HomeMy WebLinkAbout167 DobiesMr. Stanley Dobies
c/o Joseph P. Troy, Esq.
Law Building
P. 0. Box 9
Frackville, PA 17931 -0009
Re: #82 -23 -C
Dear Mr. Dobies:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 167
December 28, 1982
The State Ethics Commission has received a complaint regarding you and a
possible violation of Act 170 of 1978. The Commission has now completed its
investigation into these allegations and finds a violation of the Ethics
Act and an appearance of a conflict with the public trust.
are:
The individual allegations and findings on which our conclusion is based
I. Allegation: That as a Supervisor in Blythe Township, you sold or placed
policies of insurance without an open and public process for the Township with
your own Insurance Company (Dobies Insurance Company) from 1979 to present and
that you realized 3 -4% commissions on these policies.
A. Findings:
1. You are a supervisor in Blythe Township (hereinafter, the Township) and as
such are a public official subject to the Ethics Act.
2. Prior to the effective date of the Ethics Act (January 1, 1979) you owned
and operated an insurance agency known as Dobies Insurance Company
(hereinafter, Dobies Insurance).
3. On September 2, 1971, you sold Dobies Insurance to the Holden Insurance
Company (hereinafter, Holden).
draft - Dobies, Page 2
4. Prior to the sale of Dobies Insurance to Holden, the Township had placed
or contracted with Dobies Insurance for various insurance policies for the
coverage of Township risks /liabilitites.
a. These contracts were made without reference to any open and public or
bid process but even subsequent to January 1, 1979 were renewed when they
came due.
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December 28, 1982
b. As a Supervisor, on occasion after January 1, 1979, you voted to pay
invoices or bills submitted by Holden Insurance relating to these policies of
the Township.
5. As part of the contract of sale between Dobies Insurance and Holden, the
policies of the Township, referenced in No. 4 above, were transferred to
Holden and you were authorized to receive 4% of the premium cost as an
administrative fee for these accounts.
a. You currently operate as an agent /salesman for Holden and receive a 4%
administrative fee on any new insurance you write for them.
b. The 4% fee paid to you relating to the Township policies has been
discontinued as of January 1, 1982.
c. Holden continues to provide various insurance coverages to the Township,
but there is no evidence that after September 2, 1971 you wrote or sold said
policies or received any administrative fees other than those set forth
above.
d. As a Supervisor you did at various times after September 2, 1971 vote to
pay invoices or bills submitted by Holden relating to the policies of
insurance Holden wrote for the Township.
6. Your Financial Interest Statement filed and dated February 5, 1981
reflects the "John J. Holden Insurance Agency" as a source of income in excess
of $500.00.
B. Discussion: As a public official your conduct must conform to the
requirements of the Ethics Act. The most pertinent provison of the Ethics
Act in this case is Section 3(c) which states:
No public official or public employee or a member of his
immediate family or any business in which the person or a
member of the person's immediate family is a director,
officer, owner or holder of stock exceeding 5% of the
equity at fair market value of the business shall enter
into any contract valued at $500 or more with a
governmental body unless the contract has been awarded
through an open and public process, including prior public
notice and subsequent public disclosure of all proposals
considered and contracts awarded. Any contract made in
violation of this subsection shalll be voidable by a
ccourt of competent jurisdiction if the suit is commended
within 90 days of making of the contract. 65 P.S 403(c).
Under this provision any contract between the governmental body with
which you were associated (the Township) and your business (Dobies Insurance)
would be subject to the open and public requirement if in excess of $500.
However, after the effective date of the Ethics Act (January 1, 1979) only
Holden, not Dobies Insurance, held such contracts with the Township. Those
contracts made between Holden and the Township, see No. 5 above, are not
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December 28, 1982
subject to the same requirements of Section 3(c) because you are not a
director, owner or holder of stock in Holden of 5% or more of the equity of
Holden. Thus, no open and public process would be required as to contracts
between Holden and the Township made after September 2, 1971. No violation of
Section 3(c) of the Ethics Act exists under these circumstances.
We must comment, however, on this case in light of Section 1 of the
Ethics Act which requires that public officials must insure that their
personal financial interests present no appearance of a conflict with the
public trust. We comment particularly with respect to your participation and
voting to pay bills submitted by your new employer /agency - Holden - after
their purchase or acquisition of the Township's policies from you on
September 2, 1971 and after the effective date of the Ethics Act (January 1,
1979). In order to assure the public that your financial interests and the
public's interests were properly separated, you should have abstained from
voting to renew or award these policies to Holden and to refrain from voting
to pay invoices relating to these policies where such payment was tantamount
to renewing or awarding these renewals to Holden. After the renewal or
contract is made, you may vote to pay standard bills which are undisputed.
We raise the abstention requirement as applicable prospectively only,
and as a guide for your future conduct so long as you remain an employee of
Holden, particularly because the payments of a 4% fee relating to these
policies has been discontinued as of January 1, 1982. See Knox, 81 -009.
C. Conclusion: There is no violation of Section 3(c) of the Ethics Act in
the circumstances presented here. Your actions in voting to renew policies
with Holden or to pay invoices which were tantamount to renewal of these
policies, particularly during the period 1979 to 1982 when you were receiving
a commission from these policies violated Section 3(a) of the Ethics Act and
gave rise to an appearance of a conflict between your financial interests and
the public trust. Given that the payment of these commissions has now ceased,
however, we will take no further action in relation to this violation.
However, in order to conform with the requirements of Section 3(a) and to
avoid the appearance of a conflict between your financial interests and the
public trust, you should, in the future, abstain from participating, including
voting, on the Township's future decisions to contract with or renew insurance
policies placed with your employer, the Holden Agency.
II. Allegation: That as Supervisor, you are in a position to and did vote to
appoint members to the Water Board and you were, in turn, retained as
Manager of the Water Board and then had the Water Company place all of its
insurance policies through the Dobies Insurance Company (later purchased by
the Holden Insurance Company) resulting in commissions to yourself.
A. Findings: In addition to the Findings made above, which are incorporated
herein by reference, we make the following findings:
7. Holden currently writes contracts of insurance with the Water Company, ie.
the Municipal Authority of Blythe Township hereinafter, the Water Board.
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December 28, 1982
8. a. Prior to Holden's purchase of Dobies Insurance (1971), the Water Board
had contracts of insurance with Dobies Insurance and upon the sale of Dobies
Insurance to Holden these contracts were transferred to Holden and renewed
upon expiration.
b. The Water Board's contracts with Dobies Insurance and Holden were not
made following an open and public process but were renewed, even after January
1, 1979, when they came due.
9. a. You served as manager of the Water Board from 1961 until April 15,
1982 at which time you retired.
b. As manager, you were responsible for the over -all daily operations of
the Water Company.
10. There is evidence that you received a commission or admininistrative fee
of 4% on the policies between the Water Board and Holden written after January
1, 1979 up to January 1, 1982.
11. The Supervisors of the Township are authorized to and do appoint members
to the Water Board.
a. As a Supervisor after January 1, 1979, you voted to appoint Thomas Doyne
to the Water Board (January 1, 1980); to re- appoint William Taylor to the
Board (January 5, 1981); and to appoint William Taylor to the Board
(October 4, 1979).
b. There is no evidence that there was any understanding between you and
Doyne and /or Taylor that your official conduct in voting to appoint these
persons to the Water Board was influenced by or made upon or presumption that
you would continue your employment as manager of the Water Board.
B. Discussion: For the same reasons detailed above in Allegation I, we find
no fault with the lack of an open and public process as to the contracts
vis -a -vis between Holden and the Water Board. In relation to the assertion
that your vote as a Supervisor to appoint members to the Water Board was given
on the understanding that you would be retained by your appointees as manager
of the Water Board, the lack of evidence to support this assertion demands it
be dismissed.
However, in relation to your role as manager of the Water Board, we
assume you had the authority to make recommendations to the Board regarding
the placement or renewal of insurance policies with your employer, Holden,
after January 1, 1979. If such authority existed and was exercised, you
should have, as discussed above, refrained from making such a recommendation
on renewal or payment of invoices which were tantamount to renewal in order to
avoid the appearance of any conflict between your financial interests and the
public trust.
Stanley Dobies Page 5
December 28, 1982
There is evidence that the renewal or placement of these policies with
Holden by the Water Board would result in your continuing receipt of a
commission or administrative fee. However, because that receipt of a
commission terminated as of January 1, 1982 and because of the extent of your
participation in recommending that these placements be made, policies be
renewed or invoices paid is unclear, no further finding of a violation of
Section 3(a) of the Ethics Act would be warranted. This ruling is appropriate
because you are no longer manager of the Water Board and you are not in a
position to make any further recommendations regarding the future placement or
renewal of these policies.
C. Conclusion: Your votes to appoint Water Board members did not violate
Section 3(b) of the Ethics Act. The fact that the Water Board contracts for
insurance or renewals of same with Holden to which you had sold Dobies
Insurance Company in 1971 were made without an open and public process, does
not violate Section 3(c) of the Ethics Act. Although you may have been in a
position to recommend the renewal of these policies between the Water Board
and Holden and may have received commissions relating to same, those
commissions ended as of January 1, 1982 and your service as manager of the
Water Board ended April 15, 1982. Given these facts, we will take no
further action in relation to any role which you played in recommending these
placements or renewals as those may have benefitted your own interests in
possible contravention of Section 3(a) of the Ethics Act and Section 1 of the
Ethics Act.
Our files in this case will remain confidential in accordance with
Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is
final and will be made available as a public document 15 days after service
unless you file documentation with the Commission which justifies
reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code
2.38. During this 15 -day period, no one, including the Respondent unless he
waives his right to challenge thisUrder, may violate this confidentiality by
releasing, discussing or circulating this Order.
Any person who violates the confidentiality of a Commission proceeding is
guilty of a misdemeanor and shall be fined not more than $1000 or imprisoned
for not more than one year or both, see 65 P.S. 409(e).
PJS /jc
Sincerely,
-Paul
J.(
Chairman