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HomeMy WebLinkAbout412-R YocabetMr. James Yocahet c/o James T. Davis, Esq. Davis & Davis 99 East Main Street Uniontown, PA 15475 Re: No. 82 -117 -C Dear Mr. Yocahet: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION March 3, 1986 Order No. 412 -R 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. On November 14, 1985, a hearing on the matter was conducted and relevant evidence and testimony was presented. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you have used your office and /or confidential information acquired through that office to realize personal financial gain other than the compensation provided for by law when, as a township supervisor in a township of the second class, you were appointed to and voted for your appointment to the position of township secretary /treasurer and received payment in that position that was not part of the compensation fixed by the township hoard of auditors, and that such is in violation of Section 3(a) of the State Ethics Act, 65 P.S. 5403(a). A. Findings: 1. You have served as a supervisor in L1lzerne Township since January, 1978 and as such are subject to the requirements of the State Ethics Act. 2. Minutes of the meetings of the township board of supervisors regarding your appointment as secretary /treasurer indicate the following: a. January 2, 1979: On motion by Sparvieri and second by Raker, you were elected secretary /treasurer. The vote was unanimous and you voted. Mr. James Yocahet Page 2 March 3, 1986 Motion by Sparvieri and second by Raker. You were appointed roadmaster. The vote was unanimous and you voted. b. January 7, 1980: On motion by Atz and second by Baker, you were elected secretary /treasurer. The vote was unanimous and you voted. On motion by Atz and second by Raker, you were appointed roadmaster. The vote was unanimous and you voted. All three supervisors were elected roadmasters and each was assigned a geographic zone as their primary responsibility within the township. c. January 5, 1981: Motion by Atz, second by Baker, you were elected secretary /treasurer of the board. The vote was unanimous and you voted. On motion by Atz, and second by Baker, you were named roadmaster. The vote was unanimous and you voted. The zoning concept for assigning supervisors a geographic zone was conti nued. January 4, 1982: On motion by Baker, second by Atz, you were elected secretary /treasurer. The vote was unanimous and you voted. On motion by Atz, second by Baker, you were appointed as roadmaster. The vote was unanimous and you voted. The zoning concept for assigning supervisors a geographic zone was continued. d. January 3, 1983: On motion by Raker and second by Atz, you were elected secretary /treasurer. The vote was unanimous and you voted. On motion by Atz and second by Raker, you were appointed roadmaster. The vote was unanimous and you voted. e. January 31, 1984: On motion by Atz and second hy Raker, you were elected secretary /treasurer. You abstained from the vote. On motion hy Baker and second by Atz, you were appointed as roadmaster. The vote was unanimous and you voted. The zoning concept for assigning supervisors a geographic zone was continued. 3. Minutes of the meetings of the township hoard of supervisors for the years 1964 through 1984 inclusive contain information relating to the wages and other benefits requested or fixed by the township hoard of supervisors in Mr. James Yocabet Page 3 March 3, 1986 relation to their various positions of employment in the township. The specific information relating to these wages and other benefits as set forth in the minutes is contained in a chart which is attached hereto, made a part hereof, marked as Appendix A. a. The aboved referenced minutes• indicate that the salary for the secretary /treasurer during the years 1966 through 1973 inclusive is fixed at 3% of the money paid out by the treasurer. b. The minutes for 1974 indicate that the salary for the secretary /treasurer will be set by the Township Board of Auditors. c. The minutes indicate that the salary for the secretary /treasurer for the year 1976 will be requested at $7,800.00. d. The minutes indicate that the salary of the secretary /treasurer for the year 1977 will be requested at $8,2.00.00. e. There is no mention in the minutes of the supervisors meetings of the salary for the secretary /treasurer during the years 1978 through 1984 i nclusive. 4. The township hoard of supervisors generally would forward a letter to the township board of auditors each year requesting that the auditors fix specific wages and other fringe benefits for supervisors employed as roadmasters, laborers or secretary /treasurer. a. A review of township records indicates that only one of these letters could be found. b. This letter was for the year 1981 and does not mention a request for any compensation for you as Secretary /Treasurer. c. This letter requested: $62.00 wages. 18 days vacaction. 10 sick days. 13 Holidays. 3 personal days for family death. 3 personal days for relative death. Mr. James Yocabet Page 4 March 3, 1986 5. Auditor minutes were obtained and reviewed for the years 1960 through 1972 inclusive and for the years 1980 through 1984 inclusive. Township records did not contain any such minutes for the years 1973 through 1979 inclusive. The minutes ohtained specifically set forth the various wages and other fringe benefits fixed by the Township Board of Auditors for supervisors who were employed by the township. The information contained in these minutes is set forth in Appendix B, which is attached hereto, made a part hereof. a. The minutes obtained contained no reference to the salary for the secretary /treasurer until the year 1982. The salary for the secretary /treasurer for the years 1982 through 1984 inclusive is fixed at $6,600.00 in each year. 6. After the Township Board of Auditors would fixed the compensation and other henefits to be paid for supervisors who were employed by the township as roadmaster, laborer, or secretary /treasurer, the Board of Auditors would advise the supervisors as to the specific compensation and benefits fixed by way of letter. Letters of the township audi tors to the members of the board of supervisors were obtained and reviewed for the years 1966 through 1984 inclusive. The specific information contained in those letters is outlined in Appendix C, which is attached hereto and, made a part hereof. a. The compensation to he paid to the township secretary /treasurer is specifically noted in the auditor letters for the years 1974 and 1975 and such compensation is fixed at $6,000.00 in each year. b. The compensation fixed by the township board of auditors for the secretary /treasurer for the years 1978 and 1979 is noted at $6,000.00 and $6,600.00 respectively. c. The compensation to be paid to the secretary /treasurer, as fixed by the board of auditors for the years 1982 through 1984 inclusive is noted at $6,600.00 in each year. d. The letters of the auditors to the supervisors in all other years reviewed make no reference to the compensation to he paid to the township secretary /treasurer. 7. Thelma J. Cox served as a township auditor in the years 1980 and 1981. a. Mrs. Cox testified that the township hoard of auditors, during her two years in office, were responsible for fixing the compensation and fringe benefits packages for the township board of supervisors. b. Mrs. Cox testified that generally township supervisors would request, in writing, certain wages and benefits and the hoard of auditors would either approve or disapprove such items. Mr. James Yocabet Page 5 March 3, 1986 c. Mrs. Cox testified that she did not know how auditors in the past had approved or disapproved the supervisor's request. d. Mrs. Cox testified that in the year 1980 the township board of auditors discussed whether a salary should be fixed for the township supervisor who served as secretary /treasurer. She indicated that other auditors generally believed that the board should approve whatever supervisors had requested. She testified that they discussed the matter and that after such discussion, the board of auditors decided not to set a separate salary for the supervisor who served as secretary /treasurer. e. Mrs. Cox testified that no additional salary for the position of secretary /treasurer was approved by the township board of auditors for the years 1980 and 1981. She indicated that in 1981 there was no discussion on this matter as there had been in 1980. She indicated that the reason for not fixing this salary was because the township was employing an office secretary who performed many of the duties of the township secretary. She testified that the board of auditors ultimately agreed that one salary was sufficient for Mr. Yocabet, i.e., as township roadmaster, and therefore, no additional salary was fixed for his service as secretary /treasurer. f. Mrs. Cox testified that as an auditor she did not consider past practices of other boards of auditors when fixing the wage and compensation packages for the supervisors. g. Mrs. Cox indicated that she did not audit the cancelled checks or checking accounts of the township because each auditor was responsible for performing a different part of the audit and she was not assigned this function. h. Mrs. Cox testified that she did not check to see if Mr. Yocabet had been paid as secretary /treasurer for the years 1980 and 1981. i. Mrs. Cox testified that the township hoard of auditors generally initialed their work when they reviewed township related items. 8. Ann Orbash served as a township auditor for the years 1980 and 1981. a. Mrs. Orbash initially testified that she could not remember if the township board of auditors had decided to pay a salary to the township secretary /treasurer for the year 1980. b. She also testified that the township hoard of auditors discussed salaries and fringe benefits but she could not remember if they discussed not paying the township secretary /treasurer. c. She later testified that she thought the township secretary /treasurer was being paid for services rendered in that position. Mr. James Yocabet Page 6 d. Mrs. Orbash further testified as follows: 0. Was there ever any discussion in 1981 among the auditors to not pay the township's secretary- treasurer? A. I don't know. Q. Did you say you don't remember? A. I don't remember. Q. Did you ever decide to change the practice -- did you personally ever decide or want to change the practice of not paying the township secretary- treasurer? A. In 1981? Q. In 1980 or 1981? A. I don't know, we talked about different things about the salaries and the fringe henefits so -- Q Q. Okay, go ahead. A. I don't know. Q. Mrs. Orbash, it's my understanding from your testimony that you did assume that the township secretary - treasurer would he paid in 1980 and 1981. Is that true? A. I don't know because we had discussed not paying him, probably -- I, can't remember. Q . W e l l , you said earlier that- - A. I don't really know. Q. So you don't know whether he was to be paid or not? A. (No response.) Q. Ma'am? A. I can't honestly s_ay Q. Do you know whether or nct he was in fact paid? March 3, 1986 Mr. James Yocabet Page 7 A. I assumed he was, I think he was. Q. And when you audited the records for 1980, did you know he had been paid? A. Yes. Q. So my question is then did you assume that he would be paid in those two years? 12. Tanya Capuzzi is employed as the Luzerne Township bookkeeper. March 3, 1986 A. At least one year. Q. In 1980? A. Yes. Q. How about in 1981? A. I don't know about that, what the others said. Q. I'm sorry, would you repeat that answer? A. I don't know what the other auditors said. 0. But you personally wanted to pay him in both years you personally? I'm not tal ki ng about the other two audi tors A. Yes. 9. Kenneth Taylor, the third auditor in the years 1980 and 1981 is deceased. a. A cancelled township check representing the pay to ,lames Yocabet was initial ed by Kenneth Taylor. This check did not specifically indicate on its face whether it was payment for your compensation as roadmaster or secretary /treasurer. b. A cancelled township check, regarding the entire township payroll also contained the initials of Kenneth Taylor. This check did not specifically indicate that it included your pay as secretary /treasurer. 10. The township board of auditors for the years 1980 and 1 consisted of Thelma Cox, Ann Orhash, and Kenneth Taylor. Prior to that year Mrs. Cox and Mrs. Orhash did not serve as auditors. 11. For the year 1982 the composition of the township hoard of auditors changed and Mr. Taylor was the only previously serving auditor to continue serving as an auditor. Mr. James Yocabet Page R March 3, 1986 a. She testified that Kenneth Taylor, a former auditor, came into the township offices nearly everyday in 1980 and in 1981 to review township books and records. She further indicated that he initialed any document that he reviewed including cancelled checks with the initials K.L.T. b. Capuzzi testified that you were paid by separate checks for your salary and compensation as roadmaster and secretary /treasurer. c. Capuzzi testified that she attended all the auditors meetings in 1981 and that she never heard any discussion regarding the salary or compensation for the secretary /treasurer. d. Capuzzi testified that pursuant to the past practice of the township board of supervisors that if the supervisors did not request a raise over the previous year compensation, the supervisors would not ask the auditors for a specific salary in their letter and the auditors would not discuss the matter. e. Capuzzi testified that she continued to issue a payroll check to you as secretary /treasurer because no one told her that the salary had not been approved. 1980. f. Capuzzi testified that she performs the following functions: 1. Enters checks received into a ledger. 2. Issues all checks upon direction. 3. Prepares the payroll and treasurers account hook. 4. Keeps minutes, books, and records of other proceedings that occur in the township including accounts, the general fund and al l miscellaneous accounts. 5. Receives money paid into the township and deposits said monies into appropriate hank accounts. 6. Keeps distinct accurate accounts of all sums received from taxes and other sources that might cone into the township, such as real estate taxes. g. Capuzzi testified that she was not present during auditor meetings in h. Capuzzi testified that the supervisors would only make recorded notations of the request for compensation and salaries made by them to the board of auditors when they were, in fact, requesting a raise in the previous years compensation or benefits. She testified that she did not know, however, from first hand knowledge that the supervisor request letter was only intended for such wage increases. Mr. James Yocabet Page 9 March 3, 1986 13. You were never surcharged by the township hoard of auditors for your receipt of compensation as secretary /treasurer in the years 1980 and 1981. 14. Ronald Dellarose has served as a Luzerne Township Auditor since 1982. a. Dellarose testified that he was of the belief that the compensation and salary for working supervisors need not be specifically placed in the auditor minutes or auditor letters to the supervisors unless the compensation for the supervisors had increased from the previous years compensation. b. Dellarose testified that even if the auditors approved the payment of such compensation, if there was not an increase from prior year payments, the specific compensation would not be set forth in the auditor minutes or 1 etters. c. Dellarose testified that this was the past practice of the township board of auditors according to his belief. d. Dellarose testified that to the best of his knowledge a review of all of the auditor minutes and auditor letters from 1959 to the present would indicate that unless the compensation paid to supervisors increased, it would not be specifically set forth in those documents. 15. Bernard Atz is a Township Supervisor and has served in that capacity since 1979. a. Mr. Atz testified that the township board of auditors never informed him that the secretary /treasurer was not to he paid. b. Mr. Atz testified that he attended the township meetings of auditors in 1980 and 1981 and there was no discussion of the compensation for secretary /treasurer at such meetings. 16. You have indicated the secretary /treasurer salary was not set forth in the supervisors letters to the auditors in 1980 and 1981 because you were not seeking a raise from your previous year compensation. You also believed that you were entitled to the salary because you were not surcharged for your receipt of this salary after the conclusion of the annual audits. 17. William Baker served as a member of the hoard of township supervisors since 1968. a. Raker testified that the auditors never informed him that the township secretary /treasurer was not to be compensated. b. Raker testified that former auditor, Kenneth Taylor, came to the township building everyday. He indicated that Taylor was retired and would come to the building, not in his official capacity, but in order to talk with his friends. Mr. James Yocabet Page 10 c. Baker indicated that Kenneth Taylor did not look at checks and perform official functions when he came to the township building everyday. d. Raker testified that his belief as to why the auditor letters did not contain a specific reference to the compensation for the supervisors serving as secretary /treasurer was because the auditors would not place such items in the auditor letters if the salary or compensation had not increased from the previous year. The item would only he mentioned in the auditor minutes and auditor letters, according to Baker's belief, if compensation was increased frcm the previous year. e. Baker indicated that the past procedure of township auditors, whereby only increases in compensation are included in the auditor minutes and auditor letters, is not only the past practice in relation to the salary of secretary /treasurer but is also the past practice in relation to the salary of all supervisors serving in positions of employment with the township such as laborers or roadmasters. 18. Township payroll records, in part, indicate that you were paid compensation as follows: a. 1980: Secretary /treasurer salary Roadmaster pay Total gross pay b. 1981: Secretary /treasurer pay Roadmaster pay Total gross pay $ 6,600.00 $14,760.00 $21,360.00 $ 6,600.00 $20,522.00 $27,127.00 March 3, 1986 B. Discussion: As a supervisor in a township of the second class, you are a public official within the purview of the State Ethics Act and subject, therefore, to the requirements of that Act. See Sowers, 80 -050; Pennsylvania State Association of Township Supervisors v. Thornburgh, 45 Pa. Commw. 361, 405 A.2d 614; Affirmed pur curiam 496 Pa. 324, 437 A.2d 1, (1981). The Ethics Act provides as follows: 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 fancily, or a business with which he is associated. 65 P.S, 403(a). We are now called upon to review the facts presented in this matter to deterrii ne i f your conduct i s or was i n violation of that provision of law. 11r. James Yocabet Page 11 Initially, it is clear that as a member of the township board of supervisors, you were appointed to serve as the township secretary /treasurer. You participated in that appointment. Additionally, you received compensation for serving in that position. In the first two years that you so served, 1978 and 1979, your salary was fixed by the township board of auditors. Evidence of this fact was presented through the introduction of the auditor letters to the township board of supervisors, wherein your salary was specifically noted. (See Appendix C). Auditor minutes for this particular period of time were not provided and were not available for review as they could not be found by any of the parties hereto. You additionally received a salary in the amount of 56,600.00 per year in 1980 and 1981. No reference was made to this salary in either the auditors letters to the supervisors, the auditor minutes, or the minutes of the meetings of the township supervisors. In 1982 through 1984, you received this same salary for your service as secretary /treasurer. The approval of this salary is specifically noted in the auditor minutes and the auditor letters covering that period of time. The specific issue with which we are confronted is whether the financial gain that you received in 1980 and 1981 was part of the compensation provided for by law. There is no doubt that you participated in appointing yourself as secretary /treasurer and that in that position you accepted and received the above referenced financial gain. Such participation in appointing yourself is a use of public office within the purview of Section 3(a) of the State Ethics Act. See King, 85 -025. The sole determination, thus to be made, is whether the funds received an 1980 and 1981 by virtue of this appointment were part of the compensation provided for by law or whether this financial gain was not part of such compensation. The compensation to he paid for a township supervisor who serves only in that capacity is specifically set by the Second Class Township Code. 53 P.S. 65515. As amended by Act 18 of 1985. Additionally, that Code provides that a township supervisor may be employed by the township in the position of secretary /treasurer. 53 P.S. §65410(b). The Second Class Township Code, however, further provides in relation to the compensation to he paid a supervisor serving as secretary /treasurer that: Treasurer Secretary Except as otherwise provided in section 540 hereof, the amount paid to the treasurer as treasurer and secretary, shall he determined by the hoard of supervisors, except that where a supervi so is serving as secretary and /or treasurer the auditors shall fix the compensation. 53 P.S. 65531. The amount paid to the secretary and treasurer as salary, wages or other canpensation for services shall he determined by the board of supervisors, except that where a supervisor is serving as secretary and /or treasurer the auditors shall fix the compensation, 53 P.S. X65540. March 3, 1986 Mr. James Yocabet Page 12 March 3, 1986 Thus, it is clear that while a township supervisor may serve in the capacity of secretary /treasurer and receive compensation, therefor, such compensation must be fixed by the township board of auditors. In the instant situation, we must determine whether the compensation that you received for the years 1980 and 1981 was in fact fixed by the township board of auditors and, thus, qualifies as compensation provided for by law. During the proceedings we heard testimony from two of the members of the township board of auditors who served in the years 1980 and 1981. One of these auditors, Thelma Cox, testified specifically and unequivocally that the township board of auditors did not fix the salary for you in the years in question. She specifically indicated that this was a conscious decision and that the reason for such decision was based upon the fact that the township had employed a bookkeeper who was performing many of the services of the township secretary /treasurer. She initially testified that while the other two township auditors were of the opinion that you should receive compensation for services rendered as secretary /treasurer, the ultimate result of their discussions in 1980 was that no such salary would he approved. She testified that she did not consider the past practices of other hoards of auditors when considering whether or not to fix compensation for you in the position of secretary /treasurer. We specifically note that the composition of the township board of auditors had changed from the previous years in which your salary had been approved. In 1980, two new township auditors began service. These two new auditors served in 1980 and 1981 and left office after that year. The records of the township, including the township auditor letters and auditor minutes, appeared to indicate that it was during these two years that no specific salary was fixed for you as township secretary /treasurer. We also heard the testimony of the second auditor who served in those two years, Ann Orhash. Mrs. Orhash's testimony as evidenced by the findings of fact appears to he inconsistent in several respects. Mrs. Orbash had initially testified that she could not remember if the township board of auditors had ever decided or discussed whether or not to pay you as a township secretary /treasurer for the year 1980. Her same testimony, however, indicated that the township hoard of auditors discussed salaries and fringe benefits and that the auditors had discussed not paying the township supervisor who served as secretary /treasurer. She indicated that she was of the opinion that you should receive such salary hut that this was her personal opinion and that the decision would have to be made by the majority of the hoard of auditors. She also testified that she assumed you had been paid in one year. Certainly, from the testimony of Mrs. Orbash, it is apparent that she did not specifically remember what decision had been made by the township board of auditors regarding whether or not you were to receive the salary as secretary /treasurer. The third auditor who served in the years 1980 and 1981 is deceased. In determining whether or not the township board of auditor's specifically decided not to compensate you for the position of secretary /treasurer, we are called upon to determine the credihi1ity of these two witnesses. In an effort to do this, we have reviewed all of the testimony and evidence received and have relied upon this evidence to make this determination. The factors that we have considered in this matter included the following: Mr. James Yocabet Page 13 March 3, 1986 Thelma Cox testified unequivocally and without reservation that the salary was not to be paid to you as secretary /treasurer. Ann Orhash could not recall, with any specificity, the final decision reached by the township board of auditors in relation to this matter although she did testify that the auditors did discuss not paying the secretary /treasurer. Thelma Cox had testified that the reason for not payi ng you this salary was based upon the fact that the bookkeeper for the township, Tanya Capuzzi, performed many of the services of secretary /treasurer. The testimony of Ms. Capuzzi, in this respect, seems to verify this statement by Mrs. Cox. Speci fical ly, Capuzzi testified that she performed the services outlined in finding 12f. These are the exact same functions and duties of the secretary /treasurer that are statutorily set forth in the Second Class Township Code. See 53 P.S. 4565530; .565540. Testimony was provided by Ms. Capuzzi that the third auditor, Kenneth Taylor, had initialed all of the checks that he reviewed in his role as auditor and that he, in fact, reviewed a substantial number of checks in relation to township business. One check bearing the initials of Mr. Taylor represented one of the by- monthly payroll checks that you received in your position as secretary /treasurer. There is no indication, however, on the face of the check that it was specifically marked as your pay as secretary /treasurer. Additionally, while it was testified that Mr. Taylor reviewed a substantial amount of checks, the check provided to this Commission was the only check relating to your salary as secretary /treasurer that was specifically initialed by Mr. Taylor. Additionally, while it was testifed that fir. Taylor would appear at the township building every day in order to perform services as an auditor on behalf of the township, subsequent testimony by a member of the township hoard of supervisors indicated that Mr. Taylor would not be performing services as an auditor when he came to the township building. Rather, it was testified that he was there in an unofficial capacity in order to socialize with many of his friends who were working at the township building. Rased upon all of the foregoing factors and considerations, we have determined that the township board of auditors in the years 1980 and 1981, did not fix the salary that you received as part of the compensation for your services as secretary /treasurer. In reaching this determination, we have considered a number of arguments that have heen presented on your behalf. Initially, you have asserted that the township hoard of auditors did in fact approve the compensation that you received in your position as secretary /treasurer. In support. of this argument, you referenced to the past practice of former township officials in relation to how they would specifically note the salary that was to be paid to the secretary /treasurer. Generally, you have indicated that it has been the steadfast practice of the Mr. James Yocabet Page 14 March 3, 1986 township only to make note of the salaries to be paid for the supervisors who serve in positions of employment in the township when the salaries have increased over the preceeding year. During the proceedings before this Commission, a number of individuals testified that if, in fact, we reviewed the many documents that have been provided in relation to the compensation paid to township supervisors, we would find that this practice would be supported in fact. In an effort to review this position, we have conducted a thorough review of the minutes of the township board of supervisors, the minutes of the township auditors, and the auditor letters that had been submitted to the supervisors indicating what salaries are set. We capsulized the information contained in these documents in the appendixes of this report. We have also combined this information into a comparison chart for reference. (See appendix D). Review of these documents clearly indicates that this past practice did not, in fact, exist. Specifically, we note that auditor minutes would frequently contain the salary to be paid to the township supervisors serving as laborers or roadmasters even when such salary did not change. Specifically, from 1960 through 1963, there was no change in the township supervisors salary or in any of the other benefits. Yet, i n each year, the auditor specifically noted in their minutes the fixing of this salary. Similarly, from the years 1965 through 1966 the salary remained the same and was noted in each year. This is also true for the years 1968 and 1969. In other years, while the salary did increase, other benefits did not, yet these other benefits were specifically referenced to in each of the years. Additionally, we note that the auditor letters reveal this same situation. Salaries are noted even though they do not change in successive years. Other fringe benefits also were specifically referenced to in each year even though there were no changes in these benefits. For example, the auditor letters indicate that in 1967 supervisors were to receive two weeks vacation. In each of the subsequent years, through and including 1979, a period of twelve years, the audi tors in their letters specifically referenced to the fixing of this fringe benefit as part of the compensation package to the supervisors even though there was no change in these benefits. Indeed, specifically with relation to the salary of secretary /treasurer, as early as 1974, the board of auditors in their auditor letters specifically noted their authority to fix the canpensation of supervisors serving as secretary /treasurer. In two successive years, 1974 and 1975, they fixed and noted the salary in their letter even though the salary did not change. The supervisors themselves, as evidenced by the township supervisors minutes in 1974, specifically noted that the salary to be paid to the secretary /treasurer would he set by the township hoard of auditors. E_ The superviors minutes, from the years 1966 through 1973 in each year referenced to the salary fixed for the secretary /treasurer. This salary is specifically noted in the supervisors minutes as 3 percent. We note for the sake of this opinion, however, that during that period of time there was no 1 egal requirement that the salary of the secretary /treasurer be fixed by the Mr. James Yocahet Page 15 March 3, 1986 township board of auditors. Our reading of the law during that period of time specifically indicates that it was the duty of the board of supervisors to fix that salary. The important aspect of this 8 year continuous notation is that it is in complete contrast to much of the testimony that the supervisors would only make written note of the salary if it were to constitute an increase over prior years. Our review of the documents in this matter clearly indicate that the contention that the township hoard of auditors and the township board of supervisors would only note the salary in their respective puhlic documents when such salary was to increase, is not supported by those documents. In fact, the documents appear to specifically contradict that contention. You have also asserted the fact that the township hoard of auditors have never surcharged you for the receipt of this salary and, thus, such lack of surcharge is an indication that the salary was approved. This specific issue has been addressed by the courts on many occasions and the decisions have been clear that the failure of the board of township auditors to initiate a surcharge action against supervisors does not and can not constitute required auditor approval or fixing of the salaries received. See McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283, (1982); Hendricks v. East Rockh`ill Township, 1 Il & C 3d 763, (1977). Finally, you have asserted that the Second Class Township Code provides that the township board of auditors "shall fix the compensation" of the secretary /treasurer when he is a township supervisor. You argue that the term "shall" is required to he read as must and that, therefore, the township board of auditors have no discretion in fixing the salary for this person. You indicate that as a result, the board of auditors abused their discretion if in fact they did not fix a salary for a secretary /treasurer. Assuming arguendo, that this legal theory is correct and that the township hoard of auditors must fix some salary for the supervisor who serves as secretary /treasurer, the failure of the auditors to exercise this duty does not authorize the township supervisor to establish his own salary in the absence of such affirmative action by the auditors. Other avenues are availahle to a township supervisor who believes that the auditors have abused their discretion. See Festa v. Derry Township, 49 Pa. Comm. 297, 411 A.2d 904, 1980. You, however, would have this Commission rule that the failure of the township auditors to fix such a salary is an authorization for a puhlic official, such as a township supervisor, to allocate to himself whatever salary he deems appropriate. Such is not the law. To the contrary, the law of this Commonwealth is clear and has been enunciated on many occasions. That law indicates that it is against puhlic policy for a puhlic official to act in a matter in which he has a precuniary interest. Indeed, the Second Class Township Code specifically sets an independent body, the hoard of auditors, as the specific body which will set the salaries and compensation for township supervisors when they serve in positions of employment with the township. This requirement can not be Mr. James Yocabet Page 16 March 3, 1986 avoided. See Genkinger v. New Castle, 368 Pa. 547, 84 A.2d 303, (1951); Commonwealth v. Radenbush, 249 Pa. 86, 94 A. 555, (1951); Henricks v. East Rockhil I Township, supra, In re: Appeal of the Auditors Report of Muncy Creek Township, 16 Lycoming Reporter 159, (1985); Reckner of the German Township 431, Pa. 375, 19 A.2d. 402, (1941). Based upon all of the facts and applicable law, we have determined that financial gain that you received in 1980 and 1981 was not part of the c anpensation provided for you by law. Your vote to appoint yourself as secretary /treasurer in the township, and your subsequent receipt of compensation in that position that was not specifically approved by the township hoard of auditors, is a violation of the State Ethics Act Section 3(a). See King, 85 -025. The penalties for violating Section 3(a) of the Ethics Act are as follows: Section 9. Penalties. (a) An y person who violates the provisions of Section 3(a) and (b) is guilty of a felony and shall he fined not more than 510,000 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 Treasurey a sum of money equal to three times the financial gain resulting from such violation. 65 P.S. 409(c). In addition, the Commission may: Section 7. Duties of the commission. (11) Make recommendations to law enforcement officials either for criminal prosecution or dismissal of charges arising out of violation of this act. 65 P.S. 407(11). The Commonwealth Court of Pennsylvania has upheld the authority to require persons in violation of the Act to return any financial gain obtained therefrom. McCutcheon v. State Ethics Commission, 77 Cmwlth. Ct. 52.9, 406 A.2d 2.80, (1981). We note that this restitution requirement is appropriate under the law even where the financial gain received has been done so in good faith. A public offical may not retain public funds that have not been received in accordance with the. law. Allegheny County v. Grier, 179 Pa. 639, 36 A.2d 35 3 (1897); Kestler Appeal , 66 Pa. Commw. 1, 444 A.2d 761, (1982). Mr. James Yocabet Page 17 C. Conclusion: You have violated the State Ethics Act as outlined above. The Commission has determined that you must divest yourself of the financial gain obtained in violation of the law. In this case, that gain was the compensation that you received in 1980 and 1981 without such compensation being fixed by the township auditors. This gain totals $13,200. You must remit to the State Ethics Commission a check made payable to Luzerne Township within thirty days of this Order. Upon receipt of this check, we will close our files in this matter. Failure to divest yourself of the financial gain as outlined above, will result in the referral of this matter to appropriate law enforcement authorities. 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 (defined as mailing). 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). By the Co7ission, H rber Chairman . Conner March 3, 1986 3 w M M 3 a n et 4 N W • 1 M 0 3 M Y a • 0 1 0. • Y R 7 W 3 W 3 3 4 0. M et 4 r 1 W f+ 0 3 4 0. d t T 0 1 0 7 • 1 O. 4 et 7 M N 0 w N M r O 0 C 0 w 0 N 4t ✓ O 0 : • r M O 0 3 a 4 •1 t 4 : N • I4 1 0 0 O 0 0 O 0 0 O 0 m 0 0 It 1 03 0 '3 m 0 0 O 1 4 : 4 • 0 n ! I• 10 10 1 I� r L4 r r f. 0 m '4 N 4 4 fJ O O 0 9. ! b 1 ! 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F 4 m m I 0 r 4 a 0 . 4 10 L 4 X r ro. 1 Lott 3 0 3 a i . z 4} ti 0 0 0 0 O 1 3 A 0 O 0 0 3 0 .¢ 7 0 tO 0 0 u 0 10 N r 10 N 0 u m N 07 r 1 m m o a m 1 • 0 1 1 1 0 tit • c ►I m r o ✓ O Z A S -i m O m 0 m 0 ri 7 A 0 N N N 2 in w w VI 1.4 Z • m 0 • D Z N 9 ' 9 h li - m m C D 9 1 t L 11 V VI I K - 9 1 0 O N 70 N N 70 ▪ • 0 2 2 A - N M D m r z 9 m 1 m 1 0 ✓ • 2 N < m L V 1 A 1 h '00 VI I 11 2 ▪ ~ O A A 0 0 N m A A 0+ O 9 N 04 1 1 O C V O C 0 0 m A S 0 1 70 C 1 IA IA N 2 • A 2 X A w 1 1 2 w N 14 0 0 A D 2 v v i K 0 0 m 2 9 r A m N w m C -1 1 2 2 i 1 0 r 't 1 -c ' C N u C 1 A tl C r A TA 0 A ►01 O C 1 9 I" 1 N 0 K N C A r 0 1 N m 1 N C m m A C 11 M O 2 A 0 A0 1 3 itt r■ 0 r 0 • 0 W U 0 n 7t k 0 0 0 1 IA • 10 10 A 1 I0 I o • 1 S 4 1 r 0 ID CO A JJC /na cc: Public Binder STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 November 17, 1987 Mr, James T. Yocabet c/o James T. Davis Davis & Davis 107 East Main Street Uniontown, PA 15401 Re: 82- 117 -C, Order No. 412 -R Dear Mr. Yocabet: On November 16, 1987, the State Ethics Commission received your payment for reimbursing Luzerne Township as required by Order No. 412 -R. We have forwarded your check No.. 1394 dated November 11, 1987, in the amount of $13,200.00 to Luzerne Township. This letter will be made part of the Order and a public record as such. Sin n Execut ' Di rector