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HomeMy WebLinkAbout88-010 CowieMr. Donald W. cc a.e Auditor 565 Melande:c Street Johistown, PA 15905 Dear Mr. Ccw e: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG,•PENNSYLVANIA 17120 OPINION OF THE COMMISSION DATE DECIDED: December 6, 1988 DATE MAILED; December 15. 19RR__ 88• -010 Re: Conflict of Interest, Second Class Township Auditor, Claimed Refund of Township Paid Insurance Benefits for Which Restitution was Made, Amnesty, Participation as Auditor This o-oinion is iesued in response to your request of August 26, 1988. I. Issue: Whether unde the Ethics Act a township auditor who received township paid insurnnce benefits when he served as a nonworking 3upe :: sri3,r and made restitution of that financial gain is now entitled to a :e and of those benefits under the amnesty provision of Act 41 of 1988 and secondly whether he may participate in any matter as to said monies in his current position of township auditor. II. Factual Basis for Determination: You state that you were an elected supervisor in Upper Yoder Township, Cambria County, from 1982 through 1987 and that you are now currently an elected auditor in the same township. You then reference Cowie, Opinion 84 -010 and Cowie, Order 555, wherein this Commission. determined that your receipt of township paid insurance benefits as a nonworking supervisor was contrary to Section 3(a) of the Ethics Act. You assert that your payment was made under protest into an escrow account and was accepted by the township. You argue that the acceptance by this Commission of your payment "under protest" had the effect of allowing your case to remain open until the Governor signed legislation which would change the determination in Cowie, supra. Given the enactment of Act No. 41 of 1988 and in particular §515(c)(2)(3) of that Act coupled with your payment "under protest--- along with the escrow agreement" with the township, you express your Mr. DonfAld W. Cowie Page 2 helir:t thp't this Commission is now obligated to issue an opinia . as to wh.e : :her t7' monies paid by you amounting to $1,211.48, p'_ ss int res: to date, hould be returned to you or deposited into the Townsh.i_p's general fund. You further state that as an auditor you are required by the Second Class Township Code to ascertain the proper disposition of all township monies; however, given the history of ;L:i.; particular issue, you do not believe that you may make such Et det€n uination regarding the escrow account without an opinion fr_ this Comission. You pose two questions under the Ethics .Act: whether you are entitled to a return of the monies that you repeid to the Township for insurance benefits you received and secondly whether you Tray participate in the matter of this money in your caparicy 1 Township auditor. III. Discussion: an Auditor for Upper Yoder Township you are a public offic' °ri within the definition of that term as set forth in the Ethics Act as the Regulations of this Commission. 65 P.S. §402; 51 Pa. Cody As such, you are subject to the provisions of the Ethics Act and the restrictions therein are applicable to you. Section 3(a) of the Ethics Act provides: 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. 65 P.S. §403(a). Under Section 3(a) quoted above, this Commission has determined that use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak /McCutcheon, Orders No. 128, 129, affirmed McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2c 283 (1983); Yacobet, Order No. 412 -R, affirmed Yacobet v. State Ethics Commission, Pa. Commw. Ct. , 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own interests; Koslow, Order 49g -R, affirmed Koslow v. State Ethics Commission, Pa. Commw. Ct. , 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. Mr. Donald W. Cowie Page 3 In determining whether you are entitled to a refund of the monies that you returned to Upper Yoder Township, certain factual matters should first be clarified. Although the record does establish that you made a voluntary repayment of the township paid insurance benefits, such repayment was not made under protest with this Commission. A reading of Cowie, Opinion 84 -010, Cowie, Order 555 and your letter of August 14, 1986 clearly establishes that your payment was voluntary but not under protest. As to your August 6, 1986 letter to the township, it does contain the following notation in the second paragraph: "This total payment is being made voluntarily, but without prejudice to my right to demand repayment should the Pennsylvania State General Assembly enact legislation declaring such coverage to be proper and that it be retroactive back to include all or part of the above dates, or should the Courts reverse the present stance of the Pennsylvania State Ethics Commission." Although your payment through the Commission to the township wal "voluntary" and complete, you did make the payment to the township subject to the above qualification. Regardless of the legal implication of the second paragraph of your letter of August 6, 1986 to Upper Yoder Township, the Commonwealth Court of Pennsylvania has already decided a case on similar facts concerning a nonworking township supervisor who received township paid insurance benefits between the period of January 1,` 1959 and March 30, 1985. In the case of Fee, Order 476 -R, this Commission determined that Mr. Fee as a nonworking second class township supervisor was not entitled to township paid insurance benefits and directed Mr. Fee to return those benefits to the township. Mr. Fee refused to comply with that order, that is, he refused to make repayment as to the township paid insurance benefits. Thereafter, the Attorney General of Pennsylvania instituted suit against Mr. Fee seeking Commonwealth Court to issue an order directing Mr. Fee to make repayment to the township. During the pendency of the foregoing action, Act No. 41 of 1988 was signed into law by the Governor on March 30, 1988. Although the issue of Act No. 41 was presented to Commonwealth Court, it ruled that Mr. Fee was required to make restitution of the township paid insurance benefits he received. In addressing Act No. 41, the Court stated the following in footnote 1 of its Opinion: "We are aware that the Act No. 41 - was signed by /Ora Governor on March 30, 1988. However, this law dces not apply to the instant matter because the factual events of this case occurred before Act No 41 Mr. Donal" W. Cowie Page 4 became effective on March 30, 1988." Commonwealth of Pennsylvania v. James Fee, , Pa. Commw. Ct. 540 A.2d 1385, 1386 (1988). Thus, Commonwealth Court has ruled that even though the "amnesty bill" for second class township supervisors was passed during the pendency of an action to seek restitution of improperly received insurance benefits by a township supervisor, Act No. 41 had no application and the township supervisor was therefore required to make restitution. The foregoing case was appealed to the Pennsylvania Supreme Court which has granted allocatur at 1 W.D. Appeal Docket 88. In the instant matter, your argument is by far weaker • than in the Fee case since your case was concluded by this Commission upon issuance of Cowie, Opinion and Order supra; as to Mr. Fee, his cass arguably could be considered as current in light of the enforceme:it action in Commonwealth Court. Additionally, 1 Pa. C.S.A. 51926 provides: "No statute shall construed to be retroactive unless clearly and manifestly so intended by the General Assembly." :pct 41 of 1988 is not retroactive in its terms and does not apply to past decisions of this Commission which ordered restitution of Improperly received township insurance benefits. Section 3 of Act 41, supra, provides that it shall take effect "immediately ", not retroactively. Based upon the foregoing, you would not be entitled under Section 3(a) of the Ethics Act to a refund of the restitution of the insurance benefits that you have made. Turning to the second matter as to your participation as an auditor as to these township monies, this Commission has made numeroue determinations that a public official /employee may not participate in a matter wherein he has a private or personal interest. See Goodman, Opinion 88 -001. In light of the fact that you had an interest in these benefits when you made restitution to the township, the Ethics Act would not prohibit you as a township auditor in performing you.*_ audit review functions of the township books. However, in the event the monies in question in any way become an audit issue, you should either abstain as to that part of the audit or seek additional advice of this Commission. Lastly, the propriety of your conduct has only been addressed under the Ethics Act. Mr. Donald W. Cowie Page 5 IV. Conclusion: As a township auditor for Upper Yoder Township you are a public: official subject to the provisions of the Ethics Act. Under Section 3(a) of the Ethics Act you are not entitled to a refund of township paid insurance benefits which you repaid to Upper Yoder Township. Further, as a township auditor, the Ethics Act would not prohibit you as a township auditor in performing your audit review functions of the township books. However, in the event the monies in question in any way become an audit issue, you should either abstain as to that part of the audit or seek additional advice of this Commission. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. 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 evidence of the advice given. such. This letter is a public record and will be made available ri Finally, any person may request within 15 days of service of the opinion that the Commission reconsider its opinion. The person requesting reconsideration should present a detailed explanation setting forth the reasons why the opinion requires reconsideration. By the Commission, (4o3ors- Joseph W. Marshall, III Chairman