HomeMy WebLinkAbout476-R FeeMr. ,lames FPe
1045 Wilson nrivp
£4Pw Cast1P, PA 16101
Pe: R4 -36_C
Dear Mr. Fee:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order Nn. 476_R
DECIDEDNQ\/ 1,9 1986
MAI LED K / `
The State Ethics Commission has received a complaint regarding you and a
possihle violation of Act 170 of 1978. The Commission has now completed its
investigation. We have also considered your request for reconsideration. The
individual allegations, conclusions, and findings on which those conclusions
are hased are as follows:
I. Allegation: That you, a Anion Township Supervisor:violated Section 3(a)
of the State Ethics Act, 65 D.S. 6403(a), hy having the township
hospitalization /medical plan and a life insurance policy in which a
you
participate, you
A. Findings:
1. You have heen serving as a Union Township .Supervisor since January, 10R2
and, as such, are subject to the State Ethics Act (Act 170_1079).
2. You are not employed in any other capacity hy the township except for the
period of January 5, 1082 to January 11, 1982 when you received compensation
in the amount of 't2R4.R0 for the position of roadmaster.
a. You were appointed roadmaster at the reorganization meeting of
January 4, 1082.
h. That appointment was rescinded at the following supervisor's meeting
of January 0, 1082 when the supervisors voted to hire an outside
roadmaster. The compensation ahove was for work performed during
that period.
c. You were not appointed roadmaster in 1081 or 1904.
Mr. James Fee
Page 2
3. You applied for township paid nos)italization from Blue Cross /Blue Shield
on January 25, 1982.
a. On October 12, 1982, you ap :lied for the "65 Special Agreement."
b. On April 21, 1982, an ap;ii:ation was filed to have your wife covered
by the "65 Special Agreemen:."
4. The township paid premiums for h:spitalization programs for you and your
wife as follows:
a. 1982 - $851.04 for coverage for you, $207.60 for coverage for your
wife for a total of $1,053.54.
b. 1983 - $441.80 for coveraiae for you, $492.80 for coverage for your
wife for a total of $934.50.
c. 1984 - $624.10 for coverage for you, $444.60 for coverage for your
wife for a total of $1,463.
d. January, 1985, $16.90 fey y:u, $77.50 for your wife for a total of
$94.90.
e. The amount paid from 19E trough January, 1984 were $1,933.80 for
your coverage, $1,222.50 fo your wife's coverage for a total of
$3,156.34.
5. You state that you signed up =or the hospitalization because you believed
you were entitle( to it as a supe °visor. Your belief was based upon the
following:
a0 The State Association of T :wnship Supervisors maintained that you
were entitled to the hospi :slization. On March 29, 1984, Gabriel P.
Cilli, Township Solicits', - esponded to your request enclosing a copy
of a letter from the St_:e 4utual Life Insurance Company of America
dated February 6, 1980 a in "update" note from the Pennsylvania
State Association of Tow -sr p Supervisors dated March 5, 1984.
(1) The insurance comz,n; letter was signed by William F. McAvoy
who analyzed vari ::Ls sections of the township code and the
insurance code arc. reviewed certain court cases and concluded
that township supe av- 3o rs may be insured for group insurance
and that the town_ ^ i may pay all or a portion of the
cost.
Mr. James Fee
Page 3
(2) The Association's update noted that the Ethics Commission had
handed down a ruling on February 23, 1984, but stated that the
Association believed the Commission decision was erroneous and
that the Association was pursuing the matter in court before
the Legislature and with the Commission. They advised
supervisors to discuss their health care coverage plan with
their solicitor until the issue was resolved.
Attorney Cilli said it would be important for you and him to
discuss the issue further. He also stated that it would be
better if the township auditors approve payment for
hospitalization coverage.
6. Your hospitalization insurance plans and premiums were not approved by the
township auditors. You have not the township pay for your hospitalization
premiums since you terminated township payment of your premiums following the
first payment for 1985.
a. Your action came after a January 17, 1985, letter from Gabriel P.
Cilli stating that according to the most recent court decisions, it
was clear that hospitalization benefits were compensation and it was
the responsibility of the auditors to set these benefits.
(3)
b. In addition, at the January 18, 1985 meeting, the supervisors
unanimously agreed that all insurance benefits and hospitalization
given to the township supervisors must be granted through the
township' auditors. The supervisors asked that a special meeting be
set by the township auditors.
7. On January 18, 1985, the township auditors met and approved a salary for
the roadmaster, Mr. Charles Cumberledge, you and Mr. Nuzzo were to be paid
$5.00 per hour for duties performed in the township. No benefits or other
forms of compensation were approved for you.
8. Your attorney had proposed a settlement of 958. O
expenditures since the Ethics Commission Opinion to KraneSe84 -004. Younno'p
longer have an attorney but you have asked that this proposal be submitted to
the Commission as part of your reconsideration.
8. Discussion: As a township supervisor, you are a public official as that
term is d ned in the State Ethics Act. 65 P.S. §402; Sowers, 80 -050. Your
conduct as such an official must, therefore, conform to the requirements of
the State Ethics Act.
Mr. James Fee
Page 4
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 holdi ng 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 taw, this Commission has previously determined
that a township supervisor may not receive at the townships expense, health,
hospitalzaticn, medical and life insurance benefits when such supervisor acts
only in the capacity of a supervisor. Krane, 84 -001; Cowie, 84 -010.
Additionally, even if such a supervisor is employed by the township as a
roadfi:ster in accordance with the Second Clasp Township Code, such benefits
are considered . copensation and must, therefore, be fixed as such by the
township board of auditors. See, Synoski v. Hazle Township, Pa. Commw.
500 A.2d 1282, (1985); In re: Appeal of the Auditors Report of Kuncy
Creek Township, 16 Lycoming, 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. Commw. 529, 466 A.2d 283. (1983); Conrad v. Exeter
7,7nship, 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.
COMM. 1, 407 Ae2d 906, (1979),
`feu served as township supervisor in Union Township since 1982. You were
apvi nted as rcadmaster in the township for a term of 7 days i r. 1982. You
received various medical insurance benefits during your term of office at the
expense cf Union Township. It s clear that under existing law, only a
working supervisor is eligible to receive benefits paid for by thr township.
in order for those benefits to constitute compensation provided for by law,
said benefits rust have been fixed as part of your compensation by the
township board of auditors. Non -worki ng supervisors are not eligible for such
benefits. As noted in the findings of fact, you only served as a working
supervisor for 7 days in 1982. A- a n -working supervisor you w:_-r',e not
eligible to receive, at the township's expense, the Lenefits previously set
forth in the findings of fact. This, tts would consitute a financial
gain received by you other than the compensation provided for by law.
Mr. James Fee
Page 5
We note that even under the law as it currently exists, while you have
received a financial gain that was not
Township Code, we believe that Provided for in the Second Class
r was not
intentional violation of the State EthicspAct, butsratheri based upon athe
advice that you had received from others including of such benefits, however, even when based upon a solicitor's advice,
will not alleviate the necessity of a public official your solicitor. Good faith
governmental body for the receipt of such financial gain reimbursing orrsi whic nc hh
entitled. See, Allegheny County v. Grier, 179 Pa. 639 , 3 6A.353., (1897) not
s
McCutch v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283,
1983 ; Kestler Appeal, 66 Pa. Commw. 1, 444 A.2d
we believe that you must reimburse Union Township for �this gain.
Y
The State Ethics Act provides as follows: gain.
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 fr
any provision of this act, in addition to ny�otherati ng
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
ro
may forward the results of any investigation to the a secutinn g
authority unless the alleged offender removes himself pfromrthe econflectof
interest by divesting himself of any financial
gain
the State Ethics Act. 65 P.S. §407 9(iii). Assuch , the v Commission a in o the f
past has, based recommendations upon the willi
divest himself of the financial n9ness of an individual to
McCutcheon v. State Ethics Commission, In thelinstantfsituation nde,
light of the fact that we do not believe that you and
i n
State Ethics Act, we believe this result is appropriate. T al aus, yos, you must
musst
t u the
reimburse Union Township in the amount of financial T
outstanding. This would total $3,156.34. gain that is still
C. Conclusion: We believe that your receipt of health and medical
benefits, at the expense of the township, violated Section 3(a) of the e Ste
Mr. James Fee
Page 6
Ethics Act. The township expended $3,156.34 for these benefits. You have
offered to repay $985.50 because you believe only the expenditures made by the
township after the Ethics Commission ruling in Krane, 84 -001, should apply.
We must reject that argument. However, while we continue to believe you must
reimburse the township for the full amount, we also believe we cannot and
should not prevent your partial reimbursement to the township and we will
accept and forward to the township the payments you have offered to make. In
addition, we believe a 10% interest penalty should be applied to your offer of
$985.50 for a total of $1,084. Checks for these payments must be made payable
to the township but mailed to the State Ethics Commission for forwarding
within 30 days of the date of this Order.
Because we believe you are responsible for the full amount, we will also
forward this matter to the Attorney General 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 ci rcul ati ng 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,
G. Sieber Pancoast
Chai rman