HomeMy WebLinkAbout116 PattersonMrs. Catherine F. Patterson
5107 Highland Avenue
Bethel Park, PA 15102
Re: #81 -94 -C
Dear Mrs. Patterson:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
May 10, 1982
No. 116
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 an appearance of a conflict of
interest under Act 170.
The individual allegations and findings on which our
conlusion is based are:
I. Allegation: That you are using your official position
as a school director to obtain personal- financial gain by
setting up an annuity program between Canada Life Assurance
Company for which you are an Assistant -Sales Manager, and
the Bethel Park Federation of Teachers, which is the Union
representing teachers in the district in which you are a
School Director.
Findings:
1. As a School Director, you are a public official subject
to the terms of Act 170.
2. Since January, 1981, you have been an Agent for Canada
Life Assurance Company.
3. In the late summer of 1981, you approached Dr. Edwin
Merritt, Superintendent, Bethel Park School District, and
were advised that there was no problem in your company being
approved to receive payroll deductions if the informal
policy of the administration, which required having ten
persons interested in the policy requesting authorization of
the company to receive deductions was met.
Mrs. Catherine F. Patterson Page 2
May 10, 1982
4. You met with James Galbraith, President of the Bethel
Park Federation of Teachers, and were later contacted by
Gerald Petracca, who had succeeded Mr. Galbraith as President
of the Teachers Federation. As a result of these meetings,
you did speak to the Union members about tax- sheltered-
annuity policies and Mr. Galbraith wrote to Mr. Frank
LaValle, director of Business Affairs for the School District,
endorsing Canada Life Assurance Company as an agent for
payroll - deducted -tax- sheltered annuities.
5. On September 23, 1981, the manager of Canada Life, T. G
Gillingham, wrote to Mr. LaValle asking that you be allowed
to assist the Bethel Park School District employees in
arranging for individual tax - sheltered annuities through the
payroll- deduction program; on November 19, 1981, Mr. Gillingham
again wrote and asked that this request be removed from the
agenda because of questions raised on whether you, as a
member of your School Board and the Assistant -Sales Manager
at Canada Life, should be the representative assigned to
that account.
6. On November 19, 1981, Mr. Richard T. Mays, counsel for
Canada Life, responded to two questions raised by Mr. Thomas
G. Gillingham, who asked "If the trustees are informed, in
advance, that one of their members is an agent with an
insurance company that sells tax - sheltered annuities, and
asked this individual to abstain from voting on the two
questions outlined above, (1) a vote by the trustees on
whether or not it would be in the best interest of the
School Board to enter this type of program; (2) a decision
on which insurance company to purchase the annuities from
for them and there should be no conflict of interest.
7. You had requested an Opinion from the Solicitor for the
School Board. He was preparing to request an Opinion of the
State Ethics. Commission when the Board became aware of this
complaint and deferred action pending our decision.
8. You have written some life- insurance policies on employees
of the School District but you have not made solicitations
for tax - sheltered - annuity policies offered by Canada Life.
You do not wish to become involved with the writing of
annuity policies and the company is expected to name another
person to handle these accounts should Canada Life be authorized
to receive payroll deductions.
9. The Board directed Mr. LaValle to handle the Canada Life
request through normal channels but because of questions
raised at the November Community Forum, the issue was deferred.
The administrative policy of making payroll deductions for
annuity policies is not part of the labor contract but was a
courtesy the Administration offered to teachers for many
years.
Mrs. Catherine F. Patterson
May 10, 1982 Page 3
10. Approval is normally given to insurance companies upon
request.
11. On March 25, 1982 you informed us that you were no
longer employed by the Canada Life Assurance Company.
Discussion: Section 3(a) of the Ethics Act prohibits a
public official or public employee from using his or her
office for financial gain; Section 3(c) prohibits a public
employee from contracting with his or her governmental body
for an amount over $500 unless the contract is awarded
through an open and public process.
Section 1 of the Act also requires that public officials
and public employees avoid the appearance of a conflict of
interest.
Your resignation from Canada Life Assurance and the
deferral of the insurance package by the School Board eliminated
the possibility that you would receive any actual financial
gain from these circumstances.
In addition, while with the Canada Life, you did
discuss the issue with the Superintendent of the Bethel Park
School District and were told there was no problem having
your Company approved to receive payroll deductions. It
appears that subsequent actions were taken by you in belief
there would be no violation of any law.
Although you met with officials and members of the
Union to discuss annuity policies from Canada Life and
payroll deductions for the members, have sold some insurance
to employees of the School District, and were originally
designated as the agent for Canada Life for any deductions
made by the School District, there is no evidence that you
have realized personal- financial gain through the use of
your public office or confidential information. Nor is
there any evidence that you have contracted with your
governmental body in violation of Section 3(c) of the Act.
In addition, the request for payroll deductions has been
deferred and the company will designate another person for
this contract. The Board's decision will be made through
an open- and - public process even though you are not involved.
Mrs. Catherine F. Patterson
May 10, 1982
Conclusion: You have not violated Sections 3(a) or 3(c) of
the Ethics Act. However, there was an appearance of a
conflict of interest when you met with the Federation of
School Teachers to discuss insurance while being a member of
the School Board which had authority to approve those arrange-
ments. In the future, you must abstain from Board decisions
in which you have a direct or indirect financial interest.
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 become avail-
able as a public document within 15 days unless you file
documentation with the Commission which justifies recon-
sideration and /or challenges pertinent factual findings.
During this 15 -day period, no one, including the Respondent
unless he waives his right to E this Order, may
violate this confidentiality by releasing, discussing or
circulating this Order.
Any person who violates
mission proceeding is guilty
fined not more than $1000 or
one year or both, see 65 P.S.
PJS /jc
Page 4
the confidentiality of a Com-
of a misdemeanor and shall be
imprisoned for not more than
409(e).
Sincerely,
au J S it
Chairm n