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