HomeMy WebLinkAbout474 YakopecMr. Steve Yakopec
c/o Paul F. Laughlin, Esquire
Laughlin, Schlass, Whitney & Yakopec
Suite 140
Ft. Pitt Commons Building
445 Ft. Pitt Boulevard
Pittsburgh, PA 15219
Re: 84 -14 -C
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
May 2, 1986
Order No. 474
Dear Mr. Yakopec:
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 Harmar Township Supervisor, violated Section 3(a)
of the Ethics Act by having the township pay for major medical and dental
insurance plans in which you participated.
A. Findings:
1. You have served as a Harmar Township Supervisor since January, 1982. You
are subject to the provisions of the Ethics Act.
2. You were also appointed as a roadmaster in the township for the years
1982, 1983, and 1984. You stated that you worked approximately 30 hours in
1984 as a roadmaster and less than that in 1982 and 1983.
3. The township carried a group medical insurance plan administered by the
Trustees Insurance Fund, sponsored by The Pennsylvania State Association of
Township Supervisors and placed with State Mutual of America. This plan
included coverage as follows:
a. Hospitalization - Effective January 1, 1978 and still in force.
h. Weekly Indemnity - Effective December 1, 1976 to April 1, 1984.
c. Hospital Indemnity - Effective December 1, 1976 to April 1, 1984.
d. Dental - Effective August 1, 1981 and still in force.
Mr. Steve Yakopec
Page 2
May 2, 1986
4. Not all supervisors were covered by these plans.
5. P 1inutes of township supervisors meetings record the following activities
relating to the insurance plan.
a. June 28, 1982: Move Seibert, second Walkiewicz that the (2)
supervisors now receiving medical insurance will
reimburse the township to remain on the program
after a (30) day period. Motion carried •
unanimously. You voted.
Move Seibert, second Manning that the Board of
Supervisors pay for their curreht life insurance
premiums on a monthly basis. Motion carried
unanimously. You voted.
Move Seibert, second Domaratz that any supervisor
on the Dental Program to have the same 30 day
option to pay for the insurance or option out.
Motion carried unanimously. You voted.
b. January 3, 1983: Motion Domaratz, second Manning to appoint
supervisors as roadmasters for 1983 with a
recommendation to the auditors setting the pay at
the same hourly rate as the road foreman. Motion
carried unanimously.
Motion Colpo, second Walkiewicz to set the
supervisors pay at $25.00 /meeting and award any
other legal benefits to the supervisors. Motion
carri ed unanimously.
c. May 23, 1983: Solicitor Edward Martin reports on supervisors
health insurance. Solicitor stated the State
Association advised that this is a proper expense.
He recommends that the auditors be requested to
approve insurance coverage as part of the
compensation for supervisors.
October 10, 1983: Motion Colpo, second Walkiewicz to pay all
tabulated bills. (Included was Trustees bill in an
amount of $6,113.00).
e. February 13, 1984: Supervisors Liberati, Adams and Domeratz state on
the record that they are not covered by the
township medical /hospitalization insurance.
Mr. Steve Yakopec
Page 3
f. March 12, 1984: Motion Adams, second Walkiewicz to cancel the
Trustees Insurance policies for hospital and weekly
indemnity. Motion carried unanimously.
January 14, 1985: Walkiewicz stated he will reimburse the township
for health insurance received through Trustees
Insurance Company (Pennsylvania State Association
of Township Supervisors sponsored) for 1984 and
1985; providing, that in the event that future
legislation makes this expense allowable, Mr.
Walkiewicz and Mr. Yakopec are reimbursed.
6. Auditors actions and related activities involving the insurance plan were
as follows:
9.
May 2, 1986
a. April 15, 1982: Letter from the auditors to the supervisors listing
recommendations following the audit. Item No. 4
recommended that the township stop paying for
i nsurance for any appointed or elected official who
does not work full -time because it creates a
fi nanci al burden.
b. May 26, 1983: Letter from township secretary /treasurer to the
auditors requesting that insurance be approved as
part of the compensation for supervisors.
c. January 26, 1984: Letter from Solicitor Edward Martin to Harmar
Township secretary /treasurer regardi ng
medical /hospitalization insurance for supervisors.
Solicitor Martin opined that the payments were
proper but speci fical ly noted that payment of
premiums was a form of additional compensatio n and
should be specifically approved by the auditors.
d. February 21, 1984: Letter from the auditors to the supervisors
allowi ng expenditures of funds for medical
insurance for supervisors only in 1983. The
auditors stated they made this decision because
legal costs would offset any money recovered. They
noted that they would not approve expenditures for
medical insurance after February 21, 1984 and
suggested that the supervisors reimburse the
township for any 1984 premium paid out of township
funds.
e. March 7, 1984: Letter from the auditors to the supervisors
reaffi rmi ng February 21, 1984 letter and denyi ng
approval for 1984 medical insurance expenditure.
Mr. Steve Yakopec
Page 4
7. The township paid the following premiums on your behalf:
A. Dental Premiums (Policy #324)
1. Coverage - February 1, 1982 to October 31, 1982:
a) You - $ 80.80
b) Dependent - $158.06
$238.86 paid February 17, 1982:
2. Coverage effective November 1, 1982 to October 31, 1983:
a) You
b) Dependent
- $106.00
May 2, 1986
- $209.00. paid October 18, 1982
3. Coverage effective November 1, 1983 to October 31, 1984:
a) You - $106.00
b) Dependent - $209.00
$315.00 paid October 17, 1983.
4. Plan terminated October 1, 1984. On November 20, 1984, Township
received refund check no. 2168 in an amount of $432.80 - you are
credited with $25.38.
B. Hospitalization Premimums (Policy #44095)
1. July 1, 1983 to October 31, 1983:
a) You - $187.64
b) Dependent - $445.00
$632.64 paid July 18, 1983.
2. November 1, 1983 to November 1, 1984:
a) You - $ 635.00
b) Dependent - $1,523.09
32,158.00 paid October 17, 1983.
3. Plan terminated October 1, 1984. November 20, 1984, township
received refund check no. 2168, your refund $179.00
Mr. Steve Yakopec
Page 5
C. Hospital Indemnity Premiums (Policy #15627)
1. July 1, 1983 to January 31, 1984:
a) $24.64 - paid July 18, 1983.
2. February 1, 1984 to January 31, 1985:
a) $42.25 - paid January 13, 1984.
May 2, 1886
3. Plan terminated April 1, 1984. May 10, 1984, township received
refund check no. 2427, your refund $32.70.
D. Weekly Indemnity Premiums (Policy #19753)
1. July 1, 1983 to January 31, 1984:
a) $28.81 - paid July 18, 1983.
2. February 1, 1984 to January 31, 1985:
a) $41.00 paid January 13, 1984.
3. Plan terminated April 1, 1984. May 10, 1984, township received
refund check no. 2427, your refund $32.50.
8. You reimbursed the township for $118.80 in 1982 and $1,644.75 in 1984, for
a total of $1,763.55.
9. The premiums paid by the township in 1983 totalled 81,354.00. Premiums
for this year were approved retroactively by the auditors.
10. The township was reimbursed $270.00 of premiums paid on your behalf
because plans were terminated or you stopped coverage.
11. On October 28, 1985, Paul F. Laughlin, Attorney, notified the Commission
that he represented you and made the following comments on the alleged
vi olation:
a. In a letter of January 26, 1984, Edwin J. Martin, Esquire, township
solicitor, noting Mr. Martin's citation of the South Union Township
Case.
b. In this letter Mr. Martin made the following points.
1. It was his opinion that payments for premiums for medical and
hospitalization insurance are proper and there is no basis for
surcharge. However, he noted that payment of premiums is a form
of additonal compensation to the supervisors and, as such,
should be specifically approved by the board of auditors by the
township.
Mr. Steve Yakopec May 2, 1986
Page 6
2. The opinion was hased on the fact that the supervisors of Harmar
Township were roadmasters and, as such, employees of the
township.
3. He stated that the opinion was also based on the fact that the
medical and hospitalization insurance available to the
supervisors is the same plan made available to all other
employees of the township.
4. He had discussed the matter with representatives of The
Pennsylvania State Association of Township Supervisors and they
agreed with his opinion.
5. He ended by emphasizing that the hoard of auditors should
approve payment of insurance premiums as part of the
compensation.
c. He cited discussion from the McCutcheon v. Cmwlth. of Pa. State
Ethics Commission, Pa. Cmwlth.' 466 A.2d 2.83 (1983). He noted that
you had reimbursed the township for the 19R4 payments but that 1983
payments did not have to be repaid because of auditor approval.
12. The reconciliation of township paid premiums, refunds, auditor approved
premiums, and your reimbursements is as follows:
Total premiums paid by township - $3,796.00.
Less refunds - $270.00.
Less auditor approved premiums - $1,354.00.
Less your reimbursements - $1,764.00.
Premiums paid and not approved or reimbursed - $408.00.
R. Discussion: As a township supervisor, you are a public official as that
term is defined in the State Ethics Act. 65 P.S. X402; Sowers, 80 -050. Your
conduct as such an official must, therefore, conform to the requirements of
the State Ethics Act.
Generally, the State Ethics Act provides as follows:
Section 3. Restricted activities:
(a) No public official or puhlic employee shall use his
puhlic office or any confidential information received
through his holding puhlic office to ohtain financial gain
other than compensation provided by law for himself, a
memher of his immediate family, or a husiness with which
he is associated. 65 P.S. 403(a).
Mr. Steve Yakopec
Page 7
May 2, MI6
Within the above provision of law, this Commission has previously determined
that a township supervisor may not receive at the township's expense, health,
medical and life insurance benefits when such supervisor acts only in the
capacity of a supervisor. Krane, 84 -001; Cowie, 84 -010. Additionally,
if such a supervisor is employed by the township as a roadmaster in accordance
with the Second Class Township Code, such benefits are considered compensation
and must, therefore, be fixed as such by the township board of auditors. See
Synoski v. Hazle Township, Pa. Commw. , 500 A.2d 1282
8
In re: A.peal of the Auditors Report Muncy Creek Township, ( 16Lycomi ng,
Rep 159, (1985); Hunt, No. 348 -R. Any benefits received other than as
provided for above, would constitute a financial gain obtained in violation
of the State Ethics Act. See McCutcheon v. State Ethics Commission, 77 Pa.
Comm. 529, 466 A.2d 283, (1983); Conrad v. Exeter Township, 76 Berks L.J. no.
2p. 7, (1983). These principles of law are now well settled and constitute
the law under which this situation must be reviewed. See, In re: Report of
Audit of South Union Township, 47 Pa. Commw. 1, 407 A.2d 906, (1979).
You served as township supervisor in Harmar Township since 1982. You
were appointed as roadmaster in the township during the years 1982 through and
including 1984. You also received various medical insurance benefits in this
position at the expense of Harmar Township. While it is clear that under
existing law, you were eligible, as a working supervisor to receive certain
benefits paid for by the township, in order for those benefits to constitute
compensation provided for by law, said benefits must have been fixed as part
of your compensation by the township board of auditors. As noted in the
findings of fact, these benefits were not fixed as such in 1982. In 1983,
although you received the benefits prior to auditor approval, the supervisors
had indeed notified the auditors that such benefits were being requested as
early as May, 1983. The auditors, however, for reasons unknown, delayed their
approval of these benefits until a later time. We believe that these benefits
regarding the year 1983 were, thus, appropriately approved by the township
board of auditors. We do note at this point that this Commission has
previously determined that the attempted retroactive approval of these types
of benefits by a township board of auditors comprised of individuals who are
not the same as at the time the benefits were obtained by the supervisors,
would not constitute the appropriate auditor approval. See, Saunders, 85 -006.
We believe, however, that the instant situation is distinguishable from our
previous opinion in that the auditors who approved the benefits in your
situation are the same auditors who were in service at the time said benefits
were received and the approval was obtained in the same year the benefits were
received. Additionally, these auditors were aware of the fact that the
benefits were being requested and, did in fact, approve them. cf: Ki ni r ,
84 - 008; Marcelllo, 85 - 003 (Auditors in service at time benefits receive may
affirm their intent that said benefits were to be part of the compensation
provided for by law).
Mr. Steve Yakopec
Page 8
May 2, 19R6
Additionally, we note that while the benefits that you received in your
position as a township supervisor /roadmaster were not approved or fixed as
your compensation by the auditors for the year 1982 and for the year 1984,
certain reimbursements were made by you to the township for your receipt of
these benefits. Our calculations i n the instant matter, however, indicate
that the township expended a total of $3,796.00 in reference to the benefits
that you had received. Our analysis further indicates that refunds to the
township totalled $270.00; auditor approved premiums totalled $1,354.00 and
you reimbursed the township for $1,764.00. There is outstanding, however, a
balance of $408.00 that. had been paid the township for your benefits. This
amount represents premiums paid by the township that were not approved by the
auditors, refunded to the township or reimbursed by you. This, therefore,
would consitute a financial gain received by you other than the compensation
provided for by law.
We note that even under the law as it currently exists, while you have
received a financial gain that was not provided for in the Second Class
Township Code, we believe that your receipt of this benefit was not an
intentional violation of the State Ethics Act, but rather based upon the
advice that you had received from others including your solicitor. Good faith
receipt of such benefits, however, even when based upon a solicitor's advice,
wi 11 not al levi ate the necessity of a publi c offici al reimbursing his
governmental body for the receipt of such financial gain for which he was not
entitled. See Allegheny County v. Grier, 179 Pa. 639, 36 A. 353, (1897);
McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283,
(1983); Kestler Appeal, 66 Pa. Commw. 1, 444 A.2d 761, (1982). As a result,
we believe that you must reimburse Harmar Township for this financial gain.
The State Ethics Act provides as follows:
Section 9., Penalties.
(a) Any person who violates the provisions of Section 3(a)
and (b) i s 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).
In addition to the above, the State Ethics Act provides that the Commission
may forward the results of any investigation to the appropriate prosecuting
authority unless the alleged offender removes himself from the conflict of
interest by divesting himself of any financial gain received in violation of
the State Ethics Act. 65 P.S. §407 9(111). As such, the Commission in the
Mr. Steve Yakopec
Page 9
May 2, 1986
past has, based recommendations for referrals for prosecution upon the
willingness of an individual to divest himself of the financial gain received
in violation of the Act. See, McCutcheon v. State Ethics Commission, supra.
In the instant situation and in light of the fact that we do not believe that
you intentionally violated the State Ethics Act, we believe this result is
appropriate. Thus, you must reimburse Harmar Township in the amount of
financial gain that is still outstanding. This would total $408.00.
In closing, we note that in relation to your part -time employee status,
this Commission has ruled that any benefits received by a part -time supervisor
employee must bear a reasonable relationship to the amount of work performed.
See Nanovic, 85 -006. You should, in the future, be aware of our analysis of
that issue as set forth in that opinion.
C. Conclusion: We believe that your receipt of various health and medical
insurance benefits at the expense of the township was not in accord with
Section 403(a) of the State Ethics Act and previous rulings of this Commission
and the courts of this Commonwealth. You have, however, reimbursed the
township for a substantial portion of the funds that have been expended on
your behalf. Our analysis of the instant situation, however, also reveals
that $408.00 was expended by the township in excess of the amount approved by
the auditors or reimbursed by you. As such, we believe that you must, within
thirty days of this order, forward a check to the State Ethics Commission made
payable to Harmar Township in that amount. Upon receipt of that payment our
files in this matter will be closed and we will take no further action in
reference hereto. Failure to reimburse the township as provided above, will
result in our referral of this matter to the appropriate law enforcement
authority for further review and action.
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,
Y #0
G. Sieber Pancoast
Chairman