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HomeMy WebLinkAbout474-R YakopecMr. Stephen Yakopec c/o Stephen Yakopec, Jr.," Esquire Suite 140 Ft. Pitt Commons Building 445 Ft. Pitt Boulevard Pittshurgh, Pennsylvania 15219 Re: Order Pao. 474, File No. 84 -14 -C Dear Mr. Yakopec: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 RECONSIDERATION ORDER OF THE COMMISSION June 16, 1986 Order No. 474 -R This refers to the request for Reconsideration presented on May 21, 1986, with respect to the above - captioned Order issued on May 2, 1986, pursuant to 51 Pa. Code 2.38. The discretion of the State Ethics Commission to grant reconsideration is properly invoked, pursuant to our regulations, 51 Pa. Code 2.38(h) when: (h) Any party may ask the Commission to reconsider an Order within 15 days of service of the Order. The person requesting reconsideration should present a detailed explanation setting forth the reason why the Order should he reconsidered. Reconsideration may he granted at the discretion of the Commission only where any of the following occur: (1) a material error of law has heen made; (2) a material error of fact has been made; (3) new facts or evidence are provided which would lead to reversal or modification of the order and where these could not he or were not discovered previously by the exercise cf due diligence. The Commission, having reviewed your request, must DENY your request hecause none of these circumstances are present. In your request for reconsideration you have alleged that material errors of law and fact have been made. In relation to this matter you have asserted that the insurance plan for supervisors who served as roadmasters was less expensive for the township than the insurance that the township was providing for the full -time employees. You also allege that similar insurance coverage emhraces the entire group of township employees and was not confined to the township supervisors. You state that the supervisor /employees were required `1r. Stephen Yakopec Page 2 June 16, 1986 to pay a deductible pursuant to their insurance coverage while the full -time employees had no such deductible. You also assert that the auditors accepted the insurance henefits provided to the supervisor /roadmasters by signing and approving the township audits for 1982, 1983 and 1984. In support of your position that the Commission has made a material error of law, you have set forth the holding of the Commonwealth Court in the Report of the Audit of South Union Township, 47 PA Commw. 1, 407 A.2d 906, 0 979). In that particular case, supervisors were not surcharged for the expenditure of township funds as reimhursement for the use of their personal automobiles even though such had not been set by the township board of auditors as part of their compensation. The Commonwealth Court determined that while such was technically in violation of the compensation provisions of the Second Class Township Code, it was not a surchargable item in that the reimbursement had not differed from that which would have been set had the auditors actually set the compensation. In the South Union case, the auditors had indicated an intent to compensate the supervisors for the use of such vehicles. However, the auditors set no specific rate of reimbursement because of their helief that the township supervisors would he using township provided cars. In reality, the auditors were unaware of the fact that the township did not have sufficient cars for use of all the supervisors who served in positions of employment. Unlike the situation in South Anion, however, where the auditors had exhibited an intent to provide that compensation to township supervisors, the auditors in the present case clearly have indicated their intent not to provide the supervisors, who serve as employees, with medical or hospitalization insurance for the years in question. The facts of this : matter specifically cannnot he contested insofar as auditor approval is concerned. The auditors specifically did not set as part of the compensation to he provided to the supervisors, the medical insurance herein question. It was not their intent to do so and they specifically reaffirmed this decision in suhsequent years. Indeed, as early as 1982 the auditors had indicated their intent to stop paying the insurance for any appointed or elected official who did not work full -time because it had created a financial hurden. While the auditors subsequently approved the premium payments for 1983, they did not approve such payments for all other years. Specifically, by letter of March 6, 1985, which was attached to the audit reports that you have provided, the auditors make note of the fact that medical insurance coverage for supervisors and dependents was an expense not approved by the auditors for 1984. As a result, they required restitution and reimbursement to the township. Unlike the South Union case where the township hoard of auditors had exhibited an intent to compensate the supervisors, the auditors here exhibited no such intent. It is clear that medical coverage of the type herein question is considered a financial gain and considered part of the compensation paid to township supervisors. See Synoski v. Hazle Township, PA Commw. , 500 A.2d 1282, (1985). The whole purpose of the Second Class Township Code in '+r. Stephen Yakopec Page 3 requiring auditor approval for township supervisors who are employed by the Township is to provide that the supervisors who are the governing body of the township do not set or fix their own salary as township employees. Such would he against puhlic policy and would present a conflict of interests. See McCutchenn v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283, ; Coitar v. Warminster Township, 8 Pa. Commw. 163, 302 A.2d 859, (1973); Conrad v. Exeter Township, 27 0. & C. 3d 253, 76 Rerks L. J. 2 p. 7, (1983). This concept, that a puhlic official should not act in a matter where in they have a vested financial interests is one that has strong support in judicial precedent. Cenkinger v. New Castle, 368 Pa. Comm. 547, 84 A.2d 303, (1951). In relation to your.'assertion that there was no financial loss to the township hecause the premiums that were paid for supervisor /roadmasters coverage were less expensive than those provided to full -time employees. In the first instance, we do not agree with this contention. Although the premiums may have been less expensive than that provided for full -time employees, it does not negate the fact that the township indeed paid for this coverage. The payment of this coverage, regardless of whether it was less expensive or more expensive than that provided for other employees, was still the payment of money by the township which was not authorized by law. As such, the township expended funds that it would not otherwise have expended. Thus, we find it difficult to perceive that the township did not suffer a financial loss when it paid for this coverage. Additionally, the instant matter is not one of a surcharge. This Commission has investigated the situation pursuant to the authority vested in it pursuant to the State Ethics Act. 65 P.S. .5.401 et. seq. The issue that concerns the Commission is not whether or not the township has suffered a financial loss but rather whether a puhlic official has used his position in order to obtain a financial gain other than the compensation provided for by law. In the instant situation this Commission has determined that when the township supervisors voted for, approved, and accepted township provided -for insurance coverage that was not authorized under appropriate law, such was the use of a.puhlic office to receive a financial gain other than the compensation provided for hy law..:• The case law in this respect is clear; when a puhlic official receives a financial gain or compensation to which he is not entitled even if said gain is received in good faith, it does not alleviate the duty to reimburse the township for the gain he had received. See Kessler Appeal, 66 Pa. Comm. 1, 44 A.2d 761, (1982). Thus, regardless of whether the township suffered a financial loss, a puhlic official who receives a financial gain to which he is not entitled may not retain said gain. In this respect, the instant matter differs from a surcharge action and thus, we have acted accordingly. In relation to your assertion that the township auditors had, in fact, approved the reasonableness of the costs of the supervisor /roadmasters insurance plan hy signing and approving the township audits for 1982, 1983, and 1884 is not consistent with both the facts and the law in this matter. Initially, the auditors, in fact, did not and have expressed the fact that June 16, 1986 Ir. Stephen Yakopec P 4 June 16, 1986 they did not approve this program or the expenditure for this program on hehalf of supervisor /roadmasters. There is substantial evidence including letters, indicating that the township auditors did not approve the township payment for these programs. In fact, the township auditors required that the supervisors reimhurse the township for the premiums paid in all years that were not approved. The years approved, as we noted, consisted of 1983. However, the premiums payments for 1982 and 1984 were not approved by the auditors. You, in fact, made partial restitution in relation to this matter and, therefore, it is now not arguable that the auditors, in fact, approved such payments. The mere fact that you made reimbursement in relation to this matter is evidence of the—fact that such was not authorized by the auditors. In addition to the foregoing, it is clear that even had the auditors not required restitution in this matter, and even if the evidence indicating that lack of approval did not exist, the mere fact that the auditors failed to initiate a surcharge action and approved the audits for the years in which the expenditures were made, does not constitute the type of affirmative auditor approval necessary to authorize these programs. See McCutcheon v. State Ethics Commission, supra at 466 A.2d 285. Once again we believe that the fact that you had reimbursed the township for most of the funds made by the township on your behalf is evidence of the fact that the auditors did not approve of the township's expenditure of these funds. In fact, the finding of this Commission was that the restitution paid by you in this respect was not complete. This Commission has offered you the opportunity to reimburse the township for that additional amount, $408.00. A review of all of the foregoing, leads us to conclude that this Commission has made no material error of law and has no made no material error of fact. The new evidence that has been submitted by you did not rise to the level that would require the granting of reconsideration in this matter. In light of the foregoing, the State Ethics Commission concludes that your request for reconsideration must he DENIED. Accordingly, you have thirty (30) days from the date of this Reconsideration denial to comply with the terms set forth in the original Order. That Order and this decision denying reconsideration are final and shall he made available as public documents on the fifth business day following the date of this Order. Ry the Commission, G. Sieber Pancoast Chairman EMS /na cc: Public Binder STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 July 15, 1986 Mr. Steve Yakopec 215 Meadow Street Cheswick, PA 15024 Re: Order No. 474, File No. 84 -14 -C Dear Mr. Yakopec: On July 14, 1986, the State Ethics Commission received your payment for reimbursing Harmar Township as required by Order No. 474. We have forwarded your check in the amount of $408 to the township. This letter will be part of the Order and a public record as such. Si ncerely, Edward . Seladones Executive Director