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HomeMy WebLinkAbout325 GlovaMr. Eugene Glova c/o Richard J. Green, Esq. 305 Franklin Street Johnstown, PA 15901 Re: No. 82 -85 -C Dear Mr. Glova: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION September 6, 1984 Order No. 325 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. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That as a supervisor in Upper Yoder Township you acted as a sales representative for Colonial Life & Accident Insurance Company and participated in presentations to the township and township employees designed to sell disability insurance and to convince the township to authorize same for payroll deduction purposes as well as approaching township employees about obtaining such coverage. These actions may violate Section 3(b) or 3(a) of the Ethics Act, 65 P.S. 403(b) and (a) respectively. A. Findings: 1. You served as a Supervisor in Upper Yoder Township hereinafter the Township and as such are subject to the terms and provisions of the Ethics Act. You began serving as Township Supervisor in January, 1978 and left office in January, 1984. 2. You became a licensed agent with Colonial Life and Accident Insurance Company, Columbia, S.C. on September 9, 1978 and remained an agent for Colonial until May, 1982. 3. Minutes or records of the Upper Yoder Township Supervisors' Meetings confirm the following in regard to the Colonial Life and Accident Insurance Company, hereinafter C.L.A. and insurance coverage in general: Eugene Glova Page 2 a. 2/15/79 Minutes - G. Philip Hylen, Regional Manager, C.L.A., presents a plan for supplemental insurance disability plan for township employees when injured on or off the job. The plan would be available through payroll deduction at a cost of $3.12 per week per employee. No definite action taken by the supervisors. You were present at this meeting. b. 8/2/79 Minutes - You report that Workmen's Compensation insurance coverage increased by $6,900 over the past fiscal year ending July 1, 1979 due to excessive claims for the years 1975, 1976, 1977 and you request a breakdown of the claims. c. 10/15/79 Minutes - Harry Wilson, Workmen's Compensation Agent, C. L.A., presents a plan to the Board of Supervisors where the Township could save money on Workmen's Compensation coverage. Wilson requests permission to talk to the supervisors three months prior to expiration of policy. No decision reached. d. 11/15/79 Minutes - Harry Wilson appears before the supervisors to inform of the various rating programs available under Workmen's Compensation. Motion by Supervisor Gillen, seconded by Supervisor Hunt that C.L.A. be granted permission to make programs available to township employees through a payroll deduction. You abstained from voting. e. 11/6/80 Minutes - Letter received from Bernard Martin notifying the supervisors that AFSCME is prepared to begin negotiations for wages and health and welfare benefits for the two bargaining units in the Township, both subject to re- opener after January 1, 1981. f. 2/19/81 Minutes - Executive Session at 5:32 p.m. relative to AFSCME contracts with Bernard Martin and Sylvester Mucardelli. Open meeting reconvened 5:52 p.m. Insurance disability income plan was discussed. 4/16/81 Minutes - (1) You commented regarding negotiated road contract which included an insurance package through C.L.A. and the minutes reflect you represented C.L.A. by presenting an insurance program to Township street workers. (2) The minutes further reflect that while the Solicitor Eckel had previously ruled you could handle C.L.A. insurance proposals to the Township or Township workers, he had now reversed that ruling. The basis of this new conclusion was the Second Class Township Code, not the Ethics Act, and the fact that you had participated in making the original presentation to the Township /workers on behalf of C.L.A. (3) You questioned the Solicitor's opinion if you would be willing to bow out, have another agent write the coverage, receive no compensation, publicly state he is a licensed agent for the company and abstain from voting, but you stated you would abide by the Solicitor's ruling. g- September 6, 1984 Eugene Glova Page 3 September 6, 1984 h. 5/7/81 - Supplemental agreements to the clerical and maintenance workers' contracts were signed effective May 1, 1981 the employer agreed to contribute on behalf of each employee the amount of 545 each month to the Union Disability Income Fund, the "Fund" for the purpose of establishing and maintaining an Insurance Income Protection Plan and effective April 1, 1982, the Township • contribution to this Fund would be increased to $52. i. Agreement between the Township and AFSCME mentioned above was signed by all Township Supervisors, including you. 4. You made the necessary arrangements to have Mr. Hylen and Mr. Wilson placed on the agenda of the Township meetings outlined above at No. 3, a, c and d. 5. On a business card attached to correspondence from the Township to C.L.A. dated 11/16/79 you are listed as "Special Representative" for C.L.A. 6. a. In November, 1979, you assisted Harry Wilson in making presentations to Township employees in an effort to sign a sufficient number of employees up to a plan with C.L.A. to qualify for group coverage for accident and disability. b. Police and road department crew members were specifically approached by you. c. However, no group plan was sold to these employees at this time because you and Mr. Wilson were unsuccessful in signing up the minimum number of employees needed to qualify for group coverage. 7. You continued to attempt to provide date to Township employees or their representatives on the C.L.A. insurance coverage available as follows. a. Prior to Township - AFSCME contract negotiations early in 1981, see No. 3, e and f above, you provided information regarding C.L.A.'s disability income protection plans to David Hornick, a member of the Township workers' union negotiating team. b. During the initial negotiation period with AFSCME, the union representing the road and clerical workers, you assisted C.L.A. Regional Manager Philip Hylen in making a presentation of the C.L.A. Income Disability Plan to union officials Bernard Martin and James Meyers at the union offices located at Duncansville, PA. c. Subsequent to this Glova -Hylen presentation, AFSCME representative Bernard Martin decided to include the C.L.A. Insurance Income Protection Plan as part of the Township clerical and maintenance workers labor demands for the 1981 contract. Eugene Glova Page 4 September 6, 1984 d. During the Township /Union negotiating workshops and bargaining sessions, you made presentations regarding the C.L.A. plan and these presentations included explaining the program and its benefits as well as working up a cost per month per employee for C.L.A. coverage. You spoke with each member of the road crew and passed out pamphlets and answered questions during these presentations. 8. Although not recorded in the Minutes of the Township meeting (No. 3 above), a verbal agreement was reached by the Supervisors to have C.L.A. benefits included as part of the labor agreement being negotiated with the clerical and maintenance workers. a. However, because Solicitor Eckel questioned your actions with respect to "selling" this plan, see No. 3(g)(2) above, the contract could not be finalized to include the Township providing C.L.A. benefits to these workers as negotiated. b. An agreement was then reached between the Supervisors and the union whereby the Township would deposit an amount of money for each employee into an account with the union. AFSCME would then purchase an accident and disability plan of the Union's choice. The amount of money negotiated to be deposited was determined by you computed from and based upon the C.L.A. plan. c. Neither the Township nor the Union (AFSCME) solicited quotations or submissions from insurance companies other than C.L.A. during the process of negotiation or afterward. d. As a result of the process described herein, Article XVIII of the Labor Agreement eventually signed between AFSCME and the Township provided for payments to the Union Fund of $45 and $52 as set forth in No. 3(h) above. 9. AFSCME purchased the insurance disability plan from C.L.A. in May, 1981. a. You were listed as C.L.A.'s representative on the premium invoice sent by C.L.A. to the Union until June, 1982 when Gene Martin's name appeared as representative. b. The original coverage included life insurance and accident disability policies. c. The coverage was expanded in December, 1981 to include a sickness policy. 10. Since May, 1981 and each month thereafter until February, 1984, C.L.A. has sent a premium invoice to AFSCME. The premiums set and payments expected list the following coverages: Eugene Glova Page 5 September 6, 1984 a. From May, 1981 through November, 1981 - Life Insurance - 520 monthly premium per employee except 522.32 for Ethel Hockensmith, Accident Insurance - monthly premium varied from 512.50 to 521 Total monthly premium 5252. b. December, 1981 - one new employee added to increase total premium to 5293.82. Sickness policy added with increase of 5104.50. Total premium increased to $398.32. c. June, 1982 - Total premium increased to 5414.32 due to addition of sickness policy (516 per month) for Robert Kasper. d. Total premium due from June, 1982 to present -- 5414.32. 11. Township records regarding payments to AFSCME attributable to the Fund reveal the following: a. From May 8, 1981 through November, 1981 a check in an amount of $315 drawn on the Township General Fund was sent to AFSCME (545 x 7 employees). b. December 3, 1981, the check was increased to 5360 to cover an additional employee (545). c. April 1, 1982, the monthly check was increased to 5416 ($52 x 8 employees). d. As of January 25, 1984 the Union's Counsel advised the Township that the indirect payment of premiums for insurance provided by C.L.A. by the Township to C.L.A. through the Union violated AFSCME's Financial Standards Code and must be discontinued. As of February, 1984 the Township was being billed and paying premiums directly to C.L.A. for this insurance for these Township employees. 12. Documents you provided and verified by Dave Dalton, Regional Manager of C.L.A., disclose: a. As a result of the sale of these life insurance and disability policies to Township employees, you obtained 5720.62 as a commission. b. The sickness policy added as rider to the original policy in December, 1981 (see No. 9, c, above) resulted in a 5250.80 commission payable and paid to you. c. No renewal premiums or commissions were paid or are expected to be paid to you as a result of these policies. Eugene Glova Page 6 September 6, 1984 13. Dave Dalton, C.L.A. Regional Manager, (See No. 12 above) states that: a. Premiums for this plan were unusually high due mainly to types of coverage written by you. b. Typical life insurance premiums for similar group plans vary between $6 and $12 per month, whereas the premiums associated with the life insurance coverage provided as described above was $20 per month. c. Policies for Class (3) Groups usually include a combination of two of three policies; life, accident, sickness, not all three. d. Typical commissions for C.L.A. agents writing similar plans is not more than $400 whereas you were paid commissions totalling $971.42 (See No. 12 a, and b above) . 14. Your employment or association with C.L.A. ended in May, 1982 and your license to sell insurance for C.L.A. expired in November, 1982. B. Discussion: As a Township Supervisor you were a "public official" within the meaning of the Ethics Act. See 65 P.S. 402. As such your conduct must conform to the requirements of the Ethics Act. The provisions of the Ethics Act most applicable to this case are reprinted below for ease of reference: Section 1. Purpose. The Legislature hereby declares that public office is a public trust and that any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust. In order to strengthen the faith and confidence of the people of the State in their government, the Legislature further declares that the people have a right to be assured that the financial interests of holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this act shall be liberally construed to promote complete disclosure. 65 P.S. 401. Eugene Glova Page 7 Section 3. Restricted activities. September 6, 1984 (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). (b) No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business with which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, official action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b) . Reviewing your conduct and based upon the facts as found above, we conclude that your conduct in soliciting the business for C.L.A. in the manner outlined above and in receiving commissions as a result of these sales (See No. 12, above) you used your public office to realize personal financial gain in violation of Section 3(a) of the Ethics Act. Your activities in this entire solicitation process are suspect. You have, in our opinion, the right to attempt to sell these policies to the Township employees, but your presentations and approaches here represented undue pressure upon the Township workers. This approach coupled with your assertion that you would not receive a commission from this process -- which, in fact, was untrue -- indicates you have used the "weight" and power of your public office to your personal, financial advantage. We have previously ruled that a School Director who met with District employees and union members to authorize payroll deductions for insurance policies the Director was selling, constituted an appearance of a conflict under Section 1 of the Ethics Act. We found no violation of Section 3(a) in that case because there was no evidence of financial gain to the Director as a result of the sale of policies. See Patterson, No. 116. Here, not only is there an appearance of a conflict with the public trust but the gain you experienced requires a finding that Section 3(a) has been violated_ Eugene Glova Page 8 September 6, 1984 We wish to emphasize in this ruling that we do not question the right of AFSCME in this case to contract with C.L.A. or to negotiate on behalf of its members for the inclusion of health, life and accident benefits in the Union - Township labor agreement. We are addressing only your conduct and concluding that you have used your office under these circumstances to your own benefit. We find no violation of Section 3(b), however, in that it is not clear that you solicited or accepted the business on behalf of C.L.A. from which you would benefit with the understanding that your official conduct as a Supervisor would be influenced thereby. However, it is clear that you should have abstained from any votes or discussions regarding this policy purchase and failure to do so created the appearance of a conflict of interest. The information gathered in the course of this investigation indicates that your involvement in discussions and presentations to the Township workers and Supervisors was substantial. Absent clear evidence that you properly abstained from Township decisions, votes, and discussions regarding C.L.A., we find your activities gave rise to an appearance of a conflict between your personal interests and the public trust. C. Conclusion: Your activities, as outlined and found above, violated Section 3(a) of the Ethics Act. We will pursuant to Section 7(11) of the Ethics Act refer this matter to the appropriate law enforcement officials with a recommendation that prosecution be undertaken pursuant to Section 9(a) of the Ethics Act unless, within 30 days of the Order, the Respondent remits the sum of $971 representing the commissions he secured by use of his public office (See No. 12 above) with interest from the date acquired to the date paid in the amount of 1O% per annum. See 65 P.S. 407(11) and 409(a) and (c) respectively which provide: Section a. Penalties.. (a) Any person who violates the provisions of section 3(a) and (b) is guilty of a felony and shall be fined not more than $10,000 or imprisoned for not more than five years, or be both fined and imprisoned. 65 P.S. 409(a). (c) Any person who obtains financial gain from violating any provision of this act, in addition to any other penalty provided by law, shall pay into the State Treasury a sum of money equal to three times the financial gain resulting from such violation. 65 P.S. 409(c). Your conduct in general with respect to C.L.A. and your participation in presentations and solicitations to Township employees and decisions of the Township with respect to C.L.A. policies constitutes an appearance of a conflict of interest with the public trust. Eugene Glova Page 9 HBC /jc By t - Co Herb- " Conner Cha rman September 6, 1984 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 in accordance with 51 Pa. Code 2.38(a). Any person who violates the confidentiality of a Commission proceeding is guilty of a misdemeanor and shall be fined not more than $1,000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). Mr. Eugene Glova c/o Richard J. Green, Esq. 305 Franklin Street Johnstown, PA 15901 Re: Order No. 325; File 82 -85 -C Dear Mr. Glova: :te r ,) STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 RECONSIDERATION ORDER OF COMMISSION No. 325 -R September 6, 1984 This refers to the Petition for Reconsideration you presented on June 4, 1984 with respect to the above - captioned Order issued on May 24, 1984 pursuant to 51 Pa. Code 2.38. The discretion of the State Ethics Commission to grant reconsideration is properly invoked, pursuant to our regulations, 51 Pa. Code 2.38(b) when: (b) Any party may ask the Commission to reconsider an order within 15 . days of service to the order. The person requesting reconsideration should present a detailed explanation setting forth the reason why the order should be reconsidered. Reconsideration may be granted at the descretion of the Commission only where any of the following occur: (1) a material error of law has been made; (2) a material error of fact has been made; (3) new facts or evidence are provided which would lead to reversal or modification of the order and where these could not be or were not discovered previously by the exercise of due diligence. The Commission, having reviewed your request must DENY your request because none of these circumstances are present. Therefore, the State Ethics Commission concludes that your request for reconsideration must be DENIED. The Order referred to above having been redated is accordingly, hereby reissued. This Order and this decision denying reconsideration are final and shall be made available as public documents on the third day following the date of this Order. e • e B. Conner Chairman Mr. Eugene J. Glova c/o Richard J. Green, Esquire 305 Franklin Street Johnstown, PA 15901 Re. Orders No. 325 and 327 Dear Mr. Glova: EMS /jh STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 September 21, 1984 This acknowledges receipt of your check No. 104 in the amount of $1,239.82 in accordance with our Orders of September 6, 1984, Nos. 325 and 327. The Commission will take no further action in this case and our file will be closed because you have met the requirements of those Orders. This letter will be a part of the Order and a public record as such. Sincerely, G= Edward M. Seladones Executi ve Di rector