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HomeMy WebLinkAbout424 HighMr. Richard High Upper Yoder Township Supervisor 2941 Hummingbird Terrace Gaithersburg, MD 20877 RE: No. 83 -58 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION September 23, 1985 Order No. 424 Dear Mr. High: 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 you, a township supervisor, used your public office to enter into an agreement to have Upper Yoder Township pay for all or portions of your Blue Cross and Blue Shield and that this is a violation of Section 3(a) of the Ethics Act in that it is the use of your public office for personal financial gain. A. Findings: 1. That you served as a township supervisor in Upper Yoder Township, Cambria County, from January, 1982 to July 14, 1984, when you resigned. As an elected public official, you were subject to the provisions of the Ethics Act. 2. Township records disclose that from January, 1982 through July, 1984, you were not listed on the payrolls as a full -time employee. a. Minutes of reorganization meetings in 1982, 1983 and 1984 disclose that you were not appointed road superintendent, roadmaster, laborer or secretary/treasurer. b. Records further disclose that your inclusion in the hospitalization, dental, and vision care plan was not done at an open township meeting. 3. Records of the Upper Yoder Township Auditors' reorganization meetings for 1982, 1983 and 1984 confirm that Blue Cross /Blue Shield coverage for you was not approved by the auditors. Mr. Richard High Page 2 a. The auditors claim they were informed by the board of supervisors, which included you, that they were not empowered to regulate supervisors' participation in hospitalization plans. 4. Upper Yoder Township has had hospitalization /medical insurance coverage for township employees with Blue Cross of Western Pennsylvania and Blue Shield of Pennsylvania (Group #072108 -00). This plan has been in effect since at least 1978. a. Effective Apil 1, 1982, dental insurance coverage was added to the plan (Group #05522031). b. Effective November 23, 1982, vision insurance coverage was added to the plan (Group #5522031). 5. Upper Yoder Township records show that you were added to the hospitalization, dental and vision care plans as follows: September 23, 1985 a. February 1, 1982: You were added to the Blue Cross /Blue Shield hospitalization plan at a premium of $133.37 (Blue Cross /Blue Shield invoice dated January 5, 1982). b. April 1, 1982: You were given dental coverage at an added premium of $14.80 monthly. c. January 1, 1983: You were given vision care coverage at an added premium of $5.25 monthly. 6. Upper Yoder Township paid $4,602.53 in premiums for your hospitalization /medical, dental and vision care programs as follows: a. Hospitalization /medical and major medical premiums from February 1, 1982 through April 30, 1984 total of $4,130.23. (1) February 1, 1982 through November, 1982: 10 months at $133.37 monthly equals $1,333.70. (2) December, 1982 only: 1 month at $148.88 equals $148.88. (3) January 1, 1983 through April, 1983: 4 months at $157.93 per month equals $631.72. (4) May 1, 1983 through October, 1983: 6 months at $158.55 equals $951.30. (5) November 1, 1983 through March, 1984: 5 months at $175.95 equals $879.75. Mr. Richard _High Page 3 September 23, 1985 (6) April 1, 1984 only: 1 month at $184.88 equals $184.88. b. Dental care premiums from April 1, 1982 through February, 1984 total of $398.50. (1) April 1, 1982 through December, 1982: 9 months at $14.80 equals $133.20. (2) January 1, 1983 through February, 1984: 14 months at $18.95 equals $265.30. c. Vision care premiums from January 1, 1983 through February, 1984: 14 months at $5.25 per month equals $73.50. 7. Blue Cross /Blue Shield group marketing representatives familiar with Upper Yoder Township state that certain guidelines must be followed for a group plan such at the one in force in Upper Yoder Township. Chief among these are: a. Only full -time employees are eligible. b. To qualify as full -time, the employee must work a minimum of (20) hours each week. c. Each participant must complete an enrollment card requiring general information concerning personal data, effective date of employment and if a rehire or new employee. Responsibility for accurate enrollment cards is the plan's administrators. d. Elected officials, not full -time employees, can be covered only if the municipality has a labor agreement or ordinance specifying inclusion of the officials. Upper Yoder Township has no such ordinance or agreement. 8. Correspondence of Solicitor Richard J. Green, Jr., regarding hospitalization for the supervisors stated the following: a. February 21, 1984: He had reviewed the Township Code, several legal cases, and the current Policy Statement of the State Ethics Commission which to date covered only pensions - annuities and concluded that the present hospitalization insurance for supervisors was proper because all employees are covered and the coverage was not intended to produce cash. b. February 27, 1984: He advised that there had been no judicial determination on the Ethics Commission ruling - he had not seen the ruling at that time but had read about it in the newspaper - he had no choice but to advise the supervisors to pay the premiums for the hospitalization plans. He added that the supervisors should expect the auditors to attempt to surcharge and a decision could be made at that time. Mr. Richard High Page 4 September 23, 1985 c. March 26, 1984: Solicitor Green advised the auditors of Upper Yoder Township that as of the date of the auditors' letter, the township would no longer pay Blue Cross premiums and that you and Mr. Cowie had agreed to repay the township for premiums paid during 1983. However, he noted that because Mr. Cowie had appealed the Ethics Commission ruling and there was a pending county court case and several other contradictory court decisions, he advised them to withold repayment at least until Mr. Cowie received a response from the Ethics Commission. 9. On March 6, 1984, the auditors asked the supervisors to prepare invoices asking you and other supervisors to reimburse the township for hospitalization and other Blue Cross premiums paid for by the township in 1983 and 1984. You were the chairman of the board of supervisors on that date. 10. The supervisors of Upper Yoder Township, took the following actions: a. On March 6, 1984, they billed you for $2,237.49 for township -paid premiums for 1983 and $399.00 for the premiums in 1984. b. As of September 16, 1985, they had not received reimbursement. 11. You have not reimbursed the township. B. Discussion: As a township supervisor you are a public official as that term is defined in the State Ethics Act. 65 P.S. §402. As such, your conduct is subject to and must, therefore, comfarm to the requirements of the Act. Sowers, 80 -050; Krane, 84 -001. The Ethics Act provides, in part, that: 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 family, or a business with which he is associated. 65 P.S. 403(a). We have on several occasions addressed the question of whether a non - working township supervisor may, within this provision of law, receive township provided hospitalization, medical and other insurance. We have concluded that such an official may not approve for himself or otherwise receive such benefits without violating the provisions of the Ethics Act. Krane, 84 -001; Cowie, 84 -010. In these matters, the Commission determined that such benefits constituted financial gain other than the compensation provided by law. Mr. Richard .High Page 5 In Krane we concluded that, after analyzing the Second Class Township Code, the case law surrounding that code, certain provisions of the Insurance Code and reported cases that a supervisor such as yourself, who is not employed in any other capacity by the township, could not, consistent with Section 3(a) of the Ethics Act, use his public office to obtain and have the township pay the premiums for hospitalization insurance. Basically, we are not convinced that these laws allow supervisors, who are not serving the township in any capacity other than a supervisor, to benefit from township -paid insurance coverages which were available to "employees" of the township. (See Krane, supra and the cases cited therein which are incorporated herein by reference.) Clearly, had you been employed by the township as provided for in the Second Class Township Code, additional compensation is provided for by law. However, even if you were so qualified, that compensation must be fixed by the board of township auditors. In the instant situation, the auditors never fixed the insurance benefits that you received as part of your compensation. Thus, consistent with Krane, we must conclude that it was a violation of the Ethics Act for you to use your public office or to "allow" yourself to be placed on such policies, to obtain or to have the township pay for the premiums associated with this insurance coverage because these payments are clearly not authorized by law. The amount that the township paid on your behalf is as follows: 1. Hospitalization /Medical Insurance - $4,130.23 2. Dental Insurance 3. Vision Insurance - $ 398.50 4 - $ 73.50 Total $4,602.23 September 23, 1985 The Ethics Act provides that: Section 9. 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). = Mr. Richard High Page 6 Additionally, the Commission may make recommendation for prosecution by or referrals to the appropriate prosecuting authority unless the person who is in violation of the Act returns any financial gain obtained in violation of the Act. See McCutcheon /Hoak v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283, (1982). We believe that this result should be reached in the instant matter. We will not impose the treble damage provisions of Section 409(c). C. Conclusion: You violated Section 3(a) of the State Ethics Act when you, as a township supervisor, received at the township expense, hospitalization, medical, dental and vision insurance in excess of that compensation provided by law. Our calculations indicate that the expense to the township for such insurance amounted to $4,602.23. Unless, within thirty (30) days of this Order, you forward to the State Ethics Commission a check in the above amount, made payable to Upper Yoder Township, we will refer this matter to the appropriate law enforcement officer for review. 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) 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 this Order, 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 $1,000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). JJC /sfb By the ommis i Her rt B. Conner Chaff rman September 23, 1985