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HomeMy WebLinkAbout564 LudwickiMr. Chester Ludwicki 11279 Center Highway North Huntingdon, PA 15642 Re: 87 -010 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 564 DECIDED: May, 26, 1987 MAILED: June 2, 1987 Dear Mr. Ludwicki: 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: A. Allegation: That you, North Huntingdon Township Commissioner, violated Section 3(a) of the Ethics Act which prohibits a public employee's or public official's use of office or confidential information gained through that office to obtain financial gain, in that you authorized the township to pay, from township funds, dental and life insurance premiums on your behalf. B. Findings: 1. You have served as a commissioner of North Huntingdon Township, a first class township, since at least January, 1985. As a public official you are subject to the provisions of the State Ethics Act. 2. The North Huntingdon Township Commissioners have been receiving dental and life insurance coverage at township expense since at least 1979. 3. Minutes of the North Huntingdon Township Commissioners' meeting of February 14, 1979 confirms that Resolution 103 of 1979 was unanimously passed which authorized township commissioners to be included in a dental care plan of Delta Central of Pennsylvania Program Pre -paid Dental Care, Plan Blue. a. You were not a township commissioner at this time. 4. Township records confirm the fol,Jowing amounts paid on your behalf for life and dental insurance premiums to the Municipal Employers Insurance Trust: a. January through November, 1985 - $49.85 /month (39.90 dental, $9.45 term life, $.50 service charge). Total $548.25. Mr. Chester Ludwicki Page 2 b. December, 1985 through September, 1986 $10.35 term life, $.50 service charge). Total07$477.63(�42.22 dental, 5. You voluntarily discontinued your participation in the plan in September, 1986. 6. You stated that you were elected in 1982 but did not join the plan until 1984. When there was an indication of problems with insurance coverage you informed Township Manager, Robert Arch, to terminate your coverage. You feel as though commissioners are entitled to the coverage because if something happened to them on township time or in a. township vehicle. You also stated you were not aware of the restrictions with insurance coverage and that you would be willing to make restitution. You added that Solicitor Cole told you to wait until a ruling was received from the State Ethics Commission before dropping out when Coles' October, 1985 letter came out. 7 . By correspondence dated October 17, 1985, Solicitor Thomas Coles informed the board of commissioners of insurance benefits for township commissioners as follows: a. I am sure you have all read your Legislative Bulletin dated October 7, 1985 from the Pennsylvania. State Association of Township Commissioners, but on the reverse side the matter involving House Bill 1296 was addressed. This House Bill involves the issue of insurance benefits of Township Commissioners. prevent legal actions against Commissioners who Hhave Bill received6 will insurance benefits at Township expense prior to December, 1984. I am not certain what that means with reference to after December, 1984. The State Ethics Commission has recently taken action which mandated repayment of insurance premiums in cases where Commissioners had been receiving i- nsurance benefits at Township expense. While not authorizing specific benefits for Commissioners, House Bill 1296 does prohibit prosecution of local officials. Obviously, the House action differs very significantly from a Bill introduced in the Senate, Senate Bill 602, which would specifically authorize insurance benefits for Commissioners at Township expense. Senate Bill 602 has been reported from the Senate Local Goyernment Committee, chaired by Senator Frank Pecora (R Allegheny) and is currently in the Senate Rules Committee. Obviously the above is a very tricky, complex and difficult situation and one which I would be pleased to discuss with the Board of Commissioners at its convenience. Mr. Chester Ludwicki Page 3 8. You agreed to remimburse North Huntingdon Township for insurance costs in three installments: a. June, 1987 - $341.99. b. September, 1987 - $341.99. c. December, 1987 - $342.00. Total: $1,025.88 9. The township manager will provide verification of this payment to the State Ethics Commission. B. Discussion: As a first class township commissioner, you are a public official within the purview of the State Ethics Act. 65 P.S. §402; Dodds, 84 -011; Hanlon, 400 -R. As such, your conduct must conform to the requirements of the State Ethics Act. The 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). The State Ethics Commission has previously reviewed the question of whether these types of insurance coverages constituteefinancial gain within the above provision of law. See Krane, 84 -001 and Davis, 84 -012. In Krane and Davis, the Commission determined that such benefits constituted financial gain. See also; Synoski v. Hazel Township, Pa. Commw. Ct. , 500 A.2d 1282, (1985); In Re Appeal of the Auditors Report of Muncy Creek Township, Pa. Commw. Ct. , 520 A.2d 1241, (1987). We will adopt the analysis in those Opinions as applicable here and move to the question of whether these coverages are "provided by Law" to be paid for by the township. We have previously considered this issue specifically in relation to First Class Township Commissioners., See Hanlon, 400 -R; Dombroski, 401 -R. Mr. Chester Ludwicki Page 4 The First Class Township Code provides, in part, authorizes Commissioners: ...to make contracts with any insurance company, so authorized, insuring any public liability of the township, and to make contracts of insurance with any insurance company, or non - profit hospitalization corporation, or non - profit medical service corporation, authorized to transact business within the Commonwealth, insuring its employes, or any class or classes thereof, or their dependents, under a policy or policies of group insurance covering life, health, hospitalization, medical and surgical service, or accident insurance. • • ...As used in this clause, the terms "employe" and "employes" shall include township commissioners, if the commissioner works on a full -time basis in his capacity as superintendent, road master, laborer or secretary for the township. Such commissioners eligible for inclusion in such plans must meet the same requirements, including hours of employment, as other full -time employes of the township. Other commissioners shall be eligible for inclusion under a policy or policies of group insurance covering life, health, hospitalization, medical and surgical service or accident insurance only if they pay their pro rata share of the premiums. Such insurance shall be uniformly applicable to those covered and shall not give eligibility preference to, or improperly discriminate in favor, of, commissioners. :As used in this clause, the terms "employe" and "employes" exclude independent contractors and all township engineers and solicitors. Any life, health, hospitalization, medical service or accident insurance coverage contract entered into by a township between January 1, 1959, and December 31, 1984, that includes or provides c,pverage for commissioners shall not be void or unlawful solely because of such inclusion of commissioners nor shall any penalty, assessment, surcharge or disciplinary action of any kind occur as a result of such participation by such commissioners; and insurance benefits payable to insureds or their beneficiaries arising out of or on account of deaths, injuries, acciderfts or illnesses occurring prior to the effective date of this amendatory act shall remain the property of the insureds or their beneficiaries. 53 P.S. §56563. Mr. Chester Ludwicki Page 5 In our previous rulings we concluded that a commissioner in a township of the first class could not receive or secure for himself, through his office, compensation, whether considered monthly payments, salary or the value of insurance premiums paid for by the township in excess of the compensation allowed and limited by law. The township code provides that township commissioners may receive certain health, medical, life and insurance benefits if they are also employed by the township in certain capacities. Additionally, the amended First Class Township Code provides that any insurance benefits which a commissioner received between the years 1959 and December 31, 1984, shall not be void and said commissioner shall not be charged, or assessed any other penalty as a result of his participation in that plan. The "amnesty" provision of Act 82, however, does not go beyond December 31, 1984. As a result, any benefits paid after that period of time on behalf of township commissioners could be subject to assessment under the State Ethics Act. We note, that as a result of the State Ethics Commission investigation, you have notified the Commission of your intent to reimburse the township for the premiums for this period of time. We further note, that even under the law as it currently exists, while you may have received a finanical gain that was not provided for in the First Class Township Code, we believe that your receipt of these benefits was not an intentional violation of the State Ethics Act, but rather based upon the advice that you have received from various advisors. Good faith receipt of .such benefits, however, will not alleviate the necessity of a public official reimbursing his govermental body for the receipt of compensation for which he was not entitled. See Allegheny County v. Grier, 179 Pa. 639, 36 A. 353 (1879), Kestler Appeal, 66 Pa. Commw. 1, 444 A.2d. 761, (1982). The amount of township funds expended on your behalf for the benefits totaled $1,025.88. This Commission has been authorized to afford public officials who receive a financial gain in violation of the Act the opportunity to divest themselves of that gain and thereafter take no further action. McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, (1982); 65 P.S. §407 9(iii). We believe that this result is appropriate in the instant situation. C. Conclusion and Order: As a township commissioner in a township of the first class, you are a public officta1 subject to the provisions of the State Ethics Act. Mr. Chester Ludwicki Page 6 Your receipt of certain health benefits during the period January, 1985 through April, 1987, at the township's expense, acquired in and through your public office, was the receipt of a financial gain other than the compensation provided by law. The amount of gain received in violation of the Act equaled $1,025.88. You are hereby ordered to remit payment in that amount to North Huntingdon Township. You have arranged to make this restitution in three installments as set forth in findings and the State Ethics Commission will receive verification thereof. As such, we will take no further action in this matter. 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, A I G. Sieber Pancoast Chairman 0