HomeMy WebLinkAbout1017 SavitskyIn Re: Robert Savitsky
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
File Docket:
Date Decided:
Date Mailed:
Before: Daneen E. Reese, Chair
Austin M. Lee, Vice Chair
Roy W. Wilt
Allan M. Kluger
Boyd E. Wolff
95- 019 -C2
11/4/96
11/13/96
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission
conducted an investigation regarding a possible violation of the Public Official and
Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 at seq., by the above -
named Respondent. At the commencement of its investigation, the Investigative
Division served upon Respondent written notice of the specific allegations. Upon
completion of its investigation, the Investigative Division issued and served upon
Respondent a Findings Report identified as an "Investigative Complaint." An Answer
was filed and a hearing was waived. The record is complete. A consent agreement
was submitted by the parties to the Commission for consideration which was
subsequently approved.
This adjudication of the State Ethics Commission will be made available as a
public document thirty days after the mailing date noted above. However,
reconsideration may be requested. Any reconsideration request must be received at
this Commission within thirty days of the mailing date and must include a detailed
explanation of the reasons as to why reconsideration should be granted in conformity
with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the finality
of this adjudication but will defer its public release pending action on the request by
the Commission.
The files in this case will remain confidential in accordance with Act 9 of 1989,
65 P.S. §408(h). Any person who violates confidentiality of the Ethics Law is 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). Confidentiality does not preclude discussing this
case with an attorney at law.
Savitskv, 95- 019 -C2
Page 2
I. ALLEGATION:
That Robert Savitsky, a public employee in his capacity as an Insurance
Company Examiner 111, violated Sections 3(a) and 5(b) of the Ethics Law (Act 9 of
1989) when he used the authority of his public position for a private pecuniary benefit
by utilizing bonus points received from the Marriott Corporation, which were earned
while traveling as a Commonwealth employee, to obtain free airfare and hotel lodging
for himself and a traveling companion; and when he failed to disclose the receipt of
said bonus on Statements of Financial Interests.
II. FINDINGS:
1. Robert Savitsky has been employed with the Insurance Department of the
Commonwealth of Pennsylvania since 1968 as an Insurance Company
Examiner.
a. Robert Savitsky's job title has been Insurance Company Examiner 111 since
at least 1991.
2. The Insurance Company Examiners are employed by the Bureau of Examinations
within the Insurance Department.
a. The examiners are responsible for traveling to the administrative offices
of insurance companies to review the financial condition and monitor the
operations of companies.
3. Savitsky's job description as an Insurance Company Examiner III is as follows:
a. Serves as Examiner -in- Charge of complex, difficult or sensitive insurance
company examinations involving large amounts of assets, complicated
corporate structure, and real or potential solvency problems.
b. Plans the examination and directs a technical staff engaged in reviewing
financial conditions, operations and reports of insurance companies to
determine adherence to state laws, rules and regulations.
c. Investigates irregularities in insurance company records, statements and
operations of a difficult and sensitive nature, including unlicensed
activity, operating outside the scope of authority, and suspected fraud.
d. Examines complex accounting procedures used to determine handling and
control of receipts and disbursements.
e. Supervises and conducts highly complex examinations of insurance
companies, including companies with complicated corporate structure, hi-
volume of fiscal activity, unusual solvency problems, or re- insurance
involvements.
f. Conducts market conduct examinations to detect unfair market conduct
practices in the are of sales and advertising, underwriting, rating and
claims.
Savitskv, 95- 019 -C2
Page 3
Supervises the review of insurance policy forms, riders, endorsements,
settlements, investments, surpluses, and reserves to assure compliance
with established laws, regulations, standards and procedures
h. Serves as an expert in the most problematic or highly technical areas of
the regulation of insurance company operations, such as in reinsurance
or in the auditing of electronic data processing systems.
Prepares reports and recommendations on results of examinations and
participates in hearings held with companies on critical reports of
examination.
g.
J.
Testifies in court when the Insurance Department institutes action
against an insurance company.
k. Reconciles irregularities in insurance company records and reports, and
take necessary measures to correct deviations from standards and
regulations.
Trains subordinates in examining methods, procedures and practices.
m. Meets with insurance company officers and representatives regarding all
aspects of the examination process, recommending administrative and
operational improvements where deficiencies exist and advising
companies of proposed Department action to obtain compliance with
laws and regulations.
n. Performs related work as required.
4. An Insurance Examiners main responsibility is to conduct examinations of
insurance companies doing business in Pennsylvania.
5. The salary of an Insurance Examiner and expenses incurred during an
examination are passed on to the insurance company by the Insurance
Department.
a. The Insurance Department reviews the books and records of each
Pennsylvania domestic insurance company at least once every five years.
b. If an insurance company is having financial problems, the Insurance
Department has the right to conduct an examination at any time.
c. The examinations conducted by the Insurance Examiners can take
anywhere from one week to twelve months.
d. The Insurance Department initially pays the salary and expenses of the
Examiner and subsequently is reimbursed by the Insurance Company.
6. The position of an Insurance Company Examiner requires extensive overnight
travel including traveling within the Commonwealth of Pennsylvania and out of
state travel.
Savitskv 95- 019 -C2
Page 4
a. Not all jobs performed by Insurance Company Examiners necessitate
overnight travel.
7. Insurance Examiners traveling on official business are subject to Management
directives promulgated by the Office of Administration.
a. Management Directive 230.10, Travel and Subsistence, is the
Management Directive which covers reimbursable travel related
expenses.
b. Insurance Examiners are also subject to Departmental memoranda, as
well as, managerial oral directives and suggestions.
8. Management Directive 230.10 promulgated by the Office of the Governor
contains policies and monetary limitations governing reimbursable expenses of
officials and employees under the Governor's jurisdiction subject to Section 216
of the Administrative Code.
a. Employees of the Insurance Department are under the Governor's
jurisdiction.
b. Management Directives cover employee expenses for out -of- pocket
expenses incurred in the performance of their duties.
9. Insurance Company Examiners traveling more than fifty miles from their home
are considered in overnight travel status.
a. Insurance Company Examiners still retain an option to commute in such
situations.
10. Management Directive 230.10, Section 10(a)(1) provides that expenses for
lodging will not be allowed at the employee's headquarters or residence nor at
sites within a reasonable commuting distance of headquarters or residence.
a. Either fifty miles or one and one -half hours of travel time at a normal rate
of speed are considered reasonable commuting, subject to itinerary,
weather and time conditions.
11. • When traveling on official Commonwealth business Examiners may pay for
lodging through the use of a Commonwealth Hotel Order, Commonwealth
Corporate Credit Card, personal credit card or cash.
a. Most Insurance Examiners utilize a hotel order when traveling on official
business.
b. Employees of the Insurance Department, including Examiners, are
encouraged to use Hotel Orders or the Commonwealth Corporate
American Express Card.
c. The Insurance Department knew, did not object to, and permitted the use
of personal credit cards and cash.
Savitskv, 95- 019 -C2
Page 5
12. Management Directive 230.10 10(b)(1) dated September 27, 1991, provides
that Hotel Orders, form STD -192, may be used for hotel rentals, provided the
hotel will accept them.
a. Hotel Orders are issued and controlled by agencies.
13. Management Directive 230.10 10(c)(1) provides that lodging costs are limited
to $33.00 plus tax, per night, for all out -of -state locations and within a twenty -
five mile radius of Allentown, Erie, Harrisburg, Philadelphia, Pittsburgh, Reading
and Scranton.
a. It is permitted to use higher priced rooms if an individual indicates higher
priced rooms in at least two other area hotels.
14. Robert Savitsky participated in an examination of the Pennsylvania National
Casualty Mutual Insurance Company in Harrisburg, Pennsylvania, from the week
of October 28, 1991, through the week of April 28, 1992.
a. Savitsky was the Examiner -in- Charge of this review.
b. Three other examiners, Jerry Hickey, Dave Evans and Mike Smith
participated.
15. Savitsky was in overnight travel status during the period of this audit.
a. This status was approved by Stephen Johnson, Director of the Bureau of
Examinations.
16. During the period of time when the audit of Pennsylvania National Insurance
Company was conducted, Robert Savitsky obtained lodging at the Marriott
Hotel, Harrisburg.
a. Examiner Jerry Hickey also stayed at the Marriott.
(1) Hickey arrived at the Marriott prior to Savitsky and made the initial
reservations for Savitsky's stay.
(2) Hickey also negotiated the initial room rate for himself.
b. Dave Evans and Mike Smith live in the Harrisburg area.
17. The room rates for Marriott were $59.00 per night, plus tax.
a. This rate exceeded the rate established by Management Directive 230.10
10(c)(1). (See Finding No. 13 and 16(a)(1)).
18. Savitsky submits Travel Expense Vouchers (TEV's) (form STD -191) to the
Commonwealth of Pennsylvania to obtain reimbursement for travel expenses,
which includes lodging.
a. The TEV's are submitted for approval to an audit manager.
Savitskv 95- 019 -C2
Page 6
19. During the period of the audit of Pennsylvania National Insurance Company,
Savitsky submitted TEV's for approval to Director Stephen Johnson and
Manager John Leddy.
a. TEV's were submitted on a bi- weekly basis.
20. Savitsky paid for his lodging at the Harrisburg Marriott through the use of a
Marriott First Card Visa Credit Card No. 4250890396101 issued by the FCNB
Bank of Wilmington, DE.
a. Savitsky paid an annual fee of $30.00 for this card.
21. Travel Expense Vouchers submitted by Savitsky confirm the dates when he
stayed at the Marriott Hotel in Harrisburg, Pennsylvania while he conducted the
examination at the Pennsylvania National Casualty Mutual Insurance Company.
Voucher Number Dates of Stay at the Marriott Hotel
30191
30191
30193
127682
127682
127683
127683
127683
127684
127684
127684
127688
127691
127691
127685
127685
127690
127690
127686
127686
127686
128201
128201
128201
128202
128202
11/04/91 to 11/08/91
11/11/91 to 11/12/91
11/26/91 to 11/27/91
12/02/91 to 12/06/91
12/09/91 to 12/13/91
12/16/91 to 12/20/91
12/26/91 to 12/27/91
12/30/91 to 12/31/91
01/02/92 to 01/03/92
01/06/92 to 01/10/92
01/15/92 to 01/17/92
01/21/92 to 01/24/92
02/03/92 to 02/06/92
02/10/92 to 02/14/92
02/18/92 to 02/21/92
02/24/92 to 02/28/92
03/02/92 to 03/06/92
03/09/92 to 03/13/92
03/16/92 to 03/20/92
03/23/92 to 03/27/92
03/30/92 to 04/01/92
04/01/92 to 04/03/92
04/06/92 to 04/10/92
04/13/92 to 04/14/92
04/20/92 to 04/23/92
04/27/92 to 04/28/92
22. Savitsky noted on the Travel Expense Vouchers that he was charging all
expenses to the Pennsylvania National Mutual Insurance Company in Harrisburg,
Pennsylvania, for an on -site examination.
23. Savitsky signed every Travel Expense Voucher certifying the expenses claimed
were correct, reasonable and were incurred in the performance of
Commonwealth duties.
Savitskv, 95- 019 -C2
Page 7
24. Savitsky's travel expense vouchers filed after July, 1992, confirm that when he
stayed at hotels other than the Marriott, he either used another credit card or
a hotel order.
25. Robert Savitsky is a member of Marriott's Honored Guest Awards Program and
the account number is 083 341776.
a. Savitsky's account with the Marriott Corporation was established on
November 21, 1985.
26. Individuals can earn points with Marriott's Honored Guest Awards (HGA)
Program as follows:
a. Hotel stays at Marriott Hotels and the use of a Marriott First Card Visa
Credit Card issued by FCNB Bank of Wilmington, DE.
b. Club Marquis Bonus Points which requires a member to personally stay
15 nights at a Marriott Hotel in a 12 month period.
c. Airline Bonus Points which are issued when staying at a Marriott Hotel.
27. Only individuals are eligible for HGA Program membership:
a. Corporations and /or entities cannot enroll as members.
b. Rooms reserved for individuals by corporations and /or entities on an
ongoing basis are not eligible to earn points.
28. As of April 13, 1995, Savitsky had earned a total of 224,093 points through
his participation in the HGA Program.
a. This figure reflects points earned by Savitsky and does not take into
consideration points redeemed by Savitsky.
29. Robert Savitsky accumulated the following points with Marriott's Honored
Guest Awards Program when staying at the Harrisburg Marriott while he
conducted the examination at the Pennsylvania National Casualty Mutual
Insurance Company. (See Finding No. 21)
Date of Posting
From To
Description Total points
11/4/91 1 1 /8/91 Harrisburg 2,921
Club Marquis Bonus 292
Airline Bonus 730
11/11/91 1 1 /12/91 Harrisburg 590
Club Marquis Bonus 59
Airline Bonus 148
11/26/91 1 1 /27/91 Harrisburg 590
Club Marquis Bonus 59
Savitskv, 95- 019 -C2
Page 8
11/27/91 First Card Marriott 1,105
12/02/91 12/06/91 Harrisburg 2,638
Club Marquis Bonus 264
Airline Bonus 660
12/09/91 12/13/91 Harrisburg 2,368
Airline Bonus 592
12/16/91 12/20/91 Harrisburg 2,409
Club Marquis Bonus 241
Airline Bonus 602
12/26/91 12/27/91 Harrisburg 590
Club Marquis Bonus 59
12/27/91 First Card Marriott 2,527 .
12/30/91 12/31/91 Harrisburg 590
Club Marquis Bonus 59
01/02/92 01/03/92 Harrisburg 590
Club Marquis Bonus 59
01/06/92 01/10/92 Harrisburg 2,440
Club Marquis Bonus 244
01/15/92 01/18/92 Harrisburg 2,395
Club Marquis Bonus 240
01/21/92 01/24/92 Harrisburg 1,770
Club Marquis Bonus 177
01/27/92 First Card Marriott 2,098
02/03/92 02/06/92 Harrisburg 1,770
Club Marquis Bonus 177
02/10/92 02/14/92 Harrisburg 2,417
Club Marquis Bonus 242
02/18/92 02/21/92 Harrisburg 1,801
Club Marquis Bonus 180
02/24/92 02/28/92 Harrisburg 2,360
Club Marquis Bonus 236
• 02/27/92 First Card Marriott 2,465
03/02/92 03/06/92 Harrisburg 2,360
Club Marquis Bonus 236
03/09/92 03/13/92 Harrisburg 2,462
Savitskv, 95- 019 -C2
Page 9
03/16/92 03/20/92
Club Marquis Bonus 246
Harrisburg
Club Marquis Bonus
2,805
d. Allowed for a Hertz rental car for eight free days.
281
03/23/92 03/27/92 Harrisburg 2,444
Club Marquis Bonus 244
03/27/92 First Card Marriott 3,166
04/06/92 04/10/92 Harrisburg 2,385
Club Marquis Bonus 239
04/13/92 04/14/92 Harrisburg 590
Club Marquis Bonus 59
04/20/92 04/23/92 Harrisburg 1,770
Club Marquis Bonus 177
04/27/92 04/28/92 Harrisburg 590
Club Marquis Bonus 59
04/27/92 First Card Marriott 3,053
05/27/92 First Card Marriott 188
TOTAL 65,108
30. Robert Savitsky requested an award from Marriott's Honored Guest Awards
Program on June 29, 1992.
a. The Award Savitsky requested was a "T1 Travel Combination" and the
number of total points used to redeem the award was 200,000.
b. The award was for a personal trip Savitsky took to Hong Kong along with
his wife.
31. Marriott's 1995 Awards Schedule listed the travel package Savitsky redeemed
as award code "X6."
a. It required a member to have 200,000 points.
b. This award authorized a member to stay seven nights at selected Marriott
Hotels in the world.
c. Provided for two round -trip coach tickets at selected destinations and on
selected dates with British Airways, Continental, Delta, Northwest, TWA
or US Air.
Savitskv, 95- 019 -C2
Page 10
32. The Insurance Department received a hotel confirmation addressed to Robert
Savitsky at the Offices of the Insurance Department at Strawberry Square in
Harrisburg, Pennsylvania, from the Hong Kong Marriott on December 28, 1992.
a. The hotel confirmation number was listed as 91496015.
b. The room was reserved on Thursday, December 24, 1992, and the arrival
status was guaranteed.
c. Savitsky was to arrive on Friday, January 8, 1993, and depart on Friday,
January 15, 1993.
33. The Accounting Department for Marriott's Guest Services, confirmed the
following costs of the award Robert Savitsky received:
a. The estimated nightly room charge at that time was $201.00 (US dollars)
plus a 10% service charge and a 5% tax. The seven night stay would
have cost $1,618.05.
(1) Savitsky paid the 15% taxes and charges out of his own pocket,
which amounted to $21 1.05.
(2) The total award Savitsky received for his stay at the hotel was
therefore $1,407.00.
b. The award included a certificate for two round trip airline tickets on
Northwest Airlines. The cost per round trip ticket according to
Northwest Airlines was $1,250.00 or a total of $2,500.00.
c. Total cost: $1,407.00
+ $2.500.00
$3,907.00
34. Savitsky's Record of Leave from the Insurance Department for 1993 reflects
that he was on annual leave from Monday, January 4, 1993, through Friday,
January 15, 1993, the period of time that he was scheduled to be in Hong
Kong.
35. Robert Savitsky filed a Statement of Financial Interests for the 1993 calendar
year which listed a gift he received from the Marriott Corporation.
Date Filed:
Calendar Year:
Occupation:
Gifts:
Source of Gift:
Value of Gift:
Reason for Gift:
04/12/94
1993
Insurance Company Examiner III
Marriott Corporation
Salt Lake City, Utah
Excess of $200.00
Marriott Honored Guest Program
36. Robert Savitsky filed a Code of Conduct Statement for the 1993 calendar year
which listed the gift he received from the Marriott Corporation.
Savitskv„ 95- 019 -C2
Page 11
a. It covered the period of January 1, 1993, through December 31, 1993.
Position /Title: Insurance Company Examiner III
Gifts: Marriott Honored Guest Award in excess of $ 100.00
Address: Marriott Corporation
Salt Lake City, Utah
b. The Code of Conduct Statement is a requirement for all employees under
the Governor's Jurisdiction.
37. On November 22, 1994, Robert Savitsky received a letter from Tracy Pontius,
Director for the Bureau of Administration with the Insurance Department.
a. The letter served as a written reprimand as a result of his acceptance of
a certificate from the Marriott Honored Guest Award Program in June,
1992, and the redemption of the certificate for a personal trip to Hong
Kong in 1993.
b. Savitsky was advised to refrain in the future from accepting and /or
redeeming credits, award certificates, bonus points, and gifts, except
those of nominal intrinsic value, and from otherwise participating in
similar promotional programs in connection with travel in his official
capacity as a Commonwealth employee. Failure to do so would result in
additional disciplinary action, including possible dismissal.
c. Savitsky accepted the Department's reprimand based on his
understanding that no further action would be taken.
38. Robert Savitsky confirmed that he redeemed an award from the Marriott
Corporation for a personal trip to Hong Kong.
39. Savitsky asserted that he was not aware he was not authorized to redeem the
award he received from the Marriott Corporation for points he had accumulated
while performing the duties of an Insurance Examiner.
a. Savitsky felt the Insurance Department had encouraged him to join the
Marriott Bonus Award Program.
b. Savitsky asserts that he was not aware of the existence of the State
Ethics Commission's Opinion in the matter of Stefanko, No. 90 -015, and
was thus unaware that his conduct was in violation of the State Ethics
Act.
40. Savitsky discussed the use and redemption of points which had been accrued
during Commonwealth travel with Insurance Department Examiner John Leddy.
41. Savitsky asserted there were other Insurance Department employees who had
utilized frequent flyer awards, but he was the only one being reprimanded.
a. Savitsky felt the Insurance Department was trying to fire him.
42. The Insurance Department never officially promulgated a policy specifically
addressing the issue of bonus award programs offered by hotels and airlines
Savitskv, 95- 019 -C2
Page 12
prior to said issue being addressed by Governor's Office of Administration in
Administrative Circular No. 95 -22 dated May 17, 1995.
43. Marriott's Honored Guest Awards Account Statement for Robert Savitsky
indicates that of the 200,000 points he accumulated for the award he received,
65,108 points were accumulated while performing the duties of Insurance
Company Examiner and during the time period of his examination of the
Pennsylvania National Casualty Mutual Insurance Company in Harrisburg,
Pennsylvania.
a. Savitsky would not have been able to redeem the Hong Kong trip during
the time period in question if he had not been able to accumulate points
through the use of his public position.
44. Robert Savitsky used the authority of his position to realize a private pecuniary
benefit in the amount of $3,907.00 when he accumulated points through a
program sponsored by the Marriott Corporation while on official Commonwealth
business and redeemed those points from the Marriott Corporation for a
personal trip to Hong Kong. (See also #39 and #42).
111. DISCUSSION:
At all times relevant to this matter, the Respondent, Robert Savitsky, hereinafter
Savitsky, has been a public employee subject to the provisions of the Public Official
and Employee Ethics Law ( "Ethics Law "), Act 9 of 1989, Pamphlet Law 26, 65 P.S.
§ 401, at deg
The issue is whether Robert Savitsky, as an Insurance Company Examiner 111,
violated Sections 3(a) (conflict provision) and 5(b) (FIS filing requirement) of Act 9 of
1989 by utilizing, and failing to report, bonus points earned while traveling as a
Commonwealth employee for free airfare and hotel lodging on a vacation for himself
and his spouse.
Pursuant to Section 3(a) of the Ethics Law, a public official /public employee is
prohibited from engaging in conduct that constitutes a 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 or
Savitskv, 95- 019 -C2
Page 13
65 P.S. §402.
facts.
his immediate family or a business with which he or a
member of his immediate family is associated.
Section 5(b)(6) of Act 9 of 1989 requires that every public official /public
employee and candidate list the name and address of the source and amount of any
gift valued in the aggregate of $200 or more and the circumstances of each gift.
Having noted the issues and applicable law, we shall now summarize the salient
Savitsky has been employed by the Pennsylvania Insurance Department since
1968 and is currently an Insurance Company Examiner III with responsibilities inter alia
of conducting examinations of insurance companies doing business in Pennsylvania.
The salary and expenses that an Insurance Examiner incurs in doing such examinations
are passed on to the insurance company by the Insurance Department. An Insurance
Company Examiner is required to do extensive travel with overnight stays.
One of the examinations in which Savitsky participated was as to the
Pennsylvania National Casualty Mutual Insurance Company from October 28, 1991
through April 28, 1992 with Savitsky being the Examiner in charge. For that
examination, Savitsky obtained lodging at a Marriott Hotel because he was in an
"overnight travel status" for that audit. Although an Insurance Examiner has the
option of paying for lodging by a Commonwealth hotel order, Commonwealth
corporate credit card, personal credit card, or cash, Savitsky paid for his lodging at the
Marriott through the use of a Marriott First Visa card for which Savitsky paid an annual
fee of $30. Savitsky is a member of the Marriott's Honored Guest Awards Program
where individuals can earn points by staying at Marriott Hotels and using the Marriott
Visa credit card. As of April, 1995, Savitsky had earned a total of 224,093 points
through his participation in the Marriott's program. Of that amount, 65,108 bonus
points were attributable to his stays relative to his work as an Insurance Company
Examiner for the Pennsylvania Insurance Department.
In January, 1993, Savitsky and his wife took a trip to Hong Kong by redeeming
200,000 bonus points which provided him with round -trip airfare valued at $2,500
and lodging valued at $1,407. On his Financial Interests Statement (FIS) form for the
calendar year 1993, as well as on the Governor's Code of Conduct form, Savitsky
listed the gift from the Marriott Corporation.
On November 22, 1994, Savitsky received a written reprimand from the
Administration Bureau within the Insurance Department resulting from his redemption
of bonus points from Marriott as to his Hong Kong trip in 1993. Savitsky accepted
the written reprimand but asserted that other Department employees utilized bonus
points from Commonwealth service and received no reprimands. This issue of bonus
points award programs was not addressed by the Governor's Office of Administration
until May 17, 1995 with the issuance of an administrative circular. Lastly, of the
$3,907 value that Savitsky received as to the round -trip airfare and lodging for his
Hong Kong vacation, only approximately one -third of the bonus points, or about
$1,300, was attributable to activities of Savitsky in Commonwealth service.
Having summarized the above relevant facts, we must now determine whether
the actions of Savitsky violated Sections 3(a) and 5(b) of Act 9 of 1989.
Savitskv, 95- 019 -C2
Page 14
In applying Section 3(a) of the Ethics Law to the instant matter, we find a
violation of that provision. In order to establish a violation, Section 3(a) requires a use
of the authority of office or confidential information by a public official /employee for
the private pecuniary benefit of himself, a member of his immediate family, or business
with which he or a member of his immediate family is associated. In this case, we
find a violation of Section 3(a) of Act 9 of 1989 by Savitsky when he utilized bonus
points accrued from Commonwealth service and redeemed those points for airfare and
lodging as to a private vacation to Hong Kong. There was a use of authority of office
by Savitsky in that the accrual of the bonus points from Marriott's Honored Guest
Awards Program related to his Commonwealth position as an Examiner in the
Pennsylvania Insurance Department. In this regard, we note that Savitsky chose his
personal Marriott Visa card to pay for the lodging rather than by Commonwealth credit
card or hotel voucher. That use of authority of office resulted in a private pecuniary
benefit in that the bonus points were redeemed for a trip to Hong Kong for which
Savitsky did not have to pay round -trip airfare or lodging. Lastly, the private pecuniary
benefit enured to both Savitsky and his wife who is a member of his immediate family
as that term is defined under Ethics Law. 65 P.S. §402.
Our decision in this case is consistent with our precedent which was first
annunciated in Stefanko, Opinion 90 -015, wherein we ruled:
Therefore, any frequent flyer credits or award certificates received
by or due the individual in connection with official travel, paid for by the
government agency by which he is employed, are due to that agency and
must be used for official travel only; the utilization for his own personal
travel is prohibited since such activity would be a private pecuniary
benefit obtained through the use of authority of office. Since this issue
is one of first impression, this opinion will have prospective application
from the date of its issuance.
1� at 5.
As to the FIS allegation, we find no violation in that the facts of record reflect
that Savitsky for his 1993 calendar year FIS listed the gift from the Marriott
Corporation. Since Savitsky made the necessary disclosure on the FIS, we find no
violation as to Section 5(b)(6) of the Ethics Law.
As to the above violation of Section 3(a) of Act 9 of 1989, Savitsky received
a private pecuniary benefit. By redeeming 200,000 bonus points, Savitsky received
a value of $3,907 for the Hong Kong vacation. However, only 65,108 bonus points
(approximately one - third) accrued as a result of Commonwealth service. Therefore,
only one -third of the value of the airfare and lodging is the private pecuniary benefit.
Through a Consent Agreement of the parties, Savitsky agrees to make a
payment of $1,300. Therefore, Savitsky is directed within thirty days of the date of
issuance of this Order to make payment in the amount of $1,300 to the Pennsylvania
Insurance Department through this Commission. Compliance with the foregoing will
result in the closure of this case with no further action. Non- compliance will result in
the institution of an order enforcement action.
Lastly, as noted, the parties have filed a Stipulation of Findings and a Consent
Agreement which sets forth a proposed resolution of the allegations. We believe that
Savitskv, 95- 019 -C2
Page 15
the consent agreement is the proper disposition for this case based upon our review
as reflected in the above analysis and the totality of the facts and circumstances.
IV. CONCLUSIONS OF LAW:
1 Robert Savitsky, as an Insurance Company Examiner 111, is a public employee
subject to the provisions of Act 9 of 1989.
2. Savitsky violated Section 3(a) of Act 9 of 1989 when he utilized bonus points
received in part as a result of Commonwealth service and redeemed for round -
trip airfare and lodging for a Hong Kong vacation for himself and his spouse.
3. Savitsky did not violate Section 5(b) of Act 9 of 1989 in that Savitsky included
a gift from the Marriott Corporation in his 1993 calendar year FIS.
In Re: Robert Savitsky
File Docket:
Date Decided:
Date Mailed:
ORDER NO. 1017 -2
BY THE COMMISSION,
95- 019 -C2
11/4/96
11/13/96
1. Robert Savitsky, as an Insurance Company Examiner III, violated Section 3(a)
of Act 9 of 1989 when he utilized bonus points received in part as a result of
Commonwealth service and redeemed for round -trip airfare and lodging for a
Hong Kong vacation for himself and his spouse.
2. Savitsky did not violate Section 5(b) of Act 9 of 1989 in that Savitsky included
a gift from the Marriott Corporation in his 1993 calendar year FIS.
3. Savitsky is directed within thirty days of the date of issuance (mailing) of this
Order to make payment in the amount of $ 1,300, made payable to the
Insurance Department of the Commonwealth of Pennsylvania but forwarded to
the State Ethics Commission. Compliance with the foregoing will result in the
closure of this case with no further action. Non - compliance will result in the
institution of an order enforcement action.
du E iguA.L..
DANEEN E. REESE, CHAIR