following action regarding the hiring of
part -time summer employees ":
Motion, Mr. Brizzi, seconded by Mr. Cercone, to confirm the
hiring of four part -time employees at the rate of $4.00 per
hour and authorize the manager to hire an additional four
employees at the same rate for part -time summer employment.
All voting in favor thereof. Motion carried."
5. Minutes of the Center Township Water Authority Board indicate
the following official action was taken relative to employee
raises:
a. January 20, 1987:
Page 4, #9, Unfinished Business, Item 4: "1987 -88 employee
union agreements - there are several grammatical errors
which must be corrected on each contract, and the Board
would like to have a clause added regarding part -time
employees in the ninety -day probationary period. Once these
matters are resolved, the contracts can be signed. Attorney
DiGiorno will contact Mr. Leek regarding these matters. At
this time, the Board agreed to approve the payment of the
1987 wages immediately as per the following action:
Motion, Mr. Sisk, seconded by Mr. Panetta, to accept the
1987 -88 employee agreements for the Maintenance Department
and office employees contingent upon the correction of
several grammatical errors in the addition of an addendum
regarding part -time employees in the ninety -day probationary
period. Wage increases for 1987 will become effective
immediately, retroactive to January 1, 1987. Maintenance
employees will receive a $.15 an hour increase; the Chief
Clerk will receive a $.25 an hour increase; and the other
two clerks will receive an additional $.50 per hour. Also
the maintenance employee's pension deductions and
contributions will be increased to 5 %. All voting in favor
thereof. Motion carried."
Present: Yezzi, Cercone, Panetta, and Sisk who arrived
after reorganization.
Joseph D. Yezzi
Page 6
b. October 12, 1988:
Page 3, #8, Request for Salary Increase from Mr. Randall
Stewart, Meter Reader: "Mr. Sisk presented a letter from
Mr. Stewart requesting a wage increase for meter readers.
After a brief discussion, the Board took the following
action:
Motion, Mr. Brizzi, seconded by Mr. Onderick, to authorize
the salary increase for the meter readers in the amount of
$25.00 per residential route read and $50.00 for the
commercial route. Said increase to become effective
immediately. All voting in favor thereof. Motion carried."
Present: Brizzi, Panetta, Onderick, and Yezzi who arrived
at 7:20 p.m.
Absent: Cercone
c. September 19, 1989:
Page 7: ^8:00 p.m., the meeting was adjourned to Executive
Session by the Chairman to discuss personnel and related
matters. The meeting was then reconvened at 8:20 p.m., and
the following action was taken ":
Motion, Mr. Brizzi, seconded by Mr. Panetta, to authorize a
wage increase for both part -time employees, Mr. Sopko and
Mr. Eshbaugh, in the amount of $1.00 per hour to $5.50 per
hour, effective with the next payroll calculator. Said
increase is a merit raise based on their above satisfactory
work record. All voting in favor thereof. Motion carried.
Present: Yezzi, Brizzi, Cercone, Panetta and Onderick.
6. Minutes of the Center Township Water Authority indicate the
following in regard to authority actions regarding insurance for
authority employees.
a. July 19, 1988:
On page four, Item 5, Summer Work Schedule to Discuss
Insurance Coverage for 1988, 1989. It was agreed that a
work session would be scheduled for Monday, July 25, 1988,
at 7:00 PM in the office to discuss the 1988, '89 insurance
proposals.
Mr. Sisk will contact Mr. Gray of the Blackwood Agency and
request that he attend the meeting. The clerk was directed
to advertise the work session.
Joseph D. Yezzi
Page 7
Board Members Present: Yezzi, Brizzi, Cercone, Panetta and
Onderick
b. Octolper 12, 1988 - Work Sessiop Aaenda
On page three, Item V, Mr. Anthony Fadool.
Mr. Sisk advised the Board that Mr. Sisk has reviewed all of
our insurance coverage.
Mr. Fadool's life insurance policy has been reviewed, and
there is no type of sick pay coverage available to him. The
Board directed the clerk to transmit a letter to Mr. Fadool
advising him of our insurance investigation and suggest he
can contact Mr. Onderick to inquire as to whether there may
be any state assistance available to him.
Board Members Present: Brizzi, Panetta, Onderick and
Yezzi, who arrived at 7:20 PM.
Absent: Mr. Cercone
c. October 18, 1988:
On page three, "Section VI, Review of Correspondence. Item
No. 2, notice from Penn Prime regarding the feasibility of
group self - insurance for the Authority. It was agreed that
Attorney DiGiorno will look in to the Penn Prime Program
before our current insurance expires ".
Board members present: Yezzi, Brizzi, Cercone, Panetta and
Onderick
d. November 15, 1988:
On page three, "Item VI, Review of Section 89 of the IRS.
Attorney DiGiorno had discussed Section 89 with an
accountant, and it is his opinion that we are in compliance
with its requirements. Section 89 concerned discrimination
in employee health benefits ".
Board members present: Yezzi, Brizzi, Cercone, Panetta and
Onderick
e. January 17, 1989:
Page two, "Item V, Depository Bank and Authorization of the
Use of Facsimile Signatures of the Chairman and Treasurer on
Checks. Motion,
Mr. Cercone; seconded Mr. Panetta. To appoint the Century
Joseph D. Yezzi
Page 8
National Bank & Trust Company, Beaver Valley Mall Office, as
the depository bank for the fiscal year 1989 and to
authorize the use of facsimile signatures of the chairman
and treasurer on authority checks. All voting in favor
thereof. Motion carried ".
On page three, Item IX. Unfinished Business. Subparagraph
No. 3. 1989 Union Contract Negotiations. The Board took the
following action regarding union contracts: subcontract,
subparagraph 3, an increase to 30% and a benefit paid to
those office employees who elect not to be covered under the
Authority's medical insurance. Subparagraph 4, a weekly
indemnity insurance coverage to be paid by the Authority.
Board members present: Yezzi, Brizzi, Cercone, Panetta and
Onderick
f. June 20, 1989:
Page four, "Item X, Solicitors Report, Subparagraph 5.
Review of Section 89 of the IRS Code. Attorney DiGiorno
advised the Board that he has reviewed the Section 89
requirements and attended several seminars, and it is his
opinion that our benefit plans are not discriminatory. He
and the chief clerk will prepare a program to be presented
to all covered employees which will provide each with a
listing of all benefits along with a complete description of
said benefits ".
Board members present: Yezzi, Brizzi, Cercone, Panetta and
Onderick
g January 16, 1990:
Page nine, "Section XIII, Paragraph 4. Review of Section 89
of the IRS Code. Attorney DiGiorno has prepared a draft of
the handout he is going to present to all employees which
describes all insurance and health benefits available to all
full -time employees. After the Board reviews the draft, a
final copy will be prepared and each employee will receive a
copy in compliance with Section 89 of the IRS Code ".
Board members present: Brizzi, Gulla, Panetta, Onderick
and Yezzi
h. April 17, 1990:
On page two, "Section VI, Review of Correspondence. Item:
In reviewing the employee benefits information given to the
employees in compliance with Section 89 of the IRS Code, Mr.
Onderick is questioning the employees accidental death and
Joseph D. Yezzi
Page 9
i. May 15, 1990:
dismemberment policy. Attorney DiGiorno
the policies in question and report back
Board members present: Brizzi, Panetta,
Yezzi
June 19, 1990:
k. July 17, 1990:
directed to review
to the Board ".
Onderick, Gulla and
Page five, "Section VIII, Paragraph 6. Review of employees
Accidental Death and Dismemberment insurance plans.
Attorney DiGiorno suggested the manager and /or chief clerk
look into the coverage of the Accidental Death and
Dismemberment insurance plans and report their findings to
the Board. This matter does not really require legal
interpretation ".
Board Members Present: Brizzi, Panetta, Onderick, Gulla and
Yezzi
Page eight, "Section XII, Paragraph 4. At this time, there
was a lengthy discussion regarding the employees Accidental
Death and Dismemberment insurance coverage. Mr. Sisk is
going to research this matter further and discuss it with
Mr. Leek of the I.B.E.W. before any changes are made ".
Board Members Present: Brizzi, Panetta, Onderick, Gulla and
Yezzi
Page three, "Section V, Paragraph 5. Received a survey from
Municipal Risk Property & Casualty Company Incorporated
concerning health insurance. They are requesting
information to determine if there is a need for a pooled
arrangement for health insurance coverage similar to the
Workers Compensation Program they now offer. The clerk was
directed to complete and submit the survey."
7. The Center Township Water Authority provided Cancer Insurance and
Accident Indemnity Insurance to full -time employees. Coverage
was provided through the American General Life and Accident
Insurance Company.
8. The CTWA Board member, Patrick Brizzi, brought American General
Insurance Company to the Board.
a. The purpose was to service a cancer insurance policy for
employees.
Joseph D. Yezzi
Page 10
b. This was prompted due to one employee having cancer and
incurring large medical bills.
9. In addition to the Life and Cancer Insurance for employees
through American General, the CTWA also provided insurance
benefits for employees through the Travelers Insurance Company.
a. Coverages included Life Insurance, Accidental Death and
Dismemberment, Weekly Income Insurance.
b. This coverage was in effect at the time the coverage with
American General was obtained.
(1) The coverage remained in effect through 1990.
10. The Center Township Water Authority received invoices from
American General Insurance Company in regard to the Accidental
Death and Dismemberment and Cancer policies purchased for
authority employees.
a. August 3, 1989 invoice in an amount of $158.67 for monthly
payment of insurance policies.
b. October 24, 1989 invoice for balance due of annual
premiums:
Accident Cancer Life
Name Plans Plans Insurance
Elsie Spearing $ 58.30 $ 121.77 -
James Lasky 58.30 58.89 -
Verna Dugan 58.30 58.87 -
Karen Galdony 58.30 121.77
Kevin Eshbaugh 58.30 43.47 -
Joseph Sopko 58.30 183.76 -
Paul Barker 58.30 188.35 -
Anthony Fadool 58.30 - $685.74
Lawrence Zon 58.30 65.50 -
Kenneth Sisk 58.30 156.50 -
Steve Gulla 58.30 52.20 -
$641.30 $1,051.08 $685.74
TOTAL $2,378.12
c. September 28, 1989 invoice in an amount of $88.30 for
initial payment of Life Insurance for Anthony Fadool.
11. Records of the Center Township Water Authority include the
following checks issued from the Revenue Fund Account to the
American General Life and Accident Insurance Company as payments
for the Accident and Cancer policies:
Joseph D. Yezzi
Page 11
a. Check No. 11375
Account No. 170
Date - August 4, 1989
Amount - $158.67
b. Check No. 11484
Account No. 176
Date - September 28, 1989
Amount - $88.30
c. Check No. 11619
Account No. 176
Date - October 24, 1989
Amount - $2,378.12
d. The checks bear the facsimile signature of Joseph D. Yezzi
and Joseph Panetta, as Chairman and Secretary, and Verna
Dugan's original signature as Chief Clerk.
e. Check Numbers 11375 and 11484 are co- signed by Joseph Yezzi
for deposit by Century National Bank & Trust Company,
Freedom, Pennsylvania into the American General Life and
Accident Insurance (PA No. 12/937), Account No.
31008064/P.E.G.
12. Minutes of the CTWA meeting of August 15, 1989 confirm that
payments to American General Insurance Company were approved as
follows:
To approve the list of billings to be ratified August 15, 1989
and to confirm approval of the payment of the monthly statement
from American General Life Insurance Company for employee
Accidental Death and Dismemberment and Cancer Insurance, Messrs.
Brizzi, Cercone, Panetta and Onderick voting in favor thereof;
Mr. Yezzi abstaining. Motion carried.
It was noted that the premium from American General Life
Insurance Company is going to be changed to an annual billing
rather than monthly.
13. Records of the Center Township Water Authority reflect that a
reimbursement to the Authority was from the American General Life
& Accident Insurance Company, Monaca, Pennsylvania for an
overpaid premium:
a. Check No. 1056
Date - March 23, 1990
Amount - $124.39
Description - Refund on Premium (0012)
Received by the Authority on June 21, 1990
Joseph D. Yezzi
Page 12
14. Records of the American General Life Insurance Company confirm
that Center Township Water Authority employees, Joseph Sopko,
James Lasky and Kevin Eshbaugh all had personal life insurance
dealings with Joseph Yezzi.
a. Joseph Sopko:
Policy Number - 189226111
Date Written - March 7, 1989
Type of Policy - Life
Premium - $566.85 /Annual
Agent - Joseph D. Yezzi
Agent ID - 133512
b. Kevin Eshbaugh:
Policy Number - 188281733
Date Written - October 17, 1988
Type of Policy - Life
Premium - $547.47
Agent - Joseph D. Yezzi
Agent ID - 133512
c. James Lasky:
Policy Number - 189018383
Date Written - June 16, 1989
Type of Policy - Life
Premium - $501.50
Agent - Joseph D. Yezzi
Agent ID - 133512
15. Joseph Sopko was hired by the CTWA on December 19, 1985 as a
part -time employee.
a. He had previous work experience with the CTWA in the mid -
1960's.
b. As a part -time employee, Sopko has no benefits or union
protection.
16. James Lasky was hired by the CTWA on May 22, 1989 as a
maintenance employee.
a. He had no previous work experience with the CTWA.
b. Minutes of the May 18, 1989 CTWA meeting confirm the
following action regarding Lasky's hiring:
(1) "Mr. Yezzi indicated that the Board has considered
Joseph D. Yezzi
Page 13
hiring a full -time employee and has reached the
following decision:
Motion, Mr. Brizzi, seconded by Mr. Panetta, to
authorize the hiring of a full -time maintenance
employee, namely Mr. James L. Lasky, at a rate of
$7.50 per hour with full employee benefits effective
Immediately. Messrs. Yezzi, Brizzi, Panetta and
Onderick voting in favor thereof.
Mr. Cercone abstaining. Motion carried.
Mr. Lasky will begin working Monday, May 22, 1989. The
Chief Clerk was directed to have Mr. Lasky placed on
all insurance, pension and other benefits available to
full -time employees of the Authority. His coverage is
to begin immediately.
c. On June 16, 1989, Joseph Yezzi wrote a life insurance
policy for Lasky with an effective date of June 28, 1989.
d. Lasky allowed the policy to lapse on December 11, 1989 for
non - payment of premiums.
17. Kevin Eshbaugh was hired by the CTWA on May 11, 1988 as a part -
time employee.
a. He is a part -time employee with no benefits or union
protection.
b. His hiring was not approved by the CTWA Board.
c. Yezzi wrote the life insurance policy, #188281733, on
October 17, 1988.
d. Center Township payroll records confirm that Eshbaugh
received a $.50 /hour raise on October 24, 1988 and
retroactive to May 11, 1988, the effective date of his
employment.
18. Minutes of the Center Township Water Authority Board meeting
indicate the following relative to a full -time position for
Kevin Eshbaugh.
a. July 26, 1989:
Page 2, #6, Part -Time Employee, Mr. Kevin Eshbaugh: "Mr.
Eshbaugh attended the meeting to request the Board consider
him for full -time employment. After a brief discussion, the
Board advised Mr. Eshbaugh that at this time, there are no
full -time positions available."
Present: Yezzi, Brizzi, Cercone and Panetta
Joseph D. Yezzi
Page 14
Absent: Onderick
19. Lawrence Zon has been a full -time employee of the Center
Township Water Authority since May 1982.
a. Zon is a member of the union and has full benefits.
b. Authority payroll records confirm that Zon received a raise
from $6.90 /hour to $9.05 /hour, effective January 1, 1987.
20. Donald Haldeman was employed by the CTWA on a part -time basis
from June 19, 1986 until April 13, 1989.
a. His hiring was not approved by the CTWA Board.
b. Haldeman had no benefits or union coverage.
c. During the summer of 1988, Yezzi, and another American
General Insurance agent, went to Haldeman's home attempting
to sell a Life Insurance Policy.
(1) The Haldeman's did not purchase a policy at that time.
21. Joseph Yezzi was employed as an Agent by the American General
Life and Accident Insurance Company.
a. Yezzi worked in the Beaver Valley District which included
Center Township.
22. Records of the Commonwealth of Pennsylvania's Insurance
Department confirm that Joseph Yezzi has the following active
insurance agent licenses.
a. Colonial Life & Accident Insurance Company; issued 3/2/89.
(1) Yezzi has not made a sale through this company.
23. Joseph Yezzi filed Statements of Financial Interests with the
Center Township Water Authority for the 1984 through 1989
calendar years.
a. Calendar Year - 1984
Filed - 4/18/84 on SEC Form 1/88
Occupation - Insurance Salesman
Position - Water Authority Member
Direct /Indirect Income - American General Life
Insurance Company, PIA Marie Yezzi - Employer, US Air
All Other Financial Interests - None
b. Calendar Year - 1985
Joseph D. Yezzi
Page 15
Filed - 4/20/85 on SEC Form 1/88
Occupation - Insurance Salesman
Position - Water Authority Member
Direct /Indirect Income - Office of Employment
Security, Ambridge, PA - Unemployment, PIA Marie
Yezzi, Employer, US Air.
All Other Financial Interests - None
c. Calendar Year - 1986
Filed - 4/25/86 on SEC Form 1/88
Occupation - Insurance Salesman
Position - Water Authority Member
Direct /Indirect Income - American General Life
Insurance Company, PIA Marie Yezzi - Employer, US Air
All Other Financial Interests - None
d. Calendar Year - 1987
Filed - 3/25/87 on SEC Form 1/88
Occupation - Insurance Salesman
Position - Water Authority Member
Direct /Indirect Income - American General Life Insurance
Company, PIA Marie Yezzi - Employer, US Air
All Other Financial Interest - None
e. Calendar Year - 1988
Filed - 3/28/89 on SEC Form 1/89
Position - Water Authority Member
Occupation - Insurance Salesman
Direct /Indirect Income - American General Life
Insurance Company, Monaca, PA
All Other Financial Interests - None
f. Calendar Year - 1989
Filed - 4/18/90 on SEC Form 1/89
Position - Water Authority Member
Occupation - Insurance Salesman
Direct /Indirect Income - American General Life
Insurance Company, Monaca, PA
All Other Financial Interests - None
24. The Statement of Financial Interest filings for years 1984
through 1987 were completed on forms SEC -1, Rev. 1/88.
a. State Ethics Commission filing form SEC -1, Rev. 1/88, was
not printed until December 1987.
b. Form SEC -1, Rev. 1/88, was forwarded to municipal
governmental entities in January 1988.
c. The form used for the filing in Finding #30, a through d,
was not available on the dates that it was allegedly filed
Joseph D. Yezzi
Page 16
in that the said form had not yet been printed.
25. Minutes of the CTWA meeting, held on September 16, 1986, confirm
that it was reported that one Statement of Financial Interest for
the 1985 calendar year was outstanding.
a. That form was for Joseph Yezzi.
B. TESTIMONY:
26. David H. Miller is a manager of the field compensation
department for American General Life and Accident Insurance
Company.
a. He maintains the agent's compensation system as to agents'
records, calculation of pay and payroll authorization.
b. Selling agents report to sales managers who in turn report
to district managers.
c. Selling agents receive different types of commissions.
(1) The sales commission is paid for the first year's
annualized premium.
(2) The conservation incentive commission is based upon the
production and conservation of existing business.
(a) It serves as an incentive for the agent to retain
existing business and a reward for new business.
(3) The collection commission is based upon the collection
of business assigned to an agent.
d. A commission pool is a fund to which commissions are
credited whereby the agent is paid from the pool over a
period of time.
(1) An agent's starting pay and the agency size affect the
initial amounts set up for the agent as the pool from
which amounts will be withdrawn for the agent.
(2) New business for an agent gives credit to the pool.
(3) Business losses are deducted from the pool of the
agent.
e. An agent's policy register is a weekly record of the
production activity of an agent for that week.
(1) Each policy register statement has a service number
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Page 17
f. An agent's weekly statement is a summary of the agent's
record.
g.
j
which is unique to each agent.
(a) The service number for Yezzi is 133512.
(2) The policy register statement provides an agent with
his progress record for the week and the calculation of
his sales commission.
(1) The record provides the credit to an agent's
accumulated commission fund and the calculation of
gross pay for each week as well as a production record
based on the annualized premiums that are credited to
the agent.
(2) There is a section for collective commissions.
(3) There are other sections reflecting the incentive
progress record of an agent and some bonus benefits
which an agent may receive.
(4) The compensation section establishes the first year
commission credit and renewal commission credits as to
an agent's accumulated commission fund.
(5) The weekly statement reflects the weekly as well as the
year -to -date compensation.
(6) Club standings is an incentive plan for possible trips
for agents.
A sales manager receives an override which is a percentage
computed based upon an agent's commission.
h. An annualized premium factors into commission
determination.
(1) The commission rate is applied to the annualized
premium to determine the amount of commission credit.
i. The Company generates three sets of policy registers and
weekly statements.
(1) One copy is for the agent, one copy is for the sales
manager and the third copy is for the district manager.
The FAM (group of policies) number 5636 reflect accident
indemnity insurance policies for Elsie Spearing, James
Lasky, Joseph Sopko, Paul Barker, Anthony Fadool, Lawrence
Joseph D. Yezzi
Page 18
Zon and Kenneth Sisk, with Yezzi as writing agent who
received the commission.
(1) These new policies were issued on August 2, 1989.
k. For Kevin Eshbaugh, a different FAM number reflects an
adjustable premium whole life policy with a supplementary
annuity benefit rider.
(1) This new policy was issued in November, 1988.
(2) Yezzi received the commission on this policy.
1. The FAM number 5636 also reflects a cancer indemnity policy
for Lawrence Zon, Elsie Spearing, Paul Barker, Kevin
Eshbaugh, Joseph Sopko, Karen Galdony, Verna Dugan, Steve
Gulla, and Kenneth Sisk which is new business.
m. Number G B 20L reflects a life policy for Anthony Fadool
which is new business with Yezzi as agent credited with
receiving the commission.
n. An excess interest whole life policy on James Lasky lapsed
in the first year of that policy.
o. The cancer insurance application of American General
indicates in the production credit area the name of the
agent who receives the credit, his service number and the
district code and agency number.
(1) Cancer insurance policies were written for the
following individuals as to which Yezzi received the
commissions: Paul Barker, 118298010; Kevin Eshbaugh,
118298011; Joseph Sopko, 118298012; Karen Galdony,
118298014; Verna M. Dugan, 118298015; Steven W. Gulla,
118298016; Kenneth Sisk, 118298017; and Lawrence Zon,
115506984.
p. Accident indemnity insurance policies of American General
were issued to the following individuals with the agent's
name listed as H. DeLouis but with Yezzi's service number of
133512: Steven Gulla, 13071468; James Lasky, 130710471;
Verna Dugan, 130710472; Karen Galdony, 130710473; Elsie
Spearing, 130710470; Kevin Eshbaugh, 130710474; Joseph
Sopko, 130710475; Paul Barker, 230710476; Anthony Fadool,
130710477; Lawrence Zon, 130710479; and Kenneth Sisk,
130710480.
(1) The service number reflects that Yezzi was credited
with the commission.
Joseph D. Yezzi
Page 19
q. Three life insurance policies of American General Insurance
Company were issued to Kevin Eshbaugh, 188281733; James
Lasky, 189018383 and Joseph Sopko, 189226111 with the
service number reflecting Yezzi as the agent receiving the
commission.
r. A graded benefit whole life insurance policy of American
General for Anthony Fadool, 118317803 was issued with Yezzi,
service number 133512 receiving the commission.
s. The cancer and accident indemnity policies, referenced in
sub - findings o and p were issued in 1989 and lapsed in
September or October 1990.
t. Yezzi terminated employment with American General during the
week of August 27, 1990.
u. An agent may receive a commission rate from 15% to 45 %.
v. An insurance policy is a contract between the company and
the insured.
w. An agent's weekly compensation varies depending upon when
commissions are incoming.
x. American General's production quota for their agents has
varied over the years but the variance was not great.
y. The overrides for a sales manager and district manager are
fixed at 25% and 12% respectively.
z. A district manager gets a base salary plus incentives based
upon the production of the agents in his district.
aa. An agent who consistently fails to meet production quotas
would be terminated after a period of time.
27. Kevin Eshbaugh is employed as a part -time laborer for the CTWA.
a. Eshbaugh began working for the CTWA in May of 1988 at a
starting salary of $4.00 per hour.
b. Yezzi was Chairman of the Board of CTWA when Eshbaugh got
the job.
c. Yezzi approached Eshbaugh regarding insurance in the fall of
1988.
(1) Yezzi telephoned Eshbaugh to come to Yezzi's house to
talk about policies.
Joseph D. Yezzi
Page 20
(a) Yezzi did not mention that the policies would be
insurance policies.
(2) When Eshbaugh arrived at Yezzi's house, Yezzi and
another insurance company representative were present.
(3) Yezzi proposed a savings life insurance plan to
Eshbaugh at a cost of $55.00 per month.
(4) Eshbaugh advised Yezzi that he might not be able to
afford a premium of $55.00 per month.
(5) Yezzi offered to Eshbaugh that "we'll" (the CTWA) give
you (Eshbaugh) a $.50 raise retroactive to the day you
(Eshbaugh) started and the raise would pay for the
policy.
(6) Yezzi told Eshbaugh that through the mechanism of the
raise, Eshbaugh would get "almost a free policy."
(a) Yezzi performed a calculation to determine
whether the raise would cover the insurance.
d. Following the purchase of the insurance policy by Eshbaugh,
he received the $.50 per hour retroactive raise on his next
paycheck.
e. When Eshbaugh did not make timely payments on his insurance
policy, Yezzi telephoned Eshbaugh at the CTWA or plant
during working hours to go to the American General office to
discuss the non - payment and the potential policy
cancellation.
(1) Yezzi placed these telephone calls to Eshbaugh on four
or five separate occasions, which coincided with the
week or the very day of Eshbaugh's pay days.
(2) On at least one occasion the CTWA manager Ken Sisk
picked Eshbaugh up from the job site in a CTWA vehicle
and took Eshbaugh to Yezzi's office, stating that Yezzi
wanted to see Eshbaugh.
(3) Eshbaugh felt intimidated by Yezzi.
f. Eshbaugh had been laid off before he bought insurance from
Yezzi for two days.
(1) The lay off occurred in September or August, 1988.
28. Joseph Sopko is employed by the CTWA as a part -time laborer.
Joseph D. Yezzi
Page 21
a. Sopko approached Yezzi in an effort to obtain more working
hours.
b. Yezzi approached Sopko about buying life insurance.
(1) The approach was made in 1986 or 1987 when Sopko was
employed by the CTWA.
(2) Sopko bought a life insurance policy.
(a) The policy was purchased about one year after the
initial approach by Yezzi.
c. Sopko did not feel that he had to purchase a life insurance
policy from Yezzi.
d. Sopko could have purchased insurance elsewhere but Sopko
purchased the insurance from Yezzi because Yezzi helped him
(Sopko).
(1) The favor done by Yezzi for Sopko was giving him more
working time.
29. Lawrence Zon is a full -time laborer employed by the CTWA.
a. As part of his union benefits, he . receives health insurance
as well as accident and cancer insurance.
b. The CTWA provides life insurance for Zon.
c. In 1986 or 1987, Yezzi approached Zon about the purchase of
life insurance.
(1) At that time Yezzi was a member of the Board of the
CTWA.
(2) At that time Zon was an employee of the CTWA.
(3) Zon was contacted during working hours of the CTWA and
went to Yezzi's office at American General during the
CTWA working hours.
(4) Yezzi told Zon that he (Yezzi) would work up a plan for
Zon and his wife and wanted to set up an appointment.
(a) An appointment was subsequently set up but Yezzi
did not appear.
(5) Zon was told by Yezzi that the insurance would cost
approximately $50.00.
Joseph D. Yezzi
Page 22
(a) Zon responded that he could not afford insurance
at that time.
(6) Yezzi inquired of Zon as to Zonis pay rate.
(a) Yezzi indicated to Zon that a raise was possible.
(b) With the raise Zon could afford the insurance.
(c) Zon received a $1.00 per hour raise about a month
later but did not buy the insurance.
(7) An understanding existed whereby Yezzi offered to
obtain a raise for Zon in return for Zon purchasing
insurance from Yezzi. (Fact Findings 29(c)(1) through
(
d. Zon had approached the CTWA Board about the inequity of his
doing the work of another employee who was in a rehab
program and who was receiving more money than Zon.
(1) Zon received the $1.00 per hour raise.
(2) Yezzi advised Zon to go to the Board meeting.
e. Zon has not received any raises after the $1.00 per hour
raise referenced in sub - finding c(6)(c) other than through
the contract.
f. The contract with the CTWA for January 1, 1987 shows a
typewritten pay rate for Zon of $8.05 which is crossed out
and handwritten 9 under the 8.
(1) As of January 1, 1988, the typed figure of $8.30 is
crossed out with a handwritten $9.30 substituted.
(2) As of July 1, 1988, the typewritten rate was $8.55
with a handwritten rate of $9.55.
(3) There is also a handwritten notation: "as per JDY."
30. Kenneth Sisk is the manager of the CTWA.
a. His duties as manager are to oversee the clerical and
maintenance operations.
b. The CTWA Board does the hiring and firing.
c. Full -time employees are paid according to the union
contract.
Joseph D. Yezzi
Page 23
(1) Part -time employees are paid at the going rate.
d. Sisk was a CTWA Board member prior to his employment as
manager.
e. The following individuals are employed by the CTWA.
(1) Elsie Spearing is a clerk who is a full -time employee.
(2) Paul Barker is full -time in maintenance.
(3) Kevin Eshbaugh is part -time in maintenance.
(4) Joseph Sopko is part -time in maintenance.
(5) Karen Galdony is a full -time office clerk.
(6) Verna Dugan is the office chief clerk.
(7) Steve Gulla is full -time in maintenance.
(8) Anthony Fadool is full -time in maintenance.
(9) James Lasky is full -time in maintenance.
(10) Lawrence Zon is full -time in maintenance.
(11) Randall Steward is a part -time meter reader.
f. Donald Haldeman is a former part -time employee of the CTWA.
(1) Haldeman was terminated on April 23, 1989.
(2) Haldeman was in a laborer position.
(3) Yezzi directed Sisk to tell Haldeman to call him
(Yezzi).
(a) Yezzi on a few occasions repeated the direction to
Sisk to have Haldeman contact him (Yezzi).
(4) Yezzi subsequently directed Sisk to tell Haldeman to
contact Yezzi by 5:00 on that day (Friday) or he
(Haldeman) would be "done."
(a) Haldeman did not show up for work the following
Monday.
g. Through the CTWA, the full -time employees received Blue
Cross /Blue Shield, eye and dental care and cancer insurance
through American General.
Joseph D. Yezzi
Page 24
(1) Accident and dismemberment indemnity insurance is
provided through Travelers.
(a) At one point, that type of insurance was also
provided in addition to the cancer insurance by
American General.
(b) The cancer and accident indemnity through
American General lapsed around September, 1990.
h. On at least one occasion, Yezzi directed Sisk to bring
Eshbaugh to his office at American General because he
(Yezzi) wanted to see him (Eshbaugh).
i. When Sisk was a CTWA Board member, he filed Statements of
Financial Interests (FIS).
(1) Sisk currently files FIS's as the CTWA manager.
(2) The chief clerk distributes the FIS forms at a
meeting, usually in December or January.
(a) Such action was taken every year as a matter of
course.
At Board meetings, there is a vote to pay total billings
from the revenue checking account unless someone has a
question.
k. Yezzi abstained at the August 15, 1989 CTWA Board meeting as
to the vote regarding the payment for the American General
cancer and accidental death and dismemberment policy.
1. At the October 17, 1989 CTWA Board meeting, Yezzi did not
abstain as to a unanimous vote to approve a group of bills
which included a bill from American General.
J
m. At the November 21, 1989 CTWA Board meeting, Yezzi voted to
approve a list of bills which included a billing from
American General.
n. In 1986, Zon came to the Board to talk about a raise.
(1) The members of the Board were in favor of Zon getting a
raise.
(2) The Board minutes do not contain any notation as to a
raise for Zon.
o. Eshbaugh got a raise to bring his rate equal to that of
Joseph D. Yezzi
Page 25
Sopko.
p. Eshbaugh was called to the office of Ronald DiGiorno who is
the CTWA solicitor and nephew of Yezzi.
(1) Sisk was present during the conversation between
DiGiorno and Eshbaugh.
(2) Upon questioning by DiGiorno, Eshbaugh stated that
Paul Baker told him (Eshbaugh) that he would get a
full -time position if "things work out."
(a) The offer was not made in connection to
Eshbaugh's testimony.
31. Susan Haldeman is the spouse of Donald Haldeman who is a former
part -time laborer with the CTWA.
a. Donald Haldeman received no benefits from his employment
with CTWA.
b. Yezzi approached Susan Heldeman regarding the purchase of
insurance.
(1) Yezzi and another young man came to her house without
any prior notice.
(2) Yezzi asked her about insurance and wanted to see her
policies.
(3) After being told by Mrs. Haldeman that she did not
know where her policies were located, Yezzi and the
other man left.
(a) Mrs. Haldeman told Yezzi she would contact him
when she decided on insurance.
(4) Yezzi telephoned Mrs. Haldeman on several subsequent
occasions concerning insurance.
c. Her spouse was terminated in his employment with the CTWA.
(1) The period between Yezzi's contact concerning
insurance and the termination of her spouse was
approximately two weeks.
32 P. Donald Haldeman is a former part -time laborer with the CTWA.
a. He worked forty hours per week but was classified as part -
time.
Joseph D. Yezzi
Page 26
(1) He received no benefits from his employment with the
CTWA.
b. Yezzi and another individual came to his house to discuss
insurance with his spouse.
(1) When asked to produce their insurance policies, Mrs.
Haldeman responded that she did not know where they
were.
(2) Yezzi and the individual left shortly after they
arrived.
c. Haldeman's employment was terminated with the CTWA.
d. At the end of one work day at CTWA, someone asked Haldeman
if he was going to buy Yezzi's insurance.
e. Kenneth Sisk told Haldeman to call Yezzi.
(1) Haldeman called the office but was told Yezzi was not
in.
(2) Haldeman called Yezzi's home but Yezzi was not there.
(3) When Haldeman reached Yezzi, Yezzi told Haldeman that
. . we take care of those who take care of us."
(a) The remark of Yezzi to Haldeman related to
insurance.
(b) Haldeman told Yezzi that Yezzi's remarks meant
that Haldeman was "done" and Yezzi did not want
him back to which Yezzi responded in the
affirmative.
f. Haldeman did not purchase insurance from Yezzi.
g. Haldeman and his spouse never received a specific insurance
proposal from Yezzi.
h. Haldeman had an expectation of the cost of the insurance
after he talked to another individual.
33. Patrick A. Brizzi was a member of the CTWA Board until December,
1990.
a. Brizzi recommended cancer insurance to the Board.
b. He has no recollection as to any Board action as to
accident /dismemberment insurance.
Joseph D. Yezzi
Page 27
c. When Fadool, an employee of the Board developed cancer,
Brizzi made inquiries as to how Fadool could be helped.
d. Brizzi favored American General because it was local.
e. Brizzi knew that Yezzi worked for American General.
f. Brizzi's recollection was that Yezzi abstained on the vote
to purchase the cancer insurance from American General.
g.
J
Brizzi's memory was that the raise Eshbaugh received
resulted from him (Eshbaugh) bringing to the Board's
attention that he was getting less than the other part -
timers.
h. Brizzi had many dealings with Yezzi because Brizzi was the
secretary and Yezzi was Chairman of the Board.
i. If the Chief Clerk Verna Dugan left something out of the
minutes, the Board could insert the omitted item through
vote which would appear in subsequent minutes.
Brizzi did no comparisons or independent research to
compare rates for cancer insurance.
k. Cancer insurance for Elsie Spearing, Gulla and Lasky was
purchased in 1989 while Brizzi was on the Board.
1. The CTWA Board Chairman is primarily in charge of hiring.
m. Yezzi recommended to Brizzi that Zon be given a $1.00 per
hour raise.
(1) Brizzi followed up on the recommendation with his own
inquiries.
n. Brizzi was unaware that the CTWA had accidental death and
dismemberment policies with Travelers Insurance when the
Authority obtained the same type of coverage from American
General.
(1) The American General policies were allowed to lapse
because certain individuals were of the opinion that
Yezzi got the coverage to benefit himself.
(2) Brizzi believed that Yezzi was not receiving
commission on the policies.
34. Joseph Panetta is a member of the CTWA Board.
Joseph D. Yezzi
Page 28
a. Panetta has served on the Board for approximately seven or
eight years.
b. Panetta is the current secretary of the Board.
c. Eshbaugh's father contacted Panetta to see if there would be
work for Eshbaugh at the CTWA.
(1) Eshbaugh was hired by the CTWA Board.
d. Eshbaugh came to the Board about getting a $.50 per hour
raise.
e. Panetta did not recall the circumstances surrounding
Haideman's termination of employment with the CTWA.
f. Panetta's recollection was that Haldeman was officially
terminated by Board action in an official meeting or in an
executive work session.
g Cancer insurance was purchased after Anthony Fadool, a CTWA
employee, developed cancer.
(1) Brizzi volunteered to look into the matter of
insurance.
h. Panetta was unaware that Yezzi was getting commissions on
the CTWA insurance policies with American General.
35. John Onderick is a member of the CTWA Board.
a. Onderick was appointed to the Board in 1988.
b. When an Authority employee developed cancer, Brizzi
suggested that cancer insurance be obtained.
c. Onderick learned at some point that the Board already had
accident indemnity insurance with Travelers and questioned
the duplicate coverage of accidental indemnity insurance
with American General.
(1) Onderick questioned why the Board did not have only one
general policy that covered everybody.
36. Stuart Johnson is a sales manager for American General Life and
Accident Insurance Company.
a. He has been employed by American General since 1983 and as a
sales manager since 1989.
b. Yezzi was formerly a sales agent under Johnson.
Joseph D. Yezzi
Page 29
c. In Fall, 1988, he and Yezzi talked to Eshbaugh's about
insurance.
(1) The appointment was unusual in that it occurred at
Yezzi's home.
(2) No paperwork or information was ready for the
appointment which is not unusual.
d. Johnson was present on an insurance sales call to the
Haldeman residence with Yezzi.
(2) Mrs. Haldeman indicated to Johnson and Yezzi that she
did not have her policies ready.
(3) The meeting, which was a very short interview, ended.
e. As a sales manager, Johnson receives an override from an
agent's production but no salary.
f. Johnson informally became sales manager in September, 1988
with Yezzi as one of the agents under his supervision.
g.
j.
(1) There was no appointment for the meeting with Mrs.
Haldeman.
From May, 1989 to August, 1990 Johnson was transferred for
that period of time to another area, Pittsburgh North, as
sales manager.
h. Yezzi's performance as a sales agent was average in the
period between September 1988 and January 1989.
(1) Yezzi was behind in preset quotas by American General
as to goals to attend conferences.
i. When Johnson returned in 1990 after his first assignment,
the performance of Yezzi was low.
It was Yezzi's idea to have the insurance sales meeting
with Eshbaugh.
(1) The meeting occurred during a weekday.
(2) The meeting was prearranged.
(3) Johnson brought a lap top computer to the meeting.
(a) The lap top is capable of performing premium
calculations and monthly costs for a particular
Joseph D. Yezzi
Page 30
type of policy.
(4) The insurance policy discussed was an adjustable
premium whole life policy.
k. As to a cancer policy application, a representative of
American General witnesses the signature of the insured and
binds the company to provide insurance at the premium rate
quoted.
(1) On the back of the one page application is the agent's
report followed by a box for the agent's
certification.
(a) The agent's signature and certification establish
that he asked the questions and recorded the
answers.
1. The policy register statement shows the total of business in
the agency which is different from the agent's weekly
statement, the latter being a computation of all
compensation.
(1) Copies of the policy register statements are given to
the district manager, staff manager and agent.
(a) Johnson puts the policy register statements in the
agents in- boxes.
m. An agent is compensated by commission with no salary
(1) An agent is in the market to generate business.
n. American General sets quotas for agents.
(1) An agent must meet a minimum standard of sales.
(2) The quota has been fairly consistent at one hundred
dollars of matched progress per week.
(a) Matched progress is net gain after lapse.
(b) Matched progress above $5200 per year is above
minimum.
(3) An agent is put on counseling if he fails to meet the
minimum standard.
(a) Counseling is a corrective action to increase
productivity.
Joseph D. Yezzi
Page 31
(b) An agent is terminated if counseling does not
work.
o. If there are high lapses, an agent could run into problems
with minimum standards.
37. James Lasky is employed as a laborer for the CTWA.
a. Lasky purchased an insurance policy from Yezzi when he was
first employed by the CTWA.
b. Lasky began employment on May 22, 1989 with the CTWA.
c. After Lasky obtained the policy referenced in sub - finding
(a) for two months, he cancelled the policy because he could
not afford it.
d. Lasky had a prior insurance dealing with Yezzi in 1983.
e. Lasky's father -in -law was on the CTWA Board when Lasky was
hired.
f. Prior to his return to Pennsylvania in May, 1989, Lasky
lived in Arizona.
(1) He returned to Pennsylvania due to the lack of work in
Arizona.
g. Lasky did not have a job lined up when he returned to
Pennsylvania in May, 1989.
(1) He could not afford insurance when he returned.
h. Lasky became employed by the CTWA on a full -time basis.
(1) Through the employment and living with in -laws, Lasky
could afford insurance.
i. As of September 5, 1989, arrangements were being made for
Lasky to be inducted into the union.
38. Henry A. DeLouis is an insurance manager for the Beaver Valley
District of American General Life and Accident Insurance Company.
a. He was the supervisor for Yezzi who worked out of his
office.
b. Yezzi left employment with American General in 1990.
c. A Board member of the CTWA contacted him regarding cancer
insurance.
Joseph D. Yezzi
Page 32
d. DeLouis states that he filled out the cancer insurance
application.
(1) DeLouis states that some policies were completed by
someone else in his office.
e. DeLouis testified that Yezzi was not involved in taking the
cancer and accident indemnity policies with the CTWA.
(1) DeLouis states that he put Yezzi's service number on
the cancer and accident indemnity policies to give
Yezzi the credit.
(a) DeLouis states that he did not tell Yezzi that he
(DeLouis) assigned the production credit to him.
f. DeLouis receives an override on the business the agents in
his office generate.
g •
Yezzi left employment with American General because he was
not meeting company minimum standards as to business.
h. DeLouis states that when the State Ethics Commission
subpoenaed American General records, DeLouis spoke to Yezzi
who, according to the testimony of DeLouis, indicated
surprise that he (Yezzi) was assigned the production credit.
i. DeLouis had no involvement with the sale of life insurance
to Kevin Eshbaugh, James Lasky or Joseph Sopko.
As to cancer applications for the CTWA personnel, the front
page of the application, top portion was filled out by
DeLouis as to Spearing, Barker, Eshbaugh, Sopko, Gaidony,
Gulla, Sisk and Zon.
j•
(1) As to a second group of policies, the top portion was
written by DeLouis as to Dugan and Sisk but not Gulia,
Lasky, Gaidony, Spearing, Eshbaugh, Sopko, Barker,
Fadool, or Zon.
k. As to policy identified as Exhibit ID -23, DeLouis did not
write Yezzi's name in the production credit box.
(1) The writing appeared to be Yezzi's.
1. For the policies referenced in sub - finding j the policy
register statement for August 21, 1989 for the policy dated
August 21, 1989 establish that the production credit box was
filled in prior to the application being sent to American
General's Nashville office.
Joseph D. Yezzi
Page 33
m. DeLouis never appeared at a CTWA Board meeting or made any
presentation to the Board about insurance.
n. When a commission is assigned to an agent, he is
responsible for collecting the premiums.
o. Cancer insurance is different from accident and indemnity
insurance and each type of policy may be purchased
separately.
(1) For the CTWA personnel, there were separate
applications for cancer and accident and indemnity
policies.
p. Yezzi was terminated after he received a number of written
warnings from the Nashville office of American General and
from DeLouis.
q•
(1) Since a March, 1990 counseling form advised Yezzi that
he did not meet $100.00 matched part progress, an
insurance business drop occurred as to Yezzi prior to
the date on the form.
A conversation occurred between DeLouis and Yezzi regarding
why he (Yezzi) could not participate in the policies with
the CTWA.
(1) The conversation occurred before DeLouis filled out
part of some of the applications of the CTWA
personnel.
(2) DeLouis testified that he saw a distinction between
Yezzi having a problem selling insurance to the CTWA
but not in receiving commission which was assigned by
DeLouis.
r. As to the CTWA cancer and accident /indemnity policies, the
premiums were monthly but later switched to annual
premiums.
(1) The premiums were paid by the CTWA.
(2) The bills were generated from the American General
office.
s. Yezzi was meeting American General's performance standard up
to the latter part of 1989.
(1) Yezzi's failure to meet standards in the first quarter
of 1990 would be based upon the last three quarters of
Joseph D. Yezzi
Page 34
1989 and the first quarter of 1990.
t. As to Exhibit ID -23, 25, and 27, the acknowledgements that
the applicants were known for specified years were completed
by Yezzi.
(1) DeLouis did not personally know the applicants.
39. Richard A. Cercone was a member of the CTWA.
a. Cercone was a Board member from 1980 until December, 1989.
b. After an employee on the work force contracted cancer, a
direction was given to Brizzi to look into insurance.
(1) Cercone knew at that time that Yezzi was working for
American General.
c. Cercone states that the Board discussed both cancer and
accident /indemnity insurance.
d. Kevin Eshbaugh came to the CTWA Board and requested that he
be given a raise to be in parity with the hourly rate of Joe
Sopko.
e. As to the $1.00 per hour raise for Zon, Zon came to the
Board and stated he deserved the raise because he was also
doing the work of another employee.
f. James Lasky was hired shortly after the termination of
Haldeman.
g.
Cercone was unaware that the CTWA had accident /indemnity
insurance with Travelers.
40. Ronald J. DiGiorno is the Solicitor for the CTWA.
a. DiGiorno states that he was aware that the CTWA had
accident /indemnity insurance with American General in
addition to the subsequent accident indemnity insurance
with American General.
b. DiGiorno states that due to the State Ethics Commission
investigation, he planned but never made a recommendation to
the CTWA Board not to renew the cancer insurance.
c. DiGiorno testified that Eshbaugh indicated to him that he
(Eshbaugh) was promised full -time employment by the CTWA
foreman if he testified properly against Yezzi.
d. As to the $1.00 per hour raise for Zon, DiGiorno states
Joseph D. Yezzi
Page 35
that there were discussions by the CTWA Board as to Zon
doing the work of another employee, Gulla and that Zon
wanted a raise.
e. DiGiorno became Solicitor of the CTWA within a year of
Yezzi's appointment to the CTWA.
f. Yezzi is the uncle of DiGiorno.
g. DiGiorno has acted as counsel for Yezzi in private matters.
h. DiGiorno states he called Eshbaugh to his office to discuss
threats made to other employees of the CTWA.
(1) DiGiorno testified that such actions may be in
violation of the Ethics Law.
(2) DiGiorno discussed the possible violations with Yezzi.
(a) DiGiorno knew at that time that Yezzi was under
investigation by the State Ethics Commission.
i. DiGiorno asked Zon as to why he (Zon) was not cooperating
with the investigator Yezzi hired as to the State Ethics
Commission investigation.
(1) DiGiorno asserts that he made the comment to Zon to see
if he (Zon) was being intimidated like other employees.
j. DiGiorno, while township solicitor, purchased insurance
from Yezzi.
41. Joseph D. Yezzi is the Chairman of the CTWA.
a. Yezzi has been in insurance for approximately 30 years.
b. Yezzi worked for American General beginning in the 1980's
until his termination in 1990, except for a period when he
worked in a private venture as to the purchase of a lounge.
c. Yezzi is currently an agent for Western and Southern.
d. Yezzi was appointed to the CTWA Board around 1984 for a
five year term and was re- appointed.
e. The CTWA Board had discussions about insurance after an
employee (Fadool) developed cancer.
(1) Brizzi was assigned to look into the matter of
insurance.
Joseph D. Yezzi
Page 36
Prior to the CTWA Board obtaining the cancer and
accident /indemnity policies from American General,
Yezzi advised Brizzi that the American General policies
were good ones.
f. Yezzi admits that he helped to complete portions of some of
the CTWA cancer insurance applications in his own printing,
and that he filled in his own name in the production credit
box for the production credit and affixed his signature to
many of the CTWA cancer insurance policies.
(2)
(1) Yezzi states that the policy forms were put on his
desk with a direction to fill in the blanks.
(a) At some point, Yezzi testified that he turned over
a policy and became aware that it was for a CTWA
employee.
(2) Yezzi states that he went to DeLouis' office to advise
that he (Yezzi) did not want to be involved with CTWA
policies.
(a) Yezzi testified that De Louis told him (Yezzi) to
fill out the rest of the policies and that he
(DeLouis) would insure that Yezzi would not get
the commission.
(b) Yezzi states that when the policies would be
issued, he believed that De Louis would change the
policies to annual premiums and exclude him
(Yezzi) from the profit for the policies.
(c) Yezzi did fill out the portion where it
indicated the number of years he (Yezzi)
applicant for the CTWA policies.
(d) Yezzi testified that at the time he gave
applications back to DeLouis he knew his
number was on them.
knew the
these
own agent
(e) Yezzi acknowledged that he could have crossed out
his name and agent number on the policies, but
stated that he did not because his boss did not
want him to do so.
(f) Yezzi testified that he would not put false
information on an insurance application if his
boss told him to do that.
(1) Yezzi admitted that his certification on the
Barker and other applications were false
Joseph D. Yezzi
Page 37
of.
because the applications were not signed in
his presence and he (Yezzi) did not ask each
question on the application as to Barker and
the other CTWA employees.
(g) Yezzi states that De Louis requested him (Yezzi)
one or two weeks later to fill out CTWA policies
and he refused but then complied after De Louis
assured him that the matter would be taken care
g. Yezzi abstained as to the voting to approve the payment of
the premium on the American General policies at the August
(1989) Board meeting.
(1) Yezzi acknowledged that at the November 21, 1989
meeting he voted on paying a bill from American
General, but states that he did not know at the time
that the bills included a bill from American General.
h. Yezzi signed checks to American General as one of the three
CTWA signatures, and he also endorsed at least one of these
checks on the back for deposit to American General.
i. Yezzi received commissions from the CTWA insurance policies
with American General.
(1) Yezzi states that he first became aware of his receipt
of commissions on CTWA's insurance policies from
American General in 1991 when DeLouis told him in the
context of the SEC investigation.
Yezzi testified that he did not read his policy register
statements or agent's weekly statements.
(1) Yezzi stated that he knew approximately what insurance
business he had "written" and what the commission was
to be.
(2) Yezzi knew from his paycheck whether it reflected the
amount of insurance business he did.
k. Yezzi had conversations about insurance policies with CTWA
personnel after issuance.
1. Yezzi states that Eshbaugh approached him at the election
polls about buying insurance.
(1) Yezzi testified that there was no connection between
Eshbaugh completing an application on October 17, 1988
to buy insurance from Yezzi, and Eshbaugh's raise which
Joseph D. Yezzi
Page 38
took place seven days later on October 17, 1989.
m. Yezzi testified that he did not prepare an application or
give a price quote for insurance to Zon.
(1) Yezzi states that Zon brought up the subject of an
insurance program when Zon came to Yezzi's office to
ask for a raise because he (Zon) needed more money due
to financial troubles.
(2) Yezzi states that there was no understanding by him
that the raise for Zon would be tied into Zon
purchasing insurance.
n. Yezzi states that he went to the Haldeman home concerning
insurance at the request of Mrs. Haldeman.
(1) Yezzi testified that Mrs. Haldeman told him (Yezzi)
that she was concerned about additional coverage
because Haldeman was always tired and losing weight.
o. Yezzi states that Haldeman was making slanderous remarks
against him (Yezzi) about being forced to purchase
insurance.
(1) Yezzi testified that he told Sisk to tell Haldeman to
call him (Yezzi) and became upset when Haldeman failed
to do so.
P. The period of time between Yezzi's visit to the
Haldeman home and the termination of Haldeman was
approximately two weeks.
q. Haldeman had a telephone conversation with Yezzi on the day
he (Haldeman) was terminated as a part -time employee of
CTWA.
(1) Yezzi states that he told Haldeman that he had two
weeks to call him (Yezzi) about slanderous remarks and
Haldeman responded that he helped during election time
and inquired about insurance.
r. As to the sale of insurance to Lasky, Yezzi states that
Lasky's wife made the contact to purchase insurance, and
that the purchased insurance subsequently lapsed when the
Lasky's moved and had to start paying rent.
s. The Financial Interest Statements (FIS's), were filed late
by Yezzi.
(1) Yezzi states that he filed the forms after he went to a
Joseph D. Yezzi
Page 39
C. EXHIBITS:
water convention in Hershey and a speaker of the SEC
spoke about filing the FIS form.
a. Yezzi testified that he filed the forms the week
after he came back from the convention.
b. Yezzi backdated the FIS's by filling in the
incorrect dates on the bottom of the FIS's when he
filed them, which were not the dates the forms
were actually filed.
c. When Yezzi delinquently filed his FIS's, he used
March or April dates so that the forms would bear
a date prior to the date they had been due.
(2) Yezzi acknowledged that he knew prior to the time he
went to the conference in Hershey that he had to file
the FIS's but had failed to do so.
(3) The April, 1986 minutes of CTWA reflect commentary that
notice was served from the SEC that the Board members
and others had to file FIS's.
(4) Yezzi acknowledged that the minutes of the meeting on
September 16, 1986, at which he was present, confirm
that it was reported that one FIS was outstanding at
that time.
(5) Yezzi acknowledged that calendar 1985 was one of the
years for which he did not file an FIS on time.
t. Yezzi states that his personnel file with American General
reflecting his termination in 1984 for failure to meet
production standards is inaccurate.
u. Yezzi's 1984 employment application with American General
reflects Yezzi's statement that he continuously does
contacting for politics, charitable organizations, etc., and
that he would incorporate this with business.
42. A review of the records of American General reflect the
following commissions paid to Yezzi as to CTWA policies and
certain other policies as to individuals who are CTWA employees
(Exhibit ID -22).
Joseph D. Yezzi
Page 40
Policy
130710468
118273100
118298010
118298011
118298014
118298015
118317803
130710470
130710473
130710474
130710476
130710477
188281733
189226111
189018383
12 -11
118298012
118298017
115506984
130710471
130710472
130710475
130710479
130710480
Name
Gulla, Steve
Spearing, Elsie
Barker, Paul
Eshbaugh, Kevin
Galdony, Karen
Dugan, Verna
Fadool, Anthony
Spearing, Elsie
Galdony, Karen
Eshbaugh, Kevin
Barker, Paul
Fadool, Anthony
Eshbaugh, Kevin
Sopko, Joseph M.
Lasky, James
Policy Lapsed
Net Commission
Sopko
Sisk
Zon
Lasky, James
Dugan, Verna
Sopko, Sr. Joseph
Zen, Jr. Lawrence
Sisk, Kenneth
Sales Comm. Conservation
19.08 19.08
47.25 29.70
50.88 44.77
16.98 10.67
47.25 29.70
22.93 14.41
269.32 269.32
19.08 19.08
19.08 19.08
19.08 19.08
19.08 19.08
19.08 19.08
161.29 198.00
300.64 150.32
290.30 133.06
- 193.54 - 133.06
96.76 0.00
50.88 44.77
41.88 36.85
23.23 14.60
19.08 19.08
19.08 19.08
19.08 19.08
19.08 19.08
19.08 19.08
43. An American General Cancer Insurance application for Elsie
Spearing, policy number 118273100, dated 08/03/89, reflects the
signature of licensed agent as Joseph D. Yezzi in the "Agent's
Certification" box whereby Yezzi certifies that he asked each
question in the "Agent's Report" box and recorded the answers as
given by the applicant (Exhibit (s) ID -23).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as 5 years.
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $13.23 with premium
due in the amount of $121.77.
d. The issued policy reflects Elsie Spearing as the insured
with an annual premium of $135.00.
44. An American General Cancer insurance application for Paul L.
Joseph D. Yezzi
Page 41
Barker, policy number. 118298010, dated August 2, 1989, reflects
the signature of licensed agent as Joseph D. Yezzi in the
"Agent's Certification" box whereby Yezzi certifies that he
asked each question in the "Agent's Report" box and recorded the
answers as given by the applicant (Exhibit (s) ID -24, 25, 26).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as 20 years.
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $20.45 with premium
due in the amount of $183.05.
d. The issued policy reflects Paul L. Barker as the insured
with an annual premium of $203.50.
45. An American General Cancer insurance application for Kevin L.
Eshbaugh, policy number 118298011, dated August 2, 1989, reflects
the signature of licensed agent as DeLouis in the "Agent's
Certification" box whereby DeLouis certifies that he asked each
question in the "Agent's Report" box and recorded the answers
given by the applicant (Exhibit (s) ID -27).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as 4 years.
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $5.01 with premium
due in the amount of $43.49.
d. The issued policy reflects Kevin L. Eshbaugh as the insured
with an annual premium of $48.50.
46. An American General Cancer insurance application for Joseph M.
Sopko, Sr., policy number 118298012, dated August 2, 1989,
reflects the signature of licensed agent as DeLouis in the
"Agent's Certification" box whereby DeLouis certifies that he
asked each question in the "Agent's Report" box and recorded the
answers as given by the applicant (Exhibit (s) ID -28).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as 10 years.
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $19.74 with premium
Joseph D. Yezzi
Page 42
due in the amount of $183.76.
d. The issued policy reflects Joseph M. Sopko, Sr. as the
insured with an annual premium of $203.50.
47. An American General Cancer insurance application for Karen
Galdony, policy number 118298014, dated August 2, 1989, reflects
the signature of licensed agent as Joseph D. Yezzi in the
"Agent's Certification" box and recorded the answers as given by
the applicant (Exhibit (s) ID -29).
a. The agent answered question 5 in the "Agent's Report as to
how long he knew the proposed insured as "just met ".
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $13.23 with premium
due in the amount of $121.77.
d. The issued policy reflects Karen C. Galdony as the insured
with an annual premium of $135.00.
48. An American General Cancer insurance application for Verna M.
Dugan, policy number 118298015, dated August 2, 1989, reflects
the signature of licensed agent as Joseph Yezzi in the "Agent's
Certification" box whereby Yezzi certifies that he asked each
question in the "Agent's Report" box and recorded the answers as
given by the applicant (Exhibit (s) ID -30).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as 10 years.
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $6.63 with premium
due in the amount of $58.87.
d. The issued policy reflects Verna M. Dugan as the insured
with an annual premium of $65.50.
49. An American General Cancer insurance application for Steve W.
Gulla, policy number 118298016, dated August 14, 1989, reflects
no signature of a licensed agent in the "Agent's Report" box for
the recorded answers as given by the applicant (Exhibit (s) ID-
31).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as 5 years.
Joseph D. Yezzi
Page 43
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $6.63 with premium
due in the amount of $58.87.
d. The issued policy reflects Steve W. Gulla as the insured
with an annual premium of $65.50.
50. An American General Cancer insurance application for Kenneth J.
Sisk, policy number 118298017, dated August 2, 1989, reflects
the signature of licensed agent as Joseph Yezzi in the "Agent's
Certification" box whereby Yezzi certifies that he asked each
question on the "Agent's Report" box and recorded the answers as
given by the applicant (Exhibit (s) ID -32).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as "just met ".
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a collection of $16.32 with premium
due in the amount of $151.18.
d. The issued policy reflects Kenneth J. Sisk as the insured
with an annual premium of $167.50.
51. The American General Cancer insurance application for Lawrence
Zon, Jr., policy number 115506984, dated August 2, 1989, reflects
the signature of licensed agent as Joseph Yezzi in the "Agent's
Certification" box whereby Yezzi that he asked each question in
the "Agent's Report" box and recorded the answers as given by the
applicant (Exhibit (s) ID -33, 34).
a. The agent answered question 5 in the "Agent's Report" as to
how long he knew the proposed insured as not completed.
b. The production credit box reflects Yezzi's service number
133512 to be credited with commissions.
c. The application reflects a premium in the amount of $5.53.
d. The issued policy reflects Lawrence Zon, Jr. as the insured
with an annual premium of $54.00.
52. The American General Accident and Indemnity insurance
applications for the following CTWA employees reflect the name
of DeLouis in the "Agent's Name" box but the service number of
133512 (Yezzi) appears opposite the name DeLouis.
Joseph D. Yezzi
Page 44
Name
Steve W. Gulla
James L. Lansky
Verna M. Dugan
Karen C. Gaidony
Elsie Spearing
Kevin L. Eshbaugh
Joseph M. Sopko
Paul L. Barker
Anthony L. Fadool
Lawrence Zon, Jr.
Kenneth J. Sisk
a.
b.
Policy Number
130710468
130710471
130710472
130710473
130710470
130710474
130710475
130710476
130710477
130710479
130710480
Exhibit Number
ID -35
ID -36
ID -37
ID -38
ID -39
ID -40
ID -41
ID -42
ID -43
ID -44
ID -45
53. Yezzi completed an application for an American General insurance
policy for Kevin Eshbaugh, policy number 188281733 on or about
10/17/88 (Exhibit ID -46).
a. The "Agent's Certification" box reflects the signature of
licensed agent as Joseph D. Yezzi.
b. The commission credit would go to Yezzi through his service
number 133512.
c. The policy date reflects a policy date of November 14, 1988,
a face amount for the policy of $25,000, an issue premium of
$55.00 and a maximum monthly premium of $58.98.
54. Yezzi completed an application for an American General insurance
policy for James Lasky, policy number 189018383 on or about June
15, 1989 (Exhibit ID -47).
a. The "Agent's Certification" box reflects the signature of
licensed agent Joseph D. Yezzi.
b. The commission credit would go to Yezzi through his service
number 133512.
c. The policy date reflects a policy date of June 28, 1989, a
face amount for the policy of $50,000, a premium of $50.40
and premium interval on a monthly basis.
55. Yezzi completed an application for an American General insurance
policy for Joseph M. Sopko, Sr., policy number 189226111 on or
about February 21, 1989 (Exhibit ID -48).
The "Agent's Certification" box reflects the signature of
licensed agent Joseph D. Yezzi.
The commission credit would go to Yezzi through his service
number 133512.
Joseph D. Yezzi
Page 45
c. The policy date reflects a policy date of March 17, 1989 a
face amount for the policy of $15,000, an issue premium of
$56.94 and a maximum monthly premium of $74.91.
56. An American General insurance policy for Anthony Fadool, number
118317803 was completed on or about October 17, 1989 with
DeLouis's name written for the signature of the licensed agent
with Yezzi's service number 133512 given the commission credit
(Exhibit ID -49).
a. The policy date is October 23, 1989.
b. The premium is $74.81 on a monthly basis.
57. The following reflects the wage scale history for certain
employees of CTWA (Exhibits ID -1, 2, 13).
Name
a. Joseph M. Sopko, Sr.
b. Kevin L. Eshbaugh
c. Lawrence Zon, Jr.
Date Rate of pay ($ /hr.)
12/19/85
11/86
09/18/89
01/01/85
07/01/85
01/01/86
07/01/86
11/01/87
01/01/88
4.00,
4.50
5.50
05/11/88 4.00
10/24/88 4.50
(Retroactive to 05/11/88)
09/18/89 5.50
6.40
6.65
6.90
7.90
9.05
9.30
58. By letters dated 03/06/90 and 06/25/90 Yezzi was advised by
Samuel J. Billante, Vice President of Marketing Services for
American General that Yezzi's progress performance was below the
"minimum premium growth standard of $100 matched conference
progress per week..." (Exhibits ID -56, 57).
59. The minutes of CTWA reflect in part the following;
a. April 15, 1986 meeting (Exhibit ID -3).
(1) Notice from the SEC as to FIS's regarding
completing the form by Board Members and certain
employees.
(2) Yezzi listed as present.
Joseph D. Yezzi
Page 46
(a) No abstentions or nay votes.
(3) Approval of bills.
b. September 16, 1986 meeting (Exhibit ID -59).
(1) Yezzi listed as present.
(2) Bills approved.
(a) No abstentions or nay votes.
(3) Chief clerk advises that one 1985 FIS is outstanding.
c. June 21, 1988 meeting (Exhibit ID -4).
(1) Yezzi listed as present.
(2) Approval of bills.
(a) No abstentious or nay votes.
d. October 12, 1988 meeting (exhibit ID -5).
(1) Yezzi listed as arriving 20 minutes late.
(2) Discussion as to Fadool and lack of sick pay.
(a) The Board directed the clerk to advise Fadool to
the above and to contact Onderick to see if State
assistance is available.
e. November 26, 1988 meeting (Exhibit R -6).
(1) Yezzi listed as present.
(2) Board adjourns to executive session to discuss
personnel matters and contract negotiations.
f. January 17, 1989 meeting (Exhibit ID -6).
(1) Yezzi listed as present.
(2) Approval of bills.
(a) No abstentions or nay votes.
(3) Wage increases for maintenance employees covering a
three year period.
g. May 18, 1989 meeting (Exhibit ID -7).
Joseph D. Yezzi
Page 47
(1) Yezzi listed as present, arriving one -half hour after
the meeting started.
(2) Board action to have part -time summer employees at
$4.00 per hour.
(3) Board action to have James L. Lasky as a full -time
employee at $7.50 per hour with Yezzi voting in favor
of the motion with no nay votes and Cercone abstaining.
h. July 26, 1989 meeting (Exhibit ID -8).
(1) Yezzi listed as present.
(2) List of bills approved.
(a) No abstentions or nay votes.
(3) Board advised Eshbaugh that there are no full time
positions available as to his request for full time
employment.
i. August 15, 1989 meeting (Exhibit R -1).
(1) Yezzi listed as present.
(2) Bills approved.
1
(a) No abstentions or nay votes except Yezzi
abstaining for payment to American General as to
insurance policy premiums.
(3) Notation that premiums from American General are going
to be changed from monthly to annual billing.
September 19, 1989 meeting (Exhibit R -2).
(1) Yezzi listed as present.
(2) Bills approved.
(a) No abstentions or nay votes.
(3) Unanimous Board action to increase the wages of part -
time employees Sopko and Eshbaugh by $1.00 per hour.
k. October 17, 1989 meeting (Exhibit R -3).
(1) Yezzi listed as present.
Joseph D. Yezzi
Page 48
(2) Bills approved.
(a) No abstentions or nay votes.
(b) Bills included premium payment for American
General insurance policies for CTWA employees
which passed with all voting in favor thereof.
1. November 21, 1989 meeting (Exhibit R -4).
(1) Yezzi listed as present.
(2) Bills approved.
(a) No abstentions or nay votes.
(b) Bills included premium payment for American
General insurance policy for CTWA employees
which passed with all voting in favor thereof.
60. The minutes of the CTWA Exhibit ID -63 do not contain any of the
following:
a. An authorization for Brizzi to investigate obtaining
cancer insurance for CTWA employees.
b. The termination of part -time CTWA employee Donald Haldeman.
c. A $0.50 per hour raise for the CTWA employee Kevin Eshbaugh
on or about October 18, 1988 retroactive to May 1988.
d. A $1.00 per hour raise for the CTWA employee Lawrence Zon
for 1987.
e. An authorization to purchase a contract with American
General for cancer or accident /indemnity insurance for CTWA
employees.
III. DISCUSSION:
(1) The minutes for August 15, 1989 reflect a vote to
approve billings and payment thereof as to which Yezzi
abstained.
As the Chairman of the Center Township Water Authority (CTWA),
Joseph D. Yezzi, hereinafter Yezzi, is a public official as that term
is defined under Act 170 of 1978 and under Act 9 of 1989. 65
P.S.S402. As such, his conduct is subject to the provisions of the
Ethics Law and the restrictions therein are applicable to him.
Initially, it is noted that Section 9 of Act 9 of June 26, 1989
Joseph D. Yezzi
Page 49
provides, in part, as follows:
"This amendatory act shall not apply to
violations committed prior to the effective date
of this act, and causes of action initiated for
such violations shall be governed by the prior
law, which is continued in effect for that purpose
as if this act were not in force. For the
purposes of this section, a violation was
committed prior to the effective date of this act
if any elements of the violation occurred prior
thereto."
Since the occurrences giving rise to the allegations in this
case transpired before and after the effective date of Act 9 (June 26,
1989), we must apply the provisions of the respective Acts to
determine whether the Ethics Act was violated.
The allegations before us are whether Yezzi as the Chairman of
the Center Township Water Authority (CTWA) violated provisions of both
Act 170 of 1978 and Act 9 of 1989 by using his public position to sell
insurance policies to Authority employees and to the Authority. In
addition there is an allegation that Yezzi violated section 4(a) of
Act 170 of 1978 by failing to file Statements of Financial Interests
(FIS's) for the 1984 through 1987 calendar years.
Under Section 3(a) of Act 170 of 1978 quoted above, this
provision of law prohibits a public official /employee from using
public office or confidential information to obtain a financial gain
other than compensation provided for by law for himself, a member of
his immediate family or business with which he is associated. See
Hoak /McCutcheon v. SEC, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1982);
Koslow v. SEC, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988), alloc.
den., Pa. , 553 A.2d 971 (1988).
Section 3(b) of Act 170 of 1978 specifically provides in part
that no person shall offer or give to a public official and no public
official shall solicit or accept anything of value based upon an
understanding that the vote, official action or judgement of the
public official /employee would be influenced thereby. See Volpe,
Order 579R; Smith, Order 578R.
Section 4(a) of Act 170 of 1978 specifically requires that every
public employee and every public official (Kremer v. SEC, 56 Pa.
Commw. Ct. 160, 424 A.2d 968 (1981), affirmed, 503 Pa. 358, 469 A.2d
593 (1983) shall file an FIS for the preceding calendar year as to
each year that the individual holds public office or employment and
for the year after he leaves such position.
Under Section 3(a) of Act 9 of 1989 quoted above, a public
official /employee shall not engage in conduct that constitutes a
Joseph D. Yezzi
Page 50
conflict of interest.
The term "conflict of interest" is defined under Act 9 of 1989 as
follows:
Section 2. 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.
"Conflict" or "conflict of interest" 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 P.S. 5402.
Turning to Section 3(a) of Act
specifically provides that a public
authority of office for the private
member of his immediate family or a
of his immediate family is associat
9 of 1989, this provision of law
official /employee may not use the
pecuniary benefit of himself, a
business with which he or a member
ed.
The specifics of the allegations are that under Section 3(a) of
Act 170 of 1978 Yezzi used public office to obtain a financial gain
consisting of commissions on individual insurance policies that he
sold to the employees of the Authority and under Section 3(b) that an
understanding existed whereby Yezzi offered to obtain raises for
certain employees as to their hourly rate of pay at the CTWA in
return for the purchase of insurance by these employees from Yezzi.
The specific allegation under Section 3(a) of Act 9 of 1989 is
that Yezzi used the authority of office to obtain a private pecuniary
benefit for himself consisting of cancer and accident /indemnity
insurance policies that were sold to the CTWA for its employees.
Factually, Yezzi has been a member of the CTWA since he was
appointed in October of 1984 and has served as Chairman since 1988.
The CTWA is a municipal authority which supplies water services and
employs a maintenance department to perform necessary repairs and
maintenance on the system. The CTWA employs full time individuals,
who are eligible to become union members after serving a ninety day
Joseph D. Yezzi
Page 51
probationary period with wages and benefits set by union contract, and
part time employees whose wages, raises and benefits are approved by
the Board of the CTWA.
The record reflects that Yezzi had discussions regarding the
sale of insurance policies and in some cases actually sold insurance
policies to individuals who were also full time or part time employees
of the CTWA. The individual employees as to whom Yezzi had
discussions or sold policies are Kevin Eshbaugh, Joe Sopko, James
Lasky, Lawrence Zon and Donald Haldeman. As to each of these
individuals, we must review the record to determine whether Yezzi used
public office under Section 3(a) of Act 170 of 1978 to obtain a
financial gain for himself through selling policies or whether under
Section 3(b) of Act 170 of 1978 Yezzi offered something of value to
these individuals based on an understanding that the individuals would
purchase policies from Yezzi.
We will now consider the facts and circumstances as to the
approach or sale of insurance by Yezzi to each of the Authority
employees. As to Kevin Eshbaugh, Eshbaugh is a part time laborer
without any union protection. The starting salary for Eshbaugh was
$4.00 per hour. In the fall of 1988, Yezzi approached Eshbaugh
regarding insurance. Yezzi telephoned Eshbaugh to come to Yezzi's
house to talk about policies. Eshbaugh was not informed that the
policies to be discussed were insurance policies. When Eshbaugh
arrived at Yezzi's house, Yezzi and another company representative
were present. After Yezzi proposed a savings life insurance plan to
Eshbaugh and Eshbaugh responded that he would not be able to afford
the premium, Yezzi at that time offered to get Eshbaugh a raise at the
CTWA so that Eshbaugh would be able to buy insurance. In particular,
Yezzi told Eshbaugh that through the mechanism of a raise, Eshbaugh
would get "almost a free policy ". Yezzi performed a calculation to
determine whether the raise would cover the insurance. Eshbaugh
purchased the insurance policy and received the retroactive raise one
week later in his next paycheck.
Subsequently, when Eshbaugh did not timely make payments on his
insurance policy, Yezzi would call Eshbaugh or would have Sisk, the
CTWA manager, bring Eshbaugh to his office from the job site in a CTWA
vehicle. Such activity occurred during weeks that Eshbaugh was to be
paid by the CTWA or even on the very same day that Eshbaugh was to be
paid. Eshbaugh was intimidated by Yezzi.
Yezzi however argues that he did not solicit Eshbaugh but rather
Eshbaugh approached him about insurance and that there was no
connection between Eshbaugh buying insurance from Yezzi and Eshbaugh
receiving the retroactive raise one week later. For the reasons
noted infra, we do not find Yezzi to be credible. Contrariwise, we
find Eshbaugh to be credible and in fact courageous in his testimony
considering that he is a part time employee with no union protection
and is testifying against the Chairman of the Board of the CTWA, his
Joseph D. Yezzi
Page 52
employer.
Under the above facts, we find violations of both Sections 3(a)
and 3(b) of Act 170 of 1978. As to Section 3(a), Yezzi has used
public office consisting of his position of Chairman of the CTWA to
pressure Eshbaugh, a part time, at will, employee to purchase
insurance from Yezzi, and further has used public office by using the
staff, facilities, time and resources of CTWA effectuating insurance
transactions. The purchase of the insurance generated a financial
gain consisting of the commissions and wages that Yezzi received from
the insurance company by selling the policy to Eshbaugh. Lastly, the
financial gain is other than compensation provided by law because
there is no provision in law which allows or authorizes a member of a
municipal authority to specifically use the status of his office or
exert pressure because of the position he holds to obtain, as a result
thereof, a private financial gain for himself. See Verszyla, Order
799. We are particularly concerned by the totality of the
circumstances whereby Yezzi has used public office in terms of the
status and power that he wields as Chairman to pressure an at will
employee, Eshbaugh, to purchase insurance through him and has then
used the authority of office to intimidate that employee to continue
paying the premiums on the policy so as to insure the continued
generation of commissions to Yezzi.
Likewise, we find a violation of Section 3(b) of Act 170 of 1978
because an understanding did exist whereby Yezzi offered to obtain a
raise for Eshbaugh from the CTWA based on the expressed understanding
that through the mechanism of the raise Eshbaugh would have enough
money to purchase an insurance policy through Yezzi. Thus, the
understanding existed that Yezzi's actions would be influenced whereby
he would attempt to obtain a raise for Eshbaugh based on the
understanding that Eshbaugh would purchase insurance from Yezzi. (Fact
Finding 27). See Volpe, supra; Smith, supra.
As to Joseph Sopko, Sopko is also employed by CTWA as a part
time laborer. The record reflects that at some point Sopko approached
Yezzi in an effort to obtain more working hours. Subsequently Yezzi
approached Sopko about purchasing life insurance. In 1986 or 1987,
approximately, Yezzi approached Sopko about insurance, and Sopko did
buy a life policy. Sopko did not feel that he had to purchase the
policy from Yezzi but did so because Yezzi had helped him in a prior
occasion regarding obtaining more working time. As to Sopko, we do
not find a violation of Section 3(a) or 3(b) of Act 170 of 1978.
Although it is clear that Yezzi did approach Sopko about insurance and
subsequently sold him a policy, there is nothing of record to
establish in this instance a use of public office on the part of
Yezzi to obtain the financial gain consisting of the commission on the
sale of the policy. Absent the requisite use of public office, we are
constrained to find that there was no violation as to Section 3(a) of
Act 170 of 1978 as to the sale of insurance to Sopko. Likewise, we do
not find the requisite understanding necessary for violation under
Joseph D. Yezzi
Page 53
Section 3(b) in that Sopko indicated that he did not feel that he had
to purchase the life insurance policy from Yezzi but in fact did so
merely because Yezzi had helped him on a prior occasion in obtaining
more working time. Based upon the facts of record and for the reasons
noted above, we find no violation as to the sale of insurance to
Sopko.
Turning to the sale of insurance to Lawrence Zon, Zon is a full
time laborer with the CTWA and hence a member of the union with the
accompanying various benefits and job security. Yezzi approached Zon
regarding the purchase of life insurance when Zon was a CTWA employee.
Zon was contacted during the CTWA working hours and went to Yezzi's
office. Yezzi told Zon that he would work up an insurance plan for
Zon and his wife and indicated that the insurance would be
approximately $50 a month. After Zon responded that he could not
afford insurance, Yezzi inquired as to Zon's pay rate. It was made
clear that a raise was possible and through a raise Zon could afford
insurance. Subsequently Zon received a dollar per hour raise about a
month later. Zon never purchased insurance from Yezzi.
In reviewing the evidence or established facts in a case, an
administrative agency may adopt inferences of facts. Simon v. Fine,
167 Pa. Super 386, 74 A.2d 674 (1950). In reviewing all of the
evidence and facts in this record, we find as a matter of fact (Fact
Find 29c) that as to Zon, Yezzi offered to obtain a raise for Zon in
exchange for Zon purchasing insurance from Yezzi. Once again, as in
the case of Eshbaugh, the facts and evidence in their entirety reflect
that such an understanding existed. Zon was brought, during CTWA
working hours, to Yezzi, the Chairman of the Board, at his insurance
office. When Yezzi solicited insurance from Zon who responded that he
could not afford insurance, Yezzi thereupon inquired as to Zon's
wages as a CTWA employee, and advised that a raise could be obtained.
It is patently clear and obvious from our review of the record that
such an understanding did exist in this case and we so find. (Fact
Finding 29c(7)).
In applying the provisions of Section 3(a) and 3(b) of Act 170 of
1978, we do not find a violation of Section 3(a) in that although we
believe that there was a use of public office on the part of Yezzi, he
did not receive the financial gain as to his dealings with Zon since
Zon did not purchase the insurance. Hence the requisite element of a
financial gain is absent and we therefore find no violation of
Section 3(a) of Act 170 of 1978. However, we do find a violation of
Section 3(b) of Act 170 of 1978 because, just as in the case of
Eshbaugh, Yezzi offered to obtain a raise for Zon based upon the
understanding that Zon would buy insurance from Yezzi. We find the
testimony of Zon to be both compelling and credible. However, Yezzi's
counter testimony, that Zon came to Yezzi's office to ask for a raise
because he needed more money and at the same time expressed an
interest in purchasing insurance strains the bounds of credulity. It
is simply nonsensical to assert that an employee would approach the
Joseph D. Yezzi
Page 54
chairman of a municipal authority for a raise because he was in
financial straits and at the same time inquire about insurance
coverage. In this regard, we note the history of Yezzi's employment
with American General and his problem of failing to meet minimum sales
quotas to sustain employment. We do not find Yezzi's testimony that
there was no understanding by him concerning the Zon raise and Zon
purchasing insurance to be credible and as such we totally discount
such testimony.
Although there was testimony by other Board members that Zon did
approach the CTWA board at a meeting and request a dollar an hour
raise in light of the fact that he was picking up the duties of
another employee who had certain personal problems, we note that Yezzi
directed him to go to the Board meeting to request the dollar raise
when Yezzi was discussing insurance with Zon at his office. Zon in
fact did go to the Board and received the raise. Therefore, we view
the testimony of the other Board members as being consistent with
Yezzi's direction to Zon that Yezzi would get the dollar raise for Zon
in return for Zon's purchasing the insurance from Yezzi.
As to Donald Haldeman, he was a part time laborer with the CTWA
prior to his termination. While Haldeman was employed as a part time
employee, Yezzi and a representative from American General came
unannounced to Haldeman's house. Haldeman's spouse let Yezzi and the
company representative enter at which time Yezzi requested that Mrs.
Haldeman obtain her insurance policies for Yezzi's review. Mrs.
Haldeman indicated that she did not have the policies available at
which time Yezzi left. About the same time, Haldeman was told by the
CTWA manager, Ken Sisk, that Yezzi wanted to talk to him and that
Haldeman should get in contact with him (Yezzi). At the end of one
work day at the CTWA, someone asked Haldeman if he was going to buy
Yezzi's insurance. Haldeman made several attempts to contact Yezzi
but did not actually talk to him until several days later. During the
conversation Yezzi told Haldeman that "...we take care of those who
take care us." Although there was no specific reference to insurance
in Yezzi's remarks, Haldeman understood the statement as relating to
insurance. Haldeman then responded to Yezzi that he (Haldeman)
assumed that he was "done" (terminated) to which Yezzi agreed. Neither
Haldeman nor his wife purchased an insurance policy from Yezzi.
Applying the provisions of Section 3(a) and 3(b) of Act 170 of 1978,
we find no violation of either Section. Although we believe there was
a use of public office on the part of Yezzi, the requisite financial
gain is absent in that the Haldeman's did not purchase insurance and
on that basis we find no violation of Section 3(a). As to Section
3(b), we find no violation in that the record does not establish the
requisite understanding and on that basis we find no 3(b) violation as
to the insurance discussions with the Haldeman's.
The last individual who was sold insurance by Yezzi is James
Lasky who was employed as a laborer by the CTWA. The record reflects
that Lasky returned to Pennsylvania in May of 1989 from Arizona where
Joseph D. Yezzi
Page 55
there was a lack of work. On May 22, 1989, Lasky immediately began
employment with the CTWA. Although Lasky testified that he could not
afford insurance when he returned, he did purchase insurance from
Yezzi around the time he became employed by the CTWA. Lasky shortly
thereafter let the policy lapse but stated that he did so because he
could no longer live with his in -laws and hence having to move and pay
rent made insurance unaffordable. Around the same time, Lasky became
a member of the union. Finally, we must note that Lasky's father -in-
law was on the CTWA board when Lasky was hired. Based upon the above,
we do not find violations of either Sections 3(a) or 3(b) of Act 170
of 1978 as to Yezzi's conduct involving Lasky. We do find difficulty
with Lasky's testimony as to his purchase of insurance from Yezzi
shortly after his return to Pennsylvania from Arizona where he had no
work and when he had no job lined up in Pennsylvania according to his
testimony. In this regard, we question why Lasky under those
financial circumstances would seek insurance and receive gainful
employment. However, the record lacks the requisite evidence of a use
of public office by Yezzi and the existence of an understanding and
therefore on that basis we find no violations of Section 3(a) or 3(b)
of Act 170 of 1978 as to Yezzi's conduct involving Lasky.
As part of the above analysis and finding, we also note as to the
violations for Yezzi's conduct involving Zon and Eshbaugh, that Yezzi
was both terminated in 1980 and 1990 for failure to meet minimum
production standards by his insurance company employer, American
General. We also note that Yezzi received letters dated March 6, 1990
and June 25, 1990 advising that his performance was below minimum
standards (Fact finding 58). It is clear that Yezzi was motivated to
use public office to obtain financial gain through the mechanism of
selling or attempting to sell policies to Eshbaugh and Zon.
Turning to the matter of the Section 4(a) allegation under Act
170 of 1978 regarding the failure to file FIS's for the 1984 through
1987 calendar years, Yezzi originally testified that he filed the
forms late after he went to a water convention in Hershey and heard a
speaker of this Commission concerning the filing requirements. Yezzi
stated that he then filed the forms approximately a week later and
admitted that he inserted incorrect dates on the forms when he filed
them. After being made aware that the CTWA minutes in April '86
reflect commentary about the notice from this Commission that the
board members had to file, Yezzi then changed his testimony and
admitted that he knew he had to file the FIS's and failed to do so
even prior to the time he went to the conference in Hershey. In fact,
the incorrect dates Yezzi chose to insert were March or April dates
because he knew the filings had to be done by May 1. Thus, by his own
admission Yezzi establishes his violation of Section 4(a) of Act 170
of 1978 for failing to timely file FIS's for the 1984 through 1987
calendar years. We find the circumstances of the violations
particularly blatant given Yezzi's own testimony, the changes in his
testimony, and lastly and most importantly Yezzi's admission that he
knew he had to file but nevertheless failed to do so.
Joseph D. Yezzi
Page 56
At this juncture, it is necessary to comment upon Yezzi's lack of
credibility. In this regard, we note the above tale by Yezzi,
ostensibly proferred to explain his failure to timely file FIS's, when
in fact he knew all along of the FIS filing requirement but failed to
observe it. We likewise note Yezzi's testimony that he would not put
false information on insurance applications which he recanted when he
admitted that he falsified certifications on insurance applications.
(Fact Finding 41f(2)(f)). We need not recount Yezzi's testimony as to
the Eshbaugh and Zon insurance solicitation set forth above but must
make note of Yezzi's spurious testimony as to his purported lack of
knowledge or limited involvement as to the cancer and accident/
indemnity policies discussed below. In short, in our view of the
record, we find that Yezzi has no credibility.
We now must turn to the final allegation as to whether Yezzi
violated Section 3(a) of Act 9 of 1989 regarding the sale of cancer
and accident /indemnity policies to the CTWA.
Factually, after an employee of the Authority, Anthony Fadool,
contracted cancer, various members of the Board believed that the
Authority should provide insurance to its employees, and Board member
and Secretary Patrick Brizzi was directed to look into the matter of
cancer insurance. Brizzi indicated that he did no comparisons or
independent research to compare rates for cancer insurance and chose
American General, Yezzi's company, because it was local (Fact finding
33). Brizzi however did not inquire as to accident indemnity insurance
and had no recollection of Board action as to how accident
dismemberment insurance was also acquired from American General in
addition to the cancer insurance. In accord with the above is the
testimony of Board members Panetta, Onderick and Cercone, none of whom
had knowledge or recollection as to how the accident /dismemberment
insurance was acquired by the Authority. In fact, Board member
Onderick, after he learned that the Board already had accident
indemnity insurance with Travelers, questioned the duplicate coverage
with American General.
As to the actual acquisition of both the cancer and indemnity
policies by the Authority, the record is devoid of any evidence to
show that the CTWA Board took action to contract for the insurance.
There is also a lack of testimony from the Board members as to
how and for what reason the Authority acquired the accident indemnity
policies from American General.
Henry A. DeLouis was the insurance manager for the Beaver
Valley district of American General and was the supervisor for Yezzi.
Although DeLouis states that a CTWA Board member contacted him
regarding cancer insurance and that he filled out the cancer insurance
applications as to some policies but as to others had someone (Yezzi)
in the office complete the policies, Delouis's testimony is deficient
Joseph D. Yezzi
Page 57
as to the circumstances of why accident indemnity policies were
issued. In this regard DeLouis admitted he never appeared at a CTWA
Board meeting or made any presentation to the Board about insurance.
It is clear as to all of these cancer and accident indemnity policies
of American General that Yezzi's service number was inserted in the
production credit box of the policies so that Yezzi did in fact
receive the commissions from these policies. Yezzi testified that he
completed certain policies at the direction of DeLouis and further
testified that DeLouis assured him that he would not be assigned the
credit even though in actuality he was assigned the credit and did in
fact receive it. Yezzi also states that he did not read his weekly
policy register statement which reflected that Yezzi was receiving
commissions from the sale of the cancer and accident /indemnity
policies to the CTWA. Yezzi also admitted that he knew from the amount
of his paycheck whether that corresponded to the amount of insurance
business he was producing.
The minutes of the CTWA board reflect that on August 15, 1989
Yezzi abstained as to a payment to American General for insurance
policy premiums. However, the November 21, 1989 minutes reflect an
approval of the premium payments for American General Insurance where
Yezzi did not abstain on the affirmative vote to pay those premiums.
In addition, Yezzi signed checks of the Authority for payment of the
premiums to American General and on at least two occasions (one which
Yezzi admits) endorsed the checks for deposit into the American
General account.
Under the above facts and circumstances, we must determine
whether Yezzi violated Section 3(a) of Act 9 of 1989 quoted above
regarding the purchase of the cancer and accident /indemnity policies
from American General to the CTWA.
Section 3(a) quoted above provides that no public
official /employee shall engage in conduct that constitutes a conflict
of interest.
The term "conflict" is defined under the Ethics Law as follows:
Section 2. 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.
"Conflict" or "conflict of interest" does not
include an action having a de minimis economic
impact or which affects to the same degree a class
Joseph D. Yezzi
Page 58
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 or his immediate family or a
business with which he or a member of his
immediate family is associated. 65 P.S. S402.
As to the sale of the cancer and accident indemnity policies to
the CTWA, it is clear, even by Yezzi's own admission, that he
received commissions on the sale of that insurance. Hence there is no
question that Yezzi received a private pecuniary benefit in this case.
The pivotal remaining question is whether there was a use of authority
of office on the part of Yezzi to obtain that private pecuniary
benefit.
In this case, there is no question that Yezzi had extensive
involvement with the cancer and accident /indemnity policies in terms
of completing certain applications. However, our focus must be
limited as to what Yezzi did as CTWA Chairman relative to any use of
authority of office as to those policies. In particular, the
Authority policies were purchased without formal action taken by the
CTWA Board. (Fact Finding 60(e)). The minutes merely reflect Yezzi
in one instance voting on a routine, uncontested list of bills
including one from American General while in another instance Yezzi
abstained. As noted above, there was a great deal of involvement by
Yezzi as to the Authority policies in his capacity as a sales agent.
However, we cannot find that there is clear and convincing evidence
that Yezzi, as the Chairman of CTWA and in that capacity, used the
authority of office to obtain a private pecuniary benefit for himself
with regard to these particular policies. On that basis we are
constrained to find no violation of Section 3(a) of Act 9 of 1989 as
to the allegation concerning the sale of the cancer and
accident /indemnity insurance to the CTWA.
As to the violations of Act 170 of 1978 regarding Kevin
Eshbaugh, Section 9(c) of Act 170 of 1978 provides:
Section 9. Penalties
(c) Any person who obtains financial gain
from violating any provision of this act, in
addition to any other penalty provided by law,
shall pay a sum of money equal to three times the
amount of the financial gain resulting from such
violation into the State Treasury or the treasury
of the political subdivision. Treble damages
shall not be assessed against a person who acted
in good faith reliance on the advice of legal
counsel. 65 P.S. 5409 (c).
Joseph D. Yezzi
Page 59
As to the policies sold to Eshbaugh by Yezzi, Yezzi received a
gain of $359.29 (Fact finding 42). A treble penalty in this case is
appropriate given the egregious nature of Yezzi's conduct. Therefore
we impose a treble penalty in the amount of $1077.87 payable to the
State Treasury of the Commonwealth of Pennsylvania. Accordingly Yezzi
is directed within thirty days of the date of this order to forward a
check or payment in full of the treble penalty in the above amount to
this Commission. Failure to comply with the above will result in the
institution of an enforcement action by this Commission.
IV. CONCLUSIONS OF LAW:
1. Joseph D. Yezzi as Chairman of the Center Township Water
Authority is a public official subject to the provisions of Act
170 of 1978 and Act 9 of 1989.
2. Yezzi violated Sections 3(a) and 3(b) of Act 170 of 1978 when he
used public office to obtain a financial gain for himself and
when he offered to sell CTWA employee Kevin Eshbaugh insurance
based on the understanding that he would obtain a raise for
Eshbaugh to cover the cost of the insurance.
3. Yezzi violated Section 3(b), but not Section 3(a), of Act 170 of
1978 when he offered to obtain a dollar per hour raise for CTWA
employee Lawrence Zon based on the understanding that Zon would
purchase insurance from Yezzi.
4. Yezzi did not violate either Section 3(a) or 3(b) of Act 170 of
1978 as to the sale of insurance to CTWA employee Joseph Sopko
after Sopko requested and received additional work time from
Yezzi and subsequently purchased insurance from Yezzi
approximately one year later of his own volition.
5. Yezzi did not violate either Section 3(a) or 3(b) of Act 170 of
1978 regarding the purchase of insurance from him by CTWA
employee James Lasky.
6. Yezzi did not violate Section 3(a) or 3(b) of Act 170 of 1978
regarding his attempt to sell insurance to Donald Haldeman who
did not purchase insurance.
7. Yezzi violated Section 4(a) of Act 170 of 1978 when he failed to
file Financial Interest Statements for the calendar years 1984
through 1987.
8. Yezzi did not violate Section 3(a) of Act 9 of 1989 regarding
the sale of the cancer and accident /disability insurance policy
to the CTWA in that there is not clear and convincing proof that
Yezzi used the authority of office to obtain a private pecuniary
benefit for himself.
In Re: Joseph Yezzi
. File Docket: 90- 018 -C2
Date Decided: February 20, 1992
Date Mailed: February 27, 1992
ORDER No. 825
1. Joseph D. Yezzi as Chairman of the Center Township Water
authority violated Sections 3(a) and 3(b) of Act 170 of 1978
when he used public office to obtain a financial gain for himself
and when he offered to sell CTWA employee Kevin Eshbaugh
insurance based on the understanding that he would obtain a raise
for Eshbaugh to cover the cost of the insurance.
2. Yezzi violated Section 3(b), but not Section 3(a), of Act 170 of
1978 when he offered to obtain a dollar per hour raise for CTWA
employee Lawrence Zon based on the understanding that Zon would
purchase insurance from Yezzi.
3. Yezzi did not violate either Section 3(a) or 3(b) of Act 170 of
1978 as to the sale of insurance to CTWA employee Joseph Sopko
after Sopko requested and received additional work time from
Yezzi and subsequently purchased insurance from Yezzi
approximately one year later of his own volition.
4. Yezzi did not violate either Section 3(a) or 3(b) of Act 170 of
1978 regarding the purchase of insurance from him by CTWA
employee James Lasky.
5. Yezzi did not violate Section 3(a) or 3(b) of Act 170 of 1978
regarding his attempt to sell insurance to Donald Haldeman who
did not purchase the insurance and was subsequently terminated in
his CTWA employment.
6. Yezzi violated Section 4(a) of Act 170 of 1978 when he failed to
file Financial Interest Statements for the calendar years 1984
through 1987.
7. Yezzi did not violate Section 3(a) of Act 9 of 1989 regarding the
sale of the cancer and accident /disabiilty insurance policy to
the CTWA in that there is not clear and convincing proof that
Yezzi used the authority of office to obtain a private pecuniary
benefit for himself.
8. The financial gain received by Yezzi as to the violation
referenced in Paragraph 1 was $359.29.
9. A treble penalty in the amount of $1077.87 is imposed against
Yezzi as to the financial gain referenced in Paragraph 8.
10. Yezzi is directed within 30 days of the date of the issuance of
the Order to forward a check or payment in full of the above
treble penalty to the Commission in the amount of $1077.87
payable to the order of the State Treasury of the Commonwealth of
Pennsylvania.
11. Failure to comply with the provisions of Paragraph 10 will
result in a directive by the Commission to initiate an Order
Enforcement Action.
BY THE COMMISSION,
0 gY, VICE CHAIR
Chair Dennis C. Harrington did not participate in this matter because
he acted as single hearing officer and recused himself pursuant to 51
Pa. Code S2.34(d).
Commissioner Roy W. Wilt dissents as to the finding of no violation of
Section 3(a) of Act 9 of 1989 regarding the sale of the cancer and
accident /disability insurance policies to the CTWA.