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HomeMy WebLinkAbout85-010 DomalakesSTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 June 11, 1985 OPINION OF THE COMMISSION Paul Domalakes, Esquire 85 -010 Rubright, Domalakes, Troy & Miller Law Building, P.O. Box 9 Frackville, PA 17931 -0009 Re: Borough Tax Collector; Participation in Group Hospitalization Program Dear Mr. Domalakes: This responds to your letter of February 18, 1985, wherein you seek the advice of the State Ethics Commission. I. Issue: Whether, within the purview of the State Ethics Act, a borough tax collector may participate in a borough group hospitalization program if is paid for by the borough. II. Facts: You are the solicitor for the Borough of St. Clair, Schuylkill County, Pennsylvania. In that capacity you have been requested by the borough counci"? to seek the advice of the State Ethics Commission regarding the above question. You indicate in your letter that some of the questions raised are answered by implication in the Commissions' opinion in Krane, 84 -001. You seek further clarification of these areas, however, in relation to the borough. III. Discussion: At the outset, it must be noted that as an elected official of the borough, the borough tax collector is a "public official" as that term is defined in the State Ethics Act. Accordingly, the conduct of such an official must conform to the requirements of the State Ethics Act. While you note the Commissions' opinion in Krane, 84 -001 as instructive in this matter, the Commission has more recently considered the questions presented herein. Opinion 84 -012, Davis. In Davis, the Commission considered whether the members of a borough council and a borough mayor may, within the purview of the Ethics Act, participate in borough paid for insurance programs. The decision in Davis, focused upon Section 3(a) of the State Ethics Act which provides that: Section 3. Restricted activities. (a) No public official or public employee shall use his public office or any confidential information received Paul Domalakes, Esq. June 11, 19 Page 2 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. 65 P.S. 403(a) . In Davis the Commission concluded that the council members and the mayor could not utilize their official positions to secure for themselves the insurance coverage in that their compensation was statutorily fixed and, therefore, such coverage would constitute prohibited financial gain pursuant to the aforecited section of the Ethics Act as it would be in excess of that provided for by law. This result was occasioned by two specific factors. First, the council and the mayor would be acting in their official positions to obtain the insurance coverage. Secondly, the compensation of council members and the mayor is speci`ically fixed by the Borough Code. In contrast to this situation is the matter at hand. The tax collector has no authority to fix compensation for himself or otherwise expend funds or contract on behalf of the borough. The duties of the tax collector are specifically set forth in the Borough Code. Generally these duties include that collection of all state, county, borough, school institution district, and other taxes levied within the borough. 53 P.S. §46086 Additionally, the compensation of one who serves as a borough tax collector is to be fixed in accordance with the Local Tax Collection Law which provides that: The tax collector in boroughs and townships of the second class shall receive, as compensation for the collection of county, institution district, borough and township taxes, salary, wages or a commission on all such taxes to be fixed by the respective taxing authorities levying such taxes, not exceeding five per cent of the amount collected. 72 P.S. §5511.35. See also; In re Ordinance No. 2.18 of the Borough of Westmont 37 Mun L.R. 298, (Cambria 1946). This compensation is to be fixed by the borough council. 57 P.S. §4606(6). It is clear that the borough tax collector cannot fix the compensation that he is to receive. As previously noted, in Davis the Commission ruled that this element was in part the reason §403(a) of the Ethic Act was operational. An additional question that is raised in relation to that section is whether the knowing acceptance of financial gain, other than compensation provided by law, is a use of public office in violation of the State Ethics Act. While this issue is one of interest, we need not decide that question in the context of this matter as we believe that there is another section of the Ethics Act which is controlling. Paul Domalakes, Esq. June 11, 1985 Page 3 The Ethics Commission may address areas of possible conflict on the part of public officials and public employees. 65 P.S. 403(d). The Commission has previously ruled that this section would operate to prevent such an official or employee from representing interests that are adverse to the interest represented in an official capacity, see Allen, 79 -024; Fritzinger, 80 -008. Additionally, such a conflict of interest would arise if the public official or employee attempted to serve in incompatible offices or positions, We also believe that Section 403(d) would prevent a public official from knowingly accepting in his public position, as part of that position, compensation in excess of that provided for by law. Such a knowing acceptance of compensation to which one is not entitled would present a conflict between the official or employee's personal interests and that of his public position wherein he is to serve the interest of the public. Strong support for this concept can be found in Section 1 of the Ethics Act as well as in judicial precedent. See, All�eg�henyy County v. Grier, 179 Pa. 639, (1897), Warminister Township Appeal, X15& d 99, (19/1). The Ethics Act was enacted based upon the concept that public office i., a public trust and that any effort to realize personal financial gain throug such public office, other than compensation provided for by law, is a violation of that trust. 65 P.S. §401. We believe that the Act must be liberally construed, and when a public official accepts compensation in excess of that provided for by law, even if he does not technically award such to himself, the spirit of the law, and the public trust has been violated. With this general principle in mind, we must now turn to the issue of whether the borough tax collector may receive these insurance benefits at the- expense of the borough that is whether such is in excess of the compensation provided for by law. The Borough Code on its face appears to allow the borough purchase of insurance only for employees. If this is in fact the status of the law, then any insurance purchased at borough expense for a borough official would be compensation or financial gain in excess of that provided for by law. First, the Commission has previously ruled that insurance coverage of the type herein involved would constitute financial gain. Krane, 84 -001, Cowie, 84 -010, Davis 84 -012. The next question, of course, is whether the gain would be in excess of that provided by law. Generally the Borough Code provides for the purchase of life, health and accident insurance for borough "employees" but does not include any provision for insurance for borough officials. 53 P.S. §46202(37) It is important to note that the Insurance Code originally provided that a borough could purchase such insurance for its elected and Paul Domalakes, Esq. June 11, 1985 Page 4 appointed officials. See 40 P.S. §535. The Borough Code, however, when enacted, became the complete and exclusive system for the regulation of boroughs and as such the aforecited Insurance Code provision was repealed insofar as it pertains to boroughs. See 53 P.S. 548501. While it has been argued that subsequent amendments to the Insurance Code have "revived" the code's application to municipalities we do not find these arguments pursuasive. (See Krane, 84 -001, for an analysis of our position in relation to this issue). As such the only question is whether the provision of the Borougle Code allows the borough to purchase these benefits for the borough officials. We believe that it does not. The Borough Code provisions regarding insurance specifically reference only to employees, while in other subparts of the same section it specifically mentions officers. 53 P.S. §46202(1). Additionally, in 1975 the Borough Code was amended to provide for the purchase of liability insurance for "officers and employees," once again creating a distinction between these ositions. See Act of 1975 June 26, P.L. No. 15, §1, repealed 53 P.S. (1)(37.1). In light of these facts, we believe that the Borough Code does not provide for the purchase of this insurance for borough officials. The acceptance of such coverage would, therefore, result in the receipt of compensation in excess of that provided for by law. If knowingly accepted, we believe that there is a conflict of interest between the personal and public interests of such an official. Such a conflict is prohibited by Section 403(d) of the Ethics Act. We do not believe that a public official may accept, at the public's expense, compensation to which he knows or has reason to know he is not entitled. With regard to your second question, the Commission has issued prior advices that indicate that even if the group insurance coverage could not be obtained by a particular official at the expense of the borough, such officials may nevertheless participate in such programs at their own expense. See Musto, 84 -583; Davis, 84 -012. IV. Conclusion: A public official, such as a borough tax collector, may not as part of his public position, accept financial gain or compensation for such public service to which he is not entitled. The Borough Code only allows the purchase at borough expense of medical health and life insurance for borough employees and not borough officials. We believe that the acceptance of such compensation to which one is not entitled gain obtained would create a conflict between the personal and public interests in violation of §403(d) of the Ethics Act. The borough tax collector may participate, at his own expense, in the borough's group insurance programs, Paul Domalakes, Esquire June 11, 1985 Page 5 Pursuant to Section 7(9)(i), this opinion is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any civil or criminal proceeding, providing the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance of the advice given. This letter is a public record and will be nude available as such. Finally, any person may request within 15 days of service of the opinion that the Commission reconsider its opinion. The person requesting reconside- ration should present a detailed explanation setting forth the reasons why the opinion requires reconsideration. JJC /sfb By the Commission, o Dr. Leon L. Haley Cr Vice- Chairman