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HomeMy WebLinkAbout469 DavidsonMs. Anna K. Davidson R.D. #3, Box 529 Boyertown, PA 19512 Re: 85 -084 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION April 9, 1986 Order No. 469 Dear Ms. Davidson: 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, as Secretary /Treasurer of Earl Township, Berks County, Pennsylvania, violated Section 3(a) of the Ethics Act which prohibits a puhlic official's or public employee's use of office or confidential information gained in that office to obtain financial gain other than compensation allowed by law for herself, a member of her immediate family or a business with which she is associated in that as the owner of Anna K. Davidson Insurance, you wrote an insurance policy for fire insurance on the township municipal building. A. Findings: 1. You served as secretary /treasurer of Earl Township from 1970 to July, 1983. Duties normally assigned to a township manager were not part of your responsibility during that period. 2. You are also the owner of the Anna K. Davidson Insurance Agency, the address of this agency is R.D. #3, Rox 529, Boyertown, PA, 19512. 3. While serving as secretary /treasurer you sold insurance to the township as follows: a. Policy #N- 110744 for the period from April 15, 1979 to April 15, 1982. Ms. Anna K. Davidson April 9, 1986 Page 2 You are listed as the agent for this policy. The annual premium for the policy was $391.00. The policy provided $28,700 for fire or fire and extended coverage or other peril. A note on the report of the policy says "97.75 commission." b. Policy #N- 106828 for the period December 13, 1976 through December 13, 1979. The annual premium was $447.00. $50,000 of fire or fire and extended coverage was provided. You were listed as the agent for this policy. c. Policy #N- 106828 a renewal covering the period from December 13, 1979 to December 13, 1982. You are listed as the agent for this policy. The annual premium for this policy was $617.00. This policy provided $80,000 for fire or fire and extended coverage, or other peril. You were paid for these premiums by the township by checks #2984 dated December 13, 1979, 3216 dated December 11, 1980, and 3344 dated December 10, 1981. You cashed all three checks. d. Policy #N- 106828 was renewed for the period December 13, 1982 through December 13, 1985. The annual premium was $548.00. You are listed as the agent for this policy. This policy provided $80,000 for fire or fire and extended coverage, or other peril. This policy was cancelled on December 28, 1983 for "non- payment of premium." The cancellation notice included a note "137.00 commission." Ms. Anna K. Davidson April 9, 1986 Page 3 4. Payments for all bills relating to the above insurance were approved by the township supervisors. You had no authority in the approval of these bills. 5. You state that the previous township solicitor had never told you that this practice was questionable. 6. You also state that your predecessor as secretary /treasurer was the insurance agent for similar policies. 7. You filed a Statement of Financial Interests on January 21, 1980, which included a listing of Anna K. Davidson Agency as a source of income. You did not file Statements of Financial Interests after that date because State Ethics Commission regulations said that a secretary /treasurer not acting as a manager did not have to file a Statement of Financial Interests. Your interpretation of this information was supported by Township Solicitors Alfred Crump and Gary Fronheiser. B. Discussion: 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, no public official or public employee may use their position in order to obtain any financial gain other than the compensation that is provided for by law for themselves or a business with which they are associated. In the instant situation, you were the owner of Anna K. Davidson Insurance Agency. This is a business with which you were associated as defined in the State Ethics Act. That Act provides as follows: Section 2. Definitions. "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. Ms. Anna K. Davidson April 9, 1986 Page 4 Generally, when a public official or employee is involved in a situation of this type, the Commission has in the past determined that the State Ethics Act has been violated. See Rogers, No. 421 -R; Glova, No. 324; 325. In the instant situation, however, we do not believe that you are a public employee as defined within the terms of the State Ethics Act. The State Ethics Act defines public employee as follows: Section 2. Definitions. "Public employee." Any individual employed by the Commonwealth or a political subdivision who is responsible for taking or recommending official action of a nonministerial nature with regard to: (1) contracting or procurement; (2) administering or monitoring grants or subsidi es; (3) planning or zoning; (4) inspecting, licensing, regulating or auditing any person; or (5) any other activity where the official action has an economic impact of greater than a de minimus nature on the interests of any person. "Public employee" shall not include individuals who are employed by the State or any political subdivision thereof i n teaching as di sti ngui shed from administrative duties. 65 P.S. 402. In addition thereto, the regulations promulgated under the State Ethics Act generally provide that township secretary /treasurers who do not serve as managers are not public employees or officials within the purview of the State Ethics Act. 51 P.S. §1.1; Nallo, 79 -004; Dissinger, 79 -015. Our investigation reveals that you did not act in any capacity as a manager but merely performed certain ministerial functions as a secretary to the township board of supervisors. As a result, we do not believe your actions violated the provisions of the State Ethics Act. Additionally, we note that while the Second Class Township Code appears to prohibit a township official either elected or appointed from being directly or i ndi rectly involved in the expenditure of funds by the township in excess of $300 in any year, a review of the facts in this particular situation do not appear to indicate that you received in excess of that particular amount as commissions on the insurance policies that you provided for the township in any given year. Such activity appears to he addressed in the Second Class Township Code, 53 P.S. §65802, and the Commission has in the past interpreted such provisions of other municipal Ms. Anna K. Davidson April 9, 1986 Page 5 codes in determining whether provisions of the State Ehtics Act have been violated. In the instant situation, however, because it does not appear as though you received any commissions in excess of that permitted by the township code or in light of the fact that you are not a public employee within the Act, we do not believe that the State Ethics Act was violated. Our decision herein only involves your liabilities under the State Ethics Act and in light of the fact that you were not a public employee as defined by the Ethics Act, we do not believe that we can find any violation of the State Ethics Act. C. Conclusion: Under the foregoing circumstances, we do not believe that you are a public employee within the purview of the State Ethics Act and we, therefore, cannot find that you violated that Act. 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). By the Commission, At?! SU' G. Sieber Pancoast Chai rman