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HomeMy WebLinkAbout459-R MathiesMr. David J. Mathies Secretary- Treasurer Union Township 5023 Gary Avenue Finleyville, PA 15332 Re: R4 -111 -C near Mr. Mathies: s STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 459 -R DECIDEDOCT 1 86 MAILS 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 haseri are as follows: I. Allegation 1. That as Secretary- Treasurer of union Township you, a memher of your immediate family or a husiness with which you or a memher of your immediate family serve as director, officer, owner or holder of stock exceeding 5% of the equity of said husiness have secured financial gain through your public office by writing your bond and other insurance for the township in violation of Section 3(a) of the Ethics Act, 65 P.S. 403(a). 2. That as Secretary - Treasurer of Union Township you, a memher of your immediate family or a husiness with which you or a memher of your immediate family serve as director, officer, owner or holder of stock exceeding 5% of the equity of said husiness contracted with Union Township in an amount in excess of $500 without an open and public process as required by Section 3(c) of the Ethics Act,.55 P.S. 403(c). Mr. David J. Mathies Page 2 A. Findings: 1. You have served as Secretary-Treasurer Union 'r'ownshi p since 1956. a. You stated that you have been responsible for the improvement of the township's financial condition and cited the following: Year Eludyet Dal ance 1956 $40,525 0 1984 $659,0'8 $452,787 In addition, two new township buildings have been valued at $614 s b. You also provided a summary of interest earned from township investments made by you: 1980 - $19,400.00, 1981 - $26,334.00, 1982 - $35,615.00, 1983 - 429,698.00, and 1984 - $27,841.00. 2. Secretary-Treasurer is one of the offices to wich the township supervisors make appointments. In addition, you have stated that township investments are made by you and that the supervisors have authorized you in your official position, to place insurance. a. You stated that you were requested !oy the township supervisors not as secretary /treasurer but rather as an ;nsurance agent to place the township insurance. b. You have advised that all final decisions regarding the placement of workers' compensation or municipal viability insurance. 3. You are a public official as that term is used in the Ethics Act and as such, are subject to the provisions of the State Ethics Act. 4. You gave us a statement from your physician i ,i which he said that he did not want you to "testify in any Court Cases, Court Hearings, Commission Hearings or any other heat ngf or rive testimony ln the form of statements or depositions" because he considered these activities detrimental to your health and wel l being. 5. You are paid a flat salary and are not reimbursed by using a percentage of the total township expenditures. a. Your 1984 salary was $7,380.00. Mr. David J. Mathies Page 3 b. The township code had a section allowing the salary of the secretary /treasurer to be no more than 3% of expenditures. This was changed in 1976 by an amendment that allows the supervisors to fix the salary without relating it to a percentage of expenditures.' 6. On December 7, 1977, on a motion by supervisor Parish, seconded by Supervisor Gabic. The township supervisors unanimously awarded insurance contracts governing the,general liability of buildings and contents, fire and extended coverage to the H. A. Thompson Agency. The premium for this insurance was $6,401.00. 7. You state that past and present supervisors have asked you to place "hard to place" insurance such as police professional liability and public officials errors and omissions insurance. a. Township minutes from February 4, 1976 through September, 1985 do not contain an authorization for you to place insurance on your own. The minutes do show that the supervisors were involved in a number of decisions on insurance matters. b. Some supervisors have stated that you were asked to place "hard to place policies" but the supervisors reserved the right to select the company. c. The supervisors did authorize you to place bonds. 8. You and your wife, Dorothy J. Mathies, were joint owners of an insurance and real estate agency with an address of Drawer G, 3559 Washington Avenue, Finleyville, PA 15332. You have advised that the agency was sold on February 1, 1985 to Dean A. Mathies. 9. Your insurance agency has received payments from the township for surety bonds as follows: a. Bonding for you as secretary- treasurer: (1) $200,000.00 bond for the period of January 1, 1984 to January 1, 1985. Bond No. 5213 -15, premium $320.00 and a $32.00 commission. Your agency was paid by township check no. 10860 and you were listed as the broker. Mr. David J. Mathies Page 4 (2) $200,n0n.fifr bond for the period of January 1, 1983 to January 1, 1984. Bond no. 5213- 15 -37, premium $320.00 and a $32.00 commission. 1T ere is no payment record hut you list this insurance and commission on the record of business hetween your insurance agency and the township, You provided this record. E3) .000,000.00 bond for the period of January 1, 1982 to January 1, 1983. Pond no 5213.15 -37, premium $359.00 and a $73,80 commission. Payment was made to Dorothy Mathies by township check no. 42 dated February 12, 1942. The tots. check was for $794,.00 and markei "Bonds". a, You have Govised that only $369.00 of the $ war for your bond. (4) For each of the periods from January 1, 19f0 to .,ar.uary 1, 1981 and Jar,uiry" 1, 1981 to January 1, 1982, the township paid your agency $644.00 for your bond. Your commission was $126.80 each year. Payment for 1980 was made by tcwoship check no. 31 payahle to David J. Mathies Insurance, and i'or 1981 1-y township check no. 8 payahle to Dorothy J. Math :es. h. konding for Stephen Parish, Jr. as assistant secretary. (1) t25,000,00 for the period of January 1, 1984 to January 1, :.985, Bond no. 5213 -15 -49 premium 859.00 and a commission of $ There is no payment record hut you list this insurance and commission on the record of business between ' o;r insurance agency and the township. (2 The premiums and commissions for 1982 and 1983 wcn'e the same as above. (3) For 1980 and 1981, the premiums were 388.00 and the commissions $22 :00 for each year. These premiums were pain by township checks no. : 1 for 1980, and no. 8 for 1981. c. Bonding for Dorothy J. Smida as wage tax collector. (1) 380,000.00 hor,d for the period of January 1, 1984 to January 1, 1985, Bond no. 5213- 15 - -48, premium 1272,00 and a commission of $54.40. Mr. David J. Mathies Page 5 (2) For 1982 and 1983, bonds for Dorothy J. Smida were provided. The premiums and commissions for each period were the same as in Finding C(1) above. (3) For each of the periods 1980 and 1981, the premiums and commissions were $374.00 and $74.80 respectively. Payments were made by township checks no. 31 and 8. 10. Your agency also received payments from the township for workmen's compensation insurance. Township minutes from February, 1976 through September, 1985 do not record supervisory action pertaining to the placement of workmen's compensation insurance. Those payments were as follows: Note: Column 1 in all listings below records payments made by the township to you, your wife, or your agency. This information is taken from the cancelled - checks. Information in Column 2 is :taken from notations on premium schedules or invoices of the Pennsylvania Manufacturers Association Insurance Company. a. For the period of July 1, 1984 to July 1, 1985: Policy no. #238400 91- 44 -08 -0, issued to Union Township Road District: Column 1 Column 2 Twp. Check Date Amount Check No. Date Amount 497 8/8/84 $4,115.00( 11250 8/10/84 $4,115.00 634 10/10/84 $947.00 11314 9/11/84 $947.00 11363 10/11/84 $947.00 11413 11/14/84 $947.00 Note: Additional payments were sheduled but documents were not available. The name of the producer was not visible on the copies of these documents. (1) the total check is for $5,155.00, notation on check "W.C. $4115 ". Mr. navid J. Mathies Page 6 h. For the period of Jul; Column i Teip. Check late 293 446 Amount %/702 13, 198.60 8/J/83 .', ;.,646000 517 9/7/83 1959,0n 55� 10/6/83 ` 643 11/2/2,3 1959.00* 716A 12/8/RL $959.00 772 12/30/83 $959.00 20 1/13/84 1745.00 144 3/12/84 1959.00* 212 4;13/84 $959.00 304 5[ /84 $959.60 3E6C :; /4/R4 3, iA2. fln 1i E53 to July 1, 1984: Column 2 Check No. (late Amount 16548 7/18/83 13,198.00 10588 8/4/83 $959.00 10646 9/8/83 959.00 '0703 10/13/83 $959,00 10743 11/8/83 $959.00 10788 12/14/83 $959.00 10814 12/30/83 - 1959.00 10957 2/13/84 1959.00 10968 3/14/84 1959.00 1102.9 4/13/84 $959.00 11092 4/11/x;4 1959.00 Deferred i ns;;a` lmcnt 13,182.00 Total p rear ; ums Note: " ota1 ano±.n% of cia.ck no. 543 is ;_7),531.0(, c r,ec;ic no. 144 Check no, 366 ror 13,182,00 dated June 4 is for a payment marked installment" on the invoice. The producer's name is not visible for this yea' - < 115,970.00 82,328.00. "deferred . on documents Mr. David J. Mathies Page 7 c. For the period of July 1, 1982 to July 1, 1983: Column 1 2 Twp. Check Date Amount (2) 458 8/5/82 $5,092.00 526 9/7/82 $1,174.00 593 10/8/82 $1,174.00 653 11/8/82 41,174.00 779 12/30/82 $1,174.00 3 1/10/83 $745.00 63 - 2/4/83 $1,174.00 198 4/8/83 $1,174.00 264 5/5/83 $1,174.00 Check No. Date Amount 9976 8/10/82 _ $5,092.00 N/A 9/10/82 $1,174.00 N/A 10/12/82 $1,174.00 N/A 11/8/82 $1,174.00 N/A 12/7/82 $1,174.00 N/A 12/30/82 $1,174.00 N/A 2/8/83 $1,174.00 N/A 3/9/83 $1,174.00 N/A 4/14/83 $1,174.00 N/A 5/11/83 $1,174.00 Deferred installment $3,948.00 Total premiums $19,538.00 Note: The producer's name was not visible but the address shown is Drawer G, Finleyville, Washington County, Pennsylvania 15352. Mr. David J. Mathies Page 8 d. For the period of July 1, 1981 to July 1, 1982: Column 1 Twp. Check Date Amount 483 N/A $9,042.00 549 1981 = $1,838.00(2) 617 10/12/81 P3.,838.00(3) 679 ?x./6/81 41 1 c, 12.1 % /81 $1,838.00 N/A !1 /A ;'fti i1 /A E / A P, "A 12.7 3/15/8? $,878.00 208 -415/82 $1,838.00 278 :/7/82 $1,838.00(4) Twp. Check Date Amount 135 2/9/81 $11,910.00 Column Check No. Date e. For the period of January 1, 1981 to ,::Ay 1, 1981: Column'1 Column Amount 9473 8/10/81- $7,976.00(1) 9473 9/10/81 $1,838.00 9526 10/15/81 $1,838.00 9557 11/9/81. $1,838.00 9603 12/3.1/81 $1,838.00 9658 1/13/82 $1,838.00 9706 2/12/82 $1,838.00 9747 3/12/32 '1,838.00 9796 4/16/82 $1,338.00 9833 3/10/82 $1,838.00 Total pre ums $24,518.00 Note: (1) The tota'. check as tor $9,042,00 :,nd includes a note "WC $7,976, MLIA $1066." (2) Total check 73,879.00, inclu $ 'or P�Llic Official anC Employee Liability Insurance. (3) Total check foi $3,123.00 includes $1 28.00 for mobile c -0 pment insurance. 4) Note on the check says W.C. nal pay. Check No. Date Amount 9202 2/13/81 $11,910.00 Mr. David J. Mathies Page 9 F. For calendar year 1980: Column 1 Twp. Check Date Amount 116 2/1/80 $6,719.00 117 3/4/80 $1,549.00 118 4/3/80 $1,549.00 120 5/1/80 $1,549.00 121 6/2/80 $1,549.00 124 7/1/80 $1,549.00 126 8/1/80 $1,549.00 127 9/1/80 $1,549.00 130 10/1/80 $1,549.00 133 11/1/80 $1,549.00 NOT OBTAINED Column 2 Check No. Date Amount 11. You also received a commission of $800.00 between 1980 and 1984 on insurance for equipment. This insurance was carried with the Hartford Insurance Company. Documents of that company show the following: a. For the period of November 10, 1983 to November 10, 1984 contractors equipment; premium $675.00. (1) Producer's name and code, David 'J. Mathies, 520609(L). (2) The document is stamped "received October 11, 1983, David J. Mathies Agency ". (3) Notations on the document read as follows: "Placed with Thompson Agency ", "20 % ", "ck10846 1- 13 -84 ". (4) You were paid a commission of $135.00. Mr. David J. Mathies Page 10 b. For the period of November 10, 1982 to November 10, 1983 contractors equipment premium +878.00. (1) Producer's nano anc COGC, ;;,?t J, Mathies, 520609(L.). (2) Staspee or the document is eceived November 10, 1982, David J. Maties Agency ". Notations'oo 'die document read as follctvs "20 % ", "ck10211 1/:, . (4) You rec: d a commission f $175.6C. For the period o: ''ovember 10, 1981 to Jovember 10 1982 contractors equipment premium $1,285.00. (1) Producer's name.and code, David J. Mathies, 520609(L). (2) Noteti ':s or the document are, "20 % ", "ck9644 7- 6 -82 ". (3) Yci rece;vec a commission of $255.60, d. y-(r the period of November 10, 1980 to November 10, 1981, contractors equipment premium $1,173.00. (1) Producer's name and code, David J, Mathies, 520609(L). (2) A stamp on the form reads "received Septeoiber 7.2 ". (v) Rotations or the form ara "20 %" "ck9154 1- 06 -80 ". (4) You received a commission of $234.60 12. Your agency aso reccv�d r,2 nship pdyr,ierts for other types of insurance: a. False Arrest Check # Amount Date Payee 417 $1,913.00 ** 7/26/82 Dorothy J. Mathies 501 $1,948.00 8/10/81 Dorothy J. Mathies 502 $2,264.00 8/1/80 David J. Mathies Insurance Mr. David J. Mathies Page 11 b. Errors and Ommissions Insurance Check # 507 c. Police Municipal "LIA" Check # Amount Date Payee 485 $1,079.00 * 8/13/82 Dorothy J. Mathies 55 $ 555.00 2/9/81 Dorothy J. Mathies L 116 $1,300.00 * 2/1/80 David J. Mathies Insurance d. Radio Equipment Insurance Check # Amount Date Payee 650 $ 600.00 10/6/80 Dorothy J. Mathies Insurance e. Other payments made to your insurance agency without identification of the purpose.* Check # Amount Date Payee 128 717 338 79 f. (Word unclear) F.A. Audit Check # 593 Amount Date Payee $2,268.00 8/4/80 David J. Mathies Insurance $2,543.00 * 3/31/83 Dorothy J. Mathies $1,052.00 * 12/3/82 Dorothy J. Mathies $ 886.00 * 6/31/82 Dorothy J. Mathies $ 855.94 * 2/22/82 David J. Mathies Amount Date Payee $ 416.00 10/8/82 Dorothy J. Mathies Mr. David J. Mathies Page 12 Note: Items with asterisk do not appear on the record of business you provided between your agency and the township. 13: On Decer,;ber 10, 1983, another insurance agent wrote to the township supervisors askix for aii opportunity t submit proposals or bids on township insurance: a. In January, 19e4, the supervisor: Hv i ted this agent to a meeting on the insurance coPtracts. b. The supervisors, sou, and en gent from 'elna Group (an insurance company) a'..terded this meeting. c. An announcement r'ade at the ,Meeting that the i n u;'ance package was awarded. The other agent was not Olen an opportunity to review the insurance needs or submit proposals prior to the award. d. Policy #4ABC060 -942 was issued with an effective date of December 8, 1983. This policy replaced policy #4ABCO52 -030 and the premium was $8,350.00. This policy was placed through H. A, Thomson Co. The insurance carrier was the National Mutual insurance Company, Cellina Group, Cellina Ohio. e. While t"ra, other insurance agent had been invited to attend the January, 1984 meeting about the placement of insurance, the insurance h _;d already been placed as is evidenced vy the December 8, 1983 polices, f. This agent asKed you to review the bond insurance program but you stated that information was privileged information and rot available. 14.. You submitted a summary of township insurance placed through your insurance agency. This report listed the following: a. Bonds for Stephen Parish, Jr., Assistant Secretary; Dorothy J. Smida, Tax Collector; and yourself for the ;cars 1980 through 1984. Your total conlmi ssion was $787.60. b. Police professional liability from August, 1980 to July, 1985; your total commission was $389.31. c. Officials car -rors and ommissions from August, 1980 to March, 1985; your tots:) commission was $594.99. Mr. David J. Mathies Page 13 d. Mohile equipment from 1980 through 1985; your total commission was $800.80. e. The total commission on the report you submitted was: 1980 - $ 735.65 1981 - $ 694.50 1982 - $ 514.86 1984 - $ 425.81 1984 - 5 200.22 Total 2572.70 14. Your report did not include premiums paid hy the township to your agency for workmen's compensation insurance from 1980 through July 1, 1985 (Findings 8a -f); False arrest insurance from 1980 through 1982 (Finding 12a), and Radio equipment insurance in 1980. 15. The total commissions paid to you, your wife, or your agency were: a. $2,572.70 reported hy you in correspondence to us. h. Commissions on premium payments made to your agency but on which the amount of commission cannot he identified. The payments totaled $8,329.00. (Findings 12a through f). 16. You have advised that you received no commissions for the placement of workers' compensation or municipal liahility insurance. 17. On Octoher 22, 1986, you forwarded to the State Ethics Commission a check in the amount of $2,572.70 made payahle to anion Township. This amount represents the commissions that you received from the placement of insurance with the township as set forth in findings 13(e). R. Discussion: As Secretary /Treasurer for Union Townhip, you are a public employee as that term is defined in the State Ethics Act. 65 P.S. , $402. This is especially so, in light of the fact, that in your position, you exercised the power to invest township funds and were generally responsible for the finances of the township. As such, your conduct must conform to the requirements of the State Ethics Act. Mr. David J. Mathies Page 14 Generally, the State 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 family, or a business with which he is associated. 65 P.S. 403(a). Within the above provision of law, you may not as a public employee use your public position in order to obtain any financial gain for yourself or a business with which you are associated. Additionally, you may not use any confidential information obtained in your position as secretary /treasurer in ocdec to eLtai n such a financial gain. Businese With which one is.associated is defined as follows: Section 2. De; "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or holder of stock. 65 P.S. 402. Yoe and your w'fe were joint owners of an insurance and real estate agency as identified in Finding 8. As such, you were clearly associated with this bu: i nE ss within the purview of the State Ethics Act. This i esuranee agency was paid by the township for various insurance poli•eies purchased by the township and your agency was paid a commission for the placeme, of this insurance. The only question, therefore, to resolve is t:'hethr r° you used your public position in order to obtain this financial caire Generally, e township official mey not award to himself or to a business with which he is associated any ;payment which emanates from the township. See Sewers, 80 -050; Glove, No. 325. Specifically, we have found in the past that a township supervisor, for exar,:ple, may not use his official position to solicit business and receive commission for the township's purchase of various types of insurance. In Glove supra, we found that the activities of a township supervisor in making presentations and attempting to influence the township's purchase of insurance from a company with which a Mr. David J. Mathies Page 15 supervisor was associated, placed undue pressure upon the township and its employees as this individual stood in an official capacity to the township and the employees. As a result, we determine that this township supervisor had used his official position in order to obtain the insurance business and thereby realized a financial gain, i.e. commissions, through the use of his position. See also Patterson, No. 116. In the instant situation, you are not a township supervisor. The board of supervisors has the ultimate authority for the placement of insurance. Township minutes indicate that the supervisors were involved in a number of decisions on insurance matters. The supervisors had instructed you to place "hard -to -place policies" but the supervisors reserved the right to select the company. The supervisors did authorize you to place bond insurance. The bonds for the township officials were, thereafter, provided to your insurance agency and you were compensated therefor. While the township board of - supervisors had asked you to place hard -to -find insurance they reserved the right to select the company. They did not authorize you, nor did they specifically select a broker ors insurance agent to place this insurance. You were asked merely to determine which companies could provide the best insurance deals for the township. Additionally, with relation to the bond insurance, the township board of supervisors specifically authorized you to place that insurance. They authorized you to place that insurance, not as a private individual but rather as the secretary /treasurer of Union Township. You thereafter, in that position, placed that insurance through your own real estate /insurance company and thereby obtained a commission. While you have asserted that the supervisors had requested you to do this as a private insurance agent rather than as secretary, we find no evidence to support this contention. As such, we believe that you used your position as secretary /treasurer to place township insurance through your private business enterprise and received compensation from the township therefor. Additionally, the preception of this activity becomes even more questionable in light of the fact that in one particiular year, December, 1983, another insurance agent wrote to the township supervisors asking for an opportunity to submit proposals or bids on township insurance. In January of 1984, the supervisors invited this agent to meet on this insurance contract. The supervisors, along with you and an agent from another insurance company attended a meeting. At this meeting an announcement was made that the insurance package was awarded. The requesting agent was not given an opportunity to review the insurance needs or submit proposals prior to the award. Additionally, even while the contract had supposedly been approved and awarded at the January, 1984 meeting, the records reflect that the effective date of the policy was December 8, 1983. This was before the December 10, 1983, request by the other insurance agent and prior to the January, 1984 meeting. Thus, while the other insurance agent had been invited to attend the Mr. flavi d J. Mathies Page 16 insurance policies had a'ircaaiy heen placed. These insue nce policies were placed with the H. A. lhomsoo Company, When the unsuccessful insurance agent later asked you to review the bond insurance progr°ar'., ,sou stated that that information was priviledged and not availahle. 'rased upon all of these circumstances above, this Commission believes that you violated Section 3(a) of the State Ethics Act when you used your position as secretary /treasurer to place the township hcnd insurance through your private insurance agency and, thereafter, received a financial gain in the form of a commission. We must note that you have forwarded to the State Ethics Commission a check it the amount of 52,572.70 made payable to Union Township. This represents the commissions that you received through the placement of the township insurance. (See, ,Finding 14e). You have, thus, divests?;; ycursr:'f of any financial gain ohtained in violation of the Ethics Act. Tha Sate Ethics Commission has the authority to make recommendations for the 2roeeeyhion of „individuals or the dismissal of charges arising out of vioirtiois c the State Ethics Act 65 P.S. .54(17(11). In the instant situation, in light of your eimhursement, we believe that no further action should be taken. Finally, haked upon the foregoing, we do not heiie ✓e that it es :.ecessary to review this matter under Section 403(c) of the :`Mate Ethics AA, 65 E.S. •S403(c). (See, Allegation No. 2). C. Conclusion: Your actions as the Union township Secretary /`treasurer in placing coenship insurance and receiving commissions therefor were eot in accord with Section 4f13(a) of the State Ethics Act. You have reim!)or se"l the township for all commissions received from such activity. (S2,b 2- ;0). As such, we do not believe that any further action should he taken in this matter. , " >;ar fi es in this n,'tter will he closed and we w : :11 recommend no further act `L: . flur files iii this case will remain confi deist; : al in aceeedance with Section F(a) of the Ethics Act, 65 n.S. 408(a). However, this Order is final and will he made available as a puhelc document 5 business days after service (defined as mailing). Any persc:o who violates the conf1 ent i a's i ty of a Commission proceeding is guilty of a misdemeanor and shall he fined rot more than 51,000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). Ry the Commission, G. Sieher Pancoast Chairman Mr. David J. Mathies c/o Rohert L. Ceisler Ceisler /Richman Law Firm 321 Washington Trust Ruilding Washington, PA 15301 Re: Order No. 459 -R, File No. 84- 111-C EMS /na cc: Public Rinder Mailing Address. State Ethics Commission 308 Finance Building P. O. Box 11470 Harrisburg, Pa. 17108 -1470 October 30, 19R6 gear Mr. Mathies: On October 27, 1986, the State Ethics Commission received your payment for reir9hursi ng linion Township as required by our Order. We have forwarded your check in the amount of 52,572.70 to the township. This letter will he part of the Order and a puhlic record as such. Sincerely, Edward M. Seladones Executive Director State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania